Good day, and welcome to the BRT Apartments Corporation third quarter 2022 earnings conference call. Today’s conference is being recorded. At this time, I’d like to turn the floor over to Mr. Kevin Reed of ICR. Thank you, sir, and you may now begin.

Thank you for joining us today for BRT Apartment Corp.'s third quarter 2022 earnings conference call. On the call today is Jeffrey Gould, President and Chief Executive Officer. Also available are George Zweier, Chief Financial Officer; Ryan Baltimore, Chief Operating Officer; and David Kalish, Senior Vice President. I would like to remind everyone that this conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's current expectations, assumptions, and beliefs. Listeners should not place undue reliance on any forward-looking statements, and are encouraged to review the company's SEC filings, including its Form 10-K and Form 10-Q, for a more complete discussion of risks and other factors that could affect these forward-looking statements. Except as required by law, BRT does not undertake any obligation to publicly update or revise any forward-looking statements. This call also includes a discussion of non-GAAP measures, including FFO, AFFO, NOI, and information regarding our pro-rata share of revenues, expenses, NOI, assets, and liabilities of BRT's unconsolidated subsidiaries. All the non-GAAP information discussed today has certain limitations to be used with caution and in conjunction with GAAP data presented in our supplemental earnings release, and in our reported filings with the SEC. Unless otherwise indicated, or the context otherwise requires, references to BRT's portfolio or its multifamily portfolio, and references to revenues, expenses, NOI, assets, and liabilities, refer to results and accounts of BRT's wholly-owned subsidiaries, and its pro-rata share of unconsolidated subsidiaries. As a reminder, the company's supplemental information and earnings release have been posted on the Investor Relations section of BRT's website. We anticipate that our quarterly report on Form 10-Q will be filed later today. I'd now like to turn the call over to President and CEO, Jeffrey Gould. Please, go ahead, Jeff.

Thank you, and welcome to the call. We are pleased to share that BRT had another strong quarter across our portfolio. The consistent and deliberate approach we have used over the past year to grow our portfolio through acquisitions of our joint venture partners’ interests, has resulted in strong quarterly operational results. Our quality property portfolio is located in strong and growing markets and is comprised of fixed-rate mortgage debt with no near-term maturities until 2025, providing BRT with a significant hedge to weather an increasingly uncertain macroeconomic backdrop. We have been prudent in our planning and judicious in our execution in growing our wholly-owned portfolio, which currently stands at 21 properties. Going forward, we are watching markets carefully as interest rates rise and pricing evolves. As always, we will remain disciplined in our process to identify properties that meet our quality and underwriting standards. We have been through cycles before, and we believe that the current dislocation and uncertainty in the broader economy will lead to opportunities, and BRT will be there to take advantage of them when they do. Turning to our results for the third quarter of 2022, net income attributable to common stockholders was $7.06 million or $0.37 per diluted share, compared to $28.11 million or $1.54 per diluted share in the same quarter of 2021. The change is due primarily to a larger gain on sale at an unconsolidated property in the corresponding period in the prior year. AFFO was $7.17 million or $0.38 per diluted share, compared to $5.66 million or $0.31 per diluted share in the third quarter of 2021. The increase in AFFO per share is due primarily to improved operating margins across our portfolio, and the incremental impact of partners buyouts. The increase was offset by increased general and administrative expenses and income tax expense. Turning to our portfolio, at September 30, 2022, our wholly-owned portfolio consists of 21 multifamily communities containing 5,420 units. We also own interest through unconsolidated entities in another eight communities totaling 2,781 units. Average occupancy for the portfolio was 96.2% for the quarter ended September 30, 2022, unchanged as compared to the 2021 quarter. Average monthly rents for the portfolio in the third quarter of 2022 were $1,301 per month, up 13% compared to the 2021 quarter. For leases signed in the third quarter of 2022, we saw favorable spreads on new leases at 16.1%, renewal spreads of 10.8%, and overall spreads of 13.5%. In the third quarter of 2022, our same-store pool for the portfolio included 4,389 units, of which 1,608 were consolidated, and 2,781 were owned by unconsolidated joint ventures. For these properties, same-store revenue grew 11.4%, same-store expenses increased by 3.6%, and same-store NOI grew 18.3% in each case from the 2021 quarter. Regarding transactions year-to-date, we have been disciplined in our growth plans and are very pleased with our partner buyouts made earlier in the year. We continued to be selectively opportunistic in the third quarter, as the macroeconomic environment has grown more uncertain, given rising interest rates, and widening bid-ask spreads that have resulted in decreased industry transaction volumes and less insight into cap rates. Staying true to our discipline of managing our portfolio and recycling capital, in the third quarter, we sold the unconsolidated joint ventures that owned Waters Edge at Harbison, a 204-unit multifamily community in Columbia, South Carolina, in which BRT held an 80% equity interest for $32.4 million. BRT’s share of the gain was approximately $11.5 million, and BRT’s share of the mortgage prepayment charge was $388,000. BRT generated an approximately 20% IRR from the property over the six years it was owned, and the proceeds from the sale were used to pay down our credit facility. In the third quarter of 2022, BRT completed the previously announced partner buyouts at five properties. In total for 2022, BRT completed the partner buyouts at 11 properties for an aggregate purchase price of $105.9 million, consisting of 2,844 units. As a result of the completion of these purchases, all these properties are wholly-owned by BRT. Subsequent to quarter-end, the mortgage debt on the Savannah Oaks property in the amount of $14.9 million matured, and was paid off by borrowing from our credit facility. At September 30, 2022, we had total assets of $744 million, total debt of $463 million, and total BRT stockholder equity of $257 million. Available liquidity at quarter-end included approximately $22 million of cash and cash equivalents and up to $51 million available under our recently amended credit facility. In addition, our unconsolidated joint ventures had approximately $15 million of cash and cash equivalents, which is used for the applicable ventures' day-to-day working capital purposes and renovations. At November 4, 2022, our available liquidity was approximately $56 million, comprised of $15 million of cash and cash equivalents, and up to $41 million available under our credit facility. The aggregate mortgage debt as of September 30 for our wholly-owned properties, combined with our pro-rata share of mortgage debt for our unconsolidated joint ventures, totals $549.5 million, with a weighted average interest rate of 3.97%, and a weighted average remaining term to maturity of 7.5 years. We continue to focus on our leverage ratios, as we improved our debt to enterprise value as of September 30, 2022, to 62%, down from 66% at September 30, 2021. In the third quarter, we sold approximately 174,000 shares, utilizing our ATM sales program at a weighted average price per share of $22.22. Net proceeds were approximately $3.9 million. Also, in the quarter, we strengthened and enhanced our financial flexibility by amending our credit facility, which, among other things, increased the amount we can borrow to $60 million, increased the amount that may be used for working capital and operating expenses to $25 million, extended the term of the facility to September 2025, and reduced the interest rate to the prime rate with a floor of 3.5%. Finally, on October 7, 2022, we paid a quarterly dividend of $0.25 per share, unchanged from the prior quarterly dividend. The current dividend equates to an annualized yield of 4.7% based on our stock price of $21.43 as of the close of business on November 4, 2022. To conclude, we are pleased with our progress made to date and continue to position ourselves well to capitalize on opportunities as they present themselves. We have been prudent regarding capital allocation and disciplined with our acquisition strategy but also have the ability to navigate today's inflationary environment with our enhanced balance sheet. The ongoing population and job growth across many of our markets gives us the comfort and confidence that we’ll continue to create long-term sustainable value for our stockholders. As always, I want to thank the entire BRT team for their continued hard work and contribution to our successes. And on behalf of myself and the team, I want to thank you for your continued support of BRT Apartments.

We now will open the call for your questions. The first question comes from Gaurav Mehta of EF Hutton. Please go ahead, sir.

Yes, thanks. Good morning. I was wondering if you could provide some color on the transaction market. What kind of movement have you seen in cap rates as interest rates have gone up in your markets?

Yes. Hi, Gaurav. Yes, so transactions have slowed considerably. The amount of the volume of transactions has almost come to - well, I wouldn't say a halt, but it's way, way down from years past. I think the bid-ask and getting sellers to understand the real world of what's happened with cap rates since interest rates have moved so high is going to take some time for them to digest and acknowledge. And I think for the time being, it's going to be a period of time where getting the sellers to understand this is going to be a few months process at minimum. We've seen cap rates rise, I'd say at least about 125 basis points, if not more, from the few deals that we've seen and bid on. But I think it's going to take some time again for the sellers to understand where pricing is as of now. And caps are difficult to actually ascertain because of the number of closed deals that have happened over the last few months.

Okay. Maybe on the operation side, have you seen any weakness at all in terms of how much you can push rents, or are you still able to push rents to your tenants?

Yes, we've been able to continue to push rents. I would say that the amount at which we're, and the velocity at which we've been able to increase the rents has slowed a little bit for sure. Still very positive and still terrific. As a matter of fact, it lasted longer than I had expected. I had thought that it was going to slow down earlier than it did, but still seeing very nice increases, but not to the same extent that we were over the last maybe six to nine months. This time of year, occupancies tend to drop a little bit. Our turnover seems to drop a little bit as well, but asking rents are still positive, but just not to the same extent as the crazy increase you were getting over the last few quarters.

Okay. And maybe lastly on the renovation side, would you expect to continue doing renovations in next year if the rent growth has slowed down as compared to six to nine months ago?

Yes, we still plan on actively involving ourselves in our renovations of individual units. I think that actually may tick up as we bought out some of these partners over the course of the past year. We think there's opportunity to increase rents pretty significantly, and the return on investment for the renovated units is terrific. So, I anticipate that we'll probably continue to do more and hope to do as many as we can because it's a great opportunity to increase cash flow.

Okay, Thank you. That's all I had.

Thank you. Our next question will be from Craig Kucera of B. Riley Securities. Please go ahead.

Yes, thanks. Good morning, guys. I want to start first talking about your same-store NOI. Clearly, here in the third quarter, a pretty strong ability to push rents, but I think in the first half of the year, you had a bit more challenges on the operating expense side, but that clearly kind of changed here in the third quarter. I think your expenses were up maybe 3% or so. Is there anything in particular that you attribute that to?

Yes, I would - I mean, we are seeing generally some increases in expenses. And yes, the expense side of things was a little light, I would say primarily because we've had some favorable tax shares on properties, which I think contributed to that. We're seeing more specific - we're definitely seeing some increases with utilities, payroll, insurance, et cetera. But the tax shares and the benefits of those and the booking those definitely we were favorable and why the expenses were as low as they were.

Okay, thanks for that. And just curious, as you have people coming in and signing new leases that pretty wide spreads relative to the prior, do you have any sense that the renters coming to your properties are maybe trading down from higher price rentals, maybe they're marginally higher income-type renters or any other sort of surveys that you do to try to determine kind of where they're coming from?

Yes, I don't - we are trying to track and we've been - and we're doing something now to track the migration from either - from higher-end properties. I would tell you that we have not specifically noticed that, and it's been a pretty consistent theme. What we've noticed over the last few months is I think we're seeing there is a little bit more of - I wouldn't say an issue, but a little bit more concern of what people can pay now. And the affordability factor may start to creep in a bit more, but fortunately, delinquencies have been low, et cetera. But we have not necessarily seen a huge migration from A quality to ours. It's been a pretty stable flow of continued B plus, or A minus renters. But I wouldn't be surprised to see some of those A migrating down to kind of the workforce housing that we can supply with the amended packages and everything else we have. So, we're keeping an eye on it, and probably have a better answer for you next quarter, but it wouldn't be surprising if we do see more of that.

Okay. Thanks. Appreciate it.

This concludes our question-and-answer session. I'd like to turn the conference back over to Mr. Gould for closing remarks.

I just want to thank you all for your time this morning and your continued interest in BRT. I hope you all have a great day, and we'll speak again soon.

Thank you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.