What changed in this filing

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Item 1. Financial Statements

2024-05-08 compared with 2023-11-06 · 120 added, 238 removed, 299 unchanged (54% of the section changed)

4 unchanged sentences

(Amounts in thousands, except per share data)

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

(unaudited) (audited)

11 unchanged sentences

37,148 37,143

Credit facility, net of deferred costs of $ 0 and $ 498

Credit facility — —

Accounts payable and accrued liabilities 19,888 21,948

19 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Rental and other revenue from real estate properties $ 23,298 $ 22,939

Other income 342 6 405 12

Interest and other income 105 —

Total revenues 23,403 22,939

Real estate operating expenses - including $ 9 and $ 9 to related parties for the three months ended and $ 25 and $ 28 for the nine months ended

Real estate operating expenses - including $ 9 and $ 6 to related parties

10,579 10,434

Interest expense 5,523 5,483

General and administrative - including $ 141 and $ 183 to related parties for the three months ended and $ 479 and $ 614 for the nine months ended

4,017 3,673 11,920 10,839

General and administrative - including $ 182 and $ 173 to related parties

Depreciation and amortization 6,435 8,008

2 unchanged sentences

Equity in earnings of unconsolidated joint ventures 228 815

Equity in earnings from sale of unconsolidated joint ventures properties — 11,472 14,744 64,531

Gain on sale of real estate 604 — 604 6

Insurance recovery of casualty loss 261 — 476 —

Gain on insurance recoveries — 240

Loss on extinguishment of debt — — — ( 563 )

(Loss) income from continuing operations ( 1,582 ) 7,272 5,721 55,257

Income tax (benefit) provision ( 122 ) 178 5 976

(Loss) income from continuing operations, net of taxes ( 1,460 ) 7,094 5,716 54,281

Loss from continuing operations ( 3,058 ) ( 3,986 )

Income tax provision 78 76

Loss from continuing operations, net of taxes ( 3,136 ) ( 4,062 )

Net income attributable to non-controlling interest ( 35 ) ( 36 )

Net (loss) income attributable to common stockholders $ ( 1,494 ) $ 7,059 $ 5,610 $ 54,174

Net loss attributable to common stockholders $ ( 3,171 ) $ ( 4,098 )

Weighted average number of shares of common stock outstanding:

Basic 17,851,715 17,928,197 18,022,975 17,721,700

Diluted 17,851,715 17,994,457 18,045,767 17,784,362

Basic and diluted 17,625,577 18,064,301

Per share amounts attributable to common stockholders:

Basic $ ( 0.08 ) $ 0.37 $ 0.30 $ 2.91

Diluted $ ( 0.08 ) $ 0.37 $ 0.27 $ 2.89

Basic and diluted $ ( 0.17 ) $ ( 0.21 )

See accompanying notes to consolidated financial statements.

3 unchanged sentences

(Dollars in thousands, except per share data)

Common Stock Additional

Shares of Common Stock Additional

Paid-In Capital (Accumulated Deficit) Non- Controlling Interest Total

4 unchanged sentences

Compensation expense - restricted stock and restricted stock units — 1,342 — — 1,342

Shares issued through DRIP — 763 — — 763

Net (loss) income — — ( 4,098 ) 36 ( 4,062 )

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 — — — ( 60 ) ( 60 )

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

Distributions - common stock - $ 0.25 per share

— — ( 4,654 ) — ( 4,654 )

Compensation expense - restricted stock and restricted stock units — 1,473 — — 1,473

Distributions to non-controlling interests — — — ( 42 ) ( 42 )

Shares issues through DRIP — 684 — — 684

Shares issued through DRIP — 931 — — 931

Shares repurchased ( 1 ) ( 2,266 ) — — ( 2,267 )

Net (loss) income — — ( 1,494 ) 34 ( 1,460 )

Balances, September 30, 2023 $ 177 $ 269,273 $ ( 32,662 ) $ 9 $ 236,797

Net loss — — ( 3,171 ) 35 ( 3,136 )

Balances, March 31, 2024 $ 176 $ 267,276 $ ( 46,798 ) $ ( 40 ) $ 220,614

See accompanying notes to consolidated financial statements.

BRT APARTMENTS CORP.

2 unchanged sentences

(Dollars in thousands, except per share data)

Common Stock Additional

Shares of Common Stock Additional

Paid-In Capital (Accumulated Deficit) Non- Controlling Interest Total

4 unchanged sentences

Compensation expense - restricted stock and restricted stock units — 1,410 — — 1,410

Shares issued through equity offering program, net 1 3,037 — — 3,038

Net income — — 11,508 36 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

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

Distributions - common stock - $ 0.22 per share

— — ( 4,720 ) — ( 4,720 )

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

Contributions from non-controlling interests — — — — —

Consolidation of investment in limited partnership — — — — —

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

Purchase of non-controlling interest — — — — —

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

Shares issued through DRIP — 763 — — 763

Shares repurchased — — — — —

Net income — — ( 4,098 ) 36 ( 4,062 )

Other comprehensive income — — — — —

Comprehensive income 7,094

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

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

See accompanying notes to consolidated financial statements

3 unchanged sentences

(Dollars in Thousands)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows from operating activities:

Net income $ 5,716 $ 54,281

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

Net loss $ ( 3,136 ) $ ( 4,062 )

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

Depreciation and amortization 6,435 8,008

3 unchanged sentences

Equity in earnings of unconsolidated joint ventures ( 228 ) ( 815 )

Equity in earnings from sale of unconsolidated joint venture properties ( 14,744 ) ( 64,531 )

Gain on sale of real estate ( 604 ) ( 6 )

Gain on insurance recovery ( 240 ) ( 62 )

Loss on extinguishment of debt — 563

Increases and decreases from changes in other assets and liabilities:

(Increase) decrease in other assets ( 3,823 ) 1,820

Increase (decrease) in accounts payable and accrued liabilities 1,575 ( 2,635 )

Increase in other assets ( 2,097 ) ( 2,201 )

Decrease in accounts payable and accrued liabilities ( 2,077 ) ( 2,538 )

Net cash provided by operating activities 653 211

1 unchanged sentence

Improvements to real estate properties ( 1,600 ) ( 2,158 )

Purchase of investment in joint ventures — ( 105,262 )

Proceeds from the sale of real estate 711 4,385

Distributions from unconsolidated joint ventures 1,517 2,228

Contributions to unconsolidated joint ventures ( 122 ) ( 3,500 )

Proceeds from insurance recoveries 240 62

Net cash provided by (used in) investing activities 18,069 ( 18,990 )

Net cash (used in) provided by investing activities ( 83 ) 70

Cash flows from financing activities:

Proceeds from mortgages payable — 21,173

Mortgage payoffs — ( 26,761 )

Mortgage principal payments ( 947 ) ( 813 )

Proceeds from credit facility — 22,000

Repayment of credit facility — ( 19,000 )

2 unchanged sentences

Distributions to non-controlling interests ( 60 ) —

Proceeds from the sale of common stock — 9,945

Proceeds from issuance of DRIP shares 931 763

1 unchanged sentence

Net cash used in financing activities ( 6,967 ) ( 8,081 )

BRT APARTMENTS CORP.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

Nine Months Ended September 30,

Net increase in cash, cash equivalents and restricted cash:

Net increase in cash, cash equivalents, restricted cash and escrows:

( 6,397 ) ( 7,800 )

Cash, cash equivalents and restricted cash at beginning of period 21,153 38,921

Cash, cash equivalents and restricted cash at end of period $ 28,886 $ 22,737

Supplemental disclosure of cash flow information:

Cash paid during the period for interest $ 15,310 $ 9,169

Cash paid for income taxes $ 710 $ 291

Consolidation on buyout of partnership interests:

Increase in real estate assets $ — $ ( 370,513 )

Increase in other assets — ( 17,489 )

Increase in mortgage payable — 231,896

Increase in deferred loan costs — ( 3,892 )

Increase in accounts payable and accrued liabilities — 6,278

Decrease in investment in unconsolidated joint ventures — 48,458

Cash, cash equivalents, restricted cash and escrows at beginning of period 31,775 27,721

$ 25,378 $ 19,921

Supplemental disclosure of cash flow information:

Cash paid during the period for interest expense $ 5,117 $ 5,094

Cash paid for income taxes and excise taxes $ 7 $ 8

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,

Reconciliation of cash and cash equivalents and restricted cash:

Cash and cash equivalents $ 21,252 $ 15,252

Restricted cash 589 830

Total cash, cash equivalents and restricted cash, shown in consolidated statement of cash flows $ 28,886 $ 22,737

Escrows (Other assets) 3,537 3,839

Total cash, cash equivalents, restricted cash and escrows shown in consolidated statement of cash flows $ 25,378 $ 19,921

BRT APARTMENTS CORP.

1 unchanged sentence

Notes to Consolidated Financial Statements

September 30, 2023

March 31, 2024

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 the Company (including its consolidated subsidiaries) or by unconsolidated joint ventures in which the Company generally contributes a significant portion of the equity.

At September 30, 2023, the Company:

At March 31, 2024, 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 $ 629,190,000 ;

(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 $ 30,878,000 ;

(ii) has interests, through unconsolidated entities, in eight multi-family properties located in four states with an aggregate of 2,527 units with a carrying value of $ 32,943,000 ;

and (iii) owns other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $ 1,821,000 .

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 and nine months ended September 30, 2023 and 2022, are not necessarily indicative of the results for the full year.

The results of operations for the three months ended March 31, 2024 and 2023, are not necessarily indicative of the results for the full year.

The consolidated audited balance sheet as of December 31, 2023, 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

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

Actual results could differ from those estimates.

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

Therefore, the Company aggregates real estate assets for reporting purposes and operates in one reportable segment.

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

As the Company operates in one reportable segment, the CODMs are provided financial reports which include a (i) consolidated income statement (detailing total revenues, operating income and net income) and (iii) Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”).

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

Reclassifications

Immaterial Error Correction

During the preparation of financial statements for the current period, it was determined that we were not correctly including the escrow accounts classified within other assets within cash flows from operating activities on the Consolidated Statements of Cash Flows.

As a result, we have made an immaterial error correction to the prior period to reclassify the escrows within Cash and Restricted Cash on the Statement of Cash Flows resulting in an increase in net cash from operating activities of $ 2,729,000 .

Note 3 - Equity

Equity Distribution Agreements

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 nine months ended September 30, 2023, the Company did not sell any shares.

During the three and nine months ended September 30, 2022, the Company sold 174,059 and 447,815 shares, respectively, at an average per share price of $ 22.22 and $ 22.50 , respectively, for an aggregate sales price of $ 3,867,000 and $ 10,076,000 , respectively, before commissions and fees of $ 48,000 and $ 131,000 , respectively.

The Company has 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, 2024 and 2023, the Company did not sell any shares.

Common Stock Dividend Distribution

The Company declared a quarterly cash distribution of $ 0.25 per share, payable on October 11, 2023 to stockholders of record on October 3, 2023.

The Company declared a quarterly cash distribution of $ 0.25 per share, payable on April 4, 2024 to stockholders of record on March 27, 2024.

Dividend Reinvestment Plan

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 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 %.

During the three and nine months ended September 30, 2023, we issued 35,470 and 111,322 shares in lieu of cash dividends of $ 684,000 and $ 2,117,000 , respectively.

During the nine months ended September 30, 2022, 29,190 shares were issued in lieu of cash dividends of $ 622,000 .

During the three months ended March 31, 2024, 50,951 shares were issued in lieu of cash dividends of $ 931,000 .

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

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 September 30, 2023, 408,746 shares are available for issuance pursuant to awards under the 2022 Plan.

Awards to acquire 789,345 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.

As of March 31, 2024, 245,049 shares are available for issuance pursuant to awards under the 2022 Plan.

Restricted shares and awards to acquire 632,446 shares of common stock are outstanding under the 2020 Amended and Restated Incentive Plan ("2020 Plan") and the 2018 Amended and Restated Incentive Plan (collectively the "Prior Plans") and no further awards may be made pursuant to the Prior Plans.

Restricted Stock Units

In July 2023 and June 2022, the Company issued restricted stock units (the "RSUs") to acquire up to 214,990 and 212,470 shares of common stock pursuant to the 2022 Incentive Plan, respectively.

As of September 30, 2023 , an aggregate of 637,835 of unvested restricted stock units are outstanding pursuant to the 2022 Plan and Prior Plans.

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.

In July 2023, the Company issued restricted stock units (the "RSUs") to acquire up to 214,990 shares of common stock pursuant to the 2022 Incentive Plan.

As of March 31, 2024 , an aggregate of 634,491 of unvested restricted stock units are outstanding pursuant to the 2022 Plan and Prior Plans.

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.

At March 31, 2024, the conditions to the vesting and issuance of 123,384 shares of common stock subject to RSUs (of the 209,322 shares subject to RSUs granted in 2021 and the payout of $ 359,000 pursuant to the related dividend equivalent rights),had been satisfied, subject to approval of the compensation committee of the Company’s board of directors.

Such committee approved such issuance and payout on May 6, 2024 and it is anticipated that such shares will be issued in May 2024 .The balance of 85,938 RSUs granted in 2021 have been forfeited.

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

For the three months ended September 30, 2023 and 2022, the Company recorded $ 651,000 and $ 457,000 , respectively, and for the nine months ended September 30, 2023 and 2022, the Company recorded $ 1,534,000 and $ 957,000 , 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, 2023 and December 31, 2022, $ 4,046,000 and $ 4,269,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting periods.

For the three months ended March 31, 2024 and 2023, the Company recorded $ 472,000 and $ 514,000 , 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, 2024 and December 31, 2023, $ 1,527,000 and $ 1,999,000 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, respectively.

As of September 30, 2023 , an aggregate of 953,139 shares of unvested restricted stock are outstanding pursuant to the 2022 Plan and Prior Plans.

In January 2024 and 2023, the Company granted 166,439 and 163,914 shares, respectively, of restricted stock pursuant to the 2022 Plan and 2020 Plan, respectively.

As of March 31, 2024 , an aggregate of 962,229 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 September 30, 2023 and 2022, the Company recorded $ 822,000 and $ 751,000 , respectively, and for the nine months ended September 30, 2023 and 2022, the Company recorded $ 2,542,000 and $ 2,226,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards.

At September 30, 2023 and December 31, 2022, $ 8,330,000 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 March 31, 2024 and 2023, the Company recorded $ 870,000 and $ 896,000 , respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards.

At March 31, 2024 and December 31, 2023, $ 9,703,000 and $ 7,484,000 , 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 2.7 years.

Share Repurchase

In June 2023, the Board of Directors extended the term of the Company's share repurchase program from December 31, 2023 to December 31, 2025 and increased the existing repurchase authorization from $ 5,000,000 to $ 10,000,000 of shares.

In August 2023, the Board of Directors, after giving effect to repurchases of $ 3,250,000 of shares made since the June 2023 share repurchase authorization, increased the Company's share repurchase program by an additional $ 6,750,000 of shares to $ 10,000,000 of shares.

During the three and nine months ended September 30, 2023, the Company repurchased 264,165 and 573,318 shares of common stock, respectively, at an average price per share of $ 18.74 and $ 18.81 , respectively, for an aggregate cost of $ 4,950,000 and $ 10,786,000 , respectively.

As of September 30, 2023, the Company is authorized to repurchase up to $ 5,966,000 of shares.

From October 1, 2023 through October 31, 2023, the Company repurchased 98,014 shares of common stock at an average price per share of $ 17.23 for an aggregate cost of $ 1,689,000 .

At October 31, 2023, the Company is authorized to repurchase up to $ 4,278,000 of shares of common stock

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

Pursuant to the Company’s repurchase program, as amended from time to time, the Company is authorized to repurchase shares of its common stock through open-market transactions, privately negotiated transactions, or otherwise.

During the three months ended March 31, 2024, the Company repurchased 123,061 shares of common stock, respectively, at an average price per share of $ 18.43 , for an aggregate cost of $ 2,267,000 .

As of March 31, 2024, the Company is authorized to repurchase up to $ 7,316,000 of shares through December 31, 2025.

During the three months ended March 31, 2023, the Company did not 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 September 30, Nine Months Ended September 30,

2023 2022 2023 2022

Three Months Ended March 31,

Numerator for basic and diluted earnings per share:

Net income $ ( 1,460 ) $ 7,094 $ 5,716 $ 54,281

Net loss $ ( 3,136 ) $ ( 4,062 )

Deduct net income attributable to non-controlling interests ( 35 ) ( 36 )

Deduct earnings allocated to unvested restricted stock ( 73 ) ( 349 ) 268 ( 2,684 )

Net income available for common stockholders:

Deduct loss allocated to unvested restricted stock 165 260

Net loss available for common stockholders:

basic and diluted $ ( 3,006 ) $ ( 3,838 )

2 unchanged sentences

Effect of dilutive securities:

RSUs — 66,260 22,792 62,662

Denominator for diluted earnings per share:

Weighted average number of shares 17,625,577 18,064,301

Earnings per common share, basic $ ( 0.08 ) $ 0.37 $ 0.30 $ 2.91

Earnings per common share, diluted $ ( 0.08 ) $ 0.37 $ 0.27 $ 2.89

Earnings (loss) per common share, basic $ ( 0.17 ) $ ( 0.21 )

Earnings (loss) per common share, diluted $ ( 0.17 ) $ ( 0.21 )

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

The renewal option was exercised and the ground lease will expire on June 30, 2045.

There are no further renewal options.

As of September 30, 2023, the remaining lease term is 21.8 years.

The ground lease expires on June 30, 2045.

There are no renewal options.

As of March 31, 2024, the remaining lease term is 21.3 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 September 30, 2023, the remaining lease term, including renewal options deemed exercised, is 13.3 years.

As of September 30, 2023, the Company's Right of Use ("ROU") assets and lease liabilities were $ 2,230,000 and $ 2,356,000 , respectively.

As of March 31, 2024, the remaining lease term, including renewal options deemed exercised, is 12.8 years.

As of March 31, 2024, the Company's Right of Use ("ROU") assets and lease liabilities were $ 2,138,000 and $ 2,280,000 , respectively.

As of December 31, 2023, the Company's ROU assets and lease liabilities were $ 2,183,000 and $ 2,318,000 , respectively.

6 unchanged sentences

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Land $ 74,246 $ 74,246

6 unchanged sentences

December 31, 2023

Balance Improvements Depreciation Sale of Property September 30, 2023

Balance Improvements Depreciation March 31, 2024

Multi-family $ 634,045 $ 1,600 $ ( 6,407 ) $ 629,238

1 unchanged sentence

Total real estate properties $ 635,836 $ 1,600 $ ( 6,435 ) $ 631,001

Partner Buyouts

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 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

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 Run Wilmington, NC 264 20 % 9,010

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

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

2,844 $ 105,868

__________________

(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 .

Property Disposition

In September 2023, the Company sold a cooperative apartment unit in New York, NY for a sale price of $ 785,000 and recognized a gain on the sale of $ 604,000 .

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, 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 U.S.

Housing and Urban Development ("HUD") 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 approval by the mortgage lender of the Company's assumption of the mortgage debt.

As of September 30, 2023, the Company paid a 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 September 30, 2023.

Note 6 - Restricted Cash

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Note 7 – Investment in Unconsolidated Ventures

At September 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.

At March 31, 2024 and December 31, 2023, the Company held interests in unconsolidated joint ventures that own 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):

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Real estate properties, net of accumulated depreciation of $ 72,863 and $ 69,970

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BRT's interest in joint venture equity $ 32,953 $ 34,242

______________________________________________________

(1) Includes $ 12,715 and $ 46,508 of work -in-process related to the Stono Oaks development at March 31, 2024 and December 31, 2023 respectively.

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Land $ 46,331 $ 46,331

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Total real estate properties, net $ 311,569 $ 275,874

At September 30, 2023 and December 31, 2022, the weighted average interest rate on the mortgages payable is 4.03 % and 3.99 %, respectively, and the weighted average remaining term to maturity is 5.3 years and 6.1 years, respectively.

At March 31, 2024 and December 31, 2023, the weighted average interest rate on the mortgages payable is 4.07 % and 4.32 %, respectively, and the weighted average remaining term to maturity is 4.8 years and 5.0 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,

2023 2022 2023 2022

Three Months Ended March 31,

Rental and other revenue $ 10,624 $ 12,132

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Gain on insurance recoveries — 65

Gain on sale of real estate — 16,937 38,418 118,270

Loss on extinguishment of debt — ( 573 ) ( 561 ) ( 3,491 )

Net income from joint ventures $ 836 $ 17,410 $ 41,560 $ 120,033

BRT's equity in earnings and equity in earnings from sale of unconsolidated joint venture properties $ 426 $ 11,607 $ 16,449 $ 65,846

Joint Venture Sales

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 .

During the nine months ended September 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

Waters Edge, Columbia, SC 8/31/2022 204 80 % $ 32,400 $ 16,937 $ 11,472 $ 12,241 573 388

1,072 $ 245,700 $ 118,270 $ 64,531 $ 98,857 $ 3,461 $ 1,861

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 nine months ended September 30, 2023, the Company funded a $ 122,000 capital call for this joint venture.

Net (loss) income $ ( 475 ) $ 1,473

BRT's equity in earnings $ 228 $ 815

Note 8 – Debt Obligations

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

September 30, 2023 December 31, 2022

March 31, 2024 December 31, 2023

Mortgages payable $ 425,632 $ 426,436

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__________________________________________

(1) Excludes $ 342,000 of deferred financing costs which are reflected in other assets at September 30, 2023.

(1) Excludes $ 236 and $ 289 of deferred financing costs which are reflected in other assets at March 31, 2024 and December 31, 2023 respectively..

Mortgages Payable

At September 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 7.3 years.

For the three months ended September 30, 2023 and 2022, interest expense, which includes amortization of deferred financing costs, was $ 4,774,000 and $ 4,423,000 , respectively.

For the nine months ended September 30, 2023 and 2022, interest expense, which includes amortization of deferred financing costs, was $ 14,063,000 and $ 8,749,000 , 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.

At March 31, 2024, the weighted average interest rate on the Company's mortgage payables was 4.02 % and the weighted average remaining term to maturity is 6.8 years.

For the three months ended March 31, 2024 and 2023, interest expense, which includes amortization of deferred financing costs, was $ 4,699,000 and $ 4,546,000 , respectively.

Credit Facility

The Company's amended credit facility 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 $ 60,000,000 .

The Company's credit facility, as amended, 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 $ 60,000,000 .

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));

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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.

On August 28, 2023, the facility was amended to convert the index on which interest on the credit facility is calculated from the prime rate to SOFR and to adjust the interest rate floor.

After giving effect to the amendment, the interest rate on the credit facility, which adjusts monthly and is subject to a floor of 6.0 %, equals one-month term SOFR plus 250 basis points.

The interest rate in effect as of September 30, 2023 is 7.81 %.

Note 8 – Debt Obligations (continued)

The interest rate on the credit facility, which adjusts monthly and is subject to a floor of 6.0 %, equals one-month term SOFR plus 250 basis points.

The interest rate in effect as of March 31, 2024 is 7.82 %.

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

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

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

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

At November 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 September 30, 2023 and 2022, which includes amortization of deferred financing costs and unused fees, was $ 91,000 and $ 227,000 , respectively.

Interest expense for the nine months ended September 30, 2023 and 2022, which includes amortization of deferred financing costs and unused fees, was $ 482,000 and $ 334,000 , respectively.

Deferred financing costs of $ 342,000 and $ 498,000 , are recorded on the Consolidated balance sheets at September 30, 2023 and December 31, 2022, respectively.

At March 31, 2024, the Company is in compliance in all material respects with its obligations under the facility.

At March 31, 2024 and December 31, 2023, there was no outstanding balance on the facility and at each such date, $ 60,000,000 was available to be borrowed.

Interest expense for the three months ended March 31, 2024 and 2023, was $ 92,000 and $ 300,000 , respectively and includes amortization of deferred financing cost and unused fess of $ 92,000 and $ 83,000 respectively.

The remaining deferred financing costs of $ 236,000 and $ 289,000 , are recorded on the Consolidated balance sheets at March 31, 2024 and December 31, 2023, respectively.

Junior Subordinated Notes

At September 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 $ 262,000 and $ 277,000 , respectively.

At March 31, 2024 and December 31, 2023, the outstanding principal balance of the Company's junior subordinated notes was $ 37,400,000 , before deferred financing costs of $ 252,000 and $ 257,000 , respectively.

The interest rate on outstanding balance resets quarterly and is equal to three month term SOFR + 2.26 %.

The interest rate in effect at September 30, 2023 and 2022 was 7.63 % and 4.78 %, respectively.

The interest rate that will be in effect for the three months beginning October 31, 2023 is 7.65 %.

The interest rate in effect at March 31, 2024 and 2023 was 7.69 % and 6.80 %, respectively.

The interest rate that will be in effect for the three months beginning May 1, 2024 is 7.59 %.

The notes mature April 30, 2036.

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 September 30, 2023 and 2022, which includes amortization of deferred financing costs, was $ 716,000 and $ 413,000 , respectively.

Interest expense for the nine months ended September 30, 2023 and 2022, which includes amortization of deferred financing costs, was $ 2,032,000 and $ 911,000 , respectively.

Interest expense for the three months ended March 31, 2024 and 2023, which includes amortization of deferred financing costs, was $ 732,000 and $ 637,000 , respectively.

Note 9 – 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 September 30, 2023 and 2022 were $ 385,000 and $ 367,000 , respectively, and $ 1,155,000 and $ 1,101,000 for the nine months ended September 30, 2023 and 2022, respectively.

The aggregate fees incurred for these services in each of the three months ended March 31, 2024 and 2023 were $ 405,000 and $ 385,000 , 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 $ 17,000 and $ 9,000 for the three months ended September 30, 2023 and 2022, respectively and $ 33,000 and $ 28,000 for the nine months ended September 30, 2023 and 2022, respectively.

These fees amounted to $ 9,000 and $ 6,000 for the three months ended March 31, 2024 and 2023.

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, (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 September 30, 2023 and 2022, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated $ 141,000 and $ 183,000 , respectively and $ 478,000 and $ 614,000 for the nine months ended September 30, 2023 and 2022, respectively.

During the three months ended March 31, 2024 and 2023, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated $ 182,000 and $ 172,000 , 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 nine months ended September 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 $ 1,008,000 , 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 September 30, 2023 and December 31, 2022, the estimated fair value of the notes is lower than their carrying value by approximately $ 3,668,000 and $ 4,695,000 , respectively, based on a market interest rate of 8.52 % and 7.91 %, respectively.

At March 31, 2024 and December 31, 2023, the estimated fair value of the notes is lower than their carrying value by approximately $ 3,577,000 and $ 3,613,000 , respectively, based on a market interest rate of 8.60 % and 8.60 %, 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 September 30, 2023, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately $ 50,853,000 , assuming market interest rates between 5.59 % and 6.94 %.

At March 31, 2024, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately $ 39,019,000 , assuming market interest rates between 5.20 % and 6.55 %.

At December 31, 2023, the estimated fair value of the Company's mortgages payable was lower than their carrying value by approximately $ 34,195,000 , assuming market interest rates between 4.88 % and 6.23 %.

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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.

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.

The Company and certain other defendants have agreed to settle this lawsuit for approximately $ 325,000 ;

the settlement remains subject to, among other things, the execution of certain additional documentation and court approval.

This settlement amount will be fully funded by the Company’s insurance carrier.

Note 12 – New Accounting Pronouncements

On January 1, 2024, the Company adopted the FASB ASU No.

2023-07, Segment Reporting – Improvements to Reportable Segments Disclosures , which enhances disclosures of significant segment expenses regularly provided to the chief operating decision maker.

This adoption did not have any impact on its consolidated financial statements.

Note 13 – Subsequent Events

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of September 30, 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 March 31, 2024, 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