What changed in this filing

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Item 1. Financial Statements

2025-11-06 compared with 2025-08-07 · 127 added, 82 removed, 438 unchanged (32% of the section changed)

4 unchanged sentences

(Amounts in thousands, except per share data)

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

(unaudited) (audited)

35 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2025 2024 2025 2024

2 unchanged sentences

Total revenues 24,434 24,396 72,737 71,661

Real estate operating expenses 11,117 10,846 21,667 21,425

Real estate operating expenses - including $ 11 and $ 9 to related parties for the three months ended and $ 26 and $ 26 for the nine months ended

11,342 11,187 33,009 32,612

Interest expense 5,882 5,745 17,265 16,768

General and administrative - including $ 163 and $ 141 to related parties for the three months ended and $ 341 and $ 361 for the six months ended

General and administrative - including $ 206 and $ 208 to related parties for the three months ended and $ 548 and $ 569 for the nine months ended

3,937 3,811 11,751 11,776

2 unchanged sentences

Total revenues less total expenses ( 3,346 ) ( 2,846 ) ( 9,028 ) ( 8,895 )

Equity in earnings of unconsolidated joint ventures 299 389 712 617

Equity in (loss) earnings of unconsolidated joint ventures ( 75 ) 369 637 986

Gain on sale of real estate 755 — 755 —

Insurance recovery of casualty loss — — 257 —

33 unchanged sentences

Balances, June 30, 2025 $ 180 $ 273,795 $ ( 81,860 ) $ ( 66 ) $ 192,049

Distributions - common stock - $ 0.25 per share

— — ( 4,739 ) — ( 4,739 )

Compensation expense - restricted stock and restricted stock units — 1,244 — — 1,244

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

Shares issues through DRIP — 831 — — 831

Net (loss) income — — ( 2,707 ) 39 ( 2,668 )

Balances, September 30, 2025 $ 180 $ 275,870 $ ( 89,306 ) $ ( 86 ) $ 186,658

See accompanying notes to consolidated financial statements.

24 unchanged sentences

Balances, June 30, 2024 $ 177 $ 268,382 $ ( 53,821 ) $ ( 64 ) $ 214,674

Distributions - common stock - $ 0.25 per share

— — ( 4,690 ) — ( 4,690 )

Compensation expense - restricted stock and restricted stock units — 1,189 — — 1,189

Distributions to non-controlling interests — — — ( 75 ) ( 75 )

Shares issued through DRIP 1 950 — — 951

Shares repurchased — ( 115 ) — — ( 115 )

Net (loss) income — — ( 2,205 ) 38 ( 2,167 )

Balances, September 30, 2024 $ 178 $ 270,406 $ ( 60,716 ) $ ( 101 ) $ 209,767

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:

7 unchanged sentences

Equity in earnings of unconsolidated joint ventures ( 637 ) ( 986 )

Gain on sale of real estate ( 755 ) —

Increases and decreases from changes in other assets and liabilities:

Increase in other assets ( 1,851 ) ( 809 )

Increase (decrease) in accounts payable and accrued liabilities 411 ( 361 )

Increase in accounts payable and accrued liabilities 4,075 1,661

Net cash provided by operating activities 17,778 16,562

1 unchanged sentence

Improvements to real estate properties ( 6,124 ) ( 4,943 )

Proceeds from the sale of real estate 913 —

Distributions from unconsolidated joint ventures 2,942 3,821

2 unchanged sentences

Cash flows from financing activities:

Proceeds from mortgages payable 15,776 27,375

Mortgage payoffs ( 15,375 ) —

Mortgage principal payments ( 3,594 ) ( 2,831 )

Proceeds from credit facility 17,500 —

Increase in deferred financing costs ( 587 ) ( 1,216 )

Dividends paid ( 14,155 ) ( 13,949 )

2 unchanged sentences

Repurchase of shares of common stock ( 2,386 ) ( 3,312 )

Net cash used in financing activities ( 12,514 ) ( 12,594 )

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

Net cash (used in) provided by financing activities ( 517 ) 8,701

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

$ ( 4,138 ) $ 23,975

4 unchanged sentences

Cash paid for income taxes and excise taxes $ 238 $ 58

BRT APARTMENTS CORP.

AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in Thousands)

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:

2 unchanged sentences

Escrows (Other assets) 10,476 9,949

Total cash, cash equivalents, restricted cash and escrows shown in consolidated statement of cash flows $ 34,550 $ 26,100

Total cash, cash equivalents, restricted cash and escrows shown in consolidated

statement of cash flows $ 36,441 $ 55,750

BRT APARTMENTS CORP.

1 unchanged sentence

Notes to Consolidated Financial Statements

June 30, 2025

September 30, 2025

Note 1 – Organization and Background

2 unchanged sentences

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

At June 30, 2025, the Company:

At September 30, 2025, the Company:

(i) wholly-owns 21 multi-family properties located in 11 states with an aggregate of 5,420 units and a carrying value of $ 600,544,000 ;

(ii) has ownership interests, through unconsolidated entities, in eight multi-family properties located in four states with an aggregate of 2,527 units and the carrying value of its net equity investment is $ 30,023,000 ;

(ii) has ownership interests, through unconsolidated entities, in ten multi-family properties located in four states with an aggregate of 2,891 units and the carrying value of its net equity investment is $ 48,169,000 ;

(iii) has investments in joint ventures that own two multi-family properties which investments are treated for financial statement purposes as loans (the "Preferred Equity Investments") with a carrying value of $ 17,713,000 ;

5 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 six months ended June 30, 2025 and 2024, are not necessarily indicative of the results for the full year.

The results of operations for the three and nine months ended September 30, 2025 and 2024, are not necessarily indicative of the results for the full year.

The consolidated audited balance sheet as of December 31, 2024, 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").

1 unchanged sentence

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

Certain items on the consolidated financial statements for the six months ended June 30, 2024, have been reclassified to conform with the current quarter's presentation including reclassifying Net change in deferred concessions and straight line rent to Other assets on the consolidated statements of cash flows.

Certain items on the consolidated financial statements for the nine months ended September 30, 2024, have been reclassified to conform with the current quarter's presentation including reclassifying Net change in deferred concessions and straight line rent to Other assets on the consolidated statements of cash flows.

Other than its Preferred Equity Investments, the Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting.

7 unchanged sentences

It was determined that the Company is not the primary beneficiary as the Company does not have the power to direct the activities of the VIE that most significantly impact the VIE's performance, and therefore these entities are not consolidated.

In accordance with GAAP, these investments are treated as loans.

These investments are unsecured and are subordinate, including the payment of the returns thereon, to the mortgage debt encumbering the applicable property.

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.

18 unchanged sentences

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 and six months ended June 30, 2025 and 2024, the Company did not sell any shares.

At June 30, 2025, the Company is authorized to sell an aggregate of $ 40,000,000 of shares pursuant to the equity distribution agreements.

During the three and nine months ended September 30, 2025 and 2024, the Company did not sell any shares.

At September 30, 2025, the Company is authorized to sell an aggregate of $ 40,000,000 of shares pursuant to the equity distribution agreements.

Common Stock Dividend Distribution

The Company declared a quarterly cash distribution of $ 0.25 per share, payable on July 9, 2025, to stockholders of record on June 25, 2025.

The Company declared a quarterly cash distribution of $ 0.25 per share, payable on October 6, 2025, to stockholders of record on September 24, 2025.

Share Repurchase Program

1 unchanged sentence

On March 11, 2025, the Board of Directors, replenished the value of the shares available to be purchased pursuant to this program to $ 10,000,000 of shares (a replenishment of $ 5,050,000 shares from the shares that were available to be repurchased prior to such increase) and extended the program through December 31, 2026.

During the three months ended June 30, 2025, the Company repurchased 63,356 shares of common stock at an average price per share of $ 15.84 for an aggregate cost of $ 1,004,000 .

During the six months ended June 30, 2025, the Company repurchased 142,080 shares of common stock at an average price per share of $ 16.79 for an aggregate cost of $ 2,386,000 .

As of June 30, 2025, and August 1, 2025, up to $ 8,752,000 of shares was available to be repurchased under the program.

During the three months ended September 30, 2025, the Company did not repurchase any shares of common stock.

During the nine months ended September 30, 2025, the Company repurchased 142,080 shares of common stock at an average price per share of $ 16.79 for an aggregate cost of $ 2,386,000 .

As of September 30, 2025, and October 31, 2025, up to $ 8,752,000 of shares were available to be repurchased under the program.

Note 3 – Equity (continued)

During the three months ended June 30, 2024, the Company repurchased 53,619 shares of common stock at an average price per share of $ 17.34 for an aggregate cost of $ 930,000 .

During the six months ended June 30, 2024, the Company repurchased 176,680 shares of common stock at an average price per share of $ 18.10 for an aggregate cost of $ 3,197,000 .

During the three months ended September 30, 2024, the Company repurchased 6,563 shares of common stock at an average price per share of $ 17.55 for an aggregate cost of $ 115,000 .

During the nine months ended September 30, 2024, the Company repurchased 183,243 shares of common stock at an average price per share of $ 18.08 for an aggregate cost of $ 3,312,000 .

Dividend Reinvestment Plan

1 unchanged sentence

The discount from the market price is currently 3 %.

During the three and six months ended June 30, 2025, 50,179 and 96,629 shares were issued in lieu of cash dividends of $ 822,000 and 1,630,000 , respectively.

During the three and six months ended June 30, 2024, 57,901 and 108,852 shares were issued in lieu of cash dividends of $ 947,000 and $ 1,878,000 , respectively.

During the three and nine months ended September 30, 2025, 53,787 and 150,416 shares were issued in lieu of cash dividends of $ 831,000 and $ 2,461,000 , respectively.

During the three and nine months ended September 30, 2024, 56,879 and 165,731 shares were issued in lieu of cash dividends of $ 951,000 and $ 2,829,000 , respectively.

Stock Based Compensation

4 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 June 30, 2025, 632,837 shares are available for issuance pursuant to awards under the 2024 Plan.

As of September 30, 2025, 449,226 shares are available for issuance pursuant to awards under the 2024 Plan.

Awards to acquire 1,496,692 shares of common stock are outstanding under the 2024 Plan, the 2022 Incentive Plan (the "2022 Plan"), and the 2020 Amended and Restated Incentive Plan (the "2020 Plan";

2 unchanged sentences

Restricted Stock Units

As of June 30, 2025 , an aggregate of 402,076 of unvested RSU's are outstanding pursuant to the 2024 Plan and the Prior Plans.

As of September 30, 2025 , an aggregate of 573,864 of unvested RSU's are outstanding pursuant to the 2024 Plan and the 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.

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

For the three months ended June 30, 2025 and 2024, the Company recorded $ 296,000 and $ 231,000 , respectively and for the six months ended June 30, 2025 and 2024, the Company recorded $ 589,000 and $ 703,000 of compensation expense related to the amortization of unearned compensation with respect to the RSUs.

At June 30, 2025 and December 31, 2024, $ 1,103,000 and $ 1,692,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting periods.

For the three months ended September 30, 2025 and 2024, the Company recorded $ 166,000 and $ 303,000 , respectively and for the nine months ended September 30, 2025 and 2024, the Company recorded $ 755,000 and $ 1,006,000 of compensation expense related to the amortization of unearned compensation with respect to the RSUs.

At September 30, 2025 and December 31, 2024, $ 1,557,000 and $ 1,692,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting periods.

The weighted average remaining vesting period of these restricted stock units is approximately 1.8 years.

1 unchanged sentence

Generally, the awards vest in 2028 subject to satisfaction of, among other things, market and performance conditions.

The Company determined that at June 30, 2025, none of the performance and market conditions with respect to the vesting of the RSUs granted in 2022 had been met.

Accordingly, all such awards, to the extent not previously forfeited, were forfeited.

Restricted Stock

In January 2025 and 2024, the Company granted 165,408 and 166,439 shares, pursuant to the 2024 Plan and 2022 Plan, respectively.

As of June 30, 2025 , an aggregate of 922,828 shares of unvested restricted stock are outstanding pursuant to the 2024 Plan and Prior Plans.

As of September 30, 2025 , an aggregate of 922,828 shares of unvested restricted stock are outstanding pursuant to the 2024 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 June 30, 2025 and 2024, the Company recorded $ 839,000 and $ 859,000 , respectively and for the six months ended June 30, 2025 and 2024, the Company recorded $ 1,688,000 and $ 1,729,000 , of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards.

At June 30, 2025 and December 31, 2024, $ 7,787,000 and $ 6,660,000 , respectively has been deferred as unearned compensation and will be charged

Note 3 – Equity (continued)

to expense over the remaining vesting periods of these restricted stock awards.

For the three months ended September 30, 2025 and 2024, the Company recorded $ 1,078,000 and $ 886,000 , respectively and for the nine months ended September 30, 2025 and 2024, the Company recorded $ 2,766,000 and $ 2,615,000 , of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards.

At September 30, 2025 and December 31, 2024, $ 6,577,000 and $ 6,660,000 , 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 restricted stock awards is 2.1 years.

Note 3 – Equity (continued)

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 June 30, Six Months Ended June 30,

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

2025 2024 2025 2024

15 unchanged sentences

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.

The Company does not separate non-lease components from the related lease components, as the timing and pattern of transfer are the same, and accounts for the combined component in accordance with ASC 842.

The Company does not separate non-lease components from the related

lease components, as the timing and pattern of transfer are the same, and accounts for the combined component in accordance with ASC 842.

Rental revenue from multi-family properties is recorded when due from residents and is recognized monthly as it is earned.

6 unchanged sentences

There are no renewal options.

As of June 30, 2025, the remaining lease term is 20.0 years.

As of September 30, 2025, the remaining lease term is 19.8 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, 2025, the remaining lease term, including renewal options deemed exercised, is 11.5 years.

As of June 30, 2025, the Company's Right of Use ("ROU") assets and lease liabilities were $ 1,917,000 and $ 2,090,000 , respectively.

As of September 30, 2025, the remaining lease term, including renewal options deemed exercised, is 11.3 years.

As of September 30, 2025, the Company's Right of Use ("ROU") assets and lease liabilities were $ 1,874,000 and $ 2,053,000 , respectively.

As of December 31, 2024, the Company's ROU assets and lease liabilities were $ 2,003,000 and $ 2,167,000 , respectively.

6 unchanged sentences

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Land $ 74,246 $ 74,246

6 unchanged sentences

December 31, 2024

Balance Improvements Depreciation June 30, 2025

Balance Improvements Depreciation Real Estate Sold September 30, 2025

Multi-family $ 614,235 $ 5,966 $ ( 19,657 ) $ — $ 600,544

1 unchanged sentence

Total real estate properties $ 615,915 $ 6,124 $ ( 19,740 ) $ ( 158 ) $ 602,141

Property Dispositions

During the quarter ended September 30, 2025, the Company sold a cooperative apartment unit located in New York, NY for a sales price of $ 995,000 and, after closing costs, recognized a gain of $ 755,000 on the sale.

Note 6 – Loans

2 unchanged sentences

These investments are unsecured and are subordinate, including the payment of the returns thereon, to the mortgage debt encumbering the property acquired by the applicable joint venture.

Information as to these investments at June 30, 2025 is summarized below (dollars and thousands):

Information as to these investments at September 30, 2025 is summarized below (dollars and thousands):

Note 6 – Loans (continued)

3 unchanged sentences

$ 18,250 $ ( 267 )

These investments provide for (1) an Annual Return (as set forth in the table above) compounded monthly, to the Company, of which the Current Return (as set forth in the table above) is payable monthly to the extent of available cash flow, and the Hurdle Return also to be paid monthly from remaining cash flow if any, parri passu or after the sponsor's receipt of its management fees and specified returns on its investment and (2) the total amount invested by the Company, including any unpaid portion of the Current Return and the Hurdle Return, to be payable to the Company, prior to any payments to the sponsor, upon the earlier to occur of certain events ( e.g., sale of the property or the refinancing of the mortgage underlying the property) and the redemption date specified above.

These investments provide for (1) an Annual Return (as set forth in the table above) compounded monthly, to the Company, of which the Current Return (as set forth in the table above) is payable monthly to the extent of available cash flow, and the Hurdle Return also to be paid monthly from remaining cash flow if any, pari passu or after the sponsor's receipt of its management fees and specified returns on its investment and (2) the total amount invested by the Company, including any unpaid portion of the Current Return and the Hurdle Return, to be payable to the Company, prior to any payments to the sponsor, upon the earlier to occur of certain events ( e.g., sale of the property or the refinancing of the mortgage underlying the property) and the redemption date specified above.

The Current Return is recorded as interest income when it is due from the sponsor and the Hurdle Return is recognized as interest income when it is received.

3 unchanged sentences

, the Preferred Equity Investments) that are outstanding (dollars in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Unpaid principal balance $ 18,250 $ 18,250

2 unchanged sentences

Net carrying value $ 17,713 $ 17,667

During the three and six months ended June 30, 2025 , the Company recorded $ 316,000 and $ 624,000 respectively, of interest income, representing the full amount of the Current Return (including loan fee amortization of $ 15,000 and $ 31,000 , respectively), payable with respect to these loans.

As of June 30, 2025, these loans were current in their payment of the Current Return.

During the three and nine months ended September 30, 2025, the Company recorded $ 324,000 and $ 949,000 respectively, of interest income, representing the full amount of the Current Return (including loan fee amortization of $ 15,000 and $ 46,000 , respectively), payable with respect to these loans.

As of September 30, 2025, these loans were current in their payment of the Current Return.

Note 7 – Allowance for Credit Loss

16 unchanged sentences

Adjustments to the allowance are recorded on the Company's Consolidated Statements of Operations as "Provision for credit loss".

If the Company determines that a loan or a portion of the loan is uncollectible, it will write off the uncollectible portion of the loan through an adjustment to its CECL allowance based on the net present value of expected future cash flows.

If the Company determines that a loan or a portion of the loan is uncollectible, it will write off the uncollectible

portion of the loan through an adjustment to its CECL allowance based on the net present value of expected future cash flows.

Write-offs are recorded in the period in which the loan balance is deemed uncollectible based on management’s judgment.

1 unchanged sentence

Changes in the Company's allowance for credit loss were as follows (dollars in thousands):

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

CECL allowance at beginning of year $ 270 $ —

6 unchanged sentences

Note 9 – Investment in Unconsolidated Ventures

At June 30, 2025 and December 31, 2024, the Company held interests in unconsolidated joint ventures that own eight multi-family properties (the "Unconsolidated Properties") (including Stono Oaks that was in lease-up as of each of such dates).

At September 30, 2025 and December 31, 2024, the Company held interests in unconsolidated joint ventures that own ten and eight , respectively, multi-family properties (the "Unconsolidated Properties") (including Stono Oaks that was in lease-up as of December 31, 2024).

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Real estate properties, net of accumulated depreciation of $ 92,124 and $ 81,843

14 unchanged sentences

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Land $ 54,272 $ 46,331

4 unchanged sentences

Total real estate properties, net $ 366,408 $ 318,594

At June 30, 2025 and December 31, 2024, the weighted average interest rate on the mortgages payable is 4.26 % and 4.30 %, respectively, and the weighted average remaining term to maturity is 3.4 years and 3.9 years, respectively.

At September 30, 2025 and December 31, 2024, the weighted average interest rate on the mortgages payable is 4.27 % and 4.30 %, respectively, and the weighted average remaining term to maturity is 3.6 years and 3.9 years, respectively.

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

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

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

2025 2024 2025 2024

7 unchanged sentences

Other equity earnings 2 5 110 26

Net income (loss) $ 268 $ 122 $ 401 $ ( 353 )

BRT's equity in earnings $ 299 $ 389 $ 712 $ 617

Net (loss) income $ ( 217 ) $ 224 $ 184 $ ( 129 )

BRT's equity in (loss) earnings $ ( 75 ) $ 369 $ 637 $ 986

On July 15, 2025, a joint venture in which the Company has an 80 % interest, acquired 1322 North, a 214 unit multi-family property located in Auburn, AL (the "Auburn Acquisition").

3 unchanged sentences

In connection with this transaction, the Company borrowed $ 7,000,000 from its credit facility.

On September 19, 2025, a joint venture in which the Company has an 80 % interest, acquired Oaks at Victory, a 150 unit multi-family property located in Savannah, GA (the "Savannah Acquisition").

The venture acquired the property for $ 23,000,000 (including a $ 15,680,000 mortgage assumed as part of the transaction).

The mortgage matures in 2031, bears a 2.71 % fixed interest rate, and is interest only through September 30, 2027.

The Company contributed $ 8,380,000 to the joint venture for its equity interest.

In connection with this transaction, the Company borrowed $ 8,000,000 from its credit facility.

Note 10 – Debt Obligations

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

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Mortgages payable $ 447,667 $ 450,481

4 unchanged sentences

__________________________________________

(1) Excludes $ 305 and $ 374 of deferred financing costs related to the credit facility which are reflected in other assets at June 30, 2025 and December 31, 2024, respectively.

(1) Excludes $ 271 and $ 374 of deferred financing costs related to the credit facility which are reflected in other assets at September 30, 2025 and December 31, 2024, respectively.

Mortgages Payable

At June 30, 2025, the weighted average interest rate on the Company's mortgage payables was 4.09 % and the weighted average remaining term to maturity is 5.6 years.

For the three months ended June 30, 2025 and 2024, interest expense, which includes amortization of deferred financing costs, was $ 5,023,000 and $ 4,686,000 , respectively.

For the six months ended June 30, 2025 and 2024, interest expense, which includes amortization of deferred financing costs, was $ 10,014,000 and $ 9,385,000 , respectively.

At September 30, 2025, the weighted average interest rate on the Company's mortgage payables was 4.12 % and the weighted average remaining term to maturity is 5.6 years.

For the three months ended September 30, 2025 and 2024, interest expense, which includes amortization of deferred financing costs, was $ 5,063,000 and $ 4,886,000 , respectively.

For the nine months ended September 30, 2025 and 2024, interest expense, which includes amortization of deferred financing costs, was $ 15,077,000 and $ 14,271,000 , respectively.

On September 26, 2025, the Company refinanced the maturing mortgage of $ 15,375,000 (and bearing an interest rate of 4.42 %) on Parkway Grande - San Marcos, TX with a new mortgage of $ 15,776,000 ;

such new mortgage matures on October 1, 2032, bears an interest rate of 5.09 % and is interest only for five years .

Credit Facility

4 unchanged sentences

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 June 30, 2025 is 6.95 %.

The interest rate in effect as of September 30, 2025 is 6.77 %.

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

At June 30, 2025, the Company is in compliance in all material respects with its obligations under the facility.

At June 30, 2025 and December 31, 2024, there was no outstanding balance on the facility and at each such date, the full amount was available to be borrowed.

Interest expense for the three months ended June 30, 2025 and 2024, which includes amortization of deferred financing costs and unused fees, was $ 60,000 and $ 92,000 , respectively.

Interest expense for the six months ended June 30, 2025 and 2024, which includes amortization of deferred financing costs and unused fees, was $ 119,000 and $ 184,000 , respectively.

The remaining deferred financing costs of $ 305,000 and $ 374,000 are recorded as Other Assets on the Consolidated balance sheets at June 30, 2025 and December 31, 2024, respectively.

At September 30, 2025, the Company is in compliance in all material respects with its obligations under the facility.

On July 9, 2025, in connection with the Auburn Acquisition, the Company borrowed $ 7,000,000 from its credit facility.

On September 19, 2025, in connection with the Savannah Acquisition, the Company borrowed $ 8,000,000 .

On September 30, 2025, in connection with supplementing working capital reserves, the Company borrowed $ 2,500,000 .

At September 30, 2025 and December 31, 2024, there was a $ 17,500,000 and no outstanding balance, respectively, on the facility.

Interest expense for the three months ended September 30, 2025 and 2024, which includes amortization of deferred financing costs and unused fees, was $ 187,000 and $ 134,000 , respectively.

Interest expense for the nine months ended September 30, 2025 and 2024, which includes amortization of deferred financing costs and unused fees, was $ 306,000 and $ 318,000 , respectively.

The remaining deferred financing costs of $ 271,000 and $ 374,000 are recorded as Other Assets on the Consolidated balance sheets at September 30, 2025 and December 31, 2024, respectively.

Junior Subordinated Notes

At June 30, 2025 and December 31, 2024, the outstanding principal balance of the Company's junior subordinated notes was $ 37,400,000 , before deferred financing costs of $ 227,000 and $ 237,000 , respectively.

At September 30, 2025 and December 31, 2024, the outstanding principal balance of the Company's junior subordinated notes was $ 37,400,000 , before deferred financing costs of $ 222,000 and $ 237,000 , 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 June 30, 2025 and 2024 was 6.54 % and 7.59 %, respectively.

The interest rate in effect at September 30, 2025 and 2024 was 6.57 % and 7.52 %, respectively.

Note 10 – Debt Obligations (continued)

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, 2025 and 2024, which includes amortization of deferred financing costs, was $ 624,000 and $ 722,000 , respectively.

expense for the six months ended June 30, 2025 and 2024, which includes amortization of deferred financing costs, was $ 1,250,000 and $ 1,454,000 , respectively.

Interest expense for the three months ended September 30, 2025 and 2024, which includes amortization of deferred financing costs, was $ 632,000 and $ 725,000 , respectively.

expense for the nine months ended September 30, 2025 and 2024, which includes amortization of deferred financing costs, was $ 1,882,000 and $ 2,179,000 , respectively.

Note 11 – 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 June 30, 2025 and 2024 were $ 425,000 and $ 405,000 , respectively and $ 850,000 and $ 810,000 for the six months ended June 30, 2025 and 2024.

The aggregate fees incurred for these services in each of the three months ended September 30, 2025 and 2024 were $ 425,000 and $ 404,000 , respectively and $ 1,275,000 and $ 1,214,000 for the nine months ended September 30, 2025 and 2024.

Management of a property owned by the Company and a joint venture property are provided by Majestic Property Management LLC.

("Majestic Property"), a company wholly owned by Fredric H.

("Majestic Property"), a company which is indirectly owned by, among others, Jeffrey A.

Gould, a director and our chief executive officer and president, and Matthew J.

Gould, a director and a senior vice president.

Certain of the Company's officers and management directors are also officers and directors of Majestic Property.

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

These fees amounted to $ 6,000 and $ 8,000 for the three months ended June 30, 2025 and 2024 and $ 15,000 and $ 17,000 for the six months ended June 30, 2025 and 2024.

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

These fees amounted to $ 11,000 and $ 9,000 for the three months ended September 30, 2025 and 2024 and $ 26,000 for each of the nine months ended September 30, 2025 and 2024.

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

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the Company and Gould Investors, is determined 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, 2025 and 2024, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated was $ 163,000 and $ 141,000 , respectively and $ 341,000 and $ 361,000 for the six months ended June 30, 2025 and 2024.

During the three months ended September 30, 2025 and 2024, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated was $ 206,000 and $ 208,000 , respectively and $ 547,000 and $ 569,000 for the nine months ended September 30, 2025 and 2024.

Gould and Matthew J.

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The following methods and assumptions were used to estimate the fair value of each class of financial instruments that are not recorded at fair value on the consolidated balance sheets:

Note 12 – Fair Value Measurements (continued)

Cash and cash equivalents, restricted cash, accounts receivable (included in other assets), accounts payable and accrued liabilities:

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Loan Receivables:

At June 30, 2025, the estimated fair value of the loan receivables is greater than their carrying value by approximately $ 178,000 , based on market interest rates ranging from 5.91 % to 6.12 %.

At September 30, 2025, the estimated fair value of the loan receivables is greater than their carrying value by approximately $ 204,000 , based on market interest rates ranging from 5.86 % to 6.07 %.

At December 31, 2024, the estimated fair value of the Company's loan receivables, equaled their carrying value due to their proximity to origination.

The Company values its loan receivables using a discounted cash flow analysis of the expected cash flow of each instrument.

Note 12 – Fair Value Measurements (continued)

Junior subordinated notes:

At June 30, 2025 and December 31, 2024, the estimated fair value of the notes is lower than their carrying value by approximately $ 3,554,000 and $ 3,578,000 , respectively, based on a market interest rate of 7.59 % and 7.94 %, respectively.

At September 30, 2025 and December 31, 2024, the estimated fair value of the notes is lower than their carrying value by approximately $ 3,503,000 and $ 3,578,000 , respectively, based on a market interest rate of 7.60 % and 7.94 %, 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 June 30, 2025, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately $ 32,369,000 , assuming market interest rates between 4.88 % and 6.54 %.

At September 30, 2025, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately $ 29,666,000 , assuming market interest rates between 4.83 % and 6.46 %.

At December 31, 2024, the estimated fair value of the Company's mortgages payable was lower than their carrying value by approximately $ 39,277,000 , assuming market interest rates between 5.38 % and 6.61 %.

18 unchanged sentences

Note 15 – Subsequent Events

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of June 30, 2025, 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, 2025, 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