BRT Apartments Corp. 10-Q

Item 1. Financial Statements BRT APARTMENTS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except per share data) September 30, 2025 December 31, 2024 (unaudited) (audited) ASSETS Real estate properties, net of accumulated depreciation and amortization of $ 126,165 and $ 106,425 $ 602,141 $ 615,915 Investments in unconsolidated joint ventures 48,169 31,344 Loan receivables, net of deferred fees of $ 267 and $ 313 and allowance for credit loss of $ 270 and $ 270 17,713 17,667 Cash and cash equivalents 21,105 27,856 Restricted cash 4,860 3,221 Other assets 20,182 17,460 Total Assets $ 714,170 $ 713,463 LIABILITIES AND EQUITY Liabilities: Mortgages payable, net of deferred costs of $ 3,864 and $ 4,010 $ 443,803 $ 446,471 Junior subordinated notes, net of deferred costs of $ 222 and $ 237 37,178 37,163 Credit facility 17,500 — Accounts payable and accrued liabilities 29,031 24,915 Total Liabilities 527,512 508,549 Commitments and contingencies Equity: BRT Apartments Corp. stockholders' equity: Preferred shares $ 0.01 par value 2,000 shares authorized, none outstanding — — Common stock, $ 0.01 par value, 300,000 shares authorized; 18,034 and 17,872 shares outstanding 180 179 Additional paid-in capital 275,870 272,275 Accumulated deficit ( 89,306 ) ( 67,485 ) Total BRT Apartments Corp. stockholders’ equity 186,744 204,969 Non-controlling interests ( 86 ) ( 55 ) Total Equity 186,658 204,914 Total Liabilities and Equity $ 714,170 $ 713,463 See accompanying notes to consolidated financial statements. 2 Table of Contents BRT APARTMENTS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (Amounts in thousands, except shares and per share data) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenues: Rental and other revenue from real estate properties $ 24,031 $ 24,177 $ 71,379 $ 71,253 Loan interest and other income 403 219 1,358 408 Total revenues 24,434 24,396 72,737 71,661 Expenses: 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 $ 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 Depreciation and amortization 6,619 6,499 19,740 19,400 Total expenses 27,780 27,242 81,765 80,556 Total revenues less total expenses ( 3,346 ) ( 2,846 ) ( 9,028 ) ( 8,895 ) 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 — Loss from continuing operations ( 2,666 ) ( 2,477 ) ( 7,379 ) ( 7,909 ) Income tax provision (benefit) 2 ( 310 ) 120 ( 297 ) Loss from continuing operations, net of taxes ( 2,668 ) ( 2,167 ) ( 7,499 ) ( 7,612 ) Net income attributable to non-controlling interest ( 39 ) ( 38 ) ( 126 ) ( 109 ) Net loss attributable to common stockholders $ ( 2,707 ) $ ( 2,205 ) $ ( 7,625 ) $ ( 7,721 ) Weighted average number of shares of common stock outstanding: Basic and diluted 18,028,496 17,796,206 18,000,615 17,720,024 Net loss per share amounts attributable to common stockholders: Basic and diluted $ ( 0.14 ) $ ( 0.12 ) $ ( 0.40 ) $ ( 0.41 ) See accompanying notes to consolidated financial statements. 3 Table of Contents BRT APARTMENTS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (Dollars in thousands, except per share data) Shares of Common Stock Additional Paid-In Capital (Accumulated Deficit) Non- Controlling Interest Total Balances, December 31, 2024 $ 179 $ 272,275 $ ( 67,485 ) $ ( 55 ) $ 204,914 Distributions - common stock - $ 0.25 per share — — ( 4,732 ) — ( 4,732 ) Restricted stock and restricted stock units vesting 2 ( 2 ) — — — Compensation expense - restricted stock and restricted stock units — 1,142 — — 1,142 Distributions to non-controlling interests — — — ( 53 ) ( 53 ) Shares issued through DRIP — 808 — — 808 Shares repurchased ( 1 ) ( 1,381 ) — — ( 1,382 ) Net (loss) income — — ( 2,352 ) 44 ( 2,308 ) Balances, March 31, 2025 $ 180 $ 272,842 $ ( 74,569 ) $ ( 64 ) $ 198,389 Distributions - common stock - $ 0.25 per share — — ( 4,725 ) — ( 4,725 ) Compensation expense - restricted stock and restricted stock units — 1,135 — — 1,135 Distributions to non-controlling interests — — — ( 45 ) ( 45 ) Shares issues through DRIP 1 821 — — 822 Shares repurchased ( 1 ) ( 1,003 ) — — ( 1,004 ) Net (loss) income — — ( 2,566 ) 43 ( 2,523 ) 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. 4 Table of Contents BRT APARTMENTS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (Unaudited) (Dollars in thousands, except per share data) Shares of Common Stock Additional Paid-In Capital (Accumulated Deficit) Non- Controlling Interest Total Balances, December 31, 2023 $ 175 $ 267,271 $ ( 38,986 ) $ ( 15 ) $ 228,445 Distributions - common stock - $ 0.25 per share — — ( 4,641 ) — ( 4,641 ) Restricted stock and restricted stock units vesting 2 ( 2 ) — — — Compensation expense - restricted stock and restricted stock units — 1,342 — — 1,342 Distributions to non-controlling interests — — — ( 60 ) ( 60 ) Shares issued through DRIP — 931 — — 931 Shares repurchased ( 1 ) ( 2,266 ) — — ( 2,267 ) Net (loss) income — — ( 3,171 ) 35 ( 3,136 ) Balances, March 31, 2024 $ 176 $ 267,276 $ ( 46,798 ) $ ( 40 ) $ 220,614 Distributions - common stock - $ 0.25 per share — — ( 4,678 ) — ( 4,678 ) Restricted stock and restricted stock units vesting 1 ( 1 ) — — — Compensation expense - restricted stock and restricted stock units — 1,090 — — 1,090 Distributions to non-controlling interests — — — ( 60 ) ( 60 ) Shares issued through DRIP 1 946 — — 947 Shares repurchased ( 1 ) ( 929 ) — — ( 930 ) Net (loss) income — — ( 2,345 ) 36 ( 2,309 ) 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. 5 Table of Contents BRT APARTMENTS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (Dollars in Thousands) Nine Months Ended September 30, 2025 2024 Cash flows from operating activities: Net loss $ ( 7,499 ) $ ( 7,612 ) Adjustments to reconcile net (loss) to net cash provided by operating activities: Depreciation and amortization 19,740 19,400 Amortization of deferred financing costs 851 866 Amortization of debt fair value adjustment 379 421 Amortization of deferred loan fee income ( 46 ) — Amortization of restricted stock and restricted stock units 3,521 3,621 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 in accounts payable and accrued liabilities 4,075 1,661 Net cash provided by operating activities 17,778 16,562 Cash flows from investing activities: 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 Contributions to unconsolidated joint ventures ( 19,130 ) ( 166 ) Net cash used in investing activities ( 21,399 ) ( 1,288 ) 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 ) Distributions to non-controlling interests ( 157 ) ( 195 ) Proceeds from issuance of DRIP shares 2,461 2,829 Repurchase of shares of common stock ( 2,386 ) ( 3,312 ) 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 Cash, cash equivalents, restricted cash and escrows at beginning of period 40,579 31,775 Cash, cash equivalents, restricted cash and escrows at end of period $ 36,441 $ 55,750 Supplemental disclosure of cash flow information: Cash paid during the period for interest expense $ 16,109 $ 15,434 Cash paid for income taxes and excise taxes $ 238 $ 58 6 Table of Contents BRT APARTMENTS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (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, 2025 2024 Reconciliation of cash and cash equivalents and restricted cash: Cash and cash equivalents $ 21,105 $ 45,801 Restricted cash 4,860 — Escrows (Other assets) 10,476 9,949 Total cash, cash equivalents, restricted cash and escrows shown in consolidated statement of cash flows $ 36,441 $ 55,750 7 Table of Contents BRT APARTMENTS CORP. AND SUBSIDIARIES Notes to Consolidated Financial Statements September 30, 2025 Note 1 – Organization and Background BRT Apartments Corp. (the "Company" or "BRT"), a Maryland corporation, owns, operates and, to a lesser extent, develops multi-family properties. 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 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 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 ; and (iv) owns other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $ 1,597,000 . The 31 multi-family properties are located in 11 states; most of these properties are located in the Southeast United States and Texas. The Company conducts its operations to qualify as a real estate investment trust, or REIT, for federal income tax purposes. Note 2 – Basis of Preparation The accompanying interim unaudited consolidated financial statements, reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for such interim periods. The results of operations for the three and 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"). Accordingly, these unaudited statements should be read in conjunction with the Company's audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2024 (the "Annual Report") filed with the Securities and Exchange Commission ("SEC"). The consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries. 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. For each venture, the Company evaluated the rights provided to each party in the venture to assess the consolidation of the venture. All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these joint ventures are variable interest entities ("VIEs"). Additionally, as determined in accordance with GAAP, the Company does not exercise substantial operating control over these entities, and therefore the entities are not consolidated. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for their share of equity in earnings, cash contributions and distributions. The distributions to each joint venture partner are determined pursuant to the applicable operating agreement and may not be pro-rata to the percentage equity interest each partner has in the applicable venture. The joint ventures in which the Company has the Preferred Equity Investments were determined to be VIE's, as it has been determined that the equity holders lack the ability to direct the activities of the legal entity that most significantly impact the entity's economic performance. 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. 8 Table of Contents Note 2 – Basis of Preparation (continued) 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. Substantially, all of the Company's real estate assets, at acquisition, are comprised of real estate owned and leased to tenants on a short-term basis. Therefore, the Company aggregates real estate assets for reporting purposes and operates in one reportable segment. The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. As the Company operates in one reportable segment, the CODM is provided financial reports including consolidated income statements detailing total revenues, total expenses and net income. These financial reports assist the CODM in assessing the Company’s financial performance and in allocating resources. Total revenues, as shown on the Consolidated Statements of Operations, represent segment revenues. Total expenses, as shown on the Consolidated Statements of Operations are the significant segment expense categories and amounts that are regularly provided to the CODM and included in the reported segment profit or loss, in accordance with ASC 280. All other items on the Consolidated Statements of Operations, are other segment items, as defined in ASC 280 are also included in the reported measure of profit or loss. Note 3 – Equity Equity Distribution Agreements 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 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 October 6, 2025, to stockholders of record on September 24, 2025. Share Repurchase Program Pursuant to the Company’s share 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. 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 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. 9 Table of Contents Note 3 – Equity (continued) 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 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, 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 In June 2024, the Company's stockholders approved the 2024 Incentive Plan (the "2024 Plan"). This plan permits the Company to grant: (i) stock options, restricted stock, restricted stock units ("RSU's"), performance shares awards and any one or more of the foregoing, for up to a maximum of 1,000,000 shares; and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards. As of 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"; and together with the 2022 Plan, the "Prior Plans"). No further awards may be granted pursuant to the Prior Plans. Restricted Stock Units 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 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. On July 11, 2025, the Company awarded an aggregate of approximately 195,413 shares subject to restricted stock units (“RSUs”), and related dividend equivalent rights. Generally, the awards vest in 2028 subject to satisfaction of, among other things, market and performance conditions. 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 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 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. 10 Table of Contents Note 3 – Equity (continued) Per Share Data 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. The RSUs are excluded from the basic earnings per share calculation as they are not participating securities. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock or resulted in the issuance of shares of common stock that share in the earnings of the Company. Diluted earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock deemed to be outstanding during such period. In calculating diluted earnings per share, the Company includes only those shares underlying the RSUs that it anticipates will vest based on management's estimates as of the end of the most recent quarter. The Company excludes any shares underlying the RSUs from such calculation if their effect would have been anti-dilutive. The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Numerator for basic and diluted earnings per share: Net loss $ ( 2,668 ) $ ( 2,167 ) $ ( 7,499 ) $ ( 7,612 ) Deduct net income attributable to non-controlling interests ( 39 ) ( 38 ) ( 126 ) ( 109 ) Deduct loss allocated to unvested restricted stock 132 113 373 398 Net loss available for common stockholders: basic and diluted $ ( 2,575 ) $ ( 2,092 ) $ ( 7,252 ) $ ( 7,323 ) Denominator for basic earnings per share: Weighted average number of common shares outstanding 18,028,496 17,796,206 18,000,615 17,720,024 Effect of dilutive securities: RSUs — — — — Denominator for diluted earnings per share: Weighted average number of shares 18,028,496 17,796,206 18,000,615 17,720,024 Loss per common share, basic and diluted $ ( 0.14 ) $ ( 0.12 ) $ ( 0.40 ) $ ( 0.41 ) Note 4 – Leases Lessor Accounting The Company owns a commercial property leased to two retail tenants under operating leases expiring from 2028 to 2035, with tenant options to extend or terminate the leases. Revenues from such leases are reported as rental income, net, and are comprised of (i) lease components, which includes fixed lease payments and (ii) non-lease components, which includes reimbursements of property level operating expenses. 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. Lease concessions are generally reported on a straight line basis over the lease term. Leases on residential properties are generally for terms that do not exceed one year . 11 Table of Contents Note 4 – Leases (continued) Lessee Accounting The Company is a lessee under a ground lease in Yonkers, NY which is classified as an operating lease. The ground lease expires on June 30, 2045. There are no renewal options. 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 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. The discount rate applied to measure each ROU asset and lease liability is based on the Company’s Incremental Borrowing Rate (“IBR”). The Company considers the general economic environment and its historical borrowing rate activity and factors in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease. As the Company did not elect to apply the hindsight practical expedient, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842. The Company’s ground lease offers a renewal option which it assesses against relevant economic factors to determine whether it is reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods that the Company is reasonably certain will be exercised, if any, are included in the measurement of the corresponding lease liability and ROU asset. Note 5 – Real Estate Properties Real estate properties, consists of the following (dollars in thousands): September 30, 2025 December 31, 2024 Land $ 74,246 $ 74,246 Building 616,979 616,979 Building improvements 37,081 31,115 Real estate properties 728,306 722,340 Accumulated depreciation ( 126,165 ) ( 106,425 ) Total real estate properties, net $ 602,141 $ 615,915 A summary of real estate properties owned is as follows (dollars in thousands): December 31, 2024 Balance Improvements Depreciation Real Estate Sold September 30, 2025 Balance Multi-family $ 614,235 $ 5,966 $ ( 19,657 ) $ — $ 600,544 Retail shopping center and other 1,680 158 ( 83 ) ( 158 ) 1,597 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 The Company made preferred equity investments in two separate joint ventures which in turn acquired multi-family properties in the locations identified below. 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 property acquired by the applicable joint venture. Information as to these investments at September 30, 2025 is summarized below (dollars and thousands): 12 Table of Contents Note 6 – Loans (continued) Location Investment Date Annual Return Current Return Hurdle Return Invested Amount Redemption Date Deferred fees Wilmington, NC October 2024 13 % 6.00 % 7.00 % $ 7,000 November 2031 $ ( 120 ) Kennesaw, GA November 2024 13 % 6.50 % 6.50 % 11,250 June 2029 ( 147 ) $ 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, 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. Deferred loan fees are capitalized and recorded into income over the life of the investment. The Company's exposure to loss is limited to its original Invested Amount (as set forth in the table above). The following table provides the net carrying value of the loans made by the Company ( i.e. , the Preferred Equity Investments) that are outstanding (dollars in thousands): September 30, 2025 December 31, 2024 Unpaid principal balance $ 18,250 $ 18,250 less: allowance for credit loss ( 270 ) ( 270 ) less: deferred loan fees ( 267 ) ( 313 ) Net carrying value $ 17,713 $ 17,667 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 The Current Expected Credit Losses ("CECL") reserve required under ASU 2016-13 “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326)” (“ASU 2016-13”) reflects the Company's estimate as of the balance sheet date of potential credit losses related to its loan portfolio. Changes to the CECL reserve are recognized through a provision for or reversal of current expected credit loss reserve on the Company's consolidated statements of operations. The reserve is based on relevant information about past events, including historical loss experience, current loan portfolio, market conditions and reasonable and supportable macroeconomic forecasts for the duration of each loan. The Company has elected to apply the practical expedient to exclude accrued interest receivable from the amortized cost basis of the receivables. The Company considers key credit quality indicators in underwriting loans and estimating credit losses, including: the capitalization of borrowers and sponsors; the expertise of the sponsors in a particular real estate sector and geographic market; collateral type; geographic region; use and occupancy of the property; property market value; loan amount and lien position; industry risk rating for the same and similar loans; and prior experience with the sponsor. Such analyses are completed and reviewed by asset management personnel and evaluated by senior management on a quarterly basis, utilizing various data sources. Ultimate repayment of the loans referenced in note 6 is sensitive to interest rate changes, general economic conditions, liquidity, existence of an active sales market for properties, and availability of replacement financing. 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. Write-offs are recorded in the period in which the loan balance is deemed uncollectible based on management’s judgment. 13 Table of Contents Note 7 – Allowance for Credit Loss (continued) Changes in the Company's allowance for credit loss were as follows (dollars in thousands): September 30, 2025 December 31, 2024 CECL allowance at beginning of year $ 270 $ — Provision for credit loss — 270 Write-offs — — Ending balance $ 270 $ 270 Note 8 – Restricted Cash Restricted cash represents funds held for specific purposes and are therefore not available for general corporate purposes. The restricted cash reflected on the consolidated balance sheets represents funds that are held by the Company specifically for capital improvements at certain multi-family properties owned by unconsolidated joint ventures. Note 9 – Investment in Unconsolidated Ventures 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): September 30, 2025 December 31, 2024 ASSETS Real estate properties, net of accumulated depreciation of $ 92,124 and $ 81,843 $ 366,408 $ 318,594 Cash and cash equivalents 5,491 5,549 Other assets 15,612 5,567 Total Assets $ 387,511 $ 329,710 LIABILITIES AND EQUITY Liabilities: Mortgages payable, net of deferred costs of $ 1,123 and $ 837 $ 286,193 $ 251,112 Accounts payable and accrued liabilities 9,442 5,148 Total Liabilities 295,635 256,260 Commitments and contingencies Equity: Total unconsolidated joint venture equity 91,876 73,450 Total Liabilities and Equity $ 387,511 $ 329,710 BRT's interest in joint venture equity $ 48,169 $ 31,344 14 Table of Contents Note 9 – Investment in Unconsolidated Ventures (continued) At the indicated dates, real estate properties of the unconsolidated joint ventures consist of the following (dollars in thousands): September 30, 2025 December 31, 2024 Land $ 54,272 $ 46,331 Building 387,567 344,546 Building improvements 16,693 9,560 Real estate properties 458,532 400,437 Accumulated depreciation ( 92,124 ) ( 81,843 ) Total real estate properties, net $ 366,408 $ 318,594 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 September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Revenues: Rental and other revenue $ 13,043 $ 11,611 $ 36,679 $ 33,529 Total revenues 13,043 11,611 36,679 33,529 Expenses: Real estate operating expenses 6,203 5,578 17,120 16,462 Interest expense 3,103 2,898 8,618 8,508 Depreciation 3,956 2,916 10,867 8,714 Total expenses 13,262 11,392 36,605 33,684 Total revenues less total expenses ( 219 ) 219 74 ( 155 ) Other equity earnings 2 5 110 26 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"). The venture acquired the property for $ 36,500,000 (including a $ 24,419,000 mortgage). The mortgage matures in 2032, bears a 5.38 % fixed interest rate, and is interest only through maturity. The Company contributed $ 10,750,000 to the joint venture for its equity interest. In connection with this transaction, the Company borrowed $ 7,000,000 from its credit facility. See Note 10. 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. See Note 10. 15 Table of Contents Note 10 – Debt Obligations Debt obligations consist of the following (dollars in thousands): September 30, 2025 December 31, 2024 Mortgages payable $ 447,667 $ 450,481 Junior subordinated notes 37,400 37,400 Credit facility 17,500 — Deferred financing costs (1) ( 4,357 ) ( 4,247 ) Total debt obligations, net of deferred costs $ 498,210 $ 483,634 __________________________________________ (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 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 The Company's 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 $ 40,000,000 . 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)); 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, and matures in September 2027. 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, 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 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 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 September 30, 2025 and 2024 was 6.57 % and 7.52 %, respectively. 16 Table of Contents 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 September 30, 2025 and 2024, which includes amortization of deferred financing costs, was $ 632,000 and $ 725,000 , respectively. Interest 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 The Company has retained certain of its part-time 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 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 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 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 L.P. ("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 by other entities. The allocation of expenses for the facilities, personnel and other resources shared by, among others, 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 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. Jeffrey A. 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. Note 12 – Fair Value Measurements The Company estimates the fair value of financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows: • Level 1— inputs to the valuation methodology are quoted prices (unadjusted) for identical assets and liabilities in active markets • Level 2— inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument. • Level 3— inputs to the valuation methodology are unobservable and significant to fair value. Financial Instruments Not Carried at Fair Value 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: 17 Table of Contents Note 12 – Fair Value Measurements (continued) Cash and cash equivalents, restricted cash, accounts receivable (included in other assets), accounts payable and accrued liabilities: The carrying amounts reported in the balance sheets for these instruments approximate their fair value due to the short term nature of these accounts. Loan Receivables: 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. Junior subordinated notes: 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 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 %. 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. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value. The fair value of debt obligations are considered to be Level 2 valuations within the fair value hierarchy. Note 13 – Commitments and Contingencies From time to time, the Company and/or its subsidiaries are parties to legal proceedings that arise in the ordinary course of business, and in particular, personal injury claims involving the operations of the Company's properties. Although management believes that the primary and umbrella insurance coverage maintained with respect to such properties is sufficient to cover claims for compensatory damages, many of these personal injury claims also assert claims for exemplary ( i.e, punitive) damages. Generally, insurance does not cover claims for exemplary damages. Note 14 – New Accounting Pronouncement In November 2024, the FASB issued ASU No. 2024 – 03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220–40): Disaggregation of Income Statement Expenses. This ASU aims to enhance financial reporting transparency by requiring disaggregated disclosure of income statement expenses for public business entities ("PBEs"). The ASU does not change the expense captions an entity presents on the face of the income statement; rather, it requires disaggregation of certain expense captions into specified categories within the footnotes to the financial statements. ASU No. 2024 – 03 is applicable for fiscal years beginning after December 15, 2026. The Company is evaluating the new guidance to determine impact on the Company’s consolidated financial statements. Note 15 – Subsequent Events 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. 18 Table of Content