What changed in this filing

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Item 1. Financial Statements

2023-08-07 compared with 2023-05-08 · 166 added, 96 removed, 332 unchanged (44% of the section changed)

4 unchanged sentences

(Amounts in thousands, except per share data)

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(unaudited) (audited)

33 unchanged sentences

Three Months Ended

June 30, Six Months Ended

2023 2022 2023 2022

Rental and other revenue from real estate properties $ 23,255 $ 14,683 $ 46,194 $ 26,113

1 unchanged sentence

Total revenues 23,318 14,685 46,257 26,119

Real estate operating expenses - including $ 6 and $ 11 to related parties

Real estate operating expenses - including $ 10 and $ 8 to related parties for the three months ended and $ 16 and $ 19 for the six months ended

10,548 6,348 20,982 11,101

Interest expense 5,513 2,912 10,996 4,933

General and administrative - including $ 173 and $ 246 to related parties

General and administrative - including $ 165 and $ 185 to related parties for the three months ended and $ 337 and $ 431 for the six months ended

3,848 3,533 7,903 7,166

Depreciation and amortization 7,543 5,010 15,551 8,616

1 unchanged sentence

Total revenues less total expenses ( 4,134 ) ( 3,118 ) ( 9,175 ) ( 5,697 )

Equity in earnings of unconsolidated joint ventures 815 1,230

Equity in earnings (loss) of unconsolidated joint ventures 464 ( 50 ) 1,279 1,180

Equity in earnings from sale of unconsolidated joint ventures properties 14,744 40,098 14,744 53,059

Gain on sale of real estate — — — 6

Insurance recovery of casualty loss 215 — 215 —

Gain on insurance recoveries — — 240 —

(Loss) income from continuing operations ( 3,986 ) 11,618

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

Income from continuing operations 11,289 36,367 7,303 47,985

Income tax provision 51 724 127 798

(Loss) income from continuing operations, net of taxes ( 4,062 ) 11,544

Income from continuing operations, net of taxes 11,238 35,643 7,176 47,187

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

Net (loss) income attributable to common stockholders $ ( 4,098 ) $ 11,508

Net income attributable to common stockholders $ 11,202 $ 35,607 $ 7,104 $ 47,115

Weighted average number of shares of common stock outstanding:

2 unchanged sentences

Per share amounts attributable to common stockholders:

Basic and diluted $ ( 0.21 ) $ 0.62

Basic $ 0.59 $ 1.91 $ 0.37 $ 2.54

Diluted $ 0.58 $ 1.91 $ 0.37 $ 2.53

See accompanying notes to consolidated financial statements.

13 unchanged sentences

Balances, March 31, 2023 $ 182 $ 276,034 $ ( 32,900 ) $ 18 $ 243,334

Distributions - common stock - $ 0.25 per share

— — ( 4,816 ) — ( 4,816 )

Compensation expense - restricted stock and restricted stock units — 1,193 — — 1,193

Distributions to non-controlling interests — — — ( 37 ) ( 37 )

Shares repurchased ( 3 ) ( 5,833 ) — — ( 5,836 )

Shares issues through DRIP — 670 — — 670

Net income — — 11,202 36 11,238

Balances, June 30, 2023 $ 179 $ 272,064 $ ( 26,514 ) $ 17 $ 245,746

BRT APARTMENTS CORP.

12 unchanged sentences

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

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

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

Net income — — 35,607 36 35,643

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

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 (loss) income $ ( 4,062 ) $ 11,544

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

Net income $ 7,176 $ 47,187

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization 15,551 8,616

3 unchanged sentences

Equity in earnings of unconsolidated joint ventures ( 1,279 ) ( 1,180 )

Equity in earnings from sale of real estate of unconsolidated

joint venture properties — ( 12,961 )

Equity in earnings from sale of unconsolidated joint venture properties ( 14,744 ) ( 53,059 )

Gain on sale of real estate — ( 6 )

Loss on extinguishment of debt — 563

Increases and decreases from changes in other assets and liabilities:

Decrease in other assets ( 2,056 ) ( 432 )

Decrease (increase) in accounts payable and accrued liabilities 528 ( 350 )

Increase in accounts payable and accrued liabilities ( 1,229 ) ( 851 )

Net cash provided by operating activities 6,860 2,779

13 unchanged sentences

Dividends paid ( 9,521 ) ( 8,460 )

Distributions to non-controlling interests ( 37 ) ( 60 )

Proceeds from the sale of common stock — 6,125

Proceeds from issuance of DRP shares 763 —

Proceeds from issuance of DRIP shares 1,433 —

Repurchase of shares of common stock ( 5,836 ) —

Net cash used in financing activities ( 14,092 ) ( 11,288 )

3 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:

11,013 22,911

24 unchanged sentences

Notes to Consolidated Financial Statements

March 31, 2023

June 30, 2023

Note 1 – Organization and Background

3 unchanged sentences

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 March 31, 2023, the Company:

At June 30, 2023, the Company:

(i) wholly owns 21 multi-family properties located in eleven states with an aggregate of 5,420 units and a carrying value of $ 641,915,000 ;

(ii) 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 $ 37,660,000 ;

(ii) has interests, through unconsolidated entities, in seven multi-family properties located in four states with an aggregate of 2,287 units with a carrying value of $ 31,902,000 ;

and (iii) own other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $ 5,582,000 .

3 unchanged sentences

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, 2023 and 2022, are not necessarily indicative of the results for the full year.

The results of operations for the three and six months ended June 30, 2023 and 2022, are not necessarily indicative of the results for the full year.

The consolidated audited balance sheet as of December 31, 2022, 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").

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The joint venture that owns a property in Yonkers, New York, was determined not to be a VIE but is consolidated because the Company has controlling rights in such entity.

The Company reviews each real estate asset owned, including those held through investments in unconsolidated joint ventures, for impairment when there is an event or a change in circumstances indicating that the carrying amount may not be recoverable.

The Company measures and records impairment charges, and reduces the carrying value of owned properties, when indicators of impairment are present and the expected undiscounted cash flows related to those properties are less than their carrying amounts.

For its unconsolidated joint venture investments, the Company measures and records impairment losses, and reduces the carrying value of the equity investment when indicators of impairment are present and the expected discounted cash flows related to the investment is less than the carrying value.

When the Company does not expect to recover its carrying value on properties held for use, the Company reduces its carrying value to fair value, and for properties held for sale, the Company reduces its carrying value to the fair value less costs to sell.

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.

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements.

Actual results could differ from those estimates.

Actual results could differ from those

Substantially all of the Company's assets are comprised of multi- family real estate assets generally leased to tenants on a one-year basis.

2 unchanged sentences

Equity Distribution Agreements

Effective as of March 18, 2022, the Company entered into 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 months ended March 31, 2023, the Company did not sell any shares.

During the three months ended March 31, 2022, the Company sold 136,279 shares (at an average per share price of $ 22.61 ), for an aggregate sales price of $ 3,082,000 , before commissions and fees of $ 44,000 .

Effective as of May 12, 2023, the Company (i) terminated the equity distributions agreements dated March 18, 2022, and (ii) entered into 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 six months ended June 30, 2023, the Company did not sell any shares.

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

Common Stock Dividend Distribution

The Company declared a quarterly cash distribution of $ 0.25 per share, payable on April 4, 2023 to stockholders of record on March 27, 2023.

The Company declared a quarterly cash distribution of $ 0.25 per share, payable on July 6, 2023 to stockholders of record on June 26, 2023.

Dividend Reinvestment Plan

The Dividend Reinvestment Plan (the “DRP”) which has been in effect since July, 2022, 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 Dividend Reinvestment Plan (the “DRP”), which has been in effect since June 2022, 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 %.

In the three months ended March 31, 2023, we issued 40,218 shares in lieu of cash dividends of $ 763,000 .

In the three and six months ended June 30, 2023, we issued 35,634 and 75,852 shares in lieu of cash dividends of $ 670,000 and $ 1,433,000 , respectively.

In the three and six months ended June 30, 2022, no shares were issued.

Stock Based Compensation

3 unchanged sentences

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, 2023, 623,617 shares are available for issuance pursuant to awards under the 2022 Plan.

As of June 30, 2023, 623,677 shares are available for issuance pursuant to awards under the 2022 Plan.

Awards to acquire 789,545 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 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.

In July 2023, the Company issued RSUs to acquire up to 214,988 shares of common stock pursuant to the 2022 Plan.

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 performance 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 on the RSU's which the Company expects to vest over the applicable vesting period.

For the three months ended March 31, 2023 and 2022, the Company recorded $ 514,000 and $ 250,000 , 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 March 31, 2023 and December 31, 2022, $ 3,111,000 and $ 4,269,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting periods.

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

For the three months ended June 30, 2023 and 2022, the Company recorded $ 369,000 and $ 250,000 , respectively, and for the six months ended June 30, 2023 and 2022, the Company recorded $ 883,000 and $ 500,000 , 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 June 30, 2023 and December 31, 2022, $ 2,536,000 and $ 4,269,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting periods.

Restricted Stock

In January 2023 and 2022, the Company granted 163,914 and 158,973 shares, respectively, of restricted stock pursuant to the 2022 and 2020 Plan.

As of March 31, 2023 , an aggregate of 953,509 shares of unvested restricted stock are outstanding pursuant to the 2022 Plan and Prior Plans.

As of June 30, 2023 , an aggregate of 953,399 shares of unvested restricted stock are outstanding

pursuant to the 2022 Plan and 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 March 31, 2023 and 2022, the Company recorded $ 896,000 and $ 724,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards.

At March 31, 2023 and December 31, 2022, $ 9,976,000 and $ 7,728,000 , 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, 2023 and 2022, the Company recorded $ 824,000 and $ 751,000 , respectively, and for the six months ended June 30, 2023 and 2022, the Company recorded $ 1,720,000 and $ 1,475,000 of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards.

At June 30, 2023 and December 31, 2022, $ 9,152,000 and $ 7,728,000 , 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 2.6 years.

Stock Buyback

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 months ended March 31, 2023 and 2022, the Company did not repurchase any shares of common stock.

On June 14, 2023, the Board of Directors extended the term of the Company's share repurchase program from December 31, 2023 to December 31, 2025 and authorized the repurchase of up to $ 10,000,000 of shares.

During the three and six months ended June 30, 2023, the Company repurchased 309,153 shares of common stock at an average market price of $ 18.76 for an aggregate cost of $ 5,836,000 .

From July 1, 2023 through July 31, 2023, the Company repurchased 45,612 shares of common stock at an average price of $ 20.11 for an aggregate cost of $ 917,000 .

During the three and six months ended June 30, 2022, the Company did not repurchase any shares of common stock.

Per Share Data

Basic earnings (loss) per share is determined by dividing net income (loss) applicable to common stockholders for the applicable period by the weighted average number of shares of common stock outstanding during such period.

Basic 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 outstanding during such period.

Net income is also allocated to the unvested restricted stock outstanding during each period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security.

5 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,

2023 2022 2023 2022

Numerator for basic and diluted earnings per share:

Net (loss) income $ ( 4,062 ) $ 11,544

Net income $ 11,238 $ 35,643 $ 7,176 $ 47,187

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

Deduct (loss) earnings allocated to unvested restricted stock 260 ( 574 )

Net (loss) income available for common stockholders:

Deduct earnings allocated to unvested restricted stock ( 561 ) ( 1,787 ) ( 349 ) ( 2,354 )

Net income available for common stockholders:

basic and diluted $ 10,641 $ 33,820 $ 6,755 $ 44,761

5 unchanged sentences

Weighted average number of shares 18,220,814 17,726,343 18,157,804 17,690,601

(Loss) earnings per common share, basic $ ( 0.21 ) $ 0.62

(Loss) earnings per common share, diluted $ ( 0.21 ) $ 0.62

(1) At March 31, 2023, excludes 35,206 shares subject to RSU's as their effect would have been anti-dilutive.

Earnings per common share, basic $ 0.59 $ 1.91 $ 0.37 $ 2.54

Earnings per common share, diluted $ 0.58 $ 1.91 $ 0.37 $ 2.53

Note 4 - Leases

5 unchanged sentences

The Company is a lessee under a ground lease in Yonkers, NY which is classified as an operating lease.

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

As of March 31, 2023, the remaining lease term, including the renewal option deemed exercised, is 22.5 years.

The ground lease was set to expire September 30, 2024 and provided for one 21-year renewal option.

During the quarter ended June 30, 2023, the renewal option was exercised and the ground lease will expire on June 30, 2045.

There are no further renewal options.

As of June 30, 2023, the remaining lease term, is 22.0 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 March 31, 2023, the remaining lease term, including renewal options deemed exercised, is 13.8 years.

As of March 31, 2023, the Company's Right of Use ("ROU") assets and lease liabilities were $ 2,324,000 and $ 2,433,000 , respectively.

As of June 30, 2023, the remaining lease term, including renewal options deemed exercised, is 13.5 years.

As of June 30, 2023, the Company's Right of Use ("ROU") assets and lease liabilities were $ 2,276,000 and $ 2,394,000 , respectively.

As of December 31, 2022, the Company's ROU assets and lease liabilities were $ 2,371,000 and $ 2,472,000 , respectively.

6 unchanged sentences

Real estate properties, consists of the following (dollars in thousands):

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Land $ 74,246 $ 74,246

6 unchanged sentences

December 31, 2022

Balance Improvements Depreciation March 31, 2023

Balance Improvements Depreciation June 30, 2023

Multi-family $ 649,701 $ 4,717 $ ( 12,503 ) $ 641,915

1 unchanged sentence

Total real estate properties $ 651,603 $ 4,824 $ ( 12,558 ) $ 643,869

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 8 - "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

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 .

Property Disposition

There were no dispositions in the three and six months ended June 30, 2023.

On February 2, 2022 the Company sold a vacant land parcel located in Daytona, Florida for a sales price of $ 4,700,000 , and, after closing costs, recognized a nominal gain.

Contract to Acquire a Property

On March 8, 2023, we entered into an agreement to acquire a 238 -unit multifamily property constructed in 2019 and located in Richmond, VA, for a purchase price of approximately $ 62,500,000 .

On March 8, 2023, the Company entered into an agreement to acquire a 238 -unit multifamily property constructed in 2019 and located in Richmond, VA, for a purchase price of approximately $ 62,500,000 .

The purchase price includes the assumption of approximately $ 32,000,000 of mortgage debt bearing an interest rate of 3.34 % and maturing in 2061.

The purchase is subject to the satisfaction of various conditions, including the completion, to our satisfaction, of its due diligence investigation, as well as the approval by the mortgage lender of our assumption of the mortgage debt.

We anticipate that this transaction will be completed by year end 2023, although we can provide no assurance that this transaction will be completed.

Property Acquisition - Prior Year

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 , with a mortgage debt in principal amount of $ 27,000,000 with a fixed rate of 3.64 % and interest only until October 2024 and a maturity of December 2029.

As a result of this purchase, this property is wholly-owned and is included in the Company's consolidated balance sheet.

The purchase is subject to the satisfaction of various conditions, including the approval by the mortgage lender of the Company's assumption of the mortgage debt.

As of June 30, 2023, the Company paid a non-refundable deposit of $ 1,250,000 on the property which will be forfeited, with certain exceptions, if the transaction is not completed.

This amount is recorded in Other Assets in the Consolidated Balance Sheet at June 30, 2023.

Note 6 - Restricted Cash

2 unchanged sentences

Note 7 – Investment in Unconsolidated Ventures

At March 31, 2023 and December 31, 2022, the Company held interests in unconsolidated joint ventures that own eight multi-family properties (the "Unconsolidated Properties") and a property in development.

At June 30, 2023 and December 31, 2022, the Company held interests in unconsolidated joint ventures that own seven and eight multi-family properties (the "Unconsolidated Properties"), respectively, and a property in development.

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Real estate properties, net of accumulated depreciation of $ 64,831 and $ 66,945

2 unchanged sentences

Other assets 37,701 35,372

Real estate property held for sale 33,970 —

Total Assets $ 324,749 $ 360,267

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Land $ 46,331 $ 59,404

4 unchanged sentences

Total real estate properties, net $ 280,305 $ 318,304

At March 31, 2023 and December 31, 2022, the weighted average interest rate on the mortgages payable is 4.07 % and 3.99 %, respectively, and the weighted average remaining term to maturity is 5.8 years and 6.1 years, respectively.

At June 30, 2023 and December 31, 2022, the weighted average interest rate on the mortgages payable is 4.07 % and 3.99 %, respectively, and the weighted average remaining term to maturity is 5.6 years and 6.1 years, respectively.

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

Three Months Ended March 31,

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

2023 2022 2023 2022

Rental and other revenue $ 11,476 $ 22,107 $ 23,608 $ 47,338

11 unchanged sentences

BRT's equity in earnings and equity in earnings from sale of unconsolidated joint venture properties $ 15,208 $ 40,048 $ 16,023 $ 54,239

Contract to sell property

On March 13, 2023, the unconsolidated joint venture that owns Chatham Court and Reflections, a 494 unit multi-family property located in Dallas and in which the Company has a 50 % interest entered into a contract to sell the property.

The contract sales price is $ 73,000,000 and the Company estimates that its share of the (i) gain will be approximately $ 14,600,000 and (ii) early extinguishment of debt charge will be approximately $ 167,000 .

This property is reflected as held for sale at March 31, 2023.

The Company anticipates that this sale will be completed in the quarter ending June 30, 2023.

Joint Venture Sale

On May 12, 2023, the unconsolidated joint venture in which the Company had a 50 % equity interest sold Chatham Court and Reflections, a 494 unit multi family property located in Dallas, TX, for a sales price of $ 73,000,000 .

The gain on the sale of this property was $ 38,418,000 and BRT's share of the gain was $ 14,744,000 .

In connection with the sale, mortgage debt of $ 25,405,000 with 5.0 years of remaining term to maturity and bearing an interest rate of 4.01 % was repaid and the joint venture incurred $ 561,000 from the loss on the extinguishment of debt, of which the Company's share was $ 212,000 .

Joint Venture Sales

During the six months ended June 30, 2022, the unconsolidated joint ventures in which the Company had equity interests, sold the following properties:

Property Date of Sale Units Interest Sold Sales Price Gain on Sale BRT Share of Gain Mtge Debt at Sale Date Loss on extinguishment of debt BRT Share of extinguishment of debt

The Verandas at Shavano,

San Antonio, TX 2/8/2022 288 65 % $ 53,750 $ 23,652 $ 12,961 $ 25,100 $ — $ —

Retreat at Cinco Ranch,

San Antonio, TX 6/14/2022 268 75 % 68,300 30,595 17,378 30,096 1,257 686

The Vive, Kannapolis, NC 6/30/2022 312 65 % 91,250 47,086 22,720 31,420 1,631 787

868 $ 213,300 $ 101,333 $ 53,059 $ 86,616 $ 2,888 $ 1,473

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 .

During the quarter ended June 30, 2023, the Company funded a $ 122,000 capital call for this joint venture.

Note 8 – Debt Obligations

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

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

Mortgages payable $ 427,821 $ 407,958

4 unchanged sentences

Mortgages Payable

At March 31, 2023, the weighted average interest rate on the Company's mortgages payable was 4.02 % and the weighted average remaining term to maturity is 7.8 years.

For the three months ended March 31, 2023 and 2022, interest expense, which includes amortization of deferred financing costs, was $ 4,546,000 and $ 1,763,000 , respectively.

On February 24, 2023, we obtained mortgage debt of $ 21,173,000 on our Silvana Oaks- North Charleston, SC multi-family property, such mortgage debt matures in March 2033, bears an interest rate of 4.55 % and is interest only for the term of the mortgage.

At June 30, 2023, the weighted average interest rate on the Company's mortgage payables was 4.02 % and the weighted average remaining term to maturity is 7.7 years.

For the three months ended June 30, 2023 and 2022, interest expense, which includes amortization of deferred financing costs, was $ 4,743,000 and $ 2,563,000 , respectively.

For the six months ended June 30, 2023 and 2022, interest expense, which includes amortization of deferred financing costs, was $ 9,289,000 and $ 4,326,000 , respectively.

On February 24, 2023, the Company obtained mortgage debt of $ 21,173,000 on its Silvana Oaks- North Charleston, SC multi-family property;

such mortgage debt matures in March 2033, bears an interest rate of 4.45 % and is interest only for the term of the mortgage.

During the three and six months ended June 30, 2022, the Company paid off mortgage debt of $ 14,558,000 at Avalon- Pensacola, FL.

Credit Facility

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provided that no more than $ 25,000,000 may be used for operating expenses.

The facility is secured by the cash available at VNB and the Company's pledge of the interests in the entities that own the properties.

The interest rate in effect as of March 31, 2023 is 8.00 %.

The facility is secured by the cash available at VNB and the Company's pledge of the interests in the entities that own the properties and matures in September 2025.

The interest rate in effect as of June 30, 2023 is 8.25 %.

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

At March 31, 2023, the Company is in compliance in all material respects with its obligations under the facility.

At March 31, 2023, there was no outstanding balance on the facility and at December 31, 2022 the outstanding balance was $ 19,000,000 .

At March 31, 2023 and December 31, 2022, $ 60,000,000 and $ 41,000,000 , respectively, was available to be borrowed.

At May 1, 2023, there was no outstanding balance on the facility and $ 60,000,000 available to be borrowed.

Interest expense for the three months ended March 31, 2023 and 2022, which includes amortization of deferred financing costs and unused fees, was $ 300,000 and $ 45,000 , respectively.

Deferred financing costs of $ 445,000 and $ 498,000 , are recorded in on the Consolidated balance sheets at March 31, 2023 and December 31, 2022, respectively.

At June 30, 2023, the Company is in compliance in all material respects with its obligations under the facility.

At June 30, 2023, there was no outstanding balance on the facility and at December 31, 2022, the outstanding balance was $ 19,000,000 .

At June 30, 2023 and December 31, 2022, $ 60,000,000 and $ 41,000,000 , respectively, was available to be borrowed.

At August 1, 2023, there was no outstanding balance on the facility and $ 60,000,000 available to be borrowed.

Interest expense for the three months ended June 30, 2023 and 2022, which includes amortization of deferred financing costs and unused fees, was $ 91,000 and $ 62,000 , respectively.

Interest expense for the six months ended June 30, 2023 and 2022, which includes amortization of deferred financing costs and unused fees, was $ 391,000 and $ 107,000 , respectively.

Deferred financing costs of $ 392,000 and $ 498,000 , are recorded on the Consolidated balance sheets at June 30, 2023 and December 31, 2022, respectively.

Junior Subordinated Notes

At March 31, 2023 and December 31, 2022, the outstanding principal balance of the Company's junior subordinated notes was $ 37,400,000 , before deferred financing costs of $ 272,000 and $ 277,000 , 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, 2023 and 2022 was 6.80 % and 2.30 %, respectively.

At June 30, 2023 and December 31, 2022, the outstanding principal balance of the Company's junior subordinated notes was $ 37,400,000 , before deferred financing costs of $ 267,000 and $ 277,000 , respectively.

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

The rate in effect at June 30, 2023 and 2022 was 7.30 % and 2.30 %, respectively.

The interest rate converted to 3 month Term SOFR + 2.26 % effective with the next payment due October 2023.

The interest rate that will be in effect for the three months ending October 31, 2023 is 7.63 %.

The notes mature April 30, 2036.

The interest rate that will be in effect for the three months ending July 31, 2023 is 7.30 %.

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, 2023 and 2022, which includes amortization of deferred financing costs, was $ 637,000 and $ 212,000 , respectively.

Interest expense for the three months ended June 30, 2023 and 2022, which includes amortization of deferred financing costs, was $ 679,000 and $ 286,000 , respectively.

Interest expense for the six months ended June 30, 2023 and 2022, which includes amortization of deferred financing costs, was $ 1,316,000 and $ 498,000 , respectively.

Note 9 – Related Party Transactions

The Company has retained certain of its executive officers and Fredric H.

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, 2023 and 2022 were $ 385,000 and $ 367,000 , respectively.

The aggregate fees incurred for these services in each of the three months ended June 30, 2023 and 2022 were $ 385,000 and $ 367,000 , respectively, and $ 770,000 .and $ 734,000 for the six months ended June 30, 2023 and 2022, 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 $ 6,000 and $ 11,000 for the three months ended March 31, 2023 and 2022, respectively.

These fees amounted to $ 10,000 and $ 8,000 for the three months ended June 30, 2023 and 2022, respectively and $ 16,000 and $ 19,000 for the six months ended June 30, 2023 and 2022, respectively.

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

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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, 2023 and 2022, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated $ 172,000 and $ 246,000 , respectively.

During the three months ended June 30, 2023 and 2022, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated $ 165,000 and $ 185,000 , respectively and $ 337,000 and $ 431,000 for the six months ended June 30, 2023 and 2022, respectively.

Gould and Matthew J.

Gould, executive officers and directors of the Company are executive officers of Georgetown Partners, LLC, the managing general partner of Gould Investors.

During the quarter ended June 30, 2023, in connection with its stock repurchase program, the Company purchased from Mitchell Gould, an Executive Vice President, 50,000 shares of Company common stock at a total cost of $ 1,007,500 , at the closing price of the common stock on the date the parties agreed to the transaction.

Note 10 – Fair Value Measurements

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Junior subordinated notes:

At March 31, 2023 and December 31, 2022, the estimated fair value of the notes is lower than their carrying value by approximately $ 4,487,000 and $ 4,695,000 , respectively, based on a market interest rate of 8.53 % and 7.91 %, respectively.

At June 30, 2023 and December 31, 2022, the estimated fair value of the notes is lower than their carrying value by approximately $ 3,666,000 and $ 4,695,000 , respectively, based on a market interest rate of 8.55 % and 7.91 %, respectively.

The Company values its junior subordinated notes using a discounted cash flow analysis on the expected cash flows of each instrument.

Mortgages payable:

At March 31, 2023, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately $ 28,532,000 , assuming market interest rates between 4.48 % and 5.83 %.

At December 31, 2022, the estimated fair value of the Company's mortgages payable was greater than their carrying value by approximately $ 37,500,000 , assuming market interest rates between 5.18 % and 6.23 %.

At June 30, 2023, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately $ 35,025,000 , assuming market interest rates between 4.81 % and 6.16 %.

At December 31, 2022, the estimated fair value of the Company's mortgages payable was lower than their carrying value by approximately $ 37,500,000 , assuming market interest rates between 5.18 % and 6.23 %.

Market interest rates were determined using rates which the Company believes reflects institutional lender yield requirements at the balance sheet dates.

The Company values its mortgages payable using a discounted cash flow analysis on the expected cash flows of each instrument.

Considerable judgment is necessary to interpret market data and develop estimated fair value.

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Note 12 – Subsequent Events

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of March 31, 2023, 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, 2023, that warrant additional disclosure, have been included in the notes to the consolidated financial statements.

Table of Content

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