EX-99.2 3 tm2019116d1_ex99-2.htm EXHIBIT 99.2

 

Exhibit 99.2

1

 

 

Bluerock Residential Growth REIT, Inc.

First Quarter 2020

Supplemental Financial Information

(Unaudited)

 

 

Table of Contents

First Quarter Earnings Release 3
Financial and Operating Highlights 17
Share and Unit Information 18
EBITDAre and Interest Information 19
Financial Statistics 20
Recent Acquisitions and Investments 21
Recent Dispositions 22
Investments in Unconsolidated Real Estate Joint Ventures, Notes and Accrued Interest Receivable from Related Parties, and Ground Lease 23
Portfolio Information 24
Renovation Table 26
Lease-up and Development Mezzanine/Preferred/Ground Lease Investments 27
Condensed Consolidated Balance Sheets 28
Consolidated Statements of Operations 29
Reconciliation of Funds from Operations (FFO) and Core Funds from Operations (CFFO) 30
Mortgages Payable Summary Information 31
Definitions of Non-GAAP Financial Measures 33

 

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur.  Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, the Company’s actual results and performance could differ materially from those set forth in these forward-looking statements due to numerous factors. Currently, one of the most significant factors is the potential adverse effect of the COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company and its tenants, partners and employees, as well as the real estate market and the global economy and financial markets. The extent to which COVID-19 impacts the Company and its tenants, partners and employees will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact (including governmental actions that may vary by jurisdiction, such as mandated business closing; stay-at-home orders; limits on group activity; and actions to protect residential tenants from eviction), and the direct and indirect economic effects of the pandemic and containment measures, including national and local employment rates and the corresponding impact on the Company’s tenants’ ability to pay their rent on time or at all, among others.  For further discussion of the factors that could affect outcomes, please refer to the risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K filed by the Company with the U.S. Securities and Exchange Commission (“SEC”) on February 24, 2020, and subsequent filings by the Company with the SEC. We claim the safe harbor protection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995.

 

2

 

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

  

 

 

For Immediate Release

 

Bluerock Residential Growth REIT Announces First Quarter 2020 Results

 

Total Revenues Grew 9% YoY -

- Same Store Revenues Grew 3.1% YoY -

- Collected 97% of April and 92% of May Rents Including Payment Plans -

 

New York, NY (May 11, 2020) – Bluerock Residential Growth REIT, Inc. (NYSE American: BRG) (“the Company”), an owner of highly amenitized multifamily apartment communities, announced today its financial results for the quarter ended March 31, 2020.

 

First Quarter Highlights

 

-Total revenues grew 9% to $56.2 million for the quarter from $51.5 million in the prior year period.

 

-Net loss attributable to common stockholders for the first quarter of 2020 was ($0.70) per share, as compared to ($0.53) per share in the prior year period. Net loss attributable to common stockholders includes non-cash items, including depreciation and amortization expense, of $0.88 per share in the first quarter of 2020 compared to $0.74 per share for the prior year period.

 

-Property Net Operating Income (“NOI”) grew 15% to $31.1 million, from $27.1 million in the prior year period.

 

-Same store revenue and NOI increased 3.1% and 2.6% respectively, as compared to the prior year period.

 

-Improved operating margins by 240 basis points year over year to 61.7%.

 

-Core funds from operations attributable to common shares and units (“CFFO”) increased 13% to $7.1 million, from $6.3 million in the prior year period. CFFO per share was up 10% to $0.22 for the first quarter as compared to $0.20 in the prior year period.

 

-Consolidated real estate investments, at cost, were approximately $2.2 billion.

 

-Completed the following investments:

 

-Two multifamily communities totaling 610 units for a total purchase price of $138 million.
-Preferred equity and mezzanine loan investments totaling $14 million, including in two multifamily communities totaling 408 units in Savannah, Georgia and Pensacola, Florida, and additional fundings for seven multifamily developments.
-Purchased land for a ground lease for $3 million and committed $20 million for the ground lease tenant’s multifamily development.

 

-Completed the following dispositions:

 

-Sold an asset underlying an unconsolidated joint venture and one operating property for an aggregate sales price of $112 million, for net proceeds of $42 million.
-In April 2020, closed on sales of three properties for $160 million which were entered into pre-COVID-19.

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Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

-Completed 120 value-add unit upgrades during the quarter achieving an average 21.8% ROI.

 

-Paid quarterly dividend of $0.1625 in cash per share of common stock, a 74% payout ratio on a CFFO basis.

 

-Raised $57.4 million through its registered Series T Preferred Stock offering in the quarter.

 

Included later in this release are definitions of NOI, CFFO and other Non-GAAP financial measures and reconciliations of such measures to their most comparable financial measures as calculated and presented under GAAP.

 

COVID-19 Pandemic Update

 

The Company’s first quarter performance did not incur significant impact from the COVID-19 pandemic. The Company is closely monitoring COVID-19’s impact on its business, properties, tenants, partners and employees and the full impact of the COVID-19 pandemic on rental revenues and overall financial performance remains uncertain.

 

Health and Safety Protocols

 

Since the beginning of the COVID-19 pandemic, the Company executed on actions to prioritize the health and well-being of its tenants, business partners, service providers and employees, while striving to provide the highest quality living experience possible and facilitating virtual leasing.

 

All of the Company’s multifamily communities have remained open and are complying with federal, state and local shelter-in-place orders and remain accessible for our tenants, although non-essential amenity spaces such as club houses, pools and fitness centers, have been closed as required.

 

Implemented enhanced protocols for the sanitization of community common areas.

 

All communications, leasing efforts, and resident servicing remain fully functional primarily through direct appointments, digital and virtual means.

 

Leasing at all communities continues through the implementation of virtual tours and online leasing for prospective tenants.

 

Implemented working from home policies for BRG corporate employees.

 

Post-Quarter Operational Performance

 

As of May 9, 2020, the Company has collected 97% of April rents from its multifamily properties, including payment plans of 1%, and 92% of May rents, including payment plans of 2%.

 

Occupancy remains strong at 94.3% as of April 30, 2020.

 

Current Liquidity

 

Due to the uncertainties presented by the COVID-19 pandemic, the Company has taken a number of measures to increase its liquidity and believes it has sufficient liquidity through this uncertain period.

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Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

The Company has approximately $117.9 million in cash and $51 million of capacity on its credit facilities as of May 8, 2020.

 

Over $22 million has been raised from the Company’s continuous Series T Preferred Stock offering since March 31, 2020.

 

“We are committed to the health, safety, and well-being of our employees, business partners, service providers and tenants. We thank our dedicated team that continues to ensure that our properties maintain their high standard of service in spite of the challenges from COVID-19,” said Ramin Kamfar, Company Chairman and CEO. “We are pleased with the strong operating results in the first quarter. We are encouraged by the rental collections in April and May which reflect the quality and stability of our investments in highly amenitized, live/work/play apartment communities in knowledge-based job economies; such as health care, technology, education, sciences and finance sectors, but recognize that we may face some challenges in the future due to the impact of COVID-19. We have taken steps to bolster our cash position to effectively navigate the current crisis and to ensure that we have the capital to continue executing on our investment strategy.”

 

First Quarter 2020 Financial Results

 

Net loss attributable to common stockholders for the first quarter of 2020 was $16.5 million, compared to $12.1 million in the prior year period. Net loss attributable to common stockholders included non-cash expenses of $20.9 million or $0.88 per share in the first quarter of 2020 compared to $17.2 million or $0.74 per share for the prior year period.

 

CFFO for the first quarter of 2019 was $7.1 million, or $0.22 per diluted share, compared to $6.3 million, or $0.20 per diluted share, in the prior year period. CFFO adds back non-cash, non-operating expenses such as accretion on the Company’s Series B preferred stock. CFFO was primarily driven by growth in property NOI of $4.0 million, interest income of $0.1 million and preferred returns of $0.3 million. This was primarily offset by a year-over-year increase in interest expense of $0.4 million and preferred stock dividends of $3.2 million.

 

Total Portfolio Performance

 

$ In thousands, except average rental rates    1Q20   1Q19    Variance 
Total Revenues (1)  $56,241   $51,466    9.3%
Property Operating Expenses  $19,299   $18,602    3.7%
NOI  $31,054   $27,088    14.6%
Operating Margin   61.7%   59.3%   240 bps
Occupancy Percentage   94.2%   93.9%   30bps
Average Rental Rate  $1,331   $1,299    2.5%

 

(1) Including interest income from related parties

 

For the first quarter of 2020, property revenues increased by 10.2% compared to the same prior year period primarily attributable to the increased size of the portfolio. Total portfolio NOI was $31.1 million, an increase of $4.0 million, or 14.6%, compared to the same period in the prior year. Property operating expenses were up primarily due to the increased size of the portfolio.

 

Property NOI margins expanded by 240 basis points to 61.7% of revenue for the quarter, compared to 59.3% of revenue in the prior year quarter.

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Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Same Store Portfolio Performance

 

$ In thousands, except average rental rates    1Q20   1Q19   Variance 
Revenues  $39,380   $38,213    3.1%
Property Operating Expenses  $15,470   $14,920    3.7%
NOI  $23,910   $23,293    2.6%
Operating Margin   60.7%   61.0%   (30)bps
Occupancy Percentage   94.3%   94.3%   0bps
Average Rental Rate  $1,348   $1,310    2.9%

 

The Company’s same store portfolio for the quarter ended March 31, 2020 included 27 properties. For the first quarter of 2020, same store NOI was $23.9 million, an increase of $0.6 million, or 2.6%, compared to the same period in the prior year. Same store property revenues grew by 3.1% compared to the same prior year period, primarily attributable to a 2.9% increase in average rental rates as twenty-five of the Company’s twenty-seven same store properties recognized rental rate increases during the period.

 

Same store expenses increased 3.7%, or $0.55 million, of which $0.5 million or 3.4% was due to non-controllable expenses. Real estate taxes increased $0.3 million from prior year due to municipality tax increases. In addition, insurance expenses increased $0.2 million due to industrywide multifamily price increases stemming from carrier losses over the past two years.

 

Renovation Activity

 

The Company completed 120 value-add unit upgrades during the first quarter achieving a 21.8% ROI. Since inception, within the existing portfolio, the Company has completed 2,765 value-add unit upgrades at an average cost of $5,811 per unit and achieved an average monthly rental rate increase of $114 per unit, equating to a 23.5% ROI on all unit upgrades leased as of March 31, 2020. The Company has identified approximately 4,611 remaining units within the existing portfolio for value-add upgrades with similar projected economics to the completed renovations. Due to the uncertainty surrounding the COVID-19 impact, the Company has temporarily suspended most interior renovations at this point, with the view that it will evaluate its renovation program at the market and property level as it has more visibility on the economic recovery. The Company has adjusted its forecasts and now expects to complete between 120 and 130 unit renovations in 2020.

 

Portfolio Activity

 

The Company completed the following investments:

 

-Acquired a 100% interest in a 254-unit apartment community located in Phoenix, Arizona, known as Avenue 25. The total purchase price was $56 million, funded in part by a $37 million mortgage loan secured by the property.

 

-Acquired a 100% interest in a 356-unit apartment community located in Cumming, Georgia, known as Falls at Forsyth. The total purchase price was $83 million, funded in part by the Company’s senior credit facility secured by the property.

 

-Made additional preferred equity investments in the Strategic Portfolio totaling $8 million into two operating assets with 408-units called Georgetown Crossing and Park on the Square, located in Savannah, Georgia and Pensacola, Florida, respectively. Subsequent to quarter end, the Company made a $4 million preferred equity investment in The Commons located in Jacksonville, Florida, the last property in the portfolio.

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Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

-Funded $6 million under existing preferred and mezzanine loan commitments in seven investments.

 

-Acquired land for $3 million and committed $20 million for the ground lease tenant’s multifamily development in Austin, Texas.

 

The Company completed the following activities:

 

-Received $23 million of net proceeds from the sale of the Helios property and $20 million of proceeds from the sale of the Whetstone property.

 

-Received a $21 million paydown on The Park at Chapel Hill mezzanine loan and an $8 million paydown on the Motif mezzanine loan.

 

-Pre-COVID-19, entered into sales agreements for the sale of Ashton I & II, Enders Place at Baldwin Park and Marquis at TPC which closed in April 2020 for total sales prices of $160 million.

 

Balance Sheet

 

As of March 31, 2020, the Company had $94.2 million of unrestricted cash on its balance sheet, approximately $51.0 million available among its revolving and term credit facilities, and $1.6 billion of indebtedness outstanding.

 

During the first quarter, the Company raised gross proceeds of approximately $57.4 million through the issuance of 2.3 million shares of Series T Preferred Stock at $25.00 per share. The Series T Preferred Stock continuous offering offers 20,000,000 preferred shares in the primary offering, along with 12,000,000 preferred shares pursuant to a dividend reinvestment plan. The preferred shares are offered at $25.00 per share and pay cumulative monthly dividends at a 6.15% annual rate, along with an annual stock dividend of up to 0.2% for five years.

 

The Company redeemed 16,986 shares of Series B Preferred Stock representing a stated value of $17.0 million plus accrued and unpaid dividends by issuing 1,442,650 shares of Class A common stock at an average price of $11.79 per share.

 

The Company repurchased 1,028,293 shares of Class A common stock during the first quarter at an average price of $11.29 per share, for approximately $11.6 million under its $50.0 million share repurchase plan announced in December 2019.

 

The Company sold 166,873 shares of its Class A common stock at a weighted average price of $11.86 per share, for total proceeds of approximately $2.0 million under its Class A common stock ATM (“At-the-Market”) offering announced in September 2019.

 

Dividend

 

The Board of Directors authorized, and the Company declared, a quarterly cash dividend for the first quarter of 2020 equal to a quarterly rate of $0.1625 per share on its Class A and Class C common stock, payable to the stockholders of record as of March 25, 2020, and was paid on April 3, 2020. A portion of each dividend may constitute a return of capital for tax purposes.

 

The Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 8.250% Series A Cumulative Redeemable Preferred Stock for the first quarter of 2020, in the amount of $0.515625 per share. In addition, the Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 7.625% Series C Cumulative Redeemable Preferred Stock for the first quarter of 2020, in the amount of $0.4765625 per share. Further, the Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 7.125% Series D Cumulative Preferred Stock for the first quarter of 2020, in the amount of $0.4453125 per share. The dividends were payable to the stockholders of record on March 25, 2020, and were paid on April 3, 2020.

 

7

 

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

On April 14, 2020, the Board of Directors authorized, and the Company declared, a monthly dividend of $5.00 per share of Series B Preferred Stock, payable to the stockholders of record as of April 24, 2020, which was paid in cash on May 5, 2020. On May 9, 2020, the Board of Directors authorized, and the Company declared, a monthly dividend of $5.00 per share of Series B Preferred Stock, payable to the stockholders of record as of May 22, 2020, and June 25, 2020, which will be paid in cash on June 5, 2020 and July 2, 2020, respectively.

 

On April 14, 2020, the Board of Directors authorized, and the Company declared a monthly dividend of $0.128125 per share of Series T Preferred Stock, prorated on the basis of the actual number of days in the applicable dividend period during which each share was outstanding.  Such pro-rated dividends were payable to the stockholders of record as of April 24, 2020, which was paid in cash on May 5, 2020.  On May 9, 2020, the Board of Directors authorized, and the Company declared a monthly dividend of $0.128125 per share of Series T Preferred Stock, prorated on the basis of the actual number of days in the applicable dividend period during which each share was outstanding.  Such pro-rated dividends are payable to the stockholders of record as of May 22, 2020, and June 25, 2020, which will be paid in cash on June 5, 2020 and July 2, 2020, respectively.

 

On May 9, 2020, the Board of Directors authorized, and the Company declared, a quarterly cash dividend for the second quarter of 2020 equal to a quarterly rate of $0.1625 per share on its Class A and Class C common stock, payable to the stockholders of record as of June 25, 2020, which will be paid on July 2, 2020. A portion of each dividend may constitute a return of capital for tax purposes.

 

On May 9, 2020, the Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 8.250% Series A Cumulative Redeemable Preferred Stock for the second quarter of 2020, in the amount of $0.515625 per share. In addition, the Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 7.625% Series C Cumulative Redeemable Preferred Stock for the second quarter of 2020, in the amount of $0.4765625 per share. Further, the Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 7.125% Series D Cumulative Preferred Stock for the second quarter of 2020, in the amount of $0.4453125 per share.  The dividends are payable to the stockholders of record as of June 25, 2020, which are payable on July 2, 2020.

  

2020 Guidance

 

While the Company’s first quarter 2020 operating results were in line with previously announced guidance, due to inherent uncertainty regarding the economic effects of the COVID-19 pandemic, the Company is withdrawing its full year 2020 guidance which was included in the Company’s February 13, 2020 earnings release.

 

Conference Call

 

All interested parties can listen to the live conference call at 11:00 AM ET on Monday, May 11, 2020 by dialing +1 (866) 843-0890 within the U.S., or +1 (412) 317-6597, and requesting the "Bluerock Residential Conference."

 

For those who are not available to listen to the live call, the conference call will be available for replay on the Company’s website two hours after the call concludes, and will remain available until June 11, 2020 at http://services.choruscall.com/links/brg200511.html, as well as by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10142897.

 

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

 

About Bluerock Residential Growth REIT, Inc.

 

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

 

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

 

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Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Forward Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, the Company’s actual results and performance could differ materially from those set forth in these forward-looking statements due to numerous factors. Currently, one of the most significant factors is the potential adverse effect of the COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company and its tenants, partners and employees, as well as the real estate market and the global economy and financial markets. The extent to which COVID-19 impacts the Company and its tenants, partners and employees will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact (including governmental actions that may vary by jurisdiction, such as mandated business closing; stay-at-home orders; limits on group activity; and actions to protect residential tenants from eviction), and the direct and indirect economic effects of the pandemic and containment measures, including national and local employment rates and the corresponding impact on the Company’s tenants’ ability to pay their rent on time or at all, among others. For further discussion of the factors that could affect outcomes, please refer to the risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K filed by the Company with the U.S. Securities and Exchange Commission (“SEC”) on February 24, 2020, and subsequent filings by the Company with the SEC. We claim the safe harbor protection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995.

 

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Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Portfolio Summary

 

The following is a summary of our operating real estate and mezzanine/preferred/ground lease investments as of March 31, 2020:

Consolidated Operating Properties  Location  Number of Units   Year Built/ Renovated (1)   Ownership Interest  

Average

Rent (2)

   % Occupied (3) 
ARIUM Glenridge  Atlanta, GA   480    1990    90%  $1,270    94.6%
ARIUM Grandewood  Orlando, FL   306    2005    100%   1,427    94.8%
ARIUM Hunter’s Creek  Orlando, FL   532    1999    100%   1,444    96.1%
ARIUM Metrowest  Orlando, FL   510    2001    100%   1,435    95.7%
ARIUM Westside  Atlanta, GA   336    2008    90%   1,560    94.6%
Ashford Belmar  Lakewood, CO   512    1988 /1993    85%   1,661    92.2%
Ashton Reserve  Charlotte, NC   473    2015    100%   1,133    95.1%
Avenue 25  Phoenix, AZ   254    2013    100%   1,225    93.3%
Cade Boca Raton  Boca Raton, FL   90    2019    81%   2,703    95.6%
Chattahoochee Ridge  Atlanta, GA   358    1996    90%   1,366    93.0%
Citrus Tower  Orlando, FL   336    2006    97%   1,347    92.9%
Denim  Scottsdale, AZ   645    1979    100%   1,206    96.6%
Element  Las Vegas, NV   200    1995    100%   1,264    96.0%
Enders Place at Baldwin Park  Orlando, FL   220    2003    92%   1,807    92.7%
Falls at Forsyth  Cumming, GA   356    2019    100%   1,345    85.4%
Gulfshore Apartment Homes  Naples, FL   368    2016    100%   1,335    94.8%
James on South First  Austin, TX   250    2016    90%   1,334    94.8%
Marquis at The Cascades  Tyler, TX   582    2009    90%   1,239    93.6%
Marquis at TPC  San Antonio, TX   139    2008    90%   1,491    93.5%
Navigator Villas  Pasco, WA   176    2013    90%   1,092    93.8%
Outlook at Greystone  Birmingham, AL   300    2007    100%   1,033    93.0%
Park & Kingston  Charlotte, NC   168    2015    100%   1,337    95.2%
Pine Lakes Preserve  Port St. Lucie, FL   320    2003    100%   1,329    95.0%
Plantation Park  Lake Jackson, TX   238    2016    80%   1,344    91.2%
Providence Trail  Mount Juliet, TN   334    2007    100%   1,241    96.1%
Roswell City Walk  Roswell, GA   320    2015    98%   1,577    95.0%
Sands Parc  Daytona Beach, FL   264    2017    100%   1,390    93.2%
The Brodie  Austin, TX   324    2001    93%   1,325    96.6%
The District at Scottsdale  Scottsdale, AZ   332    2018    100%   2,191    68.1%
The Links at Plum Creek  Castle Rock, CO   264    2000    88%   1,438    94.3%
The Mills  Greenville, SC   304    2013    100%   1,059    91.8%
The Preserve at Henderson Beach  Destin, FL   340    2009    100%   1,447    96.2%
The Reserve at Palmer Ranch  Sarasota, FL   320    2016    100%   1,332    96.3%
The Sanctuary  Las Vegas, NV   320    1988    100%   1,021    95.6%
Veranda at Centerfield  Houston, TX   400    1999    93%   997    94.3%
Villages of Cypress Creek  Houston, TX   384    2001    80%   1,167    94.8%
Wesley Village  Charlotte, NC   301    2010    100%   1,361    94.4%
Consolidated Operating Properties Subtotal/Average      12,356             $1,331(4)   94.3%(4)

 

Mezzanine/Preferred/Ground Lease Investments  Location  Planned Number of Units            Pro Forma Average Rent         
Alexan CityCentre  Houston, TX   340                 $1,736(2)        
Alexan Southside Place  Houston, TX   270               1,722(2)        
Arlo  Charlotte, NC   286               1,507         
Belmont Crossing  Smyrna, GA   192               791(2)        
Domain at The One Forty  Garland, TX   299               1,410(2)        
Georgetown Crossing  Savannah, GA   168               1,012(2)        
Mira Vista  Austin, TX   200               1,009(2)        
Motif  Fort Lauderdale, FL   385               2,352         
North Creek Apartments  Leander, TX   259               1,358         
Novel Perimeter  Atlanta, GA   320               1,749         
Park on the Square  Pensacola, FL   240               1,103(2)        
Riverside Apartments  Austin, TX   222               1,408         
Sierra Terrace  Atlanta, GA   135               1,182(2)        
Sierra Village  Atlanta, GA   154               1,066(2)        
The Park at Chapel Hill  Chapel Hill, NC   *               *         
Thornton Flats  Austin, TX   104               1,493(2)        
Vickers Historic Roswell  Roswell, GA   79               3,176         
Wayforth at Concord  Concord, NC   150               1,707         
Zoey  Austin, TX   307               1,762         
Mezzanine/Preferred/Ground Lease Investments Subtotal/Average      4,110              $1,545         
                                 
Portfolio Properties Total/Average      16,466              $1,386(4)        

 

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

(2) Represents the average effective monthly rent per occupied unit for the three months ended March 31, 2020.

(3) Percent occupied is calculated as (i) the number of units occupied as of March 31, 2020, divided by (ii) total number of units, expressed as a percentage.

(4) Excludes The District at Scottsdale which is in lease-up.

* The development is in the planning phase; project specifications are in process. 

10

 

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Consolidated Statement of Operations

For the Three Months Ended March 31, 2020 and 2019

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

 

   Three Months Ended 
   March 31, 
   2020   2019 
Revenues        
Rental and other property revenues  $50,353   $45,690 
Interest income from related parties and ground leases   5,888    5,776 
Total revenues   56,241    51,466 
Expenses          
Property operating   19,299    18,602 
Property management fees   1,294    1,215 
General and administrative   6,371    5,627 
Acquisition and pursuit costs   1,269    58 
Depreciation and amortization   20,921    17,230 
Total expenses   49,154    42,732 
Operating income   7,087    8,734 
Other income (expense)          
Other income   40     
Preferred returns on unconsolidated real estate joint ventures   2,415    2,289 
Gain on sale of real estate investments   253     
Gain on sale of non-depreciable real estate investments       679 
Interest expense, net   (14,916)   (16,067)
Total other expense   (12,208)   (13,099)
Net loss   (5,121)   (4,365)
Preferred stock dividends   (13,547)   (10,384)
Preferred stock accretion   (3,925)   (1,887)
Net loss attributable to noncontrolling interests          
Operating partnership units   (5,822)   (4,051)
Partially owned properties   (278)   (492)
Net loss attributable to noncontrolling interests   (6,100)   (4,543)
Net loss attributable to common stockholders  $(16,493)  $(12,093)
           
Net loss per common share - Basic  $(0.70)  $(0.53)
           
Net loss per common share – Diluted  $(0.70)  $(0.53)
           
Weighted average basic common shares outstanding   24,087,811    23,123,616 
Weighted average diluted common shares outstanding   24,087,811    23,123,616 

 

11

 

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Consolidated Balance Sheets

First Quarter 2020

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

 

   March 31,
2020
   December 31,
2019
 
ASSETS        
Net Real Estate Investments         
Land $273,038   $268,244 
Buildings and improvements  1,800,314    1,752,738 
Furniture, fixtures and equipment  70,814    67,904 
Total Gross Real Estate Investments  2,144,166    2,088,886 
Accumulated depreciation  (147,601)   (141,566)
Total Net Operating Real Estate Investments  1,996,565    1,947,320 
Operating real estate held for sale, net  76,413     
Total Net Real Estate Investments  2,072,978    1,947,320 
Cash and cash equivalents  94,180    31,683 
Restricted cash  21,855    19,085 
Notes and accrued interest receivable from related parties  166,169    193,781 
Due from affiliates  2,015    4,077 
Accounts receivable, prepaids and other assets  21,037    15,209 
Preferred equity investments and investments in unconsolidated real estate joint ventures  103,372    126,444 
In-place lease intangible assets, net  2,612    3,098 
Non-real estate assets associated with operating real estate held for sale  399     
Total Assets $2,484,617   $2,340,697 
          
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY         
Mortgages payable $1,399,422   $1,425,257 
Mortgages payable associated with operating real estate held for sale  61,918     
Revolving credit facilities  102,753    18,000 
Accounts payable  1,740    1,488 
Other accrued liabilities  28,708    27,499 
Due to affiliates  1,006    790 
Distributions payable  14,057    13,541 
Liabilities associated with operating real estate held for sale  1,071     
Total Liabilities  1,610,675    1,486,575 
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; 5,721,460 shares issued and outstanding as of March 31, 2020 and December 31, 2019  140,560    140,355 
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 519,338 and 536,695 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively  467,043    480,921 
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,323,750 shares issued and outstanding as of March 31, 2020 and December 31, 2019  56,876    56,797 
6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 2,314,512 and 17,400 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively  52,153    388 
Equity         
Stockholders’ Equity         
Preferred stock, $0.01 par value, 197,900,000 shares authorized; no shares issued and outstanding       
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,850,602 shares issued and outstanding as of March 31, 2020 and December 31, 2019  68,705    68,705 
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 24,015,484 and 23,422,557 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively  240    234 
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding as of March 31, 2020 and December 31, 2019  1    1 
Additional paid-in-capital  318,802    311,683 
Distributions in excess of cumulative earnings  (273,538)   (253,132)
Total Stockholders’ Equity  114,210    127,491 
Noncontrolling Interests         
Operating partnership units  14,946    19,331 
Partially owned properties  28,154    28,839 
Total Noncontrolling Interests  43,100    48,170 
Total Equity  157,310    175,661 
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY $2,484,617   $2,340,697 

 

12

 

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Non-GAAP Financial Measures

 

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

 

Funds from Operations and Core Funds from Operations

 

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

 

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

 

CFFO makes certain adjustments to FFO, removing the effect of items that do not reflect ongoing property operations such as acquisition expenses, non-cash interest, unrealized gains and losses on derivatives, losses on extinguishment of debt and debt modification costs (includes prepayment penalties incurred and the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt), one-time weather-related costs, gain or losses on sales of non-depreciable real estate property, shareholder activism, stock compensation expense and preferred stock accretion. Commencing January 1, 2020, we did not deduct the accrued portion of the preferred income on our preferred equity investments from FFO to determine CFFO as the income is deemed fully collectible under the terms of the agreement. The amount totaled $0.4 million for the three months ended March 31, 2020. We believe that CFFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core recurring property operations. As a result, we believe that CFFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential.

 

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

 

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

 

We have acquired nine operating properties and made seven property investments through preferred equity interests or mezzanine loans and sold nine operating properties subsequent to March 31, 2019. The results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance.

 

13

 

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

The table below reconciles our calculations of FFO and CFFO to net loss, the most directly comparable GAAP financial measure, for the three months ended March 31, 2020 and 2019 (in thousands, except per share amounts):

 

   Three Months Ended 
   March 31, 
   2020   2019 
Net loss attributable to common shares  $(16,493)  $(12,093)
Add back: Net loss attributable to operating partnership units   (5,822)   (4,051)
Net loss attributable to common shares and units   (22,315)   (16,144)
Common stockholders and operating partnership units pro-rata share of:          
Real estate depreciation and amortization (1)   19,900    16,142 
Gain on sale of real estate investments   (110)    
FFO Attributable to Common Shares and Units   (2,525)   (2)
Common stockholders and operating partnership units pro-rata share of:          
Acquisition and pursuit costs   1,269    58 
Non-cash interest expense   845    775 
Unrealized (gain) loss on derivatives   (26)   1,635 
Non-real estate depreciation and amortization   120    86 
Gain on sale of non-depreciable real estate investments       (679)
Shareholder activism       338 
Non-recurring income   (40)    
Non-cash preferred returns on unconsolidated real estate joint ventures       (212)
Non-cash equity compensation   3,547    2,391 
Preferred stock accretion   3,925    1,887 
CFFO Attributable to Common Shares and Units  $7,115   $6,277 
           
Per Share and Unit Information:          
FFO Attributable to Common Shares and Units - diluted  $(0.08)  $(0.00)
CFFO Attributable to Common Shares and Units - diluted  $0.22   $0.20 
           
Weighted average common shares and units outstanding - diluted   32,668,294    30,885,006 

 

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

 

14

 

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

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

 

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

 

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

 

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

 

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

 

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

 

   Three Months Ended 
   March 31, 
   2020   2019 
Net loss attributable to common stockholders  $(16,493)  $(12,093)
Net loss income attributable to noncontrolling interests   (6,100)   (4,543)
Preferred stock dividends   13,547    10,384 
Preferred stock accretion   3,925    1,887 
Interest expense, net   14,916    16,067 
Depreciation and amortization   20,876    17,144 
Gain on sale of real estate investments   (253)    
EBITDAre  $30,418   $28,846 
Acquisition and pursuit costs   1,269    58 
Non-real estate depreciation and amortization   120    86 
Gain on sale of non-depreciable real estate investments       (679)
Shareholder activism       338 
Non-cash equity compensation   3,547    2,391 
Non-recurring income   (40)    
Non-cash preferred returns on unconsolidated real estate joint ventures       (212)
Adjusted EBITDAre  $35,314   $30,828 

15

 

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Same Store Properties

 

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

 

Property Net Operating Income ("Property NOI")

 

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

 

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

 

   Three Months Ended 
   March 31, 
   2020   2019 
Net loss attributable to common shares  $(16,493)  $(12,093)
Add back: Net loss attributable to operating partnership units   (5,822)   (4,051)
Net loss attributable to common shares and units   (22,315)   (16,144)
Add common stockholders and operating partnership units pro-rata share of:          
Depreciation and amortization   19,900    16,142 
Non-real estate depreciation and amortization   120    86 
Non-cash interest expense   845    775 
Unrealized (gain) loss on derivatives   (26)   1,635 
Property management fees   1,232    1,148 
Acquisition and pursuit costs   1,269    58 
Corporate operating expenses   6,296    5,554 
Preferred dividends   13,547    10,384 
Preferred stock accretion   3,925    1,887 
Less common stockholders and operating partnership units pro-rata share of:          
Other income   40     
Preferred returns on unconsolidated real estate joint ventures   2,574    2,289 
Interest income from related parties and ground leases   5,888    5,776 
Gain on sale of real estate investments   110     
Gain on sale of non-depreciable real estate investments       679 
Pro-rata share of properties’ income   16,181    12,781 
Add:          
Noncontrolling interest pro-rata share of partially owned property income   803    729 
Total property income   16,984    13,510 
Add:          
Interest expense   14,070    13,578 
Net operating income   31,054    27,088 
Less:          
Non-same store net operating income   7,144    3,795 
Same store net operating income (1)  $23,910   $23,293 

 

(1) Same store portfolio for the three months ended March 31, 2020 consists of 27 properties, which represent 9,291 units.

 

Contact

Investors:

(888) 558.1031
investor.relations@bluerockre.com

 

Media:

Josh Hoffman

(208) 475.2380

jhoffman@bluerockre.com

#

 

16

 

 

Bluerock Residential Growth REIT, Inc.

Financial and Operating Highlights

For the Three Months Ended March 31, 2020

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

 

   Three Months Ended     
   March 31,     
OPERATING INFORMATION  2020   2019   % Change 
Total revenue  $56,241   $51,466    9.3%
                
Total assets  $2,484,617   $2,013,447    23.4%
                
Property NOI (1)  $31,054   $27,088    14.6%
                
Property NOI margins   61.7%   59.3%   4.0%
                
Net loss per common share - Diluted  $(0.70)  $(0.53)   - 
                
CFFO attributable to common stockholders and unit holders per share (2)  $0.22   $0.20    10.0%

 

(1) See page 35 for the Company's definition of this non-GAAP measurement and reasons for using it.

 

(2) See page 33 for the Company's definition of this non-GAAP measurement and reasons for using it.

 

17

 

 

Bluerock Residential Growth REIT, Inc.

Share and Unit Information

First Quarter 2020

(Unaudited)

 

Weighted Average Common Stock and Units Outstanding for the quarter ended March 31, 2020    
Class A Common Stock   24,011,208 
Class C Common Stock   76,603 
Weighted Average Common Stock Outstanding, Diluted   24,087,811 
Warrants (1)   11,058 
Restricted Stock Grants (2)   45,572 
Weighted Average Common Stock Outstanding, Diluted   24,144,441 
OP Units   6,384,467 
LTIP Units   2,139,386 
Weighted Average Common Stock and Total Units Outstanding, Diluted   32,668,294 
      
Outstanding Common Stock and Units at March 31, 2020   33,887,580 
      
Outstanding 8.250% Series A Cumulative Redeemable Preferred Stock at March 31, 2020   5,721,460 
      
Outstanding 6.000% Series B Redeemable Preferred Stock at March 31, 2020   519,338 
      
Outstanding 7.625% Series C Cumulative Redeemable Preferred Stock at March 31, 2020   2,323,750 
      
Outstanding 7.125% Series D Cumulative Preferred Stock at March 31, 2020   2,850,602 
      
Outstanding 6.150% Series T Redeemable Preferred Stock at March 31, 2020   2,314,512 

 

 

(1) Potential dilution from warrants outstanding from issuance of Series B Preferred Stock offering that are potentially exercisable into 11,058 shares of common stock.

 

(2) Potential dilution from vesting of restricted stock grants issued to employees for 45,572 shares of common stock.

 

The following table reflects the impact of various LTIP Unit issuances, share repurchases, and other share/unit changes subsequent to December 31, 2019:

 

Share Type  Shares and
units
outstanding
December
31, 2019
   Class A
ATM
Offering
   Class A
common
from Series
B Company
redemptions
   Class A
common
from Series
B holder
redemptions
   Class A
Share
Repurchase
   LTIP
Issuances
   Other   Shares and
units
outstanding
March 31,
2020
   Ownership
%
 
Class A Common Stock   23,422,557    166,873    1,334,501    108,149    (1,028,293)   -    11,697    24,015,484    70.86%
Class C Common Stock   76,603    -    -    -    -    -    -    76,603    0.23%
Total share equivalents   23,499,160    166,873    1,334,501    108,149    (1,028,293)   -    11,697    24,092,087    71.09%
OP Units   6,384,467    -    -    -    -    -    -    6,384,467    18.84%
LTIP Units   2,598,465    -    -    -    -    812,561    -    3,411,026    10.07%
Total noncontrolling interest   8,982,932    -    -    -    -    812,561    -    9,795,493    28.91%
Total shares, OP and LTIP Units   32,482,092    166,873    1,334,501    108,149    (1,028,293)   812,561    11,697    33,887,580    100.00%

 

18

 

 

Bluerock Residential Growth REIT, Inc.

EBITDAre and Interest Information

First Quarter 2020

(Unaudited and dollars in thousands)

 

   Three Months Ended 
   March 31, 
   2020 
Q1 EBITDAre Calculation     
Net loss attributable to common stockholders  $(16,493)
Net loss attributable to noncontrolling interests   (6,100)
Preferred stock dividends   13,547 
Preferred stock accretion   3,925 
Interest expense, net   14,916 
Depreciation and amortization   20,876 
Gain on sale of real estate investments   (253)
EBITDAre (1)  $30,418 
Acquisition and pursuit costs   1,269 
Non-real estate depreciation and amortization   120 
Non-cash equity compensation   3,547 
Non-recurring income   (40)
Adjusted EBITDAre  $35,314 
      
Modified Q1 EBITDAre Calculation (2)     
Adjusted EBITDAre  $35,314 
Adjustment   (37)
Modified Q1 EBITDAre  $35,277 
Modified Q1 EBITDAre annualized  $141,108 
      
Modified Q1 Interest Calculation (2)(3)     
Interest expense  $14,070 
Adjustment   466 
Modified Q1 interest expense  $14,536 
Modified Q1 interest expense annualized  $58,144 

 

(1) See page 34 for a reconciliation of net income attributable to common stockholders to EBITDAre and the Company's definition of EBITDAre and reasons for using it.

 

(2) Adjustment to EBITDAre and interest expense represents the estimated impact over the full period of the following activity assuming the transactions had occurred on January 1, 2020: (i) acquisitions of Avenue 25 and Falls at Forsyth, (ii) acquisition of Zoey ground lease, (iii) sales of Helios and Whetstone Apartments, (iv) additional investments at Alexan CityCentre, Alexan Southside Place, Arlo, Domain at The One Forty, North Creek Apartments, Riverside Apartments, Strategic Portfolio, and Wayforth at Concord, and (v) paydowns at Motif and The Park at Chapel Hill. Actual results may differ significantly from the presented, adjusted amounts including annualized amounts.

 

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

 

19

 

 

Bluerock Residential Growth REIT, Inc.

Financial Statistics

First Quarter 2020

(Unaudited and dollars in thousands)

 

   Three Months Ended 
   March 31, 
   2020 
Interest Coverage Ratio     
Modified Q1 EBITDAre *  $35,277 
Modified Q1 interest expense (4) *   14,536 
Interest coverage ratio   2.43x
      
Quarterly Fixed Charge Coverage Ratio     
Modified Q1 interest expense (4) *  $14,536 
Preferred stock dividends   13,547 
Total fixed charges  $28,083 
Modified Q1 EBITDAre *   35,277 
Modified Q1 EBITDAre fixed charge coverage ratio   1.26x
      
Net Debt / Modified EBITDAre Ratio     
Total debt (1)  $1,572,430 
Less: cash (3)   (116,035)
Net debt (total debt less cash)  $1,456,395 
Modified Q1 EBITDAre (annualized)*   141,108 
Net debt / modified EBITDAre ratio   10.32x
      
Leverage as a Percentage of Assets     
Total debt (1)  $1,572,430 
Total undepreciated assets (2)   2,644,403 
Total debt / total undepreciated assets   59.5%
Net debt / net undepreciated assets (less cash)   57.6%
      
Leverage as a Percentage of Enterprise Value     
Total market cap (5)  $967,951 
Total debt (1)   1,572,430 
Total enterprise value  $2,540,381 
Total debt / total enterprise value   61.9%
Net debt / total enterprise value   57.3%

 

(1) Total debt excludes amortization of fair market value adjustments of $3.0 million and deferred financing costs of $11.3 million.

 

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

 

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

 

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

 

(5) Total market cap is calculated by using common shares, preferred shares, and equivalents (OP Units/LTIP Units) multiplied by the March 31, 2020 closing share prices.

 

* Adjustment to EBITDAre and interest expense represents the estimated impact over the full period of the following activity assuming the transactions had occurred on January 1, 2020: (i) acquisitions of Avenue 25 and Falls at Forsyth, (ii) acquisition of Zoey ground lease, (iii) sales of Helios and Whetstone Apartments, (iv) additional investments at Alexan CityCentre, Alexan Southside Place, Arlo, Domain at The One Forty, North Creek Apartments, Riverside Apartments, Strategic Portfolio, and Wayforth at Concord, and (v) paydowns at Motif and The Park at Chapel Hill. Actual results may differ significantly from the presented, adjusted amounts including annualized amounts. See prior page for calculations.

 

20

 

 

Bluerock Residential Growth REIT, Inc.

Recent Acquisitions and Investments

(Unaudited)

 

Property  MSA  Date of
Investment
  Year Built/
Renovated (1)
   Number
of Units
   Ownership
Interest in
Property
   Purchase
Price (in
millions)
   Average
Rent (2)
 
Operating Properties                               
Avenue 25  Phoenix, AZ  1/23/2020   2013    254    100%  $55.6   $1,225 
Falls at Forsyth  Atlanta, GA  3/06/2020   2019    356    100%   82.5    1,345 
   Total/Average              610        $138.1   $1,263 

 

Property  MSA  Date of
Investment
  Year Built/
Renovated (1)
   Number
of Units
   Investment
Amount (in
millions)
   Average
Rent (2)
 
Preferred Equity                          
Georgetown Crossing  Savannah, GA  3/20/2020   1994    168   $2.2   $1,012 
Park on the Square  Pensacola, FL  3/20/2020   1999    240    5.8    1,103 
   Total Preferred Equity              408    8.0    1,065 
                           
Ground Lease                          
Zoey (3)  Austin, TX  3/04/2020   2022    307    3.1    1,762 
   Total Ground Lease              307    3.1    1,762 
                           
   Total/Average              715   $11.1   $1,364 

 

(1) All dates are for the year construction was completed or expects to be completed, or the date that a significant renovation has or will be completed.

 

(2) Represents the average effective monthly rent per occupied unit for the three months ended March 31, 2020. The average rent for the development project represents the average pro forma effective monthly rent per occupied unit for all expected units upon stabilization.

 

(3) Property is a development project. The Company acquired land and entered into a ground lease.

 

21

 

 

Bluerock Residential Growth REIT, Inc.

Recent Dispositions

(Unaudited and dollars in millions)

 

Property  Location  Date Sold  Number of Units   Sale Price   BRG Net Proceeds 
Preferred Equity                     
Helios  Atlanta, GA  1/08/2020   282   $65.6   $22.7 
Whetstone Apartments  Durham, NC  1/24/2020   204    46.5    19.6 
   Total         486   $112.1   $42.3 

 

22

Bluerock Residential Growth REIT, Inc.

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

For the Three Months Ended March 31, 2020

(Unaudited and dollars in thousands)

 

Multifamily Community Name 

Investment
Balance as of
January 1, 2020

   Change  

Investment
Balance as of
March 31, 2020

  

Return as of
March 31, 2020

   CFFO Earned for the
Three Months Ended
March 31, 2020
 
Preferred and Equity Investments                         
Operating – Stabilized                         
Alexan CityCentre  $12,788   $1,192   $13,980    17.7%  $591 
Alexan Southside Place   24,866    630    25,496    5.0%   315 
Mira Vista   5,250    -    5,250    10.1%   134 
Strategic Portfolio   10,183    8,045    18,228    10.5%   297 
Thornton Flats   4,600    -    4,600    9.0%   103 
Total operating - stabilized   57,687    9,867    67,554         1,440 
                          
Lease-up                         
Wayforth at Concord   4,683    1,817    6,500    13.0%   193 
Total lease-up   4,683    1,817    6,500         193 
                          
Development                         
North Creek Apartments   14,964    284    15,248    12.5%   476 
Riverside Apartments   12,342    912    13,254    12.5%   409 
Total development   27,306    1,196    28,502         885 
                          
Sold                         
Helios   23,663    (23,021)   642    -    (16)(1)
Leigh House (2)   80    -    80    -    - 
Whetstone Apartments   12,932    (12,932)   -    -    56 
Total sold   36,675    (35,953)   722         40 
                          
Other   93    1    94    (3)   - 
   $126,444   $(23,072)  $103,372        $2,558 
                          
Mezzanine Loans                         
Operating - Stabilized                         
Domain at The One Forty (3)  $23,430   $392   $23,822    5.5%  $322 
Total operating - stabilized   23,430    392    23,822         322 
                          
Lease-up                         
Arlo (3)   27,605    996    28,601    15.0%   1,020 
Motif (3)   75,436    (8,000)   67,436    12.9%   2,400 
Novel Perimeter (3)   20,867    -    20,867    15.0%   770 
Vickers Historic Roswell (3)   11,624    -    11,624    15.0%   429 
Total lease-up   135,532    (7,004)   128,528         4,619 
                          
Development                         
The Park at Chapel Hill (4)   34,819    (21,000)   13,819    10.6%   935 
Total development   34,819    (21,000)   13,819         935 
                          
   $193,781   $(27,612)  $166,169        $5,876 
                          
Ground Lease - Development (5)                         
Zoey  $-    3,157    3,157    -   $12 
   $-   $3,157   $3,157        $12 

 

(1) The property incurred an additional $143 of costs related to the sale of Helios.

 

(2) Represents remaining net assets in the joint venture after receipt of $14.2 million in proceeds for the preferred equity investment.

 

(3) The Company also holds an equity method investment with 0.5% common ownership.

 

(4) The investment includes a $5.0 million senior loan and a $8.5 million mezzanine loan.

 

(5) Ground lease investments are included in accounts receivable, prepaids and other assets. 

23

 

 

 

Bluerock Residential Growth REIT, Inc.

Portfolio Information

First Quarter 2020

(Unaudited)

 

Multifamily
Community Name
  Location  Number
of Units
   Year Built/
Renovated (1)
   Average
Rent (2)
   Revenue per
Occupied
Unit (3)
   Average
Occupancy
 
Consolidated Operating Properties:                            
ARIUM Glenridge  Atlanta, GA   480    1990   $1,270   $1,386    94.3%
ARIUM Grandewood  Orlando, FL   306    2005    1,427    1,560    94.8%
ARIUM Hunter’s Creek  Orlando, FL   532    1999    1,444    1,603    95.6%
ARIUM Metrowest  Orlando, FL   510    2001    1,435    1,638    94.3%
ARIUM Westside  Atlanta, GA   336    2008    1,560    1,690    95.3%
Ashford Belmar  Lakewood, CO   512    1988/1993   1,661    1,854    91.8%
Ashton Reserve  Charlotte, NC   473    2015    1,133    1,282    95.5%
Avenue 25  Phoenix, AZ   254    2013    1,225    1,357    94.0%
Cade Boca Raton  Boca Raton, FL   90    2019    2,703    2,699    95.4%
Chattahoochee Ridge  Atlanta, GA   358    1996    1,366    1,456    90.7%
Citrus Tower  Orlando, FL   336    2006    1,347    1,509    92.6%
Denim  Scottsdale, AZ   645    1979    1,206    1,370    96.7%
Element  Las Vegas, NV   200    1995    1,264    1,488    94.2%
Enders Place at Baldwin Park  Orlando, FL   220    2003    1,807    1,906    95.1%
Falls at Forsyth  Cumming, GA   356    2019    1,345    1,389    85.1%
Gulfshore Apartment Homes  Naples, FL   368    2016    1,335    1,470    93.8%
James on South First  Austin, TX   250    2016    1,334    1,501    95.7%
Marquis at The Cascades  Tyler, TX   582    2009    1,239    1,324    93.8%
Marquis at TPC  San Antonio, TX   139    2008    1,491    1,652    94.1%
Navigator Villas  Pasco, WA   176    2013    1,092    1,277    95.0%
Outlook at Greystone  Birmingham, AL   300    2007    1,033    1,220    93.8%
Park & Kingston  Charlotte, NC   168    2015    1,337    1,398    96.4%
Pine Lakes Preserve  Port St. Lucie, FL   320    2003    1,329    1,476    96.6%
Plantation Park  Lake Jackson, TX   238    2016    1,344    1,473    90.5%
Providence Trail  Mount Juliet, TN   334    2007    1,241    1,379    93.7%
Roswell City Walk  Roswell, GA   320    2015    1,577    1,776    94.6%
Sands Parc  Daytona Beach, FL   264    2017    1,390    1,600    95.5%
The Brodie  Austin, TX   324    2001    1,325    1,492    94.6%
The District at Scottsdale  Scottsdale, AZ   332    2018    2,191    2,322    60.9%
The Links at Plum Creek  Castle Rock, CO   264    2000    1,438    1,584    92.8%
The Mills  Greenville, SC   304    2013    1,059    1,188    92.5%
The Preserve at Henderson Beach  Destin, FL   340    2009    1,447    1,605    95.3%
The Reserve at Palmer Ranch  Sarasota, FL   320    2016    1,332    1,461    95.9%
The Sanctuary  Las Vegas, NV   320    1988    1,021    1,158    92.6%
Veranda at Centerfield  Houston, TX   400    1999    997    1,098    94.4%
Villages of Cypress Creek  Houston, TX   384    2001    1,167    1,254    94.6%
Wesley Village  Charlotte, NC   301    2010    1,361    1,472    93.5%
                             
Total Consolidated Operating Properties      12,356        $1,331(5)  $1,474(5)   94.2%(5)
                             
Mezzanine/Preferred/Ground Lease Investments:                            
Alexan CityCentre  Houston, TX   340        $1,736   $1,835    90.8%
Alexan Southside Place  Houston, TX   270         1,722    1,848    95.5%
Arlo  Charlotte, NC   286         1,507(4)    N/A      N/A  
Belmont Crossing  Smyrna, GA   192         791    867    91.1%
Domain at The One Forty  Garland, TX   299         1,410    1,563    89.3%
Georgetown Crossing  Savannah, GA   168         1,012    1,076    95.3%
Mira Vista  Austin, TX   200         1,009    1,112    96.3%
Motif  Fort Lauderdale, FL   385         2,352(4)    N/A      N/A  
North Creek Apartments  Leander, TX   259         1,358(4)    N/A      N/A  
Novel Perimeter  Atlanta, GA   320         1,749(4)    N/A      N/A  
Park on the Square  Pensacola, FL   240         1,103    1,237    95.1%
Riverside Apartments  Austin, TX   222         1,408(4)    N/A      N/A  
Sierra Terrace  Atlanta, GA   135         1,182    1,301    95.6%
Sierra Village  Atlanta, GA   154         1,066    1,117    95.5%
The Park at Chapel Hill  Chapel Hill, NC   *         *     N/A      N/A  
Thornton Flats  Austin, TX   104         1,493    1,692    92.3%
Vickers Historic Roswell  Roswell, GA   79         3,176(4)    N/A      N/A  
Wayforth at Concord  Concord, NC   150         1,707(4)    N/A      N/A  
Zoey  Austin, TX   307         1,762(4)    N/A      N/A  
                             
Total Mezzanine/Preferred/Ground Lease Investments      4,110        $1,545   $1,415    93.1%
                             
Total Portfolio      16,466        $1,386(5)  $1,465(5)   94.0%(5)

 

24

 

 

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

 

(2) Represents the average effective monthly rent per occupied unit for the three months ended March 31, 2020.

 

(3) Revenue per occupied unit is total revenue divided by average number of occupied units for the three months ended March 31, 2020.

 

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

 

(5) Excludes District at Scottsdale, which is in lease-up.

 

* The development is in the planning phase; project specifications are in process.

  

25

 

 

Bluerock Residential Growth REIT, Inc.

Renovation Table

As of March 31, 2020

(Unaudited)

  

Units and Investment                   
   2020  To Date 
   Completed   Completed   Total Expected  Total   Unrenovated Units 
   in 1Q   Year-to-date   Completions in 2020  Completed   Remaining 
Number of Renovations   120    120    120 - 130   2,765    4,611 
Renovation Cost per Unit  $8,520   $8,520   $6,000 - $7,000          

 

Returns  Inception-to-date 
   Cost   Monthly Rent   Return on 
   per Unit   Premium   Investment 
Weighted Average Returns to Date  $5,811   $114    23.5%

 

26

 

 

Bluerock Residential Growth REIT, Inc.

Lease-up and Development Mezzanine/Preferred/Ground Lease Investments

As of March 31, 2020

(Unaudited)

 

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

 

                             Actual/Estimated Dates for
Multifamily Community Name   Actual/
Planned
Number
of Units
    Total Actual/
Estimated
Construction
Cost (in
millions)
    Cost to
Date (in
millions)
    Actual/
Estimated
Construction
Cost Per
Unit
    Total
Available
Financing
(in millions)
    Construction
Start
   Initial
Occupancy
   Construction
Completion
   

Stabilized
Operations
(1)

Lease-up Investments                                         
Vickers Historic Roswell (2)   79   $31.9   $30.3   $403,797   $22.0    2Q16   2Q18   3Q18   4Q20
Arlo (2)   286    60.0    58.6    209,790    43.0    4Q16   2Q18   1Q19   4Q20
Novel Perimeter (2)   320    71.0    68.3    221,875    44.7    4Q16   3Q18   1Q19   4Q20
Motif (2)   385    135.4    127.5    351,688    70.4    1Q18   1Q20   3Q20   2Q22
Wayforth at Concord (3)   150    33.5    15.3    223,333    22.3    4Q18   1Q20   3Q21   3Q21
   Total lease-up units   1,220                                     
                                          
Development Investments                                         
North Creek Apartments (3)   259    44.0    26.7    169,884    23.6    4Q18   3Q20   4Q20   3Q21
Riverside Apartments (3)   222    37.9    16.4    170,721    20.2    2Q19   1Q21   2Q21   4Q21
Zoey   307    59.5    7.8    193,811    25.5    1Q20   1Q22   2Q22   1Q23
The Park at Chapel Hill (4)   -    -    -    -    -    -   -   -   -
   Total development units   788                                     
                                          
   Total units   2,008                                     

 

(1) We define stabilized occupancy as attainment of 90% physical occupancy.

 

(2) Represents a mezzanine loan investment. Arlo and Vickers Historic Roswell have an option to purchase indirect property interest upon maturity.

 

(3) Represents a preferred equity investment. North Creek Apartments, Riverside Apartments, and Wayforth at Concord have an option to purchase the property at stabilization.

 

(4) The development is in the planning phase; project specifications are in process.

  

27

 

 

Bluerock Residential Growth REIT, Inc.

Condensed Consolidated Balance Sheets

First Quarter 2020

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

 

   March 31, 2020   December 31,
2019
 
ASSETS          
Net Real Estate Investments          
Land  $273,038   $268,244 
Buildings and improvements   1,800,314    1,752,738 
Furniture, fixtures and equipment   70,814    67,904 
Total Gross Real Estate Investments   2,144,166    2,088,886 
Accumulated depreciation   (147,601)   (141,566)
Total Net Operating Real Estate Investments   1,996,565    1,947,320 
Operating real estate held for sale, net   76,413     
Total Net Real Estate Investments   2,072,978    1,947,320 
Cash and cash equivalents   94,180    31,683 
Restricted cash   21,855    19,085 
Notes and accrued interest receivable from related parties   166,169    193,781 
Due from affiliates   2,015    4,077 
Accounts receivable, prepaids and other assets   21,037    15,209 
Preferred equity investments and investments in unconsolidated real estate joint ventures   103,372    126,444 
In-place lease intangible assets, net   2,612    3,098 
Non-real estate assets associated with operating real estate held for sale   399     
Total Assets  $2,484,617   $2,340,697 
           
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY          
Mortgages payable  $1,399,422   $1,425,257 
Mortgages payable associated with operating real estate held for sale   61,918     
Revolving credit facilities   102,753    18,000 
Accounts payable   1,740    1,488 
Other accrued liabilities   28,708    27,499 
Due to affiliates   1,006    790 
Distributions payable   14,057    13,541 
Liabilities associated with operating real estate held for sale   1,071     
Total Liabilities   1,610,675    1,486,575 
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; 5,721,460 shares issued and outstanding as of March 31, 2020 and December 31, 2019   140,560    140,355 
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 519,338 and 536,695 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively   467,043    480,921 
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,323,750 shares issued and outstanding as of March 31, 2020 and December 31, 2019   56,876    56,797 
6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 2,314,512 and 17,400 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively   52,153    388 
Equity          
Stockholders’ Equity          
Preferred stock, $0.01 par value, 197,900,000 shares authorized; no shares issued and outstanding        
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,850,602 shares issued and outstanding as of March 31, 2020 and December 31, 2019   68,705    68,705 
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 24,015,484 and 23,422,557 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively   240    234 
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding as of March 31, 2020 and December 31, 2019   1    1 
Additional paid-in-capital   318,802    311,683 
Distributions in excess of cumulative earnings   (273,538)   (253,132)
Total Stockholders’ Equity   114,210    127,491 
Noncontrolling Interests          
Operating Partnership units   14,946    19,331 
    Partially owned properties   28,154    28,839 
Total Noncontrolling Interests   43,100    48,170 
Total Equity   157,310    175,661 
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY  $2,484,617   $2,340,697 

 

28

 

  

Bluerock Residential Growth REIT, Inc.

Consolidated Statements of Operations

For the Three Months Ended March 31, 2020 and 2019

(Dollars in thousands)

 

   Three Months Ended 
   March 31, 
   2020   2019 
Revenues          
Rental and other property revenues  $50,353   $45,690 
Interest income from related parties and ground leases   5,888    5,776 
Total revenues   56,241    51,466 
Expenses          
Property operating   19,299    18,602 
Property management fees   1,294    1,215 
General and administrative   6,371    5,627 
Acquisition and pursuit costs   1,269    58 
Depreciation and amortization   20,921    17,230 
Total expenses   49,154    42,732 
Operating income   7,087    8,734 
Other income (expense)          
Other income   40     
Preferred returns on unconsolidated real estate joint ventures   2,415    2,289 
Gain on sale of real estate investments   253     
Gain on sale of non-depreciable real estate investments       679 
Interest expense, net   (14,916)   (16,067)
Total other expense   (12,208)   (13,099)
Net loss   (5,121)   (4,365)
Preferred stock dividends   (13,547)   (10,384)
Preferred stock accretion   (3,925)   (1,887)
Net loss attributable to noncontrolling interests          
Operating Partnership units   (5,822)   (4,051)
Partially owned properties   (278)   (492)
Net loss attributable to noncontrolling interests   (6,100)   (4,543)
Net loss attributable to common stockholders  $(16,493)  $(12,093)
           
Net loss per common share - Basic  $(0.70)  $(0.53)
           
Net loss per common share – Diluted  $(0.70)  $(0.53)
           
Weighted average basic common shares outstanding   24,087,811    23,123,616 
Weighted average diluted common shares outstanding   24,087,811    23,123,616 

  

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Bluerock Residential Growth REIT, Inc.

Reconciliation of Funds from Operations (FFO) and Core FFO (CFFO) Attributable to Common Stockholders and Unit Holders

For the Three Months Ended March 31, 2020 and 2019

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

 

   Three Months Ended 
   March 31, 
   2020   2019 
Net loss attributable to common stockholders  $(16,493)  $(12,093)
Add back: Net loss attributable to Operating Partnership Units   (5,822)   (4,051)
Net loss attributable to common stockholders and unit holders   (22,315)   (16,144)
Common stockholders and Operating Partnership Units pro-rata share of:          
Real estate depreciation and amortization (1)   19,900    16,142 
Gain on sale of real estate investments   (110)    
FFO Attributable to Common Stockholders and Unit Holders   (2,525)   (2)
Common stockholders and Operating Partnership Units pro-rata share of:          
Acquisition and pursuit costs   1,269    58 
 Non-cash interest expense   845    775 
Unrealized (gain) loss on derivatives   (26)   1,635 
Non-real estate depreciation and amortization   120    86 
Gain on sale of non-depreciable real estate investments       (679)
Shareholder activism       338 
Non-recurring income   (40)    
Non-cash preferred returns on unconsolidated real estate joint ventures       (212)
Non-cash equity compensation   3,547    2,391 
Preferred stock accretion   3,925    1,887 
CFFO Attributable to Common Stockholders and Unit Holders  $7,115   $6,277 
           
Per Share and Unit Information:          
FFO Attributable to Common Stockholders and Unit Holders - diluted  $(0.08)  $(0.00)
CFFO Attributable to Common Stockholders and Unit Holders - diluted  $0.22   $0.20 
           
Weighted average common shares and units outstanding - diluted   32,668,294    30,885,006 

 

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

 

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Bluerock Residential Growth REIT, Inc.

Mortgages Payable Summary Information

As of March 31, 2020

(Unaudited and dollars in thousands)

Property  Outstanding
Principal
   Interest Rate   Fixed/ Floating  Maturity Date
ARIUM Glenridge  $49,500    2.85%  L + 1.33% subject to Cap (1)  September 1, 2025
ARIUM Grandewood   39,385    3.63%  (2)  July 1, 2025
ARIUM Hunter’s Creek   71,856    3.65%  Fixed  November 1, 2024
ARIUM Metrowest   64,559    4.43%  Fixed  May 1, 2025
ARIUM Westside   52,150    3.68%  Fixed  August 1, 2023
Ashford Belmar   100,675    4.53%  Fixed  December 1, 2025
Avenue 25   36,566    4.18%  Fixed  July 1, 2027
Cade Boca Raton   23,500    3.09%  L + 1.50% subject to Cap (1)  January 1, 2025
Chattahoochee Ridge   45,338    3.25%  Fixed  December 5, 2024
Citrus Tower   41,151    4.07%  Fixed  October 1, 2024
Denim   91,634    3.32%  Fixed  August 1, 2029
Element   29,260    3.63%  Fixed  July 1, 2026
Enders Place at Baldwin Park (3)   23,212    4.30%  Fixed  November 1, 2022
Gulfshore Apartment Homes   46,345    3.26%  Fixed  September 1, 2029
James on South First   26,002    4.35%  Fixed  January 1, 2024
Marquis at The Cascades I   32,130    3.13%  L + 1.61% subject to Cap (1)  June 1, 2024
Marquis at The Cascades II   22,423    3.13%  L + 1.61% subject to Cap (1)  June 1, 2024
Navigator Villas   20,515    4.56%  Fixed  June 1, 2028
Outlook at Greystone   22,105    4.30%  Fixed  June 1, 2025
Park & Kingston   19,600    3.32%  Fixed  November 1, 2026
Pine Lakes Reserve   26,950    3.95%  Fixed  November 1, 2023
Plantation Park   26,625    4.64%  Fixed  July 1, 2028
Providence Trail   47,950    3.54%  Fixed  July 1, 2026
Roswell City Walk   50,764    3.63%  Fixed  December 1, 2026
The Brodie   34,037    3.71%  Fixed  December 1, 2023
The District at Scottsdale   82,200    2.05%  L + 1.25% (1)  December 11, 2020
The Links at Plum Creek   40,000    4.31%  Fixed  October 1, 2025
The Mills   25,669    4.21%  Fixed  January 1, 2025
The Preserve at Henderson Beach   48,490    3.26%  Fixed  September 1, 2029
The Reserve at Palmer Ranch   41,348    4.41%  Fixed  May 1, 2025
The Sanctuary   33,707    3.31%  Fixed  August 1, 2029
Veranda at Centerfield   26,100    2.83%  L + 1.25% subject to Cap (1)  July 26, 2023
Villages of Cypress Creek   26,200    3.23%  Fixed  October 1, 2022
Wesley Village   39,952    4.25%  Fixed  April 1, 2024
Total   1,407,898            
Fair value adjustments   2,442            
Deferred financing costs, net   (10,918)           
Total continuing operations  $1,399,422            
Held for sale                
Ashton Reserve I (4)  $30,188    4.67%  Fixed  December 1, 2025
Ashton Reserve II (4)   15,213    3.02%  L + 1.50% subject to Cap (1)  August 1, 2025
Marquis at TPC (4)   16,378    3.13%  L + 1.61% subject to Cap (1)  June 1, 2024
Fair value adjustments   565            
Deferred financing costs, net   (426)           
Total held for sale  $61,918            
Total  $1,461,340            
Weighted Average Interest Rate   3.67%           

 

(1) In March 2020, one month LIBOR in effect was 1.52%. LIBOR rate is subject to a LIBOR rate cap of 2.50% until at earliest July 1, 2021, except for Cade Boca Raton with a rate cap of 3.00%.

(2) The principal balance includes a $19.7 million advance at a fixed rate of 4.35% and a $19.7 million advance at a variable rate of 2.92% as of March 31, 2020.

(3) The principal balance includes a $15.8 million loan at a fixed rate of 3.97% and a $7.5 million supplemental loan at a fixed rate of 5.01%.

(4) The property was subsequently sold in April 2020.

 

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Bluerock Residential Growth REIT, Inc.

Mortgages Payable Summary Information Continued

As of March 31, 2020

(Unaudited and dollars in thousands)

 

Mortgages Payable Maturity Schedules

 

Year  Fixed Rate   Floating Rate   Total   % of Total 
2020  $5,768   $83,395   $89,163(1)   6.07%
2021   10,320    2,132    12,452    0.85%
2022   60,153    3,421    63,574    4.33%
2023   124,864    29,230    154,094    10.48%
2024   222,393    67,874    290,267    19.75%
Thereafter   759,063    101,064    860,127    58.52%
   $1,182,561   $287,116   $1,469,677    100.00%
Fair Value Adjustments   3,007    -    3,007      
Subtotal  $1,185,568   $287,116   $1,472,684      
Deferred Financing Costs, net   (9,078)   (2,266)   (11,344)     
Total  $1,176,490   $284,850   $1,461,340      

 

   Amounts   % of Total   Weighted
Average
Interest Rates
   Weighted
Average
Maturities
(years)
 
Continuing Operations                    
Secured Fixed Rate Debt  $1,154,815    81.9%   3.88%   5.9 
Secured Floating Rate Debt (2)   255,525    18.1%   2.67%   3.3 
   Total/Average Secured Continuing Operations  $1,410,340    100.0%   3.67%   5.5 
                     
Held for Sale                    
Secured Fixed Rate Debt  $30,753    49.3%   4.67%   5.7 
Secured Floating Rate Debt (2)   31,591    50.7%   3.07%   4.7 
   Total/Average Secured Held for Sale  $62,344    100.0%   3.86%   5.2 
                     
Total/Average  $1,472,684    100.0%   3.67%   5.5 
                     

 

(1) $82.2 million represents a loan in connection with The District at Scottsdale. The loan has a December 2020 maturity date and contains a six-month extension option, subject to certain conditions.

 

(2) $181.4 million or 63% of the floating rate debt is subject to a LIBOR rate cap of 2.50% until at earliest July 1, 2021. $23.5 million or 8% relates to the Cade Boca Raton loan, which has a rate cap of 3.00% through January 1, 2023. The remaining $82.2 million, or 29%, relates to the District at Scottsdale loan, which does not have a rate cap.

 

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Bluerock Residential Growth REIT, Inc.

Definitions of Non-GAAP Financial Measures

 

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

 

Funds from Operations and Core Funds from Operations, Attributable to Common Stockholders and Unit Holders

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

 

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

 

CFFO makes certain adjustments to FFO, removing the effect of items that do not reflect ongoing property operations such as acquisition expenses, non-cash interest expense, unrealized gains or losses on derivatives, losses on extinguishment of debt and debt modification costs (includes prepayment penalties incurred and the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt), one-time weather-related costs, gains or losses on sales of non-depreciable real estate property, shareholder activism, stock compensation expense and preferred stock accretion. Commencing January 1, 2020, we did not deduct the accrued portion of the preferred income on our preferred equity investments from FFO to determine CFFO as the income is deemed fully collectible. The amount totaled $0.4 million for the three months ended March 31, 2020. We believe that CFFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core recurring property operations. As a result, we believe that CFFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential.

 

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

 

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

 

We have acquired nine operating properties and made seven property investments through preferred equity interests or mezzanine loans and sold nine operating properties subsequent to March 31, 2019. The results presented are not directly comparable and should not be considered an indication of our future operating performance (unaudited and dollars in thousands, except share and per share data).

 

Same Store Properties

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

 

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Bluerock Residential Growth REIT, Inc.

Definitions of Non-GAAP Financial Measures

(Unaudited and dollars in thousands)

 

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

 

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

 

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

 

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

 

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

 

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

 

   Three Months Ended 
   March 31, 
   2020   2019 
Net loss attributable to common stockholders  $(16,493)  $(12,093)
Net loss attributable to noncontrolling interests   (6,100)   (4,543)
Preferred stock dividends   13,547    10,384 
Preferred stock accretion   3,925    1,887 
Interest expense, net   14,916    16,067 
Depreciation and amortization   20,876    17,144 
Gain on sale of real estate investments   (253)    
EBITDAre  $30,418   $28,846 
Acquisition and pursuit costs   1,269    58 
Non-real estate depreciation and amortization   120    86 
Gain on sale of non-depreciable real estate investments       (679)
Shareholder activism       338 
Non-cash equity compensation   3,547    2,391 
Non-recurring income   (40)    
Non-cash preferred returns on unconsolidated real estate joint ventures       (212)
Adjusted EBITDAre  $35,314   $30,828 

 

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Bluerock Residential Growth REIT, Inc.

Definitions of Non-GAAP Financial Measures

(Unaudited and dollars in thousands)

 

Property Net Operating Income ("Property NOI")

 

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

 

We have acquired nine operating properties and made seven property investments through preferred equity interests or mezzanine loans and sold nine operating properties subsequent to March 31, 2019. Therefore, the results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance.

 

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

 

   Three Months Ended 
   March 31, 
   2020   2019 
Net loss attributable to common stockholders  $(16,493)  $(12,093)
Add back: Net loss attributable to Operating Partnership Units   (5,822)   (4,051)
Net loss attributable to common stockholders and unit holders   (22,315)   (16,144)
Add common stockholders and Operating Partnership Units pro-rata share of:          
Depreciation and amortization   19,900    16,142 
Non-real estate depreciation and amortization   120    86 
Non-cash interest expense   845    775 
Unrealized (gain) loss on derivatives   (26)   1,635 
Property management fees   1,232    1,148 
Acquisition and pursuit costs   1,269    58 
Corporate operating expenses   6,296    5,554 
Preferred dividends   13,547    10,384 
Preferred stock accretion   3,925    1,887 
Less common stockholders and Operating Partnership Units pro-rata share of:          
Other income   40     
Preferred returns on unconsolidated real estate joint ventures   2,574    2,289 
Interest income from related parties and ground leases   5,888    5,776 
Gain on sale of real estate investments   110     
Gain on sale of non-depreciable real estate investments       679 
Pro-rata share of properties’ income   16,181    12,781 
Add:          
Noncontrolling interest pro-rata share of partially owned property income   803    729 
Total property income   16,984    13,510 
Add:          
Interest expense   14,070    13,578 
Net operating income   31,054    27,088 
Less:          
Non-same store net operating income   7,144    3,795 
Same store net operating income (1)  $23,910   $23,293 

 

(1) Same store portfolio for the three months ended March 31, 2020 consists of 27 properties, which represent 9,291 units.

 

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