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 September 30, ~~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.

~~18,940,249~~18,596,389 Shares of Common Stock,

par value $0.01 per share, outstanding on November ~~4, 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 -~~ September 30, ~~2022~~2023 (unaudited) and December 31, ~~2021~~2022 (audited)	32
	Consolidated Statements of Operations –Three and nine months ended September 30, 2023 and 2022 (unaudited)	3

	Consolidated Statements of Equity – Three and nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)	4
	Consolidated Statements of ~~Comprehensive Income~~Cash Flows – ~~Three and nine~~Nine months ended September 30, ~~2022~~2023 and ~~2021~~2022 (unaudited)	5
	~~Consolidated Statements of Equity – Three and nine months ended September 30, 2022 and 2021 (unaudited)~~	6
	~~Consolidated Statements of Cash Flows – Nine months ended September 30, 2022 and 2021 (unaudited)~~	8
	Notes to Consolidated Financial Statements	119

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2320

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	4238

Item 4.	Controls and Procedures	4238

Part II – Other Information

Item 1.	Legal Proceedings	4339

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39

Item 5.	Other Information	39

Item 6.	Exhibits	4340

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)~~(iii) "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.

Table of Contents

~~Part I ‑ FINANCIAL INFORMATION~~

Item 1. Financial Statements

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share data)


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
		(unaudited)		(audited)			(unaudited)		(audited)
ASSETS	ASSETS					ASSETS
Real estate properties, net of accumulated depreciation and amortization of $49,008 and $36,467		$	655,645	$	293,550
Real estate properties, net of accumulated depreciation and amortization of $74,108 and $55,195						Real estate properties, net of accumulated depreciation and amortization of $74,108 and $55,195	$	639,989	$	651,603
Investments in unconsolidated joint ventures	Investments in unconsolidated joint ventures	43,759		112,347		Investments in unconsolidated joint ventures	34,501		42,576
Cash and cash equivalents	Cash and cash equivalents	21,865		32,339		Cash and cash equivalents	28,117		20,281
Restricted cash	Restricted cash	872		6,582		Restricted cash	769		872
Other assets	Other assets	21,518		10,341		Other assets	17,766		16,786
Real estate property held for sale		—		4,379

Total Assets	Total Assets	$	743,659	$	459,538	Total Assets	$	721,142	$	732,118
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Liabilities:	Liabilities:					Liabilities:
Mortgages payable, net of deferred costs of $4,327 and $980		$	419,115	$	199,877
Junior subordinated notes, net of deferred costs of $282 and $297		37,118		37,103
Credit facility, net of deferred costs of $551 and $—		6,449		—
Mortgages payable, net of deferred costs of $4,224 and $4,166						Mortgages payable, net of deferred costs of $4,224 and $4,166	$	422,935	$	403,792
Junior subordinated notes, net of deferred costs of $262 and $277						Junior subordinated notes, net of deferred costs of $262 and $277	37,138		37,123
Credit facility, net of deferred costs of $0 and $498						Credit facility, net of deferred costs of $0 and $498	—		18,502
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	23,862		19,607		Accounts payable and accrued liabilities	24,272		22,631
Total Liabilities	Total Liabilities	486,544		256,587		Total Liabilities	484,345		482,048

Commitments and contingencies	Commitments and contingencies					Commitments and contingencies
Equity:	Equity:					Equity:
BRT Apartments Corp. stockholders' equity:	BRT Apartments Corp. stockholders' equity:					BRT Apartments Corp. stockholders' equity:
Preferred shares $0.01 par value 2,000 shares authorized, none outstanding	Preferred shares $0.01 par value 2,000 shares authorized, none outstanding	—		—		Preferred shares $0.01 par value 2,000 shares authorized, none outstanding	—		—
Common stock, $0.01 par value, 300,000 shares authorized; 17,973 and 17,349 shares outstanding		180		173
Common stock, $0.01 par value, 300,000 shares authorized; 17,689 and 18,006 shares outstanding						Common stock, $0.01 par value, 300,000 shares authorized; 17,689 and 18,006 shares outstanding	177		180
Additional paid-in capital	Additional paid-in capital	271,904		258,161		Additional paid-in capital	269,273		273,863

Accumulated deficit	Accumulated deficit	(14,952)		(55,378)		Accumulated deficit	(32,662)		(23,955)
Total BRT Apartments Corp. stockholders’ equity	Total BRT Apartments Corp. stockholders’ equity	257,132		202,956		Total BRT Apartments Corp. stockholders’ equity	236,788		250,088
Non-controlling interest	Non-controlling interest	(17)		(5)		Non-controlling interest	9		(18)
Total Equity	Total Equity	257,115		202,951		Total Equity	236,797		250,070
Total Liabilities and Equity	Total Liabilities and Equity	$	743,659	$	459,538	Total Liabilities and Equity	$	721,142	$	732,118

See accompanying notes to consolidated financial statements.

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Revenues:	Revenues:									Revenues:
Rental and other revenue from real estate properties	Rental and other revenue from real estate properties	$	21,691	$	7,709	$	47,804	$	21,762	Rental and other revenue from real estate properties	$	23,510	$	21,691	$	69,704	$	47,804
Other income	Other income	6		5		12		12		Other income	342		6		405		12
Total revenues	Total revenues	21,697		7,714		47,816		21,774		Total revenues	23,852		21,697		70,109		47,816
Expenses:	Expenses:									Expenses:
Real estate operating expenses - including $9 and $8 to related parties for the three months ended and $28 and $23 for the nine months ended		9,195		3,404		20,296		9,687
Real estate operating expenses - including $9 and $9 to related parties for the three months ended and $25 and $28 for the nine months ended										Real estate operating expenses - including $9 and $9 to related parties for the three months ended and $25 and $28 for the nine months ended	10,583		9,195		31,565		20,296
Interest expense	Interest expense	5,061		1,535		9,994		4,804		Interest expense	5,581		5,061		16,577		9,994
General and administrative - including $183 and $172 to related parties for the three months ended and $614 and $523 for the nine months ended		3,673		3,114		10,839		9,382
Impairment charge		—		—		—		520
General and administrative - including $141 and $183 to related parties for the three months ended and $479 and $614 for the nine months ended										General and administrative - including $141 and $183 to related parties for the three months ended and $479 and $614 for the nine months ended	4,017		3,673		11,920		10,839

Depreciation and amortization	Depreciation and amortization	8,165		1,787		16,781		4,740		Depreciation and amortization	6,544		8,165		22,095		16,781
Total expenses	Total expenses	26,094		9,840		57,910		29,133		Total expenses	26,725		26,094		82,157		57,910
Total revenues less total expenses	Total revenues less total expenses	(4,397)		(2,126)		(10,094)		(7,359)		Total revenues less total expenses	(2,873)		(4,397)		(12,048)		(10,094)
Equity in earnings (loss) of unconsolidated joint ventures		135		(4,196)		1,315		(6,033)
Equity in earnings of unconsolidated joint ventures										Equity in earnings of unconsolidated joint ventures	426		135		1,705		1,315
Equity in earnings from sale of unconsolidated joint ventures properties	Equity in earnings from sale of unconsolidated joint ventures properties	11,472		34,982		64,531		34,982		Equity in earnings from sale of unconsolidated joint ventures properties	—		11,472		14,744		64,531
Gain on sale of real estate	Gain on sale of real estate	—		414		6		7,693		Gain on sale of real estate	604		—		604		6
Gain on sale of partnership interest		—		—		—		2,244
Insurance recovery of casualty loss										Insurance recovery of casualty loss	261		—		476		—
Gain on insurance recoveries	Gain on insurance recoveries	62		—		62		—		Gain on insurance recoveries	—		62		240		62
Loss on extinguishment of debt	Loss on extinguishment of debt	—		(902)		(563)		(902)		Loss on extinguishment of debt	—		—		—		(563)
Income from continuing operations		7,272		28,172		55,257		30,625
Income tax provision		178		31		976		155
Net income from continuing operations, net of taxes		7,094		28,141		54,281		30,470
(Loss) income from continuing operations										(Loss) income from continuing operations	(1,582)		7,272		5,721		55,257
Income tax (benefit) provision										Income tax (benefit) provision	(122)		178		5		976
(Loss) income from continuing operations, net of taxes										(Loss) income from continuing operations, net of taxes	(1,460)		7,094		5,716		54,281
Net income attributable to non-controlling interest	Net income attributable to non-controlling interest	(35)		(35)		(107)		(102)		Net income attributable to non-controlling interest	(34)		(35)		(106)		(107)
Net income attributable to common stockholders		$	7,059	$	28,106	$	54,174	$	30,368
Net (loss) income attributable to common stockholders										Net (loss) income attributable to common stockholders	$	(1,494)	$	7,059	$	5,610	$	54,174

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	17,928,197		17,261,520		17,721,700		16,916,623		Basic	17,851,715		17,928,197		18,022,975		17,721,700
Diluted	Diluted	17,994,457		17,292,988		17,784,362		16,992,974		Diluted	17,851,715		17,994,457		18,045,767		17,784,362

Per share amounts attributable to common stockholders:	Per share amounts attributable to common stockholders:									Per share amounts attributable to common stockholders:
Basic	Basic	$	0.37	$	1.55	$	2.91	$	1.71	Basic	$	(0.08)	$	0.37	$	0.30	$	2.91
Diluted	Diluted	$	0.37	$	1.54	$	2.89	$	1.70	Diluted	$	(0.08)	$	0.37	$	0.27	$	2.89

See accompanying notes to consolidated financial statements.

~~Table of Contents~~

~~BRT APARTMENTS CORP. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME~~

~~(Unaudited)~~

~~(Dollars in thousands)~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2022 2021 2022 2021
Net income $ 7,094 $ 28,141 $ 54,281 $ 30,470
Other comprehensive income :
Unrealized gain on derivative instruments — 12 — 22
Other comprehensive income — 12 — 22
Comprehensive income 7,094 28,153 54,281 30,492
Comprehensive (income) attributable to non-controlling interests (35) (37) (107) (106)
Comprehensive income attributable to common stockholders $ 7,059 $ 28,116 $ 54,174 $ 30,386

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

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(Dollars in thousands, except per share data)


		Common Stock		Additional Paid-In Capital		Accumulated Deficit		Non- Controlling Interest		Total			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 - $0.23 per share		—		—		(4,305)		—		(4,305)
Balances, December 31, 2022												Balances, December 31, 2022	$	180	$	273,863	$	(23,955)	$	(18)	$	250,070
Distributions - common stock - $0.25 per share												Distributions - common stock - $0.25 per share	—		—		(4,847)		—		(4,847)
Restricted stock and restricted stock units vesting	Restricted stock and restricted stock units vesting	2		(2)		—		—		—		Restricted stock and restricted stock units vesting	2		(2)		—		—		—
Compensation expense - restricted stock and restricted stock units	Compensation expense - restricted stock and restricted stock units	—		974		—		—		974		Compensation expense - restricted stock and restricted stock units	—		1,410		—		—		1,410

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

Net income		—		—		11,508		36		11,544
Shares issued through DRIP												Shares issued through DRIP	—		763		—		—		763

Comprehensive income										11,544
Balances, March 31, 2022		$	176	$	262,170	$	(48,175)	$	31	$	214,202
Net (loss) income												Net (loss) income	—		—		(4,098)		36		(4,062)

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

Distributions - common stock - $0.25 per share	Distributions - common stock - $0.25 per share	—		—		(4,723)		—		(4,723)		Distributions - common stock - $0.25 per share	—		—		(4,816)		—		(4,816)
Compensation expense - restricted stock and restricted stock units	Compensation expense - restricted stock and restricted stock units	—		1,001		—		—		1,001		Compensation expense - restricted stock and restricted stock units	—		1,193		—		—		1,193

Distributions to non-controlling interests	Distributions to non-controlling interests	—		—		—		(60)		(60)		Distributions to non-controlling interests	—		—		—		(37)		(37)

Shares issued through equity offering program, net		2		3,085		—		—		3,087

Shares repurchased												Shares repurchased	(3)		(5,833)		—		—		(5,836)
Shares issues through DRIP												Shares issues through DRIP	—		670		—		—		670
Net income	Net income	—		—		35,607		36		35,643		Net income	—		—		11,202		36		11,238

Comprehensive income										35,643
Balances, June 30, 2022		$	178	$	266,256	$	(17,291)	$	7	$	249,150

Balances, June 30, 2023												Balances, June 30, 2023	$	179	$	272,064	$	(26,514)	$	17	$	245,746

Distributions - common stock - $0.25 per share	Distributions - common stock - $0.25 per share	—		—		(4,720)		—		(4,720)		Distributions - common stock - $0.25 per share	—		—		(4,654)		—		(4,654)
Compensation expense - restricted stock and restricted stock units	Compensation expense - restricted stock and restricted stock units	—		1,208		—		—		1,208		Compensation expense - restricted stock and restricted stock units	—		1,473		—		—		1,473

Distributions to non-controlling interests	Distributions to non-controlling interests	—		—		—		(59)		(59)		Distributions to non-controlling interests	—		—		—		(42)		(42)
Shares issued through equity offering program, net		2		3,818		—		—		3,820

Shares issues through DRIP	Shares issues through DRIP	—		622		—		—		622		Shares issues through DRIP	—		684		—		—		684
Shares repurchased												Shares repurchased	(2)		(4,948)		—		—		(4,950)
Net (loss) income												Net (loss) income	—		—		(1,494)		34		(1,460)

Net income		—		—		7,059		35		7,094

Comprehensive income										7,094
Balances, September 30, 2022		$	180	$	271,904	$	(14,952)	$	(17)	$	257,115

Balances, September 30, 2023												Balances, September 30, 2023	$	177	$	269,273	$	(32,662)	$	9	$	236,797

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(Dollars in thousands, except per share data)


		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive income		Accumulated Deficit		Non- Controlling Interest		Total			Common Stock		Additional Paid-In Capital		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)
Balances, December 31, 2021														Balances, December 31, 2021	$	173	$	258,161	$	(55,378)	$	(5)	$	202,951
Distributions - common stock - $0.23 per share														Distributions - common stock - $0.23 per share	—		—		(4,305)		—		(4,305)
Restricted stock vesting	Restricted stock vesting	4		(4)		—		—		—		—		Restricted stock vesting	2		(2)		—		—		—
Compensation expense - restricted stock and restricted stock units	Compensation expense - restricted stock and restricted stock units	—		538		—		—		—		538		Compensation expense - restricted stock and restricted stock units	—		974		—		—		974

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

Net income														Net income	—		—		11,508		36		11,544

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

Distributions - common stock - $0.22 per share		—		—		—		(4,007)		—		(4,007)
Distributions - common stock - $0.25 per share														Distributions - common stock - $0.25 per share	—		—		(4,723)		—		(4,723)
Compensation expense - restricted stock and restricted stock units	Compensation expense - restricted stock and restricted stock units	—		569		—		—		—		569		Compensation expense - restricted stock and restricted stock units	—		1,001		—		—		1,001
Shares issued through equity offering program, net	Shares issued through equity offering program, net	4		7,345		—		—		—		7,349		Shares issued through equity offering program, net	2		3,085		—		—		3,087

Distributions to non-controlling interests														Distributions to non-controlling interests	—		—		—		(60)		(60)

Net income	Net income	—		—		—		6,027		33		6,060		Net income	—		—		35,607		36		35,643
Other comprehensive income		—		—		4		—		1		5
Comprehensive income												6,065
Balances, June 30, 2021		$	172	$	254,053	$	(11)	$	(73,734)	$	(15)	$	180,465

Balances, June 30, 2022														Balances, June 30, 2022	$	178	$	266,256	$	(17,291)	$	7	$	249,150

Distributions - common stock - $0.22 per share	Distributions - common stock - $0.22 per share	—		—		—		(4,233)		—		(4,233)		Distributions - common stock - $0.22 per share	—		—		(4,720)		—		(4,720)
Compensation expense - restricted stock and restricted stock units	Compensation expense - restricted stock and restricted stock units	—		842		—		—		—		842		Compensation expense - restricted stock and restricted stock units	—		1,208		—		—		1,208

Contributions from non-controlling interests														Contributions from non-controlling interests	—		—		—		—		—
Consolidation of investment in limited partnership														Consolidation of investment in limited partnership	—		—		—		—		—
Distributions to non-controlling interests														Distributions to non-controlling interests	—		—		—		(59)		(59)
Purchase of non-controlling interest														Purchase of non-controlling interest	—		—		—		—		—
Shares issued through equity offering program, net	Shares issued through equity offering program, net	1		1,065		—		—		—		1,066		Shares issued through equity offering program, net	2		3,818		—		—		3,820

Shares issued through DRIP														Shares issued through DRIP	—		622		—		—		622
Shares repurchased														Shares repurchased	—		—		—		—		—
Net income	Net income	—		—		—		28,106		35		28,141		Net income	—		—		7,059		35		7,094
Other comprehensive income	Other comprehensive income	—		—		11		—		1		12		Other comprehensive income	—		—		—		—		—
Comprehensive income	Comprehensive income											28,153		Comprehensive income									7,094
Balances, September 30, 2021		$	173	$	255,960	$	—	$	(49,861)	$	21	$	206,293
Balances, September 30, 2022														Balances, September 30, 2022	$	180	$	271,904	$	(14,952)	$	(17)	$	257,115

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)


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income	Net income	$	54,281	$	30,470	Net income	$	5,716	$	54,281
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:						Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	16,781		4,740		Depreciation and amortization	22,095		16,781
Amortization of deferred financing costs	Amortization of deferred financing costs	399		216		Amortization of deferred financing costs	799		399
Amortization of debt fair value adjustment	Amortization of debt fair value adjustment	(28)		—		Amortization of debt fair value adjustment	463		(28)
Amortization of restricted stock and restricted stock units	Amortization of restricted stock and restricted stock units	3,183		1,949		Amortization of restricted stock and restricted stock units	4,076		3,183
Equity in (earnings) loss of unconsolidated joint ventures		(1,315)		6,033
Equity in earnings from sale of real estate of unconsolidated joint venture properties		(64,531)		(34,982)
Impairment charge		—		520
Equity in earnings of unconsolidated joint ventures						Equity in earnings of unconsolidated joint ventures	(1,705)		(1,315)
Equity in earnings from sale of unconsolidated joint venture properties						Equity in earnings from sale of unconsolidated joint venture properties	(14,744)		(64,531)

Gain on sale of real estate	Gain on sale of real estate	(6)		(7,693)		Gain on sale of real estate	(604)		(6)
Gain on sale of partnership interest		—		(2,244)
Gain on insurance recovery	Gain on insurance recovery	(62)		—		Gain on insurance recovery	(240)		(62)
Loss on extinguishment of debt	Loss on extinguishment of debt	563		902		Loss on extinguishment of debt	—		563

Increases and decreases from changes in other assets and liabilities:	Increases and decreases from changes in other assets and liabilities:					Increases and decreases from changes in other assets and liabilities:

Decrease in other assets		1,820		1,868
Decrease in accounts payable and accrued liabilities		(2,635)		(2,000)
Net cash provided by (used in) operating activities		8,450		(221)
(Increase) decrease in other assets						(Increase) decrease in other assets	(3,823)		1,820
Increase (decrease) in accounts payable and accrued liabilities						Increase (decrease) in accounts payable and accrued liabilities	1,575		(2,635)
Net cash provided by operating activities						Net cash provided by operating activities	13,608		8,450

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:

Improvements to real estate properties	Improvements to real estate properties	(4,151)		(794)		Improvements to real estate properties	(7,406)		(4,151)
Purchase of investment in joint ventures	Purchase of investment in joint ventures	(105,262)		(22,420)		Purchase of investment in joint ventures	—		(105,262)
Proceeds from the sale of real estate	Proceeds from the sale of real estate	4,385		24,632		Proceeds from the sale of real estate	711		4,385
Proceeds from the sale of partnership interest		—		7,540
Distributions from unconsolidated joint ventures	Distributions from unconsolidated joint ventures	89,476		58,312		Distributions from unconsolidated joint ventures	24,646		89,476
Contributions to unconsolidated joint ventures	Contributions to unconsolidated joint ventures	(3,500)		(6,031)		Contributions to unconsolidated joint ventures	(122)		(3,500)
Proceeds from insurance recoveries	Proceeds from insurance recoveries	62		—		Proceeds from insurance recoveries	240		62
Net cash (used in) provided by investing activities		(18,990)		61,239
Net cash provided by (used in) investing activities						Net cash provided by (used in) investing activities	18,069		(18,990)

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:
Proceeds from mortgages payable	Proceeds from mortgages payable	18,953		—		Proceeds from mortgages payable	21,173		18,953
Mortgage payoffs	Mortgage payoffs	(26,761)		(46,963)		Mortgage payoffs	—		(26,761)
Mortgage principal payments	Mortgage principal payments	(1,475)		(2,180)		Mortgage principal payments	(2,435)		(1,475)
Proceeds from credit facility	Proceeds from credit facility	22,000		—		Proceeds from credit facility	—		22,000
Repayment of credit facility	Repayment of credit facility	(15,000)		—		Repayment of credit facility	(19,000)		(15,000)
Increase in deferred financing costs	Increase in deferred financing costs	(672)		(38)		Increase in deferred financing costs	(683)		(672)
Dividends paid	Dividends paid	(13,136)		(11,779)		Dividends paid	(14,251)		(13,136)

Distributions to non-controlling interests	Distributions to non-controlling interests	(119)		—		Distributions to non-controlling interests	(79)		(119)
Proceeds from the sale of common stock	Proceeds from the sale of common stock	9,945		8,415		Proceeds from the sale of common stock	—		9,945
Proceeds from issuance of DRP shares		622		—

Proceeds from issuance of DRIP shares						Proceeds from issuance of DRIP shares	2,117		622
Repurchase of shares of common stock						Repurchase of shares of common stock	(10,786)		—
Net cash used in financing activities	Net cash used in financing activities	(5,643)		(52,545)		Net cash used in financing activities	(23,944)		(5,643)

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BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Thousands)


		Nine Months Ended September 30,					Nine Months Ended September 30,
		2022		2021			2023		2022
Net (decrease) increase in cash, cash equivalents and restricted cash:		(16,184)		8,473
Net increase in cash, cash equivalents and restricted cash:						Net increase in cash, cash equivalents and restricted cash:	7,733		(16,184)
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	$	22,737	$	37,158	Cash, cash equivalents and restricted cash at end of period	$	28,886	$	22,737

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	$	9,169	$	4,591	Cash paid during the period for interest	$	15,310	$	9,169
Cash paid for income taxes	Cash paid for income taxes	$	291	$	174	Cash paid for income taxes	$	710	$	291

Consolidation on buyout of partnership interests:	Consolidation on buyout of partnership interests:					Consolidation on buyout of partnership interests:
Increase in real estate assets	Increase in real estate assets	$	(370,513)	$	(85,301)	Increase in real estate assets	$	—	$	(370,513)
Increase in other assets	Increase in other assets	(17,489)		(2,263)		Increase in other assets	—		(17,489)
Increase in mortgage payable	Increase in mortgage payable	231,896		52,000		Increase in mortgage payable	—		231,896
Increase in deferred loan costs	Increase in deferred loan costs	(3,892)		(178)		Increase in deferred loan costs	—		(3,892)
Increase in accounts payable and accrued liabilities	Increase in accounts payable and accrued liabilities	6,278		1,474		Increase in accounts payable and accrued liabilities	—		6,278
Decrease in investment in unconsolidated joint ventures	Decrease in investment in unconsolidated joint ventures	48,458		11,848		Decrease in investment in unconsolidated joint ventures	—		48,458
		$	(105,262)	(22,420)			$	—	(105,262)

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.

		September 30,					September 30,
		2022		2021			2023		2022
Cash and cash equivalents	Cash and cash equivalents	$	21,865	$	29,598	Cash and cash equivalents	$	28,117	$	21,865
Restricted cash	Restricted cash	872		7,560		Restricted cash	769		872
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	$	22,737	$	37,158	Total cash, cash equivalents and restricted cash, shown in consolidated statement of cash flows	$	28,886	$	22,737

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BRT APARTMENTS CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

September 30, ~~2022~~2023

Note 1 – Organization and Background

BRT Apartments Corp. (the "Company" or "BRT"), a Maryland corporation, owns, operates and, to a lesser extent, holds ~~interest~~interests 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 the Company (including its consolidated subsidiaries) or by unconsolidated joint ventures in which the Company generally contributes a significant portion of the equity. At September 30, ~~2022,~~2023, the Company: ~~(a)~~(i) wholly owns 21 multi-family properties located in eleven states with an aggregate of 5,420 units and a carrying value of ~~$653,716,000; (b)~~$638,170,000; (ii) has interests, through unconsolidated entities, in ~~eight~~seven multi-family properties located in four states with an aggregate of ~~2,781~~2,287 units with a carrying value of ~~$40,281,000;~~$30,878,000; and ~~(c) has a 17.45% interest in a development project~~(iii) owns other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of ~~$3,500,000. BRT's equity interests~~$5,441,000. These 28 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 September 30, 2022, the carrying value of the other real estate assets was $1,929,000.~~

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 and nine months ended September 30, ~~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 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.

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

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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 one reportable segment.

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Note 3 - Equity

Equity Distribution Agreements

Effective as of ~~March 18, 2022,~~May 12, 2023, the Company (i) terminated the equity ~~distribution~~distributions agreements dated ~~November 26, 2019, as amended~~ March ~~31, 2021~~18, 2022, and (ii) entered into ~~separate~~ equity distribution agreements with three sales agents to sell up to $40,000,000 of its common stock from time-to-time in an at-the-market offering. During the three and nine months ended September 30, 2023, the Company did not sell any shares. During the three and nine months ended September 30, 2022, the Company sold 174,059 and 447,815 shares, respectively, at an average per share price of $22.22 and $22.50, respectively, for an aggregate sales price of $3,867,000 and $10,076,000, respectively, before commissions and fees of $48,000 and ~~$131,166,~~$131,000, respectively. ~~During the three and nine months ended September 30, 2021, the Company sold 469,490 shares for an aggregate sales price of $8,542,000 before commissions and fees of $126,000.~~

Common Stock Dividend Distribution

The Company declared a quarterly cash distribution of $0.25 per share, payable on October ~~7, 2022~~11, 2023 to stockholders of record on ~~September 27, 2022.~~October 3, 2023.

Dividend Reinvestment Plan

The Dividend Reinvestment Plan (the “DRP”), which has been in effect since June 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%. ~~The DRP is effective with the dividend paid on July 8, 2022. In~~During the three and nine months ended September 30, ~~2022,~~2023, we issued 35,470 and 111,322 shares in lieu of cash dividends of $684,000 and $2,117,000, respectively. During the nine months ended September 30, 2022, 29,190 shares were issued in lieu of cash dividends of $622,000.

Stock Based Compensation

In 2022, the Company's board of directors adopted, and the stockholders' approved, the 2022 Incentive Plan (the "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 September 30, ~~2022, 787,531~~2023, 408,746 shares are available for issuance pursuant to awards under the 2022 Plan. Awards to acquire ~~934,092~~789,345 shares of common stock are outstanding under the 2020 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 July 2023 and June 2022, ~~and 2021,~~ the Company issued restricted stock units (the "RSUs") to acquire up to ~~212,469~~214,990 and ~~210,375~~212,470 shares of common stock pursuant to the 2022 ~~Plan and the 2020~~ Incentive Plan, respectively. As of September 30, 2023, an aggregate of 637,835 of unvested restricted stock units are outstanding pursuant to the 2022 Plan and Prior Plans. Generally, the RSUs entitle the recipients, subject to continued service through the three-year vesting 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 during the three-year ~~vesting~~performance 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 on the ~~RSU's~~RSUs which the Company expects to vest over the applicable vesting period. For the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, the Company recorded ~~$457,000~~$651,000 and ~~$200,000,~~$457,000, respectively, and for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, the Company recorded ~~$957,000~~$1,534,000 and ~~$271,000,~~$957,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the RSUs issued under the 2020 and 2022 Incentive Plans. At September 30, ~~2022~~2023 and December 31, ~~2021, $3,786,000~~2022, $4,046,000 and ~~$2,248,000~~$4,269,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting periods.

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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.~~Plan, respectively. As of September 30, ~~2022~~2023, an aggregate of ~~934,092~~953,139 shares of unvested restricted stock are outstanding pursuant to the 2022 Plan and 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.

~~Table of Contents~~

For the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, the Company recorded ~~$751,000~~$822,000 and ~~$642,000,~~$751,000, respectively, and for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, the Company recorded ~~$2,226,000~~$2,542,000 and ~~$1,678,000,~~$2,226,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards. At September 30, ~~2022~~2023 and December 31, ~~2021, $8,480,000~~2022, $8,330,000 and ~~$7,332,000,~~$7,728,000, respectively, has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards. The weighted average remaining vesting period of these shares of restricted stock is ~~2.8~~2.4 years.

~~Stock Buyback~~Share Repurchase

~~On September 13, 2021,~~In June 2023, the Board of Directors ~~approved a stock~~extended the term of the Company's share repurchase ~~plan authorizing~~program from December 31, 2023 to December 31, 2025 and increased the ~~Company, effective as~~existing repurchase authorization from $5,000,000 to $10,000,000 of ~~October 1, 2021,~~shares.

In August 2023, the Board of Directors, after giving effect to ~~repurchase up to $5,000,000~~repurchases of $3,250,000 of shares made since the June 2023 share repurchase authorization, increased the Company's share repurchase program by an additional $6,750,000 of ~~common stock through December 31, 2023.~~shares to $10,000,000 of shares. During the three and nine months ended September 30, ~~2022~~2023, the Company repurchased 264,165 and ~~2021,~~573,318 shares of common stock, respectively, at an average price per share of $18.74 and $18.81, respectively, for an aggregate cost of $4,950,000 and $10,786,000, respectively. As of September 30, 2023, the Company is authorized to repurchase up to $5,966,000 of shares. From October 1, 2023 through October 31, 2023, the Company repurchased 98,014 shares of common stock at an average price per share of $17.23 for an aggregate cost of $1,689,000. At October 31, 2023, the Company is authorized to repurchase up to $4,278,000 of shares of common stock

During the three and nine months ended September 30, 2022, the Company did not repurchase any shares of common stock.

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 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 September 30, Nine Months Ended September 30,
2022 2021 2022 2021
Numerator for basic and diluted earnings per share:
Net income $7,094 $28,141 $54,281 $30,470
Deduct net income attributable to non-controlling interests (35) (35) (107) (102)
Deduct earnings allocated to unvested restricted stock (349) (1,426) (2,684) (1,441)
Net income available for common stockholders: basic and diluted $ 6,710 $ 26,680 $ 51,490 $ 28,927
Denominator for basic earnings per share:
Weighted average number of common shares outstanding 17,928,197 17,261,520 17,721,700 16,916,623
Effect of dilutive securities:
RSUs 66,260 31,468 62,662 76,351
Denominator for diluted earnings per share:
Weighted average number of shares 17,994,457 17,292,988 17,784,362 16,992,974
Earnings per common share, basic $ 0.37 $ 1.55 $ 2.91 $ 1.71
Earnings per common share, diluted $ 0.37 $ 1.54 $ 2.89 $ 1.70

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	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Numerator for basic and diluted earnings per share:
Net income	$	(1,460)	$	7,094	$	5,716	$	54,281
Deduct net income attributable to non-controlling interests	(34)		(35)		(106)		(107)
Deduct earnings allocated to unvested restricted stock	(73)		(349)		268		(2,684)
Net income available for common stockholders: basic and diluted	$	(1,567)	$	6,710	$	5,878	$	51,490

Denominator for basic earnings per share:
Weighted average number of common shares outstanding	17,851,715		17,928,197		18,022,975		17,721,700
Effect of dilutive securities:
RSUs	—		66,260		22,792		62,662
Denominator for diluted earnings per share:
Weighted average number of shares	17,851,715		17,994,457		18,045,767		17,784,362

Earnings per common share, basic	$	(0.08)	$	0.37	$	0.30	$	2.91
Earnings per common share, diluted	$	(0.08)	$	0.37	$	0.27	$	2.89

Note 4 - Leases

Lessor Accounting

The Company owns a commercial building in Yonkers, NY leased to two retail tenants under operating leases expiring from ~~2024~~2028 to ~~2028,~~2035, with tenant options to extend 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~~was set to expire September 30, 2024 and ~~provides~~provided for one 21-year renewal option. The renewal option was exercised and the ground lease will expire on June 30, 2045. There are no further renewal options. As of September 30, ~~2022,~~2023, the remaining lease term ~~including the renewal option deemed exercised,~~ is ~~23.0~~21.8 years.

The Company is a lessee under a corporate office lease in Great Neck, New York, which is classified as an operating lease. The lease expires on December 31, 2031 and provides a five-year renewal option. As of September 30, ~~2022,~~2023, the remaining lease term, including renewal options deemed exercised, is ~~14.3~~13.3 years.

As of September 30, ~~2022,~~2023, the Company's Right of Use ("ROU") assets and lease liabilities were ~~$2,420,000~~$2,230,000 and ~~$2,510,000,~~$2,356,000, 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.

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Note 5 ‑ Real Estate Properties

Real estate properties, ~~excluding real estate held for sale in December 2021,~~ consists of the following (dollars in thousands):


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Land	Land	$	74,246	$	38,822	Land	$	74,246	$	74,246
Building	Building	617,102		281,841		Building	616,997		617,041
Building improvements	Building improvements	13,305		9,354		Building improvements	22,854		15,511
Real estate properties	Real estate properties	704,653		330,017		Real estate properties	714,097		706,798
Accumulated depreciation	Accumulated depreciation	(49,008)		(36,467)		Accumulated depreciation	(74,108)		(55,195)
Total real estate properties, net	Total real estate properties, net	$	655,645	$	293,550	Total real estate properties, net	$	639,989	$	651,603

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


		December 31, 2021 Balance		Partner Buyouts		Improvements		Depreciation		September 30, 2022 Balance			December 31, 2022 Balance		Improvements		Depreciation		Sale of Property		September 30, 2023 Balance
Multi-family	Multi-family	$	291,538	$	370,513	$	4,151	$	(12,486)	$	653,716	Multi-family	$	649,701	$	7,299	$	(18,830)	$	—	$	638,170
Retail shopping center and other	Retail shopping center and other	2,012		—		—		(83)		1,929		Retail shopping center and other	1,902		107		(83)		(107)		1,819
Total real estate properties	Total real estate properties	$	293,550	$	370,513	$	4,151	$	(12,569)	$	655,645	Total real estate properties	$	651,603	$	7,406	$	(18,913)	$	(107)	$	639,989

~~Table of Contents~~

Partner Buyouts

In the nine months ended September 30, 2022, the Company completed the purchase of its partners' remaining interests in the unconsolidated joint ventures that own the properties identified below. As a result of these purchases, these properties (including the related mortgage debt - see note 98 - "Debt Obligations") are wholly-owned and effective as of the closing of such purchase, are included in the Company's consolidated balance sheet and results of operations (dollars in thousands):


Buyout Date	Buyout Date	Property Name	Location	Units	Remaining Interest Purchased		Purchase Price (1)		Buyout Date	Property Name	Location	Units	Remaining Interest Purchased		Purchase Price (1)
03/23/2022	03/23/2022	Verandas at Alamo	San Antonio, TX	288	28.1	%	$	8,721	03/23/2022	Verandas at Alamo	San Antonio, TX	288	28.1	%	$	8,721
04/07/2022	04/07/2022	Vanguard Heights	Creve Coeur, MO	174	21.6	%	4,880		04/07/2022	Vanguard Heights	Creve Coeur, MO	174	21.6	%	4,880
05/11/2022	05/11/2022	Jackson Square	Tallahassee, FL	242	20	%	7,215		05/11/2022	Jackson Square	Tallahassee, FL	242	20	%	7,215
05/24/2022	05/24/2022	Brixworth at Bridge Street	Huntsville, AL	208	20	%	10,697		05/24/2022	Brixworth at Bridge Street	Huntsville, AL	208	20	%	10,697
05/26/2022	05/26/2022	Woodland Apartments	Boerne, TX	120	20	%	3,881		05/26/2022	Woodland Apartments	Boerne, TX	120	20	%	3,881
06/30/2022	06/30/2022	Grove at River Place	Macon, GA	240	20	%	7,485		06/30/2022	Grove at River Place	Macon, GA	240	20	%	7,485
07/12/2022	07/12/2022	Civic I	Southaven, MS	392	25	%	18,233		07/12/2022	Civic I	Southaven, MS	392	25	%	18,233
07/12/2022	07/12/2022	Civic II	Southaven, MS	384	25	%	17,942		07/12/2022	Civic II	Southaven, MS	384	25	%	17,942
07/14/2022	07/14/2022	Abbotts Run	Wilmington, NC	264	20	%	9,010		07/14/2022	Abbotts Run	Wilmington, NC	264	20	%	9,010
07/19/2022	07/19/2022	Somerset at Trussville	Trussville, AL	328	20	%	10,558		07/19/2022	Somerset at Trussville	Trussville, AL	328	20	%	10,558
08/03/2022	08/03/2022	Magnolia Pointe	Madison, AL	204	20	%	7,246		08/03/2022	Magnolia Pointe	Madison, AL	204	20	%	7,246
			Total	2,844			$	105,868				2,844			$	105,868

~~_________________~~__________________

(1) The purchase price gives effect to the purchase of the "promote interest" (as more fully described in the Annual Report) of the Company's joint venture partners and does not include closing costs of $2,191 and operating cash acquired from the ventures of $2,797.

The Company determined that the gross assets purchased in each of these 11 acquisitions is concentrated in a single identifiable asset. Therefore, the transactions do not meet the definition of a business and are accounted for as asset acquisitions. The Company assessed the fair value of the tangible assets of the properties as of the acquisition date using the cost accumulation and income approach which utilized market capitalization rates between 4.25% and 4.75%, which are Level 3 unobservable inputs in the fair value hierarchy.

1513

Table of Contents

~~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):~~

Property Land Building and Improvements Total Land and Building Acquisition and Intangible Assets Total Assets Acquisition Related Mortgage Intangible
Verandas at Alamo $ 3,336 $ 33,465 $ 36,801 $ 797 $ 37,598 $ (61)
Vanguard Heights 5,466 30,826 36,292 508 36,800 578
Jackson Square 3,398 27,167 30,565 634 31,199 283
Brixworth at Bridge Street 1,959 20,080 22,039 321 22,360 —
The Woodland Apts 1,289 12,853 14,142 233 14,375 —
Grove at River Place 2,866 16,416 19,282 396 19,678 136
Civic I 3,646 45,554 49,200 913 50,113 562
Civic II 3,847 46,452 50,299 1,013 51,312 1,254
Abbotts Run 3,468 37,312 40,780 701 41,481 481
Somerset at Trussville 4,095 42,943 47,038 869 47,907 1,090
Magnolia Pointe 2,052 22,023 24,075 503 24,578 396
Total Purchase Price Allocation $ 35,422 $ 335,091 $ 370,513 $ 6,888 $ 377,401 $ 4,719

Property Disposition

In September 2023, the Company sold a cooperative apartment unit in New York, NY for a sale price of $785,000 and recognized a gain on the sale of $604,000.

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~~Contract to Acquire 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.Property

~~When~~On March 8, 2023, the Company ~~does not expect~~entered into an agreement to ~~recover its carrying value on properties held~~acquire a 238-unit multifamily property constructed in 2019 and located in Richmond, VA, for ~~use,~~a purchase price of approximately $62,500,000. The purchase price includes the assumption of approximately $32,000,000 of U.S. Housing and Urban Development ("HUD") 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 approval by the mortgage lender of the Company's assumption of the mortgage debt. As of September 30, 2023, the Company ~~reduces its carrying value to fair value, and for properties held for sale,~~paid a deposit of $1,250,000 on the ~~Company reduces its carrying value to~~property which will be forfeited, with certain exceptions, if the ~~fair value less costs to sell. When~~transaction is not completed. This amount is recorded in Other Assets in 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.Consolidated Balance Sheet at September 30, 2023.

For the three and nine months ended September 30, 2022, the Company did not record any impairment charges. In the three and nine months ended September 30, 2021, the Company recorded an impairment charge of $520,000 related to its investment in the OPOP Towers and Loft properties, St Louis, MO, as the carrying value exceeded the fair value by that amount. The fair value was based upon the contractual price of the sale agreement which closed in November 2021.

Note 76 - 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.

~~Table of Contents~~

Note 87 – Investment in Unconsolidated Ventures

At September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the Company held interests in unconsolidated joint ventures that own ~~eight~~seven and 23eight multi-family properties (the "Unconsolidated Properties"), ~~respectively.~~respectively, and a property-in-development. The condensed balance sheets below present information regarding such properties (dollars in thousands):


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
ASSETS	ASSETS					ASSETS
Real estate properties, net of accumulated depreciation of $64,104 and $133,615		$	320,772	$	734,247
Real estate properties, net of accumulated depreciation of $67,399 and $66,945						Real estate properties, net of accumulated depreciation of $67,399 and $66,945	$	278,096	$	318,304
Cash and cash equivalents	Cash and cash equivalents	14,706		13,741		Cash and cash equivalents	8,504		6,591
Other assets	Other assets	31,832		25,535		Other assets	50,789		35,372

Total Assets	Total Assets	$	367,310	$	773,523	Total Assets	$	337,389	$	360,267

LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Liabilities:	Liabilities:					Liabilities:
Mortgages payable, net of deferred costs of $1,531 and $3,423		$	249,575	$	584,479
Mortgages payable, net of deferred costs of $1,185 and $1,421						Mortgages payable, net of deferred costs of $1,185 and $1,421	$	242,763	$	255,261
Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	11,819		17,064		Accounts payable and accrued liabilities	11,547		8,222
Total Liabilities	Total Liabilities	261,394		601,543		Total Liabilities	254,310		263,483
Commitments and contingencies	Commitments and contingencies					Commitments and contingencies
Equity:	Equity:					Equity:
Total unconsolidated joint venture equity	Total unconsolidated joint venture equity	105,916		171,980		Total unconsolidated joint venture equity	83,079		96,784
Total Liabilities and Equity	Total Liabilities and Equity	$	367,310	$	773,523	Total Liabilities and Equity	$	337,389	$	360,267

BRT's interest in joint venture equity	BRT's interest in joint venture equity	$	43,759	$	112,347	BRT's interest in joint venture equity	$	34,501	$	42,576

Table of Contents

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


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Land	Land	$	59,404	$	97,230	Land	$	46,331	$	59,404
Building	Building	315,400		739,577		Building	291,473		315,400
Building improvements	Building improvements	10,072		31,055		Building improvements	7,691		10,445
Real estate properties	Real estate properties	384,876		867,862		Real estate properties	345,495		385,249
Accumulated depreciation	Accumulated depreciation	(64,104)		(133,615)		Accumulated depreciation	(67,399)		(66,945)
Total real estate properties, net	Total real estate properties, net	$	320,772	$	734,247	Total real estate properties, net	$	278,096	$	318,304

At September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the weighted average interest rate on the mortgages payable is ~~3.90%~~4.03% and ~~3.97%~~3.99%, respectively, and the weighted average remaining term to maturity is ~~6.5~~5.3 years and ~~7.6~~6.1 years, respectively.

~~Table of Contents~~

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Revenues:	Revenues:									Revenues:
Rental and other revenue	Rental and other revenue	$	13,502	$	29,818	$	60,840	$	95,495	Rental and other revenue	$	10,636	$	13,502	$	34,244	$	60,840
Total revenues	Total revenues	13,502		29,818		60,840		95,495		Total revenues	10,636		13,502		34,244		60,840

Expenses:	Expenses:									Expenses:
Real estate operating expenses	Real estate operating expenses	6,512		14,587		27,523		45,523		Real estate operating expenses	5,023		6,512		15,835		27,523
Interest expense	Interest expense	2,843		7,568		13,762		24,562		Interest expense	2,212		2,843		7,057		13,762
Depreciation	Depreciation	3,113		8,288		14,957		28,464		Depreciation	2,568		3,113		7,833		14,957
Total expenses	Total expenses	12,468		30,443		56,242		98,549		Total expenses	9,803		12,468		30,725		56,242
Total revenues less total expenses	Total revenues less total expenses	1,034		(625)		4,598		(3,054)		Total revenues less total expenses	833		1,034		3,519		4,598
Other equity earnings	Other equity earnings	12		7		89		21		Other equity earnings	3		12		119		89
Impairment of assets		—		—		—		(2,813)
Insurance recoveries		—		—		—		2,813

Gain on insurance recoveries	Gain on insurance recoveries	—		1,246		567		1,246		Gain on insurance recoveries	—		—		65		567
Gain on sale of real estate	Gain on sale of real estate	16,937		83,984		118,270		83,984		Gain on sale of real estate	—		16,937		38,418		118,270
Loss on extinguishment of debt	Loss on extinguishment of debt	(573)		(9,401)		(3,491)		(9,401)		Loss on extinguishment of debt	—		(573)		(561)		(3,491)
Net income from joint ventures	Net income from joint ventures	$	17,410	$	75,211	$	120,033	$	72,796	Net income from joint ventures	$	836	$	17,410	$	41,560	$	120,033

BRT's equity in (loss) earnings and equity in earnings from sale of unconsolidated joint venture properties		$	11,607	$	30,786	$	65,846	$	28,949
BRT's equity in earnings and equity in earnings from sale of unconsolidated joint venture properties										BRT's equity in earnings and equity in earnings from sale of unconsolidated joint venture properties	$	426	$	11,607	$	16,449	$	65,846

Joint Venture Sales

On ~~February 8, 2022,~~May 12, 2023, the unconsolidated joint venture in which the Company had a ~~65%~~50% equity interest sold ~~The Verandas at Shavano,~~Chatham Court and Reflections, a ~~288-unit multi-family~~494 unit multi family property located in ~~San Antonio,~~Dallas, TX, for a sales price of ~~$53,750,000.~~$73,000,000. The gain on the sale of this property was ~~$23,652,000~~$38,418,000 and BRT's share of the gain was ~~$12,961,000.~~$14,744,000. In connection with the sale, mortgage debt of ~~$25,100,000~~$25,405,000 with ~~1.2~~5.0 years of remaining term to maturity and bearing an interest rate of ~~3.61%~~4.01% was ~~repaid.~~repaid and the joint venture incurred $561,000 from the loss on the extinguishment of debt, of which the Company's share was $212,000.

~~On June 14,~~

Table of Contents

During the nine months ended September 30, 2022, the unconsolidated joint ventures in which the Company had ~~a 75%~~ equity ~~interest~~interests, sold ~~Retreat at Cinco Ranch, a 268-unit multi family property in San Antonio, TX for $68,300,000. The gain on~~ the sale of this property was $30,595,000 and BRT's share of the gain was $17,378,000. In connection with the sale, mortgage debt of $30,096,000 with 3.6 years of remaining term to maturity and bearing an interest rate of 4.44% was repaid and the joint venture incurred $1,257,000 from the loss on the extinguishment of debt, of which BRT's share was $686,000.following properties:

On June 30, 2022, the unconsolidated joint venture in which the Company had a 65% equity interest sold The Vive, a 312-unit multi-family property in Kannapolis, NC for $91,250,000. The gain on the sale of this property was $47,086,000 and BRT's share of the gain was $22,720,000. In connection with the sale, mortgage debt of $31,420,000 with 29.7 years of remaining term to maturity and bearing an interest rate of 3.52% was repaid and the joint venture incurred $1,631,000 from the loss on extinguishment of debt, of which BRT's share was $787,000.

On August 31, 2022, the unconsolidated joint venture in which the Company had a 80% equity interest sold Water's Edge, a 204-unit multi-family property in Columbia, SC for $32,400,000. The gain on the sale of this property was $16,937,000 and BRT's share of the gain was $11,472,000. In connection with the sale, mortgage debt of $12,241,000 with 3.8 years of remaining term to maturity and bearing an interest rate of 4.28% was repaid and the joint venture incurred $573,000 from the loss on extinguishment of debt, of which BRT's share was $388,000.


Property	Date of Sale	Units	Interest Sold		Sales Price		Gain on Sale		BRT Share of Gain		Mtge Debt at Sale Date		Loss on extinguishment of debt		BRT Share of extinguishment of debt
The Verandas at Shavano, San Antonio, TX	2/8/2022	288	65	%	$	53,750	$	23,652	$	12,961	$	25,100	$	—	$	—
Retreat at Cinco Ranch, San Antonio, TX	6/14/2022	268	75	%	68,300		30,595		17,378		30,096		1,257		686
The Vive, Kannapolis, NC	6/30/2022	312	65	%	91,250		47,086		22,720		31,420		1,631		787
Waters Edge, Columbia, SC	8/31/2022	204	80	%	$	32,400	$	16,937	$	11,472	$	12,241	573		388
		1,072			$	245,700	$	118,270	$	64,531	$	98,857	$	3,461	$	1,861

Acquisition of Interest in Joint Venture

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. During the nine months ended September 30, 2023, the Company funded a $122,000 capital call for this joint venture.

~~Table of Contents~~

~~Joint Venture Buyouts~~

The Company completed the partner buyout transactions in the unconsolidated joint ventures that own the properties identified in note 5 - Real Estate Properties - Partner Buyouts. As a result of these purchases, these properties (including the related mortgage debt - see note 9 - Debt Obligations) are wholly-owned effective as of the closing of each purchase, and are included in the Company's consolidated balance sheet and results of operations as of such applicable date.

Note 98 – Debt Obligations

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


		September 30, 2022		December 31, 2021			September 30, 2023		December 31, 2022
Mortgages payable	Mortgages payable	$	423,442	$	200,857	Mortgages payable	$	427,159	$	407,958
Junior subordinated notes	Junior subordinated notes	37,400		37,400		Junior subordinated notes	37,400		37,400
Credit facility(1)	Credit facility(1)	7,000		—		Credit facility(1)	—		19,000
Deferred financing costs	Deferred financing costs	(5,160)		(1,277)		Deferred financing costs	(4,486)		(4,941)
Total debt obligations, net of deferred costs	Total debt obligations, net of deferred costs	$	462,682	$	236,980	Total debt obligations, net of deferred costs	$	460,073	$	459,417

(1) Excludes $342,000 of deferred financing costs which are reflected in other assets at September 30, 2023.

Mortgages Payable

At September 30, ~~2022,~~2023, the weighted average interest rate on the Company's ~~mortgages payable~~mortgage payables was ~~3.99%~~4.02% and the weighted average remaining term to maturity is ~~7.8~~7.3 years. For the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, interest expense, which includes amortization of deferred financing costs, was ~~$4,423,000~~$4,774,000 and ~~$1,305,000,~~$4,423,000, respectively. For the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, interest expense, which includes amortization of deferred financing costs, was ~~$8,749,000~~$14,063,000 and ~~$4,113,000,~~$8,749,000, respectively.

~~During the three and nine months ended September 30, 2022,~~On February 24, 2023, the Company ~~paid off~~obtained mortgage debt of ~~$15,613,000~~$21,173,000 on ~~two properties.~~

~~On October 31, 2022, the Company paid off maturing~~its Silvana Oaks - North Charleston, SC multi-family property; such mortgage debt matures in March 2033, bears an interest rate of ~~$14,900,000.~~4.45% and is interest only for the term of the mortgage.

~~Partner Buyouts~~

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

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

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

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

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

1916

Table of Contents

.Credit Facility

~~On September 15, 2022, the~~

The Company's amended credit facility with an affiliate of Valley National Bank ("VNB"), ~~was amended to, among other things, increase the amount~~allows the Company ~~may~~to borrow, subject to compliance with borrowing base requirements and other conditions, up to ~~$60,000,000, extend the facility's maturity date to September 2025, reduce the adjustable interest rate to prime, with a floor of 3.50%, and revise certain financial and other covenants.~~$60,000,000. The facility can be used to facilitate the acquisition of multi-family properties, repay mortgage debt secured by multi-family properties and for operating expenses (~~i.e.,~~(i.e.,working capital (including dividend payments)); provided that no more than $25,000,000 may be used for operating expenses. The facility is secured by the cash available at VNB and the Company's pledge of the interests in the entities that own the properties and matures in September 2025.

On August 28, 2023, the facility was amended to convert the index on which interest on the credit facility is calculated from the prime rate to SOFR and to adjust the interest rate floor. After giving effect to the amendment, the interest rate on the credit facility, which adjusts monthly and is subject to a floor of 6.0%, equals one-month term SOFR plus 250 basis points. The interest rate in effect as of September 30, ~~2022~~2023 is ~~6.25%~~7.81%. There is an unused facility fee of 0.25% per ~~annum.~~annum on the total amount committed by VNB and unused by the Company. At September 30, ~~2022,~~2023, the Company is in compliance in all material respects with its obligations under the facility.

At September 30, ~~2022,~~2023, there was ~~$7,000,000~~no outstanding balance on the facility and ~~no outstanding balance~~ at December 31, ~~2021.~~2022, the outstanding balance was $19,000,000. At September 30, ~~2022~~2023 and December 31, ~~2021, $53,000,000~~2022, $60,000,000 and ~~$35,000,000,~~$41,000,000, respectively, was available to be borrowed. At November ~~4, 2022,~~1, 2023, there was anno outstanding balance ~~of $19,000,000~~ on the facility ~~bearing an interest rate of 7.00%~~ and ~~$41,000,000~~$60,000,000 available to be borrowed. Interest expense for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, which includes amortization of deferred financing costs and unused fees, was ~~$227,000~~$91,000 and ~~$18,000,~~$227,000, respectively. Interest expense for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, which includes amortization of deferred financing costs and unused fees, was ~~$334,000~~$482,000 and ~~$54,000,~~$334,000, respectively. Deferred financing costs of ~~$551,000~~$342,000 and ~~$270,000,~~$498,000, are recorded ~~in other assets~~ on the Consolidated balance sheets at September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, respectively.

Junior Subordinated Notes

At September 30, ~~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 ~~$282,000~~$262,000 and ~~$297,000,~~$277,000, respectively. The interest rate on ~~the~~ outstanding balance resets quarterly and is ~~based on~~equal to three ~~months LIBOR~~month term SOFR + ~~2.00%~~2.26%. The interest rate in effect at September 30, 2023 and 2022 was 7.63% and ~~2021 was~~ 4.78% ~~and 2.21%~~, respectively. ~~The notes mature April 30, 2036.~~ The interest rate that will be in effect for the three months ~~ending January~~beginning October 31, 2023 is ~~6.41%~~7.65%. The notes mature April 30, 2036.

The junior subordinated notes require interest only payments through the maturity date of April 30, 2036, at which time repayment of the outstanding principal and unpaid interest become due. Interest expense for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, which includes amortization of deferred financing costs, was ~~$413,000~~$716,000 and ~~$210,000,~~$413,000, respectively. Interest expense for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, which includes amortization of deferred financing costs, was ~~$911,000~~$2,032,000 and ~~$636,000,~~$911,000, 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 respect to other business matters, as required. The aggregate fees incurred for these services in each of the three months ended September 30, 2023 and 2022 were $385,000 and ~~2021 were~~ $367,000, ~~and $350,000,~~ respectively, and ~~$1,101,000~~$1,155,000 and ~~$1,049,000~~$1,101,000 for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, 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 ~~$9,000~~$17,000 and $9,000 for the three months ended September 30, ~~2022~~2023 and ~~2021,~~2022, respectively and ~~$28,000~~$33,000 and ~~$23,000~~$28,000 for the nine months ended September 30, ~~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 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 September 30, ~~2022~~2023 and ~~2021,~~2022, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated

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~~$183,000~~ $141,000 and ~~$172,000,~~$183,000, respectively and ~~$614,000~~$478,000 and ~~$523,000~~$614,000 for the nine months ended September 30, ~~2022~~2023 and ~~2021,~~2022, 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.

During the nine months ended September 30, 2023, in connection with its stock repurchase program, the Company purchased from Mitchell Gould, an Executive Vice President, 50,000 shares of Company common stock at a total cost of $1,008,000, at the closing price of the common stock on the date the parties agreed to the transaction.

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.

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Junior subordinated notes: At September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, the estimated fair value of the notes is lower than their carrying value by approximately ~~$6,772,000~~$3,668,000 and ~~$8,296,000,~~$4,695,000, respectively, based on a market interest rate of ~~6.78%~~8.52% and ~~4.21%~~7.91%, respectively. The Company values its junior subordinated notes using a discounted cash flow analysis on the expected cash flows of each instrument.

Mortgages payable: At September 30, ~~2022,~~2023, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately ~~$37,083,000,~~$50,853,000, assuming market interest rates between ~~5.13%~~5.59% and ~~6.18%~~6.94%. At December 31, ~~2021,~~2022, the estimated fair value of the Company's mortgages payable was ~~greater~~lower 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. The Company values its mortgages payable using a discounted cash flow analysis on the expected cash flows of each instrument.

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~~

~~The Company reviews each investment in real estate and joint venture interests when events or circumstances change, indicating the carrying value~~ of ~~the investment may not be recoverable.In the evaluation of an investment for impairment, many factors~~debt obligations are considered ~~including estimated current and expected cash flows from the asset during the projected hold period, costs necessary~~ to ~~extend the life of the asset, expected capitalization rates, projected stabilized net operating income, and the ability to hold or dispose of the asset in the ordinary course of business.~~

~~Note 12 – Derivative Financial Instruments~~

~~Cash Flow Hedges of Interest Rate Risk~~

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

~~The changes in~~be Level 2 valuations within 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 September 30, 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.~~hierarchy.

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~~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 September 30, Nine Months Ended September 30,
2021 2021
Amount of (loss) gain recognized on derivative in Other Comprehensive Income $ (1) $ (1)
Amount of (loss) gain reclassified from Accumulated Other Comprehensive Income into Interest expense $ (2) $ (12)
Total amount of Interest expense presented in the Consolidated Statements of Operations $ 1,535 $ 4,804

~~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 1411 – Commitments and Contingencies

From time to time, the Company and/or its subsidiaries are parties to legal proceedings that arise in the ordinary course of business, and in particular, personal injury claims involving the operations of 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 these personal injury claims also assert claims for exemplary (~~i.e~~(i.e punitive) damages. Generally, insurance does not cover claims for exemplary damages.

The Company is one of several defendants in 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 determine the probability and/or magnitude of any potential loss, if any, management believes the~~The Company ~~has sufficient primary~~ and ~~umbrella insurance to cover the claim for compensatory damages.~~

~~In connection with a mediation conducted subsequent to September 30, 2022, the parties to a personal injury lawsuit in which the Company is one of the~~certain other defendants have agreed to settle this lawsuit for approximately $325,000; the settlement remains subject to, among other things, the ~~signing~~execution of ~~a definitive agreement, to a~~certain additional documentation and court approval. This settlement ~~pursuant to which~~amount will be fully funded by the Company’s insurance ~~carrier would pay the plaintiff $850,000.~~carrier.

Note 1512 – Subsequent Events

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of September 30, ~~2022,~~2023, that warrant additional disclosure, have been included in the notes to the consolidated financial statements.

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

Cautionary Statement Regarding Forward-Looking Statements

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

•~~the impact of the COVID-19 pandemic~~inability to generate sufficient cash flows due to unfavorable economic and market conditions (e.g., inflation, volatile interest rates and the ~~governmental~~possibility of a recession), changes in supply and/or demand, competition, uninsured losses, changes in tax and ~~non-governmental responses thereto;~~housing laws or other factors;

•~~general economic and business conditions, including those currently affecting our nation’s economy and~~adverse changes in real estate markets, ~~such as increasing inflation~~including, but not limited to, the 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 ~~interest rates;~~

•~~the availability of,~~consummate attractive acquisitions and ~~costs associated with, sources of capital~~dispositions on favorable terms, and ~~liquidity;~~

•~~accessibility of debt 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;

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

•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;~~

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

•~~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~~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.

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 September 30, ~~2022,~~2023, we: (i) wholly-own 21 multi-family properties with an aggregate of 5,420 units and a carrying value of ~~$653.7~~$638.2 million; (ii) have ownership interests, through unconsolidated entities, in ~~eight~~seven multi-family properties with ~~2,781~~2,287 units and a carrying value of ~~$40.3~~

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$30.9 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 ~~$3.5~~$5.4 million. The 2928 properties are located in 11 states; most of the properties are located in the Southeast United States and Texas. ~~See "~~

~~-Other Financing Sources And 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 as a Result of the ~~Volatile~~Uncertain Economic Environment

During the three and nine months ended September 30, 2022, economic uncertainty and stock market volatility have increased due to a number of factors, including rising inflation, increasing interest rates, the continuing COVID-19 pandemic, and lingering supply chain disruptions. This uncertainty, volatility and the related causes may adversely impact usAs more fully described in ~~the future. Rising inflation could have an adverse impact on~~(i) our ~~operating expenses(~~Annual Report, and in particular, ~~real estate operating expenses~~the sections thereof entitled "Risk Factors" and ~~general~~"Management's Discussion and ~~administrative expense)~~Analysis of Financial Condition and ~~interest expense on our floating rate debt~~Results of Operations" and (ii) below, we face challenges (~~i.e.,~~e.g ~~our junior subordinated notes and credit facility)~~., ~~as these costs could increase at a rate higher than our rental and other revenue. We can provide no assurance that we will be able to mitigate the impact of~~inflation, rising ~~inflation. The Federal Reserve has been raising~~ interest rates ~~to combat inflation~~ and ~~it is anticipated that rates will continue to rise throughout the remainder of 2022. Increases in interest rates on any of our floating rate debt will result in higher debt service costs and~~decelerating increases in our operating expenses that we are unable to pass through to our tenants will adversely affect our profitability and cash flows. We cannot assure you that our access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of future borrowings, renewals or refinancings. Further,rental rates) due to the uncertain economic environment which may limit our ability or willingness (i) to acquire (or complete the acquisition of previously contracted for) properties, (ii) grow rental income or (iii) control our real estate operating expenses, some of which, such as real estate tax and insurance expense, we have a very limited ability to control.

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Proposed Purchase of Richmond, VA 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 $62.5 million. The purchase price includes the assumption of approximately $32 million 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 approval by the mortgage lender of our assumption of the mortgage debt. As of September 30, 2023, there is a $1.3 million deposit on this property, which we will forfeit if we do not, with certain exceptions, complete this acquisition. To complete this purchase, we anticipate that we will have to draw on our credit facility which, at November 1, 2023, bears an interest rate of approximately 7.82% or obtain mortgage financing from our unencumbered properties. There is uncertainty as to whether this transaction will be completed.

Share repurchases

In August 2023, the Board of Directors increased the Company's share repurchase program by an additional approximate $6.7 million of shares to $10 million of shares of common stock.

During the quarter ended September 30, 2023, we repurchased 264,165 shares of common stock at an average price of $18.74 for an aggregate cost of $4.9 million. From October 1 through October 31, 2023, we repurchased 98,014 shares of our common stock at an average price of $17.23 per share for an aggregate cost of $1.7 million. After giving effect to these repurchases, we are authorized to repurchase up to $4.3 million of additional shares of our common stock.

We anticipate that due to the uncertain acquisition environment, and the current price of our common stock, that, in the near term, we ~~will be especially cautious in pursuing acquiring properties. As a result,~~may continue to repurchase our ~~ability, in the near term, to grow revenue and net income through acquisitions will be adversely affected.~~

~~Buyout of Interests in Joint Ventures~~

In 2021 and the nine months ended September 30, 2022, we completed the purchase of the remaining interests of our joint venture partners in the unconsolidated ventures that own three and 11 multi-family properties, respectively. We refer to these 14 purchases and the related effects on our financial statements as the “Partner Buyouts”. After a Partner Buyout is completed, such multi-family property is wholly owned and the accounts and operations of such property are included in our consolidated balance sheet and statements of operations, respectively, as of the date of completion of such purchase. Our assets, liabilities, revenues and expenses increased significantly as a result of these Partner Buyouts. Had the 11 Partner Buyouts completed in 2022 been included as of January 1, 2022 in our consolidated statements of operations, such properties would have contributed, for the nine months ended September 30, 2022, an aggregate of $18.4 million of rental income and $17.4 million of expense (including $4.5 million of mortgage interest expense and $5.1 million of depreciation expense). We do not anticipate completing any Partner Buyouts in the near future.

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

Set forth below is information regarding the Partner Buyouts completed during the three months ended September 30, 2022. The mortgage debt reflects the debt that was on such property at the time of the purchase of the remaining interest. The purchase price gives effect to our purchase of the joint venture partners' "promote interests" (as more fully described in the Annual Report) (dollars in thousands):

Property Name Location Units Percent Acquired Purchase Price (1) Closing Date Mortgage Debt (2) Interest Rate Maturity
Civic Center I Southaven, MS 392 25% $ 18,233 July 12, 2022 27,389 4.24 % March 2026
Civic Center II Southaven, MS 384 25% 17,942 July 12, 2022 30,105 3.73 % September 2026
Abbotts Run Willmington, NC 264 20% 9,010 July 14, 2022 23,160 4.71 % July 2030
Somerset at Trussville Trussville, AL 328 20% 10,558 July 19, 2022 32,250 4.19 % June 2029
Magnolia Pointe at Madison Madison, AL 204 20% 7,246 Aug 3, 2022 15,000 4.08 % January 2028
Total 1,572 $ 62,989 $ 127,904 $ 127,904,000
~~___________________________________~~

~~(1) Excludes closing costs and operating cash acquired from the joint ventures.~~

~~(2) Excludes fair value adjustments of $4,719 determined as part of the purchase price allocation.~~common stock.

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~~Completed Disposition~~

On August 31, 2022, the unconsolidated joint venture that owns Waters Edge at Harbison, located in Columbia, SC and in which we held an 80% equity interest, sold the property for $32.4 million, recognized a $16.9 million gain on the sale of this property and recorded a $573,000 mortgage prepayment charge. As a result of the sale, we recorded a $11.5 million gain and $388,000 mortgage prepayment charge, representing our share of the gain and the mortgage prepayment charge, respectively. The mortgage debt securing the property and paid off in connection with the sale was in principal amount of $12.2 million, with a remaining term to maturity of 3.8 years and an interest rate of 4.28%. In the six months ended June 30, 2022, this property contributed $103,000 of equity in loss of unconsolidated joint ventures.

~~Other~~ Activities During the Three Months Ended September 30, ~~2022~~

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

~~We sold 174,059 shares pursuant to our at-the-market offering program at an average price of $22.22 per share. Net proceeds after commissions and fees was $3.8 million.~~2023

~~Credit Facility Amendment~~

~~We entered into an amendment (the "Amendment") to~~On August 28, 2023, our ~~amended and restated~~ credit facility ~~(the "Facility") with VNB New York, LLC, an affiliate of Valley National Bank (“VNB”). Among other things,~~was amended to convert the ~~Amendment (i) increased~~index on which interest is calculated from the ~~amount we are permitted~~prime rate to ~~borrow from $35 million~~SOFR and to an aggregate of $60 million, subject to compliance with borrowing base requirements and other conditions, (ii) increased from $15 million to $25 million the amount that may be used for working capital (including dividend payments) and operating expenses, (iii) extended the term of the facility from November 2024 to September 2025, (iv) reducedadjust the interest rate floor. After giving effect to the ~~prime~~amendment, the interest rate ~~(subject~~on the credit facility, which adjusts monthly and is subject to a floor of ~~3.5%) by eliminating the 25~~6.0%, equals one-month term SOFR plus 250 basis point spread over the prime rate, (v) increased the number and value of the unencumbered properties we are required to maintain from two properties with a value of at least $50 million to three properties with a value of at least $75 million and (vi) requires that we maintain a tangible net worth of a least $140 million. In connection with the Amendment, we paid fees of approximately $357,000 which will be amortized over the remaining term of the facility.

~~Mortgage Payoff~~

~~On October 31, 2022, the mortgage debt on Silvana Oaks Apartments - N. Charleston, SC with an~~points. The interest rate in effect as of ~~3.79%~~September 30, 2023 is 7.81% and at such date we were in compliance in all material respects with our obligations under the ~~amount of $14.9 million matured and was paid off. In connection with this payoff, we borrowed $15.0 million from our credit~~ facility.

~~UPREIT Structure~~

~~We are evaluating whether to establish an UPREIT structure to enhance our ability to acquire multi-family properties.~~

~~There is no timetable for the completion of such evaluation or implementation of such structure and we can provide no assurance that we will implement an UPREIT structure.~~

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~~Table of Contents~~

Results of Operations

Three months ended September 30, ~~2022~~2023 compared to three months ended September 30, ~~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 ~~and nine~~ months ended September 30, ~~2022~~2023 and ~~2021,~~2022, there were ~~seven~~11 same store properties in our consolidated portfolio. As used in the comparison of the three months ended September 30, 2023 and 2022, the term "Partner Buyouts" refers to our purchase in 2022 of the interests of our joint venture partners at five properties during the three months ended September 30, 2022. See note 5 - Real Estate Properties - to our consolidated financial statements.

Revenues

The following table compares our revenues for the periods indicated:


		Three Months Ended September 30,									Three Months Ended September 30,
(Dollars in thousands):	(Dollars in thousands):	2022		2021		Increase (Decrease)		% Change		(Dollars in thousands):	2023		2022		Increase (Decrease)		% Change
Rental and other revenue from real estate properties	Rental and other revenue from real estate properties	$	21,691	$	7,709	$	13,982	181.4	%	Rental and other revenue from real estate properties	$	23,510	$	21,691	$	1,819	8.4	%
Other income	Other income	6		5		1		20.0	%	Other income	342		6		336		N/M
Total revenues	Total revenues	$	21,697	$	7,714	$	13,983	181.3	%	Total revenues	$	23,852	$	21,697	$	2,155	9.9	%

Rental and other revenue from real estate properties

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

•$~~13.3 million due to the Partner Buyouts, including $4.9~~1.4 million from the Partner Buyouts, ~~completed during the three months ended September 30, 2022;~~ and

•$~~727,000 at~~723,000 from same store properties primarily due to an increase in ~~average~~ rental ~~rates.~~rates across most of the portfolio.

The increase was offset by a $291,000 decrease due to a decline in occupancy rates across most of the portfolio (including an aggregate of $144,000 at Verandas at Alamo Ranch - San Antonio, TX ("Alamo Ranch") and at Bells Bluff - West Nashville, TN ("Bells Bluff), due primarily, with respect to the former, to a tightening of the tenant screening process, and with respect to the latter, to increased supply in its market and a change in market demand for certain apartment types).

Other Income

The increase in the current three month period ended September 2023, is primarily due to the impact of rising interest rates on our cash balances.

Expenses

The following table compares our expenses for the periods indicated:


		Three Months Ended September 30,									Three Months Ended September 30,
(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	$	9,195	$	3,404	$	5,791	170.1	%	Real estate operating expenses	$	10,583	$	9,195	$	1,388	15.1	%
Interest expense	Interest expense	5,061		1,535		3,526		229.7	%	Interest expense	5,581		5,061		520		10.3	%
General and administrative	General and administrative	3,673		3,114		559		18.0	%	General and administrative	4,017		3,673		344		9.4	%

Depreciation and amortization	Depreciation and amortization	8,165		1,787		6,378		356.9	%	Depreciation and amortization	6,544		8,165		(1,621)		(19.9)	%
Total expenses	Total expenses	$	26,094	$	9,840	$	16,254	165.2	%	Total expenses	$	26,725	$	26,094	$	631	2.4	%

Table of Content

Real estate operating expense.

The ~~increase~~change is due ~~primarily~~ to ~~$5.7 million~~the following increases:

•$878,000 from same store properties, including:

–$447,000 due to the master insurance program implemented in December 2022;

–$238,000 due to general cost increases across various expense categories and properties; and

–$193,000 due to repairs and maintenance and replacements due to general cost increases and increased unit turns.

•$476,000 from the Partner ~~Buyouts, including $1.9 million from the Partner Buyouts completed during the three months ended September 30, 2022.~~Buyouts.

Interest expense.

The ~~change~~increase is due ~~to a:~~to:

•$~~2.2 million increase from the Partner Buyouts, including $1.4 million from the Partner Buyouts completed during the three months ended September 30, 2022;~~

•~~$208,000 increase~~303,000 due to the increase in the average outstanding balance on the credit facility to $13.8 million during the three months ended September 30, 2022 from no balance outstanding during the corresponding period of the prior year.

•~~$189,000 increase due to an~~a 318 basis point increase on the interest rate on our junior subordinated ~~debt which is based on three month LIBOR.~~debt; and

~~Table of Contents~~•

$265,000 from the Partner Buyouts.

The increase was offset by a ~~decrease of $375,000~~$134,000 decline in interest expense due to a reduction in the ~~payoff of $46.5 million of mortgage debt since October 1, 2021.~~balance outstanding on our credit facility.

General and administrative

The increase is due primarily to a ~~$367,000~~$320,000 increase in ~~non-cash~~ compensation expense - specifically, increases of:

•$~~207,000~~180,000 due to the inclusion, for the entire three months ended September 30, ~~2022,~~2023, of the amortization expense related to the performance and market based restricted stock units (the "RSUs") granted in June ~~2022;~~2023; and

•$~~160,000 due~~123,000 of other components of compensation expense, including $70,000 related to the amortization ~~expense related to restricted stock, including $110,000 related to the~~of restricted stock granted in January ~~2022 as a result of the higher fair value of the shares granted in 2022 in comparison to the restricted stock granted in 2017.~~2023.

~~The balance of the increase is due primarily to increased professional fees and higher levels of compensation.~~

Depreciation and amortization

The ~~increase~~decrease is due primarily to ~~$6.4~~a $1.6 million decline due to reduced depreciation related to lease intangibles from properties that were subject to the Partner Buyouts ~~including $ 2.6 million from the Partner Buyouts completed during the three months ended September 30,~~in 2022.

~~Income tax provision~~Gain on Sale of Real Estate

In the three months ended September 30, 2022, income tax provision increased to $178,000 from $31,000 in the corresponding period of the prior year due to an increase in state level taxes accrued. The increase in the accrual is the result of income generated by property sales in the current period and the unavailability of net operating loss carryforwards available in certain states to offset such income.

~~Gain on sale of real estate~~

~~In the three months ended September 30, 2021,~~2023, we sold a cooperative apartment in New York NY for a sales price of ~~$545,000~~$785,000 and recognized a gain of ~~$414,000~~$604,000 on the sale.

Insurance recovery of casualty loss

During the quarter ended September 30, 2023, we received $261,000 in insurance proceeds (in addition to $215,000 previously received) as reimbursement for expenses incurred related to a winter storm in December 2022. There was no ~~comparable gain~~similar recovery in the corresponding 2022 period.

Income tax provision (benefit)

Income tax provision (benefit) in the quarter ended September 30, ~~2022.~~2023, decreased $300,000 to a benefit of $122,000 from an expense of $178,000 in the corresponding quarter in the prior year. The change is primarily the result of the reversal of previously accrued expense and the anticipated receipt of refunds from the 2022 tax year.

~~Loss on extinguishment of debt~~

In the three months ended September 30, 2021, our consolidated subsidiaries paid off three first mortgage loans and three supplemental loans with an aggregate outstanding principal balance of $31.9 million and incurred an aggregate $902,000 of prepayment charges and deferred loan fee write-offs. There was no comparable expense in the quarter ended September 30, 2022.

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Table of ~~Contents~~Content

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):

Three Months Ended September 30,
2022 2021 Increase
(Decrease) % change
Rental and other revenues from unconsolidated joint ventures $ 13,502 $ 29,818 $ (16,316) (54.7) %
Real estate operating expense from unconsolidated joint ventures 6,512 14,587 (8,075) (55.4) %
Interest expense from unconsolidated joint ventures 2,843 7,568 (4,725) (62.4) %
Depreciation from unconsolidated joint ventures 3,113 8,288 (5,175) (62.4) %
Total expenses from unconsolidated joint ventures 12,468 30,443 (17,975) (59.0) %
Total revenues less total expenses from unconsolidated joint ventures 1,034 (625) 1,659 265.4 %
Other equity earnings 12 7 5 71.4 %
Gain on insurance recoveries from unconsolidated joint ventures — 1,246 (1246) N/A
Loss on extinguishment of debt from unconsolidated joint ventures (573) (9,401) 8,828 (93.9) %
Gain on sale of real estate from unconsolidated joint ventures 16,937 83,984 (67,047) (79.8) %
Net income (loss) from unconsolidated joint ventures $ 17,410 $ 75,211 $ (57,801) (76.9) %
Equity in earnings (loss) of unconsolidated joint ventures and equity in earnings from sale of unconsolidated joint venture properties $ 11,607 $ 30,786 $ (19,179)


	Three Months Ended September 30,
	2023		2022		Increase (Decrease)		% change
Rental and other revenues from unconsolidated joint ventures	$	10,636	$	13,502	$	(2,866)	(21.2)	%

Real estate operating expense from unconsolidated joint ventures	5,023		6,512		(1,489)		(22.9)	%
Interest expense from unconsolidated joint ventures	2,212		2,843		(631)		(22.2)	%
Depreciation from unconsolidated joint ventures	2,568		3,113		(545)		(17.5)	%
Total expenses from unconsolidated joint ventures	9,803		12,468		(2,665)		(21.4)	%

Total revenues less total expenses from unconsolidated joint ventures	833		1,034		(201)		(19.4)	%

Other equity earnings	3		12		(9)		(75.0)	%



Gain on sale of real estate from unconsolidated joint ventures	—		16,937		(16,937)		(100.0)	%
Loss on extinguishment of debt from unconsolidated joint ventures	—		(573)		573		(100.0)	%
Net income from unconsolidated joint ventures	$	836	$	17,410	$	(16,574)	(95.2)	%

Equity in earnings of unconsolidated joint ventures and equity in earnings from sale of unconsolidated joint venture properties	$	426	$	11,607	$	(11,181)	(96.3)	%

Set forth below is an explanation of the most significant changes in the components of the equity in earnings of unconsolidated joint ventures and equity in earnings from sale of unconsolidated joint venture properties. Same store properties at Unconsolidated Properties represent ~~eight~~seven properties that were owned for the entirety of the periods being compared.

Rental and other revenues from unconsolidated joint ventures

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

•$~~11.9~~1.9 million from the ~~Partner Buyouts, including $4.4 million from~~sale of the ~~Partner Buyouts completed during the three months ended September 30, 2022;~~Chatham Court and Reflections property - Dallas, TX ("Chatham Sale") in 2023;

•$~~3.8 million~~963,000 from the sale in 2022 of the properties owned by the unconsolidated joint ventures which owned Verandas at Shavano - San Antonio, TX ("Shavano"), Retreat at Cinco Ranch - Katy, TX ("Cinco") ,The Vive - Kanapolis, NC (the "Vive"), and Waters Edge at Harbison - Columbia, SC ("Waters Edge"; collectively with Shavano, Cinco, and Vive, the "Shavano/Cinco/Vive/Waters Edge Sales"), including $165,000 from the sale of Waters Edge completed during the three months ended September 30, 2022;

•$1.1 million from the sale in 2021 of the properties by the unconsolidated joint ventures which owned The Avenue Apartments-Ocoee, FL and Parc at 980-Lawrenceville, GA (collectively, the "Avenue/Parc Sales");Partner Buyouts; and

•$~~723,000~~532,000 primarily from the sale ~~in 2021~~ of ~~our interest in~~ the ~~unconsolidated joint venture that owned Tower at Opop and Lofts at Opop-St. Louis, MO (the "Opop~~Waters Edge property-Columbia, SC. ("Waters Edge Sale"). 2022.

Offsetting the decrease was a ~~$1.2 million~~$499,000 increase from same store properties due ~~primarily~~ to increased rental rates, net of the impact of a decrease in occupancy rates.

Real estate operating expenses from unconsolidated joint ventures

~~Table~~The components of ~~Contents~~

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

•$~~5.5 million~~954,000 from the ~~Partner Buyouts, including $1.8 million from the Partner Buyouts completed during the three months ended September 30, 2022;~~Chatham Sale.

•$~~1.7 million~~621,000 primarily from the ~~Shavano/Cinco/Vive/~~Waters Edge ~~Sales;~~Sale; and

•$~~669,000~~431,000 from the ~~Avenue/Parc Sales;~~

•~~$423,000 from the Opop Sale.~~

Partner Buyouts.

Offsetting this decrease was a ~~$152,000~~$517,000 increase in such expenses at same store properties ~~with expenses generally increasing across most expense categories~~due primarily to increased real estate taxes, including the inclusion, in the corresponding period of the prior year, of the receipt of a $152,000 tax refund and, to a lesser extent, increases in personnel costs, utilities ~~repairs~~ and ~~maintenance and insurance.~~insurance expense.

Table of Content

Interest expense from unconsolidated joint ventures.

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

•$~~3.1 million~~269,000 from the ~~Partner Buyouts, including $1.1 million from the Partner Buyouts completed during the three months ended September 30, 2022;~~Chatham Sale;

•$~~926,000~~232,000 from the ~~sale of Shavano/Cinco/Vive/Waters Edge Sales;~~

•~~$341,000 from the Avenue/Parc Sales;~~Partner Buyouts; and

•$~~330,000~~92,000 from the ~~Opop~~Waters Edge Sale.

Depreciation from unconsolidated joint ventures

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

•$~~3.6 million~~272,000 from the Partner ~~Buyouts, including $1.3 million from the Partner Buyouts completed during the three months ended September 30, 2022;~~Buyouts;

•$~~1.2 million~~262,000 from the ~~Shavano/Cinco/Vive/Waters Edge Sales;~~Chatham Sale; and

•$~~334,000~~272,000 from the ~~Opop~~Waters Edge Sale.

~~Gain~~Loss on ~~insurance recoveries~~extinguishment of debt from unconsolidated joint ventures

In the three months ended September 30, 2021, we recognized $1.2 million in gains primarily due to our receipt of insurance recoveries from claims on three properties located in Texas that were damaged in a February 2021 ice storm ( the "Texas Storm"), which receipts exceeded the assets previously written-off.

~~Loss on extinguishment of debt~~

~~See~~ ~~" - Completed Disposition"~~ ~~for information about the loss on extinguishment of debt from the sale of Water's Edge . In the three months ended September 30, 2021,~~2022, we recognized a loss on the early extinguishment of debt of ~~$9.4 million from the payoff of the mortgages~~$573,000 in connection with the ~~Avenue/ Parc sales.~~Waters Edge sale. There was no similar loss in the 2023 corresponding period.

Gain on sale of real estate from unconsolidated joint ventures

~~See~~ ~~"- Completed Dispositions"~~ ~~for information about the gain from the sales of Waters Edge.~~ In ~~the~~ three months ended September 30, ~~2021,~~2022, we recognized a gain on the sale of real estate of ~~$84.0~~$16.9 million from the ~~Avenue/ Parc Sales.~~

Waters Edge sale. There was no similar gain in the 2023 corresponding period.

3026

Table of ~~Contents~~Content

Results of Operations

Nine months ended September 30, ~~2022~~2023 compared to nine months ended September 30, ~~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 nine months ended September 30, 2023 and 2022, there were ten same store properties in our consolidated portfolio. As used in the comparison of the nine months ended September 30, 2023 and 2022, the term "Partner Buyouts" refers to our purchase in 2022 of the interests of our joint venture partners at 11 properties.

Revenues

The following table compares our revenues for the periods indicated:


		Nine Months Ended September 30,									Nine Months Ended September 30,
(Dollars in thousands):	(Dollars in thousands):	2022		2021		Increase (Decrease)		% Change		(Dollars in thousands):	2023		2022		Increase (Decrease)		% Change
Rental and other revenue from real estate properties	Rental and other revenue from real estate properties	47,804		21,762		$	26,042	119.7	%	Rental and other revenue from real estate properties	$	69,704	$	47,804	$	21,900	45.8	%
Other income	Other income	12		12		—		—	%	Other income	405		12		393		3,275.0	%
Total revenues	Total revenues	$	47,816	$	21,774	$	26,042	119.6	%	Total revenues	$	70,109	$	47,816	$	22,293	46.6	%

Rental and other revenue from real estate properties

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

•$~~25.2 million due to the Partner Buyouts, including $12.7~~20.3 million from the Partner Buyouts, ~~completed during the nine months ended September 30, 2022;~~ and

•$~~2.0~~2.3 million ~~primarily~~at same store properties due to an increase in average rental rates.

The increase was offset by a $799,000 decrease due to a decline in occupancy rates at same store ~~properties.~~properties, including $262,000 at Bells Bluff which experienced a decline in occupancy due to increased supply in the market and a change in market demand for certain unit types.

~~Offsetting~~Other Income

The increase in the ~~increase~~three months ended September 2023, is ~~a $1.2 million decrease~~primarily due to the ~~sale~~impact of ~~the Kendall Manor Property-Houston, TX (the "Kendall Sale").~~rising interest rates on our cash balances.

Expenses

The following table compares our expenses for the periods indicated:


		Nine Months Ended September 30,							Nine Months Ended September 30,
(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	20,296	9,687	$	10,609	109.5	%	Real estate operating expenses	$	31,565	$	20,296	$	11,269	55.5	%
Interest expense	Interest expense	9,994	4,804	5,190		108.0	%	Interest expense	16,577		9,994		6,583		65.9	%
General and administrative	General and administrative	10,839	9,382	1,457		15.5	%	General and administrative	11,920		10,839		1,081		10.0	%
Impairment charges		—	520	(520)		N/M

Depreciation and amortization	Depreciation and amortization	16,781	4,740	12,041		254.0	%	Depreciation and amortization	22,095		16,781		5,314		31.7	%
Total expenses	Total expenses	57,910	29,133	$	28,777	98.8	%	Total expenses	$	82,157	$	57,910	$	24,247	41.9	%

Real estate operating expense.

The ~~increase~~change is due ~~primarily to:~~to the following increases:

•$~~10.9 million due to the Partner Buyouts, including $5.5~~9.6 million from the Partner Buyouts, ~~completed during the nine months ended September 30, 2022;~~ and

•$~~596,000 at~~1.6 million from same store properties, ~~due to increases~~including an approximate:

Table of ~~$137,000~~Content

–$633,000 in ~~payroll costs, $118,000 in replacement costs, $109,000 in utility costs and $232,000 across other~~insurance expense ~~categories.~~

~~The increase was offset by a decline of $828,000~~ due to the ~~Kendall Sale.~~implementation, in December 2022, of the master insurance program;

–$399,000 of repair, maintenance and replacements (including $116,000 related to expenses related to the December 2022 blizzard);

–$393,000 of various miscellaneous expenses across the portfolio; and

–$213,000 increase in utility expense, including approximately $102,000 at Bells Bluff, primarily due to a water leak.

Interest expense.

The change is due to a:

•~~$6.4 million increase due to the inclusion of interest expense related to the Partner Buyouts, including $3.6 million from Partner Buyouts completed during the nine months ended September 30, 2022;~~

•$279,000 increase in interest expense on our credit facility, due to an increase of $5.2 million in the average outstanding balances during the nine months ended September 30, 2022 from no outstanding balance during the nine months ended September 30, 2021; and

•~~$233,000 due to the increase in the interest rate on our floating rate junior subordinated notes.~~

~~Table of Contents~~

~~The increase was offset by a (i) $1.4 million decrease due to the payoff of $46.5 million of mortgage debt since October 1, 2021 and (ii) $271,000 decrease due to the Kendall Sale.~~

~~General and administrative.~~

~~The increase is due to a $1.2 million increase in non-cash compensation expense, including~~ increases of:

•$~~687,000~~5.3 million from the Partner Buyouts;

•$1.1 million due to ~~increased~~an increase on the interest rate on our junior subordinated debt; and

•$150,000 primarily due to increases in unused credit facility fees and deferred fee amortization ~~expense from RSUs, of which (i) $479,000 was~~related to our credit facility.

General and administrative

The increase is due primarily to a $1.1 million increase in compensation expense - specifically, increases of:

•$396,000 due to the inclusion, for the entire nine months ended September 30, ~~2022,~~2023, of the amortization expense related to the RSUs granted in ~~2021 and (ii) $208,000 due to the inclusion of amortization of expense related to RSU's granted in~~ June 2022;

•$~~294,000~~314,000 due to the amortization expense related to restricted stock, including an increase of $287,000 related to the restricted stock granted in January ~~2022 (as~~2023 as a result of the higher fair value of the shares granted in ~~2022~~2023 in comparison to the value of the restricted stock granted in ~~2017);~~2018;

•$219,000 in salaries and other components of cash compensation, due to higher levels of compensation and, to a lesser extent, an increase in the number of employees; and

•$~~254,000~~181,000 due to the inclusion ~~for the entire nine months ended September 30, 2022,~~ of ~~the~~ amortization expense related to the ~~restricted stock~~RSU's granted in June ~~2021; and~~2023.

~~Also contributing to the increase was a $191,000 increase due to higher levels of cash compensation, including compensation allocated pursuant to the shared services agreement.~~

~~The increase was offset by the inclusion, in the corresponding period of the prior year, of $176,000 of professional fees related primarily to a terminated stock offering.~~

~~Impairment charges~~

In the nine months ended September 30, 2021, we recorded an impairment charge of $520,000 representing the excess of the book value of our investment in the Opop Tower and Loft properties, St Louis, MO, over the anticipated selling price of the investment. There was no comparable charge in the nine months ended September 30, 2022.

Depreciation and amortization

The increase is due primarily to ~~the inclusion of $12.1 million of such expense from the Partner Buyouts, including $6.1~~$7.4 million from the Partner Buyouts, ~~completed during~~offset by a $2.1 million decline due to reduced depreciation related to lease intangibles.

Insurance recovery of casualty loss

During the nine months ended September 30, ~~2022.The increase~~2023, we received $604,000 in insurance proceeds as reimbursement for expenses incurred related to a winter storm in December 2022. There was ~~offset by $123,000 due to~~no similar recovery in the ~~Kendall Sale.~~corresponding 2022 period.

Gain on ~~sale of real estate~~insurance recoveries

InDuring the nine months ended September 30, ~~2021,~~2023, we ~~recognized~~received a ~~$7.3 million gain on~~$240,000 payment, representing the ~~Kendall Sale and a $414,000 gain from~~final payment made by the ~~sale of a cooperative apartment unit in New York, NY. There were no comparable gains in the nine months ended September 30, 2022.~~

~~Gain on sales of partnership interest~~

~~In the nine months ended September 30, 2021,~~insurance carrier with respect to damage we ~~sold our interest in a joint venture that owned Anatole~~sustained at The Woodland Apartments - ~~Daytona, Beach, FL and recognized a gain of $2.2 million. There was no comparable gain~~Boerne, TX in ~~the nine months ended September 30, 2022.~~

~~Loss on extinguishment of debt~~

In the nine months ended September 30, 2022, we incurred $563,000 of loss on extinguishment of debt related to the mortgage refinancing that took place with the buyout of our joint venture partner's interest in Brixworth at Bridge Street. In the nine months ended September 30, 2021, we incurred $902,000 of loss on extinguishment of debt in connection with the payoff of $31.9 million of mortgage debt.2021.

Income tax provision

InIncome tax provision for the nine months ended September 30, 2023, decreased $971,000 to $5,000 from $976,000 in the corresponding period of the prior year. The decline is primarily the result of increased state tax provision recorded in the nine months ended September 30, 2022, ~~income tax provision increased to $976,000 from $155,000 in the corresponding period of the prior year due to an increase in state level taxes accrued. The increase in the accrual is~~ the result of ~~income generated~~higher gains that were reported from the sale of properties by ~~property sales and the unavailability of net operating loss carryforwards available in certain states to offset such income.~~unconsolidated joint ventures.

3228

Table of ~~Contents~~Content

Unconsolidated Joint Ventures - Results of Operations

Equity in earnings ~~(loss)~~ of unconsolidated joint ventures.


		Nine Months Ended September 30,									Nine Months Ended June 30,
		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	$	60,840	$	95,495	$	(34,655)	(36.3)	%	Rental and other revenues from unconsolidated joint ventures	$	34,244	$	60,840	$	(26,596)	(43.7)	%

Real estate operating expense from unconsolidated joint ventures	Real estate operating expense from unconsolidated joint ventures	27,523		45,523		(18,000)		(39.5)	%	Real estate operating expense from unconsolidated joint ventures	15,835		27,523		(11,688)		(42.5)	%
Interest expense from unconsolidated joint ventures	Interest expense from unconsolidated joint ventures	13,762		24,562		(10,800)		(44.0)	%	Interest expense from unconsolidated joint ventures	7,057		13,762		(6,705)		(48.7)	%
Depreciation from unconsolidated joint ventures	Depreciation from unconsolidated joint ventures	14,957		28,464		(13,507)		(47.5)	%	Depreciation from unconsolidated joint ventures	7,833		14,957		(7,124)		(47.6)	%
Total expenses from unconsolidated joint ventures	Total expenses from unconsolidated joint ventures	56,242		98,549		(42,307)		(42.9)	%	Total expenses from unconsolidated joint ventures	30,725		56,242		(25,517)		(45.4)	%

Total revenues less total expenses from unconsolidated joint ventures	Total revenues less total expenses from unconsolidated joint ventures	4,598		(3,054)		7,652		250.6	%	Total revenues less total expenses from unconsolidated joint ventures	3,519		4,598		(1,079)		(23.5)	%

Other equity earnings	Other equity earnings	89		21		68		323.8	%	Other equity earnings	119		89		30		33.7	%
Impairment of assets from unconsolidated joint ventures		—		(2,813)		2,813		N/A
Insurance recoveries from unconsolidated joint ventures		—		2,813		(2813)		N/A

Gain on insurance recoveries from unconsolidated joint ventures	Gain on insurance recoveries from unconsolidated joint ventures	567		1,246		(679)		N/A		Gain on insurance recoveries from unconsolidated joint ventures	65		567		(502)		(88.5)	%
Gain on sale of real estate from unconsolidated joint ventures										Gain on sale of real estate from unconsolidated joint ventures	38,418		118,270		(79,852)		(67.5)	%
Loss on extinguishment of debt from unconsolidated joint ventures	Loss on extinguishment of debt from unconsolidated joint ventures	(3,491)		(9,401)		5,910		N/A		Loss on extinguishment of debt from unconsolidated joint ventures	(561)		(3,491)		2,930		(83.9)	%
Gain on sale of real estate from unconsolidated joint ventures		118,270		83,984		34,286		N/A
Net income (loss) from unconsolidated joint ventures		$	120,033	$	72,796	$	47,237	N/A
Net income from unconsolidated joint ventures										Net income from unconsolidated joint ventures	$	41,560	$	120,033	$	(78,473)	(65.4)	%

Equity in earnings (loss) of unconsolidated joint ventures and equity in earnings from sale of unconsolidated joint venture properties		$	65,846	$	28,949	$	36,897
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	$	16,449	$	65,846	$	(49,397)	(75.0)	%

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 ~~eight~~seven properties that were owned for the entirety of the periods being ~~compared and excludes those properties which were or which are the subject of the Partner Buyouts.~~compared.

Rental and other revenues from unconsolidated joint ventures

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

•$~~20.3~~18.4 million from the Partner ~~Buyouts, including $10.1 million from the Partner Buyouts completed during the nine months ended September 30, 2022;~~Buyouts;

•$~~10.4~~7.6 million from the ~~Avenue/Parc Sales;~~

•sale in 2022 of four properties (~~$4.9 million, from the Shavano/Cinco/Vive/~~i.e., Verandas at Shavano - San Antonio, TX , Retreat at Cinco Ranch Katy, TX ,The Vive - Kannapolis, NC , and Waters Edge ~~Sales;~~at Harbison - Columbia, SC ; collectively (the "2022 Sales"); and

•$~~3.0~~2.4 million from the ~~Opop Sale and the sale of our partnership interests in Anatole Apartments , collectively (the"Anatole/Opop Sales").~~Chatham Sale.

Offsetting the decrease was a ~~$3.8~~$1.9 million increase from same store ~~sales, including $3.1 million from higher~~properties due to increased rental rates, ~~$564,000 from increased~~net of the impact of a decrease in occupancy ~~and $189,000 from increased ancillary fees.~~rates.

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Real estate operating expenses from unconsolidated joint ventures

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

•$~~10.0~~7.8 million from the Partner ~~Buyouts, including $5.0 million from the Partner Buyouts completed during the nine months ended September 30, 2022;~~Buyouts;

•$~~4.6~~4.1 million from the ~~Avenue/Parc~~2022 Sales; and

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•$~~2.4~~1.2 million from the ~~from the Shavano/Cinco/Vive/Waters Edge Sales; and~~

•~~$1.8 million from the Anatole/Opop Sales.~~Chatham Sale.

Offsetting this decrease was a ~~$773,000~~$1.4 million increase in such expenses at same store properties, ~~resulting from increases in~~particularly with respect to real estate taxes, utilities, ~~payroll,~~ insurance and ~~repairs and maintenance.~~payroll.

Interest expense from unconsolidated joint ventures.

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

•$~~5.8~~4.5 million from the Partner ~~Buyouts, including $3.2 million from the Partner Buyouts completed during the nine months ended September 30, 2022;~~Buyouts;

•$~~2.5~~1.8 million from the ~~Avenue/Parc Sales;~~

•~~$1.3 million from the Shavano/Cinco/Vive/Waters Edge~~2022 Sales; and

•$~~1.2 million~~364,000 from the ~~Anatole/Opop Sales.~~Chatham Sale.

Depreciation from unconsolidated joint ventures

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

•$~~7.4~~5.1 million from the Partner ~~Buyouts, including $3.6 million from the Partner Buyouts completed during the nine months ended September 30, 2022;~~

•~~$2.4 million from the Avenue/Parc Sale;~~

•~~$2.4 million from the Shavano/Cinco/Vive/Waters Edge Sales; and~~Buyouts;

•$1.2 million from the ~~Anatole/Opop~~2022 Sales properties; and

•$615,000 from the Chatham Sale.

~~Impairment of assets from unconsolidated joint ventures~~

During the nine months ended September 30, 2021, we recognized $2.8 million of impairment charges at three properties due to the Texas Storm; there were no comparable charges in the nine months ended September 30, 2022.

~~Insurance recoveries from unconsolidated joint ventures~~

During the nine months ended September 30, 2021, we recognized $2.8 million of insurance recoveries related to the impairment charges resulting from the Texas Storm; there were no comparable recoveries in the nine months ended September 30, 2022.

Gain on insurance recoveries from unconsolidated joint ventures.

InDuring the nine months ended September 30, 2022, we recognized $567,000 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. In~~written off. During the nine months ended September 30, ~~2021,~~2023, we recognized ~~$1.2 million~~a small gain from insurance recoveries related to ~~these claims.~~

~~Loss on early extinguishment of debt from unconsolidated joint ventures~~

In the nine months ended September 30, 2022, we recognized $3.5 million of loss on extinguishment of debt from the Shavano/Cinco/Vive/Waters Edge Sales and in the nine months ended September 30, 2021, we recognized $9.4 million of loss from the extinguishment of debt from the Avenue/Parc Sale. These losses were incurred in connection with the payoff of the mortgages upon the respective property sales.

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a claim at a property.

Gain on sale of real estate from unconsolidated joint ventures

InDuring the nine months ended September 30, 2023, we recognized a gain on the sale of real estate of $38.4 million from the Chatham Sale. During the nine months ended September 30, 2022, we recognized ~~an aggregate~~ gain on the sale of ~~$118.2~~real estate of $118.3 million from the ~~Shavano/Cinco/Vive/Waters Edge Sales and in~~sale of four properties.

Loss on extinguishment of debt from unconsolidated joint ventures

During the nine months ended September 30, ~~2021,~~2023, we recognized ~~an aggregate gain~~a loss on the early extinguishment of ~~$84.0~~debt of $561,000 in connection with the Chatham Sale. During the nine months ended September 30, 2022, we recognized a loss on early extinguishment of debt of $3.5 million ~~from~~in connection with the ~~Avenue/Parc Sale..~~sale of four properties.

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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, pay dividends and ~~to the extent we deem appropriate, reduce, other than in the ordinary course,~~repurchase our ~~indebtedness over time.~~common stock. 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~~sale/issuance of shares of our common stock pursuant to our at-the-market equity distribution and dividend reinvestment program, borrowings from our credit facility and our available cash. At November ~~4, 2022,~~1, 2023, our available liquidity was ~~$55.9~~$81.7 million, including ~~$14.9~~$21.7 million of cash and cash equivalents and ~~$ 41.0~~$60 million available under our credit ~~facility and excludes funds held at our unconsolidated joint ventures. At November 4, 2022, the interest rate on the facility was 7%.~~facility.

We anticipate that from October 1, ~~2022~~2023 through ~~2024,~~December 31, 2026, our operating expenses, ~~$74.0~~$105.3 million of mortgage amortization and interest expense (including ~~$30.0~~$38.4 million from unconsolidated joint ventures), $15.4 million and ~~$14.9~~$118.1 million of balloon payments ~~( which as noted below was paid off on October 31, 2022) due~~ with respect to ~~a mortgage~~mortgages maturing in 2025 and 2026, respectively (including $48.6 million maturing in 2026 from ~~2022 to 2024,~~unconsolidated joint ventures), estimated capital expenditures (for 2023 only) of $2.7 million (including an estimated $785,000 for our value add program), interest expense on our ~~credit facility and~~ junior subordinated notes, estimated cash dividend payments of at least ~~$42.1~~$65.2 million (assuming (i) the current quarterly dividend rate of $0.25 per share and (ii) ~~18.7~~18.6 million shares outstanding), will be funded from cash generated from operations (including distributions from unconsolidated joint ventures), property sales, obtaining mortgage debt financing on unencumbered properties and, to the extent available, our credit facility. ~~On October 30, 2022,~~Our operating cash flow and available cash is insufficient to fully fund the $133.5 million of balloon payments due through 2026, and if we ~~borrowed $15.0 million from~~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.

Our ability to acquire additional multi-family properties and implement value-add projects is limited by our available cash and our ability to (i) draw on our credit facility, ~~to pay off the $14.9 million of~~(ii) obtain, on acceptable terms, mortgage debt ~~that matured at~~from lenders, and (iii) raise capital from the ~~end~~sale of ~~October 2022.~~our common stock. See - "Proposed Purchase of Richmond Property".

At September 30, ~~2022~~, 2023, wehad mortgage debt of ~~$673.2~~$672.6 million (including ~~$247.6~~$243.9 million of mortgage principal debt of our unconsolidated subsidiaries). The mortgage debt at our: (i) consolidated subsidiaries had a weighted average interest rate of ~~3.99%~~4.02% and a weighted average remaining term to maturity of approximately ~~7.8~~7.3 years, and (ii) at our unconsolidated subsidiaries had a weighted average interest rate of ~~3.96%~~4.25% and a remaining term to maturity of approximately ~~7.3~~5.3 years.

Capital improvements at (i) two unconsolidated multi-family properties will be funded by approximately ~~$872,000~~$769,000 of restricted cash available at September 30, ~~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 September 30, ~~2022,~~2023, $37.4 million (excluding deferred costs of ~~$282,000)~~$262,000) 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, at a rate of three-month ~~LIBOR~~term SOFR plus ~~200~~250 basis points. At ~~November 4, 2022,~~ September 30, ~~2022~~2023 and ~~2021,~~2022, the interest rate on these notes was ~~6.41%,~~7.63% and 4.78% ~~and 2.13%~~, respectively. The interest rate that will be in effect for the three months ending January 31, 2024 is 7.65%%.

Credit Facility

Our credit facility with VNB New York, LLC, an affiliate of Valley National Bank (collectively, "VNB"), allows us to borrow, subject to compliance with borrowing base requirements and other conditions, up to $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 $25 million may be used for Operating Expenses. 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,~~monthly, equal to the ~~prime rate,~~one-month term SOFR plus 250 basis points, with a floor of ~~3.50%~~6.00%. The interest rate in effect as of September 30, 2023 was 7.81%. There is an annual fee of 0.25% on the total amount committed by VNB and unused by us. The credit facility matures in 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 November ~~4, 2022, $19..0 million is~~1, 2023, there was no outstanding balance on the credit facility and ~~$41.0~~$60 million is available to be borrowed thereunder. The interest rate in effect at November 1, 2023 is 7.82%

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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 three unencumbered properties with an

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aggregate value(as calculated pursuant to the facility) of at least $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 September 30, ~~2022,~~2023, we were in compliance in all material respects with the requirements of the facility.

Other Financing Sources and Arrangements

At September 30, ~~2022,~~2023, we are joint venture partners in unconsolidated joint ventures which own ~~eight~~seven multi-family properties and a development project, and the distributions to us from these joint venture properties ~~($14.8~~of $1.4 million ~~(including $13.3 million from the sale of a property)~~ in the quarter ended September 30, ~~2022) are a significant 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 September 30, ~~2022,~~2023, these joint venture properties have a ~~net equity~~net-equity carrying value of ~~$43.8~~$30.9 million and are subject to mortgage debt, which is not reflected on our consolidated balance sheet, of ~~$247.6~~$242.8 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 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 $36.0 million and we anticipate applying this amount to offset income generated in 2022.~~ On October ~~7, 2022,~~11, 2023, we paid a quarterly cash dividend of $0.25 per share.

We carefully monitor our discretionary spending. Our largest recurring discretionary expenditure has been our quarterly dividend (which was $0.25 per share of common stock, or in the approximate amount of $4.7 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.

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.~~estimates.

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Funds from Operations, Adjusted Funds from 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 September 30, Nine Months Ended September 30,
2022 2021 2022 2021
GAAP Net income attributable to common stockholders $ 7,059 $ 28,106 $ 54,174 $ 30,368
Add: depreciation of properties 8,165 1,787 16,781 4,740
Add: our share of depreciation in unconsolidated joint venture properties 1,657 5,514 9,234 18,389
Add: Impairment charge — — — 520
Add: our share of impairment charge in unconsolidated joint venture properties — — — 2,010
Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties (11,472) (34,982) (64,531) (34,982)
Deduct: gain on sale of real estate and partnership interests — (414) (6) (9,937)
Adjustments for non-controlling interests (4) (4) (12) (12)
NAREIT Funds from operations attributable to common stockholders 5,405 7 15,640 11,096
Adjustments for: straight-line rent accruals 6 (10) 18 (30)
Add: loss on extinguishment of debt — 902 563 902
Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties 388 4,581 1,880 4,581
Add: amortization of restricted stock and RSU expense 1,208 843 3,183 1,950
Add: amortization of deferred mortgage and debt costs 191 62 370 215
Add: our share of deferred mortgage costs from unconsolidated joint venture properties 33 148 199 439
Less: our share of insurance recovery from unconsolidated joint venture properties — — — (2,010)
Less: gain on insurance proceeds (62) — (62) —
Less: our share of gain on insurance proceeds from unconsolidated joint venture properties — (880) (432) (880)
Adjustments for non-controlling interests (1) 2 (3) 6
Adjusted funds from operations attributable to common stockholders $ 7,168 $ 5,655 $ 21,356 $ 16,269


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
GAAP Net (loss) income attributable to common stockholders	$	(1,494)	$	7,059	$	5,610	$	54,174
Add: depreciation and amortization of properties	6,544		8,165		22,095		16,781
Add: our share of depreciation in unconsolidated joint venture properties	1,307		1,657		3,985		9,234


Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties	—		(11,472)		(14,744)		(64,531)
Deduct: gain on sale of real estate	(604)		—		(604)		(6)
Adjustments for non-controlling interests	(4)		(4)		(12)		(12)
NAREIT Funds from operations attributable to common stockholders	5,749		5,405		16,330		15,640

Adjustments for: straight-line rent accruals	24		6		68		18
Add: loss on extinguishment of debt	—		—		—		563
Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties	—		388		212		1,880
Add: amortization of restricted stock and RSU expense	1,473		1,208		4,076		3,183
Add: amortization of deferred mortgage and debt costs	272		191		799		370
Add: our share of deferred mortgage costs from unconsolidated joint venture properties	26		33		80		199
Add: amortization of fair value adjustment for mortgage debt	152		—		463		—

Less: gain on insurance recoveries	—		(62)		(240)		(62)
Less: our share of gain on insurance recoveries from unconsolidated joint venture properties	—		—		(30)		(432)
Adjustments for non-controlling interests	(4)		(1)		(11)		(3)
Adjusted funds from operations attributable to common stockholders	$	7,692	$	7,168	$	21,747	$	21,356

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		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,				Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		2023		2022
Net income attributable to common stockholders		$	0.37	$	1.54	$	2.91	$	1.69
Add: depreciation of properties		0.44		0.10		0.90		0.29
Net (loss) income attributable to common stockholders										Net (loss) income attributable to common stockholders	$	(0.08)	$	0.37	$	0.28	$	2.91
Add: depreciation and amortization of properties										Add: depreciation and amortization of properties	0.35		0.44		1.17		0.90
Add: our share of depreciation in unconsolidated joint venture properties	Add: our share of depreciation in unconsolidated joint venture properties	0.09		0.30		0.50		1.04		Add: our share of depreciation in unconsolidated joint venture properties	0.07		0.09		0.21		0.50
Add: Impairment charge		—		—		—		0.03
Add: our share of impairment charge in unconsolidated joint venture properties		—		—		—		0.11

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	(0.61)		(1.92)		(3.47)		(1.97)		Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties	(0.03)		(0.61)		(0.77)		(3.47)
Deduct: gain on sale of real estate and partnership interests		—		(0.02)		—		(0.56)
Deduct: gain on sale of real estate										Deduct: gain on sale of real estate	—		—		(0.03)		—
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	0.29		—		0.84		0.63		NAREIT Funds from operations per diluted common share	0.31		0.29		0.86		0.84

Adjustments for: straight line rent accruals	Adjustments for: straight line rent accruals	—		—		—		—		Adjustments for: straight line rent accruals	—		—		—		—
Add: loss on extinguishment of debt	Add: loss on extinguishment of debt	—		0.05		0.03		0.05		Add: loss on extinguishment of debt	—		—		—		0.03
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	0.02		0.25		0.10		0.26		Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties	—		0.02		0.01		0.10
Add: amortization of restricted stock and RSU expense	Add: amortization of restricted stock and RSU expense	0.06		0.05		0.16		0.11		Add: amortization of restricted stock and RSU expense	0.08		0.06		0.22		0.16
Add: amortization of deferred mortgage and debt costs	Add: amortization of deferred mortgage and debt costs	0.01		—		0.02		0.01		Add: amortization of deferred mortgage and debt costs	0.01		0.01		0.04		0.02
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		0.02		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		—		—		—		(0.11)
Less: gain on insurance proceeds		—		—		—		—
Less: our share of gain on insurance proceeds from unconsolidated joint venture properties		—		(0.05)		(0.02)		(0.05)
Add: amortization of fair value adjustment for mortgage debt										Add: amortization of fair value adjustment for mortgage debt	0.01		—		0.02		—

Less: gain on insurance recoveries										Less: gain on insurance recoveries	—		—		(0.01)		—
Less: our share of gain on insurance recoveries from unconsolidated joint venture properties										Less: our share of gain on insurance recoveries 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	$	0.38	$	0.31	$	1.14	$	0.92	Adjusted funds from operations per diluted common share	$	0.41	$	0.38	$	1.14	$	1.14

Diluted shares outstanding for FFO and AFFO	Diluted shares outstanding for FFO and AFFO	18,928,648		18,215,924		18,712,740		17,820,909		Diluted shares outstanding for FFO and AFFO	18,804,874		18,928,648		19,016,032		18,712,740

Three Months Ended September 30, ~~2022~~2023 and ~~2021~~2022

FFO for the three months ended September 30, ~~2022~~2023 increased from the corresponding quarter in the prior year primarily due to to:

•a decrease in the ~~loss on~~early extinguishment of ~~debt at our unconsolidated properties, improved operating margins across our portfolio~~debt; and ~~the~~

•an increase in ~~our share of the operating income due to our increased ownership in the 14 properties that were the subject Partner Buyouts(the “Incremental Impact”), net of decreases due to property sales.~~ other income.

The increase was offset ~~by (i)~~primarily by:

•a decrease in operating margins from the ~~inclusion,~~2022 Sales;

•amortization of mortgage fair value adjustments related to Partner Buyouts;

•a decrease in the ~~three months ended September 30, 2021, of gains from insurance proceeds~~income tax provision; and ~~(ii) increases,~~

•an increase in ~~the three months ended September 30, 2022, in general and administrative expenses (primarily~~ non-cash compensation expense related to the amortization of restricted stock and ~~RSU expense), and income tax expense.~~RSUs.

AFFO for the three months ended September 30, ~~2022~~2023 increased from the corresponding period in the prior year, primarily ~~reflecting improved operating margins across our portfolio~~due to the decrease in the income tax provision, the increase in insurance recovery and the ~~Incremental Impact (net of decreases due to property sales).~~increase in other income. The increase was offset by ~~increased general~~the decrease in operating margins and ~~administrative expense (excluding the impact~~an increase in interest expense.

Table of ~~the restricted stock and RSU amortization expense) and income tax expense.~~Contents

Diluted per share FFO and AFFO were favorably impacted in the three months ended September 30, ~~2022~~2023 by a ~~713,000~~124,000 decrease in the current quarter from the corresponding quarter in the prior year in the weighted average shares of common stock outstanding, primarily due to stock buybacks.

See "-Results of Operations - Three Months Ended September 30, 2023 compared to three months ended September 30, 2022", for a discussion of these changes.

Nine Months Ended September 30, 2023 and 2022

FFO for the nine months ended September 30, 2023 increased from the corresponding period in the prior year primarily due to:

•a decrease in early extinguishment of debt;

•a decrease in income tax provision;

•an increase in insurance recovery from casualty loss; and

•an increase in other income.

The increase was offset primarily by:

•an increase in interest expense;

•an increase in non-cash compensation expense related to the amortization of restricted stock and RSUs;

•an increase in the amortization of fair value mortgage adjustments;

•a decrease in operating margins; and

•a decrease in gain on insurance proceeds.

AFFO for the nine months ended September 30, 2023 increased from the corresponding period in the prior year primarily due to the decrease in income tax expense and the increases in insurance recovery and other income, offset by the increase in interest expense and the decline in operating margins.

Diluted per share FFO and AFFO were negatively impacted in the nine months ended September 30, 2023 by a 303,000 increase in the weighted average shares of common stock outstanding, , primarily due to stock issuances pursuant to our at-the market offering, ~~and our~~ equity incentive ~~programs.~~

~~Table~~program and dividend reinvestment plan, net of ~~Contents~~

stock repurchases.

- See "Results of Operations - ~~Three~~Nine Months Ended ~~September~~June 30, ~~2022~~2023 compared to ~~three~~nine months ended ~~September~~ September\30, ~~2021~~2022", for a discussion of these changes.

~~Nine Months Ended September 30, 2022 and 2021~~

FFO increased for the nine months ended September 30, 2022 from the corresponding period in the prior year primarily due to improved operating margins across our portfolio, the Incremental Impact (net of decreases due to property sales), a decline in interest expense primarily due to the payoff of mortgage debt in 2021, and a decrease in loss on extinguishment of debt. The increase was offset by (i) the inclusion, in the nine months ended September 30, 2021, of insurance recoveries and gains from insurance proceeds, and(ii) the increase , in the nine months ended September 30, 2022, in general and administrative expenses (primarily non-cash compensation expense related to the amortization of restricted stock and RSU expense), and income tax expense.

AFFO increased for the nine months ended September 30, 2022 from the corresponding period in the prior year primarily due to improved operating margins across our portfolio, the Incremental Impact (net of decreases due to property sales), and a decline in interest expense primarily due to the payoff of mortgage debt in 2021. The increase was offset by increased income tax expense.

Diluted per share FFO and AFFO were impacted in the nine months ended September 30, 2022 by a 892,000 increase in the weighted average shares of common stock outstanding from the beginning of the third quarter, primarily due to stock issuances pursuant to our at-the-market offering and equity incentive programs.

~~See - "Results of Operations - Nine Months Ended September 30, 2022 compared to the nine months ended September 30, 2021", for a discussion of these changes.~~

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~~earnings (loss) from sale of unconsolidated joint ~~ventures,~~venture properties, (6) provision for taxes, and (7) the impact of non-controlling interests, and (b) deduct (1) other income, (2) gain on sale of real estate, (3) insurance recovery of casualty loss, and ~~(3)~~(4) 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.

Table of Contents

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):

~~Table of Contents~~


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended September 30,						Nine Months Ended September 30,
		2022		2021		2022		2021			2023		2022		Variance		2023			2022		Variance
GAAP Net income attributable to common stockholders		$	7,059	$	28,106	$	54,174	$	30,368
GAAP Net (loss) income attributable to common stockholders										GAAP Net (loss) income attributable to common stockholders	$	(1,494)	$	7,059	$	(8,553)	$	5,610		$	54,174	$	(48,564)
Less: Other Income	Less: Other Income	(6)		(5)		(12)		(12)		Less: Other Income	(342)		(6)		(336)		(405)			(12)		(393)
Add: Interest expense	Add: Interest expense	5,061		1,535		9,994		4,804		Add: Interest expense	5,581		5,061		520		16,577			9,994		6,583
General and administrative	General and administrative	3,673		3,114		10,839		9,382		General and administrative	4,017		3,673		344		11,920			10,839		1,081
Impairment charge		—		—		—		520
Depreciation		8,165		1,787		16,781		4,740

Depreciation and amortization										Depreciation and amortization	6,544		8,165		(1,621)		22,095			16,781		5,314
Provision for taxes	Provision for taxes	178		31		976		155		Provision for taxes	(122)		178		(300)		5			976		(971)
Less: Gain on sale of real estate	Less: Gain on sale of real estate	—		(414)		(6)		(7,693)		Less: Gain on sale of real estate	(604)		—		(604)		(604)			(6)		(598)
Gain on sale of partnership interest		—		—		—		(2,244)

Equity in earnings from sale of unconsolidated joint venture properties	Equity in earnings from sale of unconsolidated joint venture properties	(11,472)		(34,982)		(64,531)		(34,982)		Equity in earnings from sale of unconsolidated joint venture properties	—		(11,472)		11,472		(14,744)			(64,531)		49,787
Insurance recovery										Insurance recovery	(261)		—		(261)		(476)		—	—		(476)
Gain on insurance recoveries	Gain on insurance recoveries	(62)		—		(62)		—		Gain on insurance recoveries	—		(62)		62		(240)			(62)		(178)
Add: Loss on extinguishment of debt	Add: Loss on extinguishment of debt	—		902		563		902		Add: Loss on extinguishment of debt	—		—		—		—			563		(563)
Adjust for: Equity in (earnings) loss of unconsolidated joint venture properties	Adjust for: Equity in (earnings) loss of unconsolidated joint venture properties	(135)		4,196		(1,315)		6,033		Adjust for: Equity in (earnings) loss of unconsolidated joint venture properties	(426)		(135)		(291)		(1,705)			(1,315)		(390)
Add: Net income attributable to non-controlling interests	Add: Net income attributable to non-controlling interests	35		35		107		102		Add: Net income attributable to non-controlling interests	34		35		(1)		106			107		(1)
Net Operating Income	Net Operating Income	$	12,496	$	4,305	$	27,508	$	12,075	Net Operating Income	$	12,927	$	12,496	$	431	$	38,139		$	27,508	$	10,631

Less: Non-same store Net Operating Income (loss)		8,402		845		(15,695)		(1,690)
Less: Non-same store Net Operating Income										Less: Non-same store Net Operating Income	4,089		3,253		836		18,696			8,029		10,667
Same store Net Operating Income	Same store Net Operating Income	$	4,094	$	3,460	$	11,813	$	10,385	Same store Net Operating Income	$	8,838	$	9,243	$	(405)	$	19,443		$	19,479	$	(36)

For the three months ended September 30, ~~2022,~~2023, NOI increased ~~$8.2 million~~$431,000 from the corresponding period in ~~2021~~2022 primarily due to a ~~$14.0~~$1.8 million increase in rental revenues ~~primarily due to the impact of the Partner Buyouts~~ offset by a ~~$5.8~~$1.4 million increase ~~primarily due to the impact of the Partner Buyouts,~~ in real estate operating expenses. The increases in rental revenue and real estate operating expenses were primarily due to the Partner Buyouts. Same store NOI in the three months ended September 30, ~~2022 increased~~2023 decreased by ~~$634,000~~$405,000 from the corresponding period in ~~2021,~~2022, due to a ~~$727,000 increase in rental revenues (and in particular, the increase in average rental rates) offset by a $93,000~~$878,000 increase in real estate operating ~~expenses.~~expenses offset by a $473,000 increase in rental revenues. See "-Results of Operations - Three Months Ended September 30, ~~2022~~2023 Compared to the ~~three~~Three Months ended September 30, ~~2021~~2022 " for a discussion of these changes.

For the nine months ended September 30, ~~2022,~~2023, NOI increased ~~$15.4~~$10.6 million from the corresponding period in ~~2021~~2022 primarily due to a ~~$26.0~~$21.9 million increase in rental revenues ~~and primarily due to the impact of the Partner Buyouts~~ offset by a ~~$10.6~~$11.3 million increase in real estate operating expenses. The increases in rental revenue and real estate operating expenses were primarily due to the Partner Buyouts, in real estate operating expenses. Same store NOI in the nine months ended September 30, 2022 increased by $1.4 million from the corresponding period in 2021, due to a $2.0 million increase in rental revenues (and in particular, the increase in average rental rates) offset by a $596,000 increase in real estate operating expenses.Buyouts. See "-Results of Operations - Nine Months Ended September 30, ~~2022~~2023 Compared to the Nine Months ~~Ended~~ended September 30, ~~2021~~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~~term SOFR plus ~~200~~226 basis points. At September 30, ~~2022,~~2023, the interest rate on these notes was ~~4.78%~~7.63%. Our credit facility bears interest at the ~~prime rate. At September 30, the interest~~ rate of one month term SOFR plus 250 basis points. There was no balance outstanding on the credit facility ~~was 6.25%~~at September 30, 2023. A 100 basis point increase in the rates would increase our related interest expense by approximately ~~$444,000 annually( of which~~ $374,000 ~~would be due to the change in rate on the junior subordinated notes)~~annually and a 100 basis point decrease in the rates would decrease our related interest expense by ~~$444,000 annually( of which~~ $374,000 ~~would be due to the change in the rate on the junior subordinated notes).~~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 September 30, ~~2022.~~2023. Based upon that evaluation, these officers concluded that as of September 30, ~~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 September 30, ~~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~~In our Annual ~~Report.~~Report, we noted that a wholly-owned subsidiary of ours that owned a property in Houston, TX is named as a defendant, along with multiple other defendants, in an action (Takakura et al. v. Houston Pizza Venture, LP, and Papa John’s USA., Inc. et.al., 129th Judicial District, Harris County, TX, Cause No. 2019-42425), alleging the wrongful death as a result of a homicide of a delivery person at our property. We and certain other defendants have agreed to settle this lawsuit for approximately $325,000; the settlement remains subject to, among other things, the execution of certain additional documentation and court approval. We anticipate that this settlement amount will be fully funded by our insurance carrier.

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 1411 of our Consolidated Financial Statements.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds


Period	(a) Total Number of Shares Purchased	(b) Average Price Paid per Share		(c) Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	(d) Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs

July 1 - July 31, 2023	45,612	$	20.10	45,612	$	3,249,000
August 1 - August 31, 2023	84,198	18.81		84,198	$	8,416,000	(1)
September 1 - September 30, 2023	134,355	18.23		134,355	$	5,966,000
Total	264,165	$	18.74	264,165

___________

(1) In August, 2023, the Board of Directors increased the share repurchase authorization by approximately $6.75 million to $10 million. We are authorized to repurchase shares in open market or privately negotiated transactions (including related party transactions).

From October 1 through October 31, 2023, we repurchased 98,014 shares of our common stock at an average price of $17.23 per share for an aggregate cost of $1.7 million. At November 1, 2023, we are authorized to repurchase up to $4.3 million of shares of our common stock.

Item 5. Other Information

None of our officers or directors had any contract, instruction, or written plan for the purchase or sale of our securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c ) or any "non-Rule 10b5-1 trading arrangement" in effect at any time during the three months ended September 30, 2023.

Table of Contents

Item 6. Exhibits


Exhibit No.						Title of Exhibits
~~10.5~~10.1						~~Form~~Second amendment dated as of ~~Performance Award Agreement granted pursuant~~August 22, 2023 to the ~~2022 Incentive Plan~~Amended and Restated Loan Agreement made as of November 18, 2021, as amended, by and between us and VNB New York, LLC.
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 September 30, ~~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.




November ~~8, 2022~~6, 2023			/s/ Jeffrey A. Gould
			Jeffrey A. Gould, President and
			Chief Executive Officer





November ~~8, 2022~~6, 2023			/s/ George Zweier
			George Zweier, Vice President
			and Chief Financial Officer
			(principal financial officer)

4441


Property	Land		Building and Improvements		Total Land and Building		Acquisition and Intangible Assets		Total Assets		Acquisition Related Mortgage Intangible
Verandas at Alamo	$	3,336	$	33,465	$	36,801	$	797	$	37,598	$	(61)
Vanguard Heights	5,466		30,826		36,292		508		36,800		578
Jackson Square	3,398		27,167		30,565		634		31,199		283
Brixworth at Bridge Street	1,959		20,080		22,039		321		22,360		—
The Woodland Apts	1,289		12,853		14,142		233		14,375		—
Grove at River Place	2,866		16,416		19,282		396		19,678		136
Civic I	3,646		45,554		49,200		913		50,113		562
Civic II	3,847		46,452		50,299		1,013		51,312		1,254
Abbotts Run	3,468		37,312		40,780		701		41,481		481
Somerset at Trussville	4,095		42,943		47,038		869		47,907		1,090
Magnolia Pointe	2,052		22,023		24,075		503		24,578		396
Total Purchase Price Allocation	$	35,422	$	335,091	$	370,513	$	6,888	$	377,401	$	4,719


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