BRT Apartments Corp. 10-Q

Item 1. Financial Statements BRT APARTMENTS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amounts in thousands, except per share data) June 30, 2026 December 31, 2025 (unaudited) (audited) ASSETS Real estate properties, net of accumulated depreciation and amortization of $ 146,212 and $ 132,821 $ 586,829 $ 596,814 Investments in unconsolidated joint ventures 43,297 46,121 Loan receivables, net of deferred fees of $ 223 and $ 252 and allowance for credit loss of $ 275 and $ 275 17,752 17,723 Cash and cash equivalents 22,718 25,138 Restricted cash 1,886 2,521 Other assets 18,673 21,496 Total Assets $ 691,155 $ 709,813 LIABILITIES AND EQUITY Liabilities: Mortgages payable, net of deferred costs of $ 4,134 and $ 4,614 $ 469,352 $ 471,083 Junior subordinated notes, net of deferred costs of $ 207 and $ 217 37,193 37,183 Credit facility — — Accounts payable and accrued liabilities 24,232 24,347 Total Liabilities 530,777 532,613 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; 18,026 and 17,919 shares outstanding 180 180 Additional paid-in capital 273,949 275,408 Accumulated deficit ( 113,669 ) ( 98,346 ) Total BRT Apartments Corp. stockholders’ equity 160,460 177,242 Non-controlling interests ( 82 ) ( 42 ) Total Equity 160,378 177,200 Total Liabilities and Equity $ 691,155 $ 709,813 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues: Rental and other revenue from real estate properties $ 24,041 $ 23,729 $ 48,211 $ 47,348 Loan interest and other income 433 468 868 955 Total revenues 24,474 24,197 49,079 48,303 Expenses: Real estate operating expenses - including $ 9 and $ 6 to related parties for the three months ended and $ 17 and $ 15 for the six months ended 11,382 11,117 21,871 21,667 Interest expense 5,993 5,707 11,953 11,383 General and administrative - including $ 251 and $ 163 to related parties for the three months ended and $ 504 and $ 341 for the six months ended 3,534 3,744 7,401 7,814 Depreciation and amortization 6,708 6,580 13,391 13,121 Total expenses 27,617 27,148 54,616 53,985 Total revenues less total expenses ( 3,143 ) ( 2,951 ) ( 5,537 ) ( 5,682 ) Equity in (loss) earnings of unconsolidated joint ventures ( 1 ) 299 ( 309 ) 712 Insurance recovery of casualty loss — 189 136 257 Loss from continuing operations ( 3,144 ) ( 2,463 ) ( 5,710 ) ( 4,713 ) Income tax provision 37 60 113 118 Loss from continuing operations, net of taxes ( 3,181 ) ( 2,523 ) ( 5,823 ) ( 4,831 ) Net income attributable to non-controlling interest ( 40 ) ( 43 ) ( 80 ) ( 87 ) Net loss attributable to common stockholders $ ( 3,221 ) $ ( 2,566 ) $ ( 5,903 ) $ ( 4,918 ) Weighted average number of shares of common stock outstanding: Basic and diluted 17,979,991 17,985,801 18,021,620 17,986,443 Net loss per share amounts attributable to common stockholders: Basic and diluted $ ( 0.19 ) $ ( 0.14 ) $ ( 0.35 ) $ ( 0.26 ) 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, 2025 $ 180 $ 275,408 $ ( 98,346 ) $ ( 42 ) $ 177,200 Distributions - common stock - $ 0.25 per share — — ( 4,727 ) — ( 4,727 ) Restricted stock and restricted stock units vesting 2 ( 2 ) — — — Compensation expense - restricted stock and restricted stock units — 922 — — 922 Distributions to non-controlling interests — — — ( 60 ) ( 60 ) Shares issued through DRIP — 976 — — 976 Shares repurchased ( 2 ) ( 2,510 ) — — ( 2,512 ) Net (loss) income — — ( 2,682 ) 40 ( 2,642 ) Balances, March 31, 2026 $ 180 $ 274,794 $ ( 105,755 ) $ ( 62 ) $ 169,157 Distributions - common stock - $ 0.25 per share — — ( 4,693 ) — ( 4,693 ) Restricted stock and restricted stock units vesting 2 ( 2 ) — — — Compensation expense - restricted stock and restricted stock units — 948 — — 948 Distributions to non-controlling interests — — — ( 60 ) ( 60 ) Shares issued through DRIP — 1,103 — — 1,103 Shares repurchased ( 2 ) ( 2,894 ) — — ( 2,896 ) Net (loss) income — — ( 3,221 ) 40 ( 3,181 ) Balances, June 30, 2026 $ 180 $ 273,949 $ ( 113,669 ) $ ( 82 ) $ 160,378 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, 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 ) Restricted stock and restricted stock units vesting — — — — — Compensation expense - restricted stock and restricted stock units — 1,135 — — 1,135 Distributions to non-controlling interests — — — ( 45 ) ( 45 ) Shares issued 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 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) Six Months Ended June 30, 2026 2025 Cash flows from operating activities: Net loss $ ( 5,823 ) $ ( 4,831 ) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 13,391 13,121 Amortization of deferred financing costs 559 567 Amortization of debt fair value adjustment 141 255 Amortization of deferred loan fee income ( 29 ) ( 31 ) Amortization of restricted stock and restricted stock units 1,870 2,277 Equity in loss (earnings) of unconsolidated joint ventures 309 ( 712 ) Increases and decreases from changes in other assets and liabilities: Increase in other assets ( 1,881 ) ( 2,333 ) (Decrease) increase in accounts payable and accrued liabilities ( 115 ) 411 Net cash provided by operating activities 8,422 8,724 Cash flows from investing activities: Improvements to real estate properties ( 3,406 ) ( 4,272 ) Distributions from unconsolidated joint ventures 2,515 2,033 Net cash used in investing activities ( 891 ) ( 2,239 ) Cash flows from financing activities: Mortgage principal payments ( 2,352 ) ( 2,231 ) Dividends paid ( 5,677 ) ( 9,429 ) Distributions to non-controlling interests ( 120 ) ( 98 ) Proceeds from issuance of DRIP shares 2,079 1,630 Repurchase of shares of common stock ( 5,408 ) ( 2,386 ) Net cash used in financing activities ( 11,478 ) ( 12,514 ) Net decrease in cash, cash equivalents, restricted cash and escrows: $ ( 3,947 ) $ ( 6,029 ) Cash, cash equivalents, restricted cash and escrows at beginning of period 35,620 40,579 Cash, cash equivalents, restricted cash and escrows at end of period $ 31,673 $ 34,550 Supplemental disclosure of cash flow information: Cash paid during the period for interest expense $ 11,035 $ 10,638 Cash paid for income taxes and excise taxes $ 220 $ 237 Supplemental disclosure of non-cash financing activity: Distributions to common stockholders $ 3,743 $ — 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. June 30, 2026 2025 Reconciliation of cash and cash equivalents and restricted cash: Cash and cash equivalents $ 22,718 $ 23,645 Restricted cash 1,886 2,922 Escrows (Other assets) 7,069 7,983 Total cash, cash equivalents, restricted cash and escrows shown in consolidated statement of cash flows $ 31,673 $ 34,550 7 Table of Contents BRT APARTMENTS CORP. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 2026 Note 1 – Organization and Background BRT Apartments Corp. (the "Company" or "BRT"), a Maryland corporation, owns and operates multifamily properties. These multifamily properties may be wholly owned by us or by unconsolidated joint ventures in which the Company contributed a portion of the equity. At June 30, 2026, the Company: (i) wholly-owns 21 multifamily properties located in 11 states with an aggregate of 5,420 units and a carrying value of $ 585,315,000 ; (ii) has ownership interests, through unconsolidated entities, in ten multifamily properties located in four states with an aggregate of 2,891 units and the carrying value of its net equity investment is $ 43,297,000 ; (iii) has investments in joint ventures that own two multifamily properties which investments are treated for financial statement purposes as loans (the "Preferred Equity Investments") with a carrying value of $ 17,752,000 ; and (iv) owns other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $ 1,514,000 . The 31 multifamily 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 six months ended June 30, 2026 and 2025, are not necessarily indicative of the results for the full year. The consolidated audited balance sheet as of December 31, 2025, 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, 2025 (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. 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 that is 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 which include (i) a consolidated income statements (detailing total revenues, operating income and net income) and (ii) Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”). These financial reports assist the CODM in assessing the Company’s financial performance and in allocating resources appropriately. 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 six months ended June 30, 2026 and 2025, the Company did not sell any shares. At June 30, 2026, 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, 2026, to stockholders of record on June 25, 2026. 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, 2026, 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 $ 4,963,000 shares from the shares that were available to be repurchased prior to such increase) and extended the program through December 31, 2028. During the three months ended June 30, 2026, the Company repurchased 202,828 shares of common stock at an average price per share of $ 14.28 for an aggregate cost of $ 2,896,000 . During the six months ended June 30, 2026, the Company repurchased 378,976 shares of common stock at an average price per share of $ 14.27 for an aggregate cost of $ 5,408,000 . Subsequent to June 30, 2026, the Company repurchased 48,523 shares of our common stock at an average price of $ 15.12 per share for an aggregate cost of $ 733,000 . At July 31, 2026 up to $ 4,972,000 of shares were available to be repurchased under the program. 9 Table of Contents Note 3 – Equity (continued) 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 . 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 six months ended June 30, 2026, 82,745 and 151,226 shares were issued in lieu of cash dividends of $ 1,103,000 and $ 2,079,000 , respectively. 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. Stock Based Compensation In June 2026, the Company's stockholders approved the 2026 Incentive Plan (the "2026 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 June 30, 2026, 828,212 shares are available for issuance pursuant to awards under the 2026 Plan. Awards to acquire 1,281,028 shares of common stock are outstanding under the 2026 Plan, the 2024 Incentive Plan ("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 and the 2024 Plan, the "Prior Plans"). No further awards may be granted pursuant to the Prior Plans. Restricted Stock Units As of June 30, 2026 , an aggregate of 545,401 of unvested RSU's are outstanding pursuant to the 2026 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, 2026 and 2025, the Company recorded $ 224,000 and $ 296,000 , respectively and for the six months ended June 30, 2026 and 2025, the Company recorded $ 358,000 and $ 589,000 , respectively of compensation expense related to the amortization of unearned compensation with respect to the RSUs. At June 30, 2026 and December 31, 2025, $ 1,507,000 and $ 1,321,000 of compensation expense, respectively, has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods. The weighted average remaining vesting period of these restricted stock units is approximately 2.0 years. On June 23, 2026 and the Company awarded an aggregate of approximately 171,788 shares subject to restricted stock units (“RSUs”), and related dividend equivalent rights. Generally, the awards vest in 2029 subject to satisfaction of, among other things, market and performance conditions. The Company determined that at June 30, 2026, none of the performance and market conditions with respect to the vesting of the RSUs granted in 2023 had been met. Accordingly, all such awards, to the extent not previously forfeited, were forfeited. Restricted Stock In January 2026 and 2025, the Company granted 148,673 and 165,408 shares, pursuant to the 2024 Plan. As of June 30, 2026 , an aggregate of 735,627 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, 2026 and 2025, the Company recorded $ 724,000 and $ 839,000 , respectively and for the six months ended June 30, 2026 and 2025, the Company recorded $ 1,512,000 and $ 1,688,000 , respectively of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards. At June 30, 2026 and December 31, 2025, $ 6,159,000 and $ 5,480,000 , respectively has been deferred as unearned compensation and will be charged 10 Table of Contents Note 3 – Equity (continued) to expense over the remaining vesting periods of these restricted stock awards. The weighted average remaining vesting period of these restricted stock awards is 2.6 years. 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 June 30, Six Months Ended June 30, 2026 2025 2026 2025 Numerator for basic and diluted earnings per share: Net loss $ ( 3,181 ) $ ( 2,523 ) $ ( 5,823 ) $ ( 4,831 ) Deduct net income attributable to non-controlling interests ( 40 ) ( 43 ) ( 80 ) ( 87 ) Adjustments for unvested restricted stock ( 184 ) ( 125 ) ( 404 ) ( 241 ) Deduct earnings allocated to unvested restricted stock — — — — Net loss available for common stockholders: basic and diluted $ ( 3,405 ) $ ( 2,691 ) $ ( 6,307 ) $ ( 5,159 ) Denominator for basic earnings per share: Weighted average number of common shares outstanding 17,979,991 17,985,801 18,021,620 17,986,443 Effect of dilutive securities: RSUs — — — — Denominator for diluted earnings per share: Weighted average number of shares 17,979,991 17,985,801 18,021,620 17,986,443 Loss per common share, basic and diluted $ ( 0.19 ) $ ( 0.14 ) $ ( 0.35 ) $ ( 0.26 ) 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. 11 Table of Contents Note 4 – Leases (continued) Rental revenue from multifamily 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 . 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 June 30, 2026, the remaining lease term is 19.0 years. The Company is a lessee under a corporate office lease in Great Neck, New York, which is classified as an operating lease. The lease expires on December 31, 2031, and provides a five-year renewal option. As of June 30, 2026, the remaining lease term, including renewal options deemed exercised, is 10.5 years. As of June 30, 2026, the Company's Right of Use ("ROU") assets and lease liabilities were $ 1,749,000 and $ 1,940,000 , respectively. As of December 31, 2025, the Company's ROU assets and lease liabilities were $ 1,832,000 and $ 2,015,000 , 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): June 30, 2026 December 31, 2025 Land $ 74,246 $ 74,246 Building 616,979 616,979 Building improvements 41,816 38,410 Real estate properties 733,041 729,635 Accumulated depreciation ( 146,212 ) ( 132,821 ) Total real estate properties, net $ 586,829 $ 596,814 A summary of real estate properties owned is as follows (dollars in thousands): December 31, 2025 Balance Improvements Depreciation June 30, 2026 Balance Multifamily $ 595,245 $ 3,406 $ ( 13,336 ) $ 585,315 Retail shopping center and other 1,569 — ( 55 ) 1,514 Total real estate properties $ 596,814 $ 3,406 $ ( 13,391 ) $ 586,829 On June 2, 2026, the Company entered into an agreement to acquire Ranch Lake Apartments, a 336 -unit multi-family property located in Bradenton, Florida. The purchase price is approximately $ 80,000,000 (subject to customary closing purchase price adjustments), including the assumption of an approximately $ 45,700,000 mortgage insured by the United States Department of Housing and Urban Development ("HUD"). The mortgage carries an interest rate of 2.91 % and matures in 2056. 12 Table of Contents Note 5 – Real Estate Properties (continued) The completion of the transaction, which is anticipated to close in the first quarter of 2027, is subject to, among other things, HUD and lender approval of the mortgage assumption, and other customary closing conditions. Note 6 – Loans The Company made Preferred Equity Investments in two separate joint ventures which in turn acquired multifamily 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 June 30, 2026 is summarized below (dollars and thousands): 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 $ ( 106 ) Kennesaw, GA November 2024 13 % 6.50 % 6.50 % 11,250 June 2029 ( 117 ) $ 18,250 $ ( 223 ) These investments provide for the Company to receive the following: (1) an (a) Annual Return (as set forth in the table above) compounded monthly, of which the Current Return (as set forth in the table above) is to be paid monthly to the extent of available cash flow, and (b) a Hurdle Return 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 portion of the Current Return and the Hurdle Return not received by 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): June 30, 2026 December 31, 2025 Unpaid principal balance $ 18,250 $ 18,250 less: allowance for credit loss ( 275 ) ( 275 ) less: deferred loan fees ( 223 ) ( 252 ) Net carrying value $ 17,752 $ 17,723 During the three and six months ended June 30, 2026, the Company recorded $ 337,000 and $ 664,000 respectively, of interest income, representing the full amount of the Current Return (including loan fee amortization of $ 15,000 and $ 29,000 , respectively), with respect to these loans. As of June 30, 2026, these loans were current in their payment of the Current Return. 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), with respect to these loans. 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 13 Table of Contents Note 7 – Allowance for Credit Loss (continued) 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. The Company's ability to collect on 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. Changes in the Company's allowance for credit loss were as follows (dollars in thousands): June 30, 2026 December 31, 2025 CECL allowance at beginning of year $ 275 $ 270 Provision for credit loss — 5 Ending balance $ 275 $ 275 Note 8 – Restricted Cash The restricted cash reflected on the consolidated balance sheets represents funds that are held by the Company specifically for capital improvements at certain multifamily properties owned by unconsolidated joint ventures. 14 Table of Contents Note 9 – Investment in Unconsolidated Ventures At June 30, 2026 and December 31, 2025, the Company held interests in unconsolidated joint ventures that own ten multifamily properties (the "Unconsolidated Properties"). The condensed balance sheets below present information regarding such properties (dollars in thousands): June 30, 2026 December 31, 2025 ASSETS Real estate properties, net of accumulated depreciation of $ 103,044 and $ 95,747 $ 358,068 $ 363,451 Cash and cash equivalents 7,194 7,506 Other assets 9,775 11,756 Total Assets $ 375,037 $ 382,713 LIABILITIES AND EQUITY Liabilities: Mortgages payable, net of deferred costs of $ 1,063 and $ 1,106 $ 283,772 $ 285,379 Accounts payable and accrued liabilities 8,277 9,435 Total Liabilities 292,049 294,814 Commitments and contingencies Equity: Total unconsolidated joint venture equity 82,988 87,899 Total Liabilities and Equity $ 375,037 $ 382,713 BRT's interest in joint venture equity $ 43,297 $ 46,121 At the indicated dates, real estate properties of the unconsolidated joint ventures consist of the following (dollars in thousands): June 30, 2026 December 31, 2025 Land $ 54,272 $ 54,272 Building 387,415 387,364 Building improvements 19,425 17,562 Real estate properties 461,112 459,198 Accumulated depreciation ( 103,044 ) ( 95,747 ) Total real estate properties, net $ 358,068 $ 363,451 At June 30, 2026 and December 31, 2025, the weighted average interest rate on the mortgages payable is 4.19 % and 4.21 %, respectively, and the weighted average remaining term to maturity is 3.0 years and 3.3 years, respectively. On June 9, 2026, the Stono Oaks joint venture exercised its right to extend the $ 37,200,000 , 5.83 % floating interest rate construction loan secured by its assets through June 8, 2027. Such venture is also entitled, subject to the satisfaction of certain conditions, to further extend the loan maturity through June 2028. 15 Table of Contents Note 9 – Investment in Unconsolidated Ventures (continued) The condensed income statements below present information regarding the Unconsolidated Properties (dollars in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Revenues: Rental and other revenue $ 13,847 $ 11,927 $ 27,279 $ 23,636 Total revenues 13,847 11,927 27,279 23,636 Expenses: Real estate operating expenses 6,878 5,744 13,383 10,917 Interest expense 3,241 2,770 6,436 5,515 Depreciation and amortization 3,917 3,163 8,115 6,911 Total expenses 14,036 11,677 27,934 23,343 Total revenues less total expenses ( 189 ) 250 ( 655 ) 293 Other equity (loss) earnings 145 18 139 108 Net (loss) income $ ( 44 ) $ 268 $ ( 516 ) $ 401 BRT's equity in (loss) earnings $ ( 1 ) $ 299 $ ( 309 ) $ 712 Note 10 – Debt Obligations Debt obligations consist of the following (dollars in thousands): June 30, 2026 December 31, 2025 Mortgages payable $ 473,486 $ 475,697 Junior subordinated notes 37,400 37,400 Credit facility — — Deferred financing costs (1) ( 4,341 ) ( 4,831 ) Total debt obligations, net of deferred costs $ 506,545 $ 508,266 __________________________________________ (1) Excludes $ 167 and $ 236 of deferred financing costs related to the credit facility which are reflected in other assets at June 30, 2026 and December 31, 2025, respectively. Mortgages Payable At June 30, 2026 and December 31, 2025, the weighted average interest rate on the Company's mortgage payables was 4.22 % and 4.22 %, and the weighted average remaining term to maturity is 5.9 years and 6.4 years, respectively. For the three months ended June 30, 2026 and 2025, interest expense, which includes amortization of deferred financing costs, was $ 5,368,000 and $ 5,023,000 , respectively. For the six months ended June 30, 2026 and 2025, interest expense, which includes amortization of deferred financing costs, was $ 10,704,000 and $ 10,014,000 , respectively. In July 2026, the Company refinanced the maturing mortgage of $ 27,767,000 (bearing an interest rate of 3.73 %) on Civic Center 2 - Southaven, MS with a new mortgage of $ 47,864,000 ; such new mortgage matures on August 1, 2036, bears a fixed interest rate of 5.38 % and is interest only through maturity. 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 16 Table of Contents Note 10 – Debt Obligations (continued) the acquisition of multifamily properties, repay mortgage debt secured by multifamily 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 June 30, 2026 is 6.18 %. 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, 2026, the Company is in compliance in all material respects with its obligations under the facility. At June 30, 2026 and December 31, 2025, there was no outstanding balance, respectively, on the facility. Interest expense for the three months ended June 30, 2026 and 2025, which includes amortization of deferred financing costs and unused fees, was $ 60,000 and $ 60,000 , respectively. Interest expense for the six months ended June 30, 2026 and 2025, which includes amortization of deferred financing costs and unused fees, was $ 119,000 and $ 119,000 , respectively. The remaining deferred financing costs of $ 167,000 and $ 236,000 are recorded as Other Assets on the Consolidated Balance Sheets at June 30, 2026 and December 31, 2025, respectively. Junior Subordinated Notes At June 30, 2026 and December 31, 2025, the outstanding principal balance of the Company's junior subordinated notes was $ 37,400,000 , before deferred financing costs of $ 207,000 and $ 217,000 , 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, 2026 and 2025 was 5.93 % and 6.54 %, respectively. 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, 2026 and 2025, which includes amortization of deferred financing costs, was $ 566,000 and $ 624,000 , respectively. Interest expense for the six months ended June 30, 2026 and 2025, which includes amortization of deferred financing costs, was $ 1,130,000 and $ 1,250,000 , 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 multifamily 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, 2026 and 2025 were $ 446,000 and $ 425,000 , respectively and $ 892,000 and $ 850,000 for the six months ended June 30, 2026 and 2025. 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 the Company's chief executive officer and president, and Matthew J. Gould, a director and a senior vice president. Certain of the Company's officers are also members of management of Majestic Property. Majestic Property also provides real estate brokerage and construction supervision services to these properties. These fees amounted to $ 9,000 and $ 6,000 for the three months ended June 30, 2026 and 2025 and $ 17,000 and $ 15,000 for the six months ended June 30, 2026 and 2025. 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 June 30, 2026 and 2025, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated was $ 251,000 and $ 163,000 , respectively and $ 504,000 and $ 341,000 for the six months ended 17 Table of Contents Note 11 – Related Party Transactions (continued) June 30, 2026 and 2025. Messrs. J. Gould and M. Gould, 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: 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 June 30, 2026, the estimated fair value of the loan receivables is greater than their carrying value by approximately $ 31,000 , based on market interest rates ranging from 6.12 % to 6.48 %. At December 31, 2025, the estimated fair value of the Company's loan receivables, is greater than their carrying value by approximately $ 193,000 , based on market interest rates ranging from 5.87 % to 6.06 %. The Company values its loan receivables using a discounted cash flow analysis of the expected cash flow of each instrument. Junior subordinated notes: At June 30, 2026 and December 31, 2025, the estimated fair value of the notes is lower than their carrying value by approximately $ 7,218,000 and $ 3,897,000 , respectively, based on a market interest rate of 8.98 % and 7.60 %, respectively. The Company values its junior subordinated notes using a discounted cash flow analysis on the expected cash flows of each instrument. Mortgages payable: At June 30, 2026, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately $ 25,752,000 , assuming market interest rates between 5.28 % and 5.68 %. At December 31, 2025, the estimated fair value of the Company's mortgages payable was lower than their carrying value by approximately $ 21,107,000 , assuming market interest rates between 4.79 % and 5.44 %. 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 18 Table of Contents Note 13 – Commitments and Contingencies (continued) 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 June 30, 2026, that warrant additional disclosure, have been included in the notes to the consolidated financial statements. 19 Table of Content