What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2022-11-09 compared with 2022-08-08 · 153 added, 117 removed, 441 unchanged (38% of the section changed)

4 unchanged sentences

(Amounts in thousands, except per share data)

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

(unaudited) (audited)

12 unchanged sentences

37,118 37,103

Credit facility, net of deferred costs of $ 551 and $ —

Accounts payable and accrued liabilities 23,862 19,607

19 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

2 unchanged sentences

Total revenues 21,697 7,714 47,816 21,774

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

Real estate operating expenses - including $ 9 and $ 8 to related parties for the three months ended and $ 28 and $ 23 for the nine months ended

9,195 3,404 20,296 9,687

Interest expense 5,061 1,535 9,994 4,804

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

General and administrative - including $ 183 and $ 172 to related parties for the three months ended and $ 614 and $ 523 for the nine months ended

3,673 3,114 10,839 9,382

3 unchanged sentences

Total revenues less total expenses ( 4,397 ) ( 2,126 ) ( 10,094 ) ( 7,359 )

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

Equity in earnings (loss) of unconsolidated joint ventures 135 ( 4,196 ) 1,315 ( 6,033 )

Equity in earnings from sale of unconsolidated joint ventures properties 11,472 34,982 64,531 34,982

1 unchanged sentence

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

Gain on insurance recoveries 62 — 62 —

Loss on extinguishment of debt — ( 902 ) ( 563 ) ( 902 )

16 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

12 unchanged sentences

Common Stock Additional

Paid-In Capital Accumulated

Other Comprehensive income Accumulated Deficit Non- Controlling Interest Total

Paid-In Capital Accumulated Deficit Non- Controlling Interest Total

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

15 unchanged sentences

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

Distributions - common stock - $ 0.25 per share

— — ( 4,720 ) — ( 4,720 )

Compensation expense - restricted stock and restricted stock units — 1,208 — — 1,208

Distributions to non-controlling interests — — — ( 59 ) ( 59 )

Shares issued through equity offering program, net 2 3,818 — — 3,820

Shares issues through DRIP — 622 — — 622

Net income — — 7,059 35 7,094

Comprehensive income 7,094

Balances, September 30, 2022 $ 180 $ 271,904 $ ( 14,952 ) $ ( 17 ) $ 257,115

BRT APARTMENTS CORP.

18 unchanged sentences

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

Net income — — — 6,027 33 6,060

Other comprehensive income — — 4 — 1 5

Comprehensive income 6,065

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

Distributions - common stock - $ 0.22 per share

— — — ( 4,233 ) — ( 4,233 )

Compensation expense - restricted stock and restricted stock units — 842 — — — 842

Shares issued through equity offering program, net 1 1,065 — — — 1,066

Net income — — — 28,106 35 28,141

Other comprehensive income — — 11 — 1 12

Comprehensive income 28,153

Balances, September 30, 2021 $ 173 $ 255,960 $ — $ ( 49,861 ) $ 21 $ 206,293

See accompanying notes to consolidated financial statements

3 unchanged sentences

(Dollars in Thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

6 unchanged sentences

Equity in (earnings) loss of unconsolidated joint ventures ( 1,315 ) 6,033

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

Equity in earnings from sale of real estate of unconsolidated

joint venture properties ( 64,531 ) ( 34,982 )

Impairment charge — 520

1 unchanged sentence

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

Gain on insurance recovery ( 62 ) —

Loss on extinguishment of debt 563 902

Increases and decreases from changes in other assets and liabilities:

Increase in other assets ( 432 ) ( 443 )

Decrease in other assets 1,820 1,868

Decrease in accounts payable and accrued liabilities ( 2,635 ) ( 2,000 )

7 unchanged sentences

Contributions to unconsolidated joint ventures ( 3,500 ) ( 6,031 )

Net cash provided by investing activities 31,420 33,101

Proceeds from insurance recoveries 62 —

Net cash (used in) provided by investing activities ( 18,990 ) 61,239

Cash flows from financing activities:

2 unchanged sentences

Mortgage principal payments ( 1,475 ) ( 2,180 )

Proceeds from credit facility 22,000 —

Repayment of credit facility ( 15,000 ) —

Increase in deferred financing costs ( 672 ) ( 38 )

2 unchanged sentences

Proceeds from the sale of common stock 9,945 8,415

Proceeds from issuance of DRP shares 622 —

Net cash used in financing activities ( 5,643 ) ( 52,545 )

3 unchanged sentences

(Dollars in Thousands)

Six Months Ended June 30,

Net increase in cash, cash equivalents and restricted cash:

Nine Months Ended September 30,

Net (decrease) increase in cash, cash equivalents and restricted cash:

( 16,184 ) 8,473

11 unchanged sentences

Decrease in investment in unconsolidated joint ventures 48,458 11,848

$ ( 105,262 ) ( 22,420 )

See accompanying notes to consolidated financial statements

4 unchanged sentences

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.

September 30,

Cash and cash equivalents $ 21,865 $ 29,598

4 unchanged sentences

Notes to Consolidated Financial Statements

June 30, 2022

September 30, 2022

Note 1 – Organization and Background

BRT Apartments Corp.

(the "Company" or "BRT"), a Maryland corporation, owns, operates and, to a lesser extent, develops multi-family properties.

(the "Company" or "BRT"), a Maryland corporation, owns, operates and, to a lesser extent, holds interest in joint ventures that own multi-family properties.

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 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;

At September 30, 2022, the Company:

(a) wholly owns 21 multi-family properties located in eleven states with an aggregate of 5,420 units and a carrying value of $ 653,716,000 ;

(b) has interests, through unconsolidated entities, in eight multi-family properties located in four states with an aggregate of 2,781 units with a carrying value of $ 40,281,000 ;

and (c) has a 17.45 % interest in a development project with a carrying value of $ 3,500,000 .

BRT's equity interests in these unconsolidated entities range from 17.45 % to 80 %.

1 unchanged sentence

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

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

At September 30, 2022, the carrying value of the other real estate assets was $ 1,929,000 .

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

The results of operations for the three and nine months ended September 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").

15 unchanged sentences

Equity Distribution Agreements

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.

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 three sales agents to sell up to $ 40,000,000 of its common stock from time-to-time in an at-the-market offering.

During the three and nine months ended September 30, 2022, the Company sold 174,059 and 447,815 shares for an aggregate sales price of $ 3,867,000 and $ 10,076,000 before commissions and fees of $ 48,000 and $ 131,166 , respectively.

During the three and nine months ended September 30, 2021, the Company sold 469,490 shares for an aggregate sales price of $ 8,542,000 before commissions and fees of $ 126,000 .

Common Stock Dividend Distribution

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.

The Company declared a quarterly cash distribution of $ 0.25 per share, payable on October 7, 2022 to stockholders of record on September 27, 2022.

Dividend Reinvestment Plan

2 unchanged sentences

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

In the three and nine months ended September 30, 2022, we issued 29,190 shares in lieu of cash dividends of $ 622,000 .

Stock Based Compensation

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").

In 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:

1 unchanged sentence

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

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

As of September 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.

1 unchanged sentence

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.

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 during the three-year vesting period 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 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.

Expense is recognized on the RSU's which the Company expects to vest over the applicable vesting period.

For the three months ended September 30, 2022 and 2021, the Company recorded $ 457,000 and $ 200,000 , respectively, and for the nine months ended September 30, 2022 and 2021, the Company recorded $ 957,000 and $ 271,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the RSUs issued under the 2020 and 2022 Incentive Plans.

At September 30, 2022 and December 31, 2021, $ 3,786,000 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 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").

As of September 30, 2022 , an aggregate of 934,092 shares of unvested restricted stock are outstanding pursuant to the Prior Plans.

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 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.

For the three months ended September 30, 2022 and 2021, the Company recorded $ 751,000 and $ 642,000 , respectively, and for the nine months ended September 30, 2022 and 2021, the Company recorded $ 2,226,000 and $ 1,678,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards.

At September 30, 2022 and December 31, 2021, $ 8,480,000 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.

1 unchanged sentence

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.

During the three and nine months ended September 30, 2022 and 2021, the Company did not repurchase any shares of common stock.

Per Share Data

4 unchanged sentences

Diluted earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock deemed to be outstanding during such period.

In calculating diluted earnings per share, the Company includes only those shares underlying the RSUs that it anticipates will vest based on management's current estimates.

In calculating diluted earnings per share, the Company includes only those shares underlying the RSUs that it anticipates will vest based on management's estimates as of the end of the most recent quarter.

The Company excludes any shares underlying the RSUs from such calculation if their effect would have been anti-dilutive.

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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

15 unchanged sentences

Lessor Accounting

The Company owns a commercial building leased to two tenants under operating leases expiring from 2024 to 2028, with tenant options to extend or terminate the leases.

The Company owns a commercial building leased to two tenants under operating leases expiring from 2024 to 2028, with tenant options to extend the leases.

Revenues from such leases are reported as rental income, net, and are comprised of (i) lease components, which includes fixed lease payments and (ii) non-lease components, which includes reimbursements of property level operating expenses.

3 unchanged sentences

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

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

As of September 30, 2022, the remaining lease term, including the renewal option deemed exercised, is 23.0 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 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 September 30, 2022, the remaining lease term, including renewal options deemed exercised, is 14.3 years.

As of September 30, 2022, the Company's Right of Use ("ROU") assets and lease liabilities were $ 2,420,000 and $ 2,510,000 , respectively.

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

5 unchanged sentences

Note 5 ‑ Real Estate Properties

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

June 30, 2022 December 31, 2021

Real estate properties, excluding real estate held for sale in December 2021, consists of the following (dollars in thousands):

September 30, 2022 December 31, 2021

Land $ 74,246 $ 38,822

6 unchanged sentences

December 31, 2021

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

Balance Partner Buyouts Improvements Depreciation September 30, 2022

Multi-family $ 291,538 $ 370,513 $ 4,151 $ ( 12,486 ) $ 653,716

2 unchanged sentences

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.

In the nine months ended September 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):

6 unchanged sentences

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 % 18,233

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

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

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

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

2 unchanged sentences

_________________

(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 $ 2,191 and operating cash acquired from the ventures of $ 2,797 .

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

2 unchanged sentences

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):

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

Total land and buildings $ 36,801 $ 36,292 $ 30,565 $ 22,039 $ 14,142 $ 19,282 $ 159,121

Acquisition related intangible assets 797 508 634 321 233 396 2,889

Total Asset $ 37,598 $ 36,800 $ 31,199 $ 22,360 $ 14,375 $ 19,678 $ 162,010

Acquisition related mortgage intangible $ ( 62 ) $ 588 $ 283 $ — $ — $ 136 $ 945

Property Land Building and Improvements Total Land and Building Acquisition and Intangible Assets Total Assets Acquisition Related Mortgage Intangible

Verandas at Alamo $ 3,336 $ 33,465 $ 36,801 $ 797 $ 37,598 $ ( 61 )

Vanguard Heights 5,466 30,826 36,292 508 36,800 578

Jackson Square 3,398 27,167 30,565 634 31,199 283

Brixworth at Bridge Street 1,959 20,080 22,039 321 22,360 —

The Woodland Apts 1,289 12,853 14,142 233 14,375 —

Grove at River Place 2,866 16,416 19,282 396 19,678 136

Civic I 3,646 45,554 49,200 913 50,113 562

Civic II 3,847 46,452 50,299 1,013 51,312 1,254

Abbotts Run 3,468 37,312 40,780 701 41,481 481

Somerset at Trussville 4,095 42,943 47,038 869 47,907 1,090

Magnolia Pointe 2,052 22,023 24,075 503 24,578 396

Total Purchase Price Allocation $ 35,422 $ 335,091 $ 370,513 $ 6,888 $ 377,401 $ 4,719

Property Disposition

8 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 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

For the three and nine months ended September 30, 2022, the Company did not record any impairment charges.

In the three and nine months ended September 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 in November 2021.

Note 7 - Restricted Cash

2 unchanged sentences

Note 8 – Investment in Unconsolidated Ventures

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.

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

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Real estate properties, net of accumulated depreciation of $ 64,104 and $ 133,615

2 unchanged sentences

Other assets 31,832 25,535

Real estate properties held for sale 14,989 —

Total Assets $ 367,310 $ 773,523

9 unchanged sentences

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Land $ 59,404 $ 97,230

4 unchanged sentences

Total real estate properties, net $ 320,772 $ 734,247

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 June 30, Six Months Ended June 30,

At September 30, 2022 and December 31, 2021, the weighted average interest rate on the mortgages payable is 3.90 % and 3.97 %, respectively, and the weighted average remaining term to maturity is 6.5 years and 7.6 years, respectively.

The condensed income statements below present information regarding the Unconsolidated Properties (dollars in thousands):

Three Months Ended September 30, Nine Months Ended September 30,

2022 2021 2022 2021

12 unchanged sentences

Loss on extinguishment of debt ( 573 ) ( 9,401 ) ( 3,491 ) ( 9,401 )

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

Net income from joint ventures $ 17,410 $ 75,211 $ 120,033 $ 72,796

BRT's equity in (loss) earnings and equity in earnings from sale of unconsolidated joint venture properties $ 11,607 $ 30,786 $ 65,846 $ 28,949

9 unchanged sentences

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 .

On August 31, 2022, the unconsolidated joint venture in which the Company had a 80 % equity interest sold Water's Edge, a 204 -unit multi-family property in Columbia, SC for $ 32,400,000 .

The gain on the sale of this property was $ 16,937,000 and BRT's share of the gain was $ 11,472,000 .

In connection with the sale, mortgage debt of $ 12,241,000 with 3.8 years of remaining term to maturity and bearing an interest rate of 4.28 % was repaid and the joint venture incurred $ 573,000 from the loss on extinguishment of debt, of which BRT's share was $ 388,000 .

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 $ 455,000 held in escrow at June 30, 2022.

The purchase price for the interest was $ 3,500,000 .

Joint Venture Buyouts

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.

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 such applicable date.

Note 9 – Debt Obligations

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

June 30, 2022 December 31, 2021

September 30, 2022 December 31, 2021

Mortgages payable $ 423,442 $ 200,857

Junior subordinated notes 37,400 37,400

Credit facility 7,000 —

Deferred financing costs ( 5,160 ) ( 1,277 )

1 unchanged sentence

Mortgages Payable

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.

At September 30, 2022, the weighted average interest rate on the Company's mortgages payable was 3.99 % and the weighted average remaining term to maturity is 7.8 years.

For the three months ended September 30, 2022 and 2021, interest expense, which includes amortization of deferred financing costs, was $ 4,423,000 and $ 1,305,000 , respectively.

For the nine months ended September 30, 2022 and 2021, interest expense, which includes amortization of deferred financing costs, was $ 8,749,000 and $ 4,113,000 , respectively.

During the three and nine months ended September 30, 2022, the Company paid off mortgage debt of $ 15,613,000 on two properties.

On October 31, 2022, the Company paid off maturing mortgage debt of $ 14,900,000 .

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):

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 nine months ended September 30, 2022 (dollars in thousands):

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

6 unchanged sentences

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 27,389 4.24 % March 2026 N/A

4 unchanged sentences

Total $ 236,615

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

___________________

(1) Excludes fair value adjustments of $ 4,719 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.

Credit Facility

The Company's amended and restated credit facility dated November 18, 2021 with an affiliate of Valley National Bank ("VNB") allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to $ 35,000,000 to facilitate the acquisition of multi-family properties, repay mortgage debt secured by multi-family properties and for operating expense ( i.e., working capital (including dividend payments));

On September 15, 2022, the Company's credit facility with an affiliate of Valley National Bank ("VNB"), was amended to, among other things, increase the amount the Company may borrow, subject to compliance with borrowing base requirements and other conditions, to $ 60,000,000 , extend the facility's maturity date to September 2025, reduce the adjustable interest rate to prime, with a floor of 3.50 %, and revise certain financial and other covenants.

The facility can be used to facilitate the acquisition of multi-family properties, repay mortgage debt secured by multi-family properties and for operating expenses ( i.e., working capital (including dividend payments));

provided that no more than $ 25,000,000 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 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 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.

The interest rate in effect as of September 30, 2022 is 6.25 %.

There is an unused facility fee of 0.25 % per annum.

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

At September 30, 2022, there was $ 7,000,000 outstanding balance on the facility and no outstanding balance at December 31, 2021.

At September 30, 2022 and December 31, 2021, $ 53,000,000 and $ 35,000,000 , respectively, was available to be borrowed.

At November 4, 2022, there was an outstanding balance of $ 19,000,000 on the facility bearing an interest rate of 7.00 % and $ 41,000,000 available to be borrowed.

Interest expense for the three months ended September 30, 2022 and 2021, which includes amortization of deferred financing costs and unused fees, was $ 227,000 and $ 18,000 , respectively.

Interest expense for the nine months ended September 30, 2022 and 2021, which includes amortization of deferred financing costs and unused fees, was $ 334,000 and $ 54,000 , respectively.

Deferred financing costs of $ 551,000 and $ 270,000 , are recorded in other assets on the Consolidated balance sheets at September 30, 2022 and December 31, 2021, respectively.

Junior Subordinated Notes

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.

At September 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 $ 282,000 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 June 30, 2022 and 2021 was 3.29 % and 2.21 %, respectively.

The rate in effect at September 30, 2022 and 2021 was 4.78 % 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 interest rate that will be in effect for the three months ending January 31, 2023 is 6.41 %.

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 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.

Interest expense for the three months ended September 30, 2022 and 2021, which includes amortization of deferred financing costs, was $ 413,000 and $ 210,000 , respectively.

Interest expense for the nine months ended September 30, 2022 and 2021, which includes amortization of deferred financing costs, was $ 911,000 and $ 636,000 , respectively.

Note 10 – Related Party Transactions

1 unchanged sentence

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

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.

The aggregate fees incurred for these services in each of the three months ended September 30, 2022 and 2021 were $ 367,000 and $ 350,000 , respectively, and $ 1,101,000 and $ 1,049,000 for the nine months ended September 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.

2 unchanged sentences

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

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.

These fees amounted to $ 9,000 and $ 9,000 for the three months ended September 30, 2022 and 2021, respectively, and $ 28,000 and $ 23,000 for the nine months ended September 30, 2022 and 2021, respectively.

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

1 unchanged sentence

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 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.

During the three months ended September 30, 2022 and 2021, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated

$ 183,000 and $ 172,000 , respectively, and $ 614,000 and $ 523,000 for the nine months ended September 30, 2022 and 2021, respectively.

Gould and Matthew J.

6 unchanged sentences

Junior subordinated notes:

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.

At September 30, 2022 and December 31, 2021, the estimated fair value of the notes is lower than their carrying value by approximately $ 6,772,000 and $ 8,296,000 , respectively, based on a market interest rate of 6.78 % and 4.21 %, respectively.

Mortgages payable:

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 September 30, 2022, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately $ 37,083,000 , assuming market interest rates between 5.13 % and 6.18 %.

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 %.

11 unchanged sentences

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 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.

As of September 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 June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

Amount of (loss) gain recognized on derivative in Other Comprehensive Income $ ( 1 ) $ ( 1 )

8 unchanged sentences

The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

Note 14 – Commitments and Contingencies

From time to time, the Company and/or its subsidiaries are parties to legal proceedings that arise in the ordinary course of business, and in particular, personal injury claims involving the operations of the Company's properties.

Although management believes that the primary and umbrella insurance coverage maintained with respect to such properties is sufficient to cover claims for compensatory damages, many of these personal injury claims also assert claims for exemplary ( i.e punitive) damages.

Generally, insurance does not cover claims for exemplary damages.

The Company is one of several defendants in a wrongful death lawsuit seeking an unspecified amount in excess of $ 1,000,000 and an unspecified amount of exemplary damages.

The Company’s primary insurance carrier is defending the claim.

Although management is not able to determine the probability and/or magnitude of any potential loss, if any, management believes the Company has sufficient primary and umbrella insurance to cover the claim for compensatory damages.

In connection with a mediation conducted subsequent to September 30, 2022, the parties to a personal injury lawsuit in which the Company is one of the defendants have agreed, subject to the signing of a definitive agreement, to a settlement pursuant to which the Company’s insurance carrier would pay the plaintiff $ 850,000 .

Note 15 – Subsequent Events

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.

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of September 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