What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2025-05-09 compared with 2024-11-14 · 483 added, 513 removed, 491 unchanged (67% of the section changed)

3 unchanged sentences

(In thousands, except share and per share amounts)

September 30,

Net Real Estate Investments

1 unchanged sentence

Furniture, fixtures and equipment

Construction in process

Total gross operating real estate investments

9 unchanged sentences

In-place lease intangible assets, net

Due from affiliates

Non-real estate assets associated with operating real estate held for sale

9 unchanged sentences

6.0 % Series A Redeemable Preferred Stock, liquidation preference $ 25.00 per share, 30,000,000 shares authorized;

3,889,446 and 436,675 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

5,278,493 and 4,628,681 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Stockholders’ Equity

Preferred stock, $ 0.01 par value, 220,000,000 shares authorized;

no shares issued and outstanding at September 30, 2024 and December 31, 2023

no shares issued and outstanding at March 31, 2025 and December 31, 2024

Common stock - Class A, $ 0.01 par value, 562,500,000 shares authorized;

3,953,919 and 3,871,265 shares issued and outstanding at September 30, 2024 and December 31, 2023, respectively

3,953,219 and 3,953,919 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively

Common stock - Class C, $ 0.01 par value, 187,500,000 shares authorized;

8,489 shares issued and outstanding at September 30, 2024 and December 31, 2023

8,489 shares issued and outstanding at March 31, 2025 and December 31, 2024

Additional paid-in-capital

Retained earnings

Cumulative earnings in excess of distributions

Accumulated other comprehensive gain (loss)

Total Stockholders’ Equity

6 unchanged sentences

BLUEROCK HOMES TRUST, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Unaudited)

(In thousands, except share and per share amounts)

Three Months Ended

Nine Months Ended

September 30,

Rental and other property revenues

6 unchanged sentences

Acquisition and other transaction costs

Weather-related losses, net

Depreciation and amortization

Total expenses

Other income (expense)

Other income (expense), net

Other (expense) income

Other (expense) income, net

Income from preferred equity investments

Provision for credit losses, net

Recovery of (provision for) credit losses, net

Gain on sale and impairment of real estate investments, net

2 unchanged sentences

Interest income

Total other income

Net income (loss)

Total other (expense) income

Loss before income taxes

Income tax expense

Preferred stock dividends

Preferred stock accretion

Net income (loss) attributable to noncontrolling interests

Net loss attributable to noncontrolling interests

Operating partnership units

Partially-owned properties

Net income (loss) attributable to noncontrolling interests

Net income (loss) attributable to common stockholders

Net income (loss) per common share – Basic

Net income (loss) per common share – Diluted

Net loss attributable to noncontrolling interests

Net loss attributable to common stockholders

Net loss per common share – Basic

Net loss per common share – Diluted

Weighted average basic common shares outstanding

Weighted average diluted common shares outstanding

See Notes to Consolidated Financial Statements

BLUEROCK HOMES TRUST, INC.

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2024

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)

(In thousands, except share amounts)

Class A Common Stock

Class C Common Stock

Noncontrolling

Balance, July 1, 2024

Issuance of restricted Class A common stock and long-term incentive plan (“LTIP”) Units for equity incentive plan compensation, net of shares withheld for employee taxes

Issuance of C-LTIP Units to Manager

Series A Preferred Stock distributions declared

Distributions to partially owned properties’ noncontrolling interests

Acquisition of noncontrolling interests

Holder redemption of Series A Preferred Stock and conversion into Class A common stock

Contributions from noncontrolling interests

Adjustment for noncontrolling interest ownership in the Operating Partnership

Balance, September 30, 2024

See Notes to Consolidated Financial Statements

BLUEROCK HOMES TRUST, INC.

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2023

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)

(In thousands, except share amounts)

Class A Common Stock

Class C Common Stock

Noncontrolling

Balance, July 1, 2023

Issuance of restricted Class A common stock and LTIP Units for equity incentive plan compensation

Issuance of C-LTIP Units to Manager

Series A Preferred Stock distributions declared

Distributions to partially owned properties’ noncontrolling interests

Adjustment for noncontrolling interest ownership in the Operating Partnership

Balance, September 30, 2023

Other comprehensive income

Unrealized gain on available for sale investments

Less unrealized gain attributable to Operating partnership units

Other comprehensive income attributable to common stockholders

Comprehensive loss attributable to noncontrolling interests

Comprehensive loss attributable to common stockholders

See Notes to Consolidated Financial Statements

BLUEROCK HOMES TRUST, INC.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2024

FOR THE THREE MONTHS ENDED MARCH 31, 2025

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)

2 unchanged sentences

Class C Common Stock

Other Comprehensive

Noncontrolling

(Loss) Income

Balance, January 1, 2025

Issuance of restricted Class A common stock and LTIP Units for equity incentive plan compensation, net of shares withheld for employee taxes

(Forfeiture) issuance of restricted Class A common stock and long-term incentive plan (“LTIP”) Units for equity incentive plan compensation

Issuance of C-LTIP Units to Manager

Common stock distributions declared

Series A Preferred Stock distributions declared

Series A Preferred Stock accretion

Distributions to Operating Partnership noncontrolling interests

Distributions to partially owned properties’ noncontrolling interests

Acquisition of noncontrolling interests

Holder redemption of Series A Preferred Stock and conversion into Class A common stock

Contributions from noncontrolling interests

Total comprehensive income

Adjustment for noncontrolling interest ownership in the Operating Partnership

Adjustment for noncontrolling interest ownership in partially owned properties

Net income (loss)

Balance, September 30, 2024

Balance, March 31, 2025

See Notes to Consolidated Financial Statements

BLUEROCK HOMES TRUST, INC.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2023

FOR THE THREE MONTHS ENDED MARCH 31, 2024

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)

8 unchanged sentences

Distributions to partially owned properties’ noncontrolling interests

Acquisition of noncontrolling interests

Conversion of Operating Partnership Units to Class A common stock

Contributions from noncontrolling interests

Adjustment for noncontrolling interest ownership in the Operating Partnership

Balance, September 30, 2023

Balance, March 31, 2024

See Notes to Consolidated Financial Statements

2 unchanged sentences

(In thousands)

Nine Months Ended

September 30,

Three Months Ended

Cash flows from operating activities

5 unchanged sentences

Fair value adjustment of interest rate caps and swaps

Provision for credit losses, net

Loss on extinguishment of debt

(Recovery of) provision for credit losses, net

Loss on extinguishment of debt costs

Noncash operating lease expense

Distributions of income and income from preferred equity investments

2 unchanged sentences

Changes in operating assets and liabilities:

Due to affiliates, net

Due from affiliates, net

Accounts receivable, prepaids and other assets

5 unchanged sentences

Capital expenditures

Purchase of interest rate cap

Investments in notes receivable

Investment in notes receivable

Repayments on notes receivable

1 unchanged sentence

Proceeds from redemption of preferred equity investments

Insurance proceeds related to real estate investments

Investments in preferred equity investments

Net cash used in investing activities

Investment in preferred equity investments

Net cash provided by (used in) investing activities

Cash flows from financing activities:

4 unchanged sentences

Contributions from noncontrolling interests

Purchase of interests from noncontrolling interests

Borrowings on mortgages payable

Repayments on mortgages payable including prepayment penalties

Repayments on mortgages payable

Proceeds from revolving credit facilities

2 unchanged sentences

Net proceeds from issuance of 6.0 % Series A Redeemable Preferred Stock

Net cash provided by financing activities

Net cash (used in) provided by financing activities

Net increase in cash, cash equivalents and restricted cash

17 unchanged sentences

(the “Company”) was incorporated in Maryland on December 16, 2021.

The Company owns and operates high-quality single-family properties located in attractive markets with a focus on the knowledge-economy and high-quality of life growth markets of the Sunbelt and Western United States.

The Company’s principal objective is to generate attractive risk-adjusted returns on investments where it believes it can drive growth in funds from operations and net asset value by acquiring pre-existing single-family residential units, developing build-to-rent communities, and through Value-Add renovations.

The Company owns and operates a portfolio of institutional residential properties including single-family homes, build-to-rent communities, and other residential communities located in attractive markets with a focus on the knowledge-economy and high-quality of life growth markets of the Sunbelt and Western United States.

The Company’s principal objective is to generate attractive risk-adjusted returns on investments where it believes it can drive growth in funds from operations and net asset value by acquiring residential units, developing residential communities, and through Value-Add renovations.

The Company’s Value-Add strategy focuses on repositioning lower-quality, less current assets to drive rent growth and expand margins to increase net operating income and maximize the Company’s return on investment.

As of September 30, 2024, the Company held twenty real estate investments, consisting of twelve consolidated investments and eight preferred equity and loan investments.

The twenty investments represent an aggregate of 4,000 residential units, comprised of 2,742 consolidated units, of which 170 units are under development, and 1,258 units through preferred equity and loan investments, which includes planned units and those under development.

As of September 30, 2024, the Company’s consolidated operating investments were approximately 90.5 % occupied;

As of March 31, 2025, the Company held twenty-three real estate investments, consisting of fourteen consolidated investments and nine preferred equity and loan investments.

The twenty-three investments represent an aggregate of 5,048 residential units, comprised of 3,414 consolidated units, of which 170 units are under development, and 1,634 units through preferred equity and loan investments, which includes planned units and those under development.

As of March 31, 2025, the Company’s consolidated operating investments were approximately 91.9 % occupied;

excluding units classified as held for sale and down/renovation units, the Company’s consolidated operating investments were approximately 94.1 % occupied.

8 unchanged sentences

The consolidated financial statements include the Company’s accounts and those of the Operating Partnership and its subsidiaries.

As of September 30, 2024, limited partners other than the Company owned approximately 69.29 % of the common units of the Operating Partnership, of which 57.09 % is held by holders of limited partnership interest in the Operating Partnership (“OP Units”) and 12.20 % is held by holders of the Operating Partnership’s long-term incentive plan units (“LTIP Units”), including 3.74 % which are not vested as of September 30, 2024.

As of March 31, 2025, limited partners other than the Company owned approximately 69.59 % of the common units of the Operating Partnership, of which 56.54 % were held by holders of limited partnership interest in the Operating Partnership (“OP Units”) and 13.05 % were held by holders of the Operating Partnership’s long-term incentive plan units (“LTIP Units”), including 3.08 % which were not vested at March 31, 2025.

Certain amounts in prior year financial statement presentation have been reclassified to conform to the current year presentation.

Real Estate Investments and Preferred Equity Investments

Summary of Significant Accounting Policies

Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 as filed with the Securities and Exchange Commission (“SEC”) on March 20, 2025 for discussion of the Company’s significant accounting policies.

During the three months ended March 31, 2025, there were no material changes to these policies.

Real Estate Investments, Preferred Equity Investments and Notes Receivable

The Company first analyzes an investment to determine if it is a variable interest entity (“VIE”) in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810:

13 unchanged sentences

As such, the Company next evaluates if these investments are considered a security under ASC 320 Investments – Debt Securities .

For investments that meet the criteria of a security under ASC 320 Investments – Debt Securities , except as noted regarding Note B of the Wayford at Pringle Loan Financing (refer to Note 6), the Company classifies each preferred equity investment as a held-to-maturity debt security as the Company has the intention and ability to hold the investment to maturity.

The Company earns a fixed return on these investments which is included within income from preferred equity investments in its consolidated statements of operations.

For investments that meet the criteria of a security under ASC 320 Investments – Debt Securities , the Company classifies each investment as an available-for-sale (“AFS”) debt security as it does not have the positive intent to hold all investments to maturity.

The Company accounts for these investments as preferred equity investments in its consolidated balance sheets, and it earns a fixed return on these investments which is included within income from preferred equity investments in its consolidated statements of operations and comprehensive income.

AFS debt securities are carried at fair value in the Company’s consolidated balance sheets, and any unrealized gains or losses on AFS debt securities are reported as a component of accumulated other comprehensive income in its consolidated balance sheets, and as a component of other comprehensive income in its consolidated statements of operations and comprehensive income.

The Company evaluates the collectability of each preferred equity investment and estimates a provision for credit loss, as applicable.

Refer to the Current Expected Credit Losses (“CECL”) section of this Note for further information regarding CECL and the Company’s provision for credit losses.

The Company accounts for these investments as preferred equity investments in its consolidated balance sheets.

Prior to the fourth quarter 2024, the Company classified its preferred equity investments as held-to-maturity debt securities as the investments met the criteria of a security under ASC 320 Investments – Debt Securities .

As of March 31, 2025, the Company does not have the positive intent to hold all the securities to maturity.

As such, the Company has reclassified all its previously held-to-maturity debt securities to AFS debt securities.

For investments that do not meet the criteria of a security under ASC 320 Investments – Debt Securities , the Company has concluded that the characteristics and the facts and circumstances indicate that loan accounting treatment is appropriate.

4 unchanged sentences

Refer to the CECL section of this Note for further information regarding CECL and the Company’s provision for credit losses.

Significant Risks and Uncertainties

Uncertainty Due to Economic Volatility

The Company’s results of operations in the future may be directly or indirectly affected by uncertainties such as the effects of inflation and related volatility in the market.

As inflation accelerated rapidly in the first half of 2023, the Federal Reserve increased interest rates a total of four times during 2023 to curb the effects of rising inflation.

While the Federal Reserve held rates steady between July 2023 and September 2024 and reduced interest rates by 50-basis points in September 2024, there can be no assurances that interest rates will not rise again, and the Company’s operating costs, including utilities and payroll, may increase as a result of increases in inflation.

Rising interest rates cause uncertainty in credit and capital markets which could have material and adverse effects on the Company’s financial condition, results of operations and cash flows.

The long-term impact of these economic developments will largely depend on any future action by the Federal Reserve, future laws that may be enacted, the impact on job growth and the broader economy, and reactions by consumers, companies, governmental entities and capital markets.

The Company continues to closely monitor the impact of economic volatility on all aspects of its business.

Summary of Significant Accounting Policies

Refer to the Company’s Annual Report on Form 10-K for the year ended December 31, 2023 as filed with the Securities and Exchange Commission (“SEC”) on March 12, 2024 for discussion of the Company’s significant accounting policies.

During the nine months ended September 30, 2024, there were no material changes to these policies.

For the three months ended March 31, 2025, the Company recorded current income tax expense of approximately $ 0.2 million and state income tax expense of $ 0.1 million, which is included in income tax expense on the Company’s consolidated statements of operations and comprehensive income.

No income tax expense was recorded in 2024.

Interim Financial Information

10 unchanged sentences

In November 2024, the FASB issued Accounting Standards Update No.

2023-07 “Improvements to Reportable Segment Disclosures (Topic 280)” (“ASU 2023-07”).

The amendments in ASU 2023-07 require additional disclosures regarding reportable segments, including a segment’s significant expenses on both an annual and interim basis.

The amendments in ASU 2023-07 will be effective for fiscal years beginning after December 15, 2023, and for interim periods with fiscal years beginning after December 15, 2024, with early adoption permitted.

ASU 2023-07 should be applied retrospectively to all prior periods presented in the financial statements unless it is impracticable to do so.

The Company does not expect the adoption of ASU 2023-07 to have a material impact on its consolidated financial statements.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09 “Improvements to Income Tax Disclosures (Topic 740)” (“ASU 2023-09”).

The amendments in ASU 2023-09 require additional disclosure with respect to the effective tax rate reconciliation and information on income taxes paid.

The amendments in ASU 2023-09 are effective for the Company for annual reporting periods beginning after December 15, 2024.

2024-03 “Disaggregation of Income Statement Expenses (Subtopic 220-40)” (“ASU 2024-03”).

The amendments in ASU 2024-03 require additional disclosure of specified information about certain costs and expenses within the notes to the financial statements.

The amendments in ASU 2024-03 are effective for the Company for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

The Company is currently evaluating the impact of adopting ASU 2024-03 on its financial disclosures.

Note 3 – Acquisition of Real Estate and Additional Interests

Acquisition of Villas at Huffmeister

On March 25, 2024, the Company, through a 95 % owned joint venture entity, acquired a 294 -unit single-family residential community located in Houston, Texas known as Villas at Huffmeister.

The purchase price of $ 41.2 million was funded with a $ 24.3 million senior loan assumption secured by Villas at Huffmeister, along with cash of $ 18.1 million funded by the Company, inclusive of certain adjustments typical in such real estate transactions.

Acquisition of Avenue at Timberlin Park

On July 31, 2024, the Company acquired a 200 -unit single-family residential community located in Jacksonville, Florida known as Avenue at Timberlin Park.

The Company has a full ownership interest in the community, and the purchase price of $ 33.8 million was funded with a $ 23.7 million senior loan secured by Avenue at Timberlin Park, along with cash of $ 12.9 million funded by the Company, inclusive of certain adjustments typical in such real estate transactions.

Purchase Price Allocation

The real estate acquisitions above have been accounted for as asset acquisitions.

The purchase prices were allocated to the acquired assets and mortgage assumed based on their estimated fair values at the dates of acquisition.

The following table summarizes the assets acquired and mortgage assumed at the acquisition dates for the Company’s acquisitions made during the nine months ended September 30, 2024 (amounts in thousands):

Building improvements

Land improvements

Furniture and fixtures

In-place leases

Total assets acquired (1)

Mortgage assumed

Fair value adjustment

Total liabilities assumed

(1) The $ 75.8 million of total assets acquired includes $ 0.8 million of acquisition expenses that have been capitalized as the acquisitions have been accounted for as asset acquisitions.

Current Expected Credit Losses

Notes Receivable

The Company estimates provision for credit losses on its loan investments (notes receivable) under CECL.

This method is based on expected credit losses for the life of the investment as of each balance sheet date.

The method for calculating the estimate of expected credit loss considers historical experience and current conditions for similar loans and reasonable and supportable forecasts about the future.

The Company estimates its provision for credit losses using a collective (pool) approach for investments with similar risk characteristics, such as collateral and duration of investment.

In measuring the CECL provision for investments that share similar characteristics, the Company applies a default rate to the investments for the remaining loan investment hold period.

As the Company does not have a significant historical population of loss data on its loan investments, the Company’s default rate utilized for CECL is based on an external historical loss rate for commercial real estate loans.

In addition to analyzing investments as a pool, the Company performs an individual investment assessment of expected credit losses.

If it is determined that the borrower is experiencing financial difficulty, or a foreclosure is probable, or the Company expects repayment through the sale of the collateral, the Company calculates expected credit losses based on the value of the underlying collateral as of the reporting date.

During this review process, if the Company determines that it is probable that it will not be able to collect all amounts due for both principal and interest according to the contractual terms of an investment, that loan investment is not considered fully recoverable and a provision for credit loss is recorded.

In estimating the value of the underlying collateral when determining if a loan investment is fully recoverable, the Company evaluates estimated future cash flows to be generated from the collateral underlying the investment.

The inputs and assumptions utilized to estimate the future cash flows of the underlying collateral are based upon the Company’s evaluation of the operating results, economy, market trends, and other factors, including judgments regarding costs to complete any construction activities, lease-up and occupancy rates, rental rates, and capitalization rates utilized to estimate the projected cash flows at the disposition.

The Company may also obtain a third-party valuation which may value the collateral through an “as-is” or “stabilized value” methodology.

If upon completion of the valuation the fair value of the underlying collateral securing the investment is less than the net carrying value, the Company records a provision for credit loss on that loan investment.

As the investment no longer displays characteristics that are similar to those of the pool of loan investments, the investment is removed from the CECL collective (pool) analysis described above.

Preferred Equity Investments

The Company performs an individual assessment of expected credit losses for its preferred equity investments, which are accounted for as AFS debt securities, that have an unrealized loss recorded at the reporting date.

During this review process, if the Company determines that it is probable that it will not be able to collect all amounts due for both principal and interest according to the contractual terms of an investment, that preferred equity investment is not considered fully recoverable and a provision for credit loss is recorded.

Significant Risks and Uncertainties

Uncertainty Due to Economic Volatility

The Company’s results of operations in the future may be directly or indirectly affected by uncertainties such as the effects of inflation and related volatility in the market.

As inflation accelerated rapidly in the first half of 2023, the Federal Reserve increased interest rates a total of four times during 2023 to curb the effects of rising inflation.

While the Federal Reserve held rates steady between July 2023 and September 2024, then reduced interest rates by 50-basis points in September 2024, with another 25-basis point reduction in each of November and December 2024, there can be no assurances that interest rates will not rise again, and the Company’s operating costs, including utilities and payroll, may increase as a result of increases in inflation.

Rising interest rates cause uncertainty in credit and capital markets which could have material and adverse effects on the Company’s financial condition, results of operations and cash flows.

In addition, any tariffs imposed by the current administration or other countries may cause further inflationary pressures in the economy, uncertainty and volatility of debt and equity markets, and a slowdown in the U.S.

and global economies.

The announced tariffs are likely to increase construction costs and further reduce already constrained new supply starts, which could adversely impact the timing of actual completion and/or stabilization of build - to - rent communities, including potential delays due to supply shortages and labor shortages.

The Company continues to closely monitor the impact of economic volatility on all aspects of its business.

Note 3 – Sale of Real Estate Assets

Sale of Navigator Villas

Prior to the sale of the property, and to effectuate a tax-deferred exchange under Section 1031 of the Code, the Company purchased its joint venture partner’s interest in Navigator Villas for $ 2.9 million, inclusive of estimated post-close adjustments.

On August 7, 2024, the Company closed on the sale of Navigator Villas located in Pasco, Washington for a sale price of $ 36.4 million, subject to certain prorations and adjustments typical in such real estate transactions.

After deductions for the payoff of existing mortgage indebtedness encumbering the property in the amount of $ 19.5 million, the purchase price of the joint venture partner’s interest, the payment of early extinguishment of debt costs, and closing costs and fees, the sale of Navigator Villas generated net proceeds of approximately $ 12.7 million and a gain on sale of approximately $ 10.0 million.

The Company recorded a loss on extinguishment of debt of $ 0.1 million related to the sale.

Sale of Consolidated Operating Units

During the three months ended September 30, 2024, the Company closed on the following sales:

five units in the Indy-Springfield portfolio, two units in the Peak JV 2 portfolio, and seven units in the Peak JV 3 portfolio, pursuant to the terms and conditions of multiple separate purchase and sales agreements.

The fourteen units were sold for an aggregate of approximately $ 2.3 million, subject to certain prorations and adjustments typical in such real estate transactions, and generated net proceeds of approximately $ 2.2 million and a gain on sales of approximately $ 0.2 million.

During the nine months ended September 30, 2024, the Company closed on the following sales:

one unit in the ILE portfolio, seven units in the Indy-Springfield portfolio, nine units in the Peak JV 2 portfolio, and thirty-four units in the Peak JV 3 portfolio, pursuant to the terms and conditions of multiple separate purchase and sales agreements.

The fifty-one units were sold for an aggregate of approximately $ 8.9 million, subject to certain prorations and adjustments typical in such real estate transactions, and generated net proceeds of approximately $ 8.4 million and a gain on sales of approximately $ 0.9 million.

During the first quarter 2025, the Company closed on the following sales:

seven units in the ILE portfolio, four units in the Indy-Springfield portfolio, ten units in the Peak JV 2 portfolio, and eighteen units in the Peak JV 3 portfolio, pursuant to the terms and conditions of multiple separate purchase and sale agreements.

The thirty-nine units were sold for an aggregate of approximately $ 6.9 million, subject to certain closing costs, prorations and adjustments typical in such real estate transactions.

After deducting the paydown of existing mortgage indebtedness encumbering six units in the ILE portfolio of approximately $ 1.2 million, the sales of the thirty-nine units generated net proceeds of approximately $ 5.1 million and a gain on sales of approximately $ 0.8 million.

Held for Sale

At September 30, 2024, the Company classified an aggregate of 207 units as held for sale in its consolidated balance sheets, and for the three and nine months ended September 30, 2024, the Company recorded an impairment of $ 0.9 million and $ 2.1 million, respectively, related to held for sale units which is included in gain on sale and impairment of real estate investments, net in the consolidated statements of operations.

The 207 units classified as held for sale are included in the following portfolios:

At March 31, 2025, the Company classified an aggregate of 138 units as held for sale in its consolidated balance sheets, and for the three months ended March 31, 2025, the Company recorded an impairment of $ 0.1 million related to held for sale units which is included in gain on sale and impairment of real estate investments, net in its consolidated statements of operations and comprehensive income.

The 138 units classified as held for sale are all reported in the Company’s scattered single-family homes segment and are included in the following portfolios:

11 units of ILE, 33 units of Indy-Springfield, 22 units of Peak JV 2, and all 72 units of Peak JV 3.

2 unchanged sentences

Note 4 - Investments in Real Estate

As of September 30, 2024, the Company held twenty real estate investments, consisting of twelve consolidated operating investments and eight held through preferred equity and loan investments.

As of March 31, 2025, the Company held twenty-three real estate investments, consisting of fourteen consolidated operating investments and nine held through preferred equity and loan investments.

The following tables provide summary information regarding the Company’s consolidated operating investments and preferred equity and loan investments.

2 unchanged sentences

Location / Market

Avenue at Timberlin Park

Jacksonville, FL

Scattered Single-Family Homes

Golden Pacific

1 unchanged sentence

Dallas-Fort Worth, TX

Total Scattered Single-Family Homes

Residential Communities

Allure at Southpark

Charlotte, NC

Amira at Westly

Avenue at Timberlin Park

Jacksonville, FL

Villas at Huffmeister

1 unchanged sentence

Yauger Park Villas

Total Residential Communities Units

Total Operating Units

Development Investment Name

Residential Communities

Abode Wendell Falls

Total Development Units

(1) Total operating units includes an aggregate of 207 units classified as held for sale, with such units included in the following portfolios:

Total number of units includes an aggregate of 138 units classified as held for sale, with such units included in the following portfolios:

11 units of ILE, 33 units of Indy-Springfield, 22 units of Peak JV 2, and all 72 units of Peak JV 3.

Depreciation expense was $ 4.1 million and $ 4.1 million, and $ 12.4 million and $ 12.1 million, for the three and nine months ended September 30, 2024 and 2023, respectively.

Depreciation expense was $ 5.6 million and $ 4.0 million for the three months ended March 31, 2025 and 2024, respectively.

Intangibles related to the Company’s consolidated investments in real estate consist of the value of in-place leases.

Amortization expense related to the in-place leases was $ 0.8 million and $ 1.3 million for the three and nine months ended September 30, 2024, respectively.

There was no amortization expense related to in-place leases during 2023.

Amortization expense related to the in-place leases was $ 1.9 million and zero for the three months ended March 31, 2025 and 2024, respectively.

Preferred Equity and Loan Investments

1 unchanged sentence

Location / Market

The Woods at Forest Hill (1)

Forest Hill, TX

Willow Park, TX

The Cottages at Myrtle Beach

Myrtle Beach, SC

The Cottages of Port St.

Wayford at Innovation Park

Charlotte, NC

Wayford at Pringle (2)

Charlotte, NC

Willow Park, TX

Total Lease-up Units

Development Investment Name

Canvas at Wildwood

Brunswick, GA

Total Development Units

(1) The Woods at Forest Hill unit count decreased from 76 units at December 31, 2023 to 18 units at September 30, 2024 resulting from the sales of 58 units during the nine months ended September 30, 2024.

Proceeds from the sales of these units were used to fully pay off the Company’s loan investment, and partially redeem the Company’s preferred equity investment, in The Woods at Forest Hill.

Refer to Note 6 and Note 7 for further information.

(2) Wayford at Pringle is a loan investment for which the Company disburses loan proceeds to the borrower for unit acquisitions upon construction completion.

Of the total 102 build-to-rent units that are to be acquired, construction of 85 units was completed during the nine months ended September 30, 2024 for which the Company provided the borrower with loan proceeds for their acquisition.

The Company estimates that all units will be completed and acquired, and its loan commitment fully funded, by the end of 2024.

Refer to Note 6 for further information.

Operating Investment Name (1)

The Cottages of Port St.

Wayford at Pringle

Charlotte, NC

Total Operating Units

Operating investments represent stabilized operating properties.

Note 5 – Notes and Interest Receivable

Following is a summary of the notes and accrued interest receivable due from loan investments at September 30, 2024 and December 31, 2023 (amounts in thousands):

September 30,

Following is a summary of the notes and accrued interest receivable due from loan investments at March 31, 2025 and December 31, 2024 (amounts in thousands):

Investment Name

Notes Receivable

The Woods at Forest Hill (1)

Wayford at Pringle (1)

1 unchanged sentence

Accrued Interest Receivable

The Woods at Forest Hill (1)

Wayford at Pringle (1)

2 unchanged sentences

Allowance for credit losses

(1) In August 2024, the Company’s loan investment in The Woods at Forest Hill was paid off in full, including any accrued but unpaid interest amounts.

Refer to The Woods at Forest Hill Loan Financing disclosure below for further information.

In February 2025, the Company’s loan investment in Wayford at Pringle was paid off in full, including any accrued but unpaid interest amounts.

Refer to the Loan Investment Summary disclosure below for further information.

Allowance for Credit Losses

The provision for credit losses of the Company’s loan investments at September 30, 2024 and December 31, 2023 are summarized in the table below (amounts in thousands):

September 30,

The provision for credit losses of the Company’s loan investments at March 31, 2025 and December 31, 2024 are summarized in the table below (amounts in thousands):

Beginning balances, net as of January 1, 2025 and 2024, respectively

Provision for credit losses on pool of assets, net (1)

(Recovery of) provision for credit losses on pool of assets, net (1)

Allowance for credit losses, net, end of period

Under CECL, a provision for, or recovery of, credit losses for similar assets is calculated based on a historical default rate applied to the remaining life of the assets.

The provision for credit losses during the nine months ended September 30, 2024 was attributable to the addition of one investment to the pool of assets and an increase in the trailing twelve-month historical default rate.

The following table is a summary of the interest income from loan investments for the three and nine months ended September 30, 2024 (amounts in thousands).

The Company did no t record any interest income from loan investments during the corresponding periods ended September 30, 2023 as it held no loan investments in 2023.

The recovery of credit losses during the period ended March 31, 2025 was primarily attributable to the removal of one investment to the pool of assets.

Following is a summary of the interest income from loan investments for the three months ended March 31, 2025 and 2024 (amounts in thousands):

Three Months Ended

Nine Months Ended

Investment Name

September 30, 2024

The Woods at Forest Hill (1)

Wayford at Pringle

(1) In August 2024, the Company’s loan investment in The Woods at Forest Hill was paid off in full, including any accrued but unpaid interest amounts.

Refer to The Woods at Forest Hill Loan Financing disclosure below for further information.

Peak Housing Financing

Prior to 2024, the Company provided a mezzanine loan to the portfolio owner in Peak JV 3, which is owned through a joint venture between the Company and the operating partnership of Peak Housing REIT (the “Peak REIT OP”).

The entity through which the Company provided the loan (the lender-entity) and the entity to which the loan was provided (the property owner) consolidate into the Company’s financial statements.

As such, the loan receivable balance and the loan payable balance, and the loan interest income and loan interest expense attributable to the Company, are eliminated through consolidation on the consolidated balance sheets and statements of operations, respectively.

The Company (as lender entity) recognizes Peak REIT OP’s portion of interest expense on the loan as income and this amount is reflected in net income (loss) attributable to common stockholders in the Company’s consolidated statements of operations.

The mezzanine loan was to mature on June 30, 2024;

however, on May 22, 2024, the property owner delivered written notice to the Company of its intention to exercise the loan’s final six-month extension option, extending the maturity date to December 30, 2024.

The loan can be prepaid without penalty.

At December 31, 2023, the outstanding balance of the loan provided by the Company was $ 15.9 million.

During the nine months ended September 30, 2024, proceeds from the sales of 34 units in the Peak JV 3 portfolio (refer to Note 4 for further information) have been used to reduce the outstanding balance of the loan to $ 11.7 million at September 30, 2024.

Wayford at Pringle Loan Financing

On January 10, 2024, the Company entered into an agreement to provide a loan in the maximum aggregate amount up to $ 30.1 million (the “Pringle Loan”) to an unaffiliated, third-party borrower to acquire 102 build-to-rent, single-family residential units in Charlotte, North Carolina to be known as Wayford at Pringle.

The project is currently under development, and the Company will disburse loan proceeds to the borrower for unit acquisitions as construction is completed.

The Pringle Loan is comprised of two notes as follows:

Note A in the maximum principal amount up to $ 22.3 million and Note B in the maximum principal amount up to $ 7.8 million.

Note B has certain conversion options that require the consent of both parties before such options can be exercised;

neither party has unilateral control to enforce a conversion.

The Company has evaluated both notes and concluded that loan accounting treatment is appropriate for Note A, whereas Note B, due to the conversion options, meets the criteria of a debt security and is considered as available for sale.

The Company records both notes in notes and accrued interest receivable, net in its consolidated balance sheets, and the interest income earned on both notes is recorded in interest income from loan investments in its consolidated statements of operations.

Note A and Note B both have an initial maturity of January 12, 2026 and contain four (4) six-month extension options subject to certain conditions.

Note A bears interest on the amount drawn at the one-month Secured Overnight Financing Rate (“SOFR”) plus 4.50 % through initial maturity, and if extended, such rate becomes subject to a 5.31 % rate floor.

Note A has regular monthly payments that are interest-only during the term of the loan, and no prepayment of Note A, in part or in whole, can be made prior to prepayment of Note B subject to certain conditions.

On Note B, interest shall accrue on the amount drawn at a rate of 15.00 % per annum, compounded monthly, with outstanding principal and accrued interest amounts due upon maturity.

Note B can be prepaid in part or in whole subject to minimum interest.

As of September 30, 2024, construction was completed on 85 of the total 102 units, and the Company had funded $ 16.8 million of Note A and fully funded the $ 7.8 million of Note B.

There were no unrealized gains or losses associated with Note B as of September 30, 2024 as the Company determined that the $ 7.8 million face value of Note B represents its fair value at such measurement date.

The Woods at Forest Hill Loan Financing

In December 2023, the Company assumed an $ 8.3 million senior loan (the “Woods Loan”) made to an unaffiliated third-party borrower for 76 build-to-rent, single family residential units in Forest Hill, Texas.

The Woods Loan investment was in addition to the Company’s existing preferred equity investment in The Woods at Forest Hill.

The Woods Loan borrower is currently in the process of selling the individual units, and during the nine months ended September 30, 2024, the borrower sold 58 of the 76 units that collateralized the Company’s loan and preferred equity investments in The Woods at Forest Hill.

Proceeds from the sales of these units were used to fully pay off the Woods Loan investment made by the Company in the aggregate amount of $ 8.5 million, which included principal investment of $ 8.3 million and accrued interest of $ 0.2 million, with the final payment received in August 2024.

Following the payoff of the Woods Loan, remaining available proceeds from the unit sales were used to partially redeem the Company’s preferred equity investment in The Woods at Forest Hill (refer to Note 7 for further information).

Willow Park Loan Financing

In October 2023, the Company provided a $ 9.4 million senior loan (the “Willow Loan”) to an unaffiliated third-party borrower for 58 build-to-rent, single-family residential units.

The Willow Loan was to initially mature on October 28, 2024;

however, on September 30, 2024, the borrower delivered written notice to the Company of its intention to exercise the first of the Willow Loan’s two six-month extension options, extending the maturity date to April 28, 2025.

Following the initial maturity date, the Willow Loan interest rate will increase from a fixed rate of 5.08 % per annum to a fixed rate of 7.50 % per annum through the first extension period, with regular monthly payments remaining interest-only.

The Willow Loan can be prepaid in part, subject to a minimum payment, or in whole without penalty.

In August 2024, the Company’s loan investment in The Woods at Forest Hill was paid off in full.

Loan Investment Summary

During the three months ended March 31, 2025, the Company’s loan investment in Wayford at Pringle was paid off in full in the aggregate amount of $ 23.0 million, which included principal investment of $ 22.3 million and accrued interest of $ 0.7 million.

Note 6 – Preferred Equity Investments

The carrying amount of the Company’s preferred equity investments at September 30, 2024 and December 31, 2023 is summarized in the table below (amounts in thousands):

September 30,

At March 31, 2025, the Company, through wholly-owned subsidiaries of the Operating Partnership, had outstanding preferred equity investments in eight joint ventures which are classified as available for sale debt securities.

The Company earns a fixed return on these investments which is included within income from preferred equity investments in its consolidated statements of operations and comprehensive income.

Each joint venture’s purpose is to develop or operate a portfolio of residential units.

The carrying amount of the Company’s preferred equity investments at March 31, 2025 and December 31, 2024 is summarized in the table below (amounts in thousands):

Investment Name

Peak Housing (1)

Canvas at Wildwood

The Cottages at Myrtle Beach

The Cottages of Port St.

The Woods at Forest Hill (2)

Wayford at Innovation Park

Allowance for credit losses

In September 2024, the Company’s preferred equity investment in Peak Housing was fully redeemed.

Refer to the Peak Housing Interests disclosure below for further information.

The Woods at Forest Hill carrying amount at September 30, 2024 includes amounts related to Willow Park, a preferred equity investment that the Company was redeemed out of in October 2023.

Refer to the The Woods at Forest Hill Interests disclosure below for further information.

Allowance for Credit Losses

The provision for credit losses of the Company’s preferred equity investments at September 30, 2024 and December 31, 2023 are summarized in the table below (amounts in thousands):

September 30,

Beginning balances, net as of January 1, 2024 and 2023, respectively

Provision for credit losses on pool of assets, net (1)

Allowance for credit losses, net, end of period

Under CECL, a provision for, or recovery of, credit losses for similar assets is calculated based on a historical default rate applied to the remaining life of the assets.

The provision for credit losses during the nine months ended September 30, 2024 was primarily attributable to an increase in the trailing twelve-month historical default rate.

At September 30, 2024, the Company, through wholly-owned subsidiaries of the Operating Partnership, had outstanding preferred equity investments in six joint ventures which are classified as held to maturity debt securities as the Company has the intention and ability to hold the investments to maturity.

The Company earns a fixed return on these investments, which is included within income from preferred equity investments in its consolidated statements of operations.

Each joint venture’s purpose is to develop or operate a portfolio of residential units.

The following table summarizes the Company’s income from preferred equity investments for the three and nine months ended September 30, 2024 and 2023 (amounts in thousands):

Wayford at Pringle

Gross unrealized gain (loss), net

The following table summarizes the net carrying amount and fair value of the Company’s preferred equity investments, which are classified as available-for-sale debt securities, by contractual maturity at March 31, 2025 (amounts in thousands):

Available-for-sale

Net carrying amount

Due within one year

Due after one year through three years

Due after three years

The following table summarizes the Company’s income from preferred equity investments for the three months ended March 31, 2025 and 2024 (amounts in thousands):

Three Months Ended

September 30,

Nine Months Ended

September 30,

Investment Name

Canvas at Wildwood

Peak Housing (1)

The Cottages at Myrtle Beach

The Cottages at Warner Robins (2)

The Cottages of Port St.

1 unchanged sentence

Wayford at Innovation Park

Willow Park (2)

Wayford at Pringle

Total income from preferred equity investments (2)

(1) In September 2024, the Company’s preferred equity investment in Peak Housing was fully redeemed.

Refer to the Peak Housing Interests disclosure below for further information.

(2) The Company’s preferred equity investments in The Cottages at Warner Robins and Willow Park were redeemed in December 2023 and October 2023, respectively.

The Company’s preferred equity investments in Peak Housing and The Woods at Forest Hill were fully redeemed in September 2024 and November 2024, respectively.

Total income from preferred equity investments includes both current and accrued income amounts.

The accrued portion of the total income was $ 2.6 million and $ 2.7 million, and $ 7.8 million and $ 7.6 million, for the three and nine months ended September 30, 2024 and 2023, respectively.

At September 30, 2024 and December 31, 2023, the Company had $ 19.9 million and $ 13.7 million, respectively, of total accrued preferred equity income, which is recorded in accounts receivable, prepaids and other assets, net in its consolidated balance sheets.

Indigo Cove Interests

On June 27, 2024, the Company entered into a joint venture agreement with an unaffiliated third party (the “Indigo JV”) to develop approximately 82 build-to-rent, single-family residential units in Bluffton, South Carolina.

The Company made a commitment to invest $ 5.3 million for preferred equity interests in the Indigo JV, of which $ 3.0 million had been funded as of September 30, 2024.

The Company earns an accrued return on its outstanding capital contributions at a rate of 17.0 % per annum compounded monthly, subject to a minimum return, with preferred return payments commencing in December 2025 contingent upon the property generating cash flows in excess of operating costs.

The Indigo JV is required to redeem the Company’s preferred equity interests plus any accrued preferred return on the date the construction loan (addressed below) is repaid or refinanced, or earlier upon the occurrence of certain events.

In conjunction with the Indigo Cove development, the Indigo Cove property owner, which is owned by the Indigo JV, entered into a $ 22.0 million construction loan, of which $ 0.6 million was outstanding as of September 30, 2024.

The loan bears interest on the amount drawn based on one-month Term SOFR plus 5.55 %, subject to a 9.87 % rate floor, with interest-only monthly payments during the term of the loan.

The loan matures on June 18, 2026 and is secured by the fee simple interest in the Indigo Cove development.

The loan contains two (2) six-month extension options, subject to certain conditions, and can be prepaid without penalty.

Peak Housing Interests

Prior to 2024, the Company made a preferred equity investment in the Peak REIT OP in the aggregate amount of $ 20.3 million which was collateralized by 648 single-family residential units (“Peak Housing”).

Peak REIT OP could sell the units collateralizing the Company’s preferred equity investment, though Peak REIT OP was required to distribute any net sale proceeds to the Company, after consideration for partnership operating expenses and reserve requirements, until the Company’s full preferred equity investment had been repaid in full, subject to certain rate of return requirements and including any accrued but unpaid preferred returns.

During 2023, Peak REIT OP sold 196 of the 648 units that collateralized the Company’s investment, with the proceeds from the sales used to partially redeem the Company’s preferred equity investment.

At December 31, 2023, the Company’s outstanding preferred equity principal investment in Peak REIT OP was $ 10.6 million.

During the nine months ended September 30, 2024, Peak REIT OP continued to sell units that collateralized the Company’s investment.

Proceeds from the sales were used by Peak REIT OP to fully redeem the Company’s preferred equity investment in the aggregate amount of $ 11.2 million, which included the Company’s remaining principal investment of $ 10.6 million and accrued preferred return of $ 0.6 million, with the final redemption payment received in September 2024.

The Cottages of Port St.

Lucie Interests

The Company is party to a joint venture agreement with an unaffiliated third party (the “Cottages St.

Lucie JV”) that developed 286 build-to-rent, single-family residential units in Port St.

Lucie, Florida.

The Company made an $ 18.8 million preferred equity investment in the Cottages St.

Lucie JV, and the joint venture is required to redeem the Company’s investment, plus any accrued but unpaid preferred returns, on the date the construction loan is due and payable or earlier upon the occurrence of certain events.

The construction loan was to mature on August 26, 2024;

however, The Cottages of Port St.

Lucie property owner, which is owned by the Cottages St.

Lucie JV, executed an amendment to the construction loan agreement, which included revising the maturity date to November 26, 2024.

The construction loan can be prepaid without penalty and has regular monthly payments that will remain interest-only during the extension period.

The Woods at Forest Hill Interests

The Company is party to a joint venture agreement with an unaffiliated third party (the “Woods JV”) for 76 build-to-rent, single-family residential units in Forest Hill, Texas.

The Company made a $ 5.6 million preferred equity investment in the Woods JV, which preceded the senior loan investment made by the Company in The Woods at Forest Hill (the Woods Loan - refer to Note 6 for further information).

The Woods Loan borrower is currently in the process of selling the individual units, and during the nine months ended September 30, 2024, the borrower sold 58 of the 76 units that collateralized the Company’s preferred equity and loan investments in The Woods at Forest Hill.

Proceeds from the sales of these units were first used to fully pay off the Woods Loan investment made by the Company, with remaining available proceeds used to partially redeem the Company’s preferred equity investment in the Woods JV in the aggregate amount of $ 3.8 million, which included principal investment of $ 2.1 million, accrued preferred return of $ 1.1 million, and a minimum multiple payment of $ 0.6 million.

At September 30, 2024, the Company’s outstanding preferred equity investment in the Woods JV was $ 3.5 million, with a remaining 18 units as collateral underlying the Company’s investment.

In addition, The Woods at Forest Hill units, along with other Peak REIT OP investments, serve as collateral for the Company’s previous preferred equity investment in Willow Park.

In October 2023, the Company’s investment in Willow Park was redeemed by the Willow Park joint venture, with the Company receiving $ 2.9 million of its $ 4.6 million principal investment.

The remaining $ 1.7 million of the Company’s preferred equity investment in Willow Park, together with the Company’s $ 3.5 million of outstanding preferred equity investment in the Woods JV, results in the Company’s preferred equity investment carrying value of $ 5.2 million in The Woods at Forest Hill at September 30, 2024.

Peak REIT OP has guaranteed the full return of the Company’s investments in both The Woods at Forest Hill and Willow Park.

For the three months ended March 31, 2025 and 2024, the accrued portion of the total income was $ 2.9 million and $ 2.5 million, respectively.

At March 31, 2025 and December 31, 2024, the Company had $ 25.1 million and $ 23.3 million, respectively, of total accrued preferred equity income, which is recorded in accounts receivable, prepaids and other assets, net in its consolidated balance sheets.

Preferred Equity Investment Summary

In February 2025, the Company increased its original capital commitment for preferred equity interests in Wayford at Innovation Park by $ 2.0 million, increasing its total investment to $ 15.4 million.

As of March 31, 2025, the Company had funded $ 11.8 million of its $ 26.9 million aggregate commitment to fund capital for preferred equity interests in Canvas at Wildwood, Indigo Cove and River Ford.

Note 7 – DST Program

The Company has a program to raise capital through private placement offerings under which it sells beneficial interests in specific Delaware statutory trusts (each, a “DST”) holding real properties (collectively, the “DST Program”).

Under the DST Program, the private placement offers interest in the real property placed into a Delaware statutory trust (a “DST Property”).

The underlying interest of the real property sold to investors pursuant to such private placement is leased-back by a wholly-owned subsidiary of the Operating Partnership on a long-term basis through a master lease agreement.

The master lease agreement is partially guaranteed by the Operating Partnership in the form of a demand note capitalizing the lessee.

Additionally, the Operating Partnership retains a fair market value purchase option giving it the right, but not the obligation, to acquire the interests in the Delaware statutory trust from the investors in exchange for OP Units or cash commencing two years after full syndication.

As the Company is the primary beneficiary of the DST Property for financial reporting purposes, the Company consolidates the DST Property and operations in its financial statements.

Under the master lease, a wholly-owned indirect subsidiary of the Operating Partnership is responsible for subleasing the property to tenants, paying certain underlying costs associated with operating the property, and remitting rent to the DST that owns such property.

As of March 31, 2025, the Company had one offering in its DST Program and had raised net offering proceeds of $ 29.2 million, with total net real estate investments associated with the DST Program of $ 102.8 million.

Note 8— Revolving Credit Facilities

The outstanding balances on the revolving credit facilities at September 30, 2024 and December 31, 2023 are as follows (amounts in thousands):

September 30,

The outstanding balances on the revolving credit facilities at March 31, 2025 and December 31, 2024 were as follows (amounts in thousands):

Revolving Credit Facilities

Amended DB Credit Facility

Amended ILE Sunflower Credit Facility

KeyBank Credit Facility

Amended Deutsche Bank Credit Facility (“Amended DB Credit Facility”)

On December 29, 2023, certain of the Company’s subsidiaries entered into an amended and restated credit facility (the “Amended DB Credit Facility”) with Deutsche Bank Securities Inc.

In December 2023, certain of the Company’s subsidiaries entered into an amended and restated credit facility (the “Amended DB Credit Facility”) with Deutsche Bank Securities Inc.

(“Deutsche Bank”), as sole lead arranger, Deutsche Bank AG, New York Branch, as administrative agent, the financial institutions party thereto as lenders and Computershare Trust Company, N.A., as paying agent and calculation agent, and the Company as a guarantor.

The Amended DB Credit Facility provides for a revolving loan with a maximum commitment amount of $ 150 million.

Borrowings under the Amended DB Credit Facility are limited to financings related to the acquisition, renovation, rehabilitation, maintenance and leasing of single-family residential units in the Indy-Springfield, Peak JV 2 and Savannah-84 portfolios.

Borrowings under the Amended DB Credit Facility bear interest on the amount drawn at Term SOFR plus 2.80 %, and borrowings can be prepaid without premium or penalty.

The interest rate on outstanding borrowings was 8.00 % at September 30, 2024.

The Amended DB Credit Facility matures on April 6, 2025 and contains a one-year extension option, subject to certain conditions.

The Amended DB Credit Facility contains certain financial and operating covenants, including maximum leverage ratio, minimum debt yield and minimum debt service coverage ratios.

At September 30, 2024, the Amended DB Credit Facility was drawn at $ 85 million and the Company was in compliance with all covenants under the Amended DB Credit Facility.

The availability of borrowings under the Amended DB Credit Facility at September 30, 2024 was approximately $ 13 million and is based on the collateral and compliance with various ratios related to those assets.

Amended ILE Sunflower Credit Facility

On June 27, 2023, the Company, along with its unaffiliated joint venture partner, ILE, entered into an amended and restated credit facility with Sunflower Bank, N.A.

(the “Amended ILE Sunflower Credit Facility”).

The Amended ILE Sunflower Credit Facility transitioned the interest rate on borrowings from LIBOR to a SOFR-based rate.

There were no other material changes in terms from the previous credit facility.

The Amended ILE Sunflower Credit Facility provided for a revolving loan with an initial commitment amount of $ 20 million, which commitment contained an accordion feature to a maximum total commitment of up to $ 50 million.

The Amended ILE Sunflower Credit Facility, along with three other separate non-revolving credit facilities (refer to Note 9 for further information), was used in the financing of acquisitions of single-family residential units.

Borrowings under the Amended ILE Sunflower Credit Facility bore interest at Term SOFR plus 3.11 %, subject to a rate floor, and could be prepaid without penalty or premium.

The interest rate on outstanding borrowings was 7.97 % at September 30, 2024.

Prior to the full payoff of the Amended ILE Sunflower Credit Facility in October 2024 (refer to the ILE Financing disclosure in Note 15 for further information), the Amended ILE Sunflower Credit Facility was to mature on December 27, 2024 and contained certain financial and operating covenants, including a minimum fixed charge coverage ratio.

At September 30, 2024, the Company was in compliance with all covenants under the Amended ILE Sunflower Credit Facility and the initial commitment was fully drawn at $ 20 million.

A principal of ILE had guaranteed the obligations under the Amended ILE Sunflower Credit Facility and the joint venture had pledged certain assets as collateral.

The Amended DB Credit Facility provided for a revolving loan with a maximum commitment amount of $ 150 million.

Borrowings under the Amended DB Credit Facility were limited to financings related to the acquisition, renovation, rehabilitation, maintenance and leasing of single-family residential units in the Indy-Springfield, Peak JV 2 and Savannah-84 portfolios.

Borrowings under the Amended DB Credit Facility bore interest on the amount drawn at Term Secured Overnight Financing Rate (“SOFR”) plus 2.80 %, and borrowings could be prepaid without premium or penalty.

The interest rate on outstanding borrowings was 7.12 % at March 31, 2025.

The Amended DB Credit Facility contained certain financial and operating covenants, including maximum leverage ratio, minimum debt yield and minimum debt service coverage ratio.

At March 31, 2025, the Amended DB Credit Facility was drawn at $ 85 million and the Company was in compliance with all covenants under the Amended DB Credit Facility.

The Amended DB Credit Facility matured in April 2025.

On April 4, 2025, the Company entered into an amended and restated agreement with Deutsche Bank that replaced the Amended DB Credit Facility with a senior loan (refer to Note 16 for further information).

KeyBank Credit Facility

On October 25, 2024, the Company, through a subsidiary of its Operating Partnership, entered into a credit agreement with KeyBank National Association (the “KeyBank Credit Facility”) related to the Company’s DST Program.

The KeyBank Credit Facility provides for a revolving loan with a maximum commitment amount of $ 50 million.

The Company has provided a guarantee on any outstanding balance and up to the full commitment and has pledged interests in certain assets as collateral.

Borrowings under the KeyBank Credit Facility bear interest per annum, at the Company’s option, at SOFR (Daily Simple or Term) plus 3.60 % or the base rate plus 2.50 % (base rate determined by reference to the greatest of (i) the prime rate, (ii) the federal funds effective rate plus 0.50 %, and (iii) Adjusted Term SOFR for a one-month interest period plus 1.00 %), and borrowings can be prepaid without premium or penalty.

The Company pays a fee on the unused portion of the KeyBank Credit Facility at an annual rate of 0.30 %.

The KeyBank Credit Facility matures on October 25, 2026;

however, borrowings under the KeyBank Credit Facility mature one-year from the date of funding, subject to certain minimum paydowns, and timing of such paydowns, pursuant to the terms of the KeyBank Credit Facility.

The KeyBank Credit Facility contains certain financial and operating covenants, including maximum leverage ratio, minimum debt service coverage ratio and minimum tangible net worth.

At March 31, 2025, the KeyBank Credit Facility was fully paid down with no outstanding balance.

Note 9 – Mortgages Payable

The following table summarizes certain information as of September 30, 2024 and December 31, 2023 with respect to the Company’s senior mortgage indebtedness (amounts in thousands):

The following table summarizes certain information at March 31, 2025 and December 31, 2024 with respect to the Company’s senior mortgage indebtedness (amounts in thousands):

Outstanding Principal

As of September 30, 2024

September 30,

As of March 31, 2025

Interest-only

1 unchanged sentence

Maturity Date

Allure at Southpark

Interest-only

January 1, 2030

Amira at Westly

Interest-only

November 1, 2034

Avenue at Timberlin Park

August 1, 2029

Navigator Villas (3)

Villas at Huffmeister

4 unchanged sentences

Floating Rate:

Interest-only

October 1, 2027

Wayford at Concord (5)

5 unchanged sentences

Of the outstanding balance, one credit agreement (“CA1”) has a balance of $ 4.8 million at a fixed rate of 3.50 %, the second credit agreement (“CA2”) has a balance of $ 17.0 million at a fixed rate of 3.75 %, and the third credit agreement (“CA3”) has a balance of $ 4.5 million at a fixed rate of 6.00 %.

CA1 and CA3 each bear interest at a floating rate that is subject to an interest rate swap to effectuate a fixed rate;

refer to Note 11 for further information.

CA1 and CA2 both mature in 2026;

1 unchanged sentence

The loan requires monthly payments of principal and interest.

(3) The Company sold Navigator Villas in August 2024.

The principal balance includes a $ 9.7 million senior loan at a fixed rate of 4.81 % and a $ 4.3 million supplemental loan at a fixed rate of 4.96 %.

The ILE loan bears interest at one-month Term SOFR plus 2.85 %, subject to a 6.50 % rate floor.

In March 2025, the one-month Term SOFR in effect for this loan was 4.32 %.

The Wayford at Concord loan bears interest at the 30-day average SOFR plus 2.23 %.

In September 2024, the 30-day average SOFR in effect was 5.35 % .

SOFR rate is subject to a 2.50 % rate cap through April 2025.

Refer to Note 11 for further information.

In March 2025, the 30-day average SOFR in effect was 4.35 %.

SOFR rate is subject to a 2.50 % rate cap through April 2027 per the terms of a new rate cap agreement entered into by the Company.

Please refer to Note 11 for further information.

Deferred financing costs

5 unchanged sentences

Upon repayment of or in conjunction with a material change (i.e., a 10% or greater difference in the cash flows between instruments) in the terms of an underlying debt agreement, the Company writes-off any unamortized deferred financing costs and fair market value adjustments related to the original debt that was extinguished.

Prepayment penalties incurred on the early repayment of debt and costs incurred in a debt modification that are not capitalized would also be included within loss on extinguishment of debt and debt modification costs on the consolidated statements of operations.

The Company had $ 0.1 million of loss on extinguishment of debt costs and no debt modification costs for both the three and nine months ended September 30, 2024.

The Company had no loss on extinguishment of debt or debt modification costs during 2023.

The Company had a negligible amount of loss on extinguishment of debt and no debt modification costs during the three months ended March 31, 2025.

The Company had no loss on extinguishment of debt or debt modification costs during the three months ended March 31, 2024.

Debt maturities

At September 30, 2024, contractual principal payments for the five subsequent years and thereafter are as follows (amounts in thousands):

2024 (October 1–December 31)

At March 31, 2025, contractual principal payments of the Company’s borrowings, including its revolving credit facilities (refer to Note 8 for further information), for the five subsequent years and thereafter are as follows (amounts in thousands):

2025 (April 1 – December 31)

Unamortized fair value debt adjustment

Deferred financing costs, net

Total mortgages payable

The net book value of real estate assets providing collateral for these above borrowings, including the revolving credit facilities (refer to Note 8 for further information), was $ 403.9 million at September 30, 2024.

The net book value of real estate assets providing collateral for these above borrowings was $ 588.0 million at March 31, 2025.

The mortgage loans encumbering the Company’s properties are nonrecourse, subject to certain exceptions for which the Company would be liable for any resulting losses incurred by the lender.

19 unchanged sentences

Fair Value of Financial Instruments

At September 30, 2024 and December 31, 2023, the carrying values of cash and cash equivalents, restricted cash, accounts receivable, due to affiliates, accounts payable, other accrued liabilities, and distributions payable approximate their fair value based on their highly-liquid nature and/or short-term maturities.

The carrying values and fair values of the Company’s financial instruments at September 30, 2024 and December 31, 2023 are summarized in the table below (amounts in thousands):

September 30, 2024

At March 31, 2025 and December 31, 2024, the carrying values of cash and cash equivalents, restricted cash, accounts receivable, due from and due to affiliates, accounts payable, other accrued liabilities, and distributions payable approximate their fair value based on their highly liquid nature and/or short-term maturities.

The carrying values and fair values of the Company’s financial instruments at March 31, 2025 and December 31, 2024 are summarized in the table below (amounts in thousands):

March 31, 2025

December 31, 2024

1 unchanged sentence

Carrying Value

Note receivable (available for sale) (1)

Preferred equity investments (1)

Mortgages payable (2)

(1) Represents Note B of the Pringle Loan which, due to conversion options, meets the criteria of a debt security and is considered as available for sale (refer to Note 6 for further information).

The fair value of the note receivable is estimated by modeling the expected contractual cash flows required under the instrument and discounting such cash flows back to their present value using estimates of current market rates.

As the estimated current market rates did not substantially differ from the discount rates originally applied, the carrying amount of the note receivable approximates its fair value.

There were no purchases, sales, issuances, or settlements during the nine months ended September 30, 2024 other than the $ 7.8 million initial funding of the note in the first quarter 2024.

(2) The carrying values of the mortgages payable include ($ 2,482 ) and $ 916 of unamortized fair value debt adjustments and exclude $ 1,838 and $ 951 of deferred financing costs at September 30, 2024 and December 31, 2023, respectively.

Represents the Company’s preferred equity investments which are classified as available-for-sale (“AFS”) debt securities (refer to Note 6 for further information).

The Company measures the fair value of its AFS preferred equity investments utilizing observable and unobservable market inputs.

The observable market inputs include recent transactions and broker quotes (“market data”).

However, given the implied price dispersion amongst the market data, the fair value determination for the AFS preferred equity investments has also utilized significant unobservable inputs in discounted cash flow models based on recent performance of the collateral, the underlying collateral characteristics, industry trends as well as expectations of macroeconomic events.

At each measurement date, the Company considers both the observable and unobservable valuation inputs in the determination of fair value.

However, given the significance of the unobservable inputs, the fair values of AFS preferred equity investments are classified in Level 3 of the fair value hierarchy.

The carrying values of the mortgages payable include ($ 2,319 ) and ($ 2,400 ) of unamortized fair value debt adjustments and exclude $ 5,131 and $ 5,416 of deferred financing costs at March 31, 2025 and December 31, 2024, respectively.

The fair value of mortgages payable is estimated based on interest rates obtained from third party lenders for similar types of borrowing arrangements.

The Company’s operating units classified as held for sale for which it has recorded impairments, measured at fair value on a non-recurring basis, for the three and nine months ended September 30, 2024 are summarized below (amounts in thousands).

The Company had no operating units classified as held for sale during the corresponding periods ended September 30, 2023.

The Company’s operating units classified as held for sale for which it has recorded impairments, measured at fair value on a non-recurring basis, for the three months ended March 31, 2025 and 2024 are summarized in the table below (amounts in thousands).

The units classified as held for sale are all reported in the Company’s scattered single-family homes segment.

Three Months Ended

Nine Months Ended

September 30, 2024

Investment in operating units classified as held for sale (Level 3)

2 unchanged sentences

Fair value (2)

(1) Impairment amounts are included in gain on sale and impairment of real estate investments, net in the Company’s consolidated statements of operations.

Impairment amounts are included in gain on sale and impairment of real estate investments, net in the Company’s consolidated statements of operations and comprehensive income.

Real estate assets classified as held for sale are reported at the lower of their carrying value or estimated fair value less costs to sell and are presented separately within operating real estate held for sale, net on the Company’s consolidated balance sheets.

The estimated fair value is based on discussions with third party brokers, historical sales experience, and current market conditions.

Fair Value Measurements on a Nonrecurring Basis

The Company continually monitors events and changes in circumstances that could indicate that the carrying amounts of its operating real estate and related intangible assets may not be recoverable.

If the Company does not believe that it will be able to recover the carrying value of operating real estate, the Company will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the operating real estate based on discounted cash flows of the operating asset using inputs that fall within Level 3 of the fair value hierarchy.

No impairment losses on operating real estate and related intangible assets were recorded during the three months ended March 31, 2025 and 2024.

Derivative Financial Instruments

17 unchanged sentences

The Company has not designated any of the interest rate derivatives as hedges.

Although these derivative financial instruments were not designated or did not qualify for hedge accounting, the Company believes these derivative financial instruments mitigate increases in interest rates.

Although these derivative financial instruments were not designated or did not qualify for hedge accounting, the Company believes the derivative financial instruments mitigate increases in interest rates.

The Company does not use derivative financial instruments for trading or speculative purposes.

At September 30, 2024, the Company had interest rate caps and swaps which effectively limit the Company’s exposure to interest rate risk by providing a ceiling on the underlying interest rate for $ 128.5 million of the Company’s debt.

The following table summarizes the Company’s derivative financial instruments at September 30, 2024 ($ in thousands):

At March 31, 2025, the Company had interest rate caps and swaps which effectively limit the Company’s exposure to interest rate risk by providing a ceiling on the underlying interest rate for $ 150.3 million of the Company’s debt.

The following table summarizes the Company’s derivative financial instruments at March 31, 2025 ($ in thousands):

Interest Rate Caps

4 unchanged sentences

Latest maturity date

The table below presents the classification and fair value of the Company’s derivative financial instruments on the consolidated balance sheets at September 30, 2024 and December 31, 2023 (amounts in thousands):

(1) In April 2025, the Company entered into new interest rate cap agreements for both of its rate caps, with such agreements effective upon the May 2025 maturity dates of the previous rate caps.

The new rate caps have an aggregate notional balance of $ 93.0 million, with the earliest maturity date in May 2026 and the latest maturity date in May 2027.

The table below presents the classification and fair value of the Company’s derivative financial instruments on its consolidated balance sheets at March 31, 2025 and December 31, 2024 (amounts in thousands):

Derivatives not designated as hedging

2 unchanged sentences

Balance Sheet Location

September 30, 2024

March 31, 2025

December 31, 2024

Interest rate caps

Accounts receivable, prepaids and other assets

Accounts receivable, prepaids and other assets, net

Interest rate swaps

Accounts receivable, prepaids and other assets

The table below presents the classification and effect of the Company’s derivative financial instruments on the consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 (amounts in thousands):

Accounts receivable, prepaids and other assets, net

The table below presents the classification and effect of the Company’s derivative financial instruments on the consolidated statements of operations and comprehensive income for the three months ended March 31, 2025 and 2024 (amounts in thousands):

The Effect of Derivative Instruments on the

Statements of Operations

Statements of Operations and Comprehensive Income

Derivatives not designated as hedging

Location of Gain (Loss)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

instruments under ASC 815-20

6 unchanged sentences

Management Agreement

In October 2022, the Company entered into a management agreement (the “Management Agreement”) with the Operating Partnership and Bluerock Homes Manager, LLC (the “Manager”), which is an affiliate of Bluerock Real Estate, LLC (“BRE”), pursuant to which the Manager provides for the day-to-day management of the Company’s operations.

In October 2022, the Company entered into a management agreement (the “Management Agreement”) with the Operating Partnership and Bluerock Homes Manager, LLC (the “Manager”), which is an affiliate of Bluerock Real Estate, LLC, pursuant to which the Manager provides for the day-to-day management of the Company’s operations.

Pursuant to the terms of the Management Agreement, the Manager provides the Company with a management team and appropriate support personnel to provide such management services to the Company.

4 unchanged sentences

The Company is required to reimburse the Manager for certain expenses and pay all operating expenses (the “operating expense reimbursement”) with respect to each calendar quarter (or part thereof that the Management Agreement is in effect) in arrears, except those specifically required to be borne by the Manager under the Management Agreement.

The Management Agreement provides that (i) the base management fee and the incentive fee shall be allocated and payable as one half ( 50 %) in C-LTIP Units and the remainder payable in cash or C-LTIP Units, at the discretion of the Board, and (ii) the operating expense reimbursement shall be payable either in cash or C-LTIP Units, at the discretion of the Board.

Prior to the fourth quarter 2024, the Management Agreement provided that (i) the base management fee and the incentive fee would be allocated and payable as one half ( 50 %) in C-LTIP Units and the remainder payable in cash or C-LTIP Units, at the discretion of the Board, and (ii) the operating expense reimbursement shall be payable either in cash or C-LTIP Units, at the discretion of the Board.

Commencing with the fourth quarter 2024, the Management Agreement provides that (i) the base management fee shall be paid in cash unless there is an agreement between the Board and the Manager to pay all or a portion of the base management fee in C-LTIP Units, and (ii) the operating expense reimbursement remains payable either in cash or C-LTIP Units, at the discretion of the Board.

The number of C-LTIP Units payable and issued to the Manager for the base management fee, the incentive fee and expense reimbursements will be equal to the dollar amount (of the portion deemed payable in C-LTIP Units) of the fees earned or reimbursement amount divided by the average of the closing prices of the Class A common stock for the five business days prior to issuance.

For the three and nine months ended September 30, 2024 and 2023, the Company recorded base management fees of $ 2.4 million and $ 2.0 million, and $ 6.6 million and $ 5.9 million, respectively.

Commencing with the base management fee for the first quarter 2024, the Company paid, and expects to continue to pay, the base management fee to the Manager as one half ( 50 )% in C-LTIP Units and the remainder in cash;

prior to the first quarter 2024, the Company paid the base management fee to the Manager entirely through the issuance of C-LTIP Units.

For the three months ended March 31, 2025, the Company recorded a base management fee of $ 2.5 million, of which $ 0.2 million shall be paid in C-LTIP Units with the remainder paid in cash.

For the three months ended March 31, 2024, the Company recorded a base management fee of $ 2.1 million, of which one half ( 50 %) was paid in C-LTIP Units and the remainder paid in cash.

There have been no incentive fee expenses incurred during 2025 or the year ended December 31, 2024.

For the three and nine months ended September 30, 2024 and 2023, the Company recorded operating expense reimbursements of $ 1.0 million and $ 0.4 million, and $ 3.3 million and $ 1.1 million, respectively.

Commencing with the operating expense reimbursement for the first quarter 2024, the Company paid, and expects to continue to pay, the operating expense reimbursement to the Manager entirely in cash;

prior to the first quarter 2024, the Company paid the operating expense reimbursement to the Manager entirely through the issuance of C-LTIP Units.

The operating expense reimbursement for each of the first three quarters of 2024 included an average reimbursement to the Manager of $ 0.7 million for accounting and legal services.

Prior to the fourth quarter 2023, the Manager elected to not seek reimbursement for accounting and legal services during the Company’s first year of operations.

In addition, for the three and nine months ended September 30, 2024 and 2023, the Company recorded direct expense reimbursements of $ 0.1 million and $ 0.1 million, and $ 0.3 million and $ 0.3 million, respectively, which were paid to the Manager in cash.

Both the operating and direct expense reimbursements were recorded as part of general and administrative expenses in the Company’s consolidated statements of operations.

The table below presents the related party amounts payable to the Manager at September 30, 2024 and December 31, 2023 pursuant to the terms of the Management Agreement (amounts in thousands).

For the three months ended March 31, 2025 and 2024, the Company recorded (i) operating expense reimbursements of $ 1.0 million and $ 1.2 million, respectively, and (ii) direct expense reimbursements of $ 0.1 million and $ 0.1 million, respectively.

Both the operating and direct expense reimbursements were paid in cash to the Manager and recorded as part of general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income.

The table below presents the related party amounts payable to the Manager at March 31, 2025 and December 31, 2024 pursuant to the terms of the Management Agreement (amounts in thousands).

The Company records these payables in due to affiliates in its consolidated balance sheets.

September 30,

Amounts payable to the Manager under the Management Agreement

3 unchanged sentences

Total amounts payable to the Manager

At September 30, 2024 and December 31, 2023, the Company had no receivables due from any related parties.

Leasehold Cost-Sharing Agreement with Bluerock Real Estate Holdings, LLC

In connection with a new lease on the Company’s New York (Manhattan) headquarters, effective May 2024, the Company and an unaffiliated third-party landlord entered into a lease for separate corporate space (the “NY Premises Lease”) located at 919 Third Avenue, New York, New York (the “NY Premises”).

The NY Premises Lease commenced in November 2024 when the landlord made the NY Premises available to the Company to begin its own alterations and improvements.

With respect to the NY Premises, the Company and Bluerock Real Estate Holdings, LLC (“BREH”), which is an affiliate of the Manager, entered into a leasehold cost-sharing agreement (the “Leasehold Cost-Sharing Agreement”) to provide for the allocation and sharing between BREH and the Company of the costs thereunder, including costs associated with tenant improvements.

BREH and certain of its respective subsidiaries and/or affiliates will share occupancy of the NY Premises.

Under the Leasehold Cost-Sharing Agreement, if there is a change in control of either BREH or the Company, the allocation of costs under the Leasehold Cost-Sharing Agreement shall be modified to thereafter allocate such costs based on the average of the cost-sharing percentages between BREH and the Company over the four most recently-completed calendar quarters immediately preceding the change in control date (or shall be the average cost-sharing percentages over such shorter period, if the change in control occurs earlier than the completion of four calendar quarters).

Under the NY Premises Lease, the Company, through its Operating Partnership, issued a payment of approximately $ 450,000 as a security deposit.

Payment by BREH of any amounts payable under the Leasehold Cost-Sharing Agreement to the Company will be made in cash.

The table below presents the related party amounts receivable from BREH at March 31, 2025 and December 31, 2024 pursuant to the terms of the Leasehold Cost-Sharing Agreement (amounts in thousands).

The Company records these receivables in due from affiliates in its consolidated balance sheets.

Amounts receivable from BREH under the Leasehold Cost-Sharing Agreement

March 31, 2025

December 31, 2024

Capital improvement cost reimbursements

Operating and direct expense reimbursements

Total amounts receivable from the Manager

At March 31, 2025 and December 31, 2024, the Company had no other receivables due from any related parties.

BR Amira DST Manager, LLC - Amira at Westly DST

The Company has agreed to pay an asset management fee equal to 0.02 % per annum of the Amira at Westly purchase price of $ 103 million, or $ 206,000 annually, to BR Amira DST Manager, LLC, which is wholly owned by Bluerock Asset Management, LLC.

During the three months ended March 31 2025, the Company incurred a total asset management fee related to Amira at Westly of $ 51,500 which is recorded within property management and asset management fees on the Company’s consolidated statements of operations and comprehensive income.

The Company did no t incur any asset management fees related to Amira at Westly in the first quarter 2024.

In addition, the Company, through consolidated subsidiaries associated with the DST Program, incurred a one-time acquisition fee of $ 2.1 million payable to BR Amira DST Manager, LLC for the Amira at Westly private placement offering.

Refer to Note 7 for further information on the Company’s DST Program.

The table below presents the related party amounts payable to BR Amira DST Manager, LLC at March 31, 2025 and December 31, 2024 (amounts in thousands).

The Company records these payables in due to affiliates in its consolidated balance sheets.

Amounts payable to BR Amira DST Manager, LLC

March 31, 2025

December 31, 2024

One-time acquisition fee

Asset management fees

Total amounts payable to BR Amira DST Manager, LLC

Selling Commissions and Dealer Manager Fees

1 unchanged sentence

The dealer manager re-allows the substantial majority of the selling commissions and dealer manager fees to participating broker-dealers and incurs costs in excess of the 10 %, which costs are borne by the dealer manager without reimbursement by the Company.

For the nine months ended September 30, 2024, the Company incurred $ 6.1 million in selling commissions and discounts and $ 2.6 million in dealer manager fees and discounts related to its offering of Series A Preferred Stock.

In addition, the Manager was, or shall be, reimbursed for offering costs of $ 0.6 million in conjunction with the offering of Series A Preferred Stock during the nine months ended September 30, 2024.

For the three months ended March 31, 2025, the Company incurred $ 1.1 million in selling commissions and discounts and $ 0.5 million in dealer manager fees and discounts related to its offering of Series A Preferred Stock.

In addition, the Manager was, or shall be, reimbursed by the Company for offering costs of $ 0.3 million in conjunction with the offering of Series A Preferred Stock during the three months ended March 31, 2025.

The selling commissions, dealer manager fees, discounts and reimbursements for offering costs were recorded as a reduction to the proceeds of the offering.

Note 13 – Stockholders’ Equity and Redeemable Preferred Stock

Net Income (Loss) Per Common Share

Basic and diluted net income (loss) per common share is computed by dividing net income (loss) attributable to common stockholders, less dividends on restricted stock, LTIP Units and C-LTIP Units expected to vest, by the weighted average number of common shares outstanding for the period.

Net income (loss) attributable to common stockholders is computed by adjusting net income (loss) for the non-forfeitable dividends paid on non-vested restricted stock, LTIP Units and C-LTIP Units.

Net Loss Per Common Share

Basic and diluted net loss per common share is computed by dividing net loss attributable to common stockholders, less dividends on restricted stock and LTIP Units expected to vest, by the weighted average number of common shares outstanding for the period.

Net loss attributable to common stockholders is computed by adjusting net loss for the non-forfeitable dividends paid on non-vested restricted stock and LTIP Units.

The Company considers the requirements of the two-class method when preparing earnings per share.

2 unchanged sentences

Earnings per share is not affected by the two-class method because the Company’s Class A and C common stock participate in dividends on a one -for- one basis.

The following table reconciles the components of basic and diluted net income (loss) per common share for the three and nine months ended September 30, 2024 and 2023 (amounts in thousands, except share and per share amounts):

The following table reconciles the components of basic and diluted net loss per common share for the three months ended March 31, 2025 and 2024 (amounts in thousands, except share and per share amounts):

Three Months Ended

Nine Months Ended

September 30,

Net income (loss)

Less preferred stock dividends

Less preferred stock accretion

Less net income / addback net loss attributable to noncontrolling interests

Net income (loss) attributable to common stockholders

Less dividends on restricted stock and LTIP Units expected to vest

Addback net loss attributable to noncontrolling interests

Net loss attributable to common stockholders

Weighted average common shares outstanding (1)

1 unchanged sentence

Weighted average common shares outstanding and potential dilutive shares (1)

Net income (loss) per common share, basic

Net income (loss) per common share, diluted

Net loss per common share, basic

Net loss per common share, diluted

Amounts relate to shares of the Company’s Class A and Class C common stock outstanding.

(2) For the three months ended September 30, 2024, potential vesting of restricted Class A common stock of 11,975 shares are included in the diluted shares calculation.

For the nine months ended September 30, 2024, potential vesting of restricted Class A common stock of 3,383 shares are excluded from the diluted shares calculation as the effect is antidilutive.

For the three and nine months ended September 30, 2024, potential conversion of the Series A Preferred Stock into Class A common stock of 4,142,972 shares and 2,315,348 shares, respectively, are excluded from the diluted shares calculation as the effect is antidilutive.

For the three and nine months ended September 30, 2023, (i) potential vesting of restricted Class A common stock of zero shares and 3,702 shares, respectively, are excluded from the diluted shares calculation as the effect is antidilutive, and (ii) potential conversion of the Series A Preferred Stock into Class A common stock of 44,658 shares and 12,810 shares, respectively, are excluded from the diluted shares calculation as the effect is antidilutive.

For the three months ended March 31, 2025 and 2024, the diluted shares calculations exclude the following as the effects are antidilutive:

(i) potential vesting of restricted Class A common stock of 3,607 shares and 4,531 shares, respectively, and (ii) potential conversion of the Series A Preferred Stock into Class A common stock of 9,135,723 shares and 989,712 shares, respectively.

The effect of the conversion of OP Units is not reflected in the computation of basic and diluted earnings per share, as they are exchangeable for Class A common stock on a one -for-one basis.

2 unchanged sentences

Series A Redeemable Preferred Stock

During the nine months ended September 30, 2024, the Company issued 3,459,331 shares of 6.0 % Series A Redeemable Preferred Stock (the “Series A Preferred Stock”) at $ 25.00 per share (the “Stated Value”) under its continuous registered offering with net proceeds of approximately $ 76.7 million after (i) commissions, dealer manager fees and sales discounts of approximately $ 8.7 million, and (ii) costs related to establishing the offering of Series A Preferred Stock of approximately $ 1.2 million.

As of September 30, 2024, the Company had issued a total of 3,896,006 shares of Series A Preferred Stock with total net proceeds of approximately $ 85.0 million after commissions, dealer manager fees, sales discounts and offering costs.

During the nine months ended September 30, 2024, the Company, at the request of holders, redeemed 6,560 shares of Series A Preferred Stock through the issuance of 9,103 shares of Class A common stock.

In November 2023, the Company announced the payment of additional contingent special daily dividends with respect to the Company’s Series A Preferred Stock.

This dividend was aggregated with the regular monthly dividend so as to effect a dividend rate of two percent over the average 10-Year Daily Treasury Par Yield Curve Rate with a floor of 6 % annually, calculated and paid monthly.

Commencing in November 2023, the Series A Preferred Stock additional contingent special dividend was declared for each month for which the Board declared the regular monthly dividend of $ 0.125 per outstanding share of Series A Preferred Stock.

In May 2024, the Company announced the payment of an enhanced special dividend replacing the additional contingent special daily dividend.

During the three months ended March 31, 2025, the Company issued 651,768 shares of 6.0 % Series A Redeemable Preferred Stock (the “Series A Preferred Stock”) at $ 25.00 per share (the “Stated Value”) under its continuous registered offering with net proceeds of approximately $ 14.1 million after (i) commissions, dealer manager fees and sales discounts, and (ii) costs related to establishing the offering of Series A Preferred Stock.

As of March 31, 2025, the Company had issued a total of 5,285,053 shares of Series A Preferred Stock with total net proceeds of approximately $ 115.2 million after commissions, dealer manager fees, sales discounts and offering costs.

Additionally, as of March 31, 2025, the Company, at the request of holders, had redeemed a total of 6,560 shares of Series A Preferred Stock through the issuance of 9,103 shares of Class A common stock.

In May 2024, the Company announced the payment of an enhanced special dividend replacing the previous special dividend.

The enhanced special dividend is aggregated with the regular monthly dividend so as to effect a dividend rate of the average one-month Term SOFR rate plus two percent, subject to a 6.5 % minimum and an 8.5 % maximum annual rate, calculated and paid monthly.

Commencing in May 2024, the Series A Preferred enhanced special dividend was declared for each month for which the Board declared the regular monthly dividend of $ 0.125 per outstanding share of Series A Preferred Stock.

At the date of issuance, the carrying amount of the Series A Preferred Stock was less than the redemption value.

As a result of the Company’s determination that holder redemption is probable, the carrying value will be increased by periodic accretions so that the carrying value will equal the redemption value net of early redemption fees at the earliest redemption date.

As of March 31, 2025, the Company had recorded a total of $ 0.8 million of accretion related to the Series A Preferred Stock.

Series A Preferred Stock Redemption Safeguard Policy

On February 6, 2025, the Company implemented a new Series A Preferred Stock Redemption Safeguard Policy (the “Policy”) with respect to its Series A Preferred Stock.

The Policy is applicable in the event of any redemption of shares of Series A Preferred Stock in shares of the Company’s Class A common stock rather than in cash (each, a “Preferred Redemption in common stock”).

The Policy provides that if, within 10 business days of any such Preferred Redemption in common stock, any such shares of Class A common stock are sold at a loss (i.e.

a lower price than the Aggregate Redemption Value), the holder can apply to the Company for a cash payment to the holder in an amount equal to the difference between (i) the Aggregate Redemption Value of the Class A common stock so issued, and (ii) the Aggregate Sale Price at which such shares of Class A common stock were sold, subject to certain conditions and requirements as set forth in the Policy.

The Policy applies both retroactively, and on a go-forward basis, to holders of the Company’s Series A Preferred Stock.

Class A Common Stock Repurchase Plan

On February 13, 2024, the Board authorized a stock repurchase plan for the repurchase, from time to time, of up to an aggregate of $ 5 million of the Company’s outstanding shares of Class A common stock, with such repurchases to be conducted in accordance with the requirements of Rule 10b-18 of the Securities Exchange Act of 1934 (the “Exchange Act”) and subject to Rule 10b-5 of the Exchange Act.

On February 13, 2024, the Board authorized a stock repurchase plan for the repurchase of up to an aggregate of $ 5 million of the Company’s outstanding shares of Class A common stock.

The repurchase plan had a term of one year and ended in February 2025.

The Company made no repurchases of its Class A common stock under this plan.

On February 28, 2025, the Board authorized a new stock repurchase plan for the repurchase, from time to time, of up to an aggregate of $ 5 million of the Company’s outstanding shares of Class A common stock, with such repurchases to be conducted in accordance with the requirements of Rule 10b-18 of the Securities Exchange Act of 1934 (the “Exchange Act”) and subject to Rule 10b-5 of the Exchange Act.

The repurchase plan has a term of one year and may be discontinued at any time.

The extent to which the Company repurchases shares of its Class A common stock under the repurchase plan, and the timing of any such repurchases, depends on a variety of factors including general business and market conditions and other corporate considerations.

The Company expects to repurchase shares of its Class A common stock through open market transactions, subject to market conditions, certain price limitations and other conditions established under the plan.

The Company expects that any repurchases of its Class A common stock will be through open market transactions, subject to market conditions, certain price limitations and other conditions established under the plan.

Open market repurchases will be structured to occur in conformity with the method, timing, price and volume requirements of Rule 10b-18 of the Exchange Act.

As of September 30, 2024, no repurchases of Class A common stock had been made by the Company.

As of March 31, 2025, no repurchases of Class A common stock had been made by the Company.

Operating Partnership and Long-Term Incentive Plan Units

As of September 30, 2024, limited partners other than the Company owned approximately 69.29 % of the common units of the Operating Partnership ( 7,365,735 OP Units, or 57.09 %, is held by OP Unit holders, and 1,573,575 LTIP Units, or 12.20 %, is held by LTIP Unit holders, including 3.74 % which are not vested as of September 30, 2024).

As of March 31, 2025, limited partners other than the Company owned approximately 69.59 % of the common units of the Operating Partnership ( 7,365,735 OP Units, or 56.54 %, were held by OP Unit holders, and 1,700,013 LTIP Units, or 13.05 %, were held by LTIP Unit holders, including 3.08 % which were not vested as of March 31, 2025).

Subject to certain restrictions set forth in the Operating Partnership’s Partnership Agreement, OP Units are exchangeable for Class A common stock on a one-for-one basis, or, at the Company’s election, redeemable for cash.

LTIP Units and C-LTIP Units may be convertible into OP Units under certain conditions and then may be settled in shares of the Company’s Class A common stock or, at the Company’s election, cash.

On February 21, 2024, the Company granted to the Manager (i) 151,600 C-LTIP Units in payment of the full base management fee of $ 2.0 million, and (ii) 95,204 C-LTIP Units in payment of the full operating expense reimbursement of $ 1.3 million, incurred for the fourth quarter 2023.

On May 14, 2024, the Company granted 60,080 C-LTIP Units to the Manager in payment of one half ( 50 )% of the total base management fee of $ 2.1 million incurred for the first quarter 2024.

On August 8, 2024, the Company granted 58,390 C-LTIP Units to the Manager in payment of one half ( 50 )% of the total base management fee of $ 2.2 million incurred for the second quarter 2024.

All such C-LTIP Units were issued pursuant to the Management Agreement and were fully vested upon issuance.

On March 7, 2025, the Company granted 21,254 C-LTIP Units, or approximately $ 245,000 , to the Manager pursuant to the Management Agreement as partial payment of the full base management fee of $ 2.5 million the fourth quarter 2024.

Such C-LTIP Units were fully vested upon issuance.

In the future, the Operating Partnership may issue OP Units or preferred OP Units from time to time in connection with acquisitions of properties or for financing, compensation or other reasons.

4 unchanged sentences

Together, the Company refers to the BHM Individuals Plan and the BHM Entities Plan as the “BHM Incentive Plans.” The BHM Incentive Plans provide for the grant of options to purchase shares of our common stock, stock awards, stock appreciation rights, performance units, incentive awards and other equity-based awards, and are administered by the compensation committee of the Board.

LTIP Unit Grants

LTIP Unit and Restricted Stock Grants

Under the BHM Incentive Plans, (i) certain of the Manager’s executive management team and personnel who provide services to the Manager were granted LTIP Units and/or shares of Class A common stock as restricted stock grants (“RSGs”) that vest over a three-year period, and (ii) each independent member of the Board was granted LTIP Units in payment of the equity portion of their respective annual retainers, with such LTIP Units fully vested upon issuance.

On January 1, 2025, the Company granted 5,405 LTIP Units pursuant to the BHM Incentive Plans to each independent member of the Board in payment of the equity portion of their respective annual retainers.

Such LTIP Units were fully vested upon issuance and the Company recognized expense of $ 0.3 million based on the fair value at the date of grant.

Effective April 1, 2024, for tax efficiency purposes, the Manager forfeited 57,670 unvested LTIP Units granted to the Manager on May 25, 2023 in payment of the annual long-term incentive equity grant pursuant to the BHM Entities Plan.

During the second quarter 2024, the Company reversed previously recognized compensation expense of approximately $ 0.3 million related to the forfeiture.

Such expense reversal was recorded as part of general and administrative expenses in the Company’s consolidated statements of operations.

On April 30, 2024 the Company granted 101,789 LTIP Units, including (by mutual agreement of the Manager and the Company, and at the direction of the Manager) the 57,670 unvested LTIP Units forfeited by the Manager, pursuant to the BHM Incentive Plans, directly to and among certain of the Manager’s executive management team and personnel who provide other services to the Manager as an annual long-term incentive equity grant for the year ended December 31, 2023.

Such LTIP Units will vest ratably on an annual basis over a three-year period from the date of grant.

The Company recognizes compensation expense ratably over the vesting period for time-based LTIP Units based on the fair value at the date of grant.

During the three and nine months ended September 30, 2024 and 2023, the Company recognized compensation expense for such LTIP Units of approximately $ 0.7 million and $ 0.7 million, and $ 2.0 million and $ 1.7 million, respectively.

Such expense was recorded as part of general and administrative expenses in the Company’s consolidated statements of operations.

At September 30, 2024, there was $ 7.8 million of total unrecognized compensation expense related to unvested LTIP Units granted under the BHM Incentive Plans.

During the three months ended March 31, 2025 and 2024, the Company recognized compensation expense for such LTIP Units of approximately $ 0.7 million and $ 0.7 million, respectively.

Such expense was recorded as part of general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income.

As of March 31, 2025, there was $ 6.4 million of total unrecognized compensation expense related to unvested LTIP Units granted under the BHM Incentive Plans.

The remaining expense is expected to be recognized over a period of 2.4 years.

Restricted Stock Grants

In November 2023, the Company issued 31,260 shares of Class A common stock as restricted stock grants (“RSGs”), pursuant to the BHM Individuals Plans, directly to and among certain of the Manager’s executive management team and personnel who provide other services to the Manager (collectively, the “BREH Personnel”), as equity compensation for services provided to the Manager in such capacities.

One-third of such RSGs vested on May 25, 2024, and the remainder will vest ratably on an annual basis over a two-year period from April 1, 2024.

On April 1, 2024 and on April 30, 2024, the Company issued 66,846 shares and 10,435 shares, respectively, of Class A common stock as RSGs, pursuant to the BHM Individual Plans, directly to and among certain of the BREH Personnel as an annual long-term incentive equity grant for the year ended December 31, 2023.

Such RSGs will vest ratably on an annual basis over a three-year period from their date of grant.

During the three and nine months ended September 30, 2024 and 2023, the Company recognized compensation expense for all such RSGs of approximately $ 0.2 million and $ 0.05 million, and $ 0.4 million and $ 0.06 million, respectively.

Such expense was recorded as part of general and administrative expenses in the Company’s consolidated statements of operations.

At September 30, 2024, there was $ 1.4 million of total unrecognized compensation expense related to the unvested RSGs granted under the BHM Incentive Plans.

Restricted Stock

The Company recognizes compensation expense ratably over the vesting period for time-based RSGs.

During the three months ended March 31, 2025 and 2024, the Company recognized compensation expense for RSGs of approximately $ 0.2 million and $ 0.05 million, respectively.

Such expense was recorded as part of general and administrative expenses in the Company’s consolidated statements of operations and comprehensive income.

At March 31, 2025, there was $ 0.9 million of total unrecognized compensation expense related to the unvested RSGs granted under the BHM Incentive Plans.

The remaining expense is expected to be recognized over a period of 2.0 years.

3 unchanged sentences

Paid / Payable Date

Class A common stock Special Dividend

December 19, 2023

Class A common stock

March 11, 2025

March 25, 2025

April 4, 2025

March 11, 2025

June 25, 2025

March 11, 2025

September 25, 2025

October 3, 2025

March 11, 2025

December 24, 2025

January 5, 2026

Class C common stock Special Dividend

December 19, 2023

Class C common stock

March 11, 2025

March 25, 2025

April 4, 2025

March 11, 2025

June 25, 2025

March 11, 2025

September 25, 2025

October 3, 2025

March 11, 2025

December 24, 2025

13 unchanged sentences

April 4, 2025

April 12, 2024

April 25, 2024

April 12, 2024

June 25, 2024

July 12, 2024

July 25, 2024

August 5, 2024

July 12, 2024

August 23, 2024

September 5, 2024

July 12, 2024

September 25, 2024

Series A Preferred Enhanced Special Dividend (2)

October 14, 2024

Series A Preferred Special Dividend (2)

November 7, 2023

Each day of December 1 - 31, 2023

December 24, 2024

January 3, 2025

January 15, 2025

Each day of January 1 - 31, 2024

January 24, 2025

February 5, 2025

January 15, 2025

Each day of February 1 - 29, 2024

February 25, 2025

March 5, 2025

January 15, 2025

Each day of March 1 - 31, 2024

April 5, 2024

March 25, 2025

April 4, 2025

Each day of April 1 - 30, 2024

Series A Preferred Enhanced Special Dividend (3)

June 25, 2024

July 12, 2024

July 25, 2024

August 5, 2024

July 12, 2024

August 23, 2024

September 5, 2024

July 12, 2024

September 25, 2024

October 4, 2024

Holders of record of newly issued Series A Preferred Stock shares that are held only a portion of the applicable monthly dividend period will receive a prorated dividend based on the actual number of days in the applicable dividend period during which each such share of Series A Preferred Stock was outstanding.

(2) Holders of record of Series A Preferred Stock shares as of the close of business on each day of the applicable month were entitled to additional contingent special daily dividends for each such day, to be aggregated and payable (if at all) on the payable date, in each case equal to the amount (if any) by which (i) the Stated Value of the Series A Preferred Stock multiplied by (a) the sum of (I) the average 10-year Daily Treasury Par Yield Curve Rate for the period from the 26 th of the prior month to the 25 th of the applicable month (as reported by the United States Department of the Treasury), plus (II) two percent, divided by (b) twelve , divided further by (c) the actual number of days in the applicable month, exceeds (ii) the quotient of (a) $ 0.125 divided by (b) the actual number of days in the applicable month.

(3) Holders of record of Series A Preferred Stock shares are entitled to an enhanced special dividend, which replaces the additional contingent special daily dividends, equal to the amount by which (i) the Stated Value of the Series A Preferred Stock multiplied by (a) the sum of (I) the average of the one -month Term SOFR for each day commencing on the 26 th of the prior month to the 25 th of the applicable month, plus (II) two percent, divided by (b) twelve , exceeds (ii) the standard monthly dividend of $ 0.125 per share of Series A Preferred Stock.

Holders of record of Series A Preferred Stock shares are entitled to an enhanced special dividend equal to the amount by which (i) the Stated Value of the Series A Preferred Stock multiplied by (a) the sum of (I) the average of the one-month Term SOFR for each day commencing on the 26 th of the prior month to the 25 th of the applicable month, plus (II) two percent, divided by (b) twelve , exceeds (ii) the standard monthly dividend of $ 0.125 per share of Series A Preferred Stock.

The enhanced special dividend will be aggregated with the standard monthly dividend so as to effect a dividend rate on the Series A Preferred Stock that is subject to a 6.5 % minimum and 8.5 % maximum annual rate.

2 unchanged sentences

Holders of restricted stock, OP Units, LTIP Units and C-LTIP Units are entitled to receive “distribution equivalents” at the same time as dividends are paid to holders of the Company’s Class A common stock.

Distributions declared and paid for the nine months ended September 30, 2024 were as follows (amounts in thousands):

Distributions declared and paid for the three months ended March 31, 2025 were as follows (amounts in thousands):

Distributions

5 unchanged sentences

Total first quarter

Second Quarter

Series A Preferred Stock (1)

Total Second Quarter

Third Quarter

Series A Preferred Stock (1)

Total Third Quarter

(1) Series A Preferred Stock amounts include the standard dividend at an annual rate of 6.0 % of the Stated Value plus any special and enhanced special dividends .

Series A Preferred Stock amounts include the standard dividend at an annual rate of 6.0 % of the Stated Value and any enhanced special dividends.

Note 14 – Commitments and Contingencies

As of September 30, 2024, the Company has contractual commitments to fund future cash obligations in certain of its loan and preferred equity investments in the aggregate of $ 7.8 million.

In addition, the Company has made a commitment to fund the total estimated project costs of $ 56.9 million for the development of Abode Wendell Falls, a 170 -unit build-to-rent development project in Wendell, North Carolina.

As of September 30, 2024, the remaining estimated project costs to complete Abode Wendell Falls is $ 50.0 million.

In connection with the Company moving its New York (Manhattan) headquarters, effective on May 31, 2024, the Company and an unaffiliated third-party landlord entered into a lease for separate corporate space (the “NY Premises Lease”) located at 919 Third Avenue, New York, New York (the “Future NY Premises”).

The NY Premises Lease will commence on the date the landlord makes the space available to the Company, which is the date that is the earlier of (i) the landlord delivering the space to the Company with substantially all agreed upon improvements completed, or (ii) the Company using the space to conduct business or begin its own alterations or improvements.

Upon the date the lease commences, the Company will record a right-of-use asset and lease liability on its consolidated balance sheets.

The Company expects the NY Premises Lease to commence in December 2024, with the Company occupying the Future NY Premises shortly thereafter.

The aggregate amount of the Company’s contractual commitments to fund future cash obligations in certain of its preferred equity investments was $ 15.1 million and $ 17.6 million at March 31, 2025 and December 31, 2024, respectively.

The Company had no contractual commitments to fund future cash obligations in any of its loan investments at March 31, 2025 or December 31, 2024.

In addition, the Company has made a commitment to fund the total estimated project costs of $ 56.9 million for the construction of Abode Wendell Falls, a 170 - unit build-to-rent development project in Wendell, North Carolina.

At March 31, 2025, the remaining estimated project costs to complete the Abode Wendell Falls development was $ 47.5 million.

The Company is subject to various legal actions and claims arising in the ordinary course of business.

Although the outcome of any legal matter cannot be predicted with certainty, management does not believe that any of these legal proceedings or matters will have a material adverse effect on the consolidated financial position or results of operations or liquidity of the Company.

Lessee – Operating Lease

In connection with the Company moving its New York (Manhattan) headquarters, effective May 2024, the Company, as lessee, and an unaffiliated third-party landlord entered into the NY Premises Lease (hereinafter, the “Lease”) for the NY Premises.

In accordance with ASC Topic 842 Leases , the Company classifies the Lease as an operating lease, and by way of practical expedient, the Company has elected to account for lease and non-lease (ex.

common area maintenance) components of the Lease as a single lease component in its consolidated statements of operations and comprehensive income.

The Company recognizes the single lease component on a straight-line basis over the term of the Lease, and expenses that are non-components of the lease, such as real estate taxes for which the Company is not a direct beneficiary of the arrangement, are expensed in the period in which the obligation for those payments are incurred.

For the three months ended March 31, 2025, the Company recorded $ 0.1 million of net rent expense related to the Lease.

Upon commencement of the Lease in November 2024, the Company recorded a right-of-use asset of $ 5.1 million and a lease liability of $ 5.0 million in its consolidated balance sheets.

The right-of-use asset is included within accounts receivable, prepaids and other assets, net, and the lease liability is included within other accrued liabilities.

In determining the right-of-use asset and lease liability, the discount rate implicit in the Lease was not readily determinable.

As such, the Company used a third-party analysis to determine that a discount rate of 7.61 % approximated the incremental borrowing rate that it would incur for a loan that was of a similar term as the Lease and with a similar form of underlying collateral.

At March 31, 2025, the remaining right-of-use asset and lease liability balances were $ 4.8 million and $ 5.1 million, respectively, and the remaining Lease term was approximately 6.3 years.

In addition, the Company incurred tenant improvement costs related to the renovation and buildout of the NY Premises which are capitalized and included within net real estate investments of the Company’s consolidated balance sheets.

Such tenant improvement costs are depreciated on a straight-line basis over the term of the Lease.

The following table summarizes the future minimum lease payments and total operating lease liability as of March 31, 2025 (amounts in thousands):

2025 (April 1 – December 31)

Total future minimum lease payments (undiscounted cash flows)

Difference between future undiscounted cash flows and discounted cash flows

Total operating lease liability

Note 15 – Segment Information

The Company owns and operates residential real estate assets that generate rental and other property-related income through the leasing of residential units to a diverse base of tenants.

The Company evaluates operating performance on an individual property investment level and based on the investments’ similar economic characteristics.

The Company’s Chief Operating Decision Makers (“CODMs”) are its Chief Executive Officer, Chief Investment Officer and Chief Financial Officer.

The CODMs’ primary financial measure for operating performance is NOI as it measures the core operations of property performance by excluding corporate level expenses and those other items not related to property operating performance.

CODMs are provided financial reports which include an income statement with property revenues, property operating expenses, and property net income.

These financial reports assist the CODMs in assessing the Company’s financial performance and in allocating resources appropriately.

The Company views its residential real estate assets as two reportable segments, consisting of (i) scattered single-family homes, and (ii) residential communities.

The CODMs do not distinguish or group operations on a geographic, tenant or other basis when assessing the financial performance of the Company’s portfolio of properties/investments.

Scattered single-family homes segment includes the acquisition, ownership, management, and renovation of scattered single-family homes, which are, generally, detached homes with no onsite property management.

Residential communities segment includes the acquisition, ownership, management, renovation, construction, and development of residential communities, which include both detached single-family home communities and attached unit communities such as apartments, townhouses, and duplexes.

Each residential community is, generally, located on a single, contiguous land parcel and has amenities including clubhouses, gyms, pools and common areas.

In addition, these residential communities typically have onsite property management.

The following table summarizes NOI by the Company’s reportable segments for the three months ended March 31, 2025 and 2024, and reconciles NOI to net loss attributable to common stockholders on the Company’s statements of operations and comprehensive income.

Prior year amounts have been reclassified to conform to the current period segment presentation (amounts in thousands):

Three Months Ended March 31,

Rental and other property revenues

Scattered single-family homes

Residential communities

Total rental and other property revenues

Property operating expenses

Scattered single-family homes

Residential communities

Total property operating expenses

Net operating income

Scattered single-family homes

Residential communities

Total net operating income

Reconciling items:

Interest income from loan investments

Property management and asset management fee expenses

General and administrative expenses

Management fees to related party

Acquisition and other transaction costs

Depreciation and amortization

Other (expense) income

Income from preferred equity investments

Recovery of (provision for) credit losses, net

Gain on sale and impairment of real estate investments, net

Loss on extinguishment of debt

Interest expense, net

Interest income

Income tax expense

Preferred stock dividends

Preferred stock accretion

Net loss attributable to noncontrolling interests

Net loss attributable to common stockholders

The following table reconciles the Company’s total rental and other property revenues for reportable segments to total revenues on the Company’s consolidated statement of operations and comprehensive income for the three months ended March 31, 2025 and 2024 (amounts in thousands):

Three Months Ended March 31,

Rental and other property revenues

Scattered single-family homes

Residential communities

Total rental and other property revenues

Interest income from loan investments

Total revenues

Asset information by reportable segment is not provided as the CODMs do not use asset values to make decisions about the allocation of resources.

Note 16 – Subsequent Events

3 unchanged sentences

Series A Preferred Stock (1)

October 14, 2024

October 25, 2024

November 5, 2024

October 14, 2024

November 25, 2024

December 5, 2024

October 14, 2024

December 24, 2024

January 3, 2025

April 15, 2025

April 25, 2025

April 15, 2025

June 25, 2025

Series A Preferred Enhanced Special Dividend

October 14, 2024

October 25, 2024

November 5, 2024

October 14, 2024

November 25, 2024

December 5, 2024

October 14, 2024

December 24, 2024

January 3, 2025

April 15, 2025

April 25, 2025

April 15, 2025

June 25, 2025

The enhanced special dividend will be aggregated with the standard monthly dividend so as to affect a dividend rate on the Series A Preferred Stock that is subject to a 6.5 % minimum and 8.5 % maximum annual rate.

Distributions Paid

The following distributions were declared and/or paid to the Company’s stockholders subsequent to September 30, 2024 (amounts in thousands):

The following distributions were declared and/or paid to the Company’s stockholders subsequent to March 31, 2025 (amounts in thousands):

Declaration Date

1 unchanged sentence

Total Distribution

Class A common stock

March 11, 2025

March 25, 2025

April 4, 2025

Class C common stock

March 11, 2025

March 25, 2025

April 4, 2025

Series A Preferred Stock (1)

July 12, 2024

September 25, 2024

October 4, 2024

January 15, 2025

March 25, 2025

April 4, 2025

March 11, 2025

March 25, 2025

April 4, 2025

LTIP / C-LTIP Units

March 11, 2025

March 25, 2025

April 4, 2025

Series A Preferred Stock (1)

October 14, 2024

October 25, 2024

November 5, 2024

April 15, 2025

April 25, 2025

Series A Preferred Stock distribution per share amounts include the standard dividend at an annual rate of 6.0 % of the Stated Value and any enhanced special dividends.

ILE Financing

On October 1, 2024, the Company, along with its unaffiliated joint venture partner, ILE, entered into a $ 23.0 million floating rate loan, with a portion of the proceeds used to fully pay off the outstanding balance of the Amended ILE Sunflower Credit Facility (refer to Note 8 for further information).

The loan bears interest at one-month Term SOFR plus 2.85 %, subject to a 6.50 % rate floor, with interest-only monthly payments during the term of the loan.

The loan matures on October 1, 2027 and can be prepaid in part or in whole through October 1, 2026 subject to a prepayment penalty;

after such date, the loan can be prepaid without penalty.

KeyBank Credit Facility

On October 25, 2024, the Company, through a subsidiary of its Operating Partnership, entered into a credit agreement with KeyBank National Association (the “KeyBank Credit Facility”).

The KeyBank Credit Facility provides for a revolving loan with a maximum commitment amount of $ 50.0 million.

The Company pays a fee on the unused portion of the KeyBank Credit Facility at an annual rate of 0.30 %.

The KeyBank Credit Facility matures on October 25, 2026;

Borrowings can be prepaid, in whole or in part, without premium or penalty.

Acquisition of Amira at Westly

On October 31, 2024, the Company, through BR Amira DST, a Delaware statutory trust and a wholly owned subsidiary of its Operating Partnership (the “Amira DST”), acquired a 408 -unit single-family residential community located in Tampa, Florida known as Amira at Westly.

The purchase price of $ 103.0 million was funded with (i) a $ 56.7 million senior loan secured by Amira at Westly, (ii) borrowings of $ 36.0 million on the KeyBank Credit Facility, and (iii) cash of $ 14.5 million funded by the Company, inclusive of certain adjustments typical in such real estate transactions.

Amira at Westly is the first property acquired by the Company through a Delaware statutory trust to be part of a private placement offering through which interests in the Amira DST will be issued to third party accredited investors therein (as further described below).

Following the acquisition of Amira at Westly, the organizational structure with respect to the ownership of Amira at Westly is such that Amira at Westly is owned by the Amira DST, and the Amira DST is wholly owned by BHM Amira Investment Co, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Operating Partnership (“BHM Amira Investment Co”).

BHM Amira Investment Co initially owns all Class 2 DST Interests in the Amira DST, which will be redeemed over time to permit the issuance of Class 1 DST Interests in the Amira DST to third party accredited investors therein as part of a private placement offering.

Amira at Westly is subject to a Master Lease Agreement with BHM Amira Leaseco, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Operating Partnership (“BHM Amira Leaseco”), pursuant to which the Company, through BHM Amira Leaseco, receives and is obligated to pay rent received from Amira at Westly to the Amira DST.

Deutsche Bank Loan Amendment

On April 4, 2025, the Company entered into an amended and restated loan agreement with Deutsche Bank, in which the terms of the loan agreement were amended to convert the prior Amended DB Credit Facility (refer to Note 8 for further information) into a senior loan (the “DB Loan”).

As part of the terms, the Company made a $ 25 million paydown, reducing the outstanding balance of the DB Loan from $ 85 million to $ 60 million.

The amendment to the DB Loan included removing the revolving borrowing option of the loan, extending the maturity date to October 4, 2027, adjusting the interest rate on the outstanding balance to Term SOFR plus 2.95 %, and changes in certain financial and operating covenants.

Sale of Indigo Cove and Wayford at Pringle Interests

On Aprill 11, 2025, the Company’s AFS debt security investments in Indigo Cove and Wayford at Pringle were sold to a joint venture, with such joint venture including an affiliate of the Manager, for an aggregate amount of $ 13.4 million.

The Company received its outstanding principal investments in Indigo Cove and Wayford at Pringle of $ 3.8 million and $ 7.8 million, respectively, plus accrued interest from both investments in the aggregate amount of $ 1.8 million, net of any reimbursements per the terms of the agreement.

Sale of The Cottages at Myrtle Beach Interests

On April 23, 2025, The Cottages at Myrtle Beach, the underlying asset of a joint venture in which the Company had a preferred equity interest located in Myrtle Beach, South Carolina, was sold.

Upon the sale, the Company’s preferred equity investment was redeemed by the joint venture for $ 28.1 million, which included its original preferred investment of $ 17.9 million, and accrued preferred return and outstanding amounts of $ 10.2 million.

Interest in Marble Capital Income and Impact Fund, LP

On April 25, 2025, the Company closed on the acquisition of a limited partnership interest in Marble Capital Income and Impact Fund, LP (the “Marble Fund”) for a purchase price of $ 25.0 million.

The Marble Fund owns a diversified portfolio of multifamily assets and build-to-rent multifamily investments located in the United States.

Acquisition of Southern Pines Reserve

On April 28, 2025, the Company, through a Delaware statutory trust (the “Southern Pines DST”), acquired a 272 -unit residential community located in Aberdeen, North Carolina known as Southern Pines Reserve, aka Hawthorne.

The purchase price of $ 56.6 million was funded with (i) a $ 30.7 million senior loan secured by Southern Pines Reserve, (ii) borrowings of $ 20.0 million on the KeyBank Credit Facility, and (iii) cash of $ 8.9 million funded by the Company, inclusive of certain adjustments typical in such real estate transactions.

Southern Pines Reserve is the second property acquired by the Company through a Delaware statutory trust to be part of a private placement offering through which interests in the Southern Pines DST will be issued to third party accredited investors therein;

refer to Note 7 for further information on the Company’s DST Program.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements