What changed in this filing

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Item 1. Financial Statements

2022-08-08 compared with 2022-05-10 · 208 added, 119 removed, 350 unchanged (48% of the section changed)

4 unchanged sentences

(Amounts in thousands, except per share data)

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

(unaudited) (audited)

32 unchanged sentences

(Amounts in thousands, except shares and per share data)

Three Months Ended March 31,

Three Months Ended

June 30, Six Months Ended

2022 2021 2022 2021

Rental and other revenue from real estate properties $ 14,683 $ 6,958 $ 26,113 $ 14,053

1 unchanged sentence

Total revenues 14,685 6,961 26,119 14,060

Real estate operating expenses - including $ 11 and $ 7 to related parties

Real estate operating expenses - including $ 8 and $ 7 to related parties for the three months ended and $ 19 and $ 14 for the six months ended

6,348 3,166 11,101 6,283

Interest expense 2,912 1,609 4,933 3,269

General and administrative - including $ 246 and $ 172 to related parties

General and administrative - including $ 185 and $ 179 to related parties for the three months ended and $ 431 and $ 351 for the six months ended

3,533 3,154 7,166 6,268

Impairment charge — 520 — 520

Depreciation and amortization 5,010 1,416 8,616 2,953

1 unchanged sentence

Total revenues less total expenses ( 3,118 ) ( 2,904 ) ( 5,697 ) ( 5,233 )

Equity in earnings (loss) of unconsolidated joint ventures 1,230 ( 1,345 )

Equity in (loss) earnings of unconsolidated joint ventures ( 50 ) ( 492 ) 1,180 ( 1,837 )

Equity in earnings from sale of unconsolidated joint ventures properties 40,098 — 53,059 —

Gain on sale of real estate — 7,279 6 7,279

Income (loss) from continuing operations 11,618 ( 3,674 )

Gain on sale of partnership interest — 2,244 — 2,244

Loss on extinguishment of debt ( 563 ) — ( 563 ) —

Income from continuing operations 36,367 6,127 47,985 2,453

Income tax provision 724 67 798 124

Net income (loss) from continuing operations, net of taxes 11,544 ( 3,731 )

Net income from continuing operations, net of taxes 35,643 6,060 47,187 2,329

Net income attributable to non-controlling interest ( 36 ) ( 33 ) ( 72 ) ( 67 )

Net income (loss) attributable to common stockholders $ 11,508 $ ( 3,765 )

Net income attributable to common stockholders $ 35,607 $ 6,027 $ 47,115 $ 2,262

Weighted average number of shares of common stock outstanding:

2 unchanged sentences

Per share amounts attributable to common stockholders:

Basic and Diluted $ 0.62 $ ( 0.22 )

Basic $ 1.91 $ 0.34 $ 2.54 $ 0.13

Diluted $ 1.91 $ 0.34 $ 2.53 $ 0.13

See accompanying notes to consolidated financial statements.

1 unchanged sentence

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Dollars in thousands)

Three Months Ended

Net income (loss) $ 11,544 $ ( 3,731 )

June 30, Six Months Ended

2022 2021 2022 2021

Net income $ 35,643 $ 6,060 $ 47,187 $ 2,329

Other comprehensive income :

Unrealized income on derivative instruments — 5

Unrealized gain on derivative instruments — 5 — 10

Other comprehensive income — 5 — 10

Comprehensive income (loss) 11,544 ( 3,726 )

Comprehensive income 35,643 6,065 47,187 2,339

Comprehensive (income) attributable to non-controlling interests ( 36 ) ( 34 ) ( 72 ) ( 69 )

Comprehensive income (loss) attributable to common stockholders $ 11,508 $ ( 3,761 )

Comprehensive income attributable to common stockholders $ 35,607 $ 6,031 $ 47,115 $ 2,270

See accompanying notes to consolidated financial statements.

5 unchanged sentences

Paid-In Capital Accumulated

Other Comprehensive (Loss) income Accumulated Deficit Non- Controlling Interest Total

Other Comprehensive income Accumulated Deficit Non- Controlling Interest Total

Balances, December 31, 2021 $ 173 $ 258,161 $ — $ ( 55,378 ) $ ( 5 ) $ 202,951

5 unchanged sentences

Net income — — — 11,508 36 11,544

Other comprehensive income — — — — — —

Comprehensive income 11,544

Balances, March 31, 2022 $ 176 $ 262,170 $ — $ ( 48,175 ) $ 31 $ 214,202

Distributions - common stock - $ 0.25 per share

— — — ( 4,723 ) — ( 4,723 )

Compensation expense - restricted stock and restricted stock units — 1,001 — — — 1,001

Distributions to non-controlling interests — — — — ( 60 ) ( 60 )

Shares issued through equity offering program, net 2 3,085 — — — 3,087

Net income — — — 35,607 36 35,643

Comprehensive income 35,643

Balances, June 30, 2022 $ 178 $ 266,256 $ — $ ( 17,291 ) $ 7 $ 249,150

BRT APARTMENTS CORP.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in thousands, except per share data)

Common Stock Additional

Paid-In Capital Accumulated

Other Comprehensive (Loss) income Accumulated Deficit Non- Controlling Interest Total

Other Comprehensive income Accumulated Deficit Non- Controlling Interest Total

Balances, December 31, 2020 $ 164 $ 245,605 $ ( 19 ) $ ( 67,978 ) $ ( 84 ) $ 177,688

7 unchanged sentences

Balances, March 31, 2021 $ 168 $ 246,139 $ ( 15 ) $ ( 75,754 ) $ ( 49 ) $ 170,489

Distributions - common stock - $ 0.22 per share

— — — ( 4,007 ) — ( 4,007 )

Compensation expense - restricted stock and restricted stock units — 569 — — — 569

Shares issued through equity offering program, net 4 7,345 — — — 7,349

Net (loss) income — — — 6,027 33 6,060

Other comprehensive income (loss) — — 4 — 1 5

Comprehensive loss 6,065

Balances, June 30, 2021 $ 172 $ 254,053 $ ( 11 ) $ ( 73,734 ) $ ( 15 ) $ 180,465

See accompanying notes to consolidated financial statements

3 unchanged sentences

(Dollars in Thousands)

Three Months Ended March 31,

Six Months Ended June 30,

Cash flows from operating activities:

Net income (loss) $ 11,544 $ ( 3,731 )

Adjustments to reconcile net income(loss) to net cash provided by operating activities:

Net income $ 47,187 $ 2,329

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation and amortization 8,616 2,953

2 unchanged sentences

Amortization of restricted stock and restricted stock units 1,975 1,107

Equity in earnings of unconsolidated joint ventures ( 1,230 ) 1,345

Equity in (earnings) loss of unconsolidated joint ventures ( 1,180 ) 1,837

Equity in earnings of sale of real estate of unconsolidated venture ( 53,059 ) —

Impairment charge — 520

Gain on sale of real estate ( 6 ) ( 7,279 )

Gain on sale of partnership interest — ( 2,244 )

Loss on extinguishment of debt 563 —

Increases and decreases from changes in other assets and liabilities:

(Increase) decrease in other assets ( 1,071 ) 470

Increase in other assets ( 432 ) ( 443 )

Decrease in accounts payable and accrued liabilities ( 851 ) ( 2,021 )

Net cash provided by operating activities 469 152

Net cash provided by (used in) operating activities 2,779 ( 3,088 )

Cash flows from investing activities:

Improvements to real estate properties ( 1,807 ) ( 594 )

Purchase of investment in joint venture ( 8,288 ) —

Purchase of investment in joint ventures ( 42,784 ) —

Proceeds from the sale of real estate 4,385 24,133

Proceeds from the sale of partnership interest — 7,540

Distributions from unconsolidated joint ventures 74,670 8,053

2 unchanged sentences

Cash flows from financing activities:

Proceeds from mortgages payable 18,953 —

Mortgage payoffs ( 26,761 ) ( 14,260 )

Mortgage principal payments ( 821 ) ( 1,559 )

Increase in deferred financing costs ( 264 ) ( 38 )

Dividends paid ( 8,460 ) ( 7,592 )

Distributions to non-controlling interests ( 60 ) —

Proceeds from the sale of common stock 6,125 7,349

4 unchanged sentences

(Dollars in Thousands)

Three Months Ended March 31,

Net decrease in cash, cash equivalents and restricted cash:

Six Months Ended June 30,

Net increase in cash, cash equivalents and restricted cash:

22,911 13,913

4 unchanged sentences

Cash paid for income taxes $ 291 $ 194

Reclassification of property to held for sale $ — $ 16,800

Consolidation on buyout of partnership interest:

Consolidation on buyout of partnership interests:

Increase in real estate assets $ ( 159,121 )

2 unchanged sentences

Increase in deferred loan costs ( 2,272 )

Increase on accounts payable and accrued liabilities 761

Increase in accounts payable and accrued liabilities 2,646

Decrease in investment in unconsolidated joint ventures 15,178

11 unchanged sentences

Notes to Consolidated Financial Statements

March 31, 2022

June 30, 2022

Note 1 – Organization and Background

2 unchanged sentences

The Company conducts its operations to qualify as a real estate investment trust, or REIT, for federal income tax purposes.

These multi-family properties may be wholly owned by us or by unconsolidated joint ventures in which the Company contributes a significant portion of the equity.

At March 31, 2022, the Company:

(a) wholly owns eleven multi-family properties located in seven states with an aggregate of 2,864 units, and a carrying value of $ 326,350,000 ;

(b) has interests, through unconsolidated entities, in 21 multi-family properties located in eight states with an aggregate of 6,121 units with a carrying value of $ 103,917,000 and;

These multi-family properties may be wholly owned by the Company (including its consolidated subsidiaries) or by unconsolidated joint ventures in which the Company generally contributes a significant portion of the equity.

At June 30, 2022, the Company:

(a) wholly owns sixteen multi-family properties located in nine states with an aggregate of 3,848 units and a carrying value of $ 445,930,000 ;

(b) has interests, through unconsolidated entities, in 14 multi-family properties located in six states with an aggregate of 4,557 units with a carrying value of $ 76,749,000 and;

2 unchanged sentences

The Company also owns and operates various other real estate assets.

At March 31, 2022, the carrying value of the other real estate assets was $ 1,984,000 .

At June 30, 2022, the carrying value of the other real estate assets was $ 1,956,000 .

Note 2 – Basis of Preparation

The accompanying interim unaudited consolidated financial statements, reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for such interim periods.

The results of operations for the three months ended March 31, 2022 and 2021, are not necessarily indicative of the results for the full year.

The results of operations for the three and six months ended June 30, 2022 and 2021, are not necessarily indicative of the results for the full year.

The consolidated audited balance sheet as of December 31, 2021, has been derived from the audited financial statements at that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States ("GAAP").

Accordingly, these unaudited statements should be read in conjunction with the Company's audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021 filed with the Securities and Exchange Commission ("SEC").

Accordingly, these unaudited statements should be read in conjunction with the Company's audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2021 (the "Annual Report") filed with the Securities and Exchange Commission ("SEC").

The consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries.

13 unchanged sentences

Equity Distribution Agreements

On March 18, 2022, the Company entered into separate equity distribution agreements with two sales agents to sell an aggregate sales price of up to $ 40,000,000 of its common stock from time-to-time in an at-the-market offering.

Effective as of March 18, 2022, the Company terminated the equity distribution agreements dated November 26, 2019, as amended March 31, 2021.

During the three months ended March 31, 2022, the Company sold 136,279 shares for an aggregate sales price of $ 3,081,825 before commissions and fees of $ 44,079 .

During the three months ended March 31, 2021, the Company did not sell shares.

Effective as of March 18, 2022, the Company (i) terminated the equity distribution agreements dated November 26, 2019, as amended March 31, 2021 and (ii) entered into separate equity distribution agreements with two sales agents to sell an aggregate sales price of up to $ 40,000,000 of its common stock from time-to-time in an at-the-market offering.

During the three and six months ended June 30, 2022, the Company sold 137,477 and 273,756 shares for an aggregate sales price of $ 3,127,000 and $ 6,209,000 before commissions and fees of $ 39,087 and $ 83,166 respectively.

During the three and six months ended June 30, 2021, the Company sold 410,221 shares for an aggregate sales price of $ 7,462,000 before commissions and fees of $ 112,000 , respectively.

Common Stock Dividend Distribution

The Company declared a quarterly cash distribution of $ 0.23 per share, payable on April 7, 2022 to stockholders of record on March 24, 2022.

The Company declared a quarterly cash distribution of $ 0.25 per share, payable on July 8, 2022 to stockholders of record on June 30, 2022.

Dividend Reinvestment Plan

The Dividend Reinvestment Plan (the “DRP”), among other things, provides stockholders with the opportunity to reinvest all or a portion of their cash dividends paid on the Company’s common stock in additional shares of its common stock, at a discount, determined in the Company’s sole discretion, of up to 5 % from the market price for the common stock (as such price is calculated pursuant to the DRP).

The discount from the market price is currently 3 %.

The DRP is effective with the dividend paid on July 8, 2022.

Stock Based Compensation

The Company's 2020 Incentive Plan (the "2020 Plan") permits the Company to grant:

During the six months ended June 30, 2022, the Company's board of directors adopted, and the stockholders' approved, the 2022 Incentive Plan (the "2022 Plan").

This plan permits the Company to grant:

(i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, for up to a maximum of 1,000,000 shares;

and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards.

As of March 31, 2022, 314,128 shares are available for issuance pursuant to awards under the 2020 Plan.

As of June 30, 2022, 787,531 shares are available for issuance pursuant to awards under the 2022 Plan.

Awards to acquire 934,092 shares of common stock are outstanding under the 2020 Incentive Plan and the 2018 Incentive Plan (collectively the "Prior Plans") and no further awards may be made pursuant to the Prior Plans.

Restricted Stock Units

In June 2021, the Company issued restricted stock units (the "RSUs") to acquire up to 210,375 shares of common stock pursuant to the 2020 Plan.

The RSUs entitled the recipients, subject to continued service through the applicable vesting date ( i.e., March 31, 2024) to receive (i) the underlying shares if and to the extent certain performance and/or market conditions are satisfied at the vesting date, and (ii) an amount equal to the cash dividends that would have been paid from the grant date through the vesting date with respect to the shares of common stock underlying the RSUs if, when, and to the extent, the related RSUs vest.

In June 2022 and 2021, the Company issued restricted stock units (the "RSUs") to acquire up to 212,469 and 210,375 shares of common stock pursuant to the 2022 Plan and the 2020 Incentive Plan, respectively.

Generally, the RSUs entitle the recipients, subject to continued service through the three year vesting period to receive (i) the underlying shares if and to the extent certain performance and/or market conditions are satisfied at the vesting date, and (ii) an amount equal to the cash dividends that would have been paid from the grant date through the vesting date with respect to the shares of common stock underlying the RSUs if, when, and to the extent, the related RSUs vest.

The shares underlying the RSUs are not participating securities but are contingently issuable shares.

Expense is recognized over the applicable vesting period on the RSUs which the Company expects to vest.

For the three months ended March 31, 2022 and 2021, the Company recorded $ 250,000 and $ 37,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the RSUs.

At March 31, 2022 and December 31, 2021, $ 1,997,000 and $ 2,248,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting period.

For the three months ended June 30, 2022 and 2021, the Company recorded $ 250,000 and $ 34,000 , respectively, and for the six months ended June 30, 2022 and 2021, the Company recorded $ 500,000 and $ 71,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the RSUs issued under the 2020 Incentive Plan.

At June 30, 2022 and December 31, 2021, $ 1,747,000 and $ 2,248,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting periods.

Restricted Stock

In January 2022, the Company granted 158,973 shares, of restricted stock pursuant to the 2020 Plan.

As of March 31, 2022 , an aggregate of 934,342 shares of unvested restricted stock are outstanding pursuant to the 2020 Incentive Plan and the 2018 Incentive Plan (the "2018 Plan").

No additional awards may be granted under the 2018 Plan.

As of June 30, 2022 , an aggregate of 934,092 shares of unvested restricted stock are outstanding pursuant to the 2020 Incentive Plan and the 2018 Incentive Plan (the "2018 Plan").

The shares of restricted stock vest five years from the date of grant and under specified circumstances, including a change in control, may vest earlier.

For financial statement purposes, the restricted stock is not included in the outstanding shares shown on the consolidated balance sheets until they vest, but is included in the earnings per share computation.

For the three months ended March 31, 2022 and 2021, the Company recorded $ 724,000 and $ 501,000 respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards.

At March 31, 2022 and December 31, 2021 , $ 9,986,000 and $ 7,332,000 , respectively, has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards.

For the three months ended June 30, 2022 and 2021, the Company recorded $ 751,000 and $ 535,000 respectively, and for the six months ended June 30, 2022 and 2021, respectively, the Company recorded $ 1,475,000 and $ 1,036,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards.

At June 30, 2022 and December 31, 2021 , $ 9,231,000 and $ 7,332,000 , respectively, has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards.

The weighted average remaining vesting period of these shares of restricted stock is 2.8 years.

Stock Buyback

On September 13, 2021, the Board of Directors approved a new stock repurchase plan authorizing the Company, effective as of October 1, 2021, to repurchase up to $ 5,000,000 of shares of common stock through December 31, 2023.

During the three months ended March 31, 2022, the Company did no t repurchase any shares of common stock.

On September 13, 2021, the Board of Directors approved a stock repurchase plan authorizing the Company, effective as of October 1, 2021, to repurchase up to $ 5,000,000 of shares of common stock through December 31, 2023.

During the three and six months ended June 30, 2022, and June 30, 2021, the Company did no t repurchase any shares of common stock.

Per Share Data

7 unchanged sentences

The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Numerator for basic and diluted earnings per share:

Net Income (loss) $ 11,544 $ ( 3,731 )

Net Income $ 35,643 $ 6,060 $ 47,187 $ 2,329

Deduct net income attributable to non-controlling interests ( 36 ) ( 33 ) ( 72 ) ( 67 )

Deduct (earnings) loss allocated to unvested restricted stock ( 574 ) 163

Net income (loss) available for common stockholders:

Deduct earnings allocated to unvested restricted stock ( 1,787 ) ( 295 ) ( 2,354 ) ( 371 )

Net income available for common stockholders:

basic and diluted $ 33,820 $ 5,732 $ 44,761 $ 1,891

5 unchanged sentences

Weighted average number of shares 17,726,343 17,720,488 17,690,601 17,520,963

Earnings (loss) per common share, basic $ 0.62 $ ( 0.22 )

Earnings (loss) per common share, diluted $ 0.62 $ ( 0.22 )

______________________

(1) E xcludes the shares underlying RSU's as their effect would have been anti-dilutive.

Earnings per common share, basic $ 1.91 $ 0.34 $ 2.54 $ 0.13

Earnings per common share, diluted $ 1.91 $ 0.34 $ 2.53 $ 0.13

Note 4 - Leases

6 unchanged sentences

The ground lease expires September 30, 2024 and provides for one 21-year renewal option.

As of March 31, 2022, the remaining lease term, including the renewal option deemed exercised, is 23.5 years.

As of June 30, 2022, the remaining lease term, including the renewal option deemed exercised, is 23.3 years.

The Company is a lessee under a corporate office lease in Great Neck, New York, which is classified as an operating lease.

The lease expires on December 31, 2031 and provides a five-year renewal option.

As of March 31, 2022, the remaining lease term, including renewal options deemed exercised, is 14.8 years.

As of March 31, 2022, the Company's Right of Use ("ROU") assets and lease liabilities were $ 2,518,000 and $ 2,589,000 , respectively.

As of June 30, 2022, the remaining lease term, including renewal options deemed exercised, is 14.5 years.

As of June 30, 2022, the Company's Right of Use ("ROU") assets and lease liabilities were $ 2,469,000 and $ 2,550,000 , respectively.

As of December 31, 2021, the Company's ROU assets and lease liabilities were $ 2,568,000 and $ 2,629,000 , respectively.

6 unchanged sentences

Real estate properties, excluding real estate held for sale, consists of the following (dollars in thousands):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Land $ 57,138 $ 38,822

6 unchanged sentences

December 31, 2021

Balance Additions Capitalized Costs and Improvements Depreciation Sale of Property March 31, 2022

Balance Partner Buyouts Improvements Depreciation Sale of Property June 30, 2022

Multi-family $ 291,538 $ 159,121 $ 1,807 $ ( 6,537 ) $ — $ 445,929

Land - Daytona, FL 4,379 — — — ( 4,379 ) —

Retail shopping center and other 2,012 — — ( 55 ) — 1,957

Total real estate properties $ 293,550 $ 159,121 $ 1,807 $ ( 6,592 ) $ — $ 447,886

Property Acquisition

On March 23, 2022, the Company completed the purchase of its partners' remaining 28.1 % interest in Verandas at Alamo, San Antonio, TX, for a purchase price of $ 8,721,000 .

As a result of this purchase, this property is wholly-owned and effective March 23, 2022, is included in the Company's consolidated results of operations and accounts, including mortgage debt (see note 9 - "Debt Obligations").

The Company determined that the gross assets purchased in this acquisition are concentrated in a single identifiable asset.

Therefore, the transaction does not meet the definition of a business and is accounted for as an asset acquisition.

The Company assessed the fair value of the tangible assets of the property as of the acquisition date using the cost accumulation and income approach which utilized a market capitalization rate of 4.5 % which is a Level 3 unobservable input in the fair value hierarchy.

Partner Buyouts

In the six months ended June 30, 2022, the Company completed the purchase of its partners' remaining interests in the unconsolidated joint ventures that own the properties identified below.

As a result of these purchases, these properties (including the related mortgage debt - see note 9 - "Debt Obligations") are wholly-owned and effective as of the closing of such purchase, are included in the Company's consolidated balance sheet and results of operations (dollars in thousands):

Buyout Date Property Name Location Units Remaining Interest Purchased Purchase Price (1)

03/23/2022 Verandas at Alamo San Antonio, TX 288 28.1 % $ 8,721

04/07/2022 Vanguard Heights Creve Coeur, MO 174 21.6 % 4,880

05/11/2022 Jackson Square Tallahassee, FL 242 20 % 7,215

05/24/2022 Brixworth at Bridge Street Huntsville, AL 208 20 % 10,697

05/26/2022 Woodland Apartments Boerne, TX 120 20 % 3,881

06/30/2022 Grove at River Place Macon, GA 240 20 % 7,485

Total 1,272 $ 42,879

__________________

(1) The purchase price gives effect to the purchase of the "promote interest" (as more fully described in the Annual Report) of the Company's joint venture partners and does not include closing costs of $ 1,313 and operating cash acquired from the ventures of $1,408.

Subsequent to the quarter ended June 30, 2022, the Company completed the purchase of its partners' remaining interests in five unconsolidated joint ventures that own the properties identified below:

Buyout Date Property Name Location Units Remaining Interest Purchased Book Value of Property at 6/30/2022 Purchase Price (1)

07/12/2022 Civic I Southaven, MS 392 25 % $ 30,865 $ 18,233

07/12/2022 Civic II Southaven, MS 384 25 % 32,912 17,942

07/14/2022 Abbotts Wilmington, NC 264 20 % 37,346 9,010

07/19/2022 Somerset at Trussville Trussville, AL 328 20 % 40,514 10,558

08/03/2022 Magnolia Pointe Madison, AL 204 20 % 18,533 7,246

Total 1,572 $ 160,170 $ 62,989

____________________

The Company determined that the gross assets purchased in each of these 11 acquisitions is concentrated in a single identifiable asset.

Therefore, the transactions do not meet the definition of a business and are accounted for as asset acquisitions.

The Company assessed the fair value of the tangible assets of the properties as of the acquisition date using the cost accumulation and income approach which utilized market capitalization rates between 4.0 % and 4.5 %, which are Level 3 unobservable inputs in the fair value hierarchy.

The following table summarizes the allocation of the book value based on the proportionate share of the estimated fair value of the property on the acquisition date (dollars in thousands):

Purchase Price Allocation

Verandas at Alamo Vanguard Heights Jackson Square Brixworth at Bridge Street The Woodland Apts Grove at River Place Total Purchase Price Allocation

Land $ 3,336 $ 5,466 $ 3,398 $ 1,959 $ 1,289 $ 2,866 $ 18,314

Building and improvements 33,465 30,826 27,167 20,080 12,853 16,416 140,807

13 unchanged sentences

When the Company does not expect to recover its carrying value on unconsolidated joint ventures that are under contract for sale, the Company, when it is determined that the sale is probable, reduces its carrying value to its fair value.

For the three months ended March 31, 2022 and 2021, the Company did not record any impairment charges.

For the three and six months ended June 30, 2022, The Company did no t record any impairment charges.

In the three and six months ended June 30, 2021, the Company recorded an impairment charge of $ 520,000 related to its investment in the OPOP Towers and Loft properties, St Louis, MO, as the carrying value exceeded the fair value by that amount.

The fair value was based upon the contractual price of the sale agreement which closed on

Note 7 - Restricted Cash

2 unchanged sentences

Note 8 – Investment in Unconsolidated Ventures

At March 31, 2022 and December 31, 2021, the Company held interests in unconsolidated joint ventures that own 21 and 23 multi-family properties (the "Unconsolidated Properties"), respectively.

At June 30, 2022 and December 31, 2021, the Company held interests in unconsolidated joint ventures that own 14 and 23 multi-family properties (the "Unconsolidated Properties"), respectively.

The condensed balance sheets below present information regarding such properties (dollars in thousands):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Real estate properties, net of accumulated depreciation of $ 91,031 and $ 133,615

2 unchanged sentences

Other assets 30,147 25,535

Real estate properties held for sale 14,989 —

Total Assets $ 539,470 $ 773,523

9 unchanged sentences

At the indicated dates, real estate properties of the unconsolidated joint ventures consist of the following (dollars in thousands):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Land $ 71,545 $ 97,230

4 unchanged sentences

Total real estate properties, net $ 483,332 $ 734,247

At March 31, 2022 and December 31, 2021, the weighted average interest rate on the mortgages payable is 4.07 % and 3.97 %, respectively, and the weighted average remaining term to maturity is 7.64 years and 7.60 years , respectively.

At June 30, 2022 and December 31, 2021, the weighted average interest rate on the mortgages payable is 4.00 % and 3.97 %, respectively, and the weighted average remaining term to maturity is 6.3 years and 7.6 years, respectively.

The condensed income statement below presents information regarding the Unconsolidated Properties (dollars in thousands):

Three Months Ended

Three Months Ended June 30, Six Months Ended June 30,

2022 2021 2022 2021

Rental and other revenue $ 22,107 $ 33,005 $ 47,338 $ 65,677

12 unchanged sentences

Net income (loss) from joint ventures $ 77,031 $ ( 486 ) $ 102,623 $ ( 2,415 )

BRT's equity in earnings (loss) and equity in earnings from sale of unconsolidated joint venture properties $ 14,191 $ ( 1,345 )

BRT's equity in (loss) earnings and equity in earnings from sale of unconsolidated joint venture properties $ 40,048 $ ( 492 ) $ 54,239 $ ( 1,837 )

Joint Venture Sales

2 unchanged sentences

In connection with the sale, mortgage debt of $ 25,100,000 with 1.2 years of remaining term to maturity and bearing an interest rate of 3.61 % was repaid.

Subsequent to March 31, 2022, the unconsolidated joint ventures in which the Company has a (i) 75 % equity interest entered into a contract dated as of April 16, 2022 to sell Retreat at Cinco Ranch, a 268 -unit multi family property in San Antonio, TX for $ 68,500,000 and (ii) 65 % equity interest entered into a contract dated as of May 3, 2022 to sell The Vive, a 312 -unit multi-family property in Kannapolis, NC for $ 92,000,000 .

The completion of these two sales are subject to the satisfaction of customary closing conditions and are not contingent upon the closing of one-another;

it is anticipated that such sales will be completed during the quarter ending June 30, 2022.

Joint Venture Acquisitions

On June 14, 2022, the unconsolidated joint ventures in which the Company had a 75 % equity interest sold Retreat at Cinco Ranch, a 268 -unit multi family property in San Antonio, TX for $ 68,300,000 .

The gain on the sale of this property was $ 30,595,000 and BRT's share of the gain was $ 17,378,000 .

In connection with the sale, mortgage debt of $ 30,096,000 with 3.6 years of remaining term to maturity and bearing an interest rate of 4.44 % was repaid and the joint venture incurred $ 1,257,000 from the loss on the extinguishment of debt, of which BRT's share was $ 686,000 .

On June 30, 2022, the unconsolidated joint venture in which the Company had a 65 % equity interest sold The Vive, a 312 -unit multi-family property in Kannapolis, NC for $ 91,250,000 .

The gain on the sale of this property was $ 47,086,000 and BRT's share of the gain was $ 22,720,000 .

In connection with the sale, mortgage debt of $ 31,420,000 with 29.7 years of remaining term to maturity and bearing an interest rate of 3.52 % was repaid and the joint venture incurred $ 1,631,000 from the loss on extinguishment of debt, of which BRT's share was $ 787,000 .

Acquisition of Interest in Joint Venture

On March 10, 2022, the Company purchased a 17.45 % interest in a planned 240 -unit development property, Stono Oaks, located in Johns Island, SC.

The purchase price for the interest, was $ 3,500,000 , which includes $ 2,122,000 held in escrow at March 31, 2022.

The purchase price for the interest, was $ 3,500,000 , which includes $ 455,000 held in escrow at June 30, 2022.

Joint Venture Buyouts

On March 23, 2022, the Company completed its acquisition of the remaining 28.1 % interest owned by its joint venture partner in the entity that owns Verandas at Alamo, a 288 -unit multi-family property located in San Antonio, TX.

The purchase price for the interest was $ 8,721,000 .

As a result of this purchase, Verandas at Alamo, effective as of the purchase date, is wholly-owned, and its operations and accounts are consolidated, including mortgage debt (see note 9 - "Debt Obligations").

Subsequent to March 31, 2022, the Company completed its acquisition of the remaining 21.6 % interest owned by its joint venture partner in the entity that owns Vanguard Heights, a 174 -unit multi-family property located in Creve Coeur, MO.

The purchase price for the interest was $ 4,800,000 .

As a result of this purchase, Vanguard Heights, effective as of the purchase

date, is wholly-owned and its operations and accounts will be consolidated, including mortgage debt in principal amount of $ 29,700,000 with an interest rate of 4.41 % (interest only until July 2025) and maturing in July 2031.

The Company completed the partner buyout transactions in the unconsolidated joint ventures that own the properties identified in note 5 - Real Estate Properties - Partner Buyouts.

As a result of these purchases, these properties (including the

related mortgage debt - see note 9 - "Debt Obligations) are wholly-owned effective as of the closing of each purchase, and are included in the Company's consolidated balance sheet and results of operations as of the applicable date.

Note 9 – Debt Obligations

Debt obligations consist of the following (dollars in thousands):

March 31, 2022 December 31, 2021

June 30, 2022 December 31, 2021

Mortgages payable $ 299,837 $ 200,857

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Mortgages Payable

At March 31, 2022, the weighted average interest rate on the Company's mortgage payables was 3.73 % and the weighted average remaining term to maturity is 10.2 years.

For the three months ended March 31, 2022 and 2021, interest expense, which includes amortization of deferred financing costs, was $ 1,763,000 and $ 1,430,000 , respectively.

During the three months ended March 31, 2022, the Company paid off mortgage debt of $ 14,558,000 on a property.

On March 23, 2022, as a result of the purchase of its partners' remaining interests in Verandas at Alamo - San Antonio, TX, mortgage debt in principal amount of $ 27,000,000 with a fixed rate ( i.e.

, 3.64 % and interest only until October 2024 and a maturity of December 2029) will be included on the Company's consolidated balance sheet.

On April 7, 2022, as a result of the purchase of its partners' remaining interests in Vanguard Heights - Creve Coeur, MO, mortgage debt in principal amount of $ 29,700,000 with a fixed rate ( i.e.

, 4.41 % and interest only for until July 2025 and a maturity of July 2031) will be included on the Company's consolidated balance sheet.

At June 30, 2022, the weighted average interest rate on the Company's mortgages payable was 3.91 % and the weighted average remaining term to maturity is 9.2 years.

For the three months ended June 30, 2022 and 2021, interest expense, which includes amortization of deferred financing costs, was $ 2,563,000 and $ 1,378,000 , respectively.

For the six months ended June 30, 2022 and 2021, interest expense, which includes amortization of deferred financing costs, was $ 4,326,000 and $ 2,808,000 , respectively.

During the three and six months ended June 30, 2022, the Company paid off mortgage debt of $ 14,558,000 on a property.

Partner Buyouts

The following table summarizes the information regarding the mortgages relating to the property in which BRT purchased the remaining interests of its joint venture partners during the six months ended June 30, 2022 (dollars in thousands):

Property Name Location Debt at Purchase Date (1) Interest Rate Maturity Date Interest Only through

Verandas at Alamo San Antonio, TX $ 27,000 3.64 % Oct 2029 October 2024

Vanguard Heights Creve Coeur, MO 29,700 4.41 % July 2031 June 2025

Jackson Square Tallahassee, FL 21,524 4.19 % Sept 2027 September 2022

Brixworth at Bridge Street (2)

Huntsville, AL 11,147 4.25 % June 2032 Maturity

The Woodland Apartments Boerne, TX 7,905 4.74 % Feb 2026 N/A

Grove at River Place (3) Macon, GA 11,426 4.39 % Feb 2026 N/A

Total $ 108,702

___________________

(1) Excludes fair value adjustments of $ 945 determined as part of the purchase price allocation.

(2) The original mortgage debt of $ 11,147 was refinanced with a new ten-year mortgage debt of $ 18,592 immediately following the buyout.

(3) Includes a supplemental mortgage of $ 1,056 which was paid off immediately following the buyout.

Subsequent to June 30, 2022, the Company completed the purchase of its joint venture partners' remaining interests in five additional unconsolidated joint ventures that own the properties identified below.

The following table summarizes the information regarding the mortgages relating to each purchase (dollars in thousands):

Property Name Location Debt at Purchase Date (1) Interest Rate Maturity Date Interest Only through

Civic I Southaven, MS $ 27,429 4.24 % March 2026 N/A

Civic II Southaven, MS 30,153 3.73 % September 2026 N/A

Abbotts Wilmington, NC 23,160 4.71 % July 2030 July 2025

Somerset at Trussville Trussville, AL 32,250 4.19 % June 2029 May 2025

Magnolia Pointe Madison, AL 15,000 4.08 % January 2028 December 2022

Total $ 127,992

(1) Excludes fair value adjustments to be determined as part of the purchase price allocation.

Credit Facility

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provided that no more than $ 15,000,000 may be used for operating expenses.

(The facility provides that it may be expanded to provide for up to $ 60 million of availability if another lender(s) is willing to provide an additional $ 25 million of availability).

The facility is secured by the cash available in certain cash accounts maintained by the Company at VNB, matures November 2024 and bears an adjustable interest rate of 25 basis points over the prime rate, with a floor of 3.5 %.

The interest rate in effect as of March 31, 2022 is 3.75 %.

The interest rate in effect as of June 30, 2022 is 5.00 %.

There is an unused facility fee of 0.25 % per annum on the total amount committed by Valley National Bank and unused by the Company.

At March 31, 2022, the Company is in compliance with all material respects with its obligations under the facility.

At March 31, 2022 and December 31, 2021, there was no outstanding balance on the facility and $ 35,000,000 was available to be borrowed in both periods.

Interest expense for the three months ended March 31, 2022 and 2021, which includes amortization of deferred financing costs and unused fees, was $ 45,000 and $ 17,000 , respectively.

Deferred financing costs of $ 247,000 and $ 270,000 , are recorded in other assets on the Consolidated balance sheets at March 31, 2022 and December 31, 2021, respectively.

At June 30, 2022, the Company is in compliance in all material respects with its obligations under the facility.

At June 30, 2022 and December 31, 2021, there was no outstanding balance on the facility and $ 35,000,000 was available to be borrowed in both periods.

At August 5, 2022, there was an outstanding balance of $ 22,000,000 on the facility bearing an interest rate of 5.75 % and $ 13,000,000 available to be borrowed.

Interest expense for the three months ended June 30, 2022 and 2021, which includes amortization of deferred financing costs and unused fees, was $ 62,000 and $ 19,000 , respectively.

Interest expense for the six months ended June 30, 2022 and 2021, which includes amortization of deferred financing costs and unused fees, was $ 107,000 and $ 36,000 , respectively.

Deferred financing costs of $ 223,000 and $ 270,000 , are recorded in other assets on the Consolidated balance sheets at June 30, 2022 and December 31, 2021, respectively.

Junior Subordinated Notes

At March 31, 2022 and December 31, 2021, the outstanding principal balance of the Company's junior subordinated notes was $ 37,400,000 , before deferred financing costs of $ 292,000 and $ 297,000 , respectively.

At June 30, 2022 and December 31, 2021, the outstanding principal balance of the Company's junior subordinated notes was $ 37,400,000 , before deferred financing costs of $ 287,000 and $ 297,000 , respectively.

The interest rate on the outstanding balance resets quarterly and is based on three months LIBOR + 2.00 %.

The rate in effect at March 31, 2022 and 2021 was 2.30 % and 2.21 %, respectively.

The rate in effect at June 30, 2022 and 2021 was 3.29 % and 2.21 %, respectively.

The notes mature April 30, 2036.

The interest rate that will be in effect for the three months ending October 30, 2022 is 4.78 %

The junior subordinated notes require interest only payments through the maturity date of April 30, 2036, at which time repayment of the outstanding principal and unpaid interest become due.

Interest expense for the three months ended March 31, 2022 and 2021, which includes amortization of deferred financing costs, was $ 212,000 and $ 214,000 , respectively.

Interest expense for the three months ended June 30, 2022 and 2021, which includes amortization of deferred financing costs, was $ 286,000 and $ 212,000 , respectively.

Interest expense for the six months ended June 30, 2022 and 2021, which includes amortization of deferred financing costs, was $ 498,000 and $ 426,000 , respectively.

Note 10 – Related Party Transactions

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Gould, a director, among other things, to participate in the Company's multi-family property analysis and approval process (which includes service on an investment committee), provide investment advice, and provide long-term planning and consulting with executives and employees with respect to other business matters, as required.

The aggregate fees incurred for these services in each of the three months ended March 31, 2022 and 2021 were $ 367,000 and $ 350,000 , respectively.

The aggregate fees incurred for these services in each of the three months ended

June 30, 2022 and 2021 were $ 367,000 and $ 349,000 , respectively, and $ 734,000 and $ 699,000 for the six months ended June 30, 2022 and 2021, respectively.

Management of certain properties owned by the Company and certain joint venture properties is provided by Majestic Property Management, Corp.

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Majestic Property may also provide real estate brokerage and construction supervision services to these properties.

These fees amounted to $ 11,000 and $ 7,000 for the three months ended March 31, 2022 and 2021, respectively.

These fees amounted to $ 8,000 and $ 7,000 for the three months ended June 30, 2022 and 2021 , respectively, and $ 19,000 and $ 14,000 for the six months ended June 30, 2022 and 2021, respectively.

Pursuant to a shared services agreement between the Company and several affiliated entities, including Gould Investors

("Gould Investors"), the owner and operator of a diversified portfolio of real estate and other assets, and One Liberty Properties, Inc., a NYSE listed equity REIT, the (i) services of the part- time personnel that perform certain executive, administrative, legal, accounting and clerical functions and (ii) certain facilities and other resources, are provided to the Company.

("Gould Investors"), the owner and operator of a diversified portfolio of real estate and other assets, and One Liberty Properties, Inc., a NYSE listed equity REIT, (i) the services of the part- time personnel that perform certain executive, administrative, legal, accounting and clerical functions and (ii) certain facilities and other resources, are provided to the Company.

The allocation of expenses for the facilities, personnel and other resources shared by, among others, the Company and Gould Investors, is computed in accordance with such agreement and is included in general and administrative expense on the consolidated statements of operations.

During the three months ended March 31, 2022 and 2021, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated $ 246,000 and $ 172,000 , respectively.

During the three months ended June 30, 2022 and 2021, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated $ 185,000 and $ 179,000 , respectively, and $ 431,000 and $ 351,000 for the six months ended June 30, 2022 and 2021, respectively.

Gould and Matthew J.

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Junior subordinated notes:

At March 31, 2022 and December 31, 2021, the estimated fair value of the notes is lower than their carrying value by approximately $ 8,150,000 and $ 8,296,000 , respectively, based on a market interest rate of 4.30 % and 4.21 %, respectively.

At June 30, 2022 and December 31, 2021, the estimated fair value of the notes is lower than their carrying value by approximately $ 7,206,000 and $ 8,296,000 , respectively, based on a market interest rate of 5.97 % and 4.21 %, respectively.

Mortgages payable:

At March 31, 2022, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately $ 36,739,000 , assuming market interest rates between 3.92 % and 4.67 %.

At June 30, 2022, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately $ 21,481,000 , assuming market interest rates between 4.27 % and 5.32 %.

At December 31, 2021, the estimated fair value of the Company's mortgages payable was greater than their carrying value by approximately $ 511,000 , assuming market interest rates between 3.12 % and 3.87 %.

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The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

As of March 31, 2022 and December 31, 2021, the Company did not have any outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk.

As of June 30, 2022 and December 31, 2021, the Company did not have any outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk.

The following table presents the effect of the Company’s interest rate swaps on the consolidated statements of comprehensive income (loss) for the dates indicated (dollars in thousands):

Three Months Ended March 31,

Three Months Ended June 30, Six Months Ended June 30,

Amount of (loss) gain recognized on derivative in Other Comprehensive Income $ — $ ( 27 )

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Note 14 – Subsequent Events

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of March 31, 2022, that warrant additional disclosure, have been included in the notes to the consolidated financial statements.

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of June 30, 2022, that warrant additional disclosure, have been included in the notes to the consolidated financial statements.

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