Toggle SGML Header (+)


Section 1: 8-K (8-K)

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): August 7, 2018

 

Bluerock Residential Growth REIT, Inc.

(Exact Name of Registrant as Specified in Its Charter)

 

Maryland   001-36369   26-3136483
(State or other jurisdiction of incorporation
or organization)
  (Commission File Number)  

(I.R.S. Employer

Identification No.)

 

712 Fifth Avenue, 9th Floor

New York, NY 10019

(Address of principal executive offices)

 

(212) 843-1601

(Registrant’s telephone number, including area code)

 

None.

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

ITEM 2.02 RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

 

On August 7, 2018, Bluerock Residential Growth REIT, Inc., a Maryland corporation, or the Company, issued a press release announcing its financial results for the second quarter ended June 30, 2018. Additionally, the Company is furnishing certain supplemental financial information, or the Supplemental Financial Information. Copies of the press release and the Supplemental Financial Information are furnished as Exhibit 99.1 and Exhibit 99.2 to this Current Report on Form 8-K and is hereby incorporated by reference herein. In accordance with General Instruction B.2 of Form 8-K, the information in this Item 2.02 shall not be deemed to be “filed” for purposes of the Securities Exchange Act of 1934, as amended, or the Exchange Act, and shall not be incorporated by reference into any registration statement or other document filed under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

 

ITEM 7.01 REGULATION FD DISCLOSURE.

 

As disclosed above in Item 2.02 of this Current Report on Form 8-K, on August 7, 2018, the Company issued the press release and Supplemental Financial Information attached hereto as Exhibit 99.1 and Exhibit 99.2 announcing the Company’s financial results for the second quarter ended June 30, 2018 and certain other supplemental financial information. In accordance with General Instruction B.2 of Form 8-K, the information set forth herein, in the press release is deemed to be “furnished” and shall not be deemed to be “filed” for purposes of the Exchange Act. The information set forth in this Item 7.01 of this Current Report on Form 8-K shall not be deemed an admission as to the materiality of any information in this Current Report on Form 8-K that is required to be disclosed solely to satisfy the requirements of Regulation FD.

 

ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

 

(d)Exhibits.

 

The following exhibits relating to Items 2.02 and 7.01 of this Current Report on Form 8-K are intended to be furnished to, not filed with, the SEC pursuant to Regulation FD.

 

Exhibit No.   Description
     
99.1   Press Release, dated August 7, 2018.
99.2   Supplemental Financial Information.

 

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  BLUEROCK RESIDENTIAL GROWTH REIT, INC.
     
Dated: August 7, 2018 By: /s/ Christopher J. Vohs
    Christopher J. Vohs
    Chief Financial Officer and Treasurer

 

 

 

 

Exhibit Index

 

Exhibit No.   Description
     
99.1   Press Release, dated August 7, 2018.
99.2   Supplemental Financial Information.

 

 

(Back To Top)

Section 2: EX-99.1 (EXHIBIT 99.1)

 

Exhibit 99.1

 

 

For Immediate Release

 

Bluerock Residential Growth REIT Announces Second Quarter 2018 Results

 

- Total Revenues Grew 57% YoY to $45.0 Million -

- Increases Low End of Full Year 2018 AFFO Guidance Range -

 

New York, NY (August 7, 2018) – Bluerock Residential Growth REIT, Inc. (NYSE American: BRG) (“the Company”), an owner of highly amenitized multi-family apartment communities, announced today its financial results for the quarter ended June 30, 2018.

 

Second Quarter Highlights

 

Total revenues grew 57% to $45.0 million for the quarter from $28.7 million in the prior year period.

 

Net loss attributable to common stockholders for the second quarter of 2018 was ($0.44) per share, as compared to net income attributable to common stockholders of $0.67 per share in the prior year period. The prior year period included $1.26 per share of gains on the sale of real estate investments and joint venture interests.

 

Property Net Operating Income (“NOI”) grew 49% to $22.5 million, from $15.0 million in the prior year period.

 

Same store Revenue and NOI increased 3.6% and 3.9% respectively, as compared to the prior year period.

 

Adjusted funds from operations attributable to common shares and units (“AFFO”) grew 56% to $5.3 million, from $3.4 million in the prior year period. AFFO per share is $0.17 for the quarter as compared to $0.13 in second quarter 2017.

 

Consolidated real estate investments, at cost, increased approximately $151.5 million to $1.6 billion, from year end.

 

The Company invested approximately $82 million in two multifamily communities totaling 502 units and $9 million to buyout minority ownership interests in two assets.

 

The Company completed 292 value-add unit upgrades at an average cost of $4,708 per unit, and leased 269 of them during the second quarter. Year-to-date, the Company has completed 462 upgrades at an average cost of $4,373 per unit. The Company expects to complete between 900 and 1,200 unit renovations in 2018.

 

 Since inception, the Company has completed 942 value-add upgrades and achieved a $107 average monthly rental increase per unit, equating to a 27.4% ROI on all unit upgrades leased as of June 30, 2018.

 

Repurchased 107,040 shares of stock during the second quarter at an average price of $8.96 per share, for a total cost of approximately $1.0 million.

 

The Company increased the low end of its full year 2018 AFFO guidance from $0.65 to $0.66 per share and is affirming the top end of the range at $0.70 per share.

 

 

 

 

“We continued to produce strong operating results in the second quarter with property NOI up 49%, same store NOI that increased 3.9% and AFFO which again for the second quarter in a row exceeded our dividend payment,” said Ramin Kamfar, Company Chairman and CEO. “The robust first half performance has allowed us to increase the bottom end of our 2018 AFFO guidance range. We remain focused on ongoing operational improvements and creating value through our value-add upgrade programs. Furthermore, with access to attractive capital with our Series B redeemable preferred stock issuance, we will selectively pursue opportunities to accretively grow our portfolio of highly amenitized communities in targeted growth markets.”

 

Financial Results

 

Net loss attributable to common stockholders for the second quarter of 2018 was $10.2 million, compared to a net income of $17.6 million in the prior year period. The prior year period included approximately $32.8 million of gains on sale of real estate investments and joint venture interests. Net loss attributable to common stockholders included non-cash expenses of $14.2 million or $0.46 per share in the second quarter of 2018 compared to $17.1 million or $0.66 per share for the prior year period.

 

AFFO for the second quarter of 2018 was $5.3 million, or $0.17 per diluted share, compared to $3.4 million, or $0.13 per diluted share in the prior year period. AFFO was primarily driven by growth in property NOI of $7.4 million and interest income of $3.5 million arising from significant investment activity. This was primarily offset by a year-over-year rise in interest expense of $4.4 million, general and administrative expenses of $2.0 million, and preferred stock dividends of $2.3 million.

 

Total Portfolio Performance

 

$ In thousands, except average rental rates  2Q18   2Q17   Variance   YTD18   YTD17   Variance 
Total Revenues (1)  $44,959   $28,666    56.8%  $86,828   $56,849    52.7%
Property Operating Expenses  $16,874   $11,527    46.4%  $32,533   $22,146    46.9%
NOI  $22,450   $15,042    49.2%  $43,465   $31,083    39.8%
Operating Margin   57.1%   56.6%   50bps   57.2%   58.4%   (120)bps
Occupancy Percentage   93.9%   94.3%   (40)bps   93.7%   94.4%   (40)bps
Average Rental Rate  $1,239   $1,208    2.6%  $1,233   $1,182    4.3%

 

(1) Including interest income from related parties

 

For the second quarter of 2018, property revenues increased by 48.0% compared to the same prior year period primarily attributable to the increased size of the portfolio. Total portfolio NOI was $22.5 million, an increase of $7.4 million, or 49.2%, compared to the same period in the prior year.

 

Property NOI margins were 57.1% of revenue for the quarter, compared to 56.6% of revenue in the prior year quarter. Property operating expenses were up primarily due to the increased size of the portfolio.

 

Same Store Portfolio Performance

 

$ In thousands, except average rental rates  2Q18   2Q17   Variance   YTD18   YTD17   Variance 
Revenues  $23,413   $22,591    3.6%  $41,707   $39,910    4.5%
Property Operating Expenses  $9,933   $9,617    3.3%  $17,629   $16,669    5.8%
NOI  $13,480   $12,974    3.9%  $24,078   $23,241    3.6%
Operating Margin   57.6%   57.4%   20bps   57.7%   58.2%   (50)bps
Occupancy Percentage   94.3%   94.8%   (50)bps   94.0%   94.4%   (40)bps
Average Rental Rate  $1,271   $1,220    4.2%  $1,284   $1,228    4.6%

 

The Company’s same store portfolio for the quarter ended June 30, 2018 included 18 properties. For the second quarter of 2018, same store NOI was $13.5 million, an increase of $0.5 million, or 3.9%, compared to the same period in the prior year. Same store property revenues increased by 3.6% compared to the same prior year period, primarily attributable to a 4.2% increase in average rental rates, offset by average occupancy decreasing 50 basis points to 94.3%. In addition, the implementation of trash valet services at eleven properties and a general increase in resident fees increased revenues by $0.2 million. Same store expenses increased $0.3 million due implementation of trash valet services and the timing of seasonal maintenance.

 

 

 

 

Second Quarter Acquisition Activity

 

On April 26, 2018, invested approximately $9 million to increase our ownership stake to 100% in each of our ARIUM Gulfshore and ARIUM at Palmer Ranch properties.

 

On May 1, 2018, acquired a 100% interest in a 264-unit apartment community located in Daytona Beach, Florida, known as Sands Parc. The total purchase price was approximately $46.2 million, funded in part by the Company’s Senior Credit Facility.

 

On June 14, 2018, acquired an 80% indirect interest in a 238-unit apartment community located in Lake Jackson, Texas, known as Plantation Park. The total purchase price was approximately $35.6 million, funded in part by a $26.6 million mortgage loan secured by the Plantation Park property.

 

Balance Sheet

 

During the second quarter, the Company raised gross proceeds of approximately $31.6 million through the issuance of 31,576 shares of Series B preferred stock with associated warrants at $1,000 per unit.

 

As of June 30, 2018, the Company had $25.4 million of unrestricted cash on its balance sheet, approximately $51.5 million available among its revolving credit facilities, and $1.1 billion of debt outstanding.

 

Dividend Details

 

The Board of Directors authorized, and the Company declared, a quarterly dividend for the second quarter of 2018 equal to a quarterly rate of $0.1625 per share on its Class A common stock, payable to the stockholders of record as of June 25, 2018, which was paid in cash on July 5, 2018. A portion of each dividend may constitute a return of capital for tax purposes. There is no assurance that we will continue to declare dividends or at this rate.

 

On July 10, 2018, the Board of Directors authorized, and the Company declared, a monthly dividend of $5.00 per share of Series B preferred stock, payable to the stockholders of record as of July 25, 2018, which was paid in cash on August 3, 2018, and as of August 24, 2018, and September 25, 2018, which will be paid in cash on September 5, 2018 and October 5, 2018, respectively.

 

2018 Guidance

 

Based on the Company’s current outlook and market conditions, the Company is increasing the bottom end of the 2018 AFFO guidance from $0.65 to $0.66 per share and is reaffirming the top end of the range at $0.70 per share. For additional guidance details, please see page 30 of Company’s Second Quarter 2018 Earnings Supplement available under Investor Relations on the Company’s website (www.bluerockresidential.com). Subsequent to issuing 2018 guidance in February 2018, the Company revised its presentation of AFFO attributable to common stockholders to reflect AFFO attributable to common shares and units. The estimated weighted average diluted shares and units outstanding used to calculate AFFO per share now includes noncontrolling interests – operating partnership units. As the Company’s presentation now also includes the impact of AFFO attributable to operating partnership units, and as shares and units are treated on a one-for-one basis, there is no change to projected AFFO per share for purposes of 2018 AFFO guidance.

 

 

 

 

Conference Call

 

All interested parties can listen to the live conference call at 11:00 AM ET on Tuesday, August 7, 2018 by dialing +1 (866) 843-0890 within the U.S., or +1 (412) 317-6597, and requesting the “Bluerock Residential Conference.”

 

For those who are not available to listen to the live call, the conference call will be available for replay on the Company’s website two hours after the call concludes, and will remain available until September 7, 2018 at http://services.choruscall.com/links/brg180807.html, as well as by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10122487.

 

The full text of this Earnings Release and additional Supplemental Information is available in the Investor Relations section on the Company’s website at http://www.bluerockresidential.com.

 

About Bluerock Residential Growth REIT, Inc.

 

Bluerock Residential Growth REIT, Inc. (NYSE American: BRG) is a real estate investment trust that focuses on developing and acquiring a diversified portfolio of institutional-quality highly amenitized live/work/play apartment communities in demographically attractive knowledge economy growth markets to appeal to the renter by choice. The Company’s objective is to generate value through off-market/relationship-based transactions and, at the asset level, through value add improvements to properties and operations. The Company is included in the Russell 2000 and Russell 3000 Indexes. BRG has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes.

 

For more information, please visit the Company’s website at www.bluerockresidential.com.

 

Forward Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K filed by the Company with the U.S. Securities and Exchange Commission (“SEC”) on March 13, 2018, and subsequent filings by the Company with the SEC. We claim the safe harbor protection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995.

 

 

 

 

Portfolio Summary

 

The following is a summary of our operating real estate and mezzanine/preferred investments as of June 30, 2018:

 

Consolidated Operating
Properties
  Location  Number
of Units
   Year
Built/
Renovated(1)
   Ownership
Interest
   Average
Rent (2)
   %
Occupied (3)
 
ARIUM at Palmer Ranch  Sarasota, FL   320    2016    100%  $1,291    96%
ARIUM Glenridge  Atlanta, GA   480    1990    90%   1,150    93%
ARIUM Grandewood  Orlando, FL   306    2005    100%   1,346    95%
ARIUM Gulfshore  Naples, FL   368    2016    100%   1,296    92%
ARIUM Hunter’s Creek  Orlando, FL   532    1999    100%   1,353    93%
ARIUM Metrowest  Orlando, FL   510    2001    100%   1,328    93%
ARIUM Palms  Orlando, FL   252    2008    95%   1,307    94%
ARIUM Pine Lakes  Port St. Lucie, FL   320    2003    85%   1,229    94%
ARIUM Westside  Atlanta, GA   336    2008    90%   1,490    93%
Ashton Reserve  Charlotte, NC   473    2015    100%   1,073    91%
Citrus Tower  Orlando, FL   336    2006    97%   1,257    95%
Enders Place at Baldwin Park  Orlando, FL   220    2003    92%   1,734    95%
James on South First  Austin, TX   250    2016    90%   1,160    98%
Marquis at Crown Ridge  San Antonio, TX   352    2009    90%   935    93%
Marquis at Stone Oak  San Antonio, TX   335    2007    90%   1,385    93%
Marquis at The Cascades  Tyler, TX   582    2009    90%   1,069    95%
Marquis at TPC  San Antonio, TX   139    2008    90%   1,461    96%
Outlook at Greystone  Birmingham, AL   300    2007    100%   936    88%
Park & Kingston  Charlotte, NC   168    2015    100%   1,218    96%
Plantation Park  Lake Jackson, TX   238    2016    80%   1,428    92%
Preston View  Morrisville, NC   382    2000    100%   1,072    97%
Roswell City Walk  Roswell, GA   320    2015    98%   1,513    97%
Sands Parc  Daytona Beach, FL   264    2017    100%   1,267    94%
Sorrel  Frisco, TX   352    2015    95%   1,252    91%
Sovereign  Fort Worth, TX   322    2015    95%   1,320    94%
The Brodie  Austin, TX   324    2001    93%   1,105    98%
The Links at Plum Creek  Castle Rock, CO   264    2000    88%   1,362    94%
The Mills  Greenville, SC   304    2013    100%   999    97%
The Preserve at Henderson Beach  Destin, FL   340    2009    100%   1,306    97%
Villages at Cypress Creek  Houston, TX   384    2001    80%   1,079    97%
Wesley Village  Charlotte, NC   301    2010    100%   1,296    95%
Consolidated Operating Properties Subtotal/Average   10,374             $1,239    94%
                          
Mezzanine/Preferred
Investments
  Location  Planned
Number
of Units
           Pro Forma
Average
Rent (4)
     
Alexan CityCentre  Houston, TX   340             $2,144      
Alexan Southside Place  Houston, TX   270              2,012      
Arlo, formerly West Morehead  Charlotte, NC   286              1,507      
Cade Boca Raton, formerly APOK Townhomes  Boca Raton, FL   90              2,549      
Domain at The One Forty, formerly Domain  Garland, TX   299              1,469      
Flagler Village  Fort Lauderdale, FL   385              2,352      
Helios  Atlanta, GA   282              1,486      
Leigh House, formerly Lake Boone Trail  Raleigh, NC   245              1,271      
Novel Perimeter, formerly Crescent Perimeter  Atlanta, GA   320              1,749      
Vickers Historic Roswell, formerly Vickers Village  Roswell, GA   79              3,176      
Whetstone  Durham, NC   204              1,300(2)     
Mezzanine and Preferred Investments Subtotal/Average   2,800             $1,816      
                             
Portfolio Properties Total/Average   13,174             $1,365      

 

(1) Represents date of last significant renovation or year built if there were no renovations.

(2) Represents the average effective monthly rent per occupied unit for the three months ended June 30, 2018.

(3) Percent occupied is calculated as (i) the number of units occupied as of June 30, 2018, divided by (ii) total number of units, expressed as a percentage.

(4) Alexan CityCentre, Alexan Southside Place, Helios, and Leigh House are preferred equity investments with an option to convert into partial ownership upon stabilization. Cade Boca Raton, Novel Perimeter, Domain at The One Forty, Flagler Village, Vickers Historic Roswell, and Arlo are mezzanine loan investments. Additionally, Cade Boca Raton, Domain at The One Forty, and Arlo have an option to purchase an indirect property interest upon maturity. Whetstone is currently a preferred equity investment providing a stated investment return. Pro forma average rent represents the average pro forma effective monthly rent per occupied unit for all expected occupied units upon stabilization.

 

 

 

 

Consolidated Statement of Operations

For the Three and Six Months Ended June 30, 2018 and 2017

(Unaudited and dollars in thousands except for share and per share data)

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
Revenues                    
Net rental income  $34,719   $23,570   $67,383   $47,412 
Other property revenues   4,605    2,999    8,615    5,817 
Interest income from related parties   5,635    2,097    10,830    3,620 
Total revenues   44,959    28,666    86,828    56,849 
Expenses                    
Property operating   16,874    11,527    32,533    22,146 
Property management fees   1,074    737    2,067    1,469 
General and administrative   4,528    1,696    9,197    3,146 
Management fees       6,163        8,931 
Acquisition and pursuit costs   28    18    71    3,200 
Management internalization       340        820 
Weather-related losses, net           168     
Depreciation and amortization   14,819    10,387    30,460    21,331 
Total expenses   37,323    30,868    74,496    61,043 
Operating loss   7,636    (2,202)   12,332    (4,194)
Other income (expense)                    
Other income       17        17 
Preferred returns and equity in income of unconsolidated real estate joint ventures   2,626    2,605    5,088    5,177 
Gain on sale of real estate investments       33,574        50,040 
Gain on sale of real estate joint venture interest       10,238        10,238 
Loss on early extinguishment of debt   (653)   (1,639)   (653)   (1,639)
Interest expense, net   (13,041)   (7,825)   (23,158)   (14,943)
Total other (expense) income    (11,068)   36,970    (18,723)   48,890 
Net (loss) income   (3,432)   34,768    (6,391)   44,696 
Preferred stock dividends   (8,643)   (6,381)   (16,890)   (12,233)
Preferred stock accretion   (1,400)   (647)   (2,510)   (984)
Net (loss) income attributable to noncontrolling interests                    
Operating partnership units   (3,010)   186    (5,685)   129 
Partially-owned properties   (253)   9,985    (468)   18,771 
Net (loss) income attributable to noncontrolling interests   (3,263)   10,171    (6,153)   18,900 
Net (loss) income attributable to common stockholders  $(10,212)  $17,569   $(19,638)  $12,579 
                     
Net (loss) income per common share - Basic  $(0.44)  $0.67   $(0.83)  $0.49 
                     
Net (loss) income per common share – Diluted  $(0.44)  $0.67   $(0.83)  $0.49 
                     
Weighted average basic common shares outstanding   23,800,770    26,075,911    23,971,129    25,535,178 
Weighted average diluted common shares outstanding   23,800,770    26,076,572    23,971,129    25,535,839 

 

 

 

 

Consolidated Balance Sheets

Second Quarter 2018

(Unaudited and dollars in thousands except for share and per share amounts)

 

   June 30,
2018
   December 31,
2017
 
ASSETS          
Net Real Estate Investments          
Land  $176,865   $169,135 
Buildings and improvements   1,382,353    1,244,193 
Furniture, fixtures and equipment   44,802    38,446 
Construction in progress   261    985 
Total Gross Real Estate Investments   1,604,281    1,452,759 
Accumulated depreciation   (80,104)   (55,177)
Total Net Real Estate Investments   1,524,177    1,397,582 
Cash and cash equivalents   25,411    35,015 
Restricted cash   29,775    29,575 
Notes and accrued interest receivable from related parties   162,971    140,903 
Due from affiliates   2,537    2,003 
Accounts receivable, prepaid and other assets   14,358    9,689 
Preferred equity investments and investments in unconsolidated real estate joint ventures   77,061    71,145 
In-place lease intangible assets, net   1,875    4,635 
Total Assets  $1,838,165   $1,690,547 
           
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY          
Mortgages payable  $1,075,799   $939,494 
Revolving credit facilities   68,209    67,670 
Accounts payable   1,071    1,652 
Other accrued liabilities   27,590    22,952 
Due to affiliates   815    1,575 
Distributions payable   11,690    14,287 
Total Liabilities   1,185,174    1,047,630 
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; and 5,721,460 issued and outstanding as of June 30, 2018 and December 31, 2017   139,137    138,801 
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 725,000 shares authorized; 233,417 and 184,130 issued and outstanding as of June 30, 2018 and December 31, 2017, respectively   206,878    161,742 
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; and 2,323,750 issued and outstanding as of June 30, 2018 and December 31, 2017   56,326    56,196 
           
Equity          
Stockholders’ Equity          
Preferred stock, $0.01 par value, 230,400,000 shares authorized; none issued and outstanding        
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,850,602 issued and outstanding at June 30, 2018 and December 31, 2017   68,705    68,705 
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 23,658,991 and 24,218,359 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively   237    242 
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding as of June 30, 2018 and December 31, 2017   1    1 
Additional paid-in-capital   310,595    318,170 
Distributions in excess of cumulative earnings   (187,720)   (164,286)
Total Stockholders’ Equity   191,818    222,832 
Noncontrolling Interests          
Operating partnership units   36,124    42,999 
Partially owned properties   22,708    20,347 
Total Noncontrolling Interests   58,832    63,346 
Total Equity   250,650    286,178 
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY  $1,838,165   $1,690,547 

 

 

 

 

Non-GAAP Financial Measures

 

The foregoing supplemental financial data includes certain non-GAAP financial measures that we believe are helpful in understanding our business and performance, as further described below. Our definition and calculation of these non-GAAP financial measures may differ from those of other REITs, and may, therefore, not be comparable.

 

Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations

 

We believe that funds from operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), core funds from operations (“Core FFO”), and adjusted funds from operations (“AFFO”) are important non-GAAP supplemental measures of operating performance for a REIT.

 

FFO attributable to common shares and units is a non-GAAP financial measure that is widely recognized as a measure of REIT operating performance. We consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative. We define FFO, consistent with the NAREIT definition, as net income, computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus depreciation and amortization of real estate assets, plus impairment write-downs of depreciable real estate, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis.

 

Core FFO makes certain adjustments to FFO, removing the effect of items that do not reflect ongoing property operations such as stock compensation expense, acquisition expenses, losses on early extinguishment of debt (includes prepayment penalties incurred and the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt), non-cash interest, one-time weather-related costs, and preferred stock accretion. We believe that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core recurring property operations. As a result, we believe that Core FFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential.

 

AFFO makes certain adjustments to Core FFO in order to arrive at a more refined measure of the operating performance of our portfolio. There is no industry standard definition of AFFO and practice is divergent across the industry. AFFO adjusts Core FFO for items that impact our ongoing operations, such as subtracting recurring capital expenditures (and while we were externally managed, when calculating the quarterly incentive fee paid to our former Manager only, we further adjusted FFO to include any realized gains or losses on our real estate investments).  We believe that AFFO is helpful to investors as a meaningful supplemental indicator of our operational performance. 

 

Our calculation of Core FFO and AFFO differs from the methodology used for calculating Core FFO and AFFO by certain other REITs and, accordingly, our Core FFO and AFFO may not be comparable to Core FFO and AFFO reported by other REITs. Our management utilizes FFO, Core FFO, and AFFO as measures of our operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare our operating performance between periods. Furthermore, although FFO, Core FFO, AFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we also believe that FFO, Core FFO, and AFFO may provide us and our stockholders with an additional useful measure to compare our financial performance to certain other REITs. While we were externally managed, we also used AFFO for purposes of determining the quarterly incentive fee paid to our former Manager in prior periods.

 

Neither FFO, Core FFO, nor AFFO is equivalent to net income, including net income attributable to common stockholders, or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO, Core FFO, and AFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO, Core FFO, nor AFFO should be considered as an alternative to net income, including net income attributable to common stockholders, as an indicator of our operating performance or as an alternative to cash flow from operating activities as a measure of our liquidity.

 

 

 

 

We have acquired interests in nine additional operating properties subsequent to June 30, 2017. Therefore, the results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance.

 

The table below reconciles our calculations of FFO, Core FFO and AFFO to net income (loss), the most directly comparable GAAP financial measure, for the three and six months ended June 30, 2018 and 2017 (in thousands, except per share amounts):

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
Net (loss) income attributable to common stockholders  $(10,212)  $17,569   $(19,638)  $12,579 
Add back: Net (loss) income attributable to operating partnership units   (3,010)   186    (5,685)   129 
Net (loss) income attributable to common shares and units   (13,222)   17,755    (25,323)   12,708 
                     
Common stockholders and operating partnership units pro-rata share of:                    
Real estate depreciation and amortization(1)   13,990    9,425    28,821    19,338 
Gain on sale of joint venture interests, net       (6,399)       (6,399)
Gain on sale of real estate investments       (26,832)       (34,313)
FFO Attributable to Common Shares and Units  $768   $(6,051)  $3,498   $(8,666)
Common stockholders and operating partnership units pro-rata share of:                    
Acquisition and pursuit costs   28    16    71    3,056 
Non-cash interest expense   1,602    783    2,062    1,261 
Loss on early extinguishment of debt   653    1,551    653    1,551 
Weather-related losses, net           165     
Non-real estate depreciation and amortization (1)   75        139     
Non-recurring income       (16)       (16)
Non-cash preferred returns and equity in income of unconsolidated real estate joint ventures   (233)   (492)   (464)   (492)
Management internalization       340        820 
Non-cash equity compensation   1,638    6,919    3,418    10,120 
Preferred stock accretion   1,400    647    2,510    984 
Core FFO Attributable to Common Shares and Units   5,931    3,697    12,052    8,618 
Common stockholders and operating partnership units pro-rata share of:                    
Normally recurring capital expenditures   (631)   (335)   (1,149)   (629)
AFFO Attributable to Common Shares and Units  $5,300   $3,362   $10,903   $7,989 
Per Share and Unit Information:                    
FFO Attributable to Common Shares and Units - diluted  $0.02   $(0.23)  $0.11   $(0.34)
Core FFO Attributable to Common Shares and Units - diluted  $0.19   $0.14   $0.39   $0.33 
AFFO Attributable to Common Shares and Units - diluted  $0.17   $0.13   $0.35   $0.31 
Weighted average common shares outstanding - diluted   30,814,839    26,352,066    30,873,023    25,815,164 

 

 

(1)    The real estate depreciation and amortization amount includes our share of consolidated real estate-related depreciation and amortization of intangibles, less amounts attributable to noncontrolling interests – partially owned properties, and our similar estimated share of unconsolidated depreciation and amortization, which is included in earnings of our unconsolidated real estate joint venture investments.

 

 

 

 

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”)

 

NAREIT defines earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) (September 2017 White Paper) as net income, computed in accordance with GAAP, before interest expense, income taxes, depreciation and amortization expense, and further adjusted for gains and losses from sales of depreciated operating properties, and impairment write-downs of depreciated operating properties.

 

We consider EBITDAre to be an appropriate supplemental measure of our performance because it eliminates depreciation, income taxes, interest and non-recurring items, which permits investors to view income from operations unobscured by non-cash items such as depreciation, amortization, the cost of debt or non-recurring items.

 

Adjusted EBITDAre represents EBITDAre further adjusted for non-comparable items and it is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not consider certain cash requirements such as income tax payments, debt service requirements, capital expenditures and other fixed charges.

 

EBITDAre and Adjusted EBITDAre are not recognized measurements under GAAP. Because not all companies use identical calculations, our presentation of EBITDAre and Adjusted EBITDAre may not be comparable to similarly titled measures of other companies.

 

Below is a reconciliation of net loss attributable to common stockholders to EBITDAre (unaudited and dollars in thousands).

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
Net (loss) income attributable to common stockholders  $(10,212)  $17,569   $(19,638)  $12,579 
Net (loss) income attributable to noncontrolling interests   (3,263)   10,171    (6,153)   18,900 
Preferred stock dividends   8,643    6,381    16,890    12,233 
Preferred stock accretion   1,400    647    2,510    984 
Interest expense, net   13,041    7,825    23,158    14,943 
Depreciation and amortization   14,744    10,387    30,321    21,331 
Gain on sale of real estate investments   -    (33,574)   -    (50,040)
Gain on sale of real estate joint venture interest, net   -    (10,238)   -    (10,238)
Loss on early extinguishment of debt   653    1,639    653    1,639 
EBITDAre  $25,006   $10,807   $47,741   $22,331 
Acquisition and pursuit costs   28    18    71    3,200 
Management internalization   -    340    -    820 
Non-real estate depreciation and amortization   75    -    139    - 
Weather-related losses, net   -    -    168    - 
Non-cash equity compensation   1,638    6,919    3,418    10,119 
Non-recurring income   -    (17)   -    (17)
Non-cash preferred returns and equity in income of unconsolidated real estate joint ventures   (233)   (492)   (464)   (492)
Adjusted EBITDAre  $26,514   $17,575   $51,073   $35,961 

 

 

 

 

Recurring Capital Expenditures

 

We define recurring capital expenditures as expenditures that are incurred at every property and exclude development, investment, revenue enhancing and non-recurring capital expenditures.

 

Non-Recurring Capital Expenditures

 

We define non-recurring capital expenditures as expenditures for significant projects that upgrade units or common areas and projects that are revenue enhancing.

 

Same Store Properties

 

Same store properties are conventional multifamily residential apartments which were owned and operational for the entire periods presented, including each comparative period.

 

Property Net Operating Income (“Property NOI”)

 

We believe that net operating income, or NOI, is a useful measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding depreciation and amortization and interest. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. We use NOI to evaluate our performance on a same store and non-same store basis; NOI measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance and captures trends in rental housing and property operating expenses. However, NOI should only be used as a supplemental measure of our financial performance.

 

Certain amounts in prior periods, related to tenant reimbursements for utility expenses amounting to $1.5 million and $3.0 million for the three and six months ended June 30, 2017, have been reclassified to other property revenues from property operating expenses, to conform to the current period.  In addition, property management fees have been reclassified from property operating expenses.

 

 

 

 

The following table reflects net loss attributable to common stockholders together with a reconciliation to NOI and to same store and non-same store contributions to consolidated NOI, as computed in accordance with GAAP for the periods presented (unaudited and amounts in thousands):

 

   Three Months Ended (1)   Six Months Ended (2) 
   June 30,   June 30, 
   2018   2017   2018   2017 
Net (loss) income attributable to common shares  $(10,212)  $17,569   $(19,638)  $12,579 
Add back: Net (loss) income attributable to operating partnership units   (3,010)   186    (5,685)   129 
Net (loss) income attributable to common shares and units   (13,222)   17,755    (25,323)   12,708 
Add common stockholders and operating partnership units pro-rata share:                    
Depreciation and amortization   13,990    9,425    28,821    19,338 
Non-real estate depreciation and amortization   75        139     
Non-cash interest expense   1,602    783    2,062    1,261 
Property management fees   1,017    668    1,956    1,317 
Management fees       6,163        8,931 
Acquisition and pursuit costs   28    16    71    3,056 
Loss on early extinguishment of debt   653    1,551    653    1,551 
Corporate operating expenses   4,528    1,696    9,197    3,146 
Management internalization       340        820 
Weather-related losses, net           165     
Preferred dividends   8,643    6,381    16,890    12,233 
Preferred stock accretion   1,400    647    2,510    984 
Less common stockholders and operating partnership units pro-rata share:                    
Other income       16        16 
Preferred returns and equity in income of unconsolidated real estate joint ventures   2,626    2,605    5,088    5,177 
Interest income from related parties   5,635    2,097    10,830    3,620 
Gain on sale of joint venture interest       6,399        6,399 
Gain on sale of real estate investments       26,832        34,313 
Pro-rata share of properties’ income   10,453    7,476    21,223    15,820 
Add:                    
Noncontrolling interest pro-rata share of partially owned property income   542    702    1,152    1,790 
Total property income   10,995    8,178    22,375    17,610 
Add:                    
Interest expense, net   11,455    6,864    21,090    13,473 
Net operating income   22,450    15,042    43,465    31,083 
Less:                    
Non-same store net operating income   8,970    2,068    19,387    7,842 
Same store net operating income  $13,480   $12,974   $24,078   $23,241 

 

(1) Same Store sales for the three months ended June 30, 2018 related to the following properties: Enders Place at Baldwin Park, ARIUM Grandewood, Park & Kingston, Ashton Reserve, ARIUM Palms, Sorrel, Sovereign, ARIUM Gulfshore, ARIUM at Palmer Ranch, The Preserve at Henderson Beach, ARIUM Westside, ARIUM Pine Lakes, James on South First, ARIUM Glenridge, Roswell City Walk, The Brodie, Preston View and Wesley Village.

(2) Same Store sales for the six months ended June 30, 2018 related to the following properties: Enders Place at Baldwin Park, ARIUM Grandewood, Park & Kingston, Ashton Reserve, ARIUM Palms, Sorrel, Sovereign, ARIUM Gulfshore, ARIUM at Palmer Ranch, The Preserve at Henderson Beach, ARIUM Westside, ARIUM Pine Lakes, James on South First, ARIUM Glenridge, Roswell City Walk and The Brodie.

 

 

 

 

Contact

Investors:

(888) 558.1031
[email protected]

 

Media:

Josh Hoffman

(208) 475.2380

[email protected]

##

 

 

(Back To Top)

Section 3: EX-99.2 (EXHIBIT 99.2)

 

Exhibit 99.2

 

 

 1 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter 2018

Supplemental Financial Information

(Unaudited)

 

 

Table of Contents

 

Second Quarter Earnings Release 3
   
Financial and Operating Highlights 16
   
Share and Unit Information 17
   
EBITDAre and Interest Information 18
   
Financial Statistics 19
   
Recent Acquisitions 20
   
Investments in Unconsolidated Real Estate Joint Ventures and Notes and Accrued Interest Receivable from Related Parties 21
   
Portfolio Information 22
   
Renovation Table 23
   
Mezzanine/Preferred Investments 24
   
Condensed Consolidated Balance Sheets 25
   
Consolidated Statements of Operations 26
   
Reconciliation of Funds from Operations (FFO), Core Funds From Operations (Core FFO) and Adjusted Funds from Operations (AFFO) 27
   
Mortgages Payable Summary Information 28
   
2018 Outlook 30
   
Definitions of Non-GAAP Financial Measures 31

 

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur, including statements relating to the Company’s operating environment, operating trends, and outlook. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the “Risk Factors” set forth in Item 1A of the Company’s Annual Report on Form 10-K filed by the Company with the U.S. Securities and Exchange Commission (“SEC”) on March 13, 2018, and subsequent filings by the Company with the SEC, including our periodic reports. We claim the safe harbor protection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995.

 

 2 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

 

For Immediate Release

 

Bluerock Residential Growth REIT Announces Second Quarter 2018 Results

 

- Total Revenues Grew 57% YoY to $45.0 Million -

- Increases Low End of Full Year 2018 AFFO Guidance Range -

 

New York, NY (August 7, 2018) – Bluerock Residential Growth REIT, Inc. (NYSE American: BRG) (“the Company”), an owner of highly amenitized multi-family apartment communities, announced today its financial results for the quarter ended June 30, 2018.

 

Second Quarter Highlights

 

Total revenues grew 57% to $45.0 million for the quarter from $28.7 million in the prior year period.

 

Net loss attributable to common stockholders for the second quarter of 2018 was ($0.44) per share, as compared to net income attributable to common stockholders of $0.67 per share in the prior year period. The prior year period included $1.26 per share of gains on the sale of real estate investments and joint venture interests.

 

Property Net Operating Income (“NOI”) grew 49% to $22.5 million, from $15.0 million in the prior year period.

 

Same store Revenue and NOI increased 3.6% and 3.9% respectively, as compared to the prior year period.

 

Adjusted funds from operations attributable to common shares and units (“AFFO”) grew 56% to $5.3 million, from $3.4 million in the prior year period. AFFO per share is $0.17 for the quarter as compared to $0.13 in second quarter 2017.

 

Consolidated real estate investments, at cost, increased approximately $151.5 million to $1.6 billion, from year end.

 

The Company invested approximately $82 million in two multifamily communities totaling 502 units and $9 million to buyout minority ownership interests in two assets.

 

The Company completed 292 value-add unit upgrades at an average cost of $4,708 per unit, and leased 269 of them during the second quarter. Year-to-date, the Company has completed 462 upgrades at an average cost of $4,373 per unit. The Company expects to complete between 900 and 1,200 unit renovations in 2018.
   
 Since inception, the Company has completed 942 value-add upgrades and achieved a $107 average monthly rental increase per unit, equating to a 27.4% ROI on all unit upgrades leased as of June 30, 2018.

 

Repurchased 107,040 shares of stock during the second quarter at an average price of $8.96 per share, for a total cost of approximately $1.0 million.

 

The Company increased the low end of its full year 2018 AFFO guidance from $0.65 to $0.66 per share and is affirming the top end of the range at $0.70 per share.

 

 3 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

“We continued to produce strong operating results in the second quarter with property NOI up 49%, same store NOI that increased 3.9% and AFFO which again for the second quarter in a row exceeded our dividend payment,” said Ramin Kamfar, Company Chairman and CEO. “The robust first half performance has allowed us to increase the bottom end of our 2018 AFFO guidance range. We remain focused on ongoing operational improvements and creating value through our value-add upgrade programs. Furthermore, with access to attractive capital with our Series B redeemable preferred stock issuance, we will selectively pursue opportunities to accretively grow our portfolio of highly amenitized communities in targeted growth markets.”

 

Financial Results

 

Net loss attributable to common stockholders for the second quarter of 2018 was $10.2 million, compared to a net income of $17.6 million in the prior year period. The prior year period included approximately $32.8 million of gains on sale of real estate investments and joint venture interests. Net loss attributable to common stockholders included non-cash expenses of $14.2 million or $0.46 per share in the second quarter of 2018 compared to $17.1 million or $0.66 per share for the prior year period.

 

AFFO for the second quarter of 2018 was $5.3 million, or $0.17 per diluted share, compared to $3.4 million, or $0.13 per diluted share in the prior year period. AFFO was primarily driven by growth in property NOI of $7.4 million and interest income of $3.5 million arising from significant investment activity. This was primarily offset by a year-over-year rise in interest expense of $4.4 million, general and administrative expenses of $2.0 million, and preferred stock dividends of $2.3 million.

 

Total Portfolio Performance

 

$ In thousands, except average rental rates  2Q18   2Q17   Variance   YTD18   YTD17   Variance 
Total Revenues (1)  $44,959   $28,666    56.8%  $86,828   $56,849    52.7%
Property Operating Expenses  $16,874   $11,527    46.4%  $32,533   $22,146    46.9%
NOI  $22,450   $15,042    49.2%  $43,465   $31,083    39.8%
Operating Margin   57.1%   56.6%   50bps   57.2%   58.4%   (120)bps
Occupancy Percentage   93.9%   94.3%   (40)bps   93.7%   94.4%   (40)bps
Average Rental Rate  $1,239   $1,208    2.6%  $1,233   $1,182    4.3%

 

(1) Including interest income from related parties

 

For the second quarter of 2018, property revenues increased by 48.0% compared to the same prior year period primarily attributable to the increased size of the portfolio. Total portfolio NOI was $22.5 million, an increase of $7.4 million, or 49.2%, compared to the same period in the prior year.

 

Property NOI margins were 57.1% of revenue for the quarter, compared to 56.6% of revenue in the prior year quarter. Property operating expenses were up primarily due to the increased size of the portfolio.

 

Same Store Portfolio Performance

 

$ In thousands, except average rental rates  2Q18   2Q17   Variance   YTD18   YTD17   Variance 
Revenues  $23,413   $22,591    3.6%  $41,707   $39,910    4.5%
Property Operating Expenses  $9,933   $9,617    3.3%  $17,629   $16,669    5.8%
NOI  $13,480   $12,974    3.9%  $24,078   $23,241    3.6%
Operating Margin   57.6%   57.4%   20bps   57.7%   58.2%   (50)bps
Occupancy Percentage   94.3%   94.8%   (50)bps   94.0%   94.4%   (40)bps
Average Rental Rate  $1,271   $1,220    4.2%  $1,284   $1,228    4.6%

 

The Company’s same store portfolio for the quarter ended June 30, 2018 included 18 properties. For the second quarter of 2018, same store NOI was $13.5 million, an increase of $0.5 million, or 3.9%, compared to the same period in the prior year. Same store property revenues increased by 3.6% compared to the same prior year period, primarily attributable to a 4.2% increase in average rental rates, offset by average occupancy decreasing 50 basis points to 94.3%. In addition, the implementation of trash valet services at eleven properties and a general increase in resident fees increased revenues by $0.2 million. Same store expenses increased $0.3 million due implementation of trash valet services and the timing of seasonal maintenance.

 

 4 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

Second Quarter Acquisition Activity

 

On April 26, 2018, invested approximately $9 million to increase our ownership stake to 100% in each of our ARIUM Gulfshore and ARIUM at Palmer Ranch properties.

 

On May 1, 2018, acquired a 100% interest in a 264-unit apartment community located in Daytona Beach, Florida, known as Sands Parc. The total purchase price was approximately $46.2 million, funded in part by the Company’s Senior Credit Facility.

 

On June 14, 2018, acquired an 80% indirect interest in a 238-unit apartment community located in Lake Jackson, Texas, known as Plantation Park. The total purchase price was approximately $35.6 million, funded in part by a $26.6 million mortgage loan secured by the Plantation Park property.

 

Balance Sheet

 

During the second quarter, the Company raised gross proceeds of approximately $31.6 million through the issuance of 31,576 shares of Series B preferred stock with associated warrants at $1,000 per unit.

 

As of June 30, 2018, the Company had $25.4 million of unrestricted cash on its balance sheet, approximately $51.5 million available among its revolving credit facilities, and $1.1 billion of debt outstanding.

 

Dividend Details

 

The Board of Directors authorized, and the Company declared, a quarterly dividend for the second quarter of 2018 equal to a quarterly rate of $0.1625 per share on its Class A common stock, payable to the stockholders of record as of June 25, 2018, which was paid in cash on July 5, 2018. A portion of each dividend may constitute a return of capital for tax purposes. There is no assurance that we will continue to declare dividends or at this rate.

 

On July 10, 2018, the Board of Directors authorized, and the Company declared, a monthly dividend of $5.00 per share of Series B preferred stock, payable to the stockholders of record as of July 25, 2018, which was paid in cash on August 3, 2018, and as of August 24, 2018, and September 25, 2018, which will be paid in cash on September 5, 2018 and October 5, 2018, respectively.

 

2018 Guidance

 

Based on the Company’s current outlook and market conditions, the Company is increasing the bottom end of the 2018 AFFO guidance from $0.65 to $0.66 per share and is reaffirming the top end of the range at $0.70 per share. For additional guidance details, please see page 30 of Company’s Second Quarter 2018 Earnings Supplement available under Investor Relations on the Company’s website (www.bluerockresidential.com). Subsequent to issuing 2018 guidance in February 2018, the Company revised its presentation of AFFO attributable to common stockholders to reflect AFFO attributable to common shares and units. The estimated weighted average diluted shares and units outstanding used to calculate AFFO per share now includes noncontrolling interests – operating partnership units. As the Company’s presentation now also includes the impact of AFFO attributable to operating partnership units, and as shares and units are treated on a one-for-one basis, there is no change to projected AFFO per share for purposes of 2018 AFFO guidance.

 

 5 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

Conference Call

 

All interested parties can listen to the live conference call at 11:00 AM ET on Tuesday, August 7, 2018 by dialing +1 (866) 843-0890 within the U.S., or +1 (412) 317-6597, and requesting the “Bluerock Residential Conference.”

 

For those who are not available to listen to the live call, the conference call will be available for replay on the Company’s website two hours after the call concludes, and will remain available until September 7, 2018 at http://services.choruscall.com/links/brg180807.html, as well as by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10122487.

 

The full text of this Earnings Release and additional Supplemental Information is available in the Investor Relations section on the Company’s website at http://www.bluerockresidential.com.

 

About Bluerock Residential Growth REIT, Inc.

 

Bluerock Residential Growth REIT, Inc. (NYSE American: BRG) is a real estate investment trust that focuses on developing and acquiring a diversified portfolio of institutional-quality highly amenitized live/work/play apartment communities in demographically attractive knowledge economy growth markets to appeal to the renter by choice. The Company’s objective is to generate value through off-market/relationship-based transactions and, at the asset level, through value add improvements to properties and operations. The Company is included in the Russell 2000 and Russell 3000 Indexes. BRG has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes.

 

For more information, please visit the Company’s website at www.bluerockresidential.com.

 

Forward Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K filed by the Company with the U.S. Securities and Exchange Commission (“SEC”) on March 13, 2018, and subsequent filings by the Company with the SEC. We claim the safe harbor protection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995.

 

 6 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

Portfolio Summary

 

The following is a summary of our operating real estate and mezzanine/preferred investments as of June 30, 2018:

 

Consolidated Operating
Properties
  Location  Number
of Units
   Year
Built/
Renovated(1)
   Ownership
Interest
   Average
Rent (2)
   %
Occupied (3)
 
ARIUM at Palmer Ranch  Sarasota, FL   320    2016    100%  $1,291    96%
ARIUM Glenridge  Atlanta, GA   480    1990    90%   1,150    93%
ARIUM Grandewood  Orlando, FL   306    2005    100%   1,346    95%
ARIUM Gulfshore  Naples, FL   368    2016    100%   1,296    92%
ARIUM Hunter’s Creek  Orlando, FL   532    1999    100%   1,353    93%
ARIUM Metrowest  Orlando, FL   510    2001    100%   1,328    93%
ARIUM Palms  Orlando, FL   252    2008    95%   1,307    94%
ARIUM Pine Lakes  Port St. Lucie, FL   320    2003    85%   1,229    94%
ARIUM Westside  Atlanta, GA   336    2008    90%   1,490    93%
Ashton Reserve  Charlotte, NC   473    2015    100%   1,073    91%
Citrus Tower  Orlando, FL   336    2006    97%   1,257    95%
Enders Place at Baldwin Park  Orlando, FL   220    2003    92%   1,734    95%
James on South First  Austin, TX   250    2016    90%   1,160    98%
Marquis at Crown Ridge  San Antonio, TX   352    2009    90%   935    93%
Marquis at Stone Oak  San Antonio, TX   335    2007    90%   1,385    93%
Marquis at The Cascades  Tyler, TX   582    2009    90%   1,069    95%
Marquis at TPC  San Antonio, TX   139    2008    90%   1,461    96%
Outlook at Greystone  Birmingham, AL   300    2007    100%   936    88%
Park & Kingston  Charlotte, NC   168    2015    100%   1,218    96%
Plantation Park  Lake Jackson, TX   238    2016    80%   1,428    92%
Preston View  Morrisville, NC   382    2000    100%   1,072    97%
Roswell City Walk  Roswell, GA   320    2015    98%   1,513    97%
Sands Parc  Daytona Beach, FL   264    2017    100%   1,267    94%
Sorrel  Frisco, TX   352    2015    95%   1,252    91%
Sovereign  Fort Worth, TX   322    2015    95%   1,320    94%
The Brodie  Austin, TX   324    2001    93%   1,105    98%
The Links at Plum Creek  Castle Rock, CO   264    2000    88%   1,362    94%
The Mills  Greenville, SC   304    2013    100%   999    97%
The Preserve at Henderson Beach  Destin, FL   340    2009    100%   1,306    97%
Villages at Cypress Creek  Houston, TX   384    2001    80%   1,079    97%
Wesley Village  Charlotte, NC   301    2010    100%   1,296    95%
Consolidated Operating Properties Subtotal/Average   10,374             $1,239    94%
                          
Mezzanine/Preferred
Investments
  Location  Planned
Number
of Units
           Pro Forma
Average
Rent (4)
     
Alexan CityCentre  Houston, TX   340             $2,144      
Alexan Southside Place  Houston, TX   270              2,012      
Arlo, formerly West Morehead  Charlotte, NC   286              1,507      
Cade Boca Raton, formerly APOK Townhomes  Boca Raton, FL   90              2,549      
Domain at The One Forty, formerly Domain  Garland, TX   299              1,469      
Flagler Village  Fort Lauderdale, FL   385              2,352      
Helios  Atlanta, GA   282              1,486      
Leigh House, formerly Lake Boone Trail  Raleigh, NC   245              1,271      
Novel Perimeter, formerly Crescent Perimeter  Atlanta, GA   320              1,749      
Vickers Historic Roswell, formerly Vickers Village  Roswell, GA   79              3,176      
Whetstone  Durham, NC   204              1,300(2)     
Mezzanine and Preferred Investments Subtotal/Average   2,800             $1,816      
                             
Portfolio Properties Total/Average   13,174             $1,365      

 

(1) Represents date of last significant renovation or year built if there were no renovations.

(2) Represents the average effective monthly rent per occupied unit for the three months ended June 30, 2018.

(3) Percent occupied is calculated as (i) the number of units occupied as of June 30, 2018, divided by (ii) total number of units, expressed as a percentage.

(4) Alexan CityCentre, Alexan Southside Place, Helios, and Leigh House are preferred equity investments with an option to convert into partial ownership upon stabilization. Cade Boca Raton, Novel Perimeter, Domain at The One Forty, Flagler Village, Vickers Historic Roswell, and Arlo are mezzanine loan investments. Additionally, Cade Boca Raton, Domain at The One Forty, and Arlo have an option to purchase an indirect property interest upon maturity. Whetstone is currently a preferred equity investment providing a stated investment return. Pro forma average rent represents the average pro forma effective monthly rent per occupied unit for all expected occupied units upon stabilization.

 

 7 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

Consolidated Statement of Operations

For the Three and Six Months Ended June 30, 2018 and 2017

(Unaudited and dollars in thousands except for share and per share data)

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
Revenues                    
Net rental income  $34,719   $23,570   $67,383   $47,412 
Other property revenues   4,605    2,999    8,615    5,817 
Interest income from related parties   5,635    2,097    10,830    3,620 
Total revenues   44,959    28,666    86,828    56,849 
Expenses                    
Property operating   16,874    11,527    32,533    22,146 
Property management fees   1,074    737    2,067    1,469 
General and administrative   4,528    1,696    9,197    3,146 
Management fees       6,163        8,931 
Acquisition and pursuit costs   28    18    71    3,200 
Management internalization       340        820 
Weather-related losses, net           168     
Depreciation and amortization   14,819    10,387    30,460    21,331 
Total expenses   37,323    30,868    74,496    61,043 
Operating loss   7,636    (2,202)   12,332    (4,194)
Other income (expense)                    
Other income       17        17 
Preferred returns and equity in income of unconsolidated real estate joint ventures   2,626    2,605    5,088    5,177 
Gain on sale of real estate investments       33,574        50,040 
Gain on sale of real estate joint venture interest       10,238        10,238 
Loss on early extinguishment of debt   (653)   (1,639)   (653)   (1,639)
Interest expense, net   (13,041)   (7,825)   (23,158)   (14,943)
Total other (expense) income    (11,068)   36,970    (18,723)   48,890 
Net (loss) income    (3,432)   34,768    (6,391)   44,696 
Preferred stock dividends   (8,643)   (6,381)   (16,890)   (12,233)
Preferred stock accretion   (1,400)   (647)   (2,510)   (984)
Net (loss) income attributable to noncontrolling interests                    
Operating partnership units   (3,010)   186    (5,685)   129 
Partially-owned properties   (253)   9,985    (468)   18,771 
Net (loss) income attributable to noncontrolling interests   (3,263)   10,171    (6,153)   18,900 
Net (loss) income attributable to common stockholders  $(10,212)  $17,569   $(19,638)  $12,579 
                     
Net (loss) income per common share - Basic  $(0.44)  $0.67   $(0.83)  $0.49 
                     
Net (loss) income per common share – Diluted  $(0.44)  $0.67   $(0.83)  $0.49 
                     
Weighted average basic common shares outstanding   23,800,770    26,075,911    23,971,129    25,535,178 
Weighted average diluted common shares outstanding   23,800,770    26,076,572    23,971,129    25,535,839 

 

 8 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

Consolidated Balance Sheets

Second Quarter 2018

(Unaudited and dollars in thousands except for share and per share amounts)

 

   June 30,
2018
   December 31,
2017
 
ASSETS          
Net Real Estate Investments          
Land  $176,865   $169,135 
Buildings and improvements   1,382,353    1,244,193 
Furniture, fixtures and equipment   44,802    38,446 
Construction in progress   261    985 
Total Gross Real Estate Investments   1,604,281    1,452,759 
Accumulated depreciation   (80,104)   (55,177)
Total Net Real Estate Investments   1,524,177    1,397,582 
Cash and cash equivalents   25,411    35,015 
Restricted cash   29,775    29,575 
Notes and accrued interest receivable from related parties   162,971    140,903 
Due from affiliates   2,537    2,003 
Accounts receivable, prepaid and other assets   14,358    9,689 
Preferred equity investments and investments in unconsolidated real estate joint ventures   77,061    71,145 
In-place lease intangible assets, net   1,875    4,635 
Total Assets  $1,838,165   $1,690,547 
           
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY          
Mortgages payable  $1,075,799   $939,494 
Revolving credit facilities   68,209    67,670 
Accounts payable   1,071    1,652 
Other accrued liabilities   27,590    22,952 
Due to affiliates   815    1,575 
Distributions payable   11,690    14,287 
Total Liabilities   1,185,174    1,047,630 
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; and 5,721,460 issued and outstanding as of June 30, 2018 and December 31, 2017   139,137    138,801 
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 725,000 shares authorized; 233,417 and 184,130 issued and outstanding as of June 30, 2018 and December 31, 2017, respectively   206,878    161,742 
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; and 2,323,750 issued and outstanding as of June 30, 2018 and December 31, 2017   56,326    56,196 
           
Equity          
Stockholders’ Equity          
Preferred stock, $0.01 par value, 230,400,000 shares authorized; none issued and outstanding        
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,850,602 issued and outstanding at June 30, 2018 and December 31, 2017   68,705    68,705 
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 23,658,991 and 24,218,359 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively   237    242 
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding as of June 30, 2018 and December 31, 2017   1    1 
Additional paid-in-capital   310,595    318,170 
Distributions in excess of cumulative earnings   (187,720)   (164,286)
Total Stockholders’ Equity   191,818    222,832 
Noncontrolling Interests          
Operating partnership units   36,124    42,999 
Partially owned properties   22,708    20,347 
Total Noncontrolling Interests   58,832    63,346 
Total Equity   250,650    286,178 
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY  $1,838,165   $1,690,547 

 

 9 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

Non-GAAP Financial Measures

 

The foregoing supplemental financial data includes certain non-GAAP financial measures that we believe are helpful in understanding our business and performance, as further described below. Our definition and calculation of these non-GAAP financial measures may differ from those of other REITs, and may, therefore, not be comparable.

 

Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations

 

We believe that funds from operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), core funds from operations (“Core FFO”), and adjusted funds from operations (“AFFO”) are important non-GAAP supplemental measures of operating performance for a REIT.

 

FFO attributable to common shares and units is a non-GAAP financial measure that is widely recognized as a measure of REIT operating performance. We consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative. We define FFO, consistent with the NAREIT definition, as net income, computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus depreciation and amortization of real estate assets, plus impairment write-downs of depreciable real estate, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis.

 

Core FFO makes certain adjustments to FFO, removing the effect of items that do not reflect ongoing property operations such as stock compensation expense, acquisition expenses, losses on early extinguishment of debt (includes prepayment penalties incurred and the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt), non-cash interest, one-time weather-related costs, and preferred stock accretion. We believe that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core recurring property operations. As a result, we believe that Core FFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential.

 

AFFO makes certain adjustments to Core FFO in order to arrive at a more refined measure of the operating performance of our portfolio. There is no industry standard definition of AFFO and practice is divergent across the industry. AFFO adjusts Core FFO for items that impact our ongoing operations, such as subtracting recurring capital expenditures (and while we were externally managed, when calculating the quarterly incentive fee paid to our former Manager only, we further adjusted FFO to include any realized gains or losses on our real estate investments).  We believe that AFFO is helpful to investors as a meaningful supplemental indicator of our operational performance. 

 

Our calculation of Core FFO and AFFO differs from the methodology used for calculating Core FFO and AFFO by certain other REITs and, accordingly, our Core FFO and AFFO may not be comparable to Core FFO and AFFO reported by other REITs. Our management utilizes FFO, Core FFO, and AFFO as measures of our operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare our operating performance between periods. Furthermore, although FFO, Core FFO, AFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we also believe that FFO, Core FFO, and AFFO may provide us and our stockholders with an additional useful measure to compare our financial performance to certain other REITs. While we were externally managed, we also used AFFO for purposes of determining the quarterly incentive fee paid to our former Manager in prior periods.

 

Neither FFO, Core FFO, nor AFFO is equivalent to net income, including net income attributable to common stockholders, or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO, Core FFO, and AFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO, Core FFO, nor AFFO should be considered as an alternative to net income, including net income attributable to common stockholders, as an indicator of our operating performance or as an alternative to cash flow from operating activities as a measure of our liquidity.

 

 10 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

We have acquired interests in nine additional operating properties subsequent to June 30, 2017. Therefore, the results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance.

 

The table below reconciles our calculations of FFO, Core FFO and AFFO to net income (loss), the most directly comparable GAAP financial measure, for the three and six months ended June 30, 2018 and 2017 (in thousands, except per share amounts):

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
Net (loss) income attributable to common stockholders  $(10,212)  $17,569   $(19,638)  $12,579 
Add back: Net (loss) income attributable to operating partnership units   (3,010)   186    (5,685)   129 
Net (loss) income attributable to common shares and units   (13,222)   17,755    (25,323)   12,708 
                     
Common stockholders and operating partnership units pro-rata share of:                    
Real estate depreciation and amortization(1)   13,990    9,425    28,821    19,338 
Gain on sale of joint venture interests, net       (6,399)       (6,399)
Gain on sale of real estate investments       (26,832)       (34,313)
FFO Attributable to Common Shares and Units  $768   $(6,051)  $3,498   $(8,666)
Common stockholders and operating partnership units pro-rata share of:                    
Acquisition and pursuit costs   28    16    71    3,056 
Non-cash interest expense   1,602    783    2,062    1,261 
Loss on early extinguishment of debt   653    1,551    653    1,551 
Weather-related losses, net           165     
Non-real estate depreciation and amortization (1)   75        139     
Non-recurring income       (16)       (16)
Non-cash preferred returns and equity in income of unconsolidated real estate joint ventures   (233)   (492)   (464)   (492)
Management internalization       340        820 
Non-cash equity compensation   1,638    6,919    3,418    10,120 
Preferred stock accretion   1,400    647    2,510    984 
Core FFO Attributable to Common Shares and Units   5,931    3,697    12,052    8,618 
Common stockholders and operating partnership units pro-rata share of:                    
Normally recurring capital expenditures   (631)   (335)   (1,149)   (629)
AFFO Attributable to Common Shares and Units  $5,300   $3,362   $10,903   $7,989 
Per Share and Unit Information:                    
FFO Attributable to Common Shares and Units - diluted  $0.02   $(0.23)  $0.11   $(0.34)
Core FFO Attributable to Common Shares and Units - diluted  $0.19   $0.14   $0.39   $0.33 
AFFO Attributable to Common Shares and Units - diluted  $0.17   $0.13   $0.35   $0.31 
Weighted average common shares outstanding - diluted   30,814,839    26,352,066    30,873,023    25,815,164 

 

 

 

(1)    The real estate depreciation and amortization amount includes our share of consolidated real estate-related depreciation and amortization of intangibles, less amounts attributable to noncontrolling interests – partially owned properties, and our similar estimated share of unconsolidated depreciation and amortization, which is included in earnings of our unconsolidated real estate joint venture investments.

 

 11 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”)

 

NAREIT defines earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) (September 2017 White Paper) as net income, computed in accordance with GAAP, before interest expense, income taxes, depreciation and amortization expense, and further adjusted for gains and losses from sales of depreciated operating properties, and impairment write-downs of depreciated operating properties.

 

We consider EBITDAre to be an appropriate supplemental measure of our performance because it eliminates depreciation, income taxes, interest and non-recurring items, which permits investors to view income from operations unobscured by non-cash items such as depreciation, amortization, the cost of debt or non-recurring items.

 

Adjusted EBITDAre represents EBITDAre further adjusted for non-comparable items and it is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not consider certain cash requirements such as income tax payments, debt service requirements, capital expenditures and other fixed charges.

 

EBITDAre and Adjusted EBITDAre are not recognized measurements under GAAP. Because not all companies use identical calculations, our presentation of EBITDAre and Adjusted EBITDAre may not be comparable to similarly titled measures of other companies.

 

Below is a reconciliation of net loss attributable to common stockholders to EBITDAre (unaudited and dollars in thousands).

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
Net (loss) income attributable to common stockholders  $(10,212)  $17,569   $(19,638)  $12,579 
Net (loss) income attributable to noncontrolling interests   (3,263)   10,171    (6,153)   18,900 
Preferred stock dividends   8,643    6,381    16,890    12,233 
Preferred stock accretion   1,400    647    2,510    984 
Interest expense, net   13,041    7,825    23,158    14,943 
Depreciation and amortization   14,744    10,387    30,321    21,331 
Gain on sale of real estate investments   -    (33,574)   -    (50,040)
Gain on sale of real estate joint venture interest, net   -    (10,238)   -    (10,238)
Loss on early extinguishment of debt   653    1,639    653    1,639 
EBITDAre  $25,006   $10,807   $47,741   $22,331 
Acquisition and pursuit costs   28    18    71    3,200 
Management internalization   -    340    -    820 
Non-real estate depreciation and amortization   75    -    139    - 
Weather-related losses, net   -    -    168    - 
Non-cash equity compensation   1,638    6,919    3,418    10,119 
Non-recurring income   -    (17)   -    (17)
Non-cash preferred returns and equity in income of unconsolidated real estate joint ventures   (233)   (492)   (464)   (492)
Adjusted EBITDAre  $26,514   $17,575   $51,073   $35,961 

 

 12 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

Recurring Capital Expenditures

 

We define recurring capital expenditures as expenditures that are incurred at every property and exclude development, investment, revenue enhancing and non-recurring capital expenditures.

 

Non-Recurring Capital Expenditures

 

We define non-recurring capital expenditures as expenditures for significant projects that upgrade units or common areas and projects that are revenue enhancing.

 

Same Store Properties

 

Same store properties are conventional multifamily residential apartments which were owned and operational for the entire periods presented, including each comparative period.

 

Property Net Operating Income (“Property NOI”)

 

We believe that net operating income, or NOI, is a useful measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding depreciation and amortization and interest. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. We use NOI to evaluate our performance on a same store and non-same store basis; NOI measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance and captures trends in rental housing and property operating expenses. However, NOI should only be used as a supplemental measure of our financial performance.

 

Certain amounts in prior periods, related to tenant reimbursements for utility expenses amounting to $1.5 million and $3.0 million for the three and six months ended June 30, 2017, have been reclassified to other property revenues from property operating expenses, to conform to the current period.  In addition, property management fees have been reclassified from property operating expenses.

 

 13 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

The following table reflects net loss attributable to common stockholders together with a reconciliation to NOI and to same store and non-same store contributions to consolidated NOI, as computed in accordance with GAAP for the periods presented (unaudited and amounts in thousands):

 

   Three Months Ended (1)   Six Months Ended (2) 
   June 30,   June 30, 
   2018   2017   2018   2017 
Net (loss) income attributable to common shares  $(10,212)  $17,569   $(19,638)  $12,579 
Add back: Net (loss) income attributable to operating partnership units   (3,010)   186    (5,685)   129 
Net (loss) income attributable to common shares and units   (13,222)   17,755    (25,323)   12,708 
Add common stockholders and operating partnership units pro-rata share:                    
Depreciation and amortization   13,990    9,425    28,821    19,338 
Non-real estate depreciation and amortization   75        139     
Non-cash interest expense   1,602    783    2,062    1,261 
Property management fees   1,017    668    1,956    1,317 
Management fees       6,163        8,931 
Acquisition and pursuit costs   28    16    71    3,056 
Loss on early extinguishment of debt   653    1,551    653    1,551 
Corporate operating expenses   4,528    1,696    9,197    3,146 
Management internalization       340        820 
Weather-related losses, net           165     
Preferred dividends   8,643    6,381    16,890    12,233 
Preferred stock accretion   1,400    647    2,510    984 
Less common stockholders and operating partnership units pro-rata share:                    
Other income       16        16 
Preferred returns and equity in income of unconsolidated real estate joint ventures   2,626    2,605    5,088    5,177 
Interest income from related parties   5,635    2,097    10,830    3,620 
Gain on sale of joint venture interest       6,399        6,399 
Gain on sale of real estate investments       26,832        34,313 
Pro-rata share of properties’ income   10,453    7,476    21,223    15,820 
Add:                    
Noncontrolling interest pro-rata share of partially owned property income   542    702    1,152    1,790 
Total property income   10,995    8,178    22,375    17,610 
Add:                    
Interest expense, net   11,455    6,864    21,090    13,473 
Net operating income   22,450    15,042    43,465    31,083 
Less:                    
Non-same store net operating income   8,970    2,068    19,387    7,842 
Same store net operating income  $13,480   $12,974   $24,078   $23,241 

 

(1) Same Store sales for the three months ended June 30, 2018 related to the following properties: Enders Place at Baldwin Park, ARIUM Grandewood, Park & Kingston, Ashton Reserve, ARIUM Palms, Sorrel, Sovereign, ARIUM Gulfshore, ARIUM at Palmer Ranch, The Preserve at Henderson Beach, ARIUM Westside, ARIUM Pine Lakes, James on South First, ARIUM Glenridge, Roswell City Walk, The Brodie, Preston View and Wesley Village.

(2) Same Store sales for the six months ended June 30, 2018 related to the following properties: Enders Place at Baldwin Park, ARIUM Grandewood, Park & Kingston, Ashton Reserve, ARIUM Palms, Sorrel, Sovereign, ARIUM Gulfshore, ARIUM at Palmer Ranch, The Preserve at Henderson Beach, ARIUM Westside, ARIUM Pine Lakes, James on South First, ARIUM Glenridge, Roswell City Walk and The Brodie.

 

 14 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

 

 

Contact

Investors:

(888) 558.1031
[email protected]

 

Media:

Josh Hoffman

(208) 475.2380

[email protected]

##

 

 15 

 

 

 

Bluerock Residential Growth REIT, Inc.

Financial and Operating Highlights

For the Three and Six Months Ended June 30, 2018

(Unaudited and dollars in thousands except for share and per share data)

 

 

   Three Months Ended       Six Months Ended     
   June 30,       June 30,     
OPERATING INFORMATION  2018   2017   % Change   2018   2017   % Change 
                         
Total revenue  $44,959   $28,666    56.8%  $86,828   $56,849    52.7%
                               
Total assets  $1,838,165   $1,440,783    27.6%  $1,838,165   $1,440,783    27.6%
                               
Property NOI margins   57.1%   56.6%   0.9%   57.2%   58.4%   (2.1)%
                               
Property NOI  $22,450   $15,042    49.2%  $43,465   $31,083    39.8%
                               
Net loss per common share - Diluted  $(0.44)  $0.67    -   $(0.83)  $0.49    - 
                               
AFFO attributable to common shares and units per share(1)  $0.17   $0.13    30.8%  $0.35   $0.31    12.9%

 

 

 

(1) See page 31 for the Company’s definition of this non-GAAP measurement and reasons for using it.

 

 16 

 

 

 

Bluerock Residential Growth REIT, Inc.

Share and Unit Information

Second Quarter 2018

(Unaudited)

 

 

Weighted Average Common Stock and Units Outstanding for the quarter ended June 30, 2018     
Class A Common Stock   23,724,167 
Class C Common Stock   76,603 
Weighted Average Common Stock Outstanding, Diluted   23,800,770 
LTIP Units   783,312 
OP Units   6,230,757 
Weighted Average Common Stock and Total Units Outstanding, Diluted   30,814,839 
      
Outstanding Common Stock and Units at June 30, 2018   31,756,435 
      
Outstanding 8.250% Series A Cumulative Redeemable Preferred Stock at June 30, 2018   5,721,460 
      
Outstanding 6.000% Series B Redeemable Preferred Stock at June 30, 2018   233,417 
      
Outstanding 7.625% Series C Cumulative Redeemable Preferred Stock at June 30, 2018   2,323,750 
      
Outstanding 7.125% Series D Cumulative Preferred Stock at June 30, 2018   2,850,602 

 

The following table reflects the impact of various LTIP Unit issuances, share repurchases, and other share/unit changes subsequent to March 31, 2018:

 

Share Type  Shares and
units
outstanding
March 31, 2018
   LTIP Issuances   Share
Repurchases
   Other   Shares and
units
outstanding
June 30, 2018
   Ownership % 
Class A Common Stock   23,733,296    -    (107,040)   32,735    23,658,991    74.50%
Class C Common Stock   76,603    -    -    -    76,603    0.24%
Total share equivalents   23,809,899    -    (107,040)   32,735    23,735,594    74.74%
OP Units   6,230,757    -    -    -    6,230,757    19.62%
LTIP Units   1,750,606    39,478    -    -    1,790,084    5.64%
Total noncontrolling interest   7,981,363    39,478    -    -    8,020,841    25.26%
Total shares, OP and LTIP Units   31,791,262    39,478    (107,040)   32,735    31,756,435    100.00%

 

 17 

 

 

 

Bluerock Residential Growth REIT, Inc.

EBITDAre and Interest Information

Second Quarter 2018

(Unaudited and dollars in thousands)

 

 

   Consolidated 
   Three Months Ended 
   June 30, 2018 
Q2 EBITDAre CALCULATION     
Net loss attributable to common stockholders  $(10,212)
Net loss attributable to noncontrolling interests   (3,263)
Preferred stock dividends   8,643 
Preferred stock accretion   1,400 
Interest expense, net   13,041 
Depreciation and amortization   14,744 
Loss on early extinguishment of debt   653 
EBITDAre (1)  $25,006 
Acquisition and pursuit costs   28 
Non-real estate depreciation and amortization   75 
Non-cash equity compensation   1,638 
Non-cash preferred returns and equity in income of unconsolidated real estate joint ventures   (233)
Adjusted EBITDAre  $26,514 
      
Modified Q2 EBITDAre calculation (2)     
Adjusted EBITDAre  $26,514 
Adjustment   796 
Modified Q2 EBITDAre  $27,310 
Modified Q2 EBITDAre annualized  $109,240 
      
Modified Q2 interest calculation (2)(3)     
Interest Expense  $11,455 
Adjustment   354 
Modified Q2 interest expense  $11,809 
Modified Q2 interest expense annualized  $47,236 

 

(1) See page 32 for a reconciliation of net income attributable to common stockholders to EBITDAre and the Company’s definition of EBITDAre and reasons for using it.

 

(2) Adjustment to EBITDAre and interest expense represents the estimated impact over the full period of the following investment activity assuming the transactions had occurred on April 1, 2018: acquisitions of Sands Parc and Plantation Park and additional investments in our preferred investments at Alexan CityCentre, Alexan Southside Place, Helios, and Leigh House. Actual results may differ significantly from the presented, adjusted amounts including annualized amounts.

 

(3) Interest expense excludes non-cash interest expense.

 

 18 

 

 

 

Bluerock Residential Growth REIT, Inc.

Financial Statistics

Second Quarter 2018

(Unaudited and dollars in thousands)

 

 

   Consolidated   
   Three Months Ended   
   June 30, 2018   
       
Interest Coverage Ratio       
Modified Q2 EBITDAre *  $27,310   
Modified Q2 interest expense (4) *  $11,809   
Interest Coverage Ratio   2.31  x
        
Quarterly Fixed Charge Coverage Ratio       
Modified Q2 interest expense (4) *  $11,809   
Preferred stock dividends  $8,643   
Total fixed charges  $20,452   
Modified Q2 EBITDAre *  $27,310   
Modified Q2 EBITDAre fixed charge coverage ratio   1.34  x
        
Net Debt / Modified EBITDAre Ratio       
Total debt (1)  $1,152,661   
Less: cash (3)  $(55,186)  
Net debt (total debt less cash)  $1,097,475   
Modified Q2 EBITDAre, (annualized)*  $109,240   
Net Debt / Modified EBITDAre Ratio   10.05  x
        
Leverage as a Percentage of assets       
Total debt (1)  $1,152,661   
Total undepreciated assets (2)  $1,918,269   
Total Debt / Total Undepreciated Assets   60.1%  
Net Debt / Net Undepreciated Assets (less cash)   58.9%  
        
Leverage as a Percentage of Enterprise Value       
Total market cap (5)  $781,272   
Total debt (1)  $1,152,661   
Total Enterprise Value  $1,933,933   
Total Debt / Total Enterprise Value   59.6%  
Net Debt / Total Enterprise Value   56.7%  

 

(1) Total debt excludes amortization of fair market value adjustments of $2.4 million and deferred financing costs of $11.1 million.

 

(2) Total undepreciated assets is calculated as total assets plus accumulated depreciation on real estate assets.

 

(3) Cash includes cash, cash equivalents, and restricted cash.

 

(4) Interest expense excludes non-cash interest expense.

 

(5) Total market cap is calculated by using common shares, preferred shares, and equivalents (OP Units/LTIP Units) multiplied by the June 30, 2018 closing share prices.

 

* Adjustment to EBITDAre and interest expense represents the estimated impact over the full period of the following investment activity assuming the transactions had occurred on April 1, 2018: acquisitions of Sands Parc and Plantation Park and additional investments in our preferred investments at Alexan CityCentre, Alexan Southside Place, Helios, and Leigh House. Actual results may differ significantly from the presented, adjusted amounts including annualized amounts. See prior page for calculations.

 

 19 

 

 

 

Bluerock Residential Growth REIT, Inc.

Recent Acquisitions

(Unaudited)

 

 

Summary of Recent Acquisitions

 

Property  Location  Date of
Investment
  Year Built/
Renovated
   Number
of Units
   Indirect
Ownership
Interest in
Property
   Purchase
Price (in
millions)
   Average
Rent(1)
 
                           
The Links at Plum Creek  Castle Rock, CO  3/26/2018   2000    264    88%  $61.1   $1,362 
                                
Sands Parc  Daytona Beach, FL  5/01/2018   2017    264    100%   46.2    1,267 
                                
Plantation Park  Lake Jackson, TX  6/14/2018   2016    238    80%   35.6    1,428 
                                
Total/Average for recent acquisitions           766        $142.9   $1,333 

 

(1) Represents the average effective monthly rent per occupied unit for the three months ended June 30, 2018.

 

 20 

 

 

 

Bluerock Residential Growth REIT, Inc.

Investments in Unconsolidated Real Estate Joint Ventures and Notes and Accrued Interest Receivable from Related Parties

For the Three Months Ended and Six Months Ended June 30, 2018

(Unaudited and dollars in thousands)

 

 

Multifamily Community Name  Investment
Balance as of
April 1, 2018
   Change   Investment
Balance as of
June 30, 2018
   Preferred
Return as of
June 30, 2018
   AFFO Earned
for the Three
Months Ended
June 30, 2018
   AFFO Earned
for the Six
Months Ended
June 30, 2018
 
Preferred and Equity Investments                              
Alexan CityCentre  $9,408   $869   $10,277    15.0%  $402   $785 
Alexan Southside   20,584    1,792    22,376    15.0%   885    1,687 
Helios   16,360    2,104    18,464    15.0%   644    1,249 
Leigh House, formerly Lake Boone Trail   11,930    987    12,917    15.0%   462    903 
Whetstone**   12,932    -    12,932    0.0%   -    - 
Other   95    -    95     *   -    - 
   $71,309   $5,752   $77,061        $2,393   $4,624 
                               
Mezzanine Loans*                              
Arlo, formerly West Morehead  $24,893   $(10)  $24,883    15.0%  $919   $1,829 
Cade Boca Raton, formerly APOK Townhomes   11,365    (4)   11,361    15.0%   420    835 
Domain at The One Forty, formerly Domain   20,536    (8)   20,528    15.0%   758    1,508 
Flagler Village   75,314    94    75,408    12.9%   2,400    4,395 
Novel Perimeter, formerly Crescent Perimeter   20,868    (9)   20,859    15.0%   771    1,533 
Vickers Historic Roswell, formerly Vickers Village   9,936    (4)   9,932    15.0%   367    730 
   $162,912   $59   $162,971        $5,635   $10,830 

 

* The company also holds an equity method investment with 0.5% common ownership.

 

**Commencing April 1, 2017, the Whetstone preferred income is being accrued and not paid currently. Effective October 2, 2017, the preferred return decreased to 6.5% from 15%.

 

 21 

 

 

 

Bluerock Residential Growth REIT, Inc.

Portfolio Information

Second Quarter 2018

(Unaudited)

 

 

Multifamily Community
Name
  Location  Number
of Units
   Year Built/
Renovated (1)
   Average
Rent(2)
   Revenue
per
Occupied
Unit(3)
   Average
Occupancy
 
Consolidated Operating Properties:                         
ARIUM at Palmer Ranch  Sarasota, FL   320    2016   $1,291   $1,439    94.5%
ARIUM Glenridge  Atlanta, GA   480    1990    1,150    1,304    93.6%
ARIUM Grandewood  Orlando, FL   306    2005    1,346    1,466    95.5%
ARIUM Gulfshore  Naples, FL   368    2016    1,296    1,441    93.5%
ARIUM Hunter’s Creek  Orlando, FL   532    1999    1,353    1,502    93.6%
ARIUM Metrowest  Orlando, FL   510    2001    1,328    1,525    93.6%
ARIUM Palms  Orlando, FL   252    2008    1,307    1,462    93.9%
ARIUM Pine Lakes  Port St. Lucie, FL   320    2003    1,229    1,414    95.5%
ARIUM Westside  Atlanta, GA   336    2008    1,490(4)   1,804(4)   93.4%
Ashton Reserve  Charlotte, NC   473    2015    1,073    1,160    90.6%
Citrus Tower  Orlando, FL   336    2006    1,257    1,401    96.3%
Enders Place at Baldwin Park  Orlando, FL   220    2003    1,734    1,848    95.1%
James on South First  Austin, TX   250    2016    1,160    1,324    95.7%
Marquis at Crown Ridge  San Antonio, TX   352    2009    935    1,070    93.0%
Marquis at Stone Oak  San Antonio, TX   335    2007    1,385    1,489    90.6%
Marquis at The Cascades  Tyler, TX   582    2009    1,069    1,168    91.5%
Marquis at TPC  San Antonio, TX   139    2008    1,461    1,558    95.2%
Outlook at Greystone  Birmingham, AL   300    2007    936    1,191    87.8%
Park & Kingston  Charlotte, NC   168    2015    1,218    1,300    96.0%
Plantation Park  Lake Jackson, TX   238    2016    1,428    1,517    91.6%
Preston View  Morrisville, NC   382    2000    1,072    1,171    95.9%
Roswell City Walk  Roswell, GA   320    2015    1,513    1,719    96.1%
Sands Parc  Daytona Beach, FL   264    2017    1,267    1,415    95.0%
Sorrel  Frisco, TX   352    2015    1,252    1,385    92.0%
Sovereign  Fort Worth, TX   322    2015    1,320    1,462    93.0%
The Brodie  Austin, TX   324    2001    1,105    1,263    96.7%
The Links at Plum Creek  Castle Rock, CO   264    2000    1,362    1,499    94.1%
The Mills  Greenville, SC   304    2013    999    1,112    91.7%
The Preserve at Henderson Beach  Destin, FL   340    2009    1,306    1,457    94.0%
Villages at Cypress Creek  Houston, TX   384    2001    1,079    1,188    97.5%
Wesley Village  Charlotte, NC   301    2010    1,296    1,399    94.9%
                             
Total Consolidated Operating Properties   10,374        $1,239   $1,384    93.9%
                             
Mezzanine/Preferred Investments:                         
Alexan CityCentre  Houston, TX   340        $2,144(5)    N/A     N/A 
Alexan Southside Place  Houston, TX   270         2,012(5)    N/A     N/A 
Arlo, formerly West Morehead  Charlotte, NC   286         1,507(5)    N/A     N/A 
Cade Boca Raton, formerly APOK Townhomes  Boca Raton, FL   90         2,549(5)    N/A     N/A 
Domain at The One Forty, formerly Domain  Garland, TX   299         1,469(5)    N/A     N/A 
Flagler Village  Fort Lauderdale, FL   385         2,352(5)    N/A     N/A 
Helios  Atlanta, GA   282         1,486(5)    N/A     N/A 
Leigh House, formerly Lake Boone Trail  Raleigh, NC   245         1,271(5)    N/A     N/A 
Novel Perimeter, formerly Crescent Perimeter  Atlanta, GA   320         1,749(5)    N/A     N/A 
Vickers Historic Roswell, formerly Vickers Village  Roswell, GA   79         3,176(5)    N/A     N/A 
Whetstone  Durham, NC   204         1,300     N/A     N/A 
                            
Total Mezzanine/Preferred Investments   2,800        $1,816     N/A     N/A 
                             
Total Portfolio   13,174        $1,365   $1,384    93.9%

 

(1) Represents date of last significant renovation or year built if there were no renovations.

 

(2) Represents the average effective monthly rent per occupied unit for the three months ended June 30, 2018.

 

(3) Revenue per occupied unit is total revenue divided by average number of occupied units for the three months ended June 30, 2018.

 

(4) Represents average rent and revenue per occupied unit for residential units only and excludes the property’s retail space.

 

(5) Represents the average pro forma effective monthly rent per occupied unit for all expected units upon stabilization.

 

 22 

 

 

 

Bluerock Residential Growth REIT, Inc.

Renovation Table

As of June 30, 2018

(Unaudited)

 

 

Units and Investment                   
   2018  To Date 
   Completed   Completed   Total Expected  Total   Unrenovated
Units
 
   in 2Q   Year-to-date   Completions in 2018  Completed   Remaining 
Number of Renovations   292    462    900 - 1,200   942    4,890 
Renovation Cost per Unit  $4,708   $4,373   $5,000 - $6,000          

 

Returns                          
   Cost   Monthly Rent   Return on               
   per Unit   Premium   Investment               
Weighted Average Returns to Date  $4,692   $107   27.4%              

 

 23 

 

 

 

Bluerock Residential Growth REIT, Inc.

Mezzanine/Preferred Investments

As of June 30, 2018

(Unaudited)

 

 

This table includes forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause results to vary from those projected. Please see the paragraph on forward-looking statements on page 2 of this document for a discussion of risks and uncertainties.

 

                       Actual/Estimated Dates for
Multifamily Community Name(1)  Actual/
Planned
Number
of Units
   Total Actual/
Estimated
Construction
Cost (in
millions)
   Cost to
Date (in
millions)
   Actual/
Estimated
Construction
Cost Per
Unit
   Total
Available
Financing
(in
millions)
   Construction
Start
  Initial
Occupancy
  Construction
Completion
  Stabilized
Operations(2)
Whetstone   204   $37.0   $37.0   $181,373   $26.3   N/A  3Q14  3Q15  4Q16
Alexan CityCentre   340   $83.2   $80.5   $244,706   $55.1   4Q14  2Q17  4Q17  2Q19
Helios   282   $51.4   $50.3   $182,270   $38.1   4Q15  2Q17  4Q17  1Q19
Alexan Southside Place   270   $49.0   $47.0   $181,481   $31.6   4Q15  4Q17  1Q18  2Q19
Leigh House, formerly Lake Boone Trail   245   $40.2   $37.7   $164,082   $25.2   2Q16  3Q17  4Q18  3Q19
Vickers Historic Roswell, formerly Vickers Village   79   $31.1   $28.4   $393,671   $18.0   2Q16  2Q18  4Q18  3Q19
Cade Boca Raton, formerly APOK Townhomes   90   $28.9   $23.7   $321,111   $18.7   2Q17  3Q18  1Q19  3Q19
Arlo, formerly West Morehead   286   $60.0   $46.8   $209,790   $41.8   4Q16  2Q18  2Q19  4Q19
Domain at The One Forty, formerly Domain   299   $52.6   $38.6   $175,920   $36.7   1Q17  2Q18  2Q19  4Q19
Novel Perimeter, formerly Crescent Perimeter   320   $70.0   $56.1   $218,750   $44.7   4Q16  4Q18  2Q19  4Q19
Flagler Village   385   $135.4   $42.8   $351,688   $70.4   1Q18  3Q19  3Q20  3Q21

 

(1) Alexan CityCentre, Alexan Southside Place, Helios, and Leigh House are preferred equity investments with an option to convert into partial ownership upon stabilization. Arlo, Cade Boca Raton, Domain at The One Forty, Flagler Village, Novel Perimeter, and Vickers Historic Roswell are mezzanine loan investments. Additionally, Arlo, Cade Boca Raton, and Domain at The One Forty have an option to purchase indirect property interest upon maturity. 

 

(2) We defined stabilized occupancy as attainment of 90% physical occupancy.

 

 24 

 

 

 

Bluerock Residential Growth REIT, Inc.

Condensed Consolidated Balance Sheets

Second Quarter 2018

(Unaudited and dollars in thousands except for share and per share data)

 

 

   June 30,
2018
   December 31,
2017
 
ASSETS          
Net Real Estate Investments          
Land  $176,865   $169,135 
Buildings and improvements   1,382,353    1,244,193 
Furniture, fixtures and equipment   44,802    38,446 
Construction in progress   261    985 
Total Gross Real Estate Investments   1,604,281    1,452,759 
Accumulated depreciation   (80,104)   (55,177)
Total Net Real Estate Investments   1,524,177    1,397,582 
Cash and cash equivalents   25,411    35,015 
Restricted cash   29,775    29,575 
Notes and accrued interest receivable from related parties   162,971    140,903 
Due from affiliates   2,537    2,003 
Accounts receivable, prepaid and other assets   14,358    9,689 
Preferred equity investments and investments in unconsolidated real estate joint ventures   77,061    71,145 
In-place lease intangible assets, net   1,875    4,635 
Total Assets  $1,838,165   $1,690,547 
           
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY          
Mortgages payable  $1,075,799   $939,494 
Revolving credit facilities   68,209    67,670 
Accounts payable   1,071    1,652 
Other accrued liabilities   27,590    22,952 
Due to affiliates   815    1,575 
Distributions payable   11,690    14,287 
Total Liabilities   1,185,174    1,047,630 
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; and 5,721,460 issued and outstanding as of June 30, 2018 and December 31, 2017   139,137    138,801 
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 725,000 shares authorized; 233,417 and 184,130 issued and outstanding as of June 30, 2018 and December 31, 2017, respectively   206,878    161,742 
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; and 2,323,750 issued and outstanding as of June 30, 2018 and December 31, 2017   56,326    56,196 
           
Equity          
Stockholders’ Equity          
Preferred stock, $0.01 par value, 230,400,000 shares authorized; none issued and outstanding        
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,850,602 issued and outstanding at June 30, 2018 and December 31, 2017   68,705    68,705 
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 23,658,991 and 24,218,359 shares issued and outstanding as of June 30, 2018 and December 31, 2017, respectively   237    242 
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding as of June 30, 2018 and December 31, 2017   1    1 
Additional paid-in-capital   310,595    318,170 
Distributions in excess of cumulative earnings   (187,720)   (164,286)
Total Stockholders’ Equity   191,818    222,832 
Noncontrolling Interests          
Operating partnership units   36,124    42,999 
Partially owned properties   22,708    20,347 
Total Noncontrolling Interests   58,832    63,346 
Total Equity   250,650    286,178 
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY  $1,838,165   $1,690,547 

 

 25 

 

 

 

Bluerock Residential Growth REIT, Inc.

Consolidated Statements of Operations

For the Three and Six Months Ended June 30, 2018 and 2017

(Dollars in thousands)

 

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
Revenues                    
Net rental income  $34,719   $23,570   $67,383   $47,412 
Other property revenues   4,605    2,999    8,615    5,817 
Interest income from related parties   5,635    2,097    10,830    3,620 
Total revenues   44,959    28,666    86,828    56,849 
Expenses                    
Property operating   16,874    11,527    32,533    22,146 
Property management fees   1,074    737    2,067    1,469 
General and administrative   4,528    1,696    9,197    3,146 
Management fees to related parties       6,163        8,931 
Acquisition and pursuit costs   28    18    71    3,200 
Management internalization       340        820 
Weather-related losses, net           168     
Depreciation and amortization   14,819    10,387    30,460    21,331 
Total expenses   37,323    30,868    74,496    61,043 
Operating income (loss)   7,636    (2,202)   12,332    (4,194)
Other income (expense)                    
Other income       17        17 
Preferred returns and equity in income of unconsolidated real estate joint ventures   2,626    2,605    5,088    5,177 
Gain on sale of real estate investments       33,574        50,040 
Gain on sale of real estate joint venture interest       10,238        10,238 
Loss on early extinguishment of debt   (653)   (1,639)   (653)   (1,639)
Interest expense, net   (13,041)   (7,825)   (23,158)   (14,943)
Total other (expense) income   (11,068)   36,970    (18,723)   48,890 
Net (loss) income   (3,432)   34,768    (6,391)   44,696 
Preferred stock dividends   (8,643)   (6,381)   (16,890)   (12,233)
Preferred stock accretion   (1,400)   (647)   (2,510)   (984)
Net (loss) income attributable to noncontrolling interests                    
Operating partnership units   (3,010)   186    (5,685)   129 
Partially owned properties   (253)   9,985    (468)   18,771 
Net (loss) income attributable to noncontrolling interests   (3,263)   10,171    (6,153)   18,900 
Net (loss) income attributable to common stockholders  $(10,212)  $17,569   $(19,638)  $12,579 
                     
Net (loss) income per common share - Basic  $(0.44)  $0.67   $(0.83)  $0.49 
                     
Net (loss) income per common share – Diluted  $(0.44)  $0.67   $(0.83)  $0.49 
                     
Weighted average basic common shares outstanding   23,800,770    26,075,911    23,971,129    25,535,178 
Weighted average diluted common shares outstanding   23,800,770    26,076,572    23,971,129    25,535,839 

 

 26 

 

 

 

Bluerock Residential Growth REIT, Inc.

Reconciliation of Funds from Operations (FFO), Core FFO (Core FFO) and Adjusted Funds from Operations (AFFO) Attributable to Common Shares and Units

For the Three and Six Months Ended June 30, 2018 and 2017

(Unaudited and dollars in thousands except for share and per share data)

 

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
Net (loss) income attributable to common shares  $(10,212)  $17,569   $(19,638)  $12,579 
Add back: Net (loss) income attributable to operating partnership units   (3,010)   186    (5,685)   129 
Net (loss) income attributable to common shares and units   (13,222)   17,755    (25,323)   12,708 
                     
Common stockholders and operating partnership units pro-rata share of:                    
Real estate depreciation and amortization(1)   13,990    9,425    28,821    19,338 
Gain on sale of joint venture interests, net       (6,399)       (6,399)
Gain on sale of real estate investments       (26,832)       (34,313)
FFO Attributable to Common Shares and Units  $768   $(6,051)  $3,498   $(8,666)
Common stockholders and operating partnership units pro-rata share of:                    
Acquisition and pursuit costs   28    16    71    3,056 
Non-cash interest expense   1,602    783    2,062    1,261 
Loss on early extinguishment of debt   653    1,551    653    1,551 
Weather-related losses, net           165     
Non-real estate depreciation and amortization (1)   75        139     
Non-recurring income       (16)       (16)
Non-cash preferred returns and equity in income of unconsolidated real estate joint ventures   (233)   (492)   (464)   (492)
Management internalization       340        820 
Non-cash equity compensation   1,638    6,919    3,418    10,120 
Preferred stock accretion   1,400    647    2,510    984 
Core FFO Attributable to Common Shares and Units   5,931    3,697    12,052    8,618 
Common stockholders and operating partnership units pro-rata share of:                    
Normally recurring capital expenditures   (631)   (335)   (1,149)   (629)
AFFO Attributable to Common Shares and Units  $5,300   $3,362   $10,903   $7,989 
Per Share and Unit Information:                    
FFO Attributable to Common Shares and Units - diluted  $0.02   $(0.23)  $0.11   $(0.34)
Core FFO Attributable to Common Shares and Units - diluted  $0.19   $0.14   $0.39   $0.33 
AFFO Attributable to Common Shares and Units - diluted  $0.17   $0.13   $0.35   $0.31 
Weighted average common shares and units outstanding - diluted   30,814,839    26,352,066    30,873,023    25,815,164 

 

(1) The real estate depreciation and amortization amount includes our share of consolidated real estate-related depreciation and amortization of intangibles, less amounts attributable to noncontrolling interests – partially owned properties, and our similar estimated share of unconsolidated depreciation and amortization, which is included in earnings of our unconsolidated real estate joint venture investments.

 

 27 

 

 

 

Bluerock Residential Growth REIT, Inc.

Mortgages Payable Summary Information

As of June 30, 2018

(Unaudited and dollars in thousands)

 

 

Mortgages Payable

 

Property  Outstanding
Principal
   Interest Rate   Fixed/ Floating  Maturity Date
ARIUM at Palmer Ranch  $41,348    4.41%  Fixed  May 1, 2025
ARIUM Glenridge   48,431    4.48%  LIBOR + 2.48 (1)  November 1, 2023
ARIUM Grandewood   39,385    3.90%  (2)  July 1, 2025
ARIUM Hunter’s Creek   72,294    3.65%  Fixed  November 1, 2024
ARIUM Metrowest   64,559    4.43%  Fixed  May 1, 2025
ARIUM Palms   24,999    4.22%  LIBOR + 2.22% (1)  September 1, 2022
ARIUM Pine Lakes   26,950    3.95%  Fixed  November 1, 2023
ARIUM Westside   52,150    3.68%  Fixed  August 1, 2023
Ashton Reserve I   31,142    4.67%  Fixed  December 1, 2025
Ashton Reserve II   15,270    4.62%  LIBOR + 2.62% (1)  January 1, 2026
Citrus Tower   41,438    4.07%  Fixed  October 1, 2024
Enders Place at Baldwin Park (3)   24,056    4.30%  Fixed  November 1, 2022
James on South First   26,500    4.35%  Fixed  January 1, 2024
Marquis at Crown Ridge   28,925    3.61%  LIBOR + 1.61% (1)  June 1, 2024
Marquis at Stone Oak   43,125    3.61%  LIBOR + 1.61% (1)  June 1, 2024
Marquis at The Cascades I   33,207    3.61%  LIBOR + 1.61% (1)  June 1, 2024
Marquis at The Cascades II   23,175    3.61%  LIBOR + 1.61% (1)  June 1, 2024
Marquis at TPC   17,005    3.61%  LIBOR + 1.61% (1)  June 1, 2024
Outlook at Greystone   22,105    4.30%  Fixed  June 1, 2025
Park & Kingston (4)   18,432    3.41%  Fixed  April 1, 2020
Plantation Park   26,625    4.64%  Fixed  July 1, 2028
Preston View   41,066    4.07%  LIBOR + 2.07% (1)  March 1, 2024
Roswell City Walk   51,000    3.63%  Fixed  December 1, 2026
Sorrel   38,684    4.29%  LIBOR + 2.29% (1)  May 1, 2023
Sovereign   28,510    3.46%  Fixed  November 10, 2022
The Brodie   34,825    3.71%  Fixed  December 1, 2023
The Links at Plum Creek   40,000    4.31%  Fixed  October 1, 2025
The Mills   26,540    4.21%  Fixed  January 1, 2025
The Preserve at Henderson Beach   35,961    4.65%  Fixed  January 5, 2023
Villages at Cypress Creek   26,200    3.23%  Fixed  October 1, 2022
Wesley Village   40,545    4.25%  Fixed  April 1, 2024
Total   1,084,452            
Fair value adjustments   2,420            
Deferred financing costs, net   (11,073)           
Total  $1,075,799            
Weighted Average Interest Rate   4.03%           

 

(1) In June 2018, one month LIBOR in effect was 2.00%. One month LIBOR at June 30, 2018 was 2.09%.

(2) The principal balance includes a $19.7 million advance at a fixed rate of 4.35% and a $19.7 million advance at a variable rate of 3.45% as of June 30, 2018.

(3) The principal balance includes a $16.4 million loan at a fixed rate of 3.97% and a $7.7 million supplemental loan at a fixed rate of 5.01%.

(4) The principal balance includes a $15.3 million loan at a fixed rate of 3.21% and a $3.2 million supplemental loan at a fixed rate of 4.34%.

 

 28 

 

 

 

Bluerock Residential Growth REIT, Inc.

Mortgages Payable Summary Information Continued

As of June 30, 2018

(Unaudited and dollars in thousands)

 

 

Mortgages Payable Maturity Schedules

 

Year  Fixed Rate   Floating Rate   Total   % of Total 
2018  $1,382   $1,393   $2,775    0.26%
2019   4,530    3,358    7,888    0.73%
2020   27,109    4,098    31,207    2.88%
2021   11,251    4,362    15,613    1.44%
2022   85,568    29,060    114,628    10.57%
Thereafter   621,053    291,288    912,341    84.13%
   $750,893   $333,559   $1,084,452    100.00%
Fair Value Adjustments   2,420    -    2,420      
Subtotal  $753,313   $333,559   $1,086,872      
Deferred Financing Costs, net   (7,632)   (3,441)   (11,073)     
Total  $745,681   $330,118   $1,075,799      
                 
   Amounts   % of Total   Weighted
Average Rates
   Weighted
Average
Maturities
(years)
 
Secured Fixed Rate Debt  $753,313    69.3%   4.07%   6.1 
Secured Floating Rate Debt   333,559    30.7%   3.95%   5.7 
Total  $1,086,872    100.0%   4.03%   5.9 

 

 29 

 

 

 

Bluerock Residential Growth REIT, Inc.

2018 Projected Guidance

(Unaudited and dollars in thousands except for per share data)

 

 

   2018 Outlook (3) 
   Low   High 
Adjusted Funds From Operations Attributable to Common Shares and Units per share  $0.66   $0.70 
           
Operations          
Existing operating portfolio revenues (1)  $146,650   $147,200 
Property operating margin   57.1%   57.5%
Property management fee as a percentage of revenue   2.8%   2.8%
General and administrative expenses (2)   11,800    11,700 
Income from preferred equity and mezzanine investments   31,300    31,300 
           
Noncontrolling interest, preferred stock and share count assumptions          
Noncontrolling interest percentage of AFFO – Operating Partnership Units   22.9%   22.9%
Noncontrolling interest percentage of AFFO - Partially owned properties   6.3%   6.0%
Series B redeemable preferred stock raise   115,000    165,000 
Preferred stock dividends   34,900    36,900 
Estimated weighted average diluted shares and units outstanding (4)   31,556    31,556 

 

 

 

(1) Revenue includes only property level revenues and excludes income from preferred investments and mezzanine loans.

 

(2) General and administrative expenses exclude non-cash expenses, such as non-cash equity compensation. Non-cash equity compensation for the three months ended June 30, 2018 was $1.6 million.

 

(3) The Company has not reconciled projected Adjusted Funds From Operations Attributable to Common Shares and Units per share (“AFFO”) guidance to the corresponding GAAP financial measure because it does not provide guidance for various reconciling items. The Company is unable to provide guidance for these reconciling items since certain items that impact net income are outside of its control and cannot be reasonably predicted. Accordingly, reconciliations to the corresponding GAAP financial measures are not available.

 

(4) Investors should note that subsequent to issuing 2018 AFFO guidance in February 2018, the Company revised its presentation of AFFO attributable to common stockholders to reflect AFFO attributable to common shares and units. The estimated weighted average diluted shares and units outstanding used to calculate AFFO per share now includes noncontrolling interests – operating partnership units. As the Company’s presentation now includes the impact of AFFO attributable to common shares and operating partnership units, and shares and units are treated on a one-for-one basis, there is no change to projected AFFO per share for purposes of 2018 AFFO guidance.

 

 30 

 

 

 

Bluerock Residential Growth REIT, Inc.

Definitions of Non-GAAP Financial Measures

 

 

The foregoing supplemental financial data includes certain non-GAAP financial measures that we believe are helpful in understanding our business, as further described below. Our definition and calculation of these non-GAAP financial measures may differ from those of other REITs, and may, therefore, not be comparable.

 

Funds from Operations, Core Funds from Operations and Adjusted Funds from Operations, Attributable to Common Shares and Units

We believe that funds from operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), core funds from operations (“Core FFO”), and adjusted funds from operations (“AFFO”) are important non-GAAP supplemental measures of operating performance for a REIT.

 

FFO attributable to common shares and units is a non-GAAP financial measure that is widely recognized as a measure of REIT operating performance. We consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative. We define FFO, consistent with the NAREIT definition, as net income, computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus depreciation and amortization of real estate assets, plus impairment write-downs of depreciable real estate, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis.

 

Core FFO makes certain adjustments to FFO, removing the effect of items that do not reflect ongoing property operations such as stock compensation expense, acquisition expenses, losses on early extinguishment of debt (includes prepayment penalties incurred and the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt), non-cash interest, one-time weather-related costs, and preferred stock accretion. We believe that Core FFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core recurring property operations. As a result, we believe that Core FFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential.

 

AFFO makes certain adjustments to Core FFO in order to arrive at a more refined measure of the operating performance of our portfolio. There is no industry standard definition of AFFO and practice is divergent across the industry. AFFO adjusts Core FFO for items that impact our ongoing operations, such as subtracting recurring capital expenditures (and while we were externally managed, when calculating the quarterly incentive fee paid to our former Manager only, we further adjusted FFO to include any realized gains or losses on our real estate investments).  We believe that AFFO is helpful to investors as a meaningful supplemental indicator of our operational performance. 

 

Our calculation of Core FFO and AFFO differs from the methodology used for calculating Core FFO and AFFO by certain other REITs and, accordingly, our Core FFO and AFFO may not be comparable to Core FFO and AFFO reported by other REITs. Our management utilizes FFO, Core FFO, and AFFO as measures of our operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare our operating performance between periods. Furthermore, although FFO, Core FFO, AFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we also believe that FFO, Core FFO, and AFFO may provide us and our stockholders with an additional useful measure to compare our financial performance to certain other REITs. While we were externally managed, we also used AFFO for purposes of determining the quarterly incentive fee paid to our former Manager in prior periods.

 

Neither FFO, Core FFO, nor AFFO is equivalent to net income, including net income attributable to common stockholders, or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO, Core FFO, and AFFO do not represent amounts available for management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO, Core FFO, nor AFFO should be considered as an alternative to net income, including net income attributable to common stockholders, as an indicator of our operating performance or as an alternative to cash flow from operating activities as a measure of our liquidity.

 

We have acquired interests in nine additional operating properties subsequent to June 30, 2017. The results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance (unaudited and dollars in thousands, except share and per share data).

 

Recurring Capital Expenditures

We define recurring capital expenditures as expenditures that are incurred at every property and exclude development, investment, revenue enhancing and non-recurring capital expenditures.

 

Non-Recurring Capital Expenditures

We define non-recurring capital expenditures as expenditures for significant projects that upgrade units or common areas and projects that are revenue enhancing.

 

Same Store Properties

Same store properties are conventional multifamily residential apartments which were owned and operational for the entire periods presented.

 

 31 

 

 

 

Bluerock Residential Growth REIT, Inc.

Definitions of Non-GAAP Financial Measures

(Unaudited and dollars in thousands)

 

 

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate (“EBITDAre”)

 

NAREIT defines earnings before interest, taxes, depreciation and amortization for real estate (“EBITDAre”) (September 2017 White Paper) as net income, computed in accordance with GAAP, before interest expense, income taxes, depreciation and amortization expense, and further adjusted for gains and losses from sales of depreciated operating properties, and impairment write-downs of depreciated operating properties.

 

We consider EBITDAre to be an appropriate supplemental measure of our performance because it eliminates depreciation, income taxes, interest and non-recurring items, which permits investors to view income from operations unobscured by non-cash items such as depreciation, amortization, the cost of debt or non-recurring items.

 

Adjusted EBITDAre represents EBITDAre further adjusted for non-comparable items and it is not intended to be a measure of free cash flow for our management’s discretionary use, as it does not consider certain cash requirements such as income tax payments, debt service requirements, capital expenditures and other fixed charges.

 

EBITDAre and Adjusted EBITDAre are not recognized measurements under GAAP. Because not all companies use identical calculations, our presentation of EBITDAre and Adjusted EBITDAre may not be comparable to similarly titled measures of other companies.

 

The reconciliations of net (loss) income attributable to common stockholders to EBITDAre and Adjusted EBITDAre are presented in the table below:

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2018   2017   2018   2017 
Net (loss) income attributable to common stockholders  $(10,212)  $17,569   $(19,638)  $12,579 
Net (loss) income attributable to noncontrolling interests   (3,263)   10,171    (6,153)   18,900 
Preferred stock dividends   8,643    6,381    16,890    12,233 
Preferred stock accretion   1,400    647    2,510    984 
Interest expense, net   13,041    7,825    23,158    14,943 
Depreciation and amortization   14,744    10,387    30,321    21,331 
Gain on sale of real estate investments   -    (33,574)   -    (50,040)
Gain on sale of real estate joint venture interest, net   -    (10,238)   -    (10,238)
Loss on early extinguishment of debt   653    1,639    653    1,639 
EBITDAre  $25,006   $10,807   $47,741   $22,331 
Acquisition and pursuit costs   28    18    71    3,200 
Management internalization   -    340    -    820 
Non-real estate depreciation and amortization   75    -    139    - 
Weather-related losses, net   -    -    168    - 
Non-cash equity compensation   1,638    6,919    3,418    10,119 
Non-recurring income   -    (17)   -    (17)
Non-cash preferred returns and equity in income of unconsolidated real estate joint ventures   (233)   (492)   (464)   (492)
Adjusted EBITDAre  $26,514   $17,575   $51,073   $35,961 

 

 32 

 

 

 

Bluerock Residential Growth REIT, Inc.

Definitions of Non-GAAP Financial Measures

(Unaudited and dollars in thousands)

 

 

Property Net Operating Income (“Property NOI”)

 

We believe that net operating income, or NOI, is a useful measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding depreciation and amortization and interest. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. We use NOI to evaluate our performance on a same store and non-same store basis; NOI measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance and captures trends in rental housing and property operating expenses. However, NOI should only be used as a supplemental measure of our financial performance.

 

The following table reflects net (loss) income attributable to common stockholders together with a reconciliation to NOI and to same store and non-same store contributions to consolidated NOI, as computed in accordance with GAAP for the periods presented:

 

   Three Months Ended (1)   Six Months Ended (2) 
   June 30,   June 30, 
   2018   2017   2018   2017 
Net (loss) income attributable to common shares  $(10,212)  $17,569   $(19,638)  $12,579 
Add back: Net (loss) income attributable to operating partnership units   (3,010)   186    (5,685)   129 
Net (loss) income attributable to common shares and units   (13,222)   17,755    (25,323)   12,708 
Add common stockholders and operating partnership units pro-rata share of:                    
Depreciation and amortization   13,990    9,425    28,821    19,338 
Non-real estate depreciation and amortization   75    -    139    - 
Non-cash interest expense   1,602    783    2,062    1,261 
Property management fees   1,017    668    1,956    1,317 
Management fees   -    6,163    -    8,931 
Acquisition and pursuit costs   28    16    71    3,056 
Loss on early extinguishment of debt   653    1,551    653    1,551 
Corporate operating expenses   4,528    1,696    9,197    3,146 
Management internalization   -    340    -    820 
Weather-related losses, net   -    -    165    - 
Preferred dividends   8,643    6,381    16,890    12,233 
Preferred stock accretion   1,400    647    2,510    984 
Less common stockholders and operating partnership units pro-rata share of:                    
Other income   -    16    -    16 
Preferred returns and equity in income of unconsolidated real estate joint ventures   2,626    2,605    5,088    5,177 
Interest income from related parties   5,635    2,097    10,830    3,620 
Gain on sale of joint venture interests, net of fees   -    6,399    -    6,399 
Gain on sale of real estate investments   -    26,832    -    34,313 
Pro-rata share of properties’ income   10,453    7,476    21,223    15,820 
Add:                    
Noncontrolling interest pro-rata share of partially owned property income   542    702    1,152    1,790 
Total property income   10,995    8,178    22,375    17,610 
Add:                    
Interest expense   11,455    6,864    21,090    13,473 
Net operating income   22,450    15,042    43,465    31,083 
Less:                    
Non-same store net operating income   8,970    2,068    19,387    7,842 
Same store net operating income  $13,480   $12,974   $24,078   $23,241 

 

(1) Same Store sales for the three months ended June 30, 2018 related to the following properties: Enders Place at Baldwin Park, ARIUM Grandewood, Park & Kingston, ARIUM Palms, Ashton Reserve, Sovereign, Sorrel, ARIUM at Palmer Ranch, ARIUM Gulfshore, The Preserve at Henderson Beach, ARIUM Westside, ARIUM Pine Lakes, James on South First, ARIUM Glenridge, Roswell City Walk, The Brodie, Preston View, and Wesley Village.

 

(2) Same Store sales for the six months ended June 30, 2018 related to the following properties: Enders Place at Baldwin Park, ARIUM Grandewood, Park & Kingston, ARIUM Palms, Ashton Reserve, Sovereign, Sorrel, ARIUM at Palmer Ranch, ARIUM Gulfshore, The Preserve at Henderson Beach, ARIUM Westside, ARIUM Pine Lakes, James on South First, ARIUM Glenridge, Roswell City Walk, and The Brodie.

 

 33 

(Back To Top)