EX-99.2 3 tm216020d1_ex99-2.htm EXHIBIT 99.2

 

Exhibit 99.2

 

 

 

1

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter 2020

Supplemental Financial Information

(Unaudited)

 

Table of Contents
Fourth Quarter Earnings Release 3
   
Financial and Operating Highlights 20
   
Share and Unit Information 21
   
EBITDAre and Interest Information 22
   
Financial Statistics 23
   
Recent Acquisitions and Investments 24
   
Recent Dispositions 25
   
Preferred Equity Investments, Notes and Accrued Interest Receivable, and Ground Lease 26
   
Portfolio Information 27
   
Renovation Table 28
   
Lease-up and Development Mezzanine/Preferred/Ground Lease Investments 29
   
Condensed Consolidated Balance Sheets 30
   
Consolidated Statements of Operations 31
   
Reconciliation of Funds from Operations (FFO) and Core Funds from Operations (CFFO) 32
   
Mortgages Payable Summary Information 33
   
2021 Projected Guidance Information 35
   
Definitions of Non-GAAP Financial Measures 36

 

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.

Fourth Quarter Earnings Release

 

 

  

For Immediate Release

 

Bluerock Residential Growth REIT Announces Fourth Quarter 2020 Results

 

-                  Total Revenues Grew 6.6% YoY -

-                  Same Store Average Occupancy Increased 1.4% -

-                  Collected 97% of Fourth Quarter Rents -

 

New York, NY (February 11, 2021) – 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 December 31, 2020.

 

“We continue to drive solid same store occupancy, average rent, and operating margins performance in our investments in highly amenitized, live/work/play apartment communities, even with the challenges of COVID-19,” said Ramin Kamfar, Company Chairman and CEO. “Our increased occupancy, sequential quarterly rent growth improvement, and consistent elevated rental collections throughout the pandemic reflect a resilient Class A affordable suburban based portfolio well positioned to outperform in the coming quarters. We will also continue to opportunistically allocate capital through dispositions and new investments, as well as opportunistic share repurchases and redemption of our preferred equity.”

 

Fourth Quarter Highlights

 

-Total revenues grew 6.6% to $56.0 million for the quarter from $52.5 million in the prior year period.

 

-Net loss attributable to common stockholders for the fourth quarter of 2020 was ($1.13) per diluted share, as compared to net loss attributable to common stockholders of ($0.62) per diluted share in the prior year period.

 

-Property Net Operating Income (“NOI”) grew 9.7% to $30.9 million from $28.2 million in the prior year period.

 

-Portfolio occupancy was 95.4% at December 31, 2020, up 140 basis points from the prior year.

 

-Same store average occupancy increased 140 basis points and same store average rent increased 0.2%, as compared to the prior year period.

 

-Same store revenue increased 0.6% and same store NOI increased 0.2%, as compared to the prior year period.

 

-Improved operating margins by 50 basis points year over year to 62.1%.

 

-Blended lease rate growth of 1.0%, up 60 basis points on a sequential quarter-over-quarter basis. January 2021 average lease growth accelerated to 1.4%, led by renewals at 4.4% and new leases at negative 1%.

 

-Collected 97% of rents from its multifamily properties for the three months ended December 31, 2020.

 

-Core funds from operations attributable to common shares and units (“CFFO”) was $6.1 million, compared to $6.7 million in the prior year period. CFFO per diluted share was $0.18 for the fourth quarter as compared to $0.21 in the prior year period.

 

3

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

-Consolidated real estate investments, at cost, were approximately $2.3 billion.

 

-Acquired three multifamily communities totaling 968 units for a total purchase price of $166 million.

 

-Made two additional Strategic Portfolio preferred equity investments in stabilized properties totaling $5 million and committed to another preferred equity investment in a development project for $10 million.

 

-Completed additional funding for eleven preferred equity, mezzanine loan, and ground lease investments totaling $20 million.

 

-Sold one operating asset for a sale price of $38 million and net proceeds of $10 million. The asset was sold at an in-place cap rate of 3.3% adjusting for the buyer’s year one taxes and $300 per unit replacement reserves.

 

-Sold three development investments for gross sales pricing of $218 million netting the Company proceeds of $70 million – two mezzanine loan repayments yielded $55 million and one preferred equity investment returned $15 million in net proceeds to the Company.

 

-Completed 65 value-add unit upgrades during the quarter achieving an average 23.9% ROI.

 

-Paid quarterly dividend of $0.1625 in cash per share of common stock.

 

-Raised $76.2 million through its continuous registered Series T Preferred Stock offering in the quarter.

 

-Completed partial redemptions of its 8.25% Series A Cumulative Redeemable Preferred Stock totaling $85 million, including accrued and unpaid dividends. Subsequent to quarter end, the Company announced it will redeem the remaining $55 million outstanding on February 26th.

 

-Repurchased 2,851,975 shares of Class A common stock during the quarter at an average price of $9.81 per share.

 

-As of December 31, 2020, had $208.3 million of unrestricted cash and availability under its revolving credit facilities.

 

Full Year Highlights

 

-Total revenues grew 4.7% to $219.8 million for the year from $210.0 million in the prior year.

 

-Net loss attributable to common stockholders for 2020 was ($1.91) per diluted share, as compared to ($0.91) per diluted share in the prior year.

 

-Property NOI grew 8.4% to $120.2 million, from $110.9 million in the prior year.

 

-Same store revenue and NOI increased 0.9% and 0.3%, respectively, as compared to the prior year.

 

-Completed 310 value-add unit upgrades during the year producing an average 23.3% ROI through increased monthly rental rates.

 

-Improved operating margin by 140 basis points year over year to 61.2%.

 

4

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

  

-CFFO was $23.7 million, compared to $25.4 million in the prior year. CFFO per diluted share was $0.72 for the year as compared to $0.82 in the prior year.

 

-Acquired six multifamily communities totaling 1,898 units for a total purchase price of $338 million.

 

-Made five additional Strategic Portfolio preferred equity investments in stabilized properties totaling $17 million and committed to another preferred equity investment in a development project for $10 million.

 

-Committed to two mezzanine loan investments in development properties for $22 million.

 

-Purchased land for a ground lease for $3 million and committed $20 million for the ground lease tenant’s multifamily development.

 

-Completed additional funding for thirteen preferred equity, mezzanine loan, and ground lease investments totaling $38 million and invested $4 million to buyout the noncontrolling interests in an asset.

 

-Sold five operating assets for a sales price of $245 million and net proceeds of $90 million.

 

-Sold four development investments for gross sales pricing of $283 million netting the Company proceeds of $92 million – two mezzanine loan repayments yielded $55 million and two preferred equity investments returned $38 million in net proceeds to the Company.

 

-Paid quarterly dividends amounting to $0.65 on an annual basis in cash per share of common stock.

 

-Raised $243 million through its continuous registered Series T Preferred Stock offering during the year.

 

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

 

Since the beginning of the COVID-19 pandemic, the Company has 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 and services.

 

Post-Quarter Operational Performance

 

As of January 31, 2021, the Company had collected 97% of January rents from its multifamily properties.

 

Occupancy and availability remains strong at 95.6% and 7.4%, respectively, as of January 31, 2021.

 

In January, average lease rate grew 1.4% year over year.

 

Current Liquidity

 

Due to the uncertainties presented by the COVID-19 pandemic, the Company continues to take measures to ensure an appropriate level of liquidity and believes it has sufficient liquidity through this uncertain period.

 

5

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

The Company has approximately $158 million in unrestricted cash and availability under its revolving credit facilities as of January 31, 2021.

 

Over $43 million was raised from the Company’s continuous registered Series T Preferred Stock offering to date in 2021.

 

Fourth Quarter 2020 Financial Results

 

Net loss attributable to common stockholders for the fourth quarter of 2020 was ($26.2) million, compared to net loss attributable to common stockholders of ($13.8) million in the prior year period. Net loss attributable to common stockholders included non-cash expenses of $31.2 million or $1.33 per share in the fourth quarter of 2020 compared to $18.6 million or $0.83 per share for the prior year period, which included a $16.4 million provision for credit loss on a preferred equity investment, primarily due to the submarket conditions in Houston, Texas impacting the underlying property operations.

 

CFFO for the fourth quarter of 2020 was $6.1 million, or $0.18 per diluted share, compared to $6.7 million, or $0.21 per diluted share, in the prior year period. CFFO was positively impacted by growth in property NOI of $2.7 million and preferred returns of $0.7 million. This was primarily offset by a year-over-year decrease in interest income of $0.5 million, an increase in general and administrative expense of $0.1 million, and preferred stock dividends of $2.8 million.

 

Total Portfolio Performance

 

$ In thousands, except average rental rates   4Q20   4Q19   Variance    YTD20    YTD19    Variance 
Total Revenues (1)  $55,987   $52,520    6.6%  $219,848   $209,971    4.7%
Property Operating Expenses  $18,861   $17,600    7.2%  $76,301   $74,449    2.5%
NOI  $30,949   $28,200    9.7%  $120,221   $110,927    8.4%
Operating Margin   62.1%   61.6%   50bps   61.2%   59.8%   140bps
Average Occupancy Percentage   94.9%   93.6%   130bps   94.7%   93.8%   90bps
Average Rental Rate  $1,318   $1,319    (0.1%)  $1,324   $1,311    1.0%

 

(1)Including interest income

 

For the fourth quarter of 2020, property revenues increased by 8.8% compared to the same prior year period. Total portfolio NOI was $30.9 million, an increase of $2.7 million, or 9.7%, compared to the same period in the prior year. Property NOI margins expanded by 50 basis points to 62.1% of revenue for the quarter, compared to 61.6% of revenue in the prior year quarter.

 

Same Store Portfolio Performance

 

 

$ In thousands, except average rental rates   4Q20   4Q19   Variance     YTD20    YTD19    Variance 
Revenues  $41,325   $41,092    0.6%   $142,199   $140,900    0.9%
Property Operating Expenses  $15,779   $15,609    1.1%   $56,660   $55,598    1.9%
NOI  $25,546   $25,483    0.2%   $85,539   $85,302    0.3%
Operating Margin   61.8%   62.0%   (20)bps    60.2%   60.5%   (30)bps
Average Occupancy Percentage   94.9%   93.5%   140bps    94.7%   93.8%   90bps
Average Rental Rate  $1,318   $1,315    0.2%   $1,341   $1,325    1.2%

 

The Company’s same store portfolio for the quarter ended December 31, 2020 included 28 properties. For the fourth quarter of 2020, same store NOI was $25.5 million, an increase of $0.1 million, or 0.2%, compared to the 2019 period. Same store property revenues increased by 0.6% compared to the 2019 period, primarily driven by a 140-basis point increase in occupancy and 0.2% increase in average rental rates; of our 28 same store properties, 22 recognized occupancy increases and 15 recognized rental rate increases during the period. This was offset by $0.3 million increase in bad debt expense due to the impact of COVID-19.

 

6

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Same store expenses increased 1.1%, or $0.2 million, primarily because of a $0.2 million repairs and maintenance expense increase due to timing. Non-controllable expenses were essentially flat; insurance expenses increased $0.2 million due to industrywide multifamily price increases offset by a $0.2 million real estate tax decrease from prior year. Real estate tax decrease was due to a $0.4 million credit in the current year offset by $0.2 million of municipality tax increases.

 

Renovation Activity

 

The Company completed 65 value-add unit upgrades during the fourth quarter achieving an average 23.9% ROI. Since inception, within the existing portfolio, the Company has completed 2,955 value-add unit upgrades at an average cost of $5,916 per unit and achieved an average monthly rental rate increase of $116 per unit, equating to an average 23.6% ROI on all unit upgrades leased as of December 31, 2020. The Company has identified approximately 4,421 remaining units within the existing portfolio for value-add upgrades with similar projected economics to the completed renovations.

 

Portfolio Activity

 

The Company completed the following investments:

 

-Acquired a 100% interest in a 266-unit apartment community located in Morrisville, North Carolina, known as Carrington at Perimeter Park. The total purchase price was $52.0 million, funded in part by a $31.3 million mortgage loan secured by the property.

 

-Acquired a 100% interest in a 270-unit apartment community located in Austin, Texas, known as Elan. The total purchase price was $39.5 million, funded in part by a $25.6 million mortgage loan secured by the property.

 

-Acquired a 90% interest in a 432-unit apartment community located in Mesa, Arizona, known as Cielo on Gilbert. The total purchase price was $74.3 million, funded in part by a $58.0 million mortgage loan secured by the property.

 

-Made additional Strategic Portfolio preferred equity investments totaling $5 million in two stabilized assets with 388-units called Water’s Edge and Hunter’s Pointe, both located in Pensacola, Florida.

 

-Entered into a preferred equity commitment to invest $10.2 million in a 208-unit development called Encore Chandler located in Chandler, Arizona.

 

-Funded $20 million under existing preferred equity, mezzanine loan, and ground lease commitments in eleven investments.

 

The Company completed the following activity subsequent to December 31, 2020:

 

-On January 28, 2021, the Company sold ARIUM Grandewood for a gross sales price of $65 million and net proceeds to the Company of $25 million.
   
-Announced the redemption of its remaining outstanding Series A Preferred Stock totaling $55 million.

 

7

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Balance Sheet

 

As of December 31, 2020, the Company had $208.3 million of unrestricted cash and availability under its revolving credit facilities, and $1.6 billion of indebtedness outstanding.

 

During the fourth quarter, the Company raised gross proceeds of approximately $76.2 million through the issuance of 3.0 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 repurchased 2,851,975 shares of Class A Common Stock during the fourth quarter at an average price of $9.81 per share.

 

On October 21, 2020, the Company redeemed 1,393,294 shares of its 8.25% Series A Cumulative Redeemable Preferred Stock, representing approximately 25% of the total outstanding shares of Series A Preferred Stock.  The total cost to redeem the shares was $35 million, including accrued and unpaid dividends. In addition, on December 21, 2020, the Company redeemed 1,963,551 shares of its 8.25% Series A Cumulative Redeemable Preferred Stock, representing approximately 47% of the then total outstanding shares of Series A Preferred Stock. The total cost to redeem the shares was $50 million, including accrued and unpaid dividends.

 

Dividend

 

The Board of Directors authorized, and the Company declared, a quarterly cash dividend for the fourth 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 December 24, 2020, which was paid on January 5, 2021. 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 fourth 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 fourth 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 fourth quarter of 2020, in the amount of $0.4453125 per share.  The dividends were payable to the stockholders of record as of December 24, 2020, and were paid on January 5, 2021.

 

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 October 23, 2020, November 25, 2020, and December 24, 2020, which were paid in cash on November 5, 2020, December 4, 2020 and January 5, 2021, respectively.

 

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 October 23, 2020, November 25, 2020, and December 24, 2020, and were paid in cash on November 5, 2020, December 4, 2020 and January 5, 2021, respectively.

 

8

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

The Board authorized, and the Company declared, an annual Series T Preferred Stock dividend of 0.20% per share of Series T Preferred Stock. Shares of Series T Preferred Stock that are held only for a portion of the applicable annual stock dividend period received a prorated Series T Preferred Stock dividend based on the actual number of months in the applicable annual stock dividend period during which each such share of Series T Preferred Stock was outstanding. The annual stock dividend was payable to stockholders of record on December 24, 2020 and was paid on December 29, 2020.

 

On January 13, 2021, 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 January 25, 2021, which was paid in cash on February 5, 2021, and as of February 25, 2021, and March 25, 2021, which will be paid in cash on March 5, 2021 and April 5, 2021, respectively.

 

On January 13, 2021, 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 January 25, 2021, which was paid in cash on February 5, 2021, and as of February 25, 2021, and March 25, 2021, which will be paid in cash on March 5, 2021 and April 5, 2021, respectively.

 

2021 Guidance

 

Based on the Company’s current outlook and market conditions, the Company anticipates 2021 CFFO in the range of $0.65 to $0.70 per share. The Company anticipates that earnings growth will be more heavily weighted towards the second half of 2021 as it realizes the upside opportunity from deploying the proceeds from opportunistic dispositions in late 2020 and early 2021, plus the implementation of institutional property management, lease-ups, and value-add renovations at its recent acquisitions. For additional guidance details underlying earnings guidance, please see page 35 of Company’s Fourth Quarter 2020 Earnings Supplement available under the Investors section on the Company’s website (www.bluerockresidential.com).

 

Conference Call

 

All interested parties can listen to the live conference call at 11:00 AM ET on Thursday, February 11, 2021 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 March 11, 2021 at http://services.choruscall.com/links/brg210211.html, as well as by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10151415.

 

The full text of this Earnings Release and additional Supplemental Information is available in the Investors 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.

 

9

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

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

 

Forward Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. 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.

 

10

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Portfolio Summary

 

The following is a summary of our operating real estate and mezzanine/preferred/ground lease investments as of December 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%  $1,289    95.4%
ARIUM Grandewood  Orlando, FL   306    2005   100%   1,407    93.1%
ARIUM Hunter’s Creek  Orlando, FL   532    1999   100%   1,413    95.7%
ARIUM Metrowest  Orlando, FL   510    2001   100%   1,406    93.9%
ARIUM Westside  Atlanta, GA   336    2008   90%   1,442    94.3%
Ashford Belmar  Lakewood, CO   512    1988/1993  85%   1,677    96.5%
Avenue 25  Phoenix, AZ   254    2013   100%   1,239    94.9%
Carrington at Perimeter Park  Morrisville, NC   266    2007   100%   1,247    95.9%
Chattahoochee Ridge  Atlanta, GA   358    1996   90%   1,388    96.6%
Chevy Chase  Austin, TX   320    1971   92%   964    98.1%
Cielo on Gilbert  Mesa, AZ   432    1985   90%   1,050    95.4%
Citrus Tower  Orlando, FL   336    2006   97%   1,364    96.4%
Denim  Scottsdale, AZ   645    1979   100%   1,236    96.6%
Elan  Austin, TX   270    2007   100%   1,133    93.7%
Element  Las Vegas, NV   200    1995   100%   1,250    97.5%
Falls at Forsyth  Cumming, GA   356    2019   100%   1,412    95.5%
Gulfshore Apartment Homes  Naples, FL   368    2016   100%   1,292    95.4%
James on South First  Austin, TX   250    2016   90%   1,348    93.6%
Marquis at The Cascades  Tyler, TX   582    2009   90%   1,214    96.0%
Navigator Villas  Pasco, WA   176    2013   90%   1,133    94.9%
Outlook at Greystone  Birmingham, AL   300    2007   100%   1,072    96.3%
Park & Kingston  Charlotte, NC   168    2015   100%   1,280    96.4%
Pine Lakes Preserve  Port St. Lucie, FL   320    2003   100%   1,377    96.9%
Plantation Park  Lake Jackson, TX   238    2016   80%   1,261    91.2%
Providence Trail  Mount Juliet, TN   334    2007   100%   1,260    95.8%
Roswell City Walk  Roswell, GA   320    2015   98%   1,584    94.4%
Sands Parc  Daytona Beach, FL   264    2017   100%   1,362    95.8%
The Brodie  Austin, TX   324    2001   100%   1,315    95.4%
The District at Scottsdale  Scottsdale, AZ   332    2018   100%   1,650    91.3%
The Links at Plum Creek  Castle Rock, CO   264    2000   88%   1,461    93.9%
The Mills  Greenville, SC   304    2013   100%   1,052    96.4%
The Preserve at Henderson Beach  Destin, FL   340    2009   100%   1,481    94.1%
The Reserve at Palmer Ranch  Sarasota, FL   320    2016   100%   1,350    95.9%
The Sanctuary  Las Vegas, NV   320    1988   100%   1,084    97.2%
Veranda at Centerfield  Houston, TX   400    1999   93%   1,017    94.8%
Villages of Cypress Creek  Houston, TX   384    2001   80%   1,174    94.8%
Wesley Village  Charlotte, NC   301    2010   100%   1,367    95.7%
Subtotal/Average      12,722            $1,315    95.4%

 

11

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Mezzanine/Preferred/Ground
Lease Investments
  Location  Actual/ Planned
Number of Units
           Pro Forma Average Rent      
Alexan CityCentre  Houston, TX   340           $1,513  (2)   
Alexan Southside Place  Houston, TX   270              1,639  (2)    
Avondale Hills  Decatur, GA   240              1,538       
Belmont Crossing  Smyrna, GA   192              831  (2)    
Domain at The One Forty  Garland, TX   299              1,282  (2)    
Encore Chandler  Chandler, AZ   208              1,457       
Georgetown Crossing  Savannah, GA   168              1,006  (2)    
Hunter’s Pointe  Pensacola, FL   204              975  (2)    
Mira Vista  Austin, TX   200              1,078  (2)    
Motif  Fort Lauderdale, FL   385              2,352       
Park on the Square  Pensacola, FL   240              1,121  (2)    
Reunion Apartments  Orlando, FL   280              1,366       
Sierra Terrace  Atlanta, GA   135              1,215  (2)    
Sierra Village  Atlanta, GA   154              1,212  (2)    
The Commons  Jacksonville, FL   328              896  (2)    
The Conley, formerly North Creek Apartments  Leander, TX   259              1,358       
The Park at Chapel Hill  Chapel Hill, NC   414              1,599       
Thornton Flats  Austin, TX   104              1,541  (2)    
Vickers Historic Roswell  Roswell, GA   79              2,783  (2)    
Water’s Edge  Pensacola, FL   184              1,118  (2)    
Wayford at Concord, formerly Wayforth at Concord  Concord, NC   150              1,707       
Zoey  Austin, TX   307              1,762       
Subtotal/Average      5,140             $1,443       
                              
Portfolio Properties Total/Average      17,862             $1,353       

  

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

12

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Consolidated Statement of Operations

For the Three and Twelve Months Ended December 31, 2020 and 2019

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

 

   Three Months Ended   Year Ended 
   December 31,   December 31, 
   2020   2019   2020   2019 
Revenues                    
Rental and other property revenues  $49,810   $45,800   $196,522   $185,376 
Interest income from mezzanine loan and ground lease investments   6,177    6,720    23,326    24,595 
Total revenues   55,987    52,520    219,848    209,971 
Expenses                    
Property operating   18,861    17,600    76,301    74,449 
Property management fees   1,269    1,192    4,988    4,899 
General and administrative   6,566    5,620    24,141    22,553 
Acquisition and pursuit costs   219    210    4,152    556 
Weather-related losses, net       7        355 
Depreciation and amortization   19,246    19,355    79,452    70,452 
Total expenses   46,161    43,984    189,034    173,264 
Operating income   9,826    8,536    30,814    36,707 
Other income (expense)                    
Other income   25    68    144    68 
Preferred returns on unconsolidated real estate joint ventures   3,037    2,700    11,250    9,797 
Provision for credit losses   (16,369)       (16,369)    
Gain on sale of real estate investments   1,412        59,508    48,680 
Gain on sale of non-depreciable real estate investments               679 
Loss on extinguishment of debt and debt modification costs   (645)   (335)   (14,630)   (7,258)
Interest expense, net   (13,700)   (13,728)   (55,994)   (59,554)
Total other expense   (26,240)   (11,295)   (16,091)   (7,588)
Net (loss) income   (16,414)   (2,759)   14,723    29,119 
Preferred stock dividends   (15,676)   (12,868)   (58,463)   (46,159)
Preferred stock accretion   (4,873)   (3,415)   (16,851)   (10,335)
Net (loss) income attributable to noncontrolling interests                    
Operating Partnership units   (10,634)   (5,032)   (17,313)   (6,779)
Partially-owned properties   (116)   (183)   1,396    (845)
Net loss attributable to noncontrolling interests   (10,750)   (5,215)   (15,917)   (7,624)
Net loss attributable to common stockholders  $(26,213)  $(13,827)  $(44,674)  $(19,751)
                     
Net loss per common share - Basic  $(1.13)  $(0.62)  $(1.91)  $(0.91)
                     
Net loss per common share – Diluted  $(1.13)  $(0.62)  $(1.91)  $(0.91)
                     
Weighted average basic common shares outstanding   23,378,695    22,729,882    24,084,347    22,649,222 
Weighted average diluted common shares outstanding   23,378,695    22,729,882    24,084,347    22,649,222 

 

13

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Consolidated Balance Sheets

Fourth Quarter 2020

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

 

   December 31,
2020
   December 31,
2019
 
ASSETS          
Net Real Estate Investments          
Land  $279,481   $268,244 
Buildings and improvements   1,889,471    1,752,738 
Furniture, fixtures and equipment   78,438    67,904 
Total Gross Real Estate Investments   2,247,390    2,088,886 
Accumulated depreciation   (186,426)   (141,566)
Total Net Operating Real Estate Investments   2,060,964    1,947,320 
Operating real estate held for sale, net   36,213     
Total Net Real Estate Investments   2,097,177    1,947,320 
Cash and cash equivalents   83,868    31,683 
Restricted cash   35,093    19,085 
Notes and accrued interest receivable, net   157,734    193,781 
Due from affiliates   339    2,969 
Accounts receivable, prepaids and other assets, net   29,502    16,317 
Preferred equity investments and investments in unconsolidated real estate joint ventures, net   83,485    126,444 
In-place lease intangible assets, net   2,594    3,098 
Non-real estate assets associated with operating real estate held for sale   145     
TOTAL ASSETS  $2,489,937   $2,340,697 
           
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY          
Mortgages payable  $1,490,932   $1,425,257 
Mortgages payable associated with operating real estate held for sale   38,773     
Revolving credit facilities   33,000    18,000 
Accounts payable   1,317    1,488 
Other accrued liabilities   31,025    27,499 
Due to affiliates   618    790 
Distributions payable   13,421    13,541 
Liabilities associated with operating real estate held for sale   383     
Total Liabilities   1,609,469    1,486,575 
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; 2,201,547 and 5,721,460 shares issued and outstanding at December 31, 2020 and 2019, respectively   54,332    140,355 
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 513,489 and 536,695 shares issued and outstanding at December 31, 2020 and 2019, respectively   469,907    480,921 
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,295,845 and 2,323,750 shares issued and outstanding at December 31, 2020 and 2019, respectively   56,462    56,797 
6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 9,717,917 and 17,400 shares issued and outstanding at December 31, 2020 and 2019, respectively   219,967    388 
Equity          
Stockholders’ Equity          
Preferred stock, $0.01 par value, 197,900,000 shares authorized; no shares issued and outstanding at December 31, 2020 and 2019        
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,774,338 and 2,850,602 shares issued and outstanding at December 31, 2020 and 2019, respectively   66,867    68,705 
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 22,020,950 and 23,422,557 shares issued and outstanding at December 31, 2020 and 2019, respectively   220    234 
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding at December 31, 2020 and 2019   1    1 
Additional paid-in-capital   304,710    311,683 
Distributions in excess of cumulative earnings   (313,392)   (253,132)
Total Stockholders’ Equity   58,406    127,491 
Noncontrolling Interests          
Operating partnership units   (3,272)   19,331 
Partially owned properties   24,666    28,839 
Total Noncontrolling Interests   21,394    48,170 
Total Equity   79,800    175,661 
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY  $2,489,937   $2,340,697 

 

14

 

 

Bluerock Residential Growth REIT, Inc.

Fourth 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 (loss), 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 certain real estate assets and investments in entities where the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, 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. The accrued portion of the preferred income totaled $0.3 million and $1.5 million for the three and twelve months ended December 31, 2020, respectively. 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.

 

15

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

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 six operating properties, made eight investments through mezzanine loans, preferred equity interests or ground lease investments, and sold six operating properties subsequent to December 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.

 

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

 

  Three Months Ended   Year Ended  
  December 31,   December 31,  
  2020     2019   2020     2019  
Net loss attributable to common stockholders $ (26,213 )   $ (13,827 ) $ (44,674 )   $ (19,751 )
Add back: Net loss attributable to Operating Partnership Units   (10,634 )     (5,032 )   (17,313 )     (6,779 )
Net loss attributable to common stockholders and unit holders   (36,847 )     (18,859 )   (61,987 )     (26,530 )
Common stockholders and Operating Partnership Units pro-rata share of:                            
Real estate depreciation and amortization (1)   18,373       18,483     75,727       66,670  
Provision for credit losses   16,369           16,369        
Gain on sale of real estate investments   (1,417 )         (56,777 )     (48,172 )
FFO Attributable to Common Stockholders and Unit Holders   (3,522 )     (376 )   (26,668 )     (8,032 )
Common stockholders and Operating Partnership Units pro-rata share of:                            
Acquisition and pursuit costs   219       210     4,152       556  
Non-cash interest expense   701       826     3,025       3,174  
Unrealized loss on derivatives   48       32     115       2,450  
Loss on extinguishment of debt and debt modification costs   647       335     14,238       7,199  
Weather-related losses, net         7           313  
Non-real estate depreciation and amortization   122       121     486       448  
Gain on sale of non-depreciable real estate investments                   (679 )
Shareholder activism                   393  
Other income, net   (351 )     (68 )   (400 )     (68 )
Non-cash preferred returns on unconsolidated real estate joint ventures         (353 )         (1,291 )
Non-cash equity compensation   3,329       2,506     11,917       10,615  
Preferred stock accretion   4,873       3,415     16,851       10,335  
CFFO Attributable to Common Stockholders and Unit Holders $ 6,066     $ 6,655   $ 23,716     $ 25,413  
                             
Per Share and Unit Information:                            
FFO Attributable to Common Stockholders and Unit Holders - diluted $ (0.11 )   $ (0.01 ) $ (0.81 )   $ (0.26 )
CFFO Attributable to Common Stockholders and Unit Holders - diluted $ 0.18     $ 0.21   $ 0.72     $ 0.82  
                             
Weighted average common shares and units outstanding - diluted   32,994,897       31,455,630     33,116,871       30,899,927  
                             
(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. 
                               

 

16

 

 

Bluerock Residential Growth REIT, Inc.

Fourth 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) income attributable to common stockholders to EBITDAre (unaudited and dollars in thousands).

 

    Three Months Ended   Year Ended
    December 31,   December 31,
    2020   2019   2020   2019
Net loss attributable to common stockholders   $ (26,213 )   $ (13,827 )   $ (44,674 )   $ (19,751 )
Net loss attributable to noncontrolling interests     (10,750 )     (5,215 )     (15,917 )     (7,624 )
Preferred stock dividends     15,676       12,868       58,463       46,159  
Preferred stock accretion     4,873       3,415       16,851       10,335  
Interest expense, net     13,700       13,728       55,994       59,554  
Real estate depreciation and amortization     19,199       19,309       79,267       70,079  
Provision for credit losses     16,369             16,369        
Gain on sale of real estate investments     (1,412 )           (59,508 )     (48,680 )
Loss on extinguishment of debt and debt modification costs     645       335       14,630       7,258  
EBITDAre   $ 32,087     $ 30,613     $ 121,475     $ 117,330  
Acquisition and pursuit costs     219       210       4,152       556  
Non-real estate depreciation and amortization     122       121       486       448  
Weather-related losses, net           7             355  
Gain on sale of non-depreciable real estate investments                       (679 )
Shareholder activism                       393  
Non-cash equity compensation     3,329       2,506       11,917       10,615  
Other income, net     (351 )     (68 )     (400 )     (68 )
Non-cash preferred returns on unconsolidated real estate joint ventures           (353 )           (1,291 )
Adjusted EBITDAre   $ 35,406     $ 33,036     $ 137,630     $ 127,659  
                                 

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.

 

17

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

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   Year Ended 
   December 31,   December 31, 
   2020   2019   2020   2019 
Net loss attributable to common stockholders  $(26,213)  $(13,827)  $(44,674)  $(19,751)
Add back: Net loss attributable to Operating Partnership Units   (10,634)   (5,032)   (17,313)   (6,779)
Net loss attributable to common stockholders and unit holders   (36,847)   (18,859)   (61,987)   (26,530)
Add common stockholders and Operating Partnership Units pro-rata share of:                    
Real estate depreciation and amortization   18,373    18,483    75,727    66,670 
Non-real estate depreciation and amortization   122    121    486    448 
Non-cash interest expense   701    826    3,025    3,174 
Unrealized loss on derivatives   48    32    115    2,450 
Loss on extinguishment of debt and debt modification costs   647    335    14,238    7,199 
Provision for credit losses   16,369        16,369     
Property management fees   1,211    1,135    4,751    4,645 
Acquisition and pursuit costs   219    210    4,152    556 
Corporate operating expenses   6,490    5,545    23,770    22,261 
Weather-related losses, net       7        313 
Preferred dividends   15,676    12,868    58,463    46,159 
Preferred stock accretion   4,873    3,415    16,851    10,335 
Less common stockholders and Operating Partnership Units pro-rata share of:                    
Other income, net   25    68    74    68 
Preferred returns on unconsolidated real estate joint ventures   3,037    2,700    11,381    9,797 
Interest income from mezzanine loan and ground lease investments   6,177    6,720    23,326    24,595 
Gain on sale of real estate investments   1,417        56,777    48,172 
Gain on sale of non-depreciable real estate investments               679 
Pro-rata share of properties’ income   17,226    14,630    64,402    54,369 
Add:                    
Noncontrolling interest pro-rata share of partially owned property income   799    724    3,074    2,810 
Total property income   18,025    15,354    67,476    57,179 
Add:                    
Interest expense   12,924    12,846    52,745    53,748 
Net operating income   30,949    28,200    120,221    110,927 
Less:                    
Non-same store net operating income   5,403    2,717    34,682    25,625 
Same store net operating income (1)  $25,546   $25,483   $85,539   $85,302 

 

(1) Same store portfolio for the three months ended December 31, 2020 consists of 28 properties, which represent 9,958 units.  Same store portfolio for the year ended December 31, 2020 consists of 24 properties, which represent 8,459 units.

 

18

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Contact

Investors:

(888) 558.1031

investor.relations@bluerockre.com

 

Media:

Josh Hoffman

(208) 475.2380

jhoffman@bluerockre.com

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19

 

 

Bluerock Residential Growth REIT, Inc.

Financial and Operating Highlights

For the Three and Twelve Months Ended December 31, 2020

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

 

   Three Months Ended       Year Ended     
   December 31,       December 31,     
OPERATING INFORMATION  2020   2019   % Change   2020   2019   % Change 
Total revenue  $55,987   $52,520    6.6%  $219,848   $209,971    4.7%
                               
Total assets  $2,489,937   $2,340,697    6.4%  $2,489,937   $2,340,697    6.4%
                               
Property NOI (1)  $30,949   $28,200    9.7%  $120,221   $110,927    8.4%
                               
Property NOI margins   62.1%   61.6%   0.8%   61.2%   59.8%   2.3%
                               
Net loss per common share - Diluted  $(1.13)  $(0.62)   -   $(1.91)  $(0.91)   - 
                               
CFFO attributable to common stockholders and unit holders per share (2)  $0.18   $0.21    (14.3%)  $0.72   $0.82    (12.2%)

 

(1)See page 38 for the Company's definition of this non-GAAP measurement and reasons for using it.
(2)See page 36 for the Company's definition of this non-GAAP measurement and reasons for using it.

 

20

 

 

Bluerock Residential Growth REIT, Inc.

Share and Unit Information

Fourth Quarter 2020

(Unaudited)

 

Weighted Average Common Stock and Units Outstanding for the quarter ended December 31, 2020    
Class A Common Stock   23,302,092 
Class C Common Stock   76,603 
Weighted Average Common Stock Outstanding, Diluted   23,378,695 
Restricted Stock Grants (1)   92,865 
Weighted Average Common Stock Outstanding, Diluted   23,471,560 
OP Units   6,314,926 
LTIP Units   3,208,411 
Weighted Average Common Stock and Total Units Outstanding, Diluted   32,994,897 
      
Outstanding Common Stock and Units at December 31, 2020   32,455,018 
      
Outstanding 8.250% Series A Cumulative Redeemable Preferred Stock at December 31, 2020   2,201,547 
      
Outstanding 6.000% Series B Redeemable Preferred Stock at December 31, 2020   513,489 
      
Outstanding 7.625% Series C Cumulative Redeemable Preferred Stock at December 31, 2020   2,295,845 
      
Outstanding 7.125% Series D Cumulative Preferred Stock at December 31, 2020   2,774,338 
      
Outstanding 6.150% Series T Redeemable Preferred Stock at December 31, 2020   9,717,917 

 

(1)Potential dilution from vesting of restricted stock grants issued to employees for 92,865 shares of common stock.

 

The following table reflects the impact of various LTIP Unit issuances, share repurchases, and other share/unit changes subsequent to September 30, 2020:

 

Share Type  Shares and
units
outstanding
September 30,
2020
   Class A
common share
repurchase
   Class A
common from
Series B and
Series T holder
redemptions
   LTIP
Issuances
   Other   Shares and
units
outstanding
December 31,
2020
   Ownership
%
 
Class A Common Stock   24,589,389    (2,851,975)   281,437    -    2,099    22,020,950    67.85%
Class C Common Stock   76,603    -    -    -    -    76,603    0.24%
Total share equivalents   24,665,992    (2,851,975)   281,437    -    2,099    22,097,553    68.09%
OP Units   6,314,754    -    -    -    (3,898)   6,310,856    19.44%
LTIP Units   3,983,578    -    -    65,221    (2,190)   4,046,609    12.47%
Total noncontrolling interest   10,298,332    -    -    65,221    (6,088)   10,357,465    31.91%
Total shares, OP and LTIP Units   34,964,324    (2,851,975)   281,437    65,221    (3,989)   32,455,018    100.00%

 

21

 

 

Bluerock Residential Growth REIT, Inc.

EBITDAre and Interest Information

Fourth Quarter 2020

(Unaudited and dollars in thousands)

 

   Three Months
Ended
 
   December 31, 
   2020 
Q4 EBITDAre Calculation     
Net loss attributable to common stockholders  $(26,213)
Net loss attributable to noncontrolling interests   (10,750)
Preferred stock dividends   15,676 
Preferred stock accretion   4,873 
Interest expense, net   13,700 
Real estate depreciation and amortization   19,199 
Provision for credit losses   16,369 
Gain on sale of real estate investments   (1,412)
Loss on extinguishment of debt and debt modification costs   645 
EBITDAre (1)  $32,087 
Acquisition and pursuit costs   219 
Non-real estate depreciation and amortization   122 
Non-cash equity compensation   3,329 
Other income, net   (351)
Adjusted EBITDAre  $35,406 
      
Modified Q4 EBITDAre Calculation (2)     
Adjusted EBITDAre  $35,406 
Adjustment   (573)
Modified Q4 EBITDAre  $34,833 
Modified Q4 EBITDAre annualized  $139,332 
      
Modified Q4 Interest Calculation (2)(3)     
Interest expense  $12,924 
Adjustment   700 
Modified Q4 interest expense  $13,624 
Modified Q4 interest expense annualized  $54,496 

 

(1)

See page 37 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 October 1, 2020: (i) acquisitions of Elan, Carrington at Perimeter Park, and Cielo on Gilbert, (ii) sale of Cade Boca Raton, (iii) sales of Arlo, Novel Perimeter, and Riverside Apartments, and (iv) changes in investments at Alexan CityCentre, Avondale Hills, Domain at The One Forty, Reunion Apartments, Strategic Portfolio, The Conley (formerly North Creek Apartments), Vickers Historic Roswell, and Zoey.  Actual results may differ significantly from the presented, adjusted amounts including annualized amounts.

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

 

22

 

 

Bluerock Residential Growth REIT, Inc.

Financial Statistics

Fourth Quarter 2020

(Unaudited and dollars in thousands)

 

   Three Months 
Ended
 
   December 31, 
   2020 
Interest Coverage Ratio     
Modified Q4 EBITDAre *  $34,833 
Modified Q4 interest expense (4) *   13,624 
Interest coverage ratio   2.56x
      
Quarterly Fixed Charge Coverage Ratio     
Modified Q4 interest expense (4) *  $13,624 
Preferred stock dividends   15,676 
Total fixed charges  $29,300 
Modified Q4 EBITDAre *   34,833 
Modified Q4 EBITDAre fixed charge coverage ratio   1.19x
      
Net Debt / Modified EBITDAre Ratio     
Total debt (1)  $1,567,643 
Less: cash (3)   (118,961)
Net debt (total debt less cash)  $1,448,682 
Modified Q4 EBITDAre (annualized)*   139,332 
Net debt / modified EBITDAre ratio   10.40x
      
Leverage as a Percentage of Assets     
Total debt (1)  $1,567,643 
Total undepreciated assets (2)   2,684,692 
Total debt / total undepreciated assets   58.4%
Net debt / net undepreciated assets (less cash)   56.5%
      
Leverage as a Percentage of Enterprise Value     
Total market cap (5)  $1,353,870 
Total debt (1)   1,567,643 
Total enterprise value  $2,921,513 
Total debt / total enterprise value   53.7%
Net debt / total enterprise value   49.6%
      

 

(1) Total debt excludes amortization of fair market value adjustments of $6.5 million and deferred financing costs of $11.4 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 December 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 October 1, 2020: (i) acquisitions of Elan, Carrington at Perimeter Park, and Cielo on Gilbert, (ii) sale of Cade Boca Raton, (iii) sales of Arlo, Novel Perimeter, and Riverside Apartments, and (iv) changes in investments at Alexan CityCentre, Avondale Hills, Domain at The One Forty, Reunion Apartments, Strategic Portfolio, The Conley (formerly North Creek Apartments), Vickers Historic Roswell, and Zoey.  Actual results may differ significantly from the presented, adjusted amounts including annualized amounts.  See prior page for calculations.

 

23

 

 

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   $1,239 
Falls at Forsyth  Atlanta, GA   3/06/2020    2019    356    100%   82.5    1,412 
Chevy Chase  Austin, TX   8/11/2020    1971    320    92%   34.5    964 
Carrington at Perimeter Park  Raleigh, NC   12/01/2020    2007    266    100%   52.0    1,247 
Elan  Austin, TX   12/01/2020    2007    270    100%   39.5    1,133 
Cielo on Gilbert  Phoenix, AZ   12/23/2020   1985    432    90%   74.3    1,050 
Total/Average                1,898        $338.4   $1,200 

 

Property  MSA  Date of
Investment
   Year Built/
Renovated (1)
   Number of
Units
   Commitment
Amount (in
millions)
   Investment
Amount (in
millions)
   Average
Rent (2)
 
Preferred Equity                                 
Strategic Portfolio                                 
Georgetown Crossing  Savannah, GA   3/20/2020    1994    168   $2.2   $2.2   $1,006 
Park on the Square  Pensacola, FL   3/20/2020    1999    240    5.8    5.8    1,121 
The Commons  Jacksonville, FL   5/08/2020    1975    328    3.9    3.9    896 
Water’s Edge  Pensacola, FL   10/01/2020    2004    184    3.3    3.3    1,118 
Hunter’s Pointe  Pensacola, FL   12/16/2020    1986    204    1.7    1.7    975 
Encore Chandler  Phoenix, AZ   12/31/2020    2023    208    10.2    -    1,457 
Total Preferred Equity                1,332    27.1    16.9    1,094 
                                  
Mezzanine                                 
Reunion Apartments  Orlando, FL   7/01/2020    2022    280    10.0    8.0    1,366 
Avondale Hills  Atlanta, GA   9/30/2020    2023    240    11.7    1.0    1,538 
Total Mezzanine                520    21.7    9.0    1,445 
                                  
Ground Lease                                 
Zoey (3)  Austin, TX   3/04/2020    2022    307    23.5    15.1    1,762 
Total Ground Lease                307    23.5    15.1    1,762 
                                  
Total/Average                2,159   $72.3   $41.0   $1,286 

 

(1) All dates are for the year construction was or is expected 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 December 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.  The purchase price includes the land acquisition of $3.1 million plus funding of $12.0 million of the $20.4 million leasehold improvement allowance.  

 

24

 

 

Bluerock Residential Growth REIT, Inc.

Recent Dispositions

(Unaudited and dollars in millions)

 

Property  Location  Date Sold  Number of
Units
   Ownership
Interest in
Property
   Sale Price   BRG Net
Proceeds
 
Operating Properties                          
Ashton Reserve  Charlotte, NC  4/14/2020   473    100%  $84.6   $31.2 
Marquis at TPC  San Antonio, TX  4/17/2020   139    90%   22.5    5.3 
Enders Place at Baldwin Park  Orlando, FL  4/21/2020   220    92%   53.2    24.0 
Cade Boca Raton  Boca Raton, FL  10/26/2020   90    81%   37.8    10.2 
Total Operating Properties         922         198.1    70.7 
                           
Mezzanine                          
Novel Perimeter  Atlanta, GA  12/9/2020   320        90.6    23.6 
Arlo  Charlotte, NC  12/15/2020   286        79.5    31.1 
Total Mezzanine         606         170.1    54.7 
                           
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 
Riverside Apartments  Austin, TX  12/22/2020   222        47.5    14.8 
Total Preferred Equity         708         159.6    57.1 
                           
Total         2,236        $527.8   $182.5 

 

25

 

 

Bluerock Residential Growth REIT, Inc.

Preferred Equity Investments, Notes and Accrued Interest Receivable, and Ground Lease

For the Three and Twelve Months Ended December 31, 2020

(Unaudited and dollars in thousands)

 

Multifamily Community Name 

Investment
Balance as of
September 30,
2020

   Change  

Investment
Balance as of
December 31,
2020

  

Return as of
December 31,
2020

   CFFO Earned for
the Three
Months Ended
December 31,
2020
  

 

CFFO Earned for
the Year Ended
December 31,
2020

 
Preferred Equity Investments                              
Operating – Stabilized                              
Alexan CityCentre  $14,416   $647   $15,063    17.8%  $664   $2,502 
Alexan Southside Place   25,717    321    26,038    0.0%   -    955 
Mira Vista   5,250    -    5,250    10.1%   136    539 
Strategic Portfolio   22,105    4,949    27,054    10.5%   687    2,121 
Thornton Flats   4,600    -    4,600    9.0%   104    415 
Total operating - stabilized   72,088    5,917    78,005         1,591    6,532 
                               
Lease-up                              
The Conley, formerly North Creek Apartments   15,735    (699)   15,036    12.5%   505    1,966 
Wayford at Concord, formerly Wayforth at Concord   6,500    -    6,500    13.0%   216    839 
Total lease-up   22,235    (699)   21,536         721    2,805 
                               
Development                              
Encore Chandler (1)   -    -    -    13.0%   -    - 
Total development   -    -    -         -    - 
                               
Sold                              
Riverside Apartments   13,679    (13,679)   -         399    1,662 
Total sold   13,679    (13,679)   -         399    1,730 
                               
Other   96    1    97    (2)   -    68(3)
Provision for credit losses (4)(5)   -    (16,153)   (16,153)        -    - 
   $108,098   $(24,613)  $83,485        $2,711   $11,067 
                               
Mezzanine Loans (6)                              
Operating - Stabilized                              
Domain at The One Forty (2)  $24,017   $298   $24,315    5.5%  $334   $1,311 
Vickers Historic Roswell (2)   11,654    394    12,048    15.0%   440    1,733 
Total operating - stabilized   35,671    692    36,363         774    3,044 
                               
Lease-up                              
Motif (2)   75,409    27    75,436    12.9%   2,427    9,549 
Total lease-up   75,409    27    75,436         2,427    9,549 
                               
Development                              
Avondale Hills   -    1,021    1,021    12.0%   3    3 
Reunion Apartments   1,934    6,227    8,161    12.0%   161    176 
The Park at Chapel Hill (7)   36,413    514    36,927    11.5%   1,046    3,077 
Total development   38,347    7,762    46,109         1,210    3,256 
                               
Sold                              
Arlo   30,242    (30,242)   -         962    4,161 
Novel Perimeter   22,980    (22,980)   -         673    3,084 
Total sold   53,222    (53,222)   -         1,635    7,245 
                               
Provision for credit losses (5)   -    (174)   (174)        -    - 
   $202,649   $(44,915)  $157,734        $6,046   $23,094 
                               
Ground Lease - Development (6)(8)                              
Zoey  $6,827    8,569    15,396    5.0%  $131   $232 
Provision for credit losses (5)   -    (42)   (42)        -    - 
   $6,827   $8,527   $15,354        $131   $232 

 

(1) The investment closed on December 31, 2020 with a loan commitment of $10.2 million, none of which had been funded as of December 31, 2020.
   
(2) The Company also holds an equity method investment with 0.5% common ownership.
   
(3) Represents preferred equity investments sold in early 2020, including Helios and Whetstone.
   
(4) The Company recorded a credit loss of $15.9 million on the Alexan Southside Place investment under Current Expected Credit Losses ("CECL")
   
(5) The Company recorded a general provision for credit losses of $439 or 18 bps on its total preferred equity, mezzanine loans and ground lease investments..
   
(6) Investment balances include accrued interest.
   
(7) The investment includes a $5.0 million senior loan and a $31.0 million mezzanine loan.
   
(8) Ground lease investments are included in accounts receivable, prepaids and other assets.

 

26

 

 

Bluerock Residential Growth REIT, Inc.

Portfolio Information

Fourth 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    $1,289    $1,379   92.7%
ARIUM Grandewood  Orlando, FL  306  2005     1,407     1,500   94.5%
ARIUM Hunter’s Creek  Orlando, FL  532  1999     1,413     1,562   93.0%
ARIUM Metrowest  Orlando, FL  510  2001     1,406     1,577   92.3%
ARIUM Westside  Atlanta, GA  336  2008     1,442     1,602   93.3%
Ashford Belmar  Lakewood, CO  512  1988/1993     1,677     1,862   95.4%
Avenue 25  Phoenix, AZ  254  2013     1,239     1,399   94.1%
Carrington at Perimeter Park  Morrisville, NC  266  2007     1,247     1,333   92.2%
Chattahoochee Ridge  Atlanta, GA  358  1996     1,388     1,463   96.1%
Chevy Chase  Austin, TX  320  1971     964     1,091   98.3%
Cielo on Gilbert  Mesa, AZ  432  1985     1,050     1,186   97.2%
Citrus Tower  Orlando, FL  336  2006     1,364     1,521   96.7%
Denim  Scottsdale, AZ  645  1979     1,236     1,390   96.3%
Elan  Austin, TX  270  2007     1,133     1,245   94.0%
Element  Las Vegas, NV  200  1995     1,250     1,515   96.9%
Falls at Forsyth  Cumming, GA  356  2019     1,412     1,536   96.1%
Gulfshore Apartment Homes  Naples, FL  368  2016     1,292     1,399   92.4%
James on South First  Austin, TX  250  2016     1,348     1,490   96.2%
Marquis at The Cascades  Tyler, TX  582  2009     1,214     1,312   96.2%
Navigator Villas  Pasco, WA  176  2013     1,133     1,207   96.0%
Outlook at Greystone  Birmingham, AL  300  2007     1,072     1,253   94.0%
Park & Kingston  Charlotte, NC  168  2015     1,280     1,366   95.9%
Pine Lakes Preserve  Port St. Lucie, FL  320  2003     1,377     1,535   95.2%
Plantation Park  Lake Jackson, TX  238  2016     1,261     1,350   92.8%
Providence Trail  Mount Juliet, TN  334  2007     1,260     1,418   93.8%
Roswell City Walk  Roswell, GA  320  2015     1,584     1,816   96.4%
Sands Parc  Daytona Beach, FL  264  2017     1,362     1,486   95.3%
The Brodie  Austin, TX  324  2001     1,315     1,484   94.7%
The District at Scottsdale  Scottsdale, AZ  332  2018     1,650     1,829   92.0%
The Links at Plum Creek  Castle Rock, CO  264  2000     1,461     1,540   95.9%
The Mills  Greenville, SC  304  2013     1,052     1,191   96.8%
The Preserve at Henderson Beach  Destin, FL  340  2009     1,481     1,631   95.9%
The Reserve at Palmer Ranch  Sarasota, FL  320  2016     1,350     1,471   95.6%
The Sanctuary  Las Vegas, NV  320  1988     1,084     1,130   94.6%
Veranda at Centerfield  Houston, TX  400  1999     1,017     1,136   96.4%
Villages of Cypress Creek  Houston, TX  384  2001     1,174     1,263   94.1%
Wesley Village  Charlotte, NC  301  2010     1,367     1,456   94.6%
                           
Total Consolidated Operating Properties     12,722       $1,315(5)   $1,449(5)  94.9%(5)
                           
Mezzanine/Preferred/Ground Lease Investments:                          
Alexan CityCentre  Houston, TX  340       $1,513    $1,594   93.9%
Alexan Southside Place  Houston, TX  270        1,639     1,770   93.5%
Avondale Hills  Decatur, GA  240        1,538(4)     N/A     N/A  
Belmont Crossing  Smyrna, GA  192        831     950   96.7%
Domain at The One Forty  Garland, TX  299        1,282     1,447   94.5%
Encore Chandler  Chandler, AZ  208        1,457(4)    N/A   N/A 
Georgetown Crossing  Savannah, GA  168        1,006     1,115   96.0%
Hunter’s Pointe  Pensacola, FL  204        975     1,097   99.0%
Mira Vista  Austin, TX  200        1,078     1,188   93.3%
Motif  Fort Lauderdale, FL  385        2,352(4)     N/A     N/A  
Park on the Square  Pensacola, FL  240        1,121     1,304   99.5%
Reunion Apartments  Orlando, FL  280        1,366(4)     N/A     N/A  
Sierra Terrace  Atlanta, GA  135        1,215     1,365   99.3%
Sierra Village  Atlanta, GA  154        1,212     1,330   90.5%
The Commons  Jacksonville, FL  328        896     1,016   97.5%
The Conley, formerly North Creek Apartments  Leander, TX  259        1,358(4)     N/A     N/A  
The Park at Chapel Hill  Chapel Hill, NC  414        1,599(4)     N/A     N/A  
Thornton Flats  Austin, TX  104        1,541     1,764   90.1%
Vickers Historic Roswell  Roswell, GA  79        2,783     2,999   97.9%
Water’s Edge  Pensacola, FL  184        1,118     1,328   98.6%
Wayford at Concord, formerly 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    5,140       $1,443(6)   $1,390(6)  95.3%(6)
Total Portfolio     17,862       $1,353(7)   $1,438(7)  95.0%(7)

 

(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 December 31, 2020.  
(3) Revenue per occupied unit is total revenue divided by average number of occupied units for the three months ended December 31, 2020.
(4) Represents the average pro forma effective monthly rent per occupied unit for all expected units upon stabilization.
(5) The average effective monthly rent, revenue per occupied unit, and average occupancy including sold properties was $1,318, $1,452, and 94.9%, respectively, for the three months ended December 31, 2020.
(6) The average effective monthly rent, revenue per occupied unit, and average occupancy including sold properties was $1,442, $1,411, and 94.6%, respectively, for the three months ended December 31, 2020.
(7) The average effective monthly rent, revenue per occupied unit, and average occupancy including sold properties was $1,358, $1,443, and 94.8%, respectively, for the three months ended December 31, 2020.

 

27

 

 

Bluerock Residential Growth REIT, Inc.

Renovation Table

As of December 31, 2020

(Unaudited)

Units and Investment           
  2020  To Date
  Completed  Completed  Total  Unrenovated Units
  in 4Q  Year-to-date  Completed  Remaining
Number of Renovations  65   310   2,955   4,421
Renovation Cost per Unit $7,299  $7,719        

 

Returns                  
   

Inception-to-date 

    Cost     Monthly Rent     Return on  
    per Unit     Premium     Investment  
Weighted Average Returns to Date   $ 5,916     $ 116       23.6 %

 

28

 

 

Bluerock Residential Growth REIT, Inc.

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

As of December 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) (1)  Construction Start  Initial Occupancy  Construction Completion  Stabilized Operations (2) 
Lease-up Investments                           
Motif (3) 385  138.4  133.5  359,481  70.4  1Q18 1Q20 2Q20 2Q22
The Conley, formerly North Creek Apartments (4) 259  44.0  38.4  169,884  23.6  4Q18 2Q20 4Q20 3Q21
Wayford at Concord, formerly Wayforth at Concord (4) 150  33.5  29.5  223,333  22.3  4Q18 1Q20 4Q20 1Q21
Total lease-up units 794                         
                            
Development Investments                           
Zoey (5) 307  59.5  29.7  193,811  25.5  1Q20 1Q22 2Q22 1Q23
Reunion Apartments (3) 280  47.6  18.6  170,000  30.5  3Q20 1Q22 3Q22 1Q23
The Park at Chapel Hill (3) 414  99.2  32.5  239,614  64.3  2Q20 3Q21 4Q22 2Q23
Avondale Hills (3) 240  51.8  10.8  215,833  31.4  4Q20 1Q23 1Q23 1Q24
Encore Chandler (4) 208  47.7  7.0  229,327  31.0  3Q21 1Q23 2Q23 2Q24
Total development units 1,449                         
                            
Total units 2,243                         

 

(1) Represents property level only and excludes mezzanine loan financing.
(2) We define stabilized occupancy as attainment of 90% physical occupancy.
(3) Represents a mezzanine loan investment.
(4) Represents a preferred equity investment. Encore Chandler, The Conley (formerly North Creek Apartments), and Wayford at Concord (formerly Wayforth at Concord) have an option to purchase the property at stabilization.
(5) Represents a ground lease investment.

  

29

 

 

Bluerock Residential Growth REIT, Inc.

Condensed Consolidated Balance Sheets

Fourth Quarter 2020

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

  December 31,
2020
  December 31,
2019
 
ASSETS        
Net Real Estate Investments        
Land $279,481  $268,244 
Buildings and improvements  1,889,471   1,752,738 
Furniture, fixtures and equipment  78,438   67,904 
Total Gross Real Estate Investments  2,247,390   2,088,886 
Accumulated depreciation  (186,426)  (141,566)
Total Net Operating Real Estate Investments  2,060,964   1,947,320 
Operating real estate held for sale, net  36,213    
Total Net Real Estate Investments  2,097,177   1,947,320 
Cash and cash equivalents  83,868   31,683 
Restricted cash  35,093   19,085 
Notes and accrued interest receivable, net  157,734   193,781 
Due from affiliates  339   2,969 
Accounts receivable, prepaids and other assets, net  29,502   16,317 
Preferred equity investments and investments in unconsolidated real estate joint ventures, net  83,485   126,444 
In-place lease intangible assets, net  2,594   3,098 
Non-real estate assets associated with operating real estate held for sale  145    
TOTAL ASSETS $2,489,937  $2,340,697 
         
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY        
Mortgages payable $1,490,932  $1,425,257 
Mortgages payable associated with operating real estate held for sale  38,773    
Revolving credit facilities  33,000   18,000 
Accounts payable  1,317   1,488 
Other accrued liabilities  31,025   27,499 
Due to affiliates  618   790 
Distributions payable  13,421   13,541 
Liabilities associated with operating real estate held for sale  383    
Total Liabilities  1,609,469   1,486,575 
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; 2,201,547 and 5,721,460 shares issued and outstanding at December 31, 2020 and 2019, respectively  54,332   140,355 
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 513,489 and 536,695 shares issued and outstanding at December 31, 2020 and 2019, respectively  469,907   480,921 
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,295,845 and 2,323,750 shares issued and outstanding at December 31, 2020 and 2019, respectively  56,462   56,797 
6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 9,717,917 and 17,400 shares issued and outstanding at December 31, 2020 and 2019, respectively  219,967   388 
Equity        
Stockholders’ Equity        
Preferred stock, $0.01 par value, 197,900,000 shares authorized; no shares issued and outstanding at December 31, 2020 and 2019      
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,774,338 and 2,850,602 shares issued and outstanding at December 31, 2020 and 2019, respectively  66,867   68,705 
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 22,020,950 and 23,422,557 shares issued and outstanding at December 31, 2020 and 2019, respectively  220   234 
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding at December 31, 2020 and 2019  1   1 
Additional paid-in-capital  304,710   311,683 
Distributions in excess of cumulative earnings  (313,392)  (253,132)
Total Stockholders’ Equity  58,406   127,491 
Noncontrolling Interests        
Operating partnership units  (3,272)  19,331 
Partially owned properties  24,666   28,839 
Total Noncontrolling Interests  21,394   48,170 
Total Equity  79,800   175,661 
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY $2,489,937  $2,340,697 

 

30

 

 

Bluerock Residential Growth REIT, Inc.

Consolidated Statements of Operations

For the Three and Twelve Months Ended December 31, 2020 and 2019

(Dollars in thousands) 

 

   Three Months Ended   Year Ended 
   December 31,   December 31, 
   2020   2019   2020   2019 
Revenues                    
Rental and other property revenues  $49,810   $45,800   $196,522   $185,376 
Interest income from mezzanine loan and ground lease investments   6,177    6,720    23,326    24,595 
Total revenues   55,987    52,520    219,848    209,971 
Expenses                    
Property operating   18,861    17,600    76,301    74,449 
Property management fees   1,269    1,192    4,988    4,899 
General and administrative   6,566    5,620    24,141    22,553 
Acquisition and pursuit costs   219    210    4,152    556 
Weather-related losses, net       7        355 
Depreciation and amortization   19,246    19,355    79,452    70,452 
Total expenses   46,161    43,984    189,034    173,264 
Operating income   9,826    8,536    30,814    36,707 
Other income (expense)                    
Other income   25    68    144    68 
Preferred returns on unconsolidated real estate joint ventures   3,037    2,700    11,250    9,797 
Provision for credit losses   (16,369)       (16,369)    
Gain on sale of real estate investments   1,412        59,508    48,680 
Gain on sale of non-depreciable real estate investments               679 
Loss on extinguishment of debt and debt modification costs   (645)   (335)   (14,630)   (7,258)
Interest expense, net   (13,700)   (13,728)   (55,994)   (59,554)
Total other expense   (26,240)   (11,295)   (16,091)   (7,588)
Net (loss) income   (16,414)   (2,759)   14,723    29,119 
Preferred stock dividends   (15,676)   (12,868)   (58,463)   (46,159)
Preferred stock accretion   (4,873)   (3,415)   (16,851)   (10,335)
Net (loss) income attributable to noncontrolling interests                    
Operating Partnership units   (10,634)   (5,032)   (17,313)   (6,779)
Partially owned properties   (116)   (183)   1,396    (845)
Net loss attributable to noncontrolling interests   (10,750)   (5,215)   (15,917)   (7,624)
Net loss attributable to common stockholders  $(26,213)  $(13,827)  $(44,674)  $(19,751)
                     
Net loss per common share - Basic  $(1.13)  $(0.62)  $(1.91)  $(0.91)
                     
Net loss per common share – Diluted  $(1.13)  $(0.62)  $(1.91)  $(0.91)
                     
Weighted average basic common shares outstanding   23,378,695    22,729,882    24,084,347    22,649,222 
Weighted average diluted common shares outstanding   23,378,695    22,729,882    24,084,347    22,649,222 

 

31

 

 

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 and Twelve Months Ended December 31, 2020 and 2019

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

 

   Three Months Ended   Year Ended 
   December 31,   December 31, 
   2020   2019   2020   2019 
Net loss attributable to common stockholders  $(26,213)  $(13,827)  $(44,674)  $(19,751)
Add back: Net loss attributable to Operating Partnership Units   (10,634)   (5,032)   (17,313)   (6,779)
Net loss attributable to common stockholders and unit holders   (36,847)   (18,859)   (61,987)   (26,530)
Common stockholders and Operating Partnership Units pro-rata share of:                    
Real estate depreciation and amortization (1)   18,373    18,483    75,727    66,670 
Provision for credit losses   16,369        16,369     
Gain on sale of real estate investments   (1,417)       (56,777)   (48,172)
FFO Attributable to Common Stockholders and Unit Holders   (3,522)   (376)   (26,668)   (8,032)
Common stockholders and Operating Partnership Units pro-rata share of:                    
Acquisition and pursuit costs   219    210    4,152    556 
Non-cash interest expense   701    826    3,025    3,174 
Unrealized loss on derivatives   48    32    115    2,450 
Loss on extinguishment of debt and debt modification costs   647    335    14,238    7,199 
Weather-related losses, net       7        313 
Non-real estate depreciation and amortization   122    121    486    448 
Gain on sale of non-depreciable real estate investments               (679)
Shareholder activism               393 
Other income, net   (351)   (68)   (400)   (68)
Non-cash preferred returns on unconsolidated real estate joint ventures       (353)       (1,291)
Non-cash equity compensation   3,329    2,506    11,917    10,615 
Preferred stock accretion   4,873    3,415    16,851    10,335 
CFFO Attributable to Common Stockholders and Unit Holders  $6,066   $6,655   $23,716   $25,413 
                     
Per Share and Unit Information:                    
FFO Attributable to Common Stockholders and Unit Holders - diluted  $(0.11)  $(0.01)  $(0.81)  $(0.26)
CFFO Attributable to Common Stockholders and Unit Holders - diluted  $0.18   $0.21   $0.72   $0.82 
                     
Weighted average common shares and units outstanding - diluted   32,994,897    31,455,630    33,116,871    30,899,927 

 

(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. 

 

32

 

 

Bluerock Residential Growth REIT, Inc.

Mortgages Payable Summary Information

As of December 31, 2020

(Unaudited and dollars in thousands)

 

Property  Outstanding
Principal
   Interest Rate   Fixed/ Floating  Maturity Date
ARIUM Glenridge  $49,500    1.48%  LIBOR + 1.33% subject to Cap (1)  September 1, 2025
ARIUM Hunter’s Creek   70,871    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 (2)   36,566    4.18%  Fixed  July 1, 2027
Carrington at Perimeter Park (3)   31,301    4.16%  Fixed  July 1, 2027
Chattahoochee Ridge   45,338    3.25%  Fixed  December 5, 2024
Chevy Chase   24,400    2.47%  LIBOR + 2.32% subject to Cap (1)  September 1, 2027
Cielo on Gilbert   58,000    2.70%  SOFR + 2.61% subject to Cap (1)  January 1, 2031
Citrus Tower   40,627    4.07%  Fixed  October 1, 2024
Denim (4)   101,205    3.41%  Fixed  August 1, 2029
Elan (5)   25,574    4.19%  Fixed  July 1, 2027
Element   29,260    3.63%  Fixed  July 1, 2026
Fannie Facility Advance   13,936    2.75%  LIBOR + 2.60% subject to Cap (1)  June 1, 2027
Gulfshore Apartment Homes   46,345    3.26%  Fixed  September 1, 2029
James on South First   25,674    4.35%  Fixed  January 1, 2024
Marquis at The Cascades I   31,668    1.76%  LIBOR + 1.61% subject to Cap (1)  June 1, 2024
Marquis at The Cascades II   22,101    1.76%  LIBOR + 1.61% subject to Cap (1)  June 1, 2024
Navigator Villas (6)   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 Preserve   42,728    3.13%  LIBOR + 2.98% subject to Cap (1)  July 1, 2030
Plantation Park   26,625    4.64%  Fixed  July 1, 2028
Providence Trail   47,950    3.54%  Fixed  July 1, 2026
Roswell City Walk   50,043    3.63%  Fixed  December 1, 2026
The Brodie   33,551    3.71%  Fixed  December 1, 2023
The District at Scottsdale   75,577    1.85%  LIBOR + 1.60% (1)  June 11, 2021
The Links at Plum Creek   39,578    4.31%  Fixed  October 1, 2025
The Mills   25,275    4.21%  Fixed  January 1, 2025
The Preserve at Henderson Beach   48,490    3.26%  Fixed  September 1, 2029
The Reserve at Palmer Ranch   40,977    4.41%  Fixed  May 1, 2025
The Sanctuary   33,707    3.31%  Fixed  August 1, 2029
Veranda at Centerfield   26,100    1.40%  LIBOR + 1.25% subject to Cap (1)  July 26, 2023
Villages of Cypress Creek   33,520    2.70%  LIBOR + 2.55% subject to Cap (1)  July 1, 2027
Wesley Village   39,438    4.25%  Fixed  April 1, 2024
Total   1,495,529            
Fair value adjustments   6,489            
Deferred financing costs, net   (11,086)           
Total continuing operations  $1,490,932            
Held for sale                
ARIUM Grandewood (7)  $39,114    2.95%  (8)  July 1, 2025
Deferred financing costs, net   (341)           
   Total held for sale  $38,773            
Total  $1,529,705            
Weighted Average Interest Rate   3.45%           

 

(1) In December 2020, one-month LIBOR in effect was 0.15% and the 30-day average SOFR in effect was 0.09%.  
(2) The principal balance includes a $29.7 million senior loan at a fixed rate of 4.02% and a $6.9 million supplemental loan at a fixed rate of 4.86%.
(3) The principal balance includes a $27.5 million senior loan at a fixed rate of 4.09% and a $3.8 million supplemental loan at a fixed rate of 4.66%.
(4) The principal balance includes a $91.6 million senior loan at a fixed rate of 3.32% and a $9.6 million supplemental loan at a fixed rate of 4.22%.
(5) The principal balance includes a $21.2 million senior loan at a fixed rate of 4.09% and a $4.4 million supplemental loan at a fixed rate of 4.66%.
(6) The principal balance includes a $14.8 million senior loan at a fixed rate of 4.31% and a $5.7 million supplemental loan at a fixed rate of 5.23%.
(7) The property was subsequently sold in January 2021.  
(8) The principal balance includes a $19.6 million advance at a fixed rate of 4.35% and a $19.5 million advance at a variable rate of 1.55% as of December 31, 2020.  

 

33

 

 

Bluerock Residential Growth REIT, Inc.

Mortgages Payable Summary Information Continued

As of December 31, 2020

(Unaudited and dollars in thousands)

 

Mortgages Payable Maturity Schedules

 

Year  Fixed Rate   Floating Rate   Total   % of Total 
2021  $8,796   $77,418   $86,214(1)   5.62%
2022   11,749    3,588    15,337    1.00%
2023   97,388    29,963    127,351    8.30%
2024   222,223    53,935    276,158    17.99%
2025   303,520    65,322    368,842    24.03%
Thereafter   493,908    166,833    660,741    43.06%
   $1,137,584   $397,059   $1,534,643    100.00%
Fair Value Adjustments   6,489    -    6,489      
Subtotal  $1,144,073   $397,059   $1,541,132      
Deferred Financing Costs, net   (8,231)   (3,196)   (11,427)     
Total  $1,135,842   $393,863   $1,529,705      

 

   Amounts   % of Total   Weighted
Average Interest
Rates
   Weighted
Average
Maturities
(years)
 
Continuing Operations                    
Secured Fixed Rate Debt  $1,124,488    74.9%   3.90%   5.5 
Secured Floating Rate Debt   377,530    25.1%   2.18%   5.2 
Total/Average Continuing Operations  $1,502,018    100.0%   3.47%   5.4 
                     
Held for Sale                    
Secured Fixed Rate Debt  $19,585    50.1%   4.35%   4.5 
Secured Floating Rate Debt   19,529    49.9%   1.55%   4.5 
   Total/Average Held for Sale  $39,114    100.0%   2.95%   4.5 
                     
Total/Average  $1,541,132    100.0%   3.45%   5.4 

 

(1) $75.6 million represents a loan in connection with The District at Scottsdale. The loan has a June 2021 maturity date and contains two (2) three-month extension options, subject to certain conditions.

 

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Bluerock Residential Growth REIT, Inc.

2021 Projected Guidance

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

 

   2021 Outlook (3) 
   Low   High 
Core Funds from Operations Attributable to Common Stockholders and Unit Holders per share  $0.65   $0.70 
           
Same Store Growth          
Rental income growth   2.0%   4.0%
Property operating expense growth   4.0%   6.0%
NOI growth   0.0%   3.0%
           
Property management fee as a percentage of revenue   2.4%   2.2%
General and administrative expenses (1)   12,500    12,000 
Income from preferred equity and mezzanine investments   29,100    29,100 
Normal recurring capital expenditures (2)   2,900    2,700 
           
Value-add Upgrades          
Forecasted unit count   250    750 
Return on investment   15%   20%
           
Investments          
Total gross asset value   600,000    800,000 
           
Dispositions          
Total gross asset value   350,000    500,000 
           
Noncontrolling Interest, Preferred Stock and Share Count Assumptions          
Noncontrolling interest percentage of CFFO - partially owned properties   4.0%   3.9%
Series T preferred stock raise   200,000    350,000 
Preferred stock dividends   54,000    58,000 
Estimated weighted average diluted common shares and units outstanding   39,100    39,100 

 

(1)General and administrative expenses exclude non-cash expenses, such as depreciation and non-cash equity compensation.
  
(2)Normally recurring capital expenditures exclude development, investment, revenue enhancing and non-recurring capital expenditures.
  
(3)The Company has not reconciled projected Core Funds from Operations Attributable to Common Stockholders and Unit Holders per share (“CFFO”) guidance to the corresponding GAAP financial measure because it does not provide guidance for various reconciling items. The Company is unable to provide guidance for these reconciling items since certain items that impact net income are outside of its control and cannot be reasonably predicted. Accordingly, reconciliations to the corresponding GAAP financial measures are not available.

 

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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 (loss), 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 certain real estate assets and investments in entities where the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, 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 accrued portion of the preferred income totaled $0.3 million and $1.5 million for the three and twelve months ended December 31, 2020, respectively. 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 six operating properties, made eight investments through mezzanine loans, preferred equity interests or ground lease investments, and sold six operating properties subsequent to December 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   Year Ended 
   December 31,   December 31, 
   2020   2019   2020   2019 
Net loss attributable to common stockholders  $(26,213)  $(13,827)  $(44,674)  $(19,751)
Net loss attributable to noncontrolling interests   (10,750)   (5,215)   (15,917)   (7,624)
Preferred stock dividends   15,676    12,868    58,463    46,159 
Preferred stock accretion   4,873    3,415    16,851    10,335 
Interest expense, net   13,700    13,728    55,994    59,554 
Real estate depreciation and amortization   19,199    19,309    79,267    70,079 
Provision for credit losses   16,369        16,369     
Gain on sale of real estate investments   (1,412)       (59,508)   (48,680)
Loss on extinguishment of debt and debt modification costs   645    335    14,630    7,258 
EBITDAre  $32,087   $30,613   $121,475   $117,330 
Acquisition and pursuit costs   219    210    4,152    556 
Non-real estate depreciation and amortization   122    121    486    448 
Weather-related losses, net       7        355 
Gain on sale of non-depreciable real estate investments               (679)
Shareholder activism               393 
Non-cash equity compensation   3,329    2,506    11,917    10,615 
Other income, net   (351)   (68)   (400)   (68)
Non-cash preferred returns on unconsolidated real estate joint ventures       (353)       (1,291)
Adjusted EBITDAre  $35,406   $33,036   $137,630   $127,659 

 

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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 six operating properties, made eight investments through mezzanine loans, preferred equity interests or ground lease investments, and sold six operating properties subsequent to December 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   Year Ended 
   December 31,   December 31, 
   2020   2019   2020   2019 
Net loss attributable to common stockholders  $(26,213)  $(13,827)  $(44,674)  $(19,751)
Add back: Net loss attributable to Operating Partnership Units   (10,634)   (5,032)   (17,313)   (6,779)
Net loss attributable to common stockholders and unit holders   (36,847)   (18,859)   (61,987)   (26,530)
Add common stockholders and Operating Partnership Units pro-rata share of:                    
Real estate depreciation and amortization   18,373    18,483    75,727    66,670 
Non-real estate depreciation and amortization   122    121    486    448 
Non-cash interest expense   701    826    3,025    3,174 
Unrealized loss on derivatives   48    32    115    2,450 
Loss on extinguishment of debt and debt modification costs   647    335    14,238    7,199 
Provision for credit losses   16,369        16,369     
Property management fees   1,211    1,135    4,751    4,645 
Acquisition and pursuit costs   219    210    4,152    556 
Corporate operating expenses   6,490    5,545    23,770    22,261 
Weather-related losses, net       7        313 
Preferred dividends   15,676    12,868    58,463    46,159 
Preferred stock accretion   4,873    3,415    16,851    10,335 
Less common stockholders and Operating Partnership Units pro-rata share of:                    
Other income, net   25    68    74    68 
Preferred returns on unconsolidated real estate joint ventures   3,037    2,700    11,381    9,797 
Interest income from mezzanine loan and ground lease investments   6,177    6,720    23,326    24,595 
Gain on sale of real estate investments   1,417        56,777    48,172 
Gain on sale of non-depreciable real estate investments               679 
Pro-rata share of properties’ income   17,226    14,630    64,402    54,369 
Add:                    
Noncontrolling interest pro-rata share of partially owned property income   799    724    3,074    2,810 
Total property income   18,025    15,354    67,476    57,179 
Add:                    
Interest expense   12,924    12,846    52,745    53,748 
Net operating income   30,949    28,200    120,221    110,927 
Less:                    
Non-same store net operating income   5,403    2,717    34,682    25,625 
Same store net operating income (1)  $25,546   $25,483   $85,539   $85,302 

 

(1)Same store portfolio for the three months ended December 31, 2020 consists of 28 properties, which represent 9,958 units.  Same store portfolio for the year ended December 31, 2020 consists of 24 properties, which represent 8,459 units.

 

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