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)
	March 31,		December 31,
	2021		2020
ASSETS
Net Real Estate Investments
Land	$	268,731	$	279,481
Buildings and improvements		1,757,833		1,889,471
Furniture, fixtures and equipment		76,790		78,438
Total Gross Real Estate Investments		2,103,354		2,247,390
Accumulated depreciation		(187,553)		(186,426)
Total Net Operating Real Estate Investments		1,915,801		2,060,964
Operating real estate held for sale, net		32,518		36,213
Total Net Real Estate Investments		1,948,319		2,097,177
Cash and cash equivalents		148,070		83,868
Restricted cash		32,618		35,093
Notes and accrued interest receivable, net		169,712		157,734
Due from affiliates		10,447		339
Accounts receivable, prepaids and other assets, net		39,198		29,502
Preferred equity investments and investments in unconsolidated real estate joint ventures, net		65,874		83,485
In-place lease intangible assets, net		1,111		2,594
Non-real estate assets associated with operating real estate held for sale		176		145
Total Assets	$	2,415,525	$	2,489,937

LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY
Mortgages payable	$	1,434,318	$	1,490,932
Mortgages payable associated with operating real estate held for sale		26,433		38,773
Revolving credit facilities		—		33,000
Accounts payable		1,500		1,317
Other accrued liabilities		29,023		31,025
Due to affiliates		665		618
Distributions payable		13,035		13,421
Liabilities associated with operating real estate held for sale		624		383
Total Liabilities		1,505,598		1,609,469
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; 0 shares and 2,201,547 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		—		54,332
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 440,934 and 513,489 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		402,243		469,907
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,295,845 shares issued and outstanding as of March 31, 2021 and December 31, 2020		56,533		56,462
6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 13,622,291 and 9,717,917 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		308,362		219,967
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 shares issued and outstanding as of March 31, 2021 and December 31, 2020		66,867		66,867
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 25,110,432 and 22,020,950 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively		251		220
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding as of March 31, 2021 and December 31, 2020		1		1
Additional paid-in-capital		332,926		304,710
Distributions in excess of cumulative earnings		(293,766)		(313,392)
Total Stockholders’ Equity		106,279		58,406
Noncontrolling Interests
Operating Partnership units		14,427		(3,272)
Partially owned properties		22,083		24,666
Total Noncontrolling Interests		36,510		21,394
Total Equity		142,789		79,800
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY	$	2,415,525	$	2,489,937

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
	March 31,
	2021		2020
Revenues
Rental and other property revenues	$	51,081	$	50,353
Interest income from mezzanine loan and ground lease investments		4,721		5,888
Total revenues		55,802		56,241

Expenses
Property operating		19,932		19,299
Property management fees		1,281		1,294
General and administrative		6,645		6,371
Acquisition and pursuit costs		11		1,269
Weather-related losses, net		400		0
Depreciation and amortization		20,322		20,921
Total expenses		48,591		49,154
Operating income		7,211		7,087
Other income (expense)
Other income		152		40
Preferred returns on unconsolidated real estate joint ventures		2,287		2,415
Provision for credit losses		(542)		0
Gain on sale of real estate investments		68,913		253
Loss on extinguishment of debt and debt modification costs		(3,040)		0
Interest expense, net		(13,835)		(14,916)
Total other income (expense)		53,935		(12,208)
Net income (loss)		61,146		(5,121)
Preferred stock dividends		(14,617)		(13,547)
Preferred stock accretion		(7,022)		(3,925)
Net income (loss) attributable to noncontrolling interests
Operating Partnership units		10,160		(5,822)
Partially owned properties		5,766		(278)
Net income (loss) attributable to noncontrolling interests		15,926		(6,100)
Net income (loss) attributable to common stockholders	$	23,581	$	(16,493)

Net income (loss) per common share - Basic	$	1.00	$	(0.70)

Net income (loss) per common share – Diluted	$	1.00	$	(0.70)

Weighted average basic common shares outstanding		23,089,364		24,087,811
Weighted average diluted common shares outstanding		23,288,089		24,087,811

See Notes to Consolidated Financial Statements

Table of Contents

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

FOR THE ~~NINE~~THREE MONTHS ENDED ~~SEPTEMBER 30, 2017~~MARCH 31, 2021

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		Noncontrolling
	Shares	Par Value		Shares	Par Value		Shares	Value		in Capital		Distributions		Stockholders		Interests		Total Equity
Balance, January 1, 2021	22,020,950	$	220	76,603	$	1	2,774,338	$	66,867	$	304,710	$	(350,154)	$	36,762	$	21,394	$	79,800

Issuance of Class A common stock, net	799		0	0		0	0		0		10		0		0		0		10
Issuance of Class A common stock due to Series B warrant exercise	20,888		0	0		0	0		0		132		0		0		0		132
Repurchase of Class A common stock	(3,557,562)		(36)	0		0	0		0		(40,684)		0		0		0		(40,720)
Issuance of Long-Term Incentive Plan (“LTIP”) Units for director compensation	0		0	0		0	0		0		0		0		0		374		374
Issuance of LTIP Units for executive bonuses	0		0	0		0	0		0		0		0		0		2,170		2,170
Issuance of LTIP Units for executive salaries	0		0	0		0	0		0		0		0		0		220		220
Vesting of LTIP Units for compensation	0		0	0		0	0		0		0		0		0		1,816		1,816
Vesting of restricted Class A common stock, net of forfeitures	(11,090)		0	0		0	0		0		60		0		0		0		60
Issuance of LTIP Units for expense reimbursements	0		0	0		0	0		0		0		0		0		397		397
Common stock distributions declared	0		0	0		0	0		0		0		(3,955)		0		0		(3,955)
Series A Preferred Stock distributions declared	0		0	0		0	0		0		0		(706)		0		0		(706)
Series A Preferred Stock accretion	0		0	0		0	0		0		0		(35)		0		0		(35)
Company redemption of Series A Preferred Stock accretion	0		0	0		0	0		0		0		(710)		0		0		(710)
Series B Preferred Stock distributions declared	0		0	0		0	0		0		0		(7,089)		0		0		(7,089)
Series B Preferred Stock accretion	0		0	0		0	0		0		0		(4,845)		0		0		(4,845)
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		(71)		0		0		(71)
Series D Preferred Stock distributions declared	0		0	0		0	0		0		0		(1,235)		0		0		(1,235)
Series T Preferred Stock distributions declared	0		0	0		0	0		0		0		(4,493)		0		0		(4,493)
Series T Preferred Stock accretion	0		0	0		0	0		0		0		(1,361)		0		0		(1,361)
Distributions to Operating Partnership noncontrolling interests	0		0	0		0	0		0		0		0		0		(1,841)		(1,841)
Distributions to partially owned noncontrolling interests	0		0	0		0	0		0		0		0		0		(8,349)		(8,349)
Conversion of Operating Partnership Units into Class A common stock	62,023		1	0		0	0		0		(23)		0		0		24		2
Holder redemptions of Series T Preferred Stock and conversion into Class A common stock	56,157		1	0		0	0		0		640		0		0		0		641
Holder redemptions of Series B Preferred Stock and conversion into Class A common stock	116,475		1	0		0	0		0		1,377		0		0		0		1,378
Company redemptions of Series B Preferred Stock and conversion into Class A common stock	6,401,792		64	0		0	0		0		71,061		0		0		0		71,125
Company redemption of Series A Preferred Stock activity	0		0	0		0	0		0		22		0		0		0		22
Adjustment for noncontrolling interest ownership in Operating Partnership	0		0	0		0	0		0		(4,379)		0		0		4,379		0
Net income	0		0	0		0	0		0		0		0		45,220		15,926		61,146

Balance, March 31, 2021	25,110,432	$	251	76,603	$	1	2,774,338	$	66,867	$	332,926	$	(375,748)	$	81,982	$	36,510	$	142,789

See Notes to Consolidated Financial Statements

Table of Contents

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

FOR THE THREE MONTHS ENDED MARCH 31, 2020

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 Income

Number of

Number of

Number of

Paid-

Cumulative

to

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

167,398

2

0

0

0

0

1,965

0

0

0

1,967
Issuance of Class A common stock due to Series B warrant exercise

11,172

0

0

0

0

0

121

0

0

0

121
Repurchase of Class A common stock

(1,028,293)

(10)

0

0

0

0

(11,598)

0

0

0

(11,608)
Issuance of LTIP Units for director compensation

0

0

0

0

0

0

0

0

0

343

343
Vesting of LTIP Units for compensation

0

0

0

0

0

0

0

0

0

1,858

1,858
Vesting of restricted Class A common stock

0

0

0

0

0

0

142

0

0

0

142
Issuance of LTIP Units for expense reimbursements

0

0

0

0

0

0

0

0

0

505

505
Common stock distributions declared

0

0

0

0

0

0

0

(3,913)

0

0

(3,913)
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

(205)

0

0

(205)
Series B Preferred Stock distributions declared

0

0

0

0

0

0

0

(7,848)

0

0

(7,848)
Series B Preferred Stock accretion

0

0

0

0

0

0

0

(3,433)

0

0

(3,433)
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

(79)

0

0

(79)
Series D Preferred Stock distributions declared

0

0

0

0

0

0

0

(1,269)

0

0

(1,269)
Series T Preferred Stock distributions declared

0

0

0

0

0

0

0

(373)

0

0

(373)
Series T Preferred Stock accretion

0

0

0

0

0

0

0

(208)

0

0

(208)
Distributions to Operating Partnership noncontrolling interests

0

0

0

0

0

0

0

0

0

(1,591)

(1,591)
Distributions to partially owned noncontrolling interests

0

0

0

0

0

0

0

0

0

(407)

(407)
Holder redemption of Series B Preferred Stock and conversion into Class A common stock

108,149

1

0

0

0

0

1,178

0

0

0

1,179
Company redemption of Series B Preferred Stock and conversion into Class A common stock

1,334,501

13

0

0

0

0

15,764

0

0

0

15,777
Cash redemption of Series B Preferred Stock

0

0

0

0

0

0

6

0

0

0

6
Series B warrant activity and exercise, net

0

0

0

0

0

0

(21)

0

0

0

(21)
Acquisition of noncontrolling interest

0

0

0

0

0

0

(116)

0

0

0

(116)
Adjustment for noncontrolling interest ownership in Operating Partnership

0

0

0

0

0

0

(322)

0

0

322

0
Net income (loss)

0

0

0

0

0

0

0

0

979

(6,100)

(5,121)
Balance, March 31, 2020

24,015,484

$
240

76,603

$
1

2,850,602

$
68,705

$
318,802

$
(280,639)

$
7,101

$
43,100

$
157,310

See Notes to Consolidated Financial Statements

6

6

Table of Contents

BLUEROCK RESIDENTIAL GROWTH REIT, INC.

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

Three Months Ended

March 31,

2021

2020
Cash flows from operating activities

Net income (loss)

$
61,146

$
(5,121)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:

Depreciation and amortization

21,199

21,897
Amortization of fair value adjustments

(252)

(100)
Preferred returns on unconsolidated real estate joint ventures

(2,287)

(2,415)
Gain on sale of real estate investments

(68,913)

(253)
Fair value adjustment of interest rate caps

35

(29)
Loss on extinguishment of debt and debt modification costs

3,040

0
Provision for credit losses

542

0
Distributions of income and preferred returns from preferred equity investments and unconsolidated real estate joint ventures

3,317

4,636
Share-based compensation attributable to equity incentive plan

2,190

2,201
Share-based compensation attributable to executive salaries

220

0
Share-based compensation attributable to restricted stock grants

60

142
Share-based expense to BRE – LTIP Units

397

505
Changes in operating assets and liabilities:

Due to affiliates, net

48

2,866
Accounts receivable, prepaids and other assets

(2,880)

(8,460)
Notes and accrued interest receivable

(876)

177
Accounts payable and other accrued liabilities

554

3,070
Net cash provided by operating activities

17,540

19,116

Cash flows from investing activities:

Acquisitions of real estate investments

0

(109,067)
Capital expenditures

(4,162)

(6,201)
Investment in notes receivable and ground lease

(19,837)

(1,565)
Repayments on notes receivable

0

29,000
Proceeds from sale of real estate investments

203,267

253
Proceeds from sale and redemption of unconsolidated real estate joint ventures

15,233

35,542
Purchase of interests from noncontrolling interests

0

(116)
Investment in unconsolidated real estate joint venture interests

(7,821)

(12,882)
Net cash provided by (used in) investing activities

186,680

(65,036)

Cash flows from financing activities:

Distributions to common stockholders

(3,642)

(3,828)
Distributions to noncontrolling interests

(9,886)

(1,790)
Distributions to preferred stockholders

(15,620)

(13,323)
Borrowings on mortgages payable

12,880

6,861
Repayments on mortgages payable including prepayment penalties

(84,774)

(1,912)
Proceeds from credit facilities

30,000

156,703
Repayments on credit facilities

(63,000)

(71,950)
Payments of deferred financing fees

(486)

(1,239)
Net proceeds from issuance of Class A common stock

10

1,967
Repurchase of Class A common stock

(40,720)

(11,608)
Redemption of 8.250% Series A Redeemable Preferred Stock

(55,055)

0
Retirement of 6.0% Series B Redeemable Preferred Stock

0

(305)
Net proceeds from exercise of Warrants associated with the 6.0% Series B Redeemable Preferred Stock

178

115
Net proceeds from issuance of 6.150% Series T Redeemable Preferred Stock

87,675

51,557
Payments to redeem 6.0% Series B Redeemable Preferred Stock

(53)

(61)
Net cash (used in) provided by financing activities

(142,493)

111,187

Net increase in cash, cash equivalents and restricted cash

$
61,727

$
65,267
Cash, cash equivalents and restricted cash, beginning of year

118,961

50,768
Cash, cash equivalents and restricted cash, end of period

$
180,688

$
116,035

Reconciliation of cash, cash equivalents and restricted cash

Cash and cash equivalents

$
148,070

$
94,180
Restricted cash

32,618

21,855
Total cash, cash equivalents and restricted cash, end of year

$
180,688

$
116,035

Supplemental disclosure of cash flow information

Cash paid for interest (net of interest capitalized)

$
13,312

$
13,737

Supplemental disclosure of non-cash investing and financing activities

Distributions payable - declared and unpaid

$
13,035

$
14,057
Mortgage assumed upon property acquisition

$
0

$
30,997
Capital expenditures held in accounts payable and other accrued liabilities

$
36

$
(284)

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,~~March 31, 2021, the ~~Company's portfolio consisted~~Company held investments in fifty-five real estate properties, consisting of ~~interests in thirty-five properties (twenty-five~~thirty-four consolidated operating properties and ~~ten~~twenty-one 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).~~one is in lease-up and fifteen properties are stabilized. The ~~Company’s thirty-five~~fifty-five properties contain an aggregate of ~~10,761~~16,457 units, comprised of ~~8,166~~11,584 consolidated operating units and ~~2,595~~4,873 units ~~under development.~~through preferred equity, mezzanine loan or ground lease investments. As of ~~September 30, 2017, these properties, exclusive of development~~March 31, 2021, the Company's consolidated operating properties were approximately ~~94%~~95.8% 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,~~March 31, 2021, limited partners other than the Company owned approximately ~~10.29%~~31.01% of the common units of the Operating Partnership ~~(1.01%~~(17.28% is held by holders of limited partnership interest in the Operating Partnership (“OP Units”) and ~~9.28%~~13.73% 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 6.09% which are not ~~within the Company’s control and are not consolidated in the Company’s financial statements.~~
vested at March 31, 2021).
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 cases where the Company holds a preferred equity investment in real estate joint ventures ~~over which~~where the preferred equity interest must be redeemed by the issuing entity or is redeemable at the Company’s option, the preferred equity investment is accounted for as a held to maturity debt security. These preferred equity investments have a mandatory redemption provision, and the Company has the intent and ability to ~~exercise significant influence, but for which it does not have financial or operating control,~~hold the investment until redemption. The preferred equity investments are ~~accounted for using the equity method of accounting. These entities are reflected on~~included in 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~~preferred equity investments and mezzanine loan 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.

Table of Contents

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.

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 the 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.

The Company believes it currently has a stable financial condition: as of March 31, 2021, the Company collected 97% of rents from its multifamily properties for the three months ~~and nine months~~ ended ~~September 30, 2017.~~March 31, 2021. In ~~addition, property management fees have been reclassified from property operating expenses.~~

~~Investments in Unconsolidated Real Estate Joint Ventures~~

~~The Company first analyzes its investments in joint ventures to determine if the joint venture is a variable interest entity (“VIE”) in accordance with ASC 810 and if so, whether~~prior quarters, 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 characteristicshad provided rent deferral payment plans as a result 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 significanthardships certain tenants experienced due to the ~~entity. Variable interests~~impact of COVID-19; for the quarter ended March 31, 2021, the Company did not provide any rent deferral payment plans, compared to the onset of the COVID-19 pandemic (quarter ended June 30, 2020) in ~~a VIE are contractual, ownership, or other financial interests in a VIE that change in value with changes~~which 1% of the tenant base was on payment plans. Although the Company may receive tenant requests for rent deferrals in the fair value of the VIE’s net assets. The Company continuously re-assesses at each level of the joint venture whether the entity is (i) a VIE, and (ii) if the Company is the primary beneficiary of the VIE. If it was determined an entity in which the Company holds a joint venture 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 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 of control by virtue of the Company being the general partner in a limited partnership or the controlling member of a limited liability company.

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~~coming months, the Company does not ~~have control, but does have the ability~~expect to ~~exercise significant influence over the entity,~~waive its contractual rights under its lease agreements. Further, while occupancy remains strong at 95.8% as of March 31, 2021, in future periods, the Company ~~accounts for these unconsolidated investments under~~may experience reduced levels of tenant retention, and reduced foot traffic and lease applications from prospective tenants, as a result of the ~~equity method~~impact of ~~accounting. The equity method~~COVID-19.

Summary of ~~accounting requires these investments~~Significant Accounting Policies

Refer to ~~be initially recorded at cost and subsequently increased (decreased)~~the Company's Annual Report on Form 10-K for the ~~Company’s share of net income (loss), including eliminations~~year ended December 31, 2020 as filed with the Securities and Exchange Commission ("SEC") on February 23, 2021 for ~~the Company’s share of intercompany transactions, and increased (decreased) for contributions (distributions). The Company’s proportionate share~~discussion of the ~~results of operations of~~Company's significant accounting policies. During the three months ended March 31, 2021, there were no material changes to these ~~investments is reflected in the Company’s earnings or losses.~~

policies.

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.

Table of Contents

The balance sheet at December 31, ~~2016~~2020 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~~2020 contained in the Annual Report on Form 10-K as filed with the ~~Securities and Exchange Commission (“SEC”)~~SEC on February ~~22, 2017.~~

~~Summary of Significant Accounting Policies~~

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.

23, 2021.

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.

New Accounting Pronouncements

In January 2017, the FASB issued ASU 2017-01, "Business Combinations; Clarifying the Definition of a Business" (“ASU 2017-01”). ASU 2017-01 modifies the requirements to meet the definition of a business under~~Accounting Standards Codification ("ASC")~~Topic 805, "Business Combinations." The amendments provide a screen to determine when a set of identifiable assets and liabilities is not a business. The screen requires that when substantially all 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.

~~In November 2016,~~August 2020, the FASB issued ASU No. ~~2016-18, "Statement of Cash Flows; Restricted Cash"~~2020-06 “Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity” (“ASU ~~2016-18”~~2020-06”). ~~This update requires that a statement of cash flows explain~~The guidance in ASU 2020-06 simplifies the ~~change during~~accounting for convertible debt and convertible preferred stock by removing the ~~period~~requirements to separately present certain conversion features in equity. In addition, the amendments in the ~~total~~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 to classify a contract as equity, which is expected to decrease the number of ~~cash, cash equivalents,~~freestanding instruments and ~~amounts generally described~~embedded derivatives accounted for as ~~restricted~~assets or liabilities. Finally, the amendments revise the guidance on calculating earnings per share, requiring use of the if-converted method for all convertible instruments and rescinding an entity’s ability to rebut the presumption of share settlement for instruments that may be settled in 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.other assets. The ~~Company will adjust the consolidated statement of cash flows as required~~amendments in ~~conjunction with the adoption of~~ ASU ~~2016-08 in 2018. ASU 2016-18 is~~2020-06 are 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 interim periods within those~~2021. Early adoption is permitted, but no earlier than fiscal ~~years. Earlier application was permitted. The Company will adjust the consolidated statement of cash flows as required in conjunction with 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 periodsyears beginning after December 15, ~~2016. ASU 2016-07 did not have a material impact on~~2020. The guidance must be adopted as of the ~~Company’s financial statements when adopted.~~

~~In June 2016,~~beginning of the ~~FASB updated ASC Topic 326 "Financial Instruments - Credit Losses" with 2016-13 “Measurement~~fiscal year 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.adoption. The Company is currently evaluating the ~~guidance and has not determined the~~ impact of this ~~standard may have on the Company’s financial statements.~~new guidance.

In ~~February 2016,~~January 2021, the FASB issued ASU No. ~~2016-02, “Leases~~2021-01 "Reference Rate Reform (Topic ~~842)” (“~~848)" ("ASU ~~2016-02”~~2021-01"). ~~Under~~The amendments in ASU ~~2016-02, an entity~~2021-01 permit entities to elect certain optional expedients in connection with reference rate reform activities and their impact on debt, contract modifications and derivative instruments as it is expected the global market will transition from LIBOR and other interbank offered rates to alternative reference rates. The amendments in ASU 2021-01 can be ~~required~~applied retrospectively to recognize right-of-use assets and 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 required to disclose qualitative and quantitative information about leasing arrangements to enable a user of the financial statements to assess the amount, timing and uncertainty of 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, and requires a modified retrospective adoption, with early adoption permitted.~~include or are subsequent to March 12, 2020 or applied prospectively through December 31, 2022. The Company expects that, because of the ASU 2016-02’s emphasis on lessee accounting, ASU 2016-02 will 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.

~~In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers (Topic 606)” (“ASU 2014-09”). Under the new standard, revenue~~ is recognized when persuasive evidence of an arrangement exists, delivery has occurred, the fee is fixed or determinable, and collectability is probable. Revenue is generally recognized net of allowances. In August 2015, the FASB issued ASU 2015-14, Revenue from Contracts with Customers-Deferral of the Effective Date which defers the effective date of the new revenue recognition standard until the first quarter of 2018. Therefore, ASU 2014-09 will become effective for the Company in the first quarter of the fiscal year ending December 31, 2018. Early adoption is permitted, but not earlier than the first quarter of the fiscal year ending December 31, 2017. The ASU allows for either full retrospective or modified retrospective 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 and ~~Abandonment~~Held for Sale Properties

Sale of ~~Development Project~~ARIUM Grandewood

On January 28, 2021, the Company closed on the sale of ARIUM Grandewood located in Orlando, Florida. The property was sold for approximately $65.3 million, subject to certain prorations and adjustments typical in such real estate transactions. ARIUM Grandewood was encumbered by a $39.1 million senior mortgage through the Master Credit Facility Agreement (refer to Note 8 for further information). Under the agreement, the Company had the option to forgo the repayment of the principal balance and any related prepayment penalties and costs by substituting the collateral securing the senior mortgage with collateral of the same or higher value. The Company elected to substitute the ARIUM Grandewood collateral with its Falls at Forsyth property and the transaction was completed on February 18, 2021. After consideration of the $39.1 million senior mortgage and payment of closing costs and fees of $1.1 million, the sale of ARIUM Grandewood generated net proceeds of approximately $25.1 million and a gain on sale of approximately $27.7 million. The Company recorded debt modification costs of $0.1 million related to the collateral substitution transaction.

Sale of ~~Village Green Ann Arbor~~

James at South First

On February ~~22, 2017,~~24, 2021, the Company closed on the sale of James at South First located in Austin, Texas. The property was sold for $50.0 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 $25.6 million, the payment of early extinguishment of debt costs of $2.5 million and payment of closing costs and fees of $0.5 million, the sale of the property generated net proceeds of

Table of Contents

approximately $21.1 million and a gain on sale of approximately $17.4 million, of which the Company’s pro rata share of the proceeds was approximately $18.1 million and pro rata share of the gain was approximately $14.5 million. The Company recorded a loss on extinguishment of debt of $2.6 million related to the sale.

Sale of Marquis at The Cascades

On March 1, 2021, the Company closed on the sale of the ~~Village Green Ann Arbor property,~~Marquis at The Cascades properties, located in ~~Ann Arbor, Michigan.~~Tyler, Texas, pursuant to the terms and conditions of two separate purchase and sales agreements. The ~~property was~~properties were sold for approximately ~~$71.4~~$90.9 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~~$53.6 million and payment of closing costs and fees of ~~$1.3~~$0.3 million, the sale of the ~~property~~properties generated net proceeds of approximately ~~$28.6~~$37.3 million and a gain on sale of approximately ~~$16.7~~$23.7 million, of which the Company’s pro rata share of the proceeds was approximately ~~$13.6~~$32.6 million and pro rata share of the gain was approximately ~~$7.8~~$20.1 million.

The Company recorded a loss on extinguishment of debt of $0.3 million related to the sale.

Sale of ~~Lansbrook Village~~The Conley Interests

On ~~April 26, 2017,~~March 18, 2021, The Conley, the ~~Company closed on~~underlying asset of an unconsolidated joint venture located in Leander, Texas, was sold. Upon the sale, the Company’s preferred equity investment was redeemed by the joint venture for $16.5 million, which included its original preferred investment of Lansbrook Village, 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$15.2 million and ~~payment~~accrued preferred return 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$1.3 million.

Sale of ~~Fox Hill~~

Alexan Southside Place Interests

On ~~May 24, 2017,~~March 25, 2021, Alexan Southside Place, the underlying asset of an unconsolidated joint venture located in Houston, Texas, was sold. The Company’s preferred equity investment of $10.1 million, which is net of the $15.9 million provision for credit loss recorded in the fourth quarter 2020, was classified as a related party receivable at March 31, 2021 as certain proceeds from the sale were not distributed by quarter end. The receivable is included in due from affiliates in the Company’s consolidated balance sheet. Of the $10.1 million investment, the Company ~~closed on~~received $9.8 million in April 2021 with the ~~sale of~~remaining $0.3 million expected to be received before year end. The remaining amount represents a holdback for a six-month representations and warranty period related to the ~~Fox Hill property, located in Austin, Texas. The property was sold~~sale.

Held for approximately $46.5 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 million, the sale of the property generated net proceeds of approximately $19.2 million and a gain on sale of approximately $10.7 million, of which the Company’s pro rata share of proceeds was approximately $16.4 million and pro rata share of the gain was approximately $10.3 million.

Sale

~~Sale of MDA Apartments~~

~~On June 30, 2017, the Company closed on the sale of its interest in MDA Apartments, located in Chicago, Illinois.~~ The Company’s 35% interest in the property was sold for approximately $18.3 million, subject to certain prorations and adjustments typical 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 $10.2 million, of which the Company’s pro rata share of proceeds was approximately $11.0 million and pro rata share of the gain was approximately $6.4 million.

~~Election to Abandon East San Marco Development~~

~~On November 24, 2015, the~~ Company entered into a ~~cost-sharing~~purchase and sale agreement ~~to pursue~~for the ~~acquisition~~sale of ~~a tract of real property~~Plantation Park, 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.Lake Jackson, Texas. The Company ~~recognized approximately $2.9 million~~has classified the property as held for sale as 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~~March 31, 2021. Refer to ~~abandonment~~.Note 14 for further information.

Note 4 – Investments in Real Estate

As of ~~September 30, 2017,~~March 31, 2021, the Company ~~was invested~~held investments in ~~twenty-five~~thirty-four consolidated operating ~~real estate~~ properties and ~~ten development~~twenty-one 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 investments, which are either consolidated or presented on the equity method of accounting.~~

~~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.~~
⁽²⁾ ~~Whetstone is currently a~~ preferred equity, ~~investment providing a stated investment return.~~mezzanine loan and ground lease investments.

Table of Contents

Consolidated Operating Properties




Number of

Date Built /

Ownership

Multifamily Community Name

Location

Units

Renovated ⁽¹⁾

Interest

ARIUM Glenridge

Atlanta, GA

480

1990

90
%
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
%
Carrington at Perimeter Park

Morrisville, NC

266

2007

100
%
Chattahoochee Ridge

Atlanta, GA

358

1996

90
%
Chevy Chase

Austin, TX

320

1971

92
%
Cielo on Gilbert

Mesa, AZ

432

1985

90
%
Citrus Tower

Orlando, FL

336

2006

97
%
Denim

Scottsdale, AZ

645

1979

100
%
Elan

Austin, TX

270

2007

100
%
Element

Las Vegas, NV

200

1995

100
%
Falls at Forsyth

Cumming, GA

356

2019

100
%
Gulfshore Apartment Homes

Naples, FL

368

2016

100
%
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

11,584

(1) Represents date of last significant renovation or year built if there were no renovations.
Depreciation expense was ~~$8.9~~$18.7 million and ~~$5.9 million, and $24.5 million and $16.7~~$18.2 million for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, 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~~$1.5 million and ~~$1.3 million, and $8.6 million and $5.8~~$2.6 million for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016,~~2020, respectively.
11
12

Table of Contents

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

Actual /

Actual /

Estimated

Actual / 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 ⁽¹⁾

~~Alexan CityCentre, Houston, TX~~
Motif
~~340~~ ~~2Q 2017~~ ~~4Q 2017~~
~~Helios, Atlanta, GA~~ ~~282~~ ~~2Q 2017~~ ~~4Q 2017~~
~~Alexan Southside Place, Houston, TX~~ ~~270~~ ~~4Q 2017~~ ~~2Q 2018~~
~~Lake Boone Trail, Raleigh, NC~~ ~~245~~ ~~3Q 2017~~ ~~3Q 2018~~
~~Vickers Village, Roswell, GA~~ 79 ~~3Q 2018~~ ~~4Q 2018~~
~~APOK Townhomes, Boca Raton, FL~~ 90 ~~3Q 2018~~ ~~1Q 2019~~
~~Crescent Perimeter, Atlanta, GA~~ ~~320~~ ~~4Q 2018~~ ~~2Q 2019~~
~~Domain, Garland, TX~~ ~~299~~ ~~4Q 2018~~ ~~2Q 2019~~
~~West Morehead, Charlotte, NC~~ ~~286~~ ~~4Q 2018~~ ~~2Q 2019~~
~~Flagler Village,~~
Fort Lauderdale, FL

385
~~384~~

1Q 2020

~~3Q 2019~~ 3Q
2Q 2020
Total lease-up units

~~2,595~~

385

Development Investments ⁽¹⁾

Zoey
Austin, TX

307

1Q 2022

2Q 2022
Reunion Apartments
Orlando, FL

280

1Q 2022

3Q 2022
Avondale Hills

Decatur, GA

240

1Q 2023

1Q 2023
The Hartley at Blue Hill, formerly The Park at Chapel Hill

Chapel Hill, NC

414

4Q 2021

1Q 2023
Encore Chandler
Chandler, AZ

208

2Q 2023

3Q 2023
Total development units

1,449

Multifamily Community Name
Location

Number of Units

Operating Investments ⁽¹⁾

Alexan CityCentre
Houston, TX

340

Belmont Crossing ⁽²⁾

Smyrna, GA

192

Domain at The One Forty

Garland, TX

299

Georgetown Crossing ⁽²⁾

Savannah, GA

168

Hunter’s Pointe ⁽²⁾

Pensacola, FL

204

Mira Vista

Austin, TX

200

Park on the Square ⁽²⁾

Pensacola, FL

240

Sierra Terrace ⁽²⁾

Atlanta, GA

135

Sierra Village ⁽²⁾

Atlanta, GA

154

The Commons⁽²⁾

Jacksonville, FL

328

The Riley

Richardson, TX

262

Thornton Flats

Austin, TX

104

Vickers Historic Roswell

Roswell, GA

79

Water’s Edge ⁽²⁾

Pensacola, FL

184

Wayford at Concord

Concord, NC

150

Total operating units

3,039

Total units

4,873

(1) Properties in which the Company has a mezzanine loan, preferred equity or ground lease investment. Operating investments represent stabilized operating properties. Refer to Note 5, Note 6 and Note 13 for further information.
(2) Belmont Crossing, Georgetown Crossing, Hunter’s Pointe, Park on the Square, Sierra Terrace, Sierra Village, The Commons and Water’s Edge are collectively known as the Strategic Portfolio. Refer to Note 6 for further information.

Table of Contents

Note 5 ~~– Acquisition of Real Estate~~
~~The following describes the Company’s significant acquisition activity during the nine months ended September 30, 2017:~~
~~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.
12
~~Purchase Price Allocations~~
The acquisitions of Wesley Village, Preston View, the Texas Portfolio, Villages at Cypress Creek, and Citrus Tower 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 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 for the nine months ended September 30, 2017 amounted to $12.4 million and $3.9 million, respectively.
~~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~~March 31, 2021 and December 31, ~~2016~~2020 (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

March 31,

December 31,
Property

2021

2020
Avondale Hills

$
7,881

$
1,021
Domain at The One Forty

24,526

24,315
Motif

77,549

75,436
Reunion Apartments

10,466

8,161
The Hartley at Blue Hill, formerly The Park at Chapel Hill

37,423

36,927
Vickers Historic Roswell

12,442

12,048
Total

$
170,287

$
157,908
Provision for credit losses ⁽¹⁾

(575)

(174)
Total, net

$
169,712

$
157,734

(1) 13 Refer to the Provision for Credit Losses table below.

~~The interest income from related parties~~Provision for Credit Losses
As of March 31, 2021, the ~~three~~Company’s provision for credit losses on its mezzanine loan investments was $0.6 million on a carrying amount of $170.3 million of these investments. Changes in provision for credit losses of the Company’s mezzanine loan investments at March 31, 2021 and ~~nine months ended September 30, 2017 and 2016~~December 31, 2020 are summarized in the table below (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 $ —


March 31,

December 31,

2021

2020
Provision for credit losses, beginning of the period

$
174

$
—
Provision for credit loss on pool of assets, net ⁽¹⁾

401

174
Provision for credit losses, end of period

$
575

$
174

(1) Under Current Expected Credit Losses (CECL), a provision for credit losses for similar assets is calculated based on a historical default rate applied to the remaining life of the assets. The change in the provision during the three months ended March 31, 2021 was a result of an increase in the trailing twelve-month historical default rate.

Following is a summary of the interest income from mezzanine loan and ground lease investments for the three months ended March 31, 2021 and 2020 (amounts in thousands):

Three Months Ended

March 31,
Property

2021

2020
Arlo ⁽¹⁾

$
—

$
1,020
Avondale Hills

117

—
Domain at The One Forty

239

322
Motif

2,374

2,400
Novel Perimeter ⁽¹⁾

—

770
Reunion Apartments

290

—
The Hartley at Blue Hill

1,023

935
Vickers Historic Roswell

440

429
Zoey ⁽²⁾

238

12
Total

$
4,721

$
5,888

(1) In the fourth quarter 2020, the Arlo and Novel Perimeter properties were sold, and the mezzanine loans provided by the Company were paid off in full.
(2) Refer to Note 13 for further information about the Zoey Ground Lease.

Table of Contents

The occupancy percentages of the Company's mezzanine loan investment properties at March 31, 2021 and December 31, 2020 are as follows:

March 31,

December 31,

Property

2021

2020

Avondale Hills

⁽¹⁾

⁽²⁾

Domain at The One Forty

95.7
%
92.6
%
Motif

77.9
%
62.1
%
Reunion Apartments

⁽¹⁾

⁽²⁾

The Hartley at Blue Hill

⁽¹⁾

⁽²⁾

Vickers Historic Roswell

100.0
%
96.2
%

(1) The development had not commenced lease-up as of March 31, 2021.
(2) The development had not commenced lease-up as of December 31, 2020.
~~West Morehead Mezzanine~~Motif Financing
On January 27, 2021, the Motif property owner entered into a $88.8 million bridge loan (the “Motif Bridge Loan”) secured by the Motif property and used the proceeds in part to pay off the outstanding balance, in full, of the Motif Construction Loan. The Motif Bridge Loan matures on August 1, 2023, contains a six-month extension option, subject to certain conditions, and bears interest at a floating basis of LIBOR + 3.70%, subject to a minimum interest rate of 3.85%, with interest-only payments through the term of the loan. The Motif Bridge Loan may be prepaid, subject to an exit fee, without prepayment penalties beginning (i) August 1, 2021 if prepayment is being made in connection with the lender providing a permanent mortgage loan, or (ii) February 1, 2022 otherwise.
On ~~December~~March 29, ~~2016,~~2021, the Company ~~through BRG Morehead NC, LLC, or BRG Morehead NC,~~entered into an ~~indirect subsidiary, provided a $21.3 million~~amended and restated mezzanine loan ~~or the BRG West Morehead~~agreement (the “Motif Mezz ~~Loan, to~~Loan”) with BR ~~Morehead~~Flagler JV Member, LLC ~~an affiliate~~(“Motif JV Member”) to increase its loan commitment to $88.6 million, of which $76.7 million has been funded as of March 31, 2021. As part of the ~~Manager, or BR Morehead JV Member. The BRG West Morehead~~agreement, the Company agreed to reduce, after December 31, 2021, the Motif Mezz Loan’s current fixed rate of 12.9% per annum as follows: 9.0% per annum for the calendar year 2022 and 6.0% per annum for the calendar year 2023 and thereafter. In conjunction with entering the amended and restated Motif Mezz Loan, ~~is secured by BR Morehead~~the Company entered into an amended operating agreement for Motif JV ~~Member’s approximate 95.0% interest in a multi-tiered joint venture along~~Member with Bluerock Special Opportunity + Income Fund II, LLC (“Fund II”) and Bluerock Special Opportunity + Income Fund III, LLC (“Fund III”). In consideration for the Company reducing the Motif Mezz Loan interest rate, Fund II and Fund III agreed to (a) admit BRG Flagler Village Profit Share, LLC (the “Motif PS”), ~~an affiliate~~a wholly-owned subsidiary of the ~~Manager,~~Company, as an additional member of Motif JV Member, (b) grant Motif PS a 50% participation in any profits achieved in a sale after repayment of the Motif Mezz Loan and ~~an affiliate~~the Company, Fund II and Fund III each receive full return of ~~ArchCo Residential,~~ their respective capital contributions, and (c) grant the Company a right to compel Motif JV Member to refinance and/or sell the ~~West Morehead JV, which intends to develop an approximately 286-unit Class A apartment community located in Charlotte, North Carolina to be known as West Morehead.~~Motif property beginning January 1, 2023. The ~~BRG West Morehead~~Motif Mezz Loan matures on ~~the earlier of January 5, 2020, or the maturity date of the West Morehead Construction Loan, as defined below, as extended,~~March 29, 2026 and bears interest at a fixed rate of 15.0%. Regular monthly payments are interest-only during the initial term. The BRG West Morehead 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 Morehead JV Member (the mezzanine borrower), which is 99.5% owned by Fund II and which currently holds an approximate 95.0% interest 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 construction 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, and contains two 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,15

Table 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. 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.Contents

~~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 monthly payments are interest-only during the initial term. The BRG Boca 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 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.

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 76 – 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~~March 31, 2021 and December 31, ~~2016~~2020 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

March 31,

December 31,
Property

2021

2020
Alexan CityCentre

$
15,725

$
15,063
Alexan Southside Place ⁽¹⁾

—

26,038
Mira Vista

5,250

5,250
Strategic Portfolio ⁽²⁾

27,054

27,054
The Conley ⁽³⁾

—

15,036
The Riley

6,961

—
Thornton Flats

4,600

4,600
Wayford at Concord

6,500

6,500
Other

99

97
Total

$
66,189

$
99,638
Provision for credit losses ⁽⁴⁾

(315)

(16,153)
Total, net

$
65,874

$
83,485

(1) 15 On March 25, 2021, Alexan Southside Place, the property underlying the Company's preferred equity investment, was sold. Refer to Note 3 for further information.
(2) Belmont Crossing, Georgetown Crossing, Hunter's Pointe, Park on the Square, Sierra Terrace, Sierra Village, The Commons and Water's Edge are collectively known as the Strategic Portfolio.
(3) On March 18, 2021, the Company's preferred equity investment in The Conley was redeemed. Refer to Note 3 for further information.
(4) Refer to the Provision for Credit Losses table below.
Provision for Credit Losses
As of ~~September 30, 2017,~~March 31, 2021, the Company’s provision for credit losses on its preferred equity investments was $0.3 million on a carrying amount of $66.2 million of these investments. Changes in provision for credit losses of the Company’s preferred equity investments at March 31, 2021 and December 31, 2020 are summarized in the table below (amounts in thousands):


March 31,

December 31,

2021

2020
Provision for credit losses, beginning of the period

$
16,153

$
—
Provision for credit loss on pool of assets, net ⁽¹⁾

92

223
Provision for credit loss – Alexan Southside Place ⁽²⁾

(15,930)

15,930
Provision for credit losses, end of period

$
315

$
16,153

(1) Under Current Expected Credit Losses (CECL), a provision for credit losses for similar assets is calculated based on a historical default rate applied to the remaining life of the assets. The change in the provision during the three months ended March 31, 2021 was a result of an increase in the trailing twelve-month historical default rate.
(2) On March 25, 2021, Alexan Southside Place, the property underlying the Company’s preferred equity investment, was sold. Refer to Note 3 for further information.
As of March 31, 2021, the Company, through wholly-owned subsidiaries of the Operating Partnership, had outstanding equity investments in ~~nine multi-tiered~~10 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~~10 equity investments, Alexan CityCentre, Encore Chandler, Mira Vista, Strategic Portfolio, The Riley, Thornton Flats, and Wayford at Concord are preferred equity investments that are classified as held to maturity debt securities as the Company has the intention and ability to hold the investments to maturity. The Company earns a fixed return on these investments which is included within 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 thesereturns on unconsolidated real estate joint ventures ~~as well as preferred interests~~ in ~~some cases, are owned by affiliates~~its consolidated statements of the Manager. In each case, the Company’s preferred investment in the joint venture generates a preferred return of 15% on its outstanding capital contributions and the Company is not allocated any of the income or loss.operations. The joint venture is the controlling member in an entity whose purpose is to develop or operate a multifamily property. ~~Each~~

Table of Contents

NaN of the 10 equity investments, Domain at The One Forty, Motif and Vickers Historic Roswell, represent a remaining 0.5% common interest in joint ventures where, in some cases, the Company had previously redeemed its preferred equity investment in the joint ventures and provided a mezzanine loan. Refer to Note 5 for further information.
The preferred returns on the Company’s unconsolidated real estate joint ventures for the three months ended March 31, 2021 and 2020 are summarized below (amounts in thousands):

Three Months Ended

March 31,

Property

2021

2020

Alexan CityCentre

$
663

$
591

Alexan Southside Place

—

315

Helios ⁽¹⁾

—

(159)

Mira Vista

133

134

Riverside Apartments

—

409

Strategic Portfolio

710

297

The Conley

405

476

The Riley

64

—

Thornton Flats

102

103

Wayford at Concord

210

193

Whetstone Apartments

—

56

Total preferred returns on unconsolidated joint ventures

$
2,287

$
2,415

(1) Of the ($159) loss incurred at Helios for the three months ended March 31, 2020, ($143) pertains to costs related to the sale of Helios.
The occupancy percentages of the Company’s unconsolidated real estate joint ventures at March 31, 2021 and December 31, 2020 are as follows:

March 31,

December 31,

Property

2021

2020

Alexan CityCentre

95.3
%
94.1
%
Encore Chandler

⁽¹⁾

⁽²⁾

Mira Vista

96.5
%
95.0
%
Strategic Portfolio

Belmont Crossing

89.6
%
91.7
%
Georgetown Crossing

89.3
%
88.7
%
Hunter’s Pointe

99.5
%
99.0
%
Park on the Square

97.5
%
97.5
%
Sierra Terrace

91.9
%
89.6
%
Sierra Village

85.1
%
87.7
%
The Commons

95.1
%
93.9
%
Water’s Edge

97.8
%
99.5
%
The Riley

94.7
%
—

Thornton Flats

97.1
%
88.5
%
Wayford at Concord

90.7
%
80.7
%

(1) The development had not commenced lease-up as of March 31, 2021.
(2) The development had not commenced lease-up as of December 31, 2020.
Alexan Southside Place Interests
On March 25, 2021, Alexan Southside Place, the property underlying the Company’s preferred equity investment, was sold. Refer to Note 3 for further information.

Table of Contents

The Conley Interests

On March 18, 2021, the Company’s preferred equity investment in The Conley was redeemed. Refer to Note 3 for further information.

The Riley Interests

On March 1, 2021, the Company made a $7.0 million preferred equity investment in a joint venture (the “Riley JV”) with an unaffiliated third party for a stabilized property in ~~which the~~Richardson, Texas known as The Riley. The Company ~~owns~~earns a 6.0% current return and a 5.0% accrued return for a total preferred ~~interest~~return of 11.0%. The Riley JV is required to redeem the Company’s preferred membership ~~interests~~interest plus any accrued but unpaid preferred return on the earlier ~~of the~~ date which ~~is six months following~~is: (i)(a) the refinancing or (b) maturity of the ~~related development’s construction~~property loan, ~~or any earlier acceleration or due date. Additionally,~~detailed below, (ii) the Company has the right, in its sole discretion, to convert 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%sale of the ~~units in the related development have been leased.~~

~~The following provides additional information regarding the Company’s preferred equity and investments.~~

The preferred returns and equity in income of the Company’s unconsolidated real estate joint ventures for the three and nine months ended September 30, 2017 and 2016 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
Summary combined financial information for the Company’s investments in unconsolidated real estate joint ventures as of September 30, 2017 and December 31, 2016 and for the three and nine months ended September 30, 2017 and 2016, is as follows:
September 30,
2017 December 31,
2016
Balance Sheets:
Real estate, net of depreciation $ 304,921 $ 197,742
Other assets 29,576 33,814
Total assets $ 334,497 $ 231,556

Mortgages payable $ 202,308 $ 97,598
Other liabilities 20,267 13,191
Total liabilities $ 222,575 $ 110,789
Members’ equity 111,922 120,767
Total liabilities and members’ equity $ 334,497 $ 231,556
16
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(iii) 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 developed upon a tract of land ground leased from Prokop Industries BH, L.P., a Texas limited partnership, by BR Bellaire BLVD, LLC, as tenant under an 85-year ground lease. The Company has made a capital commitment of $19.0 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).
other acceleration event.
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 the Company owns an indirect interest, entered into a $31.8 million construction loan, of which $19.4 million is outstanding at September 30, 2017, which is secured by the leasehold interest in the Alexan Southside Place property. The ~~loan matures on April 7, 2019, and contains a one-year extension option, subject to certain conditions including a debt service coverage, loan to value ratio and payment of an extension fee.~~Riley investment, The loan bears interest on a floating basis on the amount drawn based on the base rate plus 1.25% or LIBOR plus 2.25%. 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.
17
~~APOK Townhomes Interests~~
On September 1, 2016, through BRG Boca, LLC, or BRG Boca, a wholly-owned subsidiary of its Operating Partnership, the Company made an investment in a multi-tiered joint venture, along with Fund II, an affiliate of the 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 in BR Boca JV 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, LLC, a wholly-owned subsidiary of the Operating Partnership, BRG Flagler Village, LLC, the Company made an 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 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, to develop a 282-unit Class A apartment community located in Atlanta, Georgia, to be known as Helios Apartments. The Company has made a capital commitment of $16.4 million to acquire 100% of the preferred equity interests in BR Cheshire Member, LLC, all of which has been funded as of September 30, 2017.
~~In conjunction with the Helios development, on December 16, 2015, the Helios~~Riley property owner, which is owned by an entity in which the Company ~~owns~~has an ~~indirect~~equity interest, entered into a ~~$38.1~~$44.1 million ~~construction~~senior mortgage loan. The loan ~~which~~matures on March 9, 2024, contains two (2) one-year extension options, subject to certain conditions, and is secured by the fee simple interest in ~~the Helios property, of which approximately $32.8 million is outstanding at September 30, 2017.~~The Riley property. The loan bears interest at a floating basis of the greater of LIBOR or 0.15%, plus 3.35%, with interest-only payments during the initial term of the loan. The loan can only be prepaid in full and is subject to yield maintenance through June 9, 2022.

Note 7 – Revolving Credit Facilities
The outstanding balances on the revolving credit facilities as of March 31, 2021 and December 31, 2020 are as follows (amounts in thousands):

March 31,

December 31,
Revolving Credit Facilities

2021

2020
Amended Senior Credit Facility

$
—

$
33,000
Second Amended Junior Credit Facility

—

—
Total

$
—

$
33,000

Table of Contents

Amended Senior Credit Facility

On March 6, 2020, the Company entered into the Amended Senior Credit Facility. The Amended Senior Credit Facility provides for a revolving loan with an initial commitment amount of $100 million, which 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 at an annual rate of 0.15% to 0.20% of the unused portion of the Amended Senior Credit Facility, depending on the borrowings outstanding. The 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 March 31, 2021, 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 of $11.9 million to acquire 100% of~~guaranteed the ~~preferred equity interests in BR Lake Boone JV Member, LLC, all of which~~obligations under the Amended Senior Credit Facility and has ~~been funded at September 30, 2017.~~pledged certain assets as collateral.

~~In conjunction~~The Amended Senior Credit Facility provides the Company with the ~~Lake Boone Trail development, on June 23, 2016,~~ability to issue up to $50 million in letters of credit. While the ~~Lake Boone property owner, which is owned by an entity in which~~issuance of letters of credit does not increase the Company’s borrowings outstanding under the Amended Senior Credit Facility, it does reduce the availability of borrowings. At March 31, 2021, 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.

~~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 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, the Company made a convertible preferred equity investment in a multi-tiered joint venture, along 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. The Company has made a capital commitment of $12.9 million to acquire 100% of the preferred equity interests in BR Whetstone Member, LLC, all of which has been funded as of September 30, 2017 (of which $0.7 million earns a 20% return). On October 2, 2016, the Company entered into ~~an agreement that provided~~the Second Amended Junior Credit Facility. The Second Amended Junior Credit Facility provides for ~~an extended twelve-month period in which it had~~ a ~~right~~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 ~~convert into common ownership.~~3.25% or the base rate plus 1.75% to 2.25%, depending on the Company’s leverage ratio. The Company ~~did not elect~~pays an unused fee at an annual rate of 0.35% to ~~convert into common ownership at October 2, 2017~~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 ~~therefore, its preferred return would decrease to 6.5%. Effective April 1, 2017, Whetstone ceased paying its preferred return on~~contains certain financial and operating covenants, including a ~~current basis. The accrued preferred return of $1.0 million is shown as a due from affiliates~~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 March 31, 2021, the Company was in compliance with all covenants under the ~~consolidated balance sheet.~~Second Amended Junior Credit Facility. The Company has ~~evaluated~~guaranteed the ~~preferred equity investment~~obligations under the Second Amended Junior Credit Facility and ~~accrued preferred return and determined that~~has pledged certain assets as collateral.

The availability of borrowings under the ~~investment~~revolving credit facilities at March 31, 2021 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~~various ratios related to those assets and was approximately $112.4 million.

Table of 1% prepayment fee or yield maintenance until October 31, 2021, 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.Contents

~~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 8 – Mortgages Payable
The following table summarizes certain information as of ~~September 30, 2017~~March 31, 2021 and December 31, ~~2016,~~2020, 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 March 31, 2021

March 31,

December 31,

Interest-only

Property

2021

2020

Interest Rate

through date

Maturity Date

Fixed Rate:

ARIUM Hunter’s Creek

$
70,525

$
70,871

3.65
%
⁽¹⁾

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
Avenue 25 ⁽²⁾

36,566

36,566

4.18
%
July 2022

July 1, 2027
Carrington at Perimeter Park⁽³⁾

31,286

31,301

4.16
%
⁽³⁾

July 1, 2027
Chattahoochee Ridge

45,338

45,338

3.25
%
December 2022

December 5, 2024
Citrus Tower

40,442

40,627

4.07
%
⁽¹⁾

October 1, 2024
Denim⁽⁴⁾

101,205

101,205

3.41
%
August 2024

August 1, 2029
Elan⁽⁵⁾

25,557

25,574

4.19
%
⁽⁵⁾

July 1, 2027
Element

29,260

29,260

3.63
%
July 2022

July 1, 2026
Falls at Forsyth ⁽⁶⁾

19,504

—

4.35
%
⁽¹⁾

July 1, 2025
Gulfshore Apartment Homes

46,345

46,345

3.26
%
September 2022

September 1, 2029
James on South First

—

25,674

Navigator Villas ⁽⁷⁾

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
Plantation Park

—

26,625

Providence Trail

47,950

47,950

3.54
%
July 2021

July 1, 2026
Roswell City Walk

49,798

50,043

3.63
%
⁽¹⁾

December 1, 2026
The Brodie

33,380

33,551

3.71
%
⁽¹⁾

December 1, 2023
The Links at Plum Creek

39,409

39,578

4.31
%
⁽¹⁾

October 1, 2025
The Mills

25,141

25,275

4.21
%
⁽¹⁾

January 1, 2025
The Preserve at Henderson Beach

48,490

48,490

3.26
%
September 2028

September 1, 2029
The Reserve at Palmer Ranch

40,806

40,977

4.41
%
⁽¹⁾

May 1, 2025
The Sanctuary

33,707

33,707

3.31
%
Interest-only

August 1, 2029
Wesley Village

39,259

39,438

4.25
%
⁽¹⁾

April 1, 2024
Total Fixed Rate

$
1,083,572

$
1,117,999

Floating Rate ⁽⁸⁾:

ARIUM Glenridge

$
49,500

$
49,500

1.45
%
September 2021

September 1, 2025
Chevy Chase

24,400

24,400

2.44
%
September 2022

September 1, 2027
Cielo on Gilbert ⁽⁹⁾

58,000

58,000

2.65
%
January 2026

January 1, 2031
Falls at Forsyth ⁽⁶⁾

19,443

—

1.52
%
⁽¹⁾

July 1, 2025
Fannie Facility Advance

13,936

13,936

2.72
%
June 2022

June 1, 2027
Fannie Facility Second Advance ⁽⁹⁾

12,880

—

2.76
%
March 2023

March 1, 2028
Marquis at The Cascades I

—

31,668

Marquis at The Cascades II

—

22,101

Pine Lakes Preserve

42,728

42,728

3.10
%
July 2025

July 1, 2030
The District at Scottsdale ⁽¹⁰⁾

74,651

75,577

1.85
%
⁽¹⁾

June 11, 2021 ⁽¹¹⁾
Veranda at Centerfield

26,100

26,100

1.37
%
July 2021

July 26, 2023 ⁽¹²⁾
Villages of Cypress Creek

33,520

33,520

2.67
%
July 2022

July 1, 2027
Total Floating Rate

$
355,158

$
377,530

Total

$
1,438,730

$
1,495,529

Fair value adjustments

6,236

6,489

Deferred financing costs, net

(10,648)

(11,086)

Total continuing operations

$
1,434,318

$
1,490,932

Held for Sale

ARIUM Grandewood ^(6)(13)

$
—

$
19,585

ARIUM Grandewood ^(6)(13)

—

19,529

Plantation Park

26,625

—

4.64
%
July 2024

July 1, 2028
Deferred financing costs, net

(192)

(341)

Total held for sale

26,433

38,773

Total mortgages payable

$
1,460,751

$
1,529,705

⁽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 The loan requires monthly payments of principal and interest.
20

Table of Contents

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

(3)

The principal balance includes a $27.5 million senior loan at a fixed rate of 4.09% and a $3.8 million supplemental loan at a fixed rate of 4.66%. The senior loan has monthly payments that are interest-only through July 2024, whereas the supplemental loan has monthly payments of principal and interest. Both loans have a maturity date of July 1, 2027.

(4)	The principal balance includes a $91.6 million senior loan at a fixed rate of 3.32% and a $9.6 million supplemental loan at a fixed rate of 4.22%.

(5)

The principal balance includes a $21.2 million senior loan at a fixed rate of 4.09% and a $4.4 million supplemental loan at a fixed rate of 4.66%. The senior loan has monthly payments that are interest-only through July 2024, whereas the supplemental loan has monthly payments of principal and interest. Both loans have a maturity date of July 1, 2027.

(6)	Refer to the Master Credit Facility with Fannie Mae section of this Note for further information regarding the senior mortgage substitution of collateral.

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

(8)

Other than Cielo on Gilbert, the Fannie Facility Second Advance and The District at Scottsdale, all the Company’s floating rate loans bear interest at one-month LIBOR + margin. In March 2021, one-month LIBOR in effect was 0.12%. LIBOR rate is subject to a rate cap. Please refer to Note 10 for further information.

(9)

The Cielo on Gilbert loan and the Fannie Facility Second Advance bear interest at a floating rate of the 30-day average SOFR+ 2.61% and + 2.70%, respectively. In March 2021, the 30-day average SOFR in effect was 0.04%. SOFR rate is subject to a rate cap. Please refer to Note 10 for further information.

(10)	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.

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

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

(13)	At December 31, 2020, ARIUM Grandewood had a fixed rate loan with a principal balance of $19.6 million and a floating rate loan with a principal balance of $19.5 million.

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 Debt 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 within loss on extinguishment of debt and debt modification costs on the consolidated statements of operations. Loss on extinguishment of debt and debt modification costs were $3.0 million and zero for the three months ended March 31, 2021 and 2020, respectively.

Master Credit Facility with Fannie Mae

~~Preston View Mortgage Payable~~

On ~~February 17, 2017,~~April 30, 2018, the Company, through ~~an indirect subsidiary,~~certain subsidiaries of the Operating Partnership, entered into ~~an approximately $41.1 million loan~~a 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 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 March 31, 2021, the mortgage loans secured by ~~Preston View.~~ARIUM Metrowest, Falls at Forsyth and Outlook at 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 ~~March~~on June 1, ~~2024~~2027 and bears interest ~~on a floating basis based on~~at LIBOR plus ~~2.07%~~2.60%, subject to an interest rate cap,

Table of Contents

with ~~interest only~~interest-only payments ~~until March 2019,~~through June 2022 and then monthly payments based on ~~30-year~~thirty-year amortization. ~~After March 31, 2018, the loan may be prepaid with a 1% prepayment fee through December 31, 2023, and thereafter at par.~~
~~Wesley Village Mortgage Payable~~
~~On March 9, 2017, the Company, through an indirect subsidiary, entered into an approximately $40.5 million loan secured by Wesley Village.~~ The loan matures April 1, 2024 and bears interest at a fixed rate of 4.25%, with interest only payments until April 2019, and then fixed monthly payments based on 30-year amortization. After January 1, 2024, the loanFannie Facility Advance may be prepaid without prepayment ~~fee~~ or yield ~~maintenance.~~
~~Marquis at Crown Ridge Mortgage Payable~~
maintenance beginning March 1, 2027.
On ~~June 9, 2017,~~February 18, 2021, the Company, through ~~an indirect subsidiary, assumed~~certain subsidiaries of the Operating Partnership, entered into a ~~loan with a~~$12.9 million floating rate advance originated under the Fannie Facility (the “Fannie Facility Second Advance”). Upon the sale of ARIUM Grandewood (refer to Note 3 for further information), the Company had the option to forgo the repayment of the principal balance and any related prepayment penalties and costs by substituting the collateral securing the senior mortgage with collateral of ~~approximately $29.5 million secured by Marquis~~the same or higher value. As such, the Company elected to substitute the ARIUM Grandewood collateral on the Fannie Facility with its Falls at ~~Crown Ridge.~~Forsyth property. As the collateral value of Falls at Forsyth exceeded the collateral value of ARIUM Grandewood, the Company elected to receive this incremental difference in collateral value as an advance under the Fannie Facility. The ~~loan~~Fannie Facility Second Advance matures ~~June~~on March 1, ~~2024, unless the maturity date is extended in connection with an election to convert to a fixed interest rate loan. The loan~~2028 and bears interest at ~~a floating basis based on LIBOR~~the 30-day average SOFR plus ~~1.61%~~2.70%, subject to an interest rate cap, with ~~fixed~~interest-only payments through March 2023 and then monthly payments based on ~~30-year~~thirty-year amortization. ~~After February 29, 2024, the loan~~The Fannie Facility Second Advance may be prepaid without prepayment ~~fee~~ or yield ~~maintenance.~~maintenance beginning December 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,~~March 31, 2021, 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
2021 (April 1-December 31) ⁽¹⁾

$
81,986
2022

13,821
2023

126,023
2024

201,580
2025

369,102
Thereafter 793,689

672,843
$ 853,565

$
1,465,355
Add: Unamortized fair value debt adjustment 2,055

6,236
Subtract: Deferred financing costs, net (8,458 )

(10,840)
Total $ 847,162

$
1,460,751

(1) $74.7 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 $1,971.2 million ~~and $987.1 million at September 30, 2017 and December~~as of March 31, ~~2016, respectively.~~
2021.
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.

Table of Contents

Note 9 – 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~~March 31, 2021 and December 31, ~~2016, the Company believes~~2020, the carrying ~~value~~values of cash and cash equivalents, restricted cash, 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.

Fair Value of Debt

As of March 31, 2021 and December 31, 2020, 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~~$1,498.0 million and ~~$714.8~~$1,586.0 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~~$1,471.6 million and ~~$717.5~~$1,541.1 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.

Table of Contents

Note 10 – 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 March 31, 2021, 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 $280.5 million of the Company’s floating rate mortgage debt.
The table below presents the classification and fair value of the Company’s derivative financial instruments on the consolidated balance sheets as of March 31, 2021 and December 31, 2020, and the classification and effect of the Company’s derivative financial instruments on the consolidated statements of operations for the three months ended March 31, 2021 and 2020 (amounts in thousands):

Fair values of

The Effect of Derivative
Derivatives not designated as hedging

Balance Sheet

derivative

Location of Gain or (Loss)

Instruments on the Statement of
instruments under ASC 815‑20

Location

instruments

Recognized in Income

Operations

Three Months Ended

March 31,

December 31,

March 31,

2021

2020

2021

2020
Interest rate caps

Accounts receivable, prepaids and other assets

$
81

$
14

Interest Expense

$
35

$
29

Table of Contents

Note 1011 – 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.~~directors (the “Board”), in the form of fully-vested LTIP Units. The ~~Manager acts under the supervision and direction~~term of the ~~Board. Specifically,~~Administrative Services Agreement expires on October 31, 2021 unless the ~~Manager~~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 also entered into a ~~base management fee in an amount equal~~Leasehold Cost-Sharing Agreement (the “Leasehold Cost-Sharing Agreement”) with respect to the ~~sum of: (A) 0.25%~~lease for their New York headquarters (the “NY Lease”) to provide for the allocation and sharing between BRE and the Company of the ~~Company’s stockholders’ existing~~costs thereunder, including costs associated with tenant improvements. The NY Lease permits the Company and ~~contributed equity prior~~certain of its respective subsidiaries and/or affiliates 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%share occupancy of the ~~equity per annum~~New York headquarters with BRE. Under the NY Lease, the Company, through its Operating Partnership, issued a $750,000 letter of credit as a security deposit, and BRE is obligated under 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~~indemnify and hold the ~~base management fee can~~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~~made in cash or, ~~LTIP Units, at~~in the ~~election~~sole discretion of the ~~Board. The number~~Board, in the form of fully-vested LTIP ~~Units issued for~~Units.

Recorded as part of general and administrative expenses, operating expenses paid by BRE on behalf of 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~~Company of ~~$7.8~~$0.8 million and ~~$4.3 million were expensed during the nine months ended September 30, 2017 and 2016, respectively.~~

~~Base management fees of $2.6~~$0.7 million were expensed during the three months ended ~~June 30, 2017,~~March 31, 2021 and 2020, respectively. Operating expense reimbursements of $0.4 million for the fourth quarter 2020 were paid to BRE through the issuance of ~~221,481~~35,573 LTIP Units on ~~August 9, 2017. The base management fees~~February 16, 2021.

Pursuant to the terms of ~~$2.8~~the Administrative Services Agreement, the Company paid operating expenses on behalf of BRE of $0.8 million and $0.5 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~~March 31, 2021 and 2020, respectively. Operating expense reimbursements 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~~fourth 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”), 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 fee2020 were paid to the ~~Manager with respect to~~Company in cash during the first ~~three calendar quarters~~quarter 2021.

Table of ~~such previous 12-month period; provided, however, that no incentive fee is payable with respect~~Contents

Pursuant to any calendar quarter unless AFFO is greater than zero for the four most recently completed calendar quarters. One half of each quarterly installment of the incentive fee will be payable in LTIP Units, calculated pursuant to the formula above. The remainder of the incentive fee will be payable in cash or in LTIP Units, at the election of the Board, in each case calculated pursuant to the formula above. Incentive fees 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 299,045 LTIP Units on August 9, 2017. There was no incentive fee during the three months ended September 30, 2017.
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 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 on the Class A common stock closing price at the vesting date or the end 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 million and $0.2 million, and $1.4 million and $0.5 million were expensed during the three and nine months ended September 30, 2017 and 2016, respectively, and of which $0.3 million and $1.1 million for the three and nine months ended September 30, 2017 are recorded as part of general and administrative expenses. In addition, the Manager was reimbursed for offering costs in conjunction with the January 2017 Common Stock Offering of $0.03 million during the nine months ended September 30, 2017.
The initial term 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 with 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~~BRE as of March 31, 2021 and December 31, 2020 (amounts in thousands):

March 31,

December 31,


2021

2020
Amounts Payable to BRE under the Administrative Services Agreement, net




Operating and direct expense reimbursements

$
367

$
338
Offering expense reimbursements

112

89
Total expense reimbursement amounts payable to BRE, net

$
479

$
427

Amounts Payable to BRE under the Leasehold Cost-Sharing Agreement

Operating and direct expense reimbursements

$
186

$
191
Capital improvement cost reimbursements

—

—
Total expense and cost reimbursement amounts payable to BRE

$
186

$
191
Total

$
665

$
618

As of March 31, 2021 and December 31, 2020, the Company had $10.4 million and $0.3 million, respectively, in receivables due from related parties other than BRE. Of the $10.4 million balance at March 31, 2021, $0.3 million represents accrued preferred returns on ~~an arm’s-length basis.~~unconsolidated real estate investments. The remaining $10.1 million represents the Company’s preferred equity investment in Alexan Southside Place. On March 25, 2021, the property underlying the Company’s investment in Alexan Southside Place was sold, and the Company classified its investment as a related party receivable as certain proceeds from the sale were not distributed by March 31, 2021. The Company ~~incurred $0.5~~received $9.8 million in April 2021 with the remaining amount expected to be received before year end. Refer to Note 3 for ~~legal costs reimbursed to the Manager in conjunction with acquisition, disposition, financing and other transactions in the nine months ended September 30, 2017.~~
further information.
Selling Commissions and Dealer Manager Fees
In conjunction with ~~the~~its offering of the Series BT Preferred Stock (the “Series T Preferred Offering”), 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~~three months ended ~~September 30, 2017,~~March 31, 2021 and 2020, the Company has incurred ~~approximately $8.2~~$6.9 million and ~~$3.5~~$4.0 million, respectively, in selling commissions and discounts and $2.9 million and $1.7 million, respectively, in dealer manager fees ~~respectively.~~and discounts related to its Series T Preferred Offering. In addition, ~~the Manager~~BRE was reimbursed for offering costs in conjunction with the Series BT Preferred Offering of ~~$0.6~~$0.3 million and $0.2 million during the ~~nine~~three months ended ~~September 30, 2017, which~~March 31, 2021 and 2020, respectively. The selling commissions, dealer manager fees, discounts and reimbursements for offering costs were recorded as a reduction to the proceeds of the offering.
Notes and interest receivable
24
~~All~~The Company provides mezzanine loans, in some cases, to related parties in conjunction with the developments of multifamily communities. At March 31, 2021, the following mezzanine loan investments were provided to related parties: Domain at The One Forty, Motif, The Hartley at Blue Hill (formerly The Park at Chapel Hill) and Vickers Historic Roswell. Please refer to Note 5 and 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~~Form 10-K for 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~~year ended 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~~2020 for ~~accrued preferred returns on unconsolidated real estate investments for the most recent month.~~
further information.
~~Notes and Interest Receivable due from Related Party;~~ 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~~interests. At March 31, 2021, the Alexan CityCentre preferred equity investment involved related parties. Please refer to ~~Notes~~Note 6 and 7the Company’s Form 10-K for the year ended December 31, 2020 for further information.

Table of Contents

Note 1112 – Stockholders’ Equity and Redeemable Preferred Stock
Net Income (Loss) Per Common Share
Basic net income (loss) per common share is computed by dividing net 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 income (loss) per common share is computed by dividing net 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 income (loss) attributable to common stockholders is computed by adjusting net 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~~income (loss) 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
Net (loss) income attributable to common stockholders $ (12,017 ) $ (2,551 ) 563 $ (11,727 )
Dividends on restricted stock expected to vest — — — (4 )
Basic net (loss) income attributable to common stockholders $ (12,017 ) $ (2,551 ) $ 563 $ (11,731 )

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

Potential dilutive shares⁽²⁾ — — 523 —
Weighted average common shares outstanding and potential dilutive shares⁽¹⁾ 26,474,093 20,908,543 25,852,059 20,706,338

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 )

Three Months Ended

March 31,

2021

2020

Net income (loss) attributable to common stockholders

$
23,581

$
(16,493)

Dividends on restricted stock and LTIP Units expected to vest

(382)

(325)

Basic net income (loss) attributable to common stockholders

$
23,199

$
(16,818)

Weighted average common shares outstanding ⁽¹⁾

23,089,364

24,087,811

Potential dilutive shares ⁽²⁾

198,725

—

Weighted average common shares outstanding and potential dilutive shares ⁽¹⁾

23,288,089

24,087,811

Net income (loss) per common share, basic

$
1.00

$
(0.70)

Net income (loss) per common share, diluted

$
1.00

$
(0.70)

(1) Amounts relate to shares of the Company’s Class A and Class C common stock outstanding.
(2) For the three months ended March 31, 2021, 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 97,416 shares of Class A common stock, and b) potential vesting of restricted stock to employees for 101,309 shares of Class A common stock.
For the three months ended March 31, 2020, 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 11,058 shares of Class A common stock, and b) potential vesting of restricted stock to employees for 45,572 shares of Class A common stock.

Table of Contents

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⁾

~~For 2017, amounts relate to shares of the Company’s Class A 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⁾

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 the three and nine months ended September 30, 2016, respectively, related to non-vested restricted stock, as the effect would be anti-dilutive.

~~Follow-On Equity Offerings~~Series T Redeemable Preferred Stock Offering

~~On January 17, 2017,~~During the three months ended March 31, 2021, the Company ~~completed an underwritten offering (the “January 2017 Class A Common Stock Offering”) of 4,000,000~~issued 3,918,433 shares of Series T Preferred Stock under its ~~Class A common stock, par value $0.01 per share. The offer~~continuous registered Series T Preferred Offering with net proceeds of approximately $88.2 million after commissions, dealer manager fees and ~~sale~~discounts of approximately $9.8 million, along with 11,621 shares issued under the dividend reinvestment plan with total proceeds of $0.3 million. During the life of the Series T Preferred Offering, the Company has issued a total of 13,654,383 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~~Series T Preferred Stock for net proceeds of ~~the January 2017 Class A Common Stock Offering were~~ approximately ~~$49.8~~$307.2 million after ~~deducting underwriting discounts~~commissions, dealer manager fees and ~~commissions and estimated offering costs. On January 24, 2017,~~discounts. During the three months ended March 31, 2021, the Company, ~~closed on~~at the ~~sale~~request of ~~600,000~~holders, redeemed 25,629 shares of Series T Preferred Stock through the issuance of 56,157 shares of Class A common stock ~~for proceeds~~and redeemed 51 shares of ~~approximately $7.5 million pursuant to the underwriters’ full exercise of the overallotment option.~~

Series T Preferred Stock in cash.

Series B Redeemable Preferred Stock ~~Offering~~

~~The~~During the three months ended March 31, 2021, the Company, ~~issued 116,486~~at the request of holders, redeemed 1,379 shares of Series B Preferred Stock ~~under a continuous registered offering with net proceeds~~through the issuance of ~~approximately $104.8 million after commissions~~116,475 shares of Class A common stock and ~~fees during the nine months ended September 30, 2017. As of September 30, 2017, the Company has sold 137,968~~redeemed 20 shares of Series B Preferred Stock in cash. In November 2019, the Company began initiating redemptions of Series B Preferred Stock, and ~~137,968 Warrants to purchase 2,759,360~~during the three months ended March 31, 2021, redemptions initiated by the Company resulted in 71,156 shares of Series B Preferred Stock redeemed through the issuance of 6,401,792 shares of Class A common stock.

As of March 31, 2021, the Company had 496,313 outstanding Warrants from its offering of Series B Preferred Stock. 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 ~~net proceeds~~the 20 trading days prior to the date of ~~approximately $124.2 million after commissions~~issuance of such Warrant, subject to the minimum exercise price of $10.00 per share (subject to adjustment). One Warrant is exercisable by holder to purchase 20 shares of Class A common stock. The Warrants are exercisable one year following the date of issuance and ~~fees.~~

expire four years following the date of issuance. As of March 31, 2021, a total of 7,348 Warrants had been exercised into 70,892 shares of Class A common stock. The outstanding Warrants have exercise prices ranging from $10.00 to $15.89 per share.

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 Company ~~has~~did not ~~commenced~~issue any ~~sales~~shares through the Class A Common Stock ATM ~~Offering.~~

~~On September 14, 2016,~~Offering during the first quarter 2021. 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~~net proceeds of $7.3 million.

Table of Contents

Stock Repurchase Plans

In October 2020, the Board authorized new stock repurchase plans for the repurchase, from time to ~~the Series C Sales Agreement, FBR will act as distribution agent with respect to the offering and sale~~time, of up to ~~$36,000,000~~an aggregate of $75 million in shares of the Company’s 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”) to be conducted in accordance with Rules 10b5-1 and 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). On February 9, 2021, the Board authorized the modification of the stock repurchase plans to increase the maximum repurchase amount from an aggregate of $75 million in shares to an aggregate of $150 million in shares of Class A common stock, Series C Preferred Stock, ~~in “at~~and/or Series D Preferred Stock. The repurchase plans will terminate at the ~~market offerings” as defined in Rule 415 under the Securities Act, including without limitation sales made directly on or through~~close of the NYSE ~~MKT, or~~American trading day on ~~any other existing trading market~~which the Company files its Form 10-Q with the SEC for the quarter ended September 30, 2021. The extent to which the Company repurchases shares of its Class A common stock, Series C Preferred Stock, and/or Series D Preferred Stock under the repurchase plans, and the timing of any such repurchases, depends 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 aprivately negotiated transactions, subject to certain price limitations and other conditions established under the plans. Open market ~~maker (the “Series C ATM Offering”). Since September 14, 2016,~~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 March 31, 2021, the Company ~~has sold 23,750~~repurchased 3,557,562 shares of Class A common stock for a total purchase price of approximately $40.7 million. Under the current repurchase plans, the total purchase price of shares repurchased by the Company is approximately $59.7 million, and as of March 31, 2021, the value of shares that may yet be repurchased under the repurchase plans is $90.3 million.

Redemption of 8.250% Series CA Cumulative Redeemable Preferred Stock ~~for net proceeds of approximately $0.6 million after commissions in the Series C ATM Offering.~~

On ~~September 27, 2016,~~February 26, 2021, the Company ~~delivered notice~~redeemed all 2,201,547 outstanding shares of its Series A Preferred Stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, ~~FBR, pursuant~~and including, the date of redemption in an amount equal to ~~the terms~~$0.320833 per share, for a total payment 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.~~

$25.320833 per share, in cash.

Operating Partnership and Long-Term Incentive Plan Units

As of ~~September 30, 2017,~~March 31, 2021, limited partners other than the Company owned approximately ~~10.29%~~31.01% of the common units of the Operating Partnership ~~(273,688~~(6,310,126 OP Units, or ~~1.01%~~17.28%, is held by OP Unit holders, and ~~2,502,389~~5,013,420 LTIP Units, or ~~9.28%~~13.73%, is held by LTIP Unit ~~holders.)~~holders, including 6.09% which are not vested at March 31, 2021). 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 of $0.1 million and $0.5 million, and $1.2 million and $2.0 million, for~~Unit Grants
On January 1, 2021, the ~~three and nine months ended September 30, 2017 and 2016, respectively, was recorded as part of general and administrative expenses, related to the 2015~~Company granted 277,001 time-based LTIP Units and 554,003 performance-based LTIP Units to various executive officers under the ~~2016~~Fourth Amended 2014 Incentive Plans pursuant to the executive officers’ employment and service agreements. The time-based LTIP ~~Units. The~~Units vest over three years, while the performance-based LTIP Units are subject to a three-year performance period and will thereafter vest upon successful achievement of performance-based conditions. All such LTIP Unit grants require continuous employment for vesting.
In addition, on January 1, 2021, the Company granted 7,381 LTIP Units pursuant to the Fourth Amended 2014 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 ~~recognized during 2017 and 2016 was~~of $0.4 million immediately based on the fair value at the date of grant.

Table of Contents

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 $0.9 million during the three months ended March 31, 2021 and 2020, 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 $0.9 million during the three months ended March 31, 2021 and 2020, respectively.
As of March 31, 2021, there was $11.7 million of total unrecognized compensation cost related to unvested LTIP Units granted under the Incentive Plans. The remaining cost is expected to be recognized over a period of 2.2 years.
Restricted Stock Grants
In April 2019 and 2020, the 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. The RSGs provided in 2019 and 2020 were comprised of an aggregate of 179,748 shares of Class A common stock ~~closing price at~~with a total fair value of $1.4 million. The Company recognized compensation expense of approximately $0.1 million and $0.1 million during the ~~vesting date or~~three months ended March 31, 2021 and 2020, respectively. The remaining compensation expense of $0.2 million is expected to be recognized over the ~~end of the period, as applicable.~~
27
remaining 1.6 years.
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

Date
Declaration Date

of record as of

Amount

Paid or Payable
Class A Common Stock






December 11, 2020

December 24, 2020

$
0.162500

January 5, 2021
March 12, 2021

March 25, 2021

$
0.162500

April 5, 2021
Class C Common Stock






December 11, 2020

December 24, 2020

$
0.162500

January 5, 2021
March 12, 2021

March 25, 2021

$
0.162500

April 5, 2021
Series A Preferred Stock






December 11, 2020

December 24, 2020

$
0.515625

January 5, 2021
January 27, 2021⁽¹⁾

February 26, 2021

$
0.320833

February 26, 2021
Series B Preferred Stock






October 9, 2020

December 24, 2020

$
5.00

January 5, 2021
January 13, 2021

January 25, 2021

$
5.00

February 5, 2021
January 13, 2021

February 25, 2021

$
5.00

March 5, 2021
January 13, 2021

March 25, 2021

$
5.00

April 5, 2021
Series C Preferred Stock






December 11, 2020

December 24, 2020

$
0.4765625

January 5, 2021
March 12, 2021

March 25, 2021

$
0.4765625

April 5, 2021
Series D Preferred Stock






December 11, 2020

December 24, 2020

$
0.4453125

January 5, 2021
March 12, 2021

March 25, 2021

$
0.4453125

April 5, 2021
Series T Preferred Stock ⁽²⁾






October 9, 2020

December 24, 2020

$
0.128125

January 5, 2021
January 13, 2021

January 25, 2021

$
0.128125

February 5, 2021
January 13, 2021

February 25, 2021

$
0.128125

March 5, 2021
January 13, 2021

March 25, 2021

$
0.128125

April 5, 2021

(1) The dividend was paid on the date indicated to stockholders in conjunction with the redemption of shares of Series A Preferred Stock.
(2) 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.
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 shares of Class A common ~~shares~~stock based on the average price of the ~~shares~~Class A

Table of Contents

common stock on the investment date. The Company plans to issue shares of Class A common ~~shares~~stock to cover shares required for investment.
~~Announcement~~The Company also has a dividend reinvestment plan that allows for participating stockholders to have their Series T Preferred Stock dividend distributions automatically reinvested in additional shares of ~~Review~~Series T Preferred Stock at a price of ~~Class A Common~~$25.00 per share. The Company plans to issue shares of Series T Preferred 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~~to cover shares required 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
investment.
Distributions declared and paid for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 were as follows (amounts in thousands):

Distributions
2017 Declared Paid

Distributions
2021

Declared

Paid
First Quarter




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

$
3,943

$
3,630
Class C Common Stock

12

12
Series A Preferred Stock 2,950 2,950

706

1,842
Series B Preferred Stock 525 395

7,089

7,400
Series C Preferred Stock 1,107 1,107

1,094

1,094
Series D Preferred Stock 1,269 1,100

1,235

1,235
Series T Preferred Stock

4,493

4,049
OP Units 82 84

1,027

1,027
LTIP Units 496 480

814

510
Total first quarter 2017 $ 13,443 $ 12,682
Second Quarter
Class A Common Stock $ 7,016 $ 7,015
Series A Preferred Stock 2,950 2,950
Series B Preferred Stock 1,054 837
Series C Preferred Stock 1,108 1,107
Series D Preferred Stock 1,270 1,270
OP Units 80 80
LTIP Units 551 533
Total second quarter 2017 $ 14,029 $ 13,792
Third Quarter
Class A Common Stock 7,017 7,016
Series A Preferred Stock 2,950 2,950
Series B Preferred Stock 1,711 1,508
Series C Preferred Stock 1,107 1,107
Series D Preferred Stock 1,270 1,269
OP Units 79 80
LTIP Units 676 625
Total third quarter 2017 $ 14,810 $ 14,555
Total $ 42,282 $ 41,029
Total first quarter 2021

$
20,413

$
20,799

Note 1213 – 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 March 31, 2021, the project is under development and $20.4 million of the leasehold improvement allowance has been funded, and this amount is included within accounts receivable, prepaids and other assets in the Company's consolidated balance sheets.
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 1314 – 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






April 12, 2021

April 23, 2021

$
5.00

May 5, 2021
April 12, 2021

May 25, 2021

$
5.00

June 4, 2021
April 12, 2021

June 25, 2021

$
5.00

July 2, 2021
Series T Preferred Stock ⁽¹⁾






April 12, 2021

April 23, 2021

$
0.128125

May 5, 2021
April 12, 2021

May 25, 2021

$
0.128125

June 4, 2021
April 12, 2021

June 25, 2021

$
0.128125

July 2, 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.
31

Table of Contents

Distributions Paid
The following distributions were declared and/or paid to the ~~Company's~~Company’s stockholders, as well as holders of OP Units and LTIP Units, subsequent to ~~September 30, 2017~~March 31, 2021 (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

March 12, 2021

March 25, 2021

April 5, 2021

$
0.1625000

$
3,943
Series A Preferred Stock September 8, 2017 September 25, 2017 October 5, 2017 $ 0.515625 $ 2,950
Class C Common Stock

March 12, 2021

March 25, 2021

April 5, 2021

0.1625000

12
Series B Preferred Stock July 10, 2017 September 25, 2017 October 5, 2017 $ 5.000000 $ 646

January 13, 2021

March 25, 2021

April 5, 2021

5.0000000

2,257
Series C Preferred Stock September 8, 2017 September 25, 2017 October 5, 2017 $ 0.4765625 $ 1,107

March 12, 2021

March 25, 2021

April 5, 2021

0.4765625

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

March 12, 2021

March 25, 2021

April 5, 2021

0.4453125

1,235
Series T Preferred Stock

January 13, 2021

March 25, 2021

April 5, 2021

0.1281250

1,676
OP Units August 9, 2017 September 25, 2017 October 5, 2017 $ 0.096667 $ 26

March 12, 2021

March 25, 2021

April 5, 2021

0.1625000

1,027
LTIP Units August 9, 2017 September 25, 2017 October 5, 2017 $ 0.096667 $ 242

March 12, 2021

March 25, 2021

April 5, 2021

0.1625000

616

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

April 12, 2021

April 23, 2021

May 5, 2021

5.0000000

2,062
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

April 12, 2021

April 23, 2021

May 5, 2021

0.1281250

1,861
Total $ 11,906







$
15,783

~~Management Internalization~~Peak Housing Interests
On ~~October 26, 2017, at~~April 12, 2021, the annual meeting of stockholders, the Company’s stockholders approved the issuance, pursuant to the Contribution Agreement, of (i) OP Units, and shares of the Company’s Class A Common Stock that may be issuedCompany made a $10.7 million preferred equity investment in the ~~Company’s discretion upon redemption~~operating partnership of ~~such OP Units in certain circumstances, and (ii) shares~~Peak Housing, a private REIT. Peak Housing's portfolio consists 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 in accordance with their original terms.~~
~~Second Amended 2014 Incentive Plans~~
On October 26, 2017, at the annual meeting of stockholders, the Company’s stockholders approved the Second Amended 2014 Incentive Plans which provides for an aggregate of 1,550,000 shares of Class A Common Stock available for grant, an increase of 1,075,000 shares.
~~Conversion 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”) 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 will be based on 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, subject to certain conditions and the payment 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. The474 single-family homes located throughout Texas.The Company will ~~pay an unused fee at an annual rate~~earn a 7.0% current return and a 3.0% accrued return for a total preferred return of 0.20% to 0.25% of the unused portion 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.
10.0%.
Acquisition of ~~Outlook at Greystone~~Yauger Park
On ~~October 19, 2017,~~April 14, 2021, the Company ~~through subsidiaries of its Operating Partnership,~~ acquired a ~~100.0%~~95% interest in ~~a 300-unit~~an 80-unit apartment community located in ~~Birmingham, Alabama,~~Olympia, Washington known as ~~Outlook at Greystone (“Outlook at Greystone”)~~Yauger Park for ~~approximately $36.3~~$24.5 million. The purchase price ~~for Outlook at Greystone~~ of ~~approximately $36.3~~$24.5 million was funded, in part, with the ~~Company’s Secured Credit Facility, secured by~~assumption of 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~~$10.5 million senior ~~mortgage~~ loan and the assumption of a $4.6 million supplemental loan, both secured by the ~~ARIUM Hunter’s Creek~~Yauger Park property.
Sale of Plantation Park
On April 26, 2021, the Company closed on the sale of Plantation Park located in Lake Jackson, Texas. The property was sold for $32.0 million, subject to certain prorations and ~~improvements (the “ARIUM Hunter’s Creek Loan”).~~adjustments typical in such real estate transactions. After deduction for the transfer of existing mortgage indebtedness encumbering the property in the amount of $26.6 million and payment of closing costs and fees of $0.4 million, an immaterial loss on the sale was incurred. The ~~ARIUM Hunter’s Creek Loan matures November 1, 2024 and bears interest at a fixed rate~~sale 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~~property generated net proceeds of approximately ~~$86.0~~$4.9 million, ~~was funded, in part, through borrowings under~~of which the Company’s ~~Senior Credit Facility.~~pro rata share of the proceeds was approximately $2.7 million.

31

32

Table of Contents

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 or newly constructed apartment properties;

Table of Contents

·●

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”) on February ~~22, 2017,~~23, 2021, and subsequent filings by us with the SEC, or (“Risk Factors”).

Table of Contents

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,~~March 31, 2021, our portfolio consisted of ~~interests~~investments held in ~~thirty-five~~fifty-five real estate properties, ~~(twenty-five~~consisting of thirty-four consolidated operating properties and ~~ten~~twenty-one 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).~~one is in lease-up and fifteen properties are stabilized. The ~~thirty-five~~fifty-five properties contain an aggregate of ~~10,761~~16,457 units, comprised of ~~8,166~~11,584 consolidated operating units and ~~2,595~~4,873 units ~~under development.~~through preferred equity, mezzanine loan or ground lease investments. As of ~~September 30, 2017, these properties, exclusive of~~March 31, 2021, our ~~development~~consolidated operating properties were approximately ~~94%~~95.8% 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 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.

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, 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 weWe 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~~closely monitoring the impact of the ~~Internalization Consideration which was issued~~COVID-19 pandemic on ~~October~~all aspects of our business and apartment communities, including how it will impact our tenants and business partners. While we did not incur any significant impact on our performance during the three months ended March 31, ~~2017~~
⁽³⁾~~Does not include any share activity not noted above~~2021 from the COVID-19 pandemic, going forward we cannot predict the impact that the COVID-19 pandemic will have on our financial condition, results of operations and ~~LTIP Units does not~~cash flows due to the numerous uncertainties. These uncertainties include the ~~issuance~~scope, severity and duration of ~~LTIPs for~~ the ~~base management fee~~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 and 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, including mutating variants 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 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.

Table of Contents

As of March 31, 2021, we collected 97% of rents from our multifamily properties for the three months ended ~~September~~March 31, 2021. As of April 30, ~~2017~~2021, we collected 98% of April rents from our multifamily properties. In prior quarters, we had provided rent deferral payment plans as a result of hardships certain tenants experienced due to the impact of COVID-19; for the quarter ended March 31, 2021, the Company did not provide any rent deferral payment plans, compared to the onset of the COVID-19 pandemic (quarter ended June 30, 2020) in which 1% of our tenant base was ~~estimated~~on payment plans. Although we may 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 ~~253,300~~95.8% and 96.3% as of March 31, 2021 and April 30, 2021, in future periods, we may experience reduced levels of tenant retention, and reduced foot traffic and lease applications from prospective tenants, as a result of the impact of COVID-19.

The impact of the COVID-19 pandemic on our rental revenue for the second quarter of 2021 and thereafter cannot be determined at ~~September 30, 2017 based~~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 March 31, 2021, 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 structure. 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 cybersecurity risks, or impair our ability to manage our business.

~~Recent~~Other Significant Developments

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, we ~~acquired eight stabilized properties, disposed~~made a preferred equity investment in a joint venture of ~~four~~approximately $7.0 million, with 262 units located in Richardson, Texas. We also increased our preferred equity investment in Alexan CityCentre and The Conley by approximately $0.9 million.

We provided increased mezzanine funding to Avondale Hills, Domain at The One Forty, Motif, Reunion Apartments and Vickers Historic Roswell of approximately $11.5 million.

We provided increased funding to the Zoey Ground Lease of approximately $8.3 million.

We sold three operating properties and, ~~converted~~together with unaffiliated joint venture partners, sold two assets underlying our preferred equity investments ~~into mezzanine financing arrangements as discussed below.~~for net proceeds of $102.5 million, of which $10.1 million is to be received subsequent to March 31, 2021 related to the sale of Alexan Southside Place (refer to the below disclosure for further information).

Table of Contents

~~Acquisition~~Sale of ~~Bell Preston View~~ARIUM Grandewood

On January 28, 2021, we closed on the sale of ARIUM Grandewood located in Orlando, Florida. The property was sold for approximately $65.3 million, subject to certain prorations and adjustments typical in such real estate transactions. ARIUM Grandewood was encumbered by a $39.1 million senior mortgage through the Master Credit Facility Agreement (refer to Note 8 in our consolidated financial statements for further information). Under the agreement, we had the option to forgo the repayment of the principal balance and any related prepayment penalties and costs by substituting the collateral securing the senior mortgage with collateral of the same or higher value. We elected to substitute the ARIUM Grandewood collateral with our Falls at Forsyth property and the transaction was completed on February 18, 2021. After consideration of the $39.1 million senior mortgage and payment of closing costs and fees of $1.1 million, the sale of ARIUM Grandewood generated net proceeds of approximately $25.1 million and a gain on sale of approximately $27.7 million. We recorded debt modification costs of $0.1 million related to the collateral substitution transaction.

Sale of James at South First

On February ~~17, 2017,~~24, 2021, we ~~through subsidiaries~~closed on the sale of ~~our Operating Partnership, acquired a 91.8% interest in a 382-unit apartment community~~James at South First located in ~~Morrisville, North Carolina, known as Bell Preston View Apartments (“Preston View”)~~Austin, Texas. The property was sold for ~~approximately $59.5 million. The purchase price~~$50.0 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of ~~$59.5~~existing mortgage indebtedness encumbering the property in the amount of $25.6 million, ~~was funded, in part, with a $41.1~~the payment of early extinguishment of debt costs of $2.5 million ~~senior mortgage loan secured by Preston View.~~

~~Acquisition~~and payment of ~~Wesley Village~~

~~On March 9, 2017, we, through subsidiaries~~closing costs and fees 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$0.5 million, the sale of the property generated net proceeds of approximately ~~$57.2~~$21.1 million ~~was funded, in part, with~~and a ~~$40.5 million senior mortgage loan secured by Wesley Village.~~

~~Acquisition of Texas Portfolio~~

On June 9, 2017, 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 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 totalgain on sale of approximately ~~$146.4~~$17.4 million, ~~secured individually by each~~of which our pro rata share of the ~~portfolio properties. The properties are Marquis at Crown Ridge, Marquis at Stone Oak~~proceeds was approximately $18.1 million and ~~Marquis at TPC located in San Antonio, Texas, and~~pro rata share of the gain was approximately $14.5 million. We recorded a loss on extinguishment of debt of $2.6 million related to the sale.

Sale of 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.

~~Sale of Village Green Ann Arbor~~

On ~~February 22, 2017,~~March 1, 2021, we closed on the sale of the ~~Village Green Ann Arbor property (“Village Green Ann Arbor”),~~Marquis at The Cascades properties, located in ~~Ann Arbor, Michigan.~~Tyler, Texas, pursuant to the terms and conditions of two separate purchase and sales agreements. The ~~property was~~properties were sold for approximately ~~$71.4~~$90.9 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~~$53.6 million and payment of closing costs and fees of ~~$1.3~~$0.3 million, the sale of the ~~property~~properties generated net proceeds of approximately ~~$28.6~~$37.3 million and a gain on sale of approximately ~~$16.7~~$23.7 million, of which our pro rata share of the proceeds was approximately ~~$13.6~~$32.6 million and pro rata share of the gain was approximately ~~$7.8~~$20.1 million. We recorded a loss on extinguishment of debt of $0.3 million related to the sale.

The Riley Interests

On March 1, 2021, we made a $7.0 million preferred equity investment in a joint venture (the "Riley JV") with an unaffiliated third party for a stabilized property in Richardson, Texas known as The Riley. We earn a 6.0% current return and a 5.0% accrued return for a total preferred return of 11.0%. The Riley JV is required to redeem our preferred membership interest plus any accrued but unpaid preferred return on the earlier date which is: (i)(a) the refinancing or (b) maturity of the property loan, detailed below, (ii) the sale of the property, or (iii) any other acceleration event.

In conjunction with The Riley investment, The Riley property owner, which is owned by an entity in which we have an equity interest, entered into a $44.1 million senior mortgage loan. The loan matures on March 9, 2024, contains two (2) one-year extension options, subject to certain conditions, and is secured by the fee simple interest in The Riley property. The loan bears interest at a floating basis of the greater of LIBOR or 0.15%, plus 3.35%, with interest-only payments during the initial term of the loan. The loan can only be prepaid in full and is subject to yield maintenance through June 9, 2022.

Sale of ~~Lansbrook Village~~The Conley Interests

On March 18, 2021, The Conley, the underlying asset of an unconsolidated joint venture located in Leander, Texas, was sold. Upon the sale, our preferred equity investment was redeemed by the joint venture for $16.5 million, which included our original preferred investment of $15.2 million and accrued preferred return of $1.3 million.

Table of Contents

Sale of Alexan Southside Place Interests

On March 25, 2021, Alexan Southside Place, the underlying asset of an unconsolidated joint venture located in Houston, Texas, was sold. Our preferred equity investment of $10.1 million, which is net of the $15.9 million provision for credit loss recorded in the fourth quarter 2020, was classified as a related party receivable at March 31, 2021 as certain proceeds from the sale were not distributed by quarter end. The receivable is included in due from affiliates in our consolidated balance sheet. Of the $10.1 million investment, we received $9.8 million in April 2021 with the remaining $0.3 million expected to be received before year end. The remaining amount represents a holdback for a six-month representations and warranty period related to the sale.

Held for Sale

We entered into a purchase and sale agreement for the sale of Plantation Park, located in Lake Jackson, Texas, and we have classified the property as held for sale as of March 31, 2021. On April 26, ~~2017,~~2021, we closed on the sale of ~~Lansbrook Village, located in Palm Harbor, Florida. The 90% owned property was sold~~Plantation Park 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 our 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, we closed on the sale of the Fox Hill property, located in Austin, Texas. The property was sold for approximately $46.5~~$32.0 million, subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the ~~payoff~~transfer 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~~$26.6 million and payment of closing costs and fees of ~~$0.5~~$0.4 million,an immaterial loss on the sale was incurred. The sale of the property generated net proceeds of approximately ~~$19.2 million and a gain on sale of approximately $10.7~~$4.9 million, of which our pro rata share of the proceeds was approximately ~~$16.4 million and pro rata share of the gain was approximately $10.3~~$2.7 million.

Series T Preferred Stock Continuous Offering

~~Sale of MDA Apartments~~

On June 30, 2017, we closed on the sale of our interest in MDA Apartments, located in Chicago, Illinois. Our 35% interest in the property was sold for approximately $18.3 million, subject to certain prorations and adjustments typical 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 $10.2 million, of which our pro rata share 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~~three months ended ~~September 30, 2017, Bluerock Special Opportunity + Income Fund II, (“Fund II”) redeemed our preferred equity interests in APOK and Domain,~~March 31, 2021, we obtained 0.5% common interests in APOK and Domain, and we provided mezzanine loans to APOK of approximately $11.2 million and to Domain of approximately $20.3 million. In addition, we increased the mezzanine loan to West Morehead by $3.3 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 September 30, 2017 we continued to raise capital to finance our investment activities.~~

~~January 2017 Offering of Class A Common Stock~~

On January 17, 2017, we completed an underwritten offering (the “January 2017 Common 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 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.

~~Series B Preferred Stock~~

We issued ~~116,486~~3,918,433 shares of Series BT Preferred Stock under a continuous registered offering with net proceeds of approximately ~~$104.8~~$88.2 million after commissions, dealer manager fees and ~~fees during~~discounts of approximately $9.8 million.

Redemption of 8.250% Series A Cumulative Redeemable Preferred Stock

On February 26, 2021, we redeemed all 2,201,547 outstanding shares of our Series A Preferred Stock at a redemption price of $25.00 per share, plus accrued and unpaid dividends up to, and including, the ~~nine~~date of redemption in an amount equal to $0.320833 per share, for a total payment of $25.320833 per share, in cash.

Redemptions of Series B Redeemable Preferred Stock

During the three months ended ~~September 30, 2017. As of September 30, 2017, the Company has sold 137,968~~March 31, 2021, we redeemed 72,535 shares of Series B Preferred Stock ~~and 137,968 Warrants~~through the issuance of 6,518,267 shares of Class A common stock.

Our total stockholders' equity increased $47.9 million from $58.4 million as of December 31, 2020 to ~~purchase 2,759,360~~$106.3 million as of March 31, 2021. The increase in our total stockholders' equity is primarily attributable to the issuance of shares of Class A common stock for ~~net proceeds~~the redemptions of ~~approximately $124.2~~shares of Series B Preferred Stock of $72.5 million ~~after commissions~~(of which, $71.2 million relates to Company-initiated redemptions) and ~~fees.~~

Our total stockholders’ equity increased $49.6 million from $241.7 million as of December 31, 2016 to $291.3 million as of September 30, 2017. The increase in our total stockholders’ equity is primarily attributable to our January 2017 Common Stock Offering of $57.3 million, our net income of ~~$21.7 million, and equity compensation of $12.2~~$45.2 million, offset by dividends declared of ~~$42.0~~$18.6 million, the repurchase of shares of Class A common stock of $40.7 million and preferred stock accretion of $7.0 million during the ~~nine~~three months ended ~~September 30, 2017.~~March 31, 2021.

~~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:~~March 31, 2021:

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
%
$
1,293

94.6
%

ARIUM Hunter's Creek

Orlando, FL

532

1999

100
%

1,417

96.4
%

ARIUM Metrowest

Orlando, FL

510

2001

100
%

1,412

96.7
%

ARIUM Westside

Atlanta, GA

336

2008

90
%

1,503

93.5
%

Ashford Belmar

Lakewood, CO

512

1988/1993

85
%

1,674

92.8
%

Avenue 25

Phoenix, AZ

254

2013

100
%

1,252

96.9
%

Carrington at Perimeter Park

Morrisville, NC

266

2007

100
%

1,263

95.9
%

Chattahoochee Ridge

Atlanta, GA

358

1996

90
%

1,387

97.5
%

Chevy Chase

Austin, TX

320

1971

92
%

964

98.1
%

Cielo on Gilbert

Mesa, AZ

432

1985

90
%

1,087

97.2
%

Citrus Tower

Orlando, FL

336

2006

97
%

1,364

95.5
%

Denim

Scottsdale, AZ

645

1979

100
%

1,246

97.2
%

Elan

Austin, TX

270

2007

100
%

1,134

95.6
%

Element

Las Vegas, NV

200

1995

100
%

1,274

94.5
%

Falls at Forsyth

Cumming, GA

356

2019

100
%

1,408

98.6
%

Gulfshore Apartment Homes

Naples, FL

368

2016

100
%

1,287

95.4
%

Navigator Villas

Pasco, WA

176

2013

90
%

1,143

99.4
%

Outlook at Greystone

Birmingham, AL

300

2007

100
%

1,090

93.7
%

Park & Kingston

Charlotte, NC

168

2015

100
%

1,303

97.0
%

Pine Lakes Preserve

Port St. Lucie, FL

320

2003

100
%

1,380

97.8
%

Plantation Park

Lake Jackson, TX

238

2016

80
%

1,232

94.5
%

Providence Trail

Mount Juliet, TN

334

2007

100
%

1,264

95.5
%

Roswell City Walk

Roswell, GA

320

2015

98
%

1,586

95.9
%

Sands Parc

Daytona Beach, FL

264

2017

100
%

1,374

94.7
%

The Brodie

Austin, TX

324

2001

100
%

1,313

95.1
%

The District at Scottsdale

Scottsdale, AZ

332

2018

100
%

1,799

91.6
%

The Links at Plum Creek

Castle Rock, CO

264

2000

88
%

1,466

95.5
%

The Mills

Greenville, SC

304

2013

100
%

1,051

95.1
%

The Preserve at Henderson Beach

Destin, FL

340

2009

100
%

1,498

97.9
%

The Reserve at Palmer Ranch

Sarasota, FL

320

2016

100
%

1,376

96.6
%

The Sanctuary

Las Vegas, NV

320

1988

100
%

1,132

95.3
%

Veranda at Centerfield

Houston, TX

400

1999

93
%

1,021

95.5
%

Villages of Cypress Creek

Houston, TX

384

2001

80
%

1,181

95.1
%

Wesley Village

Charlotte, NC

301

2010

100
%

1,373

96.0
%

Total/Average

11,584

$
1,318
⁽⁴⁾
95.8
%

(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.
⁽³⁾
(2) Represents the average effective monthly rent per occupied unit for the three months ended March 31, 2021. Total concessions for the three months ended March 31, 2021 amounted to approximately $0.4 million.
(3) Percent occupied is calculated as (i) the number of units occupied as of March 31, 2021 divided by (ii) total number of units, expressed as a percentage.
(4) The average effective monthly rent including sold properties was $1,315 for the three months ended March 31, 2021.

Table of ~~units occupied as of September 30, 2017, divided by (ii) total number of units, expressed as a percentage.~~Contents

⁽⁴⁾ ~~Whetstone is currently a preferred equity investment providing a stated investment return.~~

The following is a summary of our ~~development properties~~preferred equity, mezzanine loan and ground lease investments as of ~~September 30, 2017:~~March 31, 2021:

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 ⁽²⁾
















Motif

Fort Lauderdale, FL

385

$
138.4

$
133.3

$
359,481

1Q 2020

2Q 2020

$
2,352
Total lease-up units



385













��

Development Investments ⁽²⁾
















Zoey

Austin, TX

307

59.5

37.1

193,811

1Q 2022

2Q 2022

1,762
Reunion Apartments

Orlando, FL

280

47.6

31.2

170,000

1Q 2022

3Q 2022

1,366
Avondale Hills

Decatur, GA

240

51.8

16.1

215,833

1Q 2023

1Q 2023

1,538
The Hartley at Blue Hill, formerly The Park at Chapel Hill

Chapel Hill, NC

414

99.2

42.1

239,614

4Q 2021

1Q 2023

1,599
Encore Chandler

Chandler, AZ

208

47.7

7.3

229,327

2Q 2023

3Q 2023

1,457
Total development units



1,449









Multifamily Community Name

Location

Number of Units











Average Rent ⁽¹⁾
Operating Investments ⁽²⁾
















Alexan CityCentre

Houston, TX

340











1,525
Belmont Crossing

Smyrna, GA

192











863
Domain at The One Forty

Garland, TX

299

1,290
Georgetown Crossing

Savannah, GA

168











993
Hunter's Pointe

Pensacola, FL

204











983
Mira Vista

Austin, TX

200











1,087
Park on the Square

Pensacola, FL

240











1,140
Sierra Terrace

Atlanta, GA

135

1,278
Sierra Village

Atlanta, GA

154











1,224
The Commons

Jacksonville, FL

328











902
The Riley

Richardson, TX

262











1,430
Thornton Flats

Austin, TX

104











1,499
Vickers Historic Roswell

Roswell, GA

79











3,134
Water's Edge

Pensacola, FL

184

1,141
Wayford at Concord

Concord, NC

150











1,707
Total operating units

3,039

Total



4,873











$
1,432

⁽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) Properties in which the Company has a mezzanine loan, preferred equity or ground lease investment. Operating investments represent stabilized operating properties. Refer to Note 5, Note 6 and Note 13 in our consolidated financial statements for further information.

40

Table of Contents

Three Months Ended ~~September 30, 2017~~March 31, 2021 Compared to Three Months Ended ~~September 30, 2016~~March 31, 2020

Revenue

~~Net rental income~~Rental and other property revenues increased ~~$6.3~~$0.7 million, or ~~34%~~1%, to ~~$24.9~~$51.1 million for the three months ended ~~September 30, 2017~~March 31, 2021 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~~$50.4 million for the same prior year period. This ~~increase~~ was ~~primarily~~ due to a $6.0 million increase from the ~~acquisition~~full period impact of ~~interests~~six properties acquired in ~~the~~2020, a $0.8 million increase from same store properties, ~~noted above of $1.5~~and a $0.4 million increase from non-same store properties, partially offset by a $6.5 million decrease driven by the sales ~~noted above~~ of ~~$0.7 million.~~

three properties in 2021 and the full period impact of four properties sold in 2020.

Interest income from ~~related parties~~mezzanine loan and ground lease investments ~~increased by $2.1 million due to interest earned on the mezzanine loans made during the last three quarters.~~

~~Expenses~~

~~Property operating expenses~~~~increased $4.1~~decreased $1.2 million, or ~~52%~~20%, to $12.0 million for the three months ended September 30, 2017 as compared to $7.9 million for the same prior year period. This increase was primarily due to the acquisition of interests in the properties noted above of $3.9 million, offset by sales the sales noted above of $2.0 million. Property NOI margins decreased to 57.2% of total revenues for the three months ended September 30, 2017 from 61.6% 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 $0.2 million, or 33%, to $0.8 million for the three months ended September 30, 2017 as compared to $0.6 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~~decreased to $1.1 million for the three months ended September 30, 2017 as compared to $1.2 million for the same prior year period. Excluding non-cash equity compensation expense of $0.1 million and $0.6 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 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 million for the same prior year period. Base management fees of $2.8 million and $1.7 million were incurred in the three months ended September 30, 2017 and 2016, respectively. Incentive management fees of $0.2 million 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 of the properties mentioned above of $7.4 million, offset by a decrease 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~~March 31, 2021 as compared to ~~income~~$5.9 million for the same prior year period due to the sales of ~~$0.4~~two underlying properties in 2020, partially offset by increases in the average balance of mezzanine loans outstanding.

Expenses

Property operating expenses increased $0.6 million, or 3%, to $19.9 million for the three months ended March 31, 2021 as compared to $19.3 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~~a $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 resulting~~ from the acquisition of ~~interests~~properties in ~~the~~2020, a $0.6 million increase from same store properties, ~~mentioned above.~~

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

~~Revenue~~

~~Net rental income~~~~increased $20.4~~and a $0.1 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~~increase from non-same store 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 millionpartially offset by ~~the sales noted above of $1.2 million.~~

~~Interest income~~a $2.5 million decrease 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.sold properties. Property NOI margins decreased to ~~58.1%~~61.0% of total revenues for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 from ~~60.6%~~61.7% 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 $0.6 million, or 35%, to $2.3~~remained relatively flat at $1.3 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 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.~~

Property management fees incurred are based on property level revenues.

General and administrative expenses~~were flat at $4.2~~ amounted to $6.6 million for the ~~nine~~three 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, 2017March 31, 2021 as compared to ~~$2.0~~$6.4 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~~ amounted to $0.01 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 as compared to ~~$2.1~~$1.3 million for the same prior year period. The ~~Company adopted ASU 2017-01 which resulted in~~2020 expense primarily related to the ~~capitalization~~write-off of pre-acquisition 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~~from abandoned deals due to the ~~Company’s decision~~uncertainty from COVID-19, of which $1.0 million of the total costs related to ~~abandon the proposed East San Marco Property development and write off the pre-acquisition costs that had been incurred.~~one abandoned deal. 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, net~~of $0.7~~ amounted to $0.4 million ~~were incurred in~~for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021. The 2021 expense related to ~~Hurricane Irma~~freeze damages at ~~six~~eight properties in ~~Florida and three properties~~Texas. No weather-related losses were recorded in ~~Georgia.~~

2020.

Depreciation and amortization expenseswere ~~$33.1~~$20.3 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 as compared to ~~$22.5~~$20.9 million for the same prior year period. ~~The~~This was due to a $2.2 million decrease from sold properties, a $0.8 million decrease from same store properties, and a $0.8 million decrease from non-same store properties, partially offset by a $3.2 million increase ~~is related to additional depreciation and amortization expense on~~from the acquisition of ~~the~~ properties ~~mentioned above of $18.0 million, offset by a decrease due to the sale of the five properties of $4.3 million.~~in 2020.

Other Income and Expense

Other income and ~~expenses~~expenseamounted to income of ~~$44.2~~$53.9 million for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 compared to expense of ~~$2.9~~$12.2 million for the same prior year period. This was primarily due to the gain on the sale of Village Green of Ann Arbor, Fox Hill and Lansbrook Village of $50.0 million, and the sale of the real estate joint venture interest of MDA Apartments of $10.2 million occurring in 2017, offset by the sale of the real estate joint venture interest of Springhouse of Newport News of $4.9 million in the prior year period, offset by an increase in gains on sale of real estate investments of $68.7 million and a net decrease in interest expense ~~net,~~ of ~~$8.2~~$1.1 million, ~~as the result~~partially offset by a loss on early extinguishment of ~~the increase in mortgages payable resulting from the acquisition~~debt of ~~interests in the properties mentioned above.~~$3.0 million.

Table of Contents

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.~~redevelopment , or properties held for sale. 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~~March 31, 2021 and 2016, the same store properties included properties owned at July 1, 2016. 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 and The Preserve at Henderson Beach. For comparison of our nine months ended September 30, 2017 and 2016,2020, the same store properties included properties owned at January 1, ~~2016.~~2020. Our same store properties for the ~~period were Enders Place at Baldwin Park, ARIUM Grandewood, Park & Kingston, Ashton Reserve, ARIUM Palms, Sovereign, ARIUM Gulfshore,~~three months ended March 31, 2021 and ~~ARIUM at Palmer Ranch.~~

~~Because~~2020 consisted of ~~the limited number of same store~~26 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.~~

representing 9,116 units.

The following table presents the same store and non-same store results from operations for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 (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

March 31,

Change


2021

2020

$

%

Property Revenues

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

$
38,798

$
38,028

$
770

2.0
%
Non-Same Store 53,169 30,544 22,625 74.1 %

12,283

12,325

(42)

-0.3
%
Total property revenues 80,993 57,389 23,604 41.1 %

51,081

50,353

728

1.4
%

Property Expenses

Same Store 10,952 10,664 288 2.7 %

14,837

14,209

628

4.4
%
Non-Same Store 22,983 11,928 11,055 92.7 %

5,095

5,090

5

0.1
%
Total property expenses 33,935 22,592 11,343 50.2 %

19,932

19,299

633

3.3
%

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

23,961

23,819

142

0.6
%
Non-Same Store NOI 30,186 18,616 11,570 62.2 %

7,188

7,235

(47)

-0.6
%
Total NOI⁽¹⁾ $ 47,058 $ 34,797 $ 12,261 35.2 %

$
31,149

$
31,054

$
95

0.3
%

⁽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~~March 31, 2021 Compared to Three Months Ended ~~September 30, 2016~~
March 31, 2020
Same store NOI for the three months ended ~~September 30, 2017 decreased~~March 31, 2021 increased 0.6%, or ~~$0.05~~$0.1 million, compared to the ~~2016~~2020 period. ~~There was a 0.9% increase in same~~Same store property revenues increased 2.0%, or $0.8 million, as compared to the ~~2016~~2020 period, primarily attributable to a ~~1.6%~~120-basis point increase in occupancy and a 1.0% increase in average rental ~~rates~~rates; of our twenty-six same store properties, twenty-one recognized increases in occupancy and eighteen recognized rental rate increases during the period. In addition, resident fees, such as early termination, pet, and administrative fees, increased $0.2 million. This increase in revenue was partially offset by a ~~66 basis point decrease~~$0.3 million increase in ~~average occupancy.~~ bad debt expense due to the impact of COVID-19.
Same store expenses for the three months ended ~~September 30, 2017~~March 31, 2021 increased ~~3.3%~~4.4%, or $0.6 million, compared to ~~$4.8 million from $4.6 million for~~ the ~~2016~~2020 period. The ~~same store results were disproportionately impacted by performance from two assets~~increase was primarily due to non-controllable expenses: real estate taxes increased $0.26 million due to municipality tax increases and insurance increased $0.16 million due to industrywide multifamily price increases. The remaining increase was due to a $0.13 million increase in ~~the Dallas Fort Worth MSA, particularly our Frisco asset which continues to remain challenged from new supply.~~
administrative expenses and $0.06 million increase in repairs and maintenance.
Property revenues, property expenses, and property ~~expenses~~NOI for our non-same store properties ~~increased significantly due to the properties acquired during 2016 and 2017; the 2017~~were essentially flat, recognizing a $0.05 million decrease in property NOI. The non-same store property count was ~~14 compared to 8~~consistent at eleven properties for both periods, the ~~2016 period. The results of operations for these properties have been included in our consolidated statements of operations from the date of acquisition.~~
~~Nine Months Ended September 30, 2017 Compared to Nine Months Ended September 30, 2016~~
~~Same store NOI for the nine~~three months ended September 30, 2017 increased by 4.3% to $16.9 million from $16.2 million for the 2016 period. There was a 3.6% increase in same store property revenues as compared to the 2016 period, primarily attributable to a 3.6% increase in average rental rates, offset by a 41 basis point decrease in average occupancy. Same store expenses for the nine months ended September 30, 2017 increased 2.7% to $11.0 million from $10.7 million for the 2016 period.
~~Property revenues~~March 31, 2021 and property expenses for our non-same store properties increased significantly due to the properties acquired during 2016 and 2017; the 2017 non-same store property count was 16 compared to 7 properties for the 2016 period. The results2020.

Table of ~~operations for these properties have been included in our consolidated statements of operations from the date of acquisition.~~Contents

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.

However, NOI should only be used as ~~an alternative~~a supplemental measure of our financial performance. The following table reflects net 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
Net (loss) income attributable to common stockholders $ (12,017 ) $ (2,551 ) $ 563 $ (11,727 )
Add pro-rata share:
Depreciation and amortization 10,771 6,197 29,900 19,436
Amortization of non-cash interest expense 245 472 1,491 620
Property management fees 773 587 2,227 1,635
Management fees 2,773 1,839 11,609 4,430
Acquisition and pursuit costs 15 619 3,039 1,993
Loss on early extinguishment of debt - 2,269 1,534 2,269
Corporate operating expenses 1,091 1,169 4,203 4,101
Management internalization process expense 818 - 1,629 -
Weather-related losses, net 635 - 635 -
Preferred dividends 6,966 3,883 19,066 8,268
Preferred stock accretion 896 271 1,870 560
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 -
Gain on sale of real estate investments - 4,876 33,945 4,876
Pro-rata share of properties' income 8,204 6,823 24,010 18,192
Add:
Noncontrolling interest pro-rata share of property income 555 1,128 2,673 3,224
Total property income 8,759 7,951 26,683 21,416
Add:
Interest expense, net 7,215 4,730 20,375 13,381
Net operating income 15,974 12,681 47,058 34,797
Less:
Non-same store net operating income 8,773 5,435 30,186 18,616
Same store net operating income $ 7,201 $ 7,246 $ 16,872 $ 16,181

Three Months Ended

March 31,

2021

2020
Net income (loss) attributable to common stockholders

$
23,581

$
(16,493)
Add back: Net income (loss) attributable to Operating Partnership Units

10,160

(5,822)
Net income (loss) attributable to common stockholders and unit holders

33,741

(22,315)
Add common stockholders and Operating Partnership Units pro-rata share of:

Real estate depreciation and amortization

19,405

19,900
Non-real estate depreciation and amortization

122

120
Non-cash interest expense

604

845
Unrealized gain on derivatives

(30)

(26)
Loss on extinguishment of debt and debt modification costs

2,564

—
Provision for credit losses

542

—
Property management fees

1,223

1,232
Acquisition and pursuit costs

11

1,269
Corporate operating expenses

6,570

6,296
Weather-related losses, net

360

—
Preferred dividends

14,617

13,547
Preferred stock accretion

7,022

3,925
Less common stockholders and Operating Partnership Units pro-rata share of:

Other income, net

51

40
Preferred returns on unconsolidated real estate joint ventures

2,287

2,574
Interest income from mezzanine loan and ground lease investments

4,721

5,888
Gain on sale of real estate investments

62,427

110
Pro-rata share of properties’ income

17,265

16,181
Add:

Noncontrolling interest pro-rata share of partially owned property income

637

803
Total property income

17,902

16,984
Add:

Interest expense

13,247

14,070
Net operating income

31,149

31,054
Less:

Non-same store net operating income

7,188

7,235
Same store net operating income

$
23,961

$
23,819

Table of Contents

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

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 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 we currently have a stable financial condition; as of March 31, 2021, we collected 97% of rents from our multifamily properties for the ~~properties underlying its real estate investments are performing well. We~~three months ended March 31, 2021. As of April 30, 2021, we collected 98% of April rents from our multifamily properties. In prior quarters, we had provided rent deferral payment plans as a ~~portfolio-wide debt service coverage ratio~~result of ~~1.98x and occupancy~~hardships certain tenants experienced due to the impact of ~~94%, exclusive~~COVID-19; for the quarter ended March 31, 2021, the Company did not provide any rent deferral payment plans, compared to the onset of the COVID-19 pandemic (quarter ended June 30, 2020) in which 1% of our ~~development~~tenant base was on payment plans. Although we may 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 95.8% and 96.3% as of March 31, 2021 and April 30, 2021, respectively, in future periods we may experience reduced levels of tenant retention, and reduced foot traffic and lease applications from prospective tenants, as a result of COVID-19 impact.

As we did in 2020 and to date in 2021, 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 suspended interior renovations at several properties as part of assuming a more conservative posture; however, we have selectively restarted the program at ~~September 30, 2017.~~

Subsequent to September 30, 2017, the Company, through its Operating Partnership, entered into 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 of $150 million, which commitment contains an accordion feature up to a maximum commitment of up to $250 million. The availability of borrowings will be basedvarious properties as we gained more visibility on the ~~value of a pool of collateral properties~~economic recovery nationally and compliance with various ratios related to those assets. In addition, we have begun negotiating an additional bank credit facility pursuant to a non-binding term sheet, and we believe this facility will enable us to deploywithin our capital more efficiently and provide capital structure flexibility as we continue raising capital through our Series B continuous offering. No definitive agreements have been entered into and we provide no assurances that we will enter into this credit facility.

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, and the properties we expect to acquire with the proceeds from~~ our continuous Series ~~B preferred stock continuous offering~~T Preferred Offering and from ~~our recent property sales,~~the 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 cannot provide any assurances that we will be able to add properties to our portfolio at the anticipated pace, or at all.

We believe we will be able to meet our primary liquidity requirements going forward through:

·•

$~~134.6~~148.1 million in cash available at ~~September 30, 2017;~~March 31, 2021;

·•

p~~roceeds from borrowings under the Senior Credit Facility;~~$112.4 million of capacity on our credit facilities as of March 31, 2021;

·•

cash generated from operating activities; and

·•

our continuous Series T Preferred Offering, 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.

Only 5.6%, or $82.0 million, of our mortgage debt is maturing through the remainder of 2021, of which $74.7 million is a loan with a June 2021 maturity and contains two (2) three-month extension options, subject to certain conditions.

Table of Contents

In October 2020, our Board authorized new stock repurchase plans for the repurchase, from time to time, of up to an aggregate of $75 million in outstanding shares of our Class A common stock, Series A Preferred Stock, Series C Preferred Stock and/or Series D Preferred Stock. On February 9, 2021, our Board authorized the modification of the stock repurchase plans to increase the maximum repurchase amount from an aggregate of $75 million in shares to $150 million in shares. The repurchase plans will terminate upon the earliest to occur of certain specified events as set forth therein. During the three months ended March 31, 2021, we purchased 3,557,562 shares of Class A common stock for a total purchase price of approximately $40.7 million. As of March 31, 2021, the value of shares that may yet be purchased under the repurchase plans is $90.3 million.

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

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 volatility 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 cannot provide assurances that these offerings are a likely source of capital to meet short-term liquidity 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 AB Preferred Stock, Series BC Preferred Stock and Series CT Preferred ~~Stock.~~

Stock, and (e) Class A common stock repurchases 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 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.~~securities, all of which may continue to be adversely impacted by COVID-19 pandemic.

WeAs we did in 2020 and to date in 2021, we may also selectively sell assets at appropriate times, which would be expected to generate cash sources for both our short-term and long-term liquidity needs.

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 March 31, 2021, 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 of 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.

Table of Contents

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~~March 31, 2021 have been paid from cash flow from operations, proceeds from our continuous ~~registered public offering,~~preferred stock offerings, including our Series T Preferred Stock, sales of assets, proceeds from ~~the IPO and Follow-On Offerings, and sales of assets~~underwritten securities offerings, and may in the future be paid from additional sources, such as from borrowings.

~~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 generally 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 current stated return, and in certain cases, an accrued 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 pay 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,~~March 31, 2021, 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,~~March 31, 2021, we own interests in ~~nine~~ten joint ventures that are accounted for ~~under the equity method~~ as ~~we exercise significant influence over, but do not control, the investee.~~held to maturity debt securities or loans.

Cash Flows from Operating Activities

As of ~~September 30, 2017,~~March 31, 2021, we owned indirect equity interests in ~~thirty-five~~fifty-five real estate properties, ~~(twenty-five~~consisting of thirty-four consolidated operating properties and ~~ten development properties), twenty-six of which are consolidated for reporting purposes.~~twenty-one through preferred equity, mezzanine loan or ground lease investments. During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, net cash provided by operating activities was ~~$33.3 million. After the~~$17.5 million after net income of ~~$40.1~~$61.1 million was ~~reduced~~adjusted for ~~$21.1 million of non-cash items, net cash provided by operating activities consisted of~~ the following:

·•

~~Distributions~~non-cash items of $46.8 million;

•

an increase in accounts receivable, prepaids and other assets of $2.8 million; and

•

an increase in notes and accrued interest receivable of $0.9 million, offset by:

•

distributions and preferred returns from unconsolidated joint ventures of ~~7.1~~$3.3 million;

·•

~~Increase~~an increase in loss on extinguishment of debt and debt modification costs of $3.0 million; and

•

an increase in accounts payable and other accrued liabilities of ~~$14.2 million;~~$0.6 million.

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

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

Table of Contents

Cash Flows from Investing Activities

During the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021, net cash ~~used in~~provided by investing activities was ~~$230.0~~$186.7 million, primarily due to the following:

•

$203.3 million of proceeds from the sale of real estate investments; and

·•

$~~259.2~~15.2 million of proceeds from the sale and redemption of unconsolidated real estate joint ventures, offset by:

•

$27.7 million used in ~~acquiring consolidated real estate investments;~~

~~$38.8 million used in acquiring~~funding additional investments in unconsolidated joint ventures, notes receivable and ~~notes receivable;~~a ground lease; and

·•

$~~33.5~~4.2 million used on capital ~~expenditures;~~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~~three months ended ~~September 30, 2017,~~March 31, 2021, net cash ~~provided by~~used in financing activities was ~~$249.3~~$142.5 million, primarily due to the following:

•

$84.8 million of repayments of our mortgages payable;

·•

~~net borrowings of $155.0~~$63.0 million in repayments on ~~mortgages payable;~~revolving credit facilities;

·•

~~net proceeds~~$55.1 million paid for the redemption of ~~$57.4 million from issuance of common stock;~~Series A Preferred Stock;

·•

~~net borrowings~~$40.7 million paid for the repurchase of ~~$63.5 million on mortgages payable;~~Class A common stock;

·•

~~net proceeds of $103.0~~$15.6 million ~~from issuance of Series B~~paid in cash distributions to preferred ~~units;~~stockholders;

·•

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

~~partially offset by $29.9~~9.9 million in distributions paid to our noncontrolling interests;

·•

$~~22.2~~3.6 million paid in cash distributions ~~paid~~ to common stockholders;

·•

$~~18.6~~0.5 million ~~paid~~increase 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~~0.1 million paid ~~in cash distributions paid to common stockholders;~~for the redemption of Series B Preferred Stock;

·•

~~$1.8~~partially offset by net proceeds of $87.7 million the from issuance of ~~repayments~~units of ~~our mortgages payable.~~Series T Preferred Stock;

•

net proceeds of $30.0 million from borrowings on revolving credit facilities;

•

net borrowings of $12.9 million on mortgages payable; and

•

net proceeds of $0.2 million from the exercise of Warrants.

Table of Contents

Capital Expenditures

The following table summarizes our total capital expenditures for the ~~nine~~three months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 (amounts in thousands):

Three Months Ended

March 31,

2021

2020

Redevelopment/renovations

$
2,879

$
4,400

Routine capital expenditures

594

747

Normally recurring capital expenditures

725

770

Total capital expenditures

$
4,198

$
5,917

For the nine months ended September 30,
2017 2016
New development $ 21,019 $ —
Redevelopment/renovations 10,178 2,540
Routine capital expenditures 2,328 1,452
Total capital expenditures $ 33,525 $ 3,992

~~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.
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 (loss), 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 certain real estate assets and investments in entities where the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for notes receivable, 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 real estate investments).~~
~~During~~derivatives, losses on extinguishment of debt and debt modification costs (includes prepayment penalties incurred and the ~~nine months ended September 30, 2017, we incurred $3.2 million~~write-off of ~~acquisition~~unamortized deferred financing costs and ~~pursuit~~fair market value adjustments of assumed debt), one-time weather-related costs, stock compensation expense and ~~$3.7 million~~preferred stock accretion. We believe that CFFO is helpful to investors as a supplemental performance measure because it excludes the effects of ~~disposition expense,~~certain items which can create significant earnings volatility, but which do not directly relate to our core recurring property operations. As a result, we believe that CFFO can help facilitate comparisons of ~~which $2.5 million~~operating performance between periods and ~~$3.1 million, respectively, was our pro rata share~~provides a more meaningful predictor 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~~

Table of ~~determining the quarterly incentive fee, if any, payable to our Manager.~~Contents

Neither FFO nor ~~AFFO~~CFFO is equivalent to net income (loss), including net income (loss) 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 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 (loss), including net income (loss) 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~~four operating properties, made six property investments through preferred equity or mezzanine loan investments, sold seven operating properties and ~~three development~~received our full mezzanine loan or preferred equity in four investments ~~and sold five properties~~ subsequent to ~~September 30, 2016.~~March 31, 2020. We paid a quarterly common stock dividend of $0.1625 during the three months ended March 31, 2021, a 102% payout on a CFFO basis. The results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance.

The table below presents our calculation of FFO and ~~AFFO~~CFFO for the three ~~and nine~~ months ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020 (in ~~thousands)~~thousands, except per share amounts):

Three Months Ended

March 31,

2021

2020
Net income (loss) attributable to common stockholders

$
23,581

$
(16,493)
Add back: Net income (loss) attributable to Operating Partnership Units

10,160

(5,822)
Net income (loss) attributable to common stockholders and unit holders

33,741

(22,315)
Common stockholders and Operating Partnership Units pro-rata share of:

Real estate depreciation and amortization

19,405

19,900
Provision for credit losses

542

—
Gain on sale of real estate investments

(62,427)

(110)
FFO Attributable to Common Stockholders and Unit Holders

(8,739)

(2,525)
Common stockholders and Operating Partnership Units pro-rata share of:

Acquisition and pursuit costs

11

1,269
Non-cash interest expense

604

845
Unrealized gain on derivatives

(30)

(26)
Loss on extinguishment of debt and debt modification costs

2,564

—
Weather-related losses, net

360

—
Non-real estate depreciation and amortization

122

120
Other expense (income), net

98

(40)
Non-cash equity compensation

3,311

3,547
Preferred stock accretion

7,022

3,925
CFFO Attributable to Common Stockholders and Unit Holders

$
5,323

$
7,115

Per Share and Unit Information:

FFO Attributable to Common Stockholders and Unit Holders - diluted

$
(0.26)

$
(0.08)
CFFO Attributable to Common Stockholders and Unit Holders - diluted

$
0.16

$
0.22
Weighted average common shares and units outstanding - diluted

33,319,020

32,668,294
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
⁽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.~~

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
49

Table of Contents

Contractual Obligations

The following table summarizes our contractual obligations as of ~~September 30, 2017 (in thousands)~~March 31, 2021 which consisted of mortgage notes secured by our properties. At ~~September 30, 2017,~~March 31, 2021, our estimated future required payments on these obligations ~~were:~~were as follows (amounts in thousands):

Remainder of



Total

2021

2022-2023

2024-2025

Thereafter
Mortgages Payable (Principal)

$
1,465,355

$
81,986

$
139,844

$
570,682

$
672,843
Estimated Interest Payments on Mortgages Payable

288,807

38,208

98,300

76,493

75,806
Total

$
1,754,162

$
120,194

$
238,144

$
647,175

$
748,649
Remainder of
Total 2017 2018-2019 2020-2021 Thereafter
Mortgages Payable (Principal) $ 853,565 $ 738 $ 11,738 $ 47,400 $ 793,689
Estimated Interest Payments on Mortgage Notes Payable, Unsecured Term Loans and Senior Unsecured Notes 191,481 7,560 62,061 59,506 62,354
Total $ 1,045,046 $ 8,298 $ 73,799 $ 106,906 $ 856,043

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.
Distributions
~~Distributions~~


Payable to




stockholders

Date
Declaration Date

of record as of

Amount

Paid or Payable
Class A Common Stock






December 11, 2020

December 24, 2020

$
0.162500

January 5, 2021
March 12, 2021

March 25, 2021

$
0.162500

April 5, 2021
Class C Common Stock






December 11, 2020

December 24, 2020

$
0.162500

January 5, 2021
March 12, 2021

March 25, 2021

$
0.162500

April 5, 2021
Series A Preferred Stock






December 11, 2020

December 24, 2020

$
0.515625

January 5, 2021
January 27, 2021⁽¹⁾

February 26, 2021

$
0.320833

February 26, 2021
Series B Preferred Stock






October 9, 2020

December 24, 2020

$
5.00

January 5, 2021
January 13, 2021

January 25, 2021

$
5.00

February 5, 2021
January 13, 2021

February 25, 2021

$
5.00

March 5, 2021
January 13, 2021

March 25, 2021

$
5.00

April 5, 2021
Series C Preferred Stock






December 11, 2020

December 24, 2020

$
0.4765625

January 5, 2021
March 12, 2021

March 25, 2021

$
0.4765625

April 5, 2021
Series D Preferred Stock






December 11, 2020

December 24, 2020

$
0.4453125

January 5, 2021
March 12, 2021

March 25, 2021

$
0.4453125

April 5, 2021
Series T Preferred Stock ⁽²⁾






October 9, 2020

December 24, 2020

$
0.128125

January 5, 2021
January 13, 2021

January 25, 2021

$
0.128125

February 5, 2021
January 13, 2021

February 25, 2021

$
0.128125

March 5, 2021
January 13, 2021

March 25, 2021

$
0.128125

April 5, 2021

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 The dividend was paid on the date indicated to stockholders in conjunction with the redemption of shares of Series A Preferred Stock.
(2) 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.
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.
We have a dividend reinvestment plan that allows for participating stockholders to have their Class A common stock dividend distributions automatically reinvested in additional shares of Class A common stock based on the average price of the Class A common stock on the investment date. We plan to issue shares of Class A common stock to cover shares required for investment.
We also have 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 T Preferred Stock at a price of $25.00 per share. We plan to issue shares of Series T Preferred Stock to cover shares required for investment.
50

Table of Contents

Our Board will determine the amount of dividends to be paid to our stockholders. The ~~Board’s~~Board's determination will be based on ~~a number of~~several 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~~"REIT taxable ~~income”~~income" each year. ~~Especially during the early stages of~~While our policy is generally to pay distributions from cash flow from 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~~$3.9 million for the ~~nine~~three months ended ~~September 30, 2017,~~March 31, 2021 which was funded from sales of real estate, borrowings, and/or proceeds from our equity offerings.

Three Months Ended

March 31,

2021

2020

(in thousands)

Cash provided by operating activities

$
17,540

$
19,116

Cash distributions to preferred stockholders

$
(15,620)

$
(13,323)

Cash distributions to common stockholders

(3,642)

(3,828)

Cash distributions to noncontrolling interests, excluding $7.7 million from the sale of real estate investments in 2021

(2,152)

(1,790)

Total distributions

(21,414)

(18,941)

(Shortfall) excess

$
(3,874)

$
175

Proceeds from sale of real estate investments, net of noncontrolling distributions of $7.7 million in 2021

$
75,794

$
253

Proceeds from sale and redemption of our preferred equity investment in unconsolidated real estate joint ventures

$
15,233

$
35,542

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 $ —

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~~2020 and Note 2 ~~“Basis~~"Basis of Presentation and Summary of Significant Accounting ~~Policies” to the~~Policies" of our interim Consolidated Financial ~~Statements.~~Statements .
Subsequent Events
Other than the items disclosed in Note ~~13, “Subsequent Events”~~14 "Subsequent Events" to our interim Consolidated Financial Statements for the period ended ~~September 30, 2017,~~March 31, 2021, no material events have occurred that required recognition or disclosure in these financial statements. ~~See~~Refer to Note ~~13 to~~14 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.

Table of Contents

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 $(4.6) million are excluded:

2021

2022

2023

2024

2025

Thereafter

Total

Mortgage Notes Payable

$
81,986

$
13,821

$
126,023

$
201,580

$
369,102

$
672,843

$
1,465,355

Weighted Average Interest Rate

2.02
%

3.56
%

3.20
%

3.75
%

3.88
%

3.42
%

3.49
%
~~($ 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~~$1,498.0 million ~~for mortgages payable~~ as of ~~September 30, 2017.~~
March 31, 2021.
The table above incorporates those exposures that exist as of ~~September 30, 2017;~~March 31, 2021; 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 March 31, 2021, we had nine 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,~~March 31, 2021, 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 $888,000 or decrease in interest expense of ~~approximately $1.0 million~~approximately$92,000, respectively, for the quarter ended ~~September 30, 2017.~~March 31, 2021.

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,~~March 31, 2021, 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,~~March 31, 2021 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~~March 31, 2021 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

49
52

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~~2020 filed with the SEC on February ~~22, 2017.~~23, 2021.
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,~~March 31, 2021, our total ~~long-term~~ indebtedness was approximately ~~$853.6 million,~~$1.5 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 March 31, 2021, the ~~date~~number of ~~this filing, we have issued 5,721,460~~preferred shares ~~of Series A Preferred Stock (146,460 of which have been issued in the Series A ATM Offering), 151,610~~outstanding was as follows: 440,934 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 13,622,291 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~~53

~~The Issuances~~Table 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.Contents

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 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, 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 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 and price we deem appropriate. Upon consummation of the Internalization, 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 and the prevailing market price for shares of our Class A Common Stock.

The Internalization was negotiated between the Special Committee, which is comprised solely of independent and disinterested members of our board of directors, the Manager, which is affiliated with certain of our officers and directors, and the Contributors, including R. Ramin Kamfar, 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, and the Contributors, including Messrs. Kamfar and Kachadurian, Michael L. Konig, our General Counsel and Secretary, 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 limit our ability to enforce any remedy under the Contribution Agreement.

~~Certain 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 subsidiary of the Company, into employment agreements with Messrs. Kamfar 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 interests 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 as a result of the Internalization.~~

We will expense all cash and non-cash costs involved in the Internalization. As a result, our statement of operations and FFO will be negatively impacted, driven predominately by the non-cash charges related 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 Manager 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 by the Manager, and there may be other unforeseen costs, expenses and difficulties associated with operating as an internally managed company. If the expenses we assume as a result of the Internalization are higher than the fees that we currently pay the Manager or otherwise higher than we anticipate, we may not realize the anticipated cost savings and other benefits from 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, there can be no assurance that this will be the case, as, among other things, the expenses we assume as a result of the Internalization may be higher than we anticipate and we may 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 of which could adversely affect our ability to maintain relationships with employees or third-parties to achieve the anticipated benefits of the Internalization, or could otherwise adversely affect our business and financial results. Therefore, the failure to plan and manage the Internalization effectively could have a material adverse effect on our business, financial condition and results of operations.

We depend on our key executives and other employees of an affiliate of the Manager. There is no guarantee that such key executives and employees will remain employed or engaged by us for any specified period of time, 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 of the Manager. It is expected that, following the consummation of the Internalization, we will continue 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, financial condition, results of operations and ability to effectively operate our business.

Further, 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 law in the states in which we do business, there can 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 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 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 of the relationships between us and our affiliates, on the one hand, and our Operating Partnership or any member thereof, on 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 conflicts may be resolved in a manner that is not in the best interest of our stockholders.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Issuer Purchases of Equity Securities
~~None.~~In October 2020, our Board authorized new stock repurchase plans for the repurchase, from time to time, of up to an aggregate of $75.0 million in outstanding shares of our Class A common stock, Series A Preferred Stock, Series C Preferred Stock and/or Series D Preferred Stock to be conducted in accordance with Rules 10b5-1 and 10b-18 of Securities Exchange Act of 1934, as amended (the "Exchange Act"). On February 9, 2021, our Board authorized the modification of the stock repurchase plans to increase the maximum repurchase amount from an aggregate of $75 million in shares to an aggregate of $150 million in shares of Class A common stock, Series C Preferred Stock, and/or Series D Preferred Stock. 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 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 March 31, 2021, we purchased 3,557,562 shares of Class A common stock for a total purchase price of approximately $40.7 million. We made no repurchases of any series of our preferred stock during the first quarter 2021.
The following table is a summary of our repurchase activity during the quarter ended March 31, 2021:






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









January 1, 2021 – January 31, 2021

1,354,186

$
11.79

1,354,186

$
40,099,159

February 1, 2021 – February 28, 2021

1,232,735

11.33

1,232,735

101,133,048
⁽²⁾
March 1, 2021 – March 31, 2021

970,641

11.12

970,641

90,343,128

Total Class A Common Stock

3,557,562

$
11.45

3,557,562



(1) Includes shares repurchased by the Company pursuant to the stock repurchase plans as noted above and publicly announced in our Annual Report on Form 10-K for the year ended December 31, 2020 as filed with the SEC on February 23, 2021, for up to an aggregate of $150.0 million in shares of our Class A common 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.
(2) The maximum dollar value of shares that may yet be purchased under the repurchase plans reflects the modification of the plans that occurred on February 9, 2021 to increase the maximum repurchase amount from an aggregate of $75 million in shares to an aggregate of $150 million in shares.

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

Item 5. Other Information
None.

53
54

Table of Contents

Item 6. Exhibits ~~Exhibits~~

~~2.1~~
31.1
Contribution and Sale Agreement, dated as of August 3, 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 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 REIT Operator, LLC, and R. Ramin Kamfar, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 4, 2017
~~10.5~~ 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 10.2 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
~~10.11~~ Assignment of Purchase and Sale Agreement by and between Bluerock Real Estate, L.L.C. and Bluerock Residential Growth REIT, Inc., through its direct and indirect subsidiaries, BR Hunters Creek, LLC and BR MetroWest, LLC, dated as of September 15, 2017, incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed September 20, 2017
~~10.12~~ 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,~~Presentation dated ~~August 4, 2017,~~January 11, 2021, incorporated ~~herein~~ by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed ~~August 4, 2017~~January 11, 2021

99.2
~~Presentation,~~Press Release dated February 11, 2021, incorporated ~~herein~~by reference to Exhibit 99.1 to the Company’s Current Report on Form 8-K filed February 11, 2021

99.3
Supplemental Financial Information, incorporated by reference to Exhibit 99.2 to the Company’s Current Report on Form 8-K filed ~~August 4, 2017~~February 11, 2021

~~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,~~March 31, 2021, 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

55

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~~
May 10, 2021
/s/ R. Ramin Kamfar
R. Ramin Kamfar
Chief Executive Officer
(Principal Executive Officer)

DATE:
~~November 8, 2017~~
May 10, 2021
/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
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~~March 31, 2021 (Unaudited) and December 31, ~~2016 (audited)~~2020 (Audited)	3

		Consolidated Statements of Operations (Unaudited) for the Three ~~and Nine~~ Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020	4

		Consolidated ~~Statement~~Statements of Stockholders’ Equity (Unaudited) for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2021 and 2020	5

		Consolidated Statements of Cash Flows (Unaudited) for the ~~Nine~~Three Months Ended ~~September 30, 2017~~March 31, 2021 and ~~2016~~2020	6 7

		Notes to Consolidated Financial Statements	7 8

Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	32 33

Item 3.		Quantitative and Qualitative Disclosures about Market Risk	49 51

Item 4.		Controls and Procedures	49 52

PART II – OTHER INFORMATION

Item 1.		Legal Proceedings	50 53

Item 1A.		Risk Factors	50 53

Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds	53 54

Item 3.		Defaults Upon Senior Securities	53 54

Item 4.		Mine Safety Disclosures	53 54

Item 5.		Other Information	53 54

Item 6.	~~Exhibits~~	54Exhibits	55

SIGNATURES			57 56

	(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

	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

	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 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	%
Carrington at Perimeter Park	Morrisville, NC	266	2007	100	%
Chattahoochee Ridge	Atlanta, GA	358	1996	90	%
Chevy Chase	Austin, TX	320	1971	92	%
Cielo on Gilbert	Mesa, AZ	432	1985	90	%
Citrus Tower	Orlando, FL	336	2006	97	%
Denim	Scottsdale, AZ	645	1979	100	%
Elan	Austin, TX	270	2007	100	%
Element	Las Vegas, NV	200	1995	100	%
Falls at Forsyth	Cumming, GA	356	2019	100	%
Gulfshore Apartment Homes	Naples, FL	368	2016	100	%
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		11,584

	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	)

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


	March 31,		December 31,
Property	2021		2020
Avondale Hills	$	7,881	$	1,021
Domain at The One Forty		24,526		24,315
Motif		77,549		75,436
Reunion Apartments		10,466		8,161
The Hartley at Blue Hill, formerly The Park at Chapel Hill		37,423		36,927
Vickers Historic Roswell		12,442		12,048
Total	$	170,287	$	157,908
Provision for credit losses ⁽¹⁾		(575)		(174)
Total, net	$	169,712	$	157,734

	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

	September 30, 2017		December 31, 2016
Balance Sheets:
Real estate, net of depreciation	$	304,921	$	197,742
Other assets		29,576		33,814
Total assets	$	334,497	$	231,556

Mortgages payable	$	202,308	$	97,598
Other liabilities		20,267		13,191
Total liabilities	$	222,575	$	110,789
Members’ equity		111,922		120,767
Total liabilities and members’ equity	$	334,497	$	231,556

	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	)


	March 31,		December 31,
Revolving Credit Facilities	2021		2020
Amended Senior Credit Facility	$	—	$	33,000
Second Amended Junior Credit Facility		—		—
Total	$	—	$	33,000

	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 March 31, 2021
	March 31,		December 31,				Interest-only
Property	2021		2020		Interest Rate		through date	Maturity Date

Fixed Rate:
ARIUM Hunter’s Creek	$	70,525	$	70,871	3.65	%	⁽¹⁾	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
Avenue 25 ⁽²⁾		36,566		36,566	4.18	%	July 2022	July 1, 2027
Carrington at Perimeter Park⁽³⁾		31,286		31,301	4.16	%	⁽³⁾	July 1, 2027
Chattahoochee Ridge		45,338		45,338	3.25	%	December 2022	December 5, 2024
Citrus Tower		40,442		40,627	4.07	%	⁽¹⁾	October 1, 2024
Denim⁽⁴⁾		101,205		101,205	3.41	%	August 2024	August 1, 2029
Elan⁽⁵⁾		25,557		25,574	4.19	%	⁽⁵⁾	July 1, 2027
Element		29,260		29,260	3.63	%	July 2022	July 1, 2026
Falls at Forsyth ⁽⁶⁾		19,504		—	4.35	%	⁽¹⁾	July 1, 2025
Gulfshore Apartment Homes		46,345		46,345	3.26	%	September 2022	September 1, 2029
James on South First		—		25,674
Navigator Villas ⁽⁷⁾		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
Plantation Park		—		26,625
Providence Trail		47,950		47,950	3.54	%	July 2021	July 1, 2026
Roswell City Walk		49,798		50,043	3.63	%	⁽¹⁾	December 1, 2026
The Brodie		33,380		33,551	3.71	%	⁽¹⁾	December 1, 2023
The Links at Plum Creek		39,409		39,578	4.31	%	⁽¹⁾	October 1, 2025
The Mills		25,141		25,275	4.21	%	⁽¹⁾	January 1, 2025
The Preserve at Henderson Beach		48,490		48,490	3.26	%	September 2028	September 1, 2029
The Reserve at Palmer Ranch		40,806		40,977	4.41	%	⁽¹⁾	May 1, 2025
The Sanctuary		33,707		33,707	3.31	%	Interest-only	August 1, 2029
Wesley Village		39,259		39,438	4.25	%	⁽¹⁾	April 1, 2024
Total Fixed Rate	$	1,083,572	$	1,117,999

Floating Rate ⁽⁸⁾:
ARIUM Glenridge	$	49,500	$	49,500	1.45	%	September 2021	September 1, 2025
Chevy Chase		24,400		24,400	2.44	%	September 2022	September 1, 2027
Cielo on Gilbert ⁽⁹⁾		58,000		58,000	2.65	%	January 2026	January 1, 2031
Falls at Forsyth ⁽⁶⁾		19,443		—	1.52	%	⁽¹⁾	July 1, 2025
Fannie Facility Advance		13,936		13,936	2.72	%	June 2022	June 1, 2027
Fannie Facility Second Advance ⁽⁹⁾		12,880		—	2.76	%	March 2023	March 1, 2028
Marquis at The Cascades I		—		31,668
Marquis at The Cascades II		—		22,101
Pine Lakes Preserve		42,728		42,728	3.10	%	July 2025	July 1, 2030
The District at Scottsdale ⁽¹⁰⁾		74,651		75,577	1.85	%	⁽¹⁾	June 11, 2021 ⁽¹¹⁾
Veranda at Centerfield		26,100		26,100	1.37	%	July 2021	July 26, 2023 ⁽¹²⁾
Villages of Cypress Creek		33,520		33,520	2.67	%	July 2022	July 1, 2027
Total Floating Rate	$	355,158	$	377,530
Total	$	1,438,730	$	1,495,529
Fair value adjustments		6,236		6,489
Deferred financing costs, net		(10,648)		(11,086)
Total continuing operations	$	1,434,318	$	1,490,932

Held for Sale
ARIUM Grandewood ^(6)(13)	$	—	$	19,585
ARIUM Grandewood ^(6)(13)		—		19,529
Plantation Park		26,625		—	4.64	%	July 2024	July 1, 2028
Deferred financing costs, net		(192)		(341)
Total held for sale		26,433		38,773
Total mortgages payable	$	1,460,751	$	1,529,705


Year	Total			Total
2017 (October 1-December 31)	$	738
2018		4,086
2019		7,652
2020		35,227
2021		12,173
2021 (April 1-December 31) ⁽¹⁾				$	81,986
2022					13,821
2023					126,023
2024					201,580
2025					369,102
Thereafter		793,689			672,843
	$	853,565
				$	1,465,355
Add: Unamortized fair value debt adjustment		2,055			6,236
Subtract: Deferred financing costs, net		(8,458	)		(10,840)
Total	$	847,162		$	1,460,751

	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			Date
Declaration Date	of record as of	Amount		Paid or Payable
Class A Common Stock
December 11, 2020	December 24, 2020	$	0.162500	January 5, 2021
March 12, 2021	March 25, 2021	$	0.162500	April 5, 2021
Class C Common Stock
December 11, 2020	December 24, 2020	$	0.162500	January 5, 2021
March 12, 2021	March 25, 2021	$	0.162500	April 5, 2021
Series A Preferred Stock
December 11, 2020	December 24, 2020	$	0.515625	January 5, 2021
January 27, 2021⁽¹⁾	February 26, 2021	$	0.320833	February 26, 2021
Series B Preferred Stock
October 9, 2020	December 24, 2020	$	5.00	January 5, 2021
January 13, 2021	January 25, 2021	$	5.00	February 5, 2021
January 13, 2021	February 25, 2021	$	5.00	March 5, 2021
January 13, 2021	March 25, 2021	$	5.00	April 5, 2021
Series C Preferred Stock
December 11, 2020	December 24, 2020	$	0.4765625	January 5, 2021
March 12, 2021	March 25, 2021	$	0.4765625	April 5, 2021
Series D Preferred Stock
December 11, 2020	December 24, 2020	$	0.4453125	January 5, 2021
March 12, 2021	March 25, 2021	$	0.4453125	April 5, 2021
Series T Preferred Stock ⁽²⁾
October 9, 2020	December 24, 2020	$	0.128125	January 5, 2021
January 13, 2021	January 25, 2021	$	0.128125	February 5, 2021
January 13, 2021	February 25, 2021	$	0.128125	March 5, 2021
January 13, 2021	March 25, 2021	$	0.128125	April 5, 2021

	Distributions
2017	Declared		Paid

					Distributions
2021					Declared		Paid
First Quarter
Class A Common Stock	$	7,014	$	6,566	$	3,943	$	3,630
Class C Common Stock						12		12
Series A Preferred Stock		2,950		2,950		706		1,842
Series B Preferred Stock		525		395		7,089		7,400
Series C Preferred Stock		1,107		1,107		1,094		1,094
Series D Preferred Stock		1,269		1,100		1,235		1,235
Series T Preferred Stock						4,493		4,049
OP Units		82		84		1,027		1,027
LTIP Units		496		480		814		510
Total first quarter 2017	$	13,443	$	12,682
Second Quarter
Class A Common Stock	$	7,016	$	7,015
Series A Preferred Stock		2,950		2,950
Series B Preferred Stock		1,054		837
Series C Preferred Stock		1,108		1,107
Series D Preferred Stock		1,270		1,270
OP Units		80		80
LTIP Units		551		533
Total second quarter 2017	$	14,029	$	13,792
Third Quarter
Class A Common Stock		7,017		7,016
Series A Preferred Stock		2,950		2,950
Series B Preferred Stock		1,711		1,508
Series C Preferred Stock		1,107		1,107
Series D Preferred Stock		1,270		1,269
OP Units		79		80
LTIP Units		676		625
Total third quarter 2017	$	14,810	$	14,555
Total	$	42,282	$	41,029
Total first quarter 2021					$	20,413	$	20,799


	Payable to stockholders
Declaration Date	of record as of	Amount		Paid / Payable Date
Series B Preferred Stock
April 12, 2021	April 23, 2021	$	5.00	May 5, 2021
April 12, 2021	May 25, 2021	$	5.00	June 4, 2021
April 12, 2021	June 25, 2021	$	5.00	July 2, 2021
Series T Preferred Stock ⁽¹⁾
April 12, 2021	April 23, 2021	$	0.128125	May 5, 2021
April 12, 2021	May 25, 2021	$	0.128125	June 4, 2021
April 12, 2021	June 25, 2021	$	0.128125	July 2, 2021

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	%	$	1,293		94.6	%
ARIUM Hunter's Creek	Orlando, FL	532	1999	100	%		1,417		96.4	%
ARIUM Metrowest	Orlando, FL	510	2001	100	%		1,412		96.7	%
ARIUM Westside	Atlanta, GA	336	2008	90	%		1,503		93.5	%
Ashford Belmar	Lakewood, CO	512	1988/1993	85	%		1,674		92.8	%
Avenue 25	Phoenix, AZ	254	2013	100	%		1,252		96.9	%
Carrington at Perimeter Park	Morrisville, NC	266	2007	100	%		1,263		95.9	%
Chattahoochee Ridge	Atlanta, GA	358	1996	90	%		1,387		97.5	%
Chevy Chase	Austin, TX	320	1971	92	%		964		98.1	%
Cielo on Gilbert	Mesa, AZ	432	1985	90	%		1,087		97.2	%
Citrus Tower	Orlando, FL	336	2006	97	%		1,364		95.5	%
Denim	Scottsdale, AZ	645	1979	100	%		1,246		97.2	%
Elan	Austin, TX	270	2007	100	%		1,134		95.6	%
Element	Las Vegas, NV	200	1995	100	%		1,274		94.5	%
Falls at Forsyth	Cumming, GA	356	2019	100	%		1,408		98.6	%
Gulfshore Apartment Homes	Naples, FL	368	2016	100	%		1,287		95.4	%
Navigator Villas	Pasco, WA	176	2013	90	%		1,143		99.4	%
Outlook at Greystone	Birmingham, AL	300	2007	100	%		1,090		93.7	%
Park & Kingston	Charlotte, NC	168	2015	100	%		1,303		97.0	%
Pine Lakes Preserve	Port St. Lucie, FL	320	2003	100	%		1,380		97.8	%
Plantation Park	Lake Jackson, TX	238	2016	80	%		1,232		94.5	%
Providence Trail	Mount Juliet, TN	334	2007	100	%		1,264		95.5	%
Roswell City Walk	Roswell, GA	320	2015	98	%		1,586		95.9	%
Sands Parc	Daytona Beach, FL	264	2017	100	%		1,374		94.7	%
The Brodie	Austin, TX	324	2001	100	%		1,313		95.1	%
The District at Scottsdale	Scottsdale, AZ	332	2018	100	%		1,799		91.6	%
The Links at Plum Creek	Castle Rock, CO	264	2000	88	%		1,466		95.5	%
The Mills	Greenville, SC	304	2013	100	%		1,051		95.1	%
The Preserve at Henderson Beach	Destin, FL	340	2009	100	%		1,498		97.9	%
The Reserve at Palmer Ranch	Sarasota, FL	320	2016	100	%		1,376		96.6	%
The Sanctuary	Las Vegas, NV	320	1988	100	%		1,132		95.3	%
Veranda at Centerfield	Houston, TX	400	1999	93	%		1,021		95.5	%
Villages of Cypress Creek	Houston, TX	384	2001	80	%		1,181		95.1	%
Wesley Village	Charlotte, NC	301	2010	100	%		1,373		96.0	%
Total/Average		11,584				$	1,318	⁽⁴⁾	95.8	%

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