Form 8-K BRT Apartments Corp. For: Feb 09
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): February 9, 2018
BRT APARTMENTS CORP.
(Exact name of Registrant as specified in charter)
Maryland | 001-07172 | 13-2755856 | ||
(State or other jurisdiction of incorporation) | (Commission file No.) | (IRS Employer I.D. No.) | ||
60 Cutter Mill Road, Suite 303, Great Neck, New York 11021
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 516-466-3100
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405) of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
o Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 2.02 and Item 7.01. Results of Operations and Financial Condition; Regulation FD Disclosure.
On February 9, 2018, we issued a press release announcing our results of operations for the three months ended December 31, 2017. In addition, we made available supplemental financial information with respect to our activities for the periods set forth in the supplemental information. Copies of the press release and the supplemental financial information are furnished as Exhibit 99.1 and Exhibit 99.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference, including the information included in Exhibits 99.1 and 99.2 attached hereto. The information in this Item 2.02 and 7.01, including the information included in Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and shall not be incorporated by reference into any registration statement or other document filed under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.
Item 9.01 | Financial Statements and Exhibits. |
(d) Exhibits.
Exhibit
No. Description
99.1Press release dated February 9, 2018.
99.2Supplemental Financial Information.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
BRT APARTMENTS CORP. | ||
February 9, 2018 | By: /s/ George Zweier | |
George Zweier, Vice President | ||
and Chief Financial Officer | ||
BRT APARTMENTS CORP. REPORTS
FIRST FISCAL QUARTER RESULTS
FOR DECEMBER 31, 2017
Net Income of $0.45 and $1.13 per fully diluted share in First Fiscal Quarter of 2018 and 2017, respectively
Grows FFO to $0.20 per fully diluted share from $0.14 per fully diluted share
Increases AFFO to $0.26 per fully diluted share from $0.21 per fully diluted share
Great Neck, New York - February 9, 2018 - BRT APARTMENTS CORP. (NYSE: BRT), a growing multi-family real estate investment trust with properties located primarily in the Southeast United States and Texas today announced operating results for the three months ended December 31, 2017, the Company’s first quarter of fiscal 2018.
Fiscal First Quarter 2018 Highlights
• | Increases rental revenues by 12.5% as compared to the corresponding prior year period. |
• | Net income of $0.45 per fully diluted share compared to $1.13 in the corresponding period of the prior year. The 2018 and 2017 quarters include $0.70 and $1.35, respectively, of net income per fully diluted share from gains on property sales, after giving effect to $0.18 and $1.23 per fully diluted share, respectively, of non-controlling interests. |
• | Grows FFO 42.9% to $0.20 per fully diluted share from $0.14 per fully diluted share in the 2017 quarter. |
• | Increases AFFO 23.8% to $0.26 per fully diluted share from $0.21 per fully diluted share in the 2017 quarter. |
Jeffrey A. Gould, President and Chief Executive Officer, stated: “Our strong results in the first quarter reflect a culmination of portfolio repositioning activities during the last 12 months. While we expect to slow our sales activity in 2018, we will continue to selectively sell assets that no longer fit our longer-term strategy. Our pipeline remains full and we are prepared to redeploy our capital into accretive acquisitions as these selective sales occur. We are identifying attractive investment opportunities with value-add components that can add incremental growth above current rents as the properties are improved. We continue to target high-growth employment and population markets and are focused on creating value for our stockholders.”
Financial Results:
Net income attributable to common stockholders was $6.4 million, or $0.45 per diluted share, for the current three months, compared to net income of $15.8 million, or $1.13 per diluted share, for the three months ended December 31, 2016. The 2018 and 2017 quarters include $0.70 and $1.35, respectively, of net income per fully diluted share from gains on property sales, after giving effect to $0.18 and $1.23, per fully diluted share, respectively, of non-controlling interests.
Funds from Operations1 , or FFO, for the current quarter grew 42.9% to $0.20 per fully diluted share, from $0.14 per fully diluted share in the three months ended December 31, 2016. FFO for the current period was $2.9 million compared to $1.9 million in the corresponding period of the prior year. Adjusted Funds from Operations, or AFFO, for the 2018 fiscal quarter grew 23.8% to $0.26 per fully diluted share, from $0.21 per fully diluted share, in the corresponding prior year period. AFFO in the 2018 quarter was $3.7 million compared to $2.9 million in the 2017 quarter.
Operating Results:
As of February 9, 2018, BRT owns or has interests in 37 multi-family properties with 10,690 units, including properties in lease-up, under development, or owned by unconsolidated joint ventures, located across 11 states. Many of these properties are owned through consolidated joint ventures in which BRT owns a substantial equity interest.
____________________________
1A description and reconciliation of non-GAAP financial measures to GAAP financial measures is presented later in this release.,
During the current quarter, average total occupancy at stabilized properties was approximately 93.7%, compared to approximately 93.2% during the 2017 quarter. Average rental rate per occupied unit at stabilized properties during the current quarter was approximately $967 per month compared to approximately $894 per month during the 2017 quarter. Stabilized properties include all our consolidated properties, other than those in lease-up or development, and for the 2018 quarter, also excludes a Katy, Texas property that was damaged by Hurricane Harvey.
Rental and other revenues from real estate properties for the current three months increased 12.8% to $28.2 million from $25.0 million for the quarter ended December 31, 2016.
Total expenses for the quarter ended December 31, 2017 were $32.3 million compared to $28.0 million for the quarter ended December 31, 2016 due primarily to increases in depreciation, interest expense and operating expense from the seven multi-family properties acquired since January 1, 2017.
Portfolio Activity:
During the current quarter, BRT acquired two multi-family properties with 324 units for a purchase price of $30.4 million, including $24.2 million of mortgage debt, and sold one property for a sales price of $22.3 million and a gain, net of non-controlling interests of $2.5 million, of $10 million.
Balance Sheet:
At December 31, 2017, BRT had: $21.8 million of cash and cash equivalents, including $8.1 million of restricted cash; total assets, net of accumulated depreciation, of $1.0 billion; total debt, net of deferred costs, of $749.1 million; and total stockholders’ equity of $170.4 million.
BRT’s mortgage debt of $712.1 million, net of deferred costs, has a weighted average interest rate of 4.07% and a weighted average remaining term to maturity of 6.9 years. Approximately 90.3% of the mortgage debt bears interest at a fixed rate. The balance of such debt represents short term or construction financing for properties in lease-up or development; BRT anticipates refinancing such debt when lease-up and development are complete.
Subsequent Events:
As previously reported, in February, BRT sold The Fountains Apartments and estimates that its share of the gain on this sale, net of non-controlling interests of approximately $20.5 million, will be approximately $21.3 million. BRT, through a joint venture in which it has a 50% equity interest, also acquired The Avenue Apartments for $71.3 million, including $53.1 million of mortgage debt.
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 and AFFO because it believes that such metrics are widely recognized and appropriate measure of the performance of an equity 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 will be 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). Since the NAREIT White Paper only provides guidelines for computing FFO, the computation of AFFO may vary from one REIT to another.
BRT believes that FFO and AFFO are useful and standard supplemental measures of the operating performance for equity REITs and are used frequently by securities analysts, investors and other interested parties in evaluating equity REITs, many of which present FFO and AFFO when reporting their operating results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate assets, which assures that the value of real estate assets diminish predictability over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, 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.
FFO and AFFO do not represent net income or cash flows from operations as defined by GAAP. FFO and AFFO should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor should FFO and AFFO be considered an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.
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,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “apparent,” “experiencing” or similar expressions or variations thereof. Forward looking statements, including statements with respect to BRT’s multi-family property acquisition and ownership activities, involve known and unknown risks, uncertainties and other factors, which, in some cases, are beyond BRT’s control and could materially affect actual results, performance or achievements. Investors are cautioned not to place undue reliance on any forward-looking statements and to carefully review the section entitled “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended September 30, 2017 and in the Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed thereafter.
Additional Information:
BRT is a real estate investment trust that owns, operates and develops multi-family properties. Interested parties are urged to review the Form 10-Q filed with the Securities and Exchange Commission for the quarter ended December 31, 2017 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)
December 31, 2017 (Unaudited) | September 30, 2017 | ||||||
ASSETS | |||||||
Real estate properties, net of accumulated depreciation | $ | 931,996 | $ | 902,281 | |||
Real estate loan | 5,350 | 5,500 | |||||
Cash and cash equivalents | 13,687 | 12,383 | |||||
Restricted cash | 8,074 | 6,151 | |||||
Deposits and escrows | 23,630 | 27,839 | |||||
Investments in unconsolidated joint ventures | 21,115 | 21,415 | |||||
Other assets | 8,933 | 9,359 | |||||
Real estate property held for sale | — | 8,969 | |||||
Total Assets | $ | 1,012,785 | $ | 993,897 | |||
LIABILITIES AND EQUITY | |||||||
Mortgages payable, net of deferred costs | $ | 712,061 | $ | 697,826 | |||
Junior subordinated notes, net of deferred costs | 37,023 | 37,018 | |||||
Accounts payable and accrued liabilities | 20,354 | 22,348 | |||||
Total Liabilities | 769,438 | 757,192 | |||||
Total BRT Apartments Corp. stockholders’ equity | 170,412 | 165,996 | |||||
Non-controlling interests | 72,935 | 70,709 | |||||
Total Equity | 243,347 | 236,705 | |||||
Total Liabilities and Equity | $ | 1,012,785 | $ | 993,897 | |||
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
Three Months Ended December 31, | |||||||
2017 | 2016 | ||||||
Revenues: | |||||||
Rental and other revenues from real estate properties | $ | 28,162 | $ | 25,029 | |||
Other income | 187 | 611 | |||||
Total revenues | 28,349 | 25,640 | |||||
Expenses: | |||||||
Real estate operating expenses | 13,347 | 12,446 | |||||
Interest expense | 7,980 | 6,687 | |||||
General and administrative | 2,303 | 2,597 | |||||
Depreciation | 8,648 | 6,297 | |||||
Total expenses | 32,278 | 28,027 | |||||
Total revenue less total expenses | (3,929 | ) | (2,387 | ) | |||
Equity in loss of unconsolidated joint ventures | (25 | ) | — | ||||
Gain on sale of real estate | 12,519 | 35,838 | |||||
Loss on extinguishment of debt | (257 | ) | (799 | ) | |||
Income from continuing operations | 8,308 | 32,652 | |||||
Provision for taxes | 106 | 350 | |||||
Income from continuing operations, net of taxes | 8,202 | 32,302 | |||||
Net income attributable to non-controlling interests | (1,851 | ) | (16,532 | ) | |||
Net income attributable to common stockholders | $ | 6,351 | $ | 15,770 | |||
Per share amounts attributable to common stockholders: | |||||||
Basic | $ | 0.45 | $ | 1.13 | |||
Diluted | $ | 0.45 | $ | 1.13 | |||
Funds from operations - Note 1 | $ | 2,887 | $ | 1,886 | |||
Funds from operations per common share - diluted - Note 2 | $ | 0.20 | $ | 0.14 | |||
Adjusted funds from operations - Note 1 | $ | 3,681 | $ | 2,863 | |||
Adjusted funds from operations per common share - diluted -Note 2 | $ | 0.26 | $ | 0.21 | |||
Weighted average number of shares of common stock outstanding: | |||||||
Basic | 14,022,438 | 13,898,626 | |||||
Diluted | 14,222,438 | 13,898,626 | |||||
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share data)
Three Months Ended December 31, | ||||||||
2017 | 2016 | |||||||
Note 1: | ||||||||
Funds from operations is summarized in the following table: | ||||||||
GAAP Net income attributable to common stockholders | $ | 6,351 | $ | 15,770 | ||||
Add: depreciation of properties | 8,648 | 6,297 | ||||||
Add: our share of depreciation in unconsolidated joint ventures | 217 | 83 | ||||||
Deduct: gain on sale of real estate and partnership interest | (12,519 | ) | (35,838 | ) | ||||
Adjustments for non-controlling interests | 190 | 15,574 | ||||||
NAREIT Funds from operations attributable to common stockholders | $ | 2,887 | $ | 1,886 | ||||
Adjustments for: straight-line rent accruals | (10 | ) | (22 | ) | ||||
Add: loss on extinguishment of debt | 257 | 799 | ||||||
Add: amortization of restricted stock and restricted stock units | 315 | 324 | ||||||
Add: amortization of deferred mortgage costs | 359 | 301 | ||||||
Adjustments for non-controlling interests | (127 | ) | (425 | ) | ||||
Adjusted funds from operations attributable to common stockholders | $ | 3,681 | $ | 2,863 | ||||
Note 2: | ||||||||
Funds from operations per share is summarized in the following table: | ||||||||
GAAP Net income attributable to common stockholders | $ | 0.45 | $ | 1.13 | ||||
Add: depreciation of properties | 0.59 | 0.46 | ||||||
Add: our share of depreciation in unconsolidated joint ventures | 0.02 | 0.01 | ||||||
Deduct: gain on sale of real estate and partnership interest | (0.88 | ) | (2.58 | ) | ||||
Adjustment for non-controlling interests | 0.02 | 1.12 | ||||||
NAREIT Funds from operations per common stock basic and diluted | 0.20 | 0.14 | ||||||
Adjustments for: straight line rent accruals | — | — | ||||||
Add: loss on extinguishment of debt | 0.02 | 0.06 | ||||||
Add: amortization of restricted stock and restricted stock units | 0.02 | 0.02 | ||||||
Add: amortization of deferred mortgage costs | 0.03 | 0.02 | ||||||
Adjustments for non-controlling interests | (0.01 | ) | (0.03 | ) | ||||
Adjusted funds from operations per common stock basic and diluted | $ | 0.26 | $ | 0.21 | ||||
1Q 2018 SUPPLEMENTAL
FINANCIAL INFORMATION
February 9, 2018
BRT APARTMENTS CORP.
60 Cutter Mill Rd., Great Neck, NY 11021
Forward Looking Statements
The information set forth herein contains forward-looking information 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. Forward-looking information included herein that is not historical fact is subject to a
number of risks and uncertainties, depending upon the risks and uncertainties described in the
Company's filings with the Securities and Exchange Commission (SEC), and actual results realized by the
Company could differ materially from the forward-looking information included herein. Existing and
prospective investors are cautioned not to place undue reliance on this forward-looking information,
which speak only as of the date hereof. The Company undertakes no obligation to update or revise the
information herein, whether as a result of new information, future events or circumstances, or
otherwise. The Company recommends that existing and prospective investors review the information
set forth in its Annual Report on Form 10-K filed contemporaneously herewith.
Our fiscal year ends on September 30 and unless otherwise indicated or the context otherwise requires,
all references to a quarter or year refer to the applicable fiscal quarter or year.
Table of Contents
Table of Contents Page Number
Financial Highlights 1
Operating Results 2
Funds From Operations 3
Consolidated Balance Sheets 4
Portfolio Data by State 5
Same Store Comparison (First Quarter) 6
Multi-Family Acquisitions and Dispositions 7
Debt Analysis 8
Non-GAAP Financial Measures, Definitions, and
Reconciliations
9-10
Portfolio Table 11
Financial Highlights
1
2017 2016 2017 2016 2015
Market Information
Market capitalization 165,324,544$ 110,077,118$ 150,320,535$ 111,190,680$ 99,976,487$
Shares outstanding 14,022,438 13,898,626 14,022,438 13,898,835 14,101,056
Closing share price 11.79$ 7.92$ 10.72$ 8.00$ 7.09$
Quarterly dividend declared per share 0.18$ -$ -$ -$ -$
Portfolio
Multi-family properties owned 34 30 33 33 28
Units 9,684 (2) 8,624 9,568 9,420 8,300
Average occupancy (1) 93.7 % 93.0 % 93.8 % 92.8 % 94.5 %
Average monthly rental revenue per occupied unit (1) $967 $863 $933 $852 $810
2017
(Unaudited)
2016
(Unaudited) 2017 2016 2015
Per Share Data
Earnings per share (basic) (3) 0.45$ 1.13$ 0.97$ 2.23$ (0.17)$
Earnings per share (diluted) (3) 0.45$ 1.13$ 0.97$ 2.23$ (0.17)$
FFO per share of common stock (4) 0.20$ 0.14$ 0.67$ 0.47$ 0.24$
AFFO per share of common stock (4) 0.26$ 0.21$ 0.88$ 0.78$ 0.36$
(1) Average includes stabilized properties and, for the quarter ended December 31, 2017, excludes Retreat at Cinco Ranch due to damage suffered from Hurricane Harvey.
(2) Includes 445 units at two properties engaged in lease-up activities and 402 units at a property under development.
(3) See note 1 on page 2 with respect to the capitalization of property acquisition costs.
(4) 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, on page 3, and the definitions of such terms at page 10.
As of September 30,December 31,
Quarter ended December 31, Year ended September 30,
Operating Results
(dollars in thousands, except per share amounts)
2
2017
(Unaudited)
2016
(Unaudited) 2017 2016 2015
Revenues
Rental and other revenue from real estate properties 28,162$ 25,029$ 104,477$ 95,202$ 77,023$
Other income 187 611 1,294 3,319 72
Total revenues 28,349 25,640 105,771 98,521 77,095
Expenses
Real estate operating expenses 13,347 12,446 51,279 47,519 38,609
Interest expense 7,980 6,687 28,171 23,878 19,297
Advisor's fees, related party - - - 693 2,448
Property acquisition costs (1) - - - 3,852 1,885
General and administrative 2,303 2,597 9,396 8,536 6,683
Depreciation 8,648 6,297 30,491 23,180 18,454
Total expenses 32,278 28,027 119,337 107,658 87,376
Total revenues less total expenses (3,929) (2,387) (13,566) (9,137) (10,281)
Equity in loss of unconsolidated joint ventures (25) - (384) - -
Gain on sale of real estate 12,519 35,838 52,601 46,477 15,005
Gain on sale of partnership interest - - - 386 -
Loss on extinguishment of debt (257) (799) (1,463) (4,547) -
Income from continuing operations 8,308 32,652 37,188 33,179 4,724
Provision for taxes 106 350 1,560 700 -
Income from continuing operations, net of taxes 8,202 32,302 35,628 32,479 4,724
Discontinued operations:
Loss from discontinued operations - - - (2,788) (6,329)
Gain on sale of partnership interest - - - 15,467 -
Income (loss) from discontinued operations - - - 12,679 (6,329)
Net income (loss) 8,202 32,302 35,628 45,158 (1,605)
Net income attributable to non-controlling interests (1,851) (16,532) (22,028) (13,869) (783)
Net income (loss) attributable to common stockholders 6,351$ 15,770$ 13,600$ 31,289$ (2,388)$
Per share amounts attributable to common stockholders:
Basic 0.45$ 1.13$ 0.97$ 2.23$ (0.17)$
Diluted 0.45$ 1.13$ 0.97$ 2.23$ (0.17)$
Weighted average number of shares of common stock outstanding:
Basic 14,022,438 13,898,626 13,993,638 14,017,279 14,133,352
Diluted 14,222,438 13,898,626 14,018,843 14,017,279 14,133,352
Quarter ended December 31, Year ended September 30,
(1) Effective with the quarter ended December 31, 2016, BRT capitalizes property acquisition costs in accordance
with ASU 2017-01, Business Combinations: Clarifying the Definition of a Business.
Funds From Operations
(dollars in thousands, except per share amounts)
3
2017
(Unaudited)
2016
(Unaudited) 2017 2016 2015
GAAP Net income (loss) attributable to common stockholders 6,351$ 15,770$ 13,600$ 31,289$ (2,388)$
Add: depreciation of properties 8,648 6,297 30,491 24,329 20,681
Add: our share of depreciation in unconsoliated joint ventures 217 83 737 20 20
Add: amortization of deferred leasing costs - - - 15 71
Deduct: gain on sales of real estate and partnership interests (12,519) (35,838) (52,601) (62,329) (15,005)
Adjustment for non-controlling interest 190 15,574 17,122 13,319 221
Funds from operations (FFO) attributable to 2,887$ 1,886$ 9,349$ 6,643$ 3,600$
common stockholders
Adjust for straight line rent accruals (10) (22) (56) (200) (411)
Add: loss on extinguishment of debt 257 799 1,463 4,547 -
Add: amortization of restricted stock and RSU expense 315 324 1,218 1,005 906
Add: amortization of deferred mortgage costs 359 301 1,244 1,645 2,242
Adjustment for non-controlling interest (127) (425) (920) (2,729) (703)
Adjusted funds from operations (AFFO) 3,681$ 2,863$ 12,298$ 10,911$ 5,634$
attributable to common stockholders
Per share data
GAAP Net income (loss) attributable to common stockholders 0.45$ 1.13$ 0.97$ 2.23$ (0.17)$
Add: depreciation of properties 0.59 0.46 2.18 1.74 1.46
Add: our share of depreciation in unconsoliated joint ventures 0.02 0.01 0.05 - -
Add: amortization of deferred leasing costs - - -
Deduct: gain on sales of real estate and partnership interests (0.88) (2.58) (3.75) (4.45) (1.07)
Adjustment for non-controlling interest 0.02 1.12 1.22 0.95 0.02
Funds from operations (FFO) attributable to 0.20$ 0.14$ 0.67$ 0.47$ 0.24$
common stockholders
Adjust for straight line rent accruals - - - (0.01) (0.04)
Add: loss on exti guishment of debt 0.02 0.06 0.10 0.32 -
Add: amortization of restricted stock and RSU expense 0.02 0.02 0.09 0.07 0.07
Add: amortization of deferred mortgage costs 0.03 0.02 0.09 0.12 0.16
Adjustment for non-controlling interest (0.01) (0.03) (0.07) (0.19) (0.07)
Adjusted funds from operations (AFFO) 0.26$ 0.21$ 0.88$ 0.78$ 0.36$
attributable to common stockholders
Quarter Ended December 31, Year ended September 30,
Consolidated Balance Sheets
(amounts in thousands)
4
At December 31,
2017 2017 2016 2015
Assets
Real estate properties, net of accumulated depreciation 931,996$ 902,281$ 759,576$ 591,727$
Real estate loan 5,350 5,500 19,500 -
Cash and cash equivalents 13,687 12,383 27,399 15,556
Restricted cash 8,074 6,151 7,383 6,518
Deposits and escrows 23,630 27,839 18,972 12,782
Investment in unconsolidated joint ventures 21,115 21,415 298 -
Other assets 8,933 9,359 7,775 6,882
Assets of discontinued operations - - - 163,545
Real estate properties held for sale - 8,969 33,996 23,859
Total Assets 1,012,785$ 993,897$ 874,899$ 820,869$
Liabilities and equity
Liabilities
Mortgage payable, net of deferred costs 712,061$ 697,826$ 588,457$ 451,159$
Junior subordinated notes, net of deferred costs 37,023 37,018 36,998 36,978
Accounts payable and accrued liabilities 20,354 22,348 20,716 14,780
Liabilities of discontinued operations - - - 138,530
Mortgage payable held for sale - - 27,052 19,248
Total liabilities 769,438 757,192 673,223 660,695
Equity
133 133 - -
Shares of beneficial interest, $3 per value - - 39,696 40,285
Additional paid in capital 202,225 201,910 161,321 161,842
Accumulated other comprehensive income (loss) 1,346 1,000 (1,602) (58)
Accumulated deficit (33,292) (37,047) (48,125) (79,414)
Total BRT Apartments Corp. stockholders' equity 170,412 165,996 151,290 122,655
Non-co trolling interests 72,935 70,709 50,386 37,519
Total Equity 243,347 236,705 201,676 160,174
Total Liabilities and Equity 1,012,785$ 993,897$ 874,899$ 820,869$
Common Stock, $.01 par value, 300,000 shares
authorized; 13,336 shares issued at June 30, 2017
At September 30,
Portfolio Data by State
(dollars in thousands, except monthly rent amounts)
5
Quarter Ended December 31, 2017
Units (1) Revenues Expenses NOI (2)
% of NOI
Contribution
Average
Occupancy (3)
Weighted Average
Monthly Rent per
Occupied Unit (3)
Texas 2,815 $ 8,404 $ 4,685 $ 3,719 25% 92.1% 1,007$
Florida 1,060 4,027 (4) 1,778 (4) 2,249 15% 93.7% 1,144
Alabama 1,030 2,164 1,049 1,114 8% 93.3% 742
Georgia 959 2,896 1,245 1,651 11% 94.3% 950
Mississippi 776 2,124 724 1,400 9% 96.7% 877
Missouri 775 2,664 1,282 1,381 9% 91.9% 1,006
South Carolina 683 1,941 891 1,050 7% 91.4% 1,007
Indiana 400 913 540 373 3% 96.2% 689
Tennessee 300 1,047 406 641 4% 98.9% 1,109
Ohio 264 693 300 393 3% 98.2% 820
Virginia 220 898 316 582 4% 93.2% 1,275
Other - 391 130 261 2% N/A N/A
T t ls 9,282 $ 28,162 $ 13,347 $ 14,815 100% 93.7% 967$
(1) Excludes 402 units under development in West Nashville, TN and, only with respect to the number of units, the Melbourne, FL property with 208 units
sold during the three months ended December 31, 2017.
(3) Excludes properties that are not stabilized and Retreat at Cinco Ranch.
(4) Includes $207 and $110 in revenues and expenses, respectively, relating to properties sold during the three months ended December 31, 2017.
(2) See the reconciliation of NOI to net income, as calculated in accordance with GAAP, at page 10 and the definition at page 10.
Same Store Comparisons
First Quarter
2018 and 2017
(dollars in thousands, except monthly rent amounts)
6
Quarter ended December 31, 2017
Units Q1 2018 Q1 2017 Growth Q1 2018 Q1 2017 Growth Q1 2018 Q1 2017 Growth
Texas (1) 1,918 $ 5,607 $ 5,324 5.3% $ 3,287 $ 3,038 8.2% $ 2,320 $ 2,286 1.5%
Florida 818 3,106 3,119 (0.4%) 1,358 1,567 (13.3%) 1,748 1,551 12.7%
Alabama 826 2,026 1,987 2.0% 995 1,032 (3.5%) 1,031 955 7.9%
Georgia 959 2,896 2,729 6.1% 1,245 1,317 (5.5%) 1,651 1,412 17.0%
Missouri 420 1,092 1,005 8.6% 640 402 59.1% 452 603 (25.1%)
South Carolina 412 1,272 1,297 (1.9%) 707 698 1.3% 565 599 (5.7%)
Indiana 400 913 807 13.1% 540 488 10.8% 373 319 16.8%
Mississippi 776 2,124 2,060 3.1% 724 796 (9.0%) 1,400 1,264 10.8%
Tennessee 300 1,047 1,014 3.3% 406 385 5.6% 641 629 1.9%
Ohio 264 693 637 8.7% 300 307 (2.3%) 393 330 18.9%
Totals 7,093 $ 20,776 $ 19,979 4.0% $ 10,202 $ 10,030 1.7% $ 10,574 $ 9,949 6.3%
Quarter ended December 31, 2017
Q1 2018 Q1 2017 Growth Q1 2018 Q1 2017 Growth
Texas (1) 93.5% 90.3% 3.5% $ 931 $ 910 2.4%
Florida 93.2% 94.4% (1.3%) 1,235 1,218 1.4%
Alabama 93.2% 95.7% (2.7%) 745 733 1.5%
Georgia 94.3% 94.0% 0.4% 950 915 3.8%
Missouri 93.5% 90.5% 3.3% 771 824 (6.4%)
South Carolina 91.4% 94.1% (2.9%) 1,007 997 1.0%
Indiana 96.2% 87.8% 9.6% 689 646 6.6%
Mississippi 96.7% 97.2% (0.5%) 877 854 2.7%
Tennessee 98.9% 97.9% 1.0% 1,109 1,079 2.8%
Ohio 98.2% 96.2% 2.1% 820 769 6.7%
Totals 93.3% 94.1% (0.9%) $ 925 $ 907 2.0%
(2) Generally, negative variances in NOI are, among other things, due to higher turnover, changes in occupancy, increases in real estate taxes, and/or increases in insurance.
(1) Excludes Retreat at Cinco Ranch in Katy, TX that suffered significant damage as a result of Hurricane Harvey.
Average Occupancy
Weighted Average Monthly Rent per Occupied
Unit
Revenues Property Operating Expenses NOI (2)
Multi-Family Acquisitions and Dispositions
Quarter Ended
December 31, 2017
(dollars in thousands)
7
Acquisitions
Location
Purchase
Date No. of Units
Contract
Purchase Price
Acquisition
Mortgage Debt Initial BRT Equity
Ownership
Percentage
Capitalized
Acquisition Costs
Madison, AL 12/7/2017 204 18,420$ 15,000$ 4,456$ 80.0% 247$
Boerne, TX 12/14/2017 120 11,500 (1) 9,200 3,780 80.0% 239
324 29,920$ 24,200$ 8,236$ 486$
Acquisitions Subsequent to December 31, 2017
Location
Purchase
Date No. of Units
Contract
Purchase Price
Acquisition
Mortgage Debt Initial BRT Equity
Ownership
Percentage
Capitalized
Acquisition Costs
Ocoee, FL 2/7/2018 522 71,347$ 53,060$ 12,370$ 1$ 1,049$
Dispositions
Location Sale Date No. of Units Sales Price Gain on Sale
BRT Portion of
Gain on Sale (2)
Mortgage
Prepayment
Charge
BRT Portion of
Mortgage
Prepayment Charge
Melbourne, FL 10/25/2017 208 22,250$ 12,519$ 10,015$ 260$ 200$
Dispositions Subsequent to December 31, 2017
Location Sale Date No. of Units Sales Price Estimated Gain
BRT Portion of
Estimated Gain (3)
Mortgage
Prepayment
Charge
BRT Portion of
Mortgage
Prepayment Charge
Palm Beach Gardens, FL 2/5/2018 542 97,200$ 41,800$ 21,300$ 594$ 304$
(1) Includes $500,000 for the acquisition of a land parcel adjacent to the property.
(2) BRT's gain equals the property gain of $12,519 less the non-controlling interest of $2,504.
(3) BRT's estimated gain equals the property gain of $41,800 less the non-controlling interest of $20,500.
Debt Analysis
As of December 31, 2017
(in thousands, except property data amounts)
8
Mortgage Debt
Year
Total Principal
Payments
Scheduled
Amortization
Principal Payments
Due at Maturity
Percent of Total
Principal
Payments Due At
Maturity
Weighted
Average Interest
Rate (1)
2018 33,503$ 4,503$ 29,000$ 5% 3.99%
2019 51,011 6,335 44,676 7% 3.83%
2020 62,145 6,804 55,341 9% 3.36%
2021 22,386 8,384 14,002 2% 4.29%
2022 40,593 8,521 32,072 5% 4.40%
Thereafter 508,643 40,907 467,736 73% 4.18%
Total 718,281$ 75,454$ 642,827$ 100%
Weighted Average Remaining Term to Maturity 6.9 years
Weighted Average Interest Rate 4.07%
Debt Service Coverage Ratio (2) 1.42
(2) See definition of Debt Service Coverage Ratio on page 11
Junior Subordinated Notes
Principal Balance $37,400
Interest Rate 3 month LIBOR + 2.00% (i.e, 3.17% at 12/31/2017)
Maturity April 30, 2036
(1) Is based on balloon payments at maturity
NON-GAAP FINANCIAL MEASURES
DEFINITIONS AND RECONCILIATIONS
(dollars in thousands)
9
We define NOI as total property revenues less total property operating expenses. Property operating expenses exclude, among
other things, depreciation and interest expense on the related property. Other REIT’s may use different methodologies for
calculating NOI, and accordingly, our NOI may not be comparable to other REIT’s. We believe NOI provides an operating
perspective not immediately apparent from GAAP operating income or net (loss) income. NOI is one of the measures we use to
evaluate our performance because it (i) measures the core operations of property performance by excluding corporate level
expenses and other items unrelated to property operating performance and (ii) captures trends in rental housing and property
operating expenses. However, NOI should only be used as an alternative measure of our financial performance.
The following table provides a reconciliation of NOI to net income attributable to common stock
holders as computed in accordance with GAAP for the periods presented:
2017
(Unaudited)
2016
(Unaudited)
GAAP Net income attributable to common stockholders 6,351$ 15,770$
Less: Other Income (187) (611)
A d: Interest xpense 7,980 6,687
G ral a administrative 2,303 2,597
Depreciation 8,648 6,297
Less: Gain on sale of real estate (12,519) (35,838)
Add: Loss on extinguishment of debt 257 799
Equity in loss of unconsolidated joint ventures 25 -
Provision for taxes 106 350
Add: Net income attributable to non-controlling interests 1,851 16,532
Net Operating Income 14,815$ 12,583$
Quarter ended December 31,
NON-GAAP FINANCIAL MEASURES
DEFINITIONS AND RECONCILIATIONS
(dollars in thousands)
10
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, as defined by us, excludes from FFO straight line rent adjustments, loss on extinguishment of debt, amortization of
restricted stock and RSU expense and amortization of deferred mortgage costs. Management believes that excluding
acquisition-related expenses from 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.
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.
Stabilized Properties
Stabilized properties include all our consolidated properties, other than those in lease-up or development, and for the 2018
quarter, also excludes a Katy, Texas property that was damaged by Hurricane Harvey.
Same Store
Same store refers to stabilized properties that we and our consolidated joint ventures owned and operated for the entirety of
both periods being compared.
Portfolio Table
As of 2/9/2018
11
Property City State Year Built Property Age No. of Units
Q1 2018
Avg.
Occupancy
Q1 2018 Avg
Rent per
Occ. Unit
%
Ownership
Silvana Oaks North Charleston SC 2010 9 208 97% 1,134 100%
Avondale Station Decatur GA 1950 69 212 98% 1,023 100%
Stonecrossing Houston TX 1978 41 240 94% 877 91%
Pathway Houston TX 1979 40 144 93% 900 91%
Brixworth at Bridgestreet Huntsville AL 1985 34 208 96% 725 80%
Newbridge Commons Columbus OH 1999 20 264 98% 820 100%
Waterside at Castleton Indianapolis IN 1983 36 400 96% 689 80%
Crossings of Bellevue Nashville TN 1985 34 300 99% 1,109 80%
Kendall Manor Houston TX 1981 38 272 92% 835 80%
Avalon Pensacola FL 2008 11 276 89% 992 98%
Apartments at Venue Valley AL 2008/2009 11 618 92% 752 61%
Parkway Grande San Marcos TX 2014 5 192 93% 1,061 80%
Cedar Lakes Lake St. Louis MO 1985 34 420 94% 771 80%
Factory at Garco North Charleston SC 2017 2 271 79% 973 65%
Woodland Trails LaGrange GA 2010 9 236 96% 904 100%
Retreat at Cinco Ranch Katy TX 2008 11 268 58% 1,460 75%
Grove at River Place Macon GA 1988 31 240 94% 705 80%
Civic Center 1 Southaven MS 2002 17 392 97% 854 60%
Verandas at Shavano Park San Antonio TX 2014 5 288 96% 992 65%
Chatham Court and Reflections Dallas TX 1986 33 494 93% 906 50%
Waters Edge at Harbison Columbia SC 1996 23 204 86% 862 80%
Pointe at Lenox Park Atlanta GA 1989 30 271 92% 1,152 74%
Civic Center 2 Southaven MS 2005 14 384 97% 899 60%
Verandas at Alamo Ranch San Antonio TX 2015 4 288 94% 975 72%
Kilburn Crossing Fredericksburg VA 2005 14 220 93% 1,275 80%
OPOP Towers St. Louis MO 2014 5 128 89% 1,637 76%
OPOP Lofts St. Louis MO 2014 5 53 86% 1,454 76%
Vanguard Heights Creve Coeur MO 2016 3 174 79% 1,694 78%
Mercer Crossing Dallas TX 2014/2016 5 509 87% 1,321 50%
Jackson Square Tallahassee FL 1996 23 242 95% 964 80%
Magnolia Pointe Madison AL 1991 28 204 95% 709 80%
Woodland Apartments Boerne TX 2007 12 120 92% 870 80%
The Avenue Ocoee FL 1998 21 522 N/A N/A 50%
Total/Weighted Average 20.7 9,262
Development Projects
Bell's Bluff Nashville TN N/A N/A 402 N/A N/A 58%
Total (Including Development Projects) 9,664
Unconsolidated Joint Ventures City State Year Built Property Age No. of Units
%
Ownership
Canalside Sola (1) Columbia SC N/A N/A 338 46%
Canalside Lofts Columbia SC 2008/2013 11 374 32%
Gateway Oaks Forney TX 2016 3 313 50%
Total 1,025
(1) Development project