BRT Apartments : Fourth Quarter 2024 Quarterly Filing

Published: 2025-03-12 17:20:06 ET BRT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

BRT APARTMENTS CORP.

(Exact name of registrant as specified in its charter)

Maryland

13-2755856

(State or other jurisdiction of

(I.R.S. employer

incorporation or organization)

identification no.)

60 Cutter Mill Road, Great Neck, New York

11021

(Address of principal executive offices)

(Zip Code)

516-466-3100

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Shares of common stock, par value $.01 per share

BRT

New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

NONE

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No ý

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer. or a smaller reporting company or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o

Accelerated filer o

Non-accelerated filer ý

Smaller reporting company ☒

Emerging growth company ☐

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

Indicate by check mark whether registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes ☐ No ý

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Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.

7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive oﬃcers during the relevant recovery period pursuant to §240.10D-1(b). .☐

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was approximately $203.5 million based on the last sale price of the common equity on June 30, 2024, which is the last business day of the registrant's most recently completed second quarter.

As of February 28, 2025, the registrant had 18,929,742 shares of common stock outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the 2024 annual meeting of stockholders of the Registrant to be filed pursuant to Regulation 14A not later than April 30, 2025, are incorporated by reference into Part III of this Annual Report on Form 10-K.

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TABLE OF CONTENTS

Form 10-K

Item No.

Page(s)

Explanatory Note

Cautionary Statement Regarding Forward-Looking Statements

PART I

Business

1A.

Risk Factors

1B.

Unresolved Staff Comments

1C.

Cybersecurity

Properties

Legal Proceedings

Mine Safety Disclosures

PART II

Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

[Reserved]

Management's Discussion and Analysis of Financial Condition and Results of Operations

7A.

Quantitative and Qualitative Disclosures About Market Risk

Financial Statements and Supplementary Data

Changes In and Disagreements With Accountants on Accounting and Financial Disclosure

9A.

Controls and Procedures

9B.

Other Information

9C.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

PART III

Directors, Executive Officers and Corporate Governance

Executive Compensation

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence

Principal Accountant Fees and Services

PART IV

Exhibits and Financial Statement Schedules

Form 10-K Summary

Signatures

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Explanatory Note

Unless otherwise indicated or the context otherwise requires:

Cautionary Statement Regarding Forward-Looking Statements

We consider this and other sections of this Annual Report on Form 10-K to contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act, with respect to our expectations for future periods. Forward-looking statements do not discuss historical fact, but instead include statements related to expectations, projections, intentions or other items related to the future. Such forward-looking statements include, without limitation, statements regarding expected operating performance and results, property acquisition and disposition activity, joint venture activity, development and value add activity and other capital expenditures, and capital raising and financing activity, as well as revenue and expense growth, occupancy, interest rate and other economic expectations. Words such as "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates," "forecasts," "projects," "assumes," "will," "may," "could," "should," "budget," "target," "outlook," "opportunity," "guidance" and variations of such words and similar expressions are intended to identify such forward-looking statements. Such forward-looking statements involve known and unknown risks, uncertainties and other factors as described below,which are in some cases beyond our control, which may cause our actual results, performance or achievements to be materially different from the results of operations, financial conditions or plans expressed or implied by such forward-looking statements. Although we believe that the assumptions underlying the forward-looking statements contained herein are reasonable, any of the assumptions could be inaccurate, and therefore such forward-looking statements included in this report may not prove to be accurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved and investors are cautioned not to place undue reliance on such information.

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The following factors, among others, could, and in certain cases would, cause our actual results, performance or achievements to differ materially from those expressed or implied in the forward-looking statements:

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We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this Annual Report. Except to the extent otherwise required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the filing of this Annual Report or to reflect the occurrence of unanticipated events thereafter.

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PART I

Item l. Business.

General

We are an internally managed real estate investment trust, also known as a REIT, that owns, operates, and to a lesser extent, holds interests in joint ventures that own and operate multi-family properties. At December 31, 2024, we (i) wholly-own 21 multi-family properties with an aggregate of 5,420 units and a carrying value of $614.2 million; (ii) have ownership interests, through unconsolidated entities, in eight multi-family properties with an aggregate of 2,527 units for which the carrying value of our net equity investment therein is $31.3 million; (iii) have preferred equity investments in two multi-family properties with a carrying value of $17.7 million; and (iv) own other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $1.7 million. The 29 multi-family properties are located in 11 states; primarily in the Southeast United States and Texas.

Our website can be accessed at www.brtapartments.com, where copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission, or SEC, can be obtained free of charge.

2024 and Recent Developments.

During 2024:

From January 1, 2025 through February 28, 2025, we purchased 65,018 shares of our common stock for an aggregate purchase price of approximately $1.1 million (i.e., average price of $17.49 per share). In March 2025, our board of directors increased the value of the shares that we can repurchase to up to $10 million and extended the repurchase program through December 31, 2026.

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Our Multi-Family Properties

Generally, our multi-family properties are garden apartments and, to a lesser extent, mid-rise or town home style properties that provide residents with amenities, such as a clubhouse, swimming pool, laundry facilities and internet access. Residential leases are typically for a one-year term and may require security deposits equal to one month's rent. Substantially all of the units at these properties are leased at market rates. Set forth below is selected information regarding the multi-family properties in which we have an interest (other than the properties involving the preferred equity investments), as of December 31, 2024; the properties in which we have a less than 100% ownership interest are owned by unconsolidated joint ventures:

Our

Average Monthly Rental Rate Per

Average Physical Occupancy (%)

Occupied Unit ($)

Number

Acquisition

Percentage

Property Name and Location

Age

Ownership

2024

2023

2022

2021

2020

2024

2023

2022

2021

2020

of Units

Date

(%) (1)

Silvana Oaks Apartments-N. Charleston, SC

208

10/4/2012

100

1,539

1,486

1,370

1,231

1,182

94.4

94.7

96.0

95.1

93.2

Avondale Station-Decatur, GA

212

11/19/2012

100

1,405

1,429

1,323

1,196

1,173

89.3

91.2

96.3

97.2

95.3

Brixworth at Bridge Street-Huntsville, AL

208

10/18/2013

100

1,061

1,079

950

879

828

95.1

93.9

94.3

96.1

97.6

Newbridge Commons-Columbus, OH

264

11/21/2013

100

1,157

1,104

1,031

947

929

95.2

96.5

97.3

97.5

95.2

Crossings of Bellevue-Nashville, TN

300

4/2/2014

100

1,453

1,459

1,328

1,186

95.4

95.0

96.7

97.1

96.3

Avalon Apartments-Pensacola, FL

276

12/22/2014

100

1,498

1,518

1,438

1,250

1,124

94.8

95.0

96.3

98.1

95.3

Parkway Grande-San Marcos, TX

192

9/10/2015

100

1,280

1,310

1,209

1,042

1,035

93.7

94.8

95.9

97.1

93.4

Woodland Trails-LaGrange, GA

236

11/18/2015

100

1,378

1,330

1,193

1,059

1,014

93.2

94.9

97.5

98.9

96.7

Grove at River Place - Macon, GA

240

2/1/2016

100

951

935

865

792

744

90.3

92.9

95.9

95.6

92.2

Civic Center I-Southaven, MS

392

2/29/2016

100

1,278

1,231

1,122

1,021

958

95.8

96.3

97.6

98.2

97.1

Civic Center II - Southaven, MS

384

9/1/2016

100

1,353

1,305

1,186

1,085

1,031

94.0

95.3

97.0

98.2

96.6

Verandas at Alamo Ranch-San Antonio, TX

288

9/19/2016

100

1,141

1,132

1,194

1,084

1,039

90.1

86.2

92.0

91.2

93.2

Kilburn Crossing - Fredericksburg, VA

220

11/4/2016

100

1,700

1,623

1,593

1,465

1,411

96.7

95.8

97.4

97.9

96.2

Bells Bluff - West Nashville, TN

402

6/2/2017

100

1,700

1,781

1,749

1,421

1,482

91.6

92.4

96.9

92.3

74.7

Vanguard Heights - Creve Coeur, MO

174

4/4/2017

100

1,684

1,711

1,598

1,583

1,604

94.9

94.2

93.6

95.9

Jackson Square - Tallahassee, FL

242

8/30/2017

100

1,432

1,375

1,270

1,131

1,090

95.1

95.6

94.3

94.2

94.8

Magnolia Pointe at Madison - Madison, AL

204

12/7/2017

100

1,215

1,234

1,154

1,036

924

93.2

92.6

92.1

96.6

97.6

The Woodland Apartments - Boerne, TX (2)

120

12/14/2017

100

1,208

1,224

1,138

974

980

96.5

96.0

97.3

87.0

96.3

Somerset at Trussville - Trussville, AL

328

5/7/2019

100

1,259

1,224

1,145

1,078

998

94.9

94.7

96.7

95.7

97.0

Crestmont at Thornblade - Greenville, SC

266

10/30/2018

100

1,393

1,346

1,232

1,104

1,051

94.8

95.7

97.8

96.3

91.8

Abbotts Run - Wilmington, NC

264

2/20/2020

100

1,286

1,251

1,110

978

873

95.3

94.7

96.8

95.3

93.5

The Pointe at Lenox Park- Atlanta, GA

271

8/15/2016

1,529

1,507

1,405

1,275

1,255

94.7

95.8

94.1

96.0

94.6

Canalside Lofts - Columbia, SC

374

11/10/2016

1,446

1,406

1,314

1,225

1,406

94.5

93.0

95.7

93.2

90.9

Canalside Sola - Columbia, SC (3)

339

11/10/2016

1,684

1,577

1,474

1,361

1,395

94.8

95.1

96.6

92.6

81.4

Mercer Crossing - Farmers Branch, TX

509

6/29/2017

1,657

1,701

1,570

1,374

1,314

91.4

93.0

94.8

95.9

90.6

Gateway Oaks - Forney, TX

313

9/15/2017

1,400

1,394

1,281

1,181

1,147

94.3

93.1

97.8

96.7

91.1

Landings of Carrier Parkway - Grand Prairie, TX

281

5/17/2018

1,320

1,367

1,288

1,149

1,098

91.9

90.2

93.2

94.1

94.5

Village at Lakeside - Auburn, AL

200

8/8/2019

1,167

1,073

983

907

859

97.7

97.5

97.7

97.1

96.0

Stono Oaks-Johns Island, SC (4)

240

1/1/2024

1,597

38.4

Total

7,947

____________________________________________

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The following table sets forth certain information, presented by state, related to our consolidated properties as of December 31, 2024 (dollars in thousands):

Number of

2024 Rental and Other

Percent of 2024 Rental and

State

Other

Properties

Units

Revenues

Tennessee

702

14,048

15 %

Mississippi

776

12,648

13 %

Alabama

740

11,391

12 %

Georgia

688

10,610

11 %

Florida

518

9,458

10 %

Texas

600

9,342

10 %

South Carolina

474

8,813

9 %

Virginia

220

4,868

5 %

North Carolina

264

4,295

5 %

Ohio

264

3,935

4 %

Missouri

174

3,770

4 %

Other (1)

1,595

2 %

Total

5,420

94,773

100 %

__________________ _________

(1) Includes non-multi- family revenues primarily from a commercial property located in Yonkers, NY.

The following table sets forth certain information, presented by state, related to properties owned by unconsolidated joint ventures at of December 31, 2024 (dollars in thousands):

Percent of 2024

Number of

2024 JV Rental and

JV Rental

State

and Other Revenues

Properties

Units

Other Revenues (1)

(1)

Texas

1,103

21,105

46 %

South Carolina

953

15,835

35 %

Alabama

200

5,225

12 %

Georgia

271

3,017

7 %

Total

2,527

45,182

4,518,200,000 %

100 %

___________________________

(1) The term "JV Rental and other Revenues" refers to the revenues generated at multi-family properties owned by unconsolidated joint ventures

Our Acquisition Process and Underwriting Criteria

We identify multi-family property acquisition opportunities primarily through relationships developed with, among others, current or former joint venture partners, real estate investors and brokers. We will acquire multi-family properties either with joint venture partners (and especially with partner's experienced in the target market), which allows us to benefit from such partner's experience, or directly (i.e., without a joint venture partner), which allows for the possibility for greater returns on our investment.

We emphasize acquiring the following types of multi-family properties:

We seek properties that provide stable risk adjusted total returns (i.e., operating income plus capital appreciation), including value-add opportunities (i.e., properties that can be repositioned or improved allowing us to generate higher rents or improved occupancy) and emphasize acquiring properties in the Southeast United States and Texas. We have been opportunistic in pursuing multi-family property acquisitions and have not mandated any specific acquisition criteria, although

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we take the following, among other things, into account in evaluating an acquisition opportunity: location, demographics, size of the target market, property quality, availability and terms and conditions of long-term fixed-rate mortgage debt, potential for capital appreciation or recurring income, extent and nature of contemplated capital improvements and property age.

A key consideration in our acquisition process is the availability of mortgage debt to finance the acquisition (or the ability to assume the mortgage debt on the property) and the terms and conditions (e.g., interest rate, amortization and maturity) of such debt. Generally, approximately 35% to 50% of the purchase price has been paid in cash (all or a portion of our share of which may be funded by borrowing from our credit facility) and the balance is financed with mortgage debt. We believe that the use of leverage allows us the ability to earn a greater return on our investment than we would otherwise earn. Generally, the mortgage debt obtained in connection with an acquisition matures in five to ten years, is interest only for one to five years, and provides for a fixed interest rate and for the amortization of the principal of such debt over 30 years.

Potential acquisitions are reviewed and approved by our investment committee. Approval requires the assent of not less than five of the eight members of this committee, all of whom are our executive officers. Board of director approval is required for any single multi-family property acquisition in which our equity investment exceeds $40 million.

From time-to-time we have pursued development opportunities with joint venture partners when we believe the potential higher returns justify the additional risks. The factors considered in pursuing these opportunities generally include the factors considered in evaluating a standard acquisition opportunity, and we place additional emphasis on our joint venture partner's ability to execute a development project. From 2022 through 2024, we invested an aggregate of $4.0 million for a 17.45% interest in a 240-unit development property located in Johns Island, SC ("Stono Oaks"); as of January 1, 2024 this property is in lease-up. We do not anticipate development properties will constitute a significant part of our portfolio.

In light of the challenging acquisition environment and the limited funds available to us to acquire properties, we have, and anticipate that we will continue to pursue, alternative investments in the multi-family property arena, such as preferred equity investments (e.g., an investment entitling the investor to a fixed rate of return prior to distributions to more junior investors) or bridge loans (e.g., a short-term loan secured by a first mortgage on the subject property). We can provide no assurance that we will continue to pursue such investments or that if we do, such investments will be profitable for us. We do not anticipate that these type of alternative investments will constitute a significant part of our portfolio.

It is our policy, and the policy of our affiliated entities, that any investment opportunity presented to us or to an affiliated entity that involves the acquisition of a multi-family property with more than 100 units, will first be offered to us and may not be pursued by our affiliated entities unless we decline the opportunity. Gould Investors has purchased and may continue to purchase multi-family properties in the Southeast United States; all of such properties have less than 100 units. We have not been interested in acquiring any of the properties purchased by Gould Investors.

Property and Joint Venture Dispositions

We monitor our portfolio to identify properties that should be sold. Factors considered in deciding whether to sell a property generally include our evaluation of the current market price of such property compared to its projected economics (including the age of the property and anticipated maintenance costs), changes in the factors considered by us in acquiring such property, the ability to reinvest net proceeds from a sale into a more favorable acquisition opportunity or other productive purpose (e.g., repayment of debt), our liquidity requirements and, with respect to properties that are owned by unconsolidated joint ventures, our partners' desires with respect thereto. If our partners deem it in their own economic interest to dispose of a property at an earlier date than we would otherwise dispose of a property, we may accommodate such request and agree to sell the property to a third party or attempt to purchase our partner's interest.

Disclaimer

BRT Apartments Corp. published this content on March 12, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 12, 2025 at 21:19:21.661.