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Section 1: 424B5 (PRELIMINARY PROSPECTUS SUPPLEMENT)

This prospectus supplement relates to an effective registration statement under the Securities Act of 1933, but the information in this prospectus supplement is not complete and may be changed. This prospectus supplement and the accompanying prospectus are not an offer to sell these securities and we are not soliciting an offer to buy these securities in any state or jurisdiction where the offer or sale is not permitted.

Filed Pursuant to Rule 424(b)(5)  
Registration No. 333-224990  

Subject to Completion, dated October 26, 2018

PRELIMINARY PROSPECTUS SUPPLEMENT
(To Prospectus dated May 23, 2018)

[GRAPHIC MISSING]

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

Maximum of 500,000 Units consisting of 500,000 Shares of Series B Redeemable Preferred Stock
and Warrants to Purchase 10,000,000 Shares of Class A Common Stock
(Liquidation Preference $1,000 per share of Series B Redeemable Preferred Stock (subject to adjustment))

Bluerock Residential Growth REIT, Inc. is a Maryland corporation formed to acquire institutional-quality apartment properties in growth markets across the United States to appeal to the renter by choice. We seek to maximize returns through investments where we believe we can drive substantial growth in our funds from operations and net asset value through one or more of our Value-Add, Opportunistic and Invest-to-Own investment strategies.

We are now offering a maximum of 500,000 shares of our Series B Redeemable Preferred Stock, par value $0.01 per share, referred to as our Series B Redeemable Preferred Stock, and warrants, referred to as the Warrants, to purchase a maximum of 10,000,000 shares of our Class A common stock, as more fully described herein. On February 24, 2016, we filed a prospectus supplement, or the Original Series B Prospectus Supplement, to our registration statement on Form S-3 (Registration Statement No. 333-200359), or the Original Registration Statement, for our continuous offering and sale of a maximum of 150,000 shares of our Series B Redeemable Preferred Stock, and Warrants to purchase a maximum of 3,000,000 shares of our Class A common stock, or the Original Series B Offering. On July 21, 2017, we filed an additional prospectus supplement to the Original Registration Statement to increase the size of the Original Series B Offering to a maximum of 225,000 shares of our Series B Redeemable Preferred Stock, and Warrants to purchase a maximum of 4,500,000 shares of our Class A common stock (which maximum amounts were inclusive of those reflected in the Original Series B Prospectus Supplement). On November 15, 2017, we filed a prospectus supplement to our registration statement on Form S-3 (Registration Statement No. 333-208956), or the Second Registration Statement, for a follow-on offering to the Original Series B Offering, or the Follow-On Series B Offering, for the continuous offering and sale of a maximum of 435,000 shares of our Series B Redeemable Preferred Stock, and Warrants to purchase a maximum of 8,700,000 shares of our Class A common stock. As of October 26, 2018, 181,942 shares of our Series B Redeemable Preferred Stock have been issued and sold in the Original Series B Offering under the Original Registration Statement, for gross offering proceeds of $181.9 million. The Original Registration Statement expired on December 19, 2017. As of October 26, 2018, 92,027 shares of our Series B Redeemable Preferred Stock have been issued and sold in the Follow-On Series B Offering under the Second Registration Statement, for gross offering proceeds of $92.0 million, and 161,031 shares of our Series B Redeemable Preferred Stock remain available for issuance and sale thereunder. The Second Registration Statement will expire on January 29, 2019.

On May 23, 2018, the Securities and Exchange Commission declared effective our registration statement on Form S-3 (Registration Statement No. 333-224990), or the Third Registration Statement. The offering pursuant to this prospectus supplement, or the Series B Offering, is made under the Third Registration Statement as a follow-on offering to the Original Series B Offering. Pursuant to this prospectus supplement, we are offering a maximum of 500,000 shares of our Series B Redeemable Preferred Stock, and Warrants to purchase a maximum of 10,000,000 shares of our Class A common stock. Except as described in this prospectus supplement, the terms of the Original Series B Offering and the Follow-On Series B Offering are substantially similar to the Series B Offering under this prospectus supplement.

This prospectus supplement also covers the shares of our Class A common stock that are issuable from time to time upon exercise of the Warrants sold pursuant to the Series B Offering, the shares of our Class A common stock that are issuable from time to time upon exercise of the Warrants sold pursuant to the Follow-On Series B Offering, and the shares of our Class A common stock that are issuable from time to time upon exercise of the Warrants sold pursuant to the Original Series B Offering. This prospectus supplement also covers shares of our Class A common stock that may be issuable upon redemption of the shares of the Series B Redeemable Preferred Stock sold pursuant to the Series B Offering, shares of our Class A common stock that may be issuable upon redemption of the shares of the Series B Redeemable Preferred Stock sold pursuant to the Follow-On Series B Offering, and shares of our Class A common stock that may be issuable upon the redemption of shares of Series B Redeemable Preferred Stock sold in the Original Series B Offering. The Series B Offering is hereinafter referred to as the offering. The Series B Redeemable Preferred Stock and the Warrants will be sold in units, or Units, with each Unit consisting of (i) one share of Series B Redeemable Preferred Stock with an initial stated value of $1,000 per share, and (ii) one Warrant to purchase 20 shares of our Class A common stock, exercisable by the holder at an exercise price that is set at a 20% premium to the current market price per share of our Class A common stock determined using the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the date of issuance of such Warrant, subject to a minimum exercise price of $10.00 per share (subject to adjustment). Each Unit will be sold at a public offering price of $1,000 per Unit. To the extent a participating broker-dealer reduces its selling commissions below 7.0%, the public offering price per Unit will be decreased by an amount equal to such reduction. Units will not be issued or certificated. The shares of Series B Redeemable Preferred Stock and the Warrants are immediately detachable and will be issued separately. The Warrants are not exercisable until one year from the date of issuance and expire four years from the date of issuance. The Series B Redeemable Preferred Stock will rank pari passu with our 8.250% Series A Cumulative Redeemable Preferred Stock, or the Series A Preferred Stock, our 7.625% Series C Cumulative Redeemable Preferred Stock, or the Series C Preferred Stock, and our 7.125% Series D Cumulative Preferred Stock, or the Series D Preferred Stock, and senior to our Class A common stock, with respect to payment of dividends and distribution of amounts upon liquidation, dissolution or winding up. Holders of our Series B Redeemable Preferred Stock will have no voting rights, except as described in the Cetera Side Letter (as hereinafter defined). See “Description of Series B Redeemable Preferred Stock — Cetera Side Letter” in this prospectus supplement.

We are organized and conduct our operations in a manner that will allow us to maintain our qualification as a real estate investment trust for federal income tax purposes, or REIT. To assist us in qualifying as a REIT, among other purposes, our charter contains certain restrictions relating to the ownership and transfer of our capital stock, and the warrant agreement that will govern the Warrants to be issued in this offering, or the Warrant Agreement, contains various other restrictions on the exercise, ownership and transfer of our Warrants. See “Description of Series B Redeemable Preferred Stock — Restrictions on Ownership and Transfer” in this prospectus supplement and “Description of Capital Stock — Restrictions on Ownership and Transfer” in the accompanying prospectus.

Our Class A common stock is listed on the NYSE American (formerly the NYSE MKT) under the symbol “BRG.” On October 25, 2018, the closing price of our Class A common stock as reported on the NYSE American was $9.07 per share. Our Series A Preferred Stock is listed on the NYSE American under the symbol “BRG-PrA.” On October 25, 2018, the closing price of our Series A Preferred Stock as reported on the NYSE American was $25.09 per share. Our Series C Preferred Stock is listed on the NYSE American under the symbol “BRG-PrC.” On October 25, 2018, the closing price of our Series C Preferred Stock as reported on the NYSE American was $24.93 per share. Our Series D Preferred Stock is listed on the NYSE American under the symbol “BRG-PrD.” On October 25, 2018, the closing price of our Series D Preferred Stock as reported on the NYSE American was $22.35 per share. Currently no market exists for the Series B Redeemable Preferred Stock or any of the Warrants, and we do not expect a market to develop. We do not intend to apply for a listing of the Series B Redeemable Preferred Stock or any of the Warrants on any national securities exchange.

The Series B Redeemable Preferred Stock has not been rated and is subject to the risks associated with non-rated securities. You should carefully read and consider “Risk Factors” beginning on page S-14 of this prospectus supplement, page 7 of the accompanying prospectus, in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 13, 2018, and under similar headings in the other documents that are incorporated by reference into this prospectus supplement or the accompanying prospectus for a discussion of the risks that should be considered in connection with your investment in our Series B Redeemable Preferred Stock.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus supplement. Any representation to the contrary is a criminal offense.

   
  Per Unit   Maximum Offering
Public offering price   $ 1,000.00     $ 500,000,000.00 (1) 
Selling commissions(2)(3)(4)   $ 70.00     $ 35,000,000.00  
Dealer manager fee   $ 30.00     $ 15,000,000.00  
Proceeds, before expenses, to us   $ 900.00     $ 450,000,000.00  

(1) Initial gross proceeds. If the Warrants are exercised in full at the minimum exercise price of $10.00 per share of Class A common stock, we will receive additional gross proceeds equal to $100,000,000.00.
(2) Selling commissions and the dealer manager fee will equal up to 7.0% and 3.0% of aggregate gross proceeds, respectively. Each is payable to our dealer manager. We or our affiliates also may provide permissible forms of non-cash compensation to registered representatives of our dealer manager and to broker-dealers that are members of FINRA and authorized by our dealer manager to sell Units, which we refer to as participating broker-dealers. The value of such items will be considered underwriting compensation in connection with this offering, and the corresponding payments of our dealer manager fee will be reduced by the aggregate value of such items. The combined selling commissions, dealer manager fee and such non-cash compensation for this offering will not exceed 10.0% of the aggregate gross proceeds of this offering, which is referred to as FINRA’s 10.0% cap. Our dealer manager will repay to us any excess payments made to our dealer manager over FINRA’s 10.0% cap if this offering is abruptly terminated before reaching the maximum amount of offering proceeds.
(3) Our dealer manager may reallow all or a portion of its selling commissions attributable to a participating broker-dealer. In addition, our dealer manager also may reallow a portion of its dealer manager fee earned on the proceeds raised by a participating broker-dealer, to such participating broker-dealer as a non-accountable marketing or due diligence allowance. The amount of the reallowance to any participating broker-dealer will be determined by the dealer manager in its sole discretion.
(4) To the extent a participating broker-dealer reduces its selling commissions below 7.0%, the public offering price per Unit will be decreased by an amount equal to such reduction. See “Plan of Distribution.”

The dealer manager of this offering is our affiliate, Bluerock Capital Markets, LLC, or Bluerock Capital Markets. The dealer manager is not required to sell any specific number or dollar amount of Units, but will use its “reasonable best efforts” to sell the Units offered. The minimum permitted purchase is generally $5,000, but purchases of less than $5,000 may be made in the discretion of the dealer manager. We expect to sell up to 500,000 Units in this offering by May 23, 2021, which may be extended through November 23, 2021, in our sole discretion. If we extend the offering period beyond May 23, 2021, we will further supplement the prospectus accordingly. We may terminate this offering at any time, or may offer Units pursuant to a new registration statement, including a follow-on registration statement.

We will sell Units through Depository Trust Company, or DTC, settlement, or DTC Settlement; or, under special circumstances, through Direct Registration System settlement, or DRS Settlement. See the section entitled “Plan of Distribution” in this prospectus supplement for a description of these settlement methods.

Bluerock Capital Markets, LLC
as Dealer Manager

Prospectus Supplement Dated October   , 2018


 
 

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We have not authorized any dealer, salesperson or other person to give any information or to make any representation other than those contained in this prospectus supplement, the accompanying prospectus, and any information incorporated by reference herein. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus supplement, the accompanying prospectus, and any information incorporated by reference herein. This prospectus supplement and the accompanying prospectus do not constitute an offer to sell or the solicitation of an offer to buy any securities other than the registered securities to which it relates, nor does this prospectus supplement or the accompanying prospectus constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. You should not assume that the information contained in this prospectus supplement and the accompanying prospectus is accurate on any date subsequent to the date set forth on its front cover or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus supplement and the accompanying prospectus are delivered or securities are sold on a later date.

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PROSPECTUS SUPPLEMENT

 
  Page
ABOUT THIS PROSPECTUS SUPPLEMENT     S-iii  
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS     S-iv  
PROSPECTUS SUPPLEMENT SUMMARY     S-1  
THE OFFERING     S-7  
RISK FACTORS     S-14  
ESTIMATED USE OF PROCEEDS     S-23  
DISTRIBUTION POLICY     S-25  
OUR INDUSTRY AND MARKET OPPORTUNITY     S-28  
OUR BUSINESS AND PROPERTIES     S-36  
RATIO OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED DIVIDENDS     S-46  
MANAGEMENT     S-47  
DESCRIPTION OF SERIES B REDEEMABLE PREFERRED STOCK     S-55  
ADDITIONAL MATERIAL FEDERAL INCOME TAX CONSIDERATIONS     S-64  
CERTAIN ERISA CONSIDERATIONS     S-67  
PLAN OF DISTRIBUTION     S-71  
LEGAL MATTERS     S-75  
EXPERTS     S-75  
WHERE YOU CAN FIND MORE INFORMATION     S-77  
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE     S-78  

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PROSPECTUS

 
  Page
ABOUT THIS PROSPECTUS     1  
CERTAIN DEFINITIONS     2  
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS     3  
BLUEROCK RESIDENTIAL GROWTH REIT, INC.     5  
RISK FACTORS     7  
RATIO OF EARNINGS TO FIXED CHARGES AND OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS     8  
USE OF PROCEEDS     9  
DESCRIPTION OF THE SECURITIES WE MAY OFFER     10  
DESCRIPTION OF CAPITAL STOCK     11  
DESCRIPTION OF DEPOSITARY SHARES     42  
DESCRIPTION OF DEBT SECURITIES     43  
DESCRIPTION OF WARRANTS     49  
DESCRIPTION OF UNITS     50  
BOOK ENTRY PROCEDURES AND SETTLEMENT     51  
IMPORTANT PROVISIONS OF MARYLAND CORPORATE LAW AND OUR CHARTER AND BYLAWS     52  
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS     57  
PLAN OF DISTRIBUTION     83  
LEGAL MATTERS     86  
EXPERTS     86  
WHERE YOU CAN FIND MORE INFORMATION     88  
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE     89  

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ABOUT THIS PROSPECTUS SUPPLEMENT

This document consists of two parts. The first part is this prospectus supplement, which describes the specific terms of this offering and adds to or updates the information contained in the accompanying prospectus. The second part is the accompanying prospectus, which provides more general information about the securities we may offer from time to time, some of which may not apply to this offering. Generally, when we refer only to the “prospectus,” we are referring to both parts combined. This prospectus supplement may add to, update or change information in the accompanying prospectus and the documents incorporated by reference into this prospectus supplement or the accompanying prospectus.

If information in this prospectus supplement is inconsistent with the accompanying prospectus, you should rely on this prospectus supplement. This prospectus supplement, the accompanying prospectus and the documents incorporated into each by reference include important information about us, the Units and Class A common stock underlying the Warrants being offered, and other information you should know before investing in these securities.

You should rely only on this prospectus supplement, the accompanying prospectus, and the information incorporated or deemed to be incorporated by reference in this prospectus supplement, the accompanying prospectus or in any free writing prospectuses we have prepared. We have not authorized anyone to provide you with information that is in addition to, or different from, that contained or incorporated by reference in this prospectus supplement, the accompanying prospectus or in any free writing prospectuses we have prepared. If anyone provides you with different or inconsistent information, you should not rely on it. We are not offering to sell these securities in any jurisdiction where the offer or sale is not permitted. You should not assume that the information contained or incorporated by reference in this prospectus supplement or the accompanying prospectus is accurate as of any date other than as of the date of this prospectus supplement or the accompanying prospectus, as the case may be, or in the case of the documents incorporated by reference, the date of such documents, regardless of the time of delivery of this prospectus supplement and the accompanying prospectus or any sale of Units and Class A common stock underlying the Warrants. Our business, financial condition, liquidity, results of operations, and prospects may have changed since those dates.

This prospectus supplement is part of a registration statement on Form S-3 (Registration No. 333-224990) that we have filed with the Securities and Exchange Commission, or the SEC, relating to the securities offered hereby. This prospectus supplement does not contain all of the information that we have included in the registration statement and the accompanying exhibits and schedules thereto in accordance with the rules and regulations of the SEC, and we refer you to such omitted information. It is important for you to read and consider all of the information contained in this prospectus supplement and the accompanying prospectus before making your investment decision. You should also read and consider the additional information incorporated by reference into this prospectus supplement and the accompanying prospectus. See “Where You Can Find More Information” in this prospectus supplement. All capitalized terms not defined in this prospectus supplement shall have the meaning described in the accompanying prospectus.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Statements included in this prospectus supplement, the accompanying prospectus, and the information incorporated by reference herein that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto) are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act; Section 27A of the Securities Act of 1933, as amended, or the Securities Act; and pursuant to the Private Securities Litigation Reform Act of 1995. These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual events or our investments and results of operations could differ materially from those expressed or implied in any forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology.

The forward-looking statements included in this prospectus supplement, the accompanying prospectus, and the information incorporated herein by reference are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to:

the factors included in this prospectus supplement, the accompanying prospectus, and incorporated herein by reference, including those set forth under the heading “Risk Factors”;
our ability to invest the net proceeds of any offering in the manner set forth in this prospectus supplement, or the accompanying prospectus;
the competitive environment in which we operate;
real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets;
decreased rental rates or increasing vacancy rates;
our ability to lease units in newly acquired or newly constructed apartment properties;
potential defaults on or non-renewal of leases by tenants;
creditworthiness of tenants;
our ability to obtain financing for and complete acquisitions under contract under the contemplated terms, or at all;
development and acquisition risks, including rising or unanticipated costs and failure of such acquisitions and developments to perform in accordance with projections;
the timing of acquisitions and dispositions;
the performance of our network of leading regional apartment owner/operators with which we invest through controlling positions in joint ventures;
potential natural disasters such as hurricanes, tornadoes and floods;
national, international, regional and local economic conditions;
board determination as to timing and payment of dividends, and our ability to pay future distributions at the dividend rates set forth in this prospectus supplement, or the accompanying prospectus;
the general level of interest rates;

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potential changes in the law or governmental regulations that affect us and interpretations of those laws and regulations, including changes in real estate and zoning or tax laws, and potential increases in real property tax rates;
financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;
lack of or insufficient amounts of insurance;
our ability to maintain our qualification as a REIT;
litigation, including costs associated with prosecuting or defending claims and any adverse outcomes;
possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us or a subsidiary owned by us or acquired by us;
the possibility that the anticipated benefits from the internalization of our former external Manager (the “Internalization”) may not be realized or may take longer to realize than expected, or that unexpected costs or unexpected liabilities may arise from the Internalization;
our ability to manage the Internalization effectively or efficiently; and
the outcome of any legal proceedings that may be instituted against us or others following the announcement of the Internalization.

Any of the assumptions underlying forward-looking statements could be inaccurate. You are cautioned not to place undue reliance on any forward-looking statements included in this prospectus supplement, the accompanying prospectus, or the information incorporated herein by reference. All forward-looking statements speak only as of their respective dates and the risk that actual results will differ materially from the expectations expressed in this prospectus supplement, the accompanying prospectus, and the information included herein by reference will increase with the passage of time. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason. In light of the significant uncertainties inherent in the forward-looking statements included in this prospectus supplement, the accompanying prospectus, and the information incorporated herein by reference, including, without limitation, the risks described under “Risk Factors,” the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives and plans set forth in this prospectus supplement, the accompanying prospectus, or the information incorporated herein by reference will be achieved.

Certain Definitions

We use certain defined terms throughout this prospectus supplement and the accompanying prospectus that have the following meanings:

Class A:  Class A properties are generally properties that are recently built or substantially rehabilitated. Class A properties typically contain high-end interior finishes and modern ceiling heights, and offer a variety of amenities, which may include fitness/spa facilities, resort-style pool, business center and WiFi connectivity, and outdoor/indoor social gathering spaces.

Invest-to-Own:  Invest-to-Own investments generally consist of investment in the development of Class A properties where the investor can capture significant development premiums and minimize and/or eliminate development risks and guarantees. Our targeted Invest-to-Own investments will generally take the form of a convertible loan or convertible preferred equity structure that provides income during the development period and/or the ability to capture development premiums at completion by exercising the conversion right to take control and an equity stake in the ownership of the project.

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Opportunistic:  Opportunistic investments generally consist of properties that exhibit some characteristics of distress, such as operational inefficiencies, significant deferred capital maintenance or broken capital structures providing an opportunity for a substantial portion of total return attributable to appreciation in value.

Value-Add:  Value-Add investments generally consist of properties that are well-occupied and provide a relatively stable stream of cash flow; however, they also provide an opportunity for the improvement of the physical, financial, operational, or management characteristics of the property in order to drive rent growth, minimize turnover, and/or control operating expenses, with a high proportion of the total return attributable to appreciation in value. Value-Add initiatives are typically identified by the buyer prior to acquisition and include projects such as comprehensive interior upgrades to units, re-tenanting and/or repositioning of the property, and curing deferred maintenance or physical obsolescence.

Industry and Market Data

We use industry forecasts and projections and market data throughout this prospectus supplement, including data from publicly available information and industry publications. These sources generally state that the information they provide has been obtained from sources they believe to be reliable. The forecasts and projections are based on industry surveys and the preparers’ experience in the industry, and there can be no assurance that any of the projections will be achieved. We believe that the surveys and market research others have performed are reliable, but we have not independently verified this information, and the accuracy and completeness of the information are not guaranteed.

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PROSPECTUS SUPPLEMENT SUMMARY

This summary highlights selected information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus. Because it is a summary, it may not contain all the information that you should consider before investing in our Series B Redeemable Preferred Stock, Warrants and Class A common stock underlying the Warrants. This prospectus supplement and the accompanying prospectus include or incorporate by reference information about the Series B Redeemable Preferred Stock, Warrants and Class A common stock underlying the Warrants we are offering, as well as information regarding our business and detailed financial data. To fully understand this offering, you should carefully read this prospectus supplement and the accompanying prospectus, as well as the documents incorporated by reference and any free writing prospectus we have prepared, including the sections entitled “Risk Factors” herein and incorporated by reference herein and therein, before investing in our Series B Redeemable Preferred Stock, Warrants and Class A common stock underlying the Warrants.

Unless otherwise indicated or the context requires otherwise, all references to “the company,” “we,” “us” and “our” mean Bluerock Residential Growth REIT, Inc., a Maryland corporation, together with its consolidated subsidiaries, including, without limitation, Bluerock Residential Holdings, L.P., a Delaware limited partnership of which we are the sole general partner, which we refer to as our operating partnership. We refer to Bluerock Real Estate, L.L.C., a Delaware limited liability company, as Bluerock, and we refer to our former external manager, BRG Manager, LLC, a Delaware limited liability company, as our former Manager. Both Bluerock and our former Manager are affiliated with the company. References to our shares of Class A common stock on a “fully diluted basis” includes all outstanding shares of our Class A common stock, shares of our Class C common stock, units of limited partnership interest in our operating partnership, or OP Units, and long-term incentive plan units in our operating partnership, or LTIP Units, whether vested or unvested.

Our Company

We are an internally managed real estate investment trust with a strategy to acquire and develop a portfolio of highly amenitized, institutional-quality live/work/play apartment communities in knowledge-economy growth markets across the United States, targeting the high disposable income renter by choice.

We utilize three key investment strategies —  Value-Add, Opportunistic and Invest-to-Own — to drive growth in funds from operations and net asset value at our properties, in order to maximize returns to our investors.

We invest primarily through controlling positions (generally 90%) in joint ventures with our network of some of the largest and leading private regional apartment owner/operators across the nation, which we believe enhances our ability to access proprietary off-market transactions, and to deliver best-in-class execution of our investment strategies across multiple markets.

As of the date of this prospectus supplement, our portfolio consisted of interests in forty-three properties, comprised of thirty-two consolidated operating properties and eleven properties held through preferred equity and mezzanine loan investments. Of the property interests held through preferred equity and mezzanine loan investments, two are under development, seven are in lease-up and two properties are stabilized. The forty-three properties contain an aggregate of 13,574 units, comprised of 10,774 consolidated operating units and 2,800 units held through preferred equity and mezzanine loan investments. As of June 30, 2018, these properties, exclusive of our development properties, were approximately 94% occupied.

Our Target Markets

We focus on demographically attractive growth markets, which we define as markets characterized by growing population and job growth, both of which are positively correlated with rental rates and occupancy. Given the high correlation between employment growth and apartment demand, we believe that selecting markets with job growth significantly above the national average will provide high potential for increased rental demand, leading to revenue growth and attractive risk-adjusted returns. Year over year change in

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employment growth in many of our current and target markets exceeded 2.8% for the year ended July 2018, as compared to the national average for year over year change in employment growth of 1.7% according the Bureau of Labor Statistics.

[GRAPHIC MISSING]

We select and continuously evaluate our target markets through an analysis of detailed demographic data at both the market and submarket levels, which may include projected short- and long-term employment growth; existence of robust infrastructures; diversity and growth of the economic base driven by the presence of major colleges, universities, technology, health care, trade, next-generation high value-add manufacturing and government industries; the presence of a younger, more educated demographic profile with a high proportion of renters by choice; the existence of right to work laws; and quality of life.

Our Investment Strategies

We acquire institutional-quality apartment properties where we believe we can create long-term value for our stockholders, utilizing the following investment strategies:

Value-Add.  We invest in well-located institutional-quality apartment properties with strong and stable cash flows in demographically attractive knowledge economy growth markets that offer where we believe there exists significant potential for medium-term capital appreciation through repositioning, renovation or redevelopment, to reposition the asset and drive future rental growth.
Opportunistic.  We invest in properties available at opportunistic prices (i.e., at prices we believe are below those available in an otherwise efficient market) that exhibit some characteristics of distress, such as operational inefficiencies, significant deferred capital maintenance or broken capital structures providing an opportunity for a substantial portion of total return attributable to appreciation in value.
Invest-to-Own.  We selectively invest in development of Class A properties in target markets where we believe we can capture significant development premiums upon completion. We generally use a convertible loan or convertible preferred equity structure which provides income during the development stage and/or the ability to capture development premiums at completion by exercising our conversion rights to take ownership.

Market Opportunity

We believe that there will be continued strong apartment demand in the foreseeable future, primarily due to large demographic trends, including the Millennial generation of 86 million entering prime rental

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age through 2030, likely forming more households than the Baby Boomers and the Gen-Xers. As one data point, new research from the National Multifamily Housing Council (the “NMHC”) indicates that approximately 4.6 million new rental units will be needed to meet projected demand by 2030, and that current construction trends indicate that only 3 million new units will be delivered. See “Our Industry and Market Opportunity — Demand Overview.”

We believe that a significant amount of institutional capital and public REITs are primarily focused on investing in the “big six gateway markets” of Boston, New York, Washington, D.C., Seattle, San Francisco, and Los Angeles, and that many other primary markets are underinvested by institutional/public capital. As a result, we believe that the top 40 primary markets below the gateway markets, including our target markets, provide the opportunity to source investments at cap rates that are at significant premiums to the gateway markets, and have the potential to provide not only significant current income, but also attractive capital appreciation.

We further believe that a number of our target growth markets are underserved by newer Class A apartment properties with a significant portion of the nation’s apartment stock built prior to 1980, especially as the wave of Millennials moves into its prime rental years over the upcoming decade. We also believe that apartment construction deliveries are peaking, and that rising construction costs will limit oversupply in the near term. As such, we believe there is opportunity in our target markets for development and/or redevelopment to deliver Class A product and capture premium rental rates and enhance value.

We believe that as financial buyers who entered the market following the recent U.S. recession to take advantage of historical spreads between higher acquisition cap rates and lower, long-term financing interest rates enter their disposition periods, the next phase of the cycle provides opportunity for real estate-centric buyers (i.e., buyers who have real estate-specific investment expertise and deep intellectual capital in specific markets) to create value using proven real estate investment strategies.

In addition, we believe that as the economy enters an environment of more traditional (i.e., higher) interest rate levels, private purchasers with greater capital constraints who have needed significant leverage to fund acquisitions will become less competitive, which would provide the opportunity to acquire apartment communities from owners who do not have sufficient capital resources to execute their business plans.

Our Competitive Strengths

We believe that our principals’ competitive strengths will enable us to generate attractive risk-adjusted returns for our stockholders. These strengths include the following:

Experienced and Well-Known Investment Team with Significant Expertise.  Our key principals have been involved with sourcing, structuring and acquiring over 50 million square feet of real estate, with approximately $13 billion in value, and have an average of over 27 years of experience during three major market cycles. We believe our key principals have significant value-added expertise in the following areas:

Expertise in the Apartment Asset Class Across Our Target Markets.  Our principals have significant experience structuring and investing in apartment properties in our target markets through multiple investment cycles with successful results, which provides them the breadth and depth of operating and investment experience to steer our investment strategy;
Expertise in Creating Value Across Our Investment Strategies and Various Capital Structures.  Our principals have substantial experience executing transactions and creating value across our Value-Add, Opportunistic and Invest-to-Own investment strategies, and across capital structures — equity, preferred equity, and mezzanine — which provides us substantial flexibility to create value in transactions, subject to maintaining our qualification as a REIT;
Expertise in Corporate and Portfolio Transactions to Create Value.  Our principals have executed large corporate and portfolio transactions, including the rollup of assets to create multiple public companies, the creation of multiple asset management platforms, and the purchase of distressed assets and/or companies out of bankruptcy, demonstrating a sophisticated structuring capability and an ability to execute complex capital markets transactions, which we believe will assist us in our goal to grow our company and to deliver attractive risk-adjusted returns to our stockholders; and

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Expertise in Financing and Structuring Transactions.  Our investment team has substantial expertise with structuring and financing transactions, which enables us to continuously evaluate and effectively access the most efficient capital structure for apartment acquisitions. In addition, our investment team has extensive experience structuring development transactions with members of our network to capture significant value while minimizing inherent risks and/or guarantees associated with such transactions.

Our Network.  We invest primarily through controlling positions in joint ventures with members of our network, which allows us to draw on the collective market knowledge of some of the leading private apartment owner/operators in the nation who invest alongside us in transactions, in order to source, underwrite, and execute attractive transactions. We believe our network provides us access to a substantial, often proprietary, transaction pipeline, along with an institutional-quality infrastructure and ability to execute, in our target markets without the cost and logistical burdens associated with maintaining our own infrastructure and pipeline in these markets.

Disciplined ‘Broad and Deep’ Underwriting.  By leveraging our network, we are able to execute a rigorous double underwriting process, which we believe improves our ability to evaluate risk and create value in our transactions. As a first level, our team of investment professionals implement a disciplined underwriting and due diligence process, including a comprehensive risk-reward analysis with a rigorous focus on relative values among potential opportunities across our target markets. At the same time, members of our network conduct their own underwriting and due diligence for potential transactions, enabling us to leverage their depth of intellectual capital and experience acquired through decades of experience in their target markets. We believe this ability to review investment opportunities with both depth (in the target market) and breadth (across target markets) improves our ability to source and execute attractive transactions.

Scalable Operating Model.  Our relationships enable us to tap into what we believe to be the substantial, often proprietary, transaction flow of our network, allowing for a rapid deployment of available capital. Our extensive network provides us the ability to scale our operations rapidly, enabling us to allocate or reallocate capital across multiple target markets and along multiple strategies, and to rapidly invest in or divest of properties without the time delay associated with building infrastructure across multiple markets, and without burdening us with excessive operating and overhead costs.

Strong Alignment of Interests.  Bluerock, our senior executives and our directors, along with their affiliates, collectively own approximately 24.6% of our company on a fully diluted basis, which we believe creates a strong alignment of their interests with those of our stockholders. In addition, prior to the Internalization, for every calendar quarter beginning with the fourth quarter of 2014 through the third quarter of 2017, the company paid 100% of the former Manager’s fees in LTIP Units, further strengthening the alignment of interest with our stockholders.

Internally Managed REIT.  On October 31, 2017, we became an internally-managed REIT as a result of the completion of the management internalization transactions (the “Internalization”) described below under “Management Internalization.” The Internalization has provided us with a full complement of experienced personnel with expertise in investment, capital markets, asset management, finance, legal and administrative functions, with unique knowledge of our assets, business strategies and investment pipeline.

Our Business and Growth Strategies

Our principal business objective is to generate attractive risk-adjusted investment returns by assembling a high-quality portfolio of apartment properties located in demographically attractive growth markets and by implementing our investment strategies and our “Live/Work/Play Initiatives” to achieve sustainable long-term growth in both our funds from operations and net asset value.

Invest in Class A Apartment Properties.  We intend to continue to acquire primarily Class A apartment properties targeting the high disposable income renter by choice, where we believe we can create long-term value growth for our stockholders.

Focus on Growth Markets.  We intend to continue to focus on demographically attractive growth markets, which we define as markets with strong employment drivers in industries creating high disposable income jobs over the long term. Employment growth is highly correlated with apartment demand; therefore,

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we believe that selecting markets with job growth significantly above the national average will provide high potential for increased rental demand leading to revenue growth and attractive risk-adjusted returns.

Implement our Value Creation Strategies.  We intend to continue to focus on creating value at our properties utilizing our Value-Add, Opportunistic and Invest-to-Own investment strategies in order to maximize our return on investment. We work with each member of our network to evaluate property needs along with value-creation opportunities and create an asset-specific business plan to best position or reposition each property to drive rental growth and asset values. We then provide an aggressive asset management presence to manage our network partner and ensure execution of the plan, with the goal of driving rental growth and values.

Implement our Live/Work/Play Initiatives.  We intend to continue to implement our amenities and attributes to transform the apartment community from a purely functional product (i.e., as solely a place to live), to a lifestyle product (i.e., as a place to live, interact, and socialize). Our Live/Work/Play Initiatives are property specific, and generally consist of attributes that go beyond traditional features, including highly amenitized common areas, cosmetic and architectural improvements, technology, music and other community-oriented activities to appeal to our residents’ desire for a “sense of community” by creating places to gather, socialize and interact in an amenity-rich environment. We believe this creates an enhanced perception of value among residents, allowing for premium rental rates and improved resident retention.

Diversify Across Markets, Strategies and Investment Size.  We will seek to grow our high-quality portfolio of apartment properties diversified by geography and by investment strategy and by size (typically ranging from $50 million to $100 million) in order to manage concentration risk, while driving both current income and capital appreciation throughout the portfolio. Our network enables us to diversify across multiple markets and multiple strategies efficiently, without the logistical burden and time delay of building operating infrastructure in multiple markets and across multiple investment strategies.

Selectively Harvest and Redeploy Capital.  On an opportunistic basis and subject to compliance with certain REIT restrictions, we intend to sell properties in cases where we have successfully executed our value creation plans and where we believe the investment has limited additional upside relative to other opportunities, in order to harvest profits and to reinvest proceeds to maximize stockholder value.

Management Internalization

On October 31, 2017, we became an internally-managed REIT as a result of the completion of the management internalization transactions (the “Internalization”), and we are no longer externally managed by our former Manager. As an internally managed company, we no longer pay the former Manager any fees or expense reimbursements arising from the Management Agreement. See “Our Business and Properties — Management Internalization.” For additional information regarding the Internalization, please see our Current Report on Form 8-K filed on August 4, 2017, our Current Report on Form 8-K filed on August 15, 2017, our Definitive Proxy Statement filed on September 5, 2017, our Current Report on Form 8-K filed on November 6, 2017, and our Quarterly Report on Form 10-Q filed on November 8, 2017, each of which are incorporated by reference herein.

Financing Policy

We intend to continue to use prudent amounts of leverage in making our investments, which we define as having total indebtedness of approximately 65% of the fair market value of our real estate investments. For purposes of calculating our leverage, we assume full consolidation of all of our real estate investments, whether or not they would be consolidated under GAAP, include assets we have classified as held for sale, and include any joint venture level indebtedness in our total indebtedness. However, we are not subject to any limitations on the amount of leverage we may use, and accordingly, the amount of leverage we use may be significantly less or greater than we currently anticipate. We expect our leverage to decline commensurately as we execute our business plan to grow our net asset value.

Our board of directors has the authority to change our financing policies at any time and without stockholder approval. If our board of directors changes our policies regarding our use of leverage, we expect that it will consider many factors, including the lending standards of government-sponsored enterprises, such as Fannie Mae and Freddie Mac, for loans in connection with the financing of apartment properties, the

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leverage ratios of publicly traded REITs with similar investment strategies, the cost of leverage as compared to expected operating net revenues, and general market conditions.

By operating on a leveraged basis, we expect to have more funds available for real estate investments and other purposes than if we operated on a nonleveraged basis, which we believe will allow us to acquire more investments than would otherwise be possible, resulting in a larger and more diversified portfolio. See “Risk Factors — Risks Related to Debt Financing” in our most recent Annual Report on Form 10-K for more information about the risks related to operating on a leveraged basis.

Distribution Policy

In order to qualify as a REIT, we must distribute to our stockholders at least 90% of our annual taxable income (excluding net capital gains and income from operations or sales through a taxable REIT subsidiary, or TRS). We intend to continue to make regular cash distributions to our stockholders out of our cash available for distribution, typically on a monthly basis. Our board of directors expects to determine the amount of distributions to be distributed to our stockholders on a quarterly basis. The board’s determination will be based on a number of factors, including funds available from operations, our capital expenditure requirements and the annual distribution requirements necessary to maintain our REIT qualification under the Internal Revenue Code of 1986, as amended, or the Code. As a result, our distribution rate and payment frequency may vary from time to time. Generally, our policy is to pay distributions from cash flow from operations. However, from the IPO through June 30, 2018, approximately 17.0% of our common stock distributions have been paid from sources other than cash flow from operations, such as from the proceeds of our equity offerings, sales of assets or borrowings, and we may continue to pay distributions from such sources as necessary.

REIT Status

As long as we maintain our qualification as a REIT, we generally will not be subject to federal income or excise tax on income that we currently distribute to our stockholders. Under the Code, a REIT is subject to numerous organizational and operational requirements, including a requirement that it annually distribute at least 90% of its REIT taxable income (determined without regard to the deduction for dividends paid and excluding net capital gain) to its stockholders. If we fail to maintain our qualification as a REIT in any year, our income will be subject to federal income tax at regular corporate rates, regardless of our distributions to stockholders, and we may be precluded from qualifying for treatment as a REIT for the four-year period immediately following the taxable year in which such failure occurs. Even if we qualify for treatment as a REIT, we may still be subject to state and local taxes on our income and property and to federal income and excise taxes on our undistributed income. Moreover, if we establish TRSs, such TRSs generally will be subject to federal income taxation and to various other taxes.

Restriction on Ownership and Transfer of Our Capital Stock

To assist us in maintaining our qualification as a REIT for federal income tax purposes, among other purposes, we impose restrictions on the ownership and transfer of our capital stock. Our charter provides that generally no person may own, or be deemed to own by virtue of the attribution provisions of the Code, either (1) more than 9.8% in value of our outstanding shares of capital stock, or (2) more than 9.8% in value or in number of shares, whichever is more restrictive, of our outstanding common stock. For purposes of this calculation, Warrants treated as held by a person will be deemed to be exercised. However, unless our board of directors decides to apply a different interpretation of our charter, Warrants held by other unrelated persons will not be deemed to have been exercised. In addition, the articles supplementary establishing and setting forth the rights, preferences and limitations of the Series B Redeemable Preferred Stock, or the Articles Supplementary, will provide that generally no person may own, or be deemed to own by virtue of the attribution provisions of the Code, more than 9.8% in value or in number of shares, whichever is more restrictive, of the outstanding Series B Redeemable Preferred Stock. Finally, unless waived by our board of directors, the Warrant Agreement will prohibit any person from beneficially or constructively owning more than 9.8% of our Warrants. Violations of this restriction are subject to provisions similar to those in our charter applicable to violations of our stock ownership limits as described above.

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The Offering

Series B Redeemable Preferred Stock offered by us    
    A maximum of 500,000 shares of Series B Redeemable Preferred Stock will be offered as part of the Units through our dealer manager in this offering on a reasonable best efforts basis.
    Ranking.  The Series B Redeemable Preferred Stock will rank, with respect to dividend rights and rights upon our liquidation, winding-up or dissolution:
   

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senior to all classes or series of our common stock, and to any other class or series of our capital stock issued in the future unless the terms of that capital stock expressly provide that it ranks senior to, or on parity with, the Series B Redeemable Preferred Stock;

   

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on parity with any class or series of our capital stock, the terms of which expressly provide that it will rank on parity with the Series B Redeemable Preferred Stock, including the Series A Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock; and

   

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junior to any other class or series of our capital stock, the terms of which expressly provide that it will rank senior to the Series B Redeemable Preferred Stock, none of which exists on the date hereof, and subject to payment of or provision for our debts and other liabilities.

    Stated Value.  Each share of Series B Redeemable Preferred Stock will have an initial “Stated Value” of $1,000, subject to appropriate adjustment in relation to certain events, such as recapitalizations, stock dividends, stock splits, stock combinations, reclassifications or similar events affecting our Series B Redeemable Preferred Stock, as set forth in the Articles Supplementary.
    Dividends.  Holders of Series B Redeemable Preferred Stock are entitled to receive, when and as authorized by our board of directors and declared by us out of legally available funds, cumulative cash dividends on each share of Series B Redeemable Preferred Stock at an annual rate of six percent (6%) of the Stated Value. Dividends on each share of Series B Redeemable Preferred Stock will begin accruing on, and will be cumulative from, the date of issuance. We expect to authorize and declare dividends on the Series B Redeemable Preferred Stock on a monthly basis, payable on the 5th day of the month to holders of record on the 25th day of the prior month (or if such day is not a business day, on the next succeeding business day, with the same force and effect as if made on such date), unless our results of operations, our general financing conditions, general economic conditions, applicable provisions of Maryland law or other factors make it imprudent to do so. The timing and amount of such dividends will be determined by our board of directors, in its sole discretion, and may vary from time to time.

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    Dividends will accrue and be paid on the basis of a 360-day year consisting of twelve 30-day months. Dividends on the Series B Redeemable Preferred Stock will accrue and be cumulative from the end of the most recent dividend period for which dividends have been paid, or if no dividends have been paid, from the date of issuance. Dividends on the Series B Redeemable Preferred Stock will accrue whether or not (i) we have earnings, (ii) there are funds legally available for the payment of such dividends and (iii) such dividends are authorized by our board of directors or declared by us. Accrued dividends on the Series B Redeemable Preferred Stock will not bear interest.
    Redemption at Option of Holders.  Beginning on the date of original issuance of the shares of Series B Redeemable Preferred Stock to be redeemed, holders will have the right to require the company to redeem such shares of Series B Redeemable Preferred Stock at a redemption price equal to the Stated Value, initially $1,000 per share, less a 13.0% redemption fee, plus an amount equal to any accrued but unpaid dividends.
    Beginning one year from the date of original issuance of the shares of Series B Redeemable Preferred Stock to be redeemed, holders will have the right to require the company to redeem such shares of Series B Redeemable Preferred Stock at a redemption price equal to the Stated Value, initially $1,000 per share, less a 10% redemption fee, plus an amount equal to any accrued but unpaid dividends.
    Beginning three years from the date of original issuance of the shares of Series B Redeemable Preferred Stock to be redeemed, holders will have the right to require the company to redeem such shares of Series B Redeemable Preferred Stock at a redemption price equal to the Stated Value, initially $1,000 per share, less a 5% redemption fee, plus an amount equal to any accrued but unpaid dividends.
    Beginning four years from the date of original issuance of the shares of Series B Redeemable Preferred Stock to be redeemed, holders will have the right to require the company to redeem such shares of Series B Redeemable Preferred Stock at a redemption price equal to the Stated Value, initially $1,000 per share, less a 3% redemption fee, plus an amount equal to any accrued but unpaid dividends.
    Beginning five years from the date of original issuance of the shares of Series B Redeemable Preferred Stock to be redeemed, holders will have the right to require the company to redeem such shares of Series B Redeemable Preferred Stock at a redemption price equal to 100% of the Stated Value, initially $1,000 per share, plus an amount equal to any accrued but unpaid dividends.
    If a holder of Series B Redeemable Preferred Stock causes the company to redeem such shares of Series B Redeemable Preferred Stock, we have the right, in our sole discretion, to pay the redemption price in cash or in equal value of shares of our Class A common stock, based on the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the redemption.

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    The terms of the holder redemption option are set forth in the articles supplementary for the Series B Redeemable Preferred Stock and cannot be modified, changed or suspended except by a vote of our common stockholders. However, our ability to redeem shares of Series B Redeemable Preferred Stock in cash may be limited to the extent that we do not have sufficient funds available to fund such cash redemption. Further, our obligation to redeem any of the shares of Series B Redeemable Preferred Stock submitted for redemption in cash may be restricted by Maryland law.
    Optional Redemption or Repurchase Following Death of a Holder.  Subject to restrictions, beginning on the date of original issuance and ending two years thereafter, we will redeem, and beginning on the second anniversary of the date of original issuance and ending three years thereafter, we will repurchase without payment of a repurchase fee, such shares of Series B Redeemable Preferred Stock of a holder who is a natural person upon his or her death at the written request of the holder’s estate at a redemption or repurchase price (as applicable) equal to the Stated Value, initially $1,000 per share, plus an amount equal to accrued and unpaid dividends thereon through and including the date of redemption or repurchase; provided, however, that our obligation to repurchase any of the shares of Series B Redeemable Preferred Stock is limited to the extent that the terms and provisions of any agreement to which we are a party prohibits such repurchase or provides that such repurchase would constitute a breach thereof or a default hereunder.
    If a holder of Series B Redeemable Preferred Stock, or a holder’s estate upon death of a holder, causes the company to redeem or repurchase (as applicable) such shares of Series B Redeemable Preferred Stock, we have the right, in our sole discretion, to pay the redemption or repurchase price in cash or in equal value of shares of our Class A common stock, based on the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the date of redemption or repurchase, in exchange for the Series B Redeemable Preferred Stock.
    Our ability to redeem or repurchase shares of Series B Redeemable Preferred Stock in cash may be limited to the extent that we do not have sufficient funds available to fund such cash redemption or repurchase. Our obligation to redeem or repurchase any of the shares of Series B Redeemable Preferred Stock submitted for redemption or repurchase in cash may be further restricted by Maryland law.
    Optional Redemption by the Company.  After two years from the date of original issuance of the shares of Series B Redeemable Preferred Stock to be redeemed, we will have the right (but not the obligation) to redeem such shares of Series B Redeemable Preferred Stock at 100% of the Stated Value, initially $1,000 per share, plus an amount equal to any accrued but unpaid dividends. If we choose to redeem any shares of Series B Redeemable Preferred Stock, we have the right, in our sole discretion, to pay the redemption price in cash or in equal value of shares of our Class A common stock, based on the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the redemption, in exchange for the Series B Redeemable Preferred Stock.

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    Change of Control Redemption by the Company.  Upon the occurrence of a Change of Control (as defined below), we will be required to redeem all outstanding shares of the Series B Redeemable Preferred Stock in whole within 60 days after the first date on which such Change of Control occurred, in cash at a redemption price of $1,000 per share, plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date. If the Maryland law solvency tests prohibit us from paying the full redemption price in cash, then we will pay such portion as would otherwise violate the solvency tests in shares of our Class A common stock to holders on a pro rata basis, based on the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the redemption. Further, our obligation to redeem any of the shares of Series B Redeemable Preferred Stock in cash may be restricted by Maryland law.
    A “Change of Control” is when, after the initial issuance of the Series B Redeemable Preferred Stock, any of the following has occurred and is continuing:
   

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a “person” or “group” within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than our company, its subsidiaries, and its and their employee benefit plans, has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of our common equity representing more than 50% of the total voting power of all outstanding shares of our common equity that are entitled to vote generally in the election of directors, with the exception of the formation of a holding company;

   

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consummation of any share exchange, consolidation or merger of our company or any other transaction or series of transactions pursuant to which our Class A common stock will be converted into cash, securities or other property, (1) other than any such transaction where the shares of our Class A common stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the common stock of the surviving person or any direct or indirect parent company of the surviving person immediately after giving effect to such transaction, and (2) expressly excluding any such transaction preceded by our company’s acquisition of the capital stock of another company for cash, securities or other property, whether directly or indirectly through one of our subsidiaries, as a precursor to such transaction; or

   

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Continuing Directors cease to constitute at least a majority of our board of directors;

    “Continuing Director” means a director who either was a member of our board of directors on February 24, 2016 or who becomes a member of our board of directors subsequent to that date and whose appointment, election or nomination for election by our stockholders was duly approved by a majority of the continuing directors on our board of directors at the time of such approval, either by a specific

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    vote or by approval of the proxy statement issued by our company on behalf of our board of directors in which such individual is named as nominee for director.
    Liquidation Preference.  Upon any voluntary or involuntary liquidation, dissolution or winding-up of our affairs, before any distribution or payment shall be made to holders of our Class A common stock or any other class or series of capital stock ranking junior to our shares of Series B Redeemable Preferred Stock, the holders of shares of Series B Redeemable Preferred Stock will be entitled to be paid out of our assets legally available for distribution to our stockholders, after payment or provision for our debts and other liabilities, a liquidation preference equal to the Stated Value per share, plus an amount equal to accrued but unpaid dividends, pari passu with the holders of shares of any other class or series of our capital stock ranking on parity with the Series B Redeemable Preferred Stock, including the Series A Preferred Stock, the Series C Preferred Stock, and the Series D Preferred Stock, as to the liquidation preference and/or accrued but unpaid dividends they are entitled to receive.
    Voting Rights.  The Series B Redeemable Preferred Stock has no voting rights, except as described in the Cetera Side Letter (as hereinafter defined). See “Description of Series B Redeemable Preferred Stock — Cetera Side Letter” in this prospectus supplement.
Warrants offered by us    
    A maximum offering of Warrants to purchase up to 10,000,000 shares of our Class A common stock will be offered as part of the Units through our dealer manager in this offering on a reasonable best efforts basis.
    The Warrants will be exercisable beginning one year from the date of original issuance and ending four years from the date of such issuance. No Warrant may be exercised if it would cause the holder to beneficially or constructively own more than 9.8%, in number or value, whichever is more restrictive, of our outstanding shares of common stock, or more than 9.8% in value of our outstanding capital stock.
    The initial exercise price will be at a 20% premium to the current market price per share of our Class A common stock on the date of issuance of the Warrant, subject to a minimum exercise price of $10.00 per share. The current market price will be determined using the weighted average price of the previous 20 days of trading volume.
Estimated use of proceeds    
    Assuming the maximum offering, we estimate that we will receive net proceeds from the sale of Units in this offering of approximately $442.5 million after deducting estimated offering expenses, including selling commissions and the dealer manager fee, payable by us of approximately $57.5 million. We intend to use the net proceeds from this offering for future investments and acquisitions and for other general corporate and working capital purposes, which may include the funding of capital improvements at properties. See “Estimated Use of Proceeds.”

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NYSE American (formerly NYSE MKT) symbol for Class A common stock, Series A Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock    
    Our Class A common stock, Series A Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock are listed on the NYSE American under the trading symbols “BRG,” “BRG-PrA,” “BRG-PrC,” and “BRG-PrD,” respectively. There is no established public trading market for the offered shares of Series B Redeemable Preferred Stock or the Warrants and we do not expect a market to develop. We do not intend to apply for a listing of the Series B Redeemable Preferred Stock or the Warrants on any national securities exchange.

Capital Structure

The Series B Redeemable Preferred Stock ranks senior to our Class A common stock, and pari passu with our Series A Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock, with respect to both payment of dividends and distribution of amounts upon liquidation. Our board of directors has the authority to issue shares of additional classes or series of preferred stock that could be senior in priority to the Series B Redeemable Preferred Stock.

Covered Security

The term “covered security” applies to securities exempt from state registration because of their oversight by federal authorities and national-level regulatory bodies pursuant to Section 18 of the Securities Act of 1933, as amended, or the Securities Act. Generally, securities listed on national exchanges are the most common type of covered security exempt from state registration. A non-traded security also can be a covered security if it has a seniority greater than or equal to other securities from the same issuer that are listed on a national exchange, such as the NYSE American. Our Series B Redeemable Preferred Stock is a covered security because it is senior to our Class A common stock and therefore is exempt from state registration. Although the Warrants are not “covered securities,” most states include an exemption for warrants that are exercisable into a listed security. Therefore, the Warrants are subject to state registration in any state that does not provide such an exemption and this offering must be registered under the securities regulations of such states in order to sell the Warrants in these states.

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There are several advantages to both issuers and investors of a security being deemed a covered security. These include:

More Investors — Covered securities can be purchased by a broader range of investors than can non-covered securities. Non-covered securities are subject to suitability requirements that vary from state to state. These so-called “Blue Sky” regulations often prohibit the sale of securities to certain investors and may prohibit the sale of securities altogether until a specific volume of sales have been achieved in other states.
Issuance Costs — Covered securities may have lower issuance costs since they avoid the expense of dealing with the various regulations of each of the 50 states and Washington, D.C. This could save time and money and allows issuers of covered securities the flexibility to enter the real estate markets at a time of their choosing. All of our investors would benefit from any lower issuance costs that may be achieved.

There are several disadvantages to investors of a security being deemed a covered security. These include:

Lack of Suitability Standards — Since there are no investor eligibility requirements, there is no prohibition on the sale of the securities to certain investors, including investors that may not be suitable to purchase the securities.
No State Review — Investors will not receive an additional level of review and possible protection afforded by the various state regulators.

Corporate Information

We were incorporated on July 25, 2008 under the laws of the State of Maryland for the purpose of raising capital and acquiring a diverse portfolio of residential real estate assets. Our principal executive offices are located at 712 Fifth Avenue, 9th Floor, New York, New York 10019. Our telephone number is (212) 843-1601. Our internet address is www.bluerockresidential.com. Our internet website and the information contained therein or connected thereto do not constitute a part of this prospectus supplement or any amendment or supplement thereto.

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RISK FACTORS

Investing in our securities involves significant risks. Before purchasing the securities offered by this prospectus supplement and the accompanying prospectus, you should carefully consider the risks, uncertainties and additional information (i) set forth in our most recent Annual Report on Form 10-K, any of our subsequent Quarterly Reports on Form 10-Q and any of our Current Reports on Form 8-K and amendments thereto on Form 8-K/A, as applicable, which are incorporated, or deemed to be incorporated, by reference into this prospectus supplement and the accompanying prospectus, and in the other documents and information incorporated by reference in this prospectus supplement and the accompanying prospectus, and (ii) contained in this prospectus supplement. For a description of these reports and documents, and information about where you can find them, see “Where You Can Find More Information” and “Incorporation of Certain Documents By Reference.” The risks and uncertainties in the documents and information incorporated by reference in this prospectus supplement and the accompanying prospectus are those that we currently believe may materially affect the company. Additional risks not presently known or that are currently deemed immaterial also could materially and adversely affect our financial condition, results of operations, business and prospects. Some statements in this prospectus supplement and the accompanying prospectus, including statements in the following risk factors, constitute forward-looking statements. Please refer to the section entitled “Cautionary Note Regarding Forward-Looking Statements.”

There is no public market for our Series B Redeemable Preferred Stock or Warrants and we do not expect one to develop.

There is no public market for our Series B Redeemable Preferred Stock or Warrants offered in this offering, and we currently have no plan to list these securities on a securities exchange or to include these shares for quotation on any national securities market. Additionally, our charter contains restrictions on the ownership and transfer of our securities, including our Series B Redeemable Preferred Stock, and these restrictions may inhibit your ability to sell the Series B Redeemable Preferred Stock or Warrants promptly or at all. Furthermore, the Warrants will expire four years from the date of issuance. If you are able to sell the Series B Redeemable Preferred Stock or Warrants, you may only be able to sell them at a substantial discount from the price you paid. Therefore, you should purchase the Units only as a long-term investment. After one year from the date of issuance, the Warrants will be exercisable at your option for shares of our Class A common stock, which currently are publicly traded on the NYSE American. Beginning two years from the date of original issuance we may redeem, and immediately upon issuance, the holder of shares of Series B Redeemable Preferred Stock may require us to redeem, such shares, with the redemption price payable, in our sole discretion, in cash or in equal value of shares of our Class A common stock, based on the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the redemption. If we opt to pay the redemption price in shares of our Class A common stock, you may receive publicly traded shares as we currently expect to continue listing our Class A common stock on the NYSE American.

The Series B Redeemable Preferred Stock has not been rated.

We have not sought to obtain a rating for the Series B Redeemable Preferred Stock. No assurance can be given, however, that one or more rating agencies might not independently determine to issue such a rating or that such a rating, if issued, would not adversely affect the market price of the Series B Redeemable Preferred Stock. In addition, we may elect in the future to obtain a rating of the Series B Redeemable Preferred Stock, which could adversely impact the market price of the Series B Redeemable Preferred Stock. Ratings only reflect the views of the rating agency or agencies issuing the ratings and such ratings could be revised downward, placed on negative outlook or withdrawn entirely at the discretion of the issuing rating agency if in its judgment circumstances so warrant. While ratings do not reflect market prices or the suitability of a security for a particular investor, such downward revision or withdrawal of a rating could have an adverse effect on the market price of the Series B Redeemable Preferred Stock. It is also possible that the Series B Redeemable Preferred Stock will never be rated.

Dividend payments on the Series B Redeemable Preferred Stock are not guaranteed.

Although dividends on the Series B Redeemable Preferred Stock are cumulative, our board of directors must approve the actual payment of the dividends. Our board of directors can elect at any time or from time

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to time, and for an indefinite duration, not to pay any or all accrued dividends. Our board of directors could do so for any reason, and may be prohibited from paying dividends in the following instances:

we have poor historical or projected cash flows;
we need to make payments on our indebtedness;
the board concludes that payment of distributions on the Series B Redeemable Preferred Stock would cause us to breach the terms of any indebtedness or other instrument or agreement; or
the board determines that the payment of dividends would violate applicable law regarding unlawful distributions to stockholders.

We intend to use the net proceeds from this offering to fund future investments and for other general corporate and working capital purposes, but this offering is not conditioned upon the closing of properties in our current pipeline and we will have broad discretion to determine alternative uses of proceeds.

As described under “Estimated Use of Proceeds,” we intend to use a portion of the net proceeds from this offering to fund future investments and for other general corporate and working capital purposes. However, this offering will not be conditioned upon the closing of definitive agreements to acquire or invest in any properties. We will have broad discretion in the application of the net proceeds from this offering, and holders of our Series B Redeemable Preferred Stock will not have the opportunity as part of their investment decision to assess whether the net proceeds are being used appropriately. Because of the number and variability of factors that will determine our use of the net proceeds from this offering, their ultimate use may vary substantially from their currently intended use, and result in investments that are not accretive to our results from operations.

Because we conduct substantially all of our operations through our operating partnership, our ability to pay dividends on our Series B Redeemable Preferred Stock depends almost entirely on the distributions we receive from our operating partnership. We may not be able to pay dividends regularly.

We may not be able to pay dividends on a regular monthly basis in the future. We intend to contribute the entire net proceeds from this offering to our operating partnership in exchange for Series B Redeemable Preferred Units that have substantially the same economic terms as the Series B Redeemable Preferred Stock. Because we conduct substantially all of our operations through our operating partnership, our ability to pay dividends on the Series B Redeemable Preferred Stock will depend almost entirely on payments and distributions we receive on our interests in our operating partnership. If our operating partnership fails to operate profitably and to generate sufficient cash from operations (and the operations of its subsidiaries), we may not be able to pay dividends on the Series B Redeemable Preferred Stock. Furthermore, any new shares of preferred stock on parity with the Series B Redeemable Preferred Stock will substantially increase the cash required to continue to pay cash dividends at stated levels. Any common stock or preferred stock that may be issued in the future to finance acquisitions, upon exercise of stock options or otherwise, would have a similar effect.

Your interests could be diluted by the incurrence of additional debt, the issuance of additional shares of preferred stock, including additional shares of Series B Redeemable Preferred Stock, and by other transactions.

As of June 30, 2018, our total long term indebtedness was approximately $1,084 million, and we may incur significant additional debt in the future. The Series B Redeemable Preferred Stock is subordinate to all of our existing and future debt and liabilities and those of our subsidiaries. Our future debt may include restrictions on our ability to pay dividends to preferred stockholders in the event of a default under the debt facilities or under other circumstances. Our charter currently authorizes the issuance of up to 250,000,000 shares of preferred stock in one or more classes or series, and as of the date of this prospectus supplement, we have issued 5,721,460 shares of Series A Preferred Stock, 272,998 shares of Series B Redeemable Preferred Stock, 2,323,750 shares of Series C Preferred Stock, and 2,850,602 shares of Series D Preferred Stock. The issuance of additional preferred stock on parity with or senior to the Series B Redeemable Preferred Stock would dilute the interests of the holders of shares of Series B Preferred Stock,

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and any issuance of preferred stock senior to the Series B Redeemable Preferred Stock or of additional indebtedness could affect our ability to pay dividends on, redeem or pay the liquidation preference on the Series B Redeemable Preferred Stock. We may issue preferred stock on parity with the Series B Redeemable Preferred Stock without the consent of the holders of the Series B Redeemable Preferred Stock. None of the provisions relating to the Series B Redeemable Preferred Stock relate to or limit our indebtedness or afford the holders of shares of Series B Redeemable Preferred Stock protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets or business, that might adversely affect the holders of shares of Series B Redeemable Preferred Stock.

We will be required to terminate this offering if our Class A common stock is no longer listed on the NYSE American or another national securities exchange.

The Series B Redeemable Preferred Stock is a “covered security” and therefore is not subject to registration under the state securities, or “Blue Sky,” regulations in the various states in which it may be sold due to its seniority to our Class A common stock, which is listed on the NYSE American. If our Class A common stock is no longer listed on the NYSE American or another appropriate exchange, we will be required to register this offering in any state in which we subsequently offer the Units. This would require the termination of this offering and could result in our raising an amount of gross proceeds that is substantially less than the amount of the gross proceeds we expect to raise if the maximum offering is sold. This would reduce our ability to make additional investments and limit the diversification of our portfolio.

Although the Warrants are not “covered securities,” most states include an exemption from securities registration for warrants that are exercisable into a listed security. Therefore, the Warrants are subject to state securities registration in any state that does not provide such an exemption and this offering must be registered in order to sell the Warrants in these states.

There may not be a broad market for our Class A common stock, which may cause our Class A common stock to trade at a discount and make it difficult for you to sell the Class A common stock for which your Warrants are exercisable and for which your Series B Redeemable Preferred Stock may be redeemable at our option.

Our Class A common stock for which the Warrants are exercisable trades on the NYSE American under the symbol “BRG.” Listing on the NYSE American or another national securities exchange does not ensure an actual or active market for our Class A common stock. Historically, our Class A common stock has had a low trading volume. Accordingly, an actual or active market for our Class A common stock may not be maintained, the market for our Class A common stock may not be liquid, the holders of our Class A common stock may be unable to sell their shares of our Class A common stock, and the prices that may be obtained following the sale of our Class A common stock upon the exercise of your Warrants or the redemption of your Series B Redeemable Preferred Stock may not reflect the underlying value of our assets and business.

Shares of Series B Redeemable Preferred Stock may be redeemed for shares of our Class A common stock, which rank junior to the Series B Redeemable Preferred Stock with respect to dividends and upon liquidation.

The holders of shares of Series B Redeemable Preferred Stock may require us to redeem such shares, with the redemption price payable, in our sole discretion, in cash or in equal value of shares of our Class A common stock, based on the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the redemption. We may opt to pay the redemption price in shares of our Class A common stock. The rights of the holders of shares of Series B Redeemable Preferred Stock, our Series A Preferred Stock, our Series C Preferred Stock and our Series D Preferred Stock rank senior to the rights of the holders of shares of our common stock as to dividends and payments upon liquidation. Unless full cumulative dividends on our shares of Series B Redeemable Preferred Stock, our Series A Preferred Stock, our Series C Preferred Stock and our Series D Preferred Stock for all past dividend periods have been declared and paid (or set apart for payment), we will not declare or pay dividends with respect to any shares of our Class A common stock for any period. Upon liquidation, dissolution or winding up of our company, the holders of shares of our Series B Redeemable Preferred Stock are entitled to receive a liquidation preference of Stated Value, $1,000 per share, plus an amount equal to all accrued but unpaid dividends, and holders of shares of

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our Series A Preferred Stock, our Series C Preferred Stock and our Series D Preferred Stock are entitled to receive a liquidation preference of $25.00 per share, plus an amount equal to all accrued and unpaid dividends, prior and in preference to any distribution to the holders of shares of our Class A common stock or any other class of our equity securities.

In the event you exercise your option to redeem Series B Redeemable Preferred Stock, we may redeem your shares of Series B Redeemable Preferred Stock either for cash, or for shares of our Class A common stock, or any combination thereof, in our sole discretion.

If we choose to so redeem for Class A common stock, you will receive shares of our Class A common stock and therefore be subject to the risks of ownership thereof, including, but not limited to, the following:

Market risk;
Dividend risk;
Interest rate risk; and/or
Risks associated with our operations.

Please see our Annual Report on Form 10-K filed on March 13, 2018, which is incorporated herein by reference, for a list of risks associated with our company, our operations and ownership of our Class A common stock. Ownership of our Series B Redeemable Preferred Stock will not give you the rights of holders of our common stock. Until and unless you receive shares of our Class A common stock upon redemption, you will have only those rights applicable to holders of our Series B Redeemable Preferred Stock.

The Series B Redeemable Preferred Stock will bear a risk of early redemption by us.

Beginning two years after the issuance date, we may voluntarily redeem some or all of the outstanding shares of Series B Redeemable Preferred Stock, for cash or equal value of shares of our Class A common stock, at 100% of the Stated Value per share, plus an amount equal to any accrued and unpaid dividends. Any such redemptions may occur at a time that is unfavorable to holders of the Series B Redeemable Preferred Stock. We may have an incentive to redeem the Series B Redeemable Preferred Stock voluntarily if market conditions allow us to issue other preferred stock or debt securities at an interest or distribution rate that is lower than the distribution rate on the Series B Redeemable Preferred Stock. Given the potential for early redemption of the Series B Redeemable Preferred Stock, holders of such shares may face an increased reinvestment risk, which is the risk that the return on an investment purchased with proceeds from the sale or redemption of the Series B Redeemable Preferred Stock may be lower than the return previously obtained from the investment in such shares.

Holders of Series B Redeemable Preferred Stock should not expect us to redeem all or any such shares on the date they first become redeemable or on any particular date after they become redeemable.

Except in limited circumstances related to our ability to qualify as a REIT or a special optional redemption in connection with a Change of Control, shares of Series B Redeemable Preferred Stock may be redeemed by us at our option, either in whole or in part, only on or after two years from the issuance date. Any decision we make at any time to propose a redemption of any such shares of Series B Redeemable Preferred Stock will depend upon, among other things, our evaluation of our capital position and general market conditions at the time. It is likely that we would choose to exercise our optional redemption right only when prevailing interest rates have declined, which would adversely affect the ability of holders of shares of the applicable series of preferred stock to reinvest proceeds from the redemption in a comparable investment with an equal or greater yield to the yield on such series of preferred stock had their shares not been redeemed. In addition, there is no penalty or premium payable on redemption, and the market price of the shares of Series B Redeemable Preferred Stock may not exceed the liquidation preference at the time the shares become redeemable for any reason.

Our requirement to redeem the Series B Redeemable Preferred Stock in the event of a Change of Control may deter a change of control transaction otherwise in your best interest.

The mandatory redemption in connection with a Change of Control feature of the Series B Redeemable Preferred Stock may have the effect of inhibiting a third party from making an acquisition proposal for the

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company, or of delaying, deferring or preventing a change of control of the company under circumstances that otherwise could provide the holders of our Class A common stock and Series B Redeemable Preferred Stock with the opportunity for liquidity or the opportunity to realize a premium over the then-current market price or that stockholders may otherwise believe is in their best interests.

The cash distributions you receive may be less frequent or lower in amount than you expect.

Our board of directors will determine the amount and timing of distributions on our Series B Redeemable Preferred Stock. In making this determination, our directors will consider all relevant factors, including the amount of cash available for distribution, capital expenditure and reserve requirements, general operational requirements and the requirements necessary to maintain our REIT qualification. We cannot assure you that we will consistently be able to generate sufficient available cash flow to fund distributions on our Series B Redeemable Preferred Stock, nor can we assure you that sufficient cash will be available to make distributions to you. We cannot predict the amount of distributions you may receive and we may be unable to pay, maintain or increase distributions over time. Our inability to acquire additional properties or make real estate-related investments or operate profitably may have a negative effect on our ability to generate sufficient cash flow from operations to pay distributions on our Series B Redeemable Preferred Stock.

Subject to the Cetera Side Letter, upon the sale of any individual property, holders of Series B Redeemable Preferred Stock do not have a priority over holders of our common stock regarding return of capital.

Subject to the Cetera Side Letter, holders of our Series B Redeemable Preferred Stock do not have a right to receive a return of capital prior to holders of our common stock upon the individual sale of a property. To provide protection to the holders of the Series B Redeemable Preferred Stock, our Cetera Side Letter restricts us from selling an asset if the sale would cause us to fail to meet a dividend coverage ratio of no less than 1.1:1 based on the ratio of our adjusted funds from operations to dividends required to be paid to holders of our Series A, Series B, Series C and Series D Preferred Stock for the two most recent quarters, subject to our ability to maintain status as a REIT for federal income tax purposes, as further described in this prospectus supplement. Subject to the provisions of the Cetera Side Letter and depending on the price at which such property is sold, it is possible that holders of our common stock will receive a return of capital prior to the holders of our Series B Redeemable Preferred Stock being redeemed, provided that any accrued but unpaid dividends have been paid in full to holders of Series B Redeemable Preferred Stock.

We established the offering price for the Units pursuant to negotiations among us and our affiliated dealer manager; as a result, the actual value of your investment may be substantially less than what you pay.

The selling price of the Units has been determined pursuant to negotiations among us and the dealer manager, which is an affiliate of Bluerock, based upon the following primary factors: the economic conditions in and future prospects for the industry in which we compete; our prospects for future earnings; an assessment of our management; the present state of our development; the prevailing conditions of the equity securities markets at the time of this offering; the present state of the market for non-traded REIT securities; and current market valuations of public companies considered comparable to our company. Because the offering price is not based upon any independent valuation, the offering price is not indicative of the proceeds that you would receive upon liquidation.

Your percentage of ownership may become diluted if we issue new shares of stock or other securities, and issuances of additional preferred stock or other securities by us may further subordinate the rights of the holders of our Class A common stock (which you may become upon receipt of redemption payments in shares of our Class A common stock, conversion of any of your shares of Series B Redeemable Preferred Stock or exercise of any of your Warrants).

We may make redemption payments under the terms of the Series B Redeemable Preferred Stock in shares of our Class A common stock. Although the dollar amounts of such payments are unknown, the number of shares to be issued in connection with such payments may fluctuate based on the price of our Class A common stock. Any sales or perceived sales in the public market of shares of our Class A common stock issuable upon such redemption payments could adversely affect prevailing market prices of shares of our Class A common stock. The issuance of shares of our Class A common stock upon such redemption payments

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also may have the effect of reducing our net income per share (or increasing our net loss per share). In addition, the existence of Series B Redeemable Preferred Stock may encourage short selling by market participants because the existence of redemption payments could depress the market price of shares of our Class A common stock.

Our board of directors is authorized, without stockholder approval, to cause us to issue additional shares of our Class A common stock or to raise capital through the issuance of additional preferred stock (including equity or debt securities convertible into preferred stock), options, warrants and other rights, on such terms and for such consideration as our board of directors in its sole discretion may determine. Any such issuance could result in dilution of the equity of our stockholders. Our board of directors may, in its sole discretion, authorize us to issue common stock or other equity or debt securities to persons from whom we purchase apartment communities, as part or all of the purchase price of the community. Our board of directors, in its sole discretion, may determine the value of any common stock or other equity or debt securities issued in consideration of apartment communities or services provided, or to be provided, to us.

Our charter also authorizes our board of directors, without stockholder approval, to designate and issue one or more classes or series of preferred stock in addition to the Series B Redeemable Preferred Stock offered in this offering (including equity or debt securities convertible into preferred stock) and to set or change the voting, conversion or other rights, preferences, restrictions, limitations as to dividends or other distributions and qualifications or terms or conditions of redemption of each class or series of shares so issued. If any additional preferred stock is publicly offered, the terms and conditions of such preferred stock (including any equity or debt securities convertible into preferred stock) will be set forth in a registration statement registering the issuance of such preferred stock or equity or debt securities convertible into preferred stock. Because our board of directors has the power to establish the preferences and rights of each class or series of preferred stock, it may afford the holders of any series or class of preferred stock preferences, powers, and rights senior to the rights of holders of common stock or the Series B Redeemable Preferred Stock. If we ever create and issue additional preferred stock or equity or debt securities convertible into preferred stock with a distribution preference over common stock or the Series B Redeemable Preferred Stock, payment of any distribution preferences of such new outstanding preferred stock would reduce the amount of funds available for the payment of distributions on our common stock and our Series B Redeemable Preferred Stock. Further, holders of preferred stock are normally entitled to receive a preference payment if we liquidate, dissolve, or wind up before any payment is made to the common stockholders, likely reducing the amount common stockholders would otherwise receive upon such an occurrence. In addition, under certain circumstances, the issuance of additional preferred stock may delay, prevent, render more difficult or tend to discourage a merger, tender offer, or proxy contest, the assumption of control by a holder of a large block of our securities, or the removal of incumbent management.

Stockholders have no rights to buy additional shares of stock or other securities if we issue new shares of stock or other securities. We may issue common stock, convertible debt or preferred stock pursuant to a subsequent public offering or a private placement, or to sellers of properties we directly or indirectly acquire instead of, or in addition to, cash consideration. Investors purchasing Units in this offering who do not participate in any future stock issuances will experience dilution in the percentage of the issued and outstanding stock they own. In addition, depending on the terms and pricing of any additional offerings and the value of our investments, you also may experience dilution in the book value and fair market value of, and the amount of distributions paid on, your shares of Series B Redeemable Preferred Stock and common stock, if any.

Our ability to redeem shares of Series B Redeemable Preferred Stock may be limited by Maryland law.

Under Maryland law, a corporation may redeem stock as long as, after giving effect to the redemption, the corporation is able to pay its debts as they become due in the usual course (the equity solvency test) and its total assets exceed the sum of its total liabilities plus, unless its charter permits otherwise, the amount that would be needed, if the corporation were to be dissolved at the time of the redemption, to satisfy the preferential rights upon dissolution of stockholders when preferential rights on dissolution are superior to those whose stock is being redeemed (the balance sheet solvency test). If the company is insolvent at any time when a redemption of shares of Series B Redeemable Preferred Stock is required to be made, the company may not be able to effect such redemption, either in cash or in shares of Class A common stock.

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Our charter, the articles supplementary establishing the Series B Redeemable Preferred Stock, and the Warrant Agreement each contain restrictions upon ownership and transfer of the Series B Redeemable Preferred Stock and the Warrants, which may impair the ability of holders to acquire the Series B Redeemable Preferred Stock, the Warrants and the shares of our Class A common stock upon exercise of the Warrants and into which shares of Series B Redeemable Preferred Stock may be converted, at the company’s option.

Our charter, the articles supplementary establishing the Series B Redeemable Preferred Stock, and the Warrant Agreement each contain restrictions on ownership and transfer of the Series B Redeemable Preferred Stock and the Warrants intended to assist us in maintaining our qualification as a REIT for federal income tax purposes. For example, to assist us in qualifying as a REIT, the articles supplementary establishing the Series B Redeemable Preferred Stock will prohibit anyone from owning, or being deemed to own by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding Series B Redeemable Preferred Stock. See “Description of the Series B Redeemable Preferred Stock — Restrictions on Ownership and Transfer” in this prospectus supplement. Additionally, the Warrant Agreement prohibits any person from beneficially or constructively owning more than 9.8% of our Warrants, and provides that Warrants may not be exercised to the extent such exercise would result in the holder’s beneficial or constructive ownership of more than 9.8%, in number or value, whichever is more restrictive, of our outstanding shares of common stock, or more than 9.8% in value of our outstanding capital stock. You should consider these ownership limitations prior to your purchase of the Units. The restrictions could also have anti-takeover effects and could reduce the possibility that a third party will attempt to acquire control of us, which could adversely affect the market price of the Series B Redeemable Preferred Stock.

There is a risk of delay in our redemption of the Series B Redeemable Preferred Stock, and we may fail to redeem such securities as required by their terms.

Substantially all of the investments we presently hold and the investments we expect to acquire in the future are, and will be, illiquid. The illiquidity of our investments may make it difficult for us to obtain cash quickly if a need arises. If we are unable to obtain sufficient liquidity prior to a redemption date, we may be forced to engage in a partial redemption or to delay a required redemption. If such a partial redemption or delay were to occur, the market price of shares of the Series B Redeemable Preferred Stock might be adversely affected, and stockholders entitled to a redemption payment may not receive payment.

Holders of the Series B Redeemable Preferred Stock will be subject to inflation risk.

Inflation is the reduction in the purchasing power of money resulting from the increase in the price of goods and services. Inflation risk is the risk that the inflation-adjusted, or “real,” value of an investment in preferred stock or the income from that investment will be worth less in the future. As inflation occurs, the real value of the Series B Redeemable Preferred Stock and dividends payable on such shares declines.

Holders of the Series B Redeemable Preferred Stock have no control over changes in our policies and operations, and have very limited voting rights.

Our board of directors determines our major policies, including with regard to investment objectives, financing, growth, debt capitalization, REIT qualification and distributions. Our board of directors may amend or revise these and other policies without a vote of the stockholders.

In addition, holders of shares of our Series B Redeemable Preferred Stock have no voting rights under our charter, and otherwise have no voting rights except as set forth in the Cetera Side Letter. Pursuant to the Cetera Side Letter, holders of shares of Series B Redeemable Preferred Stock have voting rights only in certain limited circumstances, voting together as a single class with the holders of preferred stock (i) ranking on parity with the Series B Redeemable Preferred Stock with respect to dividend rights and rights upon our liquidation, dissolution or winding up, and (ii) upon which voting rights have been conferred (such holders, together with holders of shares of Series B Redeemable Preferred Stock, the Parity Holders). The Parity Holders currently include the holders of Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock. The affirmative vote of a majority of the votes cast by the Parity Holders, voting together as

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a single class, is required to approve (a) the authorization, creation or issuance, or an increase in the number of authorized or issued shares of, any class or series of our capital stock ranking senior to the Series A Preferred Stock, Series B Redeemable Preferred Stock, Series C Preferred Stock, or Series D Preferred Stock with respect to dividend rights and rights upon our liquidation, dissolution or winding up (any such senior stock, the “Senior Stock”), (b) the reclassification of any of our authorized capital stock into Senior Stock, or (c) the creation, authorization or issuance of any obligation or security convertible into, or evidencing the right to purchase, Senior Stock. Other than in these limited circumstances, holders of Series B Redeemable Preferred Stock have no voting rights. See “Description of Series B Redeemable Preferred Stock — Cetera Side Letter” in this prospectus supplement.

We may have conflicts of interest with our affiliates, which could result in investment decisions that are not in the best interests of our stockholders.

There are numerous conflicts of interest between our interests and the interests of Bluerock and its affiliates, including conflicts arising out of allocation of personnel to our activities, allocation of investment opportunities between us and investment vehicles affiliated with Bluerock, and purchase or sale of apartment properties, including from or to Bluerock or its affiliates. Examples of these potential conflicts of interest include:

Bluerock owns a significant portion of our voting common stock on a fully diluted basis, which could give Bluerock the ability to control the outcome of matters submitted for stockholder approval and allow Bluerock to exert significant influence over our company in a manner that may not be in the best interests of our other stockholders;
Competition for the time and services of personnel that work for us and our affiliates;
The possibility that our officers and their respective affiliates will face conflicts of interest relating to the purchase and leasing of properties, and that such conflicts may not be resolved in our favor, thus potentially limiting our investment opportunities, impairing our ability to make distributions and adversely affecting the trading price of our stock;
The possibility that if we acquire properties from Bluerock or its affiliates, the price may be higher than we would pay if the transaction were the result of arm’s-length negotiations with a third party;
The possibility that conflicts of interest may arise between BR-NPT Springing Entity, LLC, or NPT, as a holder of OP Units, and our stockholders with respect to a reduction of indebtedness of our operating partnership, which could have adverse tax consequences to certain members of NPT thereby making those transactions less desirable to NPT, which will continue to be managed by a Bluerock affiliate;
The possibility that the competing demands for the time of our officers may result in them spending insufficient time on our business, which may result in our missing investment opportunities or having less efficient operations, which could reduce our profitability and result in lower distributions to you; and
Many of our investments have been made through joint venture arrangements with affiliates of our former Manager (in addition to unaffiliated third parties), which arrangements were not the result of arm’s-length negotiations of the type normally conducted between unrelated co-venturers, and which could result in a disproportionate benefit to affiliates of our former Manager.

Any of these and other conflicts of interest could have a material adverse effect on the returns on our investments, our ability to make distributions to stockholders and the trading price of our stock.

Employee Benefit Plan Risks

If you fail to meet the fiduciary and other standards under ERISA or the Code as a result of an investment in our stock, you could be subject to liability and penalties.

Special considerations apply to the purchase of stock or holding of Warrants by employee benefit plans subject to the fiduciary rules of Title I of ERISA, including pension or profit sharing plans and entities that hold assets of such ERISA Plans, and plans and accounts that are subject to the prohibited transaction rules of

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Section 4975 of the Code, including IRAs, Keogh Plans, and medical savings accounts (collectively, we refer to ERISA Plans and plans subject to Section 4975 of the Code as “Benefit Plans”). If you are investing the assets of any Benefit Plan, you should satisfy yourself that:

your investment is consistent with your fiduciary obligations under ERISA and the Code;
your investment is made in accordance with the documents and instruments governing the Benefit Plan, including the Benefit Plan’s investment policy;
your investment satisfies the prudence and diversification requirements of Sections 404(a)(1)(B) and 404(a)(1)(C) of ERISA, if applicable, and other applicable provisions of ERISA and the Code;
your investment will not impair the liquidity of the Benefit Plan;
your investment will not produce UBTI for the Benefit Plan;
you will be able to value the assets of the plan annually in accordance with ERISA requirements and applicable provisions of the Benefit Plan; and
your investment will not constitute a non-exempt prohibited transaction under Section 406 of ERISA or Section 4975 of the Code.

Fiduciaries may be held personally liable under ERISA for losses as a result of failure to satisfy the fiduciary standards of conduct and other applicable requirements of ERISA. In addition, if an investment in our stock or holding of Warrants constitutes a non-exempt prohibited transaction under ERISA or the Code, the fiduciary of the plan who authorized or directed the investment may be subject to imposition of excise taxes with respect to the amount invested and an IRA investing in the stock may lose its tax exempt status.

Plans that are not subject to ERISA or the prohibited transactions of the Code, such as government plans or church plans, may be subject to similar requirements under state law or other federal law. Such plans should satisfy themselves that the investment satisfies applicable law. We have not, and will not, evaluate whether an investment in our stock or holding of Warrants is suitable for any particular plan.

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ESTIMATED USE OF PROCEEDS

The table below sets forth our estimated use of proceeds from this offering, assuming we sell the maximum of 500,000 Units in this offering at the public offering price of $1,000 per Unit for maximum gross offering proceeds of $500 million.

The Series B Redeemable Preferred Stock and Warrants will be sold in Units, with each Unit consisting of (i) one share of Series B Redeemable Preferred Stock with an initial Stated Value of $1,000 per share, and (ii) one Warrant to purchase 20 shares of our Class A common stock, exercisable by the holder at an exercise price at a 20% premium to the current market price per share of our Class A common stock determined using the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the date of issuance of such Warrant, subject to a minimum exercise price of $10.00 per share (subject to adjustment). Each Unit will be sold at a public offering price of $1,000 per Unit. Units will not be issued or certificated. The shares of Series B Redeemable Preferred Stock and Warrants are immediately detachable and will be issued separately.

Estimated Application of Proceeds of this Offering

   
  Maximum Offering
     Amount   Percent
Gross offering proceeds   $ 500,000,000       100.00
Offering expenses:
                 
Selling commissions(1)   $ 35,000,000       7.00
Dealer manager fee(1)   $ 15,000,000       3.00
Other offering expenses(2)   $ 7,500,000       1.50
Amount available for investment(3)   $ 442,500,000       88.50
Cash down payment (equity)   $ 418,500,000       83.70
Acquisition expenses   $ 19,000,000       3.80
Working capital reserve   $ 5,000,000       1.00
Proceeds invested   $ 442,500,000       88.50
Offering expenses   $ 57,500,000       11.50
Total application of proceeds   $ 500,000,000       100.00

(1) Assumes selling commissions equal to 7.0% of gross offering proceeds and a dealer manager fee of 3.0% of gross offering proceeds in the offering under this prospectus supplement. A portion of selling commissions and/or of the dealer manager fee may be reallowed to participating broker-dealers. See the “Plan of Distribution” section of this prospectus supplement for a description of these commissions and fees. We or our affiliates also may provide permissible forms of non-cash compensation to registered representatives of our dealer manager and the participating broker-dealers, including gifts. In no event shall such gifts exceed an aggregate value of $100 per annum per participating salesperson, or be pre-conditioned on achievement of a sales target. The value of such items will be considered underwriting compensation in connection with this offering, and the corresponding payments of our dealer manager fee will be reduced by the aggregate value of such items. The aggregate combined selling commissions, dealer manager fee and such non-cash compensation for this offering will not exceed FINRA’s 10.0% cap. Our dealer manager will repay to the company any excess payments made to our dealer manager over FINRA’s 10.0% cap if this offering is abruptly terminated before reaching the maximum amount of offering proceeds.
(2) Includes all expenses (other than selling commissions and the dealer manager fee) to be paid by us or on our behalf in connection with the qualification and registration of this offering and the marketing and distribution of the Units, including, without limitation, expenses for printing and amending registration statements or supplementing prospectuses, mailing and distributing costs, all advertising and marketing expenses (including costs incurred for travel, meals and lodging for our employees to attend retail seminars hosted by broker-dealers or bona fide training or educational meetings hosted by us), charges of transfer agents, registrars and experts and fees, expenses and taxes related to the filing, registration and qualification, as necessary, of the sale of the Units under federal and state laws, including taxes and fees and accountants’ and attorneys’ fees. We do not expect such offering expenses to exceed 1.5% of gross

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offering proceeds, though the amount of such expenses may exceed the expected amount, as long as said expenses would not cause the cumulative selling commissions, dealer manager fee and issuer organization and offering expenses paid by us to exceed 15.0% of gross offering proceeds. All organization and offering expenses, including selling commissions and the dealer manager fee, are not expected to exceed 11.5% of the aggregate gross proceeds of this offering, though the amount of such expenses may exceed the expected amount.
(3) Although the net proceeds are expected to be used in connection with the acquisition of multifamily properties and other real estate-related investments and the payment of fees and expenses related thereto, the proceeds are available for our other capital needs, whether related to the repayment of debt or otherwise. For purposes of this table, however, we have assumed that we will use all the net proceeds for acquisitions of real property and other real estate-related investments and the payment of related fees and expenses. Until required in connection with the acquisition of real property, other real estate-related investments or other capital needs, we intend to invest the net proceeds of this offering in interest-bearing, short-term investment-grade securities, money-market accounts or other investments that will not adversely affect our ability to qualify, or maintain our qualification, as a REIT. Both gross and net proceeds do not include any amounts received by us in connection with any exercise of the Warrants.

Assuming the maximum offering, we estimate that we will receive net proceeds from the sale of our Units in this offering of approximately $442.5 million, after deducting estimated offering expenses, including selling commissions and the dealer manager fee, payable by us of approximately $57.5 million. Both gross and net proceeds do not include any amounts received by us in connection with any exercise of the Warrants.

We will contribute the net proceeds of this offering to our operating partnership in exchange for Series B Redeemable Preferred Units (as defined herein).

We intend to use the net proceeds of this offering for future acquisitions, investments in properties, and other general corporate and working capital purposes, which may include the funding of capital improvements at our properties.

We generally intend to use prudent amounts of leverage in making our investments (including investments in properties in our investment pipeline), which we define as having total indebtedness of approximately 65% of the fair market value of all of our investments. We invest primarily through controlling positions in joint ventures with members of our network.

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DISTRIBUTION POLICY

We intend to continue to qualify as a REIT for federal income tax purposes. The Code generally requires that a REIT annually distribute at least 90% of its REIT taxable income, determined without regard to the deduction for dividends paid and excluding any net capital gain, and imposes tax on any taxable income retained by a REIT, including capital gains.

To satisfy the requirements for qualification as a REIT and generally not be subject to federal income and excise tax, we intend to continue to make regular monthly distributions of all or substantially all of our REIT taxable income, determined without regard to dividends paid, to our stockholders out of assets legally available for such purposes. All future distributions will be determined at the sole discretion of our board of directors on a quarterly basis.

Holders of shares of our Class A common stock will be entitled to receive cash dividends when, as and if authorized by our board of directors and declared by us.

Subject to the preferential rights of the holders of any class or series of our capital stock ranking senior to the Series B Redeemable Preferred Stock with respect to priority of dividend payments, holders of shares of the Series B Redeemable Preferred Stock are entitled to receive, when and as authorized by our board of directors and declared by us out of legally available funds, cumulative cash dividends on each share of Series B Redeemable Preferred Stock at an annual rate of six percent (6%) of the initial stated value of $1,000 per share, or the Stated Value. Dividends on each share of Series B Redeemable Preferred Stock will begin accruing on, and will be cumulative from, the date of issuance or the end of the most recent dividend period for which dividends on the Series B Redeemable Preferred Stock have been paid, payable monthly in arrears on the 5th day of each month to holders of record on the 25th day of the prior month.

Subject to the preferential rights of the holders of any class or series of our capital stock ranking senior to the Series A Preferred Stock with respect to priority of dividend payments, holders of shares of the Series A Preferred Stock will be entitled to receive cumulative cash dividends on the Series A Preferred Stock when, as and if authorized by our board of directors and declared by us from and including the date of original issue or the end of the most recent dividend period for which dividends on the Series A Preferred Stock have been paid, payable quarterly in arrears on each January 5th, April 5 th, July 5th and October 5th of each year, commencing on January 5, 2016. From the date of original issue to, but not including, October 21, 2022, we will pay dividends on the Series A Preferred Stock at the rate of 8.250% per annum of the $25.00 liquidation preference per share (equivalent to the fixed annual amount of $2.0625 per share), or the Series A Initial Rate. Commencing October 21, 2022, we will pay cumulative cash dividends on the Series A Preferred Stock at an annual dividend rate of the Series A Initial Rate increased by 2.0% of the liquidation preference per annum, which will increase by an additional 2.0% of the liquidation preference per annum on each subsequent anniversary thereafter, subject to a maximum annual dividend rate of 14.0%.

Subject to the preferential rights of the holders of any class or series of our capital stock ranking senior to the Series C Preferred Stock with respect to priority of dividend payments, holders of shares of the Series C Preferred Stock are entitled to receive cumulative cash dividends on the Series C Preferred Stock when, as and if authorized by our board of directors and declared by us from and including the date of original issue or the first day following the end of the most recent dividend period for which dividends on the Series C Preferred Stock have been paid, payable quarterly in arrears on each January 5th, April 5th, July 5th and October 5th of each year. Holders of shares of Series C Preferred Stock will not be entitled to receive dividends paid on any dividend payment date if such shares were not issued and outstanding on the record date for such dividend. From the date of original issue to, but not including, July 19, 2023, we will pay cumulative cash dividends at the rate of 7.625% per annum of the $25.00 liquidation preference per share of the Series C Preferred Stock (equivalent to the fixed annual amount of $1.90625 per share of the Series C Preferred Stock), or the Series C Initial Rate. Commencing July 19, 2023, we will pay cumulative cash dividends at an annual dividend rate of the Series C Initial Rate increased by 2.0% of the liquidation preference per annum, or $0.50 per annum, which will increase by an additional 2.0% of the liquidation preference per annum, or $0.50 per annum, on each subsequent anniversary thereafter, subject to a maximum annual dividend rate of 14.0%.

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Subject to the preferential rights of the holders of any class or series of our capital stock ranking senior to the Series D Preferred Stock with respect to priority of dividend payments, holders of shares of the Series D Preferred Stock are entitled to receive cumulative cash dividends on the Series D Preferred Stock when, as and if authorized by our board of directors and declared by us from and including the date of original issue or the first day following the end of the most recent dividend period for which dividends on the Series D Preferred Stock have been paid, payable quarterly in arrears on each January 5th, April 5th, July 5th and October 5th of each year, commencing on January 5, 2017. Holders of shares of Series D Preferred Stock will not be entitled to receive dividends paid on any dividend payment date if such shares were not issued and outstanding on the record date for such dividend. From the date of original issue, we will pay cumulative cash dividends at the rate of 7.125% per annum of the $25.00 liquidation preference per share of the Series D Preferred Stock (equivalent to the fixed annual amount of $1.78125 per share of the Series D Preferred Stock).

When determining the amount of future distributions, we expect that our board of directors will consider, among other factors, (i) the amount of cash generated from our operating activities, (ii) our expectations of future cash flows, (iii) our determination of near-term cash needs for acquisitions of new properties, general property capital improvements and debt repayments, (iv) our ability to continue to access additional sources of capital, (v) the requirements of Maryland law, (vi) the amount required to be distributed to maintain our status as a REIT and to reduce any income and excise taxes that we otherwise would be required to pay and (vii) any limitations on our distributions contained in our credit or other agreements.

We cannot assure you that we will generate sufficient cash flows to make distributions to our stockholders, or that we will be able to sustain those distributions. If our operations do not generate sufficient cash flow to allow us to satisfy the REIT distribution requirements, we may be required to fund distributions from working capital, borrow funds, sell assets, make a taxable distribution of our equity or debt securities, or reduce such distributions. In addition, while we have no intention to do so, prior to the time we have fully invested the net proceeds of this offering, we may fund our distributions out of the net proceeds of this offering, which could adversely impact our results of operations. Our distribution policy enables us to review the alternative funding sources available to us from time to time. Our actual results of operations will be affected by a number of factors, including the revenues we receive from our properties, our operating expenses, interest expense, the ability of our tenants to meet their obligations and unanticipated expenditures. For more information regarding risk factors that could materially adversely affect our actual results of operations, please see “Risk Factors.”

Since our IPO on April 2, 2014 through June 30, 2018, we have paid total common stock distributions of $88.8 million and incurred a cumulative net loss attributable to common stockholders of $87.8 million.

Following our IPO through December 20, 2017, we declared monthly cash distributions on our common stock on a forward, quarterly basis (i.e., for each of the three months of the applicable quarter), with each monthly distribution payable to each common stockholder of record on the 5th day of the following month. On December 20, 2017, we announced a revised distribution policy for our common stock, and set an annual dividend rate of $0.65 per common share. Since December 20, 2017, we have declared quarterly cash distributions on our common stock on a forward, quarterly basis (i.e., for each of the three months of the applicable quarter), with each quarterly distribution payable to each common stockholder of record on the 5th day of the month following quarter-end. Since our IPO on April 2, 2014 through September 30, 2018, we have declared the following cash distributions (expressed on a quarterly basis) on our common stock:

   
    Cash Distributions
Declared per Share of
Common Stock
2014     Second Quarter     $ 0.29  
       Third Quarter       0.29  
       Fourth Quarter       0.29  
2015     First Quarter     $ 0.29  
       Second Quarter       0.29  
       Third Quarter       0.29  
       Fourth Quarter       0.29  

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    Cash Distributions
Declared per Share of
Common Stock
2016     First Quarter     $ 0.29  
       Second Quarter       0.29  
       Third Quarter       0.29  
       Fourth Quarter       0.29  
2017     First Quarter     $ 0.29  
       Second Quarter       0.29  
       Third Quarter       0.29  
       Fourth Quarter       0.29  
2018     First Quarter     $ 0.1625  
       Second Quarter       0.1625  
       Third Quarter       0.1625  

For income tax purposes, dividends to common and preferred stockholders are characterized as ordinary income, capital gains, or as a return of a stockholder’s invested capital. We will furnish annually to each of our stockholders a statement setting forth distributions paid during the preceding year and their characterization as ordinary income, return of capital qualified dividend income or capital gain.

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OUR INDUSTRY AND MARKET OPPORTUNITY

We believe that there will be continued strong apartment demand in the foreseeable future, primarily due to large demographic trends, including the Millennial generation of 86 million entering prime rental age through 2030, likely forming more households than the Baby Boomers and the Gen-Xers. As one data point, new research from the National Multifamily Housing Council (the “NMHC”) indicates that approximately 4.6 million new rental units will be needed to meet projected demand by 2030, and that current construction trends indicate that only 3 million new units will be delivered. See “Demand Overview.”

We believe that a significant amount of institutional capital and public REITs are primarily focused on investing in the “big six gateway markets” of Boston, New York, Washington, D.C., Seattle, San Francisco, and Los Angeles, and that many other primary markets are underinvested by institutional/public capital. As a result, we believe that the top 40 primary markets below the gateway markets, including our target markets, provide the opportunity to source investments at cap rates that are at significant premiums to the gateway markets, and have the potential to provide not only significant current income, but also attractive capital appreciation.

We further believe that a number of our target growth markets are underserved by newer Class A apartment properties with a significant portion of the nation’s apartment stock built prior to 1980, especially as the wave of Millennials moves into its prime rental years over the upcoming decade. We also believe that apartment construction deliveries are peaking, and that rising construction costs will limit oversupply in the near term. As such, we believe there is opportunity in our target markets for development and/or redevelopment to deliver Class A product and capture premium rental rates and enhance value.

We believe that as financial buyers who entered the market following the recent U.S. recession to take advantage of historical spreads between higher acquisition cap rates and lower, long-term financing interest rates enter their disposition periods, the next phase of the cycle provides opportunity for real estate-centric buyers (i.e., buyers who have real estate-specific investment expertise and deep intellectual capital in specific markets) to create value using proven real estate investment strategies.

In addition, we believe that as the economy enters an environment of more traditional (i.e., higher) interest rate levels, private purchasers with greater capital constraints who have needed significant leverage to fund acquisitions will become less competitive, which would provide the opportunity to acquire apartment communities from owners who do not have sufficient capital resources to execute their business plans.

Demand Overview

We believe that demographic forces indicate robust apartment demand in the foreseeable future due to a variety of factors, including demand from the growing Millennial population which has a high propensity to rent, large pent-up demand from young adults living at home or with roommates, the historically low homeownership rate, home purchase affordability issues, and overall preferences for rentals following the housing crisis experienced during the Great Recession.

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4.6 Million New Units Needed by 2030. According to the NMHC report, U.S. Apartment Demand – A Forward Look, approximately 4.6 million new rental units will be needed by 2030, while current construction trends portend approximately 3 million deliveries by 2030.

[GRAPHIC MISSING]

Source: National Multifamily Housing Council, May 2017

The NMHC report further indicates that in order to keep up with demand, the U.S. will need to add an average of over 328,000 new apartment homes each year. By comparison, the industry averaged just 225,000 completions annually from 2011 to 2016.

Pent-up Demand from Young Adults Living with their Parents is Projected to Drive Additional Renter Households. The chart below illustrates the significant increase in young adults living with their parents or in college dormitories since 2005. As expected, this upward trend is just starting to reverse as employment gains due to continued economic expansion enable these young adults to form their own households, the majority of which are likely to be renter households. The continued and more widespread reversal of this trend is expected to spur additional apartment demand.

[GRAPHIC MISSING]

Source: Marcus and Millichap, The Apartment Outlook, Midyear 2018

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The 20-44 Year-Old Cohort Has a High Propensity to Rent. The prime renter age range is the 20-34 year old range where a majority of households choose to rent. While all age cohorts have increased their rentership rate since home ownership peaked in the early 2000s, the chart below shows that the younger cohorts experienced the largest declines in home ownership since that time.

[GRAPHIC MISSING]

Source: BTIG Equity Research, October 4, 2018

Housing Affordability Concerns Expected to Constrain the Homeownership Rate and Push Demand for New Renters. The nation’s homeownership rate remains at historically low levels at 64.3%, below the 20 year average of 66.6%. We believe this is a systemic change for the foreseeable future and very significant as a 1% change in the rate is equivalent to approximately 1.2 million households. Despite a mild uptick in the rate in 2018 to 64.3%, we believe the rate is likely to remain near current levels or perhaps decline due to increased demand as described above, and the supply and cost challenges described below.

[GRAPHIC MISSING]

Source: Federal Reserve Bank of St. Louis, Economic Research Division, as of April 2018

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In fact, projections from the NMHC May 2017 report anticipate a homeownership rate decline to 60.5% through 2030.

[GRAPHIC MISSING]

Source: National Multifamily Housing Council, May 2017

An Increase in the Homeownership Rate is Further Challenged by the Rapid Increase in Home Prices in the Economic Recovery Period since the Great Recession. The national Case-Schiller Housing Price Index indicates that housing prices have increased over 40% nationally since 2011.

[GRAPHIC MISSING]

Source: Federal Reserve Bank of St. Louis, Economic Research Division, as of July 2018

With recently rising mortgage rates, the NMHC chart shows the significant increase in the cost of ownership. In fact, despite significantly higher rental rates, recent housing price increases have increased the cost of owning relative to renting back to 2005 levels. Data from the NMHC indicates that owning a median-priced home in the U.S. currently carries a premium of more than $400 per month relative to renting the median-priced apartment.

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[GRAPHIC MISSING]

Source: National Multifamily Housing Council Market Trends - August 13, 2018

Supply Overview

While we believe demand for apartments will remain strong in the coming years, we also believe the supply of new units, which has increased in recent years, will be tempered and revert to historical levels for several reasons, including a decline in permits and higher residential constructions costs.

Overall Housing Shortfall Continues. Multifamily completions have increased in recent years in response to tremendous apartment demand; however, single-family completions remain low. This is notable as total housing completions are still below the historical average despite a higher current U.S. population. We believe current annual multifamily deliveries, which are estimated at approximately 400,000 in 2018, slightly above historical averages closer to 300,000, are partially filling the single-family supply gap and do not necessarily reflect any apartment oversupply.

[GRAPHIC MISSING]

Source: Freddie Mac 2018 Mid-year Outlook

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Further evidence of this is illustrated in the chart below, showing that the combined single-family and multifamily completions currently approximate the annual household growth, but supply has fallen short in recent years.

[GRAPHIC MISSING]

Source: Marcus and Millichap, The Apartment Outlook, Midyear 2018

Furthermore, when analyzing data from the NMHC comparing historical permits, starts, and completions of housing construction, it appears that permits peaked in 2015, and are declining. Thus, as we would expect, this is beginning to be reflected in the decline of starts. Completions, however, generally lag 2-3 years behind permits, and thus have not yet begun to reflect this downward trend. We believe that completions are peaking in 2018 and 2019, and will commence a modest decline consistent with the decline already seen in permits and starts.

[GRAPHIC MISSING]

Source: National Multifamily Housing Council Market Trends - August 13, 2018

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Residential Construction Costs are Spiking. The differences between permits and deliveries may increase in the coming years due to rising construction costs. Residential construction costs, including materials and labor, are rising at approximately 6.4% annually since 2017, increasing the likelihood that many permitted projects may be abandoned in the near term. This further supports the conclusion that deliveries may be peaking.

[GRAPHIC MISSING]

Source: National Association of Home Builders, Eye on Housing, May 2018

Rental and Occupancy Rate Trends

The preceding supply and demand analysis and prognosis is well documented in apartment market data and projections. Absorption has been strong in the recovery since the Great Recession, leading to high and increasing occupancies and steadily rising rental rates.

Robust Absorption. The chart below shows annual absorption near 300,000 units since 2014. This absorption has tightened the rental market, which has stabilized in 2017 and 2018 given new supply in-line with this new demand.

[GRAPHIC MISSING]

Projected High Occupancy and Increasing Rental Rates. Given the stabilization and possible decline of new supply and continued robust demand, Axiometrics projects an effective rent increase of approximately

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16%, and an average occupancy rate of 94.75% through 2023. We believe that overall, these conditions and projections are favorable for the apartment sector.

[GRAPHIC MISSING]

Source: Axiometrics, Q3 2018 Quarterly National Trend Report

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OUR BUSINESS AND PROPERTIES

Overview of Our Business Objectives and Strategy

We were formed in 2008 as a Maryland corporation and have elected to be taxed as a REIT for federal income tax purposes beginning with our taxable year ended December 31, 2010. On October 31, 2017, we became an internally-managed REIT as a result of the completion of the management internalization transactions (the “Internalization”) described below under “Management Internalization.” Prior to completing the Internalization, we were externally managed by the former Manager.

Our company’s strategy is to acquire and develop a portfolio of highly amenitized, institutional-quality live/work/play apartment communities in knowledge-economy growth markets across the United States, targeting the high disposable income renter by choice. We utilize three key investment strategies — Value-Add, Opportunistic and Invest-to-Own — to drive growth in funds from operations and net asset value at our properties, in order to maximize returns to our investors.

We invest primarily through controlling positions (generally 90%) in joint ventures with our network of some of the largest and leading private regional apartment owner/operators across the nation, which we believes enhances our ability to access proprietary off market transactions, and to deliver best-in-class execution of our investment strategies across multiple markets.

As of the date of this prospectus supplement, our portfolio consisted of interests in forty-three properties, comprised of thirty-two consolidated operating properties and eleven properties held through preferred equity and mezzanine loan investments. Of the property interests held through preferred equity and mezzanine loan investments, two are under development, seven are in lease-up and two properties are stabilized. The forty-three properties contain an aggregate of 13,574 units, comprised of 10,774 consolidated operating units and 2,800 units held through preferred equity and mezzanine loan investments. As of June 30, 2018, these properties, exclusive of our development properties, were approximately 94% occupied.

We are an affiliate of Bluerock, a leading alternative asset manager which has transacted over nine million square feet of residential and commercial real estate acquisitions since its inception in 2002. Bluerock’s key principals have an average of over 27 years of investing experience, have been involved with acquiring over 50 million square feet of real estate with approximately $13 billion in value and have helped launch leading real estate private and public company platforms. Our senior executive officers have extensive experience investing in and developing multifamily real estate through several real estate and credit cycles, which we believe provide us and our stockholders a competitive advantage in sourcing, evaluating, underwriting and managing attractive investment opportunities.

Our board of directors has delegated to our executive management team the authority to approve any Investment Transaction involving an equity investment of less than ten percent (10%) of the sum of (i) our Existing and Contributed Stockholders’ Equity, and (ii) our New Stockholders’ Equity calculated as a static calculation without regard to proration of issuances (as each such capitalized term is defined below) (such sum, collectively, “Company Equity”) at the time of consideration. Our board of directors has delegated to our investment committee the authority to approve any Investment Transaction involving an equity investment equal to or in excess of ten percent (10%) and up to ten percent (10%) of Company Equity at the time of the Investment Committee’s consideration.

For purposes of calculating Company Equity, “Existing and Contributed Stockholders’ Equity” means (a) the net proceeds from (or equity value assigned to) all issuances of the company’s equity and equity equivalent securities (including Class A common stock; shares of Class A common stock issuable pursuant to outstanding rights, options or warrants to subscribe for, purchase or otherwise acquire shares of Class A common stock that are in-the-money on such date (“Common Stock Equivalents”); preferred stock; and units of limited partnership interest in the Operating Partnership) since inception (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), less (b) any amount that the company has paid to repurchase the company’s Class A common stock since inception. Existing and Contributed Stockholders’ Equity also excludes (1) any unrealized gains and losses and other non-cash items (including depreciation and amortization) that have impacted stockholders’ equity as reported in the company’s financial statements prepared in accordance with GAAP, and (2) one-time events pursuant to changes in GAAP, and

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certain non-cash items not otherwise described above, in each case after discussions between the company’s executive management and the company’s independent directors and approval by a majority of the independent directors.

For purposes of calculating Company Equity, “New Stockholders’ Equity” means (a) the sum of (1) the net proceeds from (or equity value assigned to) all issuances of the company’s equity and equity equivalent securities (including Class A common stock; Common Stock Equivalents; preferred stock; and units of limited partnership interest in the Operating Partnership) in the company’s initial public offering in April 2014 (the “IPO”) or any subsequent offering (allocated on a pro rata daily basis for such issuances during the fiscal quarter of any such issuance), plus (2) the company’s retained earnings at the end of the most recently completed calendar quarter (without taking into account any non-cash equity compensation expense incurred in current or prior periods), less (b) any amount that the company has paid to repurchase the company’s Class A common stock issued in the IPO or any subsequent offering. New Stockholders’ Equity also excludes (1) any unrealized gains and losses and other non-cash items (including depreciation and amortization) that have impacted stockholders’ equity as reported in the company’s financial statements prepared in accordance with GAAP, and (2) one-time events pursuant to changes in GAAP, and certain non-cash items not otherwise described above, in each case after discussions between the company’s executive management and the company’s independent directors and approval by a majority of the independent directors.

While it is not our intention to engage in affiliated purchase and sale transactions, we may engage in co-investments with affiliated funds in connection with our Invest-to-Own structure to the extent that our Audit Committee approves such transactions under our related party transactions policy, and to the extent that such co-investments, in the aggregate, do not exceed more than 10% of our aggregate equity investments.

Our Target Markets

We focus on demographically attractive growth markets, which we define as markets characterized by growing population and job growth. Employment growth is highly correlated with apartment demand; therefore, we believe that selecting markets with job growth significantly above the national average will provide high potential for increase rental demand leading to revenue growth and attractive risk-adjusted returns. Year over year change in employment growth in many of our current and target markets exceeded 2.8% for the year ended July 2018, as compared to the national average for year over year change in employment growth of 1.7% according the Bureau of Labor Statistics.

[GRAPHIC MISSING]

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We select and continuously evaluate our target markets through an analysis of detailed demographic data at both the market and submarket levels, which may include the following;

- Strong Economic Drivers.  Economic base characterized by growth industries and jobs of the future such as health care and technology leading to short- and long-term employment growth, relatively low housing affordability and low rent to income ratios allowing for significant future rent increases.
- Favorable Business Climate.  Regulatory conditions that attract, retain, and foster job growth and new business development including lower tax rates and right to work states.
- Robust Infrastructure.  Growing economic base driven by the presence of technology centers, major colleges and universities, health care, trade, next-generation high value-add manufacturing, government industries, and modern transportation facilities and networks.
- Renter Demographics.  The presence of a young, educated workforce with a high population of renters by choice.
- High Quality of Life.  Areas with abundant recreation, leisure, cultural, and entertainment options and plentiful social opportunities including ample recreation, open space and vibrant downtowns, which foster population retention and growth.

Within our target markets, we focus on submarkets where members of our network have established relationships, transaction history, market knowledge and potential access to off-market investments, as well as an ability to efficiently direct property management and leasing operations.

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Our Network Strategy

We believe some of the most important elements in successful investing in multifamily real estate is the ability to access an attractive proprietary deal flow, deep intellectual capital in the local market to enable appropriate underwriting, and the operational expertise to provide best-in-class execution of the investment strategy. To accomplish the above, we invest primarily through controlling positions (generally 90%) in joint ventures with members of our network of some of the largest and leading private regional apartment owner/operators across the nation, which generally bring the following attributes to our relationship to augment the likelihood of success of an investment:

- Deep relationship capital in order to generate proprietary, often off-market relationship-based transactions. To illustrate this advantage, and based on conversations with members of our network, the transaction activity for the top four members of our network is projected to exceed $4 billion in 2018.
- Deep intellectual capital and track record of success in order to deliver best-in-class underwriting of the transaction. To illustrate this depth of intellectual capital, the top five members of our network own and/or operate more than 150,000 units, which provides us with a continuous source of proprietary information flow.
- Extensive operational infrastructure. This enables us to deliver best-in-class execution across multiple investment strategies and across multiple markets without the cost and logistical burdens to continuously maintain our own infrastructure across markets and strategies.
- Substantial capital to invest alongside us (generally 10% of the equity). This enables us to ensure the interests of members of our network are aligned with ours in terms of delivering returns for our investors, as compared to simply being fee managers. Notwithstanding the investments of each member of our network, we expect to maintain substantial control over these ventures, including over strategic decision-making.

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To date, our network has included some of the leading apartment owner/operators in the nation, including:

- Carroll Organization is a privately held owner and operator of multifamily real estate with approximately 32,000 units owned and operated and $5 billion in assets under management. In 2017, Carroll was ranked in the top 50 property managers in the U.S.
- Tribridge Residential is a full-service multifamily investment, management, and development company with over 16,500 units and $1 billion in assets under management. With 65 corporate professionals and 335 on-site staff, the firm focuses on markets in the Southeast and provides a vertically-integrated platform with a 20+ year track record through its subsidiaries and affiliates.
- Bell Partners is the 15th largest apartment manager in the United States by the NMHC, with approximately 58,000 units under management and with a portfolio valued at more than $5 billion.
- CWS Capital Partners is a fully integrated real estate investment management company with over 26,000 units under management and a total capitalization in excess of $4 billion.
- Trammell Crow Residential is a premier multifamily real estate company — the only national group with more than 35 years of experience in residential development and asset management. Since 1977, Dallas-based Trammell Crow Residential has developed more than 250,000 units in major markets.
- F&B Capital, LLC is an opportunistic real estate sponsor actively pursuing multifamily opportunities in Austin, Dallas, Houston, Denver, Ohio and Kentucky. Founded in 2002 by Jason Berkowitz and Hank Farrell III, F&B has acquired more than $1.5 billion in assets and manages more than 25,000 units in Central Texas through its affiliate Roscoe Properties, Inc.

All rankings provided by the National Multi Housing Council, 2017.

We will generally seek regional members of our network who have the ability to provide property management services. In our experience, regional members of our network as co-investors in the property can provide superior management execution than would be available from disinterested third party management companies. Our asset management team will then work with members of our network to oversee the implementation of each asset’s business plan, including budgeting, capital expenditures, tenant improvements and financial performance.

Management Internalization

On August 4, 2017, we and our former Manager announced that the parties had entered into a Contribution and Sale Agreement (as amended by that certain Amendment No. 1 thereto, dated August 9, 2017), or the Contribution Agreement, and other definitive agreements providing for our acquisition of a newly-formed entity to own the assets used by the former Manager in its performance of the management functions then provided to us pursuant to the Management Agreement, or the Internalization.

On October 31, 2017, we completed the Internalization pursuant to the Contribution Agreement for total consideration of approximately $41.24 million, as determined pursuant to a formula established in the Management Agreement at the time of our IPO in April 2014. Upon completion of the Internalization, our current management and investment teams, who were previously employed by an affiliate of our former Manager, became employed by our indirect subsidiary, and we become an internally managed real estate investment trust. In order to further align the interests of our management with those of our stockholders, payment of the aggregate Internalization consideration was paid 99.9% in equity: we caused the Operating Partnership to issue an aggregate of 3,753,593 OP Units, and we issued an aggregate of 76,603 shares of a newly reclassified Class C common stock and paid an aggregate of approximately $40,794 in cash to the applicable Contributor and its affiliates and related persons in connection with the Internalization.

Following the Internalization, our senior management team continues to oversee, manage and operate the company, and we are no longer externally managed by our former Manager. As an internally managed company, we no longer pay the former Manager any fees or expense reimbursements arising from the Management Agreement. For additional information regarding the Internalization, please see our Current

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Report on Form 8-K filed on August 4, 2017, our Current Report on Form 8-K filed on August 15, 2017, our Definitive Proxy Statement filed on September 5, 2017, our Current Report on Form 8-K filed on November 6, 2017, and our Quarterly Report on Form 10-Q filed on November 8, 2017, each of which are incorporated by reference herein.

Our Competitive Strengths

We believe that our principals’ competitive strengths will enable us to generate attractive risk-adjusted returns for our stockholders. These strengths include the following:

Experienced and Well-Known Investment Team with Significant Expertise.  Our key principals have been involved with sourcing, structuring and acquiring over 50 million square feet of real estate, with approximately $13 billion in value, and have an average of over 27 years of experience during three major market cycles. We believe our key principals have significant value-added expertise in the following areas:

Expertise in the Apartment Asset Class Across Our Target Markets.  Our principals have significant experience structuring and investing in apartment properties in our target markets through multiple investment cycles with successful results, which provides them the breadth and depth of operating and investment experience to steer our investment strategy;
Expertise in Creating Value Across Our Investment Strategies and Various Capital Structures.  Our principals have substantial experience executing transactions and creating value across our Value-Add, Opportunistic and Invest-to-Own investment strategies, and across capital structures — equity, preferred equity, and mezzanine — which provides us substantial flexibility to create value in transactions, subject to maintaining our qualification as a REIT;
Expertise in Corporate and Portfolio Transactions to Create Value.  Our principals have executed large corporate and portfolio transactions, including the rollup of assets to create multiple public companies, the creation of multiple asset management platforms, and the purchase of distressed assets and/or companies out of bankruptcy, demonstrating a sophisticated structuring capability and an ability to execute complex capital markets transactions, which we believe will assist us in our goal to grow our company and to deliver attractive risk-adjusted returns to our stockholders; and
Expertise in Financing and Structuring Transactions.  Our investment team has substantial expertise with structuring and financing transactions, which enables us to continuously evaluate and effectively access the most efficient capital structure for apartment acquisitions. In addition, our investment team has extensive experience structuring development transactions with members of our network to capture significant value while minimizing inherent risks and/or guarantees associated with such transactions.

Our Network.  We invest primarily through controlling positions in joint ventures with members of our network, which allows us to draw on the collective market knowledge of some of the leading private apartment owner/operators in the nation who invest alongside us in transactions, in order to source, underwrite, and execute attractive transactions. We believe our network provides us access to a substantial, often proprietary, transaction pipeline, along with an institutional-quality infrastructure and ability to execute, in our target markets without the cost and logistical burdens associated with maintaining our own infrastructure and pipeline in these markets.

Disciplined ‘Broad and Deep’ Underwriting.  By leveraging our network, we are able to execute a rigorous double underwriting process, which we believe improves our ability to evaluate risk and create value in our transactions. As a first level, our team of investment professionals implement a disciplined underwriting and due diligence process, including a comprehensive risk-reward analysis with a rigorous focus on relative values among potential opportunities across our target markets. At the same time, members of our network conduct their own underwriting and due diligence for potential transactions, enabling us to leverage their depth of intellectual capital and experience acquired through decades of experience in their target markets. We believe this ability to review investment opportunities with both depth (in the target market) and breadth (across target markets) improves our ability to source and execute attractive transactions.

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Scalable Operating Model.  Our relationships enable us to tap into what we believe to be the substantial, often proprietary, transaction flow of our network, allowing for a rapid deployment of available capital. Our extensive network provides us the ability to scale our operations rapidly, enabling us to allocate or reallocate capital across multiple target markets and along multiple strategies, and to rapidly invest in or divest of properties without the time delay associated with building infrastructure across multiple markets, and without burdening us with excessive operating and overhead costs.

Strong Alignment of Interests.  Bluerock, our senior executives and our directors, along with their affiliates, collectively will own approximately 24.6% of our company on a fully diluted basis, which we believe creates a strong alignment of their interests with those of our stockholders. In addition, prior to the Internalization, for every calendar quarter beginning with the fourth quarter of 2014 through the third quarter of 2017, the company paid 100% of the former Manager’s fees in LTIP Units, further strengthening the alignment of interest with our stockholders.

Internally Managed REIT.  On October 31, 2017, we became an internally-managed REIT as a result of the completion of the management internalization transactions (the “Internalization”) described above under “Management Internalization.” The Internalization has provided us with a full complement of experienced personnel with expertise in investment, capital markets, asset management, finance, legal and administrative functions, with unique knowledge of our assets, business strategies and investment pipeline.

Our Business and Growth Strategies

Our principal business objective is to generate attractive risk-adjusted investment returns by assembling portfolio of Class A apartment properties located in growth markets targeting the renter by choice, and by implementing our investment strategies and our Live/Work/Play Initiatives to achieve sustainable long-term growth in both our funds from operations and net asset value.

Invest in Class A Apartment Properties.  We intend to continue to acquire primarily Class A apartment properties targeting the high disposable income renter by choice, where we believe we can create long-term value growth for our stockholders utilizing one of the below strategies:

Value-Add.  We invest in well-located institutional-quality apartment properties with strong and stable cash flows in demographically attractive knowledge economy growth markets that offer where we believe there exists significant potential for medium-term capital appreciation through repositioning, renovation or redevelopment, to reposition the asset and drive future rental growth.
Opportunistic.  We invest in properties available at opportunistic prices (i.e., at prices we believe are below those available in an otherwise efficient market) that exhibit some characteristics of distress, such as operational inefficiencies, significant deferred capital maintenance or broken capital structures providing an opportunity for a substantial portion of total return attributable to appreciation in value.
Invest-to-Own.  We selectively invest in development of Class A properties in target markets where we believe we can capture significant development premiums upon completion. We generally use a convertible loan or convertible preferred equity structure which provides income during the development stage and/or the ability to capture development premiums at completion by exercising our conversion rights to take ownership.

We may selectively invest in Class B properties in attractive locations if we believe we can deliver attractive risk-adjusted returns to our investors.

Invest in Growth Markets.  We intend to continue to invest in demographically attractive growth markets, which we define as markets with strong employment drivers in industries creating high disposable income jobs over the long term. Given that employment growth is highly correlated with apartment demand, we believe that selecting markets with job growth significantly above the national average will provide high potential for increase rental demand leading to revenue growth and attractive risk-adjusted returns.

Implement our Value Creation Strategies.  We intend to continue to focus on creating value at our properties utilizing our Value-Add, Opportunistic and Invest-to-Own investment strategies in order to maximize our return on investment. We will work with each member of our network to evaluate property

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needs along with value-creation opportunities and create an asset-specific business plan to best position or reposition each property to drive rental growth and asset values. We will then provide an aggressive asset management presence to manage each member of our network and ensure execution of the plan, with the goal of driving rental growth and values.

Implement our Live/Work/Play Initiatives.  We intend to continue to implement our amenities and attributes to transform the apartment community from a purely functional product (i.e., as solely a place to live), to a lifestyle product (i.e., as a place to live, interact, and socialize). Our Live/Work/Play Initiatives are property specific, and generally consist of attributes that go beyond traditional features, including highly amenitized common areas, cosmetic and architectural improvements, technology, music and other community-oriented activities to appeal to our residents’ desire for a “sense of community” by creating places to gather, socialize and interact in an amenity-rich environment. We believe this creates an enhanced perception of value among residents, allowing for premium rental rates and improved resident retention.

Diversify Across Markets, Strategies and Investment Size.  We will seek to grow our high-quality portfolio of apartment properties diversified by geography and by investment strategy and by size (typically ranging from $50 million to $100 million) in order to manage concentration risk, while driving both current income and capital appreciation throughout the portfolio. Our network enables us to diversify across multiple markets and multiple strategies efficiently, without the logistical burden and time delay of building operating infrastructure in multiple markets and across multiple investment strategies.

Selectively Harvest and Redeploy Capital.  On an opportunistic basis and subject to compliance with certain REIT restrictions, we intend to sell properties in cases where we have successfully executed our value creation plans and where we believe the investment has limited additional upside relative to other opportunities, in order to harvest profits and to reinvest proceeds to maximize stockholder value.

Our Live/Work/Play Initiatives

We intend to continue to implement our amenities and attributes to transform the apartment community from a purely functional product (i.e., as solely a place to live), to a lifestyle product (i.e., as a place to live, interact, and socialize). Our Live/Work/Play Initiatives are specifically targeted to appeal to the following two lucrative and rapidly growing segments of the multifamily market:

Lifestyle Renters are generally established, adult households with multiple housing choices open to them, which choose to rent an apartment for primarily nonfinancial reasons. They include Baby Boomers who have become empty nesters and who are seeking to live a simpler lifestyle without the responsibilities of home ownership, as well as some older members of the Echo Boomer generation.
Young Professional Renters are generally younger and more mobile than Lifestyle Renters, and while they can generally afford to own, they have chosen either to save their money (perhaps to purchase a larger house at a later date), to spend it on other goods and services or to invest it in something other than housing, or they are in a personal or job transition. For Young Professional Renters, an apartment can provide an inexpensive and maintenance-free residence.

Our Live/Work/Play Initiatives are property specific, and generally consist of attributes that go beyond traditional features, including highly amenitized common areas, cosmetic and architectural improvements, technology, music and other community-oriented activities to appeal to our residents’ desire for a “sense of community” by creating places to gather, socialize and interact in an amenity-rich environment. We believe this creates an enhanced perception of value among residents, allowing for premium rental rates and improved resident retention. These initiatives may include:

common areas with Wi-Fi allowing residents to stay connected online while socializing with friends;
unique places to gather and socialize, such as outdoor kitchens, fireplaces or fire pits, and dog parks;
state-of-the-art fitness centers providing a range of fitness and wellness classes;
architecturally appealing common areas designed to encourage social interaction and a “sense of community”;
a state-of-the-art security system;
occasional live music and other performances;

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group activities, such as book clubs, cooking classes and wine tastings;
resort-like pools; and
social activities incorporated into each property through a concierge program.

Our Approach to Evaluating Potential Investments

We have developed a disciplined investment approach that combines our experience with a structure that emphasizes thorough market research, local market knowledge, underwriting discipline, and risk management in evaluating potential investments, as follows:

National Market Research.  Our investment team continuously and extensively conduct market research to proactively select our target markets. Our investment team is focused on identifying markets that exhibit outsized population and employment growth, among other salient characteristics, including a high quality of life, an intellectual capital base, and a commitment to investments in infrastructure. We utilize real-time market data, leading third-party research, and the deep transactional knowledge and collective experiences of our network.

Local Market Knowledge.  Our breadth and depth of professional relationships, particularly within our network, provides us with access to substantial and often proprietary coveted off-market opportunities within our target markets. Further, we are able to leverage the local market knowledge of our network to fully evaluate not only a particular submarket’s supply and demand fundamentals, but a property’s competitive position from a neighborhood perspective.

Underwriting Discipline.  We follow a disciplined double underwriting process to examine and evaluate a potential investment in terms of its income-producing capacity and prospects for capital appreciation. Our approach begins with an extensive review of the following: (1) property fundamentals, such as tenant profile, expense structure, occupancy, construction quality and efficiency of floor plans and deferred maintenance; (2) capital markets fundamentals, including cap rates, debt markets and future capital flows; and (3) market fundamentals, such as rental rates, concession and occupancy levels at comparable properties, along with projected product delivery and absorption rates. We will then utilize our double underwriting approach to verify and refine all assumptions provided by leveraging the local market knowledge and expertise of members of our network, which generally have a knowledge base built from daily investing and operating experience over a period of decades. Only those real estate assets meeting our investment criteria will be accepted for inclusion in our portfolio.

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Risk Management.  Risk management is a fundamental principle in our construction of our portfolio and in the management of each investment. Prior to the purchase of any individual asset or portfolio, our investment team will develop a ‘360-degree’ asset-level business strategy. The business strategy consists of a detailed forecast of the action items to be taken and the capital needed to achieve the anticipated returns. We regularly review asset-level business strategies to anticipate changes or opportunities in the market during a given phase of a real estate cycle.

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Investment/Disposition Considerations

When evaluating potential acquisitions and dispositions, we generally consider the following factors:

strategically targeted markets;
income levels and employment growth trends in the relevant market;
employment, household growth and net migration of the relevant market’s population;
barriers to entry that would limit competition (zoning laws, building permit availability, supply of undeveloped or developable real estate, local building costs and construction costs, among other factors);
the location, construction quality, condition and design of the property;
the current and projected cash flow of the property and the ability to increase cash flow;
the potential for capital appreciation of the property;
purchase price relative to the replacement cost of the property;
the terms of resident leases, including the potential for rent increases;
the potential for economic growth and the tax and regulatory environment of the community in which the property is located;
the occupancy and demand by residents for properties of a similar type in the vicinity (the overall market and submarket);
the prospects for liquidity through sale, financing or refinancing of the property;
the benefits of integration into existing operations;
purchase prices and yields of available existing stabilized properties, if any;
competition from existing properties and properties under development and the potential for the construction of new properties in the area; and
potential for opportunistic selling based on demand and price of high quality assets, including condominium conversions.

Our investment approach also includes active and aggressive management of each asset acquired. Prior to the purchase of an individual asset or portfolio, our asset managers will work closely with our acquisition officers and underwriting teams to develop an asset-level business strategy. This is a forecast of the action items to be taken and the capital needed to achieve the anticipated returns. We will review asset-level business strategies quarterly to anticipate changes or opportunities in the market during a given phase of a real estate cycle. We will design this process to allow for realistic yet aggressive creation of value throughout the investment period.

In an effort to keep an asset in compliance with our underwriting standards, our investment officers will remain involved through the investment life cycle of the acquired asset and will actively consult with our asset management teams throughout the hold period. In addition, our investment officers will continuously review the operating performance of investments against projections, and will provide the oversight necessary to detect and resolve issues as they arise.

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RATIO OF EARNINGS TO COMBINED FIXED CHARGES
AND PREFERRED DIVIDENDS

           
  Six Months
Ended June 30,
2018
  Year Ended December 31,
     2017   2016   2015   2014   2013
     (In thousands, except for ratio computation)
(Loss) income from continuing operations before adjustment for non controlling interest   $ (6,391   $ (7,028   $ (2,974   $ 7,643     $ (6,674   $ (4,219
Add back:
                                                     
Fixed Charges     23,221       31,575       19,960       11,389       8,683       4,961  
Distributed income of equity investees     4,558       9,252       11,405       24,617       11,550       289  
Deduct:
                                                     
Equity in (income) loss of equity investees     (5,088     (10,336     (11,632     (17,893     (5,133     (1,501
Capitalized Interest                             (143     (99
Earnings as Defined   $ 16,300     $ 23,463     $ 16,759     $ 25,756     $ 8,283     $ (569
Fixed Charges
                                                     
Interest expense including amortization of deferred financing fees   $ 23,158     $ 31,520     $ 19,915     $ 11,366     $ 8,538     $ 4,854  
Capitalized Interest                             143       99  
Interest portion of rent expense     63       55       45       23       2       8  
Fixed Charges   $ 23,221     $ 31,575     $ 19,960     $ 11,389     $ 8,683     $ 4,961  
Ratio of Earnings to Fixed Charges     (a)       (a)       (a)       2.26       (a)       (a)  
Preferred Share dividends     16,890       27,023       13,763       1,153              
Combined Fixed Charges and Preferred Dividends   $ 40,111     $ 58,598     $ 33,723     $ 12,542     $ 8,683     $ 4,961  
Ratio of Earnings to Combined Fixed Charges and Preferred Dividends     (b)       (b)       (b)       2.05       (b)       (b)  

(a) Due to the loss from continuing operations, the ratio coverage was less than 1:1 for 2018, 2017, 2016, 2014 and 2013. We would have needed to generate additional earnings from continuing operations of $6.9 million, $8.1 million, $3.2 million, $0.4 million, and $5.5 million for 2018, 2017, 2016, 2014 and 2013 respectively to achieve a coverage ratio of 1:1.
(b) Due to the loss from continuing operations, the ratio coverage was less than 1:1 for 2018, 2017, 2016, 2014 and 2013. We would have needed to generate additional earnings from continuing operations of $23.8 million, $35.1 million, $17.0 million, $0.4 million, and $5.5 million for 2018, 2017, 2016, 2014 and 2013, respectively to achieve a coverage ratio of 1:1.

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MANAGEMENT

Our Board of Directors

We operate under the direction of our board of directors. Our board of directors is responsible for the management and control of our affairs.

Our directors must perform their duties in good faith and in a manner each director reasonably believes to be in our best interests. Further, our directors must act with such care as an ordinarily prudent person in a like position would use under similar circumstances. However, our directors and executive officers are not required to devote all of their time to our business and must only devote such time to our affairs as their duties may require. We do not expect that our directors will be required to devote a substantial portion of their time to us in discharging their duties.

We have five directors, four of whom are independent directors as defined by the listing standards of the NYSE American.

Each director will serve until the next annual meeting of stockholders and until his successor has been duly elected and qualifies. At any stockholder meeting, the presence in person or by proxy of stockholders entitled to cast a majority of all the votes entitled to be cast at such meeting on any matter constitutes a quorum. With respect to the election of directors, each candidate nominated for election to our board of directors must receive the affirmative vote of a plurality of the votes cast at a meeting at which a quorum is present, in order to be elected.

Although our board of directors may increase or decrease the number of directors, a decrease may not have the effect of shortening the term of any incumbent director. Any director may resign at any time or may be removed only for cause, and then only by the stockholders upon the affirmative vote of at least a majority of all the votes entitled to be cast generally in the election of directors. The notice of any special meeting called to remove a director will indicate that the purpose, or one of the purposes, of the meeting is to determine if the director shall be removed.

A vacancy created by an increase in the number of directors or the death, resignation, removal, adjudicated incompetence or other incapacity of a director may be filled only by a vote of a majority of the remaining directors, even if the remaining directors do not constitute a quorum, and any director elected to fill a vacancy will serve for the remainder of the full term of the directorship in which the vacancy occurred and until a successor is duly elected and qualifies.

In addition to meetings of the various committees of our board of directors, which committees we describe below, we expect our directors to hold at least four regular board meetings each year.

Our Executive Officers and Directors

The individuals listed as our executive officers below serve to manage the day-to-day affairs and carry out the directives of our board of directors in the review, selection and recommendation of investment opportunities and operating acquired investments and monitoring the performance of those investments to ensure that they are consistent with our investment objectives. The duties that these executive officers perform also include the performance of corporate governance activities on our behalf that require the attention of one of our corporate officers, including signing certifications required under Sarbanes-Oxley Act of 2002, as amended, for filing with the our periodic reports.

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The following table and biographical descriptions set forth certain information with respect to the individuals who currently serve as our executive officers and directors:

   
Name   Age*   Position
R. Ramin Kamfar   54   Chairman of the Board and Chief Executive Officer
Jordan B. Ruddy   54   Chief Operating Officer and President
James G. Babb, III   54   Chief Investment Officer
Ryan S. MacDonald   35   Chief Acquisitions Officer
Christopher J. Vohs   41   Chief Financial Officer and Treasurer
Michael L. Konig   57   Chief Legal Officer and Secretary
Brian D. Bailey   51   Independent Director
I. Bobby Majumder   50   Independent Director
Romano Tio   57   Independent Director
Elizabeth Harrison   54   Independent Director

* As of October 26, 2018

R. Ramin Kamfar, Chairman of the Board and Chief Executive Officer.  Mr. Kamfar serves as our Chairman of the Board and as our Chief Executive Officer. Mr. Kamfar has served as our Chairman of the Board since August 2008, and also served as our President from April 2014 to October 2017, and as the Chief Executive Officer of our former advisor, Bluerock Multifamily Advisor, LLC, from August 2008 to February 2013. He has also served as the Chairman of the Board and Chief Executive Officer of Bluerock since its inception in October 2002, where he has overseen the acquisition and development of approximately 21,400 apartment units, and over 2.5 million square feet of office space. In addition, Mr. Kamfar has served as Chairman of the Board of Trustees and as a Trustee of Total Income (plus) Real Estate Fund, a closed-end interval fund organized by Bluerock, since 2012. Mr. Kamfar has approximately 30 years of experience in various aspects of real estate, mergers and acquisitions, private equity investing, investment banking, and public and private financings. From 1988 to 1993, Mr. Kamfar worked as an investment banker at Lehman Brothers Inc., New York, New York, where he specialized in mergers and acquisitions and corporate finance. In 1993 Mr. Kamfar left Lehman to focus on private equity transactions. From 1993 to 2002, Mr. Kamfar executed a growth/consolidation strategy to build a startup into a leading public company in the ‘fast casual’ market now known as Einstein Noah Restaurant Group, Inc. with approximately 800 locations and $400 million in gross revenues. From 1999 to 2002, Mr. Kamfar also served as an active investor, advisor and member of the Board of Directors of Vsource, Inc., a technology company subsequently sold to Symphony House (KL: SYMPHNY), a leading business process outsourcing company focused on the Fortune 500 and Global 500. Mr. Kamfar received an M.B.A. degree with distinction in Finance in 1988 from The Wharton School of the University of Pennsylvania, located in Philadelphia, Pennsylvania, and a B.S. degree with distinction in Finance in 1985 from the University of Maryland located in College Park, Maryland.

Jordan B. Ruddy, Chief Operating Officer and President.  Mr. Ruddy serves as our Chief Operating Officer and President. Mr. Ruddy also served as the President of our former Manager from February 2013 to October 2017. Mr. Ruddy joined Bluerock in 2002 and has continuously served in various senior management capacities for it and its affiliates, including as Bluerock’s President until January 2013, and as co-portfolio manager for the advisor of Total Income (plus) Real Estate Fund since October of 2013. Mr. Ruddy has approximately 30 years of experience in real estate acquisitions, financings, management and dispositions. From 2000 to 2001, Mr. Ruddy served as a real estate investment banker at Banc of America Securities LLC. From 1997 to 2000, Mr. Ruddy served as Vice President of Amerimar Enterprises, a real estate company specializing in value-added investments nationwide, where he managed acquisitions, financings, leasing, asset management and dispositions involving over 1.5 million square feet of commercial and multifamily real estate. From 1995 to 1997, Mr. Ruddy served as a real estate investment banker at Smith Barney Inc. From 1988 to 1993, Mr. Ruddy served in the real estate department of The Chase Manhattan Bank, most recently as a Second Vice President. Mr. Ruddy received an M.B.A. degree in Finance and Real Estate in 1995 from The Wharton School of the University of Pennsylvania, located in Philadelphia, Pennsylvania, and a B.S. degree with high honors in Economics in 1986 from the London School of Economics, located in London, England.

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James G. Babb, III, Chief Investment Officer.  Mr. Babb serves as our Chief Investment Officer. Mr. Babb previously served as Chief Investment Officer of our former Manager from November 2013 until October 2017, as a director of the Company until April 2, 2014, as our Chief Investment Officer from July 2008 until November 2013, as our President from July 2008 until August 2012, and as the President of our former advisor from July 2008 until February 2013. Mr. Babb joined Bluerock in 2007 and served as its Chief Investment Officer through October 2017, and has been a Trustee of Total Income (plus) Real Estate Fund since 2012. He has been involved exclusively in real estate acquisition, management, financing and disposition for approximately 30 years. From 1992 to August 2003, Mr. Babb helped lead the residential and office acquisitions initiatives for Starwood Capital Group, or Starwood Capital. Starwood Capital was formed in 1992 and during his tenure raised and invested funds on behalf of institutional investors through seven private real estate funds, which in the aggregate ultimately invested approximately $8 billion in approximately 250 separate transactions. Mr. Babb was also active in Starwood Capital’s efforts to expand its platform to invest in Europe. From August 2003 to July 2007, Mr. Babb founded Bluepoint Capital, LLC, a private real estate investment company focused on the acquisition, development and/or redevelopment of residential and commercial properties. Mr. Babb received a B.A. degree in Economics in 1987 from the University of North Carolina at Chapel Hill.

Ryan S. MacDonald, Chief Acquisitions Officer.  Mr. MacDonald serves as our Chief Acquisitions Officer. Mr. MacDonald joined Bluerock in 2008 and has continuously served in various senior acquisition and disposition capacities for it and its affiliates, including as Senior Vice President — Investments of our former Manager from November 2013 through February 2016, and as Managing Director — Investments for our former Manager from March 2016 through October 2017. To date, with Bluerock, Mr. MacDonald has been involved with real estate transactions with an aggregate value of approximately $1.25 billion. Prior to joining Bluerock, from 2006 to 2008, Mr. MacDonald was an Analyst for PNC Realty Investors (formerly Mercantile Real Estate Advisors), where he served as part of an investment team that made more than $1.2 billion in investments within all tranches of the capital structure. From 2005 to 2006, Mr. MacDonald served in a corporate development role at Mercantile Bankshares, where he worked with Executive Management focusing on high level strategic initiatives for the $6 billion bank. Mr. MacDonald received a B.A. in Economics in 2005 from the University of Maryland, College Park.

Christopher J. Vohs, Chief Financial Officer and Treasurer.  Mr. Vohs serves as our Chief Financial Officer and Treasurer. Mr. Vohs previously served as our Chief Accounting Officer and Treasurer from August 2013 through October 2017. Mr. Vohs joined Bluerock in July 2010 and has continuously served in various senior accounting and financial capacities for it and its affiliates, including as Bluerock’s Chief Accounting Officer from July 2010 until October 2017. In his role as Chief Accounting Officer for Bluerock and our former advisor, Bluerock Multifamily Advisor, LLC, and our former Manager, all of which are affiliates of our Company, Mr. Vohs has been responsible for the oversight of all financial recordkeeping and reporting aspects of those companies. Previously, Mr. Vohs served as Corporate Controller for Roberts Realty Investors, Inc., a public multifamily REIT based in Atlanta, Georgia, from March 2009 to July 2010, where he was responsible for the accounting and financial reporting for the REIT. From October 2004 to March 2009, Mr. Vohs worked at Pulte Homes, a nationwide builder of single family homes, in various financial roles, including as Internal Audit Manager & Asset Manager and later as Vice President of Finance for Pulte’s Orlando and Southeast Florida operations. As Vice President of Finance, Mr. Vohs was responsible for all finance, accounting, and administrative operations of the division. From January 1999 to October 2004, Mr. Vohs worked as an Audit Manager for Deloitte & Touche, an international professional services firm, where he earned his CPA certification and focused on mid-size to large private and public companies in the manufacturing, finance, and communications industries. Mr. Vohs received his B.A. degree in Accounting from Michigan State University in 1998.

Michael L. Konig, Chief Legal Officer and Secretary.  Mr. Konig serves as our Chief Legal Officer and Secretary. Previously, Mr. Konig served as our Chief Operating Officer, General Counsel and Secretary of both our Company and our former Manager from November 2013 through October 2017, and as Senior Vice President and General Counsel of our Company and our former advisor from August 2008 through November 2013. Mr. Konig joined Bluerock in 2004 and has continuously served in various senior legal and management capacities for it and its affiliates, including as General Counsel of Bluerock, and as Chief Legal

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Officer of the advisor of Total Income (plus) Real Estate Fund from October of 2012 to May 2018. Mr. Konig has over 25 years of experience in law and business. Mr. Konig was an attorney at the firms of Ravin Sarasohn Cook Baumgarten Fisch & Baime from September 1987 to September 1989, and Greenbaum Rowe Smith & Davis from September 1989 to March 1997, representing borrowers and lenders in numerous financing transactions, primarily involving real estate, distressed real estate and Chapter 11 reorganizations, as well as a broad variety of litigation and corporate law matters. From 1998 to 2002, Mr. Konig served as legal counsel, including as General Counsel, at New World Restaurant Group, Inc. (now known as Einstein Noah Restaurant Group, Inc.). From 2002 to December 2004, Mr. Konig served as Senior Vice President of Roma Food Enterprises, Inc. where he led operations and the restructuring and sale of the privately held company with approximately $300 million in annual revenues. Mr. Konig received a J.D. degree cum laude in 1987 from California Western School of Law, located in San Diego, California, an M.B.A. degree in Finance in 1988 from San Diego State University and a Bachelor of Commerce degree in 1982 from the University of Calgary.

Brian D. Bailey, Independent Director.  Mr. Bailey has served as one of our independent directors since January 2009. Mr. Bailey has more than 20 years of experience in sourcing, evaluating, structuring and managing investments, including real estate and real estate-related debt financing. Mr. Bailey founded and currently serves as Managing Member of Carmichael Partners, LLC, a private equity investment firm based in Charlotte, North Carolina. He also currently serves as a director for Bandwidth Inc. (Nasdaq: BAND), a software company based in Raleigh, North Carolina. Prior to founding Carmichael Partners, Mr. Bailey served as Managing Partner (2000 – 2008) and Senior Advisor (2008 – 2009) of Carousel Capital, LLC, a private equity investment firm in Charlotte, North Carolina. Earlier in his career, Mr. Bailey was a team member of Forstmann Little & Co., a private equity investment firm in New York, New York, and a Principal at the Carlyle Group, a private equity investment firm in Washington, DC. Mr. Bailey also previously worked in the leveraged buyout group at CS First Boston in New York, New York and in the mergers and acquisitions group at Bowles Hollowell Conner & Company in Charlotte, North Carolina. Mr. Bailey also served in the public sector, as Assistant to the Deputy Chief of Staff and Special Assistant to the President at the White House from 1994 to 1996 and as Director of Strategic Planning and Policy at the U.S. Small Business Administration in 1994. Mr. Bailey received a B.A. degree in Mathematics and Economics in 1988 from the University of North Carolina at Chapel Hill and an M.B.A. degree in 1992 from the Stanford Graduate School of Business, located in Stanford, California.

I. Bobby Majumder, Independent Director.  Mr. Majumder has served as one of our independent directors since January 2009. In addition, since May 2017, Mr. Majumder has served as our lead independent director and presides over executive sessions of our non-employee directors. Mr. Majumder is a partner at the law firm of Perkins Coie, where he serves as the Managing Partner of the firm’s Dallas office and firmwide Co-Chair of the firm’s India practice. Mr. Majumder specializes in corporate and securities transactions with an emphasis on the representation of underwriters, placement agents and issuers in both public and private offerings, private investment in public equity (PIPE) transactions and venture capital and private equity funds. Prior to Perkins Coie, Mr. Majumder was a partner in the law firm of K&L Gates LLP from May 2005 to March 2013. From January 2000 to April 2005, Mr. Majumder was a partner at the firm of Gardere Wynne Sewell LLP. Through his law practice, Mr. Majumder has gained significant experience relating to the acquisition of a number of types of real property assets including raw land, improved real estate and oil and gas interests. Mr. Majumder also has served as an independent Trustee on the Board of Trustees of Total Income (plus) Real Estate Fund, a closed-end interval fund organized by Bluerock, since July 2012. He is an active member of the Park Cities Rotary Club, a charter member of the Dallas Chapter of The Indus Entrepreneurs and an Associates Board member of the Cox School of Business at Southern Methodist University. Mr. Majumder received a J.D. degree in 1993 from Washington and Lee University School of Law, located in Lexington, Virginia, and a B.A. degree in 1990 from Trinity University, located in San Antonio, Texas.

Romano Tio, Independent Director.  Mr. Tio has served as one of our independent directors since January 2009. In addition, from February 2016 to May 2017, Mr. Tio served as our lead independent director and presided over executive sessions of our non-employee directors. Mr. Tio serves as Senior Managing Director at Ackman-Ziff, an institutional real estate capital advisory firm. From May 2009 to June 2017,

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Mr. Tio served as Managing Director of RM Capital Management LLC, a boutique real estate investment and advisory firm. From January 2008 to May 2009, Mr. Tio served as a Managing Director and co-head of the commercial real estate efforts of HCP Real Estate Investors, LLC, an affiliate of Harbinger Capital Partners Funds, a $10+ billion private investment firm specializing in event/distressed strategies. From August 2003 until December 2007, Mr. Tio was a Managing Director at Carlton Group Ltd., a boutique real estate investment banking firm where he was involved in over $2.5 billion worth of commercial real estate transactions. Earlier in his career, Mr. Tio was involved in real estate sales and brokerage for 25 years. Mr. Tio also has served as an independent Trustee of the Board of Trustees of Total Income (plus) Real Estate Fund, a closed-end interval fund organized by Bluerock, since July 2012. Mr. Tio served as an independent member of the Board of Directors of Yangtze River Development Ltd. from January 2016 until February 2017. Mr. Tio received a B.S. degree in Biochemistry in 1982 from Hofstra University located in Hempstead, New York.

Elizabeth Harrison, Independent Director.  Ms. Harrison has served as one of our independent directors since July 2018. Ms. Harrison has over 23 years of branding and marketing experience. Ms. Harrison serves as the CEO and Principal of Harrison & Shriftman (“H&S”), a full-service marketing, branding and public relations agency with offices in New York, Miami and Los Angeles, which she co-founded in 1995. In 2003, Ms. Harrison organized the sale of H&S to Omnicom Group (NYSE: OMC), a leading global marketing and corporate communications company, and continued to serve as CEO where she is responsible for the company’s operations and strategic development, while overseeing communications, partnerships and marketing for clients that include real estate developers, luxury hotel properties and travel technology companies on a global level. In 2011, H&S became the complementary sister-agency of Ketchum, a leading global communications consultancy. Ms. Harrison is the co-author of several books and is frequently invited to share her luxury branding expertise at high-profile conferences and summits, most recently including Harvard’s 5th Annual CEO Roundtable: Building Leading Brands and Driving Growth. Ms. Harrison has also served as a panelist for Step Up Women’s Network’s “View from the Top” seminar. Ms. Harrison has served on the boards of Love Heals and the Alison Gertz Foundation for AIDS Education, and also works closely with the Ars Nova Theater Group. Ms. Harrison received a B.A. degree in 1986 from Sarah Lawrence College, located in Bronxville, New York.

Bluerock Real Estate, L.L.C.

Bluerock Real Estate, L.L.C., or Bluerock, is a leading alternative asset manager headquartered in Manhattan with regional offices in Southfield, Michigan, Boise, Idaho and Newport Beach, California. Mr. Kamfar controls Bluerock and our former Manager.

Selection of Our Board of Directors

In determining the composition of our board of directors, our goal was to assemble a group of individuals of sound character, judgment and business acumen, whose varied backgrounds, leadership experience and real estate experience would complement each other to bring a diverse set of skills and perspectives to the board. We have determined that each of our directors, including our independent directors, has at least three years of relevant experience demonstrating the knowledge and experience required to successfully acquire and manage the type of assets being acquired by our company.

Mr. Kamfar was chosen to serve as the Chairman of the Board because, as our Chief Executive Officer, Mr. Kamfar is well positioned to provide essential insight and guidance to our board of directors from the inside perspective of the day-to-day operations of the company. Furthermore, Mr. Kamfar brings to the board approximately 30 years of experience in building operating companies, and in various aspects of real estate, mergers and acquisitions, private equity investing and public and private financings. His experience with complex financial and operational issues in the real estate industry, as well as his strong leadership ability and business acumen, make him critical to proper functioning of our board.

Mr. Bailey was selected as one of our independent directors to leverage his extensive experience in sourcing, evaluating, structuring and managing private equity investments and his experience related to real estate and real estate-related debt financing. In addition, Mr. Bailey’s prior service on the audit committees of numerous privately-held companies provides him with the requisite skills and knowledge to serve effectively on our audit committee.

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Mr. Majumder was selected as one of our independent directors due to his depth of legal experience in advising clients with respect to corporate and securities transactions, including representations of underwriters, placement agents and issuers in both public and private offerings. Mr. Majumder also brings with him significant legal experience relating to the acquisition of a number of types of real estate assets.

Mr. Tio was selected as one of our independent directors as a result of his demonstrated leadership skill and industry-specific experience developed through a number of high-level management positions with investment and advisory firms specializing in the commercial real estate sector.

Ms. Harrison was selected as one of our independent directors based on her extensive leadership and entrepreneurial experience, background in luxury branding and marketing, and oversight of global communications, partnerships and marketing for clients including real estate developers, luxury hotel properties and travel technology companies.

Committees of the Board of Directors

We currently have an audit committee, an investment committee, a compensation committee and a nominating and corporate governance committee. All of our committees consist solely of independent directors, except that R. Ramin Kamfar, our Chief Executive Officer and Chairman of our board of directors, serves on the investment committee. The principal functions of these committees are briefly described below. Our board of directors may from time to time establish other committees to facilitate our management.

Audit Committee

Our board of directors has established an audit committee, which is comprised of three of our independent directors: Brian D. Bailey, I. Bobby Majumder, and Romano Tio. Mr. Bailey is the chairman of our audit committee, and is designated as the audit committee financial expert as defined by the applicable rules promulgated by the SEC and the NYSE American (formerly the NYSE MKT) corporate governance listing standards.

The audit committee meets on a regular basis, at least quarterly and more frequently as necessary. The audit committee’s primary functions are:

to evaluate and approve the audit and non-audit services and fees of our independent registered public accounting firm;
to periodically review the auditors’ independence; and
to assist our board of directors in fulfilling its oversight responsibilities by reviewing the financial information to be provided to the stockholders and others, management’s system of internal controls and procedures, and the audit and financial reporting process.

The audit committee also reviews and approves certain related party transactions

The background and experience of Messrs. Bailey, Majumder and Tio are described above in “— Our Executive Officers and Directors.”

Investment Committee

Our board of directors has established an investment committee, which is comprised of Romano Tio, Brian D. Bailey and R. Ramin Kamfar. Mr. Tio is the chairman of our investment committee. The board of directors has delegated to the investment committee the authority (1) to approve all real property acquisitions, developments and dispositions, including real property portfolio acquisitions, developments and dispositions, as well as all other investments in real estate consistent with our investment policy (each, an “Investment Transaction”) involving an equity investment amount equal to or in excess of ten percent (10%) of our Company equity at the time of consideration, and (2) to review our investment policies and procedures on an ongoing basis and recommend any changes to our board of directors.

Our board of directors has further delegated to a management committee comprised of members of our executive management team the authority (1) to approve Investment Transactions involving an equity investment amount of less than ten percent (10%) of our Company equity at the time of consideration, and (2) to review and recommend potential investments equal to or in excess of the 10% threshold for

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consideration by the investment committee. If the members of the investment committee or the management committee (as applicable) approve a given investment, then management will be directed to make such investment on our behalf, if such investment can be completed on terms approved by the applicable committee.

The background and experience of Messrs. Tio, Bailey and Kamfar are described above in “— Our Executive Officers and Directors.”

Compensation Committee

Our board of directors has established a compensation committee, which is comprised of three of our independent directors: Brian D. Bailey, Elizabeth Harrison, and I. Bobby Majumder. Mr. Bailey is the chairman of our compensation committee. Our compensation committee charter details the principal functions of the compensation committee. These functions include:

reviewing and approving on an annual basis the corporate goals and objectives relevant to our chief executive officer’s compensation; evaluating our chief executive officer’s performance in light of such goals and objectives; and determining and approving the remuneration of our chief executive officer based on such evaluation;
reviewing and approving the compensation of all of our other executive officers;
reviewing our executive compensation policies and plans;
implementing and administering our incentive compensation equity-based remuneration plans;
assisting management in complying with our proxy statement and annual report disclosure requirements;
producing a report on executive compensation to be included in our annual proxy statement; and
reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

The background and experience of Messrs. Bailey and Majumder, and of Ms. Harrison, are described above in “— Our Executive Officers and Directors.”

Nominating and Corporate Governance Committee

Our board of directors has established a nominating and corporate governance committee, which is comprised of three of our independent directors: I. Bobby Majumder, Elizabeth Harrison, and Romano Tio. Mr. Majumder is the chairman of our nominating and corporate governance committee. Our nominating and corporate governance committee charter details the principal functions of the nominating and corporate governance committee. These functions include:

identifying and recommending qualified candidates to our full board of directors for election as directors, and recommending nominees for election as directors at the annual meeting of stockholders;
developing and recommending corporate governance guidelines to our board of directors, and implementing and monitoring such guidelines;
reviewing and making recommendations on matters involving the general operation of our board of directors, including board size and composition, and committee composition and structure;
recommending nominees for each committee of our board of directors to our board of directors;
annually facilitating the assessment of our board of directors’ performance as a whole and of the individual directors, as required by applicable law, regulations and the NYSE American (formerly the NYSE MKT) corporate governance listing standards; and
our board of directors’ evaluation of management.

The nominating and corporate governance committee may form and delegate authority to subcommittees in its discretion, provided that such subcommittees must be composed entirely of independent directors, and each such subcommittee must have its own charter setting forth its purpose and responsibilities.

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The background and experience of Messrs. Majumder and Tio, and of Ms. Harrison, are described above in “— Our Executive Officers and Directors.”

Limited Liability and Indemnification of Directors, Officers, Employees and Other Agents

Under the Maryland General Corporation Law, or MGCL, a Maryland corporation may limit in its charter the liability of directors and officers to the corporation and its stockholders for money damages unless such liability results from actual receipt of an improper benefit or profit in money, property or services or active and deliberate dishonesty established by a final judgment and which is material to the cause of action.

In addition, the MGCL requires a corporation (unless its charter provides otherwise, which our charter does not) to indemnify a director or officer who has been successful, on the merits or otherwise, in the defense of any proceeding to which he or she is made or threatened to be made a party by reason of his or her service in that capacity and allows directors and officers to be indemnified against judgments, penalties, fines, settlements, and expenses actually incurred in a proceeding unless the following can be established:

the act or omission of the director or officer was material to the cause of action adjudicated in the proceeding, and was committed in bad faith or was the result of active and deliberate dishonesty;
the director or officer actually received an improper personal benefit in money, property or services; or
with respect to any criminal proceeding, the director or officer had reasonable cause to believe his or her act or omission was unlawful.

However, under the MGCL, a Maryland corporation may not indemnify for an adverse judgment in a suit by or in the right of the corporation or for a judgment of liability on the basis that a personal benefit was improperly received, unless in either case a court orders indemnification and then only for expenses.

Finally, the MGCL permits a Maryland corporation to advance reasonable expenses to a director or officer upon receipt of a written affirmation by the director or officer of his or her good faith belief that he or she has met the standard of conduct necessary for indemnification and a written undertaking by him or her or on his or her behalf to repay the amount paid or reimbursed if it is ultimately determined that the standard of conduct was not met.

To the maximum extent permitted by Maryland law, our charter limits the personal liability of our directors and officers to us and our stockholders for monetary damages and our charter authorizes us to obligate ourselves to indemnify and, without requiring a preliminary determination of the ultimate entitlement to indemnification, pay or reimburse reasonable expenses in advance of final disposition of a proceeding to our directors, our officers, and our former Manager (including any director or officer who is or was serving at the request of our company as a director, officer, partner, member, manager or trustee of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise), except to the extent prohibited by the MGCL. In addition, our bylaws require us to indemnify and advance expenses to our directors and our officers, and permit us, with the approval of our board of directors, to provide such indemnification and advance of expenses to any individual who served a predecessor of us in any of the capacities described above and to any employee or agent of us, including our former Manager, or a predecessor of us, except to the extent prohibited by the MGCL.

However, the SEC takes the position that indemnification against liabilities arising under the Securities Act is against public policy and unenforceable.

We have purchased and maintain insurance on behalf of all of our directors and executive officers against liability asserted against or incurred by them in their official capacities with us, whether or not we are required or have the power to indemnify them against the same liability.

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DESCRIPTION OF SERIES B REDEEMABLE PREFERRED STOCK

The following is a summary of the rights and preferences of our Series B Redeemable Preferred Stock. While we believe that the following description covers the material terms of our Series B Redeemable Preferred Stock, the description may not contain all of the information that is important to you. We encourage you to read carefully this entire prospectus, our charter, including the articles supplementary setting forth the terms of the Series B Preferred Stock, and our bylaws, as well as the relevant provisions of Maryland law, for a more complete understanding of our Series B Redeemable Preferred Stock. Copies of our charter and bylaws are available from us and have been filed with the SEC, and the following summary, to the extent it relates to those documents, is qualified in its entirety by reference thereto. See “Where You Can Find More Information.”

Securities Offered In This Offering

Series B Redeemable Preferred Stock

Our board of directors, including our independent directors, has created out of the authorized and unissued shares of our preferred stock a series of redeemable preferred stock designated as the Series B Redeemable Preferred Stock. Our Series B Redeemable Preferred Stock is being offered pursuant to this prospectus supplement and will be issued in up to 500,000 Units, with each Unit consisting of one share of Series B Redeemable Preferred Stock and one Warrant to purchase up to 20 shares of our Class A common stock.

The following is a brief description of the terms of our Series B Redeemable Preferred Stock. The description of our Series B Redeemable Preferred Stock contained herein does not purport to be complete and is qualified in its entirety by reference to the Articles Supplementary for our Series B Redeemable Preferred Stock, which have been filed with the SEC and are incorporated by reference as an exhibit to the registration statement, of which this prospectus supplement is a part.

Rank.  Our Series B Redeemable Preferred Stock ranks, with respect to dividend rights and rights upon our liquidation, winding-up or dissolution:

senior to all classes or series of our common stock, and to any other class or series of our capital stock issued in the future unless the terms of that capital stock expressly provide that it ranks senior to, or on parity with, the Series B Redeemable Preferred Stock;
on parity with any class or series of our capital stock, the terms of which expressly provide that it will rank on parity with the Series B Redeemable Preferred Stock, including the Series A Preferred Stock, the Series C Preferred Stock, and the Series D Preferred Stock; and
junior to any other class or series of our capital stock, the terms of which expressly provide that it will rank senior to the Series B Redeemable Preferred Stock, none of which exists on the date hereof, and subject to payment of or provision for our debts and other liabilities.

Investors in the Series B Redeemable Preferred Stock should note that holders of common stock will receive additional distributions from the sale of a property (in excess of their capital attributable to the asset sold) before the holders of Series B Redeemable Preferred Stock receive a return of their capital.

Stated Value.  Each share of Series B Redeemable Preferred Stock has an initial “Stated Value” of $1,000, subject to appropriate adjustment in relation to certain events, such as recapitalizations, stock dividends, stock splits, stock combinations, reclassifications or similar events affecting our Series B Redeemable Preferred Stock, as set forth in the Articles Supplementary for our Series B Redeemable Preferred Stock.

Dividends.  Subject to the preferential rights of the holders of any class or series of our capital stock ranking senior to our Series B Redeemable Preferred Stock, if any such class or series is authorized in the future, the holders of Series B Redeemable Preferred Stock are entitled to receive, when and as authorized by our board of directors and declared by us out of legally available funds, cumulative cash dividends on each share of Series B Redeemable Preferred Stock at an annual rate of six percent (6%) of the Stated Value. Dividends on each share of Series B Redeemable Preferred Stock will begin accruing on, and will be

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cumulative from, the date of issuance. We expect to authorize and declare dividends on the Series B Redeemable Preferred Stock on a monthly basis, payable on the 5th day of the month to holders of record on the 25th day of the prior month (or if such day is not a business day, on the next succeeding business day, with the same force and effect as if made on such date), unless our results of operations, our general financing conditions, general economic conditions, applicable provisions of Maryland law or other factors make it imprudent to do so. The timing and amount of such dividends will be determined by our board of directors, in its sole discretion, and may vary from time to time.

Dividends will accrue and be paid on the basis of a 360-day year consisting of twelve 30-day months. Dividends on the Series B Redeemable Preferred Stock will accrue and be cumulative from the end of the most recent dividend period for which dividends have been paid, or if no dividends have been paid, from the date of issuance. Dividends on the Series B Redeemable Preferred Stock will accrue whether or not (i) we have earnings, (ii) there are funds legally available for the payment of such dividends and (iii) such dividends are authorized by our board of directors or declared by us. Accrued dividends on the Series B Redeemable Preferred Stock will not bear interest.

Holders of our shares of Series B Redeemable Preferred Stock are not entitled to any dividend in excess of full cumulative dividends on our shares of Series B Redeemable Preferred Stock. Unless full cumulative dividends on our shares of Series B Redeemable Preferred Stock, Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock for all past dividend periods have been or contemporaneously are declared and paid or declared and a sum sufficient for the payment thereof is set apart for payment, we will not:

declare and pay or declare and set apart for payment dividends or declare and make any other distribution of cash or other property (other than dividends or distributions paid in shares of stock ranking junior to the Series B Redeemable Preferred Stock as to the dividend rights or rights on our liquidation, winding-up or dissolution, and options, warrants or rights to purchase such shares), directly or indirectly, on or with respect to any shares of our common stock or any class or series of our stock ranking junior to or on parity with the Series B Redeemable Preferred Stock as to dividend rights or rights on our liquidation, winding-up or dissolution for any period; or
except by conversion into or exchange for shares of stock ranking junior to the Series B Redeemable Preferred Stock as to dividend rights or rights on our liquidation, winding-up or dissolution, or options, warrants or rights to purchase such shares, redeem, purchase or otherwise acquire (other than a redemption, purchase or other acquisition of common stock made for purposes of an employee incentive or benefit plan) for any consideration, or pay or make available any monies for a sinking fund for the redemption of, any common stock or any class or series of our stock ranking junior to or on parity with the Series B Redeemable Preferred Stock as to dividend rights or rights on our liquidation, winding-up or dissolution.

To the extent necessary to preserve our status as a REIT, the foregoing sentence, however, will not prohibit declaring or paying or setting apart for payment any dividend or other distribution on our common stock or any class or series of our stock ranking junior to or on parity with the Series B Redeemable Preferred Stock as to dividend rights or rights on our liquidation, winding-up or dissolution for any period.

Holders of the Series B Redeemable Preferred Stock are not eligible to participate in the company’s dividend reinvestment plan.

Redemption at Option of Holders.  Beginning on the date of original issuance of the shares of Series B Redeemable Preferred Stock to be redeemed, holders will have the right to require the company to redeem such shares of Series B Redeemable Preferred Stock at a redemption price equal to the Stated Value, initially $1,000 per share, less a 13.0% redemption fee, plus an amount equal to any accrued but unpaid dividends.

Beginning one year from the date of original issuance of the shares of our Series B Redeemable Preferred Stock to be redeemed, holders will have the right to require the company to redeem such shares of Series B Redeemable Preferred Stock at a redemption price equal to the Stated Value, initially $1,000 per share, less a 10% redemption fee, plus an amount equal to any accrued but unpaid dividends.

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Beginning three years from the date of original issuance of the shares of our Series B Redeemable Preferred Stock to be redeemed, holders will have the right to require the company to redeem such shares of Series B Redeemable Preferred Stock at a redemption price equal to the Stated Value, initially $1,000 per share, less a 5% redemption fee, plus an amount equal to any accrued but unpaid dividends.

Beginning four years from the date of original issuance of the shares of our Series B Redeemable Preferred Stock to be redeemed, holders will have the right to require the company to redeem such shares of Series B Redeemable Preferred Stock at a redemption price equal to the Stated Value, initially $1,000 per share, less a 3% redemption fee, plus an amount equal to any accrued but unpaid dividends.

Beginning five years from the date of original issuance of the shares of our Series B Redeemable Preferred Stock to be redeemed, holders will have the right to require the company to redeem such shares of Series B Redeemable Preferred Stock at a redemption price equal to 100% of the Stated Value, initially $1,000 per share, plus an amount equal to any accrued but unpaid dividends.

If a holder of Series B Redeemable Preferred Stock causes the company to redeem such shares of Series B Redeemable Preferred Stock, we have the right, in our sole discretion, to pay the redemption price in cash or in equal value of shares of our Class A common stock, based on the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the redemption.

The terms of the holder redemption option are set forth in the articles supplementary for the Series B Redeemable Preferred Stock and cannot be modified, changed or suspended except by a vote of our common stockholders. However, our ability to redeem shares of Series B Redeemable Preferred Stock in cash may be limited to the extent that we do not have sufficient funds available to fund such cash redemption. Further, our obligation to redeem any of the shares of Series B Redeemable Preferred Stock submitted for redemption in cash may be restricted by Maryland law.

Optional Redemption Following Death of a Holder.  Subject to restrictions, beginning on the date of original issuance and ending two years thereafter, we will redeem shares of Series B Redeemable Preferred Stock held by a natural person upon his or her death at the written request of the holder’s estate at a redemption price equal to the Stated Value, plus accrued and unpaid dividends thereon through and including the date of redemption. Upon any such redemption request from a holder’s estate, we have the right, in our sole discretion, to pay the redemption price in cash or in equal value of shares of our Class A common stock, based on the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the date of redemption. Our ability to redeem shares of Series B Redeemable Preferred Stock in cash may be limited to the extent that we do not have sufficient funds available to fund such cash redemption. Further, our obligation to redeem any of the shares of Series B Redeemable Preferred Stock submitted for redemption in cash may be restricted by Maryland law.

Optional Repurchase Following Death of a Holder.  Subject to restrictions, beginning on the second anniversary of the date of original issuance and ending three years thereafter, we will repurchase shares of Series B Redeemable Preferred Stock held by a natural person upon his or her death at the written request of the holder’s estate, without payment of a repurchase fee, at a repurchase price equal to the Stated Value, plus accrued and unpaid dividends thereon through and including the date of repurchase; provided, however, that our obligation to repurchase any of the shares of Series B Redeemable Preferred Stock is limited to the extent that the terms and provisions of any agreement to which we are a party prohibits such repurchase or provides that such repurchase would constitute a breach thereof or a default thereunder. Upon any such repurchase request from a holder’s estate, we have the right, in our sole discretion, to pay the repurchase price in cash or in equal value of shares of our Class A common stock, based on the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the date of repurchase. Our ability to repurchase shares of Series B Redeemable Preferred Stock in cash may be limited to the extent that we do not have sufficient funds available to fund such cash repurchase. Our obligation to repurchase any of the shares of Series B Redeemable Preferred Stock submitted for repurchase in cash may be further restricted by Maryland law.

Optional Redemption by the Company.  Beginning two years from the date of original issuance of the shares of Series B Redeemable Preferred Stock to be redeemed, we will have the right to redeem any or all

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shares of our Series B Redeemable Preferred Stock. We will redeem such shares of Series B Redeemable Preferred Stock at a redemption price equal to 100% of the Stated Value per share of Series B Redeemable Preferred Stock, plus an amount equal to any accrued but unpaid dividends. We have the right, in our sole discretion, to pay the redemption price in cash or in equal value of shares of our Class A common stock, based on the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the redemption, in exchange for the Series B Redeemable Preferred Stock.

We may exercise our redemption right by delivering a written notice thereof to all, but not less than all, of the holders of Series B Redeemable Preferred Stock. A notice of redemption shall be irrevocable. Each such notice will state the date on which the redemption by us shall occur, which date will be 30 days following the notice date.

Change of Control Redemption by the Company.  Upon the occurrence of a Change of Control (as defined below), we will be required to redeem all outstanding shares of the Series B Redeemable Preferred Stock in whole within 60 days after the first date on which such Change of Control occurred, in cash at a redemption price of $1,000 per share, plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date; provided, however, that if the Maryland law solvency tests prohibit us from paying the full redemption price in cash, then we will pay such portion as would otherwise violate the solvency tests in shares of our Class A common stock to holders of the Series B Redeemable Preferred Stock on a pro rata basis, based on the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the redemption. Further, our obligation to redeem any of the shares of Series B Redeemable Preferred Stock in cash may be restricted by Maryland law.

We will mail to you, if you are a record holder of the Series B Redeemable Preferred Stock, a notice of redemption no fewer than 15 days nor more than 30 days before the redemption date. We will send the notice to your address shown on our stock transfer books. A failure to give notice of redemption or any defect in the notice or in its mailing will not affect the validity of the redemption of any Series B Redeemable Preferred Stock except as to the holder to whom notice was defective. Each notice will state the following:

the redemption date;
the redemption price;
the number of shares of Series B Redeemable Preferred Stock to be redeemed;
DTC’s procedures for book entry transfer of Series B Redeemable Preferred Stock for payment of the redemption price;
that dividends on the shares of Series B Redeemable Preferred Stock to be redeemed will cease to accrue on such redemption date;
that payment of the redemption price and an amount equal to any accrued and unpaid dividends will be made upon book entry transfer of such Series B Redeemable Preferred Stock in compliance with DTC’s procedures; and
that the Series B Redeemable Preferred Stock is being redeemed pursuant to our mandatory redemption in connection with the occurrence of a Change of Control and a brief description of the transaction or transactions constituting such Change of Control.

If we have given a notice of redemption and have set apart sufficient funds for the redemption in trust for the benefit of the holders of the Series B Redeemable Preferred Stock called for redemption, then from and after the redemption date, those shares of Series B Redeemable Preferred Stock will be treated as no longer being outstanding, no further dividends will accrue and all other rights of the holders of those shares of Series B Redeemable Preferred Stock will terminate. The holders of those shares of Series B Redeemable Preferred Stock will retain their right to receive the redemption price for their shares and an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date, without interest.

The holders of Series B Redeemable Preferred Stock at the close of business on a dividend record date will be entitled to receive the dividend payable with respect to the Series B Redeemable Preferred Stock on the corresponding payment date notwithstanding the redemption of the Series B Redeemable Preferred Stock

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between such record date and the corresponding payment date or our default in the payment of the dividend due. Except as provided above, we will make no payment or allowance for unpaid dividends, whether or not in arrears, on Series B Redeemable Preferred Stock to be redeemed.

A “Change of Control” is when, after the original issuance of the Series B Redeemable Preferred Stock, any of the following has occurred and is continuing:

a “person” or “group” within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than our company, its subsidiaries, and its and their employee benefit plans, has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of our common equity representing more than 50% of the total voting power of all outstanding shares of our common equity that are entitled to vote generally in the election of directors (“Voting Stock”); provided, that notwithstanding the foregoing, such a transaction will not be deemed to involve a Change of Control if (i) we become a direct or indirect wholly-owned subsidiary of a holding company and (ii) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of our Voting Stock immediately prior to that transaction;
consummation of any share exchange, consolidation or merger of our company or any other transaction or series of transactions pursuant to which our Class A common stock will be converted into cash, securities or other property, (1) other than any such transaction where the shares of our Class A common stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the common stock of the surviving person or any direct or indirect parent company of the surviving person immediately after giving effect to such transaction, and (2) expressly excluding any such transaction preceded by our company’s acquisition of the capital stock of another company for cash, securities or other property, whether directly or indirectly through one of our subsidiaries, as a precursor to such transaction; or
Continuing Directors cease to constitute at least a majority of our board of directors;

“Continuing Director” means a director who either was a member of our board of directors on February 24, 2016 or who becomes a member of our board of directors subsequent to that date and whose appointment, election or nomination for election by our stockholders was duly approved by a majority of the continuing directors on our board of directors at the time of such approval, either by a specific vote or by approval of the proxy statement issued by our company on behalf of our board of directors in which such individual is named as nominee for director.

Liquidation Preference.  Upon any voluntary or involuntary liquidation, dissolution or winding-up of our affairs, before any distribution or payment shall be made to holders of our common stock or any other class or series of capital stock ranking junior to our shares of Series B Redeemable Preferred Stock, the holders of shares of Series B Redeemable Preferred Stock will be entitled to be paid out of our assets legally available for distribution to our stockholders, after payment or provision for our debts and other liabilities, a liquidation preference equal to the Stated Value per share, plus an amount equal to any accrued and unpaid dividends (whether or not declared) to and including the date of payment, pari passu with the holders of shares of any other class or series of our capital stock ranking on parity with the Series B Redeemable Preferred Stock, including the Series A Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock, as to the liquidation preference and accrued but unpaid dividends they are entitled to receive.

After payment of the full amount of the liquidating distributions to which they are entitled, the holders of our shares of Series B Redeemable Preferred Stock will have no right or claim to any of our remaining assets. Our consolidation or merger with or into any other corporation, trust or other entity, the consolidation or merger of any other corporation, trust or entity with or into us, the sale or transfer of any or all our assets or business, or a statutory share exchange will not be deemed to constitute a liquidation, dissolution or winding-up of our affairs.

In determining whether a distribution (other than upon voluntary or involuntary liquidation), by dividend, redemption or other acquisition of shares of our stock or otherwise, is permitted under the MGCL amounts

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that would be needed, if we were to be dissolved at the time of distribution, to satisfy the preferential rights upon dissolution of holders of the Series B Redeemable Preferred Stock will not be added to our total liabilities.

Voting Rights.  Our Series B Redeemable Preferred Stock has no voting rights, except as set forth in the Cetera Side Letter (as hereinafter defined). See “Description of Series B Redeemable Preferred Stock — Cetera Side Letter.”

Exchange Listing.  We do not plan on making an application to list the shares of our Series B Redeemable Preferred Stock on the NYSE American, any other national securities exchange or any other nationally recognized trading system. Our Class A common stock, and our Series A Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock, are listed on the NYSE American.

Cetera Side Letter

On February 6, 2017, we entered into a side letter agreement with Cetera Financial Group, Inc., or Cetera, on behalf of itself and its affiliated broker dealers who have been engaged to offer and sell the Series B Redeemable Preferred Stock, or the Cetera Side Letter, to provide certain additional protections to the holders of Series B Redeemable Preferred Stock, or the Series B Holders, in addition to those provided under our charter.

The following description of the Cetera Side Letter is a summary and is qualified in its entirety by the terms set forth in the Cetera Side Letter, a copy of which has been filed with the SEC and incorporated by reference as an exhibit to the registration statement of which this prospectus supplement is a part.

Dividend Coverage Ratio

Under the terms of the Cetera Side Letter, we have agreed, for so long as shares of Series B Redeemable Preferred Stock remain outstanding, to maintain a Dividend Coverage Ratio (as defined below) of not less than 1.1:1, or the Coverage Requirement, as of the end of each calendar quarter. Within five business days following the filing of our Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as applicable, for such calendar quarter (each, a Testing Date), we shall deliver a written certificate to Cetera (i) certifying and demonstrating by calculation that we met the Coverage Requirement as of the end of the applicable calendar quarter and (ii) certifying that we are reasonably expected to maintain the Dividend Coverage Ratio for the subsequent calendar quarter based solely on information known to our Chief Executive Officer, Chief Accounting Officer and Chief Financial Officer, as applicable, as of such Testing Date. If we are not able to make both of these representations, then following such Testing Date, we will not be permitted to issue any additional preferred stock other than stock ranking junior to the Series B Redeemable Preferred Stock with respect to any other distributions or liquidation rights upon voluntary or involuntary liquidation, dissolution or winding up of our affairs, or Junior Stock, nor to make any voluntary distributions on shares of our common stock or any other class of Junior Stock (except as required to maintain our qualification as a REIT for federal income tax purposes) until and unless the Coverage Requirement is certified in a subsequent certificate.

For purposes of the Cetera Side Letter, the Dividend Coverage Ratio shall equal: (A) our Adjusted Funds from Operations, or AFFO, calculated in accordance with commonly accepted industry standards and further adjusted to add back the expense of all preferred dividends, for the two most recent quarters, plus the sum of: (1) the product of (a)(i) unrestricted cash on our balance sheet as reflected in our Quarterly Report on Form 10-Q or Annual Report on Form 10-K, as applicable, filed at such Testing Date, or the Current Filing, minus (ii) an amount equal to the greater of $5,000,000 or 5.0% of the amount in subclause (i) (provided, if such calculation would cause the amount to be negative, it will instead be equal to zero), multiplied by (b) a 5.0% annualized rate of return over such quarterly period, and (2) the product of (a)(i) unrestricted cash on our balance sheet as reflected in the filing filed immediately preceding the Current Filing, minus (ii) an amount equal to the greater of $5,000,000 or 5.0% of the amount in subclause (i) (provided, if such calculation would cause the amount to be negative, it will instead be equal to zero), multiplied by (b) a 5.0% annualized rate of return over such quarterly period; over (B) the amount of preferred dividends required to be distributed to the Series B Holders and any preferred stock the terms of which expressly provide that it ranks (x) on parity with the Series B Redeemable Preferred Stock, or the Parity Preferred Stock, or (y) senior to the Series B Redeemable Preferred Stock, in either case with respect to any other distributions or liquidation

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rights upon voluntary or involuntary liquidation, dissolution or winding up of our affairs for such quarters without any breach, default or deferral with respect to any such distributions.

Voting Rights

Under the terms of the Cetera Side Letter, for so long as any shares of Series B Redeemable Preferred Stock remain outstanding and subject to be called for redemption, in addition to any other vote or consent of stockholders required by our charter, the affirmative vote or consent of a majority of the votes cast by the Series B Holders and the holders of Parity Preferred Stock upon which voting rights have been conferred and are exercisable as described herein (together, the Parity Holders), voting together as a single class, at a meeting at which a majority of the outstanding shares of Parity Preferred Stock are present, in person or by proxy, shall be required to (a) authorize, create or issue, or increase the number of authorized or issued shares of, any class or series of our capital stock ranking senior to the Series A Preferred Stock, Series B Redeemable Preferred Stock, Series C Preferred Stock, or Series D Preferred Stock with respect to dividend rights and rights upon our liquidation, dissolution or winding up (any such senior stock, the Senior Stock), (b) reclassify any authorized shares of our capital stock into Senior Stock, or (c) create, authorize or issue any obligation or security convertible into, or evidencing the right to purchase, Senior Stock (collectively, the Parity Preferred Voting Right). Each share of Series B Redeemable Preferred Stock is entitled to one vote per $1,000.00 of liquidation preference, and each other share of Parity Preferred Stock is entitled to one vote per $1,000.00 of liquidation preference. The Series B Holders otherwise have no voting rights.

At any time when the Parity Preferred Voting Right applies, a proper officer of the company shall call or cause to be called a special meeting of the Parity Holders by mailing or causing to be mailed to such Parity Holders a notice of such special meeting to be held not fewer than ten (10) nor more than forty-five (45) days after the date such notice is given. The record date for determining Parity Holders of the Parity Preferred Stock entitled to notice of and to vote at such special meeting will be the close of business on the third business day preceding the day on which such notice is mailed. Notice of all meetings at which Series B Holders shall be entitled to vote will be given to such Series B Holders at their addresses as they appear in our transfer records, and to Cetera at the address specified in the Cetera Side Letter.

Further Protections

For so long as any shares of Series B Redeemable Preferred Stock remain outstanding, we have agreed under the Cetera Side Letter as follows: (1) neither we, the Operating Partnership, nor any controlled subsidiary thereof may take any corporate action that restricts our ability to redeem Series B Redeemable Preferred Stock with shares of the our Class A common stock, or that is intended to or that could be reasonably expected to cause the rights of the Series B Holders under the Cetera Side Letter to be terminated or materially, adversely affected; and (2) we will not sell an asset if such sale would cause us to fail to meet the Coverage Requirement, unless such sale is reasonably necessary for us to maintain our qualification as a REIT for federal income tax purposes, as determined by a majority of our independent directors.

Class A Common Stock Warrants

The following is a brief summary of the Warrants and is subject to, and qualified in its entirety by, the terms set forth in the Warrant Agreement (as defined below) filed with the SEC and incorporated by reference as an exhibit to the registration statement, of which this prospectus supplement is a part.

Warrant Agreement.  The Warrants to be issued in this offering will be governed by a warrant agreement, or the Warrant Agreement. The Warrants shall be issued either in certificated form or by “book-entry” form, in either case to DTC, and evidenced by one or more global warrants. Those investors who own beneficial interests in a global warrant do so through participants in DTC’s system, and the rights of these indirect owners will be governed solely by the Warrant Agreement and the applicable procedures and requirements of the DTC. The Warrants may be exercised by the holders of beneficial interest in the Warrants by delivering to the warrant agent, through a broker who is a DTC participant, prior to the expiration of such Warrants, a duly signed exercise notice and payment of the exercise price for the shares of our Class A common stock for which such Warrants are being exercised, as described in more detail below.

Exercisability.  Holders may exercise the Warrants at any time beginning one year from the date of issuance, and ending at 5:00 p.m., New York time, on the date that is the fourth anniversary of such date of

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issuance. The Warrants are exercisable, at the option of each holder, in whole, but not in part, by delivering to the warrant agent a duly executed exercise notice accompanied by payment in full for the number of shares of our Class A common stock purchased upon such exercise (except in the case of a cashless exercise in the circumstances discussed below). Each Warrant is exercisable for 20 shares of our Class A common stock (subject to adjustment, as discussed below). A holder of Warrants does not have the right to exercise any portion of a Warrant to the extent that, after giving effect to the issuance of shares of our Class A common stock upon such exercise, the holder (together with its affiliates and any other persons acting as a group together with such holder or any of its affiliates) would beneficially or constructively own in excess of 9.8% in value of the shares of our capital stock outstanding or in excess of 9.8% (in value or number of shares, whichever is more restrictive) of the shares of our common stock outstanding, in each case, immediately after giving effect to the issuance of shares of our Class A common stock upon exercise of the Warrant.

Cashless Exercise.  The holder may satisfy its obligation to pay the exercise price upon the exercise of its Warrant on a cashless basis in accordance with the terms of the Warrant Agreement. When exercised on a cashless basis, a portion of the Warrant is cancelled in payment of the purchase price payable in respect of the number of shares of our Class A common stock purchasable upon such exercise. Any Warrant that is outstanding on the termination date of the Warrant shall be automatically terminated.

Exercise Price.  The exercise price of the Class A common stock purchasable upon exercise of the Warrants equals a 20% premium to the current market price per share of our Class A common stock on the date of issuance of such Warrant, subject to a minimum exercise price of $10.00 per share. The current market price will be determined using the volume weighted average price per share of our Class A common stock for the 20 trading days immediately prior to the date of the issuance of the Warrant. The exercise price and the number of shares of our Class A common stock issuable upon exercise of the Warrants is subject to appropriate adjustment from time to time in relation to the following events or actions in respect of the company: (i) we declare a dividend or make a distribution on our outstanding Class A common stock in Class A common stock; (ii) we subdivide or reclassify our outstanding Class A common stock into a greater number of shares of our Class A common stock; (iii) we combine or reclassify our outstanding Class A common stock into a smaller number of shares of our Class A common stock; or (iv) we enter into any transaction whereby the outstanding shares of our Class A common stock are at any time changed into or exchanged for a different number or kind of shares or other securities of the company or of another entity through reorganization, merger, consolidation, liquidation or recapitalization.

Transferability.  Subject to applicable law, the Warrants may be transferred at the option of the holder upon surrender of the Warrants with the appropriate instruments of transfer.

Exchange Listing.  We do not plan on making an application to list the Warrants on the NYSE American, any other national securities exchange or other nationally recognized trading system. Our Class A common stock, and our Series A Preferred Stock, Series C Preferred Stock, and Series D Preferred Stock are listed on the NYSE American.

Rights as Stockholder.  Except as otherwise provided in the Warrants or by virtue of such holder’s ownership of shares of our Class A common stock, the holders of the Warrants will not have the rights or privileges of holders of our Class A common stock, including any voting rights, until they exercise their Warrants.

Fractional Shares.  No fractional shares of Class A common stock will be issued upon the exercise of the Warrants. Rather, we shall, at our election, either pay a cash adjustment in respect of such fraction in an amount equal to such fraction multiplied by the exercise price or round up the number of shares of Class A common stock to be issued to the nearest whole number.

Restrictions on Ownership and Transfer

In order for us to maintain our qualification as a REIT under the Code, our shares of stock must be beneficially owned by 100 or more persons during at least 335 days of a taxable year of 12 months or during a proportionate part of a shorter taxable year. Also, no more than 50% of the value of our outstanding shares of capital stock may be owned, directly or indirectly, by five or fewer individuals (as defined by the Code to include certain entities) during the last half of any taxable year.

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To help us to maintain our qualification as a REIT, among other purposes, our charter, subject to certain exceptions, contains, and the Articles Supplementary establishing the Series B Redeemable Preferred Stock contains, restrictions ownership and transfer of our capital stock. Our charter generally restricts any person from acquiring beneficial or constructive ownership in excess of either (i) 9.8% in value of the aggregate of the outstanding shares of our capital stock, or (ii) 9.8% in value or in number of shares, whichever is more restrictive, of our outstanding common stock. For purposes of this calculation, Warrants treated as held by a person will be deemed to have been exercised. However, unless our board of directors decides to apply a different interpretation of our charter, Warrants held by unrelated persons will not be deemed to be exercised. As a result of this treatment, shares that could be received upon an exercise of a Warrant held by an investor will be included in both the numerator and the denominator when calculating how many shares an investor may own without violating the 9.8% ownership limits. In addition, the Articles Supplementary establishing the Series B Redeemable Preferred Stock provide that generally no person may own, or be deemed to own by virtue of the attribution provisions of the Code, more than 9.8% in value or in number of shares, whichever is more restrictive, of the outstanding Series B Redeemable Preferred Stock.

The beneficial ownership and/or constructive ownership rules under the Code are complex and may cause shares of stock owned actually or constructively by a group of related individuals and/or entities to be owned constructively by one individual or entity. See “Description of Capital Stock — Restrictions on Ownership and Transfer” in the accompanying prospectus.

The Warrant Agreement will also contain restrictions on the number of our Warrants that a person may own. The Warrant Agreement will provide that no person may beneficially or constructively own more than 9.8% of our Warrants. Violations of this restriction are subject to provisions similar to those in our charter applicable to violations of our stock ownership limits as described in “Description of Capital Stock —  Restrictions on Ownership and Transfer” in the accompanying prospectus. For this purpose, a transfer of a Warrant in violation of the foregoing restriction will be treated in the same manner as a transfer of stock in violation of our stock ownership limits.

Transfer Agent and Registrar

The transfer agent and registrar for shares of our common stock, Series A Preferred Stock, Series B Redeemable Preferred Stock, Series C Preferred Stock and Series D Preferred Stock is Computershare Trust Company, N.A.

Listing

Our shares of Class A common stock, Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock are listed on the NYSE American under the symbols “BRG,” BRG-PrA,” “BRG-PrC,” and “BRG-PrD,” respectively. Our shares of Series B Redeemable Preferred Stock are not listed on an exchange and we do not intend to apply to have any such shares listed on an exchange in the future.

Accounting Treatment of Preferred Stock

The accounting treatment of preferred stock under GAAP may vary based on the specific terms and rights of the subject preferred stock, and may result in such preferred stock being classified as either equity, mezzanine or debt on the issuer’s balance sheet accordingly. Further, the tax and legal characterization of a preferred stock as equity or debt may vary from the GAAP accounting treatment.

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ADDITIONAL MATERIAL FEDERAL INCOME TAX CONSIDERATIONS

This summary supplements the discussion contained under the caption “Material Federal Income Tax Considerations” in the accompanying prospectus and should be read in conjunction therewith. Prospective investors are urged to consult their tax advisors in order to determine the U.S. federal, state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our shares of Series B Redeemable Preferred Stock, the Warrants and our shares of Class A common stock underlying the Warrants, the tax treatment of a REIT and the effect of potential changes in the applicable tax laws.

Allocation of Purchase Price of Unit as Between Series B Redeemable Preferred Stock and Warrant.

U.S. Stockholders.  For federal income tax purposes, the purchase of each Unit will be treated as the purchase of an “investment unit” consisting of two components, a share of Series B Redeemable Preferred Stock and a Warrant to purchase 20 shares of Class A common stock exercisable by the holder at an exercise price equal to a 20% premium to the current market price per share of our Class A common stock determined using the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the date of issuance of such Warrant, subject to a minimum exercise price of $10.00 per share (subject to adjustment). The purchase price for the Unit must be allocated as between the Series B Redeemable Preferred Stock and the Warrant in proportion to their relative fair market values on the date that the Unit is purchased. The allocation of the purchase price will establish your initial tax basis for federal income tax purposes in your Series B Redeemable Preferred Stock and the Warrant. You should consult your tax advisor regarding the allocation of the purchase price between the share of Series B Redeemable Preferred Stock and the Warrant.

If the allocation of the purchase price between the Series B Redeemable Preferred Stock and the Warrant results in an “issue price” for the Series B Redeemable Preferred Stock that is lower than the price at which the Series B Redeemable Preferred stock may be redeemed under certain circumstances, this difference in price (the “redemption premium”) will be treated as a constructive distribution of additional stock on preferred stock under Code Section 305(c), unless the redemption premium is less than a statutory de minimis amount. If shares of the Series B Redeemable Preferred Stock may be redeemed at more than one time, the time and price at which redemption is most likely to occur must be determined based on all the facts and circumstances as of the issue date. Any such constructive distribution must be taken into account under principles similar to the principles governing the inclusion of accrued original issue discount under Code Section 1272(a). Under those principles, a U.S. Holder is required to include the redemption premium in gross income as it accrues under a constant yield method.

We intend to take a position, through an appropriate valuation methodology, on an allocation of the purchase price for the Units between the shares of Series B Redeemable Preferred Stock and the Warrants that comprise the Units. If the allocation results in a value for the Warrant in excess of the statutory de minimis amount, we will report the premium in gross income of U.S. Holders as it accrues under a constant yield method and include the amount on the annual dividend reporting form, Form 1099-DIV. However, our position on the allocation of the purchase price to the Warrants is not binding on the Internal Revenue Service, or IRS. If the IRS were to take a different position regarding such allocation, U.S. Holders would be required to include a different amount of redemption premium in gross income as it accrues under a constant yield method and may be required to treat any gain recognized on the disposition of the Series B Redeemable Preferred Stock as ordinary income rather than as capital gain.

Non-U.S. Stockholders.  As described above, a portion of the purchase price for the Unit will be allocated to the Warrant. Any redemption premium that may result will be treated as a constructive distribution of additional stock on preferred stock under Code Section 305(c), unless the redemption premium is less than a statutory de minimis amount. Any such constructive distribution may need to be taken into account under principles similar to the principles governing the inclusion of accrued original issue discount under Code Section 1272(a) and may be subject to a withholding tax equal to 30% of the gross amount of the dividend unless an applicable tax treaty reduces or eliminates that tax. See “Taxation of Non-U.S. Stockholders — Distributions” in the accompanying prospectus.

Because constructive dividends would not give rise to any cash from which any applicable withholding tax could be satisfied, we may withhold the federal tax on such dividend from cash proceeds otherwise payable to a Non-U.S. Stockholder.

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Redemption or Repurchase at Option of Holders

As described in “Description of Series B Redeemable Preferred Stock — Redemption at Option of Holders,” “— Optional Redemption Following Death of a Holder” and “— Optional Repurchase Following Death of a Holder,” we have the option to pay the redemption or repurchase price, in whole or in part, in cash or shares of our Class A common stock.

If we elect to pay the entire redemption or repurchase price in Class A common stock, stockholders will not recognize gain or loss, except to the extent they receive cash in lieu of fractional shares. A stockholder’s tax basis in our Class A common stock received will be equal to its adjusted tax basis in the Series B Redeemable Preferred Stock being redeemed less any portion allocable to cash received in lieu of a fractional share. Cash received in lieu of a fractional share generally will be treated as a payment in a taxable exchange for such fractional share, and gain or loss will be recognized on the receipt of cash in an amount equal to the difference between the amount of cash received and the adjusted tax basis allocable to the fractional share deemed exchanged. This gain or loss will be long-term capital gain or loss if the U.S. stockholder has held our Series B Redeemable Preferred Stock for more than one year at the time of conversion.

If we elect to pay the redemption or repurchase price partly in Class A common stock and partly in cash, stockholders will recognize no loss on the redemption or repurchase. If a stockholder realizes gain on the redemption or repurchase, the stockholder will be required to recognize that gain in an amount equal to the lesser of (1) the gain realized and (2) the amount of cash received, excluding cash attributable to a fractional share. Cash received in lieu of fractional shares will be treated as described in the paragraph above. Stockholders will realize gain to the extent the sum of the cash and the fair market value of our Class A common stock received exceeds their adjusted tax basis in the Series B Redeemable Preferred Stock. A stockholders aggregate basis in our Class A common stock received (including any fractional share interest) will be equal to the stockholder’s adjusted tax basis in the Series B Redeemable Preferred Stock, decreased by the amount of cash received (excluding cash attributable to a fractional share) and increased by the amount of gain recognized on the redemption or repurchase.

Stockholders should refer to “Material Federal Income Tax Considerations — Taxation of U.S. Stockholders on a Redemption of Our Preferred Stock” in the accompanying prospectus for a discussion of the federal income tax consequences of a cash redemption or repurchase of our Series B Redeemable Preferred Stock.

Warrants

U.S. Stockholders.  Upon the exercise of a Warrant for cash, you will not recognize gain or loss, and the amount paid for the Warrant plus the amount paid at exercise will be added to your basis in the Class A common stock received. Your holding period for the Class A common stock purchased pursuant to exercise of a Warrant for cash will generally begin no later than the day following the exercise and will not include the period you held the Warrant.

Upon a sale or other disposition (other than exercise) of a Warrant, you will recognize capital gain or loss in an amount equal to the difference between the amount realized and your tax basis in the Warrant. Such gain or loss will be long-term capital gain or loss provided you held the Warrant for more than one year at the time of sale or other disposition.

If the Warrant is allowed to lapse unexercised, you will generally have a capital loss equal to your basis in the Warrant. Such loss will be a long-term capital loss provided you held the Warrant for more than one year at the time the Warrant is allowed to lapse.

Certain adjustments to, or failure to adjust, the number of shares underlying the Warrants and/or exercise price of the Warrants may cause holders of Warrants and our stock to be treated as having received a distribution, to the extent any such adjustment or failure to adjust results in an increase in the proportionate interest of such holders in our company. Such a distribution would be taxable to holders as a dividend, return of capital or capital gain in accordance with rules discussed in the accompanying prospectus under the headings “Taxation of Taxable U.S. Stockholders” and “Taxation of Non-U.S. Stockholders — Distributions.”

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Non-U.S. Stockholders.  The discussion directly above under “U.S. Stockholders” generally applies to Non-U.S. Stockholders, except that a Non-U.S. Stockholder generally will not be subject to federal income tax or withholding tax on gain recognized upon the sale or otherwise taxable disposition of a Warrant, provided, however, that: (i) such gain is not effectively connected with the conduct by such Non-U.S. Stockholder of a trade or business within the U.S.; (ii) the Non-U.S. Stockholder is an individual and is not present in the U.S. for 183 days or more during the taxable year and certain other conditions apply; and (iii) our REIT is “domestically controlled” (see “Taxation of Non-U.S. Stockholders — Dispositions” in the accompanying prospectus).

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CERTAIN ERISA CONSIDERATIONS

The following is a summary of certain considerations associated with the acquisition and holding of our Series B Redeemable Preferred Stock and Warrants by an employee benefit plan (as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended, or ERISA) that is subject to Title I of ERISA, a plan described in, and subject to, Section 4975 of the Code, including an individual retirement account, or IRA, or a Keogh plan, a plan subject to provisions under applicable federal, state, local, non-U.S. or other laws or regulations that are similar to the provisions of Title I of ERISA or Section 4975 of the Code, which we refer to as “Similar Laws,” and any entity whose underlying assets include “plan assets” by reason of any such employee benefit or retirement plan’s investment in such entity (each of which we refer to as a “Plan”).

General Fiduciary Matters

ERISA and the Code impose certain duties on persons who are fiduciaries of a Plan subject to Title I of ERISA or Section 4975 of the Code (an “ERISA Plan”) and prohibit certain transactions involving the assets of an ERISA Plan with its fiduciaries or other interested parties. In general, under ERISA and the Code, any person who exercises any discretionary authority or control over the administration of such an ERISA Plan or the management or disposition of the assets of such an ERISA Plan, or who renders investment advice for a fee or other compensation (direct or indirect) to such an ERISA Plan, is generally considered to be a fiduciary of the ERISA Plan. Plans that are governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA or Section 4975(g)(3) of the Code) and non-U.S. plans (as described in Section 4(b)(4) of ERISA) are not subject to the requirements of ERISA or Section 4975 of the Code but may be subject to similar prohibitions under Similar Laws. In considering the acquisition, holding and, to the extent relevant, disposition of our Series B Redeemable Preferred Stock and Warrants by an ERISA Plan, a fiduciary should determine whether the investment is in accordance with the documents and instruments governing the plan, whether the investment is consistent with the plan’s needs for liquidity to satisfy minimum and other distribution requirements and whether the investment is in accordance with the applicable provisions of ERISA, the Code or any Similar Law relating to a fiduciary’s duties to the Plan including, without limitation, the prudence, diversification, delegation of control and prohibited transaction provisions of ERISA, the Code and any other applicable Similar Laws.

Prohibited Transaction Issues

Section 406 of ERISA prohibits ERISA Plans from engaging in specified transactions involving plan assets with persons or entities who are “parties in interest,” within the meaning of Section 3(14) of ERISA, and Section 4975 of the Code imposes an excise tax on certain “disqualified persons,” within the meaning of Section 4975 of the Code, who engage in similar transactions, in each case unless an exemption is available. A party in interest or disqualified person who engages in a non-exempt prohibited transaction may be subject to other penalties and liabilities under ERISA and the Code. In addition, a fiduciary of an ERISA Plan that engages in such a non-exempt prohibited transaction may be subject to penalties and liabilities under ERISA and the Code. In the case of an IRA, the occurrence of a prohibited transaction could cause the IRA to lose its tax-exempt status.

We may be a party in interest or a disqualified person with respect to ERISA Plans. The acquisition, holding and, to the extent relevant, disposition of our Series B Redeemable Preferred Stock and Warrants by an ERISA Plan with respect to which we are considered a party in interest or a disqualified person may constitute or result in a direct or indirect prohibited transaction under Section 406 of ERISA and/or Section 4975 of the Code, unless the investment is acquired, held and disposed of in accordance with an applicable statutory, class or individual prohibited transaction exemption. In this regard, the U.S. Department of Labor (the “DOL”) has issued prohibited transaction class exemptions, or “PTCEs,” that may apply to the acquisition and holding of our Series B Redeemable Preferred Stock and Warrants. These class exemptions (as may be amended from time to time) include, without limitation, PTCE 84-14 respecting transactions determined by independent qualified professional asset managers, PTCE 90-1 respecting insurance company pooled separate accounts, PTCE 91-38 respecting bank collective investment funds, PTCE 95-60 respecting life insurance company general accounts and PTCE 96-23 respecting transactions determined by in-house asset managers.

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In addition, Section 408(b)(17) of ERISA and Section 4975(d)(20) of the Code each provides a limited exemption, commonly referred to as the “service provider exemption,” from the prohibited transaction provisions of ERISA and Section 4975 of the Code for certain transactions, provided that neither the issuer of the securities nor any of its affiliates (directly or indirectly) have or exercise any discretionary authority or control or render any investment advice with respect to the assets of any ERISA Plan involved in the transaction and provided further that the ERISA Plan pays no more than adequate consideration in connection with the transaction. There can be no assurance that all of the conditions of any such exemptions will be satisfied at the time that our Series B Redeemable Preferred Stock and Warrants are acquired by a purchaser, or thereafter, if the facts relied upon for utilizing a prohibited transaction exemption change.

Governmental plans (as defined in Section 3(32) of ERISA), certain church plans (as defined in Section 3(33) of ERISA or Section 4975(g)(3) of the Code) and non-U.S. plans (as described in Section 4(b)(4) of ERISA) are not subject to the requirements of ERISA or Section 4975 of the Code but may be subject to similar prohibitions under Similar Laws. Fiduciaries of such plans should consult with their counsel before acquiring our Series B Redeemable Preferred Stock and Warrants.

Our Series B Redeemable Preferred Stock and Warrants should not be acquired, held or disposed of by any person investing “plan assets” of any Plan if such acquisition, holding and disposition will constitute a non-exempt prohibited transaction under ERISA or Section 4975 of the Code or similar violation of any applicable Similar Laws.

Plan Asset Issues

ERISA and regulations issued by the DOL (the “Plan Asset Regulations”) generally provide that when an ERISA Plan acquires an “equity interest” in an entity that is neither a security issued by an investment company registered under the Investment Company Act of 1940, as amended, nor a “publicly offered security,” the ERISA Plan’s assets include both the equity interest and an undivided interest in each of the underlying assets of the entity. It is not anticipated that our Series B Redeemable Preferred Stock and Warrants will be issued by an investment company registered under the Investment Company Act of 1940. We expect, however, that our Series B Redeemable Preferred Stock and Warrants will satisfy the requirements of a “publicly offered security” under the Plan Asset Regulations.

As noted above, if an ERISA Plan acquires “publicly offered securities” then the ERISA Plan’s assets include the equity securities acquired by the ERISA Plan but do not include an undivided interest in the underlying assets of the entity. The definition of “publicly offered securities” in the Plan Asset Regulations requires that the equity securities satisfy a registration requirement under the federal securities laws, be “widely held” and “freely transferable.”

A class of securities satisfies the registration requirement under the Plan Asset Regulations if (i) the class of securities is part of a class of securities registered under Section 12(b) or 12(g) of the Exchange Act or (ii) the class of securities is part of an offering of securities registered under the Securities Act and the class of securities of which such security is a part is registered under the Exchange Act within 120 days (or such later time as may be allowed by the Securities Exchange Commission) after the end of the fiscal year of the issuer during which the offering of such securities occurred. We anticipate that we will meet the registration requirements under the Plan Asset Regulations with respect to our Series B Redeemable Preferred Stock and Warrants.

The Plan Asset Regulations provide that a class of securities is “widely held” for purposes of the publicly offered securities exception if it is held by 100 or more persons who are independent of the issuer. We anticipate that we will meet this requirement with respect to our Series B Redeemable Preferred Stock and Warrants.

The Plan Asset Regulations provide that whether a security is “freely transferable” is a question that is determined on the basis of all relevant facts and circumstances. Our Series B Redeemable Preferred Stock and Warrants are subject to certain restrictions on transferability that are typically found in REITS and that are intended to ensure that we continue to qualify as a REIT for U.S. federal income tax purposes. The Plan Asset Regulations provide that where (as in the case of our Series B Redeemable Preferred Stock and Warrants) the minimum investment is $10,000 or less, the presence of transfer restrictions intended to prohibit transfers that

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would result in a termination or reclassification for U.S. federal or state tax purposes will not ordinarily affect a determination that such securities are “freely transferable.” Because we anticipate that (i) we will satisfy the requirement under the Plan Asset Regulations to register the Series B Redeemable Preferred Stock and Warrants, (ii) the securities will be held by 100 or more persons who are independent of us and (iii) the securities will be “freely transferable” under the Plan Asset Regulations, we believe that the publicly offered securities exception will apply to our Series B Redeemable Preferred Stock and Warrants. There can be no assurance that will we qualify for the exception, however, especially in light of the fact that the availability of the exception will depend on actions to be taken at a later date, the number of persons who acquire our Series B Redeemable Preferred Stock and Warrants and the facts and circumstances nature of the “freely transferable” requirement.

The Plan Asset Regulations also provide that an ERISA Plan’s assets include the equity security acquired by the ERISA Plan, but not an undivided interest in the issuer’s underlying assets, if the equity security is issued by an “operating company” (including a “venture capital operating company” and a “real estate operating company”) or if less than 25% of the class of equity security is held by “benefit plan investors” (the “Insignificant Participation Exception”). It is unclear whether we qualify as a real estate operating company under the Plan Asset Regulations and at this time we do not intend to rely on that exception. In addition, we do not intend to limit or monitor benefit plan investors’ investments in our Series B Redeemable Preferred Stock and Warrants and so there can be no assurance that the Insignificant Participation Exception will apply to our Series B Redeemable Preferred Stock and Warrants.

If our assets were deemed to be “plan assets” under ERISA, this would result, among other things, in (i) the application of the prudence and other fiduciary responsibility standards of ERISA to investments made by us and (ii) the possibility that certain transactions in which we might seek to engage could constitute “prohibited transactions” under ERISA and the Code.

Representation

Each purchaser of our Series B Redeemable Preferred Stock will represent and warrant that under ERISA or applicable Similar Laws either (1) it is not a Plan and no portion of the assets used to acquire or hold our Series B Redeemable Preferred Stock and Warrants constitutes assets of any Plan, or (2) the acquisition, holding and disposition of our Series B Redeemable Preferred Stock and Warrants will not constitute a prohibited transaction under Section 406 of ERISA or Section 4975 of the Code or similar violation under any applicable Similar Laws for which there is no applicable statutory, regulatory or administrative exemption.

Valuation and Reporting

ERISA Plan fiduciaries (or the trustee or custodian of an IRA) may be required to determine the fair market value of the assets of such plans on at least an annual basis and sometimes as frequently as quarterly. If the fair market value of any particular asset is not readily available, the fiduciary (or trustee or custodian in the case of an IRA) is required to make a good faith determination of that asset’s value.

Unless and until our shares of Series B Redeemable Preferred Stock are listed on a securities exchange, it is not expected that a public market for our shares of Series B Redeemable Preferred Stock will develop. To assist ERISA Plan fiduciaries (and trustees and custodians of IRAs) subject to the annual reporting requirements, we intend to provide reports of our quarterly and annual determinations of the current estimated share value to those fiduciaries (and trustees or custodians of IRAs) who identify themselves to us and request the reports until we obtain a listing for our shares of Series B Redeemable Preferred Stock.

We anticipate that we will provide annual reports of our determination of value (i) to IRA trustees and custodians not later than January 15 of each year and (ii) to the fiduciaries of other ERISA Plans within 75 days after the end of each calendar year. Each determination may be based upon valuation information available as of October 31 of the preceding year, updated, however, for any material changes occurring between October 31 and December 31.

There can be no assurance, however, that with respect to any determination of estimated value (i) the estimated value per share would actually be realized upon liquidation, (ii) the holder would realize the

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estimated net asset values if they attempted to sell the Series B Redeemable Preferred Stock or (iii) the value or method used to establish the estimated value would comply with ERISA or the Internal Revenue Code requirements described above.

ERISA Plans may be required to report certain compensation paid by us (or by third parties) to our service providers as “reportable indirect compensation” on Schedule C to Form 5500. In addition, under ERISA’s general reporting and disclosure rules, ERISA Plans that are subject to ERISA are required to include information regarding their assets, expenses and liabilities. To the extent any compensation arrangements described herein constitute reportable indirect compensation or fees that must be disclosed under ERISA, any such description (other than compensation or fees for which there is no formula used to calculate or determine the compensation or fees or an actual amount is stated), the descriptions are intended to assist the ERISA Plan in satisfying its reporting and disclosure obligations.

The foregoing discussion is general in nature and is not intended to be all-inclusive. Due to the complexity of these rules and the penalties that may be imposed upon persons involved in non-exempt prohibited transactions, it is particularly important that fiduciaries, or other persons considering purchasing our Series B Redeemable Preferred Stock and Warrants on behalf of, or with the assets of, any Plan, consult with their counsel regarding the potential applicability of ERISA, Section 4975 of the Code and any Similar Laws to such investment and whether an exemption would be applicable to the purchase and holding of our Series B Redeemable Preferred Stock and Warrants. The acquisition, holding and, to the extent relevant, disposition of our Series B Redeemable Preferred Stock and Warrants by or to any Plan is in no respect a representation by us or any of our affiliates or representatives that such an investment meets all relevant legal requirements with respect to investments by such Plans generally or any particular Plan, or that such an investment is appropriate for Plans generally or any particular Plan. Purchasers of our Series B Redeemable Preferred Stock and Warrants have the exclusive responsibility for ensuring that their purchase and holding of our Series B Redeemable Preferred Stock and Warrants complies with the fiduciary responsibility rules of ERISA and does not violate the prohibited transaction rules of ERISA, the Code or applicable Similar Laws.

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PLAN OF DISTRIBUTION

General

We are offering up to a maximum of 500,000 shares of our Series B Redeemable Preferred Stock and Warrants to purchase up to a maximum of 10,000,000 shares of our Class A common stock in this offering through our affiliate, Bluerock Capital Markets, LLC, or Bluerock Capital Markets, our dealer manager, on a “reasonable best efforts” basis, which means that the dealer manager is only required to use its good faith efforts and reasonable diligence to sell the Series B Redeemable Preferred Stock and Warrants and has no firm commitment or obligation to purchase any specific number or dollar amount of the Series B Redeemable Preferred Stock or Warrants. The Series B Redeemable Preferred Stock and Warrants will be sold in Units, with each Unit consisting of (i) one share of Series B Redeemable Preferred Stock with an initial stated value of $1,000 per share, and (ii) one Warrant to purchase 20 shares of Class A common stock, exercisable by the holder at an exercise price that is a 20% premium to the current market price per share of our Class A common stock determined using the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the date of issuance of such Warrant, subject to a minimum exercise price of $10.00 per share (subject to adjustment). Each Unit will be sold at a public offering price of $1,000 per Unit. To the extent a participating broker-dealer reduces its selling commissions below 7.0%, the public offering price per Unit will be decreased by an amount equal to such reduction. Units will not be issued or certificated. The shares of Series B Redeemable Preferred Stock and Warrants are immediately detachable and will be issued separately.

This offering is scheduled to terminate by May 23, 2021. Under rules promulgated by the SEC, in some circumstances we could continue this offering until as late as November 23, 2021 in our sole discretion. If we decide to continue this offering beyond May 23, 2021 we will further supplement the prospectus accordingly. We may terminate this offering at any time, or may offer Units pursuant to a new registration statement, including a follow-on registration statement.

We will sell Units using two closing services provided by the DTC. The first service is DTC Settlement and the second service is DRS Settlement. Investors purchasing Units through DTC Settlement will coordinate with their registered representatives to pay the full purchase price for their Units by the settlement date, and such payments will not be held in escrow. Investors who are permitted to utilize the DRS Settlement method will complete and sign subscription agreements, which will be delivered to the escrow agent, UMB Bank, N.A. In addition, such investors will pay the full purchase price for their Units to the escrow agent (as set forth in the subscription agreement), to be held in trust for the investors’ benefit pending release to us as described herein. See “— Settlement Procedures” for a description of the closing procedures with respect to each of the closing methods.

Bluerock Capital Markets, our dealer manager, is a member firm of FINRA. An affiliate of Bluerock, BR Capital Markets, LLC, owns a 100% interest in Bluerock Capital Markets. BR Capital Markets is 100% owned by R. Ramin Kamfar, a principal of Bluerock, and a family limited liability company controlled by Mr. Kamfar. Bluerock controls our dealer manager. Bluerock Capital Markets is a Massachusetts limited liability company with a principal business address of 4100 Newport Place, Suite 720, Newport Beach, California 92660 and its telephone number is (877) 826-BLUE (2583).

Compensation of Dealer Manager and Participating Broker-Dealers

We will pay to Bluerock Capital Markets selling commissions of up to 7.0% of the gross offering proceeds from this offering. We will also pay to Bluerock Capital Markets up to 3.0% of the gross offering proceeds from this offering as compensation for acting as dealer manager. As dealer manager, Bluerock Capital Markets will manage, direct and supervise its associated persons who will be wholesalers in connection with the offering. The combined selling commission and dealer manager fee under this offering will not exceed FINRA’s 10.0% cap. Our dealer manager will repay to the company any excess payments made to our dealer manager over FINRA’s 10.0% cap if this offering is abruptly terminated before reaching the maximum amount of offering proceeds. We will not pay referral or similar fees to any accountants, attorneys or other persons in connection with the distribution of the Units.

We expect Bluerock Capital Markets to authorize other broker-dealers that are members of FINRA, which we refer to as participating broker-dealers, to sell our Units. Bluerock Capital Markets may reallow all

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or a portion of its selling commissions attributable to a participating broker-dealer. Bluerock Capital Markets may also reallow a portion of its dealer manager fee earned on the proceeds raised by a participating broker-dealer, to such participating broker-dealer as a non-accountable marketing or due diligence allowance. The amount of the reallowance to any participating broker-dealer will be determined by the dealer manager in its sole discretion.

We will not pay any selling commissions in connection with the sale of Units to investors whose contracts for investment advisory and related brokerage services include a fixed or “wrap” fee feature or sales of Units otherwise made to a client of an investment advisor through such advisor. Investors may agree with their participating broker-dealers to reduce the amount of selling commissions payable with respect to the sale of their Units down to zero (i) if the investor has engaged the services of a registered investment advisor, or RIA, or other financial advisor who will be paid compensation for investment advisory services or other financial or investment advice, or (ii) if the investor is investing through a bank trust account with respect to which the investor has delegated the decision-making authority for investments made through the account to a bank trust department. Dealer manager fees will still be charged in these fixed or “wrap” fee arrangements; however, the dealer manager reserves the right, in its sole discretion, to reduce such fees in connection with these sales. In the event that an investor purchases Units net of selling commissions and/or with reduced dealer manager fees, the net proceeds to us will not be affected, and each share of Series B Redeemable Preferred Stock sold as part of a Unit pursuant to this arrangement will have an initial stated value of $1,000.00. Neither our dealer manager nor its affiliates will directly or indirectly compensate any person engaged as an investment advisor or a bank trust department by a potential investor as an inducement for such investment advisor or bank trust department to advise favorably for an investment in Units.

Dealer Manager and Participating Broker-Dealer Compensation

The table below sets forth the nature and estimated amount of all items viewed as “underwriting compensation” by FINRA, assuming we sell all the Units offered hereby.

 
Selling commissions (maximum)   $ 35,000,000  
Dealer manager fee (maximum)   $ 15,000,000  
Total   $ 50,000,000  

We also will reimburse Bluerock Capital Markets for reimbursements it may make to participating broker-dealers for bona fide due diligence expenses presented on detailed and itemized invoices.

We or our affiliates also may provide permissible forms of non-cash compensation to registered representatives of our dealer manager and the participating broker-dealers, including gifts. In no event shall such gifts exceed an aggregate value of $100 per annum per participating salesperson, or be pre-conditioned on achievement of a sales target. The value of such items will be considered underwriting compensation in connection with this offering. The combined selling commissions, dealer manager fee and such non-cash compensation under this offering will not exceed FINRA’s 10.0% cap. Our dealer manager will repay to the company any excess payments made to our dealer manager over FINRA’s 10.0% cap if this offering is abruptly terminated before reaching the maximum amount of offering proceeds. The dealer manager’s legal expenses will be paid by the dealer manager from the dealer manager fee.

To the extent permitted by law and our charter, we will indemnify the participating broker-dealers and Bluerock Capital Markets against certain civil liabilities, including certain liabilities arising under the Securities Act and liabilities arising from breaches of our representations and warranties contained in the dealer manager agreement. However, the SEC takes the position that indemnification against liabilities arising under the Securities Act is against public policy and is not enforceable.

We do not expect the actual amount of expenses incurred in connection with this offering to exceed 1.5% of gross offering proceeds, though the amount of such expenses may exceed the expected amount, as long as said expenses would not cause the cumulative selling commissions, dealer manager fee and issuer organization and offering expenses paid by us to exceed 15.0% of gross offering proceeds. This includes all expenses (other than selling commissions and the dealer manager fee) to be paid by us or on our behalf in connection with the qualification and registration of this offering and the marketing and distribution of the Units, including, without limitation, expenses for printing and amending registration statements or supplementing

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prospectuses, mailing and distributing costs, all advertising and marketing expenses (including actual costs incurred for travel, meals and lodging for our employees to attend retail seminars hosted by broker-dealers or bona fide training or educational meetings hosted by us), charges of transfer agents, registrars and experts and fees, expenses and taxes related to the filing, registration and qualification, as necessary, of the sale of the Units under federal and state laws, including taxes and fees and accountants’ and attorneys’ fees. All organization and offering expenses, including selling commissions and the dealer manager fee, are not expected to exceed 11.5% of the aggregate gross proceeds of this offering, though the amount of such expenses may exceed the expected amount.

We will be responsible for the expenses of issuance and distribution of the Units in this offering, including registration fees, printing expenses and the company’s legal and accounting fees, which we estimate will total approximately $7.5 million (excluding selling commissions and dealer manager fees).

The obligations of the dealer manager may be terminated in the event of a material adverse change in economic, political or financial conditions or upon the occurrence of certain other conditions specified in the dealer manager agreement.

In the event our dealer manager enters into a participating broker-dealer agreement that provides for less than a 7.0% selling commission to be paid to the participating broker-dealer, we will reduce the public offering price per Unit on sales made by such participating broker-dealer by an amount equal to the reduction in commissions paid to such participating broker-dealer. The net proceeds to us will not be affected by the reduction in commissions and corresponding reduction in the offering price per Unit on such sales.

Settlement Procedures

If your broker-dealer uses DTC Settlement, then you can place an order for the purchase of Units through your broker-dealer. A broker-dealer using this service will have an account with DTC in which your funds are placed to facilitate the anticipated monthly closing cycle. Orders will be executed by your broker-dealer electronically and you must coordinate with your registered representative to pay the full purchase price of the Units by the settlement date, which depends on when you place the order during the monthly settlement cycle and can be anywhere from one to 20 days after the date of your order. This purchase price will not be held in escrow.

Under special circumstances, you have the option to elect to use DRS Settlement. If you elect to use DRS Settlement, you should complete and sign a subscription agreement similar to the one filed as an exhibit to the registration statement of which this prospectus supplement is a part, which is available from your registered representative and which will be delivered to the escrow agent. In connection with a DRS Settlement subscription, you should pay the full purchase price of the Units to the escrow agent as set forth in the subscription agreement. Subscribers may not withdraw funds from the escrow account. Subscriptions will be effective upon our acceptance, and we reserve the right to reject any subscription in whole or in part.

Irrespective of whether you purchase Units using DTC Settlement or DRS Settlement, by accepting Units you will be deemed to have accepted the terms of our charter.

Subject to compliance with Rule 15c2-4 of the Exchange Act, in connection with purchases using DRS Settlement, our dealer manager or the broker-dealers participating in this offering promptly will deposit any checks received from subscribers in an escrow account maintained by UMB Bank, N.A. by the end of the next business day following receipt of the subscriber’s subscription documents and check. In certain circumstances where the subscription review procedures are more lengthy than customary or pursuant to a participating broker-dealer’s internal supervising review procedures, a subscriber’s check will be transmitted by the end of the next business day following receipt by the review office of the dealer, which will then be promptly deposited by the end of the next business day following receipt by the review office. Any subscription payments received by the escrow agent will be deposited into a special non-interest bearing account in our name until such time as we have accepted or rejected the subscription and will be held in trust for your benefit, pending our acceptance of your subscription. Subscriptions will be accepted or rejected within 10 business days of receipt by us and, if rejected, all funds shall be returned to the rejected subscribers

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within 10 business days. If accepted, the funds will be transferred into our general account on our next closing date. You will receive a confirmation of your purchase subsequent to a closing. We generally will admit stockholders on a semimonthly basis.

Investors purchasing Units through DTC Settlement will coordinate with their registered representatives to pay the full purchase price for their Units by the settlement date, and such payments will not be held in escrow.

Each participating dealer who sells shares on our behalf has the responsibility to make every reasonable effort to determine that the purchase of shares is appropriate for the investor. In making this determination, the participating broker-dealer will rely on relevant information provided by the investor, including information as to the investor’s age, investment objectives, investment experience, income, net worth, financial situation, other investments and other pertinent information. Each investor should be aware that the participating broker-dealer will be responsible for determining whether this investment is appropriate for your portfolio. However, you are required to represent and warrant in the subscription agreement or, if placing an order through your registered representative not through a subscription agreement in connection with a DTC Settlement, to the registered representative, that you have received a copy of this prospectus supplement and have had sufficient time to review this prospectus supplement. Bluerock Capital Markets and each participating broker-dealer shall maintain records of the information used to determine that an investment in the Units is suitable and appropriate for an investor. These records are required to be maintained for a period of at least six years.

Minimum Purchase Requirements

For your initial investment in our Units, you must invest at least $5,000, or such lesser amounts in the discretion of Bluerock Capital Markets, our dealer manager. In order to satisfy the minimum purchase requirement for retirement plans, unless otherwise prohibited by state law, a husband and wife may jointly contribute funds from their separate IRAs. You should note that an investment in the Units will not, in itself, create a retirement plan and that, in order to create a retirement plan, you must comply with all applicable provisions of the Code.

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LEGAL MATTERS

The statements under the caption “Additional Material Federal Income Tax Considerations” as they relate to U.S. federal income tax matters have been reviewed by our special tax counsel, Vinson & Elkins, LLP, which has opined as to certain federal income tax matters relating to Bluerock Residential Growth REIT, Inc. Certain legal matters regarding the validity of the shares of Series B Redeemable Preferred Stock offered hereby and certain matters of Maryland law have been passed upon for us by Venable LLP.

EXPERTS

The consolidated financial statements of Bluerock Residential Growth REIT, Inc. and subsidiaries as of December 31, 2017 and 2016 and for each of the three years in the period ended December 31, 2017 and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2017 incorporated by reference in this prospectus supplement and the accompanying prospectus have been so incorporated in reliance on the reports of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

The historical statement of revenues and certain direct operating expenses of Sovereign Apartments for the period from November 1, 2014 (commencement of real estate operations) through December 31, 2014 incorporated by reference in this prospectus have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

The historical statement of revenues and certain direct operating expenses of Park & Kingston for the year ended December 31, 2014 incorporated by reference in this prospectus have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

The historical statement of revenues and certain direct operating expenses of Arium Palms at World Gateway for the year ended December 31, 2014 incorporated by reference in this prospectus have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

The historical statement of revenues and certain direct operating expenses of Summer Wind for the year ended December 31, 2014 incorporated by reference in this prospectus have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

The historical statement of revenues and certain direct operating expenses of Citation Club on Palmer Ranch for the year ended December 31, 2014 incorporated by reference in this prospectus have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

The historical statement of revenues and certain direct operating expenses of Alexan Henderson Beach Apartments for the year ended December 31, 2014 incorporated by reference in this prospectus supplement and the accompanying prospectus have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

The historical statement of revenues and certain direct operating expenses of Tenside Apartments for the year ended December 31, 2015 incorporated by reference in this prospectus supplement and the accompanying prospectus have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

The combined historical statement of revenues and certain direct operating expenses of The Mansions at Canyon Springs Apartments, The Towers at TPC Apartments, The Estates at Crown Ridge Apartments, The Mansions at Cascades I Apartments and The Mansions at Cascades II Apartments for the year ended December 31, 2016 incorporated by reference in this prospectus supplement and the accompanying prospectus

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have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

The combined historical statement of revenues and certain direct operating expenses of ARIUM Metrowest and ARIUM Hunter’s Creek (collectively, the “Crow Portfolio”) for the year ended December 31, 2016 incorporated by reference in this prospectus supplement and the accompanying prospectus have been so incorporated in reliance on the report of BDO USA, LLP, an independent registered public accounting firm, incorporated herein by reference, given on the authority of said firm as experts in auditing and accounting.

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WHERE YOU CAN FIND MORE INFORMATION

We file annual, quarterly and current reports, proxy statements and other information with the SEC under the Exchange Act.

We will provide to each person, including any beneficial owner, to whom our prospectus is delivered, upon request, a copy of any or all of the information that we have incorporated by reference into our prospectus but not delivered with our prospectus. To receive a free copy of any of the documents incorporated by reference in our prospectus, other than exhibits, unless they are specifically incorporated by reference in those documents, call or write us at:

Bluerock Residential Growth REIT, Inc.
c/o Bluerock Real Estate, L.L.C.
712 Fifth Avenue
9th Floor
New York, New York 10019
(877) 826-BLUE (2583)

Our website at www.bluerockresidential.com contains additional information about us. Our website and the information contained therein or connected thereto do not constitute a part of this prospectus supplement, the accompanying prospectus or any supplement thereto.

We have filed with the SEC a registration statement on Form S-3 with respect to the securities offered hereby, of which this prospectus supplement and accompanying prospectus are a part under the Securities Act of 1933. This prospectus supplement and accompanying prospectus do not contain all of the information set forth in the registration statement, portions of which have been omitted as permitted by the rules and regulations of the SEC. Statements contained in this prospectus supplement and accompanying prospectus as to the content of any contract or other document incorporated by reference in the registration statement are necessarily summaries of such contract or other document, with each such statement being qualified in all respects by such contract or other document as incorporated by reference in the registration statement. For further information regarding our company and the securities offered by this prospectus supplement and accompanying prospectus, reference is made by this prospectus supplement and accompanying prospectus to the registration statement and the schedules and exhibits incorporated therein by reference.

The registration statement and the schedules and exhibits forming a part of the registration statement filed by us with the SEC can be inspected and copies obtained from the Securities and Exchange Commission at Room 1580, 100 F Street, N.E., Washington, D.C. 20549. Copies of such material can be obtained from the Public Reference Section of the Securities and Exchange Commission, Room 1580, 100 F Street, N.E., Washington, D.C. 20549, at prescribed rates. In addition, the SEC maintains a website that contains reports, proxies and information statements and other information regarding our company and other registrants that have been filed electronically with the SEC. The address of such site is http://www.sec.gov.

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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

We are incorporating certain information about us that we have filed with the SEC by reference in this prospectus supplement and accompanying prospectus, which means that we are disclosing important information to you by referring you to those documents. We are also incorporating by reference in this prospectus supplement and accompanying prospectus information that we file with the SEC after this date. The information we incorporate by reference is an important part of this prospectus supplement and accompanying prospectus, and later information that we file with the SEC automatically will update and supersede the information we have included in or incorporated by reference into this prospectus supplement and accompanying prospectus.

We incorporate by reference the following documents we have filed, or may file, with the SEC:

Our Annual Report on Form 10-K for the year ended December 31, 2017 filed with the SEC on March 13, 2018;
Our Quarterly Report on Form 10-Q for the period ended March 31, 2018 filed with the SEC on May 9, 2018;
Our Quarterly Report on Form 10-Q for the period ended June 30, 2018 filed with the SEC on August 8, 2018;
Our Current Reports on Form 8-K and amendments thereto on Form 8-K/A, as applicable, filed with the SEC on January 8, 2016, January 11, 2016, March 15, 2016, July 20, 2016, September 29, 2016, December 7, 2016, February 13, 2017, August 9, 2017; November 6, 2017; November 9, 2017, November 20, 2017, January 5, 2018, February 15, 2018, March 19, 2018, March 20, 2018, May 4, 2018, May 14, 2018, July 16, 2018; August 13, 2018; October 2, 2018, October 9, 2018, and October 10, 2018;
The description of our shares of 7.125% Series D Cumulative Preferred Stock contained in our Form 8-A, filed October 12, 2016, including any amendments or reports filed for the purpose of updating the description;
The description of our shares of 7.625% Series C Cumulative Redeemable Preferred Stock contained in our Form 8-A, filed July 18, 2016, including any amendments or reports filed for the purpose of updating the description;
The description of our shares of 8.250% Series A Cumulative Redeemable Preferred Stock contained in our Form 8-A, filed October 20, 2015, including any amendments or reports filed for the purpose of updating the description;
The description of our shares of Class A common stock contained in our Form 8-A, filed March 21, 2014, including any amendments or reports filed for the purpose of updating the description;
The Historical Statements of Revenues and Certain Direct Operating Expenses of Sovereign Apartments for the period from November 1, 2014 (commencement of real estate operations) through December 31, 2014 (audited) and the nine months ended September 30, 2015 (unaudited) as provided in the company’s Current Report on Form 8-K/A filed with the SEC on January 8, 2016;
The Historical Statement of Revenues and Certain Direct Operating Expenses of Sorrel Phillips Creek Ranch Apartments for the period from January 1, 2015 (commencement of real estate operations) through September 30, 2015 (unaudited) as provided in the company’s Current Report on Form 8-K/A filed with the SEC on January 8, 2016;
The Historical Statement of Revenues and Certain Direct Operating Expenses of Park & Kingston for the year ended December 31, 2014 (audited) as provided in the company’s Current Report on Form 8-K filed with the SEC on January 11, 2016;

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The Historical Statements of Revenues and Certain Direct Operating Expenses of Whetstone Apartments for the three months ended March 31, 2015 (unaudited) and the period from September 19, 2014 (commencement of real estate operations) through December 31, 2014 (unaudited) as provided in the company’s Current Report on Form 8-K filed with the SEC on January 11, 2016;
The Historical Statements of Revenues and Certain Direct Operating Expenses of Arium Palms at World Gateway for the year ended December 31, 2014 (audited) and the six months ended June 30, 2015 and 2014 (unaudited) as provided in the company’s Current Report on Form 8-K filed with the SEC on January 11, 2016;
The Historical Statement of Revenues and Certain Direct Operating Expenses of Ashton Reserve at Northlake Phase II for the period from January 1, 2015 (commencement of real estate operations) through September 30, 2015 (unaudited) as provided in the company’s Current Report on Form 8-K filed with the SEC on January 11, 2016;
The Historical Statements of Revenues and Certain Direct Operating Expenses of Summer Wind for the year ended December 31, 2014 (audited) and the nine months ended September 30, 2015 and 2014 (unaudited) as provided in the company’s Current Report on Form 8-K filed with the SEC on January 11, 2016;
The Historical Statements of Revenues and Certain Direct Operating Expenses of Citation Club on Palmer Ranch for the year ended December 31, 2014 (audited) and the nine months ended September 30, 2015 and 2014 (unaudited) as provided in the company’s Current Report on Form 8-K filed with the SEC on January 11, 2016;
The Historical Statements of Revenues and Certain Direct Operating Expenses of Alexan Henderson Beach Apartments for the year ended December 31, 2014 (audited) and the nine months ended September 30, 2015 and 2014 (unaudited) as provided in the company’s Current Report on Form 8-K filed with the SEC on March 15, 2016;
The Historical Statements of Revenues and Certain Direct Operating Expenses of Tenside Apartments for the year ended December 31, 2015 (audited) and the six months ended June 30, 2016 and 2015 (unaudited) as provided in the company’s Current Report on Form 8-K/A filed with the SEC on September 29, 2016;
The Historical Statements of Revenues and Certain Direct Operating Expenses of Roswell City Walk for the year ended December 31, 2015 (unaudited) and the nine months ended September 30, 2016 and 2015 (unaudited) as provided in the company’s Current Report on Form 8-K/A filed with the SEC on February 13, 2017;
The Combined Historical Statement of Revenues and Certain Direct Operating Expenses of The Mansions at Canyon Springs Apartments, The Towers at TPC Apartments, The Estates at Crown Ridge Apartments, The Mansions at Cascades I Apartments and The Mansions at Cascades II Apartments for the year ended December 31, 2016 (audited) and the three months ended March 31, 2017 and 2016 (unaudited) as provided in the company’s Current Report on Form 8-K/A filed with the SEC on August 9, 2017;
The Combined Historical Statements of Revenues and Certain Direct Operating Expenses of ARIUM Metrowest and ARIUM Hunter’s Creek (collectively, the “Crow Portfolio”) for the year ended December 31, 2016 (audited) and the six months ended June 30, 2017 and 2016 (unaudited) as provided in the company’s Current Report on Form 8-K/A filed with the SEC on November 6, 2017; and

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All documents that we file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act on or after the date of the initial filing of the registration statement of which this prospectus supplement and the accompanying prospectus forms a part and prior to the effectiveness of such registration statement and on or after the date of this prospectus supplement and the accompanying prospectus and prior to the termination of the offering made pursuant to this prospectus supplement and the accompanying prospectus are also incorporated herein by reference and will automatically update and supersede information contained or incorporated by reference in this prospectus supplement and the accompanying prospectus.

We are not, however, incorporating by reference any documents or portions thereof, whether specifically listed above or filed in the future, that are furnished to, but not deemed “filed” with, the SEC, including our compensation committee report and performance graph (included in any proxy statement) or any information furnished pursuant to Item 2.02 or Item 7.01 of Form 8-K (or corresponding information furnished under Item 9.01 or included as an exhibit to Form 8-K).

The Section entitled “Where You Can Find More Information” above describes how you can obtain or access any documents or information that we have incorporated by reference herein. The information relating to us contained in this prospectus supplement and accompanying prospectus does not purport to be comprehensive and should be read together with the information contained in the documents incorporated or deemed to be incorporated by reference in this prospectus supplement and accompanying prospectus.

Upon written or oral request, we will provide, free of charge, to each person, including any beneficial owner, to whom a prospectus is delivered, a copy of any or all of the reports or documents that are incorporated by reference into this prospectus supplement and accompanying prospectus. Such written or oral requests should be made to:

Bluerock Residential Growth REIT, Inc.
c/o Bluerock Real Estate, L.L.C.
712 Fifth Avenue
9th Floor
New York, New York 10019
(877) 826-BLUE (2583)

In addition, such reports and documents may be found on our website at www.bluerockresidential.com.

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PROSPECTUS

[GRAPHIC MISSING]

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

$2,500,000,000

Class A Common Stock
Preferred Stock
Depositary Shares
Debt Securities
Warrants
Units

We may offer, issue and sell from time to time, together or separately, the securities described in this prospectus at an aggregate public offering price that will not exceed $2,500,000,000.

This prospectus describes some of the general terms that apply to the securities. We will provide the specific terms of any securities we may offer in supplements to this prospectus. You should read this prospectus and any applicable prospectus supplement carefully before you invest. We also may authorize one or more free writing prospectuses to be provided to you in connection with an offering. The prospectus supplement and any free writing prospectus also may add, update or change information contained or incorporated in this prospectus.

We may offer and sell these securities to or through one or more underwriters, dealers or agents, or directly to purchasers on a continuous or delayed basis. The prospectus supplement for each offering of securities will describe the plan of distribution for that offering. For general information about the distribution of securities offered, see “Plan of Distribution” in this prospectus. The prospectus supplement also will set forth the price to the public of the securities and the net proceeds that we expect to receive from the sale of such securities.

Our Class A common stock, $0.01 par value per share, is listed on the NYSE American, formerly known as the NYSE MKT, under the symbol “BRG.” On May 15, 2018, the last sale price of our Class A common stock as reported on the NYSE American was $8.87 per share. Our 8.250% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share, or our Series A Preferred Stock, is listed on the NYSE American under the symbol “BRG-PrA.” On May 15, 2018, the last sale price of our Series A Preferred Stock as reported on the NYSE American was $25.15 per share. Our 7.625% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per share, or our Series C Preferred Stock, is listed on the NYSE American under the symbol “BRG-PrC.” On May 15, 2018, the closing price of our Series C Preferred Stock as reported on the NYSE American was $23.59 per share. Our 7.125% Series D Cumulative Preferred Stock, $0.01 par value per share, or our Series D Preferred Stock, is listed on the NYSE American under the symbol “BRG- PrD.” On May 15, 2018, the closing price of our Series D Preferred Stock as reported on the NYSE American was $21.82 per share. Currently no market exists for our Series B Redeemable Preferred Stock, $0.01 par value per share, or the Series B Preferred Stock, or any of the underlying warrants to purchase shares of our Class A common stock, or the Warrants, and we do not expect a market to develop. We do not intend to apply for a listing of the Series B Preferred Stock or any of the Warrants on any national securities exchange.

We have elected to qualify as a real estate investment trust, or REIT, for federal income tax purposes under the Internal Revenue Code of 1986, as amended, or the Code. Shares of our capital stock are subject to ownership limitations that are intended, among other things, to assist us in maintaining our qualification as a REIT. Our charter and Articles Supplementary contain certain restrictions relating to the ownership and transfer of our capital stock, including, subject to certain exceptions, a 9.8% ownership limit (in value or in number of shares, whichever is more restrictive) of common stock, Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, or Series D Preferred Stock. See “Description of Capital Stock — Restrictions on Ownership and Transfer” in this prospectus for a description of these restrictions.

Investing in our securities involves a high degree of risk. You should carefully read and consider “Risk Factors” included on page 7 of this prospectus, in our most recent Annual Report on Form 10-K, any of our subsequent Quarterly Reports on Form 10-Q and any of our Current Reports on Form 8-K, and under similar headings in the other documents that are incorporated by reference into this prospectus, and in any applicable prospectus supplement for a discussion of the risks that should be considered in connection with your investment in our securities.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this prospectus. Any representation to the contrary is a criminal offense.

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  Page
ABOUT THIS PROSPECTUS     1  
CERTAIN DEFINITIONS     2  
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS     3  
BLUEROCK RESIDENTIAL GROWTH REIT, INC.     5  
RISK FACTORS     7  
RATIO OF EARNINGS TO FIXED CHARGES AND OF EARNINGS TO COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS     8  
USE OF PROCEEDS     9  
DESCRIPTION OF THE SECURITIES WE MAY OFFER     10  
DESCRIPTION OF CAPITAL STOCK     11  
DESCRIPTION OF DEPOSITARY SHARES     42  
DESCRIPTION OF DEBT SECURITIES     43  
DESCRIPTION OF WARRANTS     49  
DESCRIPTION OF UNITS     50  
BOOK ENTRY PROCEDURES AND SETTLEMENT     51  
IMPORTANT PROVISIONS OF MARYLAND CORPORATE LAW AND OUR CHARTER AND BYLAWS     52  
MATERIAL FEDERAL INCOME TAX CONSIDERATIONS     57  
PLAN OF DISTRIBUTION     83  
LEGAL MATTERS     86  
EXPERTS     86  
WHERE YOU CAN FIND MORE INFORMATION     88  
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE     89  

We have not authorized any dealer, salesperson or other person to give any information or to make any representation other than those contained or incorporated by reference in this prospectus. You must not rely upon any information or representation not contained or incorporated by reference in this prospectus. This prospectus does not constitute an offer to sell or the solicitation of an offer to buy any securities other than the registered securities to which it relates, nor does this prospectus constitute an offer to sell or the solicitation of an offer to buy securities in any jurisdiction to any person to whom it is unlawful to make such offer or solicitation in such jurisdiction. You should not assume that the information contained in this prospectus is accurate on any date subsequent to the date set forth on its front cover or that any information we have incorporated by reference is correct on any date subsequent to the date of the document incorporated by reference, even though this prospectus is delivered or securities are sold on a later date.

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ABOUT THIS PROSPECTUS

This prospectus is part of a “shelf” registration statement on Form S-3 that we have filed with the Securities and Exchange Commission, or the SEC. By using a shelf registration statement, we may sell, at any time and from time to time, in one or more offerings, any combination of the securities described in this prospectus for up to a total dollar amount of $2,500,000,000 at prices and on terms to be determined at the time of offering. The exhibits to our registration statement and documents incorporated by reference contain the full text of certain contracts and other important documents that we have summarized in this prospectus or that we may summarize in a prospectus supplement. Since these summaries may not contain all the information that you may find important in deciding whether to purchase the securities we offer, you should review the full text of these documents. The registration statement and the exhibits and other documents can be obtained at the SEC’s website (www.sec.gov) and as otherwise may be indicated under the sections entitled “Where You Can Find More Information” and “Incorporation of Certain Documents By Reference.”

This prospectus only provides you with a general description of the securities we may offer and sell from time to time, which is not meant to be a complete description of each such security. Each time we sell securities, we will provide a prospectus supplement that contains specific information about the terms of those securities. The prospectus supplement also may add, update or change information contained in this prospectus. If there is any inconsistency between the information in this prospectus and any prospectus supplement, you should rely on the information in the prospectus supplement. You should read carefully both this prospectus and any prospectus supplement together with the additional information described under the sections entitled “Where You Can Find More Information” and “Incorporation of Certain Documents By Reference.”

Unless otherwise indicated or the context requires otherwise, including with respect to the securities offered by this prospectus as described in “Description of the Securities We May Offer,” in this prospectus and any prospectus supplement hereto, references to “the company,” “we,” “us” and “our” mean Bluerock Residential Growth REIT, Inc., a Maryland corporation, together with its consolidated subsidiaries, including, without limitation, Bluerock Residential Holdings, L.P., a Delaware limited partnership of which we are the sole general partner, which we refer to as our Operating Partnership. We refer to Bluerock Real Estate, L.L.C., a Delaware limited liability company, as Bluerock, and we refer to our former external manager, BRG Manager, LLC, a Delaware limited liability company, as our former Manager. Both Bluerock and our former Manager are related parties to the company.

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CERTAIN DEFINITIONS

We use certain defined terms throughout this prospectus, any prospectus supplement, and in other documents that are incorporated by reference into this prospectus, which terms have the following meanings:

Class A: Class A properties are generally properties that are recently built or substantially rehabilitated. Class A properties typically contain high-end interior finishes and modern ceiling heights, and offer a variety of amenities, which may include fitness/spa facilities, resort-style pool, business center and WiFi connectivity, and outdoor/indoor social gathering spaces.

Core-Plus: Core-Plus investments generally consist of properties that demonstrate predictable and stable cash flow with a high proportion of the total return attributable to current income. These communities, however, also provide an opportunity for the owner to achieve appreciation by increasing occupancy and/or executing enhancement projects. These enhancement projects can generally be undertaken without disrupting the property’s rent roll and while maintaining occupancy and the in-place cash flow stream.

Invest-to-Own: Invest-to-Own investments generally consist of investment in the development of Class A properties where the investor can capture significant development premiums and minimize and/or eliminate development risks and guarantees. Our targeted Invest-to-Own investments will generally take the form of a convertible mezzanine loan or convertible preferred equity structure that provides income during the development period and/or the ability to capture development premiums at completion by exercising the conversion right to take control and an equity stake in the ownership of the project.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Statements included in this prospectus and the information incorporated by reference into this prospectus that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto) are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act; Section 27A of the Securities Act of 1933, as amended, or the Securities Act; and pursuant to the Private Securities Litigation Reform Act of 1995. These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual events or our investments and results of operations could differ materially from those expressed or implied in any forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology.

The forward-looking statements included herein and incorporated herein by reference are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Factors that could have a material adverse effect on our operations and future prospects include, but are not limited to:

the factors included in this prospectus and incorporated herein by reference, including those set forth under the heading “Risk Factors”;
our ability to invest the net proceeds of any capital offering in the manner set forth in this prospectus or any applicable prospectus supplement;
the competitive environment in which we operate;
real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets;
decreased rental rates or increasing vacancy rates;
our ability to lease units in newly acquired or newly constructed apartment properties;
potential defaults on or non-renewal of leases by tenants;
creditworthiness of tenants;
our ability to obtain financing for and complete acquisitions under contract under the contemplated terms, or at all;
development and acquisition risks, including rising and unanticipated costs and failure of such acquisitions and developments to perform in accordance with projections;
the timing of acquisitions and dispositions;
the performance of our network of leading regional apartment owner/operators with which we invest through controlling positions in joint ventures;
potential natural disasters such as hurricanes, tornadoes and floods;
national, international, regional and local economic conditions;
board determination as to timing and payment of dividends, and our ability to pay future distributions at the dividend rates set forth in this prospectus or any applicable prospectus supplement;
the general level of interest rates;

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potential changes in the law or governmental regulations that affect us and interpretations of those laws and regulations, including changes in real estate and zoning or tax laws, and potential increases in real property tax rates;
financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;
lack of or insufficient amounts of insurance;
our ability to maintain our qualification as a REIT;
litigation, including costs associated with prosecuting or defending claims and any adverse outcomes;
possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us or a subsidiary owned by us or acquired by us;
the possibility that the anticipated benefits from the internalization of our former external Manager, or the Internalization, may not be realized or may take longer to realize than expected, or that unexpected costs or unexpected liabilities may arise from the Internalization;
our ability to manage the Internalization effectively or efficiently; and
the outcome of any legal proceedings that may be instituted against us or others in connection with the Internalization.

Any of the assumptions underlying forward-looking statements could be inaccurate. You are cautioned not to place undue reliance on any forward-looking statements included in this prospectus or included herein by reference. All forward-looking statements are made as of the date of this prospectus or the date of any document incorporated herein by reference, and the risk that actual results will differ materially from the expectations expressed in this prospectus and included herein by reference will increase with the passage of time. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason. In light of the significant uncertainties inherent in the forward-looking statements included in this prospectus and included herein by reference, including, without limitation, the risks described under “Risk Factors,” the inclusion of such forward-looking statements should not be regarded as a representation by us or any other person that the objectives and plans set forth in this prospectus or included herein by reference will be achieved.

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BLUEROCK RESIDENTIAL GROWTH REIT, INC.

Bluerock Residential Growth REIT, Inc. was formed as a Maryland corporation on July 25, 2008, and has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the Code, commencing with our taxable year ended December 31, 2010. On October 31, 2017, we became an internally-managed REIT as a result of the completion of the management internalization transactions (the “Internalization”) described below under “Management Internalization.” Prior to completing the Internalization, we were externally managed by our former Manager.

The company’s objective is to maximize long-term stockholder value by developing and acquiring a diversified portfolio of, institutional-quality highly-amenitized live/work/play apartment communities in demographically attractive knowledge economy growth markets across the United States to appeal to the renter by choice. We seek to maximize returns through investments where we believe we can drive substantial growth in our funds from operations and net asset value through one or more of our Core-Plus, Value-Add, Opportunistic and Invest-to-Own investment strategies.

For a description of our portfolio of apartment properties, see Item 2, “Properties” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2017, which is incorporated herein by reference, and as may be updated by our most recent Annual Report on Form 10-K, any of our subsequent Quarterly Reports on Form 10-Q and any of our Current Reports on Form 8-K and amendments thereto on Form 8-K/A, as applicable, which are incorporated, or deemed to be incorporated, by reference into this prospectus, and in the other documents incorporated by reference in this prospectus that we file with the SEC on or after the date of this prospectus and which are deemed incorporated by reference in this prospectus, and as may be contained in any applicable prospectus supplement.

Management Internalization

On August 4, 2017, we announced that the parties had entered into a Contribution and Sale Agreement (as amended by that certain Amendment No. 1 thereto, dated August 9, 2017), or the Contribution Agreement, and other definitive agreements providing for our acquisition of a newly-formed entity to own the assets used by our former Manager in its performance of the management functions then provided to us pursuant to the Management Agreement dated as of April 2, 2014, among the company, our Operating Partnership and our former Manager, or the Internalization. A special committee comprised entirely of independent and disinterested members of our board of directors, or the Special Committee, which retained independent legal and financial advisors, unanimously determined that the entry into the Contribution Agreement and the completion of the Internalization were in the best interests of the company. Our board of directors, by unanimous vote, made a similar determination, and on October 26, 2017, the company held its annual meeting of stockholders, at which our stockholders approved the proposals necessary for the completion of the Internalization.

On October 31, 2017, we completed the Internalization pursuant to the Contribution Agreement for total consideration of approximately $41.24 million, as determined pursuant to a formula established in the Management Agreement at the time of our IPO in April 2014. Upon completion of the Internalization, our current management and investment teams, who were previously employed by an affiliate of our former Manager, became employed by our indirect subsidiary, and we became an internally managed real estate investment trust. In order to further align the interests of our management with those of our stockholders, payment of the aggregate Internalization consideration was paid 99.9% in equity: we caused the Operating Partnership to issue an aggregate of 3,753,593 units of our operating partnership, or OP Units, and we issued an aggregate of 76,603 shares of a newly reclassified Class C common stock, $0.01 par value per share, and paid an aggregate of approximately $40,794 in cash to the contributors and their affiliates and related persons in connection with the Internalization.

Following the Internalization, our senior management team continues to oversee, manage and operate the company, and we are no longer externally managed by our former Manager. As an internally managed company, we no longer pay the former Manager any fees or expense reimbursements arising from the Management Agreement. For additional information regarding the Internalization, please see our Current Report on Form 8-K filed on August 4, 2017, our Current Report on Form 8-K filed on August 15, 2017, our

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Definitive Proxy Statement filed on September 5, 2017, our Current Report on Form 8-K filed on November 6, 2017, and our Quarterly Report on Form 10-Q filed on November 8, 2017, each of which are incorporated by reference herein.

Our consolidated financial statements include the accounts of the company and our Operating Partnership. The company controls our Operating Partnership through its sole general partnership interest and conducts substantially all its business through our Operating Partnership.

Our principal executive offices are located at 712 Fifth Avenue, 9th Floor, New York, New York 10019. Our telephone number is (212) 843-1601. Our internet address is www.bluerockresidential.com. Our internet website and the information contained therein or connected thereto do not constitute a part of this prospectus or any amendment or supplement thereto.

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RISK FACTORS

Investing in our securities involves significant risks. Before purchasing the securities offered by this prospectus you should carefully consider the risks, uncertainties and additional information (i) set forth in our most recent Annual Report on Form 10-K, any of our subsequent Quarterly Reports on Form 10-Q and any of our Current Reports on Form 8-K and amendments thereto on Form 8-K/A, as applicable, which are incorporated, or deemed to be incorporated, by reference into this prospectus, and in the other documents incorporated by reference in this prospectus that we file with the SEC on or after the date of this prospectus and which are deemed incorporated by reference in this prospectus, and (ii) contained in any applicable prospectus supplement. For a description of these reports and documents, and information about where you can find them, see “Where You Can Find More Information” and “Incorporation of Certain Documents By Reference.” The risks and uncertainties in the documents incorporated by reference in this prospectus are those that we currently believe may materially affect the company. Additional risks not presently known or that are currently deemed immaterial also could materially and adversely affect our financial condition, results of operations, business and prospects.

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RATIO OF EARNINGS TO FIXED CHARGES AND OF EARNINGS TO
COMBINED FIXED CHARGES AND PREFERRED STOCK DIVIDENDS

           
Computation of Ratio of Earnings to Combined Fixed Charges and Preferred Dividends   Quarter
Ended
March 31,
2018
  Year Ended December 31,
  2017   2016   2015   2014   2013
     (In thousands, except for ratio computation)
Income (loss) from continuing operations before adjustment for non controlling interest   $ (2,955   $ (7,028   $ (2,974   $ 7,643     $ (6,674   $ (4,219
Add back:
                                                     
Fixed Charges     10,147       31,575       19,960       11,389       8,683       4,961  
Distributed income of equity investees     2,483       9,252       11,405       24,617       11,550       289  
Deduct:
                                                     
Equity in (income) loss of equity investees     (2,461     (10,336     (11,632     (17,893     (5,133     (1,501
Capitalized Interest                             (143     (99
Earnings as Defined   $ 7,214     $ 23,463     $ 16,759     $ 25,756     $ 8,283     $ (569
Fixed Charges
                                                     
Interest expense including amortization of deferred financing fees   $ 10,117     $ 31,520     $ 19,915     $ 11,366     $ 8,538     $ 4,854  
Capitalized Interest                             143       99  
Interest portion of rent expense     30       55       45       23       2       8  
Fixed Charges   $ 10,147     $ 31,575     $ 19,960     $ 11,389     $ 8,683     $ 4,961  
Ratio of Earnings to Fixed Charges     (a)       (a)       (a)       2.26       (a)       (a)  
Preferred Share dividends     8,248       27,023       13,763       1,153              
Combined Fixed Charges and Preferred Dividends   $ 18,395     $ 58,598     $ 33,723     $ 12,542     $ 8,683     $ 4,961  
Ratio of Earnings to Combined Fixed Charges and Preferred Dividends     (b)       (b)       (b)       2.05       (b)       (b)  

(a) Due to the loss from continuing operations, the ratio coverage was less than 1:1 for 2018, 2017, 2016, 2014 and 2013. We would have needed to generate additional earnings from continuing operations of $2.9 million, $8.1 million, $3.2 million, $0.4 million and $5.5 million for 2017, 2016, 2014 and 2013 respectively to achieve a coverage ratio of 1:1.
(b) Due to the loss from continuing operations, the ratio coverage was less than 1:1 for 2018, 2017, 2016, 2014 and 2013. We would have needed to generate additional earnings from continuing operations of $11.2 million, $35.1 million, $17.0 million, $0.4 million and $5.5 million for 2017, 2016, 2014 and 2013 respectively to achieve a coverage ratio of 1:1.

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USE OF PROCEEDS

Unless otherwise indicated in a prospectus supplement, we intend to use the net proceeds from the offering of securities under this prospectus for general corporate purposes, including funding our investment activity, the repayment of outstanding indebtedness, working capital and other general purposes. Further details relating to the use of the net proceeds from an offering of securities under this prospectus will be set forth in the applicable prospectus supplement. Pending such uses, we anticipate that we will invest the net proceeds in interest-bearing securities in a manner consistent with maintaining our qualification as a REIT.

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DESCRIPTION OF THE SECURITIES WE MAY OFFER

This prospectus contains summary descriptions of the securities that we may offer from time to time. As further described in this prospectus, these summary descriptions are not meant to be complete descriptions of each security. The particular terms of any security will be described in the accompanying prospectus supplement and other offering material. The accompanying prospectus supplement may add, update or change the terms and conditions of the securities as described in this prospectus. As used in this prospectus and any accompanying prospectus supplement, references to “our,” “we,” “us” and similar terms when referring to a security offered, mean securities of Bluerock Residential Growth REIT, Inc., a Maryland corporation, excluding its subsidiaries, unless otherwise expressly stated or the context otherwise requires.

For purposes of this prospectus, (a) all classes or series of our capital stock ranking on parity with the Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series D Preferred Stock with respect to the payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up shall be referred to as “Parity Preferred Stock”; and (b) all Parity Preferred Stock upon which like voting rights have also been conferred (which, as of the date of this prospectus, includes the Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock, but does not include the Series B Preferred Stock) shall be referred to as “Voting Preferred Stock.”

So long as any shares of any series of Voting Preferred Stock remain outstanding, in addition to any other vote or consent of stockholders required by our charter, we may not, without the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of the Voting Preferred Stock, voting together as a single class, (i) authorize or issue any class or series of capital stock ranking, as to payment of dividends and the distribution of assets upon our liquidation, dissolution or winding up, senior to any series of such Voting Preferred Stock, or (ii) amend any provision of our charter so as to materially and adversely affect the terms of any series of such Voting Preferred Stock. In addition, so long as any shares of Series B Preferred Stock remain outstanding, in addition to any other vote or consent of stockholders required by our charter, we may not, without the affirmative vote or consent of the holders of at least two-thirds of the outstanding shares of the Voting Preferred Stock, voting together as a single class with holders of Series B Preferred Stock, (a) authorize, create or issue, or increase the number of authorized or issued shares of any class or series of capital stock ranking senior to the Series B Preferred Stock with respect to payment of dividends or the distribution of assets upon our liquidation, dissolution or winding up (any such senior stock, the “Senior Stock”), (b) reclassify any of our authorized capital stock into Senior Stock, or (c) create, authorize or issue any obligation or security convertible into or evidencing the right to purchase Senior Stock. We refer to these restrictions collectively as the Preferred Stock Restrictions.

Subject to the Preferred Stock Restrictions, our board of directors may authorize the issuance of additional securities, including common stock, preferred stock, convertible preferred stock and convertible debt, for cash, property or other consideration on such terms as it may deem advisable, and may classify or reclassify any unissued shares of capital stock of our company into other classes or series of stock without approval of the holders of the outstanding securities. We may issue debt obligations with conversion privileges on such terms and conditions as the directors may determine, whereby the holders of such debt obligations may acquire our common stock or preferred stock. We may also issue warrants, options and rights to buy shares on such terms as the directors deem advisable, despite the possible dilution in the value of the outstanding shares that may result from the exercise of such warrants, options or rights to buy shares, as part of a ratable issue to stockholders, as part of a private or public offering, or as part of other financial arrangements. Subject to the preferential rights of any holders of preferred stock, our board of directors, with the approval of a majority of the directors and without any action by stockholders, may also amend our charter from time to time to increase or decrease the aggregate number of shares of our stock or the number of shares of stock of any class or series that we have authority to issue.

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DESCRIPTION OF CAPITAL STOCK

We were formed under the laws of the state of Maryland. The rights of our stockholders are governed by Maryland law as well as our charter and bylaws. The following summary of our capital stock does not purport to be complete and is subject to and qualified in its entirety by reference to Maryland law and to our charter (including the applicable articles supplementary designating the terms of a class or series of preferred stock) and bylaws, copies of which are filed as exhibits to the registration statement of which this prospectus forms a part. See “Where You Can Find More Information.”

General

Our charter provides that we may issue up to 750,000,000 shares of common stock, $0.01 par value per share, and 250,000,000 shares of preferred stock, $0.01 par value per share. Of our 750,000,000 authorized shares of common stock, 747,509,582 shares have been classified as Class A common stock, $0.01 par value per share, 804,605 shares have been classified as Class B-1 Common Stock, $0.01 par value per share, 804,605 shares have been classified as Class B-2 Common Stock, $0.01 par value per share, 804,605 shares have been classified as Class B-3 Common Stock, $0.01 par value per share, and 76,603 shares have been classified as Class C common stock, $0.01 par value per share. Of our 250,000,000 authorized shares of preferred stock, 10,875,000 shares have been classified as 8.250% Series A Cumulative Redeemable Preferred Stock, or the Series A Preferred Stock, 725,000 shares have been classified as Series B Redeemable Preferred Stock, or the Series B Preferred Stock, 4,000,000 shares have been classified as 7.625% Series C Cumulative Preferred Stock, $0.01 par value per share, or the Series C Preferred Stock, and 4,000,000 shares have been classified as 7.125% Series D Cumulative Preferred Stock, $0.01 par value per share, or the Series D Preferred Stock. Subject to the preferential rights of any holders of preferred stock, our charter authorizes our board of directors, with the approval of a majority of the directors and without any action by stockholders, to amend our charter from time to time to increase or decrease the aggregate number of authorized shares of stock or the number of shares of stock of any class or series that we have authority to issue. As of the date of this prospectus, we have 23,756,432 shares of Class A common stock, 76,603 shares of Class C common stock, 5,721,460 shares of Series A Preferred Stock, 215,972 shares of Series B Preferred Stock, 2,323,750 shares of Series C Preferred Stock and 2,850,602 shares of Series D Preferred Stock issued and outstanding. In addition, we may issue warrants in connection with our Series B Preferred Stock offering that are exercisable for up to an aggregate of 14,500,000 shares of our Class A common stock. Under Maryland law, stockholders are not generally liable for our debts or obligations.

As of the date of this prospectus, there were outstanding: (a) 6,230,757 units of limited partnership interest in our Operating Partnership, or OP Units, which may, subject to certain limitations, be redeemed for cash or, at our option, exchanged for shares of our Class A common stock on a one-for-one basis; and (b) 1,790,084 units of a special class of partnership interest in our Operating Partnership, or LTIP Units, of which (i) 733,873 have vested, (ii) 160,192 will vest ratably on an annual basis over the applicable three-year period that commenced upon issuance, (iii) 125,165 will vest at the end of the applicable three-year period that commenced upon issuance, subject to certain performance-based vesting formulas, and (iv) 770,854 will vest ratably on an annual basis over the applicable five-year period that commenced upon issuance. Upon vesting and reaching capital account equivalency with the OP Units held by us, LTIP Units may convert to OP Units, and may then be settled in shares of our Class A common stock. In addition, the 76,603 shares of our Class C common stock issued as Internalization consideration pursuant to the Contribution Agreement may be converted, or automatically convert, in certain circumstances to shares of our Class A common stock on a one-for-one basis. Other than those described above, there are no outstanding rights of any other kind in respect of our Class A common stock.

Our charter also contains a provision permitting our board of directors, by resolution, to classify or reclassify any unissued common stock or preferred stock into one or more classes or series of stock and establish the preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications, or terms or conditions of redemption of any such stock, subject to certain restrictions, including the express terms of any class or series of stock outstanding at the time, such as the Preferred Stock Restrictions (as defined herein). We believe that the power to classify or reclassify unissued shares of stock and thereafter issue the classified or reclassified shares provides us with increased flexibility in structuring possible future financings and acquisitions and in meeting other needs that might arise.

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Our charter and bylaws contain certain provisions that could make it more difficult to acquire control of the company by means of a tender offer, a proxy contest or otherwise. These provisions are expected to discourage certain types of coercive takeover practices and inadequate takeover bids and to encourage persons seeking to acquire control of the company to negotiate first with our board of directors. We believe that these provisions increase the likelihood that proposals initially will be on more attractive terms than would be the case in their absence and facilitate negotiations that may result in improvement of the terms of an initial offer that might involve a premium price for our capital stock or otherwise be in the best interest of our stockholders. See the section entitled “Risk Factors” included elsewhere in this prospectus.

Common Stock

Subject to the preferential rights of our Series A Preferred Stock, our Series B Preferred Stock, our Series C Preferred Stock and our Series D Preferred Stock, and any other class or series of preferred stock and any preferential rights of any other class or series of stock and to the provisions of our charter regarding the restrictions on the ownership and transfer of stock, the holders of our common stock are entitled to receive distributions authorized by our board of directors and declared by us out of legally available funds after payment of, or provision for, full cumulative distributions on and any required redemptions of shares of our Series A Preferred Stock, our Series B Preferred Stock, our Series C Preferred Stock and our Series D Preferred Stock, and any other preferred stock then outstanding, and, upon our liquidation or dissolution, are entitled to share ratably in the distributable assets of our company remaining after satisfaction of the prior preferential rights of any preferred stock and the satisfaction of all of our debts and liabilities. Holders of our common stock do not have preference, conversion, exchange, sinking fund, or redemption rights or preemptive rights to subscribe for any of our securities, and generally have no appraisal rights.

Subject to the restrictions on ownership and transfer of stock contained in our charter and except as may otherwise be specified in our charter, each share of our Class A common stock will have one vote per share and each share of our Class C common stock will have fifty votes per share on all matters voted on by stockholders, including the election of directors. Because stockholders do not have cumulative voting rights, holders of a majority of the outstanding shares of common stock can elect our entire board of directors. Generally, the affirmative vote of a majority of all votes cast is necessary to take stockholder action, except that a plurality of all the votes cast at a meeting at which a quorum is present is sufficient to elect a director, and except as set forth in the next paragraph.

Under Maryland law, a Maryland corporation generally cannot dissolve, amend its charter, merge, convert, sell all or substantially all of its assets, engage in a share exchange or engage in similar transactions outside the ordinary course of business, unless approved by the affirmative vote of stockholders holding at least two-thirds of the shares entitled to vote on the matter. However, a Maryland corporation may provide in its charter for approval of these matters by a lesser percentage, but not less than a majority of all of the votes entitled to be cast on the matter. Our charter provides for a majority vote in these situations. Our charter further provides that any or all of our directors may be removed from office at any time, but only for cause, and then only by the affirmative vote of at least a majority of the votes entitled to be cast generally in the election of directors. For these purposes, “cause” means, with respect to any particular director, conviction of a felony or final judgment of a court of competent jurisdiction holding that such director caused demonstrable material harm to us through bad faith or active and deliberate dishonesty.

Each stockholder entitled to vote on a matter may do so at a meeting in person or by proxy directing the manner in which he or she desires that his or her vote be cast or without a meeting by a consent in writing or by electronic transmission. Any proxy must be received by us prior to the date on which the vote is taken. Pursuant to Maryland law and our bylaws and subject in all respects to the terms of any outstanding shares of preferred stock, if no meeting is held, 100% of the stockholders must consent in writing or by electronic transmission to take effective action on behalf of our company, unless the action is advised, and submitted to the stockholders for approval, by our board of directors, in which case such action may be approved by the consent in writing or by electronic transmission of stockholders entitled to cast not less than the minimum number of votes that would be necessary to authorize or take the action at a meeting of stockholders.

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Preferred Stock

Our charter authorizes our board of directors, without further stockholder action, to provide for the issuance of up to 250,000,000 shares of preferred stock, in one or more classes or series, with such terms, preferences, conversion or other rights, voting powers, restrictions, limitations as to dividends or other distributions, qualifications and terms or conditions of redemption, as our board of directors may approve, subject to the Preferred Stock Restrictions.

If any preferred stock is publicly offered, the terms and conditions of such preferred stock, including any convertible preferred stock, will be set forth in articles supplementary and described in a prospectus supplement relating to the issuance of such preferred stock, if such preferred stock is registered. Because our board of directors has the power to establish the preferences and rights of each class or series of preferred stock, it may afford the holders of any series or class of preferred stock preferences, powers, and rights senior to the rights of holders of common stock or other preferred stock, subject to the Preferred Stock Restrictions. If we ever authorize, create and issue additional preferred stock with a distribution preference over common stock or preferred stock, payment of any distribution preferences of new outstanding preferred stock would reduce the amount of funds available for the payment of distributions on the common stock and junior preferred stock. Further, holders of preferred stock are normally entitled to receive a preference payment if we liquidate, dissolve, or wind up before any payment is made to the common stockholders, likely reducing the amount common stockholders and junior preferred stockholders, if any, would otherwise receive upon such an occurrenc