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 March 31, ~~2022~~2023

☐ 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.

~~18,603,490~~19,179,905 Shares of Common Stock,

par value $0.01 per share, outstanding on May ~~2, 2022~~1, 2023

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 -~~ March 3 1 ~~, 202~~2 31, 2023 (unaudited) and December 31, ~~202~~1 2022 (audited)	3
	Consolidated Statements of Operations – Three months ended March 3 1 , 202 23 and 202 12 (unaudited)	4
	~~Consolidated Statements of Comprehensive Income (loss) – Three~~ m ~~onths ended~~ ~~March~~ 3 1 ~~, 202~~2 ~~and 202~~1 ~~(unaudited)~~	5
	Consolidated Statements of Equity – Three months ended March 3 1 , 202 23 and 202 12 (unaudited)	65
	Consolidated Statements of Cash Flows – Three months ended ~~March~~M a rch 3 1 , 202 23 and 202 12 (unaudited)	7
	Notes to Consolidated Financial Statements	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2019

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	3431

Item 4.	Controls and Procedures	3431

Part II – Other Information

Item 1.	Legal Proceedings	32

Item 6.	Exhibits	3532

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) references to the impact of the COVID-19 pandemic include the impact of the governmental~~ and ~~non-governmental responses thereto and the economic consequences thereof, and (v)~~(iv) "same store properties" refer to properties that we owned and operated for the entirety of the 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.

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~~Part I ‑ FINANCIAL INFORMATION~~

Item 1. Financial Statements

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share data)

March 31, 2022 December 31, 2021
(unaudited) (audited)
ASSETS
Real estate properties, net of accumulated depreciation and amortization of $39,259 and $36,467 $ 328,334 $ 293,550
Investments in unconsolidated joint ventures 106,025 112,347
Cash and cash equivalents 29,688 32,339
Restricted cash 6,543 6,582
Other assets 12,410 10,341
Real estate property held for sale — 4,379
Total Assets $ 483,000 $ 459,538
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net of deferred costs of $1,297 and $980 $ 211,565 $ 199,877
Junior subordinated notes, net of deferred costs of $292 and $297 37,108 37,103
Accounts payable and accrued liabilities 20,125 19,607
Total Liabilities 268,798 256,587
Commitments and contingencies 0 0
Equity:
BRT Apartments Corp. stockholders' equity:
Preferred shares $0.01 par value 2,000 shares authorized, none outstanding — —
Common stock, $0.01 par value, 300,000 shares authorized;
17,632 and 17,349 shares outstanding
176 173
Additional paid-in capital 262,170 258,161
Accumulated deficit (48,175) (55,378)
Total BRT Apartments Corp. stockholders’ equity 214,171 202,956
Non-controlling interest 31 (5)
Total Equity 214,202 202,951
Total Liabilities and Equity $ 483,000 $ 459,538


	March 31, 2023		December 31, 2022
	(unaudited)		(audited)
ASSETS
Real estate properties, net of accumulated depreciation and amortization of $61,480 and $55,195	$	647,476	$	651,603
Investments in unconsolidated joint ventures	41,163		42,576
Cash and cash equivalents	15,252		20,281
Restricted cash	830		872
Other assets	14,980		16,786

Total Assets	$	719,701	$	732,118
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net of deferred costs of $4,655 and $4,166	$	423,820	$	403,792
Junior subordinated notes, net of deferred costs of $272 and $277	37,128		37,123
Credit facility, net of deferred costs of $— and $498	—		18,502
Accounts payable and accrued liabilities	15,419		22,631
Total Liabilities	476,367		482,048

Commitments and contingencies
Equity:
BRT Apartments Corp. stockholders' equity:
Preferred shares $0.01 par value 2,000 shares authorized, none outstanding	—		—
Common stock, $0.01 par value, 300,000 shares authorized; 18,191 and 18,006 shares outstanding	182		180
Additional paid-in capital	276,034		273,863

Accumulated deficit	(32,900)		(23,955)
Total BRT Apartments Corp. stockholders’ equity	243,316		250,088
Non-controlling interest	18		(18)
Total Equity	243,334		250,070
Total Liabilities and Equity	$	719,701	$	732,118

See accompanying notes to consolidated financial statements.

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BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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


		Three Months Ended March 31,				Three Months Ended March 31,
		2022		2021				2023		2022
Revenues:	Revenues:						Revenues:
Rental and other revenue from real estate properties	Rental and other revenue from real estate properties	$	11,430	$	7,095		Rental and other revenue from real estate properties	$	22,939	$	11,430
Other income	Other income	4		4			Other income	—		4
Total revenues	Total revenues	11,434		7,099			Total revenues	22,939		11,434
Expenses:	Expenses:						Expenses:
Real estate operating expenses - including $11 and $7 to related parties		4,753		3,117
Real estate operating expenses - including $6 and $11 to related parties							Real estate operating expenses - including $6 and $11 to related parties	10,434		4,753
Interest expense	Interest expense	2,021		1,660			Interest expense	5,483		2,021
General and administrative - including $246 and $172 to related parties		3,633		3,114
General and administrative - including $173 and $246 to related parties							General and administrative - including $173 and $246 to related parties	4,055		3,633

Depreciation and amortization	Depreciation and amortization	3,606		1,537			Depreciation and amortization	8,008		3,606
Total expenses	Total expenses	14,013		9,428			Total expenses	27,980		14,013
Total revenues less total expenses	Total revenues less total expenses	(2,579)		(2,329)			Total revenues less total expenses	(5,041)		(2,579)
Equity in earnings (loss) of unconsolidated joint ventures		1,230		(1,345)
Equity in earnings of unconsolidated joint ventures							Equity in earnings of unconsolidated joint ventures	815		1,230
Equity in earnings from sale of unconsolidated joint ventures properties	Equity in earnings from sale of unconsolidated joint ventures properties	12,961		—			Equity in earnings from sale of unconsolidated joint ventures properties	—		12,961
Gain on sale of real estate	Gain on sale of real estate	6		—			Gain on sale of real estate	—		6

Gain on insurance recoveries							Gain on insurance recoveries	240		—

Income (loss) from continuing operations		11,618		(3,674)
(Loss) income from continuing operations							(Loss) income from continuing operations	(3,986)		11,618
Income tax provision	Income tax provision	74		57			Income tax provision	76		74
Net income (loss) from continuing operations, net of taxes		11,544		(3,731)
(Loss) income from continuing operations, net of taxes							(Loss) income from continuing operations, net of taxes	(4,062)		11,544
Net income attributable to non-controlling interest	Net income attributable to non-controlling interest	(36)		(34)			Net income attributable to non-controlling interest	(36)		(36)
Net income (loss) attributable to common stockholders		$	11,508	$	(3,765)
Net (loss) income attributable to common stockholders							Net (loss) income attributable to common stockholders	$	(4,098)	$	11,508

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	Basic	17,561,802		17,319,222			Basic	18,064,301		17,561,802
Diluted	Diluted	17,654,349		17,319,222			Diluted	18,064,301		17,654,349

Per share amounts attributable to common stockholders:	Per share amounts attributable to common stockholders:						Per share amounts attributable to common stockholders:
Basic and Diluted		$	0.62	$	(0.22)
Basic and diluted							Basic and diluted	$	(0.21)	$	0.62

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
March 31,
2022 2021
Net income (loss) $ 11,544 $ (3,731)
Other comprehensive income :
Unrealized income on derivative instruments — 5
Other comprehensive income — 5
Comprehensive income (loss) 11,544 (3,726)
Comprehensive (income) attributable to non-controlling interests (36) (35)
Comprehensive income (loss) attributable to common stockholders $ 11,508 $ (3,761)

~~See accompanying notes to consolidated financial statements.~~

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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
Balances, December 31, 2021 $ 173 $ 258,161 $ — $ (55,378) $ (5) $ 202,951
Distributions - common stock - $0.23 per share — — — (4,305) — (4,305)
Restricted stock and restricted stock units vesting 2 (2) — — — —
Compensation expense - restricted stock and restricted stock units — 974 — — — 974
Shares issued through equity offering program, net 1 3,037 — — — 3,038
Net income — — — 11,508 36 11,544
Other comprehensive income — — — — — —
Comprehensive income 11,544
Balances, March 31, 2022 $ 176 $ 262,170 $ — $ (48,175) $ 31 $ 214,202


	Common Stock		Additional Paid-In Capital		Accumulated Deficit		Non- Controlling Interest		Total
Balances, December 31, 2022	$	180	$	273,863	$	(23,955)	$	(18)	$	250,070
Distributions - common stock - $0.25 per share	—		—		(4,847)		—		(4,847)
Restricted stock and restricted stock units vesting	2		(2)		—		—		—
Compensation expense - restricted stock and restricted stock units	—		1,410		—		—		1,410



Shares issued through DRIP	—		763		—		—		763

Net (loss) income	—		—		(4,098)		36		(4,062)


Balances, March 31, 2023	$	182	$	276,034	$	(32,900)	$	18	$	243,334

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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
Balances, December 31, 2020 $ 164 $ 245,605 $ (19) $ (67,978) $ (84) $ 177,688
Distributions - common stock - $0.22 per share — — — (4,011) — (4,011)
Restricted stock vesting 4 (4) — — — —
Compensation expense - restricted stock and restricted stock units — 538 — — — 538
Net (loss) income — — — (3,765) 34 (3,731)
Other comprehensive income — — 4 — 1 5
Comprehensive loss (3,726)
Balances, March 31, 2021 $ 168 $ 246,139 $ (15) $ (75,754) $ (49) $ 170,489


	Common Stock		Additional Paid-In Capital		Accumulated Deficit		Non- Controlling Interest		Total
Balances, December 31, 2021	$	173	$	258,161	$	(55,378)	$	(5)	$	202,951
Distributions - common stock - $0.22 per share	—		—		(4,305)		—		(4,305)
Restricted stock vesting	2		(2)		—		—		—
Compensation expense - restricted stock and restricted stock units	—		974		—		—		974

Shares issued through equity offering program, net	1		3,037		—		—		3,038

Net income	—		—		11,508		36		11,544


Balances, March 31, 2022	$	176	$	262,170	$	(48,175)	$	31	$	214,202

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)

Three Months Ended March 31,
2022 2021
Cash flows from operating activities:
Net income (loss) $ 11,544 $ (3,731)
Adjustments to reconcile net income(loss) to net cash provided by operating activities:
Depreciation and amortization 3,606 1,537
Amortization of deferred financing costs 52 80
Amortization of debt fair value adjustment (89) —
Amortization of restricted stock and restricted stock units 974 538
Equity in earnings of unconsolidated joint ventures (1,230) 1,345
Equity in earnings of sale of real estate of unconsolidated venture (12,961) —
Gain on sale of real estate (6) —
Increases and decreases from changes in other assets and liabilities:
(Increase) decrease in other assets (1,071) 470
Decrease in accounts payable and accrued liabilities (350) (87)
Net cash provided by operating activities 469 152
Cash flows from investing activities:
Improvements to real estate properties (802) (223)
Purchase of investment in joint venture (8,288) —
Proceeds from the sale of real estate 4,385 —
Distributions from unconsolidated joint ventures 19,796 3,881
Contributions to unconsolidated joint ventures (2,122) —
Net cash provided by investing activities 12,969 3,658
Cash flows from financing activities:
Mortgage payoffs (14,558) —
Mortgage principal payments (410) (801)
Dividends paid (4,198) (3,777)
Proceeds from the sale of common stock 3,038 —
Net cash used in financing activities (16,128) (4,578)


	Three Months Ended March 31,
	2023		2022
Cash flows from operating activities:
Net (loss) income	$	(4,062)	$	11,544
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	8,008		3,606
Amortization of deferred financing costs	252		52
Amortization of debt fair value adjustment	157		(89)
Amortization of restricted stock and restricted stock units	1,410		974
Equity in earnings of unconsolidated joint ventures	(815)		(1,230)
Equity in earnings from sale of real estate of unconsolidated joint venture properties	—		(12,961)

Gain on sale of real estate	—		(6)




Increases and decreases from changes in other assets and liabilities:

Decrease in other assets	(2,538)		(1,071)
Decrease (increase) in accounts payable and accrued liabilities	528		(350)
Net cash provided by operating activities	2,940		469

Cash flows from investing activities:


Improvements to real estate properties	(2,158)		(802)
Purchase of investment in joint ventures	—		(8,288)
Proceeds from the sale of real estate	—		4,385

Distributions from unconsolidated joint ventures	2,228		19,796
Contributions to unconsolidated joint ventures	—		(2,122)

Net cash provided by investing activities	70		12,969

Cash flows from financing activities:
Proceeds from mortgages payable	21,173		—
Mortgage payoffs	—		(14,558)
Mortgage principal payments	(813)		(410)

Repayment of credit facility	(19,000)		—
Increase in deferred financing costs	(683)		—
Dividends paid	(9,521)		(4,198)


Proceeds from the sale of common stock	—		3,038
Proceeds from issuance of DRP shares	763		—

Net cash used in financing activities	(8,081)		(16,128)

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BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Thousands)


		Three Months Ended March 31,					Three Months Ended March 31,
		2022		2021			2023		2022
Net decrease in cash, cash equivalents and restricted cash:	Net decrease in cash, cash equivalents and restricted cash:	(2,690)		(768)		Net decrease in cash, cash equivalents and restricted cash:	(5,071)		(2,690)
Cash, cash equivalents and restricted cash at beginning of period	Cash, cash equivalents and restricted cash at beginning of period	38,921		28,685		Cash, cash equivalents and restricted cash at beginning of period	21,153		38,921
Cash, cash equivalents and restricted cash at end of period	Cash, cash equivalents and restricted cash at end of period	$	36,231	$	27,917	Cash, cash equivalents and restricted cash at end of period	$	16,082	$	36,231

Supplemental disclosure of cash flow information:	Supplemental disclosure of cash flow information:					Supplemental disclosure of cash flow information:
Cash paid during the period for interest	Cash paid during the period for interest	$	2,021	$	1,587	Cash paid during the period for interest	$	5,094	$	2,021
Cash paid for income taxes	Cash paid for income taxes	$	1	$	6	Cash paid for income taxes	$	8	$	1
Reclassification of property to held for sale		$	—	$	16,800

Consolidation on buyout of partnership interest:

Consolidation on buyout of partnership interests:						Consolidation on buyout of partnership interests:
Increase in real estate assets	Increase in real estate assets	$	(36,802)			Increase in real estate assets	$	—	$	(36,802)
Increase in other assets	Increase in other assets	(1,784)				Increase in other assets	—		(1,784)
Increase in mortgage payable	Increase in mortgage payable	27,062				Increase in mortgage payable	—		27,062
Increase in deferred loan costs	Increase in deferred loan costs	(364)				Increase in deferred loan costs	—		(364)
Increase on accounts payable and accrued liabilities		761
Increase in accounts payable and accrued liabilities						Increase in accounts payable and accrued liabilities	—		761
Decrease in investment in unconsolidated joint ventures	Decrease in investment in unconsolidated joint ventures	2,839				Decrease in investment in unconsolidated joint ventures	—		2,839
		$	(8,288)				$	—	(8,288)

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.

		March 31,					March 31,
		2022		2021			2023		2022
Cash and cash equivalents	Cash and cash equivalents	$	29,688	$	19,406	Cash and cash equivalents	$	15,252	$	29,688
Restricted cash	Restricted cash	6,543		8,511		Restricted cash	830		6,543
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	$	36,231	$	27,917	Total cash, cash equivalents and restricted cash, shown in consolidated statement of cash flows	$	16,082	$	36,231

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BRT APARTMENTS CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

March 31, ~~2022~~2023

Note 1 – Organization and Background

BRT Apartments Corp. (the "Company" or "BRT"), a Maryland corporation, owns, operates and, to a lesser extent, ~~develops~~holds interest in joint ventures that own multi-family properties. The Company conducts its operations to qualify as a real estate investment trust, or REIT, for federal income tax purposes.

These multi-family properties may be wholly owned by usthe Company (including its consolidated subsidiaries) or by unconsolidated joint ventures in which the Company generally contributes a significant portion of the equity. At March 31, ~~2022,~~2023, the Company: ~~(a)~~(i) wholly owns 1121 multi-family properties located in 7eleven states with an aggregate of ~~2,864~~5,420 units and a carrying value of ~~$326,350,000; (b)~~$645,564,000; (ii) has interests, through unconsolidated entities, in 21eight multi-family properties located in 8four states with an aggregate of ~~6,121~~2,781 units with a carrying value of ~~$103,917,000 and; (c) has a 17.45% interest in a development project~~$37,660,000; and (iii) own other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of ~~$2,122,000. BRT's equity interests~~$5,415,000. These 29 multi-family properties are located in ~~these unconsolidated entities range from 17.45% to 80%. Most~~11 states; 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 March 31, 2022, the carrying value of the other real estate assets was $1,984,000.~~

Note 2 – Basis of Preparation

The accompanying interim unaudited consolidated financial statements, 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 months ended March 31, ~~2022~~2023 and ~~2021,~~2022, are not necessarily indicative of the results for the full year. The consolidated audited balance sheet as of December 31, ~~2021,~~2022, 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, ~~2021~~2022 (the "Annual Report") 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 1one reportable segment.

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Note 3 - Equity

Equity Distribution Agreements

OnEffective as of March 18, 2022, the Company entered into ~~separate~~ equity distribution agreements with 2three sales agents to sell ~~an aggregate sales price of~~ up to $40,000,000 of its common stock from time-to-time in an at-the-market offering. ~~Effective as of~~During the three months ended March ~~18, 2022,~~31, 2023, the Company ~~terminated the equity distribution agreements dated November 26, 2019, as amended March 31, 2021.~~did not sell any shares. During the three months ended March 31, 2022, the Company sold 136,279 shares (at an average per share price of $22.61), for an aggregate sales price of ~~$3,081,825~~$3,082,000, before commissions and fees of ~~$44,079. During the three months ended March 31, 2021, the Company did not sell shares.~~$44,000.

Common Stock Dividend Distribution

The Company declared a quarterly cash distribution of ~~$0.23~~$0.25 per share, payable on April ~~7, 2022~~4, 2023 to stockholders of record on March ~~24, 2022.~~27, 2023.

Dividend Reinvestment Plan

The Dividend Reinvestment Plan (the “DRP”) which has been in effect since July, 2022, among other things, provides stockholders with the opportunity to reinvest all or a portion of their cash dividends paid on the Company’s common stock in additional shares of its common stock, at a discount, determined in the Company’s sole discretion, of up to 5% from the market price for the common stock (as such price is calculated pursuant to the DRP). The discount from the market price is currently 3%. In the three months ended March 31, 2023, we issued 40,218 shares in lieu of cash dividends of $763,000.

Stock Based Compensation

~~The~~In 2022, the Company's ~~2020~~board of directors adopted, and the stockholders' approved, the 2022 Incentive Plan (the ~~"2020~~"2022 Plan"). This 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 March 31, ~~2022, 314,128~~2023, 623,617 shares are available for issuance pursuant to awards under the 2022 Plan. Awards to acquire 789,595 shares of common stock are outstanding under the 2020 ~~Plan.~~Incentive Plan and the 2018 Incentive Plan (collectively the "Prior Plans") and no further awards may be made pursuant to the Prior Plans.

Restricted Stock Units

In June 2022 and 2021, the Company issued restricted stock units (the "RSUs") to acquire up to 212,469and 210,375 shares of common stock pursuant to the 2022 Plan and the 2020 ~~Plan. The~~Incentive Plan, respectively. Generally, the RSUs ~~entitled~~entitle the recipients, subject to continued service through the ~~applicable~~three-year vesting ~~date (i.e.,~~ ~~March 31, 2024)~~period 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 that would have been paid ~~from~~during the ~~grant date through the~~three-year vesting ~~date~~period with respect to the shares of common stock underlying the RSUs if, when, and to the extent, the related RSUs vest. The shares underlying the RSUs are not participating securities but are contingently issuable shares.

Expense is recognized ~~over the applicable vesting period~~ on the ~~RSUs~~RSU's which the Company expects to ~~vest.~~vest over the applicable vesting period. For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, the Company recorded ~~$250,000~~$514,000 and ~~$37,000,~~$250,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the ~~RSUs.~~RSUs issued under the 2020 and 2022 Incentive Plans. At March 31, ~~2022~~2023 and December 31, ~~2021, $1,997,000~~2022, $3,111,000 and ~~$2,248,000~~$4,269,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting ~~period.~~periods.

Restricted Stock

In January 2023 and 2022, the Company granted 163,914 and 158,973 shares, respectively, of restricted stock pursuant to the 2022 and 2020 Plan. As of March 31, ~~2022~~2023, an aggregate of ~~934,342~~953,509 shares of unvested restricted stock are outstanding pursuant to the ~~2020 Incentive~~2022 Plan and ~~the 2018 Incentive Plan (the "2018 Plan"). No additional awards may be granted under the 2018 Plan.~~Prior Plans. The shares of restricted stock vest five years from the date of grant and under 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 included in the earnings per share computation.

For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, the Company recorded ~~$724,000~~$896,000 and ~~$501,000~~$724,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards. At March 31, ~~2022~~2023 and December 31, ~~2021~~, ~~$9,986,000~~2022, $9,976,000 and ~~$7,332,000,~~$7,728,000, respectively, has been deferred as unearned compensation

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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 ~~3.1~~3.0 years.

Stock Buyback

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. During the three months ended March 31, 2023 and 2022, the Company did not repurchase any shares of common stock.

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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 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 includes only those shares underlying the RSUs that it anticipates will vest based on management's ~~current estimates.~~estimates as of the end of the most recent quarter. The Company excludes any shares underlying the RSUs from such calculation if their effect would have been anti-dilutive.

The following table provides a reconciliation of the numerator and denominator of earnings per share calculations (amounts in thousands, except per share amounts):


		Three Months Ended March 31,					Three Months Ended March 31,
		2022		2021					2023		2022
Numerator for basic and diluted earnings per share:	Numerator for basic and diluted earnings per share:							Numerator for basic and diluted earnings per share:
Net Income (loss)		$	11,544	$	(3,731)
Net (loss) income								Net (loss) income	$	(4,062)	$11,544
Deduct net income attributable to non-controlling interests	Deduct net income attributable to non-controlling interests	(36)		(34)				Deduct net income attributable to non-controlling interests	(36)		(36)
Deduct (earnings) loss allocated to unvested restricted stock		(574)		163
Net income (loss) available for common stockholders: basic and diluted		$	10,934	$	(3,602)
Deduct (loss) earnings allocated to unvested restricted stock								Deduct (loss) earnings allocated to unvested restricted stock	260		(574)
Net (loss) income available for common stockholders: basic and diluted								Net (loss) income available for common stockholders: basic and diluted	$	(3,838)	$	10,934

Denominator for basic earnings per share:	Denominator for basic earnings per share:							Denominator for basic earnings per share:
Weighted average number of common shares outstanding	Weighted average number of common shares outstanding	17,561,802		17,319,222				Weighted average number of common shares outstanding	18,064,301		17,561,802
Effect of dilutive securities:	Effect of dilutive securities:							Effect of dilutive securities:
RSUs(1)	RSUs(1)	92,547		—		(1)		RSUs(1)	—		92,547
Denominator for diluted earnings per share:	Denominator for diluted earnings per share:							Denominator for diluted earnings per share:
Weighted average number of shares	Weighted average number of shares	17,654,349		17,319,222				Weighted average number of shares	18,064,301		17,654,349

Earnings (loss) per common share, basic		$	0.62	$	(0.22)
Earnings (loss) per common share, diluted		$	0.62	$	(0.22)
(Loss) earnings per common share, basic								(Loss) earnings per common share, basic	$	(0.21)	$	0.62
(Loss) earnings per common share, diluted								(Loss) earnings per common share, diluted	$	(0.21)	$	0.62

~~______________________~~

(1) E~~xcludes the~~ At March 31, 2023, excludes 35,206 shares ~~underlying~~subject to RSU's as their effect would have been anti-dilutive.

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Note 4 - Leases

Lessor Accounting

The Company owns a commercial building leased to 2two tenants under operating leases expiring from ~~2024~~2028 to ~~2028,~~2035, 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.

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 1one 21-year renewal option. As of March 31, ~~2022,~~2023, the remaining lease term, including the renewal option deemed exercised, is ~~23.5~~22.5 years.

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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 March 31, ~~2022,~~2023, the remaining lease term, including renewal options deemed exercised, is ~~14.8~~13.8 years.

As of March 31, ~~2022,~~2023, the Company's Right of Use ("ROU") assets and lease liabilities were ~~$2,518,000~~$2,324,000 and ~~$2,589,000,~~$2,433,000, respectively. As of December 31, ~~2021,~~2022, the Company's ROU assets and lease liabilities were ~~$2,568,000~~$2,371,000 and ~~$2,629,000,~~$2,472,000, 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 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, ~~excluding real estate held for sale,~~ consists of the following (dollars in thousands):


		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Land	Land	$	42,158	$	38,822	Land	$	74,246	$	74,246
Building	Building	315,279		281,841		Building	617,041		617,041
Building improvements	Building improvements	10,156		9,354		Building improvements	17,669		15,511
Real estate properties	Real estate properties	367,593		330,017		Real estate properties	708,956		706,798
Accumulated depreciation	Accumulated depreciation	(39,259)		(36,467)		Accumulated depreciation	(61,480)		(55,195)
Total real estate properties, net	Total real estate properties, net	$	328,334	$	293,550	Total real estate properties, net	$	647,476	$	651,603

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


		December 31, 2021 Balance		Additions		Capitalized Costs and Improvements		Depreciation		Sale of Property		March 31, 2022 Balance			December 31, 2022 Balance		Improvements		Depreciation		March 31, 2023 Balance
Multi-family	Multi-family	$	291,538	$	36,802	$	802	$	(2,792)	$	—	$	326,350	Multi-family	$	649,701	$	2,120	$	(6,257)	$	645,564
Land - Daytona, FL		4,379		—		—		—		(4,379)		—
Retail shopping center and other	Retail shopping center and other	2,012		—		—		(28)		—		1,984		Retail shopping center and other	1,902		38		(28)		1,912
Total real estate properties	Total real estate properties	$	297,929	$	36,802	$	802	$	(2,820)	$	(4,379)	$	328,334	Total real estate properties	$	651,603	$	2,158	$	(6,285)	$	647,476

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Contract to Acquire a Property

On March 8, 2023, we entered into an agreement to acquire a 238-unit multifamily property constructed in 2019 and located in Richmond, VA, for a purchase price of approximately $62,500,000. The purchase price includes the assumption of approximately $32,000,000 of mortgage debt bearing an interest rate of 3.34% and maturing in 2061. The purchase is subject to the satisfaction of various conditions, including the completion, to our satisfaction, of its due diligence investigation, as well as the approval by the mortgage lender of our assumption of the mortgage debt. We anticipate that this transaction will be completed by year end 2023, although we can provide no assurance that this transaction will be completed.

Property Acquisition

- Prior Year

On March 23, 2022, the Company completed the purchase of its partners' remaining 28.1% interest in Verandas at Alamo, San Antonio, TX, for a purchase price of ~~$8,721,000.~~$8,721,000, with a mortgage debt in principal amount of $27,000,000 with a fixed rate of 3.64% and interest only until October 2024 and a maturity of December 2029. As a result of this purchase, this property is wholly-owned and ~~effective March 23, 2022,~~ is included in the Company's consolidated ~~results of operations and accounts, including mortgage debt (see note 9 - "Debt Obligations").~~balance sheet.

The Company determined that the gross assets purchased in this acquisition 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 the cost accumulation and income approach which utilized a market capitalization rate of 4.5% which is a Level 3 unobservable input in the fair value hierarchy.

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~~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 (dollars in thousands):~~


	~~Purchase Price Allocation~~
~~Land~~	$	~~3,336~~
~~Building and improvements~~	~~33,404~~
~~Total land and buildings~~	~~36,740~~

~~Acquisition related intangible assets~~	~~797~~
~~Total Asset~~	$	~~37,537~~

~~Acquisition related mortgage intangible~~	$	62

~~Property Disposition~~

On February 2, 2022 the Company sold a vacant land parcel located in Daytona, Florida for a sales price of $4,700,000, and, after closing costs, recognized a nominal gain. In 2020, we recognized an impairment charge of $3,600,000 in connection with this property. At December 31, 2021, this property was classified as held-for-sale.

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.

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.

~~For the three months ended March 31, 2022 and 2021, the Company did not record any impairment charges.~~

~~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.

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Note 87 – Investment in Unconsolidated Ventures

At March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company held interests in unconsolidated joint ventures that own ~~21 and 23~~eight multi-family properties (the "Unconsolidated Properties")~~, respectively.~~ and a property in development. The condensed balance sheets below present information regarding such properties (dollars in thousands):
March 31, 2022 December 31, 2021
ASSETS
Real estate properties, net of accumulated depreciation of $125,930 and $133,615 $ 675,246 $ 734,247
Cash and cash equivalents 11,567 13,741
Other assets 25,944 25,535
Total Assets $ 712,757 $ 773,523
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net of deferred costs of $3,244 and $3,423 $ 531,246 $ 584,479
Accounts payable and accrued liabilities 10,266 17,064
Total Liabilities 541,512 601,543
Commitments and contingencies 0 0
Equity:
Total unconsolidated joint venture equity 171,245 171,980
Total Liabilities and Equity $ 712,757 $ 773,523
BRT's interest in joint venture equity $ 106,025 $ 112,347


	March 31, 2023		December 31, 2022
ASSETS
Real estate properties, net of accumulated depreciation of $62,273 and $66,945	$	282,329	$	318,304
Cash and cash equivalents	6,909		6,591
Other assets	37,563		35,372
Real estate property held for sale	33,970		—
Total Assets	$	360,771	$	360,267

LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net of deferred costs of $1,367 and $1,421	$	259,482	$	255,261
Accounts payable and accrued liabilities	5,684		8,222
Total Liabilities	265,166		263,483
Commitments and contingencies
Equity:
Total unconsolidated joint venture equity	95,605		96,784
Total Liabilities and Equity	$	360,771	$	360,267

BRT's interest in joint venture equity	$	41,163	$	42,576

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


		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Land	Land	$	92,378	$	97,230	Land	$	46,331	$	59,404
Building	Building	678,140		739,577		Building	291,473		315,400
Building improvements	Building improvements	30,658		31,055		Building improvements	6,798		10,445
Real estate properties	Real estate properties	801,176		867,862		Real estate properties	344,602		385,249
Accumulated depreciation	Accumulated depreciation	(125,930)		(133,615)		Accumulated depreciation	(62,273)		(66,945)
Total real estate properties, net	Total real estate properties, net	$	675,246	$	734,247	Total real estate properties, net	$	282,329	$	318,304

At March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the weighted average interest rate on the mortgages payable is 4.07% and ~~3.97%~~3.99%, respectively, and the weighted average remaining term to maturity is ~~7.64~~5.8 years and ~~7.60~~6.1 years, , respectively.

The condensed income statements below present information regarding the Unconsolidated Properties (dollars in thousands):


	Three Months Ended March 31,
	2023		2022
Revenues:
Rental and other revenue	$	12,132	$	25,231
Total revenues	12,132		25,231

Expenses:
Real estate operating expenses	5,675		11,169
Interest expense	2,455		6,026
Depreciation	2,707		6,636
Total expenses	10,837		23,831
Total revenues less total expenses	1,295		1,400
Other equity earnings	113		55


Gain on insurance recoveries	65		515
Gain on sale of real estate	—		23,652
Loss on extinguishment of debt	—		(30)
Net income from joint ventures	$	1,473	$	25,592

BRT's equity in earnings and equity in earnings from sale of unconsolidated joint venture properties	$	815	$	14,191

Contract to sell property

On March 13, 2023, the unconsolidated joint venture that owns Chatham Court and Reflections, a 494 unit multi-family property located in Dallas and in which the Company has a 50% interest entered into a contract to sell the property. The contract sales price is $73,000,000 and the Company estimates that its share of the (i) gain will be approximately $14,600,000 and (ii) early extinguishment of debt charge will be approximately $167,000. This property is reflected as held for sale at March 31, 2023. The Company anticipates that this sale will be completed in the quarter ending June 30, 2023.

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

Three Months Ended
March 31,
2022 2021
Revenues:
Rental and other revenue $ 25,231 $ 32,672
Total revenues 25,231 32,672
Expenses:
Real estate operating expenses 11,169 15,703
Interest expense 6,026 8,522
Depreciation 6,636 10,385
Total expenses 23,831 34,610
Total revenues less total expenses 1,400 (1,938)
Other equity earnings 55 9
Impairment of assets — (2,323)
Insurance recoveries — 2,323
Gain on insurance recoveries 515 —
Gain on sale of real estate 23,652 —
Loss on extinguishment of debt (30) —
Net income (loss) from joint ventures $ 25,592 $ (1,929)
BRT's equity in earnings (loss) and equity in earnings from sale of unconsolidated joint venture properties $ 14,191 $ (1,345)

~~Joint Venture Sales~~

On February 8, 2022, the unconsolidated joint venture in which the Company had a 65% equity interest sold The Verandas at Shavano, a 288-unit multi-family property in San Antonio, TX, for a sales price of $53,750,000. The gain on the sale of this property was $23,652,000 and BRT's share of the gain was $12,961,000. In connection with the sale, mortgage debt of $25,100,000 with 1.2 years of remaining term to maturity and bearing an interest rate of 3.61% was repaid.

Subsequent to March 31, 2022, the unconsolidated joint ventures in which the Company has a (i) 75% equity interest entered into a contract dated as of April 16, 2022 to sell Retreat at Cinco Ranch, a 268-unit multi family property in San Antonio, TX for $68,500,000 and (ii) 65% equity interest entered into a contract dated as of May 3, 2022 to sell The Vive, a 312-unit multi-family property in Kannapolis, NC for $92,000,000. The completion of these 2 sales are subject to the satisfaction of customary closing conditions and are not contingent upon the closing of one-another; it is anticipated that such sales will be completed during the quarter ending June 30, 2022.

~~Joint Venture Acquisitions~~

On March 10, 2022, the Company purchased a 17.45% interest in a planned 240-unit development property, Stono Oaks, located in Johns Island, SC. The purchase price for the interest, was $3,500,000, which includes $2,122,000 held in escrow at March 31, 2022.

~~Joint Venture Buyouts~~

On March 23, 2022, the Company completed its acquisition of the remaining 28.1% interest owned by its joint venture partner in the entity that owns Verandas at Alamo, a 288-unit multi-family property located in San Antonio, TX. The purchase price for the interest was $8,721,000. As a result of this purchase, Verandas at Alamo, effective as of the purchase date, is wholly-owned, and its operations and accounts are consolidated, including mortgage debt (see note 9 - "Debt Obligations").

Subsequent to March 31, 2022, the Company completed its acquisition of the remaining 21.6% interest owned by its joint venture partner in the entity that owns Vanguard Heights, a 174-unit multi-family property located in Creve Coeur, MO. The purchase price for the interest was $4,800,000. As a result of this purchase, Vanguard Heights, effective as of the purchase

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date, is wholly-owned and its operations and accounts will be consolidated, including mortgage debt in principal amount of $29,700,000 with an interest rate of 4.41% (interest only until July 2025) and maturing in July 2031.

Note 98 – Debt Obligations

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


		March 31, 2022		December 31, 2021			March 31, 2023		December 31, 2022
Mortgages payable	Mortgages payable	$	212,862	$	200,857	Mortgages payable	$	428,475	$	407,958
Junior subordinated notes	Junior subordinated notes	37,400		37,400		Junior subordinated notes	37,400		37,400

Credit facility						Credit facility	—		19,000
Deferred financing costs	Deferred financing costs	(1,589)		(1,277)		Deferred financing costs	(4,927)		(4,941)
Total debt obligations, net of deferred costs	Total debt obligations, net of deferred costs	$	248,673	$	236,980	Total debt obligations, net of deferred costs	$	460,948	$	459,417

Mortgages Payable

At March 31, ~~2022,~~2023, the weighted average interest rate on the Company's ~~mortgage payables~~mortgages payable was ~~3.73%~~4.02% and the weighted average remaining term to maturity is ~~10.2~~7.8 years. For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, interest expense, which includes amortization of deferred financing costs, was ~~$1,763,000~~$4,546,000 and ~~$1,430,000,~~$1,763,000, respectively.

~~During the three months ended March 31, 2022, the Company paid off~~On February 24, 2023, we obtained mortgage debt of ~~$14,558,000~~$21,173,000 on ~~a property.~~

~~On March 23, 2022, as a result of the purchase of its partners' remaining interests in Verandas at Alamo - San Antonio, TX,~~our Silvana Oaks- North Charleston, SC multi-family property, such mortgage debt matures in ~~principal amount~~March 2033, bears an interest rate of ~~$27,000,000 with a fixed rate (i.e., 3.64%~~4.55% and ~~interest only until October 2024 and a maturity of December 2029) will be included on the Company's consolidated balance sheet.~~

~~On April 7, 2022, as a result of the purchase of its partners' remaining interests in Vanguard Heights - Creve Coeur, MO, mortgage debt in principal amount of $29,700,000 with a fixed rate (i.e., 4.41% and~~is interest only for ~~until July 2025 and a maturity~~the term of ~~July 2031) will be included on~~ the ~~Company's consolidated balance sheet.~~mortgage.

Credit Facility

The Company's amended ~~and restated~~ credit facility ~~dated November 18, 2021~~ with an affiliate of Valley National Bank ("VNB"), allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to ~~$35,000,000~~$60,000,000. The facility can be used to facilitate the acquisition of multi-family properties, repay mortgage debt secured by ~~multi family~~multi-family properties and for operating ~~expense (i.e.~~expenses (i.e.,working capital (including dividend payments)); provided that no more than ~~$15,000,000~~$25,000,000 may be used for operating expenses. The facility is secured by the cash available ~~in certain cash accounts maintained by the Company~~ at VNB ~~matures November 2024~~ and ~~bears an adjustable interest rate~~the Company's pledge of ~~25 basis points over~~ the ~~prime rate, with a floor of 3.5%.~~interests in the entities that own the properties. The interest rate in effect as of March 31, ~~2022~~2023 is ~~3.75%~~8.00%. There is an unused facility fee of 0.25% per ~~annum on the total amount committed by Valley National Bank and unused by the Company.~~annum. At March 31, ~~2022,~~2023, the Company is in compliance ~~with~~in all material respects with its obligations under the facility.

At March 31, ~~2022 and December 31, 2021,~~2023, there was no outstanding balance on the facility and ~~$35,000,000~~at December 31, 2022 the outstanding balance was $19,000,000. At March 31, 2023 and December 31, 2022, $60,000,000 and $41,000,000, respectively, was available to be ~~borrowed in both periods.~~borrowed. At May 1, 2023, there was no outstanding balance on the facility and $60,000,000 available to be borrowed. Interest expense for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, which includes amortization of deferred financing costs and unused fees, was ~~$45,000~~$300,000 and ~~$17,000,~~$45,000, respectively. Deferred financing costs of ~~$247,000~~$445,000 and ~~$270,000,~~$498,000, are recorded in ~~other assets~~ on the Consolidated balance sheets at March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

Junior Subordinated Notes

At March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the outstanding principal balance of the Company's junior subordinated notes was $37,400,000, before deferred financing costs of ~~$292,000~~$272,000 and ~~$297,000,~~$277,000, respectively. The interest rate on the outstanding balance resets quarterly and is based on three months LIBOR + 2.00%. The rate in effect at March 31, 2023 and 2022 was 6.80% and ~~2021 was~~ 2.30% ~~and 2.21%~~, respectively. The notes mature April 30, 2036. The interest rate that will be in effect for the three months ending July 31, 2023 is 7.30%.

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 March 31, ~~2022~~2023 and ~~2021,~~2022, which includes amortization of deferred financing costs, was $637,000 and $212,000, ~~and $214,000,~~ respectively.

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Note 109 – 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

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respect to other business matters, as required. The aggregate fees incurred for these services in each of the three months ended March 31, 2023 and 2022 were $385,000 and ~~2021 were~~ $367,000, ~~and $350,000 ,~~ respectively.

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 ~~$11,000~~$6,000 and ~~$7,000~~$11,000 for the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, 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, (i) the ~~(i)~~ services of the 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 March 31, ~~2022~~2023 and ~~2021,~~2022, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated ~~$246,000~~$172,000 and ~~$172,000,~~$246,000, respectively. Jeffrey A. Gould and Matthew J. Gould, executive officers and directors of the Company are executive officers of Georgetown Partners, LLC, the managing general partner of Gould Investors.

Note 1110 – Fair Value Measurements

The Company estimates the fair value of financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

• Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets and liabilities in active markets

• Level 2— inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

• Level 3— inputs to the valuation methodology are unobservable and significant to fair value.

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 March 31, ~~2022~~2023 and December 31, ~~2021,~~2022, the estimated fair value of the notes is lower than their carrying value by approximately ~~$8,150,000~~$4,487,000 and ~~$8,296,000,~~$4,695,000, respectively, based on a market interest rate of ~~4.30%~~8.53% and ~~4.21%~~7.91%, respectively.

Mortgages payable: At March 31, ~~2022,~~2023, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately ~~$36,739,000,~~$28,532,000, assuming market interest rates between ~~3.92%~~4.48% and ~~4.67%~~5.83%. At December 31, ~~2021,~~2022, the estimated fair value of the Company's mortgages payable was greater than their carrying value by approximately ~~$511,000,~~$37,500,000, assuming market interest rates between ~~3.12%~~5.18% and ~~3.87%~~6.23%. 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.

~~Non-recurring~~ The fair value ~~measurements~~of debt obligations are considered to be Level 2 valuations within the fair value hierarchy.

~~The~~

Note 11 – Commitments and Contingencies

From time to time, the Company ~~reviews each investment in real estate and joint venture interests when events~~ and/or ~~circumstances change, indicating the carrying value of the investment may not be recoverable.In the evaluation of an investment for impairment, many factors~~its subsidiaries are ~~considered, including estimated current and expected cash flows from the asset during the projected hold period, costs necessary~~parties 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~~legal proceedings that arise in the ordinary course of ~~business.~~

~~Table~~business, and in particular, personal injury claims involving the operations of ~~Contents~~

~~Note 12 – Derivative Financial Instruments~~

~~Cash Flow Hedges~~the Company's properties. Although management believes that the primary and umbrella insurance coverage maintained with respect to such properties is sufficient to cover claims for compensatory damages, many of ~~Interest Rate Risk~~these personal injury claims also assert claims for exemplary (i.e punitive) damages. Generally, insurance does not cover claims for exemplary damages.

The ~~Company's objective~~Company is one of several defendants in ~~using interest rate derivatives are~~a wrongful death lawsuit seeking an unspecified amount in excess of $1,000,000 and an unspecified amount of exemplary damages. The Company’s primary insurance carrier is defending the claim. Although management is not able to ~~add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective,~~determine the probability and/or magnitude of any potential loss, if any, management believes 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~~has sufficient primary and umbrella insurance to cover the ~~receipt of variable amounts from a counterparty in exchange~~claim 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 income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

~~As of March 31, 2022 and December 31, 2021, the Company did not have any outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk.~~

~~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 March 31,~~

~~2021~~

~~Amount of (loss) gain recognized on derivative in Other Comprehensive Income~~

—

~~Amount of (loss) gain reclassified from Accumulated Other Comprehensive Income into Interest expense~~

~~(5)~~

~~Total amount of Interest expense presented in the Consolidated Statements of Operations~~

~~1,660~~

compensatory damages.

~~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.

Note 1412 – Subsequent Events

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of March 31, ~~2022,~~2023, that warrant additional disclosure, have been included in the notes to the consolidated financial statements.

1918

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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," "apparent," "experiencing," 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 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 COVID-19 pandemic and the governmental and non-governmental responses thereto;~~

•~~general~~inability to generate sufficient cash flows due to unfavorable economic and ~~business~~market conditions ~~including those currently affecting our nation’s economy~~(e.g., inflation, volatile interest rates and ~~real estate markets;~~the possibility of a recession), changes in supply and/or demand, competition, uninsured losses, changes in tax and housing laws or other factors;

•adverse changes in real estate markets, including, but not limited to, the ~~availability~~extent of future demand for multifamily units in our significant markets, barriers of entry into new markets which we may seek to enter in the future, limitations on our ability to increase or collect rental rates, competition, our ability to identify and ~~costs associated with, sources of capital~~consummate attractive acquisitions and ~~liquidity;~~

•~~accessibility of debt~~dispositions on favorable terms, and ~~equity capital markets;~~our ability to reinvest sale proceeds in a manner that generates favorable returns;

•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~~decreasing rental rates or increasing vacancy rates;

•~~our~~challenges in acquiring properties (including challenges in buying properties directly without the participation of joint venture partners and the limited number of multi-family property acquisition ~~strategy,~~opportunities available to us), which acquisitions may not be completed or 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;~~rates;

•exposure to risks inherent in investments in a ~~limited number of multi-family property acquisition opportunities acceptable to us;~~single industry and sector;

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

•increases in expenses over which we have limited control, such as real estate taxes, insurance costs and utilities, due to inflation and other factors;

•impairment in the value of real estate we own;

•failure of property managers to properly manage properties;

•accessibility of debt and equity capital markets;

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

•inability to obtain financing at favorable rates, if at all, or refinance existing debt as it matures;

•level and volatility of interest or capitalization rates or capital market conditions;

•extreme weather and natural disasters such as hurricanes, tornadoes and floods;

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

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

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

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

•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 successfully evaluate, finance, complete and integrate acquisitions, including the acquisitions of the interests of our joint venture partners in unconsolidated subsidiaries;~~

•~~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~~our ability to satisfy the ~~risks that our cash flows from operations may be insufficient to meet~~complex rules 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;~~REIT for federal income tax purposes;

•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;~~

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

•~~failure~~disease outbreaks and other public health events, and measures that are taken by federal, state, and local governmental authorities in response to ~~comply with,~~such outbreaks and events;

•impact of climate change on our properties or ~~obtain waivers of, the provisions of, and covenants and coverage ratios in, our debt instruments;~~operations;

•risks associated with the stock ownership restrictions of the Internal Revenue Code of 1986, as amended (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;~~ and

•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, ~~2021 (the~~2022( the "Annual Report"), including those ~~factors~~ set forth in such report under the ~~sections of such reports, as applicable, entitled~~ captions "Item 1. Business,"~~Cautionary Statement Regarding Forward-Looking Statements,~~" ~~"Risk~~Item 1A. Risk Factors,~~" "Business,~~" and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations".

We caution you not to ~~rely~~place undue reliance on forward-looking statements, ~~since they involve known and unknown risks, uncertainties and other factors~~ which ~~are, in some cases, beyond our control, and which could materially affect actual results, performance or achievements.~~speak only as of the date of this 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~~report or to reflect the occurrence of unanticipated ~~events.~~events thereafter.

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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, operation~~owns, operates and, to a lesser extent, ~~development of~~holds interests in joint ventures that own and operate multi-family properties. ~~These properties may be wholly owned or by unconsolidated joint ventures in which we generally contribute a significant portion of the equity.~~ At March 31, ~~2022,~~2023, we: (i) wholly-own ~~eleven~~21 multi-family properties with an aggregate of ~~2,864~~5,420 units and a carrying value of ~~$326.3~~$645.6 million; (ii) have ownership interests, through unconsolidated entities, in 21eight multi-family properties with ~~6,121~~2,781 units and a carrying value of ~~$103.9~~our net equity investment $37.7 million; and (iii) ~~have a 17.45% interest in a 240-unit multi-family development property~~own other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of ~~$2.1 million~~

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~~(excluding $1.4 million held in escrow).~~$5.4 million. The 3329 properties are located in 11 states; most of the properties are located in the Southeast United States and Texas. ~~See "~~

~~-Off Balance Sheet Arrangements" for information regarding the contributions to, and our reliance on, the cash flow and liquidity provided by the properties owned by our unconsolidated subsidiaries.~~

Challenges and Uncertainties ~~Presented by COVID-19~~

~~The pandemic did not have~~as a ~~direct material adverse effect on our financial condition and results of operations; however, there were some direct negative effects (e.g.,~~ we were more conservative in raising rents, pursuing acquisitions and in implementing our value add program, all of which, if more aggressively pursued, may have allowed us to generate additional income). The impactResult of the ~~pandemic on our business, financial condition, liquidity, results of operations and prospects will depend on future developments, which are highly uncertain and cannot be predicted with confidence.~~Volatile Economic Environment

~~Buyout of Interests in Joint Ventures~~

As ~~disclosed~~more fully described in our Annual Report, ~~our acquisition efforts~~and in ~~2022 are focused on purchasing~~particular, the ~~remaining interests~~sections thereof entitled "Risk Factors" and "Management's Discussion and Analysis of our joint venture partners in joint ventures that own multifamily properties. We refer to such purchases as the “Partner Buyouts”. After a Partner Buyout is completed, such multifamily property will be wholly ownedFinancial Condition and ~~the accounts and operations~~Results of such property will be included in our consolidated balance sheet and statements of operations, respectively, as of the date of completion of such purchase. We anticipate that our assets, liabilities, revenues and expenses will increase significantly as a result of these Partner Buyouts.

Operations

~~Due~~", we face challenges due to the ~~timing that contemplates that the sales of Retreat at Cinco Ranch and The Vive (the "Cinco/Vive Sales") described below ("-Property Dispositions - Dispositions of Joint Venture Properties - Contracts to Dispose of Joint Venture Properties") will be completed before all the Partner Buyouts described below (i.e.~~, the Partner Buyouts completed or to be completed after March 31, 2022) are completed, and after giving effect to the Shavano Sale (as described below), it is expected that there may be a slight decline in operating results in the quarter ending June 30, 2022, and that after the Cinco/Vive Sales and the Partner Buyouts described below are completed, such transactions will not have a material impact in the short-term on our net income, funds from operations or adjusted funds from operations. After giving effect to the Cinco/Vive Sales and the Partner Buyouts described below, our consolidated balance sheet will include an ~~additional~~ ~~(i) $217.4 million of mortgage debt with a weighted average remaining term to maturity of 6.5 years and a weighted average interest rate of 4.24 % and (ii) $302.2 million of real estate assets.~~volatile economic environment.

~~Completed Purchases of the Remaining Interests of Joint Venture Partners~~

~~During the Three Months Ended March 31, 2022~~

On March 23, 2022, we completed the acquisition of the remaining 28.1% interest owned by our joint venture partners in the entity that owns Verandas at Alamo Ranch, a 288-unit multi-family property located in San Antonio, TX. The purchase price for the interest, which gives effect to the cost of purchasing the promote interest (as described under "-~~Contracts to Purchase the Remaining Interests of Joint Venture Partners~~") of our joint venture partner, was $8.7 million. As a result, this property is wholly-owned and effective March 23, 2022, is included in our consolidated operations and accounts, including mortgage debt in principal amount of $27 million with an interest rate of 3.64% and maturing in December 2029. We anticipate that in the quarter ending June 30, 2022, this property will generate approximately $1.2 million of rental revenues, $579,000 of real estate operating expenses, $258,000 of interest expense and $518,000 of depreciation. For the quarter ended March 31, 2022, the average occupancy rate at this property was 94.7% and the average monthly rental rate was $1,206.

~~Subsequent to the Three Months Ended March 31, 2022~~

On April 7, 2022, we acquired the remaining 21.6% interest owned by our joint venture partners in the entity that owns Vanguard Heights, a 174-unit multi-family property located in Creve Couer, MO. The purchase price for the interest, which gives effect to the cost of purchasing the promote interest of our joint venture partner, was $4.8 million. As a result, this property is wholly-owned by us and effective April 7, 2022, is included in our consolidated operations and accounts, including mortgage debt of $29.7 million with an interest rate of 4.41% and maturing in July 2031. We anticipate that in the quarter ending June 30, 2022, this property will generate approximately $900,000 of rental revenues, $367,000 of real estate operating expenses, $337,000 of interest expense and $495,000 of depreciation. For the quarter ended March 31, 2022, the average occupancy rate at this property was 93.1% and the average monthly rental rate was $1,569.

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~~Contracts to Purchase the Remaining Interests of Joint Venture Partners in Nine Unconsolidated Ventures~~

From February 17, 2022 through April 6, 2022, we entered into agreements to acquire the remaining interests of our joint venture partners in the unconsolidated joint ventures that own the properties identified below. It is anticipated that these transactions, subject to the satisfaction of customary closing conditions, including the approval of the holders of the applicable mortgage debt, will be completed by August 1, 2022. Except as otherwise indicated, the mortgage debt reflected is currently on the property and after the completion of the applicable acquisition, will be included in our consolidated balance sheet (dollars in thousands):

Date of Agreement Property Name Location Units Remaining Interest to be Purchased Book Value of Property at 3/31/22 Purchase Price (1) Estimated Amount of Debt to be Included on our Consolidated Balance Sheet
February 2022 Jackson Square Tallahassee, FL 242 20 % $ 25,102 $ 6,220 $ 21,524
February 2022 Grove at River Place Macon, GA 240 20 % 12,829 7,485 11,481
February 2022 The Woodland Apartments Boerne, TX 120 20 % 11,394 3,550 7,935
March 2022 Brixworth at Bridge Street Huntsville, AL 208 20 % 11,844 10,851 18,500 (2)
April 2022 Abbotts Run Willmington, NC 264 20 % 37,552 8,560 23,160
April 2022
Civic Center I (3)
Southaven, MS 392 25 % 30,831 18,063 27,544
April 2022
Civic Center II (3)
Southaven, MS 384 25 % 32,725 17,694 30,288
April 2022 Magnolia Pointe at Madison Madison, AL 204 20 % 18,474 7,132 15,000
April 2022 Somerset at Trussville Birmingham, AL 328 20 % 40,300 9,785 32,250
Total 2,382 $ 221,051 $ 89,340 $ 187,682
~~____________________~~

~~(1) The purchase (i) price gives effect to the purchase of the "promote interest" (as more fully described in the Annual Report) of our joint venture partners and~~

~~(ii) is subject to customary closing and similar adjustments.~~

~~(2) The current mortgage debt of $11,184 is to be refinanced with approximately $18,500 of new ten-year mortgage debt with an anticipated interest rate of~~

~~4.25% (the "New Mortgage Debt").~~

~~(3) The completion of the sale of each of Civic Center I and Civic Center II is conditioned upon the closing of one another. The purchase price reflected for~~

~~each represents an allocation of the total purchase price based on number of units.~~

To fund these purchases, we anticipate using our available cash, a portion of the proceeds from the Cinco/Vive Sales, a portion of the proceeds of the New Mortgage Debt, funds from our at-the-market equity offering program and, funds from our credit facility. After a purchase is completed, such property will be wholly-owned and the accounts (~~i.e.,~~ the assets and liabilities), and operations of such property will be included directly, from the date of such purchase, in our consolidated balance sheets and consolidated statement of operations, respectively.

~~Property Dispositions~~

~~Dispositions of Joint Venture Properties~~

~~Completed Dispositions~~

On February 8, 2022, the unconsolidated joint venture which owned Verandas At Shavano, a 288-unit multi-family property in which we had a 65% interest, sold the property for $53.8 million and recognized a gain on the sale of this property of $23.7 million (the "Shavano Sale"). As a result of the sale, we recorded a gain of $13.0 million. The mortgage debt secured by this property and paid-off in connection with the sale was in principal amount of $25.1 million, had an interest rate of 3.61% and was scheduled to mature in May 2023. During 2021, this property contributed $526,000 of equity in earnings of unconsolidated joint ventures.

~~Contracts to Dispose of Joint Venture Properties~~

In April 2022, the unconsolidated joint venture that owns Retreat at Cinco Ranch, located in Katy, Texas, in which we hold a 75% equity interest, entered into an agreement to sell the property for $68.5 million. This property, which as of March 31, 2022, had mortgage debt of $30.2 million, with a remaining term to maturity of 3.8 years and an interest rate of 4.44%, contributed $336,000 of equity in loss of unconsolidated joint ventures in 2021. We anticipate that our share of the gain, after giving effect to our approximate $1.1 million share of the mortgage prepayment charge, will be approximately $16.4 million.

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In May 2022, the unconsolidated joint venture that owns The Vive, a 312-unit multi-family property located in Kannapolis, NC, in which we hold a 65% equity interest, entered into an agreement to sell the property for $92.0 million. This property, which as of March 31, 2022, had mortgage debt of $31.6 million, with a remaining term to maturity of 30 years and an interest rate of 3.52%, contributed $77,000 of equity in earnings of unconsolidated joint ventures in 2021. We anticipate that our share of the gain, after giving effect to our approximate $738,000 share of the mortgage prepayment charge, will be approximately $21.5 million.

~~We anticipate that the Cinco/Vive Sales will be completed, subject to the satisfaction of customary closing conditions, during the quarter ending June 30, 2022.~~

~~Sale of Vacant Land Parcel~~

On February 2, 2022, we completed the sale of a vacant land parcel located in Daytona, Florida for a sales price of $4.7 million, and, after closing costs, recognized a nominal gain. In 2020, we recognized an impairment charge of $3.6 million in connection with this property. At December 31, 2021, this property was classified as held-for-sale.

~~Other~~ Activities During the Three Months Ended March 31, ~~2022~~2023

~~Investment~~

Mortgage Financing and Credit Line Paydown

On February 24, 2023, we obtained mortgage debt of $21.2 million on our Silvana Oaks-North Charleston, SC multi-family property. Such mortgage debt matures in ~~Multi-Family Development Project~~March 2033, bears interest of 4.45% and is interest only for the term of the mortgage. We used the proceeds of this financing to pay off the outstanding $19 million balance on our credit facility.

Joint Venture - Contract to sell a property

On March ~~10, 2022, we purchased~~13, 2023, the unconsolidated joint venture that owns Chatham Court and Reflections, a ~~17.45% interest in Stono Oaks, a planned 240-unit ground-up~~494 unit multi-family ~~development,~~property located in ~~Johns Island, SC. The purchase price~~Dallas, TX, and in which we have a 50% interest, entered into a contract to sell such property. We estimate that our share of the gain from this sale will be approximately $14.6 million and that our share of the related early extinguishment of debt charge will be $167,000. In 2022, this property accounted for ~~the interest was $3.5 million, including $1.4 million held~~$753,000 of equity in ~~escrow.~~earnings from unconsolidated joint ventures. We anticipate that the closing of this ~~project~~transaction, which is subject to customary closing conditions, will be completed in the ~~fourth~~ quarter ending June 30, 2023, although we can provide no assurance that this transaction will be completed.

Contract to Acquire a Property

On March 8, 2023, we entered into an agreement to acquire a 238-unit multifamily property constructed in 2019 and located in Richmond, VA, for a purchase price of ~~2023.~~

~~Debt Reduction~~

~~In addition to~~approximately $62.5 million. The purchase price includes the ~~debt pay-offs described in "-Completed Purchases~~assumption of ~~the Remaining Interests~~approximately $32 million of ~~Joint Venture Partner" in connection with property dispositions, we paid-off, one month prior to its maturity,~~ mortgage debt ~~of $14.6 million~~ bearing an interest rate of ~~4.29% on~~3.34% and maturing in 2061. The purchase is subject to the ~~Avalon Apartments-Pensacola, FL (the "Avalon Debt").~~satisfaction of various conditions, including the completion, to our satisfaction, of its due diligence investigation, as well as the approval by the mortgage lender of our assumption of the mortgage debt. We anticipate that this transaction will be completed by year end 2023, although we can provide no assurance that this transaction will be completed.

Insurance Recoveries

In late April 2023, we received $215,000, and during the quarter ending June 30, 2023, we anticipate receiving, an additional $275,000 of insurance recoveries (net of applicable deductibles) related to an approximate $614,000 of repair and maintenance expense incurred in the six months ended March 31, 2023 (including $100,000 in the quarter ended March 31, 2023), at ten properties that incurred damage as a result of a late December 2022 storm. We anticipate that such amounts will be recorded as insurance recoveries in the quarters ending June 30, 2023 and/or September 30, 2023.

~~Sale~~Results of ~~Common Stock Pursuant to the ATM Program~~

~~We sold 136,279 shares pursuant to our ATM sales program at an average price of $22.61 per share. Net proceeds after commissions and fees was $3.0 million.~~

Operations

~~Results of Operations~~ – Three months ended March 31, ~~2022~~2023 compared to three months ended March 31, ~~2021.~~2022.

As used herein, the term "same store properties" refers to operating properties that were wholly owned for the entirety of the periods presented. For the three months ended March 31, ~~2022~~2023 and ~~2021,~~2022, there were ~~seven~~ten same store properties in our consolidated portfolio.

Revenues

The following table compares our revenues for the periods indicated:

Three Months Ended March 31,
(Dollars in thousands): 2022 2021 Increase
(Decrease) %
Change
Rental and other revenue from real estate properties $ 11,430 $ 7,095 $ 4,335 61.1
Other income 4 4 — —
Total revenues $ 11,434 $ 7,099 $ 4,335 61.1


	Three Months Ended March 31,
(Dollars in thousands):	2023		2022		Increase (Decrease)		% Change
Rental and other revenue from real estate properties	$	22,939	$	11,430	$	11,509	100.7	%
Other income	—		4		(4)		(100.0)	%
Total revenues	$	22,939	$	11,434	$	11,505	100.6	%

Rental and other revenue from real estate properties

The increase iswas due ~~to the following changes:~~to:

•$~~4.4~~10.7 million ~~due to~~from our purchase in 2022, of the ~~Partner Buyouts at four properties(i.e.,~~ ~~primarily Bells Bluff, Crestmont at Thornblade, Crossings~~interests of ~~Bellevue in 2021 and, to a lesser extent, Verandas at Alamo Ranch in February 2022 (collectively, the “Consolidating Transactions”~~our joint venture partners that owned 11 multi-family properties (the "Partner Buyouts"));, and

•$~~614,000~~1.1 million at same store properties primarily due to an increase in average rental ~~rates at same store properties.~~rates.

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~~Offsetting the~~The increase iswas offset by a ~~$739,000~~$347,000 decrease due to ~~the sale of the Kendall Manor property~~a decline in ~~May 2021 (the "Kendall Sale").~~occupancy rates.

Expenses

The following table compares our expenses for the periods indicated:


		Three Months Ended March 31,								Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2022		2021		Increase (Decrease)		% Change	(Dollars in thousands)	2023		2022		Increase (Decrease)		% Change
Real estate operating expenses	Real estate operating expenses	$	4,753	$	3,117	$	1,636	52.5	Real estate operating expenses	$	10,434	$	4,753	$	5,681	119.5	%
Interest expense	Interest expense	2,021		1,660		361		21.7	Interest expense	5,483		2,021		3,462		171.3	%
General and administrative	General and administrative	3,633		3,114		519		16.7	General and administrative	4,055		3,633		422		11.6	%

Depreciation and amortization	Depreciation and amortization	3,606		1,537		2,069		134.6	Depreciation and amortization	8,008		3,606		4,402		122.1	%
Total expenses	Total expenses	$	14,013	$	9,428	$	4,585	48.6	Total expenses	$	27,980	$	14,013	$	13,967	99.7	%

Real estate operating expense.

The increase is due ~~primarily to:~~to the following changes:

•$4.9 million from the ~~inclusion of $1.9 million relating to the Consolidating Transactions;~~Partner Buyouts, and

•$~~224,000 at~~803,000 from same store properties, including an approximate (i) $263,000 increase in insurance expense ( including approximately $70,000 related to cancellation penalties) due to ~~increases across most~~the implementation, in December 2022, of the master insurance program, (ii) $238,000 of repair, maintenance and replacements and (iii) $102,000 increase in utility expense ~~categories.~~at Bells Bluff - West Nashville, TN property, primarily due to a water leak.

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Interest expense.

The change is due to a:

•$2.9 million increase from the Partner Buyouts;

•$423,000 increase due to an increase on the interest rate on our junior subordinated debt which is based on three month LIBOR - we estimate that our interest expense on this debt during the quarter ending June 30, 2023, will be approximately $680,000, a $394,000 increase from the quarter ended June 30, 2022; and

•$250,000 increase due to the increase in the average outstanding balance on the credit facility to $11.4 million during the three months ended March 31, 2023. As of March 31, 2023, there is no outstanding balance on the facility.

The increase was offset by a ~~decline~~decrease of ~~$456,000 due to the Kendall Sale.~~

~~Interest expense.~~

~~The change is due to a $1.0 million increase from the inclusion of interest expense related to the Consolidating Transactions. This was offset by a $664,000 decrease~~$132,000 due to the payoff of ~~$31.9~~$29.5 million of mortgage debt in ~~2021 and, to a lesser extent, the payoff of the Avalon Debt in the current period. See Item 3 "Quantitative and Qualitative Disclosures About Market Risks" for information regarding the impact of changing interest rates on our floating rate junior subordinated notes.~~2022.

General and ~~administrative.~~administrative

The increase is due primarily to a ~~$436,000~~$435,000 increase in non-cash compensation expense ~~including increased amortization~~- specifically, increases of:

•$~~213,000 relating~~264,000 due to the ~~grant~~inclusion, for the entire three months ended March 31, 2023, of the amortization expense related to the performance and market based restricted stock units (the "RSUs") ~~in June 2021;~~

•~~$130,000 with respect to restricted stock~~ granted in June ~~2021;~~2022; and

•$~~93,000~~171,000 due to the amortization expense related to restricted stock, including $143,000 related to the restricted stock granted in January ~~2021 (as~~2023 as a result of the higher fair value of the shares granted in ~~in 2021~~2023 in comparison to the value of the restricted stock granted in ~~2016).~~2018.

Depreciation and amortization

The increase is due primarily to ~~the inclusion of $2.2~~$5.1 million ~~of such expense~~ from the ~~Consolidating Transactions.~~Partner Buyouts, offset by a $721,000 decline due to reduced depreciation related to lease intangibles.

Gain on insurance recoveries

We received a $240,000 payment during the quarter ended March 31, 2023, representing the final payment made by the insurance carrier with respect to damage we sustained at The Woodland Apartments - Boerne, TX in 2021.

Unconsolidated Joint Ventures - Results of Operations

Equity in earnings (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 and equity in earnings from sale of unconsolidated joint ventures) is presented as if these properties are wholly owned by us although our equity interests in these properties ranges from ~~17.45%~~32 to 80% (see note 87 of our consolidated financial statements) (dollars in thousands):

2523

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		Three Months Ended March 31,									Three Months Ended March 31,
		2022		2021		Increase (Decrease)		% change			2023		2022		Increase (Decrease)		% change
Rental and other revenues from unconsolidated joint ventures	Rental and other revenues from unconsolidated joint ventures	$	25,231	$	32,672	$	(7,441)	(22.8)	%	Rental and other revenues from unconsolidated joint ventures	$	12,132	$	25,231	$	(13,099)	(51.9)	%

Real estate operating expense from unconsolidated joint ventures	Real estate operating expense from unconsolidated joint ventures	11,169		15,703		(4,534)		(28.9)	%	Real estate operating expense from unconsolidated joint ventures	5,675		11,169		(5,494)		(49.2)	%
Interest expense from unconsolidated joint ventures	Interest expense from unconsolidated joint ventures	6,026		8,522		(2,496)		(29.3)	%	Interest expense from unconsolidated joint ventures	2,455		6,026		(3,571)		(59.3)	%
Depreciation from unconsolidated joint ventures	Depreciation from unconsolidated joint ventures	6,636		10,385		(3,749)		(36.1)	%	Depreciation from unconsolidated joint ventures	2,707		6,636		(3,929)		(59.2)	%
Total expenses from unconsolidated joint ventures	Total expenses from unconsolidated joint ventures	23,831		34,610		(10,779)		(31.1)	%	Total expenses from unconsolidated joint ventures	10,837		23,831		(12,994)		(54.5)	%

Total revenues less total expenses from unconsolidated joint ventures	Total revenues less total expenses from unconsolidated joint ventures	1,400		(1,938)		3,338		172.2	%	Total revenues less total expenses from unconsolidated joint ventures	1,295		1,400		(105)		(7.5)	%

Other equity earnings	Other equity earnings	55		9		46		511.1	%	Other equity earnings	113		55		58		105.5	%
Impairment of assets from unconsolidated joint ventures		—		(2,323)		2,323		N/A
Insurance recoveries from unconsolidated joint ventures		—		2,323		(2323)		N/A
Gain on insurance recoveries		515		—		515		N/A
Loss on extinguishment of debt		(30)		—		(30)		N/A
Gain on sale of real estate		23,652		—		23,652		N/A
Net income (loss)		$	25,592	$	(1,929)	$	27,521	N/A

Equity in earnings (loss) of unconsolidated joint ventures and equity in earnings from sale of unconsolidated joint venture properties		$	14,191	$	(1,345)	$	15,536

Gain on insurance recoveries from unconsolidated joint ventures										Gain on insurance recoveries from unconsolidated joint ventures	65		515		(450)		(87.4)	%
Loss on extinguishment of debt from unconsolidated joint ventures										Loss on extinguishment of debt from unconsolidated joint ventures	—		(30)		30		(100.0)	%
Gain on sale of real estate from unconsolidated joint ventures										Gain on sale of real estate from unconsolidated joint ventures	—		23,652		(23,652)		(100.0)	%
Net income from unconsolidated joint ventures										Net income from unconsolidated joint ventures	$	1,473	$	25,592	$	(24,119)	(94.2)	%

Equity in earnings of unconsolidated joint ventures and equity in earnings from sale of unconsolidated joint venture properties										Equity in earnings of unconsolidated joint ventures and equity in earnings from sale of unconsolidated joint venture properties	$	815	$	14,191	$	(13,376)	(94.3)	%

Set forth below is an explanation of the most significant changes in the components of the equity in earnings ~~(loss)~~ of unconsolidated joint ~~ventures.~~ventures and equity in earnings from sale of unconsolidated joint venture properties. Same store properties at Unconsolidated Properties represent 27eight properties that were owned for the entirety of the periods being ~~compared and excludes four properties, three of which were sold and the fourth which is the subject of the Consolidating Transaction.~~compared.

Rental and other revenues from unconsolidated joint ventures

The components of the decrease ~~is composed of :~~include:

•$~~4.5~~10.1 million from the Partner Buyouts;

•$3.9 million from the sale in ~~2021~~2022 of the following properties owned by ~~the~~ unconsolidated joint ~~ventures which owned The Avenue Apartments-Ocoee, FL~~ventures: Verandas at Shavano - San Antonio, TX ("Shavano"), Retreat at Cinco Ranch - Katy, TX ("Cinco") ,The Vive - Kanapolis, NC (the "Vive"), and ~~Parc~~Waters Edge at ~~980-Lawrenceville, GA (collectively,~~Harbison - Columbia, SC ("Waters Edge"; collectively with Shavano, Cinco and Vive, the ~~"Avenue/Parc~~"2022 Sales");

•~~$3.4 million from the Consolidating Transactions;~~

•$1.4 million from the sale in 2021 of our interests in the unconsolidated joint ventures that owned Anatole Apartments-Daytona Beach, FL and Tower at Opop and Lofts at Opop-St. Louis, MO (collectively, the "Anatole/Opop Sales"); and

•~~$514,000 due to the Shavano Sale.~~.

Offsetting the decrease was ~~$2.4 million~~a $868,000 increase from same store ~~sales, including $1.7 million from~~properties due to increased rental rates, ~~$545,000 from increased~~net of the impact of a decrease in occupancy ~~and $177,000 from increased ancillary fees.~~rates..

Real estate operating expenses from unconsolidated joint ventures

The components of the decrease ~~is composed of:~~are:

•$4.3 million from the Partner Buyouts; and

•$1.9 million from the ~~Avenue/Parc Sales;~~2022 Sales.

•~~$1.7 million from the Consolidating Transactions;~~

•~~$843,000 from the Anatole/Opop Sales; and~~

•~~$239,000 from the Shavano Sale.~~

Offsetting this decrease was a ~~$193,000~~$678,000 increase in such expenses at same store properties, with expenses generally increasing across most expense ~~categories.~~categories including real estate taxes and utilities and payroll.

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Interest expense from unconsolidated joint ventures.

The decrease is due to the decrease in mortgage debt due to property sales and the ~~Consolidated Transactions-in~~Partner Buyouts-in particular:

•$~~1.1~~2.5 million from the ~~Avenue/Parc Sales;~~

•~~$913,000 from the Consolidating Transactions;~~Partner Buyouts; and

•$~~464,000~~1.0 million from the ~~Anatole/Opop~~2022 Sales.

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Depreciation from unconsolidated joint ventures

The components of the decrease ~~is composed of:~~include:

•$~~1.4~~2.8 million from the ~~Avenue/Parc Sale;~~Partner Buyouts;

•$~~1.4 million~~908,000 from the ~~Consolidating Transactions;~~

•~~$511,000 from the Anatole/Opop Sales; and~~

•~~$314,000 from the Shavano Sale.~~2022 Sales (excluding Shavano).

~~Impairment charges from unconsolidated joint ventures~~

During the three months ended March 31, 2021, we recognized $2.3 million of impairment charges at three properties located in Texas due to storm damage in 2021 (the "Texas Storm"); there were no comparable charges in the current period.

~~Insurance~~Gain on insurance recoveries from unconsolidated joint ventures

~~During~~In the three months ended March 31, ~~2021,~~2023, we recognized ~~$2.3 million of insurance recoveries related to the impairment charges resulting from the Texas Storm; there were no comparable recoveries in the current period.~~

~~Gain~~a $65,000 gain on insurance recoveries from ~~unconsolidated joint ventures~~.

Ina claim filed at a property and in the three months ended March 31, 2022, we recognized $515,000 in gains primarily due to ~~the fact that the amounts we received on claims related to~~our receipt of insurance recoveries from ~~the~~claims on two properties located in Texas ~~Storm~~that were damaged in a February 2021 ice storm, which receipts exceeded the assets previously written-off.

Gain on sale of real estate from unconsolidated joint ventures

~~See "-~~ ~~Completed Dispositions"~~ ~~for information about the gain from the Shavano Sale. There was no comparable gain in~~In the three months ended March 31, ~~2021.~~2022, we recognized a gain on the sale of real estate of $23.7 million from the sale of Varandas at Shavano - San Antonio, TX. There was no comparative sale in the quarter ended March 31, 2023.

Liquidity and Capital Resources

We require funds to pay operating expenses and debt service obligations, acquire properties, ~~(including the acquisition of interests of our joint venture partners) ,~~ make capital and other improvements, fund capital contributions and pay ~~dividends and, to the extent we deem appropriate, reduce, other than in the ordinary course, our indebtedness over time.~~dividends. Generally, our primary sources of capital and liquidity are the operations of our multi-family properties (including distributions from the operations of our multi-family joint ~~ventures and distributions from sale transactions)~~ventures), mortgage debt financings and re-financings, ~~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 March 31, 2022 and~~cash. At May ~~2, 2022,~~1, 2023, our available liquidity was $73.4 million, including $13.4 million of cash and cash equivalents ~~were approximately $29.7~~and $60 million ~~and $21.5 million, respectively, and excludes funds held at~~available under our ~~unconsolidated joint ventures.~~credit facility. At May 1, 2023, the interest rate on the credit facility was 8%.

We anticipate that from April 1, ~~2022~~2023 through ~~2024,~~December 31, 2026, our operating expenses, ~~$104.5~~$130.5 million of mortgage amortization and interest expense ~~and $25.7~~(including $53.2 million from unconsolidated joint ventures), $123.4 million of balloon payments ~~(including $78.8 million and $10.8 million, respectively, from unconsolidated joint ventures) due~~ with respect to mortgages maturing ~~from 2022 to 2024,~~in 2025 and 2026, estimated capital expenditures (for 2023 only) of $8.7 million (including an estimated $2.9 million for our value add program), interest expense on our junior subordinated notes, estimated cash dividend payments of at least ~~$47.0~~$71.6 million (assuming (i) the current quarterly dividend rate of ~~$0.23~~$0.25 per share and (ii) ~~18.6~~19.1 million shares outstanding), will be funded from cash generated from operations (including distributions from unconsolidated joint ventures), property sales ~~of properties~~ and, to the extent available, our credit facility. Our operating cash flow and available cash is insufficient to fully fund the ~~$25.7~~$123.4 million of balloon payments, and if we are unable to refinance such debt on acceptable terms, we may need to issue additional equity or dispose of properties, in each case on potentially unfavorable terms.

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~~See "~~– ~~Contracts~~Our ability to ~~Purchase the Remaining Interests of Joint Venture Partners in Nine Unconsolidated Ventures" for information regarding the source of funding to effectuate the Partner Buyouts of nine~~acquire additional multi-family properties ~~owned~~and implement value-add projects is limited by ~~unconsolidated joint ventures.~~our available cash and our ability to (i) draw on our credit facility, (ii) obtain, on acceptable terms, mortgage debt from lenders, and (iii) raise capital from the sale of our common stock.

At March 31, ~~2022~~, 2023, wehad mortgage debt of ~~$747.3~~$691.2 million (including ~~$534.5~~$260.8 million of mortgage principal debt of our unconsolidated subsidiaries). The mortgage debt at our: (i) consolidated subsidiaries had a weighted average interest rate of ~~3.73%~~4.02% and a weighted average remaining term to maturity of approximately ~~10.2~~7.8 years, and (ii) at our unconsolidated subsidiaries had a weighted average interest rate of 4.07% and a remaining term to maturity of approximately ~~7.6~~5.8 years.

Capital improvements at (i) 13two unconsolidated multi-family properties will be funded by approximately ~~$6.5 million~~$830,000 of restricted cash available at March 31, ~~2022~~2023 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.

Junior Subordinated Notes

As of March 31, ~~2022,~~2023, $37.4 million (excluding deferred costs of ~~$292,000)~~$272,000 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 March 31, ~~2022~~2023 and ~~2021,~~2022, the interest rate on these notes was ~~2.30%~~6.80% and ~~2.21%~~2.30%, respectively. As noted

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in our Annual Report, there is uncertainty as to whether the alternative interest rates to LIBOR contemplated by these notes will be available when LIBOR becomes unavailable in July 2023.

Credit Facility

Our credit facility with VNB New York, LLC, an affiliate of Valley National Bank (collectively, "VNB"), ~~as amended and restated,~~ allows us to borrow, subject to compliance with borrowing base requirements and other conditions, up to ~~$35~~$60 million, (i) for the acquisition of, and investment in, multi-family properties, (ii) to repay mortgage debt secured by multi-family properties and (iii) for Operating Expenses (i.e., working capital (including dividend payments) and operating expenses); provided, that not more than ~~$15~~$25 million may be used for Operating Expenses. ~~(The facility provides that it may be expanded to provide for up to $60 million of availability if another lender(s) is willing to provide an additional $25 million of availability).~~ The credit facility is secured by cash accounts maintained by us at VNB (and we are required to maintain substantially all of our bank accounts at VNB), and the pledge of our interests in the entities that own the unencumbered multi-family properties used in calculating the borrowing base. The credit facility bears an annual interest rate, which resets daily, ~~of 25 basis points over~~equal to the prime rate, with a floor of 3.50%. The interest rate in effect as of March 31, 2023 was 8%. There is an annual fee of 0.25% on the total amount committed by VNB and unused by us. The credit facility matures in ~~November 2024.~~September 2025. Net proceeds received from the sale, financing or refinancing of our properties are generally required to be used to repay amounts outstanding on the facility. As of ~~the date of this filing,~~May 1, 2023, there was no ~~amounts are~~ outstanding balance on the credit facility and ~~$35~~$60 million is available to be borrowed thereunder.

The terms of the credit facility include certain restrictions and covenants which, among other things, limit the incurrence of liens, require that we maintain and include in the collateral securing the facility at least ~~two~~three unencumbered properties with an aggregate value(as calculated pursuant to the facility) of at least ~~$50~~$75 million, and require compliance with financial ratios relating to, among other things, maintaining a minimum tangible net worth of $140 million, the minimum amount of debt service coverage with respect to the properties (and amounts drawn on the credit facility) used in calculating the borrowing base. Net proceeds received from the sale, financing or refinancing of wholly-owned properties are generally required to be used to repay amounts outstanding under the credit facility.

At March 31, ~~2022,~~2023, we were in compliance in all material respects with the requirements of the facility.

Other Financing Sources and Arrangements

At March 31, ~~2022,~~2023, we are joint venture partners in ~~approximately 22~~ unconsolidated joint ventures which own 23eight multi-family properties ~~(including~~and a development ~~project)~~project, and ~~that~~ the distributions to us from these joint venture properties ~~($19.7~~of $2.2 million ~~(including $14.9 million from the sale of the property)~~ in the quarter ended March 31, ~~2022) are a material source of~~2023 contributed to our liquidity and cash flow. Further, we may be required to make significant capital contributions with respect to these properties. At March 31, ~~2022,~~2023, these joint venture properties have a net equity carrying value of ~~$109.4~~$41.2 million and are subject to ~~net~~ mortgage debt, which is not reflected on our consolidated balance sheet, of ~~$534.5~~$260.8 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 87 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

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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, 2021 was approximately $35.7 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

On April ~~7, 2022,~~4, 2023, we paid a quarterly cash dividend of ~~$0.23~~$0.25 per share.

We carefully monitor our discretionary spending. Our largest recurring discretionary expenditure has been our quarterly dividend (which was ~~$0.23~~$0.25 per share of common stock, or in the approximate amount of ~~$4.3~~$4.8 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.

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Application of Critical Accounting Estimates

A complete discussion of our critical accounting estimates is included in our Annual Report. There have been no significant changes in such estimates since December 31, ~~2021.~~2022.

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Funds from ~~Operations;~~Operations, Adjusted Funds from ~~Operations;~~Operations and Net Operating Income

We disclose below funds from operations (“FFO”), adjusted funds from operations (“AFFO”) and net operating income ("NOI") 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~~adjusting FFO for the loss of extinguishment of debt,our straight-line rent accruals, ~~loss on extinguishment of debt,~~ restricted stock and ~~restricted stock unit~~RSU compensation expense, ~~deferred~~fair value adjustment of mortgage ~~costs and~~debt, gain on insurance ~~recovery.~~recovery, insurance recovery from casualty loss and deferred mortgage and debt costs ( including, in each case as applicable, from our share from our unconsolidated joint ventures). 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 March 31,
2022 2021
GAAP Net income (loss) attributable to common stockholders $ 11,508 $ (3,765)
Add: depreciation of properties 3,606 1,537
Add: our share of depreciation in unconsolidated joint venture properties 4,318 6,599
Add: our share of impairment charge in unconsolidated joint venture properties — 1,662
Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties (12,961) —
Deduct: gain on sale of real estate and partnership interests (6) —
Adjustments for non-controlling interests (4) (4)
NAREIT Funds from operations attributable to common stockholders 6,461 6,029
Adjustments for: straight-line rent accruals 6 (10)
Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties 19 —
Add: amortization of restricted stock and RSU expense 974 538
Add: amortization of deferred mortgage and debt costs 77 80
Add: our share of deferred mortgage costs from unconsolidated joint venture properties 93 148
Less: our share of insurance recovery — (1,662)
Less: our share of gain on insurance proceeds from unconsolidated joint venture properties (386) —
Adjustments for non-controlling interests (1) 2
Adjusted funds from operations attributable to common stockholders $ 7,243 $ 5,125


	Three Months Ended March 31,
	2023		2022
GAAP Net (loss) income attributable to common stockholders	$	(4,098)	$	11,508
Add: depreciation of properties	8,008		3,606
Add: our share of depreciation in unconsolidated joint venture properties	1,376		4,318


Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties	—		(12,961)
Deduct: gain on sale of real estate	—		(6)
Adjustments for non-controlling interests	(4)		(4)
NAREIT Funds from operations attributable to common stockholders	5,282		6,461

Adjustments for: straight-line rent accruals	19		6

Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties	—		19
Add: amortization of restricted stock and RSU expense	1,410		974
Add: amortization of deferred mortgage and debt costs	252		77
Add: our share of deferred mortgage costs from unconsolidated joint venture properties	27		93
Add: amortization of fair value adjustment for mortgage debt	157		—

Less: gain on insurance proceeds	(240)		—
Less: our share of gain on insurance proceeds from unconsolidated joint venture properties	(30)		(386)
Adjustments for non-controlling interests	(3)		(1)
Adjusted funds from operations attributable to common stockholders	$	6,874	$	7,243

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		Three Months Ended March 31,				Three Months Ended March 31,
		2022		2021				2023		2022
Net income (loss) attributable to common stockholders		$	0.62	$	(0.22)
Net (loss) income attributable to common stockholders							Net (loss) income attributable to common stockholders	$	(0.21)	$	0.62
Add: depreciation of properties	Add: depreciation of properties	0.20		0.09			Add: depreciation of properties	0.42		0.20
Add: our share of depreciation in unconsolidated joint venture properties	Add: our share of depreciation in unconsolidated joint venture properties	0.23		0.38			Add: our share of depreciation in unconsolidated joint venture properties	0.07		0.23

Add: our share of impairment charge in unconsolidated joint venture properties		—		0.10

Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties	Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties	(0.70)		—			Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties	—		(0.70)
Deduct: gain on sale of real estate and partnership interests		—		—
Deduct: gain on sale of real estate							Deduct: gain on sale of real estate	—		—
Adjustment for non-controlling interests	Adjustment for non-controlling interests	—		—			Adjustment for non-controlling interests	—		—
NAREIT Funds from operations per diluted common share	NAREIT Funds from operations per diluted common share	0.35		0.35			NAREIT Funds from operations per diluted common share	0.28		0.35

Adjustments for: straight line rent accruals	Adjustments for: straight line rent accruals	—		—			Adjustments for: straight line rent accruals	—		—

Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties	Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties	—		—			Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties	—		—
Add: amortization of restricted stock and RSU expense	Add: amortization of restricted stock and RSU expense	0.05		0.04			Add: amortization of restricted stock and RSU expense	0.07		0.05
Add: amortization of deferred mortgage and debt costs	Add: amortization of deferred mortgage and debt costs	—		—			Add: amortization of deferred mortgage and debt costs	0.01		—
Add: our share of deferred mortgage and debt costs from unconsolidated joint venture properties	Add: our share of deferred mortgage and debt costs from unconsolidated joint venture properties	0.01		0.01			Add: our share of deferred mortgage and debt costs from unconsolidated joint venture properties	—		0.01
Less: our share of insurance recovery from unconsolidated joint venture properties		—		(0.10)
Add: amortization of fair value adjustment for mortgage debt							Add: amortization of fair value adjustment for mortgage debt	0.01		—

Less: gain on insurance proceeds							Less: gain on insurance proceeds	(0.01)		—
Less: our share of gain on insurance proceeds from unconsolidated joint venture properties	Less: our share of gain on insurance proceeds from unconsolidated joint venture properties	(0.02)		—			Less: our share of gain on insurance proceeds from unconsolidated joint venture properties	—		(0.02)
Adjustments for non-controlling interests	Adjustments for non-controlling interests	—		—			Adjustments for non-controlling interests	—		—
Adjusted funds from operations per diluted common share	Adjusted funds from operations per diluted common share	$	0.39	$	0.30		Adjusted funds from operations per diluted common share	$	0.36	$	0.39

Diluted shares outstanding for FFO and AFFO	Diluted shares outstanding for FFO and AFFO	18,570,639		17,319,222			Diluted shares outstanding for FFO and AFFO	19,137,577		18,570,639

Three Months Ended March 31, 2023 and 2022

FFO ~~increased on an absolute basis~~ for the three months ended March 31, ~~2022,~~2023 decreased from the corresponding ~~2021 period~~quarter in the prior year primarily due to the ~~improved operating margins at consolidated~~increases in (i) interest expense (the result of increased usage on our credit facility and ~~unconsolidated same store properties,~~increased interest rates on our subordinated debt); (ii) general and administrative expenses (primarily non-cash compensation expense related to the Consolidating Transactions and reduced interest expense. The increase was offset by the Kendall Sale, the Avenue/Parc Sales, the Anatole/Opop Sales, the inclusion in the three months ended March 31, 2021 of significant insurance recoveries and the increase, in the three months ended March 31, 2022 from the corresponding period in 2021, of non-cash amortization of ~~equity award expense.~~restricted stock and RSU expense); and (iii) amortization of mortgage fair value adjustments related to Partner Buyouts.

AFFO ~~increased on an absolute and diluted per share basis~~ for the three months ended March 31, ~~2022~~2023 decreased from the corresponding period in ~~2021~~the prior year, primarily due to the ~~factors impacting~~increase in interest expense, the ~~improvement in FFO, other than the effects~~result of ~~the significant insurance recoveries in 2021~~increased usage on our credit facility and ~~the non-cash compensation expense related to equity awards in the three months ended March 31, 2022.~~increased interest rates on our subordinated debt.

Diluted per share FFO and AFFO were impacted in the three months ended March 31, ~~2022~~2023 by a ~~1.25 million~~567,000 increase in the weighted average shares of common stock outstanding, ~~from the first quarter of 2021 through the current quarter,~~ primarily due to stock issuances pursuant to our at-the ~~-market equity~~market offering, ~~and~~ equity incentive ~~programs.~~program and dividend reinvestment plan.

See "Results of Operations - Three Months Ended March 31, 2023 compared to three months ended March 31, 2022", for a discussion of these changes.

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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 March 31,				Three Months Ended March 31,
		2022		2021				2023		2022		Variance
GAAP Net income (loss) attributable to common stockholders		$	11,508	$	(3,765)
GAAP Net (loss) income attributable to common stockholders							GAAP Net (loss) income attributable to common stockholders	$	(4,098)	$	11,508	$	(15,606)
Less: Other Income	Less: Other Income	(4)		(4)			Less: Other Income	—		(4)		4
Add: Interest expense	Add: Interest expense	2,021		1,660			Add: Interest expense	5,483		2,021		3,462
General and administrative	General and administrative	3,633		3,114			General and administrative	4,055		3,633		422
Impairment charge		—		—
Depreciation		3,606		1,537

Depreciation and amortization							Depreciation and amortization	8,008		3,606		4,402
Provision for taxes	Provision for taxes	74		57			Provision for taxes	76		74		2
Less: Gain on sale of real estate	Less: Gain on sale of real estate	(6)		—			Less: Gain on sale of real estate	—		(6)		6

Equity in earnings from sale of unconsolidated joint venture properties	Equity in earnings from sale of unconsolidated joint venture properties	(12,961)		—			Equity in earnings from sale of unconsolidated joint venture properties	—		(12,961)		12,961
Add: Loss on extinguishment of debt		—		—
Adjust for: Equity in (earnings) loss of unconsolidated joint venture properties		(1,230)		1,345
Gain on insurance recoveries							Gain on insurance recoveries	(240)		—		(240)

Adjust for: Equity in (earnings) of unconsolidated joint venture properties							Adjust for: Equity in (earnings) of unconsolidated joint venture properties	(815)		(1,230)		415
Add: Net income attributable to non-controlling interests	Add: Net income attributable to non-controlling interests	36		34			Add: Net income attributable to non-controlling interests	36		36		—
Net Operating Income	Net Operating Income	$	6,677	$	3,978		Net Operating Income	$	12,505	$	6,677	$	5,828

Less: Non-same store Net Operating Income	Less: Non-same store Net Operating Income	$	2,841	$	532		Less: Non-same store Net Operating Income	6,127		320		5,807
Same store Net Operating Income	Same store Net Operating Income	$	3,836	$	3,446		Same store Net Operating Income	$	6,378	$	6,357	$	21

For the three months ended March 31, ~~2022,~~2023, NOI increased ~~$2.7~~$5.8 million from the corresponding period in ~~2021~~2022 primarily due to a ~~$4.4~~$11.5 million increase in rental revenues ~~(and in particular, the impact of the Consolidating Transactions)~~ offset by a ~~$1.9~~$5.7 million increase ~~primarily from the Consolidating Transactions,~~ in real estate operating expenses. The increase in rental revenue and real estate operating expenses were primarily due to the Partner Buyouts. Same store NOI in the three months ended March 31, ~~2022,~~2023 increased by ~~$390,000~~$21,000 from the corresponding period in ~~2021,~~2022, due to a ~~$614,000~~$823,000 increase in rental revenues (and in particular, the increase in average rental rates) offset by a ~~$224,000~~$802,000 increase in real estate operating expenses. See "-Results of ~~Operations"~~Operations - Three Months Ended March 31, 2023 Compared to the three Months ended March 31, 2022 " for a discussion of these changes.

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Item 3. Quantitative and Qualitative Disclosures About Market Risks

All of our mortgage debt bears interest at fixed rates. Our junior subordinated notes bear interest at the rate of three month LIBOR plus 200 basis points. At March 31, ~~2022,~~2023, the interest rate on these notes was ~~2.30%~~6.80%. Our credit facility bears interest at the prime rate. At March 31, 2023 the interest rate on the credit facility was 8.00%. There was no balance outstanding on the credit facility at March 31, 2023. A 100 basis point increase in the ~~rate~~rates would increase our related interest expense by approximately $374,000 annually and a 100 basis point decrease in the ~~rate~~rates would decrease our related interest expense by ~~$112,000~~$374,000 annually.

Item 4. Controls and Procedures

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 March 31, ~~2022.~~2023. Based upon that evaluation, these officers concluded that as of March 31, ~~2022~~2023 our disclosure controls and procedures were effective.

There have been no changes in our internal control over financial reporting during the quarter ended March 31, ~~2022~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II - Other Information

Item 1. Legal Proceedings

There are no material changes to the status of the litigation we disclosed in our Annual Report.

From time to time, we are party to legal proceedings that arise in the ordinary course of our business, and in particular, personal injury claims involving the operations of our properties. Although we believe that the primary and umbrella insurance coverage maintained with respect to our properties is sufficient to cover claims for compensatory damages, many of these personal injury claims also assert exemplary(i.e punitive) damages. Generally, insurance does not cover claims for exemplary damages and we may be adversely affected if claims for exemplary damages are asserted successfully. See Note 11 of our Consolidated Financial Statements.

Item 6. Exhibits


Exhibit No.						Title of Exhibits
~~10.1~~3.2						Amended and Restated Bylaws of the Registrant effective as of December 6, 2022 (incorporated by reference to Exhibit 3.2 filed on December 6, 2022 pursuant to a Current Report on Form ~~of Membership Interest Agreement used to effectuate Partner Buyouts~~8-K)
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 March 31, ~~2022,~~2023, 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.




May ~~10, 2022~~8, 2023			/s/ Jeffrey A. Gould
			Jeffrey A. Gould, President and
			Chief Executive Officer





May ~~10, 2022~~8, 2023			/s/ George Zweier
			George Zweier, Vice President
			and Chief Financial Officer
			(principal financial officer)

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	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) income		Accumulated Deficit		Non- Controlling Interest		Total
Balances, December 31, 2021	$	173	$	258,161	$	—	$	(55,378)	$	(5)	$	202,951
Distributions - common stock - $0.23 per share	—		—		—		(4,305)		—		(4,305)
Restricted stock and restricted stock units vesting	2		(2)		—		—		—		—
Compensation expense - restricted stock and restricted stock units	—		974		—		—		—		974


Shares issued through equity offering program, net	1		3,037		—		—		—		3,038

Net income	—		—		—		11,508		36		11,544
Other comprehensive income	—		—		—		—		—		—
Comprehensive income											11,544
Balances, March 31, 2022	$	176	$	262,170	$	—	$	(48,175)	$	31	$	214,202


Date of Agreement	Property Name	Location	Units	Remaining Interest to be Purchased		Book Value of Property at 3/31/22		Purchase Price (1)		Estimated Amount of Debt to be Included on our Consolidated Balance Sheet
February 2022	Jackson Square	Tallahassee, FL	242	20	%	$	25,102	$	6,220	$	21,524
February 2022	Grove at River Place	Macon, GA	240	20	%	12,829		7,485		11,481
February 2022	The Woodland Apartments	Boerne, TX	120	20	%	11,394		3,550		7,935
March 2022	Brixworth at Bridge Street	Huntsville, AL	208	20	%	11,844		10,851		18,500		(2)
April 2022	Abbotts Run	Willmington, NC	264	20	%	37,552		8,560		23,160
April 2022	Civic Center I (3)	Southaven, MS	392	25	%	30,831		18,063		27,544
April 2022	Civic Center II (3)	Southaven, MS	384	25	%	32,725		17,694		30,288
April 2022	Magnolia Pointe at Madison	Madison, AL	204	20	%	18,474		7,132		15,000
April 2022	Somerset at Trussville	Birmingham, AL	328	20	%	40,300		9,785		32,250
		Total	2,382			$	221,051	$	89,340	$	187,682