BRT Apartments Corp. Reports Third Quarter Results for 2021
BRT Apartments Corp. (NYSE:BRT) reported strong financial results for Q3 2021, with a net income of $28.11 million or $1.54 per diluted share, compared to a net loss of $7.48 million in Q3 2020. The company experienced a significant gain of $34.98 million from property sales, contributing to an 8.9% increase in Net Operating Income (NOI) across its portfolio. Additionally, BRT reduced its mortgage debt by $31.9 million, strengthening its capital structure. The firm continues to pursue advantageous buyouts of its joint venture partners to enhance long-term value for shareholders.
- Net income increased to $28.11 million from a loss of $7.48 million year-over-year.
- 8.9% growth in Net Operating Income (NOI) across the portfolio.
- Reduction of mortgage debt by $31.9 million to strengthen capital structure.
- Successful buyout of joint venture partner interests, improving ownership stake.
- Funds from Operations (FFO) decreased significantly, showing only $7,000 compared to $4.56 million in Q3 2020.
- Equity in loss from unconsolidated joint ventures increased to a loss of $4.20 million.
– Continues Advantageous Buy-Outs of its JV Partners –
– Capital Structure Strengthened by Leverage Reduction –
GREAT NECK, N.Y., Nov. 08, 2021 (GLOBE NEWSWIRE) -- BRT APARTMENTS CORP. (NYSE:BRT), a real estate investment trust that owns and operates multi-family properties, today reported that for the three months ended September 30, 2021, it generated net income of
Jeffrey A. Gould, President and Chief Executive Officer stated, “Our third quarter results reflect the strong performance of our high-quality portfolio, and the continued hard work of our team in building our platform. As we have noted in the past, our markets are benefiting from sustained demand drivers, including population and job growth, which have allowed us to produce, over the third quarter of 2020, NOI growth of
Financial Results:
Net income attributable to common stockholders was
FFO was
AFFO for the three months ended September 30, 2021 was
Diluted per share net income, FFO and AFFO were impacted during the quarter ended September 30, 2021 by the increase of 860,732 weighted average shares of common stock outstanding from the third quarter of 2020 through the current quarter, primarily due to stock issuances pursuant to the Company’s equity awards and at-the-market equity offering programs.
1 A description and reconciliation of non-GAAP financial measures (i.e., FFO, AFFO, NOI and pro rata share) to GAAP financial measures is presented later in this release. See “Non-GAAP Financial Measures” for further information. The term “leverage” refers to the quotient obtained by dividing the sum of the Company’s mortgage debt and junior subordinated notes by the Company’s total assets.
Operating Results:
Rental and other revenues for the current three months increased
Total expenses for the three months ended September 30, 2021 decreased
Equity in loss of unconsolidated joint ventures for the current quarter increased by
Net operating income, or NOI, at same store properties in our entire portfolio4 increased in the current quarter by
Transaction Activity During the Third Quarter:
As previously announced, BRT closed on the purchase of the remaining
In July 2021, BRT completed the previously announced sales of Parc at 980, located in Lawrenceville, Georgia and The Avenue Apartments, located in Ocoee, Florida. BRT had a
During the third quarter, BRT reduced the mortgage debt on its wholly-owned properties by
2 Although these are items of income and expense at unconsolidated joint venture properties, these are presented on a
3 See footnote 2 above.
4 That is,
Subsequent Events
On October 1, 2021, BRT purchased, for
On November 4, 2021, BRT completed the previously announced sale of its interests in two underperforming properties located in St. Louis, MO. In the quarter ended June 30, 2021, BRT recorded a
Balance Sheet:
At September 30, 2021, BRT had
At November 1, 2021, BRT’s available liquidity was approximately
Conference Call and Webcast Information:
The Company will host a conference call and webcast to review its financial results with investors and other interested parties at 8:30 a.m. ET on Tuesday, November 9, 2021. Jeffrey A. Gould, Chief Executive Officer will host the call. To participate in the conference call, callers from the United States and Canada should dial 1-877-407-9208, and international callers should dial 1-201-493-6784, ten minutes prior to the scheduled call time. The webcast may also be accessed live by visiting the Company’s investor relations website under the “webcast” tab at https://brtapartments.com/investor-relations.
A replay of the conference call will be available after 11:30 a.m. ET on Tuesday, November 9, 2021 through 11:59 p.m. ET on Tuesday, November 23, 2021. To access the replay, listeners may use 1-844-512-2921 domestic) or 1-412-317-6671 (international). The passcode for the replay is 10016915.
Supplemental Financial Information:
In an effort to enhance its financial disclosures to investors, BRT has posted a supplemental financial information report which can be accessed on the Company’s website at www.brtapartments.com under the caption “Investor Relations - Financial Statements and SEC Filings.”
Non-GAAP Financial Measures:
BRT discloses FFO, AFFO and NOI because it believes that such metrics are widely recognized and appropriate measure of the performance of an equity REIT.
BRT computes FFO in accordance with the “White Paper on Funds from Operations” issued by the National Association of Real Estate Investment Trusts (“NAREIT”) and NAREIT’s related guidance. FFO is defined in the White Paper as net income (calculated in accordance with generally accepted accounting principles), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, impairment write-downs of certain real estate assets and investments in entities when the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis.
BRT computes AFFO by adjusting FFO for loss on extinguishment of debt; straight-line rent accruals; restricted stock and restricted stock unit expense and deferred mortgage costs (including its share of its unconsolidated joint ventures); and gain on insurance recovery. Since the NAREIT White Paper only provides guidelines for computing FFO, the computation of AFFO may vary from one REIT to another.
BRT computes NOI by adjusting net income (loss) to (a) add back (1) depreciation expense, (2) general and administrative expenses, (3) interest expense, (4) loss on extinguishment of debt, (5) equity in loss of unconsolidated joint ventures, (6) provision for taxes, (7) the impact of non-controlling interests, and (b) deduct (1) other income, (2) gain on sale of real estate, and (3) gain on insurance recoveries related to casualty loss. BRT defines “Same Store NOI” as NOI for all its properties that were owned for the entirety of the periods being presented, other than properties in lease up. References to same store NOI with respect to BRT’s portfolio refers to
The pro rata share reflects BRT’s percentage equity interest in the applicable subsidiary. Because it represents BRT’s equity ownership in its unconsolidated subsidiaries, BRT uses pro rata share to help provide a better understanding of the operations of its unconsolidated joint ventures. However, the use of pro rata information has limitations. Among other things, as a result of the allocation/ distribution provisions of the agreements governing the unconsolidated joint ventures, BRT’s share of the gain/loss with respect to such venture may be different than (and generally less than that) implied by its percentage equity interest therein. Further, the use of pro rata share is not representative of our operations and accounts as presented in accordance with GAAP.
BRT believes that FFO, AFFO and NOI are useful and standard supplemental measures of the operating performance for equity REITs and are used frequently by securities analysts, investors and other interested parties in evaluating equity REITs, many of which present such metrics when reporting their operating results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate assets, which assures that the value of real estate assets diminish predictability over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, BRT believes that FFO and AFFO provide a performance measure that when compared year-over-year, should reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs and other matters without the inclusion of depreciation and amortization, providing a perspective that may not be necessarily apparent from net income. BRT also considers FFO and AFFO to be useful in evaluating potential property acquisitions. BRT views Same Store NOI as an important measure of operating performance because it allows a comparison of operating results of properties owned for the entirety of the current and comparable periods and therefore eliminates variations caused by acquisitions or dispositions during the periods.
FFO, AFFO and NOI do not represent net income or cash flows from operations as defined by GAAP. FFO, AFFO and NOI should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor should FFO, AFFO and NOI be considered an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity. Further, because there is no industry standard definition of NOI and practice is divergent across the industry, the computation of NOI may from one REIT to another.
Forward Looking Information:
Certain information contained herein is forward looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. BRT intends such forward looking statements to be covered by the safe harbor provisions for forward looking statements contained in the Private Securities Litigation Reform Act of 1995 and includes this statement for purposes of complying with these safe harbor provisions. Forward-looking statements, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “believe,” “expect,” “intend,” “anticipate,” “estimate,” “project,” “apparent,” “experiencing” or similar expressions or variations thereof. Forward looking statements, including statements with respect to BRT’s multi-family property acquisition and ownership activities, involve known and unknown risks, uncertainties and other factors, which, in some cases, are beyond BRT’s control and could materially affect actual results, performance or achievements. Investors are cautioned not to place undue reliance on any forward-looking statements and to carefully review the sections entitled “Cautionary Statement Regarding Forward Looking Information”, “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2020, as amended, and in the other reports filed by the Company with the SEC thereafter, for a discussion of the factors that could cause BRT’s actual results, performance or achievements to differ from its expectations.
Additional Information:
BRT is a real estate investment trust that owns and operates multi-family properties. Interested parties are urged to review the Form 10-Q to be filed with the Securities and Exchange Commission for the quarter ended September 30, 2021 and the supplemental disclosures regarding the quarter on the investor relations section of the Company’s website at: http://brtapartments.com/investor_relations for further details. The Form 10-Q can also be linked through the “Investor Relations” section of BRT’s website. For additional information on BRT’s operations, activities and properties, please visit its website at www.brtapartments.com.
Contact: Investor Relations - (516) 466-3100
BRT APARTMENTS CORP.
60 Cutter Mill Road
Suite 303
Great Neck, New York 11021
Telephone (516) 466-3100
Telecopier (516) 466-3132
www.BRTapartments.com
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONDENSED BALANCE SHEETS
(Dollars in thousands)
| September 30, 2021 | December 31, 2020 | ||||||
| (unaudited) | (audited) | ||||||
| ASSETS | |||||||
| Real estate properties, net of accumulated depreciation | $ | 224,620 | $ | 160,192 | |||
| Investments in unconsolidated joint ventures | 128,478 | 169,474 | |||||
| Cash and cash equivalents | 29,598 | 19,885 | |||||
| Restricted cash | 7,560 | 8,800 | |||||
| Other assets | 7,792 | 7,390 | |||||
| Total assets | $ | 398,048 | $ | 365,741 | |||
| LIABILITIES AND EQUITY | |||||||
| Mortgages payable, net of deferred costs | $ | 134,193 | $ | 130,434 | |||
| Junior subordinated notes, net of deferred costs | 37,098 | 37,083 | |||||
| Accounts payable and accrued liabilities | 20,464 | 20,536 | |||||
| Total Liabilities | 191,755 | 188,053 | |||||
| Total BRT Apartments Corp. stockholders’ equity | 206,272 | 177,772 | |||||
| Non-controlling interests | 21 | (84 | ) | ||||
| Total Equity | 206,293 | 177,688 | |||||
| Total Liabilities and Equity | $ | 398,048 | $ | 365,741 | |||
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)
| Three Months Ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| Revenues: | ||||||||
| Rental and other revenues from real estate properties | $ | 7,709 | $ | 7,020 | ||||
| Other income | 5 | 293 | ||||||
| Total revenues | 7,714 | 7,313 | ||||||
| Expenses: | ||||||||
| Real estate operating expenses | 3,404 | 3,289 | ||||||
| Interest expense | 1,535 | 1,731 | ||||||
| General and administrative | 3,114 | 2,730 | ||||||
| Impairment charge | — | 3,642 | ||||||
| Depreciation | 1,787 | 1,777 | ||||||
| Total expenses | 9,840 | 13,169 | ||||||
| Total revenue less total expenses | (2,126 | ) | (5,856 | ) | ||||
| Equity in loss of unconsolidated joint ventures | (4,196 | ) | (1,529 | ) | ||||
| Equity in earnings from sale of unconsolidated joint ventures properties | 34,982 | — | ||||||
| Gain on sale of real estate | 414 | — | ||||||
| Loss on extinguishment of debt | (902 | ) | — | |||||
| Income (loss) from continuing operations | 28,172 | (7,385 | ) | |||||
| Income tax provision | 31 | 65 | ||||||
| Net income (loss) from continuing operations, net of taxes | 28,141 | (7,450 | ) | |||||
| Net income attributable to non-controlling interests | (35 | ) | (34 | ) | ||||
| Net income (loss) attributable to common stockholders | $ | 28,106 | $ | (7,484 | ) | |||
| Per share amounts attributable to common stockholders: | ||||||||
| Basic | $ | 1.55 | $ | (0.44 | ) | |||
| Funds from operations - Note 1 | $ | 7 | $ | 4,555 | ||||
| Funds from operations per common share - diluted - Note 2 | $ | — | $ | 0.27 | ||||
| Adjusted funds from operations - Note 1 | $ | 5,655 | $ | 4,894 | ||||
| Adjusted funds from operations per common share - diluted - Note 2 | $ | 0.31 | $ | 0.28 | ||||
| Weighted average number of shares of common stock outstanding: | ||||||||
| Basic | 17,261,520 | 17,176,401 | ||||||
| Diluted | 17,292,988 | 17,176,401 | ||||||
BRT APARTMENTS CORP. AND SUBSIDIARIES
FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)
| Three Months Ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| Note 1: | ||||||||
| Funds from operations is summarized in the following table: | ||||||||
| GAAP Net income (loss) attributable to common stockholders | $ | 28,106 | $ | (7,484 | ) | |||
| Add: depreciation of properties | 1,787 | 1,777 | ||||||
| Add: our share of depreciation in unconsolidated joint ventures | 5,514 | 6,624 | ||||||
| Add: Impairment charge | — | 3,642 | ||||||
| Deduct: our share of equity in earnings from sale of unconsolidated joint venture | (34,982 | ) | — | |||||
| Deduct: gain on sale of real estate and partnership interest | (414 | ) | — | |||||
| Adjustments for non-controlling interests | (4 | ) | (4 | ) | ||||
| NAREIT Funds from operations attributable to common stockholders | 7 | 4,555 | ||||||
| Adjustments for: straight-line rent accruals | (10 | ) | (10 | ) | ||||
| Add: loss on extinguishment of debt | 902 | — | ||||||
| Add: our share of loss on extinguishment of debt from unconsolidated joint ventures | 4,581 | — | ||||||
| Add: amortization of restricted stock and restricted stock units | 843 | 461 | ||||||
| Add: amortization of deferred borrowing costs | 62 | 80 | ||||||
| Add: our share of deferred mortgage costs from unconsolidated joint venture properties | 148 | 156 | ||||||
| Less: our share of gain on insurance proceeds from unconsolidated joint venture | (880 | ) | (350 | ) | ||||
| Adjustments for non-controlling interests | 2 | $ | 2 | |||||
| Adjusted funds from operations attributable to common stockholders | $ | 5,655 | $ | 4,894 | ||||
BRT APARTMENTS CORP. AND SUBSIDIARIES
FUNDS FROM OPERATIONS AND ADJUSTED FUNDS FROM OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)
| Three Months Ended September 30, | ||||||||
| 2021 | 2020 | |||||||
| Note 2: | ||||||||
| Net income (loss) attributable to common stockholders | $ | 1.54 | $ | (0.44 | ) | |||
| Add: depreciation of properties | 0.10 | 0.11 | ||||||
| Add: our share of depreciation in unconsolidated joint ventures | 0.30 | 0.39 | ||||||
| Add: Impairment charge | — | 0.21 | ||||||
| Deduct: our share of equity in earnings from sale of unconsolidated joint venture | (1.92 | ) | — | |||||
| Deduct: gain on sale of real estate | (0.02 | ) | — | |||||
| Adjustment for non-controlling interests | — | — | ||||||
| NAREIT Funds from operations per diluted common share | — | 0.27 | ||||||
| Adjustments for: straight line rent accruals | — | — | ||||||
| Add: loss on extinguishment of debt | 0.05 | — | ||||||
| Add: our share of loss on extinguishment of debt from unconsolidated joint ventures | 0.25 | — | ||||||
| Add: amortization of restricted stock and restricted stock units | 0.05 | 0.02 | ||||||
| Add: amortization of deferred borrowing costs | — | — | ||||||
| Add: our share of deferred mortgage costs from unconsolidated joint venture properties | 0.01 | 0.01 | ||||||
| Less: our share of gain on insurance proceeds from unconsolidated joint venture | (0.05 | ) | (0.02 | ) | ||||
| Adjustments for non-controlling interests | — | — | ||||||
| Adjusted funds from operations per diluted common share | $ | 0.31 | $ | 0.28 | ||||
BRT APARTMENTS CORP. AND SUBSIDIARIES
RECONCILIATION OF NOI TO NET INCOME
(Unaudited)
The following tables provides a reconciliation of NOI to net income attributable to common stockholders as computed in accordance with GAAP for the periods presented:
| Consolidated | Three Months Ended September 30, | |||||||
| 2021 | 2020 | |||||||
| GAAP Net income (loss) attributable to common stockholders | $ | 28,106 | $ | (7,484 | ) | |||
| Less: Other Income | (5 | ) | (293 | ) | ||||
| Add: Interest expense | 1,535 | 1,731 | ||||||
| General and administrative | 3,114 | 2,730 | ||||||
| Impairment charge | — | 3,642 | ||||||
| Depreciation | 1,787 | 1,777 | ||||||
| Provision for taxes | 31 | 65 | ||||||
| Less: Gain on sale of real estate | (414 | ) | — | |||||
| Equity in earnings from sale of unconsolidated joint venture properties | (34,982 | ) | — | |||||
| Add: Loss on extinguishment of debt | 902 | — | ||||||
| Equity in loss of unconsolidated joint venture properties | 4,196 | 1,529 | ||||||
| Add: Net income attributable to non-controlling interests | 35 | 34 | ||||||
| Net Operating Income | $ | 4,305 | $ | 3,731 | ||||
| Less: Non-same store Net Operating Income | $ | (845 | ) | $ | (476 | ) | ||
| Same store Net Operating Income | $ | 3,460 | $ | 3,255 | ||||
BRT APARTMENTS CORP. AND SUBSIDIARIES
RECONCILIATION OF NOI AT UNCONSOLIDATED SUBSIDIARIES
(Unaudited)
(Dollars in thousands, except per share data)
The following tables provides a reconciliation of NOI to equity in loss of unconsolidated joint ventures as computed in accordance with GAAP for the periods presented for BRT’s pro rata share of NOI at its unconsolidated subsidiaries. Also presented is the combined same store NOI for Consolidated and Unconsolidated subsidiaries:
| Unconsolidated | Three Months Ended September 30, | ||||||||
| 2021 | 2020 | ||||||||
| BRT's equity in earnings from sale of unconsolidated joint venture properties and equity in loss of joint ventures | $ | 30,786 | $ | (1,529 | ) | ||||
| Add: Interest expense | 5,037 | 5,571 | |||||||
| Depreciation | 5,514 | 6,623 | |||||||
| Less: Gain on insurance recoveries | (880 | ) | (350 | ) | |||||
| Gain on sale of real estate | (34,982 | ) | — | ||||||
| Equity in earnings of joint ventures | (7 | ) | (97 | ) | |||||
| Add: Loss on extinguishment of debt | 4,581 | — | — | ||||||
| Net Operating Income | $ | 10,049 | $ | 10,218 | |||||
| Less: Non-same store Net Operating Income | $ | (749 | ) | $ | (1,753 | ) | |||
| Same store Net Operating Income | $ | 9,300 | $ | 8,465 | |||||
| Consolidated same store Net Operating Income | $ | 3,460 | $ | 3,255 | |||||
| Unconsolidated same store Net Operating Income | 9,300 | 8,465 | |||||||
| Combined same store Net Operating Income | $ | 12,760 | $ | 11,720 | |||||
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)
The condensed income statements below present, for the periods indicated, a reconciliation of the information that appears in note 8 of BRT’s Quarterly report on Form 10-Q to BRT’s pro rata share of the operations of its unconsolidated subsidiaries:
| Three Months Ended September 30, 2021 | ||||||||||||||
| Total | Partner Share | BRT’s Pro-Rata Share | ||||||||||||
| Revenues: | ||||||||||||||
| Rental and other revenue | $ | 29,818 | $ | 10,237 | $ | 19,581 | ||||||||
| Total revenues | 29,818 | 10,237 | 19,581 | |||||||||||
| Expenses: | ||||||||||||||
| Real estate operating expenses | 14,587 | 5,055 | 9,532 | |||||||||||
| Interest expense | 7,568 | 2,531 | 5,037 | |||||||||||
| Depreciation | 8,288 | 2,774 | 5,514 | |||||||||||
| Total expenses | 30,443 | 10,360 | 20,083 | |||||||||||
| Total revenues less total expenses | (625 | ) | (123 | ) | (502 | ) | ||||||||
| Other equity earnings | 7 | — | 7 | |||||||||||
| Gain on sale of real estate | 83,984 | 49,002 | 34,982 | |||||||||||
| Gain on insurance recoveries | 1,246 | 366 | 880 | |||||||||||
| Loss on extinguishment of debt | (9,401 | ) | (4,820 | ) | (4,581 | ) | (1) | |||||||
| Net loss (income) | $ | 75,211 | $ | 44,425 | $ | 30,786 | ||||||||
| Three Months Ended September 30, 2020 | ||||||||||||||
| Total | Partner Share | BRT’s Pro-Rata Share | ||||||||||||
| Revenues: | ||||||||||||||
| Rental and other revenue | $ | 32,341 | $ | 11,852 | $ | 20,489 | ||||||||
| Total revenues | $ | 32,341 | $ | 11,852 | $ | 20,489 | ||||||||
| Expenses: | ||||||||||||||
| Real estate operating expenses | 16,092 | 5,821 | 10,271 | |||||||||||
| Interest expense | 8,663 | 3,092 | 5,571 | |||||||||||
| Depreciation | 10,411 | 3,788 | 6,623 | |||||||||||
| Total expenses | 35,166 | 12,701 | 22,465 | |||||||||||
| Total revenues less total expenses | (2,825 | ) | (849 | ) | (1,976 | ) | ||||||||
| Other equity earnings | 97 | — | 97 | |||||||||||
| Gain on insurance recoveries | 427 | 77 | 350 | |||||||||||
| Net loss | $ | (2,301 | ) | $ | (772 | ) | $ | (1,529 | ) | (1) | ||||
________________
(1) Reflects BRT’s share as determined in accordance with GAAP - not its pro-rata share.
FAQ
What were BRT Apartments' Q3 2021 net income results?
How did BRT Apartments perform compared to Q3 2020?
What is the significance of the property sales reported by BRT?
How much mortgage debt did BRT Apartments reduce in Q3 2021?
What challenges did BRT Apartments face in Q3 2021?
