UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~June~~September 30, 2021

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 001-07172

BRT APARTMENTS CORP.

(Exact name of Registrant as specified in its charter)


Maryland						13-2755856
(State or other jurisdiction of						(I.R.S. Employer Identification No.)
incorporation or organization)


60 Cutter Mill Road, Great Neck, NY						11021
(Address of principal executive offices)						(Zip Code)

516-466-3100

(Registrant’s telephone number, including area code)

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	BRT	NYSE

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

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


Large accelerated filer ☐						Accelerated filer ☐
Non-accelerated filer ☒						Smaller reporting company ☒
Emerging growth company ☐

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of stock, as of the latest practicable date.

~~18,178,216~~18,236,367 Shares of Common Stock,

par value $0.01 per share, outstanding on ~~August 4,~~November 1, 2021

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

Table of Contents


Part I - Financial Information		Page No.
Item 1.	Financial Statements
	Consolidated Balance Sheets - Consolidated Balance Sheets - ~~June~~September 3 0 ,30, 2021 (unaudited) and December 31, 2020 (audited)	3
	Consolidated Statements of Operations – Three and ~~Three~~ Nine ~~and Six~~ months ended ~~June~~ September 3 0 , 30, 2021 and 2020 (unaudited)	4
	Consolidated Statements of Comprehensive Income (loss) – Three and ~~six~~nine months ended ~~June~~September 3 0 ,30, 2021 and 2020 (unaudited)	5
	Consolidated Statements of Equity – Three and ~~and six~~ nine months ended ~~June~~September 330, 2021 0 ~~, 2021~~ and 2020 (unaudited)	6
	Consolidated Statements of Cash Flows –~~Six~~ Nine months ended ~~June~~ 3 0September , 30, 2021 and 2020 (unaudited)	8
	Notes to Consolidated Financial Statements	11

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2224

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	3640

Item 4.	Controls and Procedures	3640

Part II – Other Information

Item ~~1A.~~2.	~~Risk Factors~~Unregistered Sales of Equity Securities and Use of Proceeds	31

~~Item 5.~~	~~Other Information~~	37

Item 6.	Exhibits	3741

Table of Contents

Explanatory Note

Unless otherwise indicated or the context otherwise requires, all references to (i) “us”, “we”, “BRT” or the “Company” refer to BRT Apartments Corp. and its consolidated and unconsolidated subsidiaries; (ii) all interest rates give effect to the related interest rate derivative, if any; (iii) "acquisitions" include investments in and by unconsolidated joint ventures; (iv) units under rehabilitation for which we have received or accrued rental income from business interruption insurance, while not physically occupied, are treated as leased (i.e., occupied) at rental rates in effect at the time of the casualty, and (v) "same store properties" refer to properties that we owned and operated for the entirety of both periods being compared, except for properties that are under construction, in lease-up, or are undergoing development or redevelopment. We move properties previously excluded from our same store portfolio (because they were under construction, in lease up or are in development or redevelopment) into the same store designation once they have stabilized (as described below) and such status has been reflected fully in all quarters during the applicable periods of comparison. Newly constructed, lease-up, development and redevelopment properties are deemed stabilized upon the earlier to occur of the first full calendar quarter beginning (a) 12 months after the property is fully completed and put in service and (b) attainment of at least 90% physical occupancy.

Table of Contents

Part I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share data)


		June 30, 2021		December 31, 2020			September 30, 2021		December 31, 2020
		(unaudited)		(audited)			(unaudited)		(audited)
ASSETS	ASSETS					ASSETS
Real estate properties, net of accumulated depreciation and amortization of $32,193 and $30,837		$	140,991	$	160,192
Real estate properties, net of accumulated depreciation and amortization of $33,980 and $30,837						Real estate properties, net of accumulated depreciation and amortization of $33,980 and $30,837	$	224,620	$	160,192
Investments in unconsolidated joint ventures	Investments in unconsolidated joint ventures	159,799		169,474		Investments in unconsolidated joint ventures	128,478		169,474

Cash and cash equivalents	Cash and cash equivalents	34,666		19,885		Cash and cash equivalents	29,598		19,885
Restricted cash	Restricted cash	7,932		8,800		Restricted cash	7,560		8,800
Other assets	Other assets	7,851		7,390		Other assets	7,792		7,390

Total Assets	Total Assets	$	351,239	$	365,741	Total Assets	$	398,048	$	365,741
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Liabilities:	Liabilities:					Liabilities:
Mortgages payable, net of deferred costs of $433 and $563		$	114,745	$	130,434
Junior subordinated notes, net of deferred costs of $307 and $317		37,093		37,083
Mortgages payable, net of deferred costs of $485 and $563						Mortgages payable, net of deferred costs of $485 and $563	$	134,193	$	130,434
Junior subordinated notes, net of deferred costs of $302 and $317						Junior subordinated notes, net of deferred costs of $302 and $317	37,098		37,083

Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	18,936		20,536		Accounts payable and accrued liabilities	20,464		20,536
Total Liabilities	Total Liabilities	170,774		188,053		Total Liabilities	191,755		188,053

Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0
Equity:	Equity:					Equity:
BRT Apartments Corp. stockholders' equity:	BRT Apartments Corp. stockholders' equity:					BRT Apartments Corp. stockholders' equity:
Preferred shares $.01 par value 2,000 shares authorized, NaN outstanding		0		0
Common stock, $.01 par value, 300,000 shares authorized; 17,230 and 16,432 shares outstanding		172		164
Preferred shares $0.01 par value 2,000 shares authorized, none outstanding						Preferred shares $0.01 par value 2,000 shares authorized, none outstanding	—		—
Common stock,$0.01 par value, 300,000 shares authorized; 17,289 and 16,432 shares outstanding						Common stock,$0.01 par value, 300,000 shares authorized; 17,289 and 16,432 shares outstanding	173		164
Additional paid-in capital	Additional paid-in capital	254,053		245,605		Additional paid-in capital	255,960		245,605
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(11)		(19)		Accumulated other comprehensive loss	—		(19)
Accumulated deficit	Accumulated deficit	(73,734)		(67,978)		Accumulated deficit	(49,861)		(67,978)
Total BRT Apartments Corp. stockholders’ equity	Total BRT Apartments Corp. stockholders’ equity	180,480		177,772		Total BRT Apartments Corp. stockholders’ equity	206,272		177,772
Non-controlling interests	Non-controlling interests	(15)		(84)		Non-controlling interests	21		(84)
Total Equity	Total Equity	180,465		177,688		Total Equity	206,293		177,688
Total Liabilities and Equity	Total Liabilities and Equity	$	351,239	$	365,741	Total Liabilities and Equity	$	398,048	$	365,741

See accompanying notes to consolidated financial statements.

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Amounts in thousands, except shares and per share data)


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2021		2020		2021		2020
Revenues:	Revenues:									Revenues:
Rental and other revenue from real estate properties	Rental and other revenue from real estate properties	$	6,958	$	6,657	$	14,053	$	13,402	Rental and other revenue from real estate properties	$	7,709	$	7,020	$	21,762	$	20,422
Other income	Other income	3		159		7		338		Other income	5		293		12		631
Total revenues	Total revenues	6,961		6,816		14,060		13,740		Total revenues	7,714		7,313		21,774		21,053
Expenses:	Expenses:									Expenses:
Real estate operating expenses - including $7 and $8 to related parties for the three months ended and $14 and $16 for the six months ended		3,166		3,004		6,283		6,062
Real estate operating expenses - including $8 and $8 to related parties for the three months ended and $23 and $24 for the nine months ended										Real estate operating expenses - including $8 and $8 to related parties for the three months ended and $23 and $24 for the nine months ended	3,404		3,289		9,687		9,351
Interest expense	Interest expense	1,609		1,809		3,269		3,669		Interest expense	1,535		1,731		4,804		5,400
General and administrative - including $179 and $238 to related parties for the three months ended and $351 and $464 for the six months ended		3,154		2,957		6,268		6,324
General and administrative - including $172 and $167 to related parties for the three months ended and $523 and $631 for the nine months ended										General and administrative - including $172 and $167 to related parties for the three months ended and $523 and $631 for the nine months ended	3,114		2,730		9,382		9,054
Impairment charge	Impairment charge	520		0		520		0		Impairment charge	—		3,642		520		3,642
Depreciation	Depreciation	1,416		1,809		2,953		3,370		Depreciation	1,787		1,777		4,740		5,147
Total expenses	Total expenses	9,865		9,579		19,293		19,425		Total expenses	9,840		13,169		29,133		32,594
Total revenues less total expenses	Total revenues less total expenses	(2,904)		(2,763)		(5,233)		(5,685)		Total revenues less total expenses	(2,126)		(5,856)		(7,359)		(11,541)
Equity in loss of unconsolidated joint ventures	Equity in loss of unconsolidated joint ventures	(492)		(1,387)		(1,837)		(3,202)		Equity in loss of unconsolidated joint ventures	(4,196)		(1,529)		(6,033)		(4,731)
Equity in earnings from sale of unconsolidated joint ventures properties										Equity in earnings from sale of unconsolidated joint ventures properties	34,982		—		34,982		—
Gain on sale of real estate	Gain on sale of real estate	7,279		0		7,279		0		Gain on sale of real estate	414		—		7,693		—
Gain on sale of partnership interest	Gain on sale of partnership interest	2,244		0		2,244		0		Gain on sale of partnership interest	—		—		2,244		—

Loss on extinguishment of debt										Loss on extinguishment of debt	(902)		—		(902)		—
Income (loss) from continuing operations	Income (loss) from continuing operations	6,127		(4,150)		2,453		(8,887)		Income (loss) from continuing operations	28,172		(7,385)		30,625		(16,272)
Income tax provision	Income tax provision	67		65		124		127		Income tax provision	31		65		155		192
Net income (loss) from continuing operations, net of taxes	Net income (loss) from continuing operations, net of taxes	6,060		(4,215)		2,329		(9,014)		Net income (loss) from continuing operations, net of taxes	28,141		(7,450)		30,470		(16,464)
Net income attributable to non-controlling interests	Net income attributable to non-controlling interests	(33)		(31)		(67)		(63)		Net income attributable to non-controlling interests	(35)		(34)		(102)		(97)
Net income (loss) attributable to common stockholders	Net income (loss) attributable to common stockholders	$	6,027	$	(4,246)	$	2,262	$	(9,077)	Net income (loss) attributable to common stockholders	$	28,106	$	(7,484)	$	30,368	$	(16,561)

Weighted average number of shares of common stock outstanding:	Weighted average number of shares of common stock outstanding:									Weighted average number of shares of common stock outstanding:
Basic and diluted		17,720,488		17,176,401		17,520,963		17,054,327

Basic										Basic	17,261,520		17,176,401		16,916,623		17,095,315
Diluted										Diluted	17,292,988		17,176,401		16,992,974		17,095,315

Per share amounts attributable to common stockholders:	Per share amounts attributable to common stockholders:									Per share amounts attributable to common stockholders:
Basic and diluted		$	0.34	$	(0.25)	$	0.13	$	(0.53)

Basic										Basic	$	1.55	$	(0.44)	$	1.71	$	(0.97)
Diluted										Diluted	$	1.54	$	(0.44)	$	1.70	$	(0.97)

See accompanying notes to consolidated financial statements.

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(Dollars in thousands)

Three Months Ended
June 30, Six Months Ended
June 30,
2021 2020 2021 2020
Net income (loss) $ 6,060 $ (4,215) $ 2,329 $ (9,014)
Other comprehensive income (loss):
Unrealized income (loss) on derivative instruments 5 1 10 (22)
Other comprehensive income (loss) 5 1 10 (22)
Comprehensive income (loss) 6,065 (4,214) 2,339 (9,036)
Comprehensive (income) attributable to non-controlling interests (34) (30) (69) (59)
Comprehensive income (loss) attributable to common stockholders $ 6,031 $ (4,244) $ 2,270 $ (9,095)


	Three Months Ended September 30,				Nine Months Ended September 30,

	2021		2020		2021		2020
Net income (loss)	$	28,141	$	(7,450)	$	30,470	$	(16,464)
Other comprehensive income (loss):
Unrealized income (loss) on derivative instruments	12		5		22		(17)
Other comprehensive income (loss)	12		5		22		(17)
Comprehensive income (loss)	28,153		(7,445)		30,492		(16,481)
Comprehensive (income) attributable to non-controlling interests	(37)		(36)		(106)		(95)
Comprehensive income (loss) attributable to common stockholders	$	28,116	$	(7,481)	$	30,386	$	(16,576)

See accompanying notes to consolidated financial statements.

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(Dollars in thousands, except per share data)


		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) income		Accumulated Deficit		Non- Controlling Interest		Total			Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) income		Accumulated Deficit		Non- Controlling Interest		Total
Balances, December 31, 2020	Balances, December 31, 2020	$	164	$	245,605	$	(19)	$	(67,978)	$	(84)	$	177,688	Balances, December 31, 2020	$	164	$	245,605	$	(19)	$	(67,978)	$	(84)	$	177,688
Distributions - common stock - $0.22 per share	Distributions - common stock - $0.22 per share	—		—		—		(4,011)		—		(4,011)		Distributions - common stock - $0.22 per share	—		—		—		(4,011)		—		(4,011)
Restricted stock and restricted stock units vesting	Restricted stock and restricted stock units vesting	4		(4)		—		—		—		0		Restricted stock and restricted stock units vesting	4		(4)		—		—		—		—
Compensation expense - restricted stock and restricted stock units	Compensation expense - restricted stock and restricted stock units	—		538		—		—		—		538		Compensation expense - restricted stock and restricted stock units	—		538		—		—		—		538

Net (loss) income	Net (loss) income	—		—		—		(3,765)		34		(3,731)		Net (loss) income	—		—		—		(3,765)		34		(3,731)
Other comprehensive income	Other comprehensive income	—		—		4		—		1		5		Other comprehensive income	—		—		4		—		1		5
Comprehensive loss	Comprehensive loss											(3,726)		Comprehensive loss											(3,726)
Balances, March 31, 2021	Balances, March 31, 2021	$	168	$	246,139	$	(15)	$	(75,754)	$	(49)	$	170,489	Balances, March 31, 2021	$	168	$	246,139	$	(15)	$	(75,754)	$	(49)	$	170,489

Distributions - common stock - $0.22 per share	Distributions - common stock - $0.22 per share	—		—		—		(4,007)		—		(4,007)		Distributions - common stock - $0.22 per share	—		—		—		(4,007)		—		(4,007)
Compensation expense - restricted stock and restricted stock units	Compensation expense - restricted stock and restricted stock units	—		569		—		—		—		569		Compensation expense - restricted stock and restricted stock units	—		569		—		—		—		569

Shares issued through equity offering program, net	Shares issued through equity offering program, net	4		7,345		—		—		—		7,349		Shares issued through equity offering program, net	4		7,345		—		—		—		7,349

Net income	Net income	—		—		—		6,027		33		6,060		Net income	—		—		—		6,027		33		6,060
Other comprehensive income	Other comprehensive income	—		—		4		—		1		5		Other comprehensive income	—		—		4		—		1		5
Comprehensive income	Comprehensive income											6,065		Comprehensive income											6,065
Balances, June 30, 2021	Balances, June 30, 2021	$	172	$	254,053	$	(11)	$	(73,734)	$	(15)	$	180,465	Balances, June 30, 2021	$	172	$	254,053	$	(11)	$	(73,734)	$	(15)	$	180,465

Distributions - common stock - $0.23 per share														Distributions - common stock - $0.23 per share	—		—		—		(4,233)		—		(4,233)
Compensation expense - restricted stock and restricted stock units														Compensation expense - restricted stock and restricted stock units	—		842		—		—		—		842

Shares issued through equity offering program, net														Shares issued through equity offering program, net	1		1,065		—		—		—		1,066
Net income														Net income	—		—		—		28,106		35		28,141
Other comprehensive income														Other comprehensive income	—		—		11		—		1		12
Comprehensive income														Comprehensive income											28,153
Balances, September 30, 2021														Balances, September 30, 2021	$	173	$	255,960	$	—	$	(49,861)	$	21	$	206,293

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(Dollars in thousands, except per share data)


		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) income		Accumulated Deficit		Non- Controlling Interest		Total			Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) income		Accumulated Deficit		Non- Controlling Interest		Total
Balances, December 31, 2019	Balances, December 31, 2019	$	156	$	232,331	$	(10)	$	(32,824)	$	(93)	$	199,560	Balances, December 31, 2019	$	156	$	232,331	$	(10)	$	(32,824)	$	(93)	$	199,560
Distributions - common stock - $0.22 per share	Distributions - common stock - $0.22 per share	—		—		—		(3,822)		—		(3,822)		Distributions - common stock - $0.22 per share	—		—		—		(3,822)		—		(3,822)
Restricted stock vesting	Restricted stock vesting	1		(1)		—		—		—		0		Restricted stock vesting	1		(1)		—		—		—		—
Compensation expense - restricted stock and restricted stock units	Compensation expense - restricted stock and restricted stock units	—		438		—		—		—		438		Compensation expense - restricted stock and restricted stock units	—		438		—		—		—		438
Distributions to non-controlling interests	Distributions to non-controlling interests	—		—		—		—		(89)		(89)		Distributions to non-controlling interests	—		—		—		—		(89)		(89)
Shares issued through equity offering program, net	Shares issued through equity offering program, net	7		12,070		—		—		—		12,077		Shares issued through equity offering program, net	7		12,070		—		—		—		12,077
Shares repurchased	Shares repurchased	—		(616)								(616)		Shares repurchased	—		(616)								(616)
Net (loss) income	Net (loss) income	—		—		—		(4,831)		32		(4,799)		Net (loss) income	—		—		—		(4,831)		32		(4,799)
Other comprehensive loss	Other comprehensive loss	—		—		(20)		—		(3)		(23)		Other comprehensive loss	—		—		(20)		—		(3)		(23)
Comprehensive loss	Comprehensive loss											(4,822)		Comprehensive loss											(4,822)
Balances, March 31, 2020	Balances, March 31, 2020	$	164	$	244,222	$	(30)	$	(41,477)	$	(153)	$	202,726	Balances, March 31, 2020	$	164	$	244,222	$	(30)	$	(41,477)	$	(153)	$	202,726

Distributions - common stock - $0.22 per share	Distributions - common stock - $0.22 per share	—		—		—		(3,822)		—		(3,822)		Distributions - common stock - $0.22 per share	—		—		—		(3,822)		—		(3,822)
Compensation expense - restricted stock and restricted stock units	Compensation expense - restricted stock and restricted stock units	—		461		—		—		—		461		Compensation expense - restricted stock and restricted stock units	—		461		—		—		—		461

Net (loss) income	Net (loss) income	—		—		—		(4,246)		31		(4,215)		Net (loss) income	—		—		—		(4,246)		31		(4,215)
Other comprehensive income (loss)	Other comprehensive income (loss)	—		—		2		—		(1)		1		Other comprehensive income (loss)	—		—		2		—		(1)		1
Comprehensive loss	Comprehensive loss											(4,214)		Comprehensive loss											(4,214)
Balances, June 30, 2020	Balances, June 30, 2020	$	164	$	244,683	$	(28)	$	(49,545)	$	(123)	$	195,151	Balances, June 30, 2020	$	164	$	244,683	$	(28)	$	(49,545)	$	(123)	$	195,151

Distributions - common stock - $0.22 per share														Distributions - common stock - $0.22 per share	—		—		—		(3,824)		—		(3,824)
Compensation expense - restricted stock and restricted stock units														Compensation expense - restricted stock and restricted stock units	—		461		—		—		—		461

Net (loss) income														Net (loss) income	—		—		—		(7,484)		34		(7,450)
Other comprehensive income														Other comprehensive income	—		—		4		—		1		5
Comprehensive loss														Comprehensive loss											(7,445)
Balances, September 30, 2020														Balances, September 30, 2020	$	164	$	245,144	$	(24)	$	(60,853)	$	(88)	$	184,343

See accompanying notes to consolidated financial statements

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Thousands)

Six Months Ended June 30,
2021 2020
Cash flows from operating activities:
Net income (loss) $ 2,329 $ (9,014)
Adjustments to reconcile net income(loss) to net cash used in operating activities:
Depreciation 2,953 3,370
Amortization of deferred financing costs 153 140
Amortization of restricted stock and restricted stock units 1,107 899
Equity in loss of unconsolidated joint ventures 1,837 3,202
Impairment charge 520 0
Gain on sale of real estate (7,279) 0
Gain on sale of partnership interest (2,244) 0
Increases and decreases from changes in other assets and liabilities:
Decrease (increase) in other assets (443) (457)
Decrease (increase) in accounts payable and accrued liabilities (2,021) 657
Net cash used in operating activities (3,088) (1,203)
Cash flows from investing activities:
Collections from real estate loan 0 150
Additions to real estate properties 0 0
Improvements to real estate properties (594) (441)
Proceeds from the sale of real estate 24,133 0
Proceeds from the sale of partnership interest 7,540 0
Distributions from unconsolidated joint ventures 8,053 6,801
Contributions to unconsolidated joint ventures (6,031) (13,700)
Net cash provided by (used in) investing activities 33,101 (7,190)
Cash flows from financing activities:
Mortgage payoffs (14,260) 0
Mortgage principal payments (1,559) (1,505)
Proceeds from credit facility 0 5,000
Repayment of credit facility 0 (5,000)
Increase in deferred financing costs (38) 0
Dividends paid (7,592) (7,556)
Distributions to non-controlling interests 0 (89)
Proceeds from the sale of common stock 7,349 12,077
Repurchase of shares of common stock 0 (616)
Net cash (used in) provided by financing activities (16,100) 2,311


	Nine Months Ended September 30,
	2021		2020
Cash flows from operating activities:
Net income (loss)	$	30,470	$	(16,464)
Adjustments to reconcile net income(loss) to net cash used in operating activities:
Depreciation	4,740		5,147
Amortization of deferred financing costs	216		210
Amortization of restricted stock and restricted stock units	1,949		1,360
Equity in loss of unconsolidated joint ventures	6,033		4,731
Equity in earnings of sale of real estate of unconsolidated venture	(34,982)		—
Impairment charge	520		3,642
Gain on sale of real estate	(7,693)		—
Gain on sale of partnership interest	(2,244)		—

Loss on extinguishment of debt	902		—

Increases and decreases from changes in other assets and liabilities:

Decrease (increase) in other assets	1,868		(1,108)
Decrease (increase) in accounts payable and accrued liabilities	(2,000)		757
Net cash used in operating activities	(221)		(1,725)

Cash flows from investing activities:
Collections from real estate loan	—		150

Improvements to real estate properties	(794)		(694)
Purchase of investment in joint venture	(22,420)		—
Proceeds from the sale of real estate	24,632		—
Proceeds from the sale of partnership interest	7,540		—
Distributions from unconsolidated joint ventures	58,312		10,556
Contributions to unconsolidated joint ventures	(6,031)		(13,700)
Net cash provided by (used in) investing activities	61,239		(3,688)

Cash flows from financing activities:

Mortgage payoffs	(46,963)		—
Mortgage principal payments	(2,180)		(2,262)
Proceeds from credit facility	—		5,000
Repayment of credit facility	—		(5,000)
Increase in deferred financing costs	(38)		—
Dividends paid	(11,779)		(11,336)

Distributions to non-controlling interests	—		(89)
Proceeds from the sale of common stock	8,415		12,077
Repurchase of shares of common stock	—		(616)
Net cash used in financing activities	(52,545)		(2,226)

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BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Thousands)


	Nine Months Ended September 30,
	2021		2020
Net increase (decrease) in cash, cash equivalents and restricted cash:	8,473		(7,639)
Cash, cash equivalents and restricted cash at beginning of period	28,685		32,418
Cash, cash equivalents and restricted cash at end of period	$	37,158	$	24,779

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	4,591	$	5,261
Cash paid for income taxes	$	174	$	297


Consolidation on buyout of partnership interest:
Increase in real estate assets	$	(85,301)
Increase in other assets	(2,263)
Increase in mortgage payable	52,000
Increase in deferred loan costs	(178)
Increase on accounts payable and accrued liabilities	1,474
Decrease in investment in unconsolidated joint ventures	11,848
	$	(22,420)

See accompanying notes to consolidated financial statements

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BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Thousands)

Six Months Ended June 30,
2021 2020
Net increase (decrease) in cash, cash equivalents and restricted cash: 13,913 (6,082)
Cash, cash equivalents and restricted cash at beginning of period 28,685 32,418
Cash, cash equivalents and restricted cash at end of period $ 42,598 $ 26,336
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 3,118 $ 3,552
Cash paid for income taxes $ 194 $ 30

~~See accompanying notes to consolidated financial statements~~

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~~BRT APARTMENTS CORP. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited)~~

~~(Dollars in Thousands)~~


The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.	The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.					The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.

		June 30,					September 30,
		2021		2020			2021		2020
Cash and cash equivalents	Cash and cash equivalents	$	34,666	$	16,874	Cash and cash equivalents	$	29,598	$	15,650
Restricted cash	Restricted cash	7,932		9,462		Restricted cash	7,560		9,129
Total cash, cash equivalents and restricted cash, shown in consolidated statement of cash flows	Total cash, cash equivalents and restricted cash, shown in consolidated statement of cash flows	$	42,598	$	26,336	Total cash, cash equivalents and restricted cash, shown in consolidated statement of cash flows	$	37,158	$	24,779

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BRT APARTMENTS CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

~~June~~September 30, 2021

Note 1 – Organization and Background

BRT Apartments Corp. (the "Company" or "BRT"), a Maryland corporation, owns and operates multi-family properties. The Company conducts its operations to qualify as a real estate investment trust, or REIT, for federal income tax purposes.

~~Generally,~~Historically, the multi-family properties ~~are~~have been acquired with joint venture partners in transactions in which the Company contributes a significant portion of the equity. At ~~June~~September 30, 2021, the Company: (a) wholly owns 78 multi-family properties located in 67 states with an aggregate of ~~1,608~~2,010 units, and a carrying value of ~~$134,458,000;~~$218,201,000; and (b) has interests, through unconsolidated entities, in 3027 multi-family properties located in 9 states with an aggregate of ~~8,954~~7,444 units and the carrying value of this net equity investment is ~~$159,799,000.~~$128,478,000. BRT's equity interests in these unconsolidated entities range from 32% to 90%. Most of the Company's properties are located in the Southeast United States and Texas.

The Company also owns and operates various other real estate assets. At ~~June~~September 30, 2021, the carrying value of the other real estate assets was ~~$6,593,000.~~$6,419,000.

Note 2 – Basis of Preparation

The accompanying interim unaudited consolidated financial statements, ~~as of June 30, 2021, and for the three and sixmonths ended June 30, 2021 and 2020,~~ reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for such interim periods. The results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, are not necessarily indicative of the results for the full year. The consolidated audited balance sheet as of December 31, 2020, has been derived from the audited financial statements at that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States ("GAAP"). Accordingly, these unaudited statements should be read in conjunction with the Company's audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2020, as amended, filed with the Securities and Exchange Commission ("SEC").

The consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries.

The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting. For each venture, the Company evaluated the rights provided to each party in the venture to assess the consolidation of the venture. All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these joint ventures are variable interest entities ("VIEs"). Additionally, as determined in accordance with GAAP, the Company does not exercise substantial operating control over these entities, and therefore the entities are not consolidated. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for their share of equity in earnings, cash contributions and distributions. The distributions to each joint venture partner are determined pursuant to the applicable operating agreement and may not be pro-rata to the percentage equity interest each partner has in the applicable venture.

The joint venture that owns a property in Yonkers, New York, was determined not to be a VIE but is consolidated because the Company has controlling rights in such entity.

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results could differ from those estimates. Substantially all of the Company's assets are comprised of multi- family real estate assets generally leased to tenants on a one-year basis. Therefore, the Company aggregates real estate assets for reporting purposes and operates in 1 reportable segment.

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Note 3 - Equity

Equity Distribution Agreements

In November 2019, the Company entered into equity distribution agreements, as amended March 31, 2021, with 3 sales agents to sell up to an aggregate of $30,000,000 of its common stock from time-to-time in an at-the-market offering. During the ~~six~~three months ended ~~June~~September 30, 2021, the Company sold ~~410,221~~59,269 shares for an aggregate sales price of ~~$7,462,000~~$1,080,000 before commissions and fees of ~~$112,000.~~$14,000. During the ~~six~~nine months ended ~~June~~September 30, 2021, the Company sold 469,490 shares for an aggregate sales price of $8,542,000 before commissions and fees of $126,000. During the nine months ended September 30, 2020, the Company sold 694,298 shares for an aggregate sales price of $12,293,000, before commissions and fees of $185,000 and offering related expenses of $31,000. From the commencement of this program through ~~June~~September 30, 2021, the Company sold ~~1,216,482~~1,275,751 shares for an aggregate sales price of ~~$21,777,000~~$22,858,000 before commissions and fees of ~~$327,000~~$344,000 and offering related expenses of $56,000.

Common Stock Dividend Distribution

The Company declared a quarterly cash distribution of ~~$0.22~~$0.23 per share, payable on ~~July 9,~~October 7, 2021 to stockholders of record on ~~June 25,~~September 21, 2021.

Stock Based Compensation

The Company's 2020 Incentive Plan (the "2020 Plan") permits the Company to grant: (i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, for up to a maximum of 1,000,000 shares; and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards. As of ~~June~~September 30, 2021, ~~527,149~~473,101 shares are available for issuance pursuant to awards under the 2020 Plan.

Restricted Stock Units

In June 2016 and 2021, the Company issued restricted stock units (the ~~"Units"~~"RSUs") to acquire up to 450,000 shares and 210,375 shares of common stock, respectively, pursuant to the 2016 Amended and Restated Incentive Plan (the "2016 Plan") and the 2020 ~~Plan.~~Plan, respectively. The ~~Units~~RSUs entitled the recipients, subject to continued service through the applicable vesting dates (i.e.;March 31, 2021 for the 2016 grants and March 31, 2024 ~~vesting date,~~for the 2021 grants) to receive (i) the underlying shares if and to the extent certain performance and/or market conditions are satisfied at the vesting date, and (ii) an amount equal to the cash dividends (the "RSU Dividend ~~Equivalents"~~Equivalent") paid from the grant date through the vesting date with respect to the shares of common stock underlying the ~~Units~~RSUs if, when, and to the extent, the related ~~Units~~RSU's vest. For financial statement purposes, because the Units were not participating securities, the shares underlying the Units are excluded in the outstanding shares reflected on the consolidated balance sheet and from the calculation of basic earnings per share. The shares underlying the ~~Units~~RSUs are not participating securities but are contingently issuable shares.

~~In June 2016, the Company issued Units to acquire up to 450,000~~shares of common stock pursuant to the 2016 Amended and Restated Incentive Plan (the "2016 Plan"). Such Units entitled the recipients, subject to continued service through the March 31, 2021 vesting date, to receive (i) the underlying shares if and to the extent certain performance and/or market conditions are satisfied at the vesting date, and (ii) an amount equal to the cash dividends paid from the grant date through the vesting date with respect to the shares of common stock underlying the Units if, when, and to the extent, the related Units vest.

InFor the quarter ended June 30, 2021, it was determined that the market conditions with respect to 250,000 shares underlying ~~Units~~RSUs issued under the 2016 Plan had been satisfied; such shares, with an aggregate market value of $4,200,000 as of the vesting date, were issued and an aggregate of $775,000 of RSU Dividend Equivalents was paid. It was also determined that the performance conditions with respect to 200,000 shares underlying ~~Units~~RSUs under the 2016 plan had not been satisfied; the 200,000 ~~Units were forfeited.~~RSUs did not vest.

Expense is recognized over the ~~applicable0~~applicable vesting period on the ~~Units~~RSUs which the Company expects to vest. For the three months ended ~~June~~September 30, 2021 and 2020, the Company recorded ~~$34,000~~$200,000 and $35,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the ~~Units~~RSUs and for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, the Company recorded ~~$71,000~~$271,000 and ~~$70,000,~~$105,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the ~~Units.~~RSUs. At September 30, 2021 and December 31, 2020, $1,761,000 and $35,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting period.

Restricted Stock

In June 2021 and January 2021, the Company granted 160,000 and 156,774 shares, respectively, of restricted stock pursuant to the 2020 Plan. As of ~~June~~September 30, 2021, an aggregate of ~~923,219~~922,719 shares of unvested restricted stock are outstanding pursuant to the 2020 Incentive Plan, the 2018 Incentive Plan (the "2018 Plan") and the 2016 Plan. ~~NaN~~No additional awards may be granted under the 2018 Plan or the 2016 Plan. The shares of restricted stock vest five years from the date of grant and under

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specified circumstances, including a change in control, may vest earlier. For financial statement purposes, the restricted stock is not included in the outstanding shares shown on the consolidated balance sheets until they vest, but is

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included in the earnings per share computation.

For the three months ended ~~June~~September 30, 2021 and 2020, the Company recorded ~~$535,000~~$642,000 and $426,000 respectively, and for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, the Company recorded ~~$1,036,000~~$1,678,000 and ~~$829,000,~~$1,255,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards. At ~~June~~September 30, 2021 and December 31, 2020, $~~8,625,000~~7,978,000 and $4,411,000, respectively, has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards. The weighted average remaining vesting period of these shares of restricted stock is ~~2.85~~2.76 years.

Stock Buyback

On September 12, 2019, the Board of Directors approved a stock repurchase plan authorizing the Company, effective as of October 1, 2019, to repurchase up to $5,000,000 of shares of common stock through September 30, 2021. During the three and ~~six~~nine months ended ~~June~~September 30, 2021, , the Company did 0tnot repurchase any shares. During the ~~six~~nine months ended ~~June~~September 30, 2020, the Company repurchased 39,093 shares of common stock at an average market price of $15.76 for an aggregate cost of $616,000.

On September 13, 2021, the Board of Directors approved a new stock repurchase plan authorizing the Company, effective as of October 1, 2021, to repurchase up to $5,000,000 of shares of common stock through December 31, 2023.

Per Share Data

Basic earnings (loss) per share is determined by dividing net income (loss) applicable to common stockholders for the applicable period by the weighted average number of shares of common stock outstanding during such period. Net income is also allocated to the unvested restricted stock outstanding during each period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security. The ~~Units~~RSUs are excluded from the basic earnings per share calculation, as they are not participating securities.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock or resulted in the issuance of shares of common stock that share in the earnings of the Company. Diluted earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock deemed to be outstanding during such period.

In calculating diluted earnings per share, the Company, ~~for~~includes only those shares underlying the ~~three and six months ended June 30, 2021 did not include~~RSUs that it anticipates will vest based on management's current estimates. The Company excludes any shares underlying the ~~Units as criteria with respect to~~RSUs from such calculation if their effect would have been anti-dilutive.

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The following table provides a reconciliation of the ~~Units has not been met~~numerator and ~~for~~denominator of earnings per share calculations ( amounts in thousands, except per share amounts):


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Numerator for basic and diluted earnings per share:
Net Income (loss)	$	28,141	$	(7,450)	$	30,470	$	(16,464)
(Deduct) add net (income) loss attributable to non-controlling interests	(35)		(34)		(102)		(97)
Deduct earnings (loss) allocated to unvested restricted stock	(1,426)		324		(1,441)		710
Net income (loss) available for common stockholders: basic and diluted	$	26,680	$	(7,160)	$	28,927	$	(15,851)

Denominator for basic earnings per share:
Weighted average number of common shares outstanding	17,261,520		17,176,401		16,916,623		17,095,315
Effect of dilutive securities:
RSUs (1)	31,468		—		76,351		—
Denominator for diluted earnings per share:
Weighted average number of shares	17,292,988		17,176,401		16,992,974		17,095,315

Earnings (loss) per common share, basic	$	1.55	$	(0.44)	$	1.71	$	(0.97)
Earnings (loss) per common share, diluted	$	1.54	$	(0.44)	$	1.70	$	(0.97)

______________________

(1)For the three and ~~six~~nine months ended ~~June 30, 2021 and June~~September 30, 2020, ~~did not include any~~excludes the shares underlying ~~the Units~~RSU's as their effect would have been anti-dilutive.

~~The following table sets forth the computation of basic and diluted earnings per share (dollars in thousands, except share amounts):~~
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
Numerator for basic and diluted earnings (loss) per share attributable to common stockholders:
Net income (loss) attributable to common stockholders $ 6,027 $ (4,246) $ 2,262 $ (9,077)
Denominator:
Denominator for basic and diluted earnings per share—weighted average number of shares 17,720,488 17,176,401 17,520,963 17,054,327
Basic and diluted income (loss) per share $ 0.34 $ (0.25) $ 0.13 $ (0.53)

Note 4 - Leases

Lessor Accounting

The Company owns a commercial ~~rental property~~building leased to ~~two~~2 tenants under operating leases ~~with current expirations ranging~~expiring from 2024 to 2028, with tenant options to extend or terminate the leases. Revenues from such leases are reported as rental income, net, and are comprised of (i) lease components, which includes fixed lease payments and (ii) non-lease components, which includes reimbursements of property level operating expenses. The Company does not separate non-lease components from the related lease components, as the timing and pattern of transfer are the same, and accounts for the combined component in accordance with ASC 842.

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Lessee Accounting

The Company is a lessee under a ground lease in Yonkers, NY which is classified as an operating lease. The ground lease expires September 30, 2024 and provides for 1 21-year renewal option. As of ~~June~~September 30, 2021, the remaining lease term, including the renewal option deemed exercised, is ~~24.3~~24.0 years.

The Company is a lessee under a corporate office lease in Great Neck, New York, which is classified as an operating lease. The lease expires on December 31, 2031 and provides a five-year renewal option. As of ~~June~~September 30, 2021,, the remaining lease term, including renewal options deemed exercised, is ~~15.5~~15.3 years.

As of ~~June~~September 30, 2021, the Company's Right of Use ("ROU") assets and lease liabilities were ~~$2,668,000~~$2,618,000 and ~~$2,721,000,~~$2,675,000, respectively. As of December 31, 2020, the Company's ROU assets and lease liabilities were $2,652,000 and $2,674,000, respectively.

The discount rate applied to measure each ROU asset and lease liability is based on the Company’s incremental borrowing rate (“IBR”). The Company considers the general economic environment and its historical borrowing rate activity and factors in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease. As the Company did not elect to apply the hindsight practical expedient, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842. The Company’s ground lease offers a renewal option which it assesses against relevant economic factors to determine whether it is reasonably certain of

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exercising or not exercising the option. Lease payments associated with renewal periods that the Company is reasonably certain will be exercised, if any, are included in the measurement of the corresponding lease liability and ROU asset.

Note 5 ‑ Real Estate Properties

Real estate properties consist of the following (dollars in thousands):


		June 30, 2021		December 31, 2020			September 30, 2021		December 31, 2020
Land	Land	$	23,317	$	25,585	Land	$	29,489	$	25,585
Building	Building	141,143		154,854		Building	220,272		154,854
Building improvements	Building improvements	8,724		10,590		Building improvements	8,839		10,590
Real estate properties	Real estate properties	173,184		191,029		Real estate properties	258,600		191,029
Accumulated depreciation	Accumulated depreciation	(32,193)		(30,837)		Accumulated depreciation	(33,980)		(30,837)
Total real estate properties, net	Total real estate properties, net	$	140,991	$	160,192	Total real estate properties, net	$	224,620	$	160,192

A summary of real estate ~~property~~properties owned is as follows (dollars in thousands):

December 31, 2020
Balance Capitalized Costs and Improvements Depreciation Sale of Property June 30, 2021
Balance
Multi-family $ 153,604 $ 594 $ (2,897) $ (16,842) $ 134,459
Land - Daytona, FL 4,379 0 0 0 4,379
Retail shopping center and other 2,209 0 (56) 0 2,153
Total real estate properties $ 160,192 $ 594 $ (2,953) $ (16,842) $ 140,991


	December 31, 2020 Balance		Additions		Capitalized Costs and Improvements		Depreciation		Sale of Property		September 30, 2021 Balance
Multi-family	$	153,604	$	85,301	$	794	$	(4,657)	$	(16,841)	$	218,201
Land - Daytona, FL	4,379		—		—		—		—		4,379
Retail shopping center and other	2,209		—		—		(83)		(86)		2,040
Total real estate properties	$	160,192	$	85,301	$	794	$	(4,740)	$	(16,927)	$	224,620

Property Acquisition

On August 18, 2021, the Company purchased its partners' interests in Bells Bluff, a previously unconsolidated joint venture. The purchase price to acquire the 41.95% interest in the venture was $27,860,000. As a result of this purchase, Bells Bluff is wholly-owned by the Company. In connection with the purchase, the $47,043,000 construction loan on the property was refinanced with 20-year fixed rate (i.e., 3.48% and interest only for 10 years) mortgage debt in principal amount of $52,000,000.

The Company determined that with respect to this acquisition, the gross assets acquired are concentrated in a single identifiable asset. Therefore, the transaction does not meet the definition of a business and is accounted for as an asset acquisition. The Company assessed the fair value of the tangible assets of the property as of the acquisition date using an income approach utilizing a market capitalization rate of 4.75% which is a Level 3 unobservable input in the fair value hierarchy.

The following table summarizes the allocation of the book value based on the proportionate share of the estimated fair value of the property on the acquisition date:


	Purchase Price Allocation
Land	$	6,172,000
Building and Improvements	77,532,000
Acquisition related intangible assets	1,597,000
	$	85,301,000

On October 1, 2021, the Company acquired the 10% interest owned by its joint venture partners in the entity that owns Crestmont at Thornblade, a 266-unit multi-family property located in Greenville, SC. The purchase price for the interest, after giving effect to the joint venture partner's carried interest, was $1,570,000. As a result, Crestmont at Thornblade, effective as of the purchase date, is wholly-owned by the Company.

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Property Dispositions

On May 26, 2021 the Company sold its Kendall Manor-Houston, TX property, which had a book value of $16,842,000, for $24,500,000, and recognized a gain on the sale of the property of $7,279,000. In connection with the sale, the Company ~~paid off~~paid-off the ~~existing~~related mortgage debt ~~in the amount~~ of $14,260,000.

On August 20, 2021, the Company sold a cooperative apartment unit in New York, NY, for a sales price of $545,000 and recognized a gain on the sale of $414,000.

Note 6 - Impairment Charges

The Company reviews each real estate asset owned, including those held through investments in unconsolidated joint ventures, for impairment when there is an event or a change in circumstances indicating that the carrying amount may not be recoverable.

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The Company measures and records impairment charges, and reduces the carrying value of owned properties, when indicators of impairment are present and the expected undiscounted cash flows related to those properties are less than their carrying amounts. For its unconsolidated joint venture investments, the Company measures and records impairment losses, and reduces the carrying value of the equity investment when indicators of impairment are present and the expected discounted cash flows related to the investment is less than the carrying value.

When the Company does not expect to recover its carrying value on properties held for use, the Company reduces its carrying value to fair value, and for properties held for sale, the Company reduces its carrying value to the fair value less costs to sell. When the Company does not expect to recover its carrying value on unconsolidated joint ventures that are under contract for sale, the Company, when it is determined that the sale is probable, reduces its carrying value to its fair value.

During the ~~three and six~~nine months ended ~~June~~September 30, 2021, the Company recorded an impairment charge of $520,000 related to its investment in the OPOP Tower and OPOP Lofts properties, St Louis, MO, as the carrying value exceeded the fair value by that amount. The fair value is based upon the ~~contract~~sale price ~~of a sale agreement~~at which the Company ~~has entered into.~~contracted to sell these properties.

Note 7 - Restricted Cash

Restricted cash represents funds held for specific purposes and are therefore not available for general corporate purposes. The restricted cash reflected on the consolidated balance sheets represents funds that are held by the Company specifically for capital improvements at certain multi-family properties owned by unconsolidated joint ventures.

Note 8 – Investment in Unconsolidated Ventures

At ~~June~~September 30, 2021 and December 31, 2020, the Company held interests in unconsolidated joint ventures that own 27 and 31 multi-family properties, (the "Unconsolidated Properties"), ~~that own 30 and 31 multi-family properties,~~ respectively. The condensed balance sheets below present ~~information regarding such properties (dollars in thousands):~~
June 30, 2021 December 31, 2020
ASSETS
Real estate properties, net of accumulated depreciation of $142,413 and $145,600 $ 896,944 $ 1,075,178
Cash and cash equivalents 15,249 16,939
Other assets 32,116 29,392
Real estate properties held for sale 139,711 $ 0
Total Assets $ 1,084,020 $ 1,121,509
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net of deferred costs of $4,951 and $5,537 $ 814,067 $ 829,646
Accounts payable and accrued liabilities 20,108 20,237
Total Liabilities 834,175 849,883
Commitments and contingencies 0 0
Equity:
Total unconsolidated joint venture equity 249,845 271,626
Total Liabilities and Equity $ 1,084,020 $ 1,121,509
BRT's interest in joint venture equity $ 159,799 $ 169,474

1516

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~~As of~~information regarding such properties (dollars in thousands):


	September 30, 2021		December 31, 2020
ASSETS
Real estate properties, net of accumulated depreciation of $144,299 and $145,600	$	824,624	$	1,075,178
Cash and cash equivalents	13,328		16,939
Other assets	34,415		29,392

Total Assets	$	872,367	$	1,121,509

LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net of deferred costs of $3,954 and $5,537	$	659,148	$	829,646
Accounts payable and accrued liabilities	21,046		20,237
Total Liabilities	680,194		849,883
Commitments and contingencies	0		0
Equity:
Total unconsolidated joint venture equity	192,173		271,626
Total Liabilities and Equity	$	872,367	$	1,121,509

BRT's interest in joint venture equity	$	128,478	$	169,474

At the indicated dates, real estate properties of the unconsolidated joint ventures consist of the following (dollars in thousands):


		June 30, 2021		December 31, 2020			September 30, 2021		December 31, 2020
Land	Land	$	110,887	$	148,341	Land	$	105,480	$	148,341
Building	Building	893,443		1,029,739		Building	827,494		1,029,739
Building improvements	Building improvements	35,027		42,698		Building improvements	35,949		42,698
Real estate properties	Real estate properties	1,039,357		1,220,778		Real estate properties	968,923		1,220,778
Accumulated depreciation	Accumulated depreciation	(142,413)		(145,600)		Accumulated depreciation	(144,299)		(145,600)
Total real estate properties, net	Total real estate properties, net	$	896,944	$	1,075,178	Total real estate properties, net	$	824,624	$	1,075,178

At ~~June~~September 30, 2021 and December 31, 2020, the weighted average interest rate on the mortgages payable is ~~3.96%~~4.03% and 3.96%, respectively, and the weighted average remaining term to maturity is ~~7.23~~7.51 years and 7.67 years, respectively.

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The condensed income statement below presents information regarding the Unconsolidated Properties (dollars in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2021		2020		2021		2020
Revenues:	Revenues:									Revenues:
Rental and other revenue	Rental and other revenue	$	33,005	$	31,542	$	65,677	$	62,385	Rental and other revenue	$	29,818	$	32,341	$	95,495	$	94,726
Total revenues	Total revenues	33,005		31,542		65,677		62,385		Total revenues	29,818		32,341		95,495		94,726

Expenses:	Expenses:									Expenses:
Real estate operating expenses	Real estate operating expenses	15,233		14,674		30,936		29,206		Real estate operating expenses	14,587		16,092		45,523		45,298
Interest expense	Interest expense	8,472		8,766		16,994		17,523		Interest expense	7,568		8,663		24,562		26,186
Depreciation	Depreciation	9,791		10,417		20,176		20,773		Depreciation	8,288		10,411		28,464		31,184
Total expenses	Total expenses	33,496		33,857		68,106		67,502		Total expenses	30,443		35,166		98,549		102,668
Total revenues less total expenses	Total revenues less total expenses	(491)		(2,315)		(2,429)		(5,117)		Total revenues less total expenses	(625)		(2,825)		(3,054)		(7,942)
Equity in earnings		5		9		14		17
Impairment charges		(490)		0		(2,813)		0

Other equity earnings										Other equity earnings	7		97		21		34
Impairment of assets										Impairment of assets	—		—		(2,813)		—
Insurance recoveries	Insurance recoveries	490		0		2,813		0		Insurance recoveries	—		—		2,813		—
Gain on insurance recoveries	Gain on insurance recoveries	0		338		0		338		Gain on insurance recoveries	1,246		427		1,246		765
Net loss from joint ventures		$	(486)	$	(1,968)	$	(2,415)	$	(4,762)
Gain on sale of real estate										Gain on sale of real estate	83,984		—		83,984		—
Loss on extinguishment of debt										Loss on extinguishment of debt	(9,401)		—		(9,401)		—
Net income (loss) from joint ventures										Net income (loss) from joint ventures	$	75,211	$	(2,301)	$	72,796	$	(7,143)

BRT's equity in loss from joint ventures		$	(492)	$	(1,387)	$	(1,837)	$	(3,202)
BRT's equity in loss and equity in earnings from sale of unconsolidated joint venture properties										BRT's equity in loss and equity in earnings from sale of unconsolidated joint venture properties	$	30,786	$	(1,529)	$	28,949	$	(4,731)

During the three and ~~six~~nine months ended ~~June~~September 30, 2021, three ~~of the~~ unconsolidated Texas joint ventures recognized an aggregate of (i) ~~$490,000 and~~ $2,813,000 of impairment charges ~~respectively,~~ as a result of ice storm damage and (ii) ~~$490,000 and~~ $2,813,000 of related insurance ~~recoveries, respectively.~~recoveries.

On April 20, 2021, the Company sold its interest in the joint venture ~~interest in~~that owns Anatole Apartments, a property located in Daytona Beach, FL. The Company recognized a gain of $2,244,000 on the sale.

On May 4, 2021, the Company purchased a 14.69% interest in Civic Center I and Civic Center II - Southaven, MS, from its joint venture partner, for $6,031,000. After giving effect to this purchase, the Company owns 74.69% of the equity ~~interest~~interests in the venture that owns these properties.

On ~~May 7,~~July 20, 2021, the joint venture which owns The Avenue Apartments, Ocoee, FL sold the property for $107,661,000 and recognized a gain on the sale of this property of $39,668,000. As a result of the sale, the Company recorded a gain of $19,518,000. The joint venture also recognized a loss on the extinguishment of debt of $9,093,000 in connection with the payoff of the related $53,060,000 mortgage debt. The Company's share of this loss was $4,474,000.

On July 28, 2021, the joint venture which owns Parc at 980, Lawrenceville, GA sold the property for $118,250,000 and recognized a gain on the sale of this property of $44,316,000. As a result of the sale, the Company recorded a gain of $15,464,000. The joint venture also recognized a loss on the extinguishment of debt of $308,000 in connection with the payoff of the related $54,447,000 mortgage debt. The Company's share of this loss was $107,000

On August 18, 2021, the Company ~~entered into an agreement to acquire~~acquired the 41.9% interest owned by its joint venture partners in the entity that owns Bells Bluff, a 402-unit multi-family property located in West Nashville, TN. The purchase price for the interest was $27,860,000. As a result of the purchase, Bells Bluff , effective as of the purchase date, is wholly-owned by, and its accounts and operations are consolidated with, the Company. In connection with the purchase, the $47,043,000 construction loan on the property was refinanced with 20-year fixed rate (i.e., 3.48% and interest only for 10 years) mortgage debt in the principal amount of $52,000,000.

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On October 1, 2021, the Company acquired the 10% interest owned by its joint venture partners in the entity that owns Crestmont at Thornblade, a 266-unit multi-family property located in Greenville, SC. The purchase price for the interest, after giving effect to the joint venture partners' carried interest, was $1,570,000. Crestmont at Thornblade is ~~$28,000,000, subject to working capital and certain other adjustments. After giving effect to this purchase, Bells Bluff will be~~now wholly-owned by the Company. ~~The completion of~~

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~~this purchase is subject to customary closing conditions, including the refinancing of the $47,200,000 floating rate (i.e., 2.975% at June 30, 2021) mortgage debt on the property.~~

On ~~July 20,~~November 4, 2021, the Company sold its interest in the joint venture ~~which owns~~that own OPOP Towers and OPOP Lofts, 2 properties located in St. Louis, MO., for $3,000,000. The ~~Avenue Apartments, Ocoee, FL sold~~Company anticipates it will record a gain of approximately $385,000. on the ~~property for $107,661,000 and for~~sale. During the ~~quarter~~nine months ended September 30, 2021, ~~will recognize a gain on~~ the ~~sale of this property of approximately $39,000,000. The Company's share of the gain will be approximately $19,000,000. The joint venture will also recognize a mortgage prepayment~~Company recorded an impairment charge of ~~$8,661,000 of which BRT's share will be approximately $4,200,000. At June 30, 2021, there was $53,060,000 of mortgage debt secured by this property which bore a 3.90% interest rate.~~

~~On July 28, 2021,~~$520,000 related to its investment in the joint venture which owns Parc at 980, Lawrenceville, GA sold the property for $118,250,000 million and for the quarter ended September 30, 2021, will recognize a gain on the sale of this property of approximately $44,000,000. Our share of the gain will be approximately $15,000,000. At June 30, 2021, there was $54,447,000 of mortgage debt secured by this property which bore a 3.97% interest rate.

venture.

Note 9 – Debt Obligations

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


		June 30, 2021		December 31, 2020			September 30, 2021		December 31, 2020
Mortgages payable	Mortgages payable	$	115,178	$	130,997	Mortgages payable	$	134,678	$	130,997
Junior subordinated notes	Junior subordinated notes	37,400		37,400		Junior subordinated notes	37,400		37,400

Deferred financing costs	Deferred financing costs	(740)		(880)		Deferred financing costs	(787)		(880)
Total debt obligations, net of deferred costs	Total debt obligations, net of deferred costs	$	151,838	$	167,517	Total debt obligations, net of deferred costs	$	171,291	$	167,517

Mortgages Payable

~~The~~At September 30, 2021, the weighted average interest rate on the Company's mortgage payables ~~at June 30, 2021~~ was ~~4.14%~~3.79% and the weighted average remaining term to maturity is ~~4.34~~11.01 years. For the three months ended ~~June~~September 30, 2021 and 2020, interest expense, which includes amortization of deferred financing costs, was ~~$1,378,000~~$1,305,000 and ~~$1,468,000,~~$1,475,000, respectively. For the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, interest expense, which includes amortization of deferred financing costs, was ~~$2,808,000~~$4,113,000 and ~~$2,943,000,~~$4,418,000, respectively.

~~In July~~During the three and nine months ended September 30, 2021, the Company paid ~~down $17,000,000 of~~off mortgage debt of $31,879,000 pertaining to 3 first mortgage loans on 3 properties and 3 supplemental loans on 2 properties. In connection with the payoff, the Company recognized a ~~primary loan~~loss on the extinguishment of ~~one property and a supplemental loan~~debt of ~~a second property.~~$902,000. Such debt was scheduled to mature in 2022 and bore a weighted average interest rate of ~~4.46%~~4.53%.

On September 18, 2021, in connection with the buyout of its partners' interests in Bells Bluff - West Nashville, TN, the $47,043,000 construction loan on the property was refinanced with a 20-year fixed rate (i.e., 3.48% and interest only for 10 years), mortgage in the principal amount of $52,000,000.

Credit Facility

The Company's credit facility with an affiliate of Valley National Bank, as amended and modified from time-to-time, allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to $15,000,000 to facilitate the acquisition of multi-family properties and for working capital (including dividend payments) and operating expenses. The facility is secured by the cash available in certain cash accounts maintained by the Company at Valley National Bank, matures April 2023 and bears an adjustable interest rate of 50 basis points over the prime rate, with a floor of 4.25%. The interest rate in effect as of ~~June~~September 30, 2021 is 4.25%. There is an unused facility fee of 0.25% per annum on the difference between the outstanding loan balance and maximum amount then available under the facility. For the three months ended ~~June~~September 30, 2021 and 2020, interest expense, which includes amortization of deferred financing costs and unused fees, was ~~$19,000~~$18,000 and ~~$47,000.~~$17,000. For the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, interest expense, which includes amortization of deferred financing costs and unused fees, was ~~$36,000~~$54,000 and ~~$62,000.~~$79,000. Deferred financing costs of ~~$30,000~~$20,000 and $12,000, are recorded in other assets on the Consolidated balance sheets at ~~June~~September 30, 2021 and December 31, 2020, respectively. At ~~June~~September 30, 2021, the Company is in compliance in all material respects with its obligation under the facility. At ~~June~~September 30, 2021 and ~~July 31,~~November 1, 2021, there was 0no outstanding balance on the facility.

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Junior Subordinated Notes

At ~~June~~September 30, 2021 and December 31, 2020, the outstanding principal balance of the Company's junior subordinated notes was $37,400,000, before deferred financing costs of ~~$307,000~~$302,000 and $317,000, respectively. The interest rate on the

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outstanding balance resets quarterly and is based on three months LIBOR + 2.00%. The rate in effect at ~~June~~September 30, 2021 and 2020 was ~~2.21%~~2.13% and ~~2.76%~~2.27%, respectively. The notes mature April 30, 2036.

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 ~~June~~September 30, 2021 and 2020, which includes amortization of deferred financing costs, was ~~$212,000~~$210,000 and ~~$293,000,~~$240,000, respectively. Interest expense for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, which includes amortization of deferred financing costs, was ~~$426,000~~$636,000 and ~~$663,000,~~$903,000, respectively.

Note 10 – Related Party Transactions

The Company has retained certain of its executive officers and Fredric H. Gould, a director, among other things, to participate in the Company's multi-family property analysis and approval process (which includes service on an investment committee), provide investment advice, and provide long-term planning and consulting with executives and employees with respect to other business matters, as required. The aggregate fees incurred for these services in each of the three months ended ~~June~~September 30, 2021 and 2020 were ~~$349,000~~$350,000 and for each of the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020 ~~was $699,000.~~were $1,049,000.

Management of certain properties owned by the Company and certain joint venture properties is provided by Majestic Property Management Corp. ("Majestic Property"), a company wholly owned by Fredric H. Gould. Certain of the Company's officers and directors are also officers and directors of Majestic Property. Majestic Property may also provide real estate brokerage and construction supervision services to these properties. These fees amounted to ~~$7,000~~$9,000 and $8,000 for the three months ended ~~June~~September 30, 2021 and 2020, respectively, and ~~$14,000~~$23,000 and ~~$16,000~~$24,000 for the ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, respectively.

Pursuant to a shared services agreement between the Company and several affiliated entities, including Gould Investors

L.P. ("Gould Investors"), the owner and operator of a diversified portfolio of real estate and other assets, and One Liberty Properties, Inc., a NYSE listed equity REIT, the (i) services of the ~~part~~part- time personnel that perform certain executive, administrative, legal, accounting and clerical functions and (ii) certain facilities and other resources, are provided to the Company. The allocation of expenses for the facilities, personnel and other resources shared by, among others, the Company and Gould Investors, is computed in accordance with such agreement and is included in general and administrative expense on the consolidated statements of operations. During the three months ended ~~June~~September 30, 2021 and 2020, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated ~~$$179,000~~$172,000 and ~~$$238,000,~~$167,000, respectively, and ~~$351,000~~$523,000 and ~~$464,000~~$631,000 for the ~~six~~nine months ended ~~June 20,~~September 30, 2021 and 2020, respectively. Fredric H. Gould is executive officer and sole stockholder of Georgetown Partners, Inc., the managing general partner of Gould Investors. Mr. Gould is also the vice chairman of the board of directors of One Liberty Properties and certain of the Company's officers and directors are also officers or directors of One Liberty Properties and Georgetown Partners.

Note 11 – Fair Value Measurements

Financial Instruments Not Carried at Fair Value

The following methods and assumptions were used to estimate the fair value of each class of financial instruments that are not recorded at fair value on the consolidated balance sheets:

Cash and cash equivalents, restricted cash, accounts receivable (included in other assets), accounts payable and accrued liabilities: The carrying amounts reported in the balance sheets for these instruments approximate their fair value due to the short term nature of these accounts.

Junior subordinated notes: At ~~June~~September 30, 2021 and December 31, 2020, the estimated fair value of the notes is lower than their carrying value by approximately ~~$8,539,000~~$8,445,000 and $8,670,000, respectively, based on a market interest rate of ~~4.13%~~4.12% and 4.22%, respectively.

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Mortgages payable: At ~~June~~September 30, 2021, the estimated fair value of the Company’s mortgages payable is ~~greater~~lower than their carrying value by approximately ~~$1,322,000,~~$2,156,000, assuming market interest rates between ~~3.38%~~3.49% and ~~3.80%~~3.87%. At December 31, 2020, the estimated fair value of the Company's mortgages payable was greater than their carrying value by approximately $3,831,000, assuming market interest rates between 2.87% and 3.28%. Market interest rates were determined using rates which the Company believes reflects institutional lender yield requirements at the balance sheet dates.

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Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value.

Financial Instruments Carried at Fair Value

The Company’s fair value measurements are based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, there is a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. Level 1 assets/liabilities are valued based on quoted prices for identical instruments in active markets, Level 2 assets/liabilities are valued based on quoted prices in active markets for similar instruments, on quoted prices in less active or inactive markets, or on other “observable” market inputs, and Level 3 assets/liabilities are valued based significantly on “unobservable” market inputs. The Company does not currently own any financial instruments that are classified as Level 3.

~~Set forth below is information regarding~~At September 30, 2021, the ~~Company’s~~Company has no financial assets ~~and~~or liabilities measured at fair ~~value as of June 30, 2021 (dollars in thousands):~~
Carrying and Fair Value Fair Value Measurements Using Fair Value Hierarchy
Level 1 Level 2 Level 3
Financial Liabilities:
Interest rate swap $ 13 $ 0 $ 13 $ 0

value.

Set forth below is information regarding the Company’s financial assets and liabilities measured at fair value as of December 31, 2020 (dollars in thousands):


		Carrying and Fair Value		Fair Value Measurements Using Fair Value Hierarchy								Carrying and Fair Value			Fair Value Measurements Using Fair Value Hierarchy
			Level 1			Level 2	Level 3							Level 1			Level 2	Level 3

Financial Liabilities:	Financial Liabilities:												Financial Liabilities:
Interest rate swap	Interest rate swap	23		$	0		$	23	$	0	Interest rate swap	$	23		$	—		$	23	$	—

Derivative financial instruments: Fair values are approximated using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, and implied volatilities. At ~~June 30, 2021 and~~ December 31, 2020, this derivative is included in other liabilities on the consolidated balance sheet.

Although the Company has determined that the majority of the inputs used to value its derivative fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with it utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. As of ~~June 30, 2021 and~~ December 31, 2020, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative position and determined that the credit valuation adjustments are not significant to the overall valuation of its derivative. As a result, the Company determined that its derivative valuation is classified in Level 2 of the fair value hierarchy.

Non-recurring fair value measurements

The Company reviews each investment in real estate and joint venture interests when events or circumstances change, indicating the carrying value of the investment may not be recoverable. In the evaluation of an investment for impairment, many factors are considered, including estimated current and expected cash flows from the asset during the projected hold period, costs necessary to extend the life of the asset, expected capitalization rates, projected stabilized net operating income, and the ability to hold or dispose of the asset in the ordinary course of business. On June 8, 2021, we entered into a ~~non-binding~~ contract, completion of which is subject to the satisfaction of specified conditions, including the approval of the lender, to sell our interests in OPOP Tower and OPOP Lofts to our joint venture partner for $3,000,000, which was below the asset carrying value as of June 30, 2021. As a result, we recorded an impairment charge of $520,000. As the estimate of fair value was based on a ~~non-binding,~~ privately negotiated contract, the Company classified the fair value estimate of the asset to determine impairment in Level 2 of the fair value hierarchy.

1921

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Note 12 – Derivative Financial Instruments

Cash Flow Hedges of Interest Rate Risk

The Company's objective in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive ~~(Loss)~~ income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

As of ~~June~~September 30, 2021, the Company ~~had the following~~did not have any outstanding interest rate derivatives that were designated as cash flow hedges of interest rate ~~risk (dollars in thousands):~~
Interest Rate Derivative Current Notional Amount Fixed Rate Maturity
Interest rate swap $ 967 5.25 % April 1, 2022
risk.

The table below presents the fair value of the Company’s derivative financial instruments as well as its classification on the consolidated balance sheets as of the dates indicated (dollars in thousands):
Derivatives as of:
June 30, 2021 December 31, 2020
Balance Sheet Location Fair Value Balance Sheet Location Fair Value
Accounts payable and accrued liabilities $ 13 Accounts payable and accrued liabilities $ 23

Derivatives as of:

September 30, 2021

December 31, 2020

Balance Sheet Location

Fair Value

Balance Sheet Location

Fair Value

Accounts payable and accrued liabilities

—

Accounts payable and accrued liabilities

The following table presents the effect of the Company’s interest rate swaps on the consolidated statements of comprehensive income (loss) for the dates indicated (dollars in thousands):


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2021		2020		2021		2020
Amount of (loss) gain recognized on derivative in Other Comprehensive Income	Amount of (loss) gain recognized on derivative in Other Comprehensive Income	$	0	$	(2)	$	0	$	(27)	Amount of (loss) gain recognized on derivative in Other Comprehensive Income	$	(1)	$	—	$	(1)	$	(25)
Amount of (loss) gain reclassified from Accumulated Other Comprehensive Income into Interest expense	Amount of (loss) gain reclassified from Accumulated Other Comprehensive Income into Interest expense	$	(5)	$	(3)	$	(10)	$	(5)	Amount of (loss) gain reclassified from Accumulated Other Comprehensive Income into Interest expense	$	(2)	$	(5)	$	(12)	$	5
Total amount of Interest expense presented in the Consolidated Statements of Operations	Total amount of Interest expense presented in the Consolidated Statements of Operations	$	1,609	$	1,809	$	3,269	$	3,669	Total amount of Interest expense presented in the Consolidated Statements of Operations	$	1,535	$	1,731	$	4,804	$	5,400

~~The~~During the three and nine months ended September 30, 2021, the Company ~~estimates an additional $14,000will be reclassified~~accelerated the reclassification of losses of $12,000 from other comprehensive ~~loss~~income to earnings as ~~an increase~~a result of the hedged forecasted transactions becoming probable not to ~~interest expense over the next twelve months.~~occur.

~~Credit-risk-related Contingent Features~~

The agreement between the Company and its derivative counterparties provides that if the Company defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, the Company could be declared in default on its derivative obligations.

As of June 30, 2021 and December 31, 2020, the fair value of derivatives in a net liability position including interest but excluding any adjustment for nonperformance risk related to these agreements was $15,000 and $25,000, respectively. As of June 30, 2021 and December 31, 2020, the Company has not posted any collateral related to this agreement and was not in breach of any agreement provisions. If the Company had breached any of these provisions, it could have been required to settle it obligations under the agreement termination value of $15,000 and $25,000, at June 30, 2021 and December 31, 2020 respectively.

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Note 13 – New Accounting Pronouncements

In March 2020, the Financial Accounting Standard Board issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, lease, derivatives and other contracts. This guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company has elected to apply hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In August 2018, the FASB issued ASU 2018-13, Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement,, which removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC Topic 820. This guidance is effective for public companies in fiscal years beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance effective January 1, 2020. The adoption of this guidance did not have a material effect on the consolidated financial statements.

In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to

~~Nonemployee~~Non-employee Share-Based Payment ~~Accounting~~.Accounting. This update provides specific guidance for transactions for acquiring goods

and services from ~~nonemployees~~non-employees and specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (i) financing to the issuer or (ii) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC Topic 606, Revenue from Contracts with Customers. The Company adopted this guidance effective January 1, 2020. The adoption of this guidance did not have a material effect on the consolidated financial statements.

In February 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) establishing ASC Topic 326, Financial Instruments - Credit Losses (“ASC 326”), as amended by subsequent ASUs on the topic. ASU 2016-13 changes how entities will account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current “incurred loss” model with an “expected loss” model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the financial asset. ASU 2016-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2022. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

Note 14 – Subsequent Events

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of ~~June~~September 30, 2021, that warrant additional disclosure, have been included in the notes to the consolidated financial statements.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (the "Quarterly Report"), together with other statements and information publicly disseminated by us, contains certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends concerning matters that are not historical facts. Forward looking statements are generally identifiable by use of words such as "may," "will," "will likely result," "shall," "should," "could," "believe," "expect," "intend," "anticipate," "estimate," "project" or similar expressions or variations thereof.

Forward-looking statements contained in this Quarterly Report are based on our beliefs, assumptions and expectations of our future performance taking into account ~~all~~the information currently available to us. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or within our control, and which could materially affect actual results, performance or achievements. Factors which may cause actual results to vary from our forward-looking statements include, but are not limited to:

•the impact of the ~~resurgence of~~COVID-19 pandemic and the ~~COVID-19 pandemic;~~governmental and non-governmental responses thereto;

•general economic and business conditions, including those currently affecting our nation’s economy and real estate markets;

•the availability of, and costs associated with, sources of capital and liquidity;

•accessibility of debt and equity capital markets;

•general and local real estate conditions, including any changes in the value of our real estate;

•changes in Federal, state and local governmental laws and regulations, including laws and regulations relating to taxes and real estate and related investments;

•the level and volatility of interest rates;

•our acquisition strategy, which may not produce the cash flows or income expected;

•the competitive environment in which we operate, including competition that could adversely affect our ability to acquire properties and/or limit our ability to lease apartments or increase or maintain rental income;

•a limited number of multi-family property acquisition opportunities acceptable to us;

•our multi-family properties are concentrated in the Southeastern United States and Texas, which makes us more susceptible to adverse developments in those markets;

•risks associated with our strategy of acquiring value-add multi-family properties, which involves greater risks than more conservative strategies;

•the condition of Fannie Mae or Freddie Mac, which could adversely impact us;

•our failure to comply with laws, including those requiring access to our properties by disabled persons, which could result in substantial costs;

•insufficient cash flows, which could limit our ability to make required payments on our debt obligations;

•our ability and the ability of our joint venture partners to maintain compliance with the covenants contained in our and our joint venture partners' debt facilities and debt instruments;

•impairment in the value of real estate we own;

•failure of property managers to properly manage properties;

•disagreements with, or misconduct by, joint venture partners;

•decreased rental rates or ancillary revenues, or increasing vacancy rates;

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•our ability to lease units in newly acquired or newly constructed multi-family properties;

•potential defaults on or non-renewal of leases by tenants;

•creditworthiness of tenants;

•our ability to evaluate, finance, complete and integrate acquisitions, including the acquisition of the Remaining Interest (as defined), successfully;

•development and acquisition risks, including rising or unanticipated costs and failure of such acquisitions and developments to perform in accordance with projections;

•the timing of acquisitions and dispositions;

•our ability to reinvest the net proceeds of dispositions into more, or as favorable, acquisition opportunities;

•potential natural disasters such as hurricanes, tornadoes and floods;

•board determinations as to timing and payment of dividends, if any, and our ability or willingness to pay future dividends;

•financing risks, including the risks that our cash flows from operations may be insufficient to meet required debt service obligations and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;

•lack of or insufficient amounts of insurance to cover, among other things, losses from catastrophes;

•our ability to maintain our qualification as a REIT;

•possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us or a subsidiary owned by us or acquired by us;

•our dependence on information systems;

•risks associated with breaches of our or our joint venture partners' information technology systems;

•failure to comply with, or obtain waivers of, the provisions of, and covenants and coverage ratios in, our debt instruments;

•risks associated with the stock ownership restrictions of the Code for REITs and the stock ownership limit imposed by our charter;

•increases in real estate taxes at properties we acquire due to such acquisitions or other factors;

•the other factors described in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, 2020,as amended (the "Annual Report"), including those factors set forth under the sections of such reports, as applicable, entitled "Cautionary Statement Regarding Forward-Looking Statements", "Risk Factors," "Business," and "Management's Discussion and Analysis of Financial Condition and Results of Operations".

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

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Overview

We are an internally managed real estate investment trust, also known as a REIT, that is focused on the ownership, and operation of multi-family properties. These properties derive revenue from tenant rental payments. Generally, these properties are owned by unconsolidated joint ventures in which we contributed 32% to 90% of the equity. At ~~June~~September 30, 2021, we: (i) ~~wholly own seven~~wholly-own eight multi-family properties located in ~~six~~seven states with an aggregate of ~~1,608~~2,010 units and a carrying value of ~~$134.5~~$218.2 million; and (ii) have ownership interests, through unconsolidated entities, in 3027 multi-family properties located in nine states with ~~8,954~~7,444 units - the carrying value of our net equity investment therein is ~~$159.8~~$128.5 million. Most of our properties are located in the southeast United States and Texas. See "-Off Balance Sheet Arrangements" for information regarding the contributions of our unconsolidated subsidiaries and our reliance upon the cash flow and liquidity provided by such subsidiaries.

As used herein, the term "same store properties" refers to operating properties that were owned for the entirety of the periods ~~being~~ presented. For the three and ~~six~~nine months ended ~~June~~September 30, 2021 and 2020, there were seven same store properties.

Challenges and Uncertainties Presented by COVID-19

While the nation-wide economic hardships resulting from the responses to the pandemic did not have a material adverse effect on our results of operations for the three and ~~six~~nine months ended ~~June~~September 30, 2021, ~~the resurgence of~~ the pandemic, among other things, may adversely affect the ability of our residents to pay rent (due to furloughs, layoffs and/or the expiration of, or reduction in, unemployment ~~benefits)~~benefits or other governmental assistance programs or our ability to evict non paying tenants) and as a result, our ability to pay dividends and/or the debt service on our mortgages. ~~Many of our properties are located in states experiencing a resurgence in the pandemic which heightens the challenges and uncertainties presented thereby.~~

Activities and Transactions During the Three Months Ended ~~June~~September 30, 2021

Effective as of April 1, 2021, we and VNB New York, LLC, an affiliate of Valley National Bank (collectively, "VNB"), entered into a modification agreement with respect to our credit facility. The modification (i) increased the amount we are permitted to borrow, subject to compliance with borrowing base requirements and other conditions, from $10 million to $15 million, (ii) extended the term of the facility from April 18, 2021 to April 18, 2023 and (iii) increased the number of wholly-owned properties we are required to own from three to four and modified certain requirements with respect to such properties.Acquisitions

On ~~April 20,~~August 18, 2021, we completed the sale (the "Anatole sale") of our 80% interest in the unconsolidated joint venture that owned Anatole Apartments - Daytona Beach, FL, to our joint venture partner, for $7.5 million and recognized a gain on sale of our partnership interest of $2.2 million. In 2020, this property contributed $250,000 in equity in loss of unconsolidated joint ventures.

On May 4, 2021, we purchased an additional 14.69% interest in Civic Center I and Civic Center II - Southaven, MS, from our joint venture partner for $6.0 million. After giving effect to such purchase, we own 74.69% of the venture that owns this property.

~~On May 7, 2021, we entered into an agreement to acquire~~acquired the 41.9% interest ~~(the “Remaining Interest”)~~ owned by our joint venture partners in the entity that owns Bells Bluff, a 402-unit multi-family property located in West Nashville, TN. ~~If we acquire the Remaining Interest, Bells Bluff will be~~As a result, this property is wholly-owned by ~~us.~~us and effective August 18, 2021, is included in our consolidated accounts and results of operations (the "Consolidating Transaction"). The purchase price for ~~the Remaining Interest, after giving effect to our partners’ carried~~this interest is approximately $28 million, subject to working capital and certain other adjustments. We anticipate that this purchase will be completed in August 2021. The completion of this purchase is subject to customary closing conditions, including the refinancing of the $47.2 million floating rate (~~i.e., 2.975% at June 30, 2021) mortgage debt on the property. We obtained a commitment for 20-year fixed-rate financing of $52 million with an interest rate of 3.48%.~~was $27.9 million. In connection with the ~~refinancing of~~purchase, the ~~mortgage debt~~$47.0 million floating-rate construction loan on the property wewas refinanced with 20-year fixed-rate (i.e; 3.48% and interest only for 10 years) mortgage debt in the principal amount of $52.0 million. We anticipate that in the quarter ending December 31, 2021, this property will ~~become an obligor or carve-out guarantor of the refinanced debt. We can provide no assurance that such transaction will be completed, or if completed, will be beneficial to us.~~

~~During: (i) the six months ended June 30, 2021, Bells Bluff generated $3.1~~generate approximately $2.0 million of rental ~~and other~~ revenues, ~~and $1.6 million, $745,000, and $1.6 million~~$805,000 of operating expenses, $460,000 of interest expense and ~~depreciation, respectively, (ii) 2020, Bells Bluff generated $5.6~~$1.2 million of rental and other revenues and $2.9 million, $1.7 million and $3.1 million, of operating expenses, interest expense and depreciation, respectively; and (iii) 2019, Bells Bluff generated $1.8 million of rental and other revenues and $1.6 million, $2.2 million and $1.3 million of operating expenses, interest expense and depreciation, respectively.depreciation. For the ~~six months~~quarter ended ~~June~~September 30, 2021, ~~and the twelve months ended December 31, 2020,~~ the average occupancy rate at this property

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was ~~94.8%~~97.7% and ~~74.7%, respectively, and for the six months ended June 30, 2021 and the twelve months ended December 31, 2020,~~ the average monthly rental rate ~~at Bells Bluff~~ was ~~$1,337, and $1,482, respectively.~~$1,483.

Dispositions

On ~~May 26,~~July 20, 2021, ~~we completed~~ the ~~sale (the "Kendall Manor Sale") of Kendall Manor - Houston, TX, a wholly-owned~~unconsolidated joint venture which owned The Avenue Apartments, Ocoee, FL, sold the property ~~to an unrelated third party~~ for ~~$24.5~~$107.7 million and recognized a gain on the sale of this property of ~~$7.3 million. During 2020, this property contributed $2.9~~$39.7 million ~~of rental income, $1.9 million of real estate operating expenses, $675,000 of interest expense and $848,000 of depreciation, respectively.~~

~~On June 8, 2021, we entered into~~(the "Avenue Sale"). As a contract to sell our interests in Tower at Opop and Lofts at Opop, located in St Louis,MO, (collectively the "OPOP Properties") to our partner for $3 million and recognized a $520,000 impairment charge, We anticipateresult of the sale, ~~will be completed in the quarter ending September 30, 2021.~~

~~During the quarter ended June 30, 2021,~~ we ~~sold 410,221 shares pursuant to our ATM sales program at an average price of $18.19 per share. Net proceeds after commissions and fees was $7.3 million.~~

~~Recent Developments~~

~~On July 20, 2021, the unconsolidated joint venture which owns The Avenue Apartments, Ocoee, FL sold the property for $107.7 million and will recognize~~recorded a gain ~~on the sale~~ of this property of approximately $39.3 million. We estimate that our share of the gain will be approximately $19 million. The joint venture will recognize a mortgage prepayment charge of $8.7 million, of which our share will be approximately $4.2$19.5 million. The mortgage debt secured by this property and discharged in connection with the sale was in principal amount of $53.1 million, had an interest rate of 3.90% and was scheduled to mature in January 2028. The joint venture recognized a loss on the extinguishment of debt of $9.1 million, of which our share was $4.5 million. During 2020, this property contributed $51,000 of equity in loss of unconsolidated joint ventures.

On July 28, 2021, the unconsolidated joint venture which ~~owns~~owned Parc at 980, Lawrenceville, GA, sold the property for $118.3 million and ~~will recognize~~recognized a gain on the sale of this property of ~~approximately $44.0 million. Our share~~$44.3 million (the "Parc Sale"; and together with the Avenue Sale, the "Avenue/Parc Sale"). As a result of the ~~gain will be approximately $15~~sale, we recorded again of $15.5 million. The mortgage debt secured by this property and discharged in connection with the sale was in principal amount of $54.4 million, had an interest rate of 3.97% and was scheduled to mature in March 2028. The joint venture recognized a loss on the extinguishment of debt of $308,000, of which our share was $107,000. During 2020, this property contributed $3,000 of equity in loss of unconsolidated joint ventures.

~~Subsequent to June~~On August 20, 2021, we sold a cooperative apartment in New York, NY, for a sales price of $545,000 and recognized a gain of $414,000 on the sale(the “Coop Sale”).

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Debt Reduction

During the quarter ended September 30, 2021, ~~we paid off $17.0 million~~our consolidated subsidiaries paid-off three first mortgages and three supplemental mortgages with an aggregate balance of ~~mortgage debt on wholly-owned properties. Such debt was scheduled to mature in 2022 and~~$31.9 million. These mortgages had a weighted average interest rate of ~~4.46%.~~4.53% and a remaining term to maturity of nine months. In connection with the payoffs, we incurred a loss on the extinguishment of debt of $902,000.

Other Activities

On September 13, 2021, the Board of Directors approved a stock repurchase plan authorizing us, effective as of October 1, 2021, to repurchase up to $5,000,000 of shares of our common stock through December 31, 2023.

During the quarter ended September 30, 2021, we sold 59,269 shares pursuant to our ATM sales program at an average price of $18.23 per share. Net proceeds after commissions and fees was $1.1 million.

We increased the dividend declared on our common stock in September 2021 by 4.5% to $0.23 per share.

Recent Transactions

On October 1, 2021, we purchased for $1.6 million, our joint venture partner’s 10.0% interest in the entity that owns Crestmont at Thornblade-Greenville SC. As a result, this property is wholly owned by us. We anticipate that during the quarter ending December 31, 2021, this property will generate approximately $970,000, $485,000, $320,000, and $350,000 of rental revenues, operating expenses, interest expense and depreciation, respectively.

On November 4, 2021, we sold our interest in the joint venture that own OPOP Towers and OPOP Lofts, two properties located in St. Louis, MO. (the "OPOP Properties"), for $3,000,000. The Company, during the quarter ended June 30, 2021, recorded a $520,000 impairment charge with respect to this property and anticipates that during the quarter ended December 31, 2021,it will record a gain of approximately $385,000 on the sale. During the nine months ended September 30, 2021, these properties generated $879,000 in equity in loss from unconsolidated joint ventures.

Results of Operations – Three months ended ~~June~~September 30, 2021 compared to three months ended ~~June~~September 30, 2020.

Revenues

The following table compares our revenues for the periods indicated:


		Three Months Ended June 30,								Three Months Ended September 30,
(Dollars in thousands):	(Dollars in thousands):	2021		2020		Increase (Decrease)		% Change	(Dollars in thousands):	2021		2020		Increase (Decrease)		% Change
Rental revenue		$	6,958	$	6,657	$	301	4.5
Rental and other revenue from real estate properties									Rental and other revenue from real estate properties	$	7,709	$	7,020	$	689	9.8
Other income	Other income	3		159		(156)		(98.1)	Other income	5		293		(288)		(98.3)
Total revenues	Total revenues	$	6,961	$	6,816	$	145	2.1	Total revenues	$	7,714	$	7,313	$	401	5.5

Rental and other revenue from real estate properties

The increase is due to the following ~~changes at same store properties:~~changes:

•$~~233,000~~964,000 due to the Consolidating Transaction,

•$268,000 due to an increase in average rental rates

•~~$191,000 due to an increase in occupancy,~~ at same store properties, and

•$~~128,000~~100,000 due to an increase in ancillary income (e.g., late fees, utility reimbursements, etc). at same store properties.

Offsetting the increase is a ~~$328,000 decline~~$717,000 decrease due to the sale of the Kendall Manor ~~sale.~~property in the quarter ended June 30, 2021 (the "Kendall Sale").

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Other income

The decrease is due to the inclusion, in the three months ended ~~June~~September 30, 2020, of the interest ~~that was~~ collected on the Newark loan ~~receivable. This loan~~receivable which was sold on September 30, ~~2020.~~2020 (the "Newark Receivable").

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Expenses

The following table compares our expenses for the periods indicated:


		Three Months Ended June 30,								Three Months Ended September 30,
(Dollars in thousands)	(Dollars in thousands)	2021		2020		Increase (Decrease)		% Change	(Dollars in thousands)	2021		2020		Increase (Decrease)		% Change
Real estate operating expenses	Real estate operating expenses	$	3,166	$	3,004	$	162	5.4	Real estate operating expenses	$	3,404	$	3,289	$	115	3.5
Interest expense	Interest expense	1,609		1,809		(200)		(11.1)	Interest expense	1,535		1,731		(196)		(11.3)
General and administrative	General and administrative	3,154		2,957		197		6.7	General and administrative	3,114		2,730		384		14.1
Impairment charge	Impairment charge	520		—		520		N/A	Impairment charge	—		3,642		(3,642)		N/A
Depreciation	Depreciation	1,416		1,809		(393)		(21.7)	Depreciation	1,787		1,777		10		0.6
Total expenses	Total expenses	$	9,865	$	9,579	$	286	3.0	Total expenses	$	9,840	$	13,169	$	(3,329)	(25.3)

Real estate operating expense

~~Contributing~~The increase is due primarily to the ~~change is an~~inclusion of $368,000 relating to the Consolidating Transaction and a $100,000 increase in real estate taxes ~~and insurance~~ at same store ~~properties. This increase was~~properties, offset by a $464,000 decrease in operating expenses from the Kendall ~~Manor~~ Sale.

Interest expense.

The change is due to a ~~$112,000~~$216,000 decrease ~~in such expense on our floating rate junior subordinated notes~~ due to the ~~decline in interest rates and to a lesser extent, the~~payoff of mortgage ~~payoff~~debt in the current period and $169,000 due to the Kendall ~~Manor Sale.~~Sale, offset by a $218,000 increase from the inclusion of interest expense related to the Consolidating Transaction.

General and administrative.

The increase is due ~~to:~~

•~~$230,000 of professional and other fees and expenses related~~primarily to ~~our proposed offering of common stock that was terminated~~a $381,000 increase in ~~May 2021(the “Terminated Offering”), and~~

•~~a $200,000 increase in~~non-cash compensation expense, including ~~a $107,000 increase~~$165,000 relating to the grant of performance and market based restricted stock units (the "RSUs") in June 2021, $105,000 due to the ~~non-cash~~increased amortization of restricted stock ~~(primarily related to~~expense (as a result of the higher fair value of the shares granted in January 2021 in comparison to the ~~shares~~restricted stock granted in 2016).

~~The increase was offset by the inclusion, in the corresponding 2020 period, of $165,000 of professional fees related~~ and $111,000 with respect to the ~~restatement (the “Restatement”) of our financial statements.~~

~~These amounts were offset by a reduction~~restricted stock granted in ~~allocated expenses pursuant to our shared services agreement.~~June 2021.

Impairment ~~charge.~~charge

In the ~~current~~2020 period, in connection with entering into a contract to sell a vacant 8.7 acre land parcel in South Daytona Beach, FL (the "South Daytona Property") we recorded an impairment charge of ~~$520,000~~$3.6 million representing the excess of the book value ~~of our investment~~over the parcel's fair value . We anticipate that this transaction will be completed in early 2022. There was no comparable charge in the ~~Opop Properties over the anticipated selling price of the investment.~~current period.

Depreciation

~~Approximately $184,000~~The increase is due primarily to the inclusion of $364,000 from the Consolidating Transaction, offset by a $326,000 decrease is due to the Kendall ~~Manor Sale and approximately $155,000 of the decrease is due to the inclusion, in the quarter ended June 30, 2020, of an adjustment (~~Sale.

~~i.e.,~~ ~~to reflect an increase in the asset value) to such expense in connection with our buyout of a joint venture partner's interest.~~

Equity in (loss) of unconsolidated joint ventures.

The table below reflects the condensed income statements of our Unconsolidated Properties. In accordance with US generally accepted accounting principles, each of the line items in the chart below (other than equity in income (loss) of unconsolidated joint ventures) is presented as if these properties are wholly owned by us although our equity interests in these properties ranges from 32% to 90% (see note 8 of our consolidated financial statements) (dollars in thousands):

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		Three Months Ended June 30,									Three Months Ended September 30,
		2021		2020		Increase (Decrease)		% change			2021		2020		Increase (Decrease)		% change
Rental and other revenues from unconsolidated joint ventures	Rental and other revenues from unconsolidated joint ventures	$	33,005	$	31,542	$	1,463	4.6	%	Rental and other revenues from unconsolidated joint ventures	$	29,818	$	32,341	$	(2,523)	(7.8)	%

Real estate operating expense from unconsolidated joint ventures	Real estate operating expense from unconsolidated joint ventures	15,233		14,674		559		3.8	%	Real estate operating expense from unconsolidated joint ventures	14,587		16,092		(1,505)		(9.4)	%
Interest expense from unconsolidated joint ventures	Interest expense from unconsolidated joint ventures	8,472		8,766		(294)		(3.4)	%	Interest expense from unconsolidated joint ventures	7,568		8,663		(1,095)		(12.6)	%
Depreciation from unconsolidated joint ventures	Depreciation from unconsolidated joint ventures	9,791		10,417		(626)		(6.0)	%	Depreciation from unconsolidated joint ventures	8,288		10,411		(2,123)		(20.4)	%
Total expenses from unconsolidated joint ventures	Total expenses from unconsolidated joint ventures	33,496		33,857		(361)		(1.1)	%	Total expenses from unconsolidated joint ventures	30,443		35,166		(4,723)		(13.4)	%

Total revenues less total expenses from unconsolidated joint ventures	Total revenues less total expenses from unconsolidated joint ventures	(491)		(2,315)		1,824		78.8	%	Total revenues less total expenses from unconsolidated joint ventures	(625)		(2,825)		2,200		77.9	%

Other equity earnings	Other equity earnings	5		9		(4)		(44.4)	%	Other equity earnings	7		97		(90)		(92.8)	%
Impairment charges		(490)		—		(490)		N/A

Insurance recoveries		490		—		490		N/A
Gain on insurance recoveries	Gain on insurance recoveries	—		338		(338)		N/A		Gain on insurance recoveries	1,246		427		819		191.8	%
Net loss		(486)		(1,968)		1,482		75.3	%
Loss on extinguishment of debt										Loss on extinguishment of debt	(9,401)		—		(9,401)		N/A
Gain on sale of real estate										Gain on sale of real estate	83,984		—		83,984		N/A
Net income (loss)										Net income (loss)	75,211		(2,301)		77,512		N/M

Equity in (loss) of unconsolidated joint ventures		$	(492)	$	(1,387)	$	895
Equity in earnings (loss) of unconsolidated joint ventures and equity in earnings from sale of unconsolidated joint venture properties										Equity in earnings (loss) of unconsolidated joint ventures and equity in earnings from sale of unconsolidated joint venture properties	$	30,786	$	(1,529)	$	32,315

Set forth below is an explanation of the most significant changes in the components of the equity in earnings (loss) of unconsolidated joint ventures. Same store properties at Unconsolidated Properties represent 2927 properties that ~~have been~~were owned for the entirety of the periods being compared and excludes ~~two~~four properties, ~~one~~three of which ~~was in lease up during~~were sold and the ~~prior period and one that was sold in~~fourth which is the ~~current period.~~subject of the Consolidating Transaction.

Rental and other revenues from unconsolidated joint ventures

The ~~increase~~decrease is ~~due primarily to:~~composed of :

•$~~1.7~~3.2 million ~~from unconsolidated same store properties, including $659,000~~ due to the ~~increase~~Avenue/Parc Sale,

•$655,000 due to the sale of our partnership interest in ~~variable ancillary fees~~Anatole Apartments - Daytona Beach, FL (~~e.g.,~~ ~~late fees, waiver fees and tech/cable package), $645,000 from increased occupancy and $418,000 from an increase~~ the "Anatole Sale") in ~~rental rates,~~the second quarter of 2021, and

•$~~275,000~~570,000 from ~~two properties (i.e., Bells Bluff and Sola Station) that were in lease up in~~ the ~~corresponding period in the prior year.~~Consolidating Transaction.

Offsetting ~~this~~the decrease was an increase ~~is a $467,000 decrease due to the Anatole Sale.~~from same store sales of $1.9 million, including $940,000 from increased occupancy, $625,000 from increased rental rates and $346,000 from increased ancillary fees.

Real estate operating expenses from unconsolidated joint ventures

The decrease is composed of:

•$1.3 million from the Avenue/Parc Sale,

•$452,000 from the Anatole Sale, and

•$367,000 from the Consolidating Transaction.

Offsetting this decrease was a $608,000 increase in such expenses at same store properties, including increases of $227,000 of labor costs (including leasing commissions), $253,000 of utility costs and $182,000 of advertising, leasing (other than commissions) and administrative costs.

Interest expense from unconsolidated joint ventures.

The decrease is ~~due to $782,000~~composed of:

•$768,000 from the Avenue/Parc Sale,

•$178,000 from the Consolidating Transaction, and

•$145,000 from the Anatole Sale.

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Depreciation from unconsolidated joint ventures

The decrease is composed of:

•$1.3 million from the Sold Properties,

•$367,000 from the Consolidating Transaction,

•$284,000 from same store properties, due ~~primarily~~ to ~~an increase~~the inclusion, in ~~utilities (primarily water/sewer charges),~~the 2020 period, of such expense related to assets that in the current quarter have been fully depreciated, and ~~to a lesser extent, increases in appliance replacements, advertising, leasing, and insurance costs.~~

•

~~Offsetting this increase is a $263,000 decrease due to~~$176,000 from the Anatole Sale.

~~Interest expense~~Gain on insurance recoveries from unconsolidated joint ~~ventures.~~ ventures~~The decrease is due to the Anatole Sale and the refinancing, in December 2020, of a variable rate construction loan to a fixed rate permanent mortgage on the Sola Station, Columbia SC property.~~.

~~Depreciation~~

~~The decline is due primarily to the cessation of depreciation in the current period for properties (i.e., the Avenue and Parc at 980) that are being held for sale.~~

~~Impairment charges~~

In the ~~current quarter,~~three months ended September 30, 2021 we ~~recorded additional impairment charges of $490,000 at~~recognized $1.3 million in gains primarily related to two properties (Verandas at Shavano and Retreat at Cinco Ranch, both located in San Antonio, TX), that ~~had experienced damage from~~were damaged by the ~~ice storms that occurred in Texas in~~ February 2021 Texas winter storm (the "Texas ~~Ice~~ Storm")~~. Damage at these properties was greater than initially estimated. There were no comparable charges in~~, as the ~~corresponding period of~~amounts received on claims exceeded the ~~prior year~~

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~~Insurance recoveries.~~assets previously written-off. During the three months ended ~~June 30, 2021, we recognized $490,000 of additional insurance recoveries related to the impairment charges from the Texas Ice Storm~~

~~Gain on insurance recoveries. During the three months ended June~~September 30, 2020,we recognized a gain of $338,000 on insurance recoveries related to fire damaged units at a property.

Loss on extinguishment of debt from unconsolidated joint ventures

In the three months ended September 30, 2021, we incurred a prepayment charge in connection with the payoff of the mortgage in the Avenue/Parc Sale. There was no comparable charge in the three months ended September 30, 2020.

Gain on sale of real estate from unconsolidated joint ventures

See "- Transactions During the Third Quarter" for information about the gains from the Avenue/Parc Sale. There was no comparable gain in the ~~current period.~~three months ended September 30, 2020.

Gain on sale of real estate

In the ~~current quarter,~~three months ended September 30, 2021, we sold ~~our wholly-owned Kendall Manor, Houston, TX property, which had~~ a ~~book value~~cooperative apartment in New York, NY for a sales price of ~~$16.8 million, for $24.5 million~~$545,000 and recognized a gain of $414,000 on the ~~sale~~sale.

Loss on extinguishment of ~~the property of 7.3 million. There was no comparable gain in the three month period ended June 30, 2020.~~

~~Impairment charge~~debt

In the ~~current quarter, we recorded~~three months ended September 30, 2021, our consolidated subsidiaries paid off three first mortgage loans and three supplemental loans with an ~~impairment charge~~aggregate outstanding principal balance of ~~$520,000 related to our investment in the OPOP Properties as the carrying value exceeded the carrying amount~~$37.9 million and incurred an aggregate $902,000 of ~~the investment. There was no comparable charge in the three month period ended June 30, 2020.~~prepayment charges and deferred loan fee write-offs.

Results of Operations – ~~Six~~Nine months ended ~~June~~September 30, 2021 compared to ~~six~~nine months ended ~~June~~September 30, 2020.

Revenues

The following table compares our revenues for the periods indicated:


		Six Months Ended June 30,								Nine Months Ended September 30,
(Dollars in thousands):	(Dollars in thousands):	2021		2020		Increase (Decrease)		% Change	(Dollars in thousands):	2021		2020		Increase (Decrease)		% Change
Rental revenue		$	14,053	$	13,402	$	651	4.9
Rental and other revenue from real estate properties									Rental and other revenue from real estate properties	$	21,762	$	20,422	$	1,340	6.6
Other income	Other income	7		338		(331)		(97.9)	Other income	12		631		(619)		(98.1)
Total revenues	Total revenues	$	14,060	$	13,740	$	320	2.3	Total revenues	$	21,774	$	21,053	$	721	3.4

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Rental and other revenue from real estate properties

The increase is primarily due ~~to the following increases at same store properties:~~to:

•$~~396,000~~1.3 million from same store properties, including $567,000 due to an increase in occupancy,

•~~$287,00~~ $449,000 due to an increase in ~~average~~ rental rates and

•~~$183,000~~ $283,000 due to an increase in ancillary income (e.g., late fees, utility reimbursements, etc)., and

•$964,000 relating to the Consolidating Transaction.

Offsetting the increase is a ~~$287,000 decline~~$1.0 million decrease due to the Kendall ~~Manor~~ Sale.

Other income

The decrease is due to the inclusion, in the ~~six~~nine months ended ~~June~~September 30, 2020, of ~~the~~ interest collected on the Newark ~~loan receivable. This loan was sold on September 30, 2020.~~Receivable.

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Expenses

The following table compares our expenses for the periods indicated:
Six Months Ended June 30,
(Dollars in thousands) 2021 2020 Increase
(Decrease) % Change
Real estate operating expenses $ 6,283 $ 6,062 $ 221 3.6
Interest expense 3,269 3,669 (400) (10.9)
General and administrative 6,268 6,324 (56) (0.9)
Impairment charge 520 — 520 N/A
Depreciation 2,953 3,370 (417) (12.4)
Total expenses $ 19,293 $ 19,425 $ (132) (0.7)


	Nine Months Ended September 30,
(Dollars in thousands)	2021		2020		Increase (Decrease)		% Change
Real estate operating expenses	$	9,687	$	9,351	$	336	3.6
Interest expense	4,804		5,400		(596)		(11.0)
General and administrative	9,382		9,054		328		3.6
Impairment charge	520		3,642		(3,122)		(85.7)
Depreciation	4,740		5,147		(407)		(7.9)
Total expenses	$	29,133	$	32,594	$	(3,461)	(10.6)

Real estate operating expense

The increase is due primarily to an

•$474,000 at same store properties, including a $277,000 increase in real estate taxes at Avondale Station - Decatur, GA due to an increased ~~assessment.~~assessment and a $124,000 increase in insurance premiums, and

•$368,000 due to the Consolidating Transaction.

This was offset by a decline of $549,000 from the Kendall Sale.

Interest ~~expense.~~expense

The ~~change~~decrease is primarily due to :

•$297,000 from a ~~$264,000 decrease~~decline in ~~such expense~~the the interest rate paid on our ~~floating rate~~ junior subordinated notes due to the decrease in LIBOR,

•$235,000 from the Kendall Sale, and

•$212,000 from the payoff of mortgage debt.

The decline was offset by an increase in interest ~~rates and, to a lesser extent,~~expense from the ~~mortgage payoff in connection with the Kendall Manor Sale.~~Consolidating Transaction.

General and administrative.

The ~~decrease~~increase is due ~~to (i) the inclusion, in the corresponding 2020 period, of $688,000 of professional fees and expenses related to the Restatement and (ii)~~ to:

•a ~~$113,000 reduction, in the 2021 period, in expenses allocated pursuant to our shared services agreement.The decrease was offset by (i) a $409,000 increase in professional expenses incurred during the 2021 period, including $230,000 related to the Terminated Offeringand (ii) a $333,000~~$615,000 increase in compensation expense, including ~~$207,000~~$423,000 due to the non-cash amortization of restricted stock (primarily related to the higher fair value of the shares granted in January 2021 in comparison to the shares ~~issues~~issued in 2016)., $166,000 of amortization of related to the RSUs granted in 2021 and $143,000 due to the non-cash amortization of restricted stock in June 2021, and

•a $479,000 increase in professional expenses incurred during the 2021 period, including $307,000 related to the follow-on-equity offering terminated in May 2021 and $ 89,000 in insurance an compensation consulting fees..

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This increase was offset by the inclusion, in the corresponding period of 2020, of $698,000 of professional fees and expenses related to the restatement of our financial statements in 2020.

Impairment charge

In the ~~current period,~~nine months ended September 30, 2021, we recorded an impairment charge of $520,000 representing the excess of the book value of our investment in the ~~Opop Properties~~"OPOP Properties" over the ~~anticipated selling~~sale price of the investment.

In the corresponding period of the prior year, we recorded a $3.6 million impairment charge with respect to the South Daytona Property.

Depreciation

~~Approximately $215,000 of the~~The decrease is due to:

•a $541,000 decline due to the Kendall ~~Manor~~ Sale, and ~~the balance is due to~~

•the inclusion, in the ~~six~~nine months ended ~~June~~September 30, 2020, of ~~adjustments~~a $231,000 adjustment (i.e., to reflect an increase in the asset value) to such expense in connection with our buyout of a joint venture partner's interest.

This decrease was offset by $364,000 of depreciation from the Consolidating Transaction.

Equity in earnings (loss) of unconsolidated joint ventures.

The table below reflects the condensed income statements of our Unconsolidated Properties. See the discussion with respect to this line item for the three months ended ~~June~~September 30, 2021 and 2020 for additional information about this presentation (dollars in thousands):

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		Six Months Ended June 30,									Nine Months Ended September 30,
		2021		2020		Increase (Decrease)		% change			2021		2020		Increase (Decrease)		% change
Rental revenues from unconsolidated joint ventures	Rental revenues from unconsolidated joint ventures	$	65,677	$	62,385	$	3,292	5.3	%	Rental revenues from unconsolidated joint ventures	$	95,495	$	94,726	$	769	0.8	%

Real estate operating expense from unconsolidated joint ventures	Real estate operating expense from unconsolidated joint ventures	30,936		29,206		1,730		5.9	%	Real estate operating expense from unconsolidated joint ventures	45,523		45,298		225		0.5	%
Interest expense from unconsolidated joint ventures	Interest expense from unconsolidated joint ventures	16,994		17,523		(529)		(3.0)	%	Interest expense from unconsolidated joint ventures	24,562		26,186		(1,624)		(6.2)	%
Depreciation from unconsolidated joint ventures	Depreciation from unconsolidated joint ventures	20,176		20,773		(597)		(2.9)	%	Depreciation from unconsolidated joint ventures	28,464		31,184		(2,720)		(8.7)	%
Total expenses from unconsolidated joint ventures	Total expenses from unconsolidated joint ventures	68,106		67,502		604		0.9	%	Total expenses from unconsolidated joint ventures	98,549		102,668		(4,119)		(4.0)	%

Total revenues less total expenses from unconsolidated joint ventures	Total revenues less total expenses from unconsolidated joint ventures	(2,429)		(5,117)		2688		52.5	%	Total revenues less total expenses from unconsolidated joint ventures	(3,054)		(7,942)		4,888		61.5	%

Other equity earnings	Other equity earnings	14		17		(3)		(17.6)	%	Other equity earnings	21		34		(13)		(38.2)	%
Impairment charges	Impairment charges	(2,813)		—		(2,813)		N/A		Impairment charges	(2,813)		—		(2,813)		N/A

Insurance recoveries	Insurance recoveries	2,813		—		2,813		N/A		Insurance recoveries	2,813		—		2,813		N/A
Gain on insurance recoveries	Gain on insurance recoveries	—		338		(338)		N/A		Gain on insurance recoveries	1,246		765		481		62.9	%
Net loss		(2,415)		(4,762)		$	2,347
Loss on extinguishment of debt										Loss on extinguishment of debt	(9,401)		—		(9,401)		N/A
Gain on sale of real estate										Gain on sale of real estate	83,984		—		83,984		N/A
Net income (loss)										Net income (loss)	72,796		(7,143)		$	79,939

Equity in (loss) of unconsolidated joint ventures		$	(1,837)	$	(3,202)	$	1,365
Equity in earnings (loss) of unconsolidated joint ventures										Equity in earnings (loss) of unconsolidated joint ventures	$	28,949	$	(4,731)	$	33,680

Set forth below is an explanation of the most significant changes in the components of the net ~~loss~~earnings of our unconsolidated joint ventures. Same store properties at unconsolidated joint ventures represent 2725 properties that have been owned for the entirety of the periods being compared and exclude any properties that were in lease up, sold or ~~sold~~purchased during ~~that same~~such periods.

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Rental revenue from unconsolidated joint ventures

The increase is due primarily to:

•$~~2.6~~3.6 million from unconsolidated same store properties - ~~$1.1~~$1.4 million from an increase in rental rates, $1.0 million due to the increase in ancillary fees (e.g., late fees, waiver fees and tech/cable package)~~, $838,000~~ and $1.0 million from increased occupancy, ~~and $741,000 from an increase in rental rates,~~

•$~~661,000 from two properties (i.e., Bells Bluff and Sola Station) that were in lease up in the corresponding period in the prior year, and~~

•~~$427,000~~494,000 from the inclusion, for the entire ~~six~~nine months ended ~~June~~September 30, 2021, ~~a property~~of Abbotts Run-Wilmington, NC ("Abbots Run"), that was only owned for a portion of the corresponding period in the prior year, ~~("Abbotts Run")~~and

•$391,000 from a property (i.e., Sola Station- Columbia, SC) that was in lease-up in the corresponding period in the prior year.

The ~~increase was~~increases were offset by ~~$413,000 due to~~$2.5 million from the Avenue/Parc Sale, $1.1 million from the Anatole ~~Sale.~~Sale, and $112,000 from the Consolidating Transaction.

Real estate operating expenses from unconsolidated joint ventures

The increase is due to:

•$~~1.4~~1.9 million from unconsolidated same store properties, ~~primarily due to~~including increases ~~of: (i) $776,000~~of $897,000 in ~~utilities (primarily water/sewer), (ii) $326,000~~utility costs, $347,000 in insurance ~~premiums,~~costs, and ~~(iii) $227,000~~$308,000 in ~~real estate tax expense,~~payroll and leasing commissions, and

•$~~398,000~~416,000 from the inclusion, for the entire ~~six~~nine months ended ~~June~~September 30, 2021, of Abbotts ~~Run, and~~

•~~$250,000 from the two properties that were in lease up in the corresponding period of the prior year.~~Run.

The increase was offset by a ~~$302,000 decrease in repairs~~$1.3 million due to the Avenue/Parc Sale and ~~maintenance and $264,000 due to~~$716,000 from the Anatole Sale.

Interest expense from unconsolidated joint ventures. The ~~decline~~decrease is due to the ~~refinancing of a variable rate construction loan to a fixed rate permanent mortgage on~~ the ~~Sola Station, Columbia, SC property and~~Avenue/Parc Sale ($779,000), the Consolidating Transaction ($379,000), from the Anatole ~~Sale.~~Sale ($259,000) and $178,000 due to reduced principal balances as a result of mortgage amortization.

Impairment ~~charges.~~charges from joint ventures. During the ~~six~~nine months ended ~~June~~September 30, 2021, we recognized $2.8 million of impairment charges related to the Texas ~~Ice~~ Storm. There were no comparable charges in the corresponding period of the prior year.

Insurance ~~recoveries.~~recoveries from joint ventures. During the ~~six~~nine months ended ~~June~~September 30, 2021, we recognized $2.8 million of insurance recoveries related to the Texas ~~Ice~~ Storm.

Loss on early extinguishment of debt from unconsolidated joint ventures

The loss in the nine months ended September 30, 2021, is due primarily to a prepayment charge in connection with the payoff of the mortgage upon the Avenue/Parc Sale.

Gain on sale of real estate from unconsolidated joint ventures

See "- Transactions During the Third Quarter" for information about the Avenue/Parc Sale. There was no comparable gain in the nine months ended September 30, 2020.

Gain on sale of real estate

In the nine months ended September 30, 2021, we recognized gains of $7.3 million from the Kendall Manor Sale and $414,000 from the Coop Sale. See note 5 to our consolidated financial statements. There was no comparable gain in the nine months ended September 30, 2020.

Gain on sale of partnership interest

In the nine months ended September 30, 2021, we recognized a gain of $2,244,000 in connection with the Anatole Sale. There was no comparable gain in the nine months ended September 30, 2020.

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Loss on extinguishment of debt

See “- Transactions During the Three Months Ended September 30, 2021” and “- Results of Operations for the Three Months ended September 30, 2021 compared to the Three Months ended September 30, 2020” for information about the payoff of $37.9 million of mortgage debt and the loss incurred in connection therewith. There was no comparable charge in the nine month period ended September 30, 2020.

Liquidity and Capital Resources

We require funds to pay operating expenses and debt service, acquire properties, make capital improvements, fund capital contributions, pay dividends and, to the extent we deem appropriate, reduce other than in the ordinary course, our indebtedness over time. Generally, our primary sources of capital and liquidity ~~have been~~are the operations of our multi-family properties (including distributions from the joint ventures that own such properties), mortgage debt financings and re-financings, equity contributions for acquisitions from our joint venture partners, our share of the proceeds from the sale of properties, the sale of shares of our common stock pursuant to our at-the-market equity distribution program, borrowings from our credit facility and our available cash (including restricted cash). On ~~June~~September 30, 2021 and ~~August 2,~~November 1, 2021, our cash and cash equivalents, were approximately ~~$34.7~~$29.6 million and ~~$61.8~~$30.4 million, respectively, and excludes funds held at our unconsolidated joint ventures.

We anticipate that through 2023, ~~and without giving effect to the debt reduction (the"Debt Reduction") described in "-Recent Developments",~~ our operating expenses, ~~$108.4~~$75.1 million of mortgage amortization and interest expense, and ~~$163.0~~$88.2 million of balloon payments (including ~~$96.0~~$66.8 million and ~~$102.4~~$56.0 million, respectively, from unconsolidated joint ventures) due with respect to mortgages maturing from 2021 to 2023, estimated cash dividend payments of at least ~~$40.0~~$37.6 million (assuming (i) the current quarterly dividend rate of ~~$0.22~~$0.23 per share and (ii) 18.2 million shares outstanding), will be funded from cash generated from operations (including distributions from unconsolidated joint ventures), sales of properties and, to the extent available, our credit facility. Our operating cash flow and available cash is insufficient to fully fund the ~~$163.0~~$88.2 million of balloon payments, and if we are unable to refinance such debt, we may need to issue additional equity or dispose of properties, in each case on potentially unfavorable terms.

~~After giving effect to the Debt Reduction, at August 2,~~At September 30, 2021, we had mortgage debt of ~~$809.7~~$797.8 million (including ~~$711.5~~$663.1 million of mortgage debt of our unconsolidated subsidiaries). The mortgage debt at our: (i) consolidated subsidiaries had a weighted average interest rate of ~~4.08%~~3.79% and a weighted average remaining term to maturity of approximately ~~5.0~~11 years, and (ii) at our unconsolidated subsidiaries had a weighted average interest rate of ~~3.95%~~4.03% and a remaining term to maturity of approximately ~~7.3~~7.5 years.

Capital improvements at (i) 16 multi-family properties will be funded by approximately ~~$7.9~~$7.6 million of restricted cash available at ~~June~~September 30, 2021 and the cash flow from operations at such properties and (ii) other properties will be funded from the cash flow from operations of such properties.

In addition to the challenges presented by the current highly competitive environment to acquire properties, our ability to acquire additional multi-family properties ~~(including our acquisition of the Remaining Interest in Bells Bluff and~~(or the interests of joint venture partners in ~~other properties)~~properties owned by our unconsolidated subsidiaries), is limited by our available cash, and our ability to (i) draw on our credit facility, (ii) obtain, on acceptable terms, equity contributions from joint venture partners and mortgage debt from lenders, (iii) raise capital from the sale of our common stock, and (iv) use the net proceeds available to us from other property sales. Further, if and to the extent we generate ordinary taxable income, we will be required to make distributions to stockholders to maintain our REIT status and as a result, will be limited in our ability to use gains, if any, from property sales, as a source of funds for operating expenses, debt service and property acquisitions.

Junior Subordinated Notes

As of ~~June~~September 30, 2021, $37.4 million (excluding deferred costs of ~~$307,000)~~$302,000) in principal amount of our junior subordinated notes is outstanding. These notes mature in April 2036, contain limited covenants (including covenants prohibiting us from paying dividends or repurchasing capital stock if there is an event of default (as defined therein) on these notes), are redeemable at our option and bear an interest rate, which resets and is payable quarterly, of three-month LIBOR plus 200 basis points. At ~~June~~September 30, 2021 and 2020, the interest rate on these notes was ~~2.19%~~2.13% and ~~2.76%~~2.27%, respectively.

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Credit Facility

Our credit facility with VNB, as amended and modified from time to time, allows us to borrow, subject to compliance with borrowing base requirements and other conditions, up to $15 million. The facility is available for the (i) for the acquisition of, and investment in, multi-family properties, and (ii) working capital (including dividend payments) and operating expenses. It is secured by the cash available in certain cash accounts maintained by the Company at VNB , matures April 2023 and bears an annual interest rate of 50 basis points over the prime rate, with a floor of 4.25%. At ~~June~~September 30, 2021, the annual interest rate on this facility was 4.25%. There is an unused facility fee of 0.25% per annum on the difference between the outstanding loan balance and the maximum amount then available under the facility.

The facility includes restrictions and covenants which limit, among other things, the incurrence of liens, and which require compliance with financial ratios relating to, among other things, the minimum amount of debt service coverage with respect to the properties (and amounts drawn on the facility) used in calculating the borrowing base, the minimum number of wholly owned properties and the minimum number of properties used in calculating the borrowing base. Net proceeds received from

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the sale, financing or refinancing of wholly owned properties are generally required to be used to repay amounts outstanding under the facility. ~~We are~~At September 30, 2021, we were in compliance in all material respects with the facility.

Off Balance Sheet Arrangements

Although we are not a party to any off-balance sheet arrangements (as such term is defined in Item 303(a)(4) of Regulation S-K), the following information may be of interest to investors. At ~~June~~September 30, 2021, we are joint venture partners in approximately 3025 unconsolidated joint ventures which own 27 multi-family properties and that the distributions to us from these joint venture properties ($~~4.2~~3.0 million in the quarter ended ~~June~~September 30, 2021) are a material source of our liquidity and cash flow. Further, we may be required to make significant capital contributions with respect to these properties. At ~~June~~September 30, 2021, these joint venture properties have a net equity carrying value of ~~$160.0~~$128.5 million and are subject to net mortgage debt, which is not reflected on our consolidated balance sheet, of ~~$817.3~~$663.1 million. Although BRT Apartments Corp. is not the obligor with respect to such mortgage debt, the loss of any of these properties due to mortgage foreclosure or similar proceedings would have a material adverse effect on our results of operations and financial condition. These joint venture arrangements have been, and we anticipate that they will continue to be, material to our liquidity and capital resource position. See note 8 to our consolidated financial statements.

Cash Distribution Policy

We have elected to be treated as a REIT under the Internal Revenue Code of 1986, as amended, which we refer to as the “Code.” To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute to our stockholders within the time frames prescribed by the Code at least 90% of our ordinary taxable income. Management currently intends to maintain our REIT status. As a REIT, we generally will not be subject to corporate Federal income tax on taxable income we distribute to stockholders in accordance with the Code. If we fail to qualify as a REIT in any taxable year, we will be subject to Federal income taxes at regular corporate rates and may not be able to qualify as a REIT for four subsequent tax years. Even if we qualify for Federal taxation as a REIT, we are subject to certain state and local taxes on our income and to Federal income and excise taxes on undistributed taxable income, (i.e., taxable income not distributed in the amounts and in the time frames prescribed by the Code).

Our net operating loss at December 31, 2020 was ~~estimated to be approximately $32.7~~$36.2 million; therefore, we are not currently required by Code provisions relating to REITs to pay cash dividends to maintain our status as a REIT. Notwithstanding the foregoing, on April 7, 2021 and July 9, 2021, we paid a quarterly cash dividend of $0.22 per share and on October 7, 2021 paid a quarterly cash dividend of $.23 per share.

We are carefully monitoring our discretionary spending in light of the pandemic. Our largest recurring discretionary expenditure has been our quarterly dividend (which was ~~$ 0.22~~$0.23 per share of common stock, or in the approximate amount of ~~$4.0~~$4.2 million, for the most recent quarter). Each quarter, our board of directors evaluates the timing and amount of our dividend based on its assessment of, among other things, our short and long- term cash and liquidity requirements, prospects, debt maturities, projections of our REIT taxable income, net income, funds from operations, and adjusted funds from ~~operations and the dividend policies of our peers.~~operations.

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Funds from Operations; Adjusted Funds from Operations; Net Operating Income

We disclose below funds from operations (“FFO”) and adjusted funds from operations (“AFFO”) because we believe that such metrics are a widely recognized and appropriate measure of the performance of an equity REIT.

We compute FFO in accordance with the “White Paper on Funds From Operations” issued by the National Association of Real Estate Investment Trusts (“NAREIT”) and NAREIT’s related guidance. FFO is defined in the White Paper as net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, 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. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis. In computing FFO, we do not add back to net income the amortization of costs in connection with our financing activities or depreciation of non- real estate assets. We compute AFFO by deducting from FFO our straight-line rent accruals, loss on extinguishment of debt, restricted stock and restricted stock unit expense, deferred mortgage costs and gain on insurance recovery. Since the NAREIT White Paper only provides guidelines for computing FFO, the computation of AFFO may vary from one REIT to another.

We believe that FFO and AFFO are useful and standard supplemental measures of the operating performance for equity REITs and are used frequently by securities analysts, investors and other interested parties in evaluating equity REITs, many of which present FFO and AFFO when reporting their operating results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate assets, which assumes that the carrying value of real estate assets diminishes predictably over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, we believe that FFO and AFFO provide a performance measure that when compared year over year, should reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs and other matters without the inclusion of depreciation and amortization, providing a perspective that may not be necessarily apparent from net income. We also consider FFO and AFFO to be useful to us in evaluating potential property acquisitions.

FFO and AFFO do not represent net income or cash flows from operations as defined by GAAP. FFO and AFFO should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor should FFO and AFFO be considered an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity. FFO and AFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization and capital improvements. FFO and AFFO do not represent cash flows from operating, investing or financing activities as defined by GAAP.

Management recognizes that there are limitations in the use of FFO and AFFO. In evaluating our performance, management is careful to examine GAAP measures such as net income and cash flows from operating, investing and financing activities.

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The tables below provides a reconciliation of net loss determined in accordance with GAAP to FFO and AFFO on a dollar and per share basis for each of the indicated periods (dollars in thousands, except per share amounts):
Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
GAAP Net income (loss) attributable to common stockholders $ 6,027 $ (4,246) $ 2,262 $ (9,077)
Add: depreciation of properties 1,416 1,809 2,953 3,370
Add: our share of depreciation in unconsolidated joint ventures 6,276 6,627 12,875 13,199
Add: Impairment charge 520 — 520 —
Add: our share of impairment charge in unconsolidated joint venture 348 — 2,010 —
Deduct: gain on sale of real estate and partnership interest (9,523) — (9,523) —
Adjustments for non-controlling interests (4) (4) (8) (8)
NAREIT Funds from operations attributable to common stockholders 5,060 4,186 11,089 7,484
Adjustments for: straight-line rent accruals (10) (10) (20) (20)
Add: amortization of restricted stock and restricted stock units 569 461 1,107 899
Add: amortization of deferred borrowing costs 73 80 153 160
Add: our share of deferred mortgage costs from unconsolidated joint venture properties 143 163 291 323
Less: our share of insurance recovery (348) — (2,010) —
Less: our share of gain on insurance proceeds from unconsolidated joint venture — (169) — (169)
Adjustments for non-controlling interests 2 1 4 3
Adjusted funds from operations attributable to common stockholders $ 5,489 $ 4,712 $ 10,614 $ 8,680


		Three Months Ended June 30,				Six Months Ended June 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2021		2020		2021		2020			2021		2020		2021		2020
GAAP Net income (loss) attributable to common stockholders	GAAP Net income (loss) attributable to common stockholders	$	0.34	$	(0.25)	$	0.13	$	(0.53)	GAAP Net income (loss) attributable to common stockholders	$	28,106	$	(7,484)	$	30,368	$	(16,561)
Add: depreciation of properties	Add: depreciation of properties	0.09		0.10		0.17		0.20		Add: depreciation of properties	1,787		1,777		4,740		5,147
Add: our share of depreciation in unconsolidated joint ventures	Add: our share of depreciation in unconsolidated joint ventures	0.35		0.39		0.73		0.77		Add: our share of depreciation in unconsolidated joint ventures	5,514		6,624		18,389		19,823
Add: Impairment charge	Add: Impairment charge	0.03		—		0.03		—		Add: Impairment charge	—		3,642		520		3,642
Add: our share of impairment charge in unconsolidated joint venture	Add: our share of impairment charge in unconsolidated joint venture	0.02		—		0.11		—		Add: our share of impairment charge in unconsolidated joint venture	—		—		2,010		—
Deduct: our share of equity in earnings from sale of unconsolidated joint venture										Deduct: our share of equity in earnings from sale of unconsolidated joint venture	(34,982)		—		(34,982)		—
Deduct: gain on sale of real estate and partnership interest										Deduct: gain on sale of real estate and partnership interest	(414)		—		(9,937)		—
Adjustments for non-controlling interests										Adjustments for non-controlling interests	(4)		(4)		(12)		(12)
NAREIT Funds from operations attributable to common stockholders										NAREIT Funds from operations attributable to common stockholders	7		4,555		11,096		12,039

Deduct: gain on sale of real estate		(0.54)		—		(0.54)		—
Adjustment for non-controlling interests		—		—		—		—
NAREIT Funds from operations per diluted common share		0.29		0.24		0.63		0.44

Adjustments for: straight line rent accruals		—		—		—		—

Adjustments for: straight-line rent accruals										Adjustments for: straight-line rent accruals	(10)		(10)		(30)		(30)
Add: loss on extinguishment of debt										Add: loss on extinguishment of debt	902		—		902		—
Add: our share of loss on extinguishment of debt from unconsolidated joint ventures										Add: our share of loss on extinguishment of debt from unconsolidated joint ventures	4,581		—		4,581		—
Add: amortization of restricted stock and restricted stock units	Add: amortization of restricted stock and restricted stock units	0.03		0.03		0.06		0.05		Add: amortization of restricted stock and restricted stock units	843		461		1,950		1,360
Add: amortization of deferred borrowing costs	Add: amortization of deferred borrowing costs	—		—		0.01		0.01		Add: amortization of deferred borrowing costs	62		80		215		240
Add: our share of deferred mortgage costs from unconsolidated joint venture properties	Add: our share of deferred mortgage costs from unconsolidated joint venture properties	0.01		0.01		0.02		0.02		Add: our share of deferred mortgage costs from unconsolidated joint venture properties	148		156		439		479
Less: our share of insurance recovery	Less: our share of insurance recovery	(0.02)		—		(0.11)		—		Less: our share of insurance recovery	—		—		(2,010)		—
Less: our share of gain on insurance proceeds from unconsolidated joint venture	Less: our share of gain on insurance proceeds from unconsolidated joint venture	—		(0.01)		—		(0.01)		Less: our share of gain on insurance proceeds from unconsolidated joint venture	(880)		(350)		(880)		(519)
Adjustments for non-controlling interests	Adjustments for non-controlling interests	—		—		—		—		Adjustments for non-controlling interests	2		2		6		5
Adjusted funds from operations per diluted common share		$	0.31	$	0.27	$	0.61	$	0.51
Adjusted funds from operations attributable to common stockholders										Adjusted funds from operations attributable to common stockholders	$	5,655	$	4,894	$	16,269	$	13,574

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	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Net income (loss) attributable to common stockholders	$	1.54	$	(0.44)	$	1.69	$	(0.97)
Add: depreciation of properties	0.10		0.11		0.29		0.31
Add: our share of depreciation in unconsolidated joint ventures	0.30		0.39		1.04		1.16
Add: Impairment charge	—		0.21		0.03		0.21
Add: our share of impairment charge in unconsolidated joint venture	—		—		0.11		—
Deduct: our share of equity in earnings from sale of unconsolidated joint venture	(1.92)		—		(1.97)		—
Deduct: gain on sale of real estate	(0.02)		—		(0.56)		—
Adjustment for non-controlling interests	—		—		—		—
NAREIT Funds from operations per diluted common share	—		0.27		0.63		0.71

Adjustments for: straight line rent accruals	—		—		—		—
Add: loss on extinguishment of debt	0.05		—		0.05		—
Add: our share of loss on extinguishment of debt from unconsolidated joint ventures	0.25		—		0.26		—
Add: amortization of restricted stock and restricted stock units	0.05		0.02		0.11		0.08
Add: amortization of deferred borrowing costs	—		—		0.01		0.01
Add: our share of deferred mortgage costs from unconsolidated joint venture properties	0.01		0.01		0.02		0.03
Less: our share of insurance recovery	—		—		(0.11)		—
Less: our share of gain on insurance proceeds from unconsolidated joint venture	(0.05)		(0.02)		(0.05)		(0.03)
Adjustments for non-controlling interests	—		—		—		—
Adjusted funds from operations per diluted common share	$	0.31	$	0.28	$	0.92	$	0.80

Diluted shares outstanding for FFO and AFFO	18,215,924		17,176,401		17,820,909		17,095,315

For the three months ended ~~June~~September 30, 2021, FFO decreased from the corresponding 2020 period primarily due to the loss on extinguishment of debt offset by a reduction in interest expense at both our consolidated and unconsolidated properties.

For the three months ended September 30, 2021, AFFO increased from the corresponding period in 2020 primarily due to ~~overall increased~~reduced interest expense and, to a lesser extent, improved operating margins at our same store consolidated and unconsolidated properties, offset by the impact of dispositions.

For the nine months ended September 30, 2021, FFO decreased from the corresponding 2020 period due to the loss on extinguishment of debt, the increase in expense related to equity awards and the inclusion, in the corresponding 2020 period, of other income related to the Newark Receivable. The decrease was offset by insurance recoveries and gain on insurance proceeds at unconsolidated properties, and improved operating margins and reduced interest expense at our consolidated and unconsolidated properties.

For the ~~six~~nine months ended ~~June~~September 30, 2021, ~~FFO and~~ AFFO increased from the corresponding period in 2020, primarily due to ~~overall increased~~improved operating margins and reduced interest expense at our consolidated and unconsolidated properties ~~and to a lesser extent, a reduction in interest expense. FFO also increased as a result of insurance recoveries~~offset by the inclusion, in the corresponding 2020 period, of other income from the Newark Receivable.

Diluted per share FFO and AFFO were impacted during the three and nine months ended September 30, 2021 by the increase of 1,039,523 and 725,594, respectively, weighted average shares of common stock outstanding from the third quarter of 2020 through the current ~~six month period.~~quarter, primarily due to stock issuances pursuant to the Company’s equity incentive and at-the-market equity offering programs.

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Net Operating Income, or NOI, is a non-GAAP measure of performance. NOI is used by our management and many investors to evaluate and compare the performance of our properties to other comparable properties, to determine trends at our properties and to determine the estimated fair value of our properties. The usefulness of NOI may be limited in that it does not take into account, among other things, general and administrative expense, interest expense, loss on extinguishment of debt, casualty losses, insurance recoveries and gains or losses as determined by GAAP. NOI is a property specific performance metric and does not measure our performance as a whole.

We compute NOI, by adjusting net income (loss) to (a) add back (1) depreciation expense, (2) general and administrative expenses, (3) interest expense, (4) loss on extinguishment of debt, (5) equity in loss of unconsolidated joint ventures, (6) provision for taxes, (7) the impact of non-controlling interests, and (b) deduct (1) other income, (2) gain on sale of real estate, and (3) gain on insurance recoveries related to casualty loss. Other REIT’s may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REIT’s. We believe NOI provides an operating perspective not immediately apparent from GAAP operating income or net income (loss). NOI is one of the measures we use to evaluate our performance because it (i) measures the core operations of property performance by excluding corporate level expenses and other items unrelated to property operating performance and (ii) captures trends in rental housing and property operating expenses. However, NOI should only be used as an alternative measure of our financial performance.

The following table provides a reconciliation of net income attributable to common stockholders as computed in accordance with GAAP to NOI of our consolidated properties for the periods presented (dollars in thousands):

Three Months Ended June 30, Six Months Ended June 30,
2021 2020 2021 2020
GAAP Net income (loss) attributable to common stockholders $ 6,027 $ (4,246) $ 2,262 $ (9,077)
Less: Other Income (3) (159) (7) (338)
Add: Interest expense 1,609 1,809 3,269 3,669
         General and administrative 3,154 2,957 6,268 6,324
         Impairment charge 520 — 520 —
         Depreciation 1,416 1,809 2,953 3,370
         Provision for taxes 67 65 124 127
Less: Gain on sale of real estate (7,279) — (7,279) —
Gain on sale of partnership interest (2,244) — (2,244) —
         Equity in loss of unconsolidated joint venture properties 492�� 1,387 1,837 3,202
Add: Net income attributable to non-controlling interests 33 31 67 63
Net Operating Income $ 3,792 $ 3,653 $ 7,770 $ 7,340
Less: Non-same store Net Operating Income $ (313) $ (560) $ (845) $ (1,035)
Same store Net Operating Income $ 3,479 $ 3,093 $ 6,925 $ 6,305


	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
GAAP Net income (loss) attributable to common stockholders	$	28,106	$	(7,484)	$	30,368	$	(16,561)
Less: Other Income	(5)		(293)		(12)		(631)
Add: Interest expense	1,535		1,731		4,804		5,400
General and administrative	3,114		2,730		9,382		9,054
Impairment charge	—		3,642		520		3,642
Depreciation	1,787		1,777		4,740		5,147
Provision for taxes	31		65		155		192
Less: Gain on sale of real estate	(414)		—		(7,693)		—
Gain on sale of partnership interest	—		—		(2,244)		—
Equity in earnings from sale of unconsolidated joint venture properties	(34,982)		—		(34,982)		—
Add: Loss on extinguishment of debt	902		—		902		—
Equity in loss of unconsolidated joint venture properties	4,196		1,529		6,033		4,731
Add: Net income attributable to non-controlling interests	35		34		102		97
Net Operating Income	$	4,305	$	3,731	$	12,075	$	11,071

Less: Non-same store Net Operating Income	$	(845)	$	(476)	$	(1,690)	$	(1,511)
Same store Net Operating Income	$	3,460	$	3,255	$	10,385	$	9,560

For the three months ended ~~June~~September 30, 2021, NOI increased ~~$139,000,~~$574,000 from the corresponding period in 2020 primarily due to a ~~$301,000~~$689,000 increase in rental revenues offset by a ~~$162,000~~$115,000 increase in operating expenses. Same store NOI in the three months ended ~~June~~September 30, 2021, increased by ~~$386,000~~$205,000 from the corresponding period in 2020, ~~for the same reasons.~~due to a $433,000 increase in rental revenues offset by a $228,000 increase in operating expenses.

For the ~~six~~nine months ended ~~June~~September 30, 2021, NOI increased ~~$430,000~~$1.0 million from the corresponding period in 2020, primarily due to a ~~$651,000~~$1.3 million increase in rental revenues offset by a ~~$221,000~~$336,000 increase in operating expenses. Same store NOI in the ~~six~~nine months ended ~~June~~September 30, 2021, increased by ~~$620,000~~$825,000 from the corresponding period in 2020, due to a $1.3 million increase in rental revenues offset by a $474,000 increase in operating expenses.

See "-Results of Operations"for a discussion of the ~~same reasons.~~improvement in operating margins.

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Item 3. Quantitative and Qualitative Disclosures About Market Risks

All of our mortgage debt isbears interest at fixed rate, other than one mortgage, which is subject to an interest rate swap agreement that effectively fixes the interest rate. As of June 30, 2021, the fair value of this derivative instrument is dependent upon existing market interest rates and swap spreads, which change over time. At June 30, 2021, if there had been (i) an increase of 100 basis points in forward interest rates, the fair market value of this derivative instruments and the net unrealized gain thereon would have increased by approximately $10,000 and (ii) if there had been a decrease of 100 basis points in forward interest rates, the fair market value of these derivatives and the net unrealized gain thereon would have decreased by approximately $10,000. These changes would not have any impact on our net income or cash.

rates. Our junior subordinated notes bear interest at the rate of three month LIBOR plus 200 basis points. At ~~June~~September 30, 2021, the interest rate on these notes was ~~2.19%~~2.13%. A 100 basis point increase in the rate would increase our related interest expense by approximately $374,000 annually and a 100 basis point decrease in the rate would decrease our related interest expense by ~~$50,000~~$46,000 annually.

Item 4. Controls and Procedures

As disclosed in Part II, Item 9A. Controls and Procedures in our Annual Reports on Form 10-K for the years ended December 31, 2020 (the “2020 Annual Report”) and 2019, a material weakness was identified in internal controls over financial reporting arising out of our misapplication of Accounting Standards Codification 810. As further described in the 2020 Annual Report, to remediate this weakness, we changed the process of evaluating the accounting for investments in property ventures. Specifically beginning during the quarter ended June 30, 2020, we implemented procedures to assess each investment in accordance with the applicable accounting guidance and prepare an analysis that highlights the key criteria and decision points leading to the consolidation or equity method determination. Specific multi-level reviews of this enhanced documentation have been implemented to ensure that the correct contract terms are included in the analyses and the criteria and decision points are properly assessed. As these controls operate over a subjective area, include management judgment, and require certain technical and operational expertise, we have determined them to be management review controls. Additionally, due to the technical knowledge needed to perform the analysis and review, we have also implemented additional required training on consolidation accounting.

As required under Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer, Senior Vice President-Finance and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of ~~June~~September 30, 2021. As a result of the implementation of the remediation efforts described above and our testing of such controls during the quarter ended June 30, 2021 (we were unable to test such controls earlier because from the quarter ended June 30, 2020 through the quarter ended March 31, 2021, we did not engage in any transactionsBased upon that ~~would have allowed us to test the remediated controls),~~evaluation, these officers concluded that as of ~~June~~September 30, 2021 our disclosure controls and procedures were effective.

There have been no changes in our internal control over financial reporting during the quarter ended ~~June~~September 30, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

For further information about our remediation of a weakness in internal controls over financial reporting, see “Item 4. Controls and Procedures” in our Quarterly Report on Form 10-Q for the period ended June 30, 2021.

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Part II - Other Information

Item ~~1A. Risk Factors~~2. Unregistered Sales of Equity Securities and Use of Proceeds

~~The following supplements~~On September 13, 2021, the ~~risk factors disclosed in Part I, Item 1A~~Board of ~~our Annual Report~~

~~Our failure~~Directors approved a stock repurchase plan authorizing the Company, effective as of October 1, 2021, to ~~comply with our obligations under our debt instruments may reduce our stockholders’ equity, and adversely affect our net income and ability~~repurchase up to ~~pay dividends.~~

~~Several~~$5,000,000 of our debt instruments include covenants that require us to maintain certain financial ratios, including various coverage ratios, and comply with other requirements. Failure to meet interest and other payment obligations under our debt instruments or a breach by usshares of common stock through December 31, 2023. During the covenants to comply with certain financial ratios would place us in non-compliance under such instruments. If the lender called a default and required us to repay the full amount outstanding under such instrument,quarter ended September 30, 2021, we might be required to rapidly dispose of our properties, including properties securing such debt instruments, which could have an adverse impact on the amounts we receive on such disposition. The lender on the Bells Bluff property, at which we are in the process of buying out the interests of our joint venture partners, previously advised that the property wasdid not in compliance with a financial covenant under the related $47.1 million mortgage and subsequently waived such non-compliance. We believe that the property is not currently in compliance with a similar financial covenant. Although we are, in connection with the buyout, refinancing such debt, no assurance can be given that we will refinance such debt before the lender declares a default or that if we are unable to timely complete the refinancing, the lender will again waive such non-compliance. If we are unable to satisfy the covenants of our debt obligations (including the Bells Bluff debt), the lender could exercise remedies available to it under the applicable debt instrument and as otherwise provided by law, including the possible appointment of a receiver to manage the property, application of deposits or reserves maintained under the debt instrument for payment of the debt, or foreclose and/or cause the forced sale of the property or asset securing such debt. A foreclosure or other forced disposition of our assets could result in the disposition of same at below the carrying value of such asset. The disposition of our properties or assets at below our carrying value may adversely affect our net income, reduce our stockholders’ equity and adversely affect our ability to pay dividends.repurchase any common stock.

Item 5. Other Information

The information set forth with respect to the sale of the investment in the OPOP Properties is incorporated herein be reference from the disclosures with respect thereto in "Management's Discussion and Analysis of Financial Condition and Results of Operations - Recent Transactions".

Item 6. Exhibits


Exhibit No.						Title of Exhibits
31.1						Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2						Certification of Senior Vice President—Finance pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3						Certification of Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1						Certification of President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2						Certification of Senior Vice President—Finance pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.3						Certification of Vice President and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101						The following financial information from the Company's Quarterly Report on Form 10-Q for the quarter ended ~~June~~September 30, 2021, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements. XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104						Cover Page Interactive Date File (formatted as inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BRT APARTMENTS CORP.




~~August 6,~~November 9, 2021			/s/Jeffrey A. Gould
			Jeffrey A. Gould, President and
			Chief Executive Officer





~~August 6,~~November 9, 2021			/s/George Zweier
			George Zweier, Vice President
			and Chief Financial Officer
			(principal financial officer)

3842


Interest Rate Derivative	Current Notional Amount		Fixed Rate		Maturity
Interest rate swap	$	967	5.25	%	April 1, 2022