EX-99.2 3 tm2115528d1_ex99-2.htm EXHIBIT 99.2

Exhibit 99.2

1

 

Bluerock Residential Growth REIT, Inc.

First Quarter 2021

Supplemental Financial Information

(Unaudited)

 

Table of Contents

 

First Quarter Earnings Release 3
   
Financial and Operating Highlights 17
   
Share and Unit Information 18
   
EBITDAre and Interest Information 19
   
Financial Statistics 20
   
Recent Investments 21
   
Recent Dispositions 22
   
Preferred Equity Investments, Notes and Accrued Interest Receivable, and Ground Lease 23
   
Portfolio Information 24
   
Renovation Table 25
   
Lease-up and Development Mezzanine/Preferred/Ground Lease Investments 26
   
Condensed Consolidated Balance Sheets 27
   
Consolidated Statements of Operations 28
   
Reconciliation of Funds from Operations (FFO) and Core Funds from Operations (CFFO) 29
   
Mortgages Payable Summary Information 30
   
2021 Projected Guidance Information 32
   
Definitions of Non-GAAP Financial Measures 33

 

This document contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur.  Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, the Company’s actual results and performance could differ materially from those set forth in these forward-looking statements due to numerous factors. Currently, one of the most significant factors is the potential adverse effect of the COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company and its tenants, partners and employees, as well as the real estate market and the global economy and financial markets. The extent to which COVID-19 impacts the Company and its tenants, partners and employees will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact (including governmental actions that may vary by jurisdiction, such as mandated business closing; stay-at-home orders; limits on group activity; and actions to protect residential tenants from eviction), and the direct and indirect economic effects of the pandemic and containment measures, including national and local employment rates and the corresponding impact on the Company’s tenants’ ability to pay their rent on time or at all, among others.  For further discussion of the factors that could affect outcomes, please refer to the risk factors set forth in Item 1A of the Company’s Annual Report on Form 10-K filed by the Company with the U.S. Securities and Exchange Commission (“SEC”) on February 23, 2021, and subsequent filings by the Company with the SEC. We claim the safe harbor protection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995.

 

2

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

 

For Immediate Release

 

Bluerock Residential Growth REIT Announces First Quarter 2021 Results

 

- Portfolio Lease Rate Growth of 3.5% -

- April Portfolio Lease Rate Growth of 7.7% -

- Same Store Average Occupancy Increased 1.2% -

- Repurchased 3.6 Million Common Shares -

 

New York, NY (May 10, 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 March 31, 2021.

 

“We are encouraged by the substantial sequential reacceleration of rent growth and year over year improvement in same store occupancy which reflect a high-quality affordable Class A portfolio of highly amenitized live/work/play apartment communities,” said Ramin Kamfar, Company Chairman and CEO. “Our strategy of maintaining occupancy over the past year, along with the favorable positioning of our portfolio, is allowing us to achieve industry-leading lease rate growth.”

 

First Quarter Highlights

 

Financial Results

 

-Net income attributable to common stockholders for the first quarter of 2021 was $23.6 million or $1.00 per diluted share, as compared to net loss attributable to common stockholders of ($16.5) million or ($0.70) per diluted share in the prior year period.

 

-Core funds from operations attributable to common stockholders and unit holders (“CFFO”) was $5.3 million, or $0.16 per diluted share, compared to $7.1 million, or $0.22 per diluted share, in the prior year period, as this year’s results were partially impacted by additional capital on the balance sheet.

 

Portfolio Performance

 

-Collected 97% of rents from multifamily properties for the three months ended March 31, 2021.

 

-Total rental and other property revenues grew 1.4% to $51.1 million for the quarter from $50.4 million in the prior year period.

 

-Blended lease rate growth of 3.5%, up 300 basis points on a sequential quarter-over-quarter basis.

 

-March 2021 average lease growth finished at 5.8%, with renewals at 5.5% and new leases at 6.1%. Average lease growth accelerated to 7.7% growth in April.

 

-Portfolio occupancy was 95.8% at March 31, 2021, up 150 basis points from the prior year.

 

-Property Net Operating Income (“NOI”) was $31.1 million, consistent with $31.1 million in the prior year period.

 

-Property operating margins were 61.0% compared to 61.7% in the prior year period.

 

3

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

  

-Same store average occupancy expanded 120 basis points and same store average rent increased 1.0%, as compared to the prior year period.

 

-Same store revenue grew 2.0% and same store NOI increased 0.6%, as compared to the prior year period.

 

Portfolio Activity

 

-Consolidated real estate investments, at cost, were approximately $2.1 billion.

 

-Sold three operating assets and two development properties for aggregate gross sales prices of $303 million with net proceeds of $102 million. The assets were sold at in-place cap rates of 4.0% adjusting for the buyer’s year one taxes and $300 per unit replacement reserves.

 

-Invested $7 million in preferred equity in a new stabilized property and completed funding for eight existing preferred equity, mezzanine loan, and ground lease investments for $21 million.

 

-Completed 72 value-add unit upgrades during the quarter achieving an average 24.3% ROI.

 

Balance Sheet and Market Activity

 

-Had $260.5 million of unrestricted cash and availability under revolving credit facilities as of March 31, 2021.

 

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

 

-Raised $98 million through its continuous registered Series T Preferred Stock offering in the quarter.

 

-Completed redemptions of its remaining 8.25% Series A Cumulative Redeemable Preferred Stock totaling $56 million, including accrued and unpaid dividends.

 

-Redeemed 72,535 shares of Series B Preferred Stock through the issuance of 6,518,267 shares of Class A common stock.

 

-Repurchased 3,557,562 shares of Class A common stock during the quarter at an average price of $11.45 per share.

 

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.

 

First Quarter 2021 Financial Results

 

Net income attributable to common stockholders for the first quarter of 2021 was $23.6 million, compared to net loss attributable to common stockholders of ($16.5) million in the prior year period. Net income in 2021 was positively impacted by three asset sales generating $69 million in gain on sale of real estate investments. Net income (loss) attributable to common stockholders included non-cash expenses of $21.6 million or $0.93 per share in the first quarter of 2021 compared to $20.9 million or $0.88 per share for the prior year period.

 

CFFO for the first quarter of 2021 was $5.3 million, or $0.16 per diluted share, compared to $7.1 million, or $0.22 per diluted share, in the prior year period. CFFO was positively impacted by an increase in property NOI of $0.1 million and a decrease in interest expense of $0.8 million. This was primarily offset by a year-over-year reduction of $1.2 million in interest income from mezzanine loan and ground lease investments, $0.1 million in preferred returns, a $0.5 million increase in general and administrative expenses and preferred stock dividends of $1.1 million.

 

4

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Total Portfolio Performance

 

$ In thousands, except average rental rates  1Q21  1Q20  Variance   
Total Revenues (1)  $55,802   $56,241    (0.8)%  
Property Operating Expenses  $19,932   $19,299    3.3%  
NOI  $31,149   $31,054    0.3%  
Operating Margin   61.0%   61.7%   (70)bps  
Average Occupancy Percentage   95.2%   94.2%   100bps  
Average Rental Rate  $1,315   $1,331    (1.2)%  

 

(1) Including interest income from mezzanine loan and ground lease investments.

 

For the first quarter of 2021, property revenues increased by 1.4% compared to the same prior year period. Total portfolio NOI was $31.1 million, an increase of $0.1 million, or 0.3%, compared to the same period in the prior year. Property NOI margins were 61.0% of revenue for the quarter, compared to 61.7% in the prior year quarter.

 

Same Store Portfolio Performance

 

$ In thousands, except average rental rates  1Q21  1Q20  Variance   
Revenues  $38,798   $38,028    2.0%  
Property Operating Expenses  $14,837   $14,209    4.4%  
NOI  $23,961   $23,819    0.6%  
Operating Margin   61.8%   62.6%   (80)bps  
Average Occupancy Percentage   95.4%   94.2%   120bps  
Average Rental Rate  $1,332   $1,319    1.0%  

 

The Company’s same store portfolio for the quarter ended March 31, 2021 included 26 properties. For the first quarter of 2021, same store NOI was $24.0 million, an increase of $0.1 million, or 0.6%, compared to the 2020 period. Same store property revenues grew by 2.0% compared to the 2020 period, primarily driven by a 120-basis point increase in occupancy and 1.0% increase in average rental rates; of the Company’s 26 same store properties, 21 recognized occupancy increases and 18 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.

 

Same store expenses increased 4.4%, or $0.6 million, primarily due to non-controllable real estate tax and insurance expense increases of $0.42 million due to municipality tax increases and industrywide multifamily insurance price increases with the remaining $0.18 million due to administrative and repairs and maintenance expense increases.

 

Renovation Activity

 

The Company completed 72 value-add unit upgrades during the first quarter of 2021 achieving an average 24.3% ROI. Since inception, the Company has completed 3,027 value-add unit upgrades at an average cost of $5,953 per unit and achieved an average monthly rental rate increase of $117 per unit, equating to an average 23.6% ROI on all unit upgrades leased as of March 31, 2021. The Company has identified approximately 4,349 remaining units within the existing portfolio for value-add upgrades with similar projected economics to the completed renovations.

 

5

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Portfolio Activity

 

The following activities were completed during the first quarter:

 

-Made a preferred equity investment of $7 million in a stabilized asset with 262-units called The Riley, located in Richardson, Texas.

 

-Funded $21 million under existing preferred equity, mezzanine loan, and ground lease commitments in eight investments.

 

-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.

 

-On February 24, 2021, the Company sold James at South First for a gross sales price of $50 million and net proceeds to the Company of $18 million.

 

-On March 1, 2021, the Company sold Marquis at the Cascades for a gross sales price of $91 million and net proceeds to the Company of $33 million.

 

-On March 18, 2021, the Company’s preferred equity investment in The Conley was redeemed for $17 million.

 

-On March 25, 2021, Alexan Southside Place was sold and the Company’s preferred equity investment was redeemed for $9.8 million in April 2021, with an additional $0.3 million expected to be received before year end.

 

The Company completed the following activity subsequent to March 31, 2021:

 

-On April 12, 2021, the Company made a $10.7 million preferred equity investment in the operating partnership of Peak Housing, a private REIT invested in a portfolio of 474 single-family homes located throughout Texas.

 

-On April 14, 2021, the Company acquired a 95% interest in an 80-unit apartment community located in Olympia, Washington, known as Yauger Park. The total purchase price was $24.5 million, funded in part through the assumption of $15.1 million in mortgage loans secured by the property.

 

-On April 26, 2021, the Company sold Plantation Park for a gross sales price of $32 million and net proceeds to the Company of $2.7 million.

 

Balance Sheet

 

As of March 31, 2021, the Company had $260.5 million of unrestricted cash and availability under its revolving credit facilities, and $1.5 billion of indebtedness outstanding.

 

During the first quarter, the Company raised gross proceeds of approximately $98.0 million through the issuance of 3.9 million shares of Series T Preferred Stock at $25.00 per share.

 

The Company repurchased 3,557,562 shares of Class A Common Stock during the first quarter at an average price of $11.45 per share and increased its repurchase program up to an aggregate $150 million.

 

6

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

On February 26, 2021, the Company redeemed the remaining 2,201,547 shares of its 8.25% Series A Cumulative Redeemable Preferred Stock.  The total cost to redeem the shares was $55.7 million, including accrued and unpaid dividends.

 

The Company redeemed 72,535 shares of Series B Preferred Stock through the issuance of 6,518,267 shares of Class A common stock.

 

Dividend

 

On March 12, 2021, the Board of Directors authorized, and the Company declared, a quarterly cash dividend for the first quarter of 2021 equal to a quarterly rate of $0.1625 per share on its Class A and Class C Common Stock, payable to the stockholders of record as of March 25, 2021, which was paid on April 5, 2021. A portion of each dividend may constitute a return of capital for tax purposes.

 

On March 12, 2021, the Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 7.625% Series C Cumulative Redeemable Preferred Stock for the first quarter of 2021, in the amount of $0.4765625 per share. Further, the Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 7.125% Series D Cumulative Preferred Stock for the first quarter of 2021, in the amount of $0.4453125 per share.  The dividends were payable to the stockholders of record as of March 25, 2021 and were paid on April 5, 2021.

 

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, February 25, 2021, and March 25, 2021, which were paid in cash on February 5, 2021, 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 were payable to the stockholders of record as of January 25, 2021, February 25, 2021, and March 25, 2021, and were paid in cash on February 5, 2021, March 5, 2021 and April 5, 2021, respectively.

 

On April 12, 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 April 23, 2021, which was paid in cash on May 5, 2021, and as of May 25, 2021, and June 25, 2021, which will be paid in cash on June 4, 2021 and July 2, 2021, respectively.

 

On April 12, 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 April 23, 2021, which was paid in cash on May 5, 2021, and as of May 25, 2021, and June 25, 2021, which will be paid in cash on June 4, 2021 and July 2, 2021, respectively.

 

2021 Guidance

 

The Company is reaffirming its prior 2021 CFFO 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 32 of Company’s First Quarter 2021 Earnings Supplement available under the Investors section on the Company’s website (www.bluerockresidential.com).

 

7

  

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Conference Call

 

All interested parties can listen to the live conference call at 11:00 AM ET on Monday, May 10, 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 June 10, 2021 at  https://services.choruscall.com/mediaframe/webcast.html?webcastid=VDVxOVOq, as well as by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10155057.

 

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 primarily affordable Class A highly amenitized live/work/play apartment communities in demographically attractive knowledge economy growth markets to appeal to the renter by choice. The Company’s objective is to generate value through off-market/relationship-based transactions and, at the asset level, through value add improvements to properties and operations. The Company is included in the Russell 2000 and Russell 3000 Indexes. BRG has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes.

 

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

 

Forward Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company’s present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. 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 23, 2021, 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.

8

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Portfolio Summary

 

The following is a summary of our operating real estate and mezzanine/preferred/ground lease investments as of March 31, 2021:

 

Multifamily Community Name  Location  Number of Units      Year Built/ Renovated (1)   Ownership Interest   Average Rent (2)   % Occupied (3)
Consolidated Operating Properties:                          
ARIUM Glenridge    Atlanta, GA   480       1990    90%  $1,293   94.6%
ARIUM Hunter’s Creek  Orlando, FL   532       1999    100%   1,417   96.4%
ARIUM Metrowest  Orlando, FL   510       2001    100%   1,412   96.7%
ARIUM Westside  Atlanta, GA   336       2008    90%   1,503   93.5%
Ashford Belmar  Lakewood, CO   512       1988/1993   85%   1,674   92.8%
Avenue 25  Phoenix, AZ   254       2013    100%   1,252   96.9%
Carrington at Perimeter Park  Morrisville, NC   266       2007    100%   1,263   95.9%
Chattahoochee Ridge  Atlanta, GA   358       1996    90%   1,387   97.5%
Chevy Chase  Austin, TX   320       1971    92%   964   98.1%
Cielo on Gilbert  Mesa, AZ   432       1985    90%   1,087   97.2%
Citrus Tower  Orlando, FL   336       2006    97%   1,364   95.5%
Denim  Scottsdale, AZ   645       1979    100%   1,246   97.2%
Elan  Austin, TX   270       2007    100%   1,134   95.6%
Element  Las Vegas, NV   200       1995    100%   1,274   94.5%
Falls at Forsyth  Cumming, GA   356       2019    100%   1,408   98.6%
Gulfshore Apartment Homes  Naples, FL   368       2016    100%   1,287   95.4%
Navigator Villas  Pasco, WA   176       2013    90%   1,143   99.4%
Outlook at Greystone  Birmingham, AL   300       2007    100%   1,090   93.7%
Park & Kingston  Charlotte, NC   168       2015    100%   1,303   97.0%
Pine Lakes Preserve  Port St. Lucie, FL   320       2003    100%   1,380   97.8%
Plantation Park  Lake Jackson, TX   238       2016    80%   1,232   94.5%
Providence Trail  Mount Juliet, TN   334       2007    100%   1,264   95.5%
Roswell City Walk  Roswell, GA   320       2015    98%   1,586   95.9%
Sands Parc  Daytona Beach, FL   264       2017    100%   1,374   94.7%
The Brodie  Austin, TX   324       2001    100%   1,313   95.1%
The District at Scottsdale  Scottsdale, AZ   332       2018    100%   1,799   91.6%
The Links at Plum Creek  Castle Rock, CO   264       2000    88%   1,466   95.5%
The Mills  Greenville, SC   304       2013    100%   1,051   95.1%
The Preserve at Henderson Beach  Destin, FL   340       2009    100%   1,498   97.9%
The Reserve at Palmer Ranch  Sarasota, FL   320       2016    100%   1,376   96.6%
The Sanctuary  Las Vegas, NV   320       1988    100%   1,132   95.3%
Veranda at Centerfield  Houston, TX   400       1999    93%   1,021   95.5%
Villages of Cypress Creek  Houston, TX   384       2001    80%   1,181   95.1%
Wesley Village  Charlotte, NC   301       2010    100%   1,373   96.0%
                           
Total/Average Consolidated Operating Properties      11,584               $1,318(5)   95.8%
                               
Mezzanine/Preferred/Ground Lease Investments:                             
Alexan CityCentre  Houston, TX   340                $1,525    
Avondale Hills  Decatur, GA   240                 1,538(4)     
Belmont Crossing  Smyrna, GA   192                 863     
Domain at The One Forty  Garland, TX   299                 1,290     
Encore Chandler  Chandler, AZ   208                 1,457(4)     
Georgetown Crossing  Savannah, GA   168                 993    
Hunter’s Pointe  Pensacola, FL   204                 983     
Mira Vista  Austin, TX   200                 1,087     
Motif  Fort Lauderdale, FL   385                2,352(4)     
Park on the Square  Pensacola, FL   240                1,140     
Reunion Apartments  Orlando, FL   280                 1,366(4)     
Sierra Terrace  Atlanta, GA   135                 1,278     
Sierra Village  Atlanta, GA   154                 1,224     
The Commons  Jacksonville, FL   328                 902     
The Hartley at Blue Hill, formerly The Park at Chapel Hill  Chapel Hill, NC   414                1,599(4)    
The Riley  Richardson, TX   262                 1,430     
Thornton Flats  Austin, TX   104                 1,499     
Vickers Historic Roswell  Roswell, GA   79                 3,134     
Water’s Edge  Pensacola, FL   184                 1,141     
Wayford at Concord  Concord, NC   150                 1,707(4)     
Zoey  Austin, TX   307                1,762(4)     
                               
Total/Average Mezzanine/Preferred/Ground Lease Investments      4,873                $1,432(6)     
                              
Total/Average Portfolio      16,457                $1,351(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 March 31, 2021.  
(3)  Percent occupied is calculated as (i) the number of units occupied as of March 31, 2021, divided by (ii) total number of units, expressed as a percentage.
(4)  Represents the average pro forma effective monthly rent per occupied unit for all expected units upon stabilization.
(5)  The average effective monthly rent including sold properties was $1,315 for the three months ended March 31, 2021.
(6)  The average effective monthly rent including sold properties was $1,438 for the three months ended March 31, 2021.
(7)  The average effective monthly rent including sold properties was $1,352 for the three months ended March 31, 2021.

 

9

  

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

  

Consolidated Statement of Operations

For the Three Months Ended March 31, 2021 and 2020

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

 

   Three Months Ended 
   March 31, 
   2021   2020 
Revenues          
Rental and other property revenues  $51,081   $50,353 
Interest income from mezzanine loan and ground lease investments   4,721    5,888 
Total revenues   55,802    56,241 
           
Expenses          
Property operating   19,932    19,299 
Property management fees   1,281    1,294 
General and administrative   6,645    6,371 
Acquisition and pursuit costs   11    1,269 
Weather-related losses, net   400     
Depreciation and amortization   20,322    20,921 
Total expenses   48,591    49,154 
Operating income   7,211    7,087 
           
Other income (expense)          
Other income   152    40 
Preferred returns on unconsolidated real estate joint ventures   2,287    2,415 
Provision for credit losses   (542)    
Gain on sale of real estate investments   68,913    253 
Loss on extinguishment of debt and debt modification costs   (3,040)    
Interest expense, net   (13,835)   (14,916)
Total other income (expense)   53,935    (12,208)
Net income (loss)   61,146    (5,121)
Preferred stock dividends   (14,617)   (13,547)
Preferred stock accretion   (7,022)   (3,925)
Net income (loss) attributable to noncontrolling interests          
Operating Partnership units   10,160    (5,822)
Partially owned properties   5,766    (278)
Net income (loss) attributable to noncontrolling interests   15,926    (6,100)
Net income (loss) attributable to common stockholders  $23,581   $(16,493)
           
Net income (loss) per common share - Basic  $1.00   $(0.70)
Net income (loss) per common share – Diluted  $1.00   $(0.70)
           
Weighted average basic common shares outstanding   23,089,364    24,087,811 
Weighted average diluted common shares outstanding   23,288,089    24,087,811 

 

10

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Consolidated Balance Sheets

First Quarter 2021

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

   March 31, 2021   December 31, 2020 
ASSETS          
Net Real Estate Investments          
Land  $268,731   $279,481 
Buildings and improvements   1,757,833    1,889,471 
Furniture, fixtures and equipment   76,790    78,438 
Total Gross Real Estate Investments   2,103,354    2,247,390 
Accumulated depreciation   (187,553)   (186,426)
Total Net Operating Real Estate Investments   1,915,801    2,060,964 
Operating real estate held for sale, net   32,518    36,213 
Total Net Real Estate Investments   1,948,319    2,097,177 
Cash and cash equivalents   148,070    83,868 
Restricted cash   32,618    35,093 
Notes and accrued interest receivable, net   169,712    157,734 
Due from affiliates   10,447    339 
Accounts receivable, prepaids and other assets, net   39,198    29,502 
Preferred equity investments and investments in unconsolidated real estate joint ventures, net   65,874    83,485 
In-place lease intangible assets, net   1,111    2,594 
Non-real estate assets associated with operating real estate held for sale   176    145 
Total Assets  $2,415,525   $2,489,937 
           
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY          
Mortgages payable  $1,434,318   $1,490,932 
Mortgages payable associated with operating real estate held for sale   26,433    38,773 
Revolving credit facilities       33,000 
Accounts payable   1,500    1,317 
Other accrued liabilities   29,023    31,025 
Due to affiliates   665    618 
Distributions payable   13,035    13,421 
Liabilities associated with operating real estate held for sale   624    383 
Total Liabilities   1,505,598    1,609,469 
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; no shares and 2,201,547 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively       54,332 
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 440,934 and 513,489 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively   402,243    469,907 
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,295,845 shares issued and outstanding as of March 31, 2021 and December 31, 2020   56,533    56,462 
6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 13,622,291 and 9,717,917 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively   308,362    219,967 
Equity          
Stockholders’ Equity          
Preferred stock, $0.01 par value, 197,900,000 shares authorized; no shares issued and outstanding        
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,774,338 shares issued and outstanding as of March 31, 2021 and December 31, 2020   66,867    66,867 
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 25,110,432 and 22,020,950 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively   251    220 
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding as of March 31, 2021 and December 31, 2020   1    1 
Additional paid-in-capital   332,926    304,710 
Distributions in excess of cumulative earnings   (293,766)   (313,392)
Total Stockholders’ Equity   106,279    58,406 
Noncontrolling Interests          
Operating Partnership units   14,427    (3,272)
    Partially owned properties   22,083    24,666 
Total Noncontrolling Interests   36,510    21,394 
Total Equity   142,789    79,800 
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY  $2,415,525   $2,489,937 

 

11

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Non-GAAP Financial Measures

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

 

Funds from Operations and Core Funds from Operations

 

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

 

FFO attributable to common 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, 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, stock compensation expense and preferred stock accretion. 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.

 

12

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

We have acquired four operating properties, made six property investments through preferred equity or mezzanine loan investments, sold seven operating properties and received our full mezzanine loan or preferred equity in four investments subsequent to March 31, 2020. 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 income (loss), the most directly comparable GAAP financial measure, for the three months ended March 31, 2021 and 2020 (in thousands, except per share amounts):

 

   Three Months Ended 
   March 31, 
   2021   2020 
Net income (loss) attributable to common stockholders  $23,581   $(16,493)
Add back: Net income (loss) attributable to Operating Partnership Units   10,160    (5,822)
Net income (loss) attributable to common stockholders and unit holders   33,741    (22,315)
Common stockholders and Operating Partnership Units pro-rata share of:          
Real estate depreciation and amortization   19,405    19,900 
Provision for credit losses   542     
Gain on sale of real estate investments   (62,427)   (110)
FFO Attributable to Common Stockholders and Unit Holders   (8,739)   (2,525)
Common stockholders and Operating Partnership Units pro-rata share of:          
Acquisition and pursuit costs   11    1,269 
Non-cash interest expense   604    845 
Unrealized gain on derivatives   (30)   (26)
Loss on extinguishment of debt and debt modification costs   2,564     
Weather-related losses, net   360     
Non-real estate depreciation and amortization   122    120 
Other expense (income), net   98    (40)
Non-cash equity compensation   3,311    3,547 
Preferred stock accretion   7,022    3,925 
CFFO Attributable to Common Stockholders and Unit Holders  $5,323   $7,115 
           
Per Share and Unit Information:          
FFO Attributable to Common Stockholders and Unit Holders - diluted  $(0.26)  $(0.08)
CFFO Attributable to Common Stockholders and Unit Holders - diluted  $0.16   $0.22 
           
Weighted average common shares and units outstanding - diluted   33,319,020    32,668,294 

 

13

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

  

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

 

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

 

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

 

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

 

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

 

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

 

   Three Months Ended 
   March 31, 
   2021   2020 
Net income (loss) attributable to common stockholders  $23,581   $(16,493)
Net income (loss) attributable to noncontrolling interests   15,926    (6,100)
Preferred stock dividends   14,617    13,547 
Preferred stock accretion   7,022    3,925 
Interest expense, net   13,835    14,916 
Real estate depreciation and amortization   20,275    20,876 
Provision for credit losses   542     
Gain on sale of real estate investments   (68,913)   (253)
Loss on extinguishment of debt and debt modification costs   3,040     
EBITDAre  $29,925   $30,418 
Acquisition and pursuit costs   11    1,269 
Non-real estate depreciation and amortization   122    120 
Weather-related losses, net   400     
Non-cash equity compensation   3,311    3,547 
Other expense (income), net   98    (40)
Adjusted EBITDAre  $33,867   $35,314 

 

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.

 

14

 

Bluerock Residential Growth REIT, Inc.

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

 

     Three Months Ended 
     March 31, 
     2021   2020 
Net income (loss) attributable to common stockholders  $23,581  $(16,493)
Add back: Net income (loss) attributable to Operating Partnership Units   10,160   (5,822)
Net income (loss) attributable to common stockholders and unit holders   33,741   (22,315)
Add common stockholders and Operating Partnership Units pro-rata share of:         
Real estate depreciation and amortization   19,405   19,900 
Non-real estate depreciation and amortization   122   120 
Non-cash interest expense   604   845 
Unrealized gain on derivatives   (30)  (26)
Loss on extinguishment of debt and debt modification costs   2,564    
Provision for credit losses   542    
Property management fees   1,223   1,232 
Acquisition and pursuit costs   11   1,269 
Corporate operating expenses   6,570   6,296 
Weather-related losses, net   360    
Preferred dividends   14,617   13,547 
Preferred stock accretion   7,022   3,925 
Less common stockholders and Operating Partnership Units pro-rata share of:         
Other income, net   51   40 
Preferred returns on unconsolidated real estate joint ventures   2,287   2,574 
Interest income from mezzanine loan and ground lease investments   4,721   5,888 
Gain on sale of real estate investments   62,427   110 
Pro-rata share of properties’ income   17,265   16,181 
Add:         
Noncontrolling interest pro-rata share of partially owned property income   637   803 
Total property income   17,902   16,984 
Add:         
Interest expense   13,247   14,070 
Net operating income   31,149   31,054 
Less:         
Non-same store net operating income   7,188   7,235 
Same store net operating income (1)  $23,961  $23,819 

 

(1) Same store portfolio for the three months ended March 31, 2021 consists of 26 properties, which represent 9,116 units.

 

15

 

Bluerock Residential Growth REIT, Inc.

First Quarter Earnings Release

 

Contact

Investors:

(888) 558.1031
investor.relations@bluerockre.com

 

Media:

Josh Hoffman

(208) 475.2380

jhoffman@bluerockre.com

#

 

16

 

Bluerock Residential Growth REIT, Inc.

Financial and Operating Highlights

For the Three Months Ended March 31, 2021

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

 

   Three Months Ended     
   March 31,     
OPERATING INFORMATION  2021   2020   % Change 
Total revenue  $55,802   $56,241    (0.8)%
                
Total assets  $2,415,525   $2,484,617    (2.8)%
                
Property NOI (1)  $31,149   $31,054    0.3%
                
Property NOI margins   61.0%   61.7%   (1.1)%
                
Net income (loss) per common share - diluted  $1.00   $(0.70)   - 
                
CFFO attributable to common stockholders and unit holders per share (2)  $0.16   $0.22    (27.3)%

 

(1)  See page 35 for the Company's definition of this non-GAAP measurement and reasons for using it.
(2)  See page 33 for the Company's definition of this non-GAAP measurement and reasons for using it.
                           

17

 

Bluerock Residential Growth REIT, Inc.

Share and Unit Information

First Quarter 2021

(Unaudited)

 

Weighted Average Common Stock and Units Outstanding for the quarter ended March 31, 2021     
Class A Common Stock   23,012,761 
Class C Common Stock   76,603 
Weighted Average Common Stock Outstanding, Diluted   23,089,364 
Warrants (1)   97,416 
Restricted Stock Grants (2)   101,309 
Weighted Average Common Stock Outstanding, Diluted   23,288,089 
OP Units   6,310,232 
LTIP Units   3,720,699 
Weighted Average Common Stock and Total Units Outstanding, Diluted   33,319,020 
      
Outstanding Common Stock and Units at March 31, 2021   36,510,581 
      
Outstanding 6.000% Series B Redeemable Preferred Stock at March 31, 2021   440,934 
      
Outstanding 7.625% Series C Cumulative Redeemable Preferred Stock at March 31, 2021   2,295,845 
      
Outstanding 7.125% Series D Cumulative Preferred Stock at March 31, 2021   2,774,338 
      
Outstanding 6.150% Series T Redeemable Preferred Stock at March 31, 2021   13,622,291 

 

(1)Potential dilution from warrants outstanding from issuances in connection with Series B Preferred Stock offering.
(2)Potential dilution from restricted common stock granted to employees.

 

The following table reflects the impact of various LTIP Unit issuances, share repurchases, and other share/unit changes subsequent to December 31, 2020:

 

Share Type  Shares and
units
outstanding
December 31,
2020
   Class A
common share
repurchase
   Class A
common
from Series B
Company
redemptions
   Class A
common from
Series B and
Series T holder
redemptions
   LTIP
Issuances
   Other   Shares and
units
outstanding
March 31,
2021
   Ownership
%
 
Class A Common Stock   22,020,950    (3,557,562)   6,401,792    172,632    -    72,620    25,110,432    68.78%
Class C Common Stock   76,603    -    -    -    -    -    76,603    0.21%
Total share equivalents   22,097,553    (3,557,562)   6,401,792    172,632    -    72,620    25,187,035    68.99%
OP Units   6,310,856    -    -    -    -    (730)   6,310,126    17.28%
LTIP Units   4,046,609    -    -    -    1,028,104    (61,293)   5,013,420    13.73%
Total noncontrolling interest   10,357,465    -    -    -    1,028,104    (62,023)   11,323,546    31.01%
Total shares, OP and LTIP Units   32,455,018    (3,557,562)   6,401,792    172,632    1,028,104    10,597    36,510,581    100.00%

 

18

 

Bluerock Residential Growth REIT, Inc.

EBITDAre and Interest Information

First Quarter 2021

(Unaudited and dollars in thousands)

 

   Three Months Ended 
   March 31, 
   2021 
Q1 EBITDAre Calculation     
Net income attributable to common stockholders  $23,581 
Net income attributable to noncontrolling interests   15,926 
Preferred stock dividends   14,617 
Preferred stock accretion   7,022 
Interest expense, net   13,835 
Real estate depreciation and amortization   20,275 
Provision for credit losses   542 
Gain on sale of real estate investments   (68,913)
Loss on extinguishment of debt and debt modification costs   3,040 
EBITDAre (1)  $29,925 
Acquisition and pursuit costs   11 
Non-real estate depreciation and amortization   122 
Weather-related losses, net   400 
Non-cash equity compensation   3,311 
Other expense, net   98 
Adjusted EBITDAre  $33,867 
      
Modified Q1 EBITDAre Calculation (2)     
Adjusted EBITDAre  $33,867 
Adjustment   (1,480)
Modified Q1 EBITDAre  $32,387 
Modified Q1 EBITDAre annualized  $129,548 
      
Modified Q1 Interest Calculation (2)(3)     
Interest expense  $13,247 
Adjustment   (435)
Modified Q1 interest expense  $12,812 
Modified Q1 interest expense annualized  $51,248 

 

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

 

(2) Adjustment to EBITDAre and interest expense represents the estimated impact over the full period of the following activity assuming the transactions had occurred on January 1, 2021: (i) sales of Alexan Southside Place, ARIUM Grandewood, James on South First, Marquis at The Cascades, and The Conley, (ii) preferred investment in The Riley, and (iii) additional investments at Alexan CityCentre, Avondale Hills, Domain at The One Forty, Motif, Reunion 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.

         

 

19

 

Bluerock Residential Growth REIT, Inc.

Financial Statistics

First Quarter 2021

(Unaudited and dollars in thousands)

  

    Three Months Ended
    March 31,
    2021
Interest Coverage Ratio        
Modified Q1 EBITDAre *   $ 32,387  
Modified Q1 interest expense (4) *     12,812  
Interest coverage ratio     2.53 x
         
Quarterly Fixed Charge Coverage Ratio        
Modified Q1 interest expense (4) *   $ 12,812  
Preferred stock dividends     14,617  
Total fixed charges   $ 27,429  
Modified Q1 EBITDAre *     32,387  
Modified Q1 EBITDAre fixed charge coverage ratio     1.18 x
         
Net Debt / Modified EBITDAre Ratio        
Total debt (1)   $ 1,465,355  
Less: cash (3)     (180,688 )
Net debt (total debt less cash)   $ 1,284,667  
Modified Q1 EBITDAre (annualized)*     129,548  
Net debt / modified EBITDAre ratio     9.92 x
         
Leverage as a Percentage of Assets        
Total debt (1)   $ 1,465,355  
Total undepreciated assets (2)     2,606,373  
Total debt / total undepreciated assets     56.2 %
Net debt / net undepreciated assets (less cash)     53.0 %
         
Leverage as a Percentage of Enterprise Value        
Total market cap (5)   $ 1,282,020  
Total debt (1)     1,465,355  
Total enterprise value   $ 2,747,375  
Total debt / total enterprise value     53.3 %
Net debt / total enterprise value     46.8 %

   
(1) Total debt excludes amortization of fair market value adjustments of $6.2 million and deferred financing costs of $10.8 million.
   
(2) Total undepreciated assets is calculated as total assets plus accumulated depreciation on real estate assets.
   
(3) Cash includes cash, cash equivalents, and restricted cash.
   
(4) Interest expense excludes non-cash interest expense.
   
(5) Total market cap is calculated by using common shares, preferred shares, and equivalents (OP Units/LTIP Units) multiplied by the March 31, 2021 closing share prices.
   
* Adjustment to EBITDAre and interest expense represents the estimated impact over the full period of the following activity assuming the transactions had occurred on January 1, 2021: (i) sales of Alexan Southside Place, ARIUM Grandewood, James on South First, Marquis at The Cascades, and The Conley, (ii) preferred investment in The Riley, and (iii) additional investments at Alexan CityCentre, Avondale Hills, Domain at The One Forty, Motif, Reunion Apartments, Vickers Historic Roswell, and Zoey.  Actual results may differ significantly from the presented, adjusted amounts including annualized amounts.  See prior page for calculations.
   
     

 

20

 

Bluerock Residential Growth REIT, Inc.

Recent Investments

(Unaudited)

 

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                                                        
The Riley     Dallas, TX       3/1/2021       2018       262     $ 7.0     $ 7.0     $ 1,430  
   Total Preferred Equity                             262       7.0       7.0       1,430  
                                                         
   Total/Average                             262     $ 7.0     $ 7.0     $ 1,430  

 

(1) All dates are for the year construction was completed, or the date that a significant renovation was completed.
   
(2) Represents the average effective monthly rent per occupied unit for the three months ended March 31, 2021.  
   
 
                 

 

21

 

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                          
ARIUM Grandewood  Orlando, FL  1/28/2021   306    100%  $65.3   $25.1 
James on South First  Austin, TX  2/24/2021   250    90%   50.0    18.1 
Marquis at The Cascades  Tyler, TX  3/1/2021   582    90%   90.9    32.6 
   Total Operating Properties         1,138         206.2    75.8 
                           
Preferred Equity                          
The Conley  Leander, TX  3/18/2021   259        52.1    16.5 
Alexan Southside Place  Houston, TX  3/25/2021   270        45.1    10.1 
   Total Preferred Equity         529         97.2    26.6 
                           
   Total         1,667        $303.4   $102.4 

  

22

 

Bluerock Residential Growth REIT, Inc.

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

For the Three Months Ended March 31, 2021

(Unaudited and dollars in thousands)

Multifamily Community Name 

Investment Balance as of

December 31, 2020

   Change  

Investment Balance as of

March 31, 2021

  

Return as of

March 31, 2021

  

 

CFFO Earned for the Three Months Ended

March 31, 2021

 
Preferred Equity Investments                         
Operating – Stabilized                         
Alexan CityCentre  $15,063   $662   $15,725    17.9%  $663 
Mira Vista   5,250    -    5,250    10.1%   133 
Strategic Portfolio   27,054    -    27,054    10.5%   710 
The Riley   -    6,961    6,961    11.0%   64 
Thornton Flats   4,600    -    4,600    9.0%   102 
Wayford at Concord   6,500    -    6,500    13.0%   210 
Total operating - stabilized   58,467    7,623    66,090         1,882 
                          
Development                         
Encore Chandler (1)   -    -    -    13.0%   - 
Total development   -    -    -         - 
                          
Sold                         
Alexan Southside Place   26,038    (26,038)   -         - 
The Conley   15,036    (15,036)   -         405 
Total sold   41,074    (41,074)   -         405 
                          
Other   97    2    99    (2)   - 
Provision for credit losses (3)   (16,153)   15,838    (315)        - 
   $83,485   $(17,611)  $65,874        $2,287 
                          
Mezzanine Loans (4)                         
Operating - Stabilized                         
Domain at The One Forty (2)  $24,315   $211   $24,526    4.0%  $239 
Vickers Historic Roswell (2)   12,048    394    12,442    15.0%   440 
Total operating - stabilized   36,363    605    36,968         679 
                          
Lease-up                         
Motif (2)   75,436    2,113    77,549    12.9%   2,374 
Total lease-up   75,436    2,113    77,549         2,374 
                          
Development                         
Avondale Hills   1,021    6,860    7,881    12.0%   117 
Reunion Apartments   8,161    2,305    10,466    12.0%   290 
The Hartley at Blue Hill, formerly The Park at Chapel Hill (5)   36,927    496    37,423    11.5%   1,023 
Total development   46,109    9,661    55,770         1,430 
                          
Provision for credit losses (3)   (174)   (401)   (575)        - 
   $157,734   $11,978   $169,712        $4,483 
                          
Ground Lease - Development (4) (6)                         
Zoey  $15,396    8,575    23,971    5.0%  $238 
Provision for credit losses (3)   (42)   (49)   (91)        - 
   $15,354   $8,526   $23,880        $238 

 

(1) The investment closed on December 31, 2020 with a loan commitment of $10.2 million, none of which had been funded as of March 31, 2021.

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

(3) The Company recorded a general provision for credit losses of $542 during the three months ended March 31, 2021 on its total preferred equity, mezzanine loans and ground lease investments.  In conjunction with the sale of Alexan Southside Place in March 2021, the $15.9 million provision for credit loss recorded in December 2020 reduced the recoverability of the Alexan Southside Place investment.

(4) Investment balances include accrued interest.

(5) The investment includes a $5.0 million senior loan and a $31.0 million mezzanine loan.  

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

 

23

 

Bluerock Residential Growth REIT, Inc.

Portfolio Information

First Quarter 2021

(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   $1,293   $1,377    94.5%
ARIUM Hunter’s Creek   Orlando, FL    532    1999    1,417    1,563    95.1%
ARIUM Metrowest   Orlando, FL    510    2001    1,412    1,591    94.4%
ARIUM Westside   Atlanta, GA    336    2008    1,503    1,639    94.3%
Ashford Belmar   Lakewood, CO    512    1988/1993    1,674    1,840    94.3%
Avenue 25   Phoenix, AZ    254    2013    1,252    1,413    95.4%
Carrington at Perimeter Park   Morrisville, NC    266    2007    1,263    1,341    93.0%
Chattahoochee Ridge   Atlanta, GA    358    1996    1,387    1,450    96.2%
Chevy Chase   Austin, TX    320    1971    964    1,072    98.4%
Cielo on Gilbert   Mesa, AZ    432    1985    1,087    1,254    95.7%
Citrus Tower   Orlando, FL    336    2006    1,364    1,521    94.7%
Denim   Scottsdale, AZ    645    1979    1,246    1,414    96.9%
Elan   Austin, TX    270    2007    1,134    1,209    93.4%
Element   Las Vegas, NV    200    1995    1,274    1,563    96.6%
Falls at Forsyth   Cumming, GA    356    2019    1,408    1,556    95.9%
Gulfshore Apartment Homes   Naples, FL    368    2016    1,287    1,370    94.9%
Navigator Villas   Pasco, WA    176    2013    1,143    1,294    97.0%
Outlook at Greystone   Birmingham, AL    300    2007    1,090    1,287    94.3%
Park & Kingston   Charlotte, NC    168    2015    1,303    1,389    97.2%
Pine Lakes Preserve   Port St. Lucie, FL    320    2003    1,380    1,556    96.5%
Plantation Park   Lake Jackson, TX    238    2016    1,232    1,362    92.0%
Providence Trail   Mount Juliet, TN    334    2007    1,264    1,397    94.9%
Roswell City Walk   Roswell, GA    320    2015    1,586    1,840    94.5%
Sands Parc   Daytona Beach, FL    264    2017    1,374    1,529    94.9%
The Brodie   Austin, TX    324    2001    1,313    1,505    95.7%
The District at Scottsdale   Scottsdale, AZ    332    2018    1,799    1,991    93.6%
The Links at Plum Creek   Castle Rock, CO    264    2000    1,466    1,592    95.7%
The Mills   Greenville, SC    304    2013    1,051    1,188    96.5%
The Preserve at Henderson Beach   Destin, FL    340    2009    1,498    1,671    95.6%
The Reserve at Palmer Ranch   Sarasota, FL    320    2016    1,376    1,511    96.2%
The Sanctuary   Las Vegas, NV    320    1988    1,132    1,332    95.5%
Veranda at Centerfield   Houston, TX    400    1999    1,021    1,157    95.1%
Villages of Cypress Creek   Houston, TX    384    2001    1,181    1,258    95.6%
Wesley Village   Charlotte, NC    301    2010    1,373    1,496    95.3%
                               
Total Consolidated Operating Properties        11,584        $1,318(5)  $1,464(5)   95.2%(5)
                               
Mezzanine/Preferred/Ground Lease Investments:                              
Alexan CityCentre   Houston, TX    340        $1,525   $1,637    95.7%
Avondale Hills   Decatur, GA    240         1,538(4)    N/A      N/A  
Belmont Crossing   Smyrna, GA    192         863    983    96.0%
Domain at The One Forty   Garland, TX    299         1,290    1,435    96.7%
Encore Chandler   Chandler, AZ    208         1,457(4)   N/A    N/A 
Georgetown Crossing   Savannah, GA    168         993    1,114    95.2%
Hunter’s Pointe   Pensacola, FL    204         983    1,128    98.0%
Mira Vista   Austin, TX    200         1,087    1,175    93.5%
Motif   Fort Lauderdale, FL    385         2,352(4)    N/A      N/A  
Park on the Square   Pensacola, FL    240         1,140    1,315    99.1%
Reunion Apartments   Orlando, FL    280         1,366(4)    N/A      N/A  
Sierra Terrace   Atlanta, GA    135         1,278    1,484    97.0%
Sierra Village   Atlanta, GA    154         1,224    1,336    90.3%
The Commons   Jacksonville, FL    328         902    1,010    97.7%
The Hartley at Blue Hill, formerly The Park at Chapel HillChapel Hill, NC    414         1,599(4)    N/A      N/A  
The Riley   Richardson, TX    262         1,430    1,523    92.7%
Thornton Flats   Austin, TX    104         1,499    1,659    93.6%
Vickers Historic Roswell   Roswell, GA    79         3,134    3,337    97.6%
Water’s Edge   Pensacola, FL    184         1,141    1,356    98.0%
Wayford at Concord   Concord, NC    150         1,707(4)   N/A    N/A 
Zoey   Austin, TX    307         1,762(4)    N/A      N/A  
                               
Total Mezzanine/Preferred/Ground Lease Investments     4,873        $1,432(6)  $1,362(6)   96.1%(6)
                               
Total Portfolio        16,457        $1,351(7)  $1,445(7)   95.4%(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 March 31, 2021.  

(3) Revenue per occupied unit is total revenue divided by average number of occupied units for the three months ended March 31, 2021.

(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 $1,315, $1,459, and 95.2%, respectively, for the three months ended March 31, 2021.

(6) The average effective monthly rent, revenue per occupied unit, and average occupancy including sold properties was $1,438, $1,397, and 95.9%, respectively, for the three months ended March 31, 2021.

(7) The average effective monthly rent, revenue per occupied unit, and average occupancy including sold properties was $1,352, $1,446, and 95.4%, respectively, for the three months ended March 31, 2021.

 

24

 

Bluerock Residential Growth REIT, Inc.
Renovation Table
As of March 31, 2021
(Unaudited)

 

Units and Investment                   
   2021  To Date 
  

Completed

in 1Q

   Completed Year-to-date  

Total Expected

Completions in 2021

 

 Total

Completed

  

Unrenovated Units

Remaining

 
Number of Renovations   72    72    500 – 1,000   3,027    4,349 
Renovation Cost per Unit  $7,732   $7,732   $7,500 - $8,500          

 

Returns 
  Inception-to-date 
    Cost per Unit   Monthly Rent Premium    Return on Investment   
Weighted Average Returns to Date   $5,953   $117    23.6%

 

25

 

Bluerock Residential Growth REIT, Inc.
Lease-up and Development Mezzanine/Preferred/Ground Lease Investments
As of March 31, 2021
(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    133.3    359,481    88.8    1Q18    1Q20    2Q20    2Q22 
   Total lease-up units   385                                         
                                              
Development Investments                                             
Zoey (5)   307    59.5    37.1    193,811    25.5    1Q20    1Q22    2Q22    1Q23 
Reunion Apartments (3)   280    47.6    31.2    170,000    30.5    3Q20    1Q22    3Q22    1Q23 
Avondale Hills (3)   240    51.8    16.1    215,833    31.4    4Q20    1Q23    1Q23    1Q24 
The Hartley at Blue Hill, formerly The Park at Chapel Hill(3)    414    99.2    42.1    239,614    64.3    2Q20    4Q21    1Q23    3Q23 
Encore Chandler (4)   208    47.7    7.3    229,327    31.0    3Q21    2Q23    3Q23    3Q24 
   Total development units   1,449                                         
                                              
   Total units   1,834                                         

 

(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 has an option to purchase the property at stabilization.

(5) Represents a ground lease investment. 

 

26

 

Bluerock Residential Growth REIT, Inc.
Condensed Consolidated Balance Sheets
First Quarter 2021
(Unaudited and dollars in thousands except for share and per share data)

 

  

March 31,

2021

   December 31,
2020
 
ASSETS          
Net Real Estate Investments          
Land  $268,731   $279,481 
Buildings and improvements   1,757,833    1,889,471 
Furniture, fixtures and equipment   76,790    78,438 
Total Gross Real Estate Investments   2,103,354    2,247,390 
Accumulated depreciation   (187,553)   (186,426)
Total Net Operating Real Estate Investments   1,915,801    2,060,964 
Operating real estate held for sale, net   32,518    36,213 
Total Net Real Estate Investments   1,948,319    2,097,177 
Cash and cash equivalents   148,070    83,868 
Restricted cash   32,618    35,093 
Notes and accrued interest receivable, net   169,712    157,734 
Due from affiliates   10,447    339 
Accounts receivable, prepaids and other assets, net   39,198    29,502 
Preferred equity investments and investments in unconsolidated real estate joint ventures, net   65,874    83,485 
In-place lease intangible assets, net   1,111    2,594 
Non-real estate assets associated with operating real estate held for sale   176    145 
Total Assets  $2,415,525   $2,489,937 
           
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY          
Mortgages payable  $1,434,318   $1,490,932 
Mortgages payable associated with operating real estate held for sale   26,433    38,773 
Revolving credit facilities       33,000 
Accounts payable   1,500    1,317 
Other accrued liabilities   29,023    31,025 
Due to affiliates   665    618 
Distributions payable   13,035    13,421 
Liabilities associated with operating real estate held for sale   624    383 
Total Liabilities   1,505,598    1,609,469 
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; no shares and 2,201,547 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively       54,332 
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 440,934 and 513,489 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively   402,243    469,907 
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,295,845 shares issued and outstanding as of March 31, 2021 and December 31, 2020   56,533    56,462 
6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 13,622,291 and 9,717,917 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively   308,362    219,967 
Equity          
Stockholders’ Equity          
Preferred stock, $0.01 par value, 197,900,000 shares authorized; no shares issued and outstanding        
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,774,338 shares issued and outstanding as of March 31, 2021 and December 31, 2020   66,867    66,867 
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 25,110,432 and 22,020,950 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively   251    220 
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding as of March 31, 2021 and December 31, 2020   1    1 
Additional paid-in-capital   332,926    304,710 
Distributions in excess of cumulative earnings   (293,766)   (313,392)
Total Stockholders’ Equity   106,279    58,406 
Noncontrolling Interests        
Operating Partnership units   14,427    (3,272)
    Partially owned properties   22,083    24,666 
Total Noncontrolling Interests   36,510    21,394 
Total Equity   142,789    79,800 
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY  $2,415,525   $2,489,937 

 

27

 

Bluerock Residential Growth REIT, Inc.

Consolidated Statements of Operations

For the Three Months Ended March 31, 2021 and 2020

(Dollars in thousands)

 

   Three Months Ended 
   March 31, 
   2021   2020 
Revenues        
Rental and other property revenues  $51,081   $50,353 
Interest income from mezzanine loan and ground lease investments   4,721    5,888 
Total revenues   55,802    56,241 
           
Expenses          
Property operating   19,932    19,299 
Property management fees   1,281    1,294 
General and administrative   6,645    6,371 
Acquisition and pursuit costs   11    1,269 
Weather-related losses, net   400     
Depreciation and amortization   20,322    20,921 
Total expenses   48,591    49,154 
Operating income   7,211    7,087 
           
Other income (expense)          
Other income   152    40 
Preferred returns on unconsolidated real estate joint ventures   2,287    2,415 
Provision for credit losses   (542)    
Gain on sale of real estate investments   68,913    253 
Loss on extinguishment of debt and debt modification costs   (3,040)    
Interest expense, net   (13,835)   (14,916)
Total other income (expense)   53,935    (12,208)
Net income (loss)   61,146    (5,121)
Preferred stock dividends   (14,617)   (13,547)
Preferred stock accretion   (7,022)   (3,925)
Net income (loss) attributable to noncontrolling interests          
Operating Partnership units   10,160    (5,822)
Partially owned properties   5,766    (278)
Net income (loss) attributable to noncontrolling interests   15,926    (6,100)
Net income (loss) attributable to common stockholders  $23,581   $(16,493)
           
Net income (loss) per common share - Basic  $1.00   $(0.70)
Net income (loss) per common share – Diluted  $1.00   $(0.70)
           
Weighted average basic common shares outstanding   23,089,364    24,087,811 
Weighted average diluted common shares outstanding   23,288,089    24,087,811 

 

28

 

Bluerock Residential Growth REIT, Inc.

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

For the Three Months Ended March 31, 2021 and 2020

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

 

   Three Months Ended 
   March 31, 
   2021   2020 
Net income (loss) attributable to common stockholders  $23,581   $(16,493)
Add back: Net income (loss) attributable to Operating Partnership Units   10,160    (5,822)
Net income (loss) attributable to common stockholders and unit holders   33,741    (22,315)
Common stockholders and Operating Partnership Units pro-rata share of:          
Real estate depreciation and amortization   19,405    19,900 
Provision for credit losses   542     
Gain on sale of real estate investments   (62,427)   (110)
FFO Attributable to Common Stockholders and Unit Holders   (8,739)   (2,525)
Common stockholders and Operating Partnership Units pro-rata share of:          
Acquisition and pursuit costs   11    1,269 
Non-cash interest expense   604    845 
Unrealized gain on derivatives   (30)   (26)
Loss on extinguishment of debt and debt modification costs   2,564     
Weather-related losses, net   360     
Non-real estate depreciation and amortization   122    120 
Other expense (income), net   98    (40)
Non-cash equity compensation   3,311    3,547 
Preferred stock accretion   7,022    3,925 
CFFO Attributable to Common Stockholders and Unit Holders  $5,323   $7,115 
           
Per Share and Unit Information:          
FFO Attributable to Common Stockholders and Unit Holders - diluted  $(0.26)  $(0.08)
CFFO Attributable to Common Stockholders and Unit Holders - diluted  $0.16   $0.22 
           
Weighted average common shares and units outstanding - diluted   33,319,020    32,668,294 

 

 

29

 

Bluerock Residential Growth REIT, Inc.

Mortgages Payable Summary Information

As of March 31, 2021

(Unaudited and dollars in thousands)

 

Property   Outstanding
Principal
    Interest Rate     Fixed/ Floating   Maturity Date
ARIUM Glenridge   $ 49,500       1.45 %   LIBOR + 1.33% subject to Cap (1)   September 1, 2025
ARIUM Hunter’s Creek     70,525       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)     31,286       4.16 %   Fixed   July 1, 2027
Chattahoochee Ridge     45,338       3.25 %   Fixed   December 5, 2024
Chevy Chase     24,400       2.44 %   LIBOR + 2.32% subject to Cap (1)   September 1, 2027
Cielo on Gilbert     58,000       2.65 %   SOFR + 2.61% subject to Cap (1)   January 1, 2031
Citrus Tower     40,442       4.07 %   Fixed   October 1, 2024
Denim (4)     101,205       3.41 %   Fixed   August 1, 2029
Elan (5)     25,557       4.19 %   Fixed   July 1, 2027
Element     29,260       3.63 %   Fixed   July 1, 2026
Falls at Forsyth     38,947       2.94 %   (6)    July 1, 2025
Fannie Facility Advance     13,936       2.72 %   LIBOR + 2.60% subject to Cap (1)   June 1, 2027
Fannie Facility Second Advance     12,880       2.76 %   SOFR + 2.70% subject to Cap (1)   March 1, 2028
Gulfshore Apartment Homes     46,345       3.26 %   Fixed   September 1, 2029
Navigator Villas (7)     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       3.10 %   LIBOR + 2.98% subject to Cap (1)   July 1, 2030
Providence Trail     47,950       3.54 %   Fixed   July 1, 2026
Roswell City Walk     49,798       3.63 %   Fixed   December 1, 2026
The Brodie     33,380       3.71 %   Fixed   December 1, 2023
The District at Scottsdale     74,651       1.85 %   LIBOR + 1.60% (1)   June 11, 2021
The Links at Plum Creek     39,409       4.31 %   Fixed   October 1, 2025
The Mills     25,141       4.21 %   Fixed   January 1, 2025
The Preserve at Henderson Beach     48,490       3.26 %   Fixed   September 1, 2029
The Reserve at Palmer Ranch     40,806       4.41 %   Fixed   May 1, 2025
The Sanctuary     33,707       3.31 %   Fixed   August 1, 2029
Veranda at Centerfield     26,100       1.37 %   LIBOR + 1.25% subject to Cap (1)   July 26, 2023
Villages of Cypress Creek     33,520       2.67 %   LIBOR + 2.55% subject to Cap (1)   July 1, 2027
Wesley Village     39,259       4.25 %   Fixed   April 1, 2024
Total     1,438,730                  
Fair value adjustments     6,236                  
Deferred financing costs, net     (10,648 )                
Total continuing operations   $ 1,434,318                  
Held for sale                        
Plantation Park (8)   $ 26,625       4.64 %   Fixed   July 1, 2028
Deferred financing costs, net     (192 )                
   Total held for sale   $ 26,433                  
Total   $ 1,460,751                  
Weighted Average Interest Rate     3.49 %                

 

(1)  In March 2021, one-month LIBOR in effect was 0.12% and the 30-day average SOFR in effect was 0.04%.  
(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 $19.5 million advance at a fixed rate of 4.35% and a $19.4 million advance at a variable rate of 1.52% as of March 31, 2021.  
(7)  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%.
(8)  The property was subsequently sold in April 2021.

 

30

 

Bluerock Residential Growth REIT, Inc.

Mortgages Payable Summary Information Continued

As of March 31, 2021

(Unaudited and dollars in thousands)

 

Mortgages Payable Maturity Schedules

 

Year  Fixed Rate   Floating Rate   Total   % of Total 
2021  $6,622   $75,364   $81,986(1)    5.59%
2022   11,268    2,553    13,821    0.94%
2023   96,886    29,137    126,023    8.60%
2024   197,992    3,588    201,580    13.76%
2025   303,520    65,582    369,102    25.19%
Thereafter   493,909    178,934    672,843    45.92%
   $1,110,197   $355,158   $1,465,355    100.00%
Fair Value Adjustments   6,236    -    6,236      
Subtotal  $1,116,433   $355,158   $1,471,591      
Deferred Financing Costs, net   (7,882)   (2,958)   (10,840)     
Total  $1,108,551   $352,200   $1,460,751      

 

   Amounts   % of Total   Weighted
Average Interest
Rates
   Weighted
Average
Maturities
(years)
 
Continuing Operations                    
Secured Fixed Rate Debt  $1,089,808    75.4%   3.88%   5.3 
Secured Floating Rate Debt   355,158    24.6%   2.21%   5.3 
Total/Average Continuing Operations  $1,444,966    100.0%   3.47%   5.3 
                     
Held for Sale                    
Secured Fixed Rate Debt  $26,625    100.0%   4.64%   7.3 
   Total/Average Held for Sale  $26,625    100.0%   4.64%   7.3 
                     
Total/Average  $1,471,591    100.0%   3.49%   5.3 

 

(1) $74.7 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.

 

31

 

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   500    1,000 
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.

 

32

 

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 (loss) income, computed in accordance with GAAP, excluding gains or losses on sales of depreciable real estate property, plus depreciation and amortization of real estate assets, plus impairment write-downs of 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, stock compensation expense and preferred stock accretion. 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 four operating properties, made six property investments through preferred equity or mezzanine loan investments, sold seven operating properties and received our full mezzanine loan or preferred equity in four investments subsequent to March 31, 2020. 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.

 

33

 

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

 

   Three Months Ended 
   March 31, 
   2021   2020 
Net income (loss) attributable to common stockholders  $23,581   $(16,493)
Net income (loss) attributable to noncontrolling interests   15,926    (6,100)
Preferred stock dividends   14,617    13,547 
Preferred stock accretion   7,022    3,925 
Interest expense, net   13,835    14,916 
Real estate depreciation and amortization   20,275    20,876 
Provision for credit losses   542     
Gain on sale of real estate investments   (68,913)   (253)
Loss on extinguishment of debt and debt modification costs   3,040     
EBITDAre  $29,925   $30,418 
Acquisition and pursuit costs   11    1,269 
Non-real estate depreciation and amortization   122    120 
Weather-related losses, net   400     
Non-cash equity compensation   3,311    3,547 
Other expense (income), net   98    (40)
Adjusted EBITDAre  $33,867   $35,314 

 

34

 

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 four operating properties, made six property investments through preferred equity or mezzanine loan investments, sold seven operating properties and received our full mezzanine loan or preferred equity in four investments subsequent to March 31, 2020. 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 income (loss) attributable to common stockholders together with a reconciliation to NOI and to same store and non-same store contributions to consolidated NOI, as computed in accordance with GAAP for the periods presented:

 

   Three Months Ended 
   March 31, 
   2021   2020 
Net income (loss) attributable to common stockholders  $23,581   $(16,493)
Add back: Net income (loss) attributable to Operating Partnership Units   10,160    (5,822)
Net income (loss) attributable to common stockholders and unit holders   33,741    (22,315)
Add common stockholders and Operating Partnership Units pro-rata share of:          
Real estate depreciation and amortization   19,405    19,900 
Non-real estate depreciation and amortization   122    120 
Non-cash interest expense   604    845 
Unrealized gain on derivatives   (30)   (26)
Loss on extinguishment of debt and debt modification costs   2,564     
Provision for credit losses   542     
Property management fees   1,223    1,232 
Acquisition and pursuit costs   11    1,269 
Corporate operating expenses   6,570    6,296 
Weather-related losses, net   360     
Preferred dividends   14,617    13,547 
Preferred stock accretion   7,022    3,925 
Less common stockholders and Operating Partnership Units pro-rata share of:          
Other income, net   51    40 
Preferred returns on unconsolidated real estate joint ventures   2,287    2,574 
Interest income from mezzanine loan and ground lease investments   4,721    5,888 
Gain on sale of real estate investments   62,427    110 
Pro-rata share of properties’ income   17,265    16,181 
Add:          
Noncontrolling interest pro-rata share of partially owned property income   637    803 
Total property income   17,902    16,984 
Add:          
Interest expense   13,247    14,070 
Net operating income   31,149    31,054 
Less:          
Non-same store net operating income   7,188    7,235 
Same store net operating income (1)  $23,961   $23,819 

 

(1)   Same store portfolio for the three months ended March 31, 2021 consists of 26 properties, which represent 9,116 units.

 

35