Exhibit 99.2
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
Unaudited Pro Forma Condensed Consolidated Financial Statements Information
The following unaudited pro forma condensed consolidated financial statements of Bluerock Residential Growth REIT, Inc. (together with its consolidated subsidiaries, the “Company,” “we,” “our” or “us”) should be read in conjunction with our historical audited consolidated financial statements as of and for the year ended December 31, 2021, and as of and for the six months ended June 30, 2022 (unaudited), and the related notes thereto.
The unaudited pro forma condensed consolidated balance sheet, as of June 30, 2022, and statement of operations for the year ended December 31, 2021, and six months ended June 30, 2022, have been prepared to provide pro forma financial information with regard to the Separation, the Distribution and the Merger.
The pro forma condensed consolidated balance sheet assumes that the disposition transactions referred to above occurred on January 1, 2022.
The pro forma consolidated statement of operations assumes the transactions referred to above occurred on January 1, 2021.
Our pro forma financial information is not necessarily indicative of what our actual financial position and results of operations would have been as of the date and for the periods indicated, nor does it purport to represent our future financial position or results of operations.
These unaudited pro forma condensed consolidated financial statements are prepared for informational purposes only. In management’s opinion, all material adjustments necessary to reflect the effects of the transactions referred to above, have been made. Our pro forma condensed consolidated financial statements are based on assumptions and estimates considered appropriate by the Company’s management. However, they are not necessarily indicative of what our consolidated financial condition or results of operations actually would have been assuming the transactions referred to above had occurred as of the dates indicated, nor do they purport to represent our consolidated financial position or results of operations for future periods.
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2022
(In thousands, except share and per share amounts)
| | | Bluerock
Residential
Growth REIT,
Inc. Historical
(a) | | | Separation of
Bluerock
Homes Trust,
Inc.
(b) | | | | | Pro Forma
Total | |
| ASSETS | | | | | | | | | | | | | | |
| Net Real Estate Investments | | | | | | | | | | | | | | |
| Land | | $ | 307,341 | | | $ | (61,932 | ) | (c) | | | $ | 245,409 | |
| Buildings and improvements | | | 1,989,363 | | | | (371,625 | ) | (c) | | | | 1,617,738 | |
| Furniture, fixtures and equipment | | | 95,102 | | | | (4,137 | ) | (c) | | | | 90,965 | |
| Total Gross Real Estate Investments | | | 2,391,806 | | | | (437,694 | ) | | | | | 1,954,112 | |
| Accumulated depreciation | | | (264,286 | ) | | | 10,482 | (c) | | | | (253,804 | ) |
| Total Net Real Estate Investments | | | 2,127,520 | | | | (427,212 | ) | | | | | 1,700,308 | |
| Cash and cash equivalents | | | 244,924 | | | | (198,807 | ) | (c) | | | | 46,117 | |
| Restricted cash | | | 30,807 | | | | (6,009 | ) | (c) | | | | 24,798 | |
| Notes and accrued interest receivable, net | | | 23,118 | | | | (9,540 | ) | (c) | | | | 13,578 | |
| Due from affiliates | | | 1,536 | | | | — | | | | | | 1,536 | |
| Accounts receivable, prepaids and other assets, net | | | 48,543 | | | | (11,133 | ) | (c) | | | | 37,410 | |
| Preferred equity investments and investments in unconsolidated real estate joint ventures, net | | | 165,556 | | | | (72,097 | ) | (c) | | | | 93,459 | |
| In-place lease intangible assets, net | | | 97 | | | | (97 | ) | (c) | | | | — | |
| TOTAL ASSETS | | $ | 2,642,101 | | | $ | (724,895 | ) | | | | $ | 1,917,206 | |
| | | | | | | | | | | | | | | |
| LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY | | | | | | | | | | | | | | |
| Mortgages payable | | $ | 1,393,076 | | | $ | (98,854 | ) | (c) | | | $ | 1,294,222 | |
| Revolving credit facilities | | | 49,407 | | | | (49,407 | ) | (c) | | | | — | |
| Accounts payable | | | 3,184 | | | | (1,835 | ) | (c) | | | | 1,349 | |
| Other accrued liabilities | | | 50,095 | | | | (10,170 | ) | (c) | | | | 39,925 | |
| Due to affiliates | | | 595 | | | | (595 | ) | (c) | | | | — | |
| Distributions payable | | | 15,590 | | | | (2,904 | ) | (c) | | | | 12,686 | |
| Total Liabilities | | | 1,511,947 | | | | (163,765 | ) | | | | | 1,348,182 | |
| 8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 5,153,540 shares authorized; no shares issued and outstanding, historical and pro forma | | | — | | | | — | | | | | | — | |
| 6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 358,235 shares issued and outstanding, historical and pro forma | | | 338,444 | | | | — | | | | | | 338,444 | |
| 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, historical and pro forma | | | 57,002 | | | | — | | | | | | 57,002 | |
| 6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 28,235,362 shares issued and outstanding, historical and pro forma | | | 648,910 | | | | — | | | | | | 648,910 | |
| Equity | | | | | | | | | | | | | | |
| Stockholders’ Equity | | | | | | | | | | | | | | |
| Preferred stock, $0.01 par value, 203,621,460 shares authorized; no shares issued and outstanding, historical and pro forma | | | — | | | | — | | | | | | — | |
| 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, historical and pro forma | | | 66,867 | | | | — | | | | | | 66,867 | |
| Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 30,410,316 shares issued and outstanding, historical and pro forma | | | 304 | | | | — | | | | | | 304 | |
| Common stock - Class C, $0.01 par value, 76,603 shares authorized; 67,933 shares issued and outstanding, historical and pro forma | | | 1 | | | | — | | | | | | 1 | |
| Additional paid-in-capital | | | 353,155 | | | | — | | | | | | 353,155 | |
| Distributions in excess of cumulative earnings | | | (369,705 | ) | | | — | | | | | | (369,705 | ) |
| Bluerock Homes Equity | | | — | | | | (538,460 | ) | (c) | | | | (538,460 | ) |
| Total Stockholders’ Equity | | | 50,622 | | | | (538,460 | ) | | | | | (487,838 | ) |
| Noncontrolling Interests | | | | | | | | | | | | | | |
| Operating partnership units | | | (4,922 | ) | | | — | | | | | | (4,922 | ) |
| Partially owned properties | | | 40,098 | | | | (22,670 | ) | (c) | | | | 17,428 | |
| Total Noncontrolling Interests | | | 35,176 | | | | (22,670 | ) | | | | | 12,506 | |
| Total Equity | | | 85,798 | | | | (561,130 | ) | | | | | (475,332 | ) |
| TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY | | $ | 2,642,101 | | | $ | (724,895 | ) | | | | $ | 1,917,206 | |
See Notes to Unaudited Pro Forma Condensed Consolidated Balance Sheet
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
AS OF JUNE 30, 2022
| (a) | Historical consolidated financial information derived from the Company’s Quarterly Report on Form 10-Q as of June 30, 2022. |
(b) | The Company separated its single-family residential real estate business (the “SFR Business”) from its multi-family residential real estate business (the “Separation”). Following the Separation, the SFR Business will be indirectly held by Bluerock Homes Trust, Inc. (“Bluerock Homes”), a Maryland corporation. Bluerock Homes has historically operated as part of Bluerock Residential Growth REIT, Inc (“Bluerock Residential” or “Parent”) and not as a standalone company. Financial statements have been derived from Bluerock Residential's historical accounting records and are presented on a carve-out basis. Bluerock Homes consists of the combined financial statements of the Operating Partnership and Bluerock REIT Operator, LLC, as well as the following investments and certain related entities: Alexan Southside Place, ARIUM Grandewood, Ballast, Golden Pacific, ILE, James at South First, Marquis at The Cascades, Mira Vista, Navigator Villas, Peak Housing (Axelrod, DFW 189, Granbury, Granbury 2.0, Indy, Lubbock, Lubbock 2.0, Lubbock 3.0, Lynnwood, Lynnwood 2.0, Peak I, Savannah 319, Springfield, Springtown, Springtown 2.0, Texarkana and Texas Portfolio 183), Park & Kingston, Plantation Park, The Conley, The Cottages at Myrtle Beach, The Cottages at Warner Robins, The Cottages of Port St. Lucie, The District at Scottsdale, The Hartley at Blue Hill, The Woods at Forest Hill, Thornton Flats, Vickers Historic Roswell, Wayford at Concord, Wayford at Innovation Park, Weatherford 185, Willow Park, and Yauger Park Villas. |
(c) | Reflects amounts representing the assets, liabilities, and equity attributable to Bluerock Homes, which were included in the Company’s historical financial statements. All asset and liabilities directly associated with the business activity of Bluerock Homes are included in the financial statements. |
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2022
(In thousands, except share and per share amounts)
| | | Bluerock
Residential
Growth REIT,
Inc. Historical
(a) | | | Separation of
Bluerock
Homes Trust,
Inc.
(b) | | | | Pro Forma
Total | |
| Revenues | | | | | | | | | | | | | |
| Rental and other property revenues | | $ | 115,014 | | | $ | (14,528 | ) | (c) | | $ | 100,486 | |
| Interest income from loan and ground lease investments | | | 7,825 | | | | (1,216 | ) | (c) | | | 6,609 | |
| Total revenues | | | 122,839 | | | | (15,744 | ) | | | | 107,095 | |
| | | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | | |
| Property operating | | | 41,690 | | | | (6,554 | ) | (c) | | | 35,136 | |
| Property management fees | | | 3,974 | | | | (1,493 | ) | (c) | | | 2,481 | |
| General and administrative | | | 15,204 | | | | (3,189 | ) | (c) (d) | | | 12,015 | |
| Acquisition and pursuit costs | | | 116 | | | | (70 | ) | (c) | | | 46 | |
| Depreciation and amortization | | | 43,456 | | | | (8,528 | ) | (c) | | | 34,928 | |
| Total expenses | | | 104,440 | | | | (19,834 | ) | | | | 84,606 | |
| Operating income | | | 18,399 | | | | 4,090 | | | | | 22,489 | |
| | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | |
| Other income | | | 1,184 | | | | (100 | ) | (c) | | | 1,084 | |
| Preferred returns on unconsolidated real estate joint ventures | | | 8,364 | | | | (3,188 | ) | (c) | | | 5,176 | |
| Provision for credit losses | | | 930 | | | | (373 | ) | (c) | | | 557 | |
| Gain on sale of unconsolidated joint ventures | | | 6,694 | | | | — | | | | | 6,694 | |
| Transaction costs | | | (9,703 | ) | | | — | | | | | (9,703 | ) |
| Interest expense, net | | | (24,918 | ) | | | 2,960 | (c) | | | (21,958 | ) |
| Total other expense | | | (17,449 | ) | | | (701 | ) | | | | (18,150 | ) |
| Net income | | | 950 | | | | 3,389 | | | | | 4,339 | |
| Preferred stock dividends | | | (37,129 | ) | | | — | | | | | (37,129 | ) |
| Preferred stock accretion | | | (10,845 | ) | | | — | | | | | (10,845 | ) |
| Net (loss) income attributable to noncontrolling interests | | | | | | | | | | | | | |
| Operating partnership units | | | (11,924 | ) | | | — | | | | | (11,924 | ) |
| Partially-owned properties | | | (2,430 | ) | | | 2,579 | (c) | | | 149 | |
| Net loss attributable to noncontrolling interests | | | (14,354 | ) | | | 2,579 | | | | | (11,775 | ) |
| Net loss attributable to common stockholders | | $ | (32,670 | ) | | $ | 810 | | | | $ | (31,860 | ) |
| | | | | | | | | | | | | | |
| Net loss per common share – Basic (e) | | $ | (1.14 | ) | | | | | | | $ | (1.09 | ) |
| Net loss per common share - Diluted (e) | | $ | (1.14 | ) | | | | | | | $ | (1.09 | ) |
| | | | | | | | | | | | | | |
| Weighted average basic common shares outstanding | | | 29,239,514 | | | | | | | | | 29,239,514 | |
| Weighted average diluted common shares outstanding | | | 29,239,514 | | | | | | | | | 29,239,514 | |
See Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2022
| (a) | Historical consolidated financial information derived from the Company’s quarterly report on Form 10-Q for the six months ended June 30, 2022. |
| (b) | The Company separated its single-family residential real estate business (the “SFR Business”) from its multi-family residential real estate business (the “Separation”). Following the Separation, the SFR Business will be indirectly held by Bluerock Homes Trust, Inc. (“Bluerock Homes”), a Maryland corporation. Bluerock Homes has historically operated as part of Bluerock Residential Growth REIT, Inc (“Bluerock Residential” or “Parent”) and not as a standalone company. Financial statements have been derived from Bluerock Residential's historical accounting records and are presented on a carve-out basis. Bluerock Homes consists of the combined financial statements of the Operating Partnership and Bluerock REIT Operator, LLC, as well as the following investments and certain related entities: Alexan Southside Place, ARIUM Grandewood, Ballast, Golden Pacific, ILE, James at South First, Marquis at The Cascades, Mira Vista, Navigator Villas, Peak Housing (Axelrod, DFW 189, Granbury, Granbury 2.0, Indy, Lubbock, Lubbock 2.0, Lubbock 3.0, Lynnwood, Lynnwood 2.0, Peak I, Savannah 319, Springfield, Springtown, Springtown 2.0, Texarkana and Texas Portfolio 183), Park & Kingston, Plantation Park, The Conley, The Cottages at Myrtle Beach, The Cottages at Warner Robins, The Cottages of Port St. Lucie, The District at Scottsdale, The Hartley at Blue Hill, The Woods at Forest Hill, Thornton Flats, Vickers Historic Roswell, Wayford at Concord, Wayford at Innovation Park, Weatherford 185, Willow Park, and Yauger Park Villas. |
| (c) | Reflects amounts representing revenues and expenses attributable to Bluerock Homes, which were included in the Company’s historical financial statements. The financial statements also include allocations of certain general, administrative, sales and marketing expenses and operations from the Company. However, amounts recognized by Bluerock Homes are not necessarily representative of the amounts that would have been reflected in the financial statements had Bluerock Homes operated independently of the Company. |
| (d) | The general and administrative expenses have been allocated to the Bluerock Homes based on relative unit count, which the Company believes to be a reasonable methodology. These allocated expenses are for corporate office expenses and management including, but not limited to, executive oversight, asset management, treasury, finance, human resources, tax, accounting, financial reporting, information technology and investor relations. |
| (e) | Loss per share is calculated in accordance with Accounting Standards Codification 260 – “Earnings per Share.” The historical loss per share amounts are the amounts reported in the Registrant’s Form 10-Q for the six months ended June 30, 2022.
|
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2021
(In thousands, except share and per share amounts)
| | | Bluerock
Residential
Growth REIT,
Inc. Historical
(a) | | | Separation of
Bluerock
Homes Trust,
Inc.
(b) | | | | Pro Forma
Total | |
| Revenues | | | | | | | | | | | | | |
| Rental and other property revenues | | $ | 203,689 | | | $ | (18,151 | ) | (c) | | $ | 185,538 | |
| Interest income from loan and ground lease investments | | | 16,962 | | | | (5,355 | ) | (c) | | | 11,607 | |
| Total revenues | | | 220,651 | | | | (23,506 | ) | | | | 197,145 | |
| | | | | | | | | | | | | | |
| Expenses | | | | | | | | | | | | | |
| Property operating | | | 76,002 | | | | (6,653 | ) | (c) | | | 69,349 | |
| Property management fees | | | 5,390 | | | | (764 | ) | (c) | | | 4,626 | |
| General and administrative | | | 27,787 | | | | (4,570 | ) | (c) (d) | | | 23,217 | |
| Acquisition and pursuit costs | | | 448 | | | | — | | | | | 448 | |
| Weather-related losses, net | | | 1,001 | | | | (87 | ) | (c) | | | 914 | |
| Depreciation and amortization | | | 80,051 | | | | (8,583 | ) | (c) | | | 71,468 | |
| Total expenses | | | 190,679 | | | | (20,657 | ) | | | | 170,022 | |
| Operating income | | | 29,972 | | | | (2,849 | ) | | | | 27,123 | |
| | | | | | | | | | | | | | |
| Other income (expense) | | | | | | | | | | | | | |
| Other income | | | 549 | | | | (253 | ) | (c) | | | 296 | |
| Preferred returns on unconsolidated real estate joint ventures | | | 12,067 | | | | (3,190 | ) | (c) | | | 8,877 | |
| Provision for credit losses | | | (384 | ) | | | (28 | ) | (c) | | | (412 | ) |
| Gain on sale of real estate investments | | | 137,427 | | | | (116,690 | ) | (c) | | | 20,737 | |
| Transaction costs | | | (15,036 | ) | | | — | | | | | (15,036 | ) |
| Loss on extinguishment of debt and debt modification costs | | | (6,740 | ) | | | 6,172 | (c) | | | (568 | ) |
| Interest expense, net | | | (52,701 | ) | | | 5,035 | (c) | | | (47,666 | ) |
| Total other income (expense) | | | 75,182 | | | | (108,954 | ) | | | | (33,772 | ) |
| Net income (loss) | | | 105,154 | | | | (111,803 | ) | | | | (6,649 | ) |
| Preferred stock dividends | | | (63,606 | ) | | | — | | | | | (63,606 | ) |
| Preferred stock accretion | | | (24,633 | ) | | | — | | | | | (24,633 | ) |
| Net income (loss) attributable to noncontrolling interests | | | | | | | | | | | | | |
| Operating partnership units | | | 2,250 | | | | — | | | | | 2,250 | |
| Partially-owned properties | | | 11,192 | | | | (11,652 | ) | (c) | | | (460 | ) |
| Net income attributable to noncontrolling interests | | | 13,442 | | | | (11,652 | ) | | | | 1,790 | |
| Net income (loss) attributable to common stockholders | | $ | 3,473 | | | $ | (100,151 | ) | | | $ | (96,678 | ) |
| | | | | | | | | | | | | | |
| Net income (loss) per common share – Basic (e) | | $ | 0.08 | | | | | | | | $ | (3.71 | ) |
| Net income (loss) per common share - Diluted (e) | | $ | 0.07 | | | | | | | | $ | (3.68 | ) |
| | | | | | | | | | | | | | |
| Weighted average basic common shares outstanding | | | 26,024,935 | | | | | | | | | 26,024,935 | |
| Weighted average diluted common shares outstanding | | | 26,249,999 | | | | | | | | | 26,249,999 | |
See Notes to Unaudited Pro Forma Condensed Consolidated Statement of Operations
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2021
| (a) | Historical consolidated financial information derived from the Company’s annual report on Form 10-K for the year ended December 31, 2021. |
| (b) | The Company separated its single-family residential real estate business (the “SFR Business”) from its multi-family residential real estate business (the “Separation”). Following the Separation, the SFR Business will be indirectly held by Bluerock Homes Trust, Inc. (“Bluerock Homes”), a Maryland corporation. Bluerock Homes has historically operated as part of Bluerock Residential Growth REIT, Inc (“Bluerock Residential” or “Parent”) and not as a standalone company. Financial statements have been derived from Bluerock Residential's historical accounting records and are presented on a carve-out basis. Bluerock Homes consists of the combined financial statements of the Operating Partnership and Bluerock REIT Operator, LLC, as well as the following investments and certain related entities: Alexan Southside Place, ARIUM Grandewood, Golden Pacific, ILE, James at South First, Marquis at The Cascades, Mira Vista, Navigator Villas, Peak Housing (Axelrod, DFW 189, Granbury, Indy, Lubbock, Lubbock 2.0, Lubbock 3.0, Lynnwood, Lynnwood 2.0, Peak I, Springfield, Springtown, Springtown 2.0, Texarkana and Texas Portfolio 183), Park & Kingston, Plantation Park, The Conley, The Cottages at Myrtle Beach, The Cottages at Warner Robins, The Cottages of Port St. Lucie, The District at Scottsdale, The Hartley at Blue Hill, The Woods at Forest Hill, Thornton Flats, Vickers Historic Roswell, Wayford at Concord, Wayford at Innovation Park, Willow Park, and Yauger Park Villas. |
| (c) | Reflects amounts representing revenues and expenses attributable to Bluerock Homes, which were included in the Company’s historical financial statements. The financial statements also include allocations of certain general, administrative, sales and marketing expenses and operations from the Company. However, amounts recognized by Bluerock Homes are not necessarily representative of the amounts that would have been reflected in the financial statements had Bluerock Homes operated independently of the Company. |
| (d) | The general and administrative expenses have been allocated to the Bluerock Homes based on relative unit count, which the Company believes to be a reasonable methodology. These allocated expenses are for corporate office expenses and management including, but not limited to, executive oversight, asset management, treasury, finance, human resources, tax, accounting, financial reporting, information technology and investor relations. |
| (e) | Income (loss) per share is calculated in accordance with Accounting Standards Codification 260 – “Earnings per Share.” The historical earnings per share amounts are the amounts reported in the Registrant’s Form 10-K for the year ended December 31, 2021. |
