BRT APARTMENTS CORP. REPORTS FIRST QUARTER RESULTS FOR 2022
–Net Income and AFFO Per Diluted Share Increase 382% and 30%, Respectively –
– Announced Additional Agreements to Acquire Partners’ Interests for Nine Properties for $89.4 Million; Year-to-Date, Acquired Partner Interests in Two Properties for $12.8 Million –
–Announces Agreements to Sell Retreat at Cinco Ranch and The Vive for Sales Prices of $68.5 Million and $92.0 Million, Respectively –
Great Neck, New York – May 9, 2022 – BRT APARTMENTS CORP. (NYSE:BRT), a real estate investment trust that owns, operates, and, to a lesser extent, develops multi-family properties, today reported that for the first quarter ended March 31, 2022, it generated net income of $11.51 million, or $0.62 per diluted share, Funds from Operations, or FFO1, of $6.46 million, or $0.35 per diluted share, and Adjusted Funds from Operations, or AFFO, of $7.24 million, or $0.39 per diluted share.
Jeffrey A. Gould, President and Chief Executive Officer stated, “We began 2022 with another strong quarter of performance, with 15.9% same store property NOI growth across our entire portfolio, as we continue to benefit from the ongoing population and job growth and the shortage of quality housing across many of our markets. Additionally, we have made significant progress on our program to enhance and grow our portfolio through acquisitions of our partners’ remaining interests and targeted dispositions of properties at which we have unlocked significant value. Year-to-date, we have closed or announced the planned acquisitions of our partners’ interests at 11 properties for a total purchase price of approximately $102.1 million, and sold or announced plans to sell three joint venture properties for a total sales price of approximately $214.3 million. We have sufficient liquidity to fund these transactions and will look for continued opportunities to grow into the future, even as we remain disciplined in identifying properties that meet our demanding underwriting standards.”
Financial Results:
In the quarter ended March 31, 2022, BRT generated net income to common stockholders of $11.51 million, or $0.62 per diluted share, compared to net loss to common stockholders of $3.77 million, or $0.22 per diluted share, for the corresponding prior year period. The improvement was due primarily to BRT’s $12.96 million share of a gain from the sale of a property owned by an unconsolidated subsidiary.
FFO increased to $6.46 million for the quarter ended March 31, 2022, from $6.03 million in the corresponding quarter in 2021. FFO was $0.35 per diluted share for each of the quarters ended March 31, 2022 and 2021. The increase on an absolute basis was due to improved operating margins at same store properties across the entire portfolio2, the impact of consolidating transactions (i.e., transactions in which BRT purchased the remaining interests of its joint venture partners) and reduced interest expense, offset by property sales, the inclusion, in the corresponding 2021 quarter, of significant insurance recoveries, and an increase in the three months ended March 31, 2022, in non-cash compensation expense related to equity awards.
AFFO increased to $7.24 million, or $0.39 per diluted share, for the quarter ended March 31, 2022, from $5.13 million, or $0.30 per diluted share, in the 2021 quarter, due to the factors impacting the improvement in FFO, other than the significant insurance recoveries in the corresponding 2021 quarter and the increase, in the quarter ended March 31, 2022, in non-cash compensation expense related to equity awards.
1 A description and reconciliation of non-GAAP financial measures (e.g., FFO, AFFO and NOI) to GAAP financial measures is presented later in this release.
2 “Same store properties” refer to properties owned for the entirety of the period being presented. “Entire portfolio” refers to 100% of BRT’s wholly-owned
subsidiaries and its pro rata share of its unconsolidated subsidiaries. “Pro rata” share reflects BRT’s percentage equity interest in the applicable
unconsolidated subsidiary.
Diluted per share net income, FFO and AFFO for the quarter ended March 31, 2022, reflect the approximate 1.3 million increase in the weighted average share count due to stock issuances pursuant to the Company’s at-the-market offering and equity incentive programs.
Operating Results:
Rental and other revenues for the current three months increased $4.34 million, or 61.1%, to $11.43 million, from $7.10 million for the quarter ended March 31, 2021, primarily reflecting the consolidating transactions and, to a lesser extent, increases in rental rates at same store properties. The increase was offset by a May 2021 property sale.
Total operating expenses for the quarter ended March 31, 2022, increased $4.58 million, or 48.6%, to $14.01 million, from $9.43 million for the quarter ended March 31, 2021, primarily reflecting increased depreciation and real estate operating expenses related to the consolidating transactions.
Equity in earnings of sales of unconsolidated joint venture for the quarter ended March 31, 2022, was $12.96 million due to the sale in February 2022 of The Veranda at Shavano, a 288-unit multi-family property located in San Antonio, Texas. There was no gain in the corresponding quarter of 2021.
Equity in earnings (loss) of unconsolidated joint ventures for the quarter ended March 31, 2022 improved by $2.58 million to $1.23 million compared to a loss of $1.35 million in the corresponding quarter of 2021. The change is due primarily to the inclusion, in the corresponding 2021 quarter, of depreciation and real estate operating expenses from properties that were either subsequently sold or that due to the consolidating transactions, were, for the current quarter, included in the Company’s consolidated results. In addition, the 2022 quarter reflects gain on insurance recoveries. Rental and other revenues from properties owned by unconsolidated joint ventures for the current three months decreased $7.44 million, or 22.7%, to $25.23 million from $32.67 million for the quarter ended March 31, 2021, primarily due to the impact of dispositions and the consolidating transactions, offset by increased rental income at unconsolidated same store properties. Total expenses at properties owned by unconsolidated joint ventures decreased $10.80 million, or 31.1%, to $23.83 million for the three months ended March 31, 2021, from $34.61 million from the corresponding 2021 quarter, primarily due to dispositions and the consolidating transactions.
BRT’s pro rata share of revenues from unconsolidated joint ventures for the three months ended March 31, 2022 and 2021 were $16.34 million and $20.69 million, respectively, and its pro rata share of such expenses for such periods were $15.53 million and $22.04 million, respectively. Included in total expenses for the three months ended March 31, 2022 and 2021 are $11.17 million and $15.7 million of real estate operating expenses, respectively, of which BRT’s pro rata share was $7.27 million and $9.98 million, respectively.
Net operating income, or NOI, at same store properties in our entire portfolio grew 15.9% in the current quarter to $12.13 million, from $10.47 million in the 2021 quarter and NOI in our entire portfolio increased in the current quarter by 7.3% to $15.75 million. The increases are primarily due to improved operating margins at same store properties over our entire portfolio.
Balance Sheet:
At March 31, 2022, BRT had $29.69 million of cash and cash equivalents, $6.5 million of restricted cash, total assets of $482.94 million, total debt of $248.61 million, and total BRT Apartments Corp. stockholders’ equity of $214.17 million.
At May 2, 2022, BRT’s available liquidity was approximately $62.7 million, comprised of $21.5 million of cash and cash equivalents, $6.2 million of restricted cash and, subject to compliance with borrowing base and other requirements, up to $35.0 million available under its credit facility.
Year-to-Date Transaction Activity:
Completed Disposition:
In February 2022, the unconsolidated joint venture which owned The Veranda at Shavano, sold the property for $53.8 million and recognized a gain on the sale of this property of $23.7 million. As a result of the sale, BRT recorded its $12.96 million share of the gain. The related mortgage debt paid-off in connection with the sale was in principal amount of $25.1 million, had an interest rate of 3.61% and was scheduled to mature in May 2023. During 2021, this property contributed $526,000 of equity in earnings of unconsolidated joint ventures. The internal rate of return, or IRR, to BRT over the 5 ½ years it owned this property is approximately 18.8%.
Contracts to Sell Properties:
In April 2022, the unconsolidated joint venture that owns the Retreat at Cinco Ranch, located in Katy, Texas, in which BRT holds a 75% equity interest, entered into an agreement to sell the property for $68.5 million. This property, which as of March 31, 2022, had mortgage debt of $30.2 million, with a remaining term to maturity of 3.8 years and an interest rate of 4.44%, contributed $336,000 of equity in loss of unconsolidated joint ventures in 2021. BRT anticipates that its share of the gain, after giving effect to its approximate $1.1 million share of the prepayment charge, will be approximately $16.4 million. The IRR to BRT over the six years it owned this property is approximately 20.4%.
In May 2022, the unconsolidated joint venture that owns The Vive, a 312-unit multi-family property located in Kannapolis, North Carolina, in which BRT holds a 65% equity interest, entered into an agreement to sell the property for $92.0 million. This property, which as of March 31, 2022, had mortgage debt of approximately $31.6 million, with a remaining term to maturity of 30 years and an interest rate of 3.52%, contributed $77,000 of equity in loss of unconsolidated joint ventures in 2021. BRT anticipates that its share of the gain, after giving effect to its approximate $738,000 share of the mortgage prepayment charge, will be approximately $21.5 million. The IRR to BRT over the three years it owned this property is approximately 41%.
BRT anticipates that these two sales will be completed, subject to the satisfaction of customary closing conditions, during the quarter ending June 30, 2022. Because these two sales may be completed before all the partner buyouts described below are completed, as well as the impact of the February 2022 sale of The Veranda at Shavano, there may be a slight decline in operating results in the second quarter of 2022 from the corresponding 2021 quarter. After all the sales and partner buyouts described herein are completed, we expect such transactions will not, in the short-term, have a material impact on BRT’s bottom line operating results.
Partner Buyout During the Quarter Ended March 31, 2022:
In late-March, BRT completed, for a purchase price of $8.7 million, the acquisition of the remaining interests of its joint venture partner with respect to a 288-unit multi-family property. The purchase of the property added approximately $36.7 million of real estate assets and approximately $27.0 million of mortgage debt to BRT’s consolidated balance sheet at March 31, 2022. The mortgage debt on this property has a remaining term to maturity of 7.5 years and an interest rate of 3.64%. This property contributed $450,000 of equity in earnings of unconsolidated joint ventures in 2021.
Partner Buyout Completed After Quarter End; Contracts for Partner Buyouts at Nine Joint Venture Properties:
In early-April, BRT completed, for a purchase price of $4.8 million, the acquisition of the remaining interests of its joint venture partners with respect to a 174-unit multi-family property. In addition, BRT, from February through early-April, entered into agreements to purchase the remaining interests in joint ventures that own nine multi-family properties with an aggregate of 2,382 units. The completion of these purchases is subject to customary closing conditions (including the approval of the holders of the applicable mortgage debt and in connection with one purchase, obtaining approximately $18.5 million of ten-year mortgage debt with an anticipated interest rate of 4.25%), and it is anticipated that all these purchases will be completed by August 1, 2022. During 2021, these ten properties (including the partner buyout completed in early-April) contributed an aggregate of $1.4 million of equity in earnings of unconsolidated joint ventures. These purchases (including the partner buyout completed in early-April), will add, when completed, approximately $302 million of real estate assets and $217 million of mortgage debt to our consolidated balance sheet; this mortgage debt will have a weighted average remaining term to maturity of approximately 6.5 years and a weighted average interest rate of approximately 4.24%. After giving effect to these ten purchases and the related $18.5 million financing, BRT estimates that its consolidated balance sheets will reflect approximately $786 million of real estate assets and approximately $429 million of mortgage debt.
BRT anticipates using its available cash, a portion of the proceeds from the sale of Retreat at Cinco Ranch and The Vive, funds from its at-the-market equity offering program, a portion of the proceeds of the $18.5 million mortgage debt, and funds from its credit facility to fund these nine purchases. After a purchase is completed, such property will be wholly owned and the accounts (i.e., the assets and liabilities), and operations of such property will be included directly, from the date of such purchase, in BRT’s consolidated balance sheet and consolidated statement of operations, respectively. BRT’s revenues, total expenses, assets and liabilities, will increase substantially as a result of the completion of these purchases.
Conference Call and Webcast Information:
The Company will host a conference call and webcast to review its financial results with investors and other interested parties at 8:30 a.m. ET on Tuesday, May 10, 2022. Jeffrey A. Gould, Chief Executive Officer will host the call. To participate in the conference call, callers from the United States and Canada should dial 1-877-407-9208, and international callers should
dial 1-201-493-6784, ten minutes prior to the scheduled call time. The webcast may also be accessed live by visiting the Company’s investor relations website under the “webcast” tab at www.brtapartments.com/investor-relations.
A replay of the conference call will be available after 11:30 a.m. ET on Tuesday, May 10, 2022 through 11:59 p.m. ET on Tuesday, May 24, 2022. To access the replay, listeners may use 1-844-512-2921 domestic) or 1-412-317-6671 (international). The passcode for the replay is 10166505.
Supplemental Financial Information:
In an effort to enhance its financial disclosures to investors, BRT has posted a supplemental financial information report which can be accessed on the Company’s website at www.brtapartments.com under the caption “Investor Relations - Financial Statements and SEC Filings.”
Non-GAAP Financial Measures:
BRT discloses FFO, AFFO and NOI because it believes that such metrics are widely recognized and appropriate measure of the performance of a multi-family REIT.
BRT computes FFO in accordance with the "White Paper on Funds from Operations" issued by the National Association of Real Estate Investment Trusts ("NAREIT") and NAREIT's related guidance. FFO is defined in the White Paper as net income (loss) (computed in accordance with generally accepting accounting principles), excluding gains (or losses) from sales of property, plus depreciation and amortization, plus impairment write-downs of depreciable real estate and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis. In computing FFO, BRT does not add back to net income the amortization of costs in connection with its financing activities or depreciation of non-real estate assets.
BRT computes AFFO by adjusting FFO for loss on extinguishment of debt; straight-line rent accruals; restricted stock and restricted stock unit expense and deferred mortgage costs (including its share of its unconsolidated joint ventures); and gain on insurance recovery. Since the NAREIT White Paper only provides guidelines for computing FFO, the computation of AFFO may vary from one REIT to another.
BRT computes NOI by adjusting net income (loss) to (a) add back (1) depreciation expense, (2) general and administrative expenses, (3) interest expense, (4) loss on extinguishment of debt, (5) equity in loss of unconsolidated joint ventures, (6) provision for taxes, (7) the impact of non-controlling interests, and (b) deduct (1) other income, (2) gain on sale of real estate, and (3) gain on insurance recoveries related to casualty loss. BRT defines "Same Store NOI" as NOI for all its properties that were owned for the entirety of the periods being presented, other than properties in lease up or development. Because there is no industry standard definition of NOI and practice is divergent across the industry, the computation of NOI may from one REIT to another.
BRT believes that FFO, AFFO and NOI 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 such metrics 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, BRT believes 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. BRT also considers FFO and AFFO to be useful in evaluating potential property acquisitions. BRT views Same Store NOI as an important measure of operating performance because it allows a comparison of operating results of properties owned for the entirety of the current and comparable periods and therefore eliminates variations caused by acquisitions or dispositions during the periods.
The term pro rata share reflects BRT’s equity ownership in its unconsolidated subsidiaries and is used to help provide a better understanding of the impact of the operations of its unconsolidated joint ventures on BRT’s operating results. However, the use of pro rata information has limitations. Among other things, as a result of the allocation/ distribution provisions of the agreements governing the unconsolidated joint ventures, BRT’s share of the gain/loss with respect to such venture may be different than (and generally less than that) implied by its percentage equity interest therein. Further, the use of pro rata share is not representative of BRT’s operations and accounts as presented in accordance with GAAP and is not intended as a substitute for the information presented in accordance with GAAP.
FFO, AFFO and NOI do not represent net income or cash flows from operations as defined by GAAP. FFO, AFFO and NOI should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor
should FFO, AFFO and NOI be considered an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.
Forward Looking Information:
Certain information contained herein is forward looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements regarding the apparent improvement in the economic environment and BRT’s ability to originate additional loans. BRT intends such forward looking statements to be covered by the safe harbor provisions for forward looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “will likely result,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “apparent,” “experiencing” or similar expressions or variations thereof. Investors are cautioned not to place undue reliance on any forward-looking statements and to carefully review the sections entitled “Risk Factors,” “Cautionary Statements Regarding Forward Looking Statements,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in BRT’s Annual Report on Form 10-K for the year ended December 31, 2021, and the other reports it files thereafter with the SEC. In addition anticipated property purchases and sales (including information regarding the purchase and/or sale of the interests of BRT in its joint ventures) may not be completed during the periods indicated or at all, and estimates of gains from property sales are subject to adjustment, among other things, because actual closing costs may differ from the estimated costs. You should not rely on forward looking statements since they involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect actual results, performance or achievements.
Additional Information:
BRT is a real estate investment trust that owns, operates and, to a lesser extent, develops multi-family properties. As of March 31, 2021, BRT owns or has interests in 33 multi-family properties with 9,225 units (including a 240– unit development project), located across 11 states. Eleven properties are wholly owned and the balance are owned through unconsolidated joint ventures in which BRT generally owns a substantial equity interest. Most of these properties are located in the Southeast United States or Texas. Interested parties are urged to review the Form 10-Q to be filed with the Securities and Exchange Commission for the quarter ended March 31, 2021, and the supplemental disclosures regarding the quarter on the investor relations section of the Company’s website at: http://brtapartments.com/investor_relations for further details. The Form 10-Q can also be linked through the “Investor Relations” section of BRT’s website. For additional information on BRT’s operations, activities and properties, please visit its website at www.brtapartments.com.
Contact: Investor Relations - (516) 466-3100
BRT APARTMENTS CORP.
60 Cutter Mill Road
Suite 303
Great Neck, New York 11021
Telephone (516) 466-3100
Telecopier (516) 466-3132
www.brtapartments.com
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Dollars in thousands)
| | | | | | | | | | | |
| March 31, 2022 | | December 31, 2021 |
| (unaudited) | | (audited) |
| ASSETS | | | |
| Real estate properties, net of accumulated depreciation | $ | 328,334 | | | $ | 293,550 | |
| Investments in unconsolidated joint ventures | 106,025 | | | 112,347 | |
| Cash and cash equivalents | 29,688 | | | 32,339 | |
| Restricted cash | 6,543 | | | 6,582 | |
| Other assets | 12,410 | | | 10,341 | |
| Real estate property held for sale | — | | | 4,379 | |
| Total assets | $ | 483,000 | | | $ | 459,538 | |
| | | |
| LIABILITIES AND EQUITY | | | |
| Mortgages payable, net of deferred costs | $ | 211,565 | | | $ | 199,877 | |
| Junior subordinated notes, net of deferred costs | 37,108 | | | 37,103 | |
| | | |
| Accounts payable and accrued liabilities | 20,125 | | | 19,607 | |
| Total Liabilities | 268,798 | | | 256,587 | |
| | | |
| Total BRT Apartments Corp. stockholders’ equity | 214,171 | | | 202,956 | |
| Non-controlling interests | 31 | | | (5) | |
| Total Equity | 214,202 | | | 202,951 | |
| Total Liabilities and Equity | $ | 483,000 | | | $ | 459,538 | |
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended
March 31, | | |
| | 2022 | | 2021 | | | | |
| Revenues: | | | | | | | | |
| Rental and other revenues from real estate properties | | $ | 11,430 | | | $ | 7,095 | | | | | |
| Other income | | 4 | | | 4 | | | | | |
| Total revenues | | 11,434 | | | 7,099 | | | | | |
| | | | | | | | |
| Expenses: | | | | | | | | |
| Real estate operating expenses | | 4,753 | | | 3,117 | | | | | |
| Interest expense | | 2,021 | | | 1,660 | | | | | |
| General and administrative | | 3,633 | | | 3,114 | | | | | |
| | | | | | | | |
| Depreciation and amortization | | 3,606 | | | 1,537 | | | | | |
| Total expenses | | 14,013 | | | 9,428 | | | | | |
| Total revenue less total expenses | | (2,579) | | | (2,329) | | | | | |
| Equity in earnings (loss) of unconsolidated joint ventures | | 1,230 | | | (1,345) | | | | | |
| Equity in earnings from sale of unconsolidated joint ventures properties | | 12,961 | | | — | | | | | |
| Gain on sale of real estate | | 6 | | | — | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Income (loss) from continuing operations | | 11,618 | | | (3,674) | | | | | |
| Income tax provision | | 74 | | | 57 | | | | | |
| Net income (loss) from continuing operations, net of taxes | | 11,544 | | | (3,731) | | | | | |
| Net income attributable to non-controlling interest | | (36) | | | (34) | | | | | |
| Net income (loss) attributable to common stockholders | | $ | 11,508 | | | $ | (3,765) | | | | | |
| | | | | | | | |
| Per share amounts attributable to common stockholders: | | | | | | | | |
| Basic and Diluted | | $ | 0.62 | | | $ | (0.22) | | | | | |
| | | | | | | | |
| | | | | | | | |
| Funds from operations - Note 1 | | $ | 6,461 | | | $ | 6,029 | | | | | |
| Funds from operations per common share - diluted - Note 2 | | $ | 0.35 | | | $ | 0.35 | | | | | |
| | | | | | | | |
| Adjusted funds from operations - Note 1 | | $ | 7,243 | | | $ | 5,125 | | | | | |
| Adjusted funds from operations per common share - diluted -Note 2 | | $ | 0.39 | | | $ | 0.30 | | | | | |
| | | | | | | | |
| Weighted average number of shares of common stock outstanding: | | | | | | | | |
| Basic | | 17,561,802 | | | 17,319,222 | | | | | |
| Diluted | | 17,654,349 | | | 17,319,222 | | | | | |
BRT APARTMENTS CORP. AND SUBSIDIARIES
FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
| Note 1: | | | | | | | | |
| Funds from operations is summarized in the following table: | | | | | | | | |
| GAAP Net income (loss) attributable to common stockholders | | $ | 11,508 | | | $ | (3,765) | | | | | |
| Add: depreciation of properties | | 3,606 | | | 1,537 | | | | | |
| Add: our share of depreciation in unconsolidated joint venture properties | | 4,318 | | | 6,599 | | | | | |
| | | | | | | | |
| Add: our share of impairment charge in unconsolidated joint venture properties | | — | | | 1,662 | | | | | |
| Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties | | (12,961) | | | — | | | | | |
| Deduct: gain on sale of real estate and partnership interests | | (6) | | | — | | | | | |
| Adjustments for non-controlling interests | | (4) | | | (4) | | | | | |
| NAREIT Funds from operations attributable to common stockholders | | 6,461 | | | 6,029 | | | | | |
| | | | | | | | |
| Adjustments for: straight-line rent accruals | | 6 | | | (10) | | | | | |
| | | | | | | | |
| Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties | | 19 | | | — | | | | | |
| Add: amortization of restricted stock and RSU expense | | 974 | | | 538 | | | | | |
| Add: amortization of deferred mortgage and debt costs | | 77 | | | 80 | | | | | |
| Add: our share of deferred mortgage costs from unconsolidated joint venture properties | | 93 | | | 148 | | | | | |
| Less: our share of insurance recovery from unconsolidated joint ventures | | — | | | (1,662) | | | | | |
| Less: our share of gain on insurance proceeds from unconsolidated joint venture properties | | (386) | | | — | | | | | |
| Adjustments for non-controlling interests | | (1) | | | 2 | | | | | |
| Adjusted funds from operations attributable to common stockholders | | $ | 7,243 | | | $ | 5,125 | | | | | |
| | | | | | | | |
BRT APARTMENTS CORP. AND SUBSIDIARIES
FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
| Note 2: | | | | | | | | |
| Net income (loss) attributable to common stockholders | | $ | 0.62 | | | $ | (0.22) | | | | | |
| Add: depreciation of properties | | 0.20 | | | 0.09 | | | | | |
| Add: our share of depreciation in unconsolidated joint venture properties | | 0.23 | | | 0.38 | | | | | |
| | | | | | | | |
| Add: our share of impairment charge in unconsolidated joint venture properties | | — | | | 0.10 | | | | | |
| Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties | | (0.70) | | | — | | | | | |
| Deduct: gain on sale of real estate and partnership interests | | — | | | — | | | | | |
| Adjustment for non-controlling interests | | — | | | — | | | | | |
| NAREIT Funds from operations per diluted common share | | 0.35 | | | 0.35 | | | | | |
| | | | | | | | |
| Adjustments for: straight line rent accruals | | — | | | — | | | | | |
| | | | | | | | |
| Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties | | — | | | — | | | | | |
| Add: amortization of restricted stock and RSU expense | | 0.05 | | | 0.04 | | | | | |
| Add: amortization of deferred mortgage and debt costs | | — | | | — | | | | | |
| Add: our share of deferred mortgage and debt costs from unconsolidated joint venture properties | | 0.01 | | | 0.01 | | | | | |
| Less: our share of insurance recovery from unconsolidated joint ventures | | — | | | (0.10) | | | | | |
| Less: our share of gain on insurance proceeds from unconsolidated joint venture | | (0.02) | | | — | | | | | |
| Adjustments for non-controlling interests | | — | | | — | | | | | |
| Adjusted funds from operations per diluted common share | | $ | 0.39 | | | $ | 0.30 | | | | | |
BRT APARTMENTS CORP. AND SUBSIDIARIES
RECONCILIATION OF NOI TO NET INCOME
(Unaudited)
The following tables provides a reconciliation of NOI to net income attributable to common stockholders as computed in accordance with GAAP for the periods presented:
| | | | | | | | | | | | | | | | | | |
| Consolidated | | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
| GAAP Net income (loss) attributable to common stockholders | | $ | 11,508 | | | $ | (3,765) | | | | | |
| Less: Other Income | | (4) | | | (4) | | | | | |
| Add: Interest expense | | 2,021 | | | 1,660 | | | | | |
| General and administrative | | 3,633 | | | 3,114 | | | | | |
| | | | | | | | |
| Depreciation | | 3,606 | | | 1,537 | | | | | |
| Provision for taxes | | 74 | | | 57 | | | | | |
| Less: Gain on sale of real estate | | (6) | | | — | | | | | |
| | | | | | | | |
| Equity in earnings from sale of unconsolidated joint venture properties | | (12,961) | | | — | | | | | |
| | | | | | | | |
| Adjust for: Equity in (earnings) loss of unconsolidated joint venture properties | | (1,230) | | | 1,345 | | | | | |
| Add: Net income attributable to non-controlling interests | | 36 | | | 34 | | | | | |
| Net Operating Income | | $ | 6,677 | | | $ | 3,978 | | | | | |
| | | | | | | | |
| Less: Non-same store Net Operating Income | | $ | 2,841 | | | $ | 532 | | | | | |
| Same store Net Operating Income | | $ | 3,836 | | | $ | 3,446 | | | | | |
BRT APARTMENTS CORP. AND SUBSIDIARIES
RECONCILIATION OF NOI AT UNCONSOLIDATED SUBSIDIARIES
(Unaudited)
(Dollars in thousands, except per share data)
The following tables provides a reconciliation of NOI to equity in loss of unconsolidated joint ventures as computed in accordance with GAAP for the periods presented for BRT's pro rata share of NOI at its unconsolidated subsidiaries. Also presented is the combined same store NOI for Consolidated and Unconsolidated subsidiaries:
| | | | | | | | | | | | | | | | | | |
| Unconsolidated | | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
| BRT's equity in earnings from sale of unconsolidated joint venture properties and equity in loss of joint ventures | | $ | 14,191 | | | $ | (1,345) | | | | | |
| Add: Interest expense | | 3,944 | | | 5,459 | | | | | |
| Depreciation | | 4,318 | | | 6,599 | | | | | |
| Loss on extinguishment of debt | | 19 | | | — | | | | | |
| Less: Impairment of asset | | — | | | 1,662 | | | | | |
| Insurance recovery | | — | | | (1,662) | | | | | |
| Gain on insurance recoveries | | (386) | | | — | | | | | |
| Gain on sale of real estate | | (12,961) | | | — | | | | | |
| Equity in earnings of joint ventures | | (55) | | | (9) | | | | | |
| | | | | | | | |
| Net Operating Income | | $ | 9,070 | | | $ | 10,704 | | | | | |
| | | | | | | | |
| Less: Non-same store Net Operating Income | | $ | (774) | | | $ | (3,681) | | | | | |
| Same store Net Operating Income | | $ | 8,296 | | | $ | 7,023 | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Consolidated same store Net Operating Income | | $ | 3,836 | | | $ | 3,446 | | | | | |
| Unconsolidated same store Net Operating Income | | 8,296 | | | 7,023 | | | | | |
| Combined same store Net Operating Income | | $ | 12,132 | | | $ | 10,469 | | | | | |
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)
The condensed income statements below present, for the periods indicated, a reconciliation of the information that appears in note 8 of BRT's Quarterly report on Form 10-Q to BRT's pro rata share of the operations of its unconsolidated subsidiaries:
| | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2022 | | | |
| | Total | | Partner Share | | BRT's Pro-Rata Share | | | |
| Revenues: | | | | | | | | | |
| Rental and other revenue | | $ | 25,231 | | | $ | 8,896 | | | $ | 16,335 | | | | |
| Total revenues | | $ | 25,231 | | | $ | 8,896 | | | $ | 16,335 | | | | |
| | | | | | | | | |
| Expenses: | | | | | | | | | |
| Real estate operating expenses | | 11,169 | | | 3,904 | | | 7,265 | | | | |
| Interest expense | | 6,026 | | | 2,082 | | | 3,944 | | | | |
| Depreciation | | 6,636 | | | 2,318 | | | 4,318 | | | | |
| Total expenses | | 23,831 | | | 8,304 | | | 15,527 | | | | |
| Total revenues less total expenses | | 1,400 | | | 592 | | | 808 | | | | |
| Equity in earnings of joint ventures | | 55 | | | — | | | 55 | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Gain on insurance recoveries | | 515 | | | 129 | | | 386 | | | | |
| Gain on sale of real estate | | 23,652 | | | 10,691 | | | 12,961 | | | | |
| Loss on extinguishment of debt | | (30) | | | (11) | | | (19) | | | | |
| Net loss (income) | | $ | 25,592 | | | $ | 11,401 | | | $ | 14,191 | | (1) | | |
________________
(1) Reflects BRT's share as determined in accordance with GAAP - not its pro-rata share.
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2021 | |
| | Total | | Partner Share | | BRT's Pro-Rata Share | |
| Revenues: | | | | | | | |
| Rental and other revenue | | $ | 32,672 | | | $ | 11,983 | | | $ | 20,689 | | |
| Total revenues | | $ | 32,672 | | | $ | 11,983 | | | $ | 20,689 | | |
| | | | | | | |
| Expenses: | | | | | | | |
| Real estate operating expenses | | 15,703 | | | 5,718 | | | 9,985 | | |
| Interest expense | | 8,522 | | | 3,063 | | | 5,459 | | |
| Depreciation | | 10,385 | | | 3,786 | | | 6,599 | | |
| Total expenses | | 34,610 | | | 12,567 | | | 22,043 | | |
| Total revenues less total expenses | | (1,938) | | | (584) | | | (1,354) | | |
| Equity in earnings of joint ventures | | 9 | | | — | | | 9 | | |
| Impairment of assets | | (2,323) | | | (661) | | | (1,662) | | |
| Insurance recoveries | | 2,323 | | | 661 | | | 1,662 | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Net loss | | $ | (1,929) | | | $ | (584) | | | $ | (1,345) | | (1) |
________________
(1) Reflects BRT's share as determined in accordance with GAAP - not its pro-rata share.
Exhibit 99.2
| | |
SUPPLEMENTAL FINANCIAL
INFORMATION FOR THREE MONTHS ENDED
MARCH 31, 2022 |
May 9, 2022
60 Cutter Mill Rd., Great Neck, NY 11021
FORWARD LOOKING STATEMENTS
The information set forth herein contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provision for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words "may", "will", "believe", "expect", "intend", "anticipate”, “estimate", "project", or similar expressions or variations thereof. Forward-looking statements involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect actual results, performance or achievements. Investors are cautioned not to place undue reliance on any forward-looking statements and are urged to read the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021 (the "Annual Report") and the other documents we file with the SEC thereafter.
We undertake no obligation to update or revise the information herein, whether as a result of new information, future events or circumstances, or otherwise.
We use pro rata (as defined under "Non-GAAP Financial Measures and Definitions") to help the reader gain a better understanding of our unconsolidated joint ventures. However, the use of pro rata information has certain limitations and is not representative of our operations and accounts as presented in accordance with GAAP. Accordingly, pro rata information should be used with caution and in conjunction with the GAAP data presented herein and in our reports filed with the SEC.
| | | | | |
| Table of Contents | Page Number |
| Financial Highlights | 1 |
| Operating Results | 2 |
| Operating Results of Unconsolidated Properties | 3 |
| Funds From Operations | 4-5 |
| Consolidated Balance Sheets | 6 |
| Balance Sheets of Unconsolidated Joint Venture Entities | 7 |
| Portfolio Data by State | 8 |
| Same Store Comparison - Consolidated | 9 |
| Same Store Comparison - Unconsolidated | 10 |
| Portfolio Data Combined | 11 |
Multi-Family Acquisitions and Dispositions
| 12 |
| Contracted Acquisitions and Dispositions | 13 |
| Value-Add Information and Capital Expenditures | 14 |
| Debt Analysis | 15 |
| Non-GAAP Financial Measures, Definitions, and Reconciliations | 16-19 |
| Portfolio Table | 20 |
BRT Apartments Corp. (NYSE: BRT)
Financial Highlights
_________________________________________________________________________________________________________
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | As at March 31, | | | | | | |
| | | 2022 | | 2021 | | | | | | | | |
| Market capitalization (thousands) | | $ | 445,051 | | | $ | 296,098 | | | | | | | | | |
| Shares outstanding (thousands) | | 18,567 | | | 17,583 | | | | | | | | | |
| Closing share price | | $ | 23.97 | | | $ | 16.84 | | | | | | | | | |
| Quarterly dividend declared per share | | $ | 0.23 | | | $ | 0.22 | | | | | | | | | |
| | | | | | | | | | | | | |
| | | Quarter ended March 31, |
| | | Combined | | Consolidated | | Unconsolidated |
| | | 2022 | | 2021 | | 2022 | | 2021 | | 2022 | | 2021 |
| Properties owned | | 33 | | 39 | | 11 | | 8 | | 22 | | 31 |
| Units (a) | | 8,985 | (a) | 11,042 | | 2,864 | | 1,880 | | 6,121 | (a) | 9,162 |
| Average occupancy | | 96.4 | % | | 93.6 | % | | 97.7 | % | | 96.1 | % | | 95.9 | % | | 93.9 | % |
| Average monthly rental revenue per occupied unit | | $ | 1,215 | | $ | 1,113 | | $ | 1,301 | | $ | 1,091 | | $ | 1,180 | | $ | 1,098 |
| ____________________________ | | | | | | | | | | | | | |
| (a) Excludes a 240-unit development project | | | | | | | | | | | | |
| | | Quarter ended March 31, | | | | | | |
| Per share data | | | 2022
(Unaudited) | | 2021
(Unaudited) | | | | | | | | |
| Earnings per share: basic and diluted | | $ | 0.62 | | | $ | (0.22) | | | | | | | | | |
| | | | | | | | | | | | |
| FFO per share of common stock (diluted) (1) | | $ | 0.35 | | | $ | 0.35 | | | | | | | | | |
| AFFO per share of common stock (diluted) (1) | | $ | 0.39 | | | $ | 0.30 | | | | | | | | | |
| | | | | | | | | | | | | |
| | | As at March 31, | | | | | | | | |
| | | 2022 | | 2021 | | | | | | | | |
| Debt to Enterprise Value (2) | | | 59 | % | | 72 | % | | | | | | | | |
| | | | | | | | | | | | | |
(1) See the reconciliation of Funds From Operations, or FFO, and Adjusted Funds From Operations, or AFFO, to net income,
as calculated in accordance with GAAP, and the definitions of such terms under "Non-GAAP Financial Measures and Definitions."
(2) Enterprise Value is equal to debt plus market capitalization less cash and cash equivalents, including BRT's pro-rata share of cash and cash equivalents at the
unconsolidated Joint Ventures. Cash and cash equivalents excludes restricted cash. Debt is equal to 100% of the debt at the consolidated properties and BRT's
pro-rata share of debt at the unconsolidated joint ventures. See "Non-GAAP Financial Measures and Definitions" for an explanation of "pro-rata share."
BRT Apartments Corp. (NYSE: BRT)
Operating Results
(dollars in thousands except per share data)
_____________________________________________________________________________________________________________________
| | | | | | | | | | | | | | | |
| Three Months Ended March 31, | | |
| 2022 | | 2021 | | | | |
| Revenues: | | | | | | | |
| Rental revenue | $ | 11,430 | | | $ | 7,095 | | | | | |
| Other income | 4 | | | 4 | | | | | |
| Total revenues | 11,434 | | | 7,099 | | | | | |
| Expenses: | | | | | | | |
| Real estate operating expenses | 4,753 | | | 3,117 | | | | | |
| Interest expense | 2,021 | | | 1,660 | | | | | |
| General and administrative | 3,633 | | | 3,114 | | | | | |
| | | | | | | |
| Depreciation and amortization | 3,606 | | | 1,537 | | | | | |
| Total expenses | 14,013 | | | 9,428 | | | | | |
| Total revenues less total expenses | (2,579) | | | (2,329) | | | | | |
| Equity in earnings (loss) of unconsolidated joint ventures | 1,230 | | | (1,345) | | | | | |
| Equity in earnings from sale of unconsolidated joint venture properties | 12,961 | | | — | | | | | |
| Gain on sale of real estate | 6 | | | — | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Income (loss) from continuing operations | 11,618 | | | (3,674) | | | | | |
| Income tax provision | 74 | | | 57 | | | | | |
| Net income (loss) from continuing operations, net of taxes | 11,544 | | | (3,731) | | | | | |
| Net income attributable to non-controlling interests | (36) | | | (34) | | | | | |
| Net income (loss) attributable to common stockholders | $ | 11,508 | | | $ | (3,765) | | | | | |
| | | | | | | |
| Weighted average number of shares of common stock outstanding: | | | | | | | |
| Basic | 17,561,802 | | | 17,319,222 | | | | | |
| Diluted | 17,654,349 | | | 17,319,222 | | | | | |
| | | | | | | |
| Per share amounts attributable to common stockholders: | | | | | | | |
| Basic and diluted | $ | 0.62 | | | $ | (0.22) | | | | | |
| | | | | | | |
BRT Apartments Corp. (NYSE: BRT)
Operating Results of Unconsolidated Properties
(dollars in thousands, except per share data)
_____________________________________________________________________________________________________________________
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
| Revenues: | | | | | | | | |
| Rental and other revenue | | $ | 25,231 | | | $ | 32,672 | | | | | |
| Total revenues | | 25,231 | | | 32,672 | | | | | |
| | | | | | | | |
| Expenses: | | | | | | | | |
| Real estate operating expenses | | 11,169 | | | 15,703 | | | | | |
| Interest expense | | 6,026 | | | 8,522 | | | | | |
| Depreciation | | 6,636 | | | 10,385 | | | | | |
| Total expenses | | 23,831 | | | 34,610 | | | | | |
| Total revenues less total expenses | | 1,400 | | | (1,938) | | | | | |
| Other equity earnings | | 55 | | | 9 | | | | | |
| Impairment of assets from unconsolidated joint ventures | | — | | | (2,323) | | | | | |
| Insurance recoveries from unconsolidated joint ventures | | — | | | 2,323 | | | | | |
| Gain on insurance recoveries | | 515 | | | — | | | | | |
| Gain on sale of real estate properties | | 23,652 | | | — | | | | | |
| Loss on extinguishment of debt | | (30) | | | — | | | | | |
| Net income (loss) income from joint ventures | | $ | 25,592 | | | $ | (1,929) | | | | | |
| | | | | | | | |
| BRT equity in earnings (loss) and equity in earnings from sale of unconsolidated joint venture properties | | $ | 14,191 | | | $ | (1,345) | | | | | |
BRT Apartments Corp. (NYSE: BRT)
Funds from Operations
(dollars in thousands)
____________________________________________________________________________________________________________________
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
| GAAP Net income (loss) attributable to common stockholders | | $ | 11,508 | | | $ | (3,765) | | | | | |
| Add: depreciation of properties | | 3,606 | | | 1,537 | | | | | |
| Add: our share of depreciation in unconsolidated joint venture properties | | 4,318 | | | 6,599 | | | | | |
| | | | | | | | |
| Add: our share of impairment charge in unconsolidated joint venture properties | | — | | | 1,662 | | | | | |
| Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties | | (12,961) | | | — | | | | | |
| Deduct: gain on sale of real estate and partnership interests | | (6) | | | — | | | | | |
| Adjust for non-controlling interests | | (4) | | | (4) | | | | | |
| NAREIT Funds from operations attributable to common stockholders | | $ | 6,461 | | | $ | 6,029 | | | | | |
| | | | | | | | |
| Adjustments for: straight-line rent accruals | | 6 | | | (10) | | | | | |
| | | | | | | | |
| Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties | | 19 | | | — | | | | | |
| Add: amortization of restricted stock and RSU expense | | 974 | | | 538 | | | | | |
| Add: amortization of deferred mortgage and debt costs | | 77 | | | 80 | | | | | |
| Add: our share of deferred mortgage costs from unconsolidated joint venture properties | | 93 | | | 148 | | | | | |
| Less: our share of insurance recovery from unconsolidated joint ventures | | — | | | (1,662) | | | | | |
| Less: our share of gain on insurance proceeds from unconsolidated joint venture | | (386) | | | — | | | | | |
| Adjustments for non-controlling interests | | (1) | | | 2 | | | | | |
| Adjusted funds from operations attributable to common stockholders | | $ | 7,243 | | | $ | 5,125 | | | | | |
Funds from Operations
(dollars in thousands, except per share data)
____________________________________________________________________________________________________________________
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
| GAAP Net income (loss) attributable to common stockholders | | $ | 0.62 | | | $ | (0.22) | | | | | |
| Add: depreciation of properties | | 0.20 | | | 0.09 | | | | | |
| Add: our share of depreciation in unconsolidated joint venture properties | | 0.23 | | | 0.38 | | | | | |
| | | | | | | | |
| Add: our share of impairment charge in unconsolidated joint venture properties | | — | | | 0.10 | | | | | |
| Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties | | (0.70) | | | — | | | | | |
| Deduct: gain on sales of real estate and partnership interests | | — | | | — | | | | | |
| Adjustment for non-controlling interests | | — | | | — | | | | | |
| NAREIT Funds from operations per diluted common share | | 0.35 | | | 0.35 | | | | | |
| | | | | | | | |
| Adjust for straight line rent accruals | | — | | | — | | | | | |
| | | | | | | | |
| Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties | | — | | | — | | | | | |
| Add: amortization of restricted stock and RSU expense | | 0.05 | | | 0.04 | | | | | |
| Add: amortization of deferred mortgage and debt costs | | — | | | — | | | | | |
| Add: our share of deferred mortgage and debt costs from unconsolidated joint venture properties | | 0.01 | | | 0.01 | | | | | |
| Less: our share of insurance recovery from unconsolidated joint venture properties | | — | | | (0.10) | | | | | |
| Less: our share of gain on insurance proceeds from unconsolidated joint venture properties | | (0.02) | | | — | | | | | |
| Adjustments for non-controlling interests | | — | | | — | | | | | |
| Adjusted funds from operations per diluted common share | | $ | 0.39 | | | $ | 0.30 | | | | | |
| | | | | | | | |
| Diluted shares outstanding for FFO and AFFO | | 18,570,639 | | | 17,319,222 | | | | | |
BRT Apartments Corp. (NYSE: BRT)
Consolidated Balance Sheets
(amounts in thousands, except per share amounts)
_____________________________________________________________________________________________________________________
| | | | | | | | | | | | | | |
| | March 31, 2022 | | December 31, 2021 |
| | (unaudited) | | (audited) |
| ASSETS | | | | |
| Real estate properties, net of accumulated depreciation | | $ | 328,334 | | | $ | 293,550 | |
| Investment in unconsolidated joint ventures | | 106,025 | | | 112,347 | |
| Cash and cash equivalents | | 29,688 | | | 32,339 | |
| Restricted cash | | 6,543 | | | 6,582 | |
| Other assets | | 12,410 | | | 10,341 | |
| Real estate property held for sale | | — | | | 4,379 | |
| Total Assets | | $ | 483,000 | | | $ | 459,538 | |
| | | | |
| LIABILITIES AND EQUITY | | | | |
| Liabilities: | | | | |
| Mortgages payable, net of deferred costs | | $ | 211,565 | | | $ | 199,877 | |
| Junior subordinated notes, net of deferred costs | | 37,108 | | | 37,103 | |
| | | | |
| Accounts payable and accrued liabilities | | 20,125 | | | 19,607 | |
| Total Liabilities | | 268,798 | | | 256,587 | |
| | | | |
| | | | |
| Commitments and contingencies | | | | |
| Equity: | | | | |
| BRT Apartments Corp. stockholders' equity: | | | | |
| Preferred shares $.01 par value 2,000 shares authorized, none issued | | — | | | — | |
Common stock, $.01 par value, 300,000 shares authorized;
17,632 and 17,349 shares outstanding | | 176 | | | 173 | |
| Additional paid-in capital | | 262,170 | | | 258,161 | |
| | | | |
| Accumulated deficit | | (48,175) | | | (55,378) | |
| Total BRT Apartments Corp. stockholders’ equity | | 214,171 | | | 202,956 | |
| Non-controlling interests | | 31 | | | (5) | |
| Total Equity | | 214,202 | | | 202,951 | |
| Total Liabilities and Equity | | $ | 483,000 | | | $ | 459,538 | |
BRT Apartments Corp. (NYSE: BRT)
Balance Sheet of Unconsolidated Joint Venture Entities
(amounts in thousands, except per share amounts)
_____________________________________________________________________________________________________________________
At March 31, 2022, the Company held interests in unconsolidated joint ventures that own 22 multi-family properties (the "Unconsolidated Properties") including an interest in a development project. The condensed balance sheet below present information regarding such properties (dollars in thousands):
| | | | | | | | |
| | March 31, 2022 |
| ASSETS | | |
| Real estate properties, net of accumulated depreciation | | $ | 675,246 | |
| Cash and cash equivalents | | 11,567 | |
| Other assets | | 25,944 | |
| Total Assets | | $ | 712,757 | |
| | |
| LIABILITIES AND EQUITY | | |
| Liabilities: | | |
| Mortgages payable, net of deferred costs | | $ | 531,246 | |
| Accounts payable and accrued liabilities | | 10,266 | |
| Total Liabilities | | 541,512 | |
| Commitments and contingencies | | |
| Equity: | | |
| Total unconsolidated joint venture equity | | 171,245 | |
| Total Liabilities and Equity | | $ | 712,757 | |
| | |
| | |
| | |
| BRT interest in joint venture equity | | $ | 106,025 | |
| | |
| Reconciliation: | | |
| Unconsolidated Mortgages Payable: | | |
BRT's pro-rata share | | $ | 345,474 | |
Partner's pro-rata share | | 185,772 | |
| Total | | $ | 531,246 | |
BRT Apartments Corp. (NYSE: BRT)
Portfolio Data by State
Quarter ended March 31, 2022
(dollars in thousands, except monthly rent amounts)
_____________________________________________________________________________________________________________________
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated | | | | | | | | | | |
| | Units at period end | | Revenues | | Property Operating Expenses | | NOI (1) | | % of NOI Contribution | | Weighted Average Occupancy
| | Weighted Average Rent per Occ. Unit
|
| Texas | | 480 | | $855 | | $415 | | $440 | | 6.6 | % | | 97.9 | % | | $ | 1,129 | |
| Georgia | | 448 | | 1,765 | | 813 | | 952 | | 14.3 | % | | 97.9 | % | | 1,189 |
| Florida | | 276 | | 1,200 | | 470 | | 730 | | 10.9 | % | | 95.5 | % | | 1,364 |
| Ohio | | 264 | | 869 | | 338 | | 531 | | 8.0 | % | | 97.3 | % | | 1,007 |
| Virginia | | 220 | | 1,073 | | 352 | | 721 | | 10.8 | % | | 98.9 | % | | 1,484 |
| South Carolina | | 474 | | 1,988 | | 940 | | 1,048 | | 15.7 | % | | 97.8 | % | | 1,248 |
| Tennessee | | 702 | | 3,308 | | 1,319 | | 1,989 | | 29.8 | % | | 97.9 | % | | 1,483 |
| Sold properties and legacy assets | | — | | 372 | | 106 | | 266 | | 3.9 | % | | N/A | | N/A |
| Totals | | 2,864 | | $11,430 | | $4,753 | | $6,677 | | 100 | % | | 97.7 | % | | $ | 1,301 | |
|
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Unconsolidated (Pro-Rata Share) (1) | | | | | | | | | | |
| | Units at period end | | Revenues | | Property Operating Expenses | | NOI (1) | | % of NOI Contribution | | Weighted Average Occupancy
| | Weighted Average Rent per Occ. Unit
|
| Texas | | 1,985 | | $4,504 | | $2,139 | | $2,365 | | 26.1 | % | | 95.9 | % | | $ | 1,213 | |
| South Carolina | | 917 | | 1,719 | | 734 | | 985 | | 10.9 | % | | 96.1 | % | | 1,274 |
| Georgia | | 511 | | 1,356 | | 619 | | 737 | | 8.1 | % | | 94.5 | % | | 1,102 |
| Florida | | 242 | | 721 | | 364 | | 357 | | 3.9 | % | | 93.8 | % | | 1,208 |
| Alabama | | 940 | | 2,544 | | 1,126 | | 1,418 | | 15.6 | % | | 96.3 | % | | 1,029 |
| Mississippi | | 776 | | 2,027 | | 699 | | 1,328 | | 14.6 | % | | 97.5 | % | | 1,106 |
| North Carolina | | 576 | | 1,658 | | 671 | | 987 | | 10.9 | % | | 96.0 | % | | 1,191 |
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| Missouri | | 174 | | 674 | | 293 | | 381 | | 4.2 | % | | 93.1 | % | | 1,570 |
| Joint venture buyouts (2) | | — | | 781 | | | 407 | | | 374 | | | 4.1 | % | | N/A | | N/A |
| Sold properties | | — | | 351 | | | 213 | | | 138 | | | 1.6 | % | | N/A | | N/A |
| Totals | | 6,121 | | $16,335 | | $7,265 | | $9,070 | | 100 | % | | 95.9 | % | | $ | 1,180 | |
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_________________________________________________________________________________
(1) See the reconciliation of NOI to net income, as calculated in accordance with GAAP, and the definition of NOI and pro-rata share under "Non-GAAP
Financial Measures and Definitions."
(2) Reflects the income and expenses for Verandas at Alamo for the period January 1 - March 22, 2022 before the partner buyout close which was completed on
March 23, 2022. The income and expenses for the remaining nine days in the quarter ending March 31, 2022 are included in the Consolidated information
in table above.
BRT Apartments Corp. (NYSE: BRT)
Consolidated Same Store Comparisons (1)
Quarters ended March 31, 2022 and 2021
(dollars in thousands, except monthly rent amounts)
_____________________________________________________________________________________________________________________
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| | | | Revenues | | Property Operating Expenses | | NOI (2) |
| | Units | | 2022 | | 2021 | | % Change | | 2022 | | 2021 | | % Change | | 2022 | | 2021 | | % Change |
| Georgia | | 448 | | $1,765 | | $1,620 | | 9.0 | % | | $813 | | $725 | | 12.1 | % | | $952 | | $895 | | 6.4 | % |
| Florida | | 276 | | 1,200 | | 1,077 | | 11.4 | % | | 470 | | 402 | | 16.9 | % | | 730 | | 675 | | 8.1 | % |
| Texas | | 192 | | 733 | | 654 | | 12.1 | % | | 347 | | 339 | | 2.4 | % | | 386 | | 315 | | 22.5 | % |
| Ohio | | 264 | | 869 | | 779 | | 11.6 | % | | 338 | | 321 | | 5.3 | % | | 531 | | 458 | | 15.9 | % |
| Virginia | | 220 | | 1,073 | | 1,037 | | 3.5 | % | | 352 | | 343 | | 2.6 | % | | 721 | | 694 | | 3.9 | % |
| South Carolina | | 208 | | 955 | | 814 | | 17.3 | % | | 439 | | 405 | | 8.4 | % | | 516 | | 409 | | 26.2 | % |
| Totals | | 1,608 | | $6,595 | | $5,981 | | 10.3 | % | | $2,759 | | $2,535 | | 8.8 | % | | $3,836 | | $3,446 | | 11.3 | % |
| | | | | | | | | | | | | | | | | 0 | | | |
| | | | Weighted Average Occupancy | | Weighted Average Monthly Rent per Occupied Unit | | | | | | |
| | | | 2022 | | 2021 | | % Change | | 2022 | | 2021 | | % Change | | | | | | |
| Georgia | | | | 97.9 | % | | 96.8 | % | | 1.1 | % | | $1,189 | | $1,103 | | 7.8 | % | | | | | | |
| Florida | | | | 95.5 | % | | 98.1 | % | | (2.7) | % | | 1,364 | | 1,190 | | 14.6 | % | | | | | | |
| Texas | | | | 97.9 | % | | 95.8 | % | | 2.2 | % | | 1,129 | | 1,019 | | 10.8 | % | | | | | | |
| Ohio | | | | 97.3 | % | | 98.1 | % | | (0.8) | % | | 1,007 | | 920 | | 9.5 | % | | | | | | |
| Virginia | | | | 98.9 | % | | 98.6 | % | | 0.3 | % | | 1,484 | | 1,416 | | 4.8 | % | | | | | | |
| South Carolina | | | | 96.8 | % | | 94.1 | % | | 2.9 | % | | 1,336 | | 1,185 | | 12.7 | % | | | | | | |
| Weighted Average | | | | 97.4 | % | | 97.0 | % | | 0.4 | % | | 1,241 | | 1,131 | | 9.7 | % | | | | | | |
_______________________________
(1) See definition of Same Store under "Non-GAAP Financial Measures and Definitions"
(2) See the reconciliation of NOI to net income, as calculated in accordance with GAAP, and the definition of NOI under "Non-GAAP Financial Measures and
Definitions."
BRT Apartments Corp. (NYSE: BRT)
Unconsolidated Same Store Comparisons (1)
Quarters ended March 31, 2022 and 2021
BRT Pro-rata Share
(dollars in thousands, except monthly rent amounts)
________________________________________________________________________________________
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| | | | Revenues | | Property Operating Expenses | | NOI (2) |
| | Units | | 2022 | | 2021 | | % Change | | 2021 | | 2020 | | % Change | | 2022 | | 2021 | | % Change |
| Texas | | 1,985 | | $4,504 | | $3,889 | | 15.8 | % | | $2,139 | | $2,060 | | 3.8 | % | | $2,365 | | $1,829 | | 29.3 | % |
| Georgia | | 511 | | 1,356 | | 1,279 | | 6.0 | % | | 619 | | 609 | | 1.6 | % | | 737 | | 670 | | 10.0 | % |
| Florida | | 242 | | 721 | | 643 | | 12.1 | % | | 364 | | 303 | | 20.1 | % | | 357 | | 340 | | 5.0 | % |
| South Carolina | | 917 | | 1,720 | | 1,537 | | 11.9 | % | | 734 | | 760 | | (3.4) | % | | 986 | | 777 | | 26.9 | % |
| Mississippi | | 776 | | 1,628 | | 1,510 | | 7.8 | % | | 562 | | 573 | | (1.9) | % | | 1,066 | | 937 | | 13.8 | % |
| Alabama | | 940 | | 2,544 | | 2,410 | | 5.6 | % | | 1,126 | | 1,054 | | 6.8 | % | | 1,418 | | 1,356 | | 4.6 | % |
| Missouri | | 174 | | 674 | | 656 | | 2.7 | % | | 293 | | 313 | | (6.4) | % | | 381 | | 343 | | 11.1 | % |
| North Carolina | | 576 | | 1,658 | | 1,446 | | 14.7 | % | | 671 | | 675 | | (0.6) | % | | 987 | | 771 | | 28.0 | % |
| Totals | | 6,121 | | $14,805 | | $13,370 | | 10.7 | % | | $6,508 | | $6,347 | | 2.5 | % | | $8,296 | | $7,023 | | 18.1 | % |
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| | | | Weighted Average Occupancy | | Weighted Average Monthly Rent per Occupied Unit | | | | | | |
| | | | 2022 | | 2021 | | % Change | | 2022 | | 2021 | | % Change | | | | | | |
| Texas | | | | 95.8 | % | | 92.2 | % | | 3.9 | % | | $1,159 | | $1,117 | | 3.8 | % | | | | | | |
| Georgia | | | | 94.5 | % | | 94.2 | % | | 0.3 | % | | 1,102 | | 1,030 | | 7.0 | % | | | | | | |
| Florida | | | | 93.8 | % | | 93.8 | % | | 0.0 | % | | 1,208 | | 1,096 | | 10.2 | % | | | | | | |
| South Carolina | | | | 96.1 | % | | 90.0 | % | | 6.8 | % | | 1,274 | | 1,205 | | 5.7 | % | | | | | | |
| Mississippi | | | | 97.5 | % | | 98.1 | % | | (0.6) | % | | 1,106 | | 1,022 | | 8.2 | % | | | | | | |
| Alabama | | | | 96.3 | % | | 95.6 | % | | 0.7 | % | | 1,029 | | 976 | | 5.4 | % | | | | | | |
| Missouri | | | | 93.1 | % | | 92.7 | % | | 0.4 | % | | 1,570 | | 1,553 | | 1.1 | % | | | | | | |
| North Carolina | | | | 96.1 | % | | 93.5 | % | | 2.8 | % | | 1,191 | | 1,063 | | 12.0 | % | | | | | | |
| Weighted Average | | | | 95.9 | % | | 93.5 | % | | 2.6 | % | | 1,161 | | 1,095 | | 6.0 | % | | | | | | |
________________________________
(1) See definition of Same Store under "Non-GAAP Financial Measures and Definitions"
(2) See the reconciliation of NOI to net income, as calculated in accordance with GAAP, and the definition of NOI and pro-rata share under "Non-GAAP Financial
Measures and Definitions."
BRT Apartments Corp. (NYSE: BRT)
Portfolio Data Combined
(dollars in thousands, except monthly rent amounts)
________________________________________________________________________________________
Quarter Ended March 31, | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Portfolio | 2022 | | 2021 | | Variance |
| Revenues | | Property Operating Expenses | | NOI | | Revenues | | Property Operating Expenses | | NOI | | Revenues | | Property Operating Expenses | | NOI |
| Consolidated | $11,430 | | $4,753 | | $6,677 | | $7,095 | | $3,117 | | $3,978 | | 61.1 | % | | 52.5 | % | | 67.8 | % |
| Unconsolidated (1) | 16,335 | | 7,265 | | 9,070 | | 20,689 | | 9,985 | | 10,704 | | (21.0) | % | | (27.2) | % | | (15.3) | % |
| Combined | $27,765 | | $12,018 | | $15,747 | | $27,784 | | $13,102 | | $14,682 | | (0.1) | % | | (8.3) | % | | 7.3 | % |
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| Same Store | | | | | | | | | | | | | | | | | |
| 2022 | | 2021 | | Variance |
| Revenues | | Property Operating Expenses | | NOI | | Revenues | | Property Operating Expenses | | NOI | | Revenues | | Property Operating Expenses | | NOI |
| Consolidated | $6,595 | | $2,759 | | $3,836 | | $5,981 | | $2,535 | | $3,446 | | 10.3 | % | | 8.8 | % | | 11.3 | % |
| Unconsolidated (1) | 14,805 | | 6,508 | | $8,296 | | 13,370 | | 6,347 | | 7,023 | | 10.7 | % | | 2.5 | % | | 18.1 | % |
| Combined | $21,400 | | $9,267 | | $12,132 | | $19,351 | | $8,882 | | $10,469 | | 10.6 | % | | 4.3 | % | | 15.9 | % |
| | | | | | | | | | | | | | | | | |
____________________________________________________
(1) Unconsolidated amounts represent BRT's pro-rata share. See definition of pro-rata under "Non-GAAP Financial Measures and Definitions."
BRT Apartments Corp. (NYSE: BRT)
Acquisitions and Dispositions
(dollars in thousands)
________________________________________________________________________________________
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| ACQUISITIONS | | | | | | | | | | | | | | |
| Buyout of Joint Venture Interest | | |
| Property/Location | | Purchase Date | | Units | | Purchase Price | | Pre-Acquisition ownership % in the JV | | Post-Acquisition Ownership % | | | | |
| Verandas at Alamo - San Antonio, TX | | 3/23/2022 | | 288 | | $ | 8,721 | | | 71.9 | % | | 100.0 | % | | | | |
| | | | | | | | | | | | | | |
| Buyout of Joint Venture Interest - subsequent to March 31, 2022 | | |
| Property/Location | | Purchase Date | | Units | | Purchase Price | | Pre-Acquisition ownership % in the JV | | Post-Acquisition Ownership % | | | | |
| Vanguard Heights, Creve Coeur, MO | | 4/7/2022 | | 174 | | $ | 4,800 | | | 78.4 | % | | 100.0 | % | | | | |
| | | | | | | | | | | | | | |
| Acquisition of Joint Venture Interest in Development Project | | |
| Property/Location | | Purchase Date | | Units | | Purchase Price | | Acquisition ownership % in the JV | | | | | | |
Stono Oaks, Johns Island, SC (a) | | 3/10/2022 | | — | | | $ | 3,500 | | | 17.45 | % | | | | | | |
| __________________________ | | | | | | | | | | | | | | |
| (a) Purchased an interest in a planned 240-unit development property | | | | | | | | |
| | | | | | | | | | | | | | |
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| DISPOSITIONS | | | | | | | | | | | | | | |
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| Disposition of Property by Unconsolidated Joint Ventures | | |
| Property/Location | | Sale Date | | No. of Units | | Sales Price | | Gain on Sale | | BRT's Share of Gain on Sale | | | | |
| Verandas at Shavano - San Antonio, TX | | 2/8/2022 | | 288 | | $ | 53,750 | | | $ | 23,652 | | | $ | 12,961 | | | | | |
BRT Apartments Corp. (NYSE: BRT)
Contracted Acquisitions and Dispositions
(dollars in thousands)
________________________________________________________________________________________
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CONTRACTED BUYOUTS OF JOINT VENTURE INTERESTS (1) | | | | | | | | | | |
| Date of Agreement | | Property Name | | Location | | Units | | Remaining Interest to be Purchased | | Book Value of Property at 3/31/22 | | Purchase Price (2) | | Estimated Amount of Debt to be Included on our Consolidated Balance Sheet | | |
| February 2022 | | Jackson Square | | Tallahassee, FL | | 242 | | 20 | % | | $ | 25,102 | | | $ | 6,220 | | | $ | 21,524 | | | |
| February 2022 | | Grove at River Place | | Macon, GA | | 240 | | 20 | % | | 12,829 | | | 7,485 | | | 11,481 | | | |
| February 2022 | | The Woodland Apartments | | Boerne, TX | | 120 | | 20 | % | | 11,394 | | | 3,550 | | | 7,935 | | | |
| March 2022 | | Brixworth at Bridge Street | | Huntsville, AL | | 208 | | 20 | % | | 11,844 | | | 10,851 | | | 18,500 | | (3) | | |
| April 2022 | | Abbotts Run | | Willmington, NC | | 264 | | 20 | % | | 37,552 | | | 8,560 | | | 23,160 | | | |
| April 2022 | | Civic Center I (4) | | Southaven, MS | | 392 | | 25 | % | | 30,831 | | | 18,063 | | | 27,544 | | | |
| April 2022 | | Civic Center II | | Southaven, MS | | 384 | | 25 | % | | 32,725 | | | 17,694 | | | 30,288 | | | |
| April 2022 | | Magnolia Pointe at Madison | | Madison, AL | | 204 | | 20 | % | | 18,474 | | | 7,132 | | | 15,000 | | | |
| April 2022 | | Somerset at Trussville | | Birmingham, AL | | 328 | | 20 | % | | 40,300 | | | 9,785 | | | 32,250 | | | |
| | | | Total | | 2,382 | | | | $ | 221,051 | | | $ | 89,340 | | | $ | 187,682 | | | |
____________________________________
(1) It is anticipated that these transactions will be completed by August 1, 2022.
(2) The purchase (i) price gives effect to the purchase of the "promote interest" of our joint venture partners (as more fully described in the Annual Report) and
(ii) is subject to customary closing and similar adjustments.
(3) The current mortgage debt of $11,184 is to be refinanced with approximately $18,500 of new ten-year mortgage debt with an anticipated interest rate of
4.25% (the "New Mortgage Debt").
(4) The completion of the sale of each of Civic Center I and Civic Center II is conditioned upon the closing of one another. The purchase price reflected for
each represents an allocation of the total purchase price based on number of units.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| CONTRACTED SALES OF PROPERTIES BY UNCONSOLIDATED JOINT VENTURES |
| Property/Location | | | | No. of Units | | Interest Owned | | Sales Price | | BRT's share of Pre-Payment Charge | | Gain on Sale | | BRT's Share of Gain on Sale |
| Retreat at Cinco Ranch - Katy, TX | | | | 268 | | 75 | % | | $ | 68,500 | | | $ | 1,140 | | | $ | 28,794 | | | $ | 16,409 | |
| The Vive at Kellswater - Kannapolis, NC | | | | 312 | | 65 | % | | 92,000 | | | 1,570 | | | 45,491 | | | 21,537 | |
| | | | 580 | | | | $ | 160,500 | | | $ | 2,710 | | | $ | 74,285 | | | $ | 37,946 | |
It is anticipated that these two sales will be completed during the quarter ending June 30, 2022
BRT Apartments Corp. (NYSE: BRT)
Value-Add Program and Capital Expenditures
Quarter ended March 31, 2022
________________________________________________________________________________________
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| Value-Add Program | | | | | | | | |
| (Includes consolidated and unconsolidated amounts) | | | | | | | | |
| Units Rehabilitated (1) | | Estimated Rehab Costs (2) | | Estimated Rehab Costs Per unit | | Estimated Average Monthly Rent Increase (3) | | Estimated Annualized ROI (3) | | Estimated units available to be renovated over next 24 months |
| 83 | | $441,000 | | $5,313 | | $217 | | 49% | | 800 |
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| (1) Refers to rehabilitated units with respect to which a new lease or renewal lease was entered into during the period. |
(2) Reflects rehab costs incurred during the current and prior periods with respect to units completed, in which a new
lease or renewal lease was entered into during the current period. | | |
(3) These results are not necessarily indicative of the results that would be generated if such improvements were made
across our portfolio of properties or at any particular property. Rents at a property may increase for reasons wholly
unrelated to property improvements, such as changes in demand for rental units in a particular market or
sub-market. Even if units are available to be renovated, the Company may decide not to renovate such units. | | |
| | | | | | | | | | | | | | | | | |
| Capital Expenditures | | | | | |
| (Includes consolidated and unconsolidated amounts) | | | | |
| Gross Capital Expenditures | | Less: JV Partner Share | | BRT Share of Capital Expenditures (4) |
| Estimated Recurring Capital Expenditures (1) | $ | 132,000 | | | $ | 34,000 | | | $ | 98,000 | |
| Estimated Non-Recurring Capital Expenditures (2) | 3,231,000 | | | 689,000 | | | 2,542,000 | |
| Total Capital Expenditures | $ | 3,363,000 | | | $ | 723,000 | | | $ | 2,640,000 | |
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| Replacements (operating expense) (3) | $ | 564,000 | | | $ | 117,000 | | | $ | 447,000 | |
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Estimated Recurring Capital Expenditures and
Replacements per unit (8,985 units) | $ | 77 | | | $ | 16 | | | $ | 61 | |
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(1) Recurring capital expenditures represent our estimate of expenditures incurred at the property to maintain the property's existing operations -
it excludes revenue enhancing projects. |
(2) Non-recurring capital expenditures represent our estimate of significant improvements to the common areas, property exteriors, or interior
units of the property, and revenue enhancing upgrades. |
| (3) Replacements are expensed as incurred at the property. |
| (4) Based on BRT's percentage equity interest. |
BRT Apartments Corp. (NYSE: BRT)
Debt Analysis
As of March 31, 2022
(dollars in thousands)
____________________________________________________________________________________________________________________________________
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Consolidated | | | | | | | | | | |
Year | | Total Principal Payments | | Scheduled Amortization | | Principal Payments Due at Maturity | | Percent of Total Principal Payments Due At Maturity | | Weighted Average Interest Rate (1) |
| 2022 | | $ | 16,297 | | | $ | 1,393 | | | $ | 14,904 | | | 8 | % | | 3.79 | % |
| 2023 | | 1,679 | | | 1,679 | | | — | | | — | % | | — | % |
| 2024 | | 2,256 | | | 2,256 | | | — | | | — | % | | — | % |
| 2025 | | 17,965 | | | 2,590 | | | 15,375 | | | 8 | % | | 4.42 | % |
| 2026 | | 2,421 | | | 2,421 | | | — | | | — | % | | — | % |
| Thereafter | | 172,244 | | | 10,754 | | | 161,490 | | | 84 | % | | 3.64 | % |
| Total | | $ | 212,862 | | | $ | 21,093 | | | $ | 191,769 | | | 100 | % | | |
| | | | | | | | | | |
Unconsolidated (BRT pro rata share) | | | | | | | | |
| Year | | Total Principal Payments | | Scheduled Amortization | | Principal Payments Due at Maturity | | Percent of Total Principal Payments Due At Maturity | | Weighted Average Interest Rate (1) |
| 2022 | | $ | 2,768 | | | $ | 2,768 | | | — | | | — | % | | — | % |
| 2023 | | 13,316 | | | 4,659 | | | $ | 8,657 | | | 3 | % | | 5.05 | % |
| 2024 | | 5,101 | | | 5,101 | | | — | | | — | % | | — | % |
| 2025 | | 5,851 | | | 5,851 | | | — | | | — | % | | — | % |
| 2026 | | 106,745 | | | 11,365 | | | 95,380 | | | 32 | % | | 4.14 | % |
| Thereafter | | 211,693 | | | 13,202 | | | 198,491 | | | 66 | % | | 4.12 | % |
| Total | | $ | 345,474 | | | $ | 42,946 | | | $ | 302,528 | | | 100 | % | | |
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| Combined (2) | | | | | | |
| Year | | Total Principal Payments | | Scheduled Amortization | | Principal Payments Due at Maturity | | Percent of Total Principal Payments Due At Maturity | | Weighted Average Interest Rate (1) |
| 2022 | | $ | 19,065 | | | $ | 4,161 | | | $ | 14,904 | | | 3 | % | | 4.04 | % |
| 2023 | | 14,995 | | | 6,338 | | | 8,657 | | | 2 | % | | 4.12 | % |
| 2024 | | 7,357 | | | 7,357 | | | — | | | — | | | — | % |
| 2025 | | 23,816 | | | 8,441 | | | 15,375 | | | 3 | % | | 4.42 | % |
| 2026 | | 109,166 | | | 13,786 | | | 95,380 | | | 19 | % | | 4.14 | % |
| Thereafter | | 383,937 | | | 23,956 | | | 359,981 | | | 73 | % | | 4.11 | % |
| Total | | $ | 558,336 | | | $ | 64,039 | | | $ | 494,297 | | | 100 | % | | |
| Weighted Average Remaining Term to Maturity (2) | | 8.47 | years | | | |
| Weighted Average Interest Rate (2) | | 3.94 | % | | | | |
| Debt Service Coverage Ratio for the quarter ended March 31, 2022 | 1.78 | | (3) | | | |
| | | | | | | | | | |
(1) Based on principal payments due at maturity.
|
(2) Includes consolidated and BRT's pro rata share unconsolidated amounts. |
| (3) See definition under "Non-GAAP Financial Measures and Definitions." Includes consolidated and 100% of the unconsolidated amounts. |
| | | | | | | | | | | |
| Junior Subordinated Notes | | | |
| Principal Balance | | $37,400 | |
| Interest Rate | | 3 month LIBOR + 2.00% (i.e, 2.30% at 3/31/2022) |
| Maturity | | April 30, 2036 |
| | | |
| Credit Facility (as of March 31, 2022) | | | |
| Maximum Amount Available | | Up to $35,000 | |
| Amount Outstanding | | $0 | |
| Interest Rate | | Prime + 0.25% (floor of 3.50%) | |
| Maturity | | November 2024 | |
BRT Apartments Corp. (NYSE: BRT)
NON-GAAP FINANCIAL MEASURES, DEFINITIONS, AND RECONCILIATIONS
(dollars in thousands)
________________________________________________________________________________________
We compute NOI by adjusting net income (loss) to (a) add back (1) depreciation expense, (2) general and administrative expenses, (3) interest expense, (4) loss on extinguishment of debt, (5) equity in loss of unconsolidated joint ventures, (6) provision for taxes, (7) the impact of non-controlling interests, and (b) deduct (1) other income, (2) gain on sale of real estate, and (3) gain on insurance recoveries related to casualty loss. We define "Same Store NOI" as NOI for all our consolidated properties that were owned for the entirety of the periods being presented, other than properties in lease up and developments. 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 (loss) income. 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. We view Same Store NOI as an important measure of operating performance because it allows a comparison of operating results of properties owned for the entirety of the periods presented and eliminates variations caused by acquisitions or dispositions during the periods. However, NOI should only be used as an alternative measure of our financial performance.
The following tables provides a reconciliation of NOI to net income attributable to common stockholders as computed in accordance with GAAP for the periods presented for the consolidated properties:
| | | | | | | | | | | | | | | | | | |
| Consolidated | | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
| GAAP Net income (loss) attributable to common stockholders | | $ | 11,508 | | | $ | (3,765) | | | | | |
| Less: Other Income | | (4) | | | (4) | | | | | |
| Add: Interest expense | | 2,021 | | | 1,660 | | | | | |
| General and administrative | | 3,633 | | | 3,114 | | | | | |
| | | | | | | | |
| Depreciation and amortization | | 3,606 | | | 1,537 | | | | | |
| Provision for taxes | | 74 | | | 57 | | | | | |
| Less: Gain on sale of real estate | | (6) | | | — | | | | | |
| | | | | | | | |
| Equity in earnings from sale of unconsolidated joint venture properties | | (12,961) | | | — | | | | | |
| | | | | | | | |
| Adjust for: Equity in (earnings) loss from sale of unconsolidated joint venture properties | | (1,230) | | | 1,345 | | | | | |
| Add: Net loss attributable to non-controlling interests | | 36 | | | 34 | | | | | |
| Net Operating Income | | $ | 6,677 | | | $ | 3,978 | | | | | |
| | | | | | | | |
| Less: Non-same store Net Operating Income | | $ | 2,841 | | | $ | 532 | | | | | |
| Same store Net Operating Income | | $ | 3,836 | | | $ | 3,446 | | | | | |
BRT Apartments Corp. (NYSE: BRT)
NON-GAAP FINANCIAL MEASURES, DEFINITIONS, AND RECONCILIATIONS
(dollars in thousands)
________________________________________________________________________________________
The following tables provides a reconciliation of NOI to net income attributable to common stockholders as computed in accordance with GAAP for the periods presented for BRT's pro rata share of the unconsolidated properties:
| | | | | | | | | | | | | | | | | | |
| Unconsolidated | | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
| BRT equity in earnings (loss) from joint ventures | | 14,191 | | | (1,345) | | | | | |
| Add: Interest expense | | 3,944 | | | 5,459 | | | | | |
| Depreciation | | 4,318 | | | 6,599 | | | | | |
| Loss on extinguishment of debt | | 19 | | | — | | | | | |
| Less: Impairment of asset | | — | | | 1,662 | | | | | |
| Insurance recovery | | — | | | (1,662) | | | | | |
| Gain on insurances recoveries | | (386) | | | — | | | | | |
| Gain on sale of real estate | | (12,961) | | | — | | | | | |
| Equity in earnings of joint ventures | | (55) | | | (9) | | | | | |
| Net Operating Income | | $ | 9,070 | | | $ | 10,704 | | | | | |
| | | | | | | | |
| Less: Non-same store Net Operating Income | | $ | (774) | | | $ | (3,681) | | | | | |
| Same store Net Operating Income | | $ | 8,296 | | | $ | 7,023 | | | | | |
| | | | | | | | |
| | | | | | | | |
| Consolidated same store Net Operating Income | | $ | 3,836 | | | $ | 3,446 | | | | | |
| Unconsolidated same store Net Operating Income | | 8,296 | | | 7,023 | | | | | |
| Combined same store Net Operating Income | | $ | 12,132 | | | $ | 10,469 | | | | | |
BRT Apartments Corp. (NYSE: BRT)
NON-GAAP FINANCIAL MEASURES, DEFINITIONS, AND RECONCILIATIONS
(dollars in thousands)
_____________________________________________________________________________________________________________________
The condensed income statements for the unconsolidated properties below, present, for the periods indicated, a reconciliation of the information that appears in note 8 to the consolidated financial statements included in BRT's Quarterly Report on Form 10-Q for the period ended March 31, 2022 to the BRT pro-rata information presented below | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2022 | | | |
| | Total | | Partner Share | | BRT Share | | | |
| Revenues: | | | | | | | | | |
| Rental and other revenue | | $ | 25,231 | | | $ | 8,896 | | | $ | 16,335 | | | | |
| Total revenues | | $ | 25,231 | | | $ | 8,896 | | | $ | 16,335 | | | | |
| Expenses: | | | | | | | | | |
| Real estate operating expenses | | 11,169 | | | 3,904 | | | 7,265 | | | | |
| Interest expense | | 6,026 | | | 2,082 | | | 3,944 | | | | |
| Depreciation | | 6,636 | | | 2,318 | | | 4,318 | | | | |
| Total expenses | | 23,831 | | | 8,304 | | | 15,527 | | | | |
| | | | | | | | | |
| Total revenues less total expenses | | 1,400 | | | 592 | | | 808 | | | | |
| | | | | | | | | |
| Equity in earnings of joint ventures | | 55 | | | — | | | 55 | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Gain on insurance recoveries | | 515 | | | 129 | | | 386 | | | | |
| Gain on sale of real estate properties | | 23,652 | | | 10,691 | | | 12,961 | | | | |
| Loss on extinguishment of debt | | (30) | | | (11) | | | (19) | | | | |
| Net income | | $ | 25,592 | | | $ | 11,401 | | | $ | 14,191 | | (1) | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, 2021 | |
| | Total | | Partner Share | | BRT Share | |
| Revenues: | | | | | | | |
| Rental and other revenue | | $ | 32,672 | | | $ | 11,983 | | | $ | 20,689 | | |
| Total revenues | | $ | 32,672 | | | $ | 11,983 | | | $ | 20,689 | | |
| Expenses: | | | | | | | |
| Real estate operating expenses | | 15,703 | | | 5,718 | | | 9,985 | | |
| Interest expense | | 8,522 | | | 3,063 | | | 5,459 | | |
| Depreciation | | 10,385 | | | 3,786 | | | 6,599 | | |
| Total expenses | | 34,610 | | | 12,567 | | | 22,043 | | |
| | | | | | | |
| Total revenues less total expenses | | (1,938) | | | (584) | | | (1,354) | | |
| | | | | | | |
| Equity in earnings of joint ventures | | 9 | | | — | | | 9 | | |
| Impairment charges | | (2,323) | | | (661) | | | (1,662) | | |
| Insurance recoveries | | 2,323 | | | 661 | | | 1,662 | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Net loss | | $ | (1,929) | | | $ | (584) | | | $ | (1,345) | | |
______________(1) Reflects BRT's share as determined in accordance with GAAP - not its pro-rata share
BRT Apartments Corp. (NYSE: BRT)
NON-GAAP FINANCIAL MEASURES, DEFINITIONS, AND RECONCILIATIONS
(dollars in thousands)
________________________________________________________________________________________
Funds from Operations (FFO)
FFO is a non-GAAP financial performance measure defined by the National Association of Real Estate Investment Trusts and is widely recognized by investors and analysts as one measure of operating performance of a REIT. The FFO calculation excludes items such as real estate depreciation and amortization, gains and losses on the sale of real estate assets and impairment on depreciable assets. Historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values have historically risen or fallen with market conditions, it is management’s view, and we believe the view of many industry investors and analysts, that the presentation of operating results for a REIT using the historical accounting for depreciation is insufficient. FFO excludes gains and losses from the sale of real estate, which we believe provides management and investors with a helpful additional measure of the performance of our real estate portfolio, as it allows for comparisons, year to year, that reflect the impact on operations from trends in items such as occupancy rates, rental rates, operating costs, general, administrative and other expenses, and interest expenses.
Adjusted Funds from Operations (AFFO)
AFFO excludes from FFO straight line rent adjustments, loss on extinguishment of debt, amortization of restricted stock and RSU expense, amortization of deferred mortgage costs and gain on insurance recovery. AFFO provides investors with supplemental performance information that is consistent with the performance models and analysis used by management and provides investors a view of the performance of our portfolio over time, including after the time we cease to acquire properties on a frequent and regular basis. We believe that AFFO enables investors to compare the performance of our portfolio with other REITs that have not recently engaged in acquisitions, as well as a comparison of our performance with that of other non-traded REITs, as AFFO, or an equivalent measure is routinely reported by non-traded REITs, and we believe often used by analysts and investors for comparison purposes.
Debt Service Coverage Ratio
Debt service coverage ratio is net operating income ("NOI") divided by total debt service and includes both consolidated and unconsolidated assets.
Total Debt Service
Total debt service is the cash required to cover the repayment of interest and principal on a debt for a particular period. Total debt service is used in the calculation of the debt service coverage ratio which is used to determine the borrower’s ability to make debt service payments.
Same Store
Same store properties refer to stabilized properties that we owned and operated for the entirety of periods being compared, except for properties that are under construction, in lease-up, or are undergoing development or redevelopment. We move properties previously excluded from our same store portfolio (because they were under construction, in lease up or are in development or redevelopment) 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.
Stabilized Properties
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.
Pro-Rata Share
BRT's pro-rata share gives effect to its percentage equity interest in the unconsolidated joint ventures that own properties. Due to the operation of allocation/distribution provision of the joint venture agreements pursuant to which BRT participates in the ownership of these properties, BRT's share of the gain and loss on the sale of a property may be less than implied by BRT's percentage equity interest. Notwithstanding the foregoing, when referring to the number of units, average occupancy, and average rent per unit, the amount shown reflects 100% of the amount.
BRT Apartments Corp. (NYSE: BRT)
Portfolio Table
As of 4/28/2022
___________________________________________________________________________________________
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Property | City | State | Year Built | Year Acquired | Property Age | | Units | Q1 2022 Avg. Occupancy | Q1 2022 Avg. Rent per Occ. Unit | % Ownership |
| Consolidated Properties | | | | | | | | | | |
| Silvana Oaks | North Charleston | SC | 2010 | 2012 | 12 | | 208 | 96.8% | $ | 1,336 | | 100 | % |
| Avondale Station | Decatur | GA | 1950 | 2012 | 72 | | 212 | 96.5% | 1,269 | | 100 | % |
| Newbridge Commons | Columbus | OH | 1999 | 2013 | 23 | | 264 | 97.3% | 1,007 | | 100 | % |
| Avalon | Pensacola | FL | 2008 | 2014 | 14 | | 276 | 95.5% | 1,364 | | 100 | % |
| Parkway Grande | San Marcos | TX | 2014 | 2015 | 8 | | 192 | 97.9% | 1,129 | | 100 | % |
| Woodland Trails | LaGrange | GA | 2010 | 2015 | 12 | | 236 | 99.2% | 1,119 | | 100 | % |
| Kilburn Crossing | Fredericksburg | VA | 2005 | 2016 | 17 | | 220 | 98.9% | 1,484 | | 100 | % |
| Bell's Bluff | Nashville | TN | 2018 | 2018 | 3 | | 402 | 98.3% | 1,668 | | 100 | % |
| Crossings of Bellevue | Nashville | TN | 1985 | 2014 | 37 | | 300 | 98.2% | 1,238 | | 100 | % |
| Verandas at Alamo Ranch | San Antonio | TX | 2015 | 2016 | 7 | | 288 | 92.7% | 1,211 | | 100 | % |
| Vanguard Heights | Creve Coeur | MO | 2016 | 2017 | 6 | | 174 | 93.1% | 1,570 | | 100 | % |
| Crestmont at Thornblade | Greenville | SC | 1998 | 2018 | 24 | | 266 | 98.5% | 1,181 | | 100 | % |
| Weighted Avg./Total Consolidated | | | | | 19 | | 3,038 | | | |
| | | | | | | | | | |
| | | | | | | 1256 | | | |
| Properties owned by Unconsolidated Joint Ventures | | | | | | | |
Brixworth at Bridgestreet (1) | Huntsville | AL | 1985 | 2013 | 37 | | 208 | 96.8% | 926 | | 80 | % |
| Retreat at Cinco Ranch | Katy | TX | 2008 | 2016 | 14 | | 268 | 96.8% | 1,381 | | 75 | % |
Grove at River Place (1) | Macon | GA | 1988 | 2016 | 34 | | 240 | 95.0% | 826 | | 80 | % |
Civic Center 1 (1) | Southaven | MS | 2002 | 2016 | 20 | | 392 | 97.9% | 1,074 | | 60 | % |
| Chatham Court and Reflections | Dallas | TX | 1986 | 2016 | 36 | | 494 | 97.3% | 1,054 | | 50 | % |
| Waters Edge at Harbison | Columbia | SC | 1996 | 2016 | 26 | | 204 | 92.5% | 1,067 | | 80 | % |
| Pointe at Lenox Park | Atlanta | GA | 1989 | 2016 | 33 | | 271 | 94.1% | 1,349 | | 74 | % |
Civic Center 2 (1) | Southaven | MS | 2005 | 2016 | 17 | | 384 | 97.0% | 1,139 | | 60 | % |
| Gateway Oaks | Forney | TX | 2016 | 2016 | 6 | | 313 | 98.6% | 1,222 | | 50 | % |
| Mercer Crossing | Dallas | TX | 2014/2016 | 2017 | 8 | | 509 | 96.0% | 1,480 | | 50 | % |
Jackson Square (1) | Tallahassee | FL | 1996 | 2017 | 26 | | 242 | 93.8% | 1,208 | | 80 | % |
Magnolia Pointe (1) | Madison | AL | 1991 | 2017 | 31 | | 204 | 92.5% | 1,106 | | 80 | % |
Woodland Apartments (1) | Boerne | TX | 2007 | 2017 | 15 | | 120 | 94.7% | 1,091 | | 80 | % |
| Canalside Lofts | Columbia | SC | 2008/2013 | 2017 | 14 | | 374 | 98.0% | 1,268 | | 32 | % |
| Landings of Carrier Parkway | Grand Prairie | TX | 2001 | 2018 | 21 | | 281 | 92.5% | 1,221 | | 50 | % |
| Canalside Sola | Columbia | SC | 2018 | 2018 | 3 | | 339 | 96.3% | 1,399 | | 46.2 | % |
| The Vive at Kellswater | Kannapolis | NC | 2011 | 2019 | 11 | | 312 | 95.1% | 1,307 | | 65 | % |
Somerset at Trussville (1) | Trussville | AL | 2007 | 2019 | 15 | | 328 | 97.6% | 1,099 | | 80 | % |
| The Village at Lakeside | Auburn | AL | 1988 | 2019 | 34 | | 200 | 97.8% | 949 | | 80 | % |
Abbotts Run (1) | Wilmington | NC | 2001 | 2020 | 21 | | 264 | 97.4% | 1,057 | | 80 | % |
| Weighted Avg./Total Unconsolidated | | | | | 20 | | 5,947 | | | |
| | | | | | | | | | |
| Development | | | | | | | | | | |
| Stono Oaks (2) | Johns Island | SC | | | | | | | | |
| | | | | | | |
| | | | | | | | | | |
| Weighted Avg./Total Portfolio | | | | | 20 | | 8,985 | | | |
___________________________
(1) From February through April 2022, we entered into agreements to acquire the remaining interests of nine of our joint venture partners as listed on page 13
of this document. It is anticipated that these transactions will be completed by August 2022.
(2) Purchased a 17.45% interest in a planned 240-unit development property
