PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share amounts)

(Unaudited)
September 30,
2017 December 31,
2016
ASSETS
Net Real Estate Investments
Land $ 157,420 $ 142,274
Buildings and improvements 1,015,262 848,445
Furniture, fixtures and equipment 32,991 27,617
Construction in progress 32,696 10,878
Total Gross Real Estate Investments 1,238,369 1,029,214
Accumulated depreciation (44,171 ) (42,137 )
Total Net Real Estate Investments 1,194,198 987,077
Cash and cash equivalents 134,632 82,047
Restricted cash 32,653 45,402
Notes and accrued interest receivable from related parties 56,771 21,267
Due from affiliates 1,756 948
Accounts receivable, prepaid and other assets 15,945 8,610
Preferred equity investments and investments in unconsolidated real estate joint ventures 94,912 91,132
In-place lease intangible assets, net 4,330 4,839
Total Assets $ 1,535,197 $ 1,241,322

LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY
Mortgages payable $ 847,162 $ 710,575
Accounts payable 3,158 1,669
Other accrued liabilities 25,159 13,431
Due to affiliates 3,269 2,409
Distributions payable 8,580 7,328
Total Liabilities 887,328 735,412
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized, and 5,721,460 issued and outstanding as of September 30, 2017 and December 31, 2016 138,622 138,316
Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 225,000 shares authorized, 137,708 and 21,482 issued and outstanding as of September 30, 2017 and December 31, 2016, respectively 120,925 18,938
7.6250% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized, 2,323,750 issued and outstanding as of September 30, 2017 and December 31, 2016 56,127 56,095
Equity
Stockholders’ Equity
Preferred stock, $0.01 par value, 230,900,000 shares authorized; none issued and outstanding — —
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized, 2,850,602 issued and outstanding as of September 30, 2017 and December 31, 2016 68,705 68,760
Common stock - Class A, $0.01 par value, 747,586,185 shares authorized; 24,193,109 and 19,567,506 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively 242 196
Additional paid-in-capital 329,219 257,403
Distributions in excess of cumulative earnings (106,838 ) (84,631 )
Total Stockholders’ Equity 291,328 241,728
Noncontrolling Interests
Operating partnership units 1,799 2,216
Partially owned properties 39,068 48,617
Total Noncontrolling Interests 40,867 50,833
Total Equity 332,195 292,561
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY $ 1,535,197 $ 1,241,322


	(Unaudited)
	September 30,		December 31,
	2020		2019
ASSETS
Net Real Estate Investments
Land	$	273,043	$	268,244
Buildings and improvements		1,807,386		1,752,738
Furniture, fixtures and equipment		73,797		67,904
Total Gross Real Estate Investments		2,154,226		2,088,886
Accumulated depreciation		(177,124)		(141,566)
Total Net Real Estate Investments		1,977,102		1,947,320
Cash and cash equivalents		91,836		31,683
Restricted cash		34,744		19,085
Notes and accrued interest receivable		202,649		193,781
Due from affiliates		314		2,969
Accounts receivable, prepaids and other assets		26,954		16,317
Preferred equity investments and investments in unconsolidated real estate joint ventures		108,098		126,444
In-place lease intangible assets, net		522		3,098
Total Assets	$	2,442,219	$	2,340,697

LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY
Mortgages payable	$	1,427,542	$	1,425,257
Revolving credit facilities		—		18,000
Mandatorily redeemable preferred stock		34,833		—
Accounts payable		1,596		1,488
Other accrued liabilities		36,664		27,499
Due to affiliates		602		790
Distributions payable		14,964		13,541
Total Liabilities		1,516,201		1,486,575
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; 5,558,392 and 5,721,460 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		102,656		140,355
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 516,100 and 536,695 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		469,538		480,921
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,295,845 and 2,323,750 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		56,373		56,797
6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 6,671,458 and 17,400 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		150,823		388
Equity
Stockholders’ Equity
Preferred stock, $0.01 par value, 197,900,000 shares authorized; 0 shares issued and outstanding		0		0
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,774,338 and 2,850,602 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		66,867		68,705
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 24,589,389 and 23,422,557 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively		246		234
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding as of September 30, 2020 and December 31, 2019		1		1
Additional paid-in-capital		323,064		311,683
Distributions in excess of cumulative earnings		(283,537)		(253,132)
Total Stockholders’ Equity		106,641		127,491
Noncontrolling Interests
Operating Partnership units		13,531		19,331
Partially owned properties		26,456		28,839
Total Noncontrolling Interests		39,987		48,170
Total Equity		146,628		175,661
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY	$	2,442,219	$	2,340,697

See Notes to Consolidated Financial Statements

Table of Contents

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)

(In thousands, except share and per share amounts)

Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Revenues
Net rental income $ 24,871 $ 18,572 $ 72,354 $ 52,013
Other property revenues 3,072 2,005 8,639 5,376
Interest income from related parties 2,120 — 5,741 —
Total revenues 30,063 20,577 86,734 57,389
Expenses
Property operating 11,969 7,896 33,935 22,592
Property management fees 781 595 2,250 1,659
General and administrative 1,103 1,177 4,249 4,155
Management fees 2,802 1,866 11,733 4,495
Acquisition and pursuit costs 15 689 3,215 2,143
Management internalization 826 — 1,647 —
Weather-related losses, net 678 — 678 —
Depreciation and amortization 11,763 7,166 33,094 22,465
Total expenses 29,937 19,389 90,801 57,509
Operating income (loss) 126 1,188 (4,067 ) (120 )
Other income (expense)
Other income — 26 17 26
Preferred returns and equity in income of unconsolidated real estate joint ventures 2,688 3,074 7,865 8,617
Gain on sale of real estate investments — 4,947 50,040 4,947
Gain on sale of real estate joint venture interest, net — — 10,238 —
Loss on early extinguishment of debt — (2,393 ) (1,639 ) (2,393 )
Interest expense, net (7,395 ) (5,274 ) (22,339 ) (14,091 )
Total other (expense) income (4,707 ) 380 44,182 (2,894 )
Net (loss) income (4,581 ) 1,568 40,115 (3,014 )
Preferred stock dividends (7,038 ) (3,940 ) (19,271 ) (8,391 )
Preferred stock accretion (905 ) (275 ) (1,889 ) (568 )
Net (loss) income attributable to noncontrolling interests
Operating partnership units (125 ) (37 ) 4 (173 )
Partially-owned properties (382 ) (59 ) 18,388 (73 )
Net (loss) income attributable to noncontrolling interests (507 ) (96 ) 18,392 (246 )
Net (loss) income attributable to common stockholders $ (12,017 ) $ (2,551 ) $ 563 $ (11,727 )

Net (loss) income per common share - Basic $ (0.45 ) $ (0.12 ) $ 0.02 $ (0.57 )

Net (loss) income per common share – Diluted $ (0.45 ) $ (0.12 ) $ 0.02 $ (0.57 )

Weighted average basic common shares outstanding 26,474,093 20,908,543 25,851,536 20,706,338
Weighted average diluted common shares outstanding 26,474,093 20,908,543 25,852,059 20,706,338


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2020		2019		2020		2019
Revenues
Rental and other property revenues	$	48,666	$	47,422	$	146,713	$	139,575
Interest income from mezzanine loan and ground lease investments		5,923		6,125		17,149		17,874
Total revenues		54,589		53,547		163,862		157,449

Expenses
Property operating		19,571		19,377		57,441		56,847
Property management fees		1,231		1,256		3,719		3,707
General and administrative		5,901		6,259		17,575		16,933
Acquisition and pursuit costs		2,242		217		3,933		346
Weather-related losses, net		0		57		0		347
Depreciation and amortization		19,216		17,643		60,206		51,097
Total expenses		48,161		44,809		142,874		129,277
Operating income		6,428		8,738		20,988		28,172
Other income (expense)
Other income		60		0		119		0
Preferred returns on unconsolidated real estate joint ventures		2,963		2,316		8,213		7,097
Gain on sale of real estate investments		0		48,680		58,096		48,680
Gain on sale of non-depreciable real estate investments		0		0		0		679
Loss on extinguishment of debt and debt modification costs		0		(6,924)		(13,985)		(6,924)
Interest expense, net		(13,520)		(14,635)		(42,294)		(45,826)
Total other (expense) income		(10,497)		29,437		10,149		3,706
Net (loss) income		(4,069)		38,175		31,137		31,878
Preferred stock dividends		(15,003)		(11,887)		(42,787)		(33,291)
Preferred stock accretion		(4,451)		(2,717)		(11,978)		(6,920)
Net (loss) income attributable to noncontrolling interests
Operating Partnership units		(6,270)		6,191		(6,679)		(1,747)
Partially owned properties		(195)		220		1,512		(662)
Net (loss) income attributable to noncontrolling interests		(6,465)		6,411		(5,167)		(2,409)
Net (loss) income attributable to common stockholders	$	(17,058)	$	17,160	$	(18,461)	$	(5,924)

Net (loss) income per common share - Basic	$	(0.71)	$	0.76	$	(0.80)	$	(0.29)

Net (loss) income per common share – Diluted	$	(0.71)	$	0.75	$	(0.80)	$	(0.29)

Weighted average basic common shares outstanding		24,566,196		22,320,710		24,321,282		22,622,040
Weighted average diluted common shares outstanding		24,566,196		22,669,188		24,321,282		22,622,040

See Notes to Consolidated Financial Statements

Table of Contents

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

FOR THE ~~NINE~~THREE MONTHS ENDED SEPTEMBER 30, ~~2017~~2020

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)

(In thousands, except share and per share amounts)

Class A Common Stock Series D Preferred
Stock
Number of
Shares Par Value Number of
Shares Value Additional
Paid-
in Capital Cumulative
Distributions Net (loss) income
to Common
Stockholders Noncontrolling
Interests Total Equity
Balance, January 1, 2017 19,567,506 $ 196 2,850,602 $ 68,760 $ 257,403 $ (70,807 ) $ (13,824 ) $ 50,833 $ 292,561

Issuance of Class A common stock, net 4,603,236 46 - - 57,313 - - - 57,359
Issuance costs for Series D preferred stock, net - - - (55 ) - - - - (55 )
Vesting of restricted stock compensation - - - - 9 - - - 9
Issuance of LTIP Units for director compensation - - - - 100 - - - 100
Issuance of LTIP Units for compensation - - - - 1,208 - - - 1,208
Issuance of Long-Term Incentive Plan ("LTIP") units - - - - 10,946 - - - 10,946
Series B warrants - - - - 2,048 - - - 2,048
Contributions from noncontrolling interests, nets - - - - - - - 10,738 10,738
Distributions declared - - - - - (22,770 ) - (241 ) (23,011 )
Series A Preferred Stock distributions declared - - - - - (8,850 ) - - (8,850 )
Series A Preferred Stock accretion - - - - - (479 ) - - (479 )
Series B Preferred Stock distributions declared - - - - - (3,290 ) - - (3,290 )
Series B Preferred Stock accretion - - - - - (1,232 ) - - (1,232 )
Series C Preferred Stock distributions declared - - - - - (3,322 ) - - (3,322 )
Series C Preferred Stock accretion - - - - - (178 ) - - (178 )
Series D Preferred Stock distributions declared - - - - - (3,809 ) - - (3,809 )
Distributions to noncontrolling interests - - - - - - - (29,706 ) (29,706 )
Redemption of operating partnership units - - - - (6 ) - - (13 ) (19 )
Redemption of Series B Redeemable Preferred Stock - - - - 31 - - - 31
Conversion of operating partnership units to Class A Common Stock 22,367 - - - 167 - - (167 ) -
Noncontrolling interest related to sale of Fox Hill - - - - - - - (136 ) (136 )
Deconsolidation of MDA Apartments - - - - - - - (8,833 ) (8,833 )
Net income - - - - - - 21,723 18,392 40,115

Balance, September 30, 2017 24,193,109 $ 242 2,850,602 $ 68,705 $ 329,219 $ (114,737 ) $ 7,899 $ 40,867 $ 332,195


	Class A Common Stock			Class C Common Stock			Series D Preferred Stock
										Additional				Net income
	Number of			Number of			Number of			Paid-		Cumulative		to Common		Noncontrolling
	Shares	Par Value		Shares	Par Value		Shares	Value		in Capital		Distributions		Stockholders		Interests		Total Equity
Balance, July 1, 2020	24,605,585	$	246	76,603	$	1	2,774,338	$	66,867	$	321,973	$	(302,485)	$	40,030	$	46,075	$	172,707
Issuance of Class A common stock, net	1,207		0	0		0	0		0		10		0		0		0		10
Repurchase of Class A common stock	(103,574)		(1)	0		0	0		0		(756)		0		0		0		(757)
Vesting of long-term incentive plan ("LTIP Units") for compensation	0		0	0		0	0		0		0		0		0		1,798		1,798
Vesting of restricted Class A common stock	0		0	0		0	0		0		129		0		0		0		129
Issuance of LTIP Units for expense and capitalized cost reimbursements	0		0	0		0	0		0		0		0		0		414		414
Issuance of LTIP Units for executive salaries	0		0	0		0	0		0		0		0		0		163		163
Common stock distributions declared	0		0	0		0	0		0		0		(4,024)		0		0		(4,024)
Series A Preferred Stock distributions declared	0		0	0		0	0		0		0		(2,866)		0		0		(2,866)
Series A Preferred Stock accretion	0		0	0		0	0		0		0		(243)		0		0		(243)
Company redemption of Series A Preferred Stock	0		0	0		0	0		0		0		(468)		0		0		(468)
Series B Preferred Stock distributions declared	0		0	0		0	0		0		0		(7,745)		0		0		(7,745)
Series B Preferred Stock accretion	0		0	0		0	0		0		0		(2,939)		0		0		(2,939)
Series C Preferred Stock distributions declared	0		0	0		0	0		0		0		(1,094)		0		0		(1,094)
Series C Preferred Stock accretion	0		0	0		0	0		0		0		(94)		0		0		(94)
Series D Preferred Stock distributions declared	0		0	0		0	0		0		0		(1,236)		0		0		(1,236)
Series T Preferred Stock distributions declared	0		0	0		0	0		0		0		(2,062)		0		0		(2,062)
Series T Preferred Stock accretion	0		0	0		0	0		0		0		(707)		0		0		(707)
Distributions to Operating Partnership noncontrolling interests	0		0	0		0	0		0		0		0		0		(1,675)		(1,675)
Distributions to partially owned noncontrolling interests	0		0	0		0	0		0		0		0		0		(294)		(294)
Holder redemption of Series B Preferred Stock and conversion into Class A common stock	81,037		1	0		0	0		0		637		0		0		0		638
Holder redemption of Series T Preferred Stock and conversion into Class A common stock	5,134		0	0		0	0		0		42		0		0		0		42
Contributions from noncontrolling interests	0		0	0		0	0		0		0		0		0		1,000		1,000
Adjustment for noncontrolling interest ownership in Operating Partnership	0		0	0		0	0		0		1,029		0		0		(1,029)		0
Net income (loss)	0		0	0		0	0		0		0		0		2,396		(6,465)		(4,069)
Balance, September 30, 2020	24,589,389	$	246	76,603	$	1	2,774,338	$	66,867	$	323,064	$	(325,963)	$	42,426	$	39,987	$	146,628

See Notes to Consolidated Financial Statements

Table of Contents

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)

~~CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)~~

(In thousands, except share and per share amounts)

Nine Months Ended
September 30,
2017 2016

Cash flows from operating activities
Net income (loss) $ 40,115 $ (3,014 )
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation and amortization 35,035 23,481
Amortization of fair value adjustments (227 ) (318 )
Preferred returns and equity in income of unconsolidated real estate joint ventures (7,865 ) (8,617 )
Gain on sale of real estate investments (50,040 ) (4,947 )
Gain on sale of real estate joint venture interest, net (10,238 ) —
Loss on early extinguishment of debt — (1,104 )
Distributions of income and preferred returns from preferred equity investments and unconsolidated real estate joint ventures 7,079 8,277
Share-based compensation attributable to directors' stock compensation plan 109 207
Share-based compensation to Manager - LTIP Units 12,154 5,898
Changes in operating assets and liabilities:
Due (from) to affiliates, net 170 707
Accounts receivable, prepaid and other assets (7,247 ) (3,570 )
Accounts payable and other accrued liabilities 14,216 7,260
Net cash provided by operating activities 33,261 24,260

Cash flows from investing activities:
Acquisitions of real estate investments (259,105 ) (178,382 )
Capital expenditures (33,525 ) (3,992 )
Investment in notes receivable from related parties (20,395 ) —
Proceeds from sale of real estate investments 71,945 36,675
Proceeds from sale of real estate joint venture interest 17,603 —
Deconsolidation of interest in MDA Apartments (16 ) —
Purchase of interests from noncontrolling interests (344 ) (3,148 )
Investment in unconsolidated real estate joint venture interests (18,448 ) (17,135 )
Decrease (increase) in restricted cash 12,285 (13,081 )
Net cash used in investing activities (230,000 ) (179,063 )

Cash flows from financing activities:
Distributions to common stockholders (22,235 ) (18,223 )
Distributions to noncontrolling interests (29,948 ) (2,844 )
Distributions to preferred stockholders (18,550 ) (5,647 )
Contributions from noncontrolling interests 10,738 4,142
Borrowings on mortgages payable 155,045 177,700
Repayments on mortgages payable (1,841 ) (68,141 )
Payments of deferred financing fees (3,685 ) (2,917 )
Net proceeds from issuance of common stock 57,359 38
Net proceeds from issuance of 8.250% Series A cumulative redeemable preferred stock (173 ) 68,503
Net proceeds from issuance of Series B Redeemable Preferred Stock 101,015 7,649
Net proceeds from issuance of Warrants underlying the Series B Redeemable Preferred Stock 2,048 144
Net proceeds from issuance of 7.625% Series C cumulative redeemable preferred stock (146 ) 56,019
Net proceeds from issuance of 7.125% Series D cumulative redeemable preferred stock (55 ) —
Payments to redeem Series B Redeemable Preferred Stock (229 ) —
Payments to redeem Operating Partnership Units (19 ) (59 )
Net cash provided by financing activities 249,324 216,364

Net increase in cash and cash equivalents $ 52,585 $ 61,561

Cash and cash equivalents at beginning of period $ 82,047 $ 68,960

Cash and cash equivalents at end of period $ 134,632 $ 130,521
Supplemental Disclosure of Cash Flow Information

Cash paid during the period for interest $ 20,474 $ 13,006
Conversion of preferred equity investment to note receivable $ (14,435 ) $ —
Distributions payable – declared and unpaid $ 8,580 $ 5,973
Mortgages assumed upon property acquisitions $ 146,377 $ 39,054
Mortgages assumed by buyer upon sale of real estate assets $ (41,419 ) $ —
Reduction of assets from deconsolidation $ 53,574 $ —
Reduction of mortgages payable from deconsolidation $ 36,854 $ —
Reduction of other liabilities from deconsolidation $ 1,002 $ —
Reduction of noncontrolling interests from deconsolidation $ 8,833 $ —

Class A Common Stock

Class C Common Stock

Series D Preferred Stock

Additional

Net (loss) income

Number of

Number of

Number of

Paid-

Cumulative

to Common

Noncontrolling


Shares

Par Value

Shares

Par Value

Shares

Value

in Capital

Distributions

Stockholders

Interests

Total Equity
Balance, July 1, 2019

22,294,327

$
223

76,603

$
1

2,850,602

$
68,705

$
295,444

$
(220,890)

$
(28,098)

$
40,391

$
155,776
Issuance of Class A common stock, net

525

0

0

0

0

0

6

0

0

0

6
Issuance of Class A common stock due to Series B warrant exercises

24,913

0

0

0

0

0

264

0

0

0

264
Issuance of restricted Class A common stock

0

0

0

0

0

0

147

0

0

0

147
Issuance of LTIP Units for director compensation

0

0

0

0

0

0

0

0

0

35

35
Vesting of LTIP Units for compensation

0

0

0

0

0

0

0

0

0

1,341

1,341
Issuance of LTIP Units for expense reimbursements

0

0

0

0

0

0

0

0

0

528

528
Issuance of Series B warrants

0

0

0

0

0

0

1,116

0

0

0

1,116
Common stock distributions declared

0

0

0

0

0

0

0

(3,648)

0

0

(3,648)
Series A Preferred Stock distributions declared

0

0

0

0

0

0

0

(2,950)

0

0

(2,950)
Series A Preferred Stock accretion

0

0

0

0

0

0

0

(231)

0

0

(231)
Series B Preferred Stock distributions declared

0

0

0

0

0

0

0

(6,562)

0

0

(6,562)
Series B Preferred Stock accretion

0

0

0

0

0

0

0

(2,397)

0

0

(2,397)
Series C Preferred Stock distributions declared

0

0

0

0

0

0

0

(1,107)

0

0

(1,107)
Series C Preferred Stock accretion

0

0

0

0

0

0

0

(89)

0

0

(89)
Series D Preferred Stock distributions declared

0

0

0

0

0

0

0

(1,269)

0

0

(1,269)
Distributions to Operating Partnership noncontrolling interests

0

0

0

0

0

0

0

0

0

(1,437)

(1,437)
Distributions to partially owned noncontrolling interests

0

0

0

0

0

0

0

0

0

(2,732)

(2,732)
Redemption of Series B Preferred Stock and conversion into Class A common stock

62,295

1

0

0

0

0

797

0

0

0

798
Cash redemption of Series B Preferred Stock

0

0

0

0

0

0

7

0

0

0

7
Series B warrant exercise, net

0

0

0

0

0

0

(50)

0

0

0

(50)
Acquisition of noncontrolling interest

0

0

0

0

0

0

972

0

0

0

972
Adjustment for noncontrolling interest ownership in Operating Partnership

0

0

0

0

0

0

804

0

0

(804)

0
Net income

0

0

0

0

0

0

0

0

31,764

6,411

38,175
Balance, September 30, 2019

22,382,060

$
224

76,603

$
1

2,850,602

$
68,705

$
299,507

$
(239,143)

$
3,666

$
43,733

$
176,693

See Notes to Consolidated Financial Statements

6
6

Table of Contents

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)

(In thousands, except share and per share amounts)

Class A Common Stock

Class C Common Stock

Series D Preferred Stock

Additional

Net income

Number of

Number of

Number of

Paid-

Cumulative

to Common

Noncontrolling

Shares

Par Value

Shares

Par Value

Shares

Value

in Capital

Distributions

Stockholders

Interests

Total Equity

Balance, January 1, 2020

23,422,557

$
234

76,603

$
1

2,850,602

$
68,705

$
311,683

$
(259,254)

$
6,122

$
48,170

$
175,661
Issuance of Class A common stock, net

170,462

2

0

0

0

0

1,982

0

0

0

1,984
Issuance of Class A common stock due to Series B warrant exercise

11,172

0

0

0

0

0

121

0

0

0

121
Issuance of Class A common stock for executive salaries

25,174

—

0

—

0

—

147

—

—

—

147
Repurchase of Class A common stock

(1,131,867)

(11)

0

0

0

0

(12,353)

0

0

0

(12,364)
Repurchase of Series A, Series C and/or Series D Preferred Stock

0

0

0

0

(76,264)

(1,838)

511

0

0

0

(1,327)
Issuance of restricted Class A common stock, net of shares withheld for employee taxes

78,865

1

0

0

0

0

350

0

0

0

351
Issuance of LTIP Units for director compensation

0

0

0

0

0

0

0

0

0

343

343
Issuance of LTIP Units for executive bonuses

0

0

0

0

0

0

0

0

0

2,034

2,034
Issuance of LTIP Units for executive salaries

0

0

0

0

0

0

0

0

0

325

325
Vesting of LTIP Units for compensation

0

0

0

0

0

0

0

0

0

5,026

5,026
Issuance of LTIP Units for expense and capitalized cost reimbursements

0

0

0

0

0

0

0

0

0

1,357

1,357
Common stock distributions declared

0

0

0

0

0

0

0

(11,944)

0

0

(11,944)
Series A Preferred Stock distributions declared

0

0

0

0

0

0

0

(8,696)

0

0

(8,696)
Series A Preferred Stock accretion

0

0

0

0

0

0

0

(744)

0

0

(744)
Company redemption of Series A Preferred Stock

0

0

0

0

0

0

0

(468)

0

0

(468)
Series B Preferred Stock distributions declared

0

0

0

0

0

0

0

(23,359)

0

0

(23,359)
Series B Preferred Stock accretion

0
��

0

0

0

0

0

0

(9,166)

0

0

(9,166)
Series C Preferred Stock distributions declared

0

0

0

0

0

0

0

(3,304)

0

0

(3,304)
Series C Preferred Stock accretion

0

0

0

0

0

0

0

(274)

0

0

(274)
Series D Preferred Stock distributions declared

0

0

0

0

0

0

0

(3,750)

0

0

(3,750)
Series T Preferred Stock distributions declared

0

0

0

0

0

0

0

(3,678)

0

0

(3,678)
Series T Preferred Stock accretion

0

0

0

0

0

0

0

(1,326)

0

0

(1,326)
Distributions to Operating Partnership noncontrolling interests

0

0

0

0

0

0

0

0

0

(4,927)

(4,927)
Distributions to partially owned noncontrolling interests

0

0

0

0

0

0

0

0

0

(4,120)

(4,120)
Conversion of OP Units into Class A common stock

69,713

1

0

0

0

0

131

0

0

(132)

0
Holder redemption of Series B Preferred Stock and conversion into Class A common stock

596,179

6

0

0

0

0

4,377

0

0

0

4,383
Company redemption of Series B Preferred Stock and conversion into Class A common stock

1,334,501

13

0

0

0

0

15,779

0

0

0

15,792
Holder redemption of Series T Preferred Stock and conversion into Class A common stock

12,633

0

0

0

0

0

78

0

0

0

78
Cash redemption of Series B Preferred Stock

0

0

0

0

0

0

8

0

0

0

8
Contributions from noncontrolling interests

0

0

0

0

0

0

0

0

0

1,000

1,000
Series B warrant activity and exercise, net

0

0

0

0

0

0

(21)

0

0

0

(21)
Transfer of noncontrolling interest to controlling interest

0

0

0

0

0

0

0

0

0

(775)

(775)
Acquisition of noncontrolling interest

0

0

0

0

0

0

(2,876)

0

0

0

(2,876)
Adjustment for noncontrolling interest ownership in Operating Partnership

0

0

0

0

0

0

3,147

0

0

(3,147)

0
Net income (loss)

0

0

0

0

0

0

0

0

36,304

(5,167)

31,137
Balance, September 30, 2020

24,589,389

$
246

76,603

$
1

2,774,338

$
66,867

$
323,064

$
(325,963)

$
42,426

$
39,987

$
146,628

See Notes to Consolidated Financial Statements

Table of Contents

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2019

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY (Unaudited)

(In thousands, except share and per share amounts)

Class A Common Stock

Class C Common Stock

Series D Preferred Stock

Additional

Net (loss) income

Number of

Number of

Number of

Paid-

Cumulative

to Common

Noncontrolling


Shares

Par Value

Shares

Par Value

Shares

Value

in Capital

Distributions

Stockholders

Interests

Total Equity

Balance, January 1, 2019

23,322,211

$
233

76,603

$
1

2,850,602

$
68,705

$
307,938

$
(187,910)

$
(30,621)

$
56,597

$
214,943
Issuance of Class A common stock, net

1,970

0

0

0

0

0

21

0

0

0

21
Issuance of Class A common stock due to Series B warrant exercises

28,793

1

0

0

0

0

305

0

0

0

306
Repurchase of Class A common stock

(1,255,445)

(13)

0

0

0

0

(13,391)

0

0

0

(13,404)
Issuance of restricted Class A common stock

90,694

1

0

0

0

0

294

0

0

0

295
Issuance of LTIP Units for director compensation

0

0

0

0

0

0

0

0

0

282

282
Vesting of LTIP Units for compensation

0

0

0

0

0

0

0

0

0

3,951

3,951
Issuance of LTIP Units for expense reimbursements

0

0

0

0

0

0

0

0

0

1,327

1,327
Issuance of Series B warrants

0

0

0

0

0

0

2,981

0

0

0

2,981
Common stock distributions declared

0

0

0

0

0

0

0

(11,022)

0

0

(11,022)
Series A Preferred Stock distributions declared

0

0

0

0

0

0

0

(8,850)

0

0

(8,850)
Series A Preferred Stock accretion

0

0

0

0

0

0

0

(598)

0

0

(598)
Series B Preferred Stock distributions declared

0

0

0

0

0

0

0

(17,313)

0

0

(17,313)
Series B Preferred Stock accretion

0

0

0

0

0

0

0

(6,092)

0

0

(6,092)
Series C Preferred Stock distributions declared

0

0

0

0

0

0

0

(3,321)

0

0

(3,321)
Series C Preferred Stock accretion

0

0

0

0

0

0

0

(230)

0

0

(230)
Series D Preferred Stock distributions declared

0

0

0

0

0

0

0

(3,807)

0

0

(3,807)
Miscellaneous offering costs

0

0

0

0

0

0

(222)

0

0

0

(222)
Distributions to Operating Partnership noncontrolling interests

0

0

0

0

0

0

0

0

0

(4,288)

(4,288)
Distributions to partially owned noncontrolling interests

0

0

0

0

0

0

0

0

0

(3,458)

(3,458)
Redemption of OP Units

0

0

0

0

0

0

(15)

0

0

(10)

(25)
Redemption of Series B Preferred Stock and conversion into Class A common stock

193,837

2

0

0

0

0

2,319

0

0

0

2,321
Cash redemption of Series B Preferred Stock

0

0

0

0

0

0

13

0

0

0

13
Series B warrant exercise, net

0

0

0

0

0

0

(76)

0

0

0

(76)
Acquisition of noncontrolling interest

0

0

0

0

0

0

(6,529)

0

0

(2,390)

(8,919)
Adjustment for noncontrolling interest ownership in Operating Partnership

0

0

0

0

0

0

5,869

0

0

(5,869)

0
Net income (loss)

0

0

0

0

0

0

0

0

34,287

(2,409)

31,878
Balance, September 30, 2019

22,382,060

$
224

76,603

$
1

2,850,602

$
68,705

$
299,507

$
(239,143)

$
3,666

$
43,733

$
176,693

See Notes to Consolidated Financial Statements

Table of Contents

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)

Nine Months Ended

September 30,

2020

2019
Cash flows from operating activities

Net income

$
31,137

$
31,878
Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation and amortization

62,882

53,806
Amortization of fair value adjustments

(277)

(285)
Preferred returns on unconsolidated real estate joint ventures

(8,213)

(7,097)
Gain on sale of real estate investments

(58,096)

(48,680)
Gain on sale of non-depreciable real estate investments

0

(679)
Fair value adjustment of interest rate caps

(75)

2,501
Loss on extinguishment of debt

13,985

6,924
Distributions of income and preferred returns from preferred equity investments and unconsolidated real estate joint ventures

10,295

6,201
Share-based compensation attributable to equity incentive plan

5,369

4,233
Share-based compensation attributable to executive salaries

472

0
Share-based compensation attributable to restricted stock grants

398

295
Share-based expense and capitalized cost reimbursements to BRE – LTIP Units

1,357

1,327
Changes in operating assets and liabilities:

Due from affiliates, net

2,466

771
Accounts receivable, prepaids and other assets

(11,964)

(2,568)
Notes and accrued interest receivable

68

(80)
Accounts payable and other accrued liabilities

12,127

2,633
Net cash provided by operating activities

61,931

51,180

Cash flows from investing activities:

Acquisitions of real estate investments

(144,703)

(306,115)
Capital expenditures

(12,253)

(15,859)
Investment in notes receivable

(37,936)

(16,097)
Repayments on notes receivable

29,000

0
Proceeds from sale of real estate investments

158,448

313,785
Proceeds from sale and redemption of unconsolidated real estate joint ventures

35,542

17,432
Purchase of interests from noncontrolling interests

(3,651)

(9,891)
Investment in unconsolidated real estate joint venture interests

(18,330)

(33,796)
Net cash provided by (used in) investing activities

6,117

(50,541)

Cash flows from financing activities:

Distributions to common stockholders

(11,748)

(11,203)
Distributions to noncontrolling interests

(8,462)

(7,459)
Distributions to preferred stockholders

(42,144)

(32,522)
Contributions from noncontrolling interests

1,000

0
Borrowings on mortgages payable

95,245

297,388
Repayments on mortgages payable including prepayment penalties

(137,263)

(254,684)
Proceeds from credit facilities

276,189

93,500
Repayments on credit facilities

(294,189)

(175,707)
Payments of deferred financing fees

(3,253)

(2,598)
Miscellaneous offering costs

0

(222)
Net proceeds from issuance of Class A common stock

1,984

21
Repurchase of Class A common stock

(12,364)

(13,404)
Shares withheld for employee taxes upon vesting of awards

(47)

0
Repurchase of Series A, Series C and/or Series D Preferred Stock

(6,103)

0
Net proceeds from issuance of 6.0% Series B Redeemable Preferred Stock

0

136,327
Retirement of 6.0% Series B Redeemable Preferred Stock

(290)

0
Net proceeds from issuance of Warrants associated with the Series B Redeemable Preferred Stock

0

2,981
Net proceeds from exercise of Warrants associated with the Series B Redeemable Preferred Stock

115

261
Net proceeds from issuance of 6.150% Series T Redeemable Preferred Stock

149,219

0
Retirement of 6.150% Series T Redeemable Preferred Stock

(32)

0
Payments to redeem 6.0% Series B Redeemable Preferred Stock

(93)

(207)
Payments to redeem Operating Partnership Units

0

(25)
Net cash provided by financing activities

7,764

32,447

Net increase in cash, cash equivalents and restricted cash

$
75,812

$
33,086
Cash, cash equivalents and restricted cash, beginning of year

50,768

52,244
Cash, cash equivalents and restricted cash, end of period

$
126,580

$
85,330

Supplemental disclosure of cash flow information

Cash paid for interest (net of interest capitalized)

$
40,173

$
41,414

Supplemental disclosure of non-cash investing and financing activities

Distributions payable - declared and unpaid

$
14,964

$
12,948
Mortgage assumed upon property acquisition

$
30,997

$
0
Capital expenditures held in accounts payable and other accrued liabilities

$
(568)

$
(1,016)

See Notes to Consolidated Financial Statements

Table of Contents

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 – Organization and Nature of Business
Bluerock Residential Growth REIT, Inc. (the “Company”) was incorporated as a Maryland corporation on July 25, 2008. The Company’s objective is to maximize long-term stockholder value by acquiring and developing well-located institutional-quality apartment properties in ~~demographically attractive~~knowledge economy growth markets across the United States. The Company seeks to maximize returns through investments where it believes it can drive substantial growth in its core funds from operations and net asset value primarily through ~~one or more of~~ its ~~Core-Plus,~~ Value-Add ~~Opportunistic~~ and Invest-to-Own investment strategies.
As of September 30, ~~2017,~~2020, the ~~Company's portfolio consisted~~Company held investments in fifty-seven real estate properties, consisting of ~~interests in~~ thirty-five ~~properties (twenty-five~~consolidated operating properties and ~~ten~~twenty-two properties through preferred equity, mezzanine loan or ground lease investments. Of the property interests held through preferred equity, mezzanine loan or ground lease investments, five are under development, ~~properties).~~three are in lease-up and fourteen properties are stabilized. The ~~Company’s thirty-five~~fifty-seven properties contain an aggregate of ~~10,761~~17,216 units, comprised of ~~8,166~~11,844 consolidated operating units and ~~2,595~~5,372 units ~~under development.~~through preferred equity, mezzanine loan or ground lease investments. As of September 30, ~~2017, these properties, exclusive of development~~2020, the Company’s consolidated operating properties were approximately ~~94%~~95.1% occupied.
The Company has elected to be treated, and currently qualifies, as a real estate investment trust (“REIT”), for federal income tax purposes. As a REIT, the Company generally is not subject to corporate-level income taxes. To maintain its REIT status, the Company is required, among other requirements, to distribute annually at least 90% of its “REIT taxable income,” as defined by the Internal Revenue Code of 1986, as amended (the “Code”), to the Company’s stockholders. If the Company fails to qualify as a REIT in any taxable year, it would be subject to federal income tax on its taxable income at regular corporate tax rates.

Note 2 – Basis of Presentation and Summary of Significant Accounting Policies
Principles of Consolidation and Basis of Presentation
The Company operates as an umbrella partnership REIT in which Bluerock Residential Holdings, L.P. (its “Operating Partnership”), or the Operating Partnership’s wholly-owned subsidiaries, owns substantially all of the property interests acquired and investments made on the Company’s behalf. As of September 30, ~~2017,~~2020, limited partners other than the Company owned approximately ~~10.29%~~29.45% of the common units of the Operating Partnership ~~(1.01%~~(18.06% is held by holders of limited partnership interest in the Operating Partnership (“OP Units”) and ~~9.28%~~11.39% is held by holders of the Operating Partnership’s long-term incentive plan units (“LTIP Units”)).
~~Bluerock Real Estate, L.L.C.~~, a Delaware limited liability company, is referred to as Bluerock (“Bluerock”), and the Company’s external manager, BRG Manager, LLC, a Delaware limited liability company, is referred to as its Manager (“Manager”). Both Bluerock and the Manager are related parties with respect to the Company, butincluding 5.60% which are not ~~within the Company’s control and are not consolidated in the Company’s financial statements.~~
vested at September 30, 2020).
Because the Company is the sole general partner of ~~its~~the Operating Partnership and has unilateral control over its management and major operating decisions (even if additional limited partners are admitted to the Operating Partnership), the accounts of the Operating Partnership are consolidated in its consolidated financial statements.
The Company also consolidates entities in which it controls more than 50% of the voting equity and in which control does not rest with other investors. Investments in real estate joint ventures ~~over~~in which the Company has the ability to exercise significant influence, but ~~for which it~~ does not have financial or operating control, are accounted for using the equity method of accounting. These entities are reflected on the Company’s consolidated financial statements as “Preferred equity investments and investments in unconsolidated real estate joint ventures.” All significant intercompany accounts and transactions have been eliminated in the consolidated financial statements. The Company will consider future ~~joint ventures~~investments for consolidation in accordance with the provisions required by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810: Consolidation.
Certain amounts in prior ~~periods, related to tenant reimbursements for utility expenses amounting to $1.0 million and $2.7 million for the three months and nine months ended September 30, 2016,~~year financial statement presentation have been reclassified ~~to other property revenues from property operating expenses,~~ to conform to the current period ~~presentation~~presentation.
Significant Risks and Uncertainties
At the present time, one of the most significant risks and uncertainties is the potential adverse effect of the current pandemic of the novel coronavirus (“COVID-19”). The Company’s tenants may experience financial difficulty due to the loss of their jobs and some have requested rent deferral or rent abatement during this pandemic. Experts have predicted that the outbreak will trigger, or has already triggered, a period of global economic slowdown or a global recession.

Table of Contents

The COVID-19 pandemic could have material and adverse effects on the Company’s financial condition, results of operations and cash flows in the near term due to, but not limited to, the following:

●

reduced economic activity may impact the employment of the Company’s tenants and their ability to pay their obligations to the Company, thus requesting modifications of such obligations, resulting in increases in uncollectible receivables and reductions in rental income;

●

the negative financial impact of the pandemic could impact the Company’s future compliance with financial covenants of its credit facilities and other debt agreements;

●

weaker economic conditions could require that the Company recognize impairment in value of its real estate assets due to a reduction in property income;

●

the Company’s inability to maintain occupancy or leasing rates, or increase these rates at stabilizing development properties, including due to possible reduced foot traffic and lease applications from prospective tenants at the Company’s properties as a result of shelter-in-place orders and similar government guidelines; and

●

concentration of the Company’s properties in markets that may be more severely affected by the COVID-19 pandemic due to its significant negative impact on certain key economic drivers in those markets, such as travel and entertainment.

The extent to which ~~includes tenant reimbursements for utility expenses amounting~~the COVID-19 pandemic impacts the Company’s operations and those of its tenants will depend on future developments, which are uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to ~~$1.6 million~~contain the pandemic or mitigate its impact, and ~~$4.6 million~~the direct and indirect economic effects of the pandemic and containment measures, among others.

As of September 30, 2020, the Company collected 97% of rents from its multifamily properties, including payment plans of 1%, for the three months ~~and nine months~~ ended September 30, ~~2017. In addition, property management fees have been reclassified~~2020. The Company provided rent deferral payment plans as a result of hardships these tenants are experiencing due to the COVID-19 impact. Although the Company expects to continue to receive tenant requests for rent deferrals in the coming months, the Company does not expect to waive its contractual rights under its lease agreements. Further, while occupancy remains strong at 95.1% and the Company has received full interest payments and preferred returns from ~~property operating expenses.~~

its mezzanine loan and preferred investments as of September 30, 2020, in future periods, the Company may experience reduced levels of tenant retention, reduced foot traffic and lease applications from prospective tenants, and reduced or interrupted payments on its mezzanine loan and preferred investments as a result of the impact of COVID-19.

Summary of Significant Accounting Policies

Preferred Equity Investments and Investments in Unconsolidated Real Estate Joint Ventures

The Company first analyzes ~~its investments in joint ventures~~an investment to determine if ~~the joint venture~~it is a variable interest entity (“VIE”) in accordance with Topic ASC 810 and, if so, whether the Company is the primary beneficiary requiring consolidation. A VIE is an entity that has (i) insufficient equity to permit it to finance its activities without additional subordinated financial support or (ii) equity holders that lack the characteristics of a controlling financial interest. VIEs are consolidated by the primary beneficiary, which is the entity that has both the power to direct the activities that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the entity that potentially could be significant to the entity. Variable interests in a VIE are contractual, ownership, or other financial interests in a VIE that change in value with changes in the fair value of the VIE’s net assets. The Company continuously re-assesses at each level of the ~~joint venture~~investment whether the entity is (i) a VIE, and (ii) if the Company is the primary beneficiary of the VIE. If it was determined that an entity in which the Company holds ~~a joint venture~~an interest qualified as a VIE and the Company was the primary beneficiary, the entity would be consolidated.

If, after consideration of the VIE accounting literature, the Company has determined that an entity is not a VIE, the Company assesses the need for consolidation under all other provisions of ASC 810. These provisions provide for consolidation of majority-owned entities through a majority voting interest held by the Company providing ~~control, or through determination~~control.

Table of ~~control by virtue of the Company being the general partner in a limited partnership or the controlling member of a limited liability company.~~Contents

In assessing whether the Company is in control of and requiring consolidation of the limited liability company and partnership venture structures, the Company evaluates the respective rights and privileges afforded each member or partner (collectively referred to as “member”). The Company’s member would not be deemed to control the entity if any of the other members have either (i) substantive kickout rights providing the ability to dissolve (liquidate) the entity or otherwise remove the managing member or general partner without cause or (ii) has substantive participating rights in the entity. Substantive participating rights (whether granted by contract or law) provide for the ability to effectively participate in significant decisions of the entity that would be expected to be made in the ordinary course of business.

If it has been determined that the Company does not have control but does have the ability to exercise significant influence over the entity, the Company accounts for these unconsolidated investments under the equity method of accounting. The equity method of accounting requires these investments to be initially recorded at cost and subsequently increased (decreased) for the Company’s share of net income (loss), including eliminations for the Company’s share of intercompany transactions, and increased (decreased) for contributions (distributions). The Company’s ~~proportionate~~ share of the results of operations of these investments is reflected in the Company’s earnings or losses.

Financial Instrument Fair Value Disclosures

As of September 30, 2020 and December 31, 2019, the carrying values of cash and cash equivalents, accounts receivable, due to and due from affiliates, accounts payable, accrued liabilities, and distributions payable approximate their fair value based on their highly-liquid nature and/or short-term maturities. The carrying values of notes receivable approximate fair value because stated interest rate terms are consistent with interest rate terms on new deals with similar leverage and risk profiles.

Refer to Note 10 for further information regarding fair value measurements.

Lessor Accounting

The Company’s current portfolio is focused predominately on apartment properties whereby the Company generates rental revenue by leasing apartments to residents in its communities. As lease revenues for apartments fall under the scope of ASC Topic 842, such lease revenues are classified as operating leases with straight-line recognition over the terms of the relevant lease agreement and inclusion within rental revenue. Resident leases are generally for one-year or month-to-month terms and are renewable by mutual agreement between the Company and the resident. Non-lease components of the Company’s apartment leases are combined with the related lease component and accounted for as a single lease component under ASC Topic 842. The balances of net real estate investments and related depreciation on the Company’s consolidated financial statements relate to assets for which the Company is the lessor.

Lessee Accounting

The Company determines if an arrangement is a lease at inception. The Company is currently engaged in operating lease agreements that primarily relate to certain equipment leases. The Company determined that the lessee operating lease commitments have no material impact on its consolidated financial statements with the adoption of ASC Topic 842. The Company will continue to assess any modification of existing lease agreements and execution of any new lease agreements for the potential requirement of recording a right-of-use-asset or liability in the future.

Interim Financial Information

The accompanying unaudited consolidated financial statements of the Company have been prepared in accordance with ~~accounting principles generally accepted in the United States of America (“GAAP”)~~GAAP for interim financial reporting, and the instructions to Form 10-Q and Article 10-1 of Regulation S-X. Accordingly, the financial statements for interim reporting do not include all of the information and notes or disclosures required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring items) considered necessary for a fair presentation have been included. Operating results for interim periods should not be considered indicative of the operating results for a full year.

The balance sheet at December 31, ~~2016~~2019 has been derived from the audited financial statements at that date but does not include all of the information and disclosures required by GAAP for complete financial statements. ~~For further information, refer to~~It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in our audited consolidated financial statements for the year ended December 31, ~~2016~~2019 contained in the Annual Report on Form 10-K as filed with the Securities and Exchange Commission ~~(“SEC”~~("SEC") on February ~~22, 2017.~~24, 2020.

~~Summary~~Table of ~~Significant Accounting Policies~~Contents

Other than the adoption of accounting pronouncements as described below, there have been no significant changes to the Company’s accounting policies since it filed its audited consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2016.

Use of Estimates

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Other than the adoption of new accounting pronouncements as described below, there have been no significant changes to the Company's accounting policies since it filed its audited consolidated financial statements in its Annual Report on Form 10-K for the year ended December 31, 2019.

New Accounting Pronouncements

In ~~January 2017,~~June 2016, the FASB issued Accounting Standards Update ("ASU”) No. 2016-13 "Measurement of Credit Losses on Financial Instruments" ("ASU ~~2017-01, "Business Combinations; Clarifying the Definition of a Business" (“ASU 2017-01”~~2016-13"). ASU ~~2017-01 modifies~~2016-13 requires more timely recognition of credit losses associated with financial assets. While previous GAAP included multiple credit impairment objectives for instruments, the ~~requirements to meet~~previous objectives generally delayed recognition of the ~~definition~~full amount of ~~a business underAccounting Standards Codification ("ASC")Topic 805, "Business Combinations."~~credit losses until the loss was probable of occurring. The amendments ~~provide a screen~~in ASU 2016-13, whose scope is asset-based and not restricted to ~~determine when a set~~financial institutions, eliminate the probable initial recognition threshold in current GAAP and, instead, reflect an entity's current estimate of ~~identifiable~~all expected credit losses. The amendments in ASU 2016-13 broaden the information that the Company must consider in developing its expected credit loss estimate for assets ~~and liabilities is not a business.~~measured either collectively or individually. The ~~screen requires~~use of forecasted information incorporates more timely information in the estimate of expected credit loss that ~~when substantially all~~will be more useful to users of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or group of similar identifiable assets, the set is not a business. The impact is expected to result in fewer transactions being accounted for as business combinations. The Company believes that this amendment will result in most of its real estate acquisitions being accounted for as asset acquisitions rather than business combinations. ASU 2017-01 is effective for the Company for annual and interim periods beginning after December 15, 2017 with early adoption permitted. The Company adopted this standard effective January 1, 2017. The impact to the Consolidated Financial Statements and related notes as a result of the adoption of this standard is primarily related to the difference in the accounting of acquisition costs. When accounting for these costs as a part of an asset acquisition, the Company is permitted to capitalize the costs. Upon the adoption of ASU 2017-01 the Company evaluates each acquisition of real estate or in-substance real estate to determine if the integrated set of assets and activities acquired meet the definition of a business and need to be accounted as a business combination. All acquisitions of real estate by the Company during 2017 to date do not meet the new definition of a business.

financial statements. In November ~~2016,~~2018, the FASB issued ASU No. ~~2016-18, "Statement of Cash Flows; Restricted Cash"~~2018-19 "Codification Improvements to Topic 326, Financial Instruments-Credit Losses" (“ASU ~~2016-18”~~2018-19”). ~~This update requires~~ASU 2018-19 clarifies that ~~a statement of cash flows explain~~operating lease receivables are excluded from the change during the period in the total of cash, cash equivalents, and amounts generally described as restricted cash or restricted cash equivalents. Therefore, amounts generally described as restricted cash and restricted cash equivalents should be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. The Company will adjust the consolidated statement of cash flows as required in conjunction with the adoptionscope of ASU ~~2016-08 in 2018.~~2016-13 and instead, impairment of operating lease receivables is to be accounted for under ASC Topic 842. ASU ~~2016-18~~2016-13 is effective ~~for the Company for annual and interim periods beginning after December 15, 2017 with early adoption permitted.~~

In August 2016, the Financial Accounting Standards Board (“FASB”) issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). The ASU provides guidance on the treatment of cash receipts and cash payments for certain types of cash transactions, to eliminate diversity in practice in the presentation of the cash flow statement. For public business entities, the amendments in ASU 2016-15 are effective for financial statements issued for fiscal years beginning after December 15, ~~2017, and~~2019, including interim periods within those fiscal years. ~~Earlier application was permitted.~~ The Company ~~will adjust the consolidated statement~~adopted ASU 2016-13 as of ~~cash flows as required in conjunction with~~January 1, 2020 and the adoption of ~~ASU 2016-15 in 2018.~~

~~In March 2016,~~ the FASB issued ASU No. 2016-07, “Simplifying the Transition to the Equity Method of Accounting” (“ASU 2016-07”), which eliminates the requirement to retroactively adjust an investment, results of operations, and retained earnings when the investment qualifies for the use of the equity method as a result of an increase in the level of ownership interest or degree of influence. The new standard ~~is effective for annual reporting periods beginning after December 15, 2016. ASU 2016-07~~ did not have a material impact on the Company’s ~~financial statements when adopted.~~

In June 2016, the FASB updated ASC Topic 326 "Financial Instruments - Credit Losses" with 2016-13 “Measurement of Credit Losses on Financial Instruments” (“ASU 2016-03”). ASU 2016-13 enhances the methodology of measuring expected credit losses to include the use of forward-looking information to better inform credit loss estimates. ASU 2016-13 is effective for annual periods (including interim periods within those periods) beginning after December 15, 2019. The Company is currently evaluating the guidance and has not determined the impact this standard may have on the Company’sconsolidated financial statements.

In ~~February 2016,~~April 2020, the FASB issued ~~ASU No. 2016-02, “Leases (Topic 842)”~~a Staff Question-and-Answer (“~~ASU 2016-02”~~Q&A”)~~. Under ASU 2016-02, an entity will be required~~ to ~~recognize right-of-use assets and~~clarify whether lease liabilities on its balance sheet and disclose key information about leasing arrangements. ASU 2016-02 offers specific accounting guidance for a lessee, a lessor and sale and leaseback transactions. Lessees and lessors are requiredconcessions related to ~~disclose qualitative and quantitative information about leasing arrangements to enable a user~~the effects of COVID-19 require the application of the ~~financial statements~~lease modification guidance under ASC Topic 842. The Q&A allows companies to ~~assess~~not apply the ~~amount, timing and uncertainty of~~lease modification guidance to rent concessions that result in deferred rent where the total cash flows ~~arising from leases. For public companies, ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period,~~required by the modified lease agreement are materially the same as the cash flows required under the original lease and ~~requires~~the changes to the lease do not result in a ~~modified retrospective adoption, with early adoption permitted.~~substantial increase to the rights of the lessor or the obligations of the lessee. The Company ~~expects~~adopted the guidance during the second quarter 2020 for eligible residential lease concessions. The lease concessions that ~~because~~met the criteria of the ~~ASU 2016-02’s emphasis on lessee accounting, ASU 2016-02 will~~Q&A are treated as if they were part of the enforceable rights and obligations of the parties under the existing lease contract. The amount of rent concessions subject to the Q&A were not material and this adoption did not have a material impact on the Company’s accounting for leases. Consistent with present standards, the Company will continue to account for lease revenue on a straight-line basis. Also, consistent with the Company’s current practice, under ASU 2016-02 only initial direct costs that are incremental to the lessor will be capitalized.

Company's consolidated results of operations.

In ~~May 2014,~~August 2020, the FASB issued ASU No. ~~2014-09, “Revenue from~~2020-06 “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts ~~with Customers (Topic 606)”~~in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU ~~2014-09”~~2020-06”). ~~Under~~The guidance in ASU 2020-06 simplifies the ~~new standard, revenue~~accounting for convertible debt and convertible preferred stock by removing the requirements to separately present certain conversion features in equity. In addition, the amendments in the ASU 2020-06 also simplify the guidance in ASC Subtopic 815-40, Derivatives and Hedging: Contracts in Entity’s Own Equity, by removing certain criteria that must be satisfied in order to classify a contract as equity, which is ~~recognized when persuasive evidence~~expected to decrease the number of ~~an arrangement exists, delivery has occurred,~~freestanding instruments and embedded derivatives accounted for as assets or liabilities. Finally, the ~~fee is fixed or determinable, and collectability is probable. Revenue is generally recognized net of allowances. In August 2015,~~amendments revise the ~~FASB issued ASU 2015-14, Revenue from Contracts with Customers-Deferral~~guidance on calculating earnings per share, requiring use of the ~~Effective Date which defers~~if-converted method for all convertible instruments and rescinding an entity’s ability to rebut the ~~effective date~~presumption of ~~the new revenue recognition standard until the first quarter of 2018. Therefore,~~share settlement for instruments that may be settled in cash or other assets. The amendments in ASU ~~2014-09 will become~~2020-06 are effective for the Company ~~in the first quarter of the~~for fiscal ~~year ending~~years beginning after December ~~31, 2018.~~15, 2021. Early adoption is permitted, but ~~not~~no earlier than fiscal years beginning after December 15, 2020. The guidance must be adopted as of the ~~first quarter~~beginning of the fiscal year ~~ending December 31, 2017. The ASU allows for either full retrospective or modified retrospective~~of adoption. The Company has selected the modified retrospective approach. In April 2016, the FASB issued ASU No. 2016-10, “Revenue from Contracts with Customers” (Topic 606): Identifying Performance Obligations and Licensing, which adds guidance on identifying performance obligations within a contract. The majority of the Company’s revenue is derived from rental income, which is scoped out from this standard and will be accounted for under ASU 2016-02, Leases, discussed above. The Company’s other revenue streams, which are being evaluated under this ASU, include but are not limited to other property revenues and interest income from related parties determined not to be within the scope of ASU 2016-02, and gains and losses from real estate dispositions. The Company will continue to assesscurrently evaluating the impact of ~~the~~this new ~~standard and will adopt it as of January 1, 2018, however, the Company does expect additional disclosures that are required from the adoption of this standard.~~guidance.

In March 2016, the FASB issued ASU 2016-08, “Principal Versus Agent Considerations (Reporting Revenue Gross Versus Net) (Topic 606)” (“ASU 2016-08”),which updates the new revenue standard by clarifying the principal versus agent implementation guidance, but does not change the core principle of the new standard. The updates to the principal versus agent guidance (1) require an entity to determine whether it is a principal or an agent for each distinct good or service (or a distinct bundle of goods or services) to be provided to the customer; (2) illustrate how an entity that is a principal might apply the control principle to goods, services, or rights to services, when another party is involved in providing goods or services to a customer; (3) clarify that the purpose of certain specific control indicators is to support or assist in the assessment of whether an entity controls a specified good or service before it is transferred to the customer, provide more specific guidance on how the indicators should be considered, and clarify that their relevance will vary depending on the facts and circumstances; and (4) revise existing examples and add two new ones to more clearly depict how the guidance should be applied. The effective date and transition requirements for ASU 2016-08 are the same as the effective date and transition requirements of Topic 606, Revenue from Contracts with Customers (see ASU 2014-09 above). The majority of the Company’s revenue is derived from rental income, which is scoped out from this standard and will be accounted for under ASU 2016-02, Leases, discussed above. The Company will continue to assess the impact of the new standard and will adopt it as of January 1, 2018, however, as noted above in Note 2, the Company has reclassified certain tenant reimbursements as other property revenues and does expect additional disclosures from the adoption of this standard.

In February 2017, the FASB issued ASU 2017-05 "Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610-20)" ("ASU 2017-05"). ASU 2017-05 clarifies that a financial asset is within the scope of Subtopic 610-20 if it meets the definition of an in substance nonfinancial asset. ASU 2017-05 also defines the term in substance nonfinancial asset. It is effective for annual periods beginning after December 15, 2017. The adoption of this standard is not anticipated to have a material impact on our consolidated financial statements.

Note 3 – Sale of Real Estate ~~Asset~~Assets

Sale of Helios

On January 8, 2020, the underlying asset of an unconsolidated joint venture located in Atlanta, Georgia known as Helios was sold for approximately $65.6 million, subject to certain prorations and ~~Abandonment~~adjustments typical in such real estate transactions. After deduction for the payoff of ~~Development Project~~existing mortgage indebtedness encumbering the property in the amount of $39.5 million and the payment of early

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extinguishment of debt costs, closing costs and fees, the Company’s pro rata share of the net proceeds was $22.7 million, which included payment for its original investment of $19.2 million and its additional investment of approximately $3.5 million. The Company also received a $0.3 million profit share distribution recorded as a gain on sale on the consolidated statements of operations.

Sale of ~~Village Green Ann Arbor~~

Whetstone Apartments

On ~~February 22, 2017,~~January 24, 2020, the Company, through a subsidiary of its Operating Partnership, closed on the sale of Whetstone Apartments located in Durham, North Carolina for approximately $46.5 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of existing mortgage indebtedness encumbering the property in the amount of $25.4 million and the payment of early extinguishment of debt costs, closing costs and fees, the Company’s net proceeds were $19.6 million, which included payment for its original investment of $12.9 million, its accrued preferred return of $2.7 million and its additional investment of approximately $4.0 million.

Sale of Ashton Reserve

On April 14, 2020, the Company closed on the sale of the ~~Village Green Ann Arbor property,~~Ashton Reserve properties, located in ~~Ann Arbor, Michigan.~~Charlotte, North Carolina, pursuant to the terms and conditions of two separate purchase and sales agreements. The ~~property was~~properties were sold for approximately ~~$71.4~~$84.6 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of the existing mortgage indebtedness encumbering the ~~Village Green Ann Arbor property~~properties in the amount of ~~$41.4~~$45.4 million, the payment of early extinguishment of debt costs of $7.1 million and payment of closing costs and fees of ~~$1.3~~$0.8 million, the sale of the ~~property~~properties generated net proceeds of approximately ~~$28.6~~$31.2 million and a gain on sale of approximately ~~$16.7 million, of which the Company’s pro rata share of proceeds was approximately $13.6 million and pro rata share of the gain was approximately $7.8~~$26.5 million.

Sale of ~~Lansbrook Village~~Marquis at TPC

On April ~~26, 2017,~~17, 2020, the Company closed on the sale of ~~Lansbrook Village,~~Marquis at TPC, located in Palm Harbor, Florida. The 90% owned property was sold for approximately $82.4 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for assumption of the existing mortgage indebtedness encumbering Lansbrook Village in the amount of $57.2 million and payment of closing costs and fees of $1.2 million, the sale of the property generated net proceeds of approximately $24.1 million and a gain on sale of approximately $22.8 million, of which the Company’s pro rata share of proceeds was approximately $19.1 million and pro rata share of the gain was approximately $16.1 million.

~~Sale of Fox Hill~~

~~On May 24, 2017, the Company closed on the sale of the Fox Hill property, located in Austin,~~San Antonio, Texas. The property was sold for ~~approximately $46.5~~$22.5 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of the existing mortgage indebtedness encumbering the ~~Fox Hill~~ property in the amount of ~~$26.7 million, the payment of a prepayment penalty on the mortgage of $1.6 million and payment of closing costs and fees of $0.5~~$16.3 million, the sale of the property generated net proceeds of approximately ~~$19.2~~$5.9 million and a gain on sale of approximately ~~$10.7~~$3.2 million, of which the Company’s pro rata share of the proceeds was approximately ~~$16.4~~$5.3 million and pro rata share of the gain was approximately ~~$10.3~~$2.8 million.

Sale of ~~MDA Apartments~~

Enders Place at Baldwin Park

On ~~June 30, 2017,~~April 21, 2020, the Company closed on the sale of ~~its interest in MDA Apartments,~~Enders Place at Baldwin Park, located in ~~Chicago, Illinois.~~Orlando, Florida. The ~~Company’s 35% interest in the~~ property was sold for approximately ~~$18.3~~$53.2 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of the existing mortgage indebtedness encumbering the property in the amount of $23.2 million, the payment of early extinguishment of debt costs of $2.2 million and payment of closing costs and fees of ~~$0.7~~$0.9 million, the sale of ~~the joint venture interest in~~ the property generated net proceeds of approximately ~~$17.6~~$26.1 million and a gain on sale of ~~$10.2~~approximately $28.2 million, of which the Company’s pro rata share of the proceeds was approximately ~~$11.0~~$24.0 million and pro rata share of the gain was approximately ~~$6.4~~$26.0 million.

~~Election to Abandon East San Marco Development~~

On November 24, 2015, the Company entered into a cost-sharing agreement to pursue the acquisition of a tract of real property located in Jacksonville, Florida for the development of a 266-unit, Class A multifamily apartment community with 44,276 square feet of retail space, or the East San Marco Property. In 2017 the Company elected to abandon pursuit of the development of the East San Marco Property due to significant cost escalations arising from scope changes imposed on the project after the start and from both general and market specific labor and material inflation, which negatively impacted the risk and return profile of the project. The Company recognized approximately $2.9 million of acquisition and pursuit costs during the nine months ended September 30, 2017 based on its investment in a controlling equity position in the East San Marco Property prior to abandonment.

Note 4 – Investments in Real Estate

As of September 30, ~~2017,~~2020, the Company ~~was invested~~held investments in ~~twenty-five~~thirty-five consolidated operating ~~real estate~~ properties and ~~ten~~twenty-two development properties ~~generally~~ through ~~joint ventures, including convertible~~ preferred equity, ~~investments, and~~ mezzanine ~~loans.~~loan or ground lease investments. The following tables provide summary information regarding ~~our~~the Company’s consolidated operating properties and ~~development~~preferred equity, mezzanine loan and ground lease investments, which are either consolidated or ~~presented on~~accounted for under the equity method of accounting.

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Consolidated Operating Properties
Multifamily Community Name/Location
Number of
Units

Year
Built/Renovated⁽¹⁾

Ownership
Interest

ARIUM at Palmer Ranch, Sarasota, FL 320 2016 95.0 %
ARIUM Grandewood, Orlando, FL 306 2005 95.0 %
ARIUM Gulfshore, Naples, FL 368 2016 95.0 %
ARIUM Palms, Orlando, FL 252 2008 95.0 %
ARIUM Pine Lakes, Port St. Lucie, FL 320 2003 85.0 %
ARIUM Westside, Atlanta, GA 336 2008 90.0 %
Ashton Reserve, Charlotte, NC 473 2015 100.0 %
Citrus Tower, Orlando, FL 336 2006 96.8 %
Enders Place at Baldwin Park, Orlando, FL 220 2003 89.5 %
James on South First, formerly Legacy at Southpark, Austin, TX 250 2016 90.0 %
Marquis at Crown Ridge, San Antonio, TX 352 2009 90.0 %
Marquis at Stone Oak, San Antonio, TX 335 2007 90.0 %
Marquis at The Cascades, Tyler, TX 582 2009 90.0 %
Marquis at TPC, San Antonio, TX 139 2008 90.0 %
Nevadan, Atlanta, GA 480 1990 90.0 %
Park & Kingston, Charlotte, NC 168 2015 96.0 %
Preston View, Morrisville, NC 382 2000 91.8 %
Roswell City Walk, Roswell, GA 320 2015 98.0 %
Sorrel, Frisco, TX 352 2015 95.0 %
Sovereign, Fort Worth, TX 322 2015 95.0 %
The Brodie, Austin, TX 324 2001 92.5 %
The Preserve at Henderson Beach, Destin, FL 340 2009 100.0 %
Villages at Cypress Creek, Houston, TX 384 2001 80.0 %
Wesley Village, Charlotte, NC 301 2010 91.8 %
Whetstone, Durham, NC 204 2015 ⁽²⁾
Total 8,166
⁽¹⁾ ~~Represents date of last significant renovation or year built if there were no renovations.~~




Number of

Date Built /

Ownership

Multifamily Community Name

Location

Units

Renovated ⁽¹⁾

Interest

ARIUM Glenridge

Atlanta, GA

480

1990

90
%
ARIUM Grandewood

Orlando, FL

306

2005

100
%
ARIUM Hunter’s Creek

Orlando, FL

532

1999

100
%
ARIUM Metrowest

Orlando, FL

510

2001

100
%
ARIUM Westside

Atlanta, GA

336

2008

90
%
Ashford Belmar

Lakewood, CO

512

1988/1993

85
%
Avenue 25

Phoenix, AZ

254

2013

100
%
Cade Boca Raton

Boca Raton, FL

90

2019

81
%
Chattahoochee Ridge

Atlanta, GA

358

1996

90
%
Chevy Chase

Austin, TX

320

1971

92
%
Citrus Tower

Orlando, FL

336

2006

97
%
Denim

Scottsdale, AZ

645

1979

100
%
Element

Las Vegas, NV

200

1995

100
%
Falls at Forsyth

Cumming, GA

356

2019

100
%
Gulfshore Apartment Homes

Naples, FL

368

2016

100
%
James at South First

Austin, TX

250

2016

90
%
Marquis at The Cascades

Tyler, TX

582

2009

90
%
Navigator Villas

Pasco, WA

176

2013

90
%
Outlook at Greystone

Birmingham, AL

300

2007

100
%
Park & Kingston

Charlotte, NC

168

2015

100
%
Pine Lakes Preserve

Port St. Lucie, FL

320

2003

100
%
Plantation Park

Lake Jackson, TX

238

2016

80
%
Providence Trail

Mount Juliet, TN

334

2007

100
%
Roswell City Walk

Roswell, GA

320

2015

98
%
Sands Parc

Daytona Beach, FL

264

2017

100
%
The Brodie

Austin, TX

324

2001

100
%
The District at Scottsdale

Scottsdale, AZ

332

2018

100
%
The Links at Plum Creek

Castle Rock, CO

264

2000

88
%
The Mills

Greenville, SC

304

2013

100
%
The Preserve at Henderson Beach

Destin, FL

340

2009

100
%
The Reserve at Palmer Ranch

Sarasota, FL

320

2016

100
%
The Sanctuary

Las Vegas, NV

320

1988

100
%
Veranda at Centerfield

Houston, TX

400

1999

93
%
Villages of Cypress Creek

Houston, TX

384

2001

80
%
Wesley Village

Charlotte, NC

301

2010

100
%
Total

11,844

⁽²⁾ ~~Whetstone is currently a preferred equity investment providing a stated investment return.~~
(1) Represents date of last significant renovation or year built if there were no renovations.
Depreciation expense was ~~$8.9~~$18.2 million and ~~$5.9~~$15.7 million, and ~~$24.5~~$54.4 million and ~~$16.7~~$47.3 million for the three and nine months ended September 30, ~~2017~~2020 and ~~2016,~~2019, respectively.
Intangibles related to the Company’s consolidated investments in real estate consist of the value of in-place leases. ~~In-place leases are amortized over the remaining term of the in-place leases, which is approximately six months.~~ Amortization expense related to the in-place leases was ~~$2.9~~$1.0 million and ~~$1.3~~$1.9 million, and ~~$8.6~~$5.8 million and ~~$5.8~~$3.8 million for the three and nine months ended September 30, ~~2017~~2020 and ~~2016,~~2019, respectively.
11
15

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Preferred Equity, Mezzanine Loan and Ground Lease Investments
~~Development Properties~~

Actual /

Actual /

Actual /

Estimated

Estimated

Planned

Initial

Construction
Multifamily Community ~~Name/Location~~
Name
~~Planned~~
Location
Number of
Units
~~Actual /~~
~~Anticipated~~
~~Initial~~
Occupancy

~~Anticipated~~Completion
~~Construction~~
~~Completion~~
Lease-up Investments

~~Alexan CityCentre, Houston, TX~~
Motif

Fort Lauderdale, FL
~~340~~

385

1Q 2020

2Q ~~2017~~
~~4Q 2017~~ 2020
~~Helios, Atlanta, GA~~
The Conley, formerly North Creek Apartments

Leander, TX
~~282~~

259

2Q 2020
~~2Q 2017~~

4Q ~~2017~~
2020
Wayford at Concord, formerly Wayforth at Concord

Concord, NC

150

1Q 2020

3Q 2021
Total lease-up units

794

Development Investments

Riverside Apartments
Austin, TX
222

1Q 2021

2Q 2021
Zoey

Austin, TX

307

1Q 2022

2Q 2022
Reunion Apartments

Orlando, FL

280

1Q 2022

3Q 2022
The Park at Chapel Hill
Chapel Hill, NC

414

3Q 2021

4Q 2022
Avondale Hills

Decatur, GA

240

1Q 2023

1Q 2023
Total development units

1,463

Multifamily Community Name
Location

Number of Units

Operating Investments ⁽¹⁾

Alexan CityCentre
Houston, TX

340

Alexan Southside Place

Houston, TX

270
~~270~~

~~4Q 2017~~ ~~2Q 2018~~

~~Lake Boone Trail, Raleigh,~~
Arlo

Charlotte, NC

286
~~245~~

~~3Q 2017~~ ~~3Q 2018~~

~~Vickers Village, Roswell,~~
Belmont Crossing ⁽²⁾

Smyrna, GA

192
79

~~3Q 2018~~ ~~4Q 2018~~

~~APOK Townhomes, Boca Raton, FL~~
Domain at The One Forty

Garland, TX
90

299

~~3Q 2018~~

~~1Q 2019~~

~~Crescent Perimeter, Atlanta,~~
Georgetown Crossing⁽²⁾

Savannah, GA

168
~~320~~

~~4Q 2018~~ ~~2Q 2019~~

~~Domain, Garland,~~
Mira Vista

Austin, TX

200
~~299~~

~~4Q 2018~~ ~~2Q 2019~~

~~West Morehead, Charlotte, NC~~
Novel Perimeter

Atlanta, GA
~~286~~

320

~~4Q 2018~~

~~2Q 2019~~

~~Flagler Village, Fort Lauderdale,~~
Park on the Square⁽²⁾

Pensacola, FL

240
~~384~~

~~3Q 2019~~ ~~3Q 2020~~

~~Total~~
Sierra Terrace ⁽²⁾

Atlanta, GA
~~2,595~~

135

Sierra Village⁽²⁾

Atlanta, GA

154

The Commons ⁽²⁾

Jacksonville, FL

328

Thornton Flats

Austin, TX

104

Vickers Historic Roswell

Roswell, GA

79

Total operating units

3,115

Total units

5,372

(1) Stabilized operating properties in which the Company has a preferred equity investment or equity interest. Refer to Note 7 for further information.
(2) Belmont Crossing, Georgetown Crossing, Park on the Square, Sierra Terrace, Sierra Village, and The Commons are collectively known as the Strategic Portfolio. Refer to Note 7 for further information.

Note 5 – Acquisition of Real Estate
The following describes the Company’s significant acquisition activity and related new financing during the nine months ended September 30, ~~2017:~~2020 (dollars in thousands):

Ownership

Purchase

Property

Location

Date

Interest

Price

Mortgage

Avenue 25

Phoenix, AZ

January 23, 2020

100
%
$
55,600

$
36,566
⁽¹⁾
Falls at Forsyth

Cumming, GA

March 6, 2020

100
%

82,500

—
⁽²⁾
Chevy Chase

Austin, TX

August 11, 2020

92
%

34,500

24,400

~~Acquisition of Bell Preston View~~
On February 17, 2017, the Company, through subsidiaries of its Operating Partnership, acquired a 91.8% interest in a 382-unit apartment community located in Morrisville, North Carolina, known as Bell Preston View Apartments (“Preston View”) for approximately $59.5 million. The purchase price of $59.5 million was funded, in part, with a $41.1 million senior mortgage loan secured by the Preston View property.
~~Acquisition of Wesley Village~~
On March 9, 2017, the Company, through subsidiaries of its Operating Partnership, acquired a 91.8% interest in a 301-unit apartment community and adjacent land located in Charlotte, North Carolina, known as Wesley Village Apartments (“Wesley Village”) for approximately $57.2 million. The purchase price for Wesley Village of approximately $57.2 million was funded, in part, with a $40.5 million senior mortgage loan secured by the Wesley Village property.
~~Acquisition of Texas Portfolio (“Texas Portfolio”)~~
On June 9, 2017, the Company, through subsidiaries of its Operating Partnership, acquired a 90.0% interest in a portfolio of five apartment community properties containing 1,408-units, located in San Antonio and Tyler, Texas for approximately $188.9 million. The purchase price for the five-property portfolio was funded, in part, with the assumption of five senior mortgage loans of a total of approximately $146.4 million secured individually by each of the portfolio properties. The properties are Marquis at Crown Ridge, Marquis at Stone Oak and Marquis at TPC located in San Antonio, Texas, and Marquis at The Cascades I and II (considered one property subsequent to acquisition) located in Tyler, Texas.
~~Acquisition at Villages at Cypress Creek~~
On September 8, 2017, the Company, through subsidiaries of its Operating Partnership, acquired an 80.0% interest in a 384-unit apartment community located in Houston, Texas, known as Villages at Cypress Creek (“Villages at Cypress Creek”) for approximately $40.7 million. The purchase price for Villages at Cypress Creek of approximately $40.7 million was funded, in part, with a $26.2 million senior mortgage loan secured by the Villages at Cypress Creek property.
~~Acquisition of Citrus Tower~~
On September 28, 2017, the Company, through subsidiaries of its Operating Partnership, acquired a 96.8% interest in a 336-unit apartment community located in Orlando, Florida, known as Citrus Tower (“Citrus Tower”) for approximately $55.3 million. The purchase price for Citrus Tower of approximately $55.3 million was funded, in part, with a $41.4 million senior mortgage loan secured by the Citrus Tower property.
(1) 12 Mortgage balance includes a $29.7 million loan assumption and a $6.9 million supplemental loan secured by the Avenue 25 property.
(2) The Company funded $79.9 million of the purchase price with proceeds from its Amended Senior Credit Facility secured by the Falls at Forsyth property. Refer to Note 8 for further information about the Company's Amended Senior Credit Facility.
16

Table of Contents

Purchase Price ~~Allocations~~
Allocation
The real estate acquisitions ~~of Wesley Village, Preston View, the Texas Portfolio, Villages at Cypress Creek, and Citrus Tower~~above have been accounted for as asset acquisitions. The purchase prices were allocated to the acquired assets and assumed liabilities based on their estimated fair values at the dates of acquisition.
The following table summarizes the assets acquired and liabilities assumed at the acquisition date ~~(amounts in thousands):~~
Purchase Price Allocation
Land $ 40,473
Building 312,884
Building improvements 19,615
Land improvements 17,039
Furniture and fixtures 7,014
In-place leases 8,021
Other assets 666
Total assets acquired $ 405,712
Mortgages assumed $ 146,377
Total liabilities assumed $ 146,377
~~The pro-forma information presented below represents the change in consolidated revenue and earnings as if the Company's~~for acquisitions ~~of Wesley Village, Preston View, the Texas Portfolio, Villages at Cypress Creek, Citrus Tower and 2016 acquisitions, had occurred on January 1, 2016 (amounts in thousands, except per share amounts).~~
Nine Months Ended September 30, Nine Months Ended September 30,
2017 2016
As Reported Pro-Forma
Adjustments Pro-Forma As Reported Pro-Forma
Adjustments Pro-Forma

Revenues $ 86,734 $ 17,796 $ 104,530 $ 57,389 $ 52,256 $ 109,645
Net income (loss) $ 40,115 $ 10,128 $ 50,243 $ (3,014 ) $ (17,384 ) $ (20,398 )
Net income (loss) attributable to common stockholders $ 563 $ 9,220 $ 9,783 $ (11,727 ) $ (15,923 ) $ (27,650 )

Income (loss) per share, basic and diluted⁽¹⁾ $ 0.02 $ 0.38 $ (0.57 ) $ (1.34 )
⁽¹⁾ ~~Pro-forma earnings (loss) per share, both basic and diluted, are calculated based on the net earnings (loss) attributable to the Company.~~
Aggregate property level revenues and net loss for 2017 acquisitions of Wesley Village, Preston View, the Texas Portfolio, Villages at Cypress Creek, and Citrus Tower since the properties’ respective acquisition dates, that are reflected in the Company’s consolidated statement of operations formade during the nine months ended September 30, ~~2017 amounted~~2020 (amounts in thousands):

Purchase

Price


Allocation
Land

$
18,046
Building

132,214
Building improvements

5,158
Land improvements

13,072
Furniture and fixtures

4,366
In-place leases

2,844
Total assets acquired

$
175,700
Mortgages assumed

$
29,705
Fair value adjustments

1,292
Total liabilities assumed

$
30,997

Acquisition of Additional Interest in The Brodie
On April 24, 2020, the Company purchased the non-controlling partner’s interest in The Brodie for $3.5 million, increasing the Company's interest in the property from 93% to ~~$12.4 million and $3.9 million, respectively.~~100%.

Note 6 – Notes and Interest Receivable ~~due from Related Party~~
Following is a summary of the ~~Notes~~notes and accrued interest receivable due from ~~related parties~~mezzanine loan investments as of September 30, ~~2017~~2020 and December 31, ~~2016~~2019 (amounts in thousands):

Property September 30,
2017 December 31,
2016

APOK Townhomes $ 11,360 $ —
Domain 20,528 —
West Morehead 24,883 21,267
Total $ 56,771 $ 21,267

September 30,

December 31,
Property

2020

2019
Arlo

$
30,242

$
27,605
Domain at The One Forty

24,017

23,430
Motif

75,409

75,436
Novel Perimeter

22,980

20,867
Reunion Apartments

1,934

—
The Park at Chapel Hill

36,413

34,819
Vickers Historic Roswell

11,654

11,624
Total

$
202,649

$
193,781

13
17

Table of Contents

~~The~~Following is a summary of the interest income from ~~related parties~~mezzanine loan and ground lease investments for the three and nine months ended September 30, ~~2017~~2020 and ~~2016 are summarized below~~2019 (amounts in thousands):

Three Months Ended
September 30, Nine Months Ended
September 30,
Property 2017 2016 2017 2016
APOK Townhomes $ 424 $ — $ 1,232 $ —
Domain 767 — 1,758 —
West Morehead 929 — 2,751 —
Interest income from related parties $ 2,120 $ — $ 5,741 $ —

Three Months Ended

Nine Months Ended


September 30,

September 30,
Property

2020

2019

2020

2019
Arlo

$
1,110

$
929

$
3,197

$
2,758
Cade Boca Raton

—

504

—

1,408
Domain at The One Forty

330

849

977

2,406
Motif

2,427

2,427

7,123

7,199
Novel Perimeter

845

779

2,411

2,312
Reunion Apartments

15

—

15

—
The Park at Chapel Hill

712

214

2,032

582
Vickers Historic Roswell

434

423

1,293

1,209
Zoey ⁽¹⁾

50

—

101

—
Total

$
5,923

$
6,125

$
17,149

$
17,874

(1) Refer to Note 14 for further information about the Zoey Ground Lease.
The occupancy percentages of the Company’s mezzanine loan investment properties at September 30, 2020 and December 31, 2019 are as follows:
~~West Morehead Mezzanine~~

September 30,

December 31,

Property

2020

2019

Arlo

93.4
%
82.2
%
Domain at The One Forty

93.0
%
85.6
%
Motif

43.4
%
—
⁽²⁾
Novel Perimeter

90.0
%
79.4
%
Reunion Apartments

—
⁽¹⁾
—

The Park at Chapel Hill

—
⁽¹⁾
—
⁽²⁾
Vickers Historic Roswell

94.9
%
74.7
%

(1) The development had not commenced lease-up as of September 30, 2020.
(2) The development had not commenced lease-up as of December 31, 2019.
Arlo Financing
On ~~December 29, 2016,~~March 30, 2020, the Company, ~~through BRG Morehead NC, LLC, or BRG Morehead NC, an indirect subsidiary, provided a $21.3 million~~increased its mezzanine loan ~~or the BRG West Morehead Mezz Loan,~~commitment to BR Morehead JV Member, LLC ~~an affiliate~~to $32.0 million, of which $29.9 million had been funded as of September 30, 2020. The loan matures on the earliest to occur of: (i) July 1, 2025, (ii) the date of sale or transfer of property, or (iii) such earlier date, by declaration of acceleration or otherwise, on which the final payment of principal becomes due. The loan can be prepaid without penalty.
On March 31, 2020, the Arlo property owner refinanced the construction loan and entered into a $43.0 million senior mortgage loan (“senior loan”) secured by the Arlo property and used the proceeds in part to pay off the outstanding principal balances, in full, of the ~~Manager, or BR Morehead JV Member.~~previous construction loan of $33.6 million and mezzanine loan provided by an unaffiliated third party of $7.3 million. The ~~BRG West Morehead Mezz Loan is secured by BR Morehead JV Member’s approximate 95.0%~~Arlo property owner accounted for the refinancing as an extinguishment of debt. The senior loan matures on April 1, 2025 and bears interest inat a ~~multi-tiered joint venture along with Bluerock Special Opportunity + Income Fund II, (“Fund II”), an affiliate~~floating basis of the ~~Manager, and~~greater of LIBOR plus 1.65% or 2.65%, with interest-only payments during the term of the senior loan. On or after April 1, 2022, the loan may be prepaid without prepayment fee or yield maintenance.

Table of Contents

Avondale Hills Mezzanine Financing
On September 30, 2020, the Company entered into an ~~affiliate~~agreement to provide a mezzanine loan in an amount up to $11.7 million, none of ~~ArchCo Residential, or the West Morehead JV,~~ which ~~intends~~had been funded as of September 30, 2020, to ~~develop~~ an ~~approximately 286-unit~~unaffiliated third party which is developing a 240-unit Class A apartment community located in ~~Charlotte, North Carolina to be~~Decatur, Georgia known as ~~West Morehead.~~Avondale Hills. The ~~BRG West Morehead Mezz Loan~~loan matures on ~~the earlier of January~~October 5, ~~2020, or the maturity date of the West Morehead Construction Loan, as defined below, as extended,~~2023 and contains 2 one-year extension options, subject to certain conditions and fees. The loan bears interest at a fixed rate of ~~15.0%. Regular~~12% per annum with monthly payments ~~are interest-only~~commencing upon completion of construction and in an amount equal to excess cash flow above the senior loan debt service from the preceding month.
Motif Mezzanine Financing
On March 31, 2020, the Company received a paydown of $8.0 million on the Motif Mezz Loan (formerly, the “Flagler Mezz Loan”), reducing the outstanding principal balance to $66.6 million. On May 8, 2020, at the borrower’s request, the Company amended the Motif Mezz Loan agreement to re-lend the $8.0 million to the Motif Mezz Loan borrower. The Company funded the full $8.0 million during the ~~initial term. The BRG West Morehead~~second quarter 2020 to the Motif Mezz Loan ~~can be prepaid without penalty. The~~borrower, increasing the outstanding Motif Mezz Loan balance to $74.6 million as of September 30, 2020.
Novel Perimeter Mezzanine Financing
On May 5, 2020, the Company ~~has~~increased its mezzanine loan commitment to BR Perimeter JV Member, LLC to $23.8 million, of which $22.7 million had been funded as of September 30, 2020. In exchange for increasing its loan commitment, the Company received the right to exercise an option to purchase, at the greater of a 252.5 basis point discount to fair market value or 15% internal rate of return for Bluerock Special Opportunity + Income Fund ~~II,~~III, LLC (“Fund III”), an affiliate of BRG Manager, LLC, the Company’s former Manager (the “former Manager”), up to a 100% common membership interest in BR ~~Morehead~~Perimeter JV Member, ~~(the~~LLC.
Reunion Apartments Mezzanine Financing
On July 1, 2020, the Company entered into an agreement to provide a mezzanine ~~borrower),~~loan in an amount up to $10.0 million, of which $1.9 million had been funded as of September 30, 2020, to an unaffiliated third party which is ~~99.5% owned by Fund II and which currently holds an approximate 95.0% interest~~developing a 280-unit Class A apartment community located in ~~the West Morehead JV and in the West Morehead property, subject to certain promote rights of our unaffiliated development partner.~~
~~On January 5, 2017, the Company increased the amount of the BRG West Morehead Mezz Loan to approximately $24.6 million.~~
In conjunction with the West Morehead development, on December 29, 2016, the West Morehead property owner, which is owned by an entity in which the Company owns an indirect interest, entered into a $34.5 million constructionOrlando, Florida known as Reunion Apartments. The loan with an unaffiliated party, or the West Morehead Construction Loan, of which a de minimus amount is outstanding at September 30, 2017, and which is secured by the West Morehead property. The West Morehead Construction Loan matures on December ~~29, 2019,~~30, 2023 and contains ~~two one-year~~2 one-year extension options, subject to certain conditions ~~including a debt service coverage, loan to value ratio~~ and payment of an extension fee. The West Morehead Construction Loan bears interest on a floating basis on the amount drawn based on LIBOR plus 3.75%, subject to a minimum of 4.25%. Regular monthly payments are interest-only until September 2019, with further payments based on twenty-five-year amortization. The West Morehead Construction Loan can be prepaid without penalty.
In addition, on December 29, 2016, the West Morehead property owner, which is owned by an entity in which the Company owns an indirect interest, entered into a $7.3 million mezzanine loan with an unaffiliated party, of which $2.8 million is outstanding at September 30, 2017, and which is secured by membership interest in the joint venture developing the West Morehead property.fees. The loan matures on December 29, 2019, and contains two one-year extension options, subject to certain conditions including a debt service coverage, loan to value ratio, extension of the West Morehead Construction Loan and payment of an extension fee. The loan bears interest on a fixed rate of 11.5%. Regular monthly payments are interest-only. The loan can be prepaid prior to maturity provided the lender receives a cumulative return of 30% of its loan amount including all principal and interest paid.
~~APOK Townhomes Mezzanine Financing~~
On January 6, 2017, the Company, through BRG Boca, LLC, or BRG Boca, an indirect subsidiary, provided a $11.2 million mezzanine loan, or the BRG Boca Mezz Loan, to BRG Boca JV Member, LLC, an affiliate of the Manager, or BR Boca JV Member. The BRG Boca Mezz Loan is secured by BR Boca JV Member’s approximate 90.0% interest in a multi-tiered joint venture along with Fund II, an affiliate of the Manager, and an affiliate of NCC Development Group, or the Boca JV, which intends to develop an approximately 90-unit Class A apartment community located in Boca Raton, Florida to be known as APOK Townhomes. The BRG Boca Mezz Loan matures on the earlier of January 6, 2020, or the maturity of the Boca Construction Loan, defined below, as extended, and bears interest at a fixed rate of ~~15.0%. Regular~~12% per annum with monthly payments ~~are interest-only~~commencing upon completion of construction and in an amount equal to excess cash flow above the senior loan debt service from the preceding month.
The Park at Chapel Hill Mezzanine Financing
On March 31, 2020, the Company received a paydown of $21.0 million on the Chapel Hill Mezz Loan, reducing the outstanding principal balance to $8.5 million. On May 9, 2020, at the borrower’s request, the Company amended the Chapel Hill Mezz Loan agreement to permit the Chapel Hill Mezz Loan borrower to re-borrow $2.0 million. The Company funded the full $2.0 million during the ~~initial term.~~second quarter 2020 to the Chapel Hill Mezz Loan borrower, increasing the outstanding Chapel Hill Mezz Loan balance to $10.5 million. The ~~BRG Boca~~senior loan of $5.0 million provided by the Company remains outstanding in full.
On August 18, 2020, the Company entered into an amended and restated mezzanine loan agreement (the "Amended Chapel Hill Mezz Loan") with the Chapel Hill Mezz Loan borrower. As part of the Amended Chapel Hill Mezz Loan, (i) the Company's maximum loan commitment was adjusted to $31.0 million, including all previously advanced amounts outstanding, from the previous commitment amount of $40.0 million, and (ii) the interest rate on the loan was increased to 11.75% per annum from the previous rate of 11% per annum, with 5.25% paid current and 6.5% accrued. As of September 30, 2020, all amounts had been funded under the Amended Chapel Hill Mezz Loan. As with the previous loan, the Amended Chapel Hill Mezz Loan matures on the earliest to occur of: (i) the latest to occur of (a) March 31, 2024 and (b) the applicable maturity date under any extension granted under any construction financing, or (ii) the date of sale or transfer of property, or (iii) such earlier date, by declaration of acceleration or otherwise, on which the final payment of principal becomes due. The Amended Chapel Hill Mezz Loan can be prepaid without penalty. ~~The Company has the right to exercise an option to purchase, at the greater~~

Table of a 25 basis point discount to fair market value or 15% internal rate of return for Fund II, up to a 100% common membership interest in BR Boca JV Member (the mezzanine borrower), which is 99.5% owned by Fund II and which currently holds an approximate 90.0% interest in the Boca JV and in the Boca property, subject to certain promote rights of our unaffiliated development partner.Contents

In conjunction with the APOK Townhomes development, on December 29, 2016, the APOK Townhomes property owner, which is owned by an entity in which the Company owns an indirect interest, entered into a $18.7 million construction loan with an unaffiliated party, the Boca Construction Loan, of which $2.7 million is outstanding at September 30, 2017, which is secured by the APOK Townhomes property. The loan matures on June 29, 2019, and contains two one-year extension option, subject to certain conditions including a debt service coverage, stabilized occupancy and payment of an extension fee. The loan requires interest-only payments at prime plus 0.625%, subject to a floor of 4.125%. The loan can be prepaid without penalty.

~~Domain Mezzanine Financing~~

On March 3, 2017, the Company, through BRG Domain Phase 1, LLC, or BRG Domain 1, an indirect subsidiary, provided a $20.3 million mezzanine loan, or the BRG Domain 1 Mezz Loan, to BR Member Domain Phase 1, LLC, an affiliate of the Manager, or BR Domain 1 JV Member. The BRG Domain 1 Mezz Loan is secured by BR Domain 1 JV Member’s approximate 95.0% interest in a multi-tiered joint venture along with Fund II, an affiliate of the Manager, and an affiliate of ArchCo Residential, or the Domain Phase 1 JV, which intends to develop an approximately 299-unit Class A apartment community located in Garland, Texas. The BRG Domain Phase 1 Mezz Loan matures on the earlier of March 3, 2020, or the maturity of the Domain 1 Construction Loan, defined below, as extended, and bears interest at a fixed rate of 15.0%. Regular monthly payments are interest-only during the initial term. The BRG Domain 1 Mezz Loan can be prepaid without penalty. The Company has the right to exercise an option to purchase, at the greater of a 25 basis point discount to fair market value or 15% internal rate of return for Fund II, up to a 100% common membership interest in BR Domain 1 JV Member (the mezzanine borrower), which is 99.5% owned by Fund II and which currently holds an approximate 95.0% interest in the Domain 1 JV and in the Domain 1 property, subject to certain promote rights of our unaffiliated development partner.

In conjunction with the Domain 1 development, on March 3, 2017, the Domain 1 property owner, which is owned by an entity in which the Company owns an indirect interest, entered into a $30.3 million construction loan with an unaffiliated party, or the Domain 1 Construction Loan, of which none is outstanding at September 30, 2017, and which is secured by the Domain 1 property. The Domain 1 Construction Loan matures on March 3, 2020, and contains two one-year extension options, subject to certain conditions including construction completion, a debt service coverage, loan to value ratio and payment of an extension fee. The Domain 1 Construction Loan bears interest on a floating basis on the amount drawn based on LIBOR plus 3.25%. Regular monthly payments are interest-only until March 2020, with further payments based on thirty-year amortization. The Domain 1 Construction Loan can be prepaid without penalty.

In addition, on March 3, 2017, the Domain 1 property owner, which is owned by an entity in which the Company owns an indirect interest, entered into a $6.4 million mezzanine loan with an unaffiliated party, of which $2.5 million is outstanding at September 30, 2017, and which is secured by membership interest in the joint venture developing the Domain 1 property. The loan matures on March 3, 2020, and contains two one-year extension options, subject to certain conditions including a debt service coverage, loan to value ratio, extension of the Domain 1 Construction Loan and payment of an extension fee. The loan bears interest on a fixed rate of 12.5%, with 9.5% paid currently. Regular monthly payments are interest-only. The loan can be prepaid prior to maturity provided the lender receives a minimum profit and 1% exit fee.

Note 7 – Preferred Equity Investments and Investments in Unconsolidated Real Estate Joint Ventures
~~Following is a summary of the Company’s ownership interests in the investments reported under the equity method of accounting.~~ The carrying amount of the Company’s preferred equity investments and investments in unconsolidated real estate joint ventures as of September 30, ~~2017~~2020 and December 31, ~~2016~~2019 is summarized in the table below (amounts in thousands):

Property September 30,
2017 December 31,
2016

Alexan CityCentre $ 9,258 $ 7,733
Alexan Southside Place 19,015 17,322
APOK Townhomes 7 7,569
Domain 12 5,249
Flagler Village 25,384 14,035
Helios 16,360 16,360
Lake Boone Trail 11,930 9,919
West Morehead 14 13
Whetstone 12,932 12,932
Total $ 94,912 $ 91,132

September 30,

December 31,
Property

2020

2019

Alexan CityCentre

$
14,416

$
12,788
Alexan Southside Place

25,717

24,866
Helios

—

23,663
Leigh House

—

80
Mira Vista

5,250

5,250
Riverside Apartments

13,679

12,342
Strategic Portfolio ⁽¹⁾

22,105

10,183
The Conley, formerly North Creek Apartments

15,735

14,964
Thornton Flats

4,600

4,600
Wayford at Concord, formerly Wayforth at Concord

6,500

4,683
Whetstone Apartments

—

12,932
Other

96

93
Total

$
108,098

$
126,444

(1) 15 Belmont Crossing, Georgetown Crossing, Park on the Square, Sierra Terrace, Sierra Village, and The Commons are collectively known as the Strategic Portfolio.
As of September 30, ~~2017,~~2020, the Company, through wholly-owned subsidiaries of the Operating Partnership, had outstanding equity investments in ~~nine multi-tiered~~13 joint ventures, each of which ~~were~~was created to develop a multifamily property. ~~In each case, a wholly-owned subsidiary~~
NaN of the ~~Operating Partnership made~~13 equity investments, Alexan CityCentre, Alexan Southside Place, Mira Vista, Riverside Apartments, Strategic Portfolio, The Conley (formerly North Creek Apartments), Thornton Flats, and Wayford at Concord (formerly Wayforth at Concord), are preferred equity investments, generate a preferred investment in a joint venture, except Flagler Village, Domain, West Morehead and APOK Townhomes, which are common interests, and West Morehead, APOK Townhomes and Domain, which are primarily mezzanine loan investments as discussed in Note 6. The common interests in these joint ventures, as well as preferred interests in some cases, are owned by affiliates of the Manager. In each case, the Company’s preferred investment in the joint venture generates astated preferred return ~~of 15%~~ on ~~its~~ outstanding capital contributions, and the Company is not allocated any of the income or ~~loss.~~loss in the joint ventures. The joint venture is the controlling member in an entity whose purpose is to develop or operate a multifamily property. ~~Each~~
NaN of the 13 equity investments, Arlo, Domain at The One Forty, Motif, Novel Perimeter and Vickers Historic Roswell, represent a remaining 0.5% common interest in joint ~~venture~~ventures where, in ~~which~~some cases, the Company owns a preferred interest is required to redeem the Company’s preferred membership interests plus any accrued but unpaid preferred return on the earlier of the date which is six months following the maturity of the related development’s construction loan, or any earlier acceleration or due date. Additionally, the Company has the right, in its sole discretion, to converthad previously redeemed its preferred ~~membership interest in each joint venture into a common membership interest for a period of six months from the date upon which 70% of the units~~equity investment in the ~~related development have been leased.~~
~~The following provides additional information regarding the Company’s preferred equity~~joint ventures and ~~investments.~~provided a mezzanine loan. Refer to Note 6 for further information.
20

Table of Contents

The preferred returns ~~and equity in income of~~on the Company’s unconsolidated real estate joint ventures for the three and nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 are summarized below (amounts in thousands):

Three Months
Ended September 30, Nine Months Ended
September 30,
Property 2017 2016 2017 2016
Alexan CityCentre $ 385 $ 294 $ 1,010 $ 791
Alexan Southside Place 740 655 2,113 1,950
APOK Townhomes — 205 — 205
Domain — 145 141 422
EOS (3 ) 137 (25 ) 409
Flagler Village (1 ) (4 ) (5 ) (4 )
Helios 619 619 1,835 1,842
Lake Boone Trail 451 375 1,319 1,117
West Morehead — 141 — 435
Whetstone 497 507 1,477 1,450
Preferred returns and equity in income of unconsolidated joint venture $ 2,688 $ 3,074 $ 7,865 $ 8,617

Three Months Ended

Nine Months Ended

September 30,

September 30,

Property

2020

2019

2020

2019

Alexan CityCentre

$
631

$
563

$
1,838

$
1,545

Alexan Southside Place

322

402

955

1,175

Helios ⁽¹⁾

26

339

(133)

1,005

Leigh House

2

73

2

1,155

Mira Vista

136

21

404

21

Riverside Apartments

434

258

1,263

562

Strategic Portfolio

593

—

1,434

—

The Conley

499

392

1,460

902

Thornton Flats

104

6

311

6

Wayford at Concord

216

26

623

26

Whetstone Apartments

—

236

56

700

Preferred returns on unconsolidated joint ventures

$
2,963

$
2,316

$
8,213

$
7,097

(1) Of the net loss incurred at Helios for the nine months ended September 30, 2020, ($143) pertains to costs related to the sale of Helios.
The occupancy percentages of the Company’s unconsolidated real estate joint ventures at September 30, 2020 and December 31, 2019 are as follows:

September 30,

December 31,

Property

2020

2019

Alexan CityCentre

94.1
%
90.9
%
Alexan Southside Place

95.2
%
95.2
%
Mira Vista

95.5
%
93.5
%
Riverside Apartments

—
⁽¹⁾
—
⁽²⁾
Strategic Portfolio

Belmont Crossing

95.8
%
89.6
%
Georgetown Crossing

89.3
%
—

Park on the Square

97.9
%
—

Sierra Terrace

91.1
%
97.0
%
Sierra Village

87.7
%
86.4
%
The Commons

93.9
%
—

The Conley

32.8
%
—
⁽²⁾
Thornton Flats

94.2
%
90.4
%
Wayford at Concord

56.7
%
—
⁽²⁾

(1) The development had not commenced lease-up.
(2) The development had not commenced lease-up at December 31, 2019.

Table of Contents

Summary combined financial information for the Company’s investments in unconsolidated real estate joint ventures as of September 30, ~~2017~~2020 and December 31, ~~2016~~2019 and for the three and nine months ended September 30, ~~2017~~2020 and ~~2016,~~2019 is as ~~follows:~~follows (amounts in thousands):

September 30,
2017 December 31,
2016


September 30,

December 31,

2020

2019
Balance Sheets:




Real estate, net of depreciation $ 304,921 $ 197,742

$
725,723

$
678,073
Other assets 29,576 33,814

36,841

51,212
Total assets $ 334,497 $ 231,556

$
762,564

$
729,285

Mortgages payable $ 202,308 $ 97,598

$
617,228

$
570,573
Other liabilities 20,267 13,191

35,825

36,129
Total liabilities $ 222,575 $ 110,789

$
653,053

$
606,702
Members’ equity 111,922 120,767

109,511

122,583
Total liabilities and members’ equity $ 334,497 $ 231,556

$
762,564

$
729,285

Three Months Ended

Nine Months Ended

September 30,

September 30,


2020

2019

2020

2019

Operating Statement:









Rental revenues

$
13,315

$
9,470

$
35,995

$
26,194

Operating expenses

(7,828)

(5,534)

(20,873)

(16,165)

Income before debt service and depreciation and amortization

5,487

3,936

15,122

10,029

Interest expense, net

(7,572)

(8,438)

(22,234)

(23,916)

Depreciation and amortization

(5,714)

(3,916)

(13,532)

(12,049)

Net operating loss

(7,799)

(8,418)

(20,644)

(25,936)

Gain on sale ⁽¹⁾

—

13,871

14,716

13,871

Net (loss) income

$
(7,799)

$
5,453

$
(5,928)

$
(12,065)

(1) 16 For the three and nine months ended September 30, 2019, represents the gain on sale of Leigh House. For the nine months ended September 30, 2020, represents the gain on sale of Helios and Whetstone, net.
Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016
Operating Statement:
Rental revenues $ 1,344 $ 1,841 $ 2,930 $ 4,608
Operating expenses (1,466 ) (885 ) (2,870 ) (2,577 )
(Loss) income before debt service, acquisition costs, and depreciation and amortization (122 ) 956 60 2,031
Interest expense, net (2,924 ) (344 ) (7,395 ) (999 )
Acquisition costs — (3 ) — (3 )
Depreciation and amortization (939 ) (771 ) (1,922 ) (2,296 )
Operating (loss) (3,985 ) (162 ) (9,257 ) (1,267 )
Net loss $ (3,985 ) $ (162 ) $ (9,257 ) $ (1,267 )
~~Alexan CityCentre Interests~~
On July 1, 2014, through BRG T&C BLVD Houston, LLC, a wholly-owned subsidiary of the Operating Partnership, the Company made a convertible preferred equity investment in a multi-tiered joint venture along with Bluerock Growth Fund, LLC (“BGF”), Fund II and Bluerock Special Opportunity + Income Fund III, LLC (“Fund III”), affiliates of the Manager, and an affiliate of Trammell Crow Residential, to develop a 340-unit Class A apartment community located in Houston, Texas, to be known as Alexan CityCentre. The Company has made a capital commitment of approximately $9.3 million to acquire 100% of the Class A preferred equity interests in BR T&C BLVD JV Member, LLC, all of which has been funded as of September 30, 2017 (of which $2.8 million earns a 20% return).
On June 7, 2016, the Alexan CityCentre property owner (the “Alexan borrower”), which is owned by an entity in which the Company owns an indirect interest, entered into a loan modification agreement to amend the terms of its construction loan financing the construction and development of the Alexan CityCentre property (the “Alexan Development”). The maximum principal amount available to the Alexan borrower under the terms of the modified loan is $55.1 million, of which approximately $48.8 million is outstanding at September 30, 2017. The maturity date is January 1, 2020, subject to a single one-year extension exercisable at the option of the Alexan borrower. The interest rate on the loan is a variable per annum rate equal to the prime rate plus 0.5%, or LIBOR plus 3.00%, at the Alexan borrower’s option. The loan requires monthly interest payments until the maturity date, after which $60,000 monthly payments of principal will be required in addition to payment of accrued interest during the maturity extension period. The Alexan borrower was required to initially fund approximately $2.6 million as an interest reserve and approximately $0.6 million as an operating deficit reserve. Certain unaffiliated third parties agreed to guaranty the completion of the development of the Alexan Development and provided partial guaranties of the Alexan borrower’s principal and interest obligations under the loan. The Alexan borrower is required to complete the Alexan Development by December 31, 2017 (without extension for any reason). To obtain the loan modification, the Alexan borrower was required to contribute additional equity for the Alexan Development in the amount of approximately $2.2 million to be applied to development costs, of which the Company funded approximately $0.7 million and Bluerock Growth Fund II, LLC (“BGF II”), an affiliate of the Manager, funded $1.3 million as Class B preferred interests earning a 20% preferred return.
Alexan Southside Place Interests
On January 12, 2015, through BRG Southside, LLC, a wholly-owned subsidiary of its Operating Partnership, the Company made a convertible preferred equity investment in a multi-tiered joint venture, along with Fund II and Fund III, which are affiliates of the Manager, and an affiliate of Trammell Crow Residential, to develop an approximately 270-unit Class A apartment community located in Houston, Texas, to be known as Alexan Southside Place. Alexan Southside Place ~~will be~~is developed upon a tract of land ground leased from ~~Prokop Industries BH, L.P., a Texas limited partnership,~~an unaffiliated third party by BR Bellaire BLVD, LLC (“BR Bellaire BLVD”) as tenant under an 85-year ground lease. ~~The Company~~BR Bellaire BLVD has ~~made~~ a ~~capital commitment~~right-of-use asset and lease liability of ~~$19.0~~$17.1 million ~~to acquire 100% of the preferred equity interests in BR Southside Member, LLC, all of which has been funded~~ as of September 30, ~~2017 (of which $1.7 million earns a 20% return).~~2020.
Strategic Portfolio Interests
~~In conjunction with the Alexan Southside development, on April 7, 2015, the Alexan Southside leasehold interest holder, which is owned by an entity in which~~On March 20, 2020, the Company ~~owns~~made an ~~indirect interest, entered into~~$8.0 million preferred equity investment in a ~~$31.8~~joint venture (the “Strategic JV”) with an unaffiliated third party for the following two stabilized properties: Georgetown Crossing, located in Savannah, Georgia, and Park on the Square, located in Pensacola, Florida. On May 8, 2020, the Company made an additional $3.9 million ~~construction loan, of which $19.4 million is outstanding at September 30, 2017, which is secured by the leasehold interest~~preferred equity investment in the ~~Alexan Southside Place property.~~Strategic JV for The ~~loan matures~~Commons, a stabilized property located in Jacksonville, Florida. These three properties, together with Belmont Crossing, Sierra Terrace and Sierra Village, are collectively known as the Strategic Portfolio. The Company will earn a 7.5% current return and a 3.0% accrued return on ~~April 7, 2019, and contains~~its total preferred equity investment in the Strategic JV, for a ~~one-year extension option, subject~~total preferred return of 10.5%. The Strategic JV is required to ~~certain conditions including a debt service coverage, loan to value ratio and payment of an extension fee. The loan bears~~redeem the Company’s preferred membership interest ~~on a floating basis~~plus any accrued but unpaid preferred return in each property on the ~~amount drawn based on~~earlier date which is: (i) the ~~base rate plus 1.25%~~sale of the property, (ii) the refinancing of the loan related to the property, or ~~LIBOR plus 2.25%. Regular monthly payments are interest-only during~~(iii) the ~~initial term, with payments during~~maturity date of the ~~extension period based on a thirty-year amortization. The loan can be prepaid without penalty.~~property loan.
17
22

Table of Contents

~~APOK Townhomes~~Whetstone Apartments Interests

On ~~September 1, 2016,~~January 22, 2020, through ~~BRG Boca, LLC, or BRG Boca,~~ a ~~wholly-owned~~ subsidiary of its Operating Partnership, the Company ~~made an investment~~entered into a membership interest purchase agreement to purchase 100% of the common membership interest in ~~a multi-tiered joint venture, along with~~BR Whetstone Member, LLC from Fund ~~II,~~III, an affiliate of the former Manager, and NCC Development Group, or the Boca JV, to develop a 90-unit Class A apartment community located in Boca Raton, Florida to be known as APOK Townhomes. On January 6, 2017, (i) Fund II substantially redeemed the common equity investment held by BRG Boca infor approximately $2.5 million. In conjunction with this transaction, BR ~~Boca JV~~Whetstone Member, for $7.3 million, (ii) BRG Boca maintained a 0.5% common interest in BR Boca JV Member, and (iii) the Company, through BRG Boca, provided a mezzanine loan in the amount of $11.2 million to BR Boca JV Member, or the BRG Boca Mezz Loan. See Note 6 for further details regarding APOK Townhomes and the BRG Boca Mezz Loan.

~~Domain Phase 1 Interests~~

~~On November 20, 2015, through a wholly-owned subsidiary of the Operating Partnership, BRG Domain Phase 1,~~ LLC, ~~the Company made a convertible preferred equity investment in a multi-tiered joint venture~~ along with Fund II, an affiliate of the Manager, and an affiliate of ArchCo Residential, to develop an approximately 299-unit, Class A, apartment community located in Garland, Texas. The property will be developed upon a tract of approximately 10 acres of land. On March 3, 2017, (i) Fund II substantially redeemed the preferred equity investment held by BRG Domain 1 in BR Domain 1 JV Member for $7.1 million, (ii) BRG Domain 1 maintained a 0.5% common interest in BR Domain 1 JV Member, and (iii) the Company, through BRG Domain 1, provided a mezzanine loan in the amount of $20.3 million to BR Domain 1 JV Member, or the BRG Domain 1 Mezz Loan. See Note 6 for further details regarding Domain Phase 1 and the BRG Domain 1 Mezz Loan.

~~Flagler Village Interests~~

~~On December 18, 2015, through BRG Flagler Village,~~Avenue 25 TRS, LLC, a wholly-owned subsidiary of the Company’s Operating Partnership, ~~BRG Flagler Village, LLC,~~entered into a membership purchase agreement to purchase the ~~Company made an investment~~right to all the economic interest promote and the common membership interest of 7.5% held in ~~a multi-tiered~~the Whetstone Apartments joint venture ~~along with Fund II,~~from an ~~affiliate~~unaffiliated member of the Manager, and an affiliate of ArchCo Residential, to develop an approximately 384-unit, Class A apartment community located in Fort Lauderdale, Florida. The Company has made a capital commitment of $49.9 million to acquire common interests in BR Flagler Village, LLC, of which $25.4 million has been funded at September 30, 2017.

~~Helios Interests~~

~~On May 29, 2015, through BRG Cheshire, LLC, a wholly-owned subsidiary of its Operating Partnership, the Company made a convertible preferred equity investment in a multi-tiered~~ joint venture ~~along with Fund III and an affiliate of Catalyst Development Partners II,~~for approximately $1.9 million.

The Whetstone Apartments investment was sold on January 24, 2020. Please refer to ~~develop a 282-unit Class A apartment community located in Atlanta, Georgia, to be known as Helios Apartments.~~ Note 3 for further information.

Note 8 – Revolving credit facilities
The ~~Company has made a capital commitment of $16.4 million to acquire 100% of~~outstanding balances on the ~~preferred equity interests in BR Cheshire Member, LLC, all of which has been funded~~revolving credit facilities as of September 30, ~~2017.~~2020 and December 31, 2019 are as follows (amounts in thousands):

September 30,

December 31,
Revolving Credit Facilities

2020

2019
Amended Senior Credit Facility

$
—

$
18,000
Second Amended Junior Credit Facility

—

—
Total

$
—

$
18,000

~~In conjunction with the Helios development, on December 16, 2015, the Helios property owner, which is owned by an entity in which~~Amended Senior Credit Facility
On March 6, 2020, the Company, ~~owns an indirect interest,~~through its Operating Partnership, entered into an amended and restated, in its entirety, Senior Credit Facility (the “Amended Senior Credit Facility”). The Amended Senior Credit Facility provides for a ~~$38.1~~revolving loan with an initial commitment amount of $100 million, ~~construction loan~~ which ~~is secured by~~commitment contains an accordion feature to a maximum total commitment of up to $350 million. Borrowings under the Amended Senior Credit Facility bear interest, at the Company’s option, at LIBOR plus 1.30% to 1.65% or the base rate plus 0.30% to 0.65%, depending on the Company’s leverage ratio. The Company pays an unused fee ~~simple interest in~~at an annual rate of 0.15% to 0.20% of the ~~Helios property,~~unused portion of ~~which approximately $32.8 million is outstanding at September 30, 2017.~~the Amended Senior Credit Facility, depending on the borrowings outstanding. The ~~loan~~Amended Senior Credit Facility matures on ~~December 16, 2018,~~March 6, 2023 and contains ~~two~~2 one-year extension options, subject to certain ~~conditions~~conditions. The Amended Senior Credit Facility contains certain financial and operating covenants, including a maximum leverage ratio, minimum liquidity, minimum debt service coverage ~~loan to value~~ ratio and payment of an extension fee. The loan bears interest on a floating basis on the amount drawn based on one-month LIBOR plus 2.50%. Regular monthly payments are interest-only during the initial term, with payments during the extension period based on a thirty-year amortization. The loan can be prepaid without penalty.
~~Lake Boone Trail Interests~~
~~On December 18, 2015, through BRG Lake Boone, LLC, a wholly-owned subsidiary of the Operating Partnership, BRG Lake Boone, LLC,~~minimum tangible net worth. At September 30, 2020, the Company ~~made a convertible preferred equity investment~~was in ~~a multi-tiered joint venture along~~compliance with ~~Fund II, an affiliate of~~all covenants under the ~~Manager, and an affiliate of Tribridge Residential, LLC, to develop an approximately 245-unit, Class A apartment community located in Raleigh, North Carolina (“Lake Boone Trail”).~~Amended Senior Credit Facility. The Company has ~~made a capital commitment~~guaranteed the obligations under the Amended Senior Credit Facility and has pledged certain assets as collateral.
The Amended Senior Credit Facility provides the Company with the ability to issue up to $50 million in letters of ~~$11.9 million to acquire 100%~~credit. While the issuance of letters of credit does not increase the ~~preferred equity interests in BR Lake Boone JV Member, LLC, all~~Company’s borrowings outstanding under the Amended Senior Credit Facility, it does reduce the availability of ~~which has been funded at~~borrowings. At September 30, ~~2017.~~
~~In conjunction with the Lake Boone Trail development, on June 23, 2016, the Lake Boone property owner, which is owned by an entity in which~~2020, the Company ~~owns an indirect interest, entered into a $25.2 million construction loan which is secured by the fee simple interest in the Lake Boone Trail property,~~had 1 outstanding letter of ~~which $10.8 million is outstanding as~~credit of ~~September 30, 2017. The loan matures on December 23,~~$0.8 million.
Second Amended Junior Credit Facility
On November 6, 2019, and contains one extension option for one year to five years, subject to certain conditions including construction completion, a debt service coverage, loan to value ratio and payment of an extension fee. The loan bears interest on a floating basis on the amount drawn based on one-month LIBOR plus 2.65%. Regular monthly payments are interest-only during the initial term, with payments during the extension period based on a thirty-year amortization. The loan can be prepaid without penalty.
18
~~West Morehead Interests~~
~~On January 6, 2016, through BRG Morehead NC, LLC, a wholly-owned subsidiary of the Operating Partnership, BRG Morehead NC, LLC,~~ the Company, ~~made~~through a convertible preferred equity investment in a multi-tiered joint venture along with Fund II, an affiliate of the Manager, and an affiliate of ArchCo Residential, to develop an approximately 286-unit Class A apartment community located in Charlotte, North Carolina to be known as West Morehead. The Company has a 0.5% common equity interest in BR Morehead JV Member, LLC, at September 30, 2017. See Note 6 for further details regarding West Morehead and the BRG West Morehead Mezz Loan.
~~Whetstone Interests~~
~~On May 20, 2015, through BRG Whetstone Durham, LLC, a wholly-owned~~ subsidiary of its Operating Partnership, entered into a second amended and restated, in its entirety, Junior Credit Facility (the “Second Amended Junior Credit Facility”). The Second Amended Junior Credit Facility provides for a revolving loan with a maximum commitment amount of $72.5 million. Borrowings under the Second Amended Junior Credit Facility bear interest, at the Company’s option, at LIBOR plus 2.75% to 3.25% or the base rate plus 1.75% to 2.25%, depending on the Company’s leverage ratio. The Company pays an unused fee at an annual rate of 0.35% to 0.40% of the unused portion of the Second Amended Junior Credit Facility, depending on the borrowings outstanding. The Second Amended Junior Credit Facility matures on December 21, 2021 and contains certain financial and operating covenants, including a maximum leverage ratio, minimum liquidity, minimum debt service coverage ratio, minimum debt yield, minimum tangible net worth and minimum equity raise and collateral values. At September 30, 2020, the Company ~~made a convertible preferred equity investment~~was in ~~a multi-tiered joint venture, along~~compliance with ~~Fund III and an affiliate of TriBridge Residential, LLC, to acquire a 204-unit Class A apartment community located in Durham, North Carolina, to be known as Whetstone Apartments.~~all covenants under the Second Amended Junior Credit Facility. The Company has ~~made a capital commitment~~guaranteed the obligations under the Second Amended Junior Credit Facility and has pledged certain assets as collateral.

Table of ~~$12.9 million to acquire 100%~~Contents

The availability of borrowings under the ~~preferred equity interests in BR Whetstone Member, LLC, all of which has been funded as of~~revolving credit facilities at September 30, 2017 (of which $0.7 million earns a 20% return). On October 2, 2016, the Company entered into an agreement that provided for an extended twelve-month period in which it had a right to convert into common ownership. The Company did not elect to convert into common ownership at October 2, 2017 and therefore, its preferred return would decrease to 6.5%. Effective April 1, 2017, Whetstone ceased paying its preferred return on a current basis. The accrued preferred return of $1.0 million2020 is shown as a due from affiliates in the consolidated balance sheet. The Company has evaluated the preferred equity investment and accrued preferred return and determined that the investment is not impaired and will be fully recoverable in the future.

On October 6, 2016, the Whetstone property owner, which is owned by an entity in which the Company owns an indirect interest, entered into a mortgage loan of approximately $26.5 million secured by the Whetstone Apartment property. The loan matures on November 1, 2023. The loan bears interest at a fixed rate of 3.81%. Regular monthly payments are interest-only until November 1, 2017, with monthly payments beginning December 1, 2017 based on ~~thirty-year amortization. The loan may be prepaid~~the collateral and compliance with ~~the greater of 1% prepayment fee or yield maintenance until October 31, 2021,~~various ratios related to those assets and thereafter at par. The loan is nonrecourse to the Company and its joint venture partners with certain standard scope non-recourse carve-outs for certain deeds, acts or failures to act on the part of the Company and the joint venture partners.was approximately $153.6 million.

~~KeyBank Land Loan~~

~~The KeyBank land loan, which had been reflected on the unconsolidated entities financial statements, was paid off during the three months ended March 31, 2017.~~

Note 89 – Mortgages Payable
The following table summarizes certain information as of September 30, ~~2017~~2020 and December 31, ~~2016,~~2019, with respect to the Company’s senior mortgage indebtedness (amounts in thousands):

Outstanding Principal As of September 30, 2017
Property September 30,
2017 December 31,
2016 Interest Rate Fixed/ Floating Maturity Date
ARIUM at Palmer Ranch $ 26,925 $ 26,925 3.40 % LIBOR + 2.17%⁽¹⁾ February 1, 2023
ARIUM Grandewood 34,294 34,294 3.05 % Floating⁽²⁾ December 1, 2024
ARIUM Gulfshore 32,626 32,626 3.40 % LIBOR + 2.17%⁽¹⁾ February 1, 2023
ARIUM Palms 24,999 24,999 3.45 % LIBOR + 2.22%⁽¹⁾ September 1, 2022
ARIUM Pine Lakes 26,950 26,950 3.95 % Fixed November 1, 2023
ARIUM Westside 52,150 52,150 3.68 % Fixed August 1, 2023
Ashton Reserve I 31,528 31,900 4.67 % Fixed December 1, 2025
Ashton Reserve II 15,270 15,270 3.85 % LIBOR + 2.62%⁽¹⁾ January 1, 2026
Citrus Tower 41,438 — 4.07 % Fixed October 1, 2024
Crescent Perimeter⁽³⁾ 1,920 — 4.23 % LIBOR + 3.00%⁽¹⁾ December 12, 2020
Enders Place at Baldwin Park⁽⁴⁾ 24,401 24,732 4.30 % Fixed November 1, 2022
Fox Hill — 26,705
James on South First 26,500 26,500 4.35 % Fixed January 1, 2024
Lansbrook Village — 57,190
Marquis at Crown Ridge 29,362 — 2.84 % LIBOR + 1.61%⁽¹⁾ June 1, 2024
Marquis at Stone Oak 43,125 — 2.84 % LIBOR + 1.61%⁽¹⁾ June 1, 2024
Marquis at The Cascades I 33,207 — 2.84 % LIBOR + 1.61%⁽¹⁾ June 1, 2024
Marquis at The Cascades II 23,175 — 2.84 % LIBOR + 1.61%⁽¹⁾ June 1, 2024
Marquis at TPC 17,273 — 2.84 % LIBOR + 1.61%⁽¹⁾ June 1, 2024
MDA Apartments — 37,124
Nevadan 48,431 48,431 3.71 % LIBOR + 2.48%⁽¹⁾ November 1, 2023
Park & Kingston⁽⁵⁾ 18,432 18,432 3.41 % Fixed April 1, 2020
Preston View 41,066 — 3.30 % LIBOR + 2.07%⁽¹⁾ March 1, 2024
Roswell City Walk 51,000 51,000 3.63 % Fixed December 1, 2026
Sorrel 38,684 38,684 3.52 % LIBOR + 2.29%⁽¹⁾ May 1, 2023
Sovereign 28,880 28,880 3.46 % Fixed November 10, 2022
The Brodie 34,825 34,825 3.71 % Fixed December 1, 2023
The Preserve at Henderson Beach 36,484 36,989 4.65 % Fixed January 5, 2023
Vickers Village⁽⁶⁾ 3,875 — 4.23 % LIBOR + 3.00%⁽⁶⁾ December 1, 2020
Village Green of Ann Arbor — 41,547
Villages at Cypress Creek 26,200 — 3.23 % Fixed October 1, 2022
Wesley Village 40,545 — 4.25 % Fixed April 1, 2024
Total 853,565 716,153
Fair value adjustments 2,055 1,364
Deferred financing costs, net (8,458 ) (6,942 )
Total $ 847,162 $ 710,575

Outstanding Principal

As of September 30, 2020

September 30,

December 31,

Interest-only

Property

2020

2019

Interest Rate

through date

Maturity Date

Fixed Rate:

ARIUM Grandewood ⁽¹⁾

$
19,664

$
19,713

4.35
%
⁽²⁾

July 1, 2025
ARIUM Hunter’s Creek

71,207

72,183

3.65
%
⁽²⁾

November 1, 2024
ARIUM Metrowest

64,559

64,559

4.43
%
May 2021

May 1, 2025
ARIUM Westside

52,150

52,150

3.68
%
August 2021

August 1, 2023
Ashford Belmar

100,675

100,675

4.53
%
December 2022

December 1, 2025
Ashton Reserve I

—

30,329

Avenue 25 ⁽³⁾

36,566

—

4.18
%
July 2022

July 1,2027
Chattahoochee Ridge

45,338

45,338

3.25
%
December 2022

December 5,2024
Citrus Tower

40,807

41,325

4.07
%
⁽²⁾

October 1, 2024
Denim

91,634

91,634

3.32
%
August 2024

August 1, 2029
Element

29,260

29,260

3.63
%
July 2022

July 1,2026
Enders Place at Baldwin Park

—

23,337

Gulfshore Apartment Homes

46,345

46,345

3.26
%
September 2022

September 1, 2029
James on South First

25,787

26,111

4.35
%
⁽²⁾

January 1, 2024
Navigator Villas ⁽⁴⁾

20,515

20,515

4.56
%
June 2021

June 1, 2028
Outlook at Greystone

22,105

22,105

4.30
%
June 2021

June 1, 2025
Park & Kingston

19,600

19,600

3.32
%
November 2024

November 1, 2026
Pine Lakes Preserve

—

26,950

Plantation Park

26,625

26,625

4.64
%
July 2024

July 1, 2028
Providence Trail

47,950

47,950

3.54
%
July 2021

July 1, 2026
Roswell City Walk

50,285

51,000

3.63
%
⁽²⁾

December 1, 2026
The Brodie

33,717

34,198

3.71
%
⁽²⁾

December 1, 2023
The Links at Plum Creek

39,740

40,000

4.31
%
⁽²⁾

October 1, 2025
The Mills

25,408

25,797

4.21
%
⁽²⁾

January 1, 2025
The Preserve at Henderson Beach

48,490

48,490

3.26
%
September 2028

September 1, 2029
The Reserve at Palmer Ranch

41,141

41,348

4.41
%
⁽²⁾

May 1, 2025
The Sanctuary

33,707

33,707

3.31
%
Interest-only

August 1, 2029
Villages of Cypress Creek

—

26,200

Wesley Village

39,609

40,111

4.25
%
⁽²⁾

April 1, 2024
Total Fixed Rate

$
1,072,884

$
1,147,555

Floating Rate ⁽⁵⁾:










ARIUM Glenridge

$
49,500

$
49,500

1.49
%
September 2021

September 1, 2025
ARIUM Grandewood ⁽¹⁾

19,615

19,672

1.56
%
⁽²⁾

July 1, 2025
Ashton Reserve II

—

15,213

Cade Boca Raton

23,500

23,500

2.50
%
June 2022

January 1, 2025
Chevy Chase

24,400

—

2.48
%
September 2022

September 1, 2027
Fannie Facility Advance

13,936

—

2.76
%
June 2022

June 1, 2027
Marquis at The Cascades I

31,822

32,284

1.77
%
⁽²⁾

June 1, 2024 ⁽⁶⁾
Marquis at The Cascades II

22,209

22,531

1.77
%
⁽²⁾

June 1, 2024 ⁽⁶⁾
Marquis at TPC

—

16,468

Pine Lakes Preserve

42,728

—

3.14
%
July 2025

July 1, 2030
The District at Scottsdale ⁽⁷⁾

76,065

82,200

1.85
%
⁽²⁾

June 11, 2021 ⁽⁸⁾
Veranda at Centerfield

26,100

26,100

1.41
%
July 2021

July 26, 2023 ⁽⁹⁾
Villages of Cypress Creek

33,520

—

2.71
%
July 2022

July 1, 2027
Total Floating Rate

$
363,395

$
287,468




Total Mortgages Payable

$
1,436,279

$
1,435,023

Fair value adjustments

2,265

1,815






Deferred financing costs, net

(11,002)

(11,581)






Total

$
1,427,542

$
1,425,257







⁽¹⁾ ~~One month LIBOR as of September 30, 2017 was 1.23%.~~
⁽²⁾ ARIUM Grandewood principal balance includes the initial advance of $29.44 million at a floating rate of 1.67% plus one month LIBOR and a $4.85 million supplemental loan at a floating rate of 2.74% plus one month LIBOR. At September 30, 2017, the interest rates on the initial advance and supplemental loan were 2.90% and 3.97%, respectively.
⁽³⁾ ~~Construction loan of up to $44.7 million, with interest at a floating rate of 3.00% plus one month LIBOR. The loan has a one-year extension option subject to certain conditions.~~
⁽⁴⁾ ~~The Enders Place at Baldwin Park principal balance includes a $16.6 million loan at a fixed rate of 3.97% and a $7.8 million supplemental loan at a fixed rate of 5.01%.~~
⁽⁵⁾ ~~The Park & Kingston principal balance includes a $15.3 million loan at a fixed rate of 3.21% and a $3.2 million supplemental loan at a fixed rate of 4.34%.~~
⁽⁶⁾ ~~Construction loan of up to $18.0 million, with interest at a floating rate of 3.00% plus one month LIBOR.~~
(1) 20 ARIUM Grandewood has a fixed rate loan and a floating rate loan.
24

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(2)	The loan requires monthly payments of principal and interest.

(3)	The principal balance includes a $29.7 million loan at a fixed rate of 4.02% and a $ 6.9 million supplemental loan at a fixed rate of 4.86%.

(4)	The principal balance includes a $14.8 million loan at a fixed rate of 4.31% and a $5.7 million supplemental loan at a fixed rate of 5.23%.

(5)	Other than The District at Scottsdale, all the Company’s floating rate loans bear interest at one-month LIBOR + margin. In September 2020, one-month LIBOR in effect was 0.16%. LIBOR rate is subject to a rate cap. Refer to Note 11 for further information.

(6)	The loan can be extended, subject to certain conditions, in connection with an election to convert to a fixed interest rate loan.

(7)	The loan bears interest at a floating rate of one or three-month LIBOR + margin at the Company's discretion. The loan is not subject to a rate cap.

(8)	The loan has 2 (2) three-month extension options subject to certain conditions.

(9)	The loan has 2 (2) one-year extension options subject to certain conditions.

Deferred financing costs

Costs incurred in obtaining long-term financing ~~reflected as a reduction of Mortgages Payable in the accompanying Consolidated Balance Sheets,~~ are amortized on a straight-line basis ~~which approximates the effective~~to interest ~~method,~~expense over the terms of the related ~~debt~~financing agreements, as ~~applicable.~~applicable, which approximates the effective interest method.

Loss on Extinguishment of Debt and Modification Costs

Upon repayment of or in conjunction with a material change (i.e. a 10% or greater difference in the cash flows between instruments) in the terms of an underlying debt agreement, the Company writes-off any unamortized deferred financing costs and fair market value adjustments related to the original debt that was extinguished. Prepayment penalties incurred on the early repayment of debt and costs incurred in a debt modification that are not capitalized are also included in loss on extinguishment of debt and debt modification costs on the consolidated statements of operations.

Refinancing of Villages of Cypress Creek

~~Preston View Mortgage Payable~~

On ~~February 17, 2017,~~June 2, 2020, the Company, through an indirect subsidiary, entered into ~~an approximately $41.1~~a $33.5 million floating rate loan, which is secured by ~~Preston View.~~Villages of Cypress Creek, and paid off the previous fixed rate loan of $26.2 million. The ~~loan matures March 1, 2024~~Company accounted for the refinancing as an extinguishment of debt and ~~bears interest~~recorded a loss on a floating basis based on LIBOR plus 2.07%, with interest only payments until March 2019, and then monthly payments based on 30-year amortization. After March 31, 2018, the loan may be prepaid with a 1% prepayment fee through December 31, 2023, and thereafter at par.

extinguishment of debt of $0.9 million.

~~Wesley Village Mortgage Payable~~

Refinancing of Pine Lakes Preserve

On ~~March 9, 2017,~~June 24, 2020, the Company, through an indirect subsidiary, entered into ~~an approximately $40.5~~a $42.7 million floating rate loan, which is secured by ~~Wesley Village. The loan matures April 1, 2024~~Pine Lakes Preserve, and ~~bears interest at a~~paid off the previous fixed rate loan of ~~4.25%, with interest only payments until April 2019,~~$27.0 million. The Company accounted for the refinancing as an extinguishment of debt and ~~then fixed monthly payments based~~recorded a loss on ~~30-year amortization. After January 1, 2024, the loan may be prepaid without prepayment fee or yield maintenance.~~

extinguishment of debt of $3.6 million.

~~Marquis~~Modification of The District at ~~Crown Ridge Mortgage Payable~~

Scottsdale loan

On June ~~9, 2017,~~30, 2020, the Company, through an indirect subsidiary, ~~assumed~~exercised the loan extension option and entered into an amended loan agreement for The District at Scottsdale. As part of the amended loan agreement, the Company made a principal payment of $6.0 million and paid an extension fee of $0.2 million. Terms of the amended loan agreement include, but are not limited to (i) extension of the loan maturity date to June 11, 2021, (ii) the addition of 2 (2) three-month extension options, and (iii) the requirement of the Company to remit mandatory prepayments in an amount equal to excess cash flow from the preceding month. The prepayments commenced in July 2020 and are to be remitted monthly thereafter until the loan is paid in full. The Company accounted for the loan amendment as a loan modification.

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Master Credit Facility with Fannie Mae
On April 30, 2018, the Company, through certain subsidiaries of the Operating Partnership, entered into a ~~principal balance~~Master Credit Facility Agreement (the “Fannie Facility”), which was issued through Fannie Mae’s Multifamily Delegated Underwriting and Servicing Program. The Fannie Facility includes certain restrictive covenants, including indebtedness, liens, investments, mergers and asset sales, and distributions. The Fannie Facility also contains events of ~~approximately $29.5 million~~default, including payment defaults, covenant defaults, bankruptcy events, and change of control events. Each note under the Fannie Facility is cross-defaulted and cross-collateralized and the Company has guaranteed the obligations under the Fannie Facility. As of September 30, 2020, the mortgage loans secured by ~~Marquis~~ARIUM Grandewood, ARIUM Metrowest and Outlook at ~~Crown Ridge.~~Greystone were issued under the Fannie Facility.
On May 27, 2020, the Company, through certain subsidiaries of the Operating Partnership, entered into a $13.9 million floating rate advance (the “Fannie Facility Advance”) originated under the Fannie Facility and collateralized by the properties issued under the Fannie Facility. The ~~loan~~Fannie Facility Advance matures on June 1, ~~2024, unless the maturity date is extended in connection with an election to convert to a fixed interest rate loan. The loan~~2027 and bears interest at ~~a floating basis based on~~ LIBOR plus ~~1.61%~~2.60%, subject to an interest rate cap, with ~~fixed~~interest-only payments through June 2022 and then monthly payments based on ~~30-year~~thirty-year amortization. ~~After February 29, 2024, the loan~~The Fannie Facility Advance may be prepaid without prepayment ~~fee~~ or yield ~~maintenance.~~maintenance beginning March 1, 2027.
~~Marquis at Stone Oak Mortgage Payable~~
~~On June 9, 2017,~~The Company may request future fixed rate advances or floating rate advances under the ~~Company, through an indirect subsidiary, assumed a loan with a principal balance~~Fannie Facility either by borrowing against the value of ~~approximately $43.1 million secured by Marquis at Stone Oak.~~the mortgaged properties (based on the valuation methodology established in the Fannie Facility) or adding eligible properties to the collateral pool, subject to customary conditions, including satisfaction of minimum debt service coverage and maximum loan-to-value tests. The ~~loan matures June 1, 2024, unless~~proceeds of any future advances made under the maturity date is extended in connection with an election to convert to a fixed interest rate loan. The loan bears interest at a floating basis based on LIBOR plus 1.61%, with interest only payments until June 2018, and then fixed monthly payments based on 30-year amortization. After February 29, 2024, the loanFannie Facility may be ~~prepaid without prepayment fee or yield maintenance.~~used, among other things, for general operating purposes and the acquisition and refinancing of additional properties to be identified in the future.
~~Marquis at The Cascades I Mortgage Payable~~
On June 9, 2017, the Company, through an indirect subsidiary, assumed a loan with a principal balance of approximately $33.2 million secured by Marquis at The Cascades I. The loan matures June 1, 2024, unless the maturity date is extended in connection with an election to convert to a fixed interest rate loan. The loan bears interest at a floating basis based on LIBOR plus 1.61%, with interest only payments until June 2018, and then fixed monthly payments based on 30-year amortization. After February 29, 2024, the loan may be prepaid without prepayment fee or yield maintenance.
~~Marquis at The Cascades II Mortgage Payable~~
On June 9, 2017, the Company, through an indirect subsidiary, assumed a loan with a principal balance of approximately $23.2 million secured by Marquis at The Cascades II. The loan matures June 1, 2024, unless the maturity date is extended in connection with an election to convert to a fixed interest rate loan. The loan bears interest at a floating basis based on LIBOR plus 1.61%, with interest only payments until June 2018, and then fixed monthly payments based on 30-year amortization. After February 29, 2024, the loan may be prepaid without prepayment fee or yield maintenance.
~~Marquis at TPC Mortgage Payable~~
On June 9, 2017, the Company, through an indirect subsidiary, assumed a loan with a principal balance of approximately $17.4 million secured by Marquis at TPC. The loan matures June 1, 2024, unless the maturity date is extended in connection with an election to convert to a fixed interest rate loan. The loan bears interest at a floating basis based on LIBOR plus 1.61%, with fixed monthly payments based on 30-year amortization. After February 29, 2024, the loan may be prepaid without prepayment fee or yield maintenance.
21
~~Villages at Cypress Creek~~
On September 8, 2017, the Company, through an indirect subsidiary, entered into an approximately $26.2 million loan secured by Villages at Cypress Creek. The loan matures October 1, 2022, with two-one year extensions subject to certain conditions, and bears interest at a fixed rate of 3.23%, with interest only payments until October l, 2020, and then fixed monthly payments based on 30-year amortization. After July 1, 2022, the loan may be prepaid without prepayment fee or yield maintenance.
~~Citrus Tower~~
On September 28, 2017, the Company, through an indirect subsidiary, entered into an approximately $41.4 million loan secured by Citrus Tower. The loan matures October 1, 2024, and bears interest at a fixed rate of 4.07%, with interest only payments until October l, 2019, and then fixed monthly payments based on 30-year amortization. After July 1, 2024, the loan may be prepaid without prepayment fee or yield maintenance.
Debt maturities
As of September 30, ~~2017,~~2020, contractual principal payments for the five subsequent years and thereafter are as follows (amounts in thousands):

Year Total

Total
2017 (October 1-December 31) $ 738
2018 4,086
2019 7,652
2020 35,227
2021 12,173
2020 (October 1–December 31)

$
2,094
2021 ⁽¹⁾

86,579
2022

15,467
2023

127,745
2024

276,177
Thereafter 793,689

928,217
$ 853,565

$
1,436,279
Add: Unamortized fair value debt adjustment 2,055

2,265
Subtract: Deferred financing costs, net (8,458 )

(11,002)
Total $ 847,162

$
1,427,542

(1) $76.1 million represents a loan in connection with The District at Scottsdale. The loan has a June 2021 maturity date and contains 2 (2) three-month extension options, subject to certain conditions.
The net book value of real estate assets providing collateral for these above borrowings, ~~were $1,194.2~~including the Amended Senior Credit Facility, Second Amended Junior Credit Facility and Fannie Facility, was $1,983.1 million ~~and $987.1 million at~~as of September 30, ~~2017 and December 31, 2016, respectively.~~
2020.
The mortgage loans encumbering the Company’s properties are generally nonrecourse, subject to certain exceptions for which the Company would be liable for any resulting losses incurred by the lender. These exceptions vary from loan to loan but generally include fraud or a material misrepresentation, misstatement or omission by the borrower, intentional or grossly negligent conduct by the borrower that harms the property or results in a loss to the lender, filing of a bankruptcy petition by the borrower, either directly or indirectly, and certain environmental liabilities. In addition, upon the occurrence of certain events, such as fraud or filing of a bankruptcy petition by the borrower, the Company or our joint ventures would be liable for the entire outstanding balance of the loan, all interest accrued thereon and certain other costs, including penalties and expenses. The mortgage loans generally have a period where a prepayment fee or yield maintenance would be required.

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Note 910 – Fair Value of Financial Instruments

Fair Value Measurements

For financial assets and liabilities recorded at fair value on a recurring or non-recurring basis, fair value is the price the Company would expect to receive to sell an asset, or pay to transfer a liability, in an orderly transaction with a market participant at the measurement date under current market conditions. In the absence of such data, fair value is estimated using internal information consistent with what market participants would use in a hypothetical transaction.

In determining fair value, observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect the Company's market assumptions; preference is given to observable inputs. In accordance with accounting principles generally accepted in the Unites States of America ("GAAP") and as defined in ASC Topic 820 "Fair Value Measurement", these two types of inputs create the following fair value hierarchy:

●Level 1:Quoted prices for identical instruments in active markets

●Level 2:Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable

●Level 3:Significant inputs to the valuation model are unobservable

If the inputs used to measure the fair value fall within different levels of the hierarchy, the fair value is determined based upon the lowest level input that is significant to the fair value measurement. Whenever possible, the Company uses quoted market prices to determine fair value. In the absence of quoted market prices, the Company uses independent sources and data to determine fair value.

Financial Instrument Fair Value Disclosures

As of September 30, ~~2017~~2020 and December 31, ~~2016, the Company believes~~2019, the carrying ~~value~~values of cash and cash equivalents, accounts receivable, due to and due from affiliates, accounts payable, accrued liabilities, and distributions payable approximate their fair value based on their highly-liquid nature and/or short-term maturities. ~~Based~~The carrying values of notes receivable approximate fair value because stated interest rate terms are consistent with interest rate terms on new deals with similar leverage and risk profiles. The fair values of notes receivable are classified in Level 3 of the fair value hierarchy due to the significant unobservable inputs that are utilized in their respective valuations.

Derivative Financial Instruments

The estimated fair values of derivative financial instruments are valued using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and volatility. The fair value of interest rate caps is determined using the market-standard methodology of discounting the future expected cash receipts which would occur if floating interest rates rise above the strike rate of the caps. The floating interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities. The inputs used in the valuation of interest rate caps fall within Level 2 of the fair value hierarchy.

As of September 30, 2020 and December 31, 2019, based on the discounted amount of future cash flows using rates currently available to the Company for similar liabilities, the fair value of the Company’s mortgages payable is estimated at ~~$856.0~~$1,497.2 million and ~~$714.8~~$1,436.2 million, ~~as of September 30, 2017 and December 31, 2016,~~ respectively, compared to the carrying amounts, before adjustments for deferred financing costs, net, of ~~$855.6~~$1,438.5 million and ~~$717.5~~$1,436.8 million, respectively. The fair value of mortgages payable is estimated based on the Company’s current interest rates (Level 3 inputs ~~as defined in ASC Topic 820, “Fair Value Measurement”)~~of the fair value hierarchy) for similar types of borrowing arrangements.

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Note 11 – Derivative Financial Instruments
Risk Management Objective of Using Derivatives
The Company is exposed to certain risks arising from both its business operations and economic conditions. The Company principally manages its exposures to a wide variety of business and operational risks through management of its core business activities. The Company manages economic risks, including interest rate, liquidity, and credit risk, primarily by managing the amount, sources, and duration of its assets and liabilities and the use of derivative financial instruments. Specifically, the Company enters into derivative financial instruments to manage exposures that arise from business activities that result in the receipt or payment of future known and uncertain cash amounts, the value of which are determined by interest rates. The Company’s derivative financial instruments are used to manage differences in the amount, timing, and duration of the Company’s known or expected cash payments principally related to the Company’s borrowings.
The Company’s objectives in using interest rate derivative financial instruments are to add stability to interest expense and to manage the Company’s exposure to interest rate movements. To accomplish these objectives, the Company primarily uses interest rate caps as part of its interest rate risk management strategy. Interest rate caps involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium.
The Company has not designated any of the interest rate derivatives as hedges. Although these derivative financial instruments were not designated or did not qualify for hedge accounting, the Company believes the derivative financial instruments are effective economic hedges against increases in interest rates. The Company does not use derivative financial instruments for trading or speculative purposes.
As of September 30, 2020, the Company had interest rate caps which effectively limit the Company’s exposure to interest rate risk by providing a ceiling on the underlying floating interest rate for $287.3 million of the Company’s floating rate mortgage debt. The Company also has an interest rate cap of $50.0 million covering its credit facilities which had no borrowings outstanding as of September 30, 2020.
The table below presents the fair value of the Company’s derivative financial instruments as well as their classification on the consolidated balance sheets as of September 30, 2020 and December 31, 2019 (amounts in thousands):

Derivatives not designated as hedging

Fair values of derivative
instruments under ASC 815‑20

Balance Sheet Location

instruments

September 30,

December 31,




2020

2019
Interest rate caps

Accounts receivable, prepaids and other assets

$
16

$
22

The table below presents the effect of Company’s derivative financial instruments as well as their classification on the consolidated statements of operations for the three and nine months ended September 30, 2020 and 2019 (amounts in thousands):

The Effect of Derivative
Derivatives not designated as hedging

Location of Gain or (Loss)

Instruments on the Statements of
instruments under ASC 815‑20

Recognized in Income

Operations

Three Months Ended

Nine Months Ended

September 30,

September 30,




2020

2019

2020

2019
Interest rate caps

Interest Expense

$
(106)

$
(136)

$
(75)

$
(2,501)

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Note 1012 – Related Party Transactions

Administrative Services Agreement

~~Management Agreement~~

~~The~~In October 2017, the Company entered into ~~a management agreement~~an Administrative Services Agreement (the ~~“Management~~“Administrative Services Agreement”), with Bluerock Real Estate, LLC and its affiliate, Bluerock Real Estate Holdings, LLC (together “BRE”). Pursuant to the ~~Manager,~~Administrative Services Agreement, BRE provides the Company with certain human resources, investor relations, marketing, legal and other administrative services (the “Services”). The Services are provided on ~~April 2, 2014. The terms and conditions~~an at-cost basis, generally allocated based on the use of such Services for the ~~Management Agreement, which became effective as~~benefit of ~~April 2, 2014, are described below.~~

~~The Management Agreement requires the Manager to manage~~ the Company’s business, ~~affairs in conformity with~~and are invoiced on a quarterly basis. In addition, the ~~investment guidelines~~Administrative Services Agreement permits certain employees of the Company to provide or cause to be provided services to BRE, on an at-cost basis, generally allocated based on the use of such services for the benefit of the business of BRE, and otherwise subject to the terms of the Services provided by BRE to the Company under the Administrative Services Agreement. Payment by the Company of invoices and other ~~policies that are approved and monitored by~~amounts payable under the Administrative Services Agreement will be made in cash or, in the sole discretion of the Company’s board of ~~directors. The Manager acts under~~directors (the “Board”), generally in the ~~supervision and direction~~form of fully-vested LTIP Units.

On August 4, 2020, the Company delivered written notice to BRE of the ~~Board. Specifically,~~Company's intention to renew the ~~Manager~~Administrative Services Agreement for an additional one-year term, to expire on October 31, 2021 unless the Company renews. The Administrative Services Agreement will automatically terminate (i) upon termination by the Company of all Services, or (ii) in the event of non-renewal by the Company. Pursuant to the Administrative Services Agreement, BRE is responsible for ~~(1)~~ the ~~selection, purchase~~payment of all employee benefits and ~~sale of~~any other direct and indirect compensation for the Company’s investment portfolio, (2) the Company’s financing activities, and (3) providing the Company with advisory and management services. The Manager provides the Company with a management team, including a chief executive officer, president, chief accounting officer and chief operating officer, along with appropriate support personnel. None of the officers or employees of BRE (or their affiliates or permitted subcontractors) assigned to perform the ~~Manager are dedicated exclusively~~Services, as well as such employees’ worker’s compensation insurance, employment taxes, and other applicable employer liabilities relating to the Company. The Company is dependent on its Manager to provide these services that are essential to the Company. In the event that the Manager or its affiliates are unable to provide the respective services, the Company will be required to obtain such ~~services from other sources.~~

employees.

The Company ~~pays the Manager~~and BRE entered into a base management fee in an amount equal to the sum of: (A) 0.25% of the Company’s stockholders’ existing and contributed equity prior to the IPO and in connection with our contribution transactions, per annum, calculated quarterly based on the Company’s stockholders’ existing and contributed equity for the most recently completed calendar quarter and payable in quarterly installments in arrears, and (B) 1.5% of the equity per annum of the Company’s stockholders who purchase shares of the Company’s stock, calculated quarterly based on their equity for the most recently completed calendar quarter and payable in quarterly installments in arrears. The base management fee is payable independent of the performance of the Company’s investments. The Company amended the ManagementLeasehold Cost-Sharing Agreement to provide that the base management fee can be payable in cash or LTIP Units, at the election of the Board. The number of LTIP Units issued for the base management fee or incentive fee will be based on the fees earned divided by the 5-day trailing average Class A common stock price prior to issuance. Base management fees of $7.8 million and $4.3 million were expensed during the nine months ended September 30, 2017 and 2016, respectively.

Base management fees of $2.6 million were expensed during the three months ended June 30, 2017, and were paid through the issuance of 221,481 LTIP Units on August 9, 2017. The base management fees of $2.8 million for the three months ended September 30, 2017 will be paid through the issuance of approximately 253,300 LTIP Units assuming the $11.06 closing share price for the Company’s Class A common stock on September 29, 2017. The actual number of LTIP Units to be issued in payment of the base management fees for the three months ended September 30, 2017 is subject to change based on the average closing share price of the Company’s Class A common stock on the five business days prior to the date of issuance.

The Company also pays the Manager an incentive fee with respect to each calendar quarter in arrears. The incentive fee is equal to the difference between (1) the product of (x) 20% and (y) the difference between (i) the Company’s adjusted funds from operations (“AFFO”(the “Leasehold Cost-Sharing Agreement”), for the previous 12-month period, and (ii) the product of (A) the weighted average of the issue price of equity securities issued in the IPO and in future offerings and transactions, multiplied by the weighted average number of all shares of the Company’s Class A common stock outstanding on a fully-diluted basis (including any restricted stock units, any restricted shares of Class A common stock, LTIP Units, and other shares of common stock underlying awards granted under the Incentive Plans and OP Units) in the previous 12-month period, exclusive of equity securities issued prior to the IPO or in the contribution transactions, and (B) 8%, and (2) the sum of any incentive fee paid to the Manager with respect to the ~~first three calendar quarters of such previous 12-month period; provided, however, that no incentive fee is payable with respect~~lease for their New York headquarters (the”NY Lease”) to ~~any calendar quarter unless AFFO is greater than zero~~provide for the ~~four most recently completed calendar quarters. One half of each quarterly installment~~allocation and sharing between BRE and the Company of the ~~incentive fee~~costs thereunder, including costs associated with tenant improvements. The NY Lease permits the Company and certain of its respective subsidiaries and/or affiliates to share occupancy of the New York headquarters with BRE. Under the NY Lease, the Company, through its Operating Partnership, issued a $750,000 letter of credit under the Amended Senior Credit Facility as a security deposit, and BRE is obligated under the Leasehold Cost-Sharing Agreement to indemnify and hold the Company harmless from loss if there is a claim under such letter of credit. Payment by the Company of any amounts payable under the Leasehold Cost-Sharing Agreement to BRE will be ~~payable in LTIP Units, calculated pursuant to the formula above. The remainder of the incentive fee will be payable~~made in cash or, in ~~LTIP Units, at~~ the ~~election~~sole discretion of the Board, generally in ~~each case calculated pursuant to~~ the ~~formula above. Incentive fees~~form of $4.0 million and $0.2 million were expensed during the nine months ended September 30, 2017 and 2016, respectively. Incentive fees for the three months ended June 30, 2017 were paid through the issuance of 299,045fully-vested LTIP ~~Units on August 9, 2017. There was no incentive fee during the three months ended September 30, 2017.~~Units.

On July 2, 2015, the Company issued a grant of LTIP Units under the Amended 2014 Incentive Plans to the Manager. The equity grant consisted of 283,390 LTIP Units (the “2015 LTIP Units”). The 2015 LTIP Units vest ratably over a three-year period that began in July 2015, subject to certain terms and conditions, including early vesting upon an internalization of our external management functions. On August 3, 2016, the Company issued a grant of LTIP Units under the Amended 2014 Incentive Plans to the Manager. The equity grant consisted of 176,610 LTIP Units (the “2016 LTIP Units”). The 2016 LTIP Units vest ratably over a three-year period that began in August 2016, subject to certain terms and conditions, including early vesting upon an internalization of our external management functions. These LTIP Units may be convertible into OP Units under certain conditions and then may be settled in shares of the Company’s Class A common stock.

~~LTIP amortization of $0.1 million and $0.5 million, and $1.2 million and $2.0 million, for the three and nine months ended September 30, 2017 and 2016, respectively, was recorded~~Recorded as part of general and administrative expenses, ~~related to the 2015 LTIP Units and the 2016 LTIP Units. The expense recognized during 2017 and 2016 was based~~operating expenses paid by BRE on ~~the Class A common stock closing price at the vesting date or the end~~behalf of the ~~period, as applicable.~~

~~The~~ Company is also required to reimburse the Manager for certain expenses and pay all operating expenses, except those specifically required to be borne by the Manager under the Management Agreement. Reimbursements of ~~$0.4~~$0.7 million and ~~$0.2~~$1.2 million, and ~~$1.4~~$2.1 million and ~~$0.5~~$2.8 million were expensed during the three and nine months ended September 30, ~~2017~~2020 and ~~2016, respectively, and~~2019, respectively. Operating expense reimbursements of ~~which $0.3~~$0.4 million for the second quarter 2020 were paid to BRE through the issuance of 55,675 LTIP Units on August 11, 2020.

Pursuant to the terms of the Administrative Services Agreement, the Company paid operating expenses on behalf of BRE of $0.4 million and ~~$1.1~~$0.4 million, and $1.5 million and $1.2 million for the three and nine months ended September 30, ~~2017 are recorded as part of general~~2020 and ~~administrative expenses. In addition,~~2019, respectively. Operating expense reimbursements for the ~~Manager was reimbursed for offering costs~~second quarter 2020 were paid to the Company in ~~conjunction with the January 2017 Common Stock Offering of $0.03 million~~cash during the ~~nine months ended September 30, 2017.~~third quarter.

~~The initial term~~Table of the Management Agreement expired on April 2, 2017 (the third anniversary of the closing of the IPO), and automatically renewed for a one-year term expiring on April 2, 2018. The Management Agreement will automatically renew for a one-year term on each anniversary date thereafter unless previously terminated in accordance withContents

Pursuant to the terms of the ~~Management Agreement.~~
23
The Management Agreement may be terminated annually upon the affirmative vote of at least two-thirds of the Company’s independent directors, based upon (1) unsatisfactory performance that is materially detrimental to the Company, or (2) the Company’s determination that the fees payable to the Manager are not fair, subject to the Manager’s right to prevent such termination due to unfair fees by accepting a reduction of the fees agreed to by at least two-thirds of the Company’s independent directors. The Company must provide 180 days’ prior notice of any such termination. Unless terminated for cause, as further described in the Management Agreement, the Manager will be paid a termination fee equal to three times the sum of the base management fee and incentive fee earned, in each case, by the Manager during the 12-month period immediately preceding such termination, calculated as of the end of the most recently completed fiscal quarter before the date of termination. The Company may also terminate the Management Agreement at any time, including during the initial term, without the payment of any termination fee, for cause with 30 days’ prior written notice from the Board.
On August 4, 2017, we announced that we, our Manager and the Contributors had entered into definitive agreements, as amended, (the “Contribution Agreement”) providing for the acquisition (the “Internalization”) by the Company of a newly-formed entity that will own the assets that our Manager uses to operate the business of the Company. The consideration to be paid to the Contributors in connection with the Internalization is based on a formula agreed to at the time the parties originally entered into the Management Agreement in April 2014, in connection with the Company’s initial public offering, and is equal to three (3) times the sum of the base management fee and incentive fee, in each case earned by the Manager under the current Management Agreement between the Manager, the Company and the Operating Partnership (the “Management Agreement”) during the 12-month period ending on the last day of the month of the most recently completed fiscal quarter prior to closing, which was the three months ended September 30, 2017 (the “Consideration”).
The Consideration is to be paid in a combination of OP Units, shares of the Company’s common stock, newly reclassified as Class C common stock (“Class C Common Stock”), and a de minimis amount of cash, and otherwise on terms consistent with the Contribution Agreement. The number of shares of Class C Common Stock and the number of OP Units to be issued in the Internalization is based on a per share and per OP Unit price, which is based on the volume-weighted average price on the NYSE MKT of our Class A common stock for the twenty (20) trading days beginning on and including September 11, 2017 through and including October 6, 2017, per an amendment dated August 9, 2017 to the definitive agreement, which the Company determined to be $10.64.
Upon closing of the Internalization, the Company will become a self-managed real estate investment trust. The following key executives and officers of our Manager will assume the following titles and duties with the Company: Mr. R. Ramin Kamfar will serve as our Chairman and Chief Executive Officer; Mr. James G, Babb, III, will serve as our Chief Investment Officer; Mr. Ryan S. MacDonald will serve as our Chief Acquisitions Officer; Mr. Jordan B. Ruddy will serve as our Chief Operating Officer and President; Mr. Christopher J. Vohs will serve as our Chief Financial Officer and Treasurer; and Mr. Michael L. Konig will serve as our Chief Legal Officer and Secretary. Messrs. Kamfar, Babb, MacDonald, Ruddy and Vohs have entered into employment agreements with an indirect subsidiary of the Company, and Mr. Konig has likewise entered into a services agreement with that subsidiary through his wholly-owned law firm, Konig & Associates, LLC on substantially the same terms as the employment agreements. Each such agreement will become effective upon Closing, and will have an initial term through and including December 31, 2020. As such, following the Internalization, our senior management team will continue to oversee, manage and operate the Company, and we will no longer be externally managed by the Manager. As an internally managed company, we will no longer pay the Manager any fees or expense reimbursements arising from the Management Agreement.
A special committee comprised entirely of independent and disinterested members of our board of directors (the “Special Committee”), which retained independent legal and financial advisors, unanimously determined that the entry into the ContributionAdministrative Services Agreement and the ~~completion of~~Leasehold Cost-Sharing Agreement, summarized below are the Internalization are in the best interests of the Company. Our board of directors, by unanimous vote, made a similar determination. The Internalization closed in the fourth quarter of 2017. See Note 13, Subsequent Events.
The Manager may retain, at its sole cost and expense, the services of such persons and firms as the Manager deems necessary in connection with our management and operations (including accountants, legal counsel and other professional service providers), provided that such expenses are innet related party amounts ~~no greater than those that would be~~ payable to third-party professionals or consultants engaged to perform such services pursuant to agreements negotiated on an arm’s-length basis. The Company incurred $0.5 million for legal costs reimbursed to the Manager in conjunction with acquisition, disposition, financing and other transactions in the nine months endedBRE as of September 30, ~~2017.~~2020 and December 31, 2019 (amounts in thousands):

September 30,

December 31,


2020

2019
Amounts Payable to BRE under the Administrative Services Agreement, net




Operating and direct expense reimbursements

$
330

$
281
Offering expense reimbursements

81

183
Total expense reimbursement amounts payable to BRE, net

$
411

$
464

Amounts Payable to BRE under the Leasehold Cost-Sharing Agreement




Operating and direct expense reimbursements

$
191

$
186
Capital improvement cost reimbursements

—

40
Total expense and cost reimbursement amounts payable to BRE

$
191

$
226
Total

$
602

$
690

As of September 30, 2020 and December 31, 2019, the Company had 0 and $0.1 million, respectively, in payables due to related parties other than BRE.
As of September 30, 2020 and December 31, 2019, the Company had $0.3 million and $3.0 million, respectively, in receivables due from related parties other than BRE, primarily for accrued preferred returns on unconsolidated real estate investments for the most recent month.
Selling Commissions and Dealer Manager Fees
In conjunction with the offering of the Series T Preferred Stock and the previous offering of the Series B Preferred Stock, the Company engaged a related party as dealer manager, and pays up to 10% of the gross offering proceeds from the offering as selling commissions and dealer manager fees. The dealer manager ~~may re-allow~~re-allows the substantial majority of the selling commissions and dealer manager fees to participating broker-dealers and ~~is expected to incur~~incurs costs in excess of the 10%, which costs ~~will be~~are borne by the dealer ~~manager.~~manager without reimbursement by the Company. For the nine months ended September 30, ~~2017,~~2020, the Company has incurred ~~approximately $8.2 million and $3.5~~$11.6 million in selling commissions and discounts and $5.0 million in dealer manager fees ~~respectively.~~and discounts related to its Series T Preferred Offering. For the nine months ended September 30, 2019, the Company had incurred $11.0 million in selling commissions and discounts and $4.7 million in dealer manager fees and discounts related to its previous Series B Preferred Offering. In addition, ~~the Manager~~BRE was reimbursed for offering costs of $0.7 million in conjunction with the Series BT Preferred Offering ~~of $0.6 million~~ during the nine months ended September 30, ~~2017, which~~2020 and reimbursed $0.8 million in conjunction with the previous Series B Preferred Offering during the nine months ended September 30, 2019. The selling commissions, dealer manager fees, discounts and reimbursements for offering costs were recorded as a reduction to the proceeds of the offering.
24
All of the Company’s executive officers, and some of its directors, are also executive officers, managers and/or holders of a direct or indirect controlling interest in the Manager and other Bluerock-affiliated entities. As a result, they owe fiduciary duties to each of these entities, their members, limited partners and investors, which fiduciary duties may from time to time conflict with the fiduciary duties that they owe to the Company and its stockholders.
Some of the material conflicts that the Manager or its affiliates face are: 1) the determination of whether an investment opportunity should be recommended to us or another Bluerock-sponsored program or Bluerock-advised investor; 2) the allocation of the time of key executive officers, directors, and other real estate professionals among the Company, other Bluerock-sponsored programs and Bluerock-advised investors, and the activities in which they are involved; and 3) the fees received by the Manager and its affiliates.
~~Pursuant to the terms of the Management Agreement, summarized below are the related party amounts payable to our Manager, as of September 30, 2017 and December 31, 2016 (in thousands):~~
September 30,
2017 December 31,
2016
Amounts Payable to the Manager under the Management Agreement
Base management fee $ 2,802 $ 2,015
Operating expense reimbursements and direct expense reimbursements 393 274
Offering expense reimbursements 74 120
Total amounts payable to Manager $ 3,269 $ 2,409
As of September 30, 2017 and December 31, 2016, the Company had $1.8 million and $0.9 million, respectively, in receivables due from related parties other than the Manager, primarily for accrued preferred returns on unconsolidated real estate investments for the most recent month.
Notes and Interest Receivable ~~due from Related Party;~~
The Company provides mezzanine loans, in some cases, to related parties in conjunction with the developments of multifamily communities. Please refer to Notes 6 and 7 and the Company’s Form 10-K for the year ended December 31, 2019 for further information.
Preferred Equity Investments and Investments in Unconsolidated Real Estate Joint Ventures
The Company invests, in some cases, with related parties in various joint ventures in which the Company owns either preferred or common ~~interests, and makes mezzanine loans to entities that are primarily owned by related parties.~~interests. Please refer to ~~Notes 6~~Note 7 and 7the Company’s Form 10-K for the year ended December 31, 2019 for further information.

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Note 1113 – Stockholders’ Equity and Redeemable Preferred Stock
Net (Loss) Income ~~(Loss)~~ Per Common Share
Basic net (loss) income ~~(loss)~~ per common share is computed by dividing net (loss) income ~~(loss)~~ attributable to common stockholders, less dividends on restricted stock and LTIP Units expected to vest, ~~plus gains on redemptions on common stock,~~ by the weighted average number of common shares outstanding for the period. Diluted net (loss) income ~~(loss)~~ per common share is computed by dividing net (loss) income ~~(loss)~~ attributable to common stockholders by the sum of the weighted average number of common shares outstanding and any potential dilutive shares for the period. Net (loss) income ~~(loss)~~ attributable to common stockholders is computed by adjusting net (loss) income ~~(loss)~~ for the non-forfeitable dividends paid on restricted stock and non-vested ~~restricted stock.~~LTIP Units.
The Company considers the requirements of the two-class method when preparing earnings per share. The Company has two classes of common stock outstanding: Class A common stock, $0.01 par value per share, and Class C common stock, $0.01 par value per share. Earnings per share is not affected by the two-class method because the Company’s Class A and ~~B-3~~C common stock ~~and LTIP Units~~ participate in dividends on a one-for-one basis.
25
The following table reconciles the components of basic and diluted net ~~loss~~(loss) income per common share (amounts in thousands, except share and per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,
2017 2016 2017 2016

Three Months Ended

Nine Months Ended

September 30,

September 30,


2020

2019

2020

2019
Net (loss) income attributable to common stockholders $ (12,017 ) $ (2,551 ) 563 $ (11,727 )

$
(17,058)

$
17,160

$
(18,461)

$
(5,924)
Dividends on restricted stock expected to vest — — — (4 )
Dividends on restricted stock and LTIP Units expected to vest

(342)

(250)

(1,008)

(735)
Basic net (loss) income attributable to common stockholders $ (12,017 ) $ (2,551 ) $ 563 $ (11,731 )

$
(17,400)

$
16,910

$
(19,469)

$
(6,659)

Weighted average common shares outstanding⁽¹⁾ 26,474,093 20,908,543 25,851,536 20,706,338

24,566,196

22,320,710

24,321,282

22,622,040

Potential dilutive shares⁽²⁾ — — 523 —

—

348,478

—

—
Weighted average common shares outstanding and potential dilutive shares⁽¹⁾ 26,474,093 20,908,543 25,852,059 20,706,338

24,566,196

22,669,188

24,321,282

22,622,040

Net (loss) income per common share, basic $ (0.45 ) $ (0.12 ) $ 0.02 $ (0.57 )

$
(0.71)

$
0.76

$
(0.80)

$
(0.29)
Net (loss) income per common share, diluted $ (0.45 ) $ (0.12 ) $ 0.02 $ (0.57 )

$
(0.71)

$
0.75

$
(0.80)

$
(0.29)

The effect of the conversion of OP Units is not reflected in the computation of basic and diluted earnings per share, as they are exchangeable for Class A common stock on a one-for-one basis. The income allocable to such ~~units~~OP Units is allocated on this same basis and reflected as noncontrolling interests in the accompanying consolidated financial statements. As such, the assumed conversion of these ~~units~~OP Units would have no net impact on the determination of diluted earnings per share.

(1) ⁽¹⁾ ~~For 2017, amounts~~Amounts relate to shares of the Company’s Class A and Class C common stock ~~and LTIP Units~~ outstanding. ~~For 2016, amounts relate to shares of Class A and B-3 common stock and LTIP Units outstanding.~~
(2) ⁽²⁾ ~~Excludes 251 shares of common stock, for the three months ended September 30, 2017, and 1,184 and 5,498 shares of common stock, for~~For the three and nine months ended September 30, ~~2016,~~2020, potential vesting of restricted stock to employees for 67,036 shares and 57,102 shares of Class A common stock, respectively, ~~related to non-vested restricted stock,~~are excluded from the diluted shares calculation as the effect ~~would be anti-dilutive.~~is antidilutive. For the three months ended September 30, 2019, the following are included in the diluted shares calculation: a) warrants outstanding from issuances in conjunction with the Company's Series B Preferred Stock offerings that are potentially exercisable for 320,037 shares of Class A common stock, and b) potential vesting of restricted stock to employees for 28,441 shares of Class A common stock. For the nine months ended September 30, 2019, the following are excluded from the diluted shares calculation as the effect is antidilutive: a) warrants outstanding from issuances in conjunction with the Company's Series B Preferred Stock offerings that are potentially exercisable for 113,985 shares of Class A common stock, and b) potential vesting of restricted stock to employees for 17,954 shares of Class A common stock.

~~Follow-On Equity Offerings~~Table of Contents

Series B Redeemable Preferred Stock Offering

On ~~January 17, 2017,~~December 20, 2019, the Company ~~completed an underwritten offering (the “January 2017 Class A Common~~made the final issuance of Series B Preferred Stock ~~Offering”) of 4,000,000 shares of its Class A common stock, par value $0.01 per share. The offer and sale of the shares were registered with the SEC~~ pursuant to the ~~January 2016 Shelf Registration Statement. The public offering price of $13.15 per share was announced~~Series B Preferred Offering, and on ~~January~~February 11, ~~2017. Net proceeds~~2020, the Board formally approved the termination of the ~~January 2017 Class A Common Stock Offering were approximately $49.8 million after deducting underwriting discounts and commissions and estimated offering costs. On January 24, 2017,~~Series B Preferred Offering. As of December 31, 2019, the Company ~~closed on the sale~~sold 549,154 shares of ~~600,000~~Series B Preferred Stock and 549,154 Warrants to purchase 10,983,080 shares of Class A common stock for net proceeds of approximately ~~$7.5~~$494.2 million ~~pursuant to~~after commissions, dealer manager fees and discounts.

During the ~~underwriters’ full exercise~~nine months ended September 30, 2020, the Company, at the request of holders, redeemed 4,383 Series B Preferred shares through the ~~overallotment option.~~

issuance of 596,179 Class A common shares and redeemed 101 Series B Preferred shares for $0.09 million in cash. In November 2019, the Company began initiating redemptions of Series B Preferred Stock, ~~Offering~~

~~The~~and during the first quarter 2020, redemptions initiated by the Company ~~issued 116,486~~resulted in 15,807 shares of Series B Preferred Stock redeemed through the issuance of 1,334,501 Class A common shares. The Company has not initiated redemptions of its Series B Preferred Stock after the first quarter 2020.

As of September 30, 2020, the Company had 536,127 outstanding warrants from the Series B Preferred Offering. The Warrants are exercisable by the holder at an exercise price of 120% of the market price per share of Class A Common Stock on the date of issuance of such Warrant, with a minimum exercise price of $10.00 per share. The market price per share of our Class A common stock was determined using the volume weighted average price per share of our Class A common stock for the 20 trading days prior to the date of issuance of such Warrant, subject to the minimum exercise price of $10.00 per share (subject to adjustment). One Warrant is exercisable by the holder to purchase 20 shares of Class A common stock. The warrants are exercisable one year following the date of issuance and expire four years following the date of issuance. As of September 30, 2020, a total of 3,748 Warrants had been exercised into 48,663 shares of Class A Common stock. The outstanding Warrants have exercise prices ranging from $10.00 to $15.99 per share.

Series T Redeemable Preferred Stock Offering

During the nine months ended September 30, 2020, the Company issued 6,657,190 shares of Series T Preferred Stock under a continuous registered offering with net proceeds of approximately ~~$104.8~~$149.8 million after commissions, dealer manager fees and discounts of approximately $16.6 million. During the life of the Series T Preferred Stock Offering, the Company has issued a total of 6,674,590 shares of Series T Preferred Stock for net proceeds of approximately $150.2 million after commissions, dealer manager fees ~~during~~and discounts. During the nine months ended September 30, ~~2017. As of September 30, 2017,~~2020, the Company, at the request of holders, redeemed 3,112 Series T Preferred shares through the issuance of 12,633 Class A common shares and redeemed 20 Series T Preferred shares in cash.

The Company has ~~sold 137,968~~a dividend reinvestment plan that allows for participating stockholders to have their Series T Preferred Stock dividend distributions automatically reinvested in additional shares of Series BT Preferred Stock ~~and 137,968 Warrants~~at a price of $25.00 per share. The Company plans to ~~purchase 2,759,360~~issue shares of ~~Class A common stock~~Series T Preferred Stock to cover shares required for ~~net proceeds of approximately $124.2 million after commissions and fees.~~

investment.

At-the-Market Offerings

~~On March 29, 2016,~~In September 2019, the Company and its Operating Partnership ~~and its Manager~~ entered into an At Market Issuance Sales Agreement (the “Series A Sales Agreement”) with FBR Capital Markets & Co. (“FBR”), and MLV & Co. LLC (“MLV”). Pursuant to the Series A Sales Agreement, FBR and MLV will act as distribution agents with respect to the offering and sale of up to $100,000,000 in shares of Series A Preferred Stock in “at the market offerings” as defined in Rule 415 under the Securities Act, including without limitation sales made directly on or through the NYSE MKT, or on any other existing trading market for Series A Preferred Stock or through a market maker (the “Series A ATM Offering”). Since March 31, 2016, the Company has sold 146,460 shares of Series A Preferred Stock for net proceeds of approximately $3.6 million after commissions in the ATM Offering. On April 8, 2016, the Company delivered notice to each of FBR and MLV, pursuant to the terms of the Series A Sales Agreement, to suspend all sales under the Series A ATM Offering. The Company terminated the Series A ATM Offering effective September 30, 2017.

On August 8, 2016, the Company, its Operating Partnership and its Manager entered into an At Market Issuance Sales Agreement (the “Class A Sales Agreement”) with FBR. Pursuant to the Class A Sales Agreement, FBR will act as distribution agent with respect to the offering and sale of up to $100,000,000 in shares of Class A common stock in “at the market offerings” as defined in Rule 415 under the Securities Act, including without limitation sales made directly on or through the NYSE ~~MKT,~~American, or on any other existing trading market for Class A common stock or through a market maker (the “Class A Common Stock ATM Offering”). ~~The~~During the first quarter 2020, the Company ~~has not commenced any sales~~issued 166,873 shares through the Class A Common Stock ATM ~~Offering.~~

~~On September 14, 2016,~~Offering at a weighted average price of $12.10 per share with net proceeds of $2.0 million. The Company has not issued any shares through the Class A Common Stock ATM Offering after the first quarter 2020. During the life of the Class A Common Stock ATM Offering, the Company ~~its Operating Partnership and its Manager entered into an At Market Issuance Sales Agreement (the “Series C Sales Agreement”)~~has issued a total of 621,110 shares at a weighted average price of $12.01 per share with ~~FBR. Pursuant to~~net proceeds of $7.3 million.

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Stock Repurchase Plans

In December 2019, the ~~Series C Sales Agreement, FBR will act as distribution agent with respect to~~Board authorized stock repurchase plans for the ~~offering and sale~~repurchase of up to ~~$36,000,000~~an aggregate of $50 million of the Company’s outstanding shares of Class A common stock. On May 9, 2020, the Board authorized the modification of the stock repurchase plans to provide for the repurchase, from time to time, of up to an aggregate of $50.0 million in shares of its Class A common stock, 8.250% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share (“Series A Preferred Stock”), 7.625% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per share (“Series C Preferred Stock”), and/or 7.125% Series D Cumulative Preferred Stock, $0.01 par value per share (“Series D Preferred Stock”). The repurchase plans will be conducted in accordance with Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The repurchase plans will terminate upon the earliest to occur of certain specified events as set forth therein. The extent to which the Company repurchases shares of its Class A common stock, Series A Preferred Stock, Series C Preferred Stock, and/or Series D Preferred Stock under the repurchase plans, and the timing of any such repurchases, will depend on a variety of factors including general business and market conditions and other corporate considerations. Stock repurchases under the repurchase plans may be made in the open market or through privately negotiated transactions, subject to certain price limitations and other conditions established under the plans. Open market repurchases will be structured to occur in conformity with the method, timing, price and volume requirements of Rule 10b-18 of the Exchange Act.

During the third quarter 2020, the Company repurchased 103,574 shares of Class A common stock under the repurchase plans. During the nine months ended September 30, 2020, the Company repurchased shares under the repurchase plans as follows: 1,131,867 shares of Class A common stock, 163,068 shares of Series A Preferred Stock, 27,905 shares of Series C Preferred Stock in “at the market offerings” as defined in Rule 415 under the Securities Act, including without limitation sales made directly on or through the NYSE MKT, or on any other existing trading market for Series C Preferred Stock or through a market maker (the “Series C ATM Offering”). Since September 14, 2016, the Company has sold 23,750and 76,264 shares of Series CD Preferred Stock for ~~net proceeds~~a total purchase price of approximately ~~$0.6~~$18.5 million. During the life of the repurchase plans, the total purchase price of shares repurchased by the Company is approximately $19.1 million, ~~after commissions~~and as of September 30, 2020, the value of shares that may yet be purchased under the repurchase plans is $30.9 million.

Partial Redemption of 8.250% Series A Cumulative Redeemable Preferred Stock

On September 21, 2020, the Company issued a notice of partial redemption to announce its election to redeem, in cash, 1,393,294 shares of its Series A Preferred Stock on October 21, 2020 at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, and including, the date of redemption. The Company had previously announced that it would pay a cash dividend on the Series ~~C ATM Offering. On~~A Preferred Stock on October 5, 2020 for the period from July 1, 2020 to September ~~27, 2016,~~30, 2020 to each holder of record on September 25, 2020, which dividend payment will be separate and distinct from the payment of the total redemption price. As the notice of partial redemption created an unconditional obligation of the Company ~~delivered notice~~ to ~~FBR, pursuant~~redeem the 1,393,294 shares of Series A Preferred Stock, these shares became mandatorily redeemable and required reclassification from mezzanine equity to a liability on the ~~terms~~Company's consolidated balance sheet as of ~~the Series C Sales Agreement, to suspend all sales under the Series C ATM Offering. The Company terminated the Series C ATM Offering effective~~ September 30, ~~2017.~~

2020.

Operating Partnership and Long-Term Incentive Plan Units

As of September 30, ~~2017,~~2020, limited partners other than the Company owned approximately ~~10.29%~~29.45% of the common units of the Operating Partnership ~~(273,688~~(6,314,754 OP Units, or ~~1.01%~~18.06%, is held by OP Unit holders, and ~~2,502,389~~3,983,578 LTIP Units, or ~~9.28%~~11.39%, is held by LTIP Unit ~~holders.)~~holders, including 5.60% which are not vested at September 30, 2020). Subject to certain restrictions set forth in the Operating Partnership’s Partnership Agreement, OP Units are exchangeable for Class A common stock on a one-for-one ~~basis. During the nine months ended September 30, 2017, 22,367 OP Units were converted into Class A common stock.~~

~~Equity Incentive Plans~~

On March 24, 2016, the Company granted a total of 7,500 shares of Class A common stock to its independent directors under the Amended 2014 Individuals Plan. The fair value of the grants was approximately $0.1 million and the shares vested immediately. On February 14, 2017, the Company granted a total of 7,500 LTIP Units to its independent directors under the Amended 2014 Individuals Plan. The fair value of the grants was approximately $0.1 million and the LTIP Units vested immediately.

~~A summary of the status of~~basis, or, at the Company’s ~~non-vested shares as of September 30, 2017 is as follows (amounts in thousands, except share amounts):~~

Non-Vested shares Shares Weighted average
grant-date fair value
Balance at January 1, 2017 659 $ 22.75
Granted — —
Vested (659 ) 22.75
Forfeited — —
Balance at September 30, 2017 — $ —
~~At September 30, 2017, there was no unrecognized compensation cost related to unvested restricted stock granted under the independent director compensation plan.~~
~~Equity Incentive Plans - LTIP Grants~~
On July 2, 2015, the Company issued a grant of LTIP Units under the Amended 2014 Incentive Plans to the Manager. The equity grant consisted of 283,390 LTIP Units (the “2015 LTIP Units”). The 2015 LTIP Units vest ratably over a three-year period that began in July 2015, subject to certain terms and conditions, including early vesting upon an internalization of our external management functions. On August 3, 2016, the Company issued a grant of LTIP Units under the Amended 2014 Incentive Plans to the Manager. The equity grant consisted of 176,610 LTIP Units (the “2016 LTIP Units”). The 2016 LTIP Units vest ratably over a three-year period that began in August 2016, subject to certain terms and conditions, including early vesting upon an internalization of our external management functions. Theseelection, redeemable for cash. LTIP Units may be convertible into OP Units under certain conditions and then may be settled in shares of the Company’s Class A common ~~stock.~~stock, or, at the Company’s election, cash.
Equity Incentive Plans
LTIP ~~amortization~~Unit Grants
On January 1, 2020, the Company granted certain equity grants of ~~$0.1~~LTIP Units to various executive officers under the Incentive Plans pursuant to the executive officers’ employment or service agreements as time-based LTIP Units and performance-based LTIP Units. All such LTIP Unit grants require continuous employment for vesting. The time-based LTIP Units were comprised of an aggregate of 247,138 LTIP Units that vest over approximately three years. The performance-based LTIP Units were comprised of an aggregate of 494,279 LTIP Units, which are subject to a three-year performance period and will thereafter vest upon successful achievement of performance-based conditions.

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In addition, on January 1, 2020, the Company granted 7,126 LTIP Units under the Incentive Plans to each independent member of the Board in payment of the equity portion of their respective annual retainers. Such LTIP Units were fully vested upon issuance and the Company recognized expense of $0.3 million immediately based on the fair value at the date of grant.

On April 15, 2020, the Company granted an aggregate of 348,117 LTIP Units to various executive officers under the Incentive Plans pursuant to the executive officers’ employment or service agreements in lieu of cash payment of annual incentive bonuses for the fiscal year ended December 31, 2019. Such LTIP Units will vest on the first anniversary of the date of grant.

In addition, on April 15, 2020, the Company granted 46,075 LTIP Units to an employee under the Incentive Plans. Such LTIP Units will vest in three equal installments on each anniversary of the date of grant.

On May 22, 2020 and August 11, 2020, the Company granted an aggregate of 27,111 LTIP Units and 21,889 LTIP Units, respectively, to 2 executive officers under the Incentive Plans in lieu of cash payment of an agreed upon portion of each such executive officer’s base salary, with the remaining portion payable in cash, for the second and third quarter 2020, respectively. Such LTIP Units will vest on the first anniversary of the date of grant.

On September 8, 2020, the Company's stockholders approved the amendment and restatement of each of the Third Amended 2014 Individuals Plan (the "Fourth Amended 2014 Individuals Plan") and the Third Amended 2014 Entities Plan (the "Fourth Amended 2014 Entities Plan", and together with the Fourth Amended 2014 Individuals Plan, the "Fourth Amended 2014 Incentive Plans"). The Fourth Amended 2014 Incentive Plans allow for the issuance of up to 3,000,000 additional shares of Class A common stock, and thus provide for the issuance of an aggregate of up to 6,800,000 shares of Class A common stock. The Fourth Amended 2014 Incentive Plans provide for the grant of options to purchase shares of the Company's common stock, stock awards, stock appreciation rights, performance units, incentive awards and other equity-based awards.

The Company recognizes compensation expense ratably over the requisite service periods for time-based LTIP Units based on the fair value at the date of grant; thus, the Company recognized compensation expense of approximately $1.0 million and ~~$0.5~~$0.9 million, and ~~$1.2~~$2.9 million and ~~$2.0~~$2.7 million, ~~for~~during the three and nine months ended September 30, ~~2017~~2020 and ~~2016, respectively,~~2019, respectively. The Company recognizes compensation expense based on the fair value at the date of grant and the probability of achievement of performance criteria over the performance period for performance-based LTIP Units; thus, the Company recognized approximately $0.8 million and $0.4 million, and $2.1 million and $1.2 million, during the three and nine months ended September 30, 2020 and 2019, respectively.

As of September 30, 2020, there was ~~recorded as part~~$8.8 million of ~~general and administrative expenses,~~total unrecognized compensation cost related to ~~the 2015~~unvested LTIP Units granted under the Incentive Plans. The remaining cost is expected to be recognized over a period of 2.0 years.

Restricted Stock Grants

On April 1, 2019 and 2020, the ~~2016 LTIP Units. The expense recognized during 2017 and 2016 was based~~Company provided restricted stock grants (“RSGs”) to employees under the Incentive Plans. Such RSGs will vest in three equal installments on each anniversary of the date of grant. In 2019, the RSGs were comprised of 90,694 shares of Class A common stock ~~closing price at~~with a fair value of $10.65 per RSG and a total fair value of $1.0 million. In 2020, the ~~vesting date or~~RSGs were comprised of 89,054 shares of Class A common stock with a fair value of $4.80 per RSG and a total fair value of $0.4 million. The Company recognized compensation expense of approximately $0.1 million and $0.1 million, and $0.3 million and $0.2 million, during the ~~end~~three and nine months ended September 30, 2020 and 2019, respectively. The remaining compensation expense of $0.6 million is expected to be recognized over the remaining 2.1 years.

On April 15, 2020, the Company granted an aggregate of 25,174 shares of Class A common stock to 2 executive officers in lieu of cash payment of an agreed upon portion of each such executive officer’s base salary, with the remaining portion having been paid in cash, for the period from January 1, 2020 through March 31, 2020. Such shares of Class A common stock will vest on the first anniversary of the ~~period, as applicable.~~date of grant.

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Distributions

Declaration Date
Payable to stockholders
of record as of
Amount Date Paid
Class A common stock
October 4, 2016 December 23, 2016 $ 0.096667 January 5, 2017
January 6, 2017 January 25, 2017 $ 0.096666 February 3, 2017
January 6, 2017 February 24, 2017 $ 0.096667 March 3, 2017
January 6, 2017 March 24, 2017 $ 0.096667 April 5, 2017
April 7, 2017 April 25, 2017 $ 0.096666 May 5, 2017
April 7, 2017 May 25, 2017 $ 0.096667 June 5, 2017
April 7, 2017 June 23, 2017 $ 0.096667 July 5, 2017
July 10, 2017 July 25, 2017 $ 0.096666 August 4, 2017
August 9, 2017 August 25, 2017 $ 0.096667 September 5, 2017
August 9, 2017 September 25, 2017 $ 0.096667 October 5, 2017
Series A Preferred Stock
December 9, 2016 December 23, 2016 $ 0.515625 January 5, 2017
March 10, 2017 March 24, 2017 $ 0.515625 April 5, 2017
June 9, 2017 June 23, 2017 $ 0.515625 July 5, 2017
September 8, 2017 September 25, 2017 $ 0.515625 October 5, 2017
Series B Preferred Stock
October 4, 2016 December 23, 2016 $ 5.00 January 5, 2017
January 6, 2017 January 25, 2017 $ 5.00 February 3, 2017
January 6, 2017 February 24, 2017 $ 5.00 March 3, 2017
January 6, 2017 March 24, 2017 $ 5.00 April 5, 2017
April 7, 2017 April 25, 2017 $ 5.00 May 5, 2017
April 7, 2017 May 25, 2017 $ 5.00 June 5, 2017
April 7, 2017 June 23, 2017 $ 5.00 July 5, 2017
July 10, 2017 July 25, 2017 $ 5.00 August 4, 2017
July 10, 2017 August 25, 2017 $ 5.00 September 5, 2017
July 10, 2017 September 25, 2017 $ 5.00 October 5, 2017
Series C Preferred Stock
December 9, 2016 December 23, 2016 $ 0.4765625 January 5, 2017
March 10, 2017 March 24, 2017 $ 0.4765625 April 5, 2017
June 9, 2017 June 23, 2017 $ 0.4765625 July 5, 2017
September 8, 2017 September 25, 2017 $ 0.4765625 October 5, 2017
Series D Preferred Stock
December 9, 2016 December 23, 2016 $ 0.3859 January 5, 2017
March 10, 2017 March 24, 2017 $ 0.4453125 April 5, 2017
June 9, 2017 June 23, 2017 $ 0.4453125 July 5, 2017
September 8, 2017 September 25, 2017 $ 0.4453125 October 5, 2017

Payable to stockholders




Declaration Date

of record as of

Amount

Date Paid or Payable
Class A Common Stock






December 6, 2019

December 24, 2019

$
0.162500

January 3, 2020
March 13, 2020

March 25, 2020

$
0.162500

April 3, 2020
May 9, 2020

June 25, 2020

$
0.162500

July 2, 2020
September 11, 2020

September 25, 2020

$
0.162500

October 5, 2020
Class C Common Stock



December 6, 2019

December 24, 2019

$
0.162500

January 3, 2020
March 13, 2020

March 25, 2020

$
0.162500

April 3, 2020
May 9, 2020

June 25, 2020

$
0.162500

July 2, 2020
September 11, 2020

September 25, 2020

$
0.162500

October 5, 2020
Series A Preferred Stock



December 6, 2019

December 24, 2019

$
0.515625

January 3, 2020
March 13, 2020

March 25, 2020

$
0.515625

April 3, 2020
May 9, 2020

June 25, 2020

$
0.515625

July 2, 2020
September 11, 2020

September 25, 2020

$
0.515625

October 5, 2020
Series B Preferred Stock



October 31, 2019

December 24, 2019

$
5.00

January 3, 2020
January 13, 2020

January 24, 2020

$
5.00

February 5, 2020
January 13, 2020

February 25, 2020

$
5.00

March 5, 2020
January 13, 2020

March 25, 2020

$
5.00

April 3, 2020
April 14, 2020

April 24, 2020

$
5.00

May 5, 2020
May 9, 2020

May 22, 2020

$
5.00

June 5, 2020
May 9, 2020

June 25, 2020

$
5.00

July 2, 2020
July 10, 2020

July 24, 2020

$
5.00

August 5, 2020
July 10, 2020

August 25, 2020

$
5.00

September 4, 2020
July 10, 2020

September 25, 2020

$
5.00

October 5, 2020
Series C Preferred Stock



December 6, 2019

December 24, 2019

$
0.4765625

January 3, 2020
March 13, 2020

March 25, 2020

$
0.4765625

April 3, 2020
May 9, 2020

June 25, 2020

$
0.4765625

July 2, 2020
September 11, 2020

September 25, 2020

$
0.4765625

October 5, 2020
Series D Preferred Stock



December 6, 2019

December 24, 2019

$
0.4453125

January 3, 2020
March 13, 2020

March 25, 2020

$
0.4453125

April 3, 2020
May 9, 2020

June 25, 2020

$
0.4453125

July 2, 2020
September 11, 2020

September 25, 2020

$
0.4453125

October 5, 2020
Series T Preferred Stock⁽¹⁾

December 20, 2019

December 24, 2019

$
0.128125

January 3, 2020
January 13, 2020

January 24, 2020

$
0.128125

February 5, 2020
January 13, 2020

February 25, 2020

$
0.128125

March 5, 2020
January 13, 2020

March 25, 2020

$
0.128125

April 3, 2020
April 14, 2020

April 24, 2020

$
0.128125

May 5, 2020
May 9, 2020

May 22, 2020

$
0.128125

June 5, 2020
May 9, 2020

June 25, 2020

$
0.128125

July 2, 2020
July 10, 2020

July 24, 2020

$
0.128125

August 5, 2020
July 10, 2020

August 25, 2020

$
0.128125

September 4, 2020
July 10, 2020

September 25, 2020

$
0.128125

October 5, 2020

(1) Shares of newly issued Series T Preferred Stock that are held only a portion of the applicable monthly dividend period will receive a prorated dividend based on the actual number of days in the applicable dividend period during which each such share of Series T Preferred Stock was outstanding.

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A portion of each dividend may constitute a return of capital for tax purposes. There is no assurance that the Company will continue to declare dividends or at this rate.
Holders of OP Units and LTIP Units are entitled to receive "distribution equivalents" at the same time as dividends are paid to holders of the Company's Class A common stock.
The Company has a dividend reinvestment plan that allows for participating stockholders to have their Class A common stock dividend distributions automatically invested in additional Class A common shares based on the average price of the Class A common shares on the investment date. The Company plans to issue Class A common shares to cover shares required for investment.
~~Announcement of Review of Class A Common Stock Dividend Policy~~
On August 4, 2017, the board of directors announced that it initiated, in conjunction with a financial advisor, a comprehensive review of the appropriate dividend policy for the Company's Class A Common Stock. The board's evaluation will consider factors including, but not limited to, achieving a sustainable dividend covered by current recurring AFFO (vs. pro forma AFFO), multifamily and small cap peer dividend rates, multifamily and small cap peer payout ratios, providing financial flexibility for the Company, and achieving an appropriate balance between the retention of capital to invest and grow net asset value, and the importance of current distributions. The board is expected to complete its review of the dividend policy for the Company's Class A Common Stock in the fourth quarter of 2017.
28
Distributions declared and paid for the nine months ended September 30, ~~2017~~2020 were as follows (amounts in thousands):

Distributions
2017 Declared Paid

Distributions
2020

Declared

Paid
First Quarter




Class A Common Stock $ 7,014 $ 6,566

$
3,901

$
3,816
Class C Common Stock

12

12
Series A Preferred Stock 2,950 2,950

2,950

2,950
Series B Preferred Stock 525 395

7,848

7,867
Series C Preferred Stock 1,107 1,107

1,107

1,107
Series D Preferred Stock 1,269 1,100

1,269

1,269
Series T Preferred Stock

373

130
OP Units 82 84

1,037

1,037
LTIP Units 496 480

554

347
Total first quarter 2017 $ 13,443 $ 12,682
Total first quarter 2020

$
19,051

$
18,535
Second Quarter




Class A Common Stock $ 7,016 $ 7,015

$
3,995

$
3,902
Class C Common Stock

12

12
Series A Preferred Stock 2,950 2,950

2,880

2,950
Series B Preferred Stock 1,054 837

7,766

7,779
Series C Preferred Stock 1,108 1,107

1,103

1,107
Series D Preferred Stock 1,270 1,270

1,245

1,269
Series T Preferred Stock

1,243

1,000
OP Units 80 80

1,026

1,038
LTIP Units 551 533

635

407
Total second quarter 2017 $ 14,029 $ 13,792
Total second quarter 2020

$
19,905

$
19,464
Third Quarter




Class A Common Stock 7,017 7,016

$
4,012

$
3,994
Class C Common Stock

12

12
Series A Preferred Stock 2,950 2,950

2,866

2,880
Series B Preferred Stock 1,711 1,508

7,745

7,751
Series C Preferred Stock 1,107 1,107

1,094

1,102
Series D Preferred Stock 1,270 1,269

1,236

1,245
Series T Preferred Stock

2,062

1,738
OP Units 79 80

1,026

1,027
LTIP Units 676 625

649

487
Total third quarter 2017 $ 14,810 $ 14,555
Total third quarter 2020

$
20,702

$
20,236
Total $ 42,282 $ 41,029

$
59,658

$
58,235

Note 1214 – Commitments and Contingencies
On March 4, 2020, the Company acquired land for $3.1 million and simultaneously structured and entered into a ground lease (the “Zoey Ground Lease”) as part of the ground lease tenant’s development of a multi-family property in Austin, Texas. The Company committed to provide the ground lease tenant a $20.4 million leasehold improvement allowance with funding subject to certain conditions. As of September 30, 2020, the project is under development and $3.6 million of the leasehold improvement allowance had been funded.

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The Company is subject to various legal actions and claims arising in the ordinary course of business. Although the outcome of any legal matter cannot be predicted with certainty, management does not believe that any of these legal proceedings or matters will have a material adverse effect on the consolidated financial position or results of operations or liquidity of the Company.

Note 1315 – Subsequent Events
Declaration of Dividends

Declaration Date
Payable to stockholders
of record as of
Amount Payable Date
Class A common stock
October 13, 2017 October 25, 2017 $ 0.096666 November 3, 2017
October 13, 2017 November 24, 2017 $ 0.096667 December 5, 2017
October 13, 2017 December 22, 2017 $ 0.096667 January 5, 2018
Series B Preferred Stock
October 13, 2017 October 25, 2017 $ 5.00 November 3, 2017
October 13, 2017 November 24, 2017 $ 5.00 December 5, 2017
October 13, 2017 December 22, 2017 $ 5.00 January 5, 2018


Payable to stockholders




Declaration Date

of record as of

Amount

Paid / Payable Date
Series B Preferred Stock






October 9, 2020

October 23, 2020

$
5.00

November 5, 2020
October 9, 2020

November 25, 2020

$
5.00

December 4, 2020
October 9, 2020

December 24, 2020

$
5.00

January 5, 2021
Series T Preferred Stock ⁽¹⁾






October 9, 2020

October 23, 2020

$
0.128125

November 5, 2020
October 9, 2020

November 25, 2020

$
0.128125

December 4, 2020
October 9, 2020

December 24, 2020

$
0.128125

January 5, 2021

~~Holders of OP and LTIP Units are entitled to receive "distribution equivalents" at the same time as dividends are paid to holders of the Company's Class A common stock.~~
~~A portion of each dividend may constitute a return of capital for tax purposes. There is no assurance that the Company will continue to declare dividends or at this rate.~~
(1) 29 Shares of newly issued Series T Preferred Stock that are held only a portion of the applicable monthly dividend period will receive a prorated dividend based on the actual number of days in the applicable dividend period during which each such share of Series T Preferred Stock was outstanding.
Distributions Paid
The following distributions were declared and/or paid to the ~~Company's~~Company’s stockholders, as well as holders of OP and LTIP Units, subsequent to September 30, ~~2017~~2020 (amounts in thousands):

Distributions

Total
Shares Declaration
Date Record Date Date Paid Distributions
per Share Total
Distribution

Declaration Date

Record Date

Date Paid

per Share

Distribution
Class A Common Stock August 9, 2017 September 25, 2017 October 5, 2017 $ 0.096667 $ 2,339

September 11, 2020

September 25, 2020

October 5, 2020

$
0.162500

$
4,012
Class C Common Stock

September 11, 2020

September 25, 2020

October 5, 2020

0.162500

12
Series A Preferred Stock September 8, 2017 September 25, 2017 October 5, 2017 $ 0.515625 $ 2,950

September 11, 2020

September 25, 2020

October 5, 2020

0.515625

2,866
Series B Preferred Stock July 10, 2017 September 25, 2017 October 5, 2017 $ 5.000000 $ 646

July 10, 2020

September 25, 2020

October 5, 2020

5.000000

2,581
Series C Preferred Stock September 8, 2017 September 25, 2017 October 5, 2017 $ 0.4765625 $ 1,107

September 11, 2020

September 25, 2020

October 5, 2020

0.4765625

1,094
Series D Preferred Stock September 8, 2017 September 25, 2017 October 5, 2017 $ 0.4453125 $ 1,269

September 11, 2020

September 25, 2020

October 5, 2020

0.4453125

1,236
Series T Preferred Stock

July 10, 2020

September 25, 2020

October 5, 2020

0.128125

810
OP Units August 9, 2017 September 25, 2017 October 5, 2017 $ 0.096667 $ 26

September 11, 2020

September 25, 2020

October 5, 2020

0.162500

1,026
LTIP Units August 9, 2017 September 25, 2017 October 5, 2017 $ 0.096667 $ 242

September 11, 2020

September 25, 2020

October 5, 2020

0.162500

500

Class A Common Stock October 13, 2017 October 25, 2017 November 3, 2017 $ 0.096666 $ 2,340

Series B Preferred Stock October 13, 2017 October 25, 2017 November 3, 2017 $ 5.000000 $ 718

October 9, 2020

October 23, 2020

November 5, 2020

5.000000

2,577
OP Units October 13, 2017 October 25, 2017 November 3, 2017 $ 0.096666 $ 240
LTIP Units October 13, 2017 October 25, 2017 November 3, 2017 $ 0.096666 $ 29
Series T Preferred Stock

October 9, 2020

October 23, 2020

November 5, 2020

0.128125

930
Total $ 11,906







$
17,644

~~Management Internalization~~Water's Edge Interests
On October 1, 2020, the Company made a $3.3 million preferred equity investment in the Strategic JV with an unaffiliated party for Water's Edge, a stabilized property located in Pensacola, Florida and the seventh property in the Strategic Portfolio. The Company will earn a 7.5% current return and a 3.0% accrued return for a total preferred return of 10.5%. The Strategic JV is required to redeem the Company's preferred membership interest plus any accrued but unpaid preferred return on the earlier date which is: (i) the sale of the property, (ii) the refinancing of the loan related to the property, or (iii) the maturity date of the property loan.

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Partial Redemption of 8.250% Series A Cumulative Redeemable Preferred Stock

On October 21, 2020, the Company redeemed 1,393,294 shares of its Series A Preferred Stock, representing approximately 25% of the total outstanding shares of Series A Preferred Stock. The shares were redeemed at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, and including, the date of redemption in an amount equal to $0.120313 per share, for a total payment of $25.120313 per share, in cash.

Sale of Cade Boca Raton

On October 26, ~~2017, at~~2020, the ~~annual meeting~~Company closed on the sale of ~~stockholders,~~Cade Boca Raton, located in Boca Raton, Florida. The property was sold for approximately $37.8 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of the existing mortgage indebtedness encumbering the property in the amount of $23.5 million, the payment of early extinguishment of debt costs of $0.2 million and payment of closing costs and fees of $0.6 million, the sale of the property generated net proceeds of approximately $13.0 million, of which the Company’s ~~stockholders approved~~pro rata share of the ~~issuance, pursuant~~proceeds was approximately $10.2 million.

Stock Repurchase Plans

On October 29, 2020, the Board authorized new stock repurchase plans for the repurchase, from time to ~~the Contribution Agreement,~~time, of ~~(i) OP Units, and~~up to an aggregate of $75 million in shares of the Company’s Class A ~~Common~~common stock, Series A Preferred Stock, ~~that may~~Series C Preferred Stock and/or Series D Preferred Stock to be issued in the Company’s discretion upon redemption of such OP Units in certain circumstances, and (ii) shares of the Company’s Class C Common Stock, and shares of the Company’s Class A Common Stock that may be issued upon conversion of such shares of Class C Common Stock in certain circumstances; in each case, to the applicable contributor and its affiliates and related persons (each, a “Contributor”) in connection with the Internalization.

The Internalization transaction closed on October 31, 2017, and the following table shows the Internalization Consideration paid in aggregate to the Contributors based on the trailing twelve-month base management and incentive fees of $13,748,029.

Total Internalization Consideration $ 41,244,086

Allocation of Internalization Consideration:
Internalization expense reimbursement $ 450,000
Internalization Consideration paid in cash $ 40,794
Internalization Consideration paid in OP Units $ 39,938,226
Internalization Consideration paid in Class C common stock $ 815,066

Volume-Weighted Average Price (“VWAP”) $ 10.64

Number of OP Units Issued 3,753,593
Number of shares of Class C Common Stock Issued 76,603
Upon closing of the Internalization, the Company became a self-managed real estate investment trust. The following key executives and officers of the Manager assumed the following titles and duties with the Company: Mr. R. Ramin Kamfar serves as Chairman and Chief Executive Officer; Mr. James G, Babb, III, serves as Chief Investment Officer; Mr. Ryan S. MacDonald serves as Chief Acquisitions Officer; Mr. Jordan B. Ruddy serves as Chief Operating Officer and President; Mr. Christopher J. Vohs serves as Chief Financial Officer and Treasurer; and Mr. Michael L. Konig serves as Chief Legal Officer and Secretary. Messrs. Kamfar, Babb, MacDonald, Ruddy and Vohs have entered into employment agreements with an indirect subsidiary of the Company, and Mr. Konig has likewise entered into a services agreement with that subsidiary through his wholly-owned law firm, Konig & Associates, LLC on substantially the same terms as the employment agreements. Each such agreement became effective upon Closing, and has an initial term through and including December 31, 2020. As such, following the Internalization, the Company’s senior management team continues to oversee, manage and operate the Company, and the Company is no longer externally managed by the Manager. As an internally managed company, the Company no longer pays our Manager any fees or expense reimbursements arising from the Management Agreement.
30
A special committee comprised entirely of independent and disinterested members of the Company’s board of directors (the “Special Committee”), which retained independent legal and financial advisors, unanimously determined that the entry into the Contribution Agreement and the completion of the Internalization are in the best interests of the Company. The Company’s board of directors, by unanimous vote, made a similar determination.
~~In conjunction with the Internalization, 212,203 outstanding LTIP Units issued as incentive equity to our Manager became vested~~conducted in accordance with ~~their original terms.~~
~~Second Amended 2014 Incentive Plans~~
~~On October 26, 2017, at~~ the ~~annual meeting~~Rules 10b5-1 and 10b-18 of ~~stockholders,~~ the ~~Company’s stockholders approved~~Exchange Act. The repurchase plans will become effective upon the ~~Second Amended 2014 Incentive Plans~~occurrence of, and will terminate upon the earliest to occur of, certain specified events as set forth therein. The extent to which ~~provides for an aggregate of 1,550,000~~the Company repurchases shares of its Class A ~~Common~~common stock, Series A Preferred Stock, ~~available for grant, an increase~~Series C Preferred Stock, and/or Series D Preferred Stock under the repurchase plans, and the timing of ~~1,075,000 shares.~~
~~Conversion~~any such purchases, depends on a variety of ~~LTIP Units to OP Units~~
~~On October 1, 2017, holders of 2,206,033 LTIP Units converted their interests into OP Units.~~
~~Entry into Senior secured revolving credit facility with KeyBank National Association~~
~~On October 4, 2017, the Company, through its Operating Partnership, entered into a credit agreement (the “Senior Credit Facility”) with KeyBank National Association (“KeyBank”)~~factors including general business and market conditions and other lenders. The Senior Credit Facility provides for an initial loan commitment amount of $150 million, which commitment contains an accordion feature up to a maximum commitment of up to $250 million. The availability of borrowings willcorporate considerations. Repurchases under the repurchase plans may be ~~based on~~made in the ~~value of a pool of collateral properties and compliance with various ratios related to those assets.~~
~~The Senior Credit Facility matures on October 4, 2020, with a one-year extension option,~~open market or through privately negotiated transactions, subject to certain price limitations and other conditions established thereunder. Open market repurchases will be structured to occur within the method, timing, price and ~~the payment~~volume requirements of an extension fee. Borrowings under the Senior Credit Facility bear interest, at the Company’s option, at LIBOR plus 1.80% to 2.45%, or the base rate plus 0.80% to 1.45%, depending on the Company’s leverage ratio. The Company will pay an unused fee at an annual rate of 0.20% to 0.25%Rule 10b-18 of the ~~unused portion~~Exchange Act.

Table of the Senior Credit Facility, depending on the amount of borrowings outstanding. The Senior Credit Facility contains certain financial and operating covenants, including a maximum leverage ratio, minimum liquidity, minimum debt service coverage ratio, and minimum tangible net worth. The Company has guaranteed the obligations under the Senior Credit Facility.Contents

~~Acquisition of Outlook at Greystone~~

On October 19, 2017, the Company, through subsidiaries of its Operating Partnership, acquired a 100.0% interest in a 300-unit apartment community located in Birmingham, Alabama, known as Outlook at Greystone (“Outlook at Greystone”) for approximately $36.3 million. The purchase price for Outlook at Greystone of approximately $36.3 million was funded, in part, with the Company’s Secured Credit Facility, secured by a mortgage by the Outlook at Greystone property.

~~Acquisition of ARIUM Hunter’s Creek and ARIUM Metrowest~~

On October 30, 2017, the Company, through subsidiaries of its Operating Partnership, acquired a 100.0% interest in two apartment communities located in Orlando, Florida. The properties are a 532-unit apartment community, known as ARIUM Hunter’s Creek, and a 510-unit apartment community known as ARIUM Metrowest.

The purchase price for ARIUM Hunter’s Creek of approximately $96.9 million was funded, in part, with a $72.3 million senior mortgage loan secured by the ARIUM Hunter’s Creek property and improvements (the “ARIUM Hunter’s Creek Loan”). The ARIUM Hunter’s Creek Loan matures November 1, 2024 and bears interest at a fixed rate of 3.65%. Regular monthly payments are interest-only until November 1, 2019, with payments based on thirty-year amortization thereafter. The Company provided standard scope non-recourse carveout guarantees in conjunction with the ARIUM Hunter’s Creek Loan.

~~The purchase price for ARIUM Metrowest of approximately $86.0 million was funded, in part, through borrowings under the Company’s Senior Credit Facility.~~

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Bluerock Residential Growth REIT, Inc., and the notes thereto. As used herein, the terms “we,” “our” and “us” refer to Bluerock Residential Growth REIT, Inc., a Maryland corporation, and, as required by context, Bluerock Residential Holdings, L.P., a Delaware limited partnership, which we refer to as our “Operating Partnership,” and to their subsidiaries. We refer to Bluerock Real Estate, L.L.C., a Delaware limited liability company, as “Bluerock”, and we refer to our former external manager, BRG Manager, LLC, a Delaware limited liability company, as our ~~“Manager.~~“former Manager.” Both Bluerock and our former Manager are affiliated with the Company.
Forward-Looking Statements
Statements included in this Quarterly Report on Form 10-Q that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto) are “forward-looking statements,” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual events or our investments and results of operations could differ materially from those expressed or implied in any forward-looking statements. Forward-looking statements are typically identified by the use of terms such as “may,” “should,” “expect,” “could,” “intend,” “plan,” “anticipate,” “estimate,” “believe,” “continue,” “predict,” “potential” or the negative of such terms and other comparable terminology.
The forward-looking statements included herein are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. ~~Factors~~
Currently, one of the most significant factors, however, is the potential adverse effect of the current pandemic of the novel coronavirus (“COVID-19”) on the financial condition, results of operations, cash flows and performance of the Company and its tenants of our properties, business partners within our network and service providers, as well as the real estate market and the global economy and financial markets. The extent to which COVID-19 impacts the Company and its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact (including governmental actions that may vary by jurisdiction, such as mandated business closing; “stay-at-home” orders; limits on group activity; and actions to protect residential tenants from eviction), and the direct and indirect economic effects of the pandemic and containment measures, among others. Moreover, you should interpret many of the risks identified in this Quarterly Report on Form 10-Q, as well as the risks set forth below, as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19.
Additional factors that could have a material adverse effect on our operations and future prospects include, but are not limited to:
·● the factors included in this Quarterly Report on Form 10-Q, including those set forth under the heading “Management’s Discussion and Analysis of Financial Condition and Results of Operations”;
·● ~~failure to plan and manage the Internalization and internalize the functions performed for us by our Manager effectively or efficiently;~~
· ~~the possibility that the anticipated benefits from the Internalization may not be realized or may take longer to realize than expected;~~
· ~~unexpected costs or unexpected liabilities that may arise from the transactions contemplated by the Contribution Agreement, whether or not completed;~~
· ~~The outcome of any legal proceedings that may be instituted against us or others following the announcement of the Internalization;~~
· use of proceeds of the Company’s securities offerings;
·● the competitive environment in which we operate;
·● real estate risks, including fluctuations in real estate values and the general economic climate in local markets and competition for tenants in such markets;
·● risks associated with geographic concentration of our investments;
·● decreased rental rates or increasing vacancy rates;
·● our ability to lease units in newly acquired, newly constructed or newly ~~constructed~~renovated apartment properties;

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·●

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

·●

creditworthiness of tenants;

·●

our ability to obtain financing for and complete acquisitions under contract at the contemplated terms, or at all;

·●

development and acquisition risks, including rising and unanticipated costs, delays in timing, abandonment of opportunities, and failure of such acquisitions and developments to perform in accordance with projections;

·●

the timing of acquisitions and dispositions;

·●

the performance of our ~~Partner Network;~~network of leading regional apartment owner/operators with which we invest, including through controlling positions in joint ventures;

·●

potential natural disasters such as hurricanes, tornadoes and floods;

·●

national, international, regional and local economic conditions;

·●

Board determination as to timing and payment of dividends, and our ability to pay future distributions at the dividend rates we have paid historically;

·●

the general level of interest rates;

·●

potential changes in the law or governmental regulations that affect us and interpretations of those laws and regulations, including changes in real estate and zoning or tax laws, and potential increases in real property tax rates;

·●

financing risks, including the risks that our cash flows from operations may be insufficient to meet required payments of principal and interest 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;

·●

our ability to maintain our qualification as a REIT;

·●

litigation, including costs associated with prosecuting or defending claims and any adverse outcomes; and

·●

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.

Any of the assumptions underlying forward-looking statements could be inaccurate. You are cautioned not to place undue reliance on any forward-looking statements included in this report. All forward-looking statements are made as of the date of this report and the risk that actual results will differ materially from the expectations expressed in this report will increase with the passage of time. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements after the date of this report, whether as a result of new information, future events, changed circumstances or any other reason. The forward-looking statements should be read in light of the risk factors set forth in Item 1A of this Quarterly Report on Form 10-Q, in Item 1A of our Annual Report on Form 10-K filed with the Securities and Exchange Commission (“~~SEC”~~SEC��) on February ~~22, 2017,~~24, 2020, and subsequent filings by us with the SEC, or (“Risk Factors”).

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Overview

We were incorporated as a Maryland corporation on July 25, 2008. Our objective is to maximize long-term stockholder value by acquiring and developing well-located institutional-quality apartment properties in ~~demographically attractive~~knowledge economy growth markets across the United States. We seek to maximize returns through investments where we believe we can drive substantial growth in our ~~funds from operations, adjusted~~core funds from operations and net asset value primarily through ~~one or more of~~ our ~~Core-Plus,~~ Value-Add ~~Opportunistic~~ and Invest-to-Own investment strategies.

We conduct our operations through Bluerock Residential Holdings, L.P., our operating partnership (the “Operating Partnership”), of which we are the sole general partner. The consolidated financial statements include our accounts and those of the Operating Partnership and its subsidiaries.

As of September 30, ~~2017,~~2020, our portfolio consisted of ~~interests~~investments held in fifty-seven real estate properties, consisting of thirty-five ~~properties (twenty-five~~consolidated operating properties and ~~ten~~twenty-two properties through preferred equity, mezzanine loan or ground lease investments. Of the property interests held through preferred equity, mezzanine loan or ground lease investments, five are under development, ~~properties).~~three are in lease-up and fourteen properties are stabilized. The ~~thirty-five~~fifty-seven properties contain an aggregate of ~~10,761~~17,216 units, comprised of ~~8,166~~11,844 consolidated operating units and ~~2,595~~5,372 units ~~under development.~~through preferred equity, mezzanine loan or ground lease investments. As of September 30, ~~2017, these properties, exclusive of~~2020, our ~~development~~consolidated operating properties were approximately ~~94%~~95.1% occupied.

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code and have qualified as a REIT commencing with our taxable year ended December 31, 2010. In order to continue to qualify as a REIT, we must distribute to our stockholders each calendar year at least 90% of our taxable income (excluding net capital gains). If we qualify as a REIT for federal income tax purposes, we generally will not be subject to federal income tax on income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates and will not be permitted to qualify as a REIT for four years following the year in which our qualification is denied. Such an event could materially and adversely affect our net income and results of operations. We intend to continue to organize and operate in such a manner as to remain qualified as a REIT.

COVID-19

~~Management Internalization~~

~~On October 26, 2017, at the annual meeting of stockholders, our stockholders approved the issuance, pursuant~~We continue to the Contribution Agreement, of (i) OP Units, and shares of the our Class A Common Stock that may be issued in the our discretion upon redemption of such OP Units in certain circumstances, and (ii) shares of the our Class C Common Stock, and shares of the our Class A Common Stock that may be issued upon conversion of such shares of Class C Common Stock in certain circumstances; in each case, to the applicable contributor and its affiliates and related persons (each, a “Contributor”) in connection with the Internalization.

Total Internalization Consideration $ 41,244,086

Allocation of Internalization Consideration:

Internalization expense reimbursement $ 450,000
Internalization Consideration paid in cash $ 40,794
Internalization Consideration paid in OP Units $ 39,938,226
Internalization Consideration paid in Class C common stock $ 815,066

Volume-Weighted Average Price (“VWAP”) $ 10.64

Number of OP Units Issued 3,753,593
Number of shares of Class C Common Stock Issued 76,603
Upon closing of the Internalization, we became a self-managed real estate investment trust. The following key executives and officers of our Manager assumed the following titles and duties with the Company: Mr. R. Ramin Kamfar serves as our Chairman and Chief Executive Officer; Mr. James G, Babb, III, serves as our Chief Investment Officer; Mr. Ryan S. MacDonald serves as our Chief Acquisitions Officer; Mr. Jordan B. Ruddy serves as our Chief Operating Officer and President; Mr. Christopher J. Vohs serves as our Chief Financial Officer and Treasurer; and Mr. Michael L. Konig serves as our Chief Legal Officer and Secretary. Messrs. Kamfar, Babb, MacDonald, Ruddy and Vohs have entered into employment agreements with an indirect subsidiary of the Company, and Mr. Konig has likewise entered into a services agreement with that subsidiary through his wholly-owned law firm, Konig & Associates, LLC on substantially the same terms as the employment agreements. Each such agreement became effective upon Closing, and has an initial term through and including December 31, 2020. As such, following the Internalization, our senior management team continues to oversee, manage and operate the Company, and we are no longer externally managed by the Manager. As an internally managed company, we no longer pay the Manager any fees or expense reimbursements arising from the Management Agreement.
A special committee comprised entirely of independent and disinterested members of our board of directors (the “Special Committee”), which retained independent legal and financial advisors, unanimously determined that the entry into the Contribution Agreement and the completion of the Internalization are in the best interests of the Company. Our board of directors, by unanimous vote, made a similar determination.
~~In conjunction with the Internalization, 212,203 outstanding LTIP Units issued as incentive equity to our Manager became vested in accordance with their original terms.~~
~~The following table reflects the impact of various LTIP Unit to OP Unit conversions and payment of Internalization Consideration subsequent to September 30, 2017:~~

Shares and units
outstanding
September 30, 2017

LTIP Unit Conversion
to OP Units⁽¹⁾

Internalization
Consideration in
shares and units⁽²⁾

Post Internalization
shares and units
outstanding
November 1, 2017⁽³⁾

Class A Common Stock 24,193,109 24,193,109
Class C Common Stock - 76,603 76,603
LTIP Units 2,502,389 (2,206,033 ) 296,356
Total share equivalents 26,695,498 (2,206,033 ) 76,603 24,566,068
OP Units 273,688 2,206,033 3,753,593 6,233,314
Total shares and OP Units 26,969,186 - 3,830,196 30,799,382
⁽¹⁾~~Reflects the impact of LTIP Unit conversions to OP Units which occurred on October 1, 2017.~~
⁽²⁾~~Reflects~~monitor the impact of the ~~Internalization Consideration which was issued~~COVID-19 pandemic on ~~October 31, 2017~~
⁽³⁾~~Does not include any share activity not noted above~~all aspects of our business and ~~LTIP Units does not include the issuance~~apartment communities, including how it will impact our tenants and business partners. While we collected 97% of ~~LTIPs for the base management fee~~rents from our multifamily properties, including 1% of payment plans, for the three months ended September 30, ~~2017~~2020, going forward we cannot predict the impact that the COVID-19 pandemic will have on our financial condition, results of operations and cash flows due to numerous uncertainties. These uncertainties include the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others. The outbreak of COVID-19 across the globe, including the United States, has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets. The global impact of the outbreak has been rapidly evolving and, as cases of COVID-19 have continued to be identified in additional countries, many countries, including the United States, have reacted by instituting quarantines, mandating business and school closures and restricting travel. Certain states and cities, including where we own communities, have developments and where our Company has places of business located, have also reacted by instituting quarantines, restrictions on travel, “stay-at-home” orders, restrictions on types of business that may continue to operate, and/or restrictions on the types of construction projects that may continue. We cannot predict if additional states and cities will implement similar restrictions or when restrictions currently in place will expire. As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly, including industries in which ~~was estimated at 253,300 at~~our tenants are employed. Further, the impacts of a potential worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets, consumer spending as well as other unanticipated consequences remain unknown. We also are unable to predict the impact that COVID-19 will have on our tenants, business partners within our network, and our service providers; and therefore, any material effect on these parties could adversely impact us.

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As of September 30, ~~2017 based~~2020, we collected 97% of rents from our multifamily properties, including payment plans of 1%, for the three months ended September 30, 2020. As of October 31, 2020, we collected 97% of October rents from our multifamily properties, including payment plans of 0.5%. We provided rent deferral payment plans as a result of hardships these tenants are experiencing due to the impact of COVID-19. Although we expect to continue to receive tenant requests for rent deferrals in the coming months, we do not expect to waive our contractual rights under our lease agreements. Further, while occupancy remains strong at 95.1% and 95.4% as of September 30, 2020 and October 31, 2020, respectively, and we have received full interest payments and preferred returns from our mezzanine loan and preferred investments as of September 30, 2020, in future periods, we may experience reduced levels of tenant retention, reduced foot traffic and lease applications from prospective tenants, and reduced or interrupted payments on our mezzanine loan and preferred investments as a result of the impact of COVID-19.

The impact of the COVID-19 pandemic on our rental revenue for the fourth quarter 2020 and thereafter cannot be determined at present. The situation surrounding the COVID-19 pandemic remains uncertain, and we are actively managing our response in collaboration with business partners in our network and service providers and assessing potential impacts to our financial position and operating results, as well as potential adverse developments in our business. For further information regarding the impact of COVID-19 on the ~~$11.06~~Company, see Part II, Item 1A titled “Risk Factors.” While we expect COVID-19 to adversely impact our tenants in the short term, we believe the knowledge economy renter by choice targeted by our Class A affordable rent strategy should be less impacted by COVID-19 related job loss, which should provide a downside buffer in the interim and allow us to reaccelerate rent growth more quickly once more economic certainty exists around the COVID-19 pandemic.

Since the beginning of the COVID-19 pandemic, we have taken actions to prioritize the health and well-being of our tenants and our employees, while maintaining our high standard of service. As of November 3, 2020, all our properties are open and are complying with federal, state and local government orders. In keeping with such orders, we have implemented, and will continue to implement, operational changes, including the adoption of social distancing practices, additional use of PPE equipment and a virtual leasing/virtual office philosophy. Our property offices are now open to the public and to residents by appointment and with strict social distancing protocols in place. Work orders are now being completed, also with strict safety protocols in place including PPE equipment and a safety questionnaire of each resident at time of request. Generally, the outdoor amenity areas at our communities, including pools, pet parks, and outdoor social areas, have re-opened with strict social distancing protocols, limited capacity and cleaning protocols implemented. Our properties continue the cleaning protocols for the sanitization of all community common areas (including handrails, doors and elevators).

~~Second Amended 2014 Incentive Plans~~

~~On October 26, 2017, at~~In response to shelter-in-place orders, our corporate offices have also transitioned to a remote work environment. There can be no assurances that the ~~annual meeting~~continuation of ~~stockholders, our stockholders approved the Second Amended 2014 Incentive Plans which provides~~such remote work arrangements for an ~~aggregate~~extended period of ~~1,550,000 shares of Class A Common Stock available for grant, an increase of 1,075,000 shares.~~time will not strain our business continuity plans, introduce operational risk, including but not limited to cybersecurity risks, or impair our ability to manage our business.

~~Recent~~Other Significant Developments

During the nine months ended September 30, ~~2017,~~2020, we acquired ~~eight stabilized~~three operating multifamily properties ~~disposed~~in which we have full or majority ownership, representing an aggregate of ~~four~~930 units, for an aggregate purchase price of $172.6 million. These properties are located in Phoenix, Arizona, Cumming, Georgia and ~~converted two~~Austin, Texas. We also purchased a parcel of land in Austin, Texas and simultaneously entered into a ground lease with an unaffiliated ground lease tenant and have funded $3.6 million of the leasehold improvement allowance.

We increased our investment in the Strategic Portfolio joint venture through increased preferred equity investments of approximately $11.9 million representing an aggregate of 736 units. These properties are located in Savannah, Georgia, Pensacola, Florida and Jacksonville, Florida. We also increased our preferred equity investments in Alexan CityCentre, Alexan Southside Place, Riverside Apartments, The Conley (formerly North Creek Apartments) and Wayford at Concord (formerly Wayforth at Concord) by approximately $6.4 million.

We entered into mezzanine ~~financing arrangements as discussed below.~~loan agreements with Reunion Apartments and Avondale Hills, located in Orlando, Florida and Decatur, Georgia, respectively, and have provided loan funding of $1.9 million. We received loan repayments of $29.0 million from and re-lent $10.0 million to Motif and The Park at Chapel Hill. We entered into an amended and restated loan agreement with The Park at Chapel Hill and provided $20.5 million of loan funding under the restated agreement. We also provided increased loan funding to Arlo, Domain at The One Forty, Novel Perimeter and Vickers Historic Roswell of approximately $5.5 million.

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We sold four operating properties and, together with an unaffiliated joint venture partner, sold an asset underlying an unconsolidated joint venture for an aggregate sale price of approximately $272.4 million.

Acquisition of ~~Bell Preston View~~Real Estate

Ownership

Purchase


Property

Location

Date

Interest

Price

Mortgage

Avenue 25

Phoenix, AZ

January 23, 2020

100
%
$
55,600

$
36,566
⁽¹⁾
Falls at Forsyth

Cumming, GA

March 6, 2020

100
%

82,500

—
⁽²⁾
Chevy Chase

Austin, TX

August 11, 2020

92
%

34,500

24,400

(1) Mortgage balance includes a $29.7 million loan assumption and a $6.9 million supplemental loan secured by the Avenue 25 property.
(2) We funded $79.9 million of the purchase price with proceeds from our Amended Senior Credit Facility secured by the Falls at Forsyth property. Refer to Note 8 “Revolving Credit Facilities” of our consolidated financial statements for further information about our Amended Secured Credit Facility.
Sale of Helios
On ~~February 17, 2017, we,~~January 8, 2020, the underlying asset of an unconsolidated joint venture located in Atlanta, Georgia known as Helios was sold for approximately $65.6 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of existing mortgage indebtedness encumbering the property in the amount of $39.5 million and the payment of early extinguishment of debt costs, closing costs and fees, our pro rata share of the net proceeds was $22.7 million, which included payment for our original investment of $19.2 million and our additional investment of approximately $3.5 million. We also received a $0.3 million profit share distribution recorded as a gain on sale on the consolidated statements of operations.
Sale of Whetstone Apartments
On January 24, 2020, through ~~subsidiaries~~a subsidiary of our Operating Partnership, we closed on the sale of Whetstone Apartments located in Durham, North Carolina for approximately $46.5 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of existing mortgage indebtedness encumbering the property in the amount of $25.4 million and the payment of early extinguishment of debt costs, closing costs and fees, our net proceeds were $19.6 million, which included payment for our original investment of $12.9 million, our accrued preferred return of $2.7 million and our additional investment of approximately $4.0 million.
Zoey Ground Lease
On March 4, 2020, we acquired land for $3.1 million and simultaneously structured and entered into a ~~91.8% interest~~ground lease (the “Zoey Ground Lease”) as part of the ground lease tenant’s development of a multi-family property in Austin, Texas. We committed to provide the ground lease tenant a $20.4 million leasehold improvement allowance with funding subject to certain conditions. As of September 30, 2020, the project is under development and $3.6 million of the leasehold improvement allowance had been funded.
Strategic Portfolio Investment
On March 20, 2020, we made an $8.0 million preferred equity investment in a ~~382-unit apartment community~~joint venture (the “Strategic JV”) with an unaffiliated third party for the following two stabilized properties: Georgetown Crossing, located in ~~Morrisville, North Carolina,~~Savannah, Georgia, and Park on the Square, located in Pensacola, Florida. On May 8, 2020, we made an additional $3.9 million preferred equity investment in the Strategic JV for The Commons, a stabilized property located in Jacksonville, Florida. These three properties, together with Belmont Crossing, Sierra Terrace and Sierra Village, are collectively known as Bell Preston View Apartments (“Preston View”) for approximately $59.5 million. The purchase price of $59.5 million was funded, in part, with a $41.1 million senior mortgage loan secured by Preston View.the Strategic Portfolio.
Motif Mezzanine Financing
~~Acquisition of Wesley Village~~
On March ~~9, 2017,~~31, 2020, we ~~through subsidiaries~~received a paydown of ~~its Operating Partnership, acquired a 91.8% interest in a 301-unit apartment community and adjacent land located in Charlotte, North Carolina, known~~$8.0 million on the Motif Mezz Loan (formerly, the “Flagler Mezz Loan”), reducing the outstanding principal balance to $66.6 million. On May 8, 2020, at the borrower’s request, we amended the Motif Mezz Loan

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agreement to re-lend the $8.0 million to the Motif Mezz Loan borrower. We funded the full $8.0 million to the Motif Mezz Loan borrower, increasing the outstanding Motif Mezz Loan principal balance to $74.6 million as ~~Wesley Village Apartments (“Wesley Village”) for approximately $57.2 million. The purchase price for Wesley Village~~ of ~~approximately $57.2 million was funded, in part, with a $40.5 million senior mortgage loan secured by Wesley Village.~~

September 30, 2020.

~~Acquisition of Texas Portfolio~~The Park at Chapel Hill Mezzanine Financing

On ~~June~~March 31, 2020, we received a paydown of $21.0 million on the Chapel Hill Mezz Loan, reducing the outstanding principal balance to $8.5 million. On May 9, ~~2017,~~2020, at the borrower’s request, we ~~through subsidiaries of its Operating Partnership, acquired a 90.0% interest in a portfolio of five apartment community properties containing 1,408-units, located in San Antonio~~amended the Chapel Hill Mezz Loan agreement to permit the Chapel Hill Mezz Loan borrower to re-borrow $2.0 million. We funded the full $2.0 million to the Chapel Hill Mezz Loan borrower, increasing the outstanding Chapel Hill Mezz Loan principal balance to $10.5 million. On August 18, 2020, we entered into an amended and ~~Tyler, Texas for approximately $188.9 million. The purchase price for the five-property portfolio was funded, in part,~~restated mezzanine loan agreement (the "Amended Chapel Hill Mezz Loan") with the ~~assumption~~Chapel Hill Mezz Loan borrower to provide a loan in the maximum amount of ~~five senior mortgage loans~~$31.0 million, including all previously advanced amounts outstanding. As of ~~a total of approximately $146.4 million secured individually by each of~~September 30, 2020 , all amounts had been funded under the portfolio properties. The properties are Marquis at Crown Ridge, Marquis at Stone Oak and Marquis at TPC located in San Antonio, Texas, and Marquis at The Cascades I and II (considered one property subsequent to acquisition) located in Tyler, Texas.

~~Acquisition of Villages at Cypress Creek~~

On September 8, 2017, we, through subsidiaries of its Operating Partnership, acquired an 80.0% interest in a 384-unit apartment community located in Houston, Texas, known as Villages at Cypress Creek (“Villages at Cypress Creek”) for approximately $40.7 million. The purchase price for Villages at Cypress Creek of approximately $40.7 million was funded, in part, with a $26.2 million senior mortgage loan secured by the Villages at Cypress Creek property.

~~Acquisition of Citrus Tower~~

On September 28, 2017, we, through subsidiaries of its Operating Partnership, acquired a 96.8% interest in a 336-unit apartment community located in Orlando, Florida, known as Citrus Tower (“Citrus Tower”) for approximately $55.3 million. The purchase price for Citrus Tower of approximately $55.3 million was funded, in part, with a $41.4 million senior mortgage loan secured by the Citrus Tower property.

Amended Chapel Hill Mezz Loan.

Sale of ~~Village Green Ann Arbor~~

Ashton Reserve

On ~~February 22, 2017,~~April 14, 2020, we closed on the sale of the ~~Village Green Ann Arbor property (“Village Green Ann Arbor”),~~Ashton Reserve properties located in ~~Ann Arbor, Michigan. The property was sold~~Charlotte, North Carolina for approximately ~~$71.4~~$84.6 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of the existing mortgage indebtedness encumbering the ~~Village Green Ann Arbor property~~properties in the amount of ~~$41.4~~$45.4 million, the payment of early extinguishment of debt costs of $7.1 million and payment of closing costs and fees of ~~$1.3~~$0.8 million, the sale of the ~~property~~properties generated net proceeds of approximately ~~$28.6~~$31.2 million and a gain on sale of approximately ~~$16.7 million, of which our pro rata share of proceeds was approximately $13.6 million and pro rata share of the gain was approximately $7.8~~$26.5 million.

Sale of ~~Lansbrook Village~~Marquis at TPC

On April ~~26, 2017,~~17, 2020, we closed on the sale of ~~Lansbrook Village,~~Marquis at TPC located in ~~Palm Harbor, Florida. The 90% owned property was sold~~San Antonio, Texas for ~~approximately $82.4~~$22.5 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for ~~assumption of~~the payoff the existing mortgage indebtedness encumbering ~~Lansbrook Village~~the property in the amount of ~~$57.2 million and payment of closing costs and fees of $1.2~~$16.3 million, the sale of the property generated net proceeds of approximately ~~$24.1~~$5.9 million and a gain on sale of approximately ~~$22.8~~$3.2 million, of which our pro rata share of the proceeds was approximately ~~$19.1~~$5.3 million and pro rata share of the gain was approximately ~~$16.1~~$2.8 million.

Sale of ~~Fox Hill~~

Enders Place at Baldwin Park

On ~~May 24, 2017,~~April21, 2020, we closed on the sale of ~~the Fox Hill property,~~Enders Place at Baldwin Park located in ~~Austin, Texas. The property was sold~~Orlando, Florida for ~~approximately $46.5~~$53.2 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of the existing mortgage indebtedness encumbering the ~~Fox Hill~~ property in the amount of ~~$26.7~~$23.2 million, the payment of ~~a prepayment penalty on the mortgage~~early extinguishment of ~~$1.6~~debt costs of $2.2 million and payment of closing costs and fees of ~~$0.5~~$0.9 million, the sale of the property generated net proceeds of approximately ~~$19.2~~$26.1 million and a gain on sale of approximately ~~$10.7~~$28.2 million, of which our pro rata share of the proceeds was approximately ~~$16.4~~$24.0 million and pro rata share of the gain was approximately ~~$10.3~~$26.0 million.

~~Sale~~Acquisition of ~~MDA Apartments~~

Additional Interest in The Brodie

On ~~June 30, 2017,~~April 24, 2020, we ~~closed on~~purchased the ~~sale of our~~non-controlling partner’s interest in ~~MDA Apartments, located in Chicago, Illinois. Our 35%~~The Brodie for $3.5 million, increasing our interest in the property ~~was sold for approximately $18.3 million, subject~~from 93% to ~~certain prorations and adjustments typical~~100%.

Reunion Apartments Mezzanine Financing

On July 1, 2020, we entered into an agreement to provide a mezzanine loan in such real estate transactions. After deduction for the payment of closing costs and fees of $0.7 million, the sale of the joint venture interest in the property generated net proceeds of approximately $17.6 million and gain on sale of $10.2an amount up to $10.0 million, of which ~~our pro rata share~~$1.9 million had been funded as of ~~proceeds was approximately $11.0 million and pro rata share of the gain was approximately $6.4 million.~~

~~Notes and accrued interest receivable from related parties~~

~~During the nine months ended~~ September 30, ~~2017, Bluerock Special Opportunity + Income Fund II, (“Fund II”) redeemed our preferred equity interests~~2020, to an unaffiliated third party which is developing a 280-unit Class A apartment community located in ~~APOK and Domain,~~Orlando, Florida known as Reunion Apartments.

Avondale Hills Mezzanine Financing

On September 30, 2020, we ~~obtained 0.5% common interests in APOK and Domain, and we provided mezzanine loans~~entered into an agreement to ~~APOK of approximately $11.2 million and to Domain of approximately $20.3 million. In addition, we increased the~~provide a mezzanine loan in an amount up to ~~West Morehead by $3.3~~$11.7 million, ~~to approximately $24.6 million. See Notes 6 and 7 to the interim Consolidated Financial Statements for additional information.~~

~~Recent Stock Offerings~~

~~During the nine months ended~~none of which had been funded as of September 30, ~~2017 we continued~~2020, to ~~raise capital to finance our investment activities.~~

~~January 2017 Offering of~~an unaffiliated third party which is developing a 240-unit Class A ~~Common Stock~~apartment community located in Decatur, Georgia known as Avondale Hills.

~~On January 17, 2017, we completed an underwritten offering (the “January 2017 Common Stock Offering”)~~Table of 4,000,000 shares of its Class A common stock, par value $0.01 per share. The offer and sale of the shares were registered with the SEC pursuant to the January 2016 Shelf Registration Statement. The public offering price of $13.15 per share was announced on January 11, 2017. Net proceeds of the January 2017 Common Stock Offering were approximately $49.8 million after deducting underwriting discounts and commissions and estimated offering costs. On January 24, 2017, we closed on the sale of 600,000 shares of Class A common stock for proceeds of approximately $7.5 million pursuant to the underwriters’ full exercise of the overallotment option.Contents

Series BT Preferred Stock Continuous Offering

We issued ~~116,486~~6,657,190 shares of Series BT Preferred Stock under a continuous registered offering with net proceeds of approximately ~~$104.8~~$149.8 million after commissions, dealer manager fees and ~~fees~~discounts of approximately $16.6 million during the nine months ended September 30, ~~2017. As~~2020.

Notice of Partial Redemption of Series A Preferred Stock

On September ~~30, 2017, the Company has sold 137,968~~21, 2020, we issued a notice of partial redemption to announce our election to redeem 1,393,294 shares of Series BA Preferred Stock on October 21, 2020. The Series A Preferred Stock was redeemed for $25.00 per share, plus accrued and ~~137,968 Warrants~~unpaid dividends up to, ~~purchase 2,759,360 shares~~and including, the date of ~~Class A common stock~~redemption in an amount equal to $0.120313 per share, for ~~net proceeds~~a total payment of ~~approximately $124.2 million after commissions and fees.~~

$25.120313 per share, in cash.

Our total stockholders’ equity ~~increased $49.6~~decreased $20.9 million from ~~$241.7~~$127.5 million as of December 31, ~~2016~~2019 to ~~$291.3~~$106.6 million as of September 30, ~~2017.~~2020. The ~~increase~~decrease in our total stockholders’ equity is primarily attributable to ~~our January 2017 Common Stock Offering~~dividends declared of ~~$57.3~~$54.7 million, ~~our~~repurchase of Class A common stock of $12.4 million and preferred stock accretion of $11.5 million, offset by the issuance of Class A common stock for redemptions of Series B Preferred shares of $20.2 million and net income of ~~$21.7 million, and equity compensation of $12.2 million, offset by dividends declared of $42.0~~$36.3 million during the nine months ended September 30, ~~2017.~~2020.

~~Election to Abandon East San Marco Development~~

~~On November 24, 2015, we entered into a cost-sharing agreement to pursue the acquisition~~Table of a tract of real property located in Jacksonville, Florida for the development of a 266-unit, Class A multifamily apartment community with 44,276 square feet of retail space, or the East San Marco Property. In 2017 we elected to abandon pursuit of the development of the East San Marco Property due to significant cost escalations arising from scope changes imposed on the project after the start and from both general and market specific labor and material inflation, which negatively impacted the risk and return profile of the project. The Company recognized approximately $2.9 million of acquisition and pursuit costs during the nine months ended September 30, 2017 based on its investment in a controlling equity position in the East San Marco Property prior to abandonment.Contents

Results of Operations

The following is a summary of our stabilized consolidated operating real estate investments as of September 30, ~~2017:~~2020:

Multifamily Community Name/Location
Number of
Units

Year
Built/Renovated⁽¹⁾

Ownership
Interest

Average
Rent⁽²⁾

%
Occupied⁽³⁾

ARIUM at Palmer Ranch, Sarasota, FL 320 2016 95.0 % $ 1,201 97 %
ARIUM Grandewood, Orlando, FL 306 2005 95.0 % 1,231 94 %
ARIUM Gulfshore, Naples, FL 368 2016 95.0 % 1,235 92 %
ARIUM Palms, Orlando, FL 252 2008 95.0 % 1,257 96 %
ARIUM Pine Lakes, Port St. Lucie, FL 320 2003 85.0 % 1,152 98 %
ARIUM Westside, Atlanta, GA 336 2008 90.0 % 1,466 97 %
Ashton Reserve, Charlotte, NC 473 2015 100.0 % 1,066 93 %
Citrus Tower, Orlando, FL 336 2006 96.8 % 1,227 92 %
Enders Place at Baldwin Park, Orlando, FL 220 2003 89.5 % 1,675 91 %
James on South First, formerly Legacy at Southpark, Austin, TX 250 2016 90.0 % 1,151 94 %
Marquis at Crown Ridge, San Antonio, TX 352 2009 90.0 % 960 94 %
Marquis at Stone Oak, San Antonio, TX 335 2007 90.0 % 1,387 92 %
Marquis at The Cascades, Tyler, TX 582 2009 90.0 % 1,105 92 %
Marquis at TPC, San Antonio, TX 139 2008 90.0 % 1,413 92 %
Nevadan, Atlanta, GA 480 1990 90.0 % 1,104 95 %
Park & Kingston, Charlotte, NC 168 2015 96.0 % 1,227 96 %
Preston View, Morrisville, NC 382 2000 91.8 % 1,005 96 %
Roswell City Walk, Roswell, GA 320 2015 98.0 % 1,496 97 %
Sorrel, Frisco, TX 352 2015 95.0 % 1,209 94 %
Sovereign, Fort Worth, TX 322 2015 95.0 % 1,243 95 %
The Brodie, Austin, TX 324 2001 92.5 % 1,111 95 %
The Preserve at Henderson Beach, Destin, FL 340 2009 100.0 % 1,359 94 %
Villages at Cypress Creek, Houston, TX 384 2001 80.0 % 1,046 93 %
Wesley Village, Charlotte, NC 301 2010 91.8 % 1,290 93 %
Whetstone, Durham, NC⁽⁴⁾ 204 2015 — 1,117 95 %
Total/Average 8,166 $ 1,214 94 %




Date Built

Ownership

Average




Multifamily Community Name

Location

Number of units

/Renovated ⁽¹⁾

Interest

Rent ⁽²⁾

% Occupied⁽³⁾

ARIUM Glenridge

Atlanta, GA

480

1990

90
%
$
1,283

93.1
%

ARIUM Grandewood

Orlando, FL

306

2005

100
%

1,411

95.4
%

ARIUM Hunter’s Creek

Orlando, FL

532

1999

100
%

1,426

92.7
%

ARIUM Metrowest

Orlando, FL

510

2001

100
%

1,437

93.7
%

ARIUM Westside

Atlanta, GA

336

2008

90
%

1,485

92.9
%

Ashford Belmar

Lakewood, CO

512

1988/1993

85
%

1,670

94.5
%

Avenue 25

Phoenix, AZ

254

2013

100
%

1,222

94.5
%

Cade Boca Raton

Boca Raton, FL

90

2019

81
%

2,710

90.0
%

Chattahoochee Ridge

Atlanta, GA

358

1996

90
%

1,363

96.4
%

Chevy Chase

Austin, TX

320

1971

92
%

928

98.8
%

Citrus Tower

Orlando, FL

336

2006

97
%

1,363

96.7
%

Denim

Scottsdale, AZ

645

1979

100
%

1,229

95.2
%

Element

Las Vegas, NV

200

1995

100
%

1,265

97.5
%

Falls at Forsyth

Cumming, GA

356

2019

100
%

1,339

96.3
%

Gulfshore Apartment Homes

Naples, FL

368

2016

100
%

1,295

92.9
%

James on South First

Austin, TX

250

2016

90
%

1,324

95.2
%

Marquis at The Cascades

Tyler, TX

582

2009

90
%

1,203

95.5
%

Navigator Villas

Pasco, WA

176

2013

90
%

1,115

94.9
%

Outlook at Greystone

Birmingham, AL

300

2007

100
%

1,060

96.0
%

Park & Kingston

Charlotte, NC

168

2015

100
%

1,313

94.0
%

Pine Lakes Preserve

Port St. Lucie, FL

320

2003

100
%

1,359

95.9
%

Plantation Park

Lake Jackson, TX

238

2016

80
%

1,291

92.0
%

Providence Trail

Mount Juliet, TN

334

2007

100
%

1,257

94.6
%

Roswell City Walk

Roswell, GA

320

2015

98
%

1,558

96.6
%

Sands Parc

Daytona Beach, FL

264

2017

100
%

1,337

96.2
%

The Brodie

Austin, TX

324

2001

100
%

1,333

94.8
%

The District at Scottsdale

Scottsdale, AZ

332

2018

100
%

1,545

89.8
%

The Links at Plum Creek

Castle Rock, CO

264

2000

88
%

1,443

96.6
%

The Mills

Greenville, SC

304

2013

100
%

1,050

96.4
%

The Preserve at Henderson Beach

Destin, FL

340

2009

100
%

1,473

96.5
%

The Reserve at Palmer Ranch

Sarasota, FL

320

2016

100
%

1,341

94.4
%

The Sanctuary

Las Vegas, NV

320

1988

100
%

1,087

94.4
%

Veranda at Centerfield

Houston, TX

400

1999

93
%

1,005

97.8
%

Villages of Cypress Creek

Houston, TX

384

2001

80
%

1,169

94.3
%

Wesley Village

Charlotte, NC

301

2010

100
%

1,365

94.7
%

Total/Average



11,844





$
1,319
⁽⁴⁾
95.1
%
⁽⁴⁾

(1)Represents date of last significant renovation or year built if there were no renovations.
⁽²⁾ Represents the average effective monthly rent per occupied unit for all occupied units for the three months ended September 30, 2017. Total concessions for the three months ended September 30, 2017 amounted to approximately $1.1 million.
(2) Represents the average effective monthly rent per occupied unit for the three months ended September 30, 2020. Total concessions for the three months ended September 30, 2020 amounted to approximately $0.4 million.
(3)Percent occupied is calculated as (i) the number of units occupied as of September 30, ~~2017,~~2020 divided by (ii) total number of units, expressed as a percentage.
(4) ~~Whetstone~~Excludes The District at Scottsdale which is ~~currently a preferred equity investment providing a stated investment return.~~in lease-up.

Table of Contents

The following is a summary of our ~~development properties~~preferred equity, mezzanine loan and ground lease investments as of September 30, ~~2017:~~2020:

Multifamily Community Name,
Location Number of
Units Total Estimated
Construction
Cost (in
millions) Cost to Date
(in millions) Estimated
Construction
Cost Per Unit Actual/
Anticipated
Initial
Occupancy Anticipated
Construction
Completion Pro
Forma
Average
Rent ⁽¹⁾
Alexan CityCentre, Houston, TX 340 $ 83.0 $ 79.9 $ 244,118 2Q17 4Q17 $ 2,144
Helios, Atlanta, GA 282 $ 50.9 $ 46.4 $ 180,496 2Q17 4Q17 $ 1,486
Alexan Southside Place, Houston, TX 270 $ 49.0 $ 40.6 $ 181,481 4Q17 2Q18 $ 2,012
Lake Boone Trail, Raleigh, NC 245 $ 40.2 $ 28.0 $ 164,082 3Q17 3Q18 $ 1,271
Vickers Village, Roswell, GA 79 $ 30.6 $ 18.2 $ 387,342 3Q18 4Q18 $ 3,176
APOK Townhomes, Boca Raton, FL 90 $ 28.9 $ 12.5 $ 321,111 3Q18 1Q19 $ 2,549
Crescent Perimeter, Atlanta, GA 320 $ 70.0 $ 29.0 $ 218,750 4Q18 2Q19 $ 1,749
Domain, Garland, TX 299 $ 52.6 $ 13.9 $ 175,920 4Q18 2Q19 $ 1,469
West Morehead, Charlotte, NC 286 $ 60.0 $ 22.1 $ 209,790 4Q18 2Q19 $ 1,507
Flagler Village, Fort Lauderdale, FL 384 $ 137.3 $ 28.6 $ 357,552 3Q19 3Q20 $ 2,358
Total 2,595 $ 1,858






Total Actual/



Actual/






Estimated

Estimated

Actual/

Pro

Construction

Construction

Actual/ Estimated

Estimated

Forma

Actual/ Planned

Cost

Cost to Date

Cost Per

Initial

Construction

Average
Multifamily Community Name

Location

Number of Units

(in millions)

(in millions)

Unit

Occupancy

Completion

Rent ⁽¹⁾
Lease-up Investments
















Motif

Fort Lauderdale, FL

385

$
135.4

$
132.9

$
351,688

1Q20

2Q20

$
2,352
The Conley, formerly North Creek Apartments

Leander, TX

259

44.0

36.1

169,884

2Q20

4Q20

1,358
Wayford at Concord, formerly Wayforth at Concord

Concord, NC

150

33.5

26.4

223,333

1Q20

3Q21

1,707
Total lease-up units



794













Development Investments
















Riverside Apartments

Austin, TX

222

37.9

24.3

170,721

1Q21

2Q21

1,408
Zoey

Austin, TX

307

59.5

17.2

193,811

1Q22

2Q22

1,762
Reunion Apartments

Orlando, FL

280

47.6

9.0

170,000

1Q22

3Q22

1,366
The Park at Chapel Hill

Chapel Hill, NC

414

99.2

20.1

239,614

3Q21

4Q22

1,599
Avondale Hills

Decatur, GA

240

50.7

8.6

211,250

1Q23

1Q23

1,538
Total development units



1,463









Multifamily Community Name

Location

Number of Units











Average Rent ⁽¹⁾
Operating Investments ⁽²⁾
















Alexan CityCentre

Houston, TX

340











1,648
Alexan Southside Place

Houston, TX

270











1,641
Arlo

Charlotte, NC

286

1,507
Belmont Crossing

Smyrna, GA

192











814
Domain at The One Forty

Garland, TX

299











1,321
Georgetown Crossing

Savannah, GA

168











988
Mira Vista

Austin, TX

200











1,060
Novel Perimeter

Atlanta, GA

320

1,749
Park on the Square

Pensacola, FL

240











1,099
Sierra Terrace

Atlanta, GA

135











1,225
Sierra Village

Atlanta, GA

154











1,178
The Commons

Jacksonville, FL

328











879
Thornton Flats

Austin, TX

104











1,527
Vickers Historic Roswell

Roswell, GA

79

3,176
Total operating units



3,115











Total



5,372











$
1,488

⁽¹⁾ ~~Represents the average pro forma effective monthly rent for all expected occupied units upon stabilization.~~
(1) 37 For lease-up and development investments, represents the average pro forma effective monthly rent per occupied unit for all expected occupied units upon stabilization. For operating investments, represents the average effective monthly rent per occupied unit.
(2) Stabilized operating properties in which we have a preferred equity investment or equity interest. See Note 7 “Preferred Equity Investments and Investments in Unconsolidated Real Estate Joint Ventures” in our consolidated financial statements for further information.
Three Months Ended September 30, ~~2017~~2020 Compared to Three Months Ended September 30, ~~2016~~2019
Revenue
Rental and other property revenues
~~Net rental income~~increased ~~$6.3~~$1.3 million, or ~~34%~~3%, to ~~$24.9~~$48.7 million for the three months ended September 30, ~~2017~~2020 as compared to $18.6 million for the same prior year period. The acquisition of various interests in fifteen properties subsequent to September 30, 2016 increased net rental income by $12.8 million while the sales of five properties including Lansbrook Village, MDA Apartments, Fox Hill, Springhouse at Newport News, and Village Green Ann Arbor decreased net rental income by $6.6 million.
~~Other property revenue~~~~increased $1.1 million, or 55%, to $3.1 million for the three months ended September 30, 2017 as compared to $2.0~~$47.4 million for the same prior year period. This increase was ~~primarily~~ due to a $8.3 million increase from the acquisition of ~~interests~~three properties in 2020 and the full period impact of six properties ~~noted above of $1.5~~acquired in 2019 and a $0.2 million increase from same store properties, partially offset by a $7.2 million decrease from the ~~sales noted above~~sale of ~~$0.7 million.~~
three properties in 2020 and the full period impact of six properties sold in 2019.
Interest income from ~~related parties~~mezzanine loan and ground lease ~~increased by $2.1 million due to interest earned on the mezzanine loans made during the last three quarters.~~
~~Expenses~~investments
~~Property operating expenses~~~~increased $4.1~~ decreased $0.2 million, or ~~52%~~3%, to ~~$12.0~~$5.9 million for the three months ended September 30, ~~2017~~2020 as compared to ~~$7.9~~$6.1 million for the same prior year period primarily due to the consolidation of Cade Boca Raton and a decreased interest rate at Domain at The One Forty, partially offset by increases in the average balance of mezzanine loans outstanding.

Table of Contents

Expenses

Property operating expenses increased $0.2 million, or 1%, to $19.6 million for the three months ended September 30, 2020 as compared to $19.4 million for the same prior year period. This increase was ~~primarily~~ due to a $3.3 million increase from the acquisition of ~~interests~~three properties in 2020 and the full period impact of six properties ~~noted above of $3.9~~acquired in 2019 and a $0.5 million increase from same store properties, partially offset by ~~sales~~a $3.6 million decrease from the ~~sales noted above~~sale of ~~$2.0 million.~~three properties in 2020 and the full period impact of six properties sold in 2019. Property NOI margins ~~decreased~~increased to ~~57.2%~~59.8% of total revenues for the three months ended September 30, ~~2017~~2020 from ~~61.6%~~59.1% in the prior year quarter. Property margins have been impacted by the sales of properties owned for longer time periods which were efficiently operated with assets purchased more recently that had not yet achieved the same level of operational efficiency. Property NOI margins are computed as total rental and other property revenues less property operating expenses, divided by total rental and other property revenues.

Property management fees ~~expenses~~expense ~~increased $0.2~~decreased $0.03 million, or ~~33%~~2%, to ~~$0.8~~$1.23 million for the three months ended September 30, ~~2017~~2020 as compared to ~~$0.6~~$1.26 million in the same prior year period. This ~~increase~~decrease was ~~primarily~~ due to a $0.22 million decrease from the sale of three properties in 2020 and the full period impact of six properties sold in 2019 and a $0.01 million decrease from same store properties, partially offset by a $0.20 million increase from the acquisition of ~~interests~~three properties in 2020 and the ~~properties noted above, offset by the~~full period impact of ~~the sales of properties.~~

six properties acquired in 2019.

General and administrative expensesdecreased $0.4 million, or 6%, to ~~$1.1~~$5.9 million for the three months ended September 30, ~~2017~~2020 as compared to ~~$1.2~~$6.3 million for the same prior year period. ~~Excluding non-cash equity compensation expense of $0.1 million~~

Acquisition and ~~$0.6~~pursuit costs amounted to $2.2 million for the three months ended September 30, ~~2017 and 2016, respectively, general and administrative expenses were $1.0 million, or 3.2% of revenues for the three months ended September 30, 2017~~2020 as compared to ~~$0.6 million, or 3.0% of revenues, for the same prior year period.~~

~~Management fees~~~~increased to $2.8 million for the three months ended September 30, 2017 as compared to $1.9~~$0.2 million for the same prior year period. ~~Base management fees of $2.8 million~~Acquisition and ~~$1.7 million were~~pursuit costs incurred in the three months ended September 30, ~~2017 and 2016, respectively. Incentive management fees of $0.2 million~~2020 were ~~incurred in the three months ended September 30, 2016. Base management fees increased~~ primarily ~~due to an increase in equity as a result of the Follow-On Offerings. Management fees of $2.8 million for the quarter ended September 30, 2017 will be paid in LTIP Units in lieu of cash.~~

~~Acquisition and pursuit costs~~were minimal for the three months ended September 30, 2017 as compared to $0.7 million for the same prior year period. The Company adopted ASU 2017-01 which resulted in the capitalization of costs incurred in asset acquisitions purchased after the effective date of January 1, 2017.

~~Weather-related losses~~~~of $0.7 million were incurred in the three months ended September 30, 2017~~ related to ~~Hurricane Irma at six properties in Florida and three properties in Georgia.~~

~~Depreciation and amortization expenses~~~~were $11.8 million for~~ the ~~three months ended September 30, 2017 as compared to $7.2 million for the same prior year period. The increase is related to additional depreciation and amortization expense on the acquisition~~write-off of ~~the properties mentioned above of $7.4 million, offset by a decrease~~pre-acquisition costs from one abandoned deal due to the ~~sale of the five properties of $1.9 million.~~

~~Other Income and Expense~~

~~Other income and expenses~~amounted to expense of $4.7 million for the three months ended September 30, 2017 compared to income of $0.4 million for the same prior year period. This was primarily due to the gain on the sale of Springhouse at Newport News of $4.9 million and the loss on early extinguishment of debt of $2.4 million in the prior year quarter, offset by an increase in interest expense, net, of $2.1 million, as the result of the increase in mortgages payable resultinguncertainty from ~~the acquisition of interests in the properties mentioned above.~~

~~Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016~~

~~Revenue~~

~~Net rental income~~increased $20.4 million, or 39%, to $72.4 million for the nine months ended September 30, 2017 as compared to $52.0 million for the same prior year period. The acquisition of various interests in fifteen properties subsequent to September 30, 2016 increased net rental income by $28.2 million while the sales of five properties including Lansbrook Village, MDA Apartments, Fox Hill, Springhouse at Newport News, and Village Green Ann Arbor decreased net rental income by $12.7 million.

~~Other property revenue~~increased $3.2 million, or 59%, to $8.6 million for the nine months ended September 30, 2017 as compared to $5.4 million for the same prior year period. This increase was primarily due to the acquisition of interests in the properties noted above of $3.5 million offset by the sales noted above of $1.2 million.

~~Interest income from related parties~~ ~~increased by $5.7 million due to interest earned on the mezzanine loans made during the last three quarters.~~

~~Expenses~~

~~Property operating expenses~~increased $11.3 million, or 50%, to $33.9 million for the nine months ended September 30, 2017 as compared to $22.6 million for the same prior year period. This increase was primarily due to the acquisition of interests in the properties noted above of $8.9 million, offset by sales the sales noted above of $3.6 million. Property NOI margins decreased to 58.1% of total revenues for the nine months ended September 30, 2017 from 60.6% in the prior year quarter. Property margins have been impacted by the sales of properties owned for longer time periods which were efficiently operated with assets purchased more recently that had not yet achieved the same level of operational efficiency. Property NOI margins are computed as total property revenues less property operating expenses, divided by total property revenues.

~~Property management fees expenses~~ increased $0.6 million, or 35%, to $2.3 million for the nine months ended September 30, 2017 as compared to $1.7 million in the same prior year period. This increase was primarily due to the acquisition of interests in the properties noted above, offset by the impact of the sales of properties.

~~General and administrative expenses~~were flat at $4.2 million for the nine months ended September 30, 2017 versus the same amount for 2016. Excluding non-cash equity compensation expense of $1.3 million and $2.2 million for the nine months ended September 30, 2017 and 2016, respectively, general and administrative expenses were $2.9 million, or 3.4% of revenues for the nine months ended September 30, 2017 as compared to $2.0 million, or 3.4% of revenues, for the same prior year period.

~~Management fees~~increased to $11.7 million for the nine months ended September 30, 2017 as compared to $4.5 million for the same prior year period. Base management fees of $7.8 million and $4.3 million were incurred in the nine months ended September 30, 2017 and 2016, respectively. Incentive management fees of $4.0 million and $0.2 million were incurred in the nine months ended September 30, 2017 and 2016, respectively, primarily due to the realized gains on asset sales. Base management fees increased primarily due to an increase in equity as a result of the Follow-On Offerings. Management fees of $2.8 million for the quarter ended September 30, 2017 will be paid in LTIP Units in lieu of cash while base management fees of $8.9 million for the six months ended June 30, 2017 were paid through the issuance of 738,479 LTIP Units.

~~Acquisition and pursuit costs~~were $3.2 million for the nine months ended September 30, 2017 as compared to $2.1 million for the same prior year period. The Company adopted ASU 2017-01 which resulted in the capitalization of costs incurred in asset acquisitions purchased after the effective date of January 1, 2017. Substantially all the expenses for the nine months ended September 30, 2017 were due to the Company’s decision to abandon the proposed East San Marco Property development and write off the pre-acquisition costs that had been incurred.COVID-19. Abandoned pursuit costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods. ~~The costs during the prior year quarter were primarily due to the acquisition of ARIUM Gulfshore, ARIUM at Palmer Ranch, ARIUM Westside, and The Preserve at Henderson Beach.~~

~~Weather-related losses~~~~of $0.7 million were incurred in the nine months ended September 30, 2017 related to Hurricane Irma at six properties in Florida and three properties in Georgia.~~

Depreciation and amortization expenseswere ~~$33.1~~$19.2 million for the ~~nine~~three months ended September 30, ~~2017~~2020 as compared to ~~$22.5~~$17.6 million for the same prior year period. ~~The~~This increase ~~is related~~was due to ~~additional depreciation and amortization expense on~~a $3.4 million increase from the acquisition of three properties in 2020 and the full period impact of six properties ~~mentioned above of $18.0~~acquired in 2019, partially offset a $1.6 million ~~offset by a~~ decrease ~~due to~~from the sale of three properties in 2020 and the ~~five~~full impact of six properties ~~of $4.3 million.~~sold in 2019 and a $0.2 million decrease from same store properties.

Other Income and Expense

Other income and ~~expenses~~expenseamounted to ~~income~~expense of ~~$44.2~~$10.5 million for the ~~nine~~three months ended September 30, ~~2017~~2020 compared to ~~expense~~income of ~~$2.9~~$29.4 million for the same prior year period. This was primarily due to ~~the~~a net gain on sale of $48.7 million for the sale of ~~Village Green~~six properties during the three months ended September 30, 2019, partially offset by a $1.1 million net decrease in interest expense during the three months ended September 30, 2020 and a $6.9 million loss on early extinguishment of ~~Ann Arbor, Fox Hill~~debt for property sales and ~~Lansbrook Village~~mortgage refinances during the three months ended September 30, 2019.

Nine Months Ended September 30, 2020 Compared to Nine Months Ended September 30, 2019

Revenue

Rental and other property revenues increased $7.1 million, or 5%, to $146.7 million for the nine months ended September 30, 2020 as compared to $139.6 million for the same prior year period. This increase was due to a $31.0 million increase from the acquisition of ~~$50.0~~three properties in 2020 and the full period impact of eight properties acquired in 2019 and a $1.2 million ~~and~~increase from same store properties, partially offset by a $25.1 million decrease from the sale of three properties in 2020 and the ~~real estate joint venture~~full impact of six properties sold in 2019.

Interest income from related parties and ground leases decreased $0.7 million, or 4%, to $17.1 million for the nine months ended September 30, 2020 as compared to $17.9 million for the same prior year period primarily due to the consolidation of Cade Boca Raton and a decreased interest ~~of MDA Apartments of $10.2 million occurring in 2017,~~rate at Domain at The One Forty, partially offset by increases in the average balance of mezzanine loans outstanding.

Table of Contents

Expenses

Property operating expenses increased $0.6 million, or 1%, to $57.4 million for the nine months ended September 30, 2020 as compared to $56.8 million for the same prior year period. This increase was due to a $11.4 million increase from the acquisition of three properties in 2020 and the full period impact of eight properties acquired in 2019 and a $1.0 million increase from same store properties, partially offset by a $11.8 million decrease from sale of three properties in 2020 and the ~~real estate joint venture interest~~full impact of ~~Springhouse~~six properties sold in 2019. Property NOI margins increased to 60.8% of ~~Newport News of $4.9 million~~total revenues for the nine months ended September 30, 2020 from 59.3% in the prior year ~~period, offset~~quarter. Property NOI margins are computed as total rental and other property revenues less property operating expenses, divided by antotal rental and other property revenues.

Property management fees expense remained relatively flat at $3.7 million for the nine months ended September 30, 2020 as compared to the same prior year period. This was due to a $0.7 million increase ~~in interest expense, net, of $8.2 million, as the result of the increase in mortgages payable resulting~~ from the acquisition of ~~interests~~three properties in 2020 and the full period impact of eight properties acquired in 2019, offset by a $0.7 million decrease from the sale of three properties in 2020 and the full impact of six properties sold in 2019.

General and administrative expenses increased $0.7 million, or 4%, to $17.6 million for the nine months ended September 30, 2020 as compared to $16.9 million for the same prior year period.

Acquisition and pursuit costs amounted to $3.9 million for the nine months ended September 30, 2020 as compared to $0.3 million for the same prior year period. Acquisition and pursuit costs incurred in the nine months ended September 30, 2020 were primarily related to the write-off of pre-acquisition costs from abandoned deals due to the uncertainty from COVID-19, of which $3.3 million of the total costs related to two abandoned deals. Abandoned pursuit costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods.

Depreciation and amortization expenses were $60.2 million for the nine months ended September 30, 2020 as compared to $51.1 million for the same prior year period. This increase was due to a $17.0 million increase from the acquisition of three properties ~~mentioned above.~~in 2020 and the full period impact of eight properties acquired in 2019 and a $0.2 million increase from same store properties, offset by a $8.1 million decrease from the sale of three properties in 2020 and the full impact of six properties sold in 2019.

Other Income and Expense

Other income and expense amounted to income of $10.1 million for the nine months ended September 30, 2020 compared to income of $3.7 million for the same prior year period. This was primarily due to a $58.1 million net gain on sale due to the sale of three properties during the nine months ended September 30, 2020, a $3.5 million net decrease in interest expense, and a $6.9 million loss on early extinguishment of debt for property sales and mortgages refinances during the nine months ended September 30, 2019. This was partially offset by a $48.7 million net gain on sale due to the sale of six properties during the nine months ended September 30, 2019 and a $14.0 million loss on early extinguishment of debt for property sales and mortgage refinances during the nine months ended September 30, 2020.

Property Operations

We define “same store” properties as those that we owned and operated for the entirety of both periods being compared, except for properties that are in the construction or lease-up phases, or properties that are undergoing development or significant redevelopment. We move properties previously excluded from our same store portfolio for these reasons into the same store designation once they have stabilized or the development or redevelopment is complete and such status has been reflected fully in all quarters during the applicable periods of comparison. For newly constructed or lease-up properties or properties undergoing significant redevelopment, we consider a property stabilized upon attainment of ~~90%~~90.0% physical ~~occupancy, subject to loss-to-lease, bad debt and rent concessions.~~

occupancy.

For comparison of our three months ended September 30, ~~2017~~2020 and ~~2016,~~2019, the same store properties included properties owned at July 1, ~~2016.~~2019. Our same store properties for the ~~period were Enders Place at Baldwin Park, ARIUM Grandewood, Park & Kingston, Ashton Reserve, ARIUM Palms, Sorrel, Sovereign, ARIUM Gulfshore, ARIUM at Palmer Ranch~~three months ended September 30, 2020 and ~~The Preserve at Henderson Beach.~~ 2019 consisted of 26 properties, representing 8,993 units.

For comparison of our nine months ended September 30, ~~2017~~2020 and ~~2016,~~2019, the same store properties included properties owned at January 1, ~~2016.~~2019. Our same store properties for the ~~period were Enders Place at Baldwin Park, ARIUM Grandewood, Park & Kingston, Ashton Reserve, ARIUM Palms, Sovereign, ARIUM Gulfshore,~~nine months ended September 30, 2020 and ~~ARIUM at Palmer Ranch.~~

~~Because~~2019 consisted of ~~the limited number~~24 properties, representing 8,459 units.

Table of ~~same store properties as compared to the number of properties in our portfolio in 2017 and 2016, respectively, our same store performance measures may be of limited usefulness.~~Contents

The following table presents the same store and non-same store results from operations for the three and nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 (dollars in thousands):

Three Months Ended
September 30, Change
2017 2016 $ %
Property Revenues
Same Store $ 11,956 $ 11,851 $ 105 0.9 %
Non-Same Store 15,987 8,726 7,261 83.2 %
Total property revenues 27,943 20,577 7,366 35.8 %

Property Expenses
Same Store 4,755 4,605 150 3.3 %
Non-Same Store 7,214 3,291 3,923 119.2 %
Total property expenses 11,969 7,896 4,073 51.6 %

Same Store NOI 7,201 7,246 (45 ) (0.6 )%
Non-Same Store NOI 8,773 5,435 3,338 61.4 %
Total NOI⁽¹⁾ $ 15,974 $ 12,681 $ 3,293 26.0 %

Nine Months Ended
September 30, Change
2017 2016 $ %


Three Months Ended

September 30,

Change


2020

2019

$

%

Property Revenues

Same Store $ 27,824 $ 26,845 $ 979 3.6 %

$
37,943

$
37,710

$
233

0.6
%
Non-Same Store 53,169 30,544 22,625 74.1 %

10,723

9,712

1,011

10.4
%
Total property revenues 80,993 57,389 23,604 41.1 %

48,666

47,422

1,244

2.6
%

Property Expenses

Same Store 10,952 10,664 288 2.7 %

15,726

15,204

522

3.4
%
Non-Same Store 22,983 11,928 11,055 92.7 %

3,845

4,173

(328)

(7.9)
%
Total property expenses 33,935 22,592 11,343 50.2 %

19,571

19,377

194

1.0
%

Same Store NOI 16,872 16,181 691 4.3 %

22,217

22,506

(289)

(1.3)
%
Non-Same Store NOI 30,186 18,616 11,570 62.2 %

6,878

5,539

1,339

24.2
%
Total NOI⁽¹⁾ $ 47,058 $ 34,797 $ 12,261 35.2 %

$
29,095

$
28,045

$
1,050

3.7
%


Nine Months Ended





September 30,

Change


2020

2019

$

%

Property Revenues

Same Store

$
106,703

$
105,529

$
1,174

1.1
%
Non-Same Store

40,010

34,046

5,964

17.5
%
Total property revenues

146,713

139,575

7,138

5.1
%

Property Expenses

Same Store

42,714

41,759

955

2.3
%
Non-Same Store

14,727

15,088

(361)

(2.4)
%
Total property expenses

57,441

56,847

594

1.0
%

Same Store NOI

63,989

63,770

219

0.3
%
Non-Same Store NOI

25,283

18,958

6,325

33.4
%
Total NOI⁽¹⁾

$
89,272

$
82,728

$
6,544

7.9
%
⁽¹⁾See “Net Operating Income” below for a reconciliation of Same Store NOI, Non-Same Store NOI and Total NOI to net income (loss) and a discussion of how management uses this non-GAAP financial measure.
(1) 40 See “Net Operating Income” below for a reconciliation of Same Store NOI, Non-Same Store NOI and Total NOI to net income (loss) and a discussion of how management uses this non-GAAP financial measure.
Three Months Ended September 30, ~~2017~~2020 Compared to Three Months Ended September 30, ~~2016~~
2019
Same store NOI for the three months ended September 30, ~~2017~~2020 decreased ~~0.6%~~1.3%, or ~~$0.05~~$0.3 million, compared to the ~~2016~~2019 period. ~~There was a 0.9% increase in same~~Same store property revenues increased 0.6%, or $0.2 million, as compared to the ~~2016~~2019 period, primarily attributable to a ~~1.6%~~110 basis point increase in occupancy and a 0.4% increase in average rental rates as fourteen of our twenty-six same store properties recognized rental rate increases during the period. This increase in revenue was partially offset by a ~~66 basis point decrease~~$0.2 million increase in ~~average occupancy.~~ bad debt expense and $0.1 million less in ancillary income, such as termination fees and late fees, due to the impact of COVID-19.
Same store expenses for the three months ended September 30, ~~2017~~2020 increased ~~3.3%~~3.4%, or $0.5 million, compared to ~~$4.8~~the 2019 period. The expense increase was primarily due to non-controllable expenses; insurance expenses increased $0.25 million due to industrywide multifamily price increases and real estate taxes increased $0.25 million from ~~$4.6 million for the 2016 period. The same store results were disproportionately impacted by performance from two assets in the Dallas Fort Worth MSA, particularly our Frisco asset which continues~~prior year due to ~~remain challenged from new supply.~~municipality tax increases.

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Property revenues and property expenses for our non-same store properties increased ~~significantly~~ due to our investment activity: the acquisition of three properties in 2020 and the full period impact of six properties acquired ~~during 2016~~in 2019, partially offset by the sale of three properties in 2020 and ~~2017;~~ the ~~2017 non-same store property count was 14 compared to 8~~full period impact of six properties ~~for the 2016 period.~~sold in 2019. The results of operations for ~~these~~acquired properties have been included in our consolidated statements of operations from the date of ~~acquisition.~~acquisition and the results of operations for disposed properties have been excluded from the consolidated statements of operations since the date of disposition.

Nine Months Ended September 30, ~~2017~~2020 Compared to Nine Months Ended September 30, ~~2016~~

2019

Same store NOI for the nine months ended September 30, ~~2017~~2020 increased ~~by 4.3%~~0.3%, or $0.2 million, compared to ~~$16.9 million from $16.2 million for~~ the ~~2016~~2019 period. ~~There was a 3.6% increase in same~~Same store property revenues increased 1.1% as compared to the ~~2016~~2019 period, primarily attributable to a ~~3.6%~~60 basis point increase in occupancy and a 1.6% increase in average rental rates as nineteen of our twenty-four same store properties recognized rental rate increases during the period. The increases were partially offset by a ~~41 basis point decrease~~$0.75 million increase in ~~average occupancy.~~ bad debt expense and $0.3 million less ancillary income, such as termination fees and late fees, due to the impact of COVID-19.

Same store expenses for the nine months ended September 30, ~~2017~~2020 increased ~~2.7%~~2.3%, or $0.95 million, compared to ~~$11.0~~the 2019 period. The expense increase was primarily due to non-controllable expenses; real estate taxes increased $0.8 million from ~~$10.7~~prior year due to municipality tax increases, insurance expenses increased $0.55 million ~~for the 2016 period.~~

due to industrywide multifamily price increases, and payroll increased $0.2 million. The increases were partially offset by a $0.3 million decrease in discretionary seasonal maintenance due to COVID-19, a $0.15 million decrease in utilities, and a $0.1 million decrease in turnover.

Property revenues and property expenses for our non-same store properties increased ~~significantly~~ due to our investment activity: the acquisition of three properties in 2020 and the full period impact of eight properties acquired ~~during 2016~~in 2019, partially offset by the sale of three properties in 2020 and ~~2017;~~ the ~~2017 non-same store property count was 16 compared to 7~~full period impact of six properties ~~for the 2016 period.~~sold in 2019. The results of operations for ~~these~~acquired properties have been included in our consolidated statements of operations from the date of ~~acquisition.~~acquisition and the results of operations for disposed properties have been excluded from the consolidated statements of operations since the date of disposition.

Net Operating Income

We believe that net operating income (“NOI”), is a useful measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding depreciation and amortization and interest. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. NOI also is a computation made by analysts and investors to measure a real estate ~~company's~~company’s operating performance.

We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. We use NOI to evaluate our performance on a same store and non-same store ~~basis because~~basis; NOI allows us to evaluate the operating performance of our properties because it measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance and captures trends in rental housing and property operating expenses.

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However, NOI should only be used as ~~an alternative~~a supplemental measure of our financial performance. The following table reflects net (loss) income ~~(loss)~~ attributable to common stockholders together with a reconciliation to NOI and to same store and non-same store contributions to consolidated NOI, as computed in accordance with GAAP for the periods presented (amounts in thousands):

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2017			2016			2017		2016

												Three Months Ended				Nine Months Ended
												September 30,				September 30,
												2020		2019		2020		2019
Net (loss) income attributable to common stockholders	$	(12,017	)	$	(2,551	)	$	563	$	(11,727	)	$	(17,058)	$	17,160	$	(18,461)	$	(5,924)
Add pro-rata share:
Add back: Net (loss) income attributable to Operating Partnership Units													(6,270)		6,191		(6,679)		(1,747)
Net (loss) income attributable to common stockholders and unit holders													(23,328)		23,351		(25,140)		(7,671)
Add common stockholders and Operating Partnership Units pro-rata share of:
Depreciation and amortization		10,771			6,197			29,900		19,436			18,309		16,755		57,353		48,187
Amortization of non-cash interest expense		245			472			1,491		620
Non-real estate depreciation and amortization													122		157		364		327
Non-cash interest expense													731		787		2,323		2,348
Unrealized loss on derivatives													98		131		67		2,418
Loss on extinguishment of debt and debt modification costs													—		6,864		13,590		6,864
Property management fees		773			587			2,227		1,635			1,173		1,193		3,540		3,511
Management fees		2,773			1,839			11,609		4,430
Acquisition and pursuit costs		15			619			3,039		1,993			2,242		217		3,933		346
Loss on early extinguishment of debt		-			2,269			1,534		2,269
Corporate operating expenses		1,091			1,169			4,203		4,101			5,817		6,187		17,279		16,716
Management internalization process expense		818			-			1,629		-
Weather-related losses, net		635			-			635		-			—		57		—		305
Preferred dividends		6,966			3,883			19,066		8,268			15,003		11,887		42,787		33,291
Preferred stock accretion		896			271			1,870		560			4,451		2,717		11,978		6,920
Less pro-rata share:
Other income		-			26			16		26
Preferred returns and equity in income of unconsolidated real estate joint ventures		2,663			3,030			7,783		8,491
Interest income from related parties		2,099			-			5,680		-
Gain on sale of real estate joint venture interest, net		-			-			6,332		-
Less common stockholders and Operating Partnership Units pro-rata share of:
Non-recurring income, net													52		—		49		—
Preferred returns on unconsolidated real estate joint ventures													2,935		2,316		8,343		7,097
Interest income from mezzanine loan and ground lease investments													5,923		6,125		17,149		17,874
Gain on sale of real estate investments		-			4,876			33,945		4,876			—		48,172		55,360		48,172
Pro-rata share of properties' income		8,204			6,823			24,010		18,192
Gain on sale of non-depreciable real estate investments													—		—		—		679
Pro-rata share of properties’ income													15,708		13,690		47,173		39,740
Add:
Noncontrolling interest pro-rata share of property income		555			1,128			2,673		3,224
Noncontrolling interest pro-rata share of partially owned property income													725		668		2,278		2,086
Total property income		8,759			7,951			26,683		21,416			16,433		14,358		49,451		41,826
Add:
Interest expense, net		7,215			4,730			20,375		13,381
Interest expense													12,662		13,687		39,821		40,902
Net operating income		15,974			12,681			47,058		34,797			29,095		28,045		89,272		82,728
Less:
Non-same store net operating income		8,773			5,435			30,186		18,616			6,878		5,539		25,283		18,958
Same store net operating income	$	7,201		$	7,246		$	16,872	$	16,181		$	22,217	$	22,506	$	63,989	$	63,770

Liquidity and Capital Resources

Liquidity is a measure of our ability to meet potential cash ~~requirements.~~requirements, both short- and long-term. Our primary short-term liquidity requirements ~~relate~~historically have related to (a) our operating expenses and other general business needs, (b) distributions to our stockholders, (c) committed investments and capital requirements to fund development and renovations at existing properties, ~~and~~ (d) ongoing commitments to repay borrowings, including our credit facilities and our maturing short-term ~~debt.~~debt, (e) the partial redemption of our Series A Preferred Stock, and (f) Class A common stock, Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock repurchases under our stock repurchase plans.

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Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our short-term liquidity needs could be affected by various risks and uncertainties, including, but not limited to, the effects of the COVID-19 pandemic and other risks detailed in Part II, Item 1A titled “Risk Factors” and in the other reports we have filed with the SEC.

We believe ~~the properties underlying its real estate investments are performing well. We had~~we currently have a ~~portfolio-wide debt service coverage ratio~~stable financial condition; as of ~~1.98x and occupancy of 94%, exclusive of our development properties, at~~ September 30, ~~2017.~~

~~Subsequent to~~2020, we collected 97% of rents from our multifamily properties, including payment plans of 1%, for the three months ended September 30, ~~2017,~~2020. As of October 31, 2020, we collected 97% of October rents from our multifamily properties, including payment plans of 0.5%. We provided rent deferral payment plans as a result of hardships these tenants are experiencing due to the ~~Company, through its Operating Partnership, entered into~~COVID-19 impact. Although we expect to continue to receive tenant requests for rent deferrals in the coming months, we do not expect to waive our contractual rights under our lease agreements. Further, while occupancy remains strong at 95.1% and 95.4% as of September 30, 2020 and October 31, 2020, respectively, in future periods, we may experience reduced levels of tenant retention as well as reduced foot traffic and lease applications from prospective tenants as a ~~credit agreement (the “Senior Credit Facility”) with KeyBank National Association (“KeyBank”) and other lenders. The Senior Credit Facility provides for an initial loan commitment amount~~result of ~~$150 million, which commitment contains an accordion feature up~~COVID-19 impact.

Due to ~~a maximum commitment~~the uncertainties presented by COVID-19 discussed above, however, as of ~~up to $250 million. The availability of borrowings will be based on the value of a pool of collateral properties and compliance with various ratios related to those assets. In addition,~~October 31, 2020, we have ~~begun negotiating an additional bank credit facility pursuant~~instituted the following actions to increase liquidity:

●sold three properties producing $60.5 million of net proceeds;

●refinanced three loans netting $7.3 million in proceeds while reducing cost of capital by 40 basis points;

●closed on a ~~non-binding term sheet, and we believe this facility will enable us~~Fannie Facility advance for $13.8 million in net proceeds;

●continued to ~~deploy our capital more efficiently and provide capital structure flexibility as we continue raising~~raise capital through our Series ~~B continuous offering. No definitive agreements~~T Preferred Offering; and

●elected to not proceed on certain potential property acquisitions.

We have ~~been entered into~~approximately $23.4 million of cash and $145.6 million of capacity on our credit facilities as of October 31, 2020. At September 30, 2020, we ~~provide no assurances that~~were in compliance with all covenants under our credit facilities. We continue to communicate with our key lenders and believe access to capacity under our credit facilities will remain available for the uses set forth in their terms.

As we ~~will enter into this credit facility.~~

did in 2019 and to date in 2020, we expect to maintain a proactive capital allocation process and selectively sell assets at appropriate cap rates, which would be expected to generate cash sources for both our short-term and long-term liquidity needs. Due to the uncertainty surrounding the COVID-19 impact, we had temporarily suspended interior renovations at several properties as part of assuming a more conservative posture; however, we expect to restart the program at these properties as we gain more visibility on the economic recovery nationally and within our specific markets.

In general, we believe our available cash balances, the proceeds from our continuous Series T Preferred Offering, the ~~Series B preferred stock continuous offering,~~Amended Senior and Second Amended Junior Credit Facilities, the ~~Senior Credit~~Fannie Facility, other financing arrangements and cash flows from operations will be sufficient to fund our liquidity requirements with respect to our existing portfolio for the next 12 months. We expect that properties added to our portfolio with the proceeds from ~~the Follow-On Offerings,~~our continuous Series T Preferred Offering and ~~the properties we expect to acquire with the proceeds from our Series B preferred stock continuous offering and from our recent property sales,~~credit facilities will have a ~~significant~~ positive impact on our future results of operations. In general, we expect that our results related to our portfolio will improve in future periods as a result of anticipated future investments in and acquisitions of real ~~estate, including~~estate. However, there can be no assurance that the worldwide economic disruptions arising from the COVID-19 pandemic will not cause conditions in the lending, capital and other financial markets to deteriorate, nor that our ~~investments~~future revenues or access to capital and other sources of funding will not become constrained, which could reduce the amount of liquidity and credit available for use in ~~development projects.~~

acquiring and further diversifying our portfolio of multifamily assets. We ~~believe~~cannot provide any assurances that we will be able to add properties to our portfolio at the anticipated pace, or at all.

Only $2.1 million, or 0.1%, of our mortgage debt is maturing through the remainder of 2020.

We anticipate approximately $80-90 million of investment activity during the fourth quarter of 2020 inclusive of additional investments into our existing preferred and mezzanine loan investments.

At the current time, we do not anticipate the need to establish any material contingency reserves related to the COVID-19 pandemic but will be assessing along with our network of business partners the possible need for such contingencies, whether at the corporate or property level.

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As equity capital market conditions permit, we may supplement our capital for short-term liquidity needs with proceeds of our Class A ATM Offering and potential offerings of common and preferred stock through underwritten offerings, as well as issuance of units of limited partnership interest in our Operating Partnership, or OP Units. Given the significant decrease in the trading price of our Class A common stock and REIT equities generally associated with the COVID-19 pandemic and our otherwise stable financial condition and liquidity position, we do not currently view these offerings as a likely source of capital to meet ~~our primary~~short-term liquidity ~~requirements going forward through:~~

~~$134.6 million in cash available at September 30, 2017;~~

p~~roceeds from borrowings under the Senior Credit Facility;~~

~~cash generated from operating activities; and~~

proceeds from future borrowings and potential offerings, including potential offerings of common and preferred stock through underwritten offerings, our continuous Series B Preferred Stock Offering and our ATM programs, as well as issuances of units of limited partnership interest in our Operating Partnership, or OP Units.

needs.

Our primary long-term liquidity requirements relate to (a) costs for additional apartment community ~~investments;~~investments, (b) repayment of long-term ~~debt;~~debt and our credit facilities, (c) capital ~~expenditures; and~~expenditures, (d) cash redemption requirements related to our Series A Preferred Stock, Series B Preferred Stock, ~~and~~ Series C Preferred ~~Stock.~~

Stock and Series T Preferred Stock, and (e) repurchases of Class A common stock, Series A Preferred Stock, Series C Preferred Stock and Series D Preferred Stock under our stock repurchase plans.

We intend to finance our long-term liquidity requirements with net proceeds of additional issuances of common and preferred stock, including our Class A ATM Offering, our continuous Series BT Preferred ~~Stock, the Senior Credit Facility,~~Offering, our credit facilities, as well as future borrowings. We entered into the Senior Credit Facility on October 4, 2017, and we believe this facility will enable us to deploy our capital more efficiently and provide capital structure flexibility as we grow our asset base. Our success in meeting these requirements will therefore depend upon our ability to access capital. Further, our ability to access equity capital is dependent upon, among other things, general market conditions for REITs and the capital markets generally, market perceptions about us and our asset class, and current trading prices of our ~~securities.~~

Wesecurities, all of which may ~~also selectively sell assets at appropriate times, which would~~continue to be ~~expected to generate cash sources for both our short-term and long-term liquidity needs.~~

adversely impacted by COVID-19 pandemic.

We may also meet our long-term liquidity needs through borrowings from a number of sources, either at the corporate or project level. We believe the Amended Senior and Second Amended Junior Credit Facilities, as well as the Fannie Facility, will continue to enable us to deploy our capital more efficiently and provide capital structure flexibility as we grow our asset base. We expect the combination of these facilities to provide us flexibility by allowing us, among other things, to use borrowings under our Amended Senior and Second Amended Junior Credit Facilities to acquire properties pending placement of permanent mortgage indebtedness, including under the Fannie Facility. In addition to restrictive covenants, these credit facilities contain material financial covenants. At September 30, 2020, we were in compliance with all covenants under our credit facilities. We will continue to monitor the debt markets, including Fannie Mae and Freddie Mac, and as market conditions permit, access borrowings that are advantageous to us.

We intend to continue to use prudent amounts of leverage in making our investments, which we define as having total indebtedness of approximately 65% of the fair market value of the properties in which we have ~~invested as determined by our Manager.~~invested. For purposes of calculating our leverage, we assume full consolidation of all our real estate investments, whether or not they would be consolidated under GAAP, include assets we have classified as held for sale, and include any joint venture level indebtedness in our total indebtedness. However, we are not subject to any limitations on the amount of leverage we may use, and accordingly, the amount of leverage we use may be significantly less or greater than we currently anticipate. We expect our leverage to decline commensurately as we execute our business plan to grow our net asset value.

If we are unable to obtain financing on favorable terms or at all, we would likely need to curtail our investment activities, including acquisitions and improvements to and developments of, real properties, which could limit our growth prospects. This, in turn, could reduce cash available for distribution to our stockholders and may hinder our ability to raise capital by issuing more securities or borrowing more money. We also may be forced to dispose of assets at inopportune times ~~in order~~ to maintain our REIT qualification and Investment Company Act exemption.

We expect to maintain ~~a distribution~~distributions paid to our Series A Preferred Stock, our Series B Preferred Stock, our Series C Preferred Stock, our Series D Preferred Stock and our Series DT Preferred Stock in accordance with the terms of those securities which require monthly or quarterly dividends depending on the series. On August 4, 2017, the board of directors announced that it initiated, in conjunction with a financial advisor, a comprehensive review of the appropriate dividend policy for the Company's Class A Common Stock. The board's evaluation will consider factors including, but not limited to, achieving a sustainable dividend covered by current recurring AFFO (vs. pro forma AFFO), multifamily and small cap peer dividend rates, multifamily and small cap peer payout ratios, providing financial flexibility for the Company, and achieving an appropriate balance between the retention of capital to invest and grow net asset value, and the importance of current distributions. The board is expected to complete its review of the dividend policy for the Company's Class A Common Stock in the fourth quarter of 2017. Currently, the Company maintains a distribution paid on a monthly basis to all of our Class A common stockholders at a quarterly rate of $0.29 per share. In August 2017, we announced that our Board is undertaking a review of our dividend policy, and that the 2018 annual dividend range for our Class A Common Stock would likely be between $0.65 and $0.75 per Class A common share. While our policy is generally to pay distributions from cash flow from operations, our distributions through September 30, ~~2017~~2020 have been paid from cash flow from operations, proceeds from our continuous ~~registered public offering,~~preferred stock offerings, including our Series T Preferred Stock, proceeds from ~~the IPO and Follow-On Offerings,~~underwritten securities offerings, and sales of assets and may in the future be paid from additional sources, such as from borrowings.

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~~Since June 30, 2015,~~We have notes receivable in conjunction with properties that are in various stages of development, in lease-up and operating. To date, these investments have been structured as mezzanine loans, and in the future, we may also provide mortgage financing to these types of projects. The notes receivable provide a stated return and required repayment based on a fixed maturity date, generally in relation to the property’s construction loan or mortgage loan maturity. If the property does not repay the notes receivable upon maturity, our income, FFO, CFFO and cash flows could be reduced below the stated returns currently being recognized if the property does not produce sufficient cash flow to pay its operating expenses and debt service, or to refinance its debt obligations. In addition, we have, ~~paid~~in certain cases, an option to purchase up to 100% of the common interest which holds an interest in the entity that owns the property. If we were to convert into common ownership, our ~~base management fees~~income, FFO, CFFO and ~~incentive fees~~cash flows would be reflective of our pro rata share of the property’s results, which could be a reduction from what our notes receivable currently generate.

We also have preferred membership interests in ~~LTIPs~~properties that are in ~~lieu~~various stages of ~~cash. In conjunction with the internalization,~~development, in lease-up and operating. Our preferred equity investments are structured to provide a current preferred return, and in some cases an accrued return, during all phases. Each joint venture in which we ~~will no longer be responsible for paying the base management fee or incentive fee,~~own a preferred membership interest is required to redeem our preferred membership interests, plus any accrued but unpaid preferred return, based on a fixed maturity date, generally in relation to the ~~extent that~~property’s construction loan or mortgage loan maturity. Upon redemption of the preferred membership interests, our income, FFO, CFFO and cash flows could be reduced below the preferred returns currently being recognized. Alternatively, if the joint ventures do not redeem our preferred membership interest when required, our income, FFO, CFFO and cash flows could be reduced if the property does not produce sufficient cash flow to pays its operating expenses, debt service and preferred return obligations. As we ~~will be paying additional general~~evaluate our capital position and ~~administrative expenses in replacement thereof, they will be paid in cash.~~capital allocation strategy, we may consider alternative means of financing the loan and preferred equity investment activities at the subsidiary level.

Off-Balance Sheet Arrangements

As of September 30, ~~2017,~~2020, we ~~did not~~ have ~~any~~ off-balance sheet arrangements that ~~have had or are reasonably likely to~~may have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital expenditures. As of September 30, ~~2017,~~2020, we own interests in ~~nine~~thirteen joint ventures that are accounted for under the equity method as we exercise significant influence over, but do not control, the investee.

Cash Flows from Operating Activities

As of September 30, ~~2017,~~2020, we owned indirect equity interests in ~~thirty-five~~fifty-seven real estate properties, ~~(twenty-five~~consisting of thirty-five consolidated operating properties and ~~ten development properties), twenty-six of which are consolidated for reporting purposes.~~twenty-two through preferred equity, mezzanine loan or ground lease investments. During the nine months ended September 30, ~~2017,~~2020, net cash provided by operating activities was ~~$33.3 million. After the~~$61.9 million after net income of ~~$40.1~~$31.1 million was ~~reduced~~adjusted for ~~$21.1 million~~the following:

●distributions and preferred returns from unconsolidated joint ventures of $10.3 million;

●an increase in accounts payable and other accrued liabilities of $12.1 million;

●non-cash items ~~net cash provided~~of $17.8 million;

●an increase in due from affiliates of $2.5 million; and

●a decrease in notes and accrued interest receivable of $0.1 million; offset by ~~operating activities consisted~~

●an increase in accounts receivable, prepaids and other assets of ~~the following:~~
$12.0 million.

~~Distributions from unconsolidated joint ventures of 7.1 million;~~

~~Increase in accounts payable and accrued liabilities of $14.2 million;~~

~~Increase in payables due to affiliates of $0.2 million;~~

~~and $7.2 million decrease in accounts receivable, prepaid expenses and other assets.~~

Cash Flows from Investing Activities

During the nine months ended September 30, ~~2017,~~2020, net cash ~~used in~~provided by investing activities was ~~$230.0~~$6.1 million, primarily due to the following:

●$194.0 million of proceeds from the sale and redemption of unconsolidated real estate joint ventures; and

●$29.0 million of repayments on notes receivable, partially offset by:

●$144.7 million used in acquiring consolidated real estate investments;

●$56.3 million used in acquiring additional investments in unconsolidated joint ventures and notes receivable;

●$12.3 million used on capital expenditures; and

●$3.7 million used in purchase of interests from noncontrolling interests.

~~$259.2 million used in acquiring consolidated real estate investments;~~

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~~$38.8 million used in acquiring investments in unconsolidated joint ventures and notes receivable;~~

~~$33.5 million used on capital expenditures;~~

~~$0.3 million used on purchases of noncontrolling interest;~~

~~Partially offset by proceeds of sale of real estate assets of $71.9 million;~~

~~$17.6 million of proceeds from sale of real estate joint venture interest; and~~

~~$12.3 million decrease in restricted cash.~~

Cash Flows from Financing Activities

During the nine months ended September 30, ~~2017,~~2020, net cash provided by financing activities was ~~$249.3~~$7.8 million, primarily due to the following:

~~net borrowings of $155.0 million on mortgages payable;~~

~~net proceeds of $57.4 million from issuance of common stock;~~

~~net borrowings of $63.5 million on mortgages payable;~~

~~net proceeds of $103.0 million from issuance of Series B preferred units;~~

~~$10.7 million of contributions from noncontrolling interests;~~

●net proceeds of $149.2 million from issuance of units of Series T Preferred Stock;

●net proceeds of $2.0 million from issuance of Class A common stock;

●net proceeds of $0.1 million from exercise of warrants;

●net borrowings of $95.2 million on mortgages payable;

●net proceeds of $276.2 million from borrowings on revolving credit facilities; and

●contributions of $1.0 million from noncontrolling interests;

●partially offset by $294.2 million in repayments on revolving credit facilities;

●$137.3 million of repayments of our mortgages payable;

●$3.3 million increase in deferred financing costs;

●$42.1 million paid in cash distributions to preferred stockholders;

●$11.7 million paid in cash distributions to common stockholders;

●$0.4 million paid for redemption and retirement of Series B Preferred Stock;

●$8.5 million in distributions paid to our noncontrolling interests;

●$12.4 million paid for the repurchase of Class A common stock; and

●$6.1 million paid for the repurchase of Series A, Series C and/or Series D Preferred Stock.

~~partially offset by $29.9 million in distributions paid to our noncontrolling interests;~~

~~$22.2 million paid in cash distributions paid to common stockholders;~~

~~$18.6 million paid in cash distributions paid to preferred stockholders;~~

~~$6.0 million paid in cash distributions paid to common stockholders;~~

~~$3.7 million payments of deferred financing costs; and~~

~~$6.0 million paid in cash distributions paid to common stockholders;~~

~~$1.8 million of repayments of our mortgages payable.~~

Capital Expenditures

The following table summarizes our total capital expenditures for the nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 (amounts in thousands):

	For the nine months ended September 30,
	2017		2016
New development	$	21,019	$	—

					Nine Months Ended
					September 30,
					2020		2019
Redevelopment/renovations		10,178		2,540	$	6,461	$	9,470
Routine capital expenditures		2,328		1,452		2,962		3,004
Normally recurring capital expenditures						2,262		2,369
Total capital expenditures	$	33,525	$	3,992	$	11,685	$	14,843

~~We define redevelopment~~Redevelopment and renovation costs asare non-recurring capital expenditures for significant projects that ~~upgrade units or common areas and projects that~~ are revenue enhancing ~~for the nine months ended September 30, 2017. We define routine~~through unit or common area upgrades, such as clubhouse renovations and kitchen remodels. Routine capital expenditures are necessary non-revenue generating improvements that extend the useful life of the property and that are less frequent in nature, such as roof repairs and asphalt resurfacing. Normally recurring capital expenditures are necessary non-revenue generating improvements that ~~are incurred at every property~~occur on a regular ongoing basis, such as carpet and ~~exclude development, investment, revenue enhancing and non-recurring capital expenditures.~~appliances.

Funds from Operations and ~~Adjusted~~Core Funds from Operations Attributable to Common Stockholders and Unit Holders

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

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FFO attributable to common stockholders ~~(“FFO”),~~and unit holders is a non-GAAP financial measure that is widely recognized as a measure of REIT operating performance. We consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative. We define FFO, consistent with the ~~National Association of Real Estate Investment Trusts, or NAREIT's,~~NAREIT definition, as net income, computed in accordance with GAAP, excluding gains ~~(or losses) from~~or losses on sales of depreciable real estate property, plus depreciation and amortization of real estate assets, plus impairment write-downs of depreciable real estate, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis.

~~In addition~~CFFO makes certain adjustments to FFO, ~~we use adjusted funds from operations attributable to common stockholders (“AFFO”). AFFO is a computation made by analysts and investors to measure a real estate company's operating performance by~~ removing the effect of items that do not reflect ongoing property ~~operations. In computing AFFO, we further adjust FFO by adding back certain items that are not added to net income in NAREIT's definition of FFO,~~operations such as acquisition ~~and pursuit costs, equity based compensation~~ expenses, ~~and any other non-recurring or~~ non-cash expenses, which are costs that do not relate to the operating performance of our properties, and subtracting recurring capital expenditures (and when calculating the quarterly incentive fee payable to our Manager only, we further adjust FFO to include any realizedinterest expense, unrealized gains or losses on ~~our~~derivatives, losses on extinguishment of debt and debt modification costs (includes prepayment penalties incurred and the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt), one-time weather-related costs, gains or losses on sales of non-depreciable real estate ~~investments).~~

~~During~~property, shareholder activism, stock compensation expense and preferred stock accretion. Commencing January 1, 2020, we did not deduct the accrued portion of the preferred income on our preferred equity investments from FFO to determine CFFO as the income is deemed fully collectible. The accrued portion of the preferred income totaled $0.4 million and $1.2 million for the three and nine months ended September 30, ~~2017,~~2020, respectively. We believe that CFFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core recurring property operations. As a result, we ~~incurred $3.2 million~~believe that CFFO can help facilitate comparisons of ~~acquisition~~operating performance between periods and ~~pursuit expense and $3.7 million~~provides a more meaningful predictor of disposition expense, of which $2.5 million and $3.1 million, respectively, was our pro rata share of the expense. We incurred $2.1 million of acquisition and pursuit expense and $0.4 million of disposition expense during the nine months ended September 30, 2016, of which $2.5 million was our pro-rata share of expense. The Company adopted ASU 2017-01 which resulted in the capitalization of costs incurred in asset acquisitions purchased after the effective date of January 1, 2017.

future earnings potential.

Our calculation of ~~AFFO~~CFFO differs from the methodology used for calculating ~~AFFO~~CFFO by certain other REITs and, accordingly, our ~~AFFO~~CFFO may not be comparable to ~~AFFO~~CFFO reported by other REITs. Our management utilizes FFO and ~~AFFO~~CFFO as measures of our operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare our operating performance between periods. Furthermore, although FFO ~~AFFO~~and CFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we also believe that FFO and ~~AFFO~~CFFO may provide us and our stockholders with an additional useful measure to compare our financial performance to certain other REITs. ~~We also use AFFO for purposes of determining the quarterly incentive fee, if any, payable to our Manager.~~

Neither FFO nor ~~AFFO~~CFFO is equivalent to net income, including net (loss) income attributable to common stockholders, or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and ~~AFFO~~CFFO do not represent amounts available for ~~management's~~management’s discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO nor ~~AFFO~~CFFO should be considered as an alternative to net income, including net (loss) income attributable to common stockholders, as an indicator of our operating performance or as an alternative to cash flow from operating activities as a measure of our liquidity.

We have acquired ~~interests in thirteen additional~~six operating properties, ~~and three development~~made eight investments through mezzanine loans, preferred equity interests or ground lease investments, and sold five operating properties subsequent to September 30, ~~2016.~~2019. The results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance.

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The table below presents our calculation of FFO and ~~AFFO~~CFFO for the three and nine months ended September 30, ~~2017~~2020 and ~~2016~~2019 (in ~~thousands)~~thousands, except per share amounts):

Three Months Ended Nine Months Ended
September 30, September 30,
2017 2016 2017 2016
Net (loss) income attributable to common stockholders $ (12,017 ) $ (2,551 ) $ 563 $ (11,727 )
Common stockholders pro-rata share of:
Real estate depreciation and amortization⁽¹⁾ 10,771 6,197 29,900 19,436
Gain on sale of real estate investments — (4,876 ) (33,945 ) (4,876 )
Gain on sale of real estate joint venture interests, net — — (6,332 ) —
FFO Attributable to Common Stockholders $ (1,246 ) $ (1,230 ) $ (9,814 ) $ 2,833
Common stockholders pro-rata share of:
Amortization of non-cash interest expense 245 472 1,491 620
Acquisition and pursuit costs 15 619 3,039 1,993
Management internalization process expense 818 — 1,629 —
Loss on early extinguishment of debt — 2,269 1,534 2,269
Weather-related losses, net 635 — 635 —
Non-recurring income — — (16 ) —
Non-cash preferred returns and equity in income of unconsolidated real estate joint ventures (493 ) — (980 ) —
Normally recurring capital expenditures⁽²⁾ (387 ) (239 ) (1,011 ) (656 )
Preferred stock accretion 896 271 1,870 560
Non-cash equity compensation 2,900 2,382 12,912 6,600
Non-recurring equity in income of unconsolidated joint ventures — (231 ) — (231 )
AFFO Attributable to Common Stockholders $ 3,383 $ 4,313 $ 11,289 $ 13,988
FFO Attributable to Common Stockholders per share $ (0.05 ) $ (0.06 ) $ (0.38 ) $ 0.14
AFFO Attributable to Common Stockholders per share $ 0.13 $ 0.21 $ 0.44 $ 0.68
Weighted average common shares outstanding 26,474,344 20,909,727 25,852,059 20,711,836

Three Months Ended

Nine Months Ended

September 30,

September 30,


2020

2019

2020

2019
Net (loss) income attributable to common stockholders

$
(17,058)

$
17,160

$
(18,461)

$
(5,924)
Add back: Net (loss) income attributable to Operating Partnership Units

(6,270)

6,191

(6,679)

(1,747)
Net (loss) income attributable to common stockholders and unit holders

(23,328)

23,351

(25,140)

(7,671)
Common stockholders and Operating Partnership Units pro-rata share of:

Real estate depreciation and amortization⁽¹⁾

18,309

16,755

57,353

48,187
Gain on sale of real estate investments

—

(48,172)

(55,360)

(48,172)
FFO Attributable to Common Stockholders and Unit Holders

(5,019)

(8,066)

(23,147)

(7,656)
Common stockholders and Operating Partnership Units pro-rata share of:

Acquisition and pursuit costs

2,242

217

3,933

346
Non-cash interest expense

731

787

2,323

2,348
Unrealized loss on derivatives

98

131

67

2,418
Loss on extinguishment of debt and debt modification costs

—

6,864

13,590

6,864
Weather-related losses, net

—

57

—

305
Non-real estate depreciation and amortization

122

157

364

327
Gain on sale of non-depreciable real estate investments

—

—

—

(679)
Shareholder activism

—

—

—

393
Non-recurring income, net

(52)

—

(49)

—
Non-cash preferred returns on unconsolidated real estate joint ventures

—

(340)

—

(938)
Non-cash equity compensation

2,850

3,290

8,589

8,109
Preferred stock accretion

4,451

2,717

11,978

6,920
CFFO Attributable to Common Stockholders and Unit Holders

$
5,423

$
5,814

$
17,648

$
18,757

Per Share and Unit Information:

FFO Attributable to Common Stockholders and Unit Holders – diluted

$
(0.15)

$
(0.26)

$
(0.70)

$
(0.25)
CFFO Attributable to Common Stockholders and Unit Holders – diluted

$
0.16

$
0.19

$
0.53

$
0.61

Weighted average common shares and units outstanding –diluted

33,688,877

30,847,869

33,187,360

30,734,110

⁽¹⁾The real estate depreciation and amortization amount includes our share of consolidated real estate-related depreciation and amortization of intangibles, less amounts attributable to noncontrolling interests, and our similar estimated share of unconsolidated depreciation and amortization, which is included in earnings of our unconsolidated real estate joint venture investments.
⁽²⁾~~Normally recurring capital expenditures exclude development, investment, revenue enhancing and non-recurring capital expenditures.~~
(1) The real estate depreciation and amortization amount includes our share of consolidated real estate-related depreciation and amortization of intangibles, less amounts attributable to noncontrolling interests for partially owned properties, and our similar estimated share of unconsolidated depreciation and amortization, which is included in earnings of our unconsolidated real estate joint venture investments.
Operating cash flow, FFO and ~~AFFO~~CFFO may also be used to fund all or a portion of certain capitalizable items that are excluded from FFO and ~~AFFO, such as tenant improvements, building improvements and deferred leasing costs.~~
CFFO.
Presentation of this information is intended to assist the reader in comparing the sustainability of the operating performance of different REITs, although it should be noted that not all REITs calculate FFO or ~~AFFO~~CFFO the same way, so comparisons with other REITs may not be meaningful. FFO or ~~AFFO~~CFFO should not be considered as an alternative to net income (loss), attributable to common stockholders or as an indication of our liquidity, nor is either indicative of funds available to fund our cash needs, including our ability to make distributions. Both FFO and ~~AFFO~~CFFO should be reviewed in connection with other GAAP measurements.
46
58

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Contractual Obligations

The following table summarizes our contractual obligations as of September 30, ~~2017 (in thousands)~~2020 which consisted of mortgage notes secured by our properties. At September 30, ~~2017,~~2020, our estimated future required payments on these obligations ~~were:~~were as follows (amounts in thousands):

			Remainder of
	Total		2017		2018-2019		2020-2021		Thereafter

													Remainder of
											Total		2020		2021–2022		2023–2024		Thereafter
Mortgages Payable (Principal)	$	853,565	$	738	$	11,738	$	47,400	$	793,689	$	1,436,279	$	2,094	$	102,046	$	403,922	$	928,217
Estimated Interest Payments on Mortgage Notes Payable, Unsecured Term Loans and Senior Unsecured Notes		191,481		7,560		62,061		59,506		62,354
Estimated Interest Payments on Mortgages Payable and Revolving Credit Facilities												270,060		12,622		96,827		86,610		74,001
Total	$	1,045,046	$	8,298	$	73,799	$	106,906	$	856,043	$	1,706,339	$	14,716	$	198,873	$	490,532	$	1,002,218

Estimated interest payments are based on the stated rates for mortgage notes payable assuming the interest rate in effect for the most recent quarter remains in effect through the respective maturity dates.

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Distributions

~~Distributions~~

Payable to




stockholders

Date
Declaration Date

of record as of

Amount

Paid or Payable
Class A Common Stock






December 6, 2019

December 24, 2019

$
0.162500

January 3, 2020
March 13, 2020

March 25, 2020

$
0.162500

April 3, 2020
May 9, 2020

June 25, 2020

$
0.162500

July 2, 2020
September 11, 2020

September 25, 2020

$
0.162500

October 5, 2020
Class C Common Stock






December 6, 2019

December 24, 2019

$
0.162500

January 3, 2020
March 13, 2020

March 25,2020

$
0.162500

April 3, 2020
May 9, 2020

June 25,2020

$
0.162500

July 2, 2020
September 11, 2020

September 25, 2020

$
0.162500

October 5, 2020
Series A Preferred Stock






December 6, 2019

December 24, 2019

$
0.515625

January 3, 2020
March 13, 2020

March 25, 2020

$
0.515625

April 3, 2020
May 9, 2020

June 25, 2020

$
0.515625

July 2, 2020
September 11, 2020

September 25, 2020

$
0.515625

October 5, 2020
Series B Preferred Stock






October 31, 2019

December 24, 2019

$
5.00

January 3, 2020
January 13, 2020

January 24, 2020

$
5.00

February 5, 2020
January 13, 2020

February 25, 2020

$
5.00

March 5, 2020
January 13, 2020

March 25, 2020

$
5.00

April 3, 2020
April 14, 2020

April 24, 2020

$
5.00

May 5, 2020
May 9, 2020

May 22, 2020

$
5.00

June 5, 2020
May 9, 2020

June 25, 2020

$
5.00

July 2, 2020
July 10, 2020

July 24, 2020

$
5.00

August 5, 2020
July 10, 2020

August 25, 2020

$
5.00

September 4, 2020
July 10, 2020

September 25, 2020

$
5.00

October 5, 2020
Series C Preferred Stock






December 6, 2019

December 24, 2019

$
0.4765625

January 3, 2020
March 13, 2020

March 25, 2020

$
0.4765625

April 3, 2020
May 9, 2020

June 25, 2020

$
0.4765625

July 2, 2020
September 11, 2020

September 25, 2020

$
0.4765625

October 5, 2020
Series D Preferred Stock






December 6, 2019

December 24, 2019

$
0.4453125

January 3, 2020
March 13, 2020

March 25, 2020

$
0.4453125

April 3, 2020
May 9, 2020

June 25, 2020

$
0.4453125

July 2, 2020
September 11, 2020

September 25, 2020

$
0.4453125

October 5, 2020
Series T Preferred Stock⁽¹⁾






December 20, 2019

December 24, 2019

$
0.128125

January 3, 2020
January 13, 2020

January 24, 2020

$
0.128125

February 5, 2020
January 13, 2020

February 25, 2020

$
0.128125

March 5, 2020
January 13, 2020

March 25, 2020

$
0.128125

April 3, 2020
April 14, 2020

April 24, 2020

$
0.128125

May 5, 2020
May 9, 2020

May 22, 2020

$
0.128125

June 5, 2020
May 9, 2020

June 25, 2020

$
0.128125

July 2, 2020
July 10, 2020

July 24, 2020

$
0.128125

August 5, 2020
July 10, 2020

August 25, 2020

$
0.128125

September 4, 2020
July 10, 2020

September 25, 2020

$
0.128125

October 5, 2020

Declaration Date

Payable to stockholders
of record as of

Amount

Date Paid
Class A common stock
October 4, 2016 December 23, 2016 $ 0.096667 January 5, 2017
January 6, 2017 January 25, 2017 $ 0.096666 February 3, 2017
January 6, 2017 February 24, 2017 $ 0.096667 March 3, 2017
January 6, 2017 March 24, 2017 $ 0.096667 April 5, 2017
April 7, 2017 April 25, 2017 $ 0.096666 May 5, 2017
April 7, 2017 May 25, 2017 $ 0.096667 June 5, 2017
April 7, 2017 June 23, 2017 $ 0.096667 July 5, 2017
July 10, 2017 July 25, 2017 $ 0.096666 August 4, 2017
August 9, 2017 August 24, 2017 $ 0.096667 September 5, 2017
August 9, 2017 September 25, 2017 $ 0.096667 October 5, 2017
Series A Preferred Stock
December 9, 2016 December 23, 2016 $ 0.515625 January 5, 2017
March 10, 2017 March 24, 2017 $ 0.515625 April 5, 2017
June 9, 2017 June 23, 2017 $ 0.515625 July 5, 2017
September 8, 2017 September 25, 2017 $ 0.515625 October 5, 2017
Series B Preferred Stock
October 4, 2016 December 23, 2016 $ 5.00 January 5, 2017
January 6, 2017 January 25, 2017 $ 5.00 February 3, 2017
January 6, 2017 February 24, 2017 $ 5.00 March 3, 2017
January 6, 2017 March 24, 2017 $ 5.00 April 5, 2017
April 7, 2017 April 25, 2017 $ 5.00 May 5, 2017
April 7, 2017 May 25, 2017 $ 5.00 June 5, 2017
April 7, 2017 June 23, 2017 $ 5.00 July 5, 2017
July 10, 2017 July 25, 2017 $ 5.00 August 4, 2017
July 10, 2017 August 24, 2017 $ 5.00 September 5, 2017
July 10, 2017 September 25, 2017 $ 5.00 October 5, 2017
Series C Preferred Stock
December 9, 2016 December 23, 2016 $ 0.4765625 January 5, 2017
March 10, 2017 March 24, 2017 $ 0.4765625 April 5, 2017
June 9, 2017 June 23, 2017 $ 0.4765625 July 5, 2017
September 8, 2017 September 25, 2017 $ 0.4765625 October 5, 2017
Series D Preferred Stock
December 9, 2016 December 23, 2016 $ 0.3859 January 5, 2017
March 10, 2017 March 24, 2017 $ 0.4453125 April 5, 2017
June 9, 2017 June 23, 2017 $ 0.4453125 July 5, 2017
September 8, 2017 September 25, 2017 $ 0.4453125 October 5, 2017
(1) 47 Shares of newly issued Series T Preferred Stock that are held only a portion of the applicable monthly dividend period will receive a prorated dividend based on the actual number of days in the applicable dividend period during which each such share of Series T Preferred Stock was outstanding.
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Table of Contents

A portion of each dividend may constitute a return of capital for tax purposes. There is no assurance that ~~the Company~~we will continue to declare dividends or at this rate.

Holders of OP Units and LTIP Units are entitled to receive “distribution equivalents” at the same time as dividends are paid to holders of our Class A common stock.

Our Board will determine the amount of dividends to be paid to our stockholders. The Board’s determination will be based on a number of factors, including funds available from operations, our capital expenditure requirements and the annual distribution requirements necessary to maintain our REIT status under the Internal Revenue Code. As a result, our distribution rate and payment frequency may vary from time to time. However, to qualify as a REIT for tax purposes, we must make distributions equal to at least 90% of our “REIT taxable income” each year. ~~Especially during the early stages of our operations, we may declare distributions in excess of funds from operations.~~

Distributions paid ~~for the nine months ended September 30, 2017 and 2016, respectively,~~ were funded from cash provided by operating activities except with respect to ~~$9.6 million~~an immaterial amount for the nine months ended September 30, ~~2017,~~2019 which was funded from sales of real estate, borrowings, and/or proceeds from our equity offerings.

Nine Months Ended September 30,
2017 2016
(In thousands)
Cash provided by operating activities $ 33,261 $ 24,260

Cash distributions to preferred shareholders $ (18,550 ) $ (5,647 )
Cash distributions to common shareholders (22,235 ) (18,223 )
Cash distributions to noncontrolling interests, excluding $27.9 million from sale of real estate investments (2,031 ) (2,844 )
Total distributions (42,816 ) (26,714 )

(Shortfall) excess $ (9,555 ) $ (2,454 )

Proceeds from sale of joint venture interests $ 17,603 $ —
Proceeds from sale of real estate assets — $ 36,675
Proceeds from sale of real estate investments, net of noncontrolling distribution of $27.9 million $ 44,028 $ —

Nine Months Ended

September 30,

2020

2019

(in thousands)
Cash provided by operating activities

$
61,931

$
51,180

Cash distributions to preferred shareholders

$
(42,144)

$
(32,522)
Cash distributions to common shareholders

(11,748)

(11,203)
Cash distributions to noncontrolling interests, excluding $2.7 million and $2.3 million from sale of real estate investments in 2020 and 2019, respectively

(5,784)

(5,136)
Total distributions

(59,676)

(48,861)

Excess (shortfall)

$
2,255

$
2,319

Proceeds from sale of real estate investments, net of noncontrolling distributions of $2.7 million and $2.3 million in 2020 and 2019, respectively

$
60,520

$
95,881
Proceeds from sale and redemption of unconsolidated real estate joint ventures

$
35,542

$
—

Significant Accounting Policies and Critical Accounting Estimates
Our significant accounting policies and critical accounting estimates are disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2016~~2019 and Note 2 “Basis of Presentation and Summary of Significant Accounting Policies” ~~to the~~of our interim Consolidated Financial Statements.
Subsequent Events
Other than the items disclosed in Note ~~13,~~15 “Subsequent Events” to our interim Consolidated Financial Statements for the period ended September 30, ~~2017,~~2020, no material events have occurred that required recognition or disclosure in these financial statements. ~~See~~Refer to Note ~~13 to~~15 of our interim Consolidated Financial Statements for discussion.

48
Item 3. Quantitative and Qualitative Disclosures about Market Risk
We are exposed to interest rate risk primarily through borrowing activities. There is inherent roll-over risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and our future financing requirements. We are not subject to foreign exchange rates or commodity price risk, and all of our financial instruments were entered into for other than trading purposes.

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Our interest rate risk is monitored using a variety of techniques. The table below presents the principal payments (in thousands) and the weighted average interest rates on outstanding debt, by year of expected maturity, to evaluate the expected cash flows and sensitivity to interest rate changes. Fair value adjustments and unamortized deferred financing costs, net, of approximately $(8.7) million are excluded:

2020

2021

2022

2023

2024

Thereafter

Total

Mortgages Payable (Principal)

$
2,094

$
86,579

$
15,467

$
127,745

$
276,177

$
928,217

$
1,436,279

Weighted Average Interest Rate

3.63
%

2.06
%

3.44
%

3.20
%

3.43
%

3.59
%

3.43
%
~~($ in thousands)~~
2017 2018 2019 2020 2021 Thereafter Total
Mortgage Notes Payable $ 738 $ 4,086 $ 7,652 $ 35,227 $ 12,173 $ 793,689 $ 853,565
Average Interest Rate 3.87 % 3.62 % 3.61 % 3.62 % 3.65 % 3.61 % 3.61 %

The fair value ~~(in thousands)~~of mortgages payable is estimated at ~~$856.0~~$1,497.2 million ~~for mortgages payable~~ as of September 30, ~~2017.~~
2020.
The table above incorporates those exposures that exist as of September 30, ~~2017;~~2020; it does not consider those exposures or positions which could arise after that date. As a result, our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period and interest rates.
As of September 30, 2020, we had ten interest rate caps, which are not accounted for as hedges, that we primarily use as part of our interest rate risk management strategy. Our interest rate caps effectively limit our exposure to interest rate risk by providing a ceiling on the underlying floating interest rates of our floating rate debt.
As of September 30, ~~2017,~~2020, a ~~100 basis~~100-basis point increase or decrease in interest rates on the portion of our debt bearing interest at ~~variable~~floating rates would result in an increase in interest expense of approximately $908,000 or decrease in interest expense of ~~approximately $1.0 million~~$908,000, respectively, for the quarter ended September 30, ~~2017.~~2020.

Item 4. Controls and Procedures
Disclosure Controls and Procedures
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) and Rule 15d-15(b) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), our management, including our Chief Executive Officer and Chief ~~Accounting~~Financial Officer, evaluated, as of September 30, ~~2017,~~2020, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) and Rule 15d-15(e). Based on that evaluation, our Chief Executive Officer and Chief ~~Accounting~~Financial Officer concluded that our disclosure controls and procedures were effective as of September 30, ~~2017,~~2020 to provide reasonable assurance that information required to be disclosed by us in this report filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to management, including the Chief Executive Officer and Chief ~~Accounting~~Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
We believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.
Changes in Internal Control over Financial Reporting
There has been no change in internal control over financial reporting that occurred during the three months ended September 30, ~~2017~~2020 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

49
62

Table of Contents

PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
~~None.~~
Item 1A. Risk Factors
Other than the following, there have been no material changes to our potential risks and uncertainties presented in the section entitled “Risk Factors” in our Annual Report on Form 10-K for the twelve months ended December 31, ~~2016~~2019 filed with the SEC on February ~~22, 2017.~~24, 2020.
Your interests could be diluted by the incurrence of additional debt, the issuance of additional shares of preferred stock, including additional shares of Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Preferred Stock and Series DT Preferred Stock (together the “Preferred Stock”) and by other transactions.
As of September 30, ~~2017,~~2020, our total ~~long-term~~ indebtedness was approximately ~~$853.6 million,~~$1.4 billion, and we may incur significant additional debt in the future. The Preferred Stock is subordinate to all of our existing and future debt and liabilities and those of our subsidiaries. Our future debt may include restrictions on our ability to pay dividends to preferred stockholders in the event of a default under the debt facilities or under other circumstances. Our charter currently authorizes the issuance of up to 250,000,000 shares of preferred stock in one or more classes or series, and as of September 30, 2020, the ~~date~~number of ~~this filing, we have issued 5,721,460~~preferred shares outstanding was as follows: 5,558,392 shares of Series A Preferred Stock, ~~(146,460 of which have been issued in the Series A ATM Offering), 151,610~~516,100 shares of Series B Preferred Stock, ~~2,323,750~~2,295,845 shares of Series C Preferred Stock, ~~and 2,850,602~~2,774,338 shares of Series D Preferred Stock and 6,671,458 shares of Series T Preferred Stock. The issuance of additional preferred stock on parity with or senior to the Preferred Stock would dilute the interests of the holders of shares of Preferred Stock, and any issuance of preferred stock senior to the Preferred Stock or of additional indebtedness could affect our ability to pay dividends on, redeem or pay the liquidation preference on the Preferred Stock. We may issue preferred stock on parity with the Preferred Stock without the consent of the holders of the Preferred Stock. Other than the Asset Coverage Ratio, our letter agreement with Cetera Financial Group, Inc. pertaining to our Series B Preferred Stock that requires us to maintain a preferred dividend coverage ratio, the articles supplementary establishing our Series T Preferred Stock that requires us to maintain a preferred dividend coverage ratio, and the right of holders to cause us to redeem the Series A Preferred Stock and Series C Preferred Stock upon a Change of Control/Delisting, none of the provisions relating to the Preferred Stock relate to or limit our indebtedness or afford the holders of shares of Preferred Stock protection in the event of a highly leveraged or other transaction, including a merger or the sale, lease or conveyance of all or substantially all our assets or business, that might adversely affect the holders of shares of Preferred Stock.
~~Risks Relating to the Internalization Transaction~~
The Issuances of shares of our Class C Common Stock in connection with the Internalization, and the Issuances of shares of our Class A Common Stock upon redemption of OP Units and/or conversion of shares of our Class C Common Stock issued in connection with the Internalization, will have a dilutive effect and will reduce the voting power and relative percentage interests of current ~~holders of our Class A Common Stockholders in our earnings and market value.~~
The issuance of 76,603 shares of our Class C Common Stock in connection with the Internalization will have a dilutive effect and will reduce the voting power and relative percentage interests of current Class A Common Stockholders in our earnings and market value.
~~Additionally, part~~pandemic of the Internalization Consideration consists of 3,753,593 OP Units, which may have a dilutive effect on the voting power and percentage interests of our current Class A Common Stockholders. Commencing on the one-year anniversary of the Closing, each OP Unit may be tendered for redemption, at the holder’s option and subject to the terms and conditions set forth in the limited partnership agreement of our Operating Partnership, for cash equal to the average closing price of Class A Common Stock for the ten (10) consecutive trading days immediately preceding the date we receive a notice of redemption,novel coronavirus, or ~~at our sole option, for shares of Class A Common Stock on a one-for-one basis, in lieu of cash. If the recipients of OP Units in the Internalization exercise their redemption rights and part~~COVID-19, or all of their outstanding OP Units are redeemed for shares of our Class A Common Stock, such redemption will have a dilutive effect on our common stock and reduce the relative percentage interests of existing common stockholders in our earnings, voting power and market value.
Future sales of our Class A Common Stock by the Contributors may adversely affect the market price of our Class A Common Stock. These sales also might make it more difficult for us to sell equity securities in the future ~~at a time~~outbreak of other highly infectious or contagious diseases, could materially and ~~price we deem appropriate. Upon consummation of the Internalization,~~adversely impact or disrupt our Operating Partnership will issue a number of OP Units to the Contributors as Internalization Consideration, which OP Units may be redeemed in shares of our Class A Common Stock rather than cash, at the Company’s option. In addition, shares of Class C Common Stock will be convertible, at the holder’s option (at any time and from time to time), into one (1) fully-paid and non-assessable share of our Class A Common Stock, and upon the occurrence of certain transfers of OP Units or shares of Class C Common Stock and similar events, will convert automatically into one (1) fully-paid and non-assessable share of our Class A Common Stock. Sales of a substantial number of shares of our Class A Common Stock by the Contributors, the perception or expectation that such sales may occur, or sales of shares of our Class A Common Stock to cover tax obligations (some of which may occur shortly after the closing of the Internalization), could have a material adverse effect on our business, financial condition, results of operations, cash flows and performance.
Since its discovery in December 2019, a new strain of coronavirus (“COVID-19”) has spread from China to many other countries, including the United States. The outbreak has been declared to be a pandemic by the World Health Organization, and the ~~prevailing market price for shares of our Class A Common Stock.~~
50
~~The Internalization was negotiated between~~Health and Human Services Secretary has declared a public health emergency in the ~~Special Committee, which is comprised solely of independent~~United States in response to the outbreak. Considerable uncertainty still surrounds the COVID-19 virus and ~~disinterested members of our board of directors, the Manager, which is affiliated with certain of our officers and directors,~~its potential effects, and the ~~Contributors,~~extent of and effectiveness of any responses taken on a national and local level. However, measures taken to limit the impact of COVID-19, including ~~R. Ramin Kamfar,~~social distancing and other restrictions on travel, congregation and business operations have already resulted in significant negative economic impacts. The long-term impact of COVID-19 on the United States and world economies remains uncertain, but is likely to result in a world-wide economic downturn, the duration and scope of which cannot currently be predicted.

Table of Contents

Our operating results depend, in large part, on revenues derived from leasing space in our ~~Chairman, President and Chief Executive Officer, Gary Kachadurian, one of our directors, and certain other officers.~~

~~The Internalization was negotiated with the Manager, which is affiliated with certain of our officers and directors,~~properties to residential tenants and the ~~Contributors, including Messrs. Kamfar~~ability of tenants to generate sufficient income to pay their rents in a timely manner. The market and ~~Kachadurian, Michael L. Konig,~~economic challenges created by the COVID-19 pandemic, and measures implemented to prevent its spread, may adversely affect our ~~General Counsel~~returns and ~~Secretary,~~profitability and, ~~Christopher A. Vohs, our Chief Accounting Officer and Treasurer. As a result, those officers and directors may have different interests than the Company~~ as a whole. This potential conflict would not exist in the case of a transaction negotiated with unaffiliated third parties. Moreover, if the Manager or any Contributor breaches any of the representations, warranties or covenants made by it in the Contribution Agreement, we may choose not to enforce, or to enforce less vigorously, our rights because of our desire to maintain our ongoing relationship with the Manager, the Contributors and the interests of certain of our directors and officers. Moreover, the representations, warranties, covenants and indemnities in the Contribution Agreement are subject to limitations and qualifiers, which may also limitresult, our ability to ~~enforce any remedy under~~make distributions to our stockholders or to realize appreciation in the ~~Contribution Agreement.~~

~~Certain~~value of our ~~directors and executive officers have interests in the Internalization that are different from, and may potentially conflict with, the interests of us and our stockholders.~~

Certain of our directors and executive officers have interests in the Internalization that may be different from, or in addition to, the interests of our stockholders generally and that may create potential conflicts of interest, including (i) the payment of Internalization Consideration in connection with the Internalization directly or indirectly to certain of these individuals, including Messrs. Kamfar, Kachadurian, and Konig, and the entry by the applicable individuals into arrangements relating to the payment of that consideration, and (ii) the entry by Bluerock REIT Operator, LLC, a wholly owned subsidiary of our Manager (“Manager Sub”), in its post-Closing capacity as an indirect subsidiaryproperties. The spread of the ~~Company, into employment agreements with Messrs. Kamfar~~COVID-19 virus could result in further increases in unemployment, and Vohs as well as James Babb, Jordan Ruddy and Ryan MacDonald, who are executive officers and principals of our Manager, and into a services agreement with Mr. Konig through Konig & Associates, all of which will become effective upon consummation of the Internalization.

In addition, Mr. Kamfar owns a controlling interest in Bluerock Real Estate, L.L.C. (“BRRE”), the sole managing member of our Manager; Messrs. Babb, MacDonald, Ruddy, Vohs and Konig are also executive officers or principals of our Manager; and Mr. Kachadurian is Vice Chairman of the Manager. The respective roles of these individuals in the Manager may create additional conflicts of interest in respect of the Internalization and the related transactions.

~~Following the Internalization, Mr. Kamfar will control a significant number of votes in any matter presented to our Class A Common Stockholders for approval, including the election of directors.~~

Although, the 76,603 shares of Class C Common Stock issued in connection with the Internalization is not designed to provide for disproportionate voting rights, the issuance of the Class C Common Stock resulted in Mr. Kamfar controlling significant voting power in matters submitted to a vote of our Class A Common Stockholders as a result of his beneficial ownership of Class C Common Stock (which gives him voting power equal to the economic interest in the Company issued to BRRE in the form of OP Units as if all of those OP Units were redeemed for shares of Class A Common Stock), including the election of directors. Mr. Kamfar may have intereststenants that differ from our other stockholders, including by reason of his direct or indirect interest in our Operating Partnership, and may accordingly vote in ways that may not be consistent with the interests of those other stockholders.

~~Our net income, FFO and AFFO may decrease in the near term~~experience deteriorating financial conditions as a result of the ~~Internalization.~~

~~We will expense all cash~~pandemic may be unwilling or unable to pay rent in full on a timely basis. In some cases, we may have to restructure tenants’ rent obligations, and ~~non-cash~~may not be able to do so on terms as favorable to us as those currently in place. Numerous state, local, federal and industry-initiated efforts may also affect our ability to collect rent or enforce remedies for the failure to pay rent. In the event of tenant nonpayment, default or bankruptcy, we may incur costs ~~involved~~ in protecting our investment and re-leasing our property, and have limited ability to renew existing leases or sign new leases at projected rents. Our properties may also incur significant costs or losses related to shelter-in-place orders, quarantines, infection or other related factors. The federal government has announced various forms of aid, both to individual Americans and to the ~~Internalization. As a result, our statement of operations and FFO~~market sectors negatively affected by COVID-19. However, there can be no certainty that such aid will be ~~negatively impacted, driven predominately by the non-cash charges related~~available to the issuance of OP Units and shares of Class C Common Stock as Internalization Consideration and, to a lesser extent, other transaction-related costs. In addition, while we will no longer effectively bear the costs of the various fees and expense reimbursements previously paid to the Manager after we became internally managed pursuant to the Internalization, our expenses will include the compensation and benefits of our executive officers and the employees of Manager Sub, which will then be our indirect subsidiary, as well as overhead previously paid by the Managertenants or its affiliates in managing our business and operations. Furthermore, these employees and consultants of Manager Sub will be providing us services historically provided by the Manager. There are no assurances that, following the Internalization, these employees and consultants will be able or incentivized to provide services at the same level or for the same costs as were previously provided to us byin any amount, or in amounts sufficient to mitigate the ~~Manager,~~material reduction in revenue we may experience. Until such time as the virus is contained or eradicated and ~~there~~commerce and employment return to more customary levels, we may ~~be other unforeseen costs, expenses and difficulties associated with~~experience material reductions in our operating ~~as an internally managed company. If the expenses we assume~~revenue.

Additionally, as a result of an extended economic downturn, the ~~Internalization are higher than~~real estate market may be unable to attract the ~~fees~~same level of capital investment that it attracts at the time of our purchases or there may be a reduction in the number of companies seeking to acquire properties, which may result in the value of our properties not appreciating, or decreasing significantly below the amount for which we ~~currently pay~~acquired them.

In light of the ~~Manager or otherwise higher than we anticipate, we may not realize the anticipated cost savings~~severe economic, market and other ~~benefits from~~disruptions worldwide being caused by the ~~Internalization and our net income, FFO and AFFO could decrease further, which could have a material adverse effect on our business, financial condition and results of operations.~~

~~The Internalization may not be accretive to our stockholders.~~

~~The Internalization may not be accretive to our stockholders. While it is intended that the Internalization be accretive to our net income, earnings and AFFO,~~COVID-19 pandemic, there can be no assurance that ~~this~~conditions in the bank lending, capital and other financial markets will ~~be the case, as, among other things, the expenses we assume~~not deteriorate as a result of the ~~Internalization may be higher than we anticipate~~pandemic, or that our access to capital and ~~we may~~other sources of funding will not achieve our anticipated cost savings from the Internalization. The failure of the Internalization to be accretive to our stockholders could have a material adverse effect on our business, financial condition and results of operations.

~~We may not manage the Internalization effectively or realize its anticipated benefits.~~

We may not manage the Internalization effectively. The Internalization could be a time-consuming and costly process and we may encounter potential difficulties in the integration process including, among other things:

the inability to successfully internalize corporate management in a manner that permits us to achieve the cost savings anticipated to result from the Internalization, which could result in the anticipated benefits of the Internalization not being realized in the timeframe currently anticipated or at all;

~~the risk of not realizing all of the anticipated operational efficiencies or other anticipated strategic and financial benefits of the Internalization within the expected timeframe or at all;~~

~~potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the Internalization; and~~

~~performance shortfalls as a result of the diversion of management’s attention caused by completing the Internalization and integrating the companies’ operations.~~

For all these reasons, you should be aware that it is possible that the Internalization process could result in the distraction of our management, the disruption of our ongoing business or inconsistencies in our operations, services, standards, controls, procedures and policies, any ofbecome constrained, which could adversely affect the availability and terms of future borrowings, renewals or refinancings. A constriction on lending by financial institutions could reduce the number of properties we can acquire, our cash flow from operations and our ability to ~~maintain relationships~~make distributions to our stockholders. If we are unable to refinance maturing indebtedness with ~~employees or third-parties~~respect to ~~achieve~~a particular property and are unable to pay the ~~anticipated benefits~~same, then the lender may foreclose on such property. Financial and real estate market disruptions could also adversely affect the availability of financing from Freddie Mac and Fannie Mae, which could decrease the amount of available liquidity and credit for use in acquiring and further diversifying our portfolio of multifamily assets.

The global impact of the ~~Internalization, or could otherwise adversely affect our business~~COVID-19 pandemic continues to evolve rapidly, and ~~financial results. Therefore,~~ the ~~failure to plan and manage the Internalization effectively could have a material adverse~~extent of its effect on our ~~business,~~operational and financial ~~condition and results of operations.~~

Weperformance will depend on ~~our key executives~~future developments, which are highly uncertain and ~~other employees of an affiliate~~cannot be predicted with confidence, including the duration, scope and severity of the ~~Manager. There is no guarantee that such key executives~~pandemic, the actions taken to contain or mitigate its impact, and ~~employees will remain employed or engaged by us for any specified period of time,~~the direct and ~~will not engage in competitive activities if they cease to be employed with or engaged by us.~~

~~We depend on the key executives and employees of an affiliate~~indirect economic effects of the ~~Manager. It is expected that, following~~pandemic and related containment measures, among others. However, the ~~consummation of the Internalization, we will continue~~COVID-19 pandemic presents material uncertainty and risk with respect to substantially depend on the services of Messrs. Kamfar, Babb, MacDonald, Ruddy and Vohs, who have each entered into employment agreements with Manager Sub, which will then be an indirect subsidiary of the Company, and Mr. Konig, who has entered into a services agreement with Manager Sub through Konig & Associates on substantially the same terms as the employment agreements. Each such agreement will become effective upon Closing, and will have an initial term through and including December 31, 2020. These agreements have been structured to incentivize our executives to stay through the end of their initial terms and, subject to the Company’s approval, to extend the terms of service for successive one-year terms. Nevertheless, as is presently the case under the Management Agreement with the Manager, the departure or the loss of the services of any of these individuals, or other senior management personnel or employees, following the Internalization could have a material adverse effect on our business,performance, financial condition, results of operations, cash flows and ~~ability to effectively operate our business.~~

~~Further,~~performance. Moreover, many of the employment and services agreements entered into by Manager Sub with each of Messrs. Kamfar, Babb, MacDonald, Ruddy, Vohs and Konig contain certain restrictions on these executives, including a restriction on engaging in activities that are deemed competitive to our business. Although we believe these covenants to be enforceable under current lawrisk factors set forth in the ~~states in which we do business, there can~~2019 Form 10-K should be no guarantee that if our executives were to breach these covenants and engage in competitive activities, a court of law would fully enforce these restrictions. If these executives were to terminate their employment or service relationship (as applicable) with Manager Sub and engage in competitive activities, such activities could have a material adverse effect on our business, financial condition and results of operations.

~~Mr. Kamfar and certain other executive officers and members of our senior management team will have competing demands on their time and attention.~~

~~Mr. Kamfar, who continues to serve~~interpreted as our Chief Executive Officer and as Chairman of our board of directors following the Internalization, and Messrs. Babb, Ruddy, MacDonald and Konig, will continue to have competing demands on their respective time and attention following the Internalization, principally with respect to the provision of services to certain outside entities affiliated with BRRE. Such competing demands are not expected to be different from those that presently exist, but there is no assurance those demands will not increase and may result in these individuals devoting time to such outside entities in a manner that could adversely affect our business. Under their respective employment or services agreements (as applicable), Mr. Kamfar and our other executive officers are permitted to devote time to certain outside activities, so long as those duties and activities do not unreasonably interfere with the performance of their respective duties to us.

~~We may be exposed to~~heightened risks ~~to which we have not historically been exposed, including liabilities with respect to the assets acquired from the Manager.~~

The Internalization will expose us to risks to which we have not historically been exposed. Pursuant to the Contribution Agreement, we will incur liabilities with respect to the assets acquired from the Manager and certain of its affiliates. In addition, our overhead will increase as a result of our becoming internally managed, as the responsibility for overhead relating to management of our business currently is borne by the Manager, and will become our responsibility following the Internalization. In addition, in our formerly externally-advised structure, we did not directly employ any employees. As a result of the Internalization, we indirectly, through Manager Sub, employ persons who are currently associated with the Manager or its affiliates. As their employer, we will indirectly, through Manager Sub, be subject to those potential liabilities that are commonly faced by employers, such as workers’ disability and compensation claims, potential labor disputes and other employee-related liabilities and grievances, and we will bear the costs of the establishment and maintenance of employee benefit plans, if established. Furthermore, these employees will be providing us services historically provided by the Manager, which will be provided with the support of the Administrative Services Agreement. There are no assurances that, following the Internalization, these employees of Manager Sub will be able to provide us with the same level of services as were previously provided to us by the Manager, and there may be other unforeseen costs, expenses and difficulties associated with operating as an internally managed company.

The representations, warranties, covenants and indemnities in the Contribution Agreement and related agreements are subject to limitations and qualifiers, which may limit our ability to enforce any remedy under these agreements.

The representations, warranties, covenants and indemnities in the Contribution Agreement, the related Administrative Services Agreement and other agreements related to the Internalization are subject to limitations and qualifiers, which may limit our ability to enforce any remedy under these agreements. These include, without limitation, limitations on liability and materiality qualifiers on certain representations and covenants.

~~Conflicts of interest may exist or could arise in the future with our Operating Partnership and its limited partners, which may impede business decisions that could benefit our stockholders.~~

~~Following the implementation of our Company’s structure~~ as a result of the ~~Internalization, conflicts of interest may exist or could arise as a result~~impact of the ~~relationships between us and our affiliates, on~~COVID-19 pandemic. In addition, if in the ~~one hand, and our Operating Partnership~~future there is an outbreak of another highly infectious or ~~any member thereof, on~~contagious disease, the ~~other. Our directors and officers have duties to our~~ Company and our stockholders under applicable Maryland law in connection with their management of our Company. At the same time, we, as general partner of our Operating Partnership, have fiduciary duties to our Operating Partnership and to its limited partners under Delaware law in connection with the management of our Operating Partnership. Our duties to our Operating Partnership and its limited partners as the general partner may come into conflict with the duties of our directors and officers to our Company and our stockholders. These conflictsproperties may be ~~resolved in a manner that is not in the best interest~~subject to similar risks as posed by COVID-19.

Table of ~~our stockholders.~~Contents

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
~~None.~~In May 2020, the Board authorized the modification of our stock repurchase plans to permit the repurchase of up to an aggregate of $50.0 million in outstanding shares of our Class A common stock, Series A Preferred Stock, Series C Preferred Stock and/or Series D Preferred Stock. The repurchase plans will be conducted in accordance with Rules 10b5-1 and 10b-18 of Exchange Act. The repurchase plans will terminate upon the earliest to occur of certain specified events as set forth therein. The extent to which we repurchase shares of our Class A common stock, Series A Preferred Stock, Series C Preferred Stock and/or Series D Preferred Stock, and the timing of any such purchases, will depend on a variety of factors including general business and market conditions and other corporate considerations. Share repurchases under the repurchase plans may be made in the open market or through privately negotiated transactions, subject to certain price limitations and other conditions established under the plans. Open market repurchases will be structured to occur in conformity with the method, timing, price and volume requirements of Rule 10b-18 of the Exchange Act. During the three months ended September 30, 2020, we purchased 103,574 shares of Class A common stock for a total purchase price of $0.8 million. We made no repurchases of any series of our preferred stock during the third quarter 2020.
The following table is a summary of our repurchase activity during the quarter ended September 30, 2020:






Total Number of

Maximum Dollar

Shares

Value of

Purchased

Shares that

as Part of

May Yet

Weighted

the Publicly

Be Purchased

Total Number of

Average Price

Announced

Under the
Period

Shares Purchased ⁽¹⁾

Per Share

Plans

Plans
Class A Common Stock








July 1, 2020 - July 31, 2020

—

$
—

—

$
31,609,458
August 1, 2020 - August 31, 2020

—

—

—

31,609,458
September 1, 2020 - September 30, 2020

103,574

7.30

103,574

30,853,055
Total Class A Common Stock

103,574

$
7.30

103,574



(1) Includes shares repurchased by the Company pursuant to the modified stock repurchase plans approved by the Board on May 9, 2020 and publicly announced in our Quarterly Report on Form 10-Q for the period ended March 31, 2020 as filed with the SEC on May 11, 2020, for up to an aggregate of $50.0 million in shares of our Class A common stock, Series A Preferred Stock, Series C Preferred Stock and/or Series D Preferred Stock. Purchases may be made thereunder until the earliest to occur of certain specified events as set forth therein.

Item 3. Defaults upon Senior Securities
None.
~~None.~~
Item 4. Mine Safety Disclosures
Not applicable.

Item 5. Other Information
None.

53
65

Table of Contents

Item 6. Exhibits

~~2.1~~

10.1
~~Contribution and Sale~~Notice of Renewal, dated August 4, 2020, of Administrative Services Agreement dated ~~as of August 3,~~October 31, 2017, by and among Bluerock ~~Residential Growth REIT, Inc.~~Real Estate, L.L.C., ~~Bluerock Residential Holdings, L.P., and Bluerock TRS Holdings, LLC, BRG Manager, LLC, Bluerock REIT Operator, LLC,~~ Bluerock Real Estate L.L.C., Konig & Associates, LLC., Jenco Business Advisors, Inc., The Kachadurian Group LLC, James G. Babb, III, Jordan B. Ruddy, and Ryan S. MacDonald, incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed August 4, 2017
~~2.2~~ ~~Amendment No. 1 to Contribution and Sale Agreement, dated as of August 9, 2017, by and among Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P., and Bluerock TRS~~ Holdings, LLC, BRG Manager, LLC, Bluerock REIT Operator, LLC, Bluerock Real Estate, L.L.C., Konig & Associates, LLC., Jenco Business Advisors, Inc., The Kachadurian Group LLC, James G. Babb, III, Jordan B. Ruddy, and Ryan S. MacDonald, incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed August 15, 2017
~~3.1~~ ~~Articles Supplementary of the Company, dated July 20, 2017, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed July 21, 2017~~
~~10.1~~ Amendment to Dealer Manager Agreement by and among Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P. and Bluerock Capital Markets, LLC, dated July 21, 2017, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed July 21, 2017
~~10.2~~ Amendment to Amended and Restated Warrant Agreement by and between Bluerock Residential Growth REIT, Inc., Computershare Inc. and Computershare Trust Company N.A., dated July 21, 2017, incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed July 21, 2017
~~10.3~~ Seventh Amendment to Amended and Restated Agreement of Limited Partnership of Bluerock Residential Holdings, L.P., dated July 21, 2017, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed July 21, 2017
~~10.4~~ ~~Employment Agreement, dated as of August 3, 2017, by and between~~ Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P., Bluerock TRS Holdings, LLC and Bluerock REIT Operator, LLC, ~~and R. Ramin Kamfar,~~ incorporated ~~herein~~ by reference to Exhibit 10.1 to the Company’s ~~Current~~Quarterly Report on Form ~~8-K~~10-Q filed August ~~4, 2017~~10, 2020.

~~10.5~~
10.2
~~Employment Agreement, dated as of August 3, 2017, by and between~~ Bluerock Residential Growth REIT, Inc.~~, Bluerock Residential Holdings, L.P., Bluerock REIT Operator, LLC,~~ Fourth Amended and ~~James G. Babb, III,~~Restated 2014 Equity Incentive Plan for Individuals, incorporated ~~herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed August 4, 2017~~
~~10.6~~ Employment Agreement, dated as of August 3, 2017, by and between Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P., Bluerock REIT Operator, LLC, and Ryan S. MacDonald, incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed August 4, 2017
~~10.7~~ Employment Agreement, dated as of August 3, 2017, by and between Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P., Bluerock REIT Operator, LLC, and Jordan B. Ruddy, incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed August 4, 2017
~~10.8~~ Employment Agreement, dated as of August 3, 2017, by and between Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P., Bluerock REIT Operator, LLC, and Christopher J. Vohs, incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed August 4, 2017
~~10.9~~ Services Agreement, dated as of August 3, 2017, by and between Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P., Bluerock REIT Operator, LLC, Konig & Associates, LLC and Michael L. Konig, incorporated herein by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed August 4, 2017
~~10.10~~ Purchase and Sale Agreement by and between Bluerock Real Estate, L.L.C., CH Realty VII – Carroll MF Orlando Hunter’s Creek, L.L.C., and CH Realty VII – Carroll MF Orlando Metrowest, L.L.C., dated as of September 7, 2017, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed September ~~20, 2017~~11, 2020

~~10.11~~
10.3
~~Assignment of Purchase and Sale Agreement by and between Bluerock Real Estate, L.L.C. and~~ Bluerock Residential Growth REIT, Inc.~~, through its direct~~ Fourth Amended and ~~indirect subsidiaries, BR Hunters Creek, LLC and BR MetroWest, LLC, dated as of September 15, 2017,~~Restated 2014 Equity Incentive Plan for Entities, incorporated ~~herein~~ by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed September ~~20, 2017~~11, 2020

~~10.12~~
31.1
Credit Agreement by and among Bluerock Residential Holdings, L.P. as Parent Borrower, the other borrowers from time to time party thereto, Bluerock Residential Growth REIT, Inc. as Guarantor, KeyBank National Association, and the other lenders party thereto, dated as of October 4, 2017, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 11, 2017
54
~~10.13~~ Guaranty by Bluerock Residential Growth REIT, Inc. to and for the benefit of KeyBank National Association, dated as of October 4, 2017, incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed October 11, 2017
~~10.14~~ 50,000,000 Note by Bluerock Residential Holdings, L.P. to and for the benefit of KeyBank National Association, dated as of October 4, 2017, incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed October 11, 2017
~~10.15~~ $50,000,000 Note by Bluerock Residential Holdings, L.P. to and for the benefit of JPMorgan Chase Bank, N.A., dated as of October 4, 2017, incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed October 11, 2017
~~10.16~~ $50,000,000 Note by Bluerock Residential Holdings, L.P. to and for the benefit of Bank of America, N.A., dated as of October 4, 2017, incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed October 11, 2017
~~10.17~~ Subordination of Advisory Contract by Bluerock Residential Holdings, L.P. and Bluerock Residential Growth REIT, Inc. to and for the benefit of KeyBank National Association, dated as of October 4, 2017, incorporated herein by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed October 11, 2017
~~10.18~~ ~~Form of Second Amended and Restated 2014 Equity Incentive Plan for Individuals, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 19, 2017~~
~~10.19~~ ~~Form of Second Amended and Restated 2014 Equity Incentive Plan for Entities, incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed October 19, 2017~~
~~10.20~~ ~~Second Amended and Restated 2014 Equity Incentive Plan for Individuals, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed October 31, 2017~~
~~10.21~~ ~~Second Amended and Restated 2014 Equity Incentive Plan for Entities, incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed October 31, 2017~~
~~10.22~~ A&R Employment Agreement, dated as of August 3, 2017, by and between Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P., Bluerock REIT Operator, LLC, and R. Ramin Kamfar, incorporated herein by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed October 31, 2017
~~10.23~~ A&R Employment Agreement, dated as of August 3, 2017, by and between Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P., Bluerock REIT Operator, LLC, and James G. Babb, III, incorporated herein by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed October 31, 2017
~~10.24~~ A&R Employment Agreement, dated as of August 3, 2017, by and between Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P., Bluerock REIT Operator, LLC, and Ryan S. MacDonald, incorporated herein by reference to Exhibit 10.5 to the Company’s Current Report on Form 8-K filed October 31, 2017
~~10.25~~ A&R Employment Agreement, dated as of August 3, 2017, by and between Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P., Bluerock REIT Operator, LLC, and Jordan B. Ruddy, incorporated herein by reference to Exhibit 10.6 to the Company’s Current Report on Form 8-K filed October 31, 2017
~~10.26~~ A&R Employment Agreement, dated as of August 3, 2017, by and between Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P., Bluerock REIT Operator, LLC, and Christopher J. Vohs, incorporated herein by reference to Exhibit 10.7 to the Company’s Current Report on Form 8-K filed October 31, 2017
~~10.27~~ A&R Services Agreement, dated as of August 3, 2017, by and between Bluerock Residential Growth REIT, Inc., Bluerock Residential Holdings, L.P., Bluerock REIT Operator, LLC, Konig & Associates, LLC and Michael L. Konig, incorporated herein by reference to Exhibit 10.8 to the Company’s Current Report on Form 8-K filed October 31, 2017
~~23.1~~ ~~Consent of BDO USA, LLP, incorporated herein by reference to Exhibit 23.1 to the Company’s Current Report on Form 8-K/A filed August 9, 2017~~
~~31.1~~ Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2
Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1
Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002.

99.1
55
~~99.1~~ Press Release dated August ~~4, 2017,~~10, 2020, incorporated ~~herein~~ by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed August ~~4, 2017~~10, 2020

99.2
~~Presentation,~~Supplemental Financial Information, incorporated ~~herein~~ by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed August ~~4, 2017~~10, 2020

~~99.3~~ ~~Press Release, dated August 8, 2017, incorporated herein by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed August 8, 2017~~
101.1
~~99.4~~ ~~Supplemental Financial Information, incorporated herein by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed August 8, 2017~~
~~99.5~~ ~~Press Release, dated October 4, 2017, incorporated herein by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed October 4, 2017~~
~~99.6~~ ~~Supplement to Proxy Statement, dated October 19, 2017, incorporated herein by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed October 19, 2017~~
~~101.1~~
The following information from the Company’s quarterly report on Form 10-Q for the quarter ended September 30, ~~2017,~~2020, formatted in ~~XBRL (eXtensible~~iXBRL (inline eXtensible Business Reporting Language): (i) Balance Sheets; (ii) Statements of Operations; (iii) Statement of Stockholders’ Equity; (iv) Statements of Cash ~~Flows.~~Flows; (v) notes to consolidated financial statements.

104
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101).

56

66

Table of Contents

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

BLUEROCK RESIDENTIAL GROWTH REIT, INC.
DATE:
November ~~8, 2017~~5, 2020
/s/ R. Ramin Kamfar
R. Ramin Kamfar
Chief Executive Officer
(Principal Executive Officer)

DATE:
November ~~8, 2017~~5, 2020
/s/ Christopher J. Vohs
Christopher J. Vohs
Chief Financial Officer and Treasurer
(Principal Financial Officer, Principal Accounting Officer)

~~Maryland~~		~~26-3136483~~
Maryland		26-3136483
(State or other ~~Jurisdiction~~jurisdiction of ~~Incorporation~~incorporation or ~~Organization)~~organization)		(I.R.S. Employer Identification No.)

~~712 Fifth~~ 1345 Avenue ~~9th~~of the Americas, 32nd Floor, New York, NY		~~10019~~ 10105
(Address ~~or Principal Executive Offices)~~of principal executive offices)		(Zip Code)

Title of each class	Trading Symbol	Name of each exchange on which registered
Class A Common Stock, $0.01 par value per share	BRG	NYSE American
8.250% Series A Cumulative Redeemable Preferred Stock, $0.01 par value per share	BRG-PrA	NYSE American
7.625% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per share	BRG-PrC	NYSE American
7.125% Series D Cumulative Preferred Stock, $0.01 par value per share	BRG-PrD	NYSE American


Large Accelerated Filer	¨ ◻		Accelerated Filer	x ⌧	Non-Accelerated Filer	◻
~~Non-Accelerated Filer~~	¨	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	¨ ☒
Emerging growth company	¨ ☐


	x ☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	¨ ☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


PART I – FINANCIAL INFORMATION

Item 1.		Financial Statements (Unaudited)

		Consolidated Balance Sheets as of September 30, ~~2017~~2020 and December 31, ~~2016 (audited)~~2019	3

		Consolidated Statements of Operations for the Three and Nine Months Ended September 30, ~~2017~~2020 and ~~2016~~2019	4

		Consolidated ~~Statement~~Statements of Stockholders’ Equity for the Three and Nine Months Ended September 30, ~~2017~~2020 and 2019	5

		Consolidated Statements of Cash Flows for the Nine Months Ended September 30, ~~2017~~2020 and ~~2016~~2019	6 9

		Notes to Consolidated Financial Statements	7 10

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	32 39

Item 3.		Quantitative and Qualitative Disclosures about Market Risk	49 61

Item 4.		Controls and Procedures	49 62

PART II – OTHER INFORMATION

Item 1.		Legal Proceedings	50 63

Item 1A.		Risk Factors	50 63

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	53 65

Item 3.		Defaults Upon Senior Securities	53 65

Item 4.		Mine Safety Disclosures	53 65

Item 5.		Other Information	53 65

Item 6.	~~Exhibits~~	54Exhibits	66

SIGNATURES			57 67

	(Unaudited)
	September 30, 2017			December 31, 2016
ASSETS
Net Real Estate Investments
Land	$	157,420		$	142,274
Buildings and improvements		1,015,262			848,445
Furniture, fixtures and equipment		32,991			27,617
Construction in progress		32,696			10,878
Total Gross Real Estate Investments		1,238,369			1,029,214
Accumulated depreciation		(44,171	)		(42,137	)
Total Net Real Estate Investments		1,194,198			987,077
Cash and cash equivalents		134,632			82,047
Restricted cash		32,653			45,402
Notes and accrued interest receivable from related parties		56,771			21,267
Due from affiliates		1,756			948
Accounts receivable, prepaid and other assets		15,945			8,610
Preferred equity investments and investments in unconsolidated real estate joint ventures		94,912			91,132
In-place lease intangible assets, net		4,330			4,839
Total Assets	$	1,535,197		$	1,241,322

LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY
Mortgages payable	$	847,162		$	710,575
Accounts payable		3,158			1,669
Other accrued liabilities		25,159			13,431
Due to affiliates		3,269			2,409
Distributions payable		8,580			7,328
Total Liabilities		887,328			735,412
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized, and 5,721,460 issued and outstanding as of September 30, 2017 and December 31, 2016		138,622			138,316
Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 225,000 shares authorized, 137,708 and 21,482 issued and outstanding as of September 30, 2017 and December 31, 2016, respectively		120,925			18,938
7.6250% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized, 2,323,750 issued and outstanding as of September 30, 2017 and December 31, 2016		56,127			56,095
Equity
Stockholders’ Equity
Preferred stock, $0.01 par value, 230,900,000 shares authorized; none issued and outstanding		—			—
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized, 2,850,602 issued and outstanding as of September 30, 2017 and December 31, 2016		68,705			68,760
Common stock - Class A, $0.01 par value, 747,586,185 shares authorized; 24,193,109 and 19,567,506 shares issued and outstanding as of September 30, 2017 and December 31, 2016, respectively		242			196
Additional paid-in-capital		329,219			257,403
Distributions in excess of cumulative earnings		(106,838	)		(84,631	)
Total Stockholders’ Equity		291,328			241,728
Noncontrolling Interests
Operating partnership units		1,799			2,216
Partially owned properties		39,068			48,617
Total Noncontrolling Interests		40,867			50,833
Total Equity		332,195			292,561
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY	$	1,535,197		$	1,241,322

	Class A Common Stock				Series D Preferred Stock
	Number of Shares		Par Value		Number of Shares		Value			Additional Paid- in Capital			Cumulative Distributions			Net (loss) income to Common Stockholders			Noncontrolling Interests			Total Equity
Balance, January 1, 2017		19,567,506	$	196		2,850,602	$	68,760		$	257,403		$	(70,807	)	$	(13,824	)	$	50,833		$	292,561

Issuance of Class A common stock, net		4,603,236		46		-		-			57,313			-			-			-			57,359
Issuance costs for Series D preferred stock, net		-		-		-		(55	)		-			-			-			-			(55	)
Vesting of restricted stock compensation		-		-		-		-			9			-			-			-			9
Issuance of LTIP Units for director compensation		-		-		-		-			100			-			-			-			100
Issuance of LTIP Units for compensation		-		-		-		-			1,208			-			-			-			1,208
Issuance of Long-Term Incentive Plan ("LTIP") units		-		-		-		-			10,946			-			-			-			10,946
Series B warrants		-		-		-		-			2,048			-			-			-			2,048
Contributions from noncontrolling interests, nets		-		-		-		-			-			-			-			10,738			10,738
Distributions declared		-		-		-		-			-			(22,770	)		-			(241	)		(23,011	)
Series A Preferred Stock distributions declared		-		-		-		-			-			(8,850	)		-			-			(8,850	)
Series A Preferred Stock accretion		-		-		-		-			-			(479	)		-			-			(479	)
Series B Preferred Stock distributions declared		-		-		-		-			-			(3,290	)		-			-			(3,290	)
Series B Preferred Stock accretion		-		-		-		-			-			(1,232	)		-			-			(1,232	)
Series C Preferred Stock distributions declared		-		-		-		-			-			(3,322	)		-			-			(3,322	)
Series C Preferred Stock accretion		-		-		-		-			-			(178	)		-			-			(178	)
Series D Preferred Stock distributions declared		-		-		-		-			-			(3,809	)		-			-			(3,809	)
Distributions to noncontrolling interests		-		-		-		-			-			-			-			(29,706	)		(29,706	)
Redemption of operating partnership units		-		-		-		-			(6	)		-			-			(13	)		(19	)
Redemption of Series B Redeemable Preferred Stock		-		-		-		-			31			-			-			-			31
Conversion of operating partnership units to Class A Common Stock		22,367		-		-		-			167			-			-			(167	)		-
Noncontrolling interest related to sale of Fox Hill		-		-		-		-			-			-			-			(136	)		(136	)
Deconsolidation of MDA Apartments		-		-		-		-			-			-			-			(8,833	)		(8,833	)
Net income		-		-		-		-			-			-			21,723			18,392			40,115

Balance, September 30, 2017		24,193,109	$	242		2,850,602	$	68,705		$	329,219		$	(114,737	)	$	7,899		$	40,867		$	332,195

Multifamily Community Name/Location	Number of Units		Year Built/Renovated⁽¹⁾		Ownership Interest
ARIUM at Palmer Ranch, Sarasota, FL		320		2016		95.0	%
ARIUM Grandewood, Orlando, FL		306		2005		95.0	%
ARIUM Gulfshore, Naples, FL		368		2016		95.0	%
ARIUM Palms, Orlando, FL		252		2008		95.0	%
ARIUM Pine Lakes, Port St. Lucie, FL		320		2003		85.0	%
ARIUM Westside, Atlanta, GA		336		2008		90.0	%
Ashton Reserve, Charlotte, NC		473		2015		100.0	%
Citrus Tower, Orlando, FL		336		2006		96.8	%
Enders Place at Baldwin Park, Orlando, FL		220		2003		89.5	%
James on South First, formerly Legacy at Southpark, Austin, TX		250		2016		90.0	%
Marquis at Crown Ridge, San Antonio, TX		352		2009		90.0	%
Marquis at Stone Oak, San Antonio, TX		335		2007		90.0	%
Marquis at The Cascades, Tyler, TX		582		2009		90.0	%
Marquis at TPC, San Antonio, TX		139		2008		90.0	%
Nevadan, Atlanta, GA		480		1990		90.0	%
Park & Kingston, Charlotte, NC		168		2015		96.0	%
Preston View, Morrisville, NC		382		2000		91.8	%
Roswell City Walk, Roswell, GA		320		2015		98.0	%
Sorrel, Frisco, TX		352		2015		95.0	%
Sovereign, Fort Worth, TX		322		2015		95.0	%
The Brodie, Austin, TX		324		2001		92.5	%
The Preserve at Henderson Beach, Destin, FL		340		2009		100.0	%
Villages at Cypress Creek, Houston, TX		384		2001		80.0	%
Wesley Village, Charlotte, NC		301		2010		91.8	%
Whetstone, Durham, NC		204		2015			⁽²⁾
Total		8,166


		Number of	Date Built /	Ownership
Multifamily Community Name	Location	Units	Renovated ⁽¹⁾	Interest
ARIUM Glenridge	Atlanta, GA	480	1990	90	%
ARIUM Grandewood	Orlando, FL	306	2005	100	%
ARIUM Hunter’s Creek	Orlando, FL	532	1999	100	%
ARIUM Metrowest	Orlando, FL	510	2001	100	%
ARIUM Westside	Atlanta, GA	336	2008	90	%
Ashford Belmar	Lakewood, CO	512	1988/1993	85	%
Avenue 25	Phoenix, AZ	254	2013	100	%
Cade Boca Raton	Boca Raton, FL	90	2019	81	%
Chattahoochee Ridge	Atlanta, GA	358	1996	90	%
Chevy Chase	Austin, TX	320	1971	92	%
Citrus Tower	Orlando, FL	336	2006	97	%
Denim	Scottsdale, AZ	645	1979	100	%
Element	Las Vegas, NV	200	1995	100	%
Falls at Forsyth	Cumming, GA	356	2019	100	%
Gulfshore Apartment Homes	Naples, FL	368	2016	100	%
James at South First	Austin, TX	250	2016	90	%
Marquis at The Cascades	Tyler, TX	582	2009	90	%
Navigator Villas	Pasco, WA	176	2013	90	%
Outlook at Greystone	Birmingham, AL	300	2007	100	%
Park & Kingston	Charlotte, NC	168	2015	100	%
Pine Lakes Preserve	Port St. Lucie, FL	320	2003	100	%
Plantation Park	Lake Jackson, TX	238	2016	80	%
Providence Trail	Mount Juliet, TN	334	2007	100	%
Roswell City Walk	Roswell, GA	320	2015	98	%
Sands Parc	Daytona Beach, FL	264	2017	100	%
The Brodie	Austin, TX	324	2001	100	%
The District at Scottsdale	Scottsdale, AZ	332	2018	100	%
The Links at Plum Creek	Castle Rock, CO	264	2000	88	%
The Mills	Greenville, SC	304	2013	100	%
The Preserve at Henderson Beach	Destin, FL	340	2009	100	%
The Reserve at Palmer Ranch	Sarasota, FL	320	2016	100	%
The Sanctuary	Las Vegas, NV	320	1988	100	%
Veranda at Centerfield	Houston, TX	400	1999	93	%
Villages of Cypress Creek	Houston, TX	384	2001	80	%
Wesley Village	Charlotte, NC	301	2010	100	%
Total		11,844


			Ownership		Purchase
Property	Location	Date	Interest		Price		Mortgage
Avenue 25	Phoenix, AZ	January 23, 2020	100	%	$	55,600	$	36,566	⁽¹⁾
Falls at Forsyth	Cumming, GA	March 6, 2020	100	%		82,500		—	⁽²⁾
Chevy Chase	Austin, TX	August 11, 2020	92	%		34,500		24,400

	Purchase Price Allocation
Land	$	40,473
Building		312,884
Building improvements		19,615
Land improvements		17,039
Furniture and fixtures		7,014
In-place leases		8,021
Other assets		666
Total assets acquired	$	405,712
Mortgages assumed	$	146,377
Total liabilities assumed	$	146,377

	Nine Months Ended September 30,						Nine Months Ended September 30,
	2017						2016
	As Reported		Pro-Forma Adjustments		Pro-Forma		As Reported			Pro-Forma Adjustments			Pro-Forma

Revenues	$	86,734	$	17,796	$	104,530	$	57,389		$	52,256		$	109,645
Net income (loss)	$	40,115	$	10,128	$	50,243	$	(3,014	)	$	(17,384	)	$	(20,398	)
Net income (loss) attributable to common stockholders	$	563	$	9,220	$	9,783	$	(11,727	)	$	(15,923	)	$	(27,650	)

Income (loss) per share, basic and diluted⁽¹⁾	$	0.02			$	0.38	$	(0.57	)				$	(1.34	)


	Purchase
	Price
	Allocation
Land	$	18,046
Building		132,214
Building improvements		5,158
Land improvements		13,072
Furniture and fixtures		4,366
In-place leases		2,844
Total assets acquired	$	175,700
Mortgages assumed	$	29,705
Fair value adjustments		1,292
Total liabilities assumed	$	30,997

Property	September 30, 2017		December 31, 2016

APOK Townhomes	$	11,360	$	—
Domain		20,528		—
West Morehead		24,883		21,267
Total	$	56,771	$	21,267

	Three Months Ended September 30,				Nine Months Ended September 30,
Property	2017		2016		2017		2016
APOK Townhomes	$	424	$	—	$	1,232	$	—
Domain		767		—		1,758		—
West Morehead		929		—		2,751		—
Interest income from related parties	$	2,120	$	—	$	5,741	$	—

	Three Months Ended September 30,						Nine Months Ended September 30,
Property	2017			2016			2017			2016
Alexan CityCentre	$	385		$	294		$	1,010		$	791
Alexan Southside Place		740			655			2,113			1,950
APOK Townhomes		—			205			—			205
Domain		—			145			141			422
EOS		(3	)		137			(25	)		409
Flagler Village		(1	)		(4	)		(5	)		(4	)
Helios		619			619			1,835			1,842
Lake Boone Trail		451			375			1,319			1,117
West Morehead		—			141			—			435
Whetstone		497			507			1,477			1,450
Preferred returns and equity in income of unconsolidated joint venture	$	2,688		$	3,074		$	7,865		$	8,617

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017			2016			2017			2016
Operating Statement:
Rental revenues	$	1,344		$	1,841		$	2,930		$	4,608
Operating expenses		(1,466	)		(885	)		(2,870	)		(2,577	)
(Loss) income before debt service, acquisition costs, and depreciation and amortization		(122	)		956			60			2,031
Interest expense, net		(2,924	)		(344	)		(7,395	)		(999	)
Acquisition costs		—			(3	)		—			(3	)
Depreciation and amortization		(939	)		(771	)		(1,922	)		(2,296	)
Operating (loss)		(3,985	)		(162	)		(9,257	)		(1,267	)
Net loss	$	(3,985	)	$	(162	)	$	(9,257	)	$	(1,267	)


	September 30,		December 31,
Revolving Credit Facilities	2020		2019
Amended Senior Credit Facility	$	—	$	18,000
Second Amended Junior Credit Facility		—		—
Total	$	—	$	18,000

	Outstanding Principal						As of September 30, 2017
Property	September 30, 2017			December 31, 2016			Interest Rate			Fixed/ Floating	Maturity Date
ARIUM at Palmer Ranch	$	26,925		$	26,925			3.40	%	LIBOR + 2.17%⁽¹⁾	February 1, 2023
ARIUM Grandewood		34,294			34,294			3.05	%	Floating⁽²⁾	December 1, 2024
ARIUM Gulfshore		32,626			32,626			3.40	%	LIBOR + 2.17%⁽¹⁾	February 1, 2023
ARIUM Palms		24,999			24,999			3.45	%	LIBOR + 2.22%⁽¹⁾	September 1, 2022
ARIUM Pine Lakes		26,950			26,950			3.95	%	Fixed	November 1, 2023
ARIUM Westside		52,150			52,150			3.68	%	Fixed	August 1, 2023
Ashton Reserve I		31,528			31,900			4.67	%	Fixed	December 1, 2025
Ashton Reserve II		15,270			15,270			3.85	%	LIBOR + 2.62%⁽¹⁾	January 1, 2026
Citrus Tower		41,438			—			4.07	%	Fixed	October 1, 2024
Crescent Perimeter⁽³⁾		1,920			—			4.23	%	LIBOR + 3.00%⁽¹⁾	December 12, 2020
Enders Place at Baldwin Park⁽⁴⁾		24,401			24,732			4.30	%	Fixed	November 1, 2022
Fox Hill		—			26,705
James on South First		26,500			26,500			4.35	%	Fixed	January 1, 2024
Lansbrook Village		—			57,190
Marquis at Crown Ridge		29,362			—			2.84	%	LIBOR + 1.61%⁽¹⁾	June 1, 2024
Marquis at Stone Oak		43,125			—			2.84	%	LIBOR + 1.61%⁽¹⁾	June 1, 2024
Marquis at The Cascades I		33,207			—			2.84	%	LIBOR + 1.61%⁽¹⁾	June 1, 2024
Marquis at The Cascades II		23,175			—			2.84	%	LIBOR + 1.61%⁽¹⁾	June 1, 2024
Marquis at TPC		17,273			—			2.84	%	LIBOR + 1.61%⁽¹⁾	June 1, 2024
MDA Apartments		—			37,124
Nevadan		48,431			48,431			3.71	%	LIBOR + 2.48%⁽¹⁾	November 1, 2023
Park & Kingston⁽⁵⁾		18,432			18,432			3.41	%	Fixed	April 1, 2020
Preston View		41,066			—			3.30	%	LIBOR + 2.07%⁽¹⁾	March 1, 2024
Roswell City Walk		51,000			51,000			3.63	%	Fixed	December 1, 2026
Sorrel		38,684			38,684			3.52	%	LIBOR + 2.29%⁽¹⁾	May 1, 2023
Sovereign		28,880			28,880			3.46	%	Fixed	November 10, 2022
The Brodie		34,825			34,825			3.71	%	Fixed	December 1, 2023
The Preserve at Henderson Beach		36,484			36,989			4.65	%	Fixed	January 5, 2023
Vickers Village⁽⁶⁾		3,875			—			4.23	%	LIBOR + 3.00%⁽⁶⁾	December 1, 2020
Village Green of Ann Arbor		—			41,547
Villages at Cypress Creek		26,200			—			3.23	%	Fixed	October 1, 2022
Wesley Village		40,545			—			4.25	%	Fixed	April 1, 2024
Total		853,565			716,153
Fair value adjustments		2,055			1,364
Deferred financing costs, net		(8,458	)		(6,942	)
Total	$	847,162		$	710,575


	Outstanding Principal				As of September 30, 2020

	September 30,		December 31,				Interest-only
Property	2020		2019		Interest Rate		through date	Maturity Date

Fixed Rate:
ARIUM Grandewood ⁽¹⁾	$	19,664	$	19,713	4.35	%	⁽²⁾	July 1, 2025
ARIUM Hunter’s Creek		71,207		72,183	3.65	%	⁽²⁾	November 1, 2024
ARIUM Metrowest		64,559		64,559	4.43	%	May 2021	May 1, 2025
ARIUM Westside		52,150		52,150	3.68	%	August 2021	August 1, 2023
Ashford Belmar		100,675		100,675	4.53	%	December 2022	December 1, 2025
Ashton Reserve I		—		30,329
Avenue 25 ⁽³⁾		36,566		—	4.18	%	July 2022	July 1,2027
Chattahoochee Ridge		45,338		45,338	3.25	%	December 2022	December 5,2024
Citrus Tower		40,807		41,325	4.07	%	⁽²⁾	October 1, 2024
Denim		91,634		91,634	3.32	%	August 2024	August 1, 2029
Element		29,260		29,260	3.63	%	July 2022	July 1,2026
Enders Place at Baldwin Park		—		23,337
Gulfshore Apartment Homes		46,345		46,345	3.26	%	September 2022	September 1, 2029
James on South First		25,787		26,111	4.35	%	⁽²⁾	January 1, 2024
Navigator Villas ⁽⁴⁾		20,515		20,515	4.56	%	June 2021	June 1, 2028
Outlook at Greystone		22,105		22,105	4.30	%	June 2021	June 1, 2025
Park & Kingston		19,600		19,600	3.32	%	November 2024	November 1, 2026
Pine Lakes Preserve		—		26,950
Plantation Park		26,625		26,625	4.64	%	July 2024	July 1, 2028
Providence Trail		47,950		47,950	3.54	%	July 2021	July 1, 2026
Roswell City Walk		50,285		51,000	3.63	%	⁽²⁾	December 1, 2026
The Brodie		33,717		34,198	3.71	%	⁽²⁾	December 1, 2023
The Links at Plum Creek		39,740		40,000	4.31	%	⁽²⁾	October 1, 2025
The Mills		25,408		25,797	4.21	%	⁽²⁾	January 1, 2025
The Preserve at Henderson Beach		48,490		48,490	3.26	%	September 2028	September 1, 2029
The Reserve at Palmer Ranch		41,141		41,348	4.41	%	⁽²⁾	May 1, 2025
The Sanctuary		33,707		33,707	3.31	%	Interest-only	August 1, 2029
Villages of Cypress Creek		—		26,200
Wesley Village		39,609		40,111	4.25	%	⁽²⁾	April 1, 2024
Total Fixed Rate	$	1,072,884	$	1,147,555

Floating Rate ⁽⁵⁾:
ARIUM Glenridge	$	49,500	$	49,500	1.49	%	September 2021	September 1, 2025
ARIUM Grandewood ⁽¹⁾		19,615		19,672	1.56	%	⁽²⁾	July 1, 2025
Ashton Reserve II		—		15,213
Cade Boca Raton		23,500		23,500	2.50	%	June 2022	January 1, 2025
Chevy Chase		24,400		—	2.48	%	September 2022	September 1, 2027
Fannie Facility Advance		13,936		—	2.76	%	June 2022	June 1, 2027
Marquis at The Cascades I		31,822		32,284	1.77	%	⁽²⁾	June 1, 2024 ⁽⁶⁾
Marquis at The Cascades II		22,209		22,531	1.77	%	⁽²⁾	June 1, 2024 ⁽⁶⁾
Marquis at TPC		—		16,468
Pine Lakes Preserve		42,728		—	3.14	%	July 2025	July 1, 2030
The District at Scottsdale ⁽⁷⁾		76,065		82,200	1.85	%	⁽²⁾	June 11, 2021 ⁽⁸⁾
Veranda at Centerfield		26,100		26,100	1.41	%	July 2021	July 26, 2023 ⁽⁹⁾
Villages of Cypress Creek		33,520		—	2.71	%	July 2022	July 1, 2027
Total Floating Rate	$	363,395	$	287,468
Total Mortgages Payable	$	1,436,279	$	1,435,023
Fair value adjustments		2,265		1,815
Deferred financing costs, net		(11,002)		(11,581)
Total	$	1,427,542	$	1,425,257


Year	Total			Total
2017 (October 1-December 31)	$	738
2018		4,086
2019		7,652
2020		35,227
2021		12,173
2020 (October 1–December 31)				$	2,094
2021 ⁽¹⁾					86,579
2022					15,467
2023					127,745
2024					276,177
Thereafter		793,689			928,217
	$	853,565
				$	1,436,279
Add: Unamortized fair value debt adjustment		2,055			2,265
Subtract: Deferred financing costs, net		(8,458	)		(11,002)
Total	$	847,162		$	1,427,542


Derivatives not designated as hedging		Fair values of derivative
instruments under ASC 815‑20	Balance Sheet Location	instruments
		September 30,		December 31,
		2020		2019
Interest rate caps	Accounts receivable, prepaids and other assets	$	16	$	22

	September 30, 2017		December 31, 2016
Amounts Payable to the Manager under the Management Agreement
Base management fee	$	2,802	$	2,015
Operating expense reimbursements and direct expense reimbursements		393		274
Offering expense reimbursements		74		120
Total amounts payable to Manager	$	3,269	$	2,409

Non-Vested shares	Shares			Weighted average grant-date fair value
Balance at January 1, 2017		659		$	22.75
Granted		—			—
Vested		(659	)		22.75
Forfeited		—			—
Balance at September 30, 2017		—		$	—

Declaration Date	Payable to stockholders of record as of	Amount		Date Paid
Class A common stock
October 4, 2016	December 23, 2016	$	0.096667	January 5, 2017
January 6, 2017	January 25, 2017	$	0.096666	February 3, 2017
January 6, 2017	February 24, 2017	$	0.096667	March 3, 2017
January 6, 2017	March 24, 2017	$	0.096667	April 5, 2017
April 7, 2017	April 25, 2017	$	0.096666	May 5, 2017
April 7, 2017	May 25, 2017	$	0.096667	June 5, 2017
April 7, 2017	June 23, 2017	$	0.096667	July 5, 2017
July 10, 2017	July 25, 2017	$	0.096666	August 4, 2017
August 9, 2017	August 25, 2017	$	0.096667	September 5, 2017
August 9, 2017	September 25, 2017	$	0.096667	October 5, 2017
Series A Preferred Stock
December 9, 2016	December 23, 2016	$	0.515625	January 5, 2017
March 10, 2017	March 24, 2017	$	0.515625	April 5, 2017
June 9, 2017	June 23, 2017	$	0.515625	July 5, 2017
September 8, 2017	September 25, 2017	$	0.515625	October 5, 2017
Series B Preferred Stock
October 4, 2016	December 23, 2016	$	5.00	January 5, 2017
January 6, 2017	January 25, 2017	$	5.00	February 3, 2017
January 6, 2017	February 24, 2017	$	5.00	March 3, 2017
January 6, 2017	March 24, 2017	$	5.00	April 5, 2017
April 7, 2017	April 25, 2017	$	5.00	May 5, 2017
April 7, 2017	May 25, 2017	$	5.00	June 5, 2017
April 7, 2017	June 23, 2017	$	5.00	July 5, 2017
July 10, 2017	July 25, 2017	$	5.00	August 4, 2017
July 10, 2017	August 25, 2017	$	5.00	September 5, 2017
July 10, 2017	September 25, 2017	$	5.00	October 5, 2017
Series C Preferred Stock
December 9, 2016	December 23, 2016	$	0.4765625	January 5, 2017
March 10, 2017	March 24, 2017	$	0.4765625	April 5, 2017
June 9, 2017	June 23, 2017	$	0.4765625	July 5, 2017
September 8, 2017	September 25, 2017	$	0.4765625	October 5, 2017
Series D Preferred Stock
December 9, 2016	December 23, 2016	$	0.3859	January 5, 2017
March 10, 2017	March 24, 2017	$	0.4453125	April 5, 2017
June 9, 2017	June 23, 2017	$	0.4453125	July 5, 2017
September 8, 2017	September 25, 2017	$	0.4453125	October 5, 2017


	Payable to stockholders
Declaration Date	of record as of	Amount		Date Paid or Payable
Class A Common Stock
December 6, 2019	December 24, 2019	$	0.162500	January 3, 2020
March 13, 2020	March 25, 2020	$	0.162500	April 3, 2020
May 9, 2020	June 25, 2020	$	0.162500	July 2, 2020
September 11, 2020	September 25, 2020	$	0.162500	October 5, 2020
Class C Common Stock
December 6, 2019	December 24, 2019	$	0.162500	January 3, 2020
March 13, 2020	March 25, 2020	$	0.162500	April 3, 2020
May 9, 2020	June 25, 2020	$	0.162500	July 2, 2020
September 11, 2020	September 25, 2020	$	0.162500	October 5, 2020
Series A Preferred Stock
December 6, 2019	December 24, 2019	$	0.515625	January 3, 2020
March 13, 2020	March 25, 2020	$	0.515625	April 3, 2020
May 9, 2020	June 25, 2020	$	0.515625	July 2, 2020
September 11, 2020	September 25, 2020	$	0.515625	October 5, 2020
Series B Preferred Stock
October 31, 2019	December 24, 2019	$	5.00	January 3, 2020
January 13, 2020	January 24, 2020	$	5.00	February 5, 2020
January 13, 2020	February 25, 2020	$	5.00	March 5, 2020
January 13, 2020	March 25, 2020	$	5.00	April 3, 2020
April 14, 2020	April 24, 2020	$	5.00	May 5, 2020
May 9, 2020	May 22, 2020	$	5.00	June 5, 2020
May 9, 2020	June 25, 2020	$	5.00	July 2, 2020
July 10, 2020	July 24, 2020	$	5.00	August 5, 2020
July 10, 2020	August 25, 2020	$	5.00	September 4, 2020
July 10, 2020	September 25, 2020	$	5.00	October 5, 2020
Series C Preferred Stock
December 6, 2019	December 24, 2019	$	0.4765625	January 3, 2020
March 13, 2020	March 25, 2020	$	0.4765625	April 3, 2020
May 9, 2020	June 25, 2020	$	0.4765625	July 2, 2020
September 11, 2020	September 25, 2020	$	0.4765625	October 5, 2020
Series D Preferred Stock
December 6, 2019	December 24, 2019	$	0.4453125	January 3, 2020
March 13, 2020	March 25, 2020	$	0.4453125	April 3, 2020
May 9, 2020	June 25, 2020	$	0.4453125	July 2, 2020
September 11, 2020	September 25, 2020	$	0.4453125	October 5, 2020
Series T Preferred Stock⁽¹⁾
December 20, 2019	December 24, 2019	$	0.128125	January 3, 2020
January 13, 2020	January 24, 2020	$	0.128125	February 5, 2020
January 13, 2020	February 25, 2020	$	0.128125	March 5, 2020
January 13, 2020	March 25, 2020	$	0.128125	April 3, 2020
April 14, 2020	April 24, 2020	$	0.128125	May 5, 2020
May 9, 2020	May 22, 2020	$	0.128125	June 5, 2020
May 9, 2020	June 25, 2020	$	0.128125	July 2, 2020
July 10, 2020	July 24, 2020	$	0.128125	August 5, 2020
July 10, 2020	August 25, 2020	$	0.128125	September 4, 2020
July 10, 2020	September 25, 2020	$	0.128125	October 5, 2020

	Distributions
2017	Declared		Paid

					Distributions
2020					Declared		Paid
First Quarter
Class A Common Stock	$	7,014	$	6,566	$	3,901	$	3,816
Class C Common Stock						12		12
Series A Preferred Stock		2,950		2,950		2,950		2,950
Series B Preferred Stock		525		395		7,848		7,867
Series C Preferred Stock		1,107		1,107		1,107		1,107
Series D Preferred Stock		1,269		1,100		1,269		1,269
Series T Preferred Stock						373		130
OP Units		82		84		1,037		1,037
LTIP Units		496		480		554		347
Total first quarter 2017	$	13,443	$	12,682
Total first quarter 2020					$	19,051	$	18,535
Second Quarter
Class A Common Stock	$	7,016	$	7,015	$	3,995	$	3,902
Class C Common Stock						12		12
Series A Preferred Stock		2,950		2,950		2,880		2,950
Series B Preferred Stock		1,054		837		7,766		7,779
Series C Preferred Stock		1,108		1,107		1,103		1,107
Series D Preferred Stock		1,270		1,270		1,245		1,269
Series T Preferred Stock						1,243		1,000
OP Units		80		80		1,026		1,038
LTIP Units		551		533		635		407
Total second quarter 2017	$	14,029	$	13,792
Total second quarter 2020					$	19,905	$	19,464
Third Quarter
Class A Common Stock		7,017		7,016	$	4,012	$	3,994
Class C Common Stock						12		12
Series A Preferred Stock		2,950		2,950		2,866		2,880
Series B Preferred Stock		1,711		1,508		7,745		7,751
Series C Preferred Stock		1,107		1,107		1,094		1,102
Series D Preferred Stock		1,270		1,269		1,236		1,245
Series T Preferred Stock						2,062		1,738
OP Units		79		80		1,026		1,027
LTIP Units		676		625		649		487
Total third quarter 2017	$	14,810	$	14,555
Total third quarter 2020					$	20,702	$	20,236
Total	$	42,282	$	41,029	$	59,658	$	58,235

Total Internalization Consideration	$	41,244,086

Allocation of Internalization Consideration:
Internalization expense reimbursement	$	450,000
Internalization Consideration paid in cash	$	40,794
Internalization Consideration paid in OP Units	$	39,938,226
Internalization Consideration paid in Class C common stock	$	815,066

Volume-Weighted Average Price (“VWAP”)	$	10.64

Number of OP Units Issued		3,753,593
Number of shares of Class C Common Stock Issued		76,603

	Shares and units outstanding September 30, 2017		LTIP Unit Conversion to OP Units⁽¹⁾			Internalization Consideration in shares and units⁽²⁾		Post Internalization shares and units outstanding November 1, 2017⁽³⁾

Class A Common Stock		24,193,109							24,193,109
Class C Common Stock		-					76,603		76,603
LTIP Units		2,502,389		(2,206,033	)				296,356
Total share equivalents		26,695,498		(2,206,033	)		76,603		24,566,068
OP Units		273,688		2,206,033			3,753,593		6,233,314
Total shares and OP Units		26,969,186		-			3,830,196		30,799,382


			Date Built	Ownership		Average
Multifamily Community Name	Location	Number of units	/Renovated ⁽¹⁾	Interest		Rent ⁽²⁾			% Occupied⁽³⁾
ARIUM Glenridge	Atlanta, GA	480	1990	90	%	$	1,283		93.1	%
ARIUM Grandewood	Orlando, FL	306	2005	100	%		1,411		95.4	%
ARIUM Hunter’s Creek	Orlando, FL	532	1999	100	%		1,426		92.7	%
ARIUM Metrowest	Orlando, FL	510	2001	100	%		1,437		93.7	%
ARIUM Westside	Atlanta, GA	336	2008	90	%		1,485		92.9	%
Ashford Belmar	Lakewood, CO	512	1988/1993	85	%		1,670		94.5	%
Avenue 25	Phoenix, AZ	254	2013	100	%		1,222		94.5	%
Cade Boca Raton	Boca Raton, FL	90	2019	81	%		2,710		90.0	%
Chattahoochee Ridge	Atlanta, GA	358	1996	90	%		1,363		96.4	%
Chevy Chase	Austin, TX	320	1971	92	%		928		98.8	%
Citrus Tower	Orlando, FL	336	2006	97	%		1,363		96.7	%
Denim	Scottsdale, AZ	645	1979	100	%		1,229		95.2	%
Element	Las Vegas, NV	200	1995	100	%		1,265		97.5	%
Falls at Forsyth	Cumming, GA	356	2019	100	%		1,339		96.3	%
Gulfshore Apartment Homes	Naples, FL	368	2016	100	%		1,295		92.9	%
James on South First	Austin, TX	250	2016	90	%		1,324		95.2	%
Marquis at The Cascades	Tyler, TX	582	2009	90	%		1,203		95.5	%
Navigator Villas	Pasco, WA	176	2013	90	%		1,115		94.9	%
Outlook at Greystone	Birmingham, AL	300	2007	100	%		1,060		96.0	%
Park & Kingston	Charlotte, NC	168	2015	100	%		1,313		94.0	%
Pine Lakes Preserve	Port St. Lucie, FL	320	2003	100	%		1,359		95.9	%
Plantation Park	Lake Jackson, TX	238	2016	80	%		1,291		92.0	%
Providence Trail	Mount Juliet, TN	334	2007	100	%		1,257		94.6	%
Roswell City Walk	Roswell, GA	320	2015	98	%		1,558		96.6	%
Sands Parc	Daytona Beach, FL	264	2017	100	%		1,337		96.2	%
The Brodie	Austin, TX	324	2001	100	%		1,333		94.8	%
The District at Scottsdale	Scottsdale, AZ	332	2018	100	%		1,545		89.8	%
The Links at Plum Creek	Castle Rock, CO	264	2000	88	%		1,443		96.6	%
The Mills	Greenville, SC	304	2013	100	%		1,050		96.4	%
The Preserve at Henderson Beach	Destin, FL	340	2009	100	%		1,473		96.5	%
The Reserve at Palmer Ranch	Sarasota, FL	320	2016	100	%		1,341		94.4	%
The Sanctuary	Las Vegas, NV	320	1988	100	%		1,087		94.4	%
Veranda at Centerfield	Houston, TX	400	1999	93	%		1,005		97.8	%
Villages of Cypress Creek	Houston, TX	384	2001	80	%		1,169		94.3	%
Wesley Village	Charlotte, NC	301	2010	100	%		1,365		94.7	%
Total/Average		11,844				$	1,319	⁽⁴⁾	95.1	%	⁽⁴⁾

Multifamily Community Name, Location	Number of Units		Total Estimated Construction Cost (in millions)		Cost to Date (in millions)		Estimated Construction Cost Per Unit		Actual/ Anticipated Initial Occupancy	Anticipated Construction Completion	Pro Forma Average Rent ⁽¹⁾
Alexan CityCentre, Houston, TX		340	$	83.0	$	79.9	$	244,118	2Q17	4Q17	$	2,144
Helios, Atlanta, GA		282	$	50.9	$	46.4	$	180,496	2Q17	4Q17	$	1,486
Alexan Southside Place, Houston, TX		270	$	49.0	$	40.6	$	181,481	4Q17	2Q18	$	2,012
Lake Boone Trail, Raleigh, NC		245	$	40.2	$	28.0	$	164,082	3Q17	3Q18	$	1,271
Vickers Village, Roswell, GA		79	$	30.6	$	18.2	$	387,342	3Q18	4Q18	$	3,176
APOK Townhomes, Boca Raton, FL		90	$	28.9	$	12.5	$	321,111	3Q18	1Q19	$	2,549
Crescent Perimeter, Atlanta, GA		320	$	70.0	$	29.0	$	218,750	4Q18	2Q19	$	1,749
Domain, Garland, TX		299	$	52.6	$	13.9	$	175,920	4Q18	2Q19	$	1,469
West Morehead, Charlotte, NC		286	$	60.0	$	22.1	$	209,790	4Q18	2Q19	$	1,507
Flagler Village, Fort Lauderdale, FL		384	$	137.3	$	28.6	$	357,552	3Q19	3Q20	$	2,358
Total		2,595									$	1,858


			Total Actual/				Actual/
			Estimated				Estimated			Actual/	Pro
			Construction					Construction	Actual/ Estimated	Estimated	Forma
		Actual/ Planned	Cost		Cost to Date		Cost Per		Initial	Construction	Average
Multifamily Community Name	Location	Number of Units	(in millions)		(in millions)		Unit		Occupancy	Completion	Rent ⁽¹⁾
Lease-up Investments
Motif	Fort Lauderdale, FL	385	$	135.4	$	132.9	$	351,688	1Q20	2Q20	$	2,352
The Conley, formerly North Creek Apartments	Leander, TX	259		44.0		36.1		169,884	2Q20	4Q20		1,358
Wayford at Concord, formerly Wayforth at Concord	Concord, NC	150		33.5		26.4		223,333	1Q20	3Q21		1,707
Total lease-up units		794

Development Investments
Riverside Apartments	Austin, TX	222		37.9		24.3		170,721	1Q21	2Q21		1,408
Zoey	Austin, TX	307		59.5		17.2		193,811	1Q22	2Q22		1,762
Reunion Apartments	Orlando, FL	280		47.6		9.0		170,000	1Q22	3Q22		1,366
The Park at Chapel Hill	Chapel Hill, NC	414		99.2		20.1		239,614	3Q21	4Q22		1,599
Avondale Hills	Decatur, GA	240		50.7		8.6		211,250	1Q23	1Q23		1,538
Total development units		1,463

Multifamily Community Name	Location	Number of Units									Average Rent ⁽¹⁾
Operating Investments ⁽²⁾
Alexan CityCentre	Houston, TX	340										1,648
Alexan Southside Place	Houston, TX	270										1,641
Arlo	Charlotte, NC	286										1,507
Belmont Crossing	Smyrna, GA	192										814
Domain at The One Forty	Garland, TX	299										1,321
Georgetown Crossing	Savannah, GA	168										988
Mira Vista	Austin, TX	200										1,060
Novel Perimeter	Atlanta, GA	320										1,749
Park on the Square	Pensacola, FL	240										1,099
Sierra Terrace	Atlanta, GA	135										1,225
Sierra Village	Atlanta, GA	154										1,178
The Commons	Jacksonville, FL	328										879
Thornton Flats	Austin, TX	104										1,527
Vickers Historic Roswell	Roswell, GA	79										3,176
Total operating units		3,115
Total		5,372									$	1,488