Debt Obligations

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt Obligations

Debt Obligations

Debt obligations consist of the following (dollars in thousands):

	September 30, 2022		December 31, 2021
Mortgages payable	$	423,442	$	200,857
Junior subordinated notes	37,400		37,400
Credit facility	7,000		—
Deferred financing costs	(5,160)		(1,277)
Total debt obligations, net of deferred costs	$	462,682	$	236,980

Mortgages Payable

At September 30, 2022, the weighted average interest rate on the Company's mortgages payable was 3.99% and the weighted average remaining term to maturity is 7.8 years. For the three months ended September 30, 2022 and 2021, interest expense, which includes amortization of deferred financing costs, was $4,423,000 and $1,305,000, respectively. For the nine months ended September 30, 2022 and 2021, interest expense, which includes amortization of deferred financing costs, was $8,749,000 and $4,113,000, respectively.

During the three and nine months ended September 30, 2022, the Company paid off mortgage debt of $15,613,000 on two properties.

On October 31, 2022, the Company paid off maturing mortgage debt of $14,900,000.

Partner Buyouts

The following table summarizes the information regarding the mortgages relating to the property in which BRT purchased the remaining interests of its joint venture partners during the nine months ended September 30, 2022 (dollars in thousands):

Property Name	Location	Debt at Purchase Date (1)		Interest Rate		Maturity Date	Interest Only through
Verandas at Alamo	San Antonio, TX	$	27,000	3.64	%	Oct 2029	October 2024
Vanguard Heights	Creve Coeur, MO	29,700		4.41	%	July 2031	June 2025
Jackson Square	Tallahassee, FL	21,524		4.19	%	Sept 2027	September 2022
Brixworth at Bridge Street (2)	Huntsville, AL	11,147		4.25	%	June 2032	Maturity
The Woodland Apartments	Boerne, TX	7,914		4.74	%	Feb 2026	N/A
Grove at River Place (3)	Macon, GA	11,426		4.39	%	Feb 2026	N/A
Civic I	Southaven, MS	27,389		4.24	%	March 2026	N/A
Civic II	Southaven, MS	30,105		3.73	%	September 2026	N/A
Abbotts	Wilmington, NC	23,160		4.71	%	July 2030	July 2025
Somerset at Trussville	Trussville, AL	32,250		4.19	%	June 2029	May 2025
Magnolia Pointe	Madison, AL	15,000		4.08	%	January 2028	December 2022
	Total	$	236,615

___________________

(1) Excludes fair value adjustments of $4,719 determined as part of the purchase price allocation.

(2) The original mortgage debt of $11,147 was refinanced with a new ten-year mortgage debt of $18,592 immediately following the buyout.

(3) Includes a supplemental mortgage of $1,056 which was paid off immediately following the buyout.

Credit Facility

On September 15, 2022, the Company's credit facility with an affiliate of Valley National Bank ("VNB"), was amended to, among other things, increase the amount the Company may borrow, subject to compliance with borrowing base requirements and other conditions, to $60,000,000, extend the facility's maturity date to September 2025, reduce the adjustable interest rate to prime, with a floor of 3.50%, and revise certain financial and other covenants. The facility can be used to facilitate the acquisition of multi-family properties, repay mortgage debt secured by multi-family properties and for operating expenses (i.e.,working capital (including dividend payments)); provided that no more than $25,000,000 may be used for operating expenses. The interest rate in effect as of September 30, 2022 is 6.25%. There is an unused facility fee of 0.25% per annum. At September 30, 2022, the Company is in compliance in all material respects with its obligations under the facility.

At September 30, 2022, there was $7,000,000 outstanding balance on the facility and no outstanding balance at December 31, 2021. At September 30, 2022 and December 31, 2021, $53,000,000 and $35,000,000, respectively, was available to be borrowed. At November 4, 2022, there was an outstanding balance of $19,000,000 on the facility bearing an interest rate of 7.00% and $41,000,000 available to be borrowed. Interest expense for the three months ended September 30, 2022 and 2021, which includes amortization of deferred financing costs and unused fees, was $227,000 and $18,000, respectively. Interest expense for the nine months ended September 30, 2022 and 2021, which includes amortization of deferred financing costs and unused fees, was $334,000 and $54,000, respectively. Deferred financing costs of $551,000 and $270,000, are recorded in other assets on the Consolidated balance sheets at September 30, 2022 and December 31, 2021, respectively.

Junior Subordinated Notes

At September 30, 2022 and December 31, 2021, the outstanding principal balance of the Company's junior subordinated notes was $37,400,000, before deferred financing costs of $282,000 and $297,000, respectively. The interest rate on the outstanding balance resets quarterly and is based on three months LIBOR + 2.00%. The rate in effect at September 30, 2022 and 2021 was 4.78% and 2.21%, respectively. The notes mature April 30, 2036. The interest rate that will be in effect for the three months ending January 31, 2023 is 6.41%.

The junior subordinated notes require interest only payments through the maturity date of April 30, 2036, at which time repayment of the outstanding principal and unpaid interest become due. Interest expense for the three months ended September 30, 2022 and 2021, which includes amortization of deferred financing costs, was $413,000 and $210,000, respectively. Interest expense for the nine months ended September 30, 2022 and 2021, which includes amortization of deferred financing costs, was $911,000 and $636,000, respectively.