BRT Apartments Corp. Reports Third Quarter Results for 2020
BRT APARTMENTS CORP. (NYSE:BRT) reported a net loss of $7.48 million, or $0.44 per diluted share, for Q3 2020, compared to a profit of $3.27 million in Q3 2019. The loss included a $3.64 million impairment charge. However, Funds from Operations (FFO) increased to $4.56 million from $1.96 million year-over-year, driven by lower interest expenses and an insurance recovery. The average rental rate rose to $1,085 per month, with occupancy improving to 95.8%. Despite the pandemic's challenges, BRT collected 98% of billed rents and aims to resume property upgrades in 2021.
- FFO increased to $4.56 million from $1.96 million year-over-year.
- Average rental rates per occupied unit increased to $1,085 from $1,044 year-over-year.
- Occupancy rate improved to 95.8% compared to 94.7% in the prior year.
- 98% of billed rent was collected during the quarter.
- Reported a net loss of $7.48 million compared to a profit of $3.27 million in Q3 2019.
- Included a $3.64 million impairment charge in the net loss.
- Total expenses increased to $13.17 million from $8.41 million year-over-year.
GREAT NECK, N.Y., Nov. 05, 2020 (GLOBE NEWSWIRE) -- BRT APARTMENTS CORP. (NYSE:BRT), a multi-family real estate investment trust with properties located primarily in the Southeast United States and Texas today announced operating results for the three months ended September 30, 2020.
Jeffrey A. Gould, President and Chief Executive Officer stated: “Our performance in the third quarter underscores the ongoing resilience of our business model and our properties as we collected
Financial Results:
Net loss attributable to common stockholders was
Funds from Operations, or FFO, was
Adjusted Funds from Operations, or AFFO, for the three months ended September 30, 2020 was
Diluted per share net income, FFO and AFFO were impacted during the quarter ended September 30, 2020 by the approximate increase of 1.1 million weighted average shares of common stock outstanding from the third quarter of 2019 through the end of the current quarter, primarily due to stock issuances pursuant to the Company’s at-the-market equity offering program.
1 A description and reconciliation of non-GAAP financial measures (i.e., FFO and AFFO) to GAAP financial measures is presented later in this release.
Operating Results:
As of November 5, 2020, BRT wholly-owns eight multi-family properties located in six states with 1,880 units and has ownership interests, through unconsolidated joint ventures, in 31 multi-family properties located in nine states with 9,162 units, including 741 units at two properties in lease-up. BRT’s equity interests in these unconsolidated subsidiaries, over which BRT actively oversees the management, generally ranges from
During the quarter ended September 30, 2020, the average rental rate per occupied unit at consolidated properties was approximately
During the quarter ended September 30, 2020, the average rental rate per occupied unit at unconsolidated properties, excluding those in lease up, was approximately
Rental revenue at consolidated properties for the current three months increased
Total expenses on a consolidated basis for the three months ended September 30, 2020 were
Equity in loss of unconsolidated joint ventures was
Balance Sheet:
At September 30, 2020, BRT had
At November 2, 2020, BRT’s available liquidity was approximately
BRT’s mortgage debt of
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 and AFFO 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 believes that FFO and AFFO 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.
FFO and AFFO do not represent net income or cash flows from operations as defined by GAAP. FFO and AFFO should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor should FFO and AFFO be considered an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.
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, including statements regarding the apparent improvement in the economic environment and BRT’s ability to originate additional loans. 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. Currently, one of the most significant uncertainties the Company is facing is the potential adverse effect of the current pandemic of the novel coronavirus, or COVID-19, on residents at the Company’s properties. The pandemic, among other things, may adversely affect the ability of the residents to pay rent (due to furloughs, layoffs and/or the expiration of, or reduction in, unemployment benefits) and as a result, the Company’s ability to pay dividends and/or the debt service on its mortgages. The possibility that in the near term, the Company may be adversely impacted by the pandemic, is heightened by the recent resurgence of the pandemic in the southeast United States and Texas, where many of the Company’s properties are located. The extent to which COVID-19 impacts the Company will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others. Investors are cautioned not to rely on any forward-looking statements and to carefully review the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K filed on May 15, 2020 and in the Quarterly Reports on Form 10-Q and Current Reports on Form 8-K filed thereafter.
Additional Information:
BRT is a real estate investment trust that owns, operates and develops 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, 2020 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, 2020 | December 31, 2019 | ||||||
| ASSETS | |||||||
| Real estate properties, net of accumulated depreciation | $ | 161,594 | $ | 169,689 | |||
| Investments in unconsolidated joint ventures | 175,484 | 177,071 | |||||
| Real estate loan | — | 4,150 | |||||
| Cash and cash equivalents | 15,650 | 22,699 | |||||
| Restricted cash | 9,129 | 9,719 | |||||
| Other assets | 12,390 | 7,282 | |||||
| Total assets | $ | 374,247 | $ | 390,610 | |||
| LIABILITIES AND EQUITY | |||||||
| Mortgages payable, net of deferred costs | $ | 131,148 | $ | 133,215 | |||
| Junior subordinated notes, net of deferred costs | 37,078 | 37,063 | |||||
| Accounts payable and accrued liabilities | 21,678 | 20,772 | |||||
| Total Liabilities | 189,904 | 191,050 | |||||
| Total BRT Apartments Corp. stockholders’ equity | 184,431 | 199,653 | |||||
| Non-controlling interests | (88 | ) | (93 | ) | |||
| Total Equity | 184,343 | 199,560 | |||||
| Total Liabilities and Equity | $ | 374,247 | $ | 390,610 | |||
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)
| Three Months Ended September 30, | ||||||||
| 2020 | 2019 | |||||||
| Revenues: | ||||||||
| Rental and other revenues from real estate properties | $ | 7,020 | $ | 6,261 | ||||
| Other income | 293 | 161 | ||||||
| Total revenues | 7,313 | 6,422 | ||||||
| Expenses: | ||||||||
| Real estate operating expenses | 3,289 | 2,741 | ||||||
| Interest expense | 1,731 | 1,870 | ||||||
| General and administrative | 2,730 | 2,430 | ||||||
| Impairment charge | 3,642 | — | ||||||
| Depreciation | 1,777 | 1,373 | ||||||
| Total expenses | 13,169 | 8,414 | ||||||
| Total revenue less total expenses | (5,856 | ) | (1,992 | ) | ||||
| Equity in loss of unconsolidated joint ventures | (1,529 | ) | (2,390 | ) | ||||
| Gain on sale of real estate | — | 9,938 | ||||||
| Loss on extinguishment of debt | — | (1,387 | ) | |||||
| (Loss) income from continuing operations | (7,385 | ) | 4,169 | |||||
| Income tax provision | 65 | 98 | ||||||
| Net (loss) income from continuing operations, net of taxes | (7,450 | ) | 4,071 | |||||
| Net income attributable to non-controlling interests | (34 | ) | (799 | ) | ||||
| Net (loss) income attributable to common stockholders | $ | (7,484 | ) | $ | 3,272 | |||
| Per share amounts attributable to common stockholders: | ||||||||
| Basic | $ | (0.44 | ) | $ | 0.21 | |||
| Diluted | $ | (0.44 | ) | $ | 0.20 | |||
| Funds from operations - Note 1 | $ | 4,555 | $ | 1,962 | ||||
| Funds from operations per common share - diluted - Note 2 | $ | 0.27 | $ | 0.12 | ||||
| Adjusted funds from operations - Note 1 | $ | 4,894 | $ | 4,178 | ||||
| Adjusted funds from operations per common share - diluted -Note 2 | $ | 0.28 | $ | 0.26 | ||||
| Weighted average number of shares of common stock outstanding: | ||||||||
| Basic | 17,176,401 | 15,913,975 | ||||||
| Diluted | 17,176,401 | 16,113,975 | ||||||
BRT APARTMENTS CORP. AND SUBSIDIARIES
FUNDS FROM OPERATIONS
(Dollars in thousands, except per share data)
| Three Months Ended September 30, | ||||||||
| 2020 | 2019 | |||||||
| Note 1: | ||||||||
| Funds from operations is summarized in the following table: | ||||||||
| GAAP Net loss attributable to common stockholders | $ | (7,484 | ) | $ | 3,272 | |||
| Add: depreciation of properties | 1,777 | 1,373 | ||||||
| Add: our share of depreciation in unconsolidated joint ventures | 6,624 | 6,366 | ||||||
| Add: Impairment charge | 3,642 | — | ||||||
| Deduct: gain on sale of real estate | — | (9,938 | ) | |||||
| Adjustments for non-controlling interests | (4 | ) | 889 | |||||
| NAREIT Funds from operations attributable to common stockholders | 4,555 | 1,962 | ||||||
| Adjustments for: straight-line rent accruals | (10 | ) | (10 | ) | ||||
| Add: loss on extinguishment of debt | — | 1,387 | ||||||
| Add: our share of loss on extinguishment of debt from unconsolidated joint ventures | — | 273 | ||||||
| Add: amortization of restricted stock and restricted stock units | 461 | 372 | ||||||
| Add: amortization of deferred mortgage costs | 80 | 71 | ||||||
| Add: our share of deferred mortgage costs from unconsolidated joint venture properties | 156 | 246 | ||||||
| Less: our share of gain on insurance proceeds from unconsolidated joint venture | (350 | ) | — | |||||
| Adjustments for non-controlling interests | 2 | $ | (123 | ) | ||||
| Adjusted funds from operations attributable to common stockholders | $ | 4,894 | $ | 4,178 | ||||
BRT APARTMENTS CORP. AND SUBSIDIARIES
FUNDS FROM OPERATIONS
(Dollars in thousands, except per share data)
| Three Months Ended September 30, | ||||||||
| 2020 | 2019 | |||||||
| Note 2: | ||||||||
| GAAP Net loss attributable to common stockholders | $ | (0.44 | ) | $ | 0.20 | |||
| Add: depreciation of properties | 0.11 | 0.09 | ||||||
| Add: our share of depreciation in unconsolidated joint ventures | 0.39 | 0.39 | ||||||
| Add: Impairment charge | 0.21 | — | ||||||
| Deduct: gain on sale of real estate | — | (0.62 | ) | |||||
| Adjustment for non-controlling interests | — | 0.06 | ||||||
| NAREIT Funds from operations per diluted common share | 0.27 | 0.12 | ||||||
| Adjustments for: straight line rent accruals | — | — | ||||||
| Add: loss on extinguishment of debt | — | 0.09 | ||||||
| Add: our share of loss on extinguishment of debt from unconsolidated joint ventures | — | 0.02 | ||||||
| Add: amortization of restricted stock and restricted stock units | 0.02 | 0.02 | ||||||
| Add: amortization of deferred mortgage costs | — | — | ||||||
| Add: our share of deferred mortgage costs from unconsolidated joint venture properties | 0.01 | 0.02 | ||||||
| Less: our share of gain on insurance proceeds from unconsolidated joint venture | (0.02 | ) | — | |||||
| Adjustments for non-controlling interests | — | (0.01 | ) | |||||
| Adjusted funds from operations per diluted common share | $ | 0.28 | $ | 0.26 | ||||
FAQ
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