BRT Apartments Corp 10-K for FY2025
BRT Apartments Corp. (BRT)
10-K
2026-03-13
For: 2025-12-31
View Original
Added on
April 11, 2026
About this 10-K
BRT Apartments Corp filed this 10-K on March 13, 2026, covering the fiscal year ended December 31, 2025 (FY2025).
Headline figures
Fiscal year ended December 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $97.03M
- up 1.5% from $95.63M a year earlier
- Net loss
- $11.95M
- compared with a net loss of $9.79M a year earlier
- Diluted EPS
- -$0.63
- compared with -$0.52 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
For the fiscal year ended December 31 , 2025
Or
Commission file number 001-07172
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. employer identification no.) | |||||||
(Address of principal executive offices) | (Zip Code) | |||||||
Registrant's telephone number, including area code
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Securities registered pursuant to Section 12(g) of the Act:
NONE
(Title of Class)
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No ý
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer. or a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Large accelerated filer o | Accelerated filer o | Smaller reporting company | |||||||||
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ No ý
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.
7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was approximately $162.9 million based on the last sale price of the common equity on June 30, 2025, which is the last business day of the registrant's most recently completed second quarter.
As of February 27, 2026, the registrant had 18,983,013 shares of common stock outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the proxy statement for the 2026 annual meeting of stockholders of the Registrant to be filed pursuant to Regulation 14A not later than April 30, 2026, are incorporated by reference into Part III of this Annual Report on Form 10-K.
TABLE OF CONTENTS
Form 10-K
Item No. | Page(s) | |||||||
PART I | ||||||||
| 1 | ||||||||
| 1A. | ||||||||
| 1B. | ||||||||
| 1C. | ||||||||
| 2 | ||||||||
| 3 | ||||||||
| 4 | ||||||||
PART II | ||||||||
| 5 | ||||||||
| 6 | ||||||||
| 7 | ||||||||
7A. | ||||||||
| 8 | ||||||||
| 9 | ||||||||
9A. | ||||||||
9B. | ||||||||
| 9C. | ||||||||
PART III | ||||||||
| 10 | ||||||||
| 11 | ||||||||
| 12 | ||||||||
| 13 | ||||||||
| 14 | ||||||||
PART IV | ||||||||
| 15 | ||||||||
| 16 | ||||||||
Explanatory Note
Unless otherwise indicated or the context otherwise requires:
•all references “us”, “we”, “BRT” or the “Company” refer to BRT Apartments Corp. and its consolidated and unconsolidated subsidiaries;
•"acquisitions" include investments in unconsolidated joint ventures;
•our "significant subsidiaries" (as such term is by Rule 1-02(w) of Regulation S-X), includes TRB Holdings LLC, and TRB Civic Center LLC, which owns Civic Center I and II, properties located in Southaven, MS;
•the term "promote" refers to our joint venture partner's share of the income and/or cash flow from a multi-family property greater than that implied by their percentage of equity interest in such project;
•we refer to certain entities as “affiliated entities”, because such entities share with us certain executive personnel and ownership. Our “affiliated entities” include Gould Investors L.P. (“Gould Investors”), a master limited partnership involved primarily in the ownership and operation of a diversified portfolio of real estate assets; Georgetown Partners LLC (“Georgetown”), which is the managing general partner of Gould Investors and which is controlled by Jeffrey A. Gould, our President, Chief Executive Officer and a director, and Matthew J. Gould, our Senior Vice President and a director; One Liberty Properties, Inc. (“OLP”), a NYSE listed industrial focused REIT; and Majestic Property Management LLC. (“Majestic Property”), a property management company which compensates certain of our executive officers, and which is indirectly owned by, among others, Jeffrey A. Gould and Matthew J. Gould. The use of the term "affiliated entities" or similar terms does not constitute an acknowledgement that such person(s) or entities are affiliates (as such term is used in the Securities Act (as defined below) or Exchange Act (as defined below)) of ours or one another;
•"same store properties" refer to properties that we owned and operated for the entirety of periods being compared, except for properties that are in lease-up. We move properties previously excluded from our same store portfolio (because they were in lease up) into the same store designation once they have stabilized (as described below) and such status has been reflected fully in all applicable periods of comparison. Newly constructed, lease-up, development and redevelopment properties are deemed stabilized upon the earlier to occur of the first full calendar quarter beginning (a) 12 months after the property is fully completed and put in service and (b) attainment of at least 90% physical occupancy;
•"standard carve-outs" refers to recourse items to an otherwise non-recourse mortgage and are customary to mortgage financing. While carve-outs vary from lender to lender and transaction to transaction, the carve-outs may include, among other things, a voluntary bankruptcy filing, environmental liabilities, the sale, financing or encumbrance of the property in violation of loan documents, damage to property as a result of intentional misconduct or gross negligence, failure to pay valid taxes and other claims which could or in certain cases, would create a lien on a property and the conversion of security deposits, insurance proceeds or condemnation awards;
•references to unconsolidated joint ventures exclude ventures in which we have a preferred equity investment; and
•rental rates do not reflect the impact of rent concessions.
Cautionary Statement Regarding Forward-Looking Statements
We consider this and other sections of this Annual Report on Form 10-K to contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Such forward-looking statements include, without limitation, statements regarding expected operating performance and results, property acquisition and disposition activity, joint venture activity, development and value add activity and other capital expenditures, and capital raising and financing activity, as well as revenue and expense growth, occupancy, interest rate and other economic expectations. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “forecasts,” “projects,” “assumes,” “will,” “may,” “could,” “should,” “budget,” “target,” “outlook,” “opportunity,” “guidance” and variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors as described below, which are in some cases beyond our control, which may cause our actual results, performance or achievements to be materially different from the results of operations, financial conditions or plans expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such forward-looking statements included in this report may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved and investors are cautioned not to place undue reliance on such information.
The following factors, among others, could, and in certain cases would, cause our actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking statements:
1
•inability to generate sufficient cash flows due to unfavorable economic and market conditions (e.g., inflation, volatile interest rates and the possibility of a recession), changes in supply and/or demand, competition, uninsured losses, changes in tax and housing laws or other factors;
•adverse changes in real estate markets, including, but not limited to, the extent of future demand for multi-family units in our significant markets, barriers of entry into new markets which we may seek to enter in the future, limitations on our ability to maintain or increase rental or occupancy rates, competition, our ability to identify and consummate attractive acquisitions and dispositions on favorable terms, and our ability to reinvest sale proceeds in a manner that generates favorable returns;
•general and local real estate conditions, including any changes in the value of our real estate;
•decreasing rental rates or increasing vacancy rates;
•challenges in acquiring properties (including challenges in buying properties directly without the participation of joint venture partners and the limited number of multi-family property acquisition opportunities available to us), which acquisitions may not be completed or may not produce the cash flows or income expected;
•the competitive environment in which we operate, including competition that adversely affects our ability to acquire properties and/or limits our ability to lease apartments or increase or maintain rental rates;
•exposure to risks inherent in investments in a single industry and sector;
•the concentration of our multi-family properties in the Southeastern United States and Texas, which makes us more susceptible to adverse developments in those markets;
•increases in expenses over which we have limited control, such as real estate taxes, repairs and maintenance, insurance, and utilities, due to inflation and other factors;
•impairment in the value of real estate we own;
•failure of property managers to manage properties effectively and efficiently;
•accessibility of debt and equity capital markets;
•disagreements with, or misconduct by, joint venture partners;
•inability to obtain financing at favorable rates, if at all, or refinance existing debt as it matures due to the level and volatility of interest or capitalization rates or capital market conditions;
•extreme weather and natural disasters such as hurricanes, tornadoes and floods;
•lack of or insufficient insurance to cover, among other things, losses from catastrophes;
•risks associated with acquiring value-add multi-family properties, which involves greater risks than more conservative approaches;
•events giving rise to increases in our current expected credit loss reserve;
•the condition of Fannie Mae or Freddie Mac, which could adversely impact us;
•changes in Federal, state and local governmental laws and regulations, including laws and regulations relating to taxes and real estate and related investments;
•our failure to comply with laws, including those requiring access to our properties by disabled persons, which could result in substantial costs;
•board determinations as to timing and payment of dividends, if any, and our ability or willingness to pay future dividends;
•our ability to satisfy the complex rules required to maintain our qualification as a REIT for federal income tax purposes;
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•possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently or previously owned, by us or a subsidiary owned by us or by the unconsolidated joint ventures in which we have interests;
•our dependence on information systems, risks associated with breaches of such systems, and the impact on us by the use of artificial intelligence by our competitors and suppliers;
•disease outbreaks and other public health events, and measures that are taken by federal, state, and local governmental authorities in response to such outbreaks and events;
•impact of climate change on our properties or operations;
•risks associated with the stock ownership restrictions of the Internal Revenue Code of 1986, as amended (the "Code") for REITs and the stock ownership limit imposed by our charter; and
•the other factors described in this Annual Report, including those set forth under the captions "Item 1. Business," "Item 1A. Risk Factors," and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations".
We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this Annual Report. Except to the extent otherwise required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the filing of this Annual Report or to reflect the occurrence of unanticipated events thereafter.
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PART I
Item l. Business.
General
We are an internally managed real estate investment trust, also known as a REIT, that owns, operates, and to a lesser extent, holds interests in joint ventures that own and operate multi-family properties. At December 31, 2025, we (i) wholly-own 21 multi-family properties with an aggregate of 5,420 units and a carrying value of $595.2 million; (ii) have ownership interests, through unconsolidated entities, in ten multi-family properties with an aggregate of 2,891 units for which the carrying value of our net equity investment therein is $46.1 million; (iii) have preferred equity investments in two multi-family properties with a carrying value of $17.7 million; and (iv) own other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $1.6 million. The 31 multi-family properties are located in 11 states; primarily in the Southeast United States and Texas.
Our website can be accessed at www.brtapartments.com, where copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission, or SEC, can be obtained free of charge.
2025 and Recent Developments.
During 2025:
•we acquired, through two unconsolidated joint ventures in two separate and unrelated transactions, an 80% interest in two multi-family properties (referred to collectively as the "2025 Acquisitions") with an aggregate of 364 units for an aggregate purchase price of $59.5 million, including $40.1 million of mortgage debt. The mortgage debt bears a weighted average interest rate of 4.34% and a weighted average remaining term to maturity of 6.6 years.
.
•we refinanced four mortgages maturing in 2025 and 2026 in aggregate principal amount of $58.0 million (the “Prior Mortgages”) and bearing a weighted average fixed interest rate of 4.38% with four replacement mortgages in aggregate principal amount $87.7 million (the "2025 Financings"). The replacement mortgages (the “Replacement Mortgages”) have a weighted average remaining term to maturity of 8.5 years, a weighted average fixed interest rate of 4.97%, and unlike the Prior Mortgages, are interest only until maturity (other than with respect to a mortgage in principal amount of $15.8 million, which is interest only until 2030, one year prior to its maturity). As a result of the 2025 Financings, our aggregate annual principal payments are expected to decrease by $1.2 million (until 2030), and our annual interest expense is expected to increase by $1.8 million, from the corresponding amounts under the Prior Mortgages.
•we sold a cooperative apartment unit in New York, NY for a sales price of approximately $1.0 million and recognized a gain of $755,000.
•we repurchased 321,060 shares of our common stock for an aggregate purchase price of approximately $5.0 million (i.e., an average purchase price of $15.53 per share).
Subsequent to December 31, 2025, we purchased 75,155 shares of our common stock for an aggregate purchase price of approximately $1.1 million (i.e., an average price of $14.82 per share). In March 2026, our board of directors increased the value of the shares that we can repurchase up to $10 million and extended the repurchase program through December 31, 2028.
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Our Multi-Family Properties
Generally, our multi-family properties are garden apartments and, to a lesser extent, mid-rise or town home style properties that provide residents with amenities, such as a clubhouse, swimming pool, laundry facilities and internet access. Residential leases are typically for a one-year term and may require security deposits equal to one month's rent. Substantially all of the units at these properties are leased at market rates. Set forth below is selected information regarding the multi-family properties in which we have an interest (other than the Preferred Equity Investments (described under "Preferred Equity Investments")), as of December 31, 2025; the properties in which we have a less than 100% ownership interest are owned by unconsolidated joint ventures:
___________________________________________
| Our Percentage Ownership (%) (1) | Average Monthly Rental Rate Per Occupied Unit ($) | Average Physical Occupancy (%) | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Property Name and Location | Number of Units | Age | Acquisition Date | 2025 | 2024 | 2023 | 2022 | 2021 | 2025 | 2024 | 2023 | 2022 | 2021 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Silvana Oaks Apartments—N. Charleston, SC | 208 | 15 | 10/4/2012 | 100 | 1,576 | 1,539 | 1,486 | 1,370 | 1,231 | 93.9 | 94.4 | 94.7 | 96.0 | 95.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Avondale Station—Decatur, GA | 212 | 71 | 11/19/2012 | 100 | 1,401 | 1,405 | 1,429 | 1,323 | 1,196 | 92.3 | 89.3 | 91.2 | 96.3 | 97.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Brixworth at Bridge Street—Huntsville, AL | 208 | 40 | 10/18/2013 | 100 | 1,036 | 1,061 | 1,079 | 950 | 879 | 94.4 | 95.1 | 93.9 | 94.3 | 96.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Newbridge Commons—Columbus, OH | 264 | 26 | 11/21/2013 | 100 | 1,193 | 1,157 | 1,104 | 1,031 | 947 | 95.3 | 95.2 | 96.5 | 97.3 | 97.5 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Crossings of Bellevue—Nashville, TN | 300 | 40 | 4/2/2014 | 100 | 1,434 | 1,453 | 1,459 | 1,328 | 1,186 | 97.5 | 95.4 | 95.0 | 96.7 | 97.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Avalon Apartments—Pensacola, FL | 276 | 17 | 12/22/2014 | 100 | 1,449 | 1,498 | 1,518 | 1,438 | 1,250 | 94.2 | 94.8 | 95.0 | 96.3 | 98.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Parkway Grande—San Marcos, TX | 192 | 11 | 9/10/2015 | 100 | 1,170 | 1,280 | 1,310 | 1,209 | 1,042 | 92.8 | 93.7 | 94.8 | 95.9 | 97.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Woodland Trails—LaGrange, GA | 236 | 15 | 11/18/2015 | 100 | 1,342 | 1,378 | 1,330 | 1,193 | 1,059 | 88.9 | 93.2 | 94.9 | 97.5 | 98.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Grove at River Place — Macon, GA | 240 | 37 | 2/1/2016 | 100 | 936 | 951 | 935 | 865 | 792 | 88.4 | 90.3 | 92.9 | 95.9 | 95.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Civic Center I—Southaven, MS | 392 | 23 | 2/29/2016 | 100 | 1,304 | 1,278 | 1,231 | 1,122 | 1,021 | 96.6 | 95.8 | 96.3 | 97.6 | 98.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Civic Center II — Southaven, MS | 384 | 20 | 9/1/2016 | 100 | 1,376 | 1,353 | 1,305 | 1,186 | 1,085 | 95.6 | 94.0 | 95.3 | 97.0 | 98.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Verandas at Alamo Ranch—San Antonio, TX | 288 | 10 | 9/19/2016 | 100 | 1,094 | 1,141 | 1,132 | 1,194 | 1,084 | 90.3 | 90.1 | 86.2 | 92.0 | 91.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Kilburn Crossing — Fredericksburg, VA | 220 | 20 | 11/4/2016 | 100 | 1,781 | 1,700 | 1,623 | 1,593 | 1,465 | 96.9 | 96.7 | 95.8 | 97.4 | 97.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Bells Bluff — West Nashville, TN | 402 | 6 | 6/2/2017 | 100 | 1,776 | 1,700 | 1,781 | 1,749 | 1,421 | 95.2 | 91.6 | 92.4 | 96.9 | 92.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Vanguard Heights — Creve Coeur, MO | 174 | 9 | 4/4/2017 | 100 | 1,683 | 1,684 | 1,711 | 1,598 | 1,583 | 94.0 | 94.9 | 94.9 | 94.2 | 93.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Jackson Square — Tallahassee, FL | 242 | 29 | 8/30/2017 | 100 | 1,483 | 1,432 | 1,375 | 1,270 | 1,131 | 94.8 | 95.1 | 95.6 | 94.3 | 94.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Magnolia Pointe at Madison — Madison, AL | 204 | 34 | 12/7/2017 | 100 | 1,219 | 1,215 | 1,234 | 1,154 | 1,036 | 94.1 | 93.2 | 92.6 | 92.1 | 96.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Woodland Apartments — Boerne, TX (2) | 120 | 18 | 12/14/2017 | 100 | 1,208 | 1,208 | 1,224 | 1,138 | 974 | 96.4 | 96.5 | 96.0 | 97.3 | 87.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Somerset at Trussville — Trussville, AL | 328 | 18 | 5/7/2019 | 100 | 1,300 | 1,259 | 1,224 | 1,145 | 1,078 | 95.0 | 94.9 | 94.7 | 96.7 | 95.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Crestmont at Thornblade — Greenville, SC | 266 | 27 | 10/30/2018 | 100 | 1,402 | 1,393 | 1,346 | 1,232 | 1,104 | 93.5 | 94.8 | 95.7 | 97.8 | 96.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Abbotts Run — Wilmington, NC | 264 | 24 | 2/20/2020 | 100 | 1,284 | 1,286 | 1,251 | 1,110 | 978 | 95.5 | 95.3 | 94.7 | 96.8 | 95.3 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| The Pointe at Lenox Park— Atlanta, GA | 271 | 36 | 8/15/2016 | 74 | 1,497 | 1,529 | 1,507 | 1,405 | 1,275 | 93.0 | 94.7 | 95.8 | 94.1 | 96.0 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Canalside Lofts — Columbia, SC | 374 | 17 | 11/10/2016 | 32 | 1,498 | 1,446 | 1,406 | 1,314 | 1,225 | 93.2 | 94.5 | 93.0 | 95.7 | 93.2 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Canalside Sola — Columbia, SC | 339 | 10 | 11/10/2016 | 46 | 1,718 | 1,684 | 1,577 | 1,474 | 1,361 | 94.4 | 94.8 | 95.1 | 96.6 | 92.6 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Mercer Crossing — Farmers Branch, TX | 509 | 10 | 6/29/2017 | 50 | 1,618 | 1,657 | 1,701 | 1,570 | 1,374 | 94.4 | 91.4 | 93.0 | 94.8 | 95.9 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Gateway Oaks — Forney, TX | 313 | 9 | 9/15/2017 | 50 | 1,334 | 1,400 | 1,394 | 1,281 | 1,181 | 94.6 | 94.3 | 93.1 | 97.8 | 96.7 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Landings of Carrier Parkway — Grand Prairie, TX | 281 | 24 | 5/17/2018 | 50 | 1,291 | 1,320 | 1,367 | 1,288 | 1,149 | 91.5 | 91.9 | 90.2 | 93.2 | 94.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Village at Lakeside — Auburn, AL | 200 | 37 | 8/8/2019 | 80 | 1,265 | 1,167 | 1,073 | 983 | 907 | 96.6 | 97.7 | 97.5 | 97.7 | 97.1 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stono Oaks-Johns Island, SC (3) | 240 | 2 | 1/1/2024 | 17 | 1,948 | 1,597 | — | — | — | 85.0 | 38.4 | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1322 North —Auburn, AL | 214 | 23 | 7/15/2025 | 80 | 1,262 | — | — | — | — | 87.7 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Oaks at Victory —Savannah, GA | 150 | 57 | 9/19/2025 | 80 | 1,375 | — | — | — | — | 88.5 | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | 8,311 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
(1) Distributions to, and profit sharing between, joint venture partners, are determined pursuant to the applicable agreement governing the relationship between the parties and are generally not pro rata to the equity ownership percentage each
joint venture partner has in the applicable joint venture.
(2) Occupancy in 2021 was effected by damage from the February ice storm in Texas (the "Texas Storm").
(3) This property was in lease up until September 2025.
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The following table sets forth certain information, presented by state, related to our consolidated properties as of December 31, 2025 (dollars in thousands):
State | Number of Properties | Number of Units | 2025 Rental and Other Revenue | % of 2025 Rental and Other Revenue | ||||||||||||||||||||||
| Tennessee | 2 | 702 | $ | 14,341 | 15 | % | ||||||||||||||||||||
| Mississippi | 2 | 776 | 12,956 | 14 | % | |||||||||||||||||||||
| Alabama | 3 | 740 | 11,404 | 12 | % | |||||||||||||||||||||
| Georgia | 3 | 688 | 10,298 | 11 | % | |||||||||||||||||||||
| Florida | 2 | 518 | 9,540 | 10 | % | |||||||||||||||||||||
| Texas | 3 | 600 | 9,002 | 9 | % | |||||||||||||||||||||
| South Carolina | 2 | 474 | 8,855 | 9 | % | |||||||||||||||||||||
| Virginia | 1 | 220 | 5,127 | 6 | % | |||||||||||||||||||||
| North Carolina | 1 | 264 | 4,286 | 4 | % | |||||||||||||||||||||
| Ohio | 1 | 264 | 4,010 | 4 | % | |||||||||||||||||||||
| Missouri | 1 | 174 | 3,746 | 4 | % | |||||||||||||||||||||
| Other (1) | — | — | 1,700 | 2 | % | |||||||||||||||||||||
| Total | 21 | 5,420 | $ | 95,265 | 100 | % | ||||||||||||||||||||
__________________ _________
(1) Includes non-multi-family revenues primarily from a commercial property located in Yonkers, NY.
The following table sets forth certain information, presented by state, related to properties owned by unconsolidated joint ventures at of December 31, 2025 (dollars in thousands):
State | Number of Properties | Number of Units | 2025 JV Rental and Other Revenues (1) | Percent of 2025 JV Rental and Other Revenues (1) | ||||||||||||||||||||||
| Texas | 3 | 1,103 | $ | 20,514 | 41 | % | ||||||||||||||||||||
| South Carolina | 3 | 953 | 18,959 | 38 | % | |||||||||||||||||||||
| Georgia | 2 | 421 | 5,671 | 11 | % | |||||||||||||||||||||
| Alabama | 2 | 414 | 4,747 | 10 | % | |||||||||||||||||||||
| Total | 10 | 2,891 | $ | 49,891 | 100 | % | ||||||||||||||||||||
___________________________
(1) The term "JV Rental and other Revenues" refers to the revenues generated at multi-family properties owned by unconsolidated joint ventures.
Our Acquisition Process and Underwriting Criteria
We identify multi-family property acquisition opportunities primarily through relationships developed with, among others, current or former joint venture partners, real estate investors and brokers. We will acquire multi-family properties either with joint venture partners (and especially with partner’s experienced in the target market), which allows us to benefit from such partner’s experience, or directly (i.e., without a joint venture partner), which allows for the possibility for greater returns on our investment.
We emphasize acquiring the following types of multi-family properties:
•Class B or better properties with strong and stable cash flows in markets where we believe there exists opportunity for rental growth and further value creation;
•Class B or better properties that offer significant potential for capital appreciation through repositioning or rehabilitating the asset to drive rental growth; and
•properties available at opportunistic prices providing an opportunity for a significant appreciation in value.
We seek properties that provide stable risk adjusted total returns (i.e., operating income plus capital appreciation), including value-add opportunities (i.e., properties that can be repositioned or improved allowing us to generate higher rents or improved occupancy) and emphasize acquiring properties in the Southeast United States and Texas. We have been opportunistic in pursuing multi-family property acquisitions and have not mandated any specific acquisition criteria, although
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we take the following, among other things, into account in evaluating an acquisition opportunity: location, demographics, size of the target market, property quality, availability and terms and conditions of long-term fixed-rate mortgage debt, potential for capital appreciation or recurring income, extent and nature of contemplated capital improvements and property age.
A key consideration in our acquisition process is the availability of mortgage debt to finance the acquisition (or the ability to assume the mortgage debt on the property) and the terms and conditions (e.g., interest rate, amortization and maturity) of such debt. Generally, approximately 35% to 50% of the purchase price has been paid in cash (all or a portion of our share of which may be funded by borrowing from our credit facility) and the balance is financed with mortgage debt. We believe that the use of leverage allows us the ability to earn a greater return on our investment than we would otherwise earn. Generally, the mortgage debt obtained in connection with an acquisition matures in five to ten years, is interest only for one to five years, and provides for a fixed interest rate and for the amortization of the principal of such debt over 30 years.
Potential acquisitions are reviewed and approved by our investment committee. Approval requires the assent of not less than five of the nine members of this committee, most of whom are our executive officers. Board of director approval is required for any single multi-family property acquisition in which our equity investment exceeds $40 million.
From time-to-time we have pursued development opportunities with joint venture partners when we believe the potential higher returns justify the additional risks. The factors considered in pursuing these opportunities generally include the factors considered in evaluating a standard acquisition opportunity, and we place additional emphasis on our joint venture partner's ability to execute a development project. We do not anticipate development properties will constitute a significant part of our portfolio.
It is our policy, and the policy of our affiliated entities, that any investment opportunity presented to us or to an affiliated entity that involves the acquisition of a multi-family property with more than 100 units, will first be offered to us and may not be acquired by our affiliated entities unless we decline the opportunity. Gould Investors has purchased and will continue to purchase multi-family properties in the Southeast United States. We have not been interested in acquiring any of the properties purchased by Gould Investors.
Property and Joint Venture Dispositions
We monitor our portfolio to identify properties that should be sold. Factors considered in deciding whether to sell a property generally include our evaluation of the current market price of such property compared to its projected economics (including the age of the property and anticipated maintenance costs), changes in the factors considered by us in acquiring such property, the ability to reinvest net proceeds from a sale into a more favorable acquisition opportunity or other productive purpose, our ability to refinance the debt maturing on such property on acceptable terms, our liquidity requirements and, with respect to properties that are owned by unconsolidated joint ventures, our partners' desires with respect thereto. If our partners deem it in their own economic interest to dispose of a property at an earlier date than we would otherwise dispose of a property, we may accommodate such request and agree to sell the property to a third party or attempt to purchase our partner's interest.
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Joint Venture Arrangements
The arrangements with our multi-family property joint venture partners are deal-specific and vary from transaction-to- transaction. Generally, these arrangements provide for us and our joint venture partner to receive net cash flow available for distribution and/or profits in the following order of priority: (i) a preferred return of 8% to 10% on each party's unreturned capital contributions, until such preferred return has been paid in full; and (ii) the return in full of each party's capital contribution (and together with the preferred return, the "Mandatory Return"). Thereafter, distributions to, and profit sharing between, joint venture partners, is determined pursuant to the applicable agreement governing the relationship between the parties. The allocation and distribution of cash and profits to BRT after the Mandatory Return is generally less than that implied by BRT's percentage equity interest in the venture/property as a result of allocation/distribution provisions of our joint venture operating agreements.
Although as noted above each joint venture operating agreement contains different terms, such agreements may limit our right to vote and receive distributions. Such agreements generally provide for a buy-sell procedure under specified circumstances, including, (i) if the partners are unable to agree on major decisions or (ii) upon a change in control of our subsidiary owning the interest in the joint venture. These arrangements may also allow us, and in some cases, our joint venture partner, to force the sale of the property after it has been owned by the joint venture for a specified period (e.g., four-to-five years after the acquisition).
Preferred Equity Investments
During the quarter ended December 31, 2024, we invested (the "Preferred Equity Investments"), in two separate and unrelated transactions, an aggregate of $18.3 million in joint ventures that purchased a 204-unit multi-family property in Wilmington, NC (the “Wilmington Investment”) and a 184-unit multi-family property in Kennesaw, GA (the “Kennesaw Investment”). These investments are unsecured and are subordinate (including the payment of the returns thereon), to an aggregate of $51.0 million of mortgage debt bearing a weighted average interest rate of 4.81% and a weighted average remaining term to maturity of 4.8 years. Generally, these investments provide for an annual return to us of 13% (i) of which 6.0% to 6.5% ($1.2 million is payable monthly to the extent of available cash-flow (the “Current Return”) and (ii) with the balance of 6.5% to 7% of the amount invested in the applicable joint venture (the “Hurdle Return”), also to be paid from remaining cash flow after the payments to the sponsor of specified fees and investment returns. We do not anticipate receiving the Hurdle Return with respect to the Kennesaw Investment until June 2029 and the Wilmington Investment until November 2031, if at all. Our maximum exposure to loss with respect to these investments is limited to our invested capital.
For financial statement reporting purposes, these investments are treated as loans and are included in "Loan receivables, net of deferred loan fees and allowance for credit loss" on our consolidated balance sheet at December 31, 2025. See notes 1, 5 and 6 to our consolidated financial statements for further information about these investments.
In evaluating whether to pursue preferred equity investments, we generally consider the same factors used in evaluating the purchase of a multi-family property through a joint venture partner.
Property Management
The day-to-day management of our multi-family properties is overseen by property management companies operating in the market in which the property is located. (Four of our seven joint venture properties are managed by management companies that are owned by a joint venture partner or its affiliates). The property management companies that manage our properties are paid fees ranging from 2% to 4% of revenues generated by the applicable property. Generally, we can terminate these management companies upon specified notice or for cause, subject to the approval of the mortgage lender and, in some cases, our joint venture partner. We believe satisfactory replacements for property managers are available, if required.
Mortgage Debt and Other Real Estate Financings
In acquiring properties, we use fixed rate mortgage debt to pay from 50% to 65% of the purchase price. Although fixed rate mortgage debt is typically more expensive and less flexible than variable rate mortgage debt (e.g., the interest rate is higher at origination and there are typically high prepayment penalties, yield maintenance payments and/or defeasance penalties when refinancing the debt prior to maturity), we prefer using such debt as it caps our exposure to fluctuating interest rates. We also from time-to-time obtain supplemental mortgage debt on an acquired property which, among other things, allows us to generate additional cash resulting from the appreciation of the value of the property. As of December 31, 2025, 19 of our 21 wholly-owned properties are subject to fixed-rate mortgage debt; our interests in the two remaining wholly-owned properties have been pledged to our credit facility lender. At December 31, 2025, the weighted average annual interest rate on these mortgages was 4.22% and the weighted average remaining term to maturity was 6.3 years.
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Our unconsolidated multi-family properties are subject to fixed-rate mortgage debt, other than Stono Oaks-Johns Island, SC, which is subject to a variable-rate construction loan. As of December 31, 2025, the weighted average annual interest rate on all of the unconsolidated debt is 4.21% and the weighted average remaining term to maturity is 3.3 years.
The following table sets forth scheduled principal (including amortization) mortgage payments due for all of our multi-family properties as of December 31, 2025 (dollars in thousands):
| YEAR | Principal Payments Due for Consolidated Properties (1) | Principal Payments Due for Unconsolidated Joint Ventures (2) | Total Principal Payments Due | ||||||||||||||||||||
| 2026 | $ | 32,170 | $ | 64,492 | $ | 96,662 | |||||||||||||||||
| 2027 | 46,162 | 26,329 | 72,491 | ||||||||||||||||||||
| 2028 | 40,697 | 69,074 | 109,771 | ||||||||||||||||||||
| 2029 | 56,399 | 1,783 | 58,182 | ||||||||||||||||||||
| 2030 | 22,447 | 1,847 | 24,294 | ||||||||||||||||||||
| Thereafter | 278,126 | 125,009 | 403,135 | ||||||||||||||||||||
| Total | $ | 476,001 | $ | 288,534 | $ | 764,535 | |||||||||||||||||
(1) Does not give effect to deferred loan fees and mortgage fair value adjustments of $304 (see note 9 to the consolidated financial statements).
(2) Includes all of the mortgage debt on properties owned by such joint venture and excludes the effect of $2,048 mortgage discounts relating to our 2025 acquisition of Oaks at Victory.
The mortgage debt associated with our multi-family properties, including the mortgage debt at our significant subsidiaries, generally contain covenants, including covenants that require, (i) the guarantor of the mortgage debt to maintain a certain level of net worth and liquid assets or (ii) in connection with the sale or other transfer of the property, the mortgage debt to be paid off (or assumed by the buyer with the consent of the mortgage lender). The mortgage debt is generally non-recourse to us and the entity that owns the property, subject to standard carve-outs. We, at the parent entity level (i.e., BRT Apartments Corp.), are the standard carve-out guarantor with respect to the mortgage debt of almost all of our wholly-owned properties. At December 31, 2025, the principal amount of mortgage debt outstanding with respect to the properties at which we are the carve-out guarantor is approximately $468 million.
Corporate Level Financing Arrangements
See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations - Corporate Level Financing Arrangements" for information about our corporate level financing arrangements.
Insurance
Each of the multi-family properties is covered by all risk property insurance generally covering 100% of the replacement cost for each building, and business interruption and rental loss insurance (covering up to twelve months of loss). On a case-by-case basis, based on an assessment of the likelihood of the risk, availability of insurance, cost of insurance and in accordance with standard market practice, we obtain earthquake, windstorm, flood, terrorism and boiler and machinery insurance. We carry commercial general liability insurance and umbrella policies for each of our properties which generally provide no less than $7 million to $25 million of coverage per incident. We request certain extension of coverage, valuation clauses, and deductibles in accordance with standard market practice and availability.
Although we may carry insurance for potential losses associated with our multi-family properties, we may still incur losses due to uninsured risks, deductibles, co-payments or losses in excess of applicable insurance coverage and those losses may be material. In addition, insurance coverage at our unconsolidated properties is provided through blanket policies obtained by our joint venture partners or the property managers for such property. A consequence of obtaining insurance coverage in this manner is that losses on properties in which we have no ownership interest could reduce significantly or eliminate the coverage available on one or more properties in which we have an interest.
Our Other Real Estate Assets and Activities
In addition to our multi-family properties and Preferred Equity Investments, we own assets, and in particular, real estate assets, with an aggregate carrying value of $1.6 million at December 31, 2025. These assets include cooperative apartment units located in Lawrence and Washington Heights, NY, a leasehold position with two commercial tenants at a property in Yonkers, NY, and a nominal profit participation in an entity that owns several multi-family properties in Newark, NJ. None of these
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assets generate significant net income or revenue other than (i) the leasehold interest in Yonkers, NY which generated $1.5 million of rental income and $1.3 million of cash flow from operations in 2025 before giving effect to the non-controlling interest, and (ii) from the sale, from time-to-time, of some of these legacy assets (in particular, the cooperative apartment units in Washington Heights, NY). See notes 2 and 3 to our consolidated financial statements.
Competition
We compete to acquire multi-family properties with publicly traded and non-publicly traded real estate investment trusts, pension and investment funds, real estate developers, private real estate investors and other owners and operators of such properties. Competition to acquire such properties, among other things, is based on price, the ability to secure financing on a timely basis, an extensive network able to introduce us to appropriate acquisition opportunities and the ability to absorb certain risks that we may be unwilling to absorb (and that larger competitors may be willing to absorb).
We compete for tenants at our multi-family properties—such competition depends upon various factors, including alternative housing options available in the applicable sub-market, rent, amenities provided and proximity to employment and quality of life venues.
Many of our competitors possess greater financial and other resources than we possess. To the extent that a potential joint venture partner introduces us to a multi-family acquisition opportunity, we compete with other sources of equity capital to participate in such joint venture based on the financial returns we are willing to offer such potential partner and the other terms and conditions of such arrangement.
Government Regulation
Multi-family properties are subject to various laws, ordinances and regulations, including regulations relating to common areas, such as swimming pools, activity centers, and recreational facilities. We believe that each of our properties has the necessary permits and approvals to operate its business.
Americans with Disabilities Act
Our properties must comply with applicable provisions of the Americans with Disabilities Act, which we refer to as the "ADA". Among other things, the ADA may require removal of structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. We believe that our properties are in substantial compliance with the ADA and that we will not be required to make substantial capital expenditures to address the requirements of the ADA. However, noncompliance with the ADA could result in imposition of fines or an award of damages to private litigants. Our obligations under the ADA are ongoing and we will continue to assess our properties and make alterations as appropriate.
Fair Housing Act
The Fair Housing Act, which we refer to as the "FHA", its state law counterparts and the regulations promulgated by the U.S. Department of Housing and Urban Development and various state agencies, prohibit discrimination in housing on the basis of race or color, national origin, religion, sex, familial status or handicap (disability) and, in some jurisdictions, financial capability or other bases. Our failure to comply with these laws could result in litigation, fines, penalties or other adverse claims, or could result in limitations or restrictions on our ability to operate, any of which could materially and adversely affect us. We believe that we operate our properties in substantial compliance with the FHA.
Environmental Matters
We are subject to regulation at the federal, state and municipal levels and are exposed to potential liability should our properties or actions result in damage to the environment or to other persons or properties. These conditions include the presence or growth of mold, potential leakage of underground storage tanks, breakage or leaks from sewer lines and risks pertaining to waste handling. The potential costs of compliance, property damage restoration and other costs for which we could be liable or which could occur without regard to our fault or knowledge, are unknown and could potentially be material. There are no material claims made or pending against us with regard to environmental damage, nor are we aware of any potential environmental hazards related to any of our properties which could reasonably be expected to result in a material loss.
Human Capital Resources
As of December 31, 2025, we had 12 salaried employees, including one individual who devotes approximately 50% of his time to our activities, one individual who works on a part-time basis, and two individuals with respect to whom a portion of their salary is allocated to affiliated entities pursuant to the shared services agreement described below. In addition, part-time personnel (including part-time executive officers), perform certain executive, administrative, legal, accounting and clerical
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functions for us. The services of the part-time personnel as well as the provision to us of certain facilities and other resources are supplied pursuant to a shared services agreement between us and several affiliated entities, including Gould Investors. The expenses for the shared personnel, facilities and resources is allocated to us and the other affiliated entities in accordance with the shared services agreement. The allocation is based on the estimated time devoted by such part-time personnel to the affairs of the parties to this agreement.
We also retain several related parties, among other things, to analyze and approve multi-family property acquisitions and dispositions, develop and maintain banking and financing relationships and provide investment advice and long-term planning (the “Services”). The aggregate fees to be paid in 2026, and paid in 2025 and 2024, for the Services, are $1.8 million, $1.7 million and $1.6 million, respectively. See note 12 to our consolidated financial statements for further information regarding the shared services agreement and the Services.
We believe that we provide a competitive benefits program, either directly or through the shared services agreement, to help meet the needs of our employees. In addition to salaries, the program includes annual cash bonuses, stock awards, pension plan contributions, healthcare and insurance benefits, flexible spending accounts, paid-time off and family leave. Employees are provided regular opportunities to participate in professional development programs, and we work with our employees to help them meet their personal and family needs. Most of our employees have a long tenure with us, which we believe is indicative of their satisfaction with our work environment.
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Executive Officers of Registrant
Set forth below is a list of our executive officers whose terms, except as otherwise indicated, will expire at our 2026 annual Board of Directors' meeting (the business history of officers who are also directors will be provided in our proxy statement to be filed not later than April 30, 2026):
__________________________________________________________________________
| Name | Age | Office | ||||||||||||
Israel Rosenzweig (1) | 78 | Chairman of the Board of Directors | ||||||||||||
Jeffrey A. Gould (2) | 60 | President, Chief Executive Officer and Director | ||||||||||||
| George E. Zweier | 62 | Vice President and Chief Financial Officer | ||||||||||||
Matthew J. Gould (2) | 66 | Senior Vice President and Director | ||||||||||||
David W. Kalish (3) | 78 | Senior Vice President - Finance | ||||||||||||
| Mark H. Lundy | 63 | Senior Vice President and Counsel | ||||||||||||
Steven Rosenzweig (1) | 50 | Senior Vice President - Legal | ||||||||||||
Isaac Kalish (3) | 50 | Chief Financial Officer, Senior Vice President and Treasurer | ||||||||||||
| Matthew Gibbons | 41 | Chief Accounting Officer | ||||||||||||
Ryan Gould (4) | 26 | Vice President | ||||||||||||
(1) Steven Rosenzweig is the son of Israel Rosenzweig.
(2) Jeffrey A. Gould and Matthew J. Gould are sons of Fredric H. Gould, a director.
(3) Isaac Kalish is the son of David W. Kalish.
(4) Ryan Gould is the son of Jeffrey A. Gould
George E. Zweier, a certified public accountant, has served as our Chief Financial Officer and a Vice President since 1998. He resigned from the Company effective February 27, 2026.
David W. Kalish, a certified public accountant, served as our Vice President and Chief Financial Officer from 1990 to 1998, and as our Senior Vice President, Finance since 1998. From 1990 to 2023, he served as Chief Financial Officer of One Liberty Properties, Inc. and since 1990 he has served as Chief Financial Officer of Georgetown.
Mark H. Lundy has been our Counsel and/or General Counsel since 2007, Senior Vice President since 2005 and Vice President from 1993 to 2005. He served as a Vice President of One Liberty Properties from 2000 to 2006 and has been its Assistant Secretary/Secretary and Senior Vice President since June 1993 and 2006, respectively. Since 2013, Mr. Lundy has served as President and Chief Operating Officer, and from 1990 through 2013 served as a Vice President/Senior Vice President, of Georgetown. He is licensed to practice law in New York and Washington, D.C.
Steven Rosenzweig has been associated with us since 2013, served as a Vice President from 2015 through 2019 and as Senior Vice President - Legal since 2019. He has served as Vice President of Georgetown since January 2016. Mr. Rosenzweig is licensed to practice law in New York.
Isaac Kalish, a certified public accountant, has been associated with us since 2004, served as Assistant Treasurer from 2007 through 2014, as Vice President and Treasurer since 2013 and 2014, respectively, as Senior Vice President since 2022, and as our Chief Financial Officer upon George Zweier's resignation. He served as Vice President of One Liberty Properties from 2013 through 2022, as its Senior Vice President since 2022 and as its Chief Financial Officer since 2023. Mr. Kalish served as Assistant Treasurer of Georgetown from 2012 through 2013, and as its Treasurer since 2013.
Matthew Gibbons, a certified public accountant, has served as our Chief Accounting Officer since September 2025. He served as a Director of Audit and Assurance at BDO US LLP from 2015 to 2023 (including the period at which BDO served as our independent auditor) and at Baker Tilly US LLP from January 2023 until the commencement of his employment with us in July 2024 as Chief Accounting Officer.
Ryan Gould commenced employment with the Company in 2022 after receiving an M.S. in Real Estate Finance and Investment from the NYU Schack Institute of Real Estate. He has served as a Vice President since 2025.
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Item 1B. Unresolved Staff Comments.
Not applicable.
Item 1C. Cybersecurity
Our information technology, communication networks, enterprise applications, accounting and financial reporting platforms and related systems are integral to our operations. We use these systems, among others, for internal communications, for accounting and record-keeping functions, and for many other key aspects of our business. Our operations rely on securing, collecting, storing, transmitting, and processing of proprietary and confidential data.
Our internal auditor performs certain procedures to test the integrity and functionality of our IT systems (which includes a high-level review of our cybersecurity defenses). In addition, we have retained a third-party cybersecurity consulting firm that (i) advises us as to cybersecurity matters (including prevailing cybersecurity threats), (ii) performs, on a periodic basis, assessments of our cybersecurity defenses and (iii) on a continuous basis, monitors our IT systems for cybersecurity threats and intrusions.
At the Board level, our cybersecurity practices are overseen by the audit committee as part of its oversight of our risk management activities. The committee meets periodically with, among others, our internal auditor and network administrator to review and discuss cybersecurity matters.
Item 2. Properties.
Our principal executive office is located at 60 Cutter Mill Road, Suite 303, Great Neck, NY. We believe that this facility is satisfactory for our current and projected needs.
See "Item 1—Business" for additional information regarding our properties.
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Item 1A. Risk Factors.
Set forth below is a discussion of certain risks affecting our business. The categorization of risks set forth below is meant to help you better understand the risks facing our business and is not intended to limit your consideration of the possible effects of these risks to the listed categories. Any adverse effects arising from the realization of any of the risks discussed, including our financial condition and results of operation, may, and likely will, adversely affect many aspects of our business.
Risks Related to Real Estate Investments and Our Operations
Unfavorable market and economic conditions could adversely affect rental revenues, occupancy levels and the value of our properties.
General economic conditions in the U.S. have fluctuated significantly in recent quarters. Unfavorable market and economic conditions significantly affect our occupancy levels, our rental rates and collections, the value of our properties and our ability to acquire or dispose of multi-family properties on favorable terms. Our ability to lease units at our multi-family properties at favorable rates is adversely affected by the increase in supply in the multi-family and other rental markets and other housing alternatives, and is dependent upon the overall level in the economy, which may continue to be adversely affected by, among other things, inflationary conditions, job losses and unemployment levels, personal debt levels, a downturn in the housing market, stock market volatility, and uncertainty about the future. Some of our major expenses generally do not decline when related rents decline. We would expect that declines in our occupancy levels, rental revenues and/or the values of our multi-family properties would cause us to have less cash available to make payments on our debt and to pay dividends, which could adversely affect our financial condition or the market value of our securities.
We may be unable to compete to acquire, finance or dispose of our properties or to lease rental units.
We compete with many third parties including other REITs, specialty finance companies, public and private investors, investment and pension funds, in acquiring, obtaining financing for, and disposing of multi-family properties. Many of these competitors have substantially greater financial and other resources than we do. Larger and more established competitors enjoy significant competitive advantages that result from, among other things, enhanced operating efficiencies and more extensive networks providing greater and more favorable access to capital, financing and tax credit allocations and more favorable acquisition opportunities.
In attracting and retaining residents to occupy our multi-family properties, we compete with numerous other housing providers. Our multi-family properties compete directly with other rental apartments, as well as condominiums and single-family homes that are available for rent or purchase in the markets in which our properties are located. Principal factors of competition include rent or price charged, attractiveness of the location of multi-family properties, and the quality and breadth of services. The number of competitive properties relative to demand in a particular area has a material effect on our ability to lease our properties, on the rents we charge and our occupancy levels.
Increasing real estate taxes, utilities and insurance premiums may negatively impact operating results
The cost of real estate taxes, utilities and insurance is a significant component of real estate operating expense. These expenses are subject to significant increases and fluctuations, including the impact of inflation, which we may be unable to control. For example, our real estate taxes have increased and will continue to increase as our properties are reassessed by taxing authorities and as property tax rates increase. Further, our real estate taxes have fluctuated and may not be comparable year-over-year because of, among other things, (i) the timing difference as to when we accrue real estate taxes and the results of any tax appeals with respect to such accrued taxes and (ii) determinations, over which we have no control, by governmental authorities to increase tax rates, assessments or procedures. In addition, our share of the insurance premiums at joint venture properties is determined by our joint venture partner at such properties. If the costs associated with real estate taxes, utilities and insurance premiums should rise, without being offset by a corresponding increase in revenues, our results of operations could be negatively impacted, and our ability to make payments on our debt and to make distributions would be adversely affected.
Most of our multi-family properties are located in the Southeast and Texas which makes us susceptible to adverse developments in such markets.
The operating performance and value of our multi-family properties is impacted by the economic environment and other conditions of the specific markets in which our properties are concentrated. As of December 31, 2025: (i) our wholly-owned properties generated approximately 75% and 9% of our 2025 revenues from properties located in the Southeast and Texas, respectively, and (ii) the properties owned by unconsolidated joint ventures at December 31, 2025, generated 59% and 41% of our 2025 JV Rental and Other Revenues at properties located in the Southeast and Texas, respectively. Accordingly, adverse developments in such markets, including economic developments, pandemics, or natural or man-made disasters, would adversely impact the cash flow and value of these properties. The concentration of our properties in the Southeast United States
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and Texas exposes us to risks of adverse developments which are greater than the risks of owning properties with a more geographically diverse portfolio.
The failure of property management companies to properly manage our properties could adversely impact our results of operations.
We rely on property management companies to manage our properties. These management companies are responsible for, among other things, leasing and marketing rental units, selecting tenants (including an evaluation of the creditworthiness of tenants), collecting rent, paying operating expenses and maintaining our properties. If these property management companies do not perform their duties properly, the occupancy and rental rates at such properties may decline and the expenses at such properties may increase. At December 31, 2025, one property manager manages 11 properties, a second property manager manages eight properties, and five other property managers manage three or fewer properties. Three properties are managed by a management company owned by or affiliated with a joint venture partner. The loss of our property managers, and in particular, the managers that manage multiple properties, could result in a decrease in occupancy rates, rental rates or both or an increase in expenses. Further, except for our multi-family properties covered by our master insurance program, property managers are also generally responsible for obtaining insurance coverage with respect to the properties they manage, which coverage is often obtained pursuant to blanket policies covering many properties in which we have no interest. Losses at properties managed by our property managers but in which we have no interest could reduce significantly the insurance coverage available at our properties managed by these property managers. It may be difficult to terminate a non-performing management company, particularly a management company owned or affiliated with a joint venture, because such termination may require the approval of the mortgagee, our joint venture partner or both. If we are unable to terminate an underperforming property manager on a timely basis, our occupancy and rental rates may decrease and our expenses may increase.
Risks involved in conducting real estate activity through joint ventures.
Ten of our multi-family properties are owned through joint ventures with other persons or entities. Joint venture investments involve risks not otherwise present when acquiring real estate directly, including the following:
•our joint venture partners may have economic or business interests or objectives which are or become inconsistent with our business interests or objectives, including differing objectives relating to the sale or refinancing of properties held by the joint venture or the timing of the termination or liquidation of the joint venture;
•the more successful a joint venture project, the more likely that profits or distributions generated above a negotiated threshold will be allocated disproportionately in favor of our joint venture partner at a rate greater than that implied by our partner's equity interest in the venture;
•several of our joint venture partners have other competing real estate interests in the markets in which our properties are located that could influence such partners to take actions favoring their properties to the detriment of the jointly owned properties;
•our joint venture partners obtain blanket property casualty and business interruption insurance insuring properties we own jointly and other properties in which we have no ownership interest and as a result, claims or losses with respect to properties owned by our joint venture partners but in which we have no interest could significantly reduce or eliminate the insurance available to properties in which we have an interest;
•our joint venture partner might become bankrupt, insolvent or otherwise refuse or be unable to meet their obligations to us or the venture (including their obligation to make capital contributions or property distributions when due);
•we may incur liabilities as a result of action taken by our joint venture partner;
•our joint venture partner may not perform properly its property oversight responsibilities;
•our joint venture partner may be in a position to take action or withhold consent contrary to our instructions or requests, including actions that may make it more difficult to maintain our qualification as a REIT;
•our joint venture partner might engage in unlawful or fraudulent conduct with respect to our jointly owned properties or other properties in which they have an ownership interest;
•changes in personnel managing our joint venture partners have resulted in greater difficulty in working with the new personnel;
•our joint venture partner may trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner's interest, at a time when we otherwise would not have initiated such a transaction;
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•disputes between us and our joint venture partners may result in litigation or arbitration that would increase our expenses and divert management's attention from operating our business; and
•disagreements with our joint venture partners with respect to property management (including with respect to whether a property should be sold, refinanced, or improved) could result in an impasse resulting in the inability to operate the property effectively.
Joint venture partners have acted without our authorization (e.g., a partner modified a mortgage term without our consent). We also have had, and expect to continue to have, disagreements with joint venture partners over various issues including, among others, as to whether, and the extent to which, value add programs should be implemented at a property, whether a mortgage debt on a property should be refinanced and the terms and conditions of such refinancing, and, because our joint venture structure may incentivize our joint venture partner to sell the property sooner than we would otherwise desire, the timing and terms and conditions of property sales.
Our operating results are significantly influenced by demand for multi-family properties generally, and a decrease in such demand will likely have a greater adverse effect on our revenues than if we owned a more diversified real estate portfolio.
Our current portfolio is focused on multi-family properties, and we expect that going forward we will continue to focus on the acquisition (including alternative investments such as bridge loans and preferred equity), disposition and operation of such properties. As a result, we are subject to risks inherent in investments in a single industry, and a decrease in the demand for multi-family properties would likely have a greater adverse effect on our rental revenues than if we owned a more diversified real estate portfolio.
Our operating results and assets may be negatively affected if our insurance coverage is insufficient to compensate us for casualty events occurring at our properties.
Our multi-family properties, including the properties owned by the joint ventures in which we are members, carry all risk property insurance covering the property and improvements thereto for the cost of replacement in the event of a casualty. Though we maintain insurance coverage, such coverage may be insufficient to compensate us for losses sustained as a result of a casualty because, among other things:
•the amount of insurance coverage maintained for a property may be insufficient to pay the full replacement cost following a casualty event;
• the rent loss coverage under a policy may not extend for the full period of time that a tenant or tenants may be entitled to a rent abatement that is a result of, or that may be required to complete restoration following, a casualty event;
•certain types of losses, such as those arising from earthquakes, floods, hurricanes and terrorist attacks, and losses arising out of claims for exemplary or punitive damages, may be uninsurable or may not be economically feasible to insure;
•changes in zoning, building codes and ordinances, environmental considerations and other factors may make it impossible or impracticable, to use insurance proceeds to replace damaged or destroyed improvements at a property;
•insurance coverage is part of blanket insurance policies in which losses on properties in which we have no ownership interest could reduce significantly or eliminate the coverage available on our properties; and
•the deductibles applicable to one or more buildings at a property may be greater than the losses sustained at such buildings.
If our insurance coverage is insufficient to cover losses sustained as a result of one or more casualty events, our operating results and the value of our portfolio will be adversely affected.
We may be adversely effected if we are unable to maintain a satisfactory working relationship with any one or more of our joint venture partners.
Two of our joint venture partners or their affiliates own an aggregate of six of the eight properties we own through unconsolidated joint ventures. This concentration of ownership of properties with a limited number of joint venture partners exposes us to risks of adverse developments, and in particular, disputes or disagreements with such joint venture partners, which are greater than the risks of owning properties with a more diverse group of joint venture partners.
Short-term leases expose us to the effects of declining market rents and we may be unable to renew leases or relet units as leases expire.
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Our multi-family leases are generally for a term of one year or less. Accordingly, our revenues are impacted by declines in market rents more quickly than if our leases were for longer terms. If we are unable to promptly renew the leases or relet the units, or if the rental rates upon renewal or reletting are significantly lower than the previous rates, our financial condition and results of operations may be adversely affected.
Risks Related to Our Financing Activities, Indebtedness and Capital Resources
If we are unable to refinance our mortgage debt at maturity on acceptable terms, we may be forced to sell properties on disadvantageous terms.
The following table sets forth, as of December 31, 2025, the principal balance of the mortgage payments due at maturity on our wholly-owned and unconsolidated joint venture properties and the weighted average interest rate thereon (dollars in thousands):
| Consolidated Properties | Unconsolidated Properties | |||||||||||||||||||||||||
| Year | Principal Balances Due at Maturity | Weighed Average Interest Rate | Principal Balances Due at Maturity (1) | Weighed Average Interest Rate | ||||||||||||||||||||||
| 2026 | $ | 27,767 | 3.73 | % | $ | 60,910 | 5.18 | % | ||||||||||||||||||
| 2027 | 42,795 | 3.96 | % | 23,108 | 4.15 | % | ||||||||||||||||||||
| 2028 | 37,951 | 4.47 | % | 67,631 | 4.26 | % | ||||||||||||||||||||
| 2029 | 54,390 | 3.94 | % | — | — | |||||||||||||||||||||
| 2030 | 21,265 | 4.71 | % | — | — | |||||||||||||||||||||
| 2031 and thereafter | 259,605 | 4.34 | % | 124,834 | 3.75 | % | ||||||||||||||||||||
| Total | $ | 443,773 | $ | 276,483 | ||||||||||||||||||||||
(1) Includes our joint venture partner's "share" of such debt.
We have a significant amount of mortgage debt maturing over the next several years. Our operating cash flow and funds available under our credit facility will be insufficient to discharge all of this debt when due. Accordingly, we will seek to refinance this debt prior to its maturity. Because current interest rates are significantly higher than the interest rates on the maturing mortgage debt (or if our access to credit markets is reduced due, among other things, to more stringent lending requirements due to our level of leverage), we may be unable to refinance this mortgage debt on acceptable terms or at all. If we are unsuccessful in refinancing such debt, or if the terms of the refinanced debt are less favorable than the current debt, we may be forced to (i) refinance such mortgage debt on unfavorable terms or (ii) dispose of properties on unfavorable terms or convey properties secured by such mortgages to the mortgagees, which would, in each case, reduce our income and impair the value of our portfolio.
Our acquisition, development and value-add activities are limited by the funds available to us.
Our ability to acquire additional multi-family properties, develop new properties and improve the properties in our portfolio is limited by the funds available to us (including funds available pursuant to our credit facility) and our ability to obtain, on acceptable terms, mortgage debt. At February 27, 2026, we had approximately $24.8 million of cash and cash equivalents (of which a significant portion is required for day-to-day operating expenses at the property level) and up to $40 million available to us under our credit facility. Our multi-family acquisition and value-add activities are constrained by funds available to us which will limit growth in our revenues and operating results.
Our failure to comply with our obligations under our debt instruments may reduce our stockholders’ equity, and adversely affect our net income and ability to pay dividends.
Several of our debt instruments include covenants that require us to maintain certain financial ratios, including various coverage ratios, and comply with other requirements. Failure to meet interest and other payment obligations under our debt instruments or a breach by us of the covenants to comply with certain financial ratios would place us in non-compliance under such instruments. If the lender called a default and required us to repay the full amount outstanding under such instrument, we might be required to rapidly dispose of our properties, including properties securing such debt instruments, which could have an adverse impact on the amounts we receive on such disposition. From time to time we have failed to comply with certain debt
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covenants. If we are unable to satisfy the covenants of our debt obligations, the lender could exercise remedies available to it under the applicable debt instrument and as otherwise provided by law, including the possible appointment of a receiver to manage the property, application of deposits or reserves maintained under the debt instrument for payment of the debt, or foreclose and/or cause the forced sale of the property or asset securing such debt. A foreclosure or other forced disposition of our assets could result in the disposition of same at below the carrying value of such asset. The disposition of our properties or assets at below our carrying value may adversely affect our net income, reduce our stockholders’ equity and adversely affect our ability to pay dividends.
We may not have sufficient funds to make required or desired capital improvements.
Our multi-family properties face competition from newer and updated properties. At December 31, 2025 the weighted average age (based on the number of units) of our multi-family properties is approximately 22 years. To remain competitive and increase occupancy at these properties and/or make them attractive to potential tenants or purchasers, we may have to make significant capital improvements and/or incur deferred maintenance costs with respect to these properties. The cost of future improvements and deferred maintenance is uncertain and the amounts earmarked for specific properties may be insufficient to effectuate needed improvements. Our results of operations and financial conditions may be adversely affected if we are required to expend significant funds (other than funds earmarked for such purposes) to repair or improve our properties.
If we are required to make payments under any “bad boy” carve out guarantees that we have provided in connection with certain mortgages and related loans, our business and financial results could be materially adversely affected.
In obtaining certain non-recourse loans, we have provided our lenders with standard carve out guarantees. These guarantees are only applicable if and when the borrower directly, or indirectly through an agreement with an affiliate, joint venture partner or other third party, voluntarily files a bankruptcy or similar liquidation or reorganization action or takes other actions that are fraudulent or improper (commonly referred to as “bad boy” guarantees). Although we believe that “bad boy” carve out guarantees are not guarantees of payment in the event of foreclosure or other actions of the foreclosing lender that are beyond the borrower’s control, some lenders in the real estate industry have recently sought to make claims for payment under such guarantees. In the event such a claim were made against us under a “bad boy” carve out guarantee, following foreclosure on mortgages or related loans, and such claim were successful, our business and financial results would be materially adversely affected.
We could be negatively impacted by changes in our relationship with Fannie Mae or Freddie Mac, changes in the condition of Fannie Mae or Freddie Mac and by changes in government support for multi-family housing.
Fannie Mae and Freddie Mac have been a major source of financing for multi-family real estate in the United States and we have used loan programs sponsored by these agencies to finance most of our acquisitions of multi-family properties. There have been ongoing discussion by the government and other interested parties with regard to the long term structure and viability of Fannie Mae and Freddie Mac, which could result in adjustments to guidelines for their loan products. Should these agencies have their mandates changed or reduced, lose key personnel, be disbanded or reorganized by the government or otherwise discontinue providing liquidity for the multi-family sector, our ability to obtain financing through loan programs sponsored by the agencies could be negatively impacted. In addition, changes in our relationships with Fannie Mae and Freddie Mac, and the lenders that participate in these loan programs, with respect to our existing mortgage financing could impact our ability to obtain comparable financing for new acquisitions or refinancing for our existing multi-family real estate investments. Should access to financing provided through Fannie Mae and Freddie Mac loan programs be reduced or impaired, it would significantly reduce our access to debt capital and/or increase borrowing costs and would significantly limit our ability to acquire properties on acceptable terms and reduce the values to be realized upon property sales.
We depend on our subsidiaries for cash flow and will be adversely impacted if these subsidiaries are prohibited from distributing cash to us.
We conduct, and intend to conduct, substantially all of our business operations through our subsidiaries, including our unconsolidated subsidiaries. Accordingly, our only source of cash to fund our operations and pay our obligations are distributions from our subsidiaries. We cannot assure you that our subsidiaries will be able to, or be permitted to, make distributions to us that will enable us to fund our operations. Each of our subsidiaries is or will be a distinct legal entity and, under certain circumstances, legal and contractual restrictions (e.g., restrictions imposed pursuant to mortgage debt on a property), limit our ability to obtain cash from such entities. In addition, because we operate through our subsidiaries, your claims as stockholders will be structurally subordinated to all existing and future liabilities and obligations of our subsidiaries. Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our subsidiaries will be able to satisfy your claims as stockholders only after all our and our subsidiaries' liabilities and obligations have been paid in full.
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Regulatory and Tax Risks
Changes to the U.S. federal income tax laws could have an adverse impact on our business and financial results.
At any time, the U.S. federal income tax laws governing REITs or the administrative interpretations of those laws may be amended. We cannot predict when or if any new U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S. federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective and any such law, regulation, or interpretation may take effect retroactively. We and our stockholders could be adversely affected by any such change in the U.S. federal income tax laws, regulations or administrative interpretations.
Liabilities relating to environmental matters may impact the value of our properties.
We may be subject to environmental liabilities arising from the ownership of properties. Under various federal, state and local laws, an owner or operator of real property may become liable for the costs of removal of certain hazardous substances released on its property. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances.
The presence of hazardous substances on our properties may adversely affect our ability to finance or sell the property and we may incur substantial remediation costs. The discovery of material environmental liabilities attached to such properties could have a material adverse effect on our results of operations and financial condition.
Compliance or failure to comply with the ADA or other safety regulations and requirements could result in substantial costs.
The ADA generally requires that the public areas at our properties be made accessible to disabled persons. Non-compliance could result in the imposition of fines by governmental authorities or the award of damages to private litigants. From time-to-time, claims have been, and may continue to be, asserted against us with respect to some of our properties under the ADA. If, under the ADA, we are required to make substantial alterations and capital expenditures in one or more of our properties, it could adversely affect our financial condition and results of operations.
Our properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety requirements. If we fail to comply with these requirements, we could incur fines or private damage awards. We do not know whether existing requirements will change or whether compliance with future requirements will require significant unanticipated expenditures that will affect our cash flow and results of operations.
Provisions for credit losses are difficult to estimate
Our provision for credit losses is evaluated on a quarterly basis in accordance with current accounting guidance which uses the Current Expected Credit Loss model, or CECL. Under CECL, we are required to present certain financial assets such as loans held for investment, at the net amount expected to be collected. The determination of our provision for credit losses requires us to make highly subjective estimates and judgments. Our estimates and judgments are based on a number of factors, including projected cash flow from the collateral, if any, securing our investments, the structure of our investment, including the availability of reserves and recourse guarantees, likelihood of repayment in full at the maturity of a loan, potential for refinancing and expected market discount rates for varying property types, and other macro economic data, all of which are uncertain and highly subjective. If our estimates and judgments are incorrect, our results of operations and financial condition could be materially and adversely impacted.
The adoption of CECL affects how we determine our allowance for loan losses and requires us to recognize provisions for credit losses earlier in the lending cycle, including at the time we enter into the transaction. Moreover, CECL may create more volatility in the level of our allowance for credit losses. If we are required to materially increase our level of allowance for credit losses for any reason, such increase could adversely affect our business, financial condition and results of operations.
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Risks Associated with the Real Estate Industry and REITs.
We face numerous risks associated with the real estate industry that could adversely affect our results of operations through decreased revenues or increased costs.
As a real estate company, we are subject to various changes in real estate conditions, and any negative trends in such real estate conditions may adversely affect our results of operations through decreased revenues or increased costs. These conditions include:
•changes in national, regional and local economic conditions, which may be negatively impacted by concerns about inflation, deflation, government deficits, unemployment rates and decreased consumer confidence particularly in markets in which we have a high concentration of properties;
•increases in interest rates, which could adversely affect our ability to obtain financing or to buy or sell properties on favorable terms or at all;
•the inability of tenants to pay rent;
•the existence and quality of the competition, such as the attractiveness of our properties as compared to our competitors' properties based on considerations such as convenience of location, rental rates, amenities and safety record;
•increased operating costs, including increased real property taxes, maintenance, insurance and utility costs (including increased prices for fossil fuels);
•weather conditions that may increase or decrease energy costs and other weather-related expenses;
•oversupply of competitive housing opportunities, including apartments or single-family housing, or a reduction in demand for real estate in the markets in which our properties are located;
•a favorable interest rate environment that may result in a significant number of residents or potential residents of our multi-family properties deciding to purchase homes instead of renting;
•changes in, or increased costs of compliance with, laws and/or governmental regulations, including those governing usage, zoning, the environment and taxes; and
•rent control or stabilization laws, or other laws regulating rental housing, which could prevent us from raising rents to offset increases in operating costs.
Moreover, other factors may adversely affect our results of operations, including potential liability under environmental and other laws and other unforeseen events, many of which are discussed elsewhere in the following risk factors. Any or all of these factors could materially adversely affect our results of operations through decreased revenues or increased costs.
Compliance with REIT requirements may hinder our ability to maximize profits.
We must continually satisfy tests concerning, among other things, our sources of income, the amounts we distribute to our stockholders and the ownership of our common stock, to qualify as a REIT for Federal income tax purposes. We may also be required to make distributions to stockholders at disadvantageous times or when we do not have funds readily available for distribution. Accordingly, compliance with REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.
To qualify as a REIT, we must also ensure that at the end of each calendar quarter at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets. The remainder of our investment in securities cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of such issuer. In addition, no more than 5% of the value of our assets can consist of the securities of any one issuer, other than a qualified REIT security. If we fail to comply with these requirements, we must dispose of the portion of our assets in excess of such amounts within 30 days after the end of the calendar quarter in order to avoid losing our REIT status and suffering adverse tax consequences. This requirement could cause us to dispose of assets for consideration of less than their true value and could lead to a material adverse impact on our results of operations and financial condition.
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Because real estate investments are illiquid, we may not be able to reconfigure our portfolio on a timely basis.
Real estate investments generally cannot be sold quickly. We may not be able to reconfigure our portfolio promptly in response to economic or other conditions. Further, even if we are able to sell properties, we may be unable to reinvest the proceeds of such sales in opportunities that are as favorable as the properties sold. Our inability to reconfigure our portfolio to profitably reinvest the proceeds of property sales promptly could adversely affect our financial condition and results of operations.
We may incur impairment charges in 2026.
We evaluate on a quarterly basis our real estate portfolio for indicators of impairment. Impairment charges reflect management's judgment of the probability and severity of the decline in the value of real estate assets we own. These charges and provisions may be required in the future as a result of factors beyond our control, including, among other things, changes in the economic environment and market conditions affecting the value of real property assets or natural or man-made disasters.
If we do not continue to pay cash dividends, the price of our common stock may decline.
REITs are generally required to distribute annually at least 90% of their ordinary taxable income to maintain our REIT status under the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder, which we refer to as the Code. Because we continue to generate operating losses primarily due to the impact of depreciation, we are not currently required, and may not be required in the future, to pay dividends to maintain our REIT status. Accordingly, we cannot assure you that we will pay dividends in the future. If we do not continue to pay cash dividends, the price of our common stock may decline.
Our business and operations are subject to physical and transition risks related to climate change.
Several of our multi-family properties are located along or near coastal areas that have historically been subject to the risk of extreme weather events. To the extent climate change causes changes in weather patterns, areas where many of our properties are located could experience more frequent and intense extreme weather events and rising sea levels, which may cause significant damage to our properties, disrupt our operations and adversely impact our residents. Over time, such conditions could result in reduced demand for housing in areas where our properties are located and increased costs related to further developing our properties to mitigate the effects of climate change or repairing damage related to the effects of climate change that may or may not be fully covered by insurance. Likewise, such conditions also may negatively impact the types and pricing of insurance we are able to procure.
Changes in federal, state and local laws and regulations on climate change could result in increased operating costs and/or capital expenditures to improve the energy efficiency of our existing properties without a corresponding increase in rental revenues. The imposition of such requirements could increase the costs of maintaining or improving our existing properties (for example by requiring retrofits of existing multi-family properties to improve their energy efficiency and/or resistance to inclement weather) without creating corresponding increases in rental revenues, which would have an adverse impact on our operating results.
Risks Related to BRT's Organization, Structure and Ownership of its Stock
Our transactions with affiliated entities involve conflicts of interest
Entities affiliated with us and with certain of our executive officers provide services to us and on our behalf. Among other things, we retain certain executive officers and others to provide the Services. The aggregate fees to be paid for the Services in 2026, and paid in 2025 and 2024, are $1.8 million, $1.7 million and $1.6 million, respectively. We obtain certain executive, administrative, legal, accounting and clerical personnel and the use of certain facilities pursuant to the shared services agreement. During 2025 and 2024, we reimbursed Gould Investors $750,000 and $698,000, respectively, for the personnel and facilities provided pursuant to the shared services agreement. We also obtain certain insurance in conjunction with Gould Investors and reimbursed Gould Investors $30,000 and $28,000, in 2025 and 2024, respectively, for our share of the insurance cost. These transactions may not be on terms as favorable as those that we would receive if the transactions were entered into with unaffiliated entities and persons.
Gould Investors from time-to time buys multi-family properties, including properties located in the Southeast United States. Although the properties purchased by Gould Investors are generally smaller than the properties in which we are interested, a conflict of interest will arise should Gould Investors decide to pursue the acquisition of large properties in such region. See "Item 1 - Business - Our Acquisition Approach"
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Senior management and other key personnel are critical to our business and our future success may depend on our ability to retain them.
We depend on the services of Jeffrey A. Gould, our president and chief executive officer, and other members of senior management to carry out our business and investment strategies. Although Jeffrey A. Gould devotes substantially all of his business time to our affairs, he devotes a portion of his business time to entities affiliated with us. In addition to Jeffrey A. Gould, only two other executive officers, Matthew Gibbons, our chief accounting officer, and Ryan Gould, a vice president, devote all or substantially all of their business time to us. Many of our executives, including Isaac Kalish, our chief financial officer (i) also provide the Services (see "Item 1. Business-Human Capital Resources") and (ii) provide their services on a part-time basis pursuant to the shared services agreement. We rely on part-time executive officers to provide certain services to us, including legal and certain financial reporting services, since we do not employ full-time executive officers to handle all of these services. If the shared services agreement is terminated, the executives performing Services are unwilling to continue to do so, or if we are dissatisfied with the services provided pursuant to these arrangements, we will have to obtain such services from other sources or hire personnel to perform them. We may not be able to replace these services or hire such employees in a timely manner or on terms that are equivalent to or better than those we receive pursuant to the Services and the shared services agreement.
In addition, in the future we may need to attract and retain qualified senior management and other key personnel, both on a full-time and part-time basis. The loss of the services of any of our senior management or other key personnel or our inability to recruit and retain qualified personnel in the future, could impair our ability to carry out our business and our investment strategies.
We do not carry key man life insurance on members of our senior management.
Certain provisions of our Articles of Incorporation, our Bylaws and Maryland law may inhibit a change in control that stockholders consider favorable and could also limit the market price of our common stock
Certain provisions of our Articles of Incorporation (the "Charter"), our Bylaws and Maryland law may impede, or prevent, a third party from acquiring control of us without the approval of our board of directors. These provisions:
•provide for a staggered board of directors consisting of three classes, with one class of directors being elected each year and each class being elected for three-year terms and until their successors are duly elected and qualify;
•impose restrictions on ownership and transfer of our stock (such provisions being intended to, among other purposes, facilitate our compliance with certain requirements under the Internal Revenue Code of 1986, as amended (the "Code"), relating to our qualification as a REIT under the Code);
•prevent our stockholders from amending the Bylaws;
•limit who may call special meetings of stockholders;
•establish advance notice and informational requirements and time limitations on any director nomination or proposal that a stockholder wishes to make at a meeting of stockholders;
•provide that directors may be removed only for cause and only by the vote of at least two-thirds of all votes generally entitled to be cast in the election of directors;
•do not permit cumulative voting in the election of our board of directors, which would otherwise permit holders of less than a majority of outstanding shares to elect one or more directors; and
•authorize our board of directors, without stockholder approval, to amend the Charter to increase or decrease the aggregate number of shares of our stock or the number of shares of stock of any class or series that we have authority to issue and classify or reclassify any unissued shares of common or preferred stock and set the preferences, rights and other terms of the classified or reclassified shares.
Certain provisions of the Maryland General Corporation Law (the “MGCL”) may impede a third party from making a proposal to acquire us or inhibit a change of control under circumstances that otherwise could be in the best interest of holders of shares of our common stock, including:
•“business combination” provisions that, subject to certain exceptions and limitations, prohibit certain business combinations between us and an “interested stockholder” (defined generally as any person who beneficially owns
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10% or more of the voting power of our outstanding voting stock or an affiliate or associate of BRT who, at any time within the two-year period immediately prior to the date in question, was the beneficial owner of 10% or more of the voting power of our then outstanding voting stock) or an affiliate thereof for five years after the most recent date on which the stockholder becomes an interested stockholder, and thereafter impose two super-majority stockholder voting requirements on these combinations;
•“control share” provisions that provide that, subject to certain exceptions, holders of “control shares” of BRT (defined as voting shares which, when aggregated with other shares controlled by the stockholder, entitle the holder to exercise voting power in the election of directors within one of three increasing ranges) acquired in a “control share acquisition” (defined as the direct or indirect acquisition of ownership or control of issued and outstanding “control shares,” subject to certain exceptions) have no voting rights with respect to the control shares except to the extent approved by our stockholders by the affirmative vote of at least two-thirds of all the votes entitled to be cast on the matter, excluding all interested shares; and
•additionally, Title 3, Subtitle 8 of the MGCL permits our board of directors, without stockholder approval and regardless of what is currently provided in the Charter or the Bylaws, to implement certain corporate governance provisions.
We have (1) exempted all business combinations between us and any other person, provided that each such business combination is first approved by our board of directors (including a majority of directors who are not affiliates or associates of such other person), from the Maryland Business Combination Act and (2) opted out of the Maryland Control Share Acquisition Act.
Ownership of less than 6.0% of our outstanding shares or less than 6.0% of the aggregate outstanding shares of all classes and series of our stock could violate the restrictions on ownership and transfer in our Charter, which would result in the transfer of the shares owned or acquired in violation of such restrictions to a trust for the benefit of a charitable beneficiary and loss of the right to receive dividends and other distributions on, and the economic benefit of any appreciation of, such shares, and you may not have sufficient information to determine at any particular time whether an acquisition of our shares will result in the loss of the economic benefit of such shares.
In order for us to qualify as a real estate investment trust under the Code, no more than 50% of the value of the outstanding shares of our stock may be owned, directly or indirectly or through application of certain attribution rules, by five or fewer “individuals” (as defined in the Code) at any time during the last half of a taxable year. To facilitate our qualification as a REIT under the Code, among other purposes, the Charter generally prohibits any person from actually or constructively owning more than 6.0%, in value or number of shares, whichever is more restrictive, of our outstanding shares of common stock, or more than 6.0% in value of the aggregate outstanding shares of all classes and series of our stock, which we refer to as the “ownership limits,” unless our board of directors exempts the person from such ownership limit. In addition, the Charter prohibits any person from beneficially or constructively owning shares of our stock that would result in more than 50% of the value of the outstanding shares of our stock to be beneficially owned by five or fewer individuals, regardless of whether such ownership is during the last half of any taxable year, which we refer to as the “Five or Fewer Limit.” Shares owned or acquired in violation of either of these restrictions will be transferred automatically to a trust for the benefit of a charitable beneficiary selected by us. The person that owned or acquired our stock in violation of the restrictions in the Charter will not be entitled to any dividends or distributions paid after the date of the transfer to the trust and, upon a sale of such shares by the trust, will generally be entitled to receive only the lesser of the market value on the date of the event that resulted in the transfer to the trust or the net proceeds of the sale by the trust to a person who could own the shares without violating the ownership limits.
Our board of directors has exempted Gould Investors, Fredric H. Gould, Matthew J. Gould and Jeffrey A. Gould from the ownership limits and has not established a limitation on ownership for such persons. Based on information supplied to us, as of December 31, 2025, Gould Investors owns approximately 21.6% of the outstanding shares of common stock and, by virtue of the applicable attribution rules under the Code, these individuals beneficially own approximately 26.4% of outstanding shares of common stock. As a result, the acquisition by each of four other individuals of 6% of our outstanding common stock, when combined with the ownership of our common stock of Gould Investors, Fredric H. Gould, Matthew J. Gould and Jeffrey A. Gould, generally would not result in a violation of the Five or Fewer Limit. However, there is no limitation on Gould Investors, Fredric H. Gould, Matthew J. Gould or Jeffrey A. Gould acquiring additional shares of our common stock or otherwise increasing their percentage of ownership of our common stock, meaning that the amount of our stock that other persons or entities may acquire without violating the Five or Fewer Limit could be reduced in the future and without notice. To the extent that Gould Investors, Fredric H. Gould, Matthew J. Gould and Jeffrey A. Gould, or their affiliates, acquire additional shares or
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our stock, or any other event occurs (including a repurchase of shares of our stock), that results in an individual beneficially or constructively owning 24.0% or more of the outstanding shares of our stock within the meaning of the Charter, the acquisition by four other individuals of 6.0% or less of our outstanding stock would violate the Five or Fewer Limit and, therefore, could cause the stock acquired by one or more of these other individuals to be transferred to the charitable trust, despite their compliance with the 6.0% ownership limits. If any of the foregoing occurs, compliance with the 6.0% ownership limit will not ensure that your ownership of our stock does not cause a violation of the Five or Fewer Limit or that your shares of our stock are not transferred to the charitable trust.
Gould Investors, Fredric H. Gould, Matthew J. Gould and Jeffrey A. Gould will be required by the Exchange Act and regulations promulgated thereunder to report, with certain exceptions, their acquisition of additional shares of our stock within two days of such acquisitions, and all holders of our stock will be required to file reports of their acquisition of beneficial ownership (as defined in the Exchange Act) of more than 5% of our outstanding stock. However, beneficial ownership for purposes of the reporting requirements under the Exchange Act is calculated differently than beneficial ownership for purposes of determining compliance with the Five or Fewer Limit. Further, to the extent that any one or more of Gould Investors, Fredric H. Gould, Matthew J. Gould or Jeffrey A. Gould acquires 30% or more of our outstanding stock, ownership of five percent or less of our outstanding stock could still result in a violation of the Five or Fewer Limit and, therefore, cause newly-acquired stock in our company to be transferred to the charitable trust. As a result, you may not have enough information currently available to you at any time to determine the percentage of ownership of our stock that you can acquire without violating the Five or Fewer Limit and losing the economic benefit of the ownership of such newly-acquired shares.
The stock market is volatile, and fluctuations in our operating results, removal from various indices and other factors could cause our stock price to decline.
The stock market has experienced, and may continue to experience, fluctuations that significantly impact the market prices of securities issued by many companies. Market fluctuations could adversely affect our stock price. These fluctuations have often been unrelated or disproportionate to the operating performance of particular companies. These broad market fluctuations, as well as general economic, systemic, political and market conditions, such as pandemics, recessions, loss of investor confidence, interest rate changes, government shutdowns, or trade wars, may negatively affect the market price of our common stock. Moreover, our operating results may fluctuate and vary from period to period due to the risk factors set forth herein.
Although our common stock is quoted on the New York Stock Exchange, the volume of trades on any given day has been limited historically, as a result of which stockholders might not have been able to sell or purchase our common stock at the volume, price or time desired. Our common stock is a component of the Russell 3000® Index. If our common stock is removed from the Russell 3000® Index because it does not meet the criteria for continued inclusion in such index, index funds, institutional investors, or other holders attempting to track the composition of that index may be required to sell our common stock, which would adversely impact the price and frequency at which it trades.
General Business Risks
Breaches of information technology systems could materially harm our business and reputation.
We, our joint venture partners and the property managers managing our properties, collect and retain, through information technology systems, financial, personal and other sensitive information provided by third parties, including tenants, vendors and employees. Such persons also rely on information technology systems for the collection and distribution of funds. Our information technology systems have been breached though, to our knowledge, none of our properties nor tenants have suffered any material damages therefrom. There can be no assurance that we, our joint venture partners or property managers will be able to prevent unauthorized access to sensitive information or the unauthorized distribution of funds. Any loss of this information or unauthorized distribution of funds as a result of a breach of information technology systems may result in loss of funds to which we are entitled, legal liability and costs (including damages and penalties), as well as damage to our reputation, that could materially and adversely affect our business and financial performance.
Artificial intelligence and other machine learning techniques could increase competitive, operational, legal and regulatory risks to our business in ways that we cannot predict.
The use of artificial intelligence (“AI”) by us and others, and the overall adoption of AI throughout society, may exacerbate or create new and unpredictable competitive, operational, legal and regulatory risks to our business. There is substantial uncertainty about the extent to which AI will result in dramatic changes throughout the world, and we may not be able to anticipate, prevent, mitigate or remediate all of the potential risks, challenges or impacts of such changes. These changes could
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potentially disrupt, among other things, our business and operational processes. Our competitors may be more successful than us in the development and implementation of services and platforms based on AI to improve their operations. If we are unable to adequately use AI, or do so at a slower pace than others in our industry, we will be at a competitive disadvantage.
If the data we, or third parties whose services we rely on and over whom we have limited oversight, use in connection with the possible development or deployment of AI is incomplete, inadequate or biased in some way, the performance of our business could suffer. Data in technology that uses AI may contain a degree of inaccuracy and error, which could result in in flawed decision-making on our part or the part of our property managers and other service providers. This could reduce the effectiveness of AI technologies and adversely impact us and our operations to the extent that we rely on the AI's work product. There is also a risk that we or our service providers may improperly disclose confidential information, including material non-public information or personally identifiable information, into AI applications, resulting in such information becoming a part of a dataset that is accessible by third parties.
Our and our service providers use of AI may require compliance with legal or regulatory frameworks that are not fully developed or tested, and we may face litigation and regulatory actions related to our or our service providers use of AI.
Item 3. Legal Proceedings.
From time to time, we are party to legal proceedings that arise in the ordinary course of our business, and in particular, personal injury claims involving the operations of our properties. Although we believe that the primary and umbrella insurance coverage maintained with respect to our properties is sufficient to cover claims for compensatory damages, many of these personal injury claims also assert exemplary (i.e., punitive) damages. Generally, insurance does not cover claims for exemplary damages and we may be adversely affected if claims for exemplary damages are asserted successfully. See note 14 to our Consolidated Financial Statements.
Item 4. Mine Safety Disclosures.
Not applicable.
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PART II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.
Market Information; Holders
Our shares of common stock are listed on the New York Stock Exchange, or the NYSE, under the symbol "BRT." As of February 27, 2026, there were approximately 679 holders of record of our common stock.
Purchases of Equity Securities by Issuer and Affiliated Purchases
The following tables summarize the purchases of our common stock during the three months ended December 31, 2025 by us and by Gould Investors (Gould Investors may be deemed to be an "affiliated purchaser" (as such term is used in Rule 10b-19a)(3) promulgated under the Exchange Act) of our company as Jeffrey A. Gould and Matthew J. Gould, our executive officers, are directly or indirectly, the managers of the managing general partner of Gould Investors):.
Purchases by Issuer
| Period | (a) Total Number of Shares Purchased | (b) Average Price Paid per Share | (c) Total Amount of Shares Purchased as Part of Publicly Announced Plans or Programs | (d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||||||||||||||||
| October 1 - October 31, 2025 | — | $ | — | $ | — | $ | 8,752,933 | |||||||||||||||||||
| November 1 - November 30, 2025 | 96,572 | 14.47 | 1,396,983 | 7,355,045 | ||||||||||||||||||||||
| December 1 - December 31, 2025 | 82,408 | 14.61 | 1,204,111 | 6,150,934 | ||||||||||||||||||||||
| Total | 178,980 | $ | 14.53 | $ | 2,601,094 | |||||||||||||||||||||
Subsequent to December 31, 2025 we purchased, pursuant to our publicly announced repurchase program, 75,155 shares at an average price of $14.82 per share. As of March 11, 2026, after giving effect to an increase in, and extension of, our share repurchase authorization, we are authorized to repurchase up to $10.0 million of shares through December 31, 2028.
Purchases by Affiliated Purchaser
| Period | Total Number of Purchased Shares | Average Price Paid per Share | Total Cost | |||||||||||||||||||||||
| October 1 - October 31, 2025 | 33,953 | $14.93 | $ | 507,029 | ||||||||||||||||||||||
| November 1 - November 30, 2025 | — | — | — | |||||||||||||||||||||||
| December 1 - December 31, 2025 | — | — | — | |||||||||||||||||||||||
Total (1) | 33,953 | $14.93 | $ | 507,029 | ||||||||||||||||||||||
______________________________
(1) Excludes 46,600 and 50,337 shares of common stock purchased at an average price of $15.62 and $14.70, respectively, pursuant to our dividend reinvestment plan with respect to dividends declared in September and December 2025, respectively.
Item 6. [Reserved]
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Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Overview
We are an internally managed real estate investment trust, also known as a REIT, that owns, operates and to a lesser extent holds interest in joint ventures that own and operate multi-family properties. At December 31, 2025, we: (i) wholly-own 21 multi-family properties with an aggregate of 5,420 units and a carrying value of $595.2 million, (ii) have ownership interests, through unconsolidated entities, in ten multi-family properties with an aggregate of 2,891 units with a carrying value of $46.1 million; (iii) have preferred equity investments in two multi-family properties with a carrying value of $17.7 million; and (iv) own other assets, through consolidated and unconsolidated entities, with a carrying value of $1.6 million. The 31 multi-family properties are located in 11 states; primarily in the Southeast United States and Texas.
2025 and Recent Developments.
During 2025:
•we acquired, through two unconsolidated joint ventures in two separate and unrelated transactions, an 80% interest in two multi-family properties (referred to collectively as the "2025 Acquisitions") with an aggregate of 364 units for an aggregate purchase price of $59.5 million, including $40.1 million of mortgage debt. The mortgage debt bears a weighted average interest rate of 4.34% and a weighted average remaining term to maturity of 6.6 years.
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•we refinanced four mortgages maturing in 2025 and 2026 in aggregate principal amount of $58.0 million (the “Prior Mortgages”) and bearing a weighted average fixed interest rate of 4.38% with four replacement mortgages in aggregate principal amount $87.7 million (the "2025 Financings"). The replacement mortgages (the “Replacement Mortgages”) have a weighted average remaining term to maturity of 8.5 years, a weighted average fixed interest rate of 4.97%, and unlike the Prior Mortgages, are interest only until maturity (other than with respect to a mortgage in principal amount of $15.8 million, which is interest only until 2030, one year prior to its maturity). As a result of the 2025 Financing, our aggregate annual principal payments are expected to decrease by $1.2 million (until 2030), and our annual interest expense is expected to increase by $1.8 million from the corresponding amounts under the Prior Mortgages.
•we sold a cooperative apartment unit in New York, NY for a sales price of approximately $1.0 million and recognized a gain of $755,000.
•we repurchased 321,060 shares of our common stock for an aggregate purchase price of approximately $4.99 million (i.e., an average purchase price of $15.53 per share).
Subsequent to December 31, 2025, we purchased 75,155 shares of our common stock for an aggregate purchase price of approximately $1.1 million (i.e., an average price of $14.82 per share). In March 2026, our board of directors increased up to $10 million the value of the shares that we can repurchase and extended the repurchase program through December 31, 2028.
Challenges and Uncertainties as a Result of the Uncertain Economic Environment
We face challenges due to the uncertain national economic environment (e.g., inflation, recession and/or stagflation, the potential impact of tariffs and trade wars, and/or interest rates), and the oversupply of multi-family properties in several markets in which we compete (including Atlanta, GA, Huntsville, AL, Dallas, TX, San Antonio, TX, Nashville TN, Pensacola, FL, LaGrange, GA and San Marcos, TX). In addition, we use concessions (and in particular, in markets that are especially competitive) as a means to improve occupancy. The use of concessions reduces our rental income and adds to the variability of our operating results. These challenges and uncertainties have, and we anticipate will continue to adversely impact (i) the rental and occupancy rates at our properties, and (ii) our ability to grow rental income and/or control our real estate operating expenses, some of which, such as real estate taxes, we have a very limited ability to control and frequently increase, with limited notice of the increase.
We anticipate that our mortgage interest expense will increase as we refinance the aggregate $154.6 million of principal balances of mortgage debt maturing through 2027 (including $84.0 million of such principal balances at unconsolidated subsidiaries) because current comparable mortgage interest rates are generally higher than the weighted average interest rate on such maturing mortgages. For comparison purposes, the weighted average interest rate on the mortgages on our consolidated and unconsolidated properties maturing through December 31, 2027 is 4.43% and the weighted average interest rate on the 2025 Financings that were completed in December 2025 was 4.97%.
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Results of Operations
Comparison of Years Ended December 31, 2025 and 2024
The term "same store properties" refers to 21 multi-family properties with an aggregate of 5,420 units that were owned for all of 2025 and 2024.
Revenues
The following table compares our revenues for the years indicated:
| (Dollars in thousands): | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||
| Rental and other revenue from real estate properties | $ | 95,265 | $ | 94,773 | $ | 492 | 0.5 | % | ||||||||||||||||||
| Loan interest and other income | 1,763 | 857 | 906 | 105.7 | % | |||||||||||||||||||||
| Total revenues | $ | 97,028 | $ | 95,630 | $ | 1,398 | 1.5 | % | ||||||||||||||||||
Rental and other revenue from real estate properties
The components of the increase include:
•$510,000 due to a 0.74% net increase in average rental rates year-over-year,
•$261,000 due to an increase in average occupancy year-over-year from 93.8% to 93.9%,
•$149,000 in other rental income (tenant reimbursements such as trash and utilities); and
•$114,000 increase at our commercial property in Yonkers, NY (the "Yonkers' Property") due to an increase in the rental rate obtained in connection with a lease extension.
The increase was offset primarily by a $532,000 decrease in revenue recognized from straight line adjustments of rent concessions, net of amortization, with approximately 50% related to Bells Bluff.
Loan interest and other income
The $1 million increase is due primarily to the inclusion, for all of 2025, of the income earned from the Preferred Equity Investments originated in the fourth quarter of 2024.
Expenses
The following table compares our expenses for the periods indicated:
| (Dollars in thousands) | 2025 | 2024 | Change | % Change | ||||||||||||||||||||||
| Real estate operating expenses | $ | 44,082 | $ | 43,555 | $ | 527 | 1.2 | % | ||||||||||||||||||
| Interest expense | 23,511 | 22,596 | 915 | 4.0 | % | |||||||||||||||||||||
| General and administrative | 15,530 | 15,595 | (65) | (0.4) | % | |||||||||||||||||||||
| Provision for credit loss | 5 | 270 | (265) | (98.1) | % | |||||||||||||||||||||
| Depreciation and amortization | 26,396 | 25,926 | 470 | 1.8 | % | |||||||||||||||||||||
| Total expenses | $ | 109,524 | $ | 107,942 | $ | 1,582 | 1.5 | % | ||||||||||||||||||
Real estate operating expenses.
The components of the increase include:
•increases of $564,000 and $476,000 in payroll and utilities (primarily water/sewer charges), respectively, at several properties;
•$354,000 increase in other expenses, including $100,000 related to advertising and $90,000 related to a loan modification; and
•a net $255,000 increase in real estate taxes at several properties.
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Offsetting the change was a $927,000 decrease in insurance expense due to reduced premiums in 2025 (and we estimate that 2026 insurance premiums will be approximately $500,000 less in 2026 than in 2025) and a $221,000 reduction in repairs and maintenance expenses.
Interest expense
Approximately $1 million of the increase is due to the $27.4 million mortgage obtained in August 2024 on Woodland Trails-La Grange, GA (the "Woodlands Financing"), $318,000 due to the 2025 Financings, and $237,000 due to increased draws on the credit facility. The increase was offset by a $375,000 decrease on our floating rate junior subordinated notes due to the decrease in SOFR and a $275,000 decrease of mortgage interest due to the impact of amortization of mortgage principal amounts.
General and administrative.
The components of the decrease include $521,000 due to the reduction in the number of employees and the inclusion, in 2024, of $141,000 of expense related to the vesting of restricted stock units that vest based on the satisfaction of metrics related to adjusted funds from operations (the "AFFO Awards"); no expense was recorded with respect to the AFFO Awards outstanding in 2025 as such awards are not expected to vest. The decrease was offset due to a (i) $272,000 increase in internal and external audit costs, including approximately $100,000 in out of scope audit costs expensed in 2025 for the 2024 audit, and (ii) $294,000 increase due to higher levels of employee compensation.
Provision for credit loss
In 2025, we recorded a non-cash provision of $5,000 related to the Loan Receivables (i.e. the Preferred Equity Investments) in comparison to $270,000 recorded in 2024.
Depreciation and amortization
The increase is related to property improvements in 2025 and 2024.
Equity in earnings of unconsolidated joint ventures
Equity in earnings from unconsolidated joint ventures decreased $1.8 million, from $1.6 million in 2024, to a loss of $174,000 for the year ended December 31, 2025. The components of the decrease include:
•$1.5 million from the 2025 Acquisitions, primarily due to the amortization of the lease intangibles acquired in such transactions. We estimate that through the quarter ending September 30, 2026, approximately $1 million of expense will be recognized in connection with the amortization of these intangibles.
•$408,000 at same store properties, due to a decrease in operating margins (i.e.,a decrease in rental revenues, a decrease in straight-line rent adjustments of rent concessions, net of amortization, and an increase in operating expense primarily due to increased payroll and repairs and maintenance expense).
Insurance recovery of casualty loss
During 2025, we received an aggregate of $313,000 from insurance recoveries primarily related to the Silvana Oaks and Avalon properties. There were no comparable recoveries in 2024.
Gain on sale of real estate
In 2025, we sold a cooperative apartment in New York for a sales price of $995,000 and a gain of $755,000. In 2024, we sold a cooperative apartment in NY for a sales price of approximately $1.1 million and a gain of $806,000.
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Provision (benefit) for taxes
Income tax provision for 2025 was $174,000, a $400,000 increase from the $226,000 benefit recorded in 2024. The benefit recorded in 2024 is the result of a $534,000 refund of franchise tax received as a result of a change in Tennessee law, offset by the 2024 estimated state tax expense of $318,000.
Comparison of Years Ended December 31, 2024 and 2023
As we are a smaller reporting company, this comparison is omitted in accordance with Instruction 1 to Item 303(a) of Regulation S-K.
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Funds from Operations; Adjusted Funds from Operations; Net Operating Income.
In view of our multi-family property activities, we disclose funds from operations ("FFO"), adjusted funds from operations ("AFFO") and net operating income ("NOI") because we believe that such metrics are a widely recognized and appropriate measure of the performance of a multi-family REIT.
We compute FFO in accordance with the "White Paper on Funds From Operations" issued by the National Association of Real Estate Investment Trusts ("NAREIT") and NAREITs related guidance. FFO is defined in the White Paper as net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities where the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis. In computing FFO, we do not add back to net income the amortization of costs in connection with our financing activities or depreciation of non-real estate assets.
We compute AFFO by adjusting FFO for loss on extinguishment of debt, our straight-line rent accruals, restricted stock and RSU compensation expense, fair value adjustment of mortgage debt, gain on insurance recovery, insurance recovery from casualty loss and deferred mortgage and debt costs (including, in each case as applicable, from our share from our unconsolidated joint ventures). Since the NAREIT White Paper does not provide guidelines for computing AFFO, the computation of AFFO may vary from one REIT to another.
We believe that FFO and AFFO are useful and standard supplemental measures of the operating performance for equity REITs and are used frequently by securities analysts, investors and other interested parties in evaluating equity REITs, many of which present FFO and AFFO when reporting their operating results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate assets, which assures that the value of real estate assets diminish predictability over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, we believe that FFO and AFFO provide a performance measure that, when compared year-over-year, should reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs and other matters without the inclusion of depreciation and amortization, providing a perspective that may not be necessarily apparent from net income. We also consider FFO and AFFO to be useful to us in evaluating potential property acquisitions.
FFO and AFFO do not represent net income or cash flows from operations as defined by GAAP. FFO and AFFO should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor should FFO and AFFO be considered an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.
FFO and AFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization and capital improvements. FFO and AFFO do not represent cash flows from operating, investing or financing activities as defined by GAAP.
Management recognizes that there are limitations in the use of FFO and AFFO. In evaluating our performance, management is careful to examine GAAP measures such as net income (loss) and cash flows from operating, investing and financing activities. Management also reviews the reconciliation of net income (loss) to FFO and AFFO.
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The table below provides a reconciliation of net income determined in accordance with GAAP to FFO and AFFO for each of the indicated years (amounts in thousands):
| 2025 | 2024 | |||||||||||||||||||||||||||||||
| GAAP Net loss attributable to common stockholders | $ | (11,946) | $ | (9,791) | ||||||||||||||||||||||||||||
| Add: depreciation of properties | 26,396 | 25,926 | ||||||||||||||||||||||||||||||
| Add: our share of depreciation in unconsolidated joint venture properties | 7,625 | 5,545 | ||||||||||||||||||||||||||||||
| Add: provision for credit loss | 5 | 270 | ||||||||||||||||||||||||||||||
| Deduct: gain on sales of real estate | (755) | (806) | ||||||||||||||||||||||||||||||
| Deduct: our share of earnings in earnings from sale of unconsolidated joint venture properties | (52) | (209) | ||||||||||||||||||||||||||||||
| Adjustment for non-controlling interests | (17) | (16) | ||||||||||||||||||||||||||||||
| Funds from operations | 21,256 | 20,919 | ||||||||||||||||||||||||||||||
| Adjust for: straight line rent concession, net of amortization | (315) | (801) | ||||||||||||||||||||||||||||||
| Adjust for: our share of straight-line rent concession, net of amortization from unconsolidated joint ventures | (33) | (147) | ||||||||||||||||||||||||||||||
| Add: amortization of restricted stock and RSU expense | 4,692 | 4,877 | ||||||||||||||||||||||||||||||
| Add: amortization of deferred mortgage and debt costs | 1,202 | 1,150 | ||||||||||||||||||||||||||||||
| Add: our share of deferred mortgage costs from unconsolidated joint venture properties | 119 | 120 | ||||||||||||||||||||||||||||||
| Add: amortization of fair value adjustment for mortgage debt | 525 | 558 | ||||||||||||||||||||||||||||||
| Adjustment for non-controlling interests | — | (8) | ||||||||||||||||||||||||||||||
| Adjusted funds from operations | $ | 27,446 | $ | 26,668 | ||||||||||||||||||||||||||||
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The table below provides a reconciliation of net income per common share (on a diluted basis) determined in accordance with GAAP to FFO and AFFO.
| 2025 | 2024 | |||||||||||||||||||||||||||||||
| Net loss attributable to common stockholders | $ | (0.63) | $ | (0.52) | ||||||||||||||||||||||||||||
| Add: depreciation of properties | 1.39 | 1.38 | ||||||||||||||||||||||||||||||
| Add: our share of depreciation in unconsolidated joint venture properties | 0.40 | 0.30 | ||||||||||||||||||||||||||||||
| Add: provision for credit loss | — | 0.01 | ||||||||||||||||||||||||||||||
| Deduct: gain on sales of real estate | (0.04) | (0.04) | ||||||||||||||||||||||||||||||
| Deduct: our share of earnings from sale of unconsolidated joint venture properties | — | (0.01) | ||||||||||||||||||||||||||||||
| Adjustment for non-controlling interests | — | — | ||||||||||||||||||||||||||||||
| Funds from operations | 1.12 | 1.12 | ||||||||||||||||||||||||||||||
| Adjust for: straight line rent concessions, net of amortization | (0.02) | (0.04) | ||||||||||||||||||||||||||||||
| Adjust for: our share of straight-line rent concession, net of amortization from unconsolidated joint ventures | — | — | ||||||||||||||||||||||||||||||
| Add: amortization of restricted stock and RSU expense | 0.25 | 0.25 | ||||||||||||||||||||||||||||||
| Add: amortization of deferred mortgage and debt costs | 0.06 | 0.06 | ||||||||||||||||||||||||||||||
| Add: our share of amortization of deferred mortgage and debt costs from unconsolidated ventures | 0.01 | 0.01 | ||||||||||||||||||||||||||||||
| Add: amortization of fair value adjustment for mortgage debt | 0.03 | 0.03 | ||||||||||||||||||||||||||||||
| Adjustment for non-controlling interests | — | — | ||||||||||||||||||||||||||||||
| Adjusted funds from operations | $ | 1.45 | $ | 1.43 | ||||||||||||||||||||||||||||
| Diluted shares outstanding for FFO and AFFO | 18,930,284 | 18,710,615 | ||||||||||||||||||||||||||||||
FFO for 2025 increased $337,000, or 1.6%, to $21.3 million from $20.9 million in 2024. Contributing to the increase was a:
•$1.6 million increase in operating margins (i.e., rental and other revenues from real estate properties less real estate operating expenses) across our portfolio (i.e. consolidated and unconsolidated multi-family properties);
•$906,000 increase in loan interest and other income;
•$314,000 increase in insurance recoveries; and
•$184,000 decrease in equity-based compensation.
The increase was offset by a:
•$1.5 million increase in interest expense;
•$607,000 decrease in straight line rent concessions, net of amortization;
•$400,000 increase in income tax expense; and
•$119,000 increase in general and administrative expense (excluding the impact of equity based compensation).
AFFO increased $778,000 or 2.9%, to $27.4 million in 2025 from $26.7 million in 2024. The increase is primarily due to the factors impacting the changes in FFO, other than the changes to net straight-line deferred rent concessions and equity-based compensation.
See “Comparison of Years Ended December 31, 2025 and 2024” for further information regarding these changes.
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NOI is a non-GAAP measure of performance. NOI is used by our management and many investors to evaluate and compare the performance of our properties to other comparable properties, to determine trends at our properties and to determine the estimated fair value of our properties. The usefulness of NOI may be limited in that it does not take into account, among other things, general and administrative expense, interest expense, loss on extinguishment of debt, casualty losses, insurance recoveries and gains or losses as determined by GAAP. NOI is a property specific performance metric and does not measure our performance as a whole. Same store NOI reflects the operations of all of our wholly-owned multi-family properties.
NOI is defined as "Rental and other revenue from real estate properties" less "Real estate operating expenses" in each case as presented on our statements of operations. Real estate operating expenses include real estate taxes, insurance, property management expense, utilities, repairs and maintenance, administrative and marketing. Other REIT’s may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REIT’s. We believe NOI provides an operating perspective not immediately apparent from GAAP operating income or net income (loss). NOI is one of the measures we use to evaluate our performance because it (i) measures the core operations of property performance by excluding corporate level expenses and other items unrelated to property operating performance and (ii) captures trends in rental housing and property operating expenses. However, NOI should only be used as an alternative measure of our financial performance.
The following table provides a reconciliation of net income attributable to common stockholders as computed in accordance with GAAP to NOI for the periods presented (dollars in thousands):
| For the year ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| GAAP Net loss attributable to common stockholders | $ | (11,946) | $ | (9,791) | ||||||||||
| Less: Loan interest and other income | (1,763) | (857) | ||||||||||||
| Add: Interest expense | 23,511 | 22,596 | ||||||||||||
| General and administrative | 15,530 | 15,595 | ||||||||||||
| Depreciation | 26,396 | 25,926 | ||||||||||||
| Provision for credit loss | 5 | 270 | ||||||||||||
| Provision (benefit) for taxes | 174 | (226) | ||||||||||||
| Less: Gain on sale of real estate | (755) | (806) | ||||||||||||
| Adjust for: Equity in loss (earnings) of unconsolidated joint venture properties | 174 | (1,644) | ||||||||||||
| Less: Insurance recovery of casualty loss | (313) | — | ||||||||||||
| Add: Net income attributable to non-controlling interests | 170 | 155 | ||||||||||||
| Net Operating Income | $ | 51,183 | $ | 51,218 | ||||||||||
| Less: Non same store and non multi-family | ||||||||||||||
| Revenues | $ | 1,698 | $ | 1,594 | ||||||||||
| Operating Expenses | 461 | 460 | ||||||||||||
| Non-same store NOI | 1,237 | $ | 1,134 | |||||||||||
| Same Store Net Operating Income | $ | 49,946 | $ | 50,084 | ||||||||||
_____________________________________
In 2025, NOI decreased by $35,000 from 2024 due primarily to a $527,000 increase in real estate operating expenses, offset by a $389,000 increase in rental revenue at wholly-owned multi-family properties and a $114,000 increase in rental revenue at the Yonkers' Property. Same store NOI decreased $138,000 in 2025 from 2024 primarily due to the factors impacting NOI, other than the Yonkers' Property. See "Results of Operations -Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024" for a discussion of these changes.
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Liquidity and Capital Resources
We require funds to pay operating expenses and debt service obligations, acquire properties, make capital and other improvements, fund capital contributions, pay dividends and repurchase shares of our common stock. Generally, in 2025, our primary sources of capital and liquidity were the operations of our multi-family properties (including distributions of $4.2 million from the operations of our unconsolidated joint ventures), $29.7 million from the 2025 Financing, $1.2 million from interests in our Preferred Equity Investments and our available cash. Excluding funds held at our unconsolidated subsidiaries, at December 31, 2025 and February 27, 2026, our available liquidity was approximately $65.1 million and $64.8 million, respectively, including $25.1 million and $24.8 million, respectively, of cash and cash equivalents, and subject to compliance with borrowing base and other requirements, up to $40 million available under our credit facility. A significant amount of our cash and cash equivalents is maintained at our properties for general working capital purposes.
We anticipate that for the four years beginning January 1, 2026, our operating expenses, $120 million of mortgage amortization and interest expense (including $38.8 million from unconsolidated joint ventures) and $314.6 million of balloon payments due with respect to mortgages maturing through 2029 (including $151.7 million from unconsolidated joint ventures), anticipated capital expenditures (for 2026 only) of an aggregate of $12.1 million for consolidated and unconsolidated properties, estimated cash dividend payments of at least $75.6 million (assuming (i) the current quarterly dividend rate of $0.25 per share and (ii) 18.9 million shares outstanding), will be funded from cash generated from operations (including distributions from unconsolidated joint ventures), mortgage financings and re-financings, sales of properties, the issuance of additional equity and, if available, our $40 million credit facility. Our operating cash flow and available cash is insufficient to fully fund the $314.6 million of balloon payments, and if we are unable to refinance such debt on acceptable terms, we may need to issue additional equity or dispose of properties, in each case on potentially unfavorable terms.
Our ability to acquire multi-family properties (including making alternative investments such as preferred equity investments), and implement value-add projects is limited by our available cash and our ability to (i) draw on our credit facility, (ii) obtain, on acceptable terms, mortgage debt and (iii) raise capital from the sale of our common stock.
Disclosure of Known Material Contractual Obligations
The following table sets forth as of December 31, 2025 our known material contractual obligations:
____________________________
| Payment Due by Period | ||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Less than 1 Year | 1 - 3 Years | 3 - 5 Years | More than 5 Years | Total | |||||||||||||||||||||||||||
| Long-Term Debt Obligations (1) | ||||||||||||||||||||||||||||||||
| Interest and Principal Amortization | $ | 40,133 | $ | 65,112 | $ | 48,033 | $ | 114,414 | $ | 267,692 | ||||||||||||||||||||||
| Balloon Principal Payments (2) | 88,677 | 171,485 | 75,655 | 384,440 | 720,257 | |||||||||||||||||||||||||||
| Operating Lease Obligations | 392 | 586 | 552 | 2,425 | 3,955 | |||||||||||||||||||||||||||
| Purchase Obligations (3) (4) | 6,082 | 12,164 | 12,164 | — | 30,410 | |||||||||||||||||||||||||||
| Total | $ | 135,284 | $ | 249,347 | $ | 136,404 | $ | 501,279 | $ | 1,022,314 | ||||||||||||||||||||||
(1) Reflects payments of principal (including amortization payments) and interest and excludes deferred costs. Includes all of the debt of unconsolidated joint ventures. See the following table for information regarding same. Assumes that the interest rate on the junior subordinated notes will be 6.10% per annum, which was the rate in effect at December 31, 2025.
(2) During the year ending December 31, 2026, $37.2 million and $51.5 million is due in March and September, respectively. We anticipate that the amount due in March under the Stono Oaks floating rate construction loan will be extended until March 2027.
(3) Assumes that $1 million and $1.8 million will be paid annually through December 31, 2030 pursuant to the shared services agreement and for the Services, respectively.
(4) Assumes that approximately $2.5 million of property management fees will be paid annually to the property managers of our multi-family properties, including $760,000 related to unconsolidated joint ventures. Such sum reflects the amount we anticipate paying in 2026 on the multi-family properties we own at December 31, 2025. These fees are typically charges based on a percentage of rental revenues from a property. No amount has been reflected as payable pursuant thereto after five years as such amount is not determinable.
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The following table sets forth as of December 31, 2025 information regarding the components of our long-term debt obligations:
| Payment due by Period | ||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Less than 1 Year | 1 - 3 Years | 3 - 5 Years | More than 5 Years | Total | |||||||||||||||||||||||||||
| Mortgages on consolidated properties (1) | $ | 51,872 | $ | 121,376 | $ | 105,881 | $ | 321,320 | $ | 600,449 | ||||||||||||||||||||||
| Mortgages on unconsolidated properties (1) | 74,657 | 110,658 | 13,244 | 127,974 | 326,533 | |||||||||||||||||||||||||||
| Junior subordinated notes and credit facility (2) | 2,281 | 4,563 | 4,563 | 49,560 | 60,967 | |||||||||||||||||||||||||||
| Total | $ | 128,810 | $ | 236,597 | $ | 123,688 | $ | 498,854 | $ | 987,949 | ||||||||||||||||||||||
___________________________
(1) Includes payments of principal (including amortization payments), and interest, and excludes deferred financing costs.
(2) Assumes that the interest rate on the junior subordinated notes will be 6.10% per annum and that no amounts are outstanding under the credit facility.
Corporate Level Financing Arrangements
Junior Subordinated Notes
As of December 31, 2025, $37.4 million (excluding deferred costs of $217,000) in principal amount of our junior subordinated notes is outstanding. These notes mature in April 2036, contain limited covenants (including covenants prohibiting us from paying dividends or repurchasing capital stock if there is an event of default (as defined therein) on these notes), are redeemable at our option and bear an interest rate, which resets and is payable quarterly, of three-month term SOFR plus 226 basis points. At December 31, 2025 and 2024, the interest rate on these notes was 6.1% and 6.85%, respectively.
Credit Facility
Our credit facility with VNB New York, LLC, an affiliate of Valley National Bank (collectively, "VNB"), allows us to borrow, subject to compliance with borrowing base requirements and other conditions, up to $40 million, (i) for the acquisition of, and investment in, multi-family properties, (ii) to repay mortgage debt secured by multi-family properties and (iii) for Operating Expenses (i.e., working capital (including dividend payments) and operating expenses); provided, that not more than $25 million may be used for Operating Expenses. The credit facility is secured by cash accounts maintained by us at VNB (we are required to maintain substantially all of our bank accounts at VNB), and the pledge of our interests in the entities that own three unencumbered multi-family properties used in calculating the borrowing base. The credit facility bears an annual interest rate, which resets monthly, equal to one-month term SOFR plus 250 basis points, with a floor of 6.00%. The interest rate at December 31, 2025 and February 27, 2026, was 6.37% and 6.18% respectively. There is an annual fee of 0.25% on the total amount committed by VNB and unused by us. The credit facility matures in September 2027. As of February 27, 2026, there was no balance outstanding and up to $40 million was available to be borrowed thereunder.
The terms of the credit facility include certain restrictions and covenants which, among other things, limit the incurrence of liens, require that we maintain and include in the collateral securing the facility at least two unencumbered properties with an aggregate value(as calculated pursuant to the facility) of at least $50 million, and require compliance with financial ratios relating to, among other things maintaining a minimum tangible net worth of $140 million, the minimum amount of debt service coverage with respect to the properties (and amounts drawn on the credit facility) used in calculating the borrowing base. Net proceeds received from the sale, financing or refinancing of wholly-owned properties are generally required to be used to repay amounts outstanding under the credit facility.
As of December 31, 2025, we were in compliance in all material respects with the requirements of the facility.
Other Financing Sources and Arrangements
At December 31, 2025, we are joint venture partners in unconsolidated joint ventures which own ten multi-family properties which distributed $3.9 million to us in 2025. We may be required to make capital contributions with respect to these properties. At December 31, 2025, our investment in these joint venture properties have a net equity carrying value of $46.1 million and are subject to mortgage debt, which is not reflected on our consolidated balance sheet, of $286.5 million. Although BRT Apartments Corp. is not the obligor with respect to such mortgage debt, the loss of any of these properties due to mortgage foreclosure or similar proceedings would have a material adverse effect on our results of operations and financial condition. See note 6 to our consolidated financial statements.
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At December 31, 2025, we had preferred equity investments in unconsolidated joint ventures that own multi-family properties. These joint ventures paid us $1.2 million in 2025 and we anticipate that, subject to the underlying property generating sufficient cash flow, that such joint ventures will pay us $1.3 million in 2026. At December 31, 2025, the carrying value of these investments was $17.7 million and these investments are subordinate to mortgage debt of $51.0 million, which debt is not reflected on our consolidated balance sheet.
See "Item 1. Business-Mortgage Debt" for information regarding our mortgage debt at consolidated and unconsolidated subsidiaries.
Inflation
Substantially all of our multi-family property leases are for periods of one-year or less. The short-term nature of these leases generally serves to reduce, but does not eliminate, the affect of inflation on our net income. During 2025, we continued to experience inflationary pressures that drove higher operating expenses, primarily in personnel, repairs and maintenance, and real estate taxes; such increases may continue in 2026 and thereafter, which would adversely affect our operating results.
Inflation affects the overall cost of our debt. We mitigate the risks presented by inflation through the use of fixed interest rate mortgage debt and by paying down, when we deem appropriate, our credit facility debt. However, increasing interest rates, which generally correlates to increasing inflation, increases the interest expense on our junior subordinated notes and makes it less attractive to obtain mortgage debt (including the refinancing of an aggregate of $88.7 million of mortgage debt (including $60.9 million of mortgage debt at unconsolidated joint ventures, that matures in 2026)) or use our credit facility in connection with acquisition and value add activities.
Cash Distribution Policy
We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. Accordingly, we must, among other things, meet a number of organizational and operational requirements, including a requirement that we distribute currently at least 90% of our ordinary taxable income to our stockholders. It is our current intention to comply with these requirements and maintain our REIT status. As a REIT, we generally will not be subject to corporate federal, state or local income taxes on taxable income we distribute currently (in accordance with the Internal Revenue Code and applicable regulations) to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal, state and local income taxes at regular corporate rates and may not be able to qualify as a REIT for four subsequent tax years. Even if we qualify for federal taxation as a REIT, we may be subject to certain state and local taxes on our income and to federal income taxes on our undistributed taxable income (i.e., taxable income not distributed in the amounts and in the time frames prescribed by the Internal Revenue Code and applicable regulations thereunder) and are subject to Federal excise taxes on our undistributed taxable income.
It is our intention to pay to our stockholders within the time periods prescribed by the Internal Revenue Code no less than 90%, and, if possible, 100% of our annual taxable income, including taxable gains from the sale of real estate. It will continue to be our policy to make sufficient distributions to stockholders in order for us to maintain our REIT status under the Internal Revenue Code.
We anticipate that if we do not sell any multi-family properties this year, that a significant amount of the dividends we will pay in 2026, if any, will be treated for federal income tax purposes as a return of capital.
Our board of directors will continue to evaluate, on a quarterly basis, the amount of dividend payments based on its assessment of, among other things, our short and long-term cash and liquidity requirements, prospects, debt maturities, net income, funds from operations, and adjusted funds from operations.
Critical Accounting Estimates
Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we reconsider and evaluate our estimates and assumptions.
We base our estimates on historical experience, current trends and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could materially differ from any of our estimates under different assumptions or conditions. Our significant accounting policies are discussed in Note 1 of our
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consolidated financial statements in this report. We believe the accounting estimates listed below are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.
Equity method investments
We report our investments in unconsolidated entities, over whose operating and financial policies we do not control, under the equity method of accounting. Under this method of accounting, our pro rata share of the applicable entity's earnings or losses is included in our consolidated statements of operations. We initially record our investments based on either the carrying value for properties contributed or the cash invested.
We evaluate our equity-method investments for impairment whenever events or changes in circumstances indicate that the carrying value of our investments may exceed the fair value. If it is determined that a decline in the fair value of our investments is not temporary, and if such reduced fair value is below its carrying value, an impairment is recorded. Determining fair value involves significant judgment. Our estimates consider available evidence including the present value of the expected future cash flows discounted at market rates, general economic conditions and other relevant factors.
Carrying Value of Real Estate Portfolio
We conduct a quarterly review of each real estate asset owned by us and through our joint ventures. This review is conducted in order to determine if indicators of impairment are present on the real estate.
In reviewing the value of the real estate assets owned, if there is an indicator of impairment and the carrying value of the real estate asset is determined to be unrecoverable, we seek to arrive at the fair value of each real estate asset by using one or more valuation techniques, such as comparable sales, discounted cash flow analysis or replacement cost analysis. A real estate asset is considered to be unrecoverable when an analysis suggests that the undiscounted cash flows to be generated by the property will be insufficient to recover our investment. Any impairment taken with respect to our real estate assets reduces our net income, assets and stockholders' equity to the extent of the amount of the allowance, but it will not affect our cash flow until such time as the property is sold.
Allowance for credit losses
We estimate the allowance for credit losses in accordance with the Current Expected Credit Loss (CECL) model under Accounting Standards Codification ("ASC") Topic 326. This model requires us to estimate expected lifetime credit losses for our loan portfolio (i.e., our preferred equity investments) by considering historical loss experience, current economic conditions, and reasonable and supportable forecasts of future economic trends. The estimate is highly subjective and involves significant judgment in the following areas:
•Historical Loss Data: We segment our loan portfolio based on risk characteristics such as borrower type, loan term, and collateral. We will use historical loss experience when available, as a basis for expected credit losses.
•Macroeconomic Forecasts: We incorporate forward-looking macroeconomic indicators, such as GDP growth, unemployment rates, and interest rate trends, to adjust historical loss trends.
•Qualitative Adjustments: We apply management judgments to adjust the allowance for factors that may not be fully captured in the quantitative model, including changes in emerging risks such as regulatory, geopolitical, or credit risks.
•The estimate of expected credit losses is inherently uncertain and sensitive to changes in economic conditions. For example, a 100-basis-point increase in unemployment rates or a prolonged downturn in the real estate market could result in a higher allowance for credit losses, negatively impacting our financial results. Conversely, improvements in economic conditions could result in a lower allowance.
•We continually evaluate the adequacy of our allowance for credit losses and adjust it as necessary. However, actual losses may differ from our estimates due to unforeseen changes in economic conditions or borrower behavior.
Purchase Price Allocations
We allocate the purchase price of properties, including acquisition costs and assumed debt, when appropriate, to the tangible and identified intangible assets and liabilities acquired based on their relative fair values. In making estimates of fair values for purposes of allocating purchase price, we use a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired and existing comparable properties in our portfolio and other market data. We also consider information obtained about each
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property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired.
Equity-Based Compensation
We grant shares of restricted stock and restricted stock units ("RSUs") to eligible plan participants, subject to the recipient's continued service over a specified period and, with respect to the RSUs, the satisfaction of specified conditions over a specified period. A portion of the RSUs vest based upon satisfaction of specified metrics with respect to (i) total stockholder return(“TSR Awards”) and (ii) adjusted funds from operations(“AFFO Awards”), in each case as calculated pursuant to the applicable award agreement. We account for the restricted stock awards and RSUs in accordance with ASC 718, Compensation - Stock Compensation, which requires that such compensation be recognized in the financial statements based on its estimated grant-date fair value. The value of such awards is recognized as compensation expense in general and administrative expenses in the accompanying consolidated statements of operations over the applicable service periods. Grant date fair value is determined with respect to the (i) the restricted stock awards, by the closing stock price on the date of grant, (ii) TSR Awards, by using a Monte Carlo simulation relying upon various assumptions and (iii) AFFO Awards, by using the closing stock price on the grant date, subject to quarterly adjustment based upon management’s subjective projections as to the achievability of the specified metrics related to the AFFO Awards (the “AFFO” Metrics).There is substantial subjectivity in (i) the inputs selected for the Monte Carlo simulation used in determining the grant date fair value of the TSR Awards and the use of different inputs would change the expense we recognize with respect to such awards and (ii) management’s projections as to the achievability of the AFFO Metrics and changes in such projections will cause fluctuations in our results of operations. See Note 11 to our consolidated financial statements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
All of our mortgage debt (other than $6.5 million in principal amount of construction financing at Stono Oaks) bears interest at fixed rates.
Our credit facility bears interest at 30 day term SOFR plus 250 basis points, with an interest rate floor of 6%. At December 31, 2025, no amounts were drawn on the facility.
Our junior subordinated notes bear interest at the rate of three-month term SOFR plus 226 basis points. At December 31, 2025, the interest rate on these notes was 6.1%. A 100 basis point increase or decrease in the rate would result in an increase or decrease, respectively, in interest expense in 2025 of $374,000 (all of which would be due to the change in rate on the junior subordinated notes).
Item 8. Financial Statements and Supplementary Data.
The information required by this item appears in a separate section of this Report following Part IV.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
A review and evaluation was performed by our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act as of the end of the period covered by this Annual Report on Form 10-K. Based on that review and evaluation, our CEO and CFO have concluded that our disclosure controls and procedures, as designed and implemented as of December 31, 2025, were effective.
Management's Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, a company's principal executive and principal financial officers and effected by a company's board, management and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP and includes those policies and procedures that:
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•pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of a company;
•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of a company are being made only in accordance with authorizations of management and the board of directors of a company; and
•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of a company's assets that could have a material effect on the financial transactions.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risks that controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate.
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, assessed the effectiveness of our internal control over financial reporting as of December 31, 2025. In making this assessment, our management used criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013).
Based on its assessment, our management concluded that, as of December 31, 2025, our internal control over financial reporting was effective based on these criteria.
Changes in Internal Controls over Financial Reporting
There have been no changes in our internal controls over financial reporting, as defined in in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act, that occurred during the three months ended December 31, 2025 that materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
Item 9B. Other Information.
Incentive and Repurchase Plans
On March 11, 2026, our board of directors
•adopted, subject to stockholder approval, our 2026 Incentive Plan pursuant to which up to 1,000,000 shares of the Company’s common stock (and certain cash payments pursuant to dividend equivalent rights) may be issued to our employees, officers, directors and certain others pursuant to grants of, among other things, stock options, restricted stock, RSUs, performance share awards and any one or more of the foregoing; and
•increased, by approximately $5 million, the value of the shares that can be repurchased pursuant to our repurchase plan to up to $10 million, and extended the repurchase plan through December 31, 2028.
Disclosure of 10b5-1 Plans
Impact of the One Big Beautiful Bill Act on the Company and its Stockholders
The discussion under "Federal Income Tax Considerations" in our prospectus dated April 28, 2023, as the same may have been amended or supplemented from time-to-time (the “Prospectus”), is hereby modified to reflect legislation commonly
referred to as the One Big Beautiful Bill Act. Capitalized terms used in this section without being defined herein shall have the
meanings ascribed to them by the Prospectus.
Enactment of the One Big Beautiful Bill Act: On July 4, 2025, legislation commonly referred to as the One Big Beautiful
Bill Act (the “OBBBA”) was enacted into law. Among other changes, the OBBBA included a number of changes to the Code
that affect the U.S. federal income tax laws applicable to REITs and their security holders. The most significant of those
changes are described below. Prospective investors should consult their tax advisors regarding the effects of the OBBBA on
their investment.
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REIT Asset Tests: The OBBBA increases the ownership limit applicable to TRSs for taxable years ending after December
31, 2025. For taxable years ending after December 31, 2017 through December 31, 2025, not more than 20% of the value of our
total assets may be represented by securities of one or more TRSs. For taxable years ending after December 31, 2025, not more
than 25% of the value of our total assets may be represented by securities of one or more TRSs.
Pass-Through Business Income Tax Rate Lowered through Deduction: The OBBBA permanently extends the provisions
allowing individuals and some trusts and estates to deduct up to 20% of “qualified REIT dividends,” which are REIT dividends
other than capital gain dividends, dividends designated as eligible for capital gain tax rates and certain other income items
discussed under “Impact of the Tax Cuts and Jobs Act on the Company and its Stockholders-Pass-Through Business Income
Tax Rate Lowered through Deduction.”
Limitations on Interest Deductibility: The OBBBA eases the limitation on the deduction for net interest expense discussed
under “Impact of the Tax Cuts and Jobs Act on the Company and its Stockholders-Limitations on Interest Deductibility,” by
modifying the definition of “adjusted taxable income” which is one of the limitations on the deduction. For taxable years
beginning after December 21, 2025, adjusted taxable income will again be calculated before any deductions for depreciation,
amortization, and depletion.
Revised Individual Tax Rates and Deductions: The OBBBA permanently extends the individual income tax changes
discussed under “Impact of the Tax Cuts and Jobs Act on the Company and its Stockholders-Revised Individual Tax rates and
Deduction.”
The changes made by the OBBBA are complex and we cannot predict the long-term impact of the OBBBA, other new U.S. federal tax laws, and whether, when and how the OBBBA and other new U.S. federal tax laws will be affected by any
administrative and judicial interpretations. Prospective investors should consult their tax advisors regarding the effects of the
OBBBA on their investment.
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Not applicable
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PART III
Item 10. Directors, Executive Officers and Corporate Governance.
Apart from certain information concerning our executive officers which is set forth in Part I of this report, the other information required by Item 10 will be incorporated herein by reference to the applicable information to be in the proxy statement to be filed by April 30, 2026 for our 2026 Annual Meeting of Stockholders.
Item 11. Executive Compensation.
The information concerning our executive compensation required by Item 11 is incorporated herein by reference to the proxy statement to be filed by April 30, 2026 with respect to our 2026 Annual Meeting of Stockholders.
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Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.
Except as set forth below, the information required by Item 12 is incorporated herein by reference to the proxy statement to be filed by April 30, 2026 with respect to our 2026 Annual Meeting of Stockholders.
Equity Compensation Plan Information
The following table provides information as of December 31, 2025 about shares of our common stock that may be issued upon the exercise of options, warrants and rights under our 2018 Amended and Restated Incentive Plan (the “2018 Plan”), our 2020 Amended and Restated Incentive Plan (the “2020 Plan”), the 2022 Incentive Plan (the "2022 Plan"; and together with the 2018 Plan and the 2020 Plan, the “Prior Plans”), and our 2024 Incentive Plan (the “2024 Plan”; and together with the Prior Plans, the “Incentive Plans”). No further awards may be granted under the Prior Plans.
Number of securities to be issued upon exercise of outstanding options, warrants and rights (a) | Weighted-average exercise price of outstanding options, warrants and rights (b) | Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a) (c) | ||||||||||||||||||
| Equity compensation plans approved by security holders | 573,864 | (1) | — | 449,346 | (2) | |||||||||||||||
| Equity compensation plans not approved by security holders | — | — | — | |||||||||||||||||
| Total | 573,864 | — | 449,346 | |||||||||||||||||
_______________________________________________________________________________
(1) Includes up to 188,438, 190,013 and 195,413 shares of common stock issuable pursuant to restricted stock units (“RSUs”) that vest as of June 30, 2026, June 30, 2027, and June 30, 2028, respectively, if and to the extent specified conditions are satisfied by such vesting dates. RSUs granted pursuant to the 2022 Plan and the 2024 Plan account for 188,438 shares and 385,426 shares, respectively. Excludes 922,428 shares of restricted stock issued pursuant to the Incentive Plans as such shares, although subject to forfeiture, are outstanding. See note 11 to our consolidated financial statements.
(2) Does not give effect to 148,673 shares of restricted stock granted January 9, 2026 pursuant to the 2024 Plan.
43
Item 13. Certain Relationships and Related Transactions, and Director Independence.
The information concerning relationships and certain transactions required by Item 13 is incorporated herein by reference to the proxy statement to be filed by April 30, 2026 with respect to our 2026 Annual Meeting of Stockholders.
Item 14. Principal Accounting Fees and Services.
The information concerning our principal accounting fees required by Item 14 is incorporated herein by reference to the proxy statement to be filed by April 30, 2026 with respect to our 2026 Annual Meeting of Stockholders.
44
PART IV
Item 15. Exhibits, Financial Statement Schedules.
(a)
1. All Financial Statements.
The response is submitted in a separate section of this report following Part IV.
2. Financial Statement Schedules.
The response is submitted in a separate section of this report following Part IV.
3. Exhibits:
In reviewing the agreements included as exhibits to this Annual Report on Form10-K, please remember they are included to provide you with information regarding their terms and are not intended to provide any other factual or disclosure information about us or the other parties to the agreements. Certain agreements contain representations and warranties by each of the parties to the applicable agreement. These representations and warranties have been made solely for the benefit of the other parties to the applicable agreement and:
•should not in all instances be treated as categorical statements of fact, but rather as a way of allocating the risk to one of the parties if those statements prove to be inaccurate;
•have been qualified by disclosures that were made to the other party in connection with the negotiation of the applicable agreement, which disclosures are not necessarily reflected in the agreement;
•may apply standards of materiality in a way that is different from what may be viewed as material to you or other investors; and
•were made only as of the date of the applicable agreement or such other date or dates as may be specified in the agreement and are subject to more recent developments. Accordingly, these representations and warranties may not describe the actual state of affairs as of the date they were made or at any other time.
45
Exhibit No. | Title of Exhibits | |||||||
| Form of Equity Distribution Agreement dated May 12, 2023 (incorporated by reference to Exhibit 1.1 to our Current Report on Form 8-K filed on May 12, 2023). | ||||||||
| Plan of Conversion dated December 8, 2016 (incorporated by reference to Annex B of Amendment No. 1 to our Registration Statement on Form S-4 filed January 12, 2017 (the "S-4 Registration") (Reg. No. 333-215221). | ||||||||
| Articles of Incorporation of the Registrant (incorporated by reference to Exhibit 3.1 filed with our Current Report on Form 8-K on March 20, 2017). | ||||||||
| By-laws of the Registrant effective as of December 6, 2022 (incorporated by reference to Exhibit 3.2 filed with our Current Report on Form 8-K on December 6, 2022). | ||||||||
| Junior Subordinated Supplemental Indenture, dated as of March 15, 2011, between us and the Bank of New York Mellon (incorporated by reference to Exhibit 4.1 filed with our Current Report on Form 8-K on March 18, 2011). | ||||||||
| Description of Registrant's Securities Registered Pursuant to Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.2 filed with our Annual Report on Form 10-K for the year ended December 31, 2020). | ||||||||
| * | Shared Services Agreement, dated as of January 1, 2002, by and among Gould Investors L.P., us, One Liberty Properties, Inc., Majestic Property Management Corp., Majestic Property Affiliates, Inc. and REIT Management Corp. (incorporated by reference to Exhibit 10.2 filed with our Annual Report on Form 10-K for the year ended September 30, 2008). | |||||||
| * | Form of Indemnification Agreement between the Registrant on the one hand, and its executive officers and directors, on the other hand (incorporated by reference to Exhibit 10.5 to our Annual Report of Form 10-K for the year ended September 30, 2017). | |||||||
| Membership Interest Purchase Agreement dated as of February 23, 2016 entered into between TRB Newark Assemblage, LLC ("TRB") and TRB Newark TRS, LLC ("TRB REIT" and together with TRB, collectively, the "Seller") and RBH Partners III, LLC, and joined by RBH-TRB Newark Holdings, LLC and GS-RBH Newark Holdings, LLC (incorporated by reference to exhibit 10.2 filed with our Quarterly Report on Form 10-Q for the period ended March 31, 2016). | ||||||||
46
Exhibit No. | Title of Exhibits | |||||||
| Amended and Restated Loan Agreement (the "Loan Agreement") made as of November 18, 2021, by and among us and VNB New York, LLC. (incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K on November 18, 2021). | ||||||||
| Unlimited guaranty given by us in favor of VNB (incorporated by reference to Exhibit 10.2 filed with our Current Report on Form 8-K on November 18, 2021). | ||||||||
| Form of Pledge Agreement (incorporated by reference to Exhibit 10.3 filed with our Current Report on Form 8-K on November 18, 2021). | ||||||||
| Form of Negative Pledge Agreement (incorporated by reference to Exhibit 10.4 filed with our Current Report on Form 8-K on November 18, 2021). | ||||||||
| Letter agreement dated as of November 19, 2021 with respect to the Loan Agreement (incorporated by reference to exhibit 10.14 filed with our Annual Report on Form 10-K for the year ended December 31, 2021). | ||||||||
| Amendment dated September 14, 2022 to the Loan Agreement (incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K on September 16, 2022). | ||||||||
| Second amendment dated as of August 22, 2023 to the Amended and Restated Loan Agreement made as of November 18, 2021, as amended, by and between us and VNB New York, LLC. (incorporated by reference to Exhibit 10.1 filed with our Quarterly Report on Form 10-Q for the period ended September 30, 2023). | ||||||||
| Third amendment dated as of July 9, 2024 to the Amended and Restated Loan Agreement made as of November 18, 2021, as amended, by and between us and VNB New York, LLC (incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K on July 15, 2024). | ||||||||
| Form of Membership Interest Purchase Agreement used to effectuate the purchase of the interests of our joint venture partners (incorporated by reference to Exhibit 10.1 filed with our Quarterly Report on Form 10-Q for the period ended March 31, 2022). | ||||||||
| * | 2018 Amended and Restated Incentive Plan (incorporated by reference to Exhibit 10.6 filed with our Current Report on Form 8-K on June 15, 2023). | |||||||
| * | 2020 Amended and Restated Incentive Plan (incorporated by reference to Exhibit 10.8 filed with our Current Report on Form 8-K on June 15, 2023). | |||||||
| * | 2022 Incentive Plan (incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K on June 10, 2022). | |||||||
| * | 2024 Incentive Plan (incorporated by reference to Exhibit 10.1 filed with our Current Report on Form 8-K on June 11, 2024). | |||||||
| * | Form of Restricted Shares Agreement for the 2018 Incentive Plan (incorporated by reference to Exhibit 10.10 filed with our Annual Report on Form 10-K filed December 10, 2018). | |||||||
| * | Form of Restricted Share Agreement awarded in 2023 pursuant to the 2022 Incentive Plan (incorporated by reference to Exhibit 10.19 filed with our Annual Report on Form 10-K for the year ended December 31, 2022). | |||||||
| * | Form of Restricted Share Agreement awarded in 2024 pursuant to the 2022 Incentive Plan (incorporated by reference to Exhibit 10.20 filed with our Annual Report on Form 10-K for the year ended December 31, 2023). | |||||||
| * | Form of Restricted Stock Award Agreement awarded in 2025 pursuant to the 2024 Incentive Plan (incorporated by reference to Exhibit 10.1 filed with our Quarterly Report on Form 10-Q for the period ended March 31, 2025). | |||||||
| * | Form of Restricted Stock Award Agreement granted in 2026 pursuant to the 2024 Incentive Plan. | |||||||
| * | Form of Performance Awards Agreement granted in 2022 pursuant to the 2022 Incentive Plan (incorporated by reference to Exhibit 10.5 filed with our Quarterly Report on Form 10-Q for the period ended September 30, 2022). | |||||||
| * | Form of Performance Awards Agreement granted in 2023 pursuant to the 2022 Incentive Plan (incorporated by reference to Exhibit 10.1 filed with our Quarterly Report on Form 10-Q for the period ended June 30, 2023). | |||||||
| * | Form of Performance Awards Agreement granted in 2024 pursuant to the 2024 Incentive Plan (incorporated by reference to Exhibit 10.2 filed with our Quarterly Report on Form 10-Q for the period ended June 30, 2024). | |||||||
| * | Form of Performance Awards Agreement granted in 2025 pursuant to the 2024 Incentive Plan (incorporated by reference to Exhibit 10.1 filed with our Quarterly Report on Form 10-Q for the period ended June 30, 2025). | |||||||
| Subsidiaries of the Registrant. | ||||||||
| Consent of Ernst & Young, LLP. | ||||||||
| Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (the "Act"). | ||||||||
| Certification of Chief Financial Officer pursuant to Section 302 of the Act. | ||||||||
| Certification of Chief Executive Officer pursuant to Section 906 of the Act. | ||||||||
47
| Certification of Chief Financial Officer pursuant to Section 906 of the Act. | ||||||||
| Registrant's Clawback Policy effective October 2, 2023 (incorporated by reference to Exhibit 97.1 filed with our Annual Report on March 14, 2024). | ||||||||
| 101.INS | The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document. | |||||||
_______________________________________________________________________________
* Indicates management contract or compensatory plan or arrangement.
(b) Exhibits.
See Item 15(a)(3) above. Except as otherwise indicated with respect to a specific exhibit, the file number for all of the exhibits incorporated by reference is: 001-07172.
(c) Financial Statements.
See Item 15(a)(2) above.
Item 16. Form 10-K Summary
Not applicable.
48
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
BRT APARTMENTS CORP. | ||||||||||||||
| Date: | March 12, 2026 | By: | /s/ Jeffrey A. Gould | |||||||||||
Jeffrey A. Gould Chief Executive Officer and President | ||||||||||||||
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
Signature | Title | Date | ||||||||||||
| /s/ Israel Rosenzweig | Chairman of the Board | March 12, 2026 | ||||||||||||
Israel Rosenzweig | ||||||||||||||
| /s/ Jeffrey A. Gould | Chief Executive Officer, President and Director (Principal Executive Officer) | March 12, 2026 | ||||||||||||
Jeffrey A. Gould | ||||||||||||||
| /s/ Carol Cicero | Director | March 12, 2026 | ||||||||||||
| Carol Cicero | ||||||||||||||
| /s/ Alan Ginsburg | Director | March 12, 2026 | ||||||||||||
Alan Ginsburg | ||||||||||||||
| Director | March 12, 2026 | |||||||||||||
Fredric H. Gould | ||||||||||||||
| /s/ Matthew J. Gould | Director | March 12, 2026 | ||||||||||||
Matthew J. Gould | ||||||||||||||
| /s/ Louis C. Grassi | Director | March 12, 2026 | ||||||||||||
Louis C. Grassi | ||||||||||||||
| /s/ Gary Hurand | Director | March 12, 2026 | ||||||||||||
Gary Hurand | ||||||||||||||
| /s/ Jeffrey Rubin | Director | March 12, 2026 | ||||||||||||
Jeffrey Rubin | ||||||||||||||
| /s/ Jonathan Simon | Director | March 12, 2026 | ||||||||||||
Jonathan Simon | ||||||||||||||
| /s/ Elie Weiss | Director | March 12, 2026 | ||||||||||||
Elie Weiss | ||||||||||||||
| /s/ Isaac Kalish | Chief Financial Officer and Senior Vice President (Principal Financial Officer) | March 12, 2026 | ||||||||||||
| Isaac Kalish | ||||||||||||||
| /s/ Matthew Gibbons | Chief Accounting Officer (Principal Accounting Officer) | March 12, 2026 | ||||||||||||
| Matthew Gibbons | ||||||||||||||
49
Table of Contents
Index
Item 8, Item 15(a)(1) and (2)
Index to Consolidated Financial Statements and Consolidated Financial Statement Schedules
Page No. | ||||||||
F-2 | ||||||||
F-4 | ||||||||
F-5 | ||||||||
F-6 | ||||||||
F-7 | ||||||||
F-9 | ||||||||
F-30 | ||||||||
F-33 | ||||||||
All other schedules are omitted because they are not applicable or the required information is shown in the consolidated financial statements or the notes thereto.
F-1
Table of Contents
Index
Report of Independent Registered Public Accounting Firm
To the Stockholders and the Board of Directors of BRT Apartments Corp.
Opinion on the Financial Statements
We have audited the accompanying consolidated balance sheets of BRT Apartments Corp. and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, stockholders' equity and cash flows for each of the two years in the period ended December 31, 2025, and the related notes and financial statement schedules listed in the Index at Item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
Basis for Opinion
These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the account or disclosures to which it relates.
F-2
Table of Contents
Index
Joint Venture Consolidation Assessment
| Description of the Matter | At December 31, 2025, the Company’s investments in unconsolidated joint ventures were $46.1 million, a portion of which were investments in new joint ventures, during the year ended December 31, 2025. The Company accounted for these investments under the equity method of accounting. As discussed in Note 1 to the consolidated financial statements, for each joint venture, the Company evaluated the rights provided to each party and whether those rights are protective or participating, in order to assess the consolidation of the venture. Auditing management’s joint venture consolidation analyses for its investments in new joint ventures were complex and highly judgmental due to the subjectivity in assessing which activities most significantly impact the respective joint venture’s economic performance based on the purpose and design of the entity over the duration of its expected life and assessing which party has rights to direct those activities. | ||||
| How We Addressed the Matter in Our Audit | To test the Company’s consolidation assessment for these investments in new joint ventures, our procedures included, among others, reviewing joint venture agreements and discussing with management the nature of the rights conveyed to the Company through the joint venture agreements. We reviewed management’s assessment of the activities that would most significantly impact the joint venture’s economic performance and evaluated whether the joint venture agreements provided participating or protective rights to the Company. | ||||
/s/ Ernst & Young LLP
We have served as the Company’s auditor since 2020
March 12, 2026
F-3
Table of Contents
Index
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| ASSETS | ||||||||||||||
Real estate properties, net of accumulated depreciation of $ | $ | $ | ||||||||||||
| Investment in unconsolidated joint ventures | ||||||||||||||
Loan receivables, net of deferred fees of $ loss of $ | ||||||||||||||
| Cash and cash equivalents | ||||||||||||||
| Restricted cash | ||||||||||||||
| Other assets | ||||||||||||||
| Total Assets | $ | $ | ||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Liabilities: | ||||||||||||||
Mortgages payable, net of deferred costs of $ | $ | $ | ||||||||||||
Junior subordinated notes, net of deferred costs of $ | ||||||||||||||
| Credit facility | ||||||||||||||
| Accounts payable, accrued and other liabilities | ||||||||||||||
| Total Liabilities | ||||||||||||||
| Commitments and contingencies | ||||||||||||||
| Equity: | ||||||||||||||
| BRT Apartments Corp. stockholders' equity: | ||||||||||||||
Preferred shares $ | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated deficit | ( | ( | ||||||||||||
| Total BRT Apartments Corp. stockholders' equity | ||||||||||||||
| Non-controlling interests | ( | ( | ||||||||||||
| Total Equity | ||||||||||||||
| Total Liabilities and Equity | $ | $ | ||||||||||||
See accompanying notes to consolidated financial statements.
F-4
Table of Contents
Index
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| Revenues: | ||||||||||||||||||||
| Rental and other revenue from real estate properties | $ | $ | ||||||||||||||||||
| Loan interest and other income | ||||||||||||||||||||
| Total revenues | ||||||||||||||||||||
| Expenses: | ||||||||||||||||||||
Real estate operating expenses—including $ | ||||||||||||||||||||
| Interest expense | ||||||||||||||||||||
General and administrative—including $ | ||||||||||||||||||||
| Provision for credit loss | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Total expenses | ||||||||||||||||||||
| Total revenues less total expenses | ( | ( | ||||||||||||||||||
| Equity in (loss) earnings from unconsolidated joint ventures | ( | |||||||||||||||||||
| Gain on sale of real estate | ||||||||||||||||||||
| Insurance recovery of casualty loss | ||||||||||||||||||||
| Loss from continuing operations | ( | ( | ||||||||||||||||||
| Provision (benefit) for taxes | ( | |||||||||||||||||||
| Loss from continuing operations, net of taxes | ( | ( | ||||||||||||||||||
| Income attributable to non-controlling interests | ( | ( | ||||||||||||||||||
| Net loss attributable to common stockholders | $ | ( | $ | ( | ||||||||||||||||
| Weighted average number of shares of common stock outstanding: | ||||||||||||||||||||
| Basic and diluted | ||||||||||||||||||||
| Per share amounts attributable to common stockholders | ||||||||||||||||||||
| Basic and diluted | $ | ( | $ | ( | ||||||||||||||||
See accompanying notes to consolidated financial statements.
F-5
Table of Contents
Index
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 2025 and 2024
(Dollars in thousands, except per share data)
| Shares of Common Stock | Additional Paid-In Capital | (Accumulated Deficit) | Non-Controlling Interests | Total | ||||||||||||||||||||||||||||||||||
| Balances, December 31, 2023 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Distributions - Common Stock - $ | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Restricted stock and restricted stock units vesting | ( | — | — | |||||||||||||||||||||||||||||||||||
| Compensation expense—restricted stock and restricted stock units | — | — | — | |||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interests | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||
| Shares issued through DRIP | — | — | ||||||||||||||||||||||||||||||||||||
| Shares repurchased | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balances, December 31, 2024 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
Distributions - Common Stock - $ | — | — | ( | — | ( | |||||||||||||||||||||||||||||||||
| Restricted stock and restricted stock units vesting | ( | — | — | |||||||||||||||||||||||||||||||||||
| Compensation expense—restricted stock and restricted stock units | — | — | — | |||||||||||||||||||||||||||||||||||
| Distributions to non-controlling interests | — | — | — | ( | ( | |||||||||||||||||||||||||||||||||
| Shares issued through DRIP | — | — | ||||||||||||||||||||||||||||||||||||
| Shares repurchased | ( | ( | — | — | ( | |||||||||||||||||||||||||||||||||
| Net (loss) income | — | — | ( | ( | ||||||||||||||||||||||||||||||||||
| Balances, December 31, 2025 | $ | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||||
See accompanying notes to consolidated financial statements.
F-6
Table of Contents
Index
| BRT APARTMENTS CORP. AND SUBSIDIARIES | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||
| (Dollars in Thousands) | ||||||||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| Cash flows from operating activities: | ||||||||||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||||||||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Provision for credit loss | ||||||||||||||||||||
| Amortization of deferred financing fees | ||||||||||||||||||||
| Amortization of debt fair value adjustment | ||||||||||||||||||||
| Amortization of deferred loan fee income | ( | ( | ||||||||||||||||||
| Amortization of restricted stock and restricted stock units | ||||||||||||||||||||
| Equity in loss (earnings) of unconsolidated joint ventures | ( | |||||||||||||||||||
| Gain on sale of real estate | ( | ( | ||||||||||||||||||
| Increases and decreases from changes in other assets and liabilities: | ||||||||||||||||||||
| Decrease (increase) in other assets | ( | |||||||||||||||||||
| Increase in accounts payable and accrued liabilities | ( | |||||||||||||||||||
| Net cash provided by operating activities | ||||||||||||||||||||
| Cash flows from investing activities: | ||||||||||||||||||||
| Improvements to real estate owned | ( | ( | ||||||||||||||||||
| Additions to loan receivables | ( | |||||||||||||||||||
| Proceeds from the sale of real estate owned | ||||||||||||||||||||
| Distributions from unconsolidated joint ventures | ||||||||||||||||||||
| Contributions to unconsolidated joint ventures | ( | ( | ||||||||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||||||||
| Cash flows from financing activities: | ||||||||||||||||||||
| Proceeds from mortgages payable | ||||||||||||||||||||
| Mortgage payoffs | ( | |||||||||||||||||||
| Mortgage principal payments | ( | ( | ||||||||||||||||||
| Proceeds from credit facility | ||||||||||||||||||||
| Repayment of credit facility | ( | |||||||||||||||||||
| Increase in deferred financing costs | ( | ( | ||||||||||||||||||
| Dividends paid | ( | ( | ||||||||||||||||||
| Distributions to non-controlling interests | ( | ( | ||||||||||||||||||
| Proceeds from the issuance of DRP shares | ||||||||||||||||||||
| Repurchase of shares of common stock | ( | ( | ||||||||||||||||||
| Net cash (used in) provided by financing activities | ||||||||||||||||||||
| Net (decrease) increase in cash, cash equivalents, restricted cash and escrows: | ( | |||||||||||||||||||
| Cash, cash equivalents, restricted cash and escrows at beginning of year | ||||||||||||||||||||
| Cash, cash equivalents, restricted cash and escrows at end of year | $ | $ | ||||||||||||||||||
F-7
Table of Contents
Index
| BRT APARTMENTS CORP. AND SUBSIDIARIES | ||||||||||||||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||||||||||
| (Dollars in Thousands) | ||||||||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| Supplemental disclosures of cash flow information: | ||||||||||||||||||||
| Cash paid during the year for interest expense | $ | $ | ||||||||||||||||||
| Cash paid (net of refunds received) during the year for income and excise taxes | $ | $ | ( | |||||||||||||||||
| The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows. | ||||||||||||||
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
| Restricted cash | ||||||||||||||
| Escrows (Other assets) | $ | |||||||||||||
| Total cash, cash equivalents, restricted cash and escrows shown in consolidated statement of cash flows | $ | $ | ||||||||||||
See accompanying notes to consolidated financial statements.
F-8
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 1—ORGANIZATION, BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES
Organization and Background
BRT Apartments Corp. (“BRT” or the “Company”) owns, operates and, to a lesser extent, develops multi-family properties. These multi-family properties may be wholly-owned by us or by unconsolidated joint ventures in which the Company contributes a significant portion of the equity. At December 31, 2025, BRT: (i) wholly-owns 21 multi-family properties located in eleven states with an aggregate of 5,420 units and a carrying value of $595,245,000 ; (ii) has ownership interests, through unconsolidated entities, in ten multi-family properties located in four states with an aggregate of 2,891 units, and the carrying value of its net equity investment is $46,121,000 ; (iii) have investments in joint ventures that own two multi-family properties which investments are treated for financial statement reporting purposes as loans (the "Preferred Equity Investments"), with a carrying value of $17,723,000 , and (iv) owns other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $1,569,000 . The Company's 31 multi-family properties are located primarily in the Southeast United States and Texas.
BRT conducts its operations to qualify as a real estate investment trust, or REIT, for Federal income tax purposes.
Most of the Company's assets are comprised of multi-family real estate assets generally leased to tenants on a one-year basis. Therefore, the Company aggregates real estate assets for reporting purposes and operates in one reportable segment.
Principles of Consolidation
The consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries.
The joint venture that owns a commercial property in Yonkers, NY was determined not to be a variable interest entity ("VIE") but is consolidated because the Company has controlling rights in such entity.
Other than the preferred equity investments (described in the following paragraph), the Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting. For each joint venture, the Company evaluated the rights provided to each party and whether those rights are protective or participating, in order to assess the consolidation of the venture. Additionally, the Company evaluated the purpose and design of each entity over the duration of its expected life and determined which activities most significantly impacted the joint venture's economic performance, as well as which party has the rights to direct those activities. All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these joint ventures are VIEs. Additionally, the Company does not exercise substantial operating control over these entities, and therefore the entities are not consolidated. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for their share of equity in earnings, cash contributions and distributions. The distributions to each joint venture partner are determined pursuant to the applicable operating agreement and may not be pro-rata to the percentage equity interest each partner has in the applicable venture.
The Company qualifies as a real estate investment trust under sections 856-860 of the Internal Revenue Code of 1986, as amended. The board of directors may, at its option, elect to revoke or terminate the Company's election to qualify as a real estate investment trust.
The Company will not be subject to federal, and generally state and local taxes on amounts it distributes to stockholders, provided it distributes 90% of its ordinary taxable income and meets other conditions.
F-9
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 1—ORGANIZATION, BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES (continued)
In accordance with Accounting Standards Codification ("ASC") Topic 740 - "Income Taxes", the Company believes that it has appropriate support for the income tax positions taken and, as such, does not have any uncertain tax positions that, if
successfully challenged, could result in a material impact on the Company's financial position or results of operations. The Company's income tax returns for the tax years 2022 through 2024 are subject to review by the Internal Revenue Service.
Revenue Recognition
Rental revenue from multi-family properties is recorded when due from residents and is recognized monthly as it is earned. Rental payments are due in advance. Lease concessions are generally reported on a straight line basis over the lease term. Leases on residential properties are generally for terms that do not exceed one year .
Rental revenue from commercial properties, including the base rent that each tenant is required to pay in accordance with the terms of their respective leases, net of any rent concessions and lease incentives, is reported on a straight-line basis over the non-cancellable term of the lease.
Current Returns (as defined in Note 5 - Loans) from our preferred equity investments are recorded as interest income when it is earned from the sponsor of the joint venture and Hurdle Returns (as defined in Note 5 - Loans) are recorded as interest income when it is probable that it will be received. Deferred loan fees are capitalized and recorded into income over the life of the investment.
Real Estate Properties
Real estate properties are stated at cost, net of accumulated depreciation, and include properties acquired through acquisition or development.
When the Company purchases real estate assets from third-parties, the Company allocates the purchase price of real estate, including direct transaction costs applicable to an asset acquisition, among land, building, improvements and intangibles (e.g., the value of above, below and at market leases, and origination costs associated with in-place leases and above or below-market mortgages assumed at the acquisition date). The value, as determined, is allocated to the gross assets acquired based on management’s determination of the relative fair values of these assets and liabilities.
Depreciation for multi-family properties is computed on a straight-line basis over an estimated useful life of 30 years. Intangible assets (and liabilities) are amortized over the remaining life of the related leases at the time of acquisition and are usually less than one year. Expenditures for maintenance and repairs are charged to operations as incurred.
Real estate is classified as held for sale when management has determined that the applicable criteria have been met. Real estate assets that are expected to be disposed of are valued at the lower of their carrying amount or their fair value less costs to sell on an individual asset basis. Real estate classified as held for sale is not depreciated.
The Company accounts for the sale of real estate when title passes to the buyer, sufficient equity payments have been received, there is no continuing involvement by the Company and there is reasonable assurance that the remaining receivable, if any, will be collected.
Real Estate Asset Impairments
The Company reviews each real estate asset owned quarterly to determine if there are indicators of impairment. If such indicators are present, the Company determines whether the carrying amount of the asset can be recovered. Recognition of impairment is required if the undiscounted cash flows estimated to be generated by the asset are less than the asset's carrying amount and that carrying amount exceeds the estimated fair value of the asset. The impairment recognized is the difference between the carrying value and the fair value. The estimated fair value is determined using a discounted cash flow model of the expected future cash flows through the useful life of the property. The analysis includes an estimate of the future cash flows that are expected to result from the real estate investment’s use and eventual disposition. These cash flows consider factors such as expected future operating income, trends, the effects of leasing demands, and other factors. In evaluating a property for impairment, various factors are considered, including estimated current and expected operating cash flow from the property during the projected holding period, costs necessary to extend the life or improve the asset, expected capitalization rates,
F-10
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 1—ORGANIZATION, BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES (continued)
projected stabilized net operating income, selling costs, and the ability to hold and dispose of such real estate in the ordinary course of business. Valuation adjustments may be necessary in the event that effective interest rates, rent-up periods, future economic conditions, and other relevant factors vary significantly from those assumed in valuing the property. If future evaluations result in a decrease in the value of the property below its carrying value, the reduction will be recognized as an impairment charge. The fair values related to the impaired real estate assets are considered to be a level 3 valuation within the fair value hierarchy because they are based on unobservable inputs and are subjective in nature.
Loan receivables
In accordance with accounting guidance, the Company is treating its preferred equity investments as loans. Despite participating in the expected residual profit, each borrower (i.e., the sponsor/owner of the multi-family property in which the Company made a preferred equity investment) has a cash equity investment substantial to the project that is not funded by the mortgage lender. As such, these arrangements are accounted for as loan receivables.
Allowance for Credit Losses on Loan Receivables
The CECL reserve required under ASU 2016-13 “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326)” (“ASU 2016-13”), reflects the Company's estimate as of the balance sheet date of potential credit losses related to its loan portfolio. Changes to the CECL reserve are recognized through a provision for or reversal of current expected credit loss reserve on the Company's consolidated statements of operations. ASU 2016-13 specifies the reserve should be based on relevant information about past events, including historical loss experience, current loan portfolio, market conditions and reasonable and supportable macroeconomic forecasts for the duration of each loan. The Company has elected to apply the practical expedient to exclude accrued interest receivable from the amortized cost basis of the receivables.
The Company considers key credit quality indicators in underwriting loans and estimating credit losses, including: the capitalization of borrowers and sponsors; the expertise of the sponsors in a particular real estate sector and geographic market; collateral type; geographic region; use and occupancy of the property; property market value; loan amount and lien position; industry risk rating for the same and similar loans; and prior experience with the sponsor. Such analyses are completed and reviewed by asset management personnel and evaluated by senior management on at least a quarterly basis, utilizing various
data sources, including, to the extent available, (i) periodic financial data such as property occupancy, rental rates, capitalization and discount rates, (ii) site inspections, (iii) sales and financing comparables, (iv) current credit spreads for refinancing and (v)
other relevant market data. Ultimate repayment of these loan receivables is sensitive to interest rate changes, general economic conditions, liquidity, existence of an active sales market for properties, and availability of replacement financing.
F-11
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 1—ORGANIZATION, BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES (continued)
Equity Based Compensation
Compensation expense for grants of restricted stock, restricted stock units ("RSUs") and dividend equivalent rights are amortized over the vesting period of such awards, based upon the estimated fair value of such award at the grant date. The Company recognizes the effect of forfeitures when they occur and previously recognized compensation expense is reversed in the period the grant or unit is forfeited. The deferred compensation related to the performance based RSUs to be recognized as expense is net of certain performance assumptions which are re-evaluated quarterly. For accounting purposes, the shares of restricted stock and the RSUs are not included in the outstanding shares shown on the consolidated balance sheets until they vest; however, the restricted stock is included in the calculation of basic and diluted earnings per share as it participates in the earnings of the Company.
Per Share Data
Basic earnings (loss) per share is determined by dividing net income (loss) applicable to holders of common stock for the applicable year by the weighted average number of shares of common stock outstanding during such year. Net income is also allocated to the unvested restricted stock outstanding during each period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security. The RSUs are excluded from the basic earnings per share calculation, as they are not participating securities.
Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue shares of common stock were exercised or converted into shares of common stock or resulted in the issuance of shares of common stock that share in the earnings of the Company. Diluted earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock deemed to be outstanding during such period.
Cash Equivalents
Cash equivalents consist of highly liquid investments; primarily, direct United States treasury obligations with maturities of three months or less when purchased.
Restricted Cash
Restricted cash consists of cash held for construction costs and property improvements for specific joint venture properties as may be required by contractual arrangements.
Segment Reporting
On January 1, 2024, the Company adopted the FASB ASU No. 2023-07, Segment Reporting – Improvements to Reportable Segments Disclosures, as amended, which enhances disclosures of significant segment expenses regularly provided to the chief operating decision maker.
Substantially all of the Company’s real estate assets, at acquisition, are comprised of real estate owned that is leased to tenants on a short-term basis. Therefore, the Company aggregates real estate assets for reporting purposes and operates in one reportable segment.
F-12
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 1—ORGANIZATION, BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES (continued)
Other Assets
Other assets consist of real estate tax, insurance and replacement escrows (all of the foregoing classified as restricted cash within the consolidated statement of cash flows), lease intangibles, tenant receivables, prepaid expenses and other receivables.
Deferred Costs
Fees and costs incurred in connection with multi-family property financings are deferred and amortized over the term of the related debt obligations. Fees and costs paid related to the successful negotiation of commercial leases are deferred and amortized on a straight-line basis over the terms of the respective leases and are included in other assets on the consolidated balance sheets.
Use of Estimates
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Actual results could differ from those estimates.
Stock Based Compensation
The fair value of restricted stock grants and restricted stock units (“RSUs”), determined as of the date of grant, is amortized into general and administrative expense over the respective vesting period. The deferred compensation to be recognized as expense is net of forfeitures. The Company recognizes the effect of forfeitures when they occur and previously recognized compensation expense is reversed in the period the grant or unit is forfeited. For share-based awards with a performance or market measure, the Company recognizes compensation expense over the requisite service period and the performance assumptions are re-evaluated quarterly. The requisite service period begins on the date the Compensation Committee of the Company’s Board of Directors authorizes the award, adopts any relevant performance measures and communicates the award to the recipient.
Concentration of Credit Risk
The Company maintains cash accounts at various financial institutions. While the Company attempts to limit any financial exposure, some of its deposit balances exceed federally insured limits. The Company has not experienced any losses on such accounts.
The Company’s properties are located in 11 states. Properties in each of Tennessee, Mississippi, Alabama, Georgia and Florida, contributed more than 10
F-13
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 2—REAL ESTATE PROPERTIES
Real estate properties consist of the following (dollars in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Land | $ | $ | ||||||||||||
| Building | ||||||||||||||
| Building improvements | ||||||||||||||
| Real estate properties | ||||||||||||||
| Accumulated depreciation | ( | ( | ||||||||||||
| Total real estate properties, net | $ | $ | ||||||||||||
A summary of activity in real estate properties, net, for the year ended December 31, 2025 follows (dollars in thousands):
| December 31, 2024 Balance | Improvements | Depreciation | Asset Sale | December 31, 2025 Balance | |||||||||||||||||||||||||
| Multi-family | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||
| Retail shopping center - Yonkers, NY/Other | ( | ||||||||||||||||||||||||||||
| Fort Washington | ( | ||||||||||||||||||||||||||||
| Total real estate properties, net | $ | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||
The following summarizes, by state, information for the year ended December 31, 2025 regarding consolidated properties (dollars in thousands):
__________________________________________
| Location | Number of Properties | Number of Units | 2025 Rental and Other Revenue | % of 2025 Rental and Other Revenue | ||||||||||||||||||||||
| Tennessee | $ | % | ||||||||||||||||||||||||
| Mississippi | % | |||||||||||||||||||||||||
| Alabama | % | |||||||||||||||||||||||||
| Georgia | % | |||||||||||||||||||||||||
| Florida | % | |||||||||||||||||||||||||
| Texas | % | |||||||||||||||||||||||||
| South Carolina | % | |||||||||||||||||||||||||
| Virginia | % | |||||||||||||||||||||||||
| North Carolina | % | |||||||||||||||||||||||||
| Ohio | % | |||||||||||||||||||||||||
| Missouri | % | |||||||||||||||||||||||||
| Other (a) | % | |||||||||||||||||||||||||
| $ | ||||||||||||||||||||||||||
(a) Represents non-multi-family revenues.
F-14
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 2—REAL ESTATE PROPERTIES (continued)
Future minimum rent to be received pursuant to non-cancellable operating leases with terms in excess of one year, from a commercial property owned by the Company at December 31, 2025, are as follows (dollars in thousands):
| Year Ending December 31, | Amount | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
Leases at the Company's multi-family properties are generally for a term of one year or less and are not reflected in this table.
NOTE 3—DISPOSITIONS
Property Dispositions
During the year ended December 31, 2025, the Company sold a cooperative apartment unit located in New York, NY for a sales price of $995,000 and, after closing costs, recognized a gain of $755,000 on the sale.
During the year ended December 31, 2024, the Company sold a cooperative apartment unit located in New York, NY for a sales price of $1,050,000 and, after closing costs, recognized a gain of $806,000 on the sale.
NOTE 4—RESTRICTED CASH
Restricted cash represents funds held for specific purposes and are therefore not available for general corporate purposes. The restricted cash reflected on the consolidated balance sheets represents funds that are held by the Company specifically for capital improvements at certain multi-family properties owned by unconsolidated joint ventures and at properties where we have a preferred equity investment; such funds are not generally available for general corporate purposes.
NOTE 5—LOANS
The Company made preferred equity investments in two separate joint ventures which in turn acquired multi-family properties in the locations identified below. In accordance with GAAP, these investments are treated as loans. These investments are unsecured and are subordinate, including the payment of the returns thereon, to the mortgage debt encumbering the property acquired by the applicable joint venture. Information as to these investments at December 31, 2025 is summarized below (dollars in thousands):
| Location | Investment Date | Annual Return | Current Return | Hurdle Return | Invested Amount | Redemption Date | Deferred fees | |||||||||||||||||||||||||||||||||||||
| Wilmington, NC | October 2024 | % | % | % | $ | November 2031 | $ | |||||||||||||||||||||||||||||||||||||
| Kennesaw, GA | November 2024 | % | % | % | June 2029 | |||||||||||||||||||||||||||||||||||||||
| $ | $ | |||||||||||||||||||||||||||||||||||||||||||
F-15
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 5—LOANS (continued)
These investments provide for (1) an Annual Return ( as set forth in the table above) to the Company, of which the Current Return (as set forth in the table above) is payable monthly to the extent of remaining cash flow, if any, pari passu or after the sponsor's receipt of its management fees and specified returns on its investment and (2) the total amount invested by the Company, including any unpaid portion of the Current Return and the Hurdle Return, to be payable to the Company, prior to any payments to the sponsor, upon the earlier to occur of certain events (e.g., sale of the property or the refinancing of the mortgage underlying the property) and the redemption date specified above. The Current Return is recorded as interest income when it is due from the sponsor and the Hurdle Return is recognized as interest income when it is probable it will received. The Company's exposure to loss is limited to its original Invested Amount (as set forth in the table above).
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Unpaid principal balance | $ | $ | ||||||||||||
| less: allowance for credit loss | ( | ( | ||||||||||||
| less: deferred loan fees | ( | ( | ||||||||||||
| Net carrying value | $ | $ | ||||||||||||
The Company recorded $1,218,000 and $206,000 of interest income (including loan fee amortization of $61,000 and $9,000 ) related to these loans during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, these loans were current in their payment of the Current Return.
NOTE 6—ALLOWANCE FOR CREDIT LOSS
Changes in the Company's allowance for credit loss were as follows (in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| CECL allowance at beginning of year | $ | $ | ||||||||||||
| Provision for credit loss | ||||||||||||||
| Write offs | ||||||||||||||
| Balance at end of year | $ | $ | ||||||||||||
NOTE 7—LEASES
Lessor Accounting
The Company owns a commercial property which is leased to two tenants under operating leases with current expirations ranging from 2028 to 2035, with options to extend or terminate the leases. Revenues from such leases are reported as rental income, net, and are comprised of (i) lease components, which includes fixed lease payments and (ii) non-lease components, which includes reimbursements of property level operating expenses. The Company does not separate non-lease components from the related lease components as the timing and pattern of transfer are the same, and accounts for the combined component in accordance with ASC 842.
F-16
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 7—LEASES (continued)
Lessee Accounting
The Company is a lessee under a ground lease in Yonkers, NY which is classified as an operating lease. The ground lease is scheduled to expire on June 30, 2045. There are no renewal options. As of December 31, 2025, the remaining lease term is 19.5 years.
The Company is a lessee under a corporate office lease in Great Neck, NY, which is classified as an operating lease. The lease expires on December 31, 2031 and provides a five-year renewal option. As of December 31, 2025, the remaining lease term, including renewal options deemed exercised, is 11.0 years.
As of December 31, 2025, the Company's right-of-use ("ROU") assets and lease liabilities were $1,832,000 and $2,015,000 , respectively and as of December 31, 2024, the Company's ROU assets and lease liabilities were $2,003,000 and
$2,167,000 , respectively. The ROU assets and lease liabilities are reported on the consolidated balance sheets in and , respectively.
The discount rate applied to measure each ROU asset and lease liability is based on the Company’s incremental borrowing
rate (“IBR”). The Company considers the general economic environment and its historical borrowing rate activity and factors
in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease.
As the Company did not elect to apply the hindsight practical expedient, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842.
As of December 31, 2025, the minimum future lease payments related to the operating ground and office leases are as follows (dollars in thousands):
| Year Ending December 31, | Amount | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total undiscounted cash flows | $ | |||||||
| Present value discount | ( | |||||||
| Lease liability | $ | |||||||
F-17
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 8—INVESTMENT IN UNCONSOLIDATED VENTURES
At December 31, 2025 and 2024, the Company owned interests in unconsolidated joint ventures (the "Unconsolidated Properties") that owns 10 and 8 multi-family properties (including Stono Oaks that was in lease-up at December 31, 2024), respectively. The condensed balance sheets below presents information regarding such investments (other than the preferred equity investments) (dollars in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| ASSETS | ||||||||||||||
Real estate properties, net of accumulated depreciation of $ | $ | $ | ||||||||||||
| Cash and cash equivalents | ||||||||||||||
| Other Assets | ||||||||||||||
| Total Assets | $ | $ | ||||||||||||
| LIABILITIES AND EQUITY | ||||||||||||||
| Liabilities: | ||||||||||||||
Mortgages payable, net of deferred costs of $ | $ | $ | ||||||||||||
| Accounts payable and accrued liabilities | ||||||||||||||
| Total Liabilities | ||||||||||||||
| Commitments and contingencies | ||||||||||||||
| Equity: | ||||||||||||||
| Total unconsolidated joint venture equity | ||||||||||||||
| Total Liabilities and Equity | $ | $ | ||||||||||||
| Company equity interest in all joint venture equity | $ | $ | ||||||||||||
F-18
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 8—INVESTMENT IN UNCONSOLIDATED VENTURES (continued)
At the indicated dates, real estate properties of the unconsolidated joint ventures consist of the following (dollars in thousands):
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Land | $ | $ | ||||||||||||
| Building | ||||||||||||||
| Building improvements | ||||||||||||||
| Real estate properties | $ | $ | ||||||||||||
| Accumulated depreciation | ( | ( | ||||||||||||
| Total real estate properties, net | $ | $ | ||||||||||||
At December 31, 2025 and December 31, 2024, the weighted average interest rate on the mortgages payable is 4.21 % and 4.30 %, respectively, and the weighted average remaining term to maturity is 3.3 years and 3.9 years, respectively.
The condensed income statements below presents information regarding the Unconsolidated Properties (dollars in thousands):
| Year Ended December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Revenues: | ||||||||||||||
| Rental and other revenue | $ | $ | ||||||||||||
| Total revenues | ||||||||||||||
| Expenses: | ||||||||||||||
| Real estate operating expenses | ||||||||||||||
| Interest expense | ||||||||||||||
| Depreciation | ||||||||||||||
| Total expenses | ||||||||||||||
| Total revenues less total expenses | ( | |||||||||||||
| Other equity earnings | ||||||||||||||
| Net (loss) income from joint ventures | $ | ( | $ | |||||||||||
| BRT equity in (loss) earnings from unconsolidated joint venture properties | $ | ( | $ | |||||||||||
F-19
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 8—INVESTMENT IN UNCONSOLIDATED VENTURES (continued)
On July 15, 2025, an unconsolidated joint venture in which the Company has an 80 % interest, acquired 1322 North, a 214 unit multi-family property located in Auburn, AL (the "Auburn Acquisition"). The venture acquired the property for $36,500,000 (including a $24,419,000 mortgage). The mortgage matures in 2032, bears a 5.38 % fixed interest rate, and is interest only through maturity. The Company contributed $10,750,000 to the joint venture for its equity interest and working capital purposes. In connection with this transaction, the Company borrowed $7,000,000 from its credit facility. See Note 9 - Debt Obligations.
On September 19, 2025, an unconsolidated joint venture in which the Company has an 80 % interest, acquired Oaks at Victory, a 150 unit multi-family property located in Savannah, GA (the "Savannah Acquisition"). The venture acquired the property for $23,000,000 (including a $15,680,000 mortgage assumed as part of the transaction). The mortgage matures in 2031, bears a 2.71 % fixed interest rate, and is interest only through September 30, 2027. The Company contributed $8,380,000 to the joint venture for its equity interest and working capital. In connection with this transaction, the Company borrowed $8,000,000 from its credit facility. See Note 9 - Debt Obligations.
NOTE 9—DEBT OBLIGATIONS
Debt obligations consist of the following (dollars in thousands):
________________________
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Mortgages payable | $ | $ | ||||||||||||
| Junior subordinated notes | ||||||||||||||
Credit facility (1) | ||||||||||||||
Deferred loan costs (2) | ( | ( | ||||||||||||
| Total debt obligations | $ | $ | ||||||||||||
(1) Draws associated with the acquisition of investments in unconsolidated ventures outlined in note 8 were repaid in full during 2025.
(2) Excludes $236 and $374 at December 31, 2025 and 2024, respectively, of deferred fees related to our credit facility which are reflected in Other Assets.
(2) Excludes $
Mortgage Debt
A summary of activity in mortgage debt, net of deferred loan fees, for the year ended December 31, 2025 is as follows (dollars in thousands):
| Balance at December 31, 2024 | $ | |||||||
| New mortgage | ||||||||
| Amortization of fair value adjustment | ||||||||
| Debt payoff | ( | |||||||
| Principal amortization | ( | |||||||
| Changes in deferred fees | ( | |||||||
| Balance at December 31, 2025 | $ | |||||||
F-20
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 9—DEBT OBLIGATIONS (continued)
At December 31, 2025, $475,697,000 of mortgage debt, all of which is fixed rate, with a weighted average interest rate of 4.22 % and a weighted average remaining term to maturity of 6.4 years, is outstanding on 19 of the Company's multi-family properties. Scheduled principal repayments for the periods indicated are as follows (dollars in thousands):
| Year Ending December 31, | Scheduled Principal Payments | |||||||
| 2026 | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| $ | ||||||||
The unamortized balance of acquisition related mortgage intangibles, which is included in mortgages payable in the consolidated balance sheet, was $304 at December 31, 2025 and will be amortized as follows (dollars in thousands):
| Year Ending December 31, | Amount | |||||||
| 2026 | $ | |||||||
| 2027 | ( | |||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
The following table summarizes mortgage debt obtained in the years ended December 31, 2025 and December 31, 2024 (dollars in thousands):
| Property Name | Location | Date | Mortgage (1) | Interest Rate | Maturity Date | |||||||||||||||||||||||||||
| 2025 | ||||||||||||||||||||||||||||||||
| Parkway Grande | LaGrange, GA | 09/26/2025 | $ | Oct 2032 | ||||||||||||||||||||||||||||
| Woodland Apartments | Boerne, TX | 12/16/2025 | Jan 2036 | |||||||||||||||||||||||||||||
| Grove at River Place | Macon, GA | 12/16/2025 | Jan 2031 | |||||||||||||||||||||||||||||
| Civic Center I | Southaven, MS | 12/16/2025 | Jan 2036 | |||||||||||||||||||||||||||||
| 2024 | ||||||||||||||||||||||||||||||||
| Woodland Trails | San Marcos, TX | 08/22/2024 | $ | Oct 2032 | ||||||||||||||||||||||||||||
(1) All mortgages are interest only for the full term with the exception of Woodland Trails which is interest only for five years .
F-21
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 9—DEBT OBLIGATIONS (continued)
Interest expense relating to mortgages for the years ended December 31, 2025 and 2024, which includes amortization of deferred loans fees and fair value adjustments, was $20,426,000 and $19,372,000 respectively.
Credit Facility
On July 9, 2024, the Company's credit facility, with an affiliate of Valley National Bank ("VNB"), was amended to, among other things, reduce the borrowing capacity from $60,000,000 to $40,000,000 , extend the facility's maturity from September 2025 to September 2027 and revise certain financial and other covenants. The facility allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to $40,000,000 . The facility can be used to facilitate the acquisition of multi-family properties, repay mortgage debt secured by multi-family properties and for operating expense (i.e.,working capital (including dividend payments)); provided that no more than $25,000,000 may be used for operating expenses. The facility is secured by the cash available at VNB and the Company's pledge of the interests in the entities that own the properties, and matures in September 2027.
The interest rate on the credit facility, which adjusts monthly and is subject to a floor of 6.00 %, equals one-month term plus 250 basis points. The interest rate in effect as of December 31, 2025 and February 27, 2026 was 6.37 % and 6.18 %, respectively. There is an unused facility fee of 0.25 % per annum on the total amount committed by VNB and unused by the Company.
On July 9, 2025, in connection with the acquisition of 1322 North, the Company borrowed $7,000,000 from its credit facility. On September 19, 2025, in connection with the acquisition of Oaks at Victory, the Company borrowed $8,000,000 . On September 30, 2025, in connection with supplementing working capital reserves, the Company borrowed $2,500,000 . On December 17, 2025, the outstanding balance of $17,500,000 was repaid in full.
At December 31, 2025, and February 27, 2026, there was no 40,000,000 no outstanding balance of on the facility. The average balance outstanding on the facility for 2025 and 2024 was $5,595,000 and $2,811,000 , respectively. Interest expense for the years ended December 31, 2025 and 2024, which includes amortization of deferred financing costs and unused fees, was $601,000 and $365,000 , respectively. Deferred costs of $236,000 and $374,000 are recorded in Other Assets on the consolidated balance sheets at December 31, 2025 and 2024, respectively.
Junior Subordinated Notes
At December 31, 2025 and 2024, the outstanding principal balance of the Company's junior subordinated notes was $37,400,000 217,000 and $237,000 , respectively. The interest rate on the outstanding balance resets quarterly and is based on three month term + 2.26 %. The rate in effect at December 31, 2025 and 2024 was 6.10 % and 6.85 %, respectively. The notes mature April 30, 2036.
The notes require interest only payments through the maturity date, at which time repayment of all outstanding principal and unpaid interest is due. Interest expense for the years ended December 31, 2025 and 2024, which includes amortization of deferred costs, was $2,484,000 and $2,859,000 , respectively.
NOTE 10—INCOME TAXES
The Company elected to be taxed as a REIT pursuant to the Code. As a REIT, the Company is generally not subject to Federal income taxes at the corporate level if it distributes 100% of its REIT taxable income, as defined, to its stockholders. To maintain its REIT status, the Company must distribute at least 90% of its ordinary taxable income; however, if it does not distribute 100% of its taxable income, it will be taxed on undistributed income. There are a number of organizational and operational requirements the Company must meet to remain a REIT. If the Company fails to qualify as a REIT in any taxable year, its taxable income will be subject to Federal income tax at regular corporate tax rates and it may not be able to qualify as a REIT for four subsequent tax years. Even if it is qualified as a REIT, the Company is subject to certain state and local income taxes and to Federal income and excise taxes on undistributed taxable income. For income tax purposes, the Company reports on a calendar year basis. As of December 31, 2025, tax returns for the calendar years 2022 through 2024 remain subject to examination by the Internal Revenue Service and various state and local tax jurisdictions.
F-22
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 10—INCOME TAXES (continued)
During the years ended December 31, 2025 and 2024, the Company recorded $174,000 and $(226,000 ), respectively, of state franchise tax (benefit) expense, net of refunds, relating to the 2025 and 2024 calendar years.
NOTE 11—STOCKHOLDERS' EQUITY
Common Stock Dividend Distribution
During each of the years ended December 31, 2025 and 2024, the Company declared an aggregate of $1.00 per share in cash dividends.
Stock Based Compensation
In 2024, the Company's stockholders approved the 2024 Incentive Plan (the "2024 Plan"). This plan permits the Company to grant: (i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, for up to a maximum of 1,000,000 shares; and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards. As of December 31, 2025, (i) 449,346 shares are available for issuance pursuant to awards under the 2024 Plan and (ii) awards with respect to 922,428 shares of common stock are outstanding under the 2024 Plan, the 2022 Incentive Plan (the "2022 Plan"), the 2020 Amended and Restated Incentive Plan (the "2020 Plan"), and the 2018 Amended and Restated Incentive Plan (the "2018 Plan; and together with the 2020 Plan and the 2022 Plan, the "Prior Plans"). No further awards may be granted pursuant to the Prior Plans.
The table below reflects activity under the 2024 Plan and the Prior Plans:
| Incentive Plan | 2024 Plan | 2022 Plan | 2020 Plan | 2018 Plan | ||||||||||||||||||||||
| Maximum shares | ||||||||||||||||||||||||||
| Restricted shares issued | ( | ( | ( | ( | ||||||||||||||||||||||
| RSUs issued | ( | ( | ( | |||||||||||||||||||||||
| Restricted shares and RSUs forfeited | ||||||||||||||||||||||||||
| Expired shares | ( | ( | ( | |||||||||||||||||||||||
| Remaining shares available to be issued | (1) | |||||||||||||||||||||||||
(1) Excludes 148,673 restricted shares issued in January 2026.
Restricted Stock
In January 2025 and January 2024, the Company granted shares of restricted stock pursuant to the 2024 Plan and 2022 Plan, respectively. The shares of restricted stock generally vest five years from the date of grant and under specified circumstances, including a change in control, may vest earlier. For financial statement purposes, the restricted stock is not included in the outstanding shares shown on the consolidated balance sheets until they vest, but are included in the basic and diluted earnings per share computation. The weighted average remaining vesting period of the outstanding restricted stock granted pursuant to the 2024 Plan and the Prior Plans is 1.81 years. Subsequent to December 31, 2025, the Company granted 148,673 shares of restricted stock pursuant to the 2024 Plan.
The tables below presents information regarding the changes in the number of shares of restricted stock outstanding under the Company's equity incentive plans, compensation expense and unearned compensation for the periods indicated (dollars in thousands):
F-23
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 11—STOCKHOLDERS' EQUITY (continued)
| Year Ended December 31, | ||||||||||||||||||||
| Restricted Stock Grants: | 2025 | 2024 | ||||||||||||||||||
| Unvested at beginning of the year | ||||||||||||||||||||
| Grants | ||||||||||||||||||||
| Forfeitures | ( | ( | ||||||||||||||||||
| Vested during the year | ( | ( | ||||||||||||||||||
| Unvested at the end of the year | ||||||||||||||||||||
| Amounts charged to compensation expense | $ | $ | ||||||||||||||||||
| Unearned compensation at period end | $ | $ | ||||||||||||||||||
Restricted Stock Units
In July 2025 and June 2024, the Company, pursuant to the 2024 Plan, issued restricted stock units (the "RSUs") to acquire shares of common stock. The RSUs granted entitle the recipients, subject to continued service during the applicable performance period, to (i) shares of common stock, (the "TSR Award"), based on achieving, during the three-year
The RSU recipients also received dividend equivalent rights entitling them to an amount equal to cash dividends they would have received with respect to the shares of common stock underlying their RSUs as if the underlying shares were outstanding during the Measurement Period, if, when, and to the extent, the related RSUs vest. The shares underlying the RSUs are not participating securities but are contingently issuable shares.
F-24
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 11—STOCKHOLDERS' EQUITY (continued)
The tables below presents activity and changes in the number of RSUs under the Company's equity incentive plans, compensation expense and unearned compensation for the periods indicated (dollars in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| RSUs: | ||||||||||||||||||||
| Unvested units at beginning of year | ||||||||||||||||||||
| Grants - TSR Awards | ||||||||||||||||||||
| Grants - TSR Peer group adjustment | ||||||||||||||||||||
| Grants - AFFO Awards | ||||||||||||||||||||
| Total RSUs granted in applicable year | ||||||||||||||||||||
| Vested | ( | |||||||||||||||||||
| Forfeitures | ( | ( | ||||||||||||||||||
| Expired | ( | ( | ||||||||||||||||||
| Total unvested RSUs at end of year | ||||||||||||||||||||
| Amounts charged to compensation expense | $ | $ | ||||||||||||||||||
| Unearned compensation at period end | $ | $ | ||||||||||||||||||
For the TSR Awards, a third party appraiser prepared a Monte Carlo simulation pricing model to assist management in determining fair value. The Monte Carlo valuation consisted of computing the grant date fair value of the awards using the Company's simulated stock price. For these TSR awards, the per unit of share fair value was estimated using the following assumptions:
| Award Year | Expected Life ( yrs) | Dividend Rate | Risk-Free Interest Rate | Expected Price Volatility | ||||||||||||||||||||||||||||||||||
| 2025 | to | to | ||||||||||||||||||||||||||||||||||||
| 2024 | to | to | ||||||||||||||||||||||||||||||||||||
For the AFFO Awards granted, fair value is based on the market value on the date of grant. Expense is not recognized on RSUs which the Company does not expect to vest because the performance conditions are not expected to be satisfied. Performance assumptions are re-evaluated quarterly. The total amount recorded at the grant date as deferred compensation with respect to the AFFO Awards granted in 2025 and 2024 was $749,000 and $1,132,000 respectively.
The following table reflects the compensation expense recorded for all equity incentive plans (dollars in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| Restricted stock | $ | $ | ||||||||||||||||||
| RSUs | ||||||||||||||||||||
| Total compensation | $ | $ | ||||||||||||||||||
F-25
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 11—STOCKHOLDERS' EQUITY (continued)
Earnings Per Share
The following table sets forth the computation of basic and diluted earnings per share (dollars in thousands):
| Year Ended December 31, | ||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||
| Numerator for basic and diluted earnings per share: | ||||||||||||||||||||
| Net loss | ( | ( | ||||||||||||||||||
| Deduct (earnings) attributable to non-controlling interests | ( | ( | ||||||||||||||||||
| Deduct loss allocated to unvested restricted stock | ||||||||||||||||||||
| Net loss available for common stockholders: basic and diluted | $ | ( | $ | ( | ||||||||||||||||
| Denominator for basic and diluted earnings per share: | ||||||||||||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||||||||
| Effect of dilutive securities: | ||||||||||||||||||||
| RSUs | ||||||||||||||||||||
| Denominator for diluted earnings per share: | ||||||||||||||||||||
| Weighted average number of shares | ||||||||||||||||||||
| Loss per common share, basic and diluted | $ | ( | $ | ( | ||||||||||||||||
Equity Distribution Agreements
The Company has equity distribution agreements with three sales agents to sell up to $40,000,000 of shares of its common stock from time-to-time in an at-the-market offering. During the years ended December 31, 2025 and 2024, the Company did not 40,000,000 of shares pursuant to these agreements.
Share Repurchase
Pursuant to the Company’s repurchase program(s), as amended from time to time, the Company is authorized to repurchase shares of its common stock through open-market transactions, privately negotiated transactions, or otherwise.
During the year ended December 31, 2025, the Company purchased 321,060 shares of common stock for total consideration of approximately $4,987,000 , net of commissions of $19,000 . During the year ended December 31, 2024, the Company repurchased 193,529 shares of common stock for total consideration of approximately $3,495,000 , net of commissions of $12,000 .
Subsequent to December 31, 2025, the Company repurchased 75,155 shares of common stock at an average price per share of $14.82 for an aggregate cost of $1,114,000 . At February 27, 2026, the Company is authorized to repurchase up to $5,037,000 of shares of common stock through December 31, 2028. On March 11, 2026, the Board of Directors authorized the increase of up to $10,000,000 of shares that may be repurchased pursuant to the repurchase plan and extended such plan through December 31, 2028.
F-26
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 11—STOCKHOLDERS' EQUITY (continued)
Dividend Reinvestment Plan
NOTE 12—RELATED PARTY TRANSACTIONS
The Company has retained certain of its part-time executive officers and Fredric H. Gould, a director, to provide, among other things, the following services: participating in the Company's multi-family property analysis and approval process (which includes service on an investment committee), providing investment advice, and long-term planning and consulting with executives and employees with respect to other business matters, as required. The aggregate fees paid in 2025 and 2024 for these services were $1,699,000 and $1,618,000 , respectively.
Management of certain properties owned by the Company and certain joint venture properties is provided by Majestic Property Management LLC ("Majestic Property"), a company which is indirectly owned by, among others, Jeffrey A. Gould, a director and Chief Executive Officer and President of the Company, and Matthew J. Gould, a director and Senior Vice President of the Company. Certain of the Company's officers and directors are also officers and directors of Majestic Property. Majestic Property provides real property management, real estate brokerage and construction supervision services for these (and other) properties. For the years ended December 31, 2025 and 2024, fees for these services were $36,000 and $37,000 , respectively.
Pursuant to a shared services agreement between the Company and several affiliated entities, including Gould Investors L.P. ("Gould Investors"), the owner and operator of a diversified portfolio of real estate and other assets, and One Liberty Properties, Inc., a NYSE listed equity REIT ("One Liberty"), the (i) services of the part time personnel that perform certain executive, administrative, legal, accounting and clerical functions and (ii) certain facilities and other resources, are provided to the Company. The allocation of expenses for the facilities, personnel and other resources shared by, among others, the Company and Gould Investors, is computed in accordance with such agreement and is included in general and administrative expense on the Consolidated Statements of Operations. During the years ended December 31, 2025 and 2024, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated $750,000 and $698,000 , respectively. As of December 31, 2025 and 2024, $202,000 and $130,000 , respectively, remains unpaid and is included in accounts payable and accrued liabilities on the consolidated balance sheets. At December 31, 2025, Gould Investors owned approximately 21.6 % of BRT’s outstanding common stock. Certain of the Company's officers and directors are also officers and directors of One Liberty and Georgetown Partners, LLC, the managing general partner of Gould Investors.
NOTE 13—FAIR VALUE OF FINANCIAL INSTRUMENTS
The Company estimates the fair value of financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:
F-27
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 13—FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)
•Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets and liabilities in active markets
•Level 2— inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.
•Level 3— inputs to the valuation methodology are unobservable and significant to fair value.
The following methods and assumptions were used to estimate the fair value of each class of financial instruments that are not reported at fair value on the consolidated balance sheets:
Cash and cash equivalents, restricted cash, accounts receivable (included in other assets), accounts payable and accrued liabilities: The carrying amounts reported on the balance sheets for these instruments approximate their fair value due to the short term nature of these accounts.
Loan Receivables: At December 31, 2025, the estimated fair value of the Company's loan receivables is greater than their carrying value by approximately $193,000 , based on market interest rates ranging from 5.87 % to 6.06 %. At December 31, 2024, the estimated fair value of the Company's loan receivables, equaled their carrying value due to their recent origination. The Company values its loan receivables using a discounted cash flow analysis of the expected cash flow of each instrument. Market interest rates were determined using current financing transaction information provided by third party institutions.
Junior subordinated notes: At December 31, 2025, and 2024, the estimated fair value of the Company's junior subordinated notes is less than their carrying value by approximately $3,897,000 and $3,578,000 , respectively, based on market interest rates of 7.60 % and 7.94 %, respectively.
Mortgages payable: At December 31, 2025, the estimated fair value of the Company's mortgages payable is less than their carrying value by approximately $21,107,000 , assuming market interest rates between 4.79 % and 5.44 %. At December 31, 2024, the estimated fair value was less than the carrying value by $39,277,000 , assuming market interest rates between 5.38 % and 6.61 %. Market interest rates were determined using current financing transaction information provided by third party institutions.
Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value assumptions. The fair values of debt obligations are considered to be Level 2 valuations within the fair value hierarchy.
Financial Instruments Measured at Fair Value
At December 31, 2025 and 2024, the Company had no
F-28
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 2025
NOTE 14—COMMITMENT AND CONTINGENCIES
From time to time, the Company and/or its subsidiaries are parties to legal proceedings that arise in the ordinary course of business, and in particular, personal injury claims involving the operations of the Company's properties. Although management believes that the primary and umbrella insurance coverage maintained with respect to such properties is sufficient to cover claims for compensatory damages, many of these personal injury claims also assert claims for exemplary (i.e. punitive) damages. Generally, insurance does not cover claims for punitive or exemplary damages.
The Company maintains a non-contributory defined contribution pension plan covering eligible employees and officers. Contributions by the Company are made through a money purchase plan and the amounts of such contributions are based upon a percent of qualified employees' total salary as defined therein. Pension expense approximated $464,000 and $515,000 during the years ended December 31, 2025 and 2024, respectively. At December 31, 2025 and 2024, $35,000 and $120,000 , respectively, remains unpaid and is included in accounts payable and accrued liabilities on the consolidated balance sheets.
At December 31, 2025, the Company is the carve-out guarantor with respect to mortgage debt in principal amount of $468,079,042 at 19 multi-family properties.
NOTE 15—NEW ACCOUNTING PRONOUNCEMENT
In November 2024, the FASB issued ASU No. 2024–03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220–40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses into specified categories within the footnotes to the financial statements. ASU No. 2024–03 is applicable for fiscal years beginning after December 15, 2026. The Company is in the process of evaluating the new guidance to determine the extent to which it will impact the Company’s consolidated financial statements.
NOTE 16—SUBSEQUENT EVENTS
F-29
Table of Contents
Index
BRT APARTMENTS CORP. AND SUBSIDIARIES
SCHEDULE III—REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2025
(Dollars in thousands)
| Initial Cost to Company | Costs Capitalized Subsequent to Acquisition | Gross Amount At Which Carried at December 31, 2025 | Depreciation Life | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Description | Encumbrances | Land | Buildings and Improvements | Land | Improvements | Land | Buildings and Improvements | Total (a) | Accumulated Depreciation | Date of Construction | Date Acquired | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commercial | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Yonkers, NY. | $ | $ | $ | $ | $ | $ | (b) | Aug-2000 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Multi-Family Residential | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| North Charleston, SC | 2010 | Oct-2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Decatur, GA | 1954 | Nov-2012 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Columbus, OH | 1999 | Nov-2013 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Pensacola, FL | 2008 | Dec-2014 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Marcos, TX | 2014 | Oct-2019 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| LaGrange, GA | 2009 | Nov-2015 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fredericksburg, VA | 2005 | Jul-2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nashville, TN | 2017 | Sept -2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Greenville, SC | 1998 | Oct-2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Nashville, TN | 1985 | Dec-2021 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| San Antonio, TX | 2018 | March-2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Creve Coeur, MO | 2019 | April-2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Tallahassee, FL | 1997 | May-2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Huntsville, AL | 1992 | May-2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Boerne, TX | 2008 | May-2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Macon, GA | 1989 | June-2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southaven, MS | 2003 | July-2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Southaven, MS | 2006 | July-2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Wilmington, NC | 2003 | July-2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Trussville, AL | 2007 | July-2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Madison, AL | 1992 | Aug-2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
F-30
Table of Contents
Index
BRT REALTY TRUST AND SUBSIDIARIES
SCHEDULE III—REAL ESTATE PROPERTIES AND ACCUMULATED DEPRECIATION
DECEMBER 31, 2025
(Dollars in thousands)
Notes to the schedule:
| (a) | Total real estate properties | $ | ||||||
Less: Accumulated depreciation | ( | |||||||
| Net real estate properties | $ | |||||||
| (b) | Information not readily obtainable. | |||||||
A reconciliation of real estate properties is as follows:
| 2025 | 2024 | |||||||||||||
| Balance at beginning of year | $ | $ | ||||||||||||
| Additions: | ||||||||||||||
| Acquisitions | ||||||||||||||
| Capital improvements | ||||||||||||||
| Capitalized development expenses and carrying costs | ||||||||||||||
| Deductions: | ||||||||||||||
| Sales | ||||||||||||||
| Depreciation | ||||||||||||||
| Balance at end of year | $ | $ | ||||||||||||
F-31
Table of Contents
Index
BRT APARTMENTS CORP. AND SUBSIDIARIES
SCHEDULE IV—MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 2025
(Dollars in thousands)
| Description | Interest Rate | Final Maturity Date | Periodic Payment Terms | Prior Liens | Face Amount of Mortgages | Carrying Value of Mortgages | Principal Amount of Loans subject to delinquent principal or interest | ||||||||||||||||||||||||||||||||||||||||
| Multi-Family, Wilmington, NC | % | November 2031 | Current Return monthly; principal at maturity | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| Multi-Family, Kennesaw, GA | % | June 2029 | Current Return monthly; principal at maturity | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ||||||||||||||||||||||||||||||||||||||||||||
See notes 1, 5 and 6 to the consolidated financial statements.
F-32
Table of Contents
Index
BRT APARTMENTS CORP. AND SUBSIDIARIES
SCHEDULE IV—MORTGAGE LOANS ON REAL ESTATE
DECEMBER 31, 2025
Notes to the schedule:
(a) The following summary reconciles mortgage loans at their carrying values:
| 2025 | 2024 | ||||||||||
| Balance at beginning of year | $ | $ | |||||||||
| New loan receivables | |||||||||||
| Deferred loan fee income amortization | |||||||||||
| Deductions: | |||||||||||
| Deferred fees | |||||||||||
| Provision for credit loss | |||||||||||
| Balance at end of year | $ | $ | |||||||||
F-33
Exhibit 10.21
RESTRICTED STOCK AWARD AGREEMENT
RESTRICTED STOCK AWARD AGREEMENT, dated as of January 9, 2026 (the “Grant Date”), by and between BRT Apartments Corp., a Maryland corporation (the “Company”), having its principal place of business at 60 Cutter Mill Road, Great Neck, New York 11021 and the person named on the signature page of this Agreement (“Holder”).
W I T N E S S E T H
A. The Board of Directors of the Company adopted, and the stockholders of the Company approved, the BRT Apartments Corp. 2024 Incentive Plan, a copy of which is made a part hereof (the “Plan”);
B. The Holder acknowledges receipt of the Plan, the Company’s prospectus dated June 11, 2024 with respect to the Plan (the “Prospectus”), the supplement dated the Grant Date to the Company’s Prospectus, the Company’s Clawback Policy (as defined in Section 13 of this Agreement), the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, and the Company’s proxy statement dated April 16, 2025;
C. The Compensation Committee of the Board of Directors (“Committee”) has approved an award of restricted shares (the “Restricted Stock”) of the Company’s common stock, $0.01 par value per share (the “Common Stock”) to the Holder, all in accordance with the terms and conditions of the Plan and this Agreement; and
D. Unless otherwise defined herein, the defined terms used in this Agreement shall have the meanings set forth in the Plan.
NOW THEREFORE, in consideration of the foregoing and the mutual promises herein contained, the Company and the Holder hereby agree as follows:
1.Participant. Holder is (a) an officer, employee, director or consultant of the Company and/or (b) performing services on behalf of the Company, either directly or pursuant to a (i) Compensation and Services Agreement between One Liberty Properties, Inc. and Majestic Property Management LLC., as amended, and/or (ii) Shared Services Agreement among the Company, One Liberty Properties, Inc., Gould Investors L.P. and the other parties thereto, as amended, and is deemed a Participant for all purposes of the Plan and this Agreement.
2.Award. Holder is hereby awarded the number of shares of Restricted Stock set forth opposite Holder’s name on the signature page hereof. At the sole discretion of the Company, the Restricted Stock will be issued in either (a) uncertificated form, with such shares recorded in the name of the Holder on the books and records of the Company’s transfer agent (the “Transfer Agent”) with appropriate notations to reflect the restrictions imposed by the Plan and this Agreement; or (b) certificated form.
3.Stock Power; Legend. The Restricted Stock registered in the name of the Holder shall remain, either directly, or indirectly through the Transfer Agent, in the custody of the Company. The Holder shall execute, deliver to and deposit with the Company a stock power, duly endorsed in blank, so as to permit the re-transfer to the Company of the Restricted Stock if the Restricted Stock shall be forfeited or otherwise does not vest in accordance with the Plan and this Agreement. The certificate representing the Restricted Stock shall bear (or if the Restricted Stock is issued in uncertificated form, the books and records of the Transfer Agent shall reflect) the following (or other similar) restrictive legend:
“The transferability of these shares is subject to the terms and conditions of the BRT Apartments Corp. 2024 Incentive Plan and to the terms and conditions of an Agreement entered into between the owner of these shares and BRT Apartments Corp. Copies of the Plan and the Agreement are on file at the offices of the Company.”
4.Vesting of Restricted Stock. (a) Unless the Restricted Stock is earlier forfeited pursuant to this Agreement or the Plan, the Period of Restriction for the Restricted Stock shall terminate upon the earlier of (i) the Business Day (as defined) immediately preceding the fifth anniversary of the Grant Date, (ii) a Change in Control, (iii) the death or Disability of the Holder or (iv) the Retirement of the Holder.
(b) In the event that during the Period of Restriction, the Holder is or becomes eligible for Retirement, then for the purposes of Section 4(a)(i) or (iv) of this Agreement, the Period of Restriction with respect to a:
(i) Participant, other than a Non-Management Director, shall terminate not less than six months after the Holder notifies the Company of the Holder’s intention to effectuate a Retirement, on the date the Retirement is effectuated; and
(ii) Non-Management Director, shall terminate on the earlier to occur of: (A) not less than six months after such director notifies the Company of his or her intention not to stand for re-election; (B) the Board’s determination that such director will not stand for re-election; and (C) the failure of the stockholders to re-elect such director, in each case on the date the Holder ceases to serve as a director.
(c) On the Vesting Date (as defined), the Restricted Stock shall vest and promptly thereafter be delivered (and if the Restricted Stock is in uncertificated form, made available by the Transfer Agent) to the Holder.
(d) The terms: (i) “Vesting Date” means the date that the Period of Restriction terminates and (ii) “Business Day” means a day of the year on which the New York Stock Exchange or any successor thereto is not required or authorized to close.
5. Rights During Period of Restriction. During the Period of Restriction, if the Restricted Stock has not been forfeited, Holder will have the right to vote the Restricted Stock, to receive and retain dividends and distributions paid or distributed on the Restricted Stock by the Company and to exercise all other rights, powers and privileges of a holder of the Company’s Shares (as defined in the Plan) with respect to the Restricted Stock; provided, however, that (a) the Holder will not be entitled to delivery of the stock certificate representing the Restricted Stock until the Vesting Date, (b) the Company (either directly, or indirectly through the Transfer Agent) will retain custody of the Restricted Stock until the Vesting Date, (c) the Holder may not sell, assign, transfer, pledge, encumber or dispose of the Restricted Stock or his or her interest in any of them until the Vesting Date, and (d) a breach of any restrictions, terms or conditions provided herein or in the Plan will cause a forfeiture of the Restricted Stock.
6. Forfeiture. In the event that during the Period of Restriction the Holder ceases to be a Participant for any reason other than Holder’s death, Disability, Retirement or a Change in Control, then the Holder’s rights to the Restricted Stock shall be forfeited, the Company shall transfer the certificate representing (or if the Restricted Stock is issued in uncertificated form, shall instruct the Transfer Agent to transfer) the Restricted Stock to the Company and the Holder shall not have any rights whatsoever (including the right to receive any dividends and voting rights) with respect to the Restricted Stock.
7. Changes in Status as a Participant. Nothing contained in this Agreement shall interfere in any way with the right of the Company, its Subsidiaries or affiliates to terminate the Holder’s status as a Participant.
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8. Pledge, Sale Assignment, Etc. Holder shall not permit the Restricted Stock to be subject to anticipation, alienation, sale, assignment, hypothecation, pledge, exchange, transfer, encumbrance or charge and any attempt to anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer, encumber or charge shall be deemed void by the Company, and the Committee may, at its sole discretion cause the Restricted Stock to be forfeited upon such event. No right or benefit hereunder shall in any manner be liable for or subject to the debts, contracts, liabilities or torts of the Holder.
9. Stock Registration. The Holder acknowledges that the Restricted Stock has been registered under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (collectively, the “Securities Act”), pursuant to a Registration Statement on Form S-8, and that until such time as the Period of Restriction has been satisfied or accelerated, the Restricted Stock may not be sold, assigned, transferred, pledged, exchanged, encumbered or disposed of, except pursuant to the Securities Act and the rules and regulations of any securities exchange or association on which the Shares may be listed or quoted.
10. Board’s Authority. The execution and delivery by the Company of this Agreement shall not be construed as creating any limitations on the power of the Board of Directors to adopt such other incentive arrangements as it may deem desirable, including without limitation, the granting of stock options and the awarding of stock and cash otherwise than under the Plan, and such arrangements may be either generally applicable or applicable only in specific cases.
11. Section 83(b) Election. The Holder acknowledges that it may make an election with the Internal Revenue Service under Section 83(b) of the Code, but only within 30 days following the date on which the Restricted Stock is granted. The Company cannot and does not provide tax advice, and encourages the Holder to promptly consult with a tax advisor about the consequences and advisability of making a Section 83(b) election.
12. No Segregation. Neither the Company nor any Subsidiary shall be required to segregate any cash or Shares which may at any time be represented by awards under the Plan and the Plan shall constitute an “unfunded” plan of the Company. Neither the Company nor any Subsidiary shall by any provisions of the Plan be deemed a trustee of any Shares or any other property, and the liabilities of the Company and any Subsidiary to the Holder pursuant to the Plan shall be those of a debtor pursuant to such contract obligations as are created by or pursuant to the Plan and this Agreement and the rights of the Holder or his/her beneficiary under the Plan shall be limited to those of a general creditor of the Company or the applicable Subsidiary, as the case may be.
13. Clawback Policy; Restrictions on Transfers. The Holder acknowledges and agrees that:
(a)(i) the Restricted Stock and the dividends paid thereon may be subject to recapture and/or return (before and/or after the Vesting Date) pursuant to the clawback or other similar policies as may be adopted by the Company from time-to-time or as required by law (including the requirements of a national securities exchange on which the Common Stock is then listed); and (ii) acknowledges that Incentive-Based-Compensation (as defined in the Company’s clawback effective as of October 2, 2023, as amended or supplemented from time-to-time (the “Clawback” Policy”)) may be subject to return and/or recapture pursuant to the Clawback Policy; and
(b) their ability to transfer the Shares subject to this award may be limited by applicable law (including without limitation, the Securities Act of 1933, as amended, and the requirements of the New York Stock Exchange), the Company’s Articles of Incorporation, as amended from time-to-time, the Company’s Bylaws, as amended from time-to-time, and the Company’s organizational and corporate governance documents as in effect from time-to-time (including without limitation, the Company’s Code of Business Conduct and Ethics and the Company’s Insider Trading Policy).
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written.
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BRT APARTMENTS CORP.
By: ______________________
David W. Kalish,
Senior Vice President - Finance
| Name of Holder | Number of Shares of Restricted Stock Awarded to Holder | ||||
_____________________
Signature of Holder
_____________________
Holder’s Address
___________________________
Holder’s Social Security Number
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Exhibit 19.1
BRT APARTMENTS CORP.
INSIDER TRADING POLICY
Effective as of March 11, 2026
I.Purpose
This Insider Trading Policy (the “Policy”) provides guidelines with respect to transactions in the securities of BRT Apartments Corp. and One Liberty Properties, Inc. (all of the foregoing collectively referred to, unless the context otherwise requires, as “us”, “we”, “our” or the “Company”) and the handling of confidential information about us and the companies with which we engage in transactions or do business. We have adopted this Policy to promote compliance with U.S. federal and state laws that prohibit certain persons who are aware of material nonpublic information about a company from: (i) engaging in transactions in the securities of that company; or (ii) providing material nonpublic information to other persons who may trade on the basis of that information.
II. Statement of Policy
A.Transactions involving our Company
If you are aware of material nonpublic information (see “VII. Definition of Material Nonpublic Information.”) relating to us, you may not, directly, or indirectly through family members or other persons or entities:
1.Engage in transactions in our securities, except as otherwise (i) specified in this Policy or (ii) permitted by the Compliance Officer. See “IV. Transactions and Transfers Subject to, and Exempt from, the Policy.”
2.Recommend that others engage in transactions in our securities;
3.Disclose such information to persons outside of the Company, including, but not limited to, family, friends, business associates, and investors, unless any such disclosure:
•is permitted by the Compliance Officer:
•is disclosed to those who owe us a duty of confidentiality (e.g., our outside professionals such as our internal and external auditors and lawyers); or
•is made in accordance with our policies regarding the protection or authorized external disclosure of information regarding the Company.
4.Assist anyone engaged in the above activities.
B.Transactions Involving Companies with whom we do Business
In addition, if in the course of working for us or our Affiliated Entities (as such term is defined below), you learn of material nonpublic information about a company (1) with which we or our Affiliated Entities do business, such as our or their respective vendors, suppliers and tenants, or (2) that is involved in a potential transaction or business relationship with us or our Affiliated Entities, you may not engage in transactions in that company’s securities until the information becomes public or is no longer material.
The term “Affiliated Entities” means the Company, Gould Investors L.P., One Liberty Properties, Inc., Majestic Property Management LLC, their respective direct and indirect subsidiaries (i.e., entities which are controlled by, directly or indirectly, the foregoing companies), and any one or more of the foregoing. (The term “controlled by” means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting securities, by contract, or otherwise).
C.Company Transactions Involving our Securities
Except as permitted by the Compliance Officer, we will not engage in transactions in our securities while aware of material nonpublic information relating to us or our securities.
III.Persons Subject to the Policy
This Policy applies to (i) all those subject to our Code of Business Conduct and Ethics, as amended from time-to-time (the “Code”) (with those subject to the Code referred to in this Policy as “you” or equivalent terms), (ii) your Family Members (as described below), (iii) your Controlled Entities, and (iv) such other persons that we (i.e., one or more of our executive officers or our Compliance Officer) designate as being subject to this Policy, such as contractors or consultants who have access to material nonpublic information (a “Designee”).
You are responsible for the transactions of your Family Members and Controlled Entities and should make them aware of the need to confer with you before they trade in our securities, and you should treat all transactions or transfers of our securities by Family Members and Controlled Entities as if the transactions were for your own account. This Policy does not, however, apply to personal securities transactions of Family Members or Controlled Entities, where the purchase or sale decision is made by a third party not controlled by, influenced by or related to you, your Family Members, or your Controlled Entities.
A. Definition of Family Members and Controlled Entities
The term “Family Members” means your family members who reside with you (including a spouse, a child, a child away at college, stepchildren, grandchildren, parents, stepparents, grandparents, siblings and in-laws), anyone else who lives in your household, and any family members who do not live in your household but whose transactions in our securities are directed by you or are subject to your influence or control, such as parents or children who consult with you before they trade in our securities.
The term “Controlled Entities” means any entities that you influence or control, including any corporations, partnerships or trusts.
IV.Transactions Subject to, and Exempt from, the Policy
A.Transactions and Transfers subject to the Policy
This Policy applies to transactions in, and transfers of, our securities including our common stock, restricted stock awards, restricted stock units or any other type of securities that we may issue, as well as derivative securities that are not issued by us, such as exchange-traded put or call options or swaps relating to our securities. Transactions subject to this Policy include purchases, sales and bona fide gifts of our securities. Transactions that occur as a result of a person’s death are not subject to the Policy.
B.Transactions and Transfers Exempt from the Policy
This Policy does not apply to the following transactions and transfers, except as specifically noted:
1. Restricted Stock and Restricted Stock Unit Awards. This Policy does not apply to the vesting of restricted stock awards or restricted stock units (i.e., performance awards). The Policy applies, however, to any sales of restricted stock or shares underlying the restricted stock units.
2. Dividend Reinvestment Plan. This Policy does not apply to transactions involving our dividend reinvestment plan (the “DRIP”). However, your (i) election to participate in, or withdraw from, the DRIP, or increase or decrease your level of participation in the DRIP, may be unlawful if it is based on material non-public information, and (ii) sale of shares acquired pursuant to the DRIP must comply with the Policy (including the pre-approval requirement described in “Section IX – Procedures to Prevent Insider Trading – A. Pre-Clearance of All Transfers and Transactions of Securities.”)
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3. Transactions Affected Pursuant to Specified Trading Plans. This policy does not apply to transactions affected pursuant to a trading plan (e.g., a trading plan that meets the requirements of Rule 10b5-1) that is approved by the Compliance Officer in his or her sole and absolute discretion (a “Trading Plan”).
4. Transactions and Transfers at the Compliance Officer’s Discretion. Because this Policy cannot address every possible transaction or transfer, the Compliance Officer, in his or her sole and absolute discretion, has the authority to determine that a proposed transaction or transfer is not subject to the Policy.
A good general rule of thumb – when in doubt, do not trade.
V.Individual Responsibility
You have ethical and legal obligations to maintain the confidentiality of information about us and to not engage in transactions in our securities while in possession of material nonpublic information. You must not engage in illegal trading and must avoid the appearance of improper trading. You are responsible for complying with this Policy and ensuring that any Family Member or Controlled Entity complies with this Policy. In all cases, the responsibility for determining whether you are in possession of material nonpublic information (as described under “VII – Definition of Material Non-Public Information”) rests with you, and any action on our part (including an approval of your proposed transaction by the Compliance Officer (as described under “VI - Administration of the Policy” and “IX – Procedures to Prevent Insider Trading – A. Pre-Clearance of All Transactions and Transfers of Our Securities.”) does not in any way constitute legal advice or insulate you from liability under applicable securities law.
VI. Administration of the Policy
The administration of this Policy is overseen by our Compliance Officer. We will advise you in writing on an annual basis as to the person(s) serving as the Compliance Officer. All determinations and interpretations by the Compliance Officer are final and not subject to further review.
VII. Definition of Material Non-public Information
A.Material Information.
Information is considered “material” if a reasonable investor would consider that information important in making a decision to buy, hold or sell securities. Any information that could be expected to affect a company’s stock price, whether positive or negative, should be considered material. Set forth below is a non-exclusive, non-comprehensive list of examples of information that ordinarily would be regarded as material:
•Projections of future earnings or losses, or other earnings guidance;
•Changes to previously announced earnings guidance, or the decision to suspend earnings guidance;
•A pending or proposed merger, acquisition or tender offer;
•A pending or proposed acquisition or disposition of a significant asset;
•A pending or proposed joint venture;
•Significant related party transactions;
•A change in dividend policy, the declaration of a stock split, or an offering of additional securities;
•Bank borrowings or other financing transactions out of the ordinary course;
•The establishment of a repurchase program for our securities;
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•A change in senior management;
•A change in auditors or notification that the auditor’s reports may no longer be relied upon;
•Pending or threatened significant litigation, or the resolution of such litigation;
•Impending bankruptcy or the existence of severe liquidity problems;
•The gain or loss of a significant tenant; or
•A significant cybersecurity incident, such as a data breach, or any other significant disruption in our operations or the loss, potential loss, breach or unauthorized access of our property or assets, whether at our facilities or through our information technology infrastructure.
B.When Information is Considered Public.
Information that has not been widely disclosed to the public is generally considered to be nonpublic information. Information generally would be considered public if it is available on the SEC’s website or if it has been disclosed through the newswire services, broadcast on widely-available radio or television program, published in a widely-available newspaper, magazine or news website. Publication of information solely on our website is not, by itself, considered to be publicly disclosed.
Once information is widely disseminated, it is still necessary to provide the public with sufficient time to absorb the information. See “IX – Procedures to Prevent Insider Trading – B. Open Window Period” for further information regarding the waiting period following the dissemination of information. Depending on the particular circumstances, the Compliance Officer may determine that a longer or shorter period should apply to the release of specific material nonpublic information.
VIII. Pledged Securities
We do not prohibit the pledging of our securities (including the use of our securities to collateralize a margin loan). Nonetheless, you should be aware your sale of our securities pursuant to a margin call or other foreclosure may occur at the time you are aware of material non-public information, or during a period that does not qualify as an Open Window Period (as described under See “IX – Procedures to Prevent Insider Trading – B. Open Window Period”), and such sale may violate this Policy.
IX. Procedures to Prevent Insider Trading
We established the following procedures to assist in the administration of this Policy:
A.Pre-Clearance of all Transactions and Transfers of our Securities. You, your Family Members, your Controlled Entities and the persons designated by the Compliance Officer as being subject to these procedures, may not transact (e.g., purchase or sell) or transfer (e.g., gifts or transfers from a regular investment account to a Keogh account) any of our securities without first obtaining pre-clearance of the transaction or transfer from the Compliance Officer. You should request pre-clearance (either orally or in writing (including email)) from the Compliance Officer at least two business days in advance of the proposed transaction. The Compliance Officer is under no obligation to approve a transaction or transfer submitted for pre-clearance and may determine not to permit the transaction or transfer. If your request to engage in the transaction is denied, you should refrain from such activity, and should not inform any other person of the restriction.
When you request pre-clearance, you should carefully consider whether you may be aware of any material nonpublic information about us, and should describe fully those circumstances to the Compliance Officer. The Compliance Officer, in his or her sole and absolute discretion, (i) may request additional information and/or documentation from you with respect to such matters as he or she deems appropriate, and (ii) will determine the period and the other terms and conditions, if any, under which the proposed transaction may be completed.
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B.Open Window Period. You, your Family Members and your Controlled Entities, may only conduct any transactions (other than as permitted by this Policy) involving our securities during an “Open Window Period.” The Open Window Period will be determined from time-to-time by the Compliance Officer (and you should consult with the Compliance Officer as to the scope of such period); generally, Open Window Periods:
•begin on the second full trading (i.e., a day on which the New York Stock Exchange is open for trading) day immediately following the date that our Quarterly Report on Form 10-Q is accepted by the SEC,
•begin on the third full trading business day immediately following the date that our Annual Report on Form 10-K (“Annual Report”), is accepted by the SEC, and
•end fourteen (14) days after the close of the next fiscal quarter.
For example, if we file our Annual Report on March 9, 2026 (and such filing is accepted by the SEC by 5:30 p.m. on such date), you generally will be entitled to transact in our securities beginning March 12, 2026 through April 14, 2026.
C.Event-Specific Restricted Periods. From time to time, an event may occur that is material to us and is known by only a few people. So long as the event remains material and nonpublic, you may not engage in transactions in our securities. In that situation, the Compliance Officer may restrict you from trading in our securities, without disclosing the reason for the restriction, and you should not discuss with others the imposition of such restriction.
D.Broker Interface Procedures. If you are a director or executive officer (i.e., those individuals filing Form 4’s), you must notify the brokerage firm at which your securities are held that you are a “control person” with respect to our securities and such brokerage firm must obtain the approval of our Compliance Officer before affecting your transactions in our securities. Your securities in our Company may only be held at a brokerage firm that agrees (and has the requisite systems in place) to maintain such restrictions (including the ability and willingness to file any Form 144); you agree to provide the Compliance Officer, upon request, with such information as he or she deem appropriate to ensure that such brokerage firm will maintain such restrictions and comply with other appropriate requirements.
X. Limitation on Liability
Neither we, our employees (including our “shared employees”) or the Compliance Officer will have any liability for any delay in reviewing, or refusal of, a Trading Plan or a request for pre-clearance of a transaction or transfer. Notwithstanding any review of a Trading Plan or pre-clearance of a transaction or transfer, neither we, our employees (including our “shared employees”) nor the Compliance Officer assumes any liability for the legality or consequences of such trading plan, transaction or transfer to the person engaging in or adopting such trading plan, transaction or transfer.
XI. Post-Termination Transactions
This Policy (other than the pre-clearance requirements) continues to apply to transactions in our securities even after your relationship with us ends. If you are in possession of material nonpublic information when your relationship with us ends, you may not engage in transactions in our securities until that information has become public or is no longer material.
XII. Consequences of Violations
The purchase or sale of securities while aware of material nonpublic information, or the disclosure of material nonpublic information to others who then engage in transactions in our securities, is prohibited by the federal and state laws. Insider trading violations are pursued vigorously by governmental authorities. Punishment for insider trading violations is severe, and could include significant fines and imprisonment.
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In addition, your failure to comply with this Policy may subject you to sanctions imposed by us, including dismissal for cause, whether or not your failure to comply results in a violation of law. Needless to say, a violation of law, or even an SEC investigation that does not result in prosecution, can tarnish a person’s reputation and irreparably damage a career.
XIII. Assistance
If you have questions about this Policy or its application to any proposed transaction you may seek additional guidance from the Compliance Officer. On an annual basis, we will notify you as to the person(s) serving as the Compliance Officer.
XIV. Certification
All persons subject to this Policy must certify their understanding of, and intent to comply with, this Policy.
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EXHIBIT 21.1
SUBSIDIARIES
| COMPANY | STATE OF ORGANIZATION | |||||||
| TRB No. 1 Corp. | New York | |||||||
| TRB 69th Street Corp. | New York | |||||||
| TRB Yonkers Corp. | New York | |||||||
| TRB Lawrence Realty Corp. | New York | |||||||
| TRB Silvana LLC | Delaware | |||||||
| TRB Avondale LLC | Delaware | |||||||
| TRB Columbus LLC | Delaware | |||||||
| TRB Arlington LLC | Delaware | |||||||
| TRB Triple Play LLC | Delaware | |||||||
| TRB Crossings Holdings LLC | Delaware | |||||||
| TRB Avalon LLC | Delaware | |||||||
| TRB Avondale LLC | Delaware | |||||||
| TRB Avondale Investor LLC | Delaware | |||||||
| TRB Holdings LLC | Delaware | |||||||
| TRB Parkway Grande LLC | Delaware | |||||||
| TRB Woodlands LLC | Delaware | |||||||
| TRB Cinco Ranch LLC | Delaware | |||||||
| TRB River Place LLC | Delaware | |||||||
| TRB Civic Center LLC | Delaware | |||||||
| TRB Shavano LLC | Delaware | |||||||
| TRB Chatham LLC | Delaware | |||||||
| TRB Waters Edge LLC | Delaware | |||||||
| TRB Lenox Park LLC | Delaware | |||||||
| TRB Alamo LLC | Delaware | |||||||
| TRB Kilburn LLC | Delaware | |||||||
| TRB Canalside SOLA LLC | Delaware | |||||||
| TRB Canalside Lofts LLC | Delaware | |||||||
| TRB VH LLC | Delaware | |||||||
| TRB Bells Bluff LLC | Delaware | |||||||
| TRB Mercer LLC | Delaware | |||||||
| TRB Magnolia Pointe LLC | Delaware | |||||||
| TRB Jackson Square LLC | Delaware | |||||||
| TRB Gateway LLC | Delaware | |||||||
| TRB Boerne LLC | Delaware | |||||||
| TRB Landings LLC | Delaware | |||||||
| TRB Integra LLC | Delaware | |||||||
| TRB Crestmont LLC | Delaware | |||||||
| TRB Trussville LLC | Delaware | |||||||
| TRB Lakeside LLC | Delaware | |||||||
| TRB Abbotts LLC | Delaware | |||||||
| TRB Stono Oaks | Delaware | |||||||
| TRB Oaks LLC | Delaware | |||||||
| TRB Charlestowne LLC | Delaware | |||||||
| TRB 1322 Auburn LLC | Delaware | |||||||
| TRB Oaks at Victory | Delaware | |||||||
EXHIBIT 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements:
(1) Registration Statement (Form S-3 No. 333-277875) of BRT Apartments Corp.,
(2) Registration Statement (Form S-3 No. 333-265591) of BRT Apartments Corp.,
(3) Registration Statement (Form S-8 No. 333-280112) pertaining to the BRT Apartments Corp. 2024
Incentive Plan,
(4) Registration Statement (Form S-8 No. 333-265585) pertaining to the BRT Apartments Corp. 2022
Incentive Plan, and
(5) Registration Statement (Form S-8 No. 333-249914) pertaining to the BRT Apartments Corp. 2020
Incentive Plan;
of our report dated March 12, 2026, with respect to the consolidated financial statements of BRT Apartments Corp. included in this Annual Report (Form 10‑K) of BRT Apartments Corp. for the year ended December 31, 2025.
/s/ Ernst & Young LLP
New York, New York
March 12, 2026
EXHIBIT 31.1
CERTIFICATION
I, Jeffrey A. Gould, certify that:
1. I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2025 of BRT Apartments Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: March 12, 2026 | /s/ Jeffrey A. Gould | |||||||
Jeffrey A. Gould President and Chief Executive Officer (Principal Executive Officer) | ||||||||
EXHIBIT 31.2
CERTIFICATION
I, Isaac Kalish, certify that:
1. I have reviewed this Annual Report on Form 10-K for the year ended December 31, 2025 of BRT Apartments Corp.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal controls over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: March 12, 2026 | /s/ Isaac Kalish | |||||||
Isaac Kalish (Principal Financial Officer) Chief Financial Officer and Senior Vice President | ||||||||
EXHIBIT 32.1
CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
The undersigned, Jeffrey A. Gould, does hereby certify to his knowledge, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based upon a review of the Annual Report on Form 10-K for the year ended December 31, 2025 of the registrant:
(1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
Date: March 12, 2026 | /s/ Jeffrey A. Gould | |||||||
| Jeffrey A. Gould | ||||||||
| President and | ||||||||
| Chief Executive Officer | ||||||||
EXHIBIT 32.2
CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
The undersigned, Isaac Kalish, does hereby certify to his knowledge, pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that based upon a review of the Annual Report on Form 10-K for the year ended December 31, 2025 of the registrant:
(1) The report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2) The information contained in the report fairly presents, in all material respects, the financial condition and results of operations of the registrant.
Date: March 12, 2026 | /s/ Isaac Kalish | |||||||
Isaac Kalish (Principal Financial Officer) Chief Financial Officer and Senior Vice President | ||||||||