Document_and_Entity_Informatio
Document and Entity Information | 3 Months Ended | |
Dec. 31, 2014 | Feb. 05, 2015 | |
Document and Entity Information | ||
Entity Registrant Name | BRT REALTY TRUST | |
Entity Central Index Key | 14846 | |
Document Type | 10-Q | |
Document Period End Date | 31-Dec-14 | |
Amendment Flag | FALSE | |
Current Fiscal Year End Date | -21 | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 14,101,056 | |
Document Fiscal Year Focus | 2015 | |
Document Fiscal Period Focus | Q1 |
CONSOLIDATED_BALANCE_SHEETS
CONSOLIDATED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
ASSETS | ||
Real estate properties, net of accumulated depreciation and amortization of $30,122 and $27,424 | $669,887,000 | $635,612,000 |
Cash and cash equivalents | 11,022,000 | 23,181,000 |
Deferred costs, net | 15,112,000 | 13,515,000 |
Deposits and escrows | 9,753,000 | 12,273,000 |
Other assets, net | 12,566,000 | 15,632,000 |
Assets of discontinued operations | 0 | 2,017,000 |
Asset held for sale | 6,748,000 | 0 |
Total Assets | 750,293,000 | 734,620,000 |
Liabilities: | ||
Mortgages payable | 502,103,000 | 482,406,000 |
Junior subordinated notes | 37,400,000 | 37,400,000 |
Accounts payable and accrued liabilities | 14,941,000 | 15,185,000 |
Deferred income | 30,990,000 | 30,990,000 |
Liability held for sale | 6,232,000 | 0 |
Total Liabilities | 591,666,000 | 565,981,000 |
Commitments and contingencies | 0 | 0 |
BRT Realty Trust shareholders’ equity: | ||
Preferred shares, $1 par value: Authorized 10,000 shares, none issued | 0 | 0 |
Shares of beneficial interest, $3 par value: Authorized number of shares, unlimited, 13,655 and 13,535 issued | 39,930,000 | 40,965,000 |
Additional paid-in capital | 161,994,000 | 166,209,000 |
Accumulated other comprehensive (loss) | -33,000 | -8,000 |
Accumulated deficit | -79,524,000 | -77,026,000 |
Total BRT Realty Trust shareholders’ equity | 122,367,000 | 130,140,000 |
Non-controlling interests | 36,260,000 | 38,499,000 |
Total Equity | 158,627,000 | 168,639,000 |
Total Liabilities and Equity | 750,293,000 | 734,620,000 |
Variable Interest Entity Primary Beneficiary [Member] | RBHTRB Newark Holdings LLC [Member] | ||
ASSETS | ||
Restricted cash – Newark | 17,731,000 | 22,835,000 |
Restricted cash – Multi-family | 17,731,000 | 22,835,000 |
Multi-Family Real Estate [Member] | ||
ASSETS | ||
Total Assets | 580,309,000 | |
Multi-Family Real Estate [Member] | Variable Interest Entity Primary Beneficiary [Member] | ||
ASSETS | ||
Restricted cash – Newark | 7,474,000 | 9,555,000 |
Restricted cash – Multi-family | $7,474,000 | $9,555,000 |
CONSOLIDATED_BALANCE_SHEETS_Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
In Thousands, except Share data, unless otherwise specified | ||
Statement of Financial Position [Abstract] | ||
Real estate properties, accumulated depreciation (in Dollars) | $30,122 | $27,424 |
Preferred shares, par value (in dollars per share) | $1 | $1 |
Preferred shares, Authorized shares | 10,000 | 10,000 |
Preferred shares, issued shares | 0 | 0 |
Shares of beneficial interest, par value (in dollars per share) | $3 | $3 |
Shares of beneficial interest, issued shares | 13,310 | 13,655 |
CONSOLIDATED_STATEMENTS_OF_OPE
CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) | 3 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Revenues: | ||
Rental and other revenue from real estate properties | $19,481 | $13,807 |
Other income | 296 | 271 |
Total revenues | 19,777 | 14,078 |
Expenses: | ||
Operating expenses related to real estate properties | 10,409 | 7,634 |
Interest expense | 6,201 | 4,684 |
Advisorbs fees, related party | 584 | 362 |
Property acquisition costs | 295 | 1,181 |
General and administrativebincluding $79 and $213 to related party | 1,657 | 1,629 |
Depreciation and amortization | 4,158 | 3,190 |
Total expenses | 23,304 | 18,680 |
Loss from continuing operations | -3,527 | -4,602 |
Discontinued operations: | ||
Discontinued operations | 0 | 851 |
Net loss | -3,527 | -3,751 |
Plus: net loss attributable to non- controlling interests | 1,029 | 1,018 |
Net loss attributable to common shareholders | -2,498 | -2,733 |
Basic and diluted per share amounts attributable to common shareholders: | ||
Loss from continuing operations | ($0.18) | ($0.25) |
Discontinued operations | $0 | $0.06 |
Basic and diluted loss per share | ($0.18) | ($0.19) |
Amounts attributable to BRT Realty Trust: | ||
Loss from continuing operations | -2,498 | -3,584 |
Discontinued operations | $0 | $851 |
Weighted average number of common shares outstanding: | ||
Basic and diluted (in shares) | 14,243,173 | 14,162,887 |
CONSOLIDATED_STATEMENTS_OF_OPE1
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Income Statement [Abstract] | ||
General and administrative, related party | $79 | $213 |
CONSOLIDATED_STATEMENTS_OF_COM
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Statement of Comprehensive Income [Abstract] | ||
Net loss | ($3,527) | ($3,751) |
Other comprehensive (loss) income: | ||
Unrealized (loss) gain on derivative instruments | -25 | 27 |
Other comprehensive (loss) income | -25 | 27 |
Comprehensive loss | -3,552 | -3,724 |
Comprehensive loss attributable to non-controlling interests | 1,033 | 1,014 |
Comprehensive loss attributable to common shareholders | ($2,519) | ($2,710) |
CONSOLIDATED_STATEMENT_OF_EQUI
CONSOLIDATED STATEMENT OF EQUITY (USD $) | Total | Common Stock [Member] | Additional Paid In Capital [Member] | Accumulated Other Comprehensive Income [Member] | Retained Earnings [Member] | Noncontrolling Interest [Member] |
In Thousands, except Share data, unless otherwise specified | ||||||
Balances at Sep. 30, 2014 | $168,639 | $40,965 | $166,209 | ($8) | ($77,026) | $38,499 |
Shares Repurchased | 345,081 | 345,081 | ||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Compensation expense brestricted stock | 206 | 206 | ||||
Contributions from non-controlling interests | 292 | 292 | ||||
Distributions to non-controlling interests | -650 | -650 | ||||
Purchase of non-controlling interest | -3,886 | -3,034 | -852 | |||
Shares repurchased - 345,081 shares | -2,422 | -1,035 | -1,387 | |||
Net loss | -3,527 | -2,498 | -1,029 | |||
Other comprehensive loss | -25 | -25 | ||||
Comprehensive loss | -3,552 | |||||
Balances at Dec. 31, 2014 | $158,627 | $39,930 | $161,994 | ($33) | ($79,524) | $36,260 |
CONSOLIDATED_STATEMENT_OF_CASH
CONSOLIDATED STATEMENT OF CASH FLOWS (USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Cash flows from operating activities: | ||
Net loss | ($3,527) | ($3,751) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 4,908 | 3,646 |
Amortization of deferred fee income | 0 | -224 |
Amortization of restricted stock | 206 | 180 |
Increases and decreases from changes in other assets and liabilities: | ||
Change in straight-line rent | -100 | -135 |
Decrease in interest and dividends receivable | 17 | 92 |
Increase in prepaid expenses | -864 | -488 |
(Increase) decrease in prepaid interest | -23 | 341 |
(Decrease) increase in accounts payable and accrued liabilities | -269 | 1,560 |
Decrease (increase) in security deposits and other receivable | 2,324 | -2,203 |
Decrease in other receivables | 4,976 | 0 |
Other | 8 | 44 |
Net cash provided by (used in) operating activities | 7,656 | -938 |
Cash flows from investing activities: | ||
Collections from real estate loans | 2,000 | 15,244 |
Additions to real estate loans | 0 | -5,103 |
Additions to real estate properties | -10,777 | -81,520 |
Net costs capitalized to real estate owned | -17,227 | -5,305 |
Collection of loan fees | 0 | 132 |
Purchase of non controlling interest | -3,886 | 0 |
Net cash used in investing activities | -23,446 | -72,347 |
Cash flows from financing activities: | ||
Proceeds from mortgages payable | 9,341 | 61,611 |
Mortgage principal payments | -584 | -345 |
Increase in deferred borrowing costs | -2,346 | -744 |
Capital contributions from non-controlling interests | 292 | 5,300 |
Capital distribution to non-controlling interests | -650 | -496 |
Repurchase of shares of beneficial interest | -2,422 | 0 |
Net cash provided by financing activities | 3,631 | 65,326 |
Net decrease in cash and cash equivalents | -12,159 | -7,959 |
Cash and cash equivalents at beginning of period | 23,181 | 60,265 |
Cash and cash equivalents at end of period | 11,022 | 52,306 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 6,273 | 4,158 |
Taxes paid | 14 | 11 |
Real estate property reclassified to assets held for sale | 6,748 | 0 |
Acquisition of real estate through assumption of debt | 17,173 | 0 |
RBHTRB Newark Holdings LLC [Member] | Variable Interest Entity Primary Beneficiary [Member] | ||
Cash flows from investing activities: | ||
Net change in restricted cash - Newark | 4,363 | 4,205 |
Net change in restricted cash - Multi Family | -4,363 | -4,205 |
Multi-Family Real Estate [Member] | Variable Interest Entity Primary Beneficiary [Member] | ||
Cash flows from investing activities: | ||
Net change in restricted cash - Newark | 2,081 | 0 |
Net change in restricted cash - Multi Family | ($2,081) | $0 |
Organization_and_Background
Organization and Background | 3 Months Ended |
Dec. 31, 2014 | |
Organization and Background [Abstract] | |
Organization and Background | Organization and Background |
BRT Realty Trust (“BRT” or the “Trust”) is a business trust organized in Massachusetts. BRT (i) owns, operates and develops multi‑family properties and (ii) owns, operates and develops commercial and mixed-use real estate assets. | |
The multi‑family properties are generally acquired with venture partners in transactions in which the Trust contributes 50% to 90% of the equity. | |
BRT conducts its operations to qualify as a real estate investment trust, or REIT, for federal income tax purposes. |
Basis_of_Preparation
Basis of Preparation | 3 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Preparation | Basis of Preparation |
The accompanying interim unaudited consolidated financial statements as of December 31, 2014, and for the three months ended December 31, 2014 and 2013, reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the results for such interim periods. The results of operations for the three months ended December 31, 2014, are not necessarily indicative of the results for the full year. The consolidated balance sheet as of September 30, 2014, has been derived from the audited financial statements at that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. | |
The consolidated financial statements include the accounts and operations of BRT Realty Trust, its wholly owned subsidiaries, and its majority owned or controlled real estate entities and its interests in variable interest entities in which the Trust is determined to be the primary beneficiary. Material intercompany balances and transactions have been eliminated. | |
RBH‑TRB Newark Holdings LLC, referred to herein as the Newark Joint Venture, was determined to be a variable interest entity (“VIE”) because the total equity investment at risk is not sufficient to permit it to finance its activities without additional subordinated financial support by its equity holders. The Trust was determined to be the primary beneficiary of this joint venture because it has a controlling interest in that it has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and it has the obligation to absorb losses of the entity and the right to receive benefits from the entity that could potentially be significant to the VIE. | |
The Trust’s consolidated joint ventures that own multi‑family properties, other than the joint venture which owns a multi-family property in Kennesaw, GA were determined to be VIE’s because the voting rights of some equity investors are not proportional to their obligations to absorb the expected losses of the entity and their right to receive the expected residual returns. In addition substantially all of the entity’s activities either involved or are conducted on behalf of the investor that has disproportionately fewer voting rights, it was determined that the Trust is the primary beneficiary of these joint ventures because it has a controlling interest in that it has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and it has the obligation to absorb losses of the entity and the right to receive benefits from the entity that could potentially be significant to the VIE. | |
The joint venture that owns the Kennesaw, GA property was determined not to be a VIE but is consolidated because the Trust has substantive participating rights in the entity giving it a controlling financial interest in the entity. | |
With respect to its unconsolidated joint ventures, as (i) the Trust is primarily the managing member but does not exercise substantial operating control over these entities or the Trust is not the managing member and (ii) such entities are not VIE’s, the Trust has determined that such joint ventures should be accounted for under the equity method of accounting for financial statement purposes. | |
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results could differ from those estimates. |
Equity
Equity | 3 Months Ended |
Dec. 31, 2014 | |
Equity [Abstract] | |
Equity | Equity |
Common Share Dividend Distribution | |
During the quarter ended December 31, 2014, the Trust did not declare a dividend on its shares. | |
Restricted Shares | |
The Trust’s 2012 Incentive Plan, approved by its shareholders in March 2012, permits the Trust to grant stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, up to a maximum of 600,000 shares. As of December 31, 2014, 271,975 shares were issued pursuant to this plan. In January 2015, the Trust granted 142,950 shares of restricted stock pursuant to this plan. As of December 31, 2014, An aggregate of 376,300 shares of restricted stock awarded pursuant to the Trust’s 2009 equity incentive plan (the "Prior Plan") were outstanding and had not vested. No additional awards may be granted under the Prior Plan. The restricted shares granted under the 2012 Incentive Plan and the Prior Plan vest 5 years from the date of grant and under specified circumstances, including a change in control, may vest earlier. For accounting purposes, the restricted shares are not included in the outstanding shares shown on the consolidated balance sheets until they vest, but are included in the earnings per share computation. For the three months ended December 31, 2014 and 2013, the Trust recorded $ 206,000 and $180,000 of compensation expense, respectively, related to the amortization of unearned compensation. At December 31, 2014, $1,872,000 has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods. The weighted average vesting period is 2.1 years. | |
Share Repurchase | |
In December 2014 The Trust purchased 345,081 of its shares of beneficial interest at a price of $7.02 for a total of $2,422,000. | |
Per Share Data | |
Basic earnings (loss) per share was determined by dividing net income (loss) applicable to common shareholders for the applicable year by the weighted average number of shares of beneficial interest , (including unvested restricted stock) outstanding during such period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue shares of beneficial interest were exercised or converted into shares of beneficial interest or resulted in the issuance of shares of beneficial interest that share in the earnings of the Trust. Diluted earnings per share was determined by dividing net income applicable to common shareholders for the applicable period by the total of the weighted average number of shares of beneficial interest outstanding. The Trust does not have any dilutive securities outstanding. | |
Basic and diluted shares outstanding for the three months ended December 31, 2014 and 2013, were 14,243,173 and 14,162,887, respectively. |
Real_Estate_Properties
Real Estate Properties | 3 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Real Estate [Abstract] | ||||||||||||||||||||||
Real Estate Properties | Real Estate Properties | |||||||||||||||||||||
A summary of real estate properties owned is as follows (dollars in thousands): | ||||||||||||||||||||||
30-Sep-14 | Additions (a) | Capitalized Costs and Improvements | Depreciation, | 31-Dec-14 | ||||||||||||||||||
Balance | Amortization and other reductions (b) | Balance | ||||||||||||||||||||
Multi-family | $ | 511,866 | $ | 27,950 | $ | 9,007 | $ | (10,374 | ) | $ | 538,449 | |||||||||||
Commercial/mixed use (c) | 113,021 | — | 8,216 | (500 | ) | 120,737 | ||||||||||||||||
Land | 7,972 | — | — | — | 7,972 | |||||||||||||||||
Shopping centers/Retail | 2,678 | — | 4 | (27 | ) | 2,655 | ||||||||||||||||
Co-op/condo apartments | 75 | — | — | (1 | ) | 74 | ||||||||||||||||
Total real estate properties | $ | 635,612 | $ | 27,950 | $ | 17,227 | $ | (10,902 | ) | $ | 669,887 | |||||||||||
_________________ | ||||||||||||||||||||||
(a) | During the three months ended December 31, 2014, the Trust purchased the following multi‑family property (dollars in thousands): | |||||||||||||||||||||
Location | Purchase | No of Units | Contract Purchase Price | Acquisition | BRT Equity | Property Acquisition Costs | ||||||||||||||||
Date | Mortgage Debt | |||||||||||||||||||||
Pensacola, FL | 12/22/14 | 276 | $ | 27,950 | $ | 17,173 | $ | 11,380 | $ | 295 | ||||||||||||
(b) Includes the re-classification of a property which is held-for-sale. See Note 5 - Asset held for sale. | ||||||||||||||||||||||
(c) Represents the real estate assets of RBH‑TRB Newark Holdings LLC, a consolidated VIE which owns operating and development properties in Newark, New Jersey. These properties contain a mix of office, retail space, charter schools and surface parking totaling approximately 690,000 square feet of commercial space and 61 residential apartment units (excluding 6,000 square feet of commercial space and 62 residential apartments currently under construction). Certain of these assets are subject to a mortgage with a principal balance of $19,500,000 held by the Trust, which is eliminated in consolidation. Several of the assets are also encumbered by other mortgages which are discussed in Note 6 - Debt Obligations. The Trust contributed capital of $4,972,000 to this venture in the year ended September 30, 2014, representing its proportionate share of capital required to fund the operations of the venture for the venture’s current fiscal year and to purchase additional land parcels. This contribution includes $2,489,000 for the payment of deferred interest on the loan held by the Trust. | ||||||||||||||||||||||
During the three months ended December 31, 2014, the Trust increased its ownership interest in a (i) joint venture that owns two multi-family properties in Houston, TX from 80% to 91% by purchasing its partner's interest in the venture for $2,036,000; and (ii) joint venture that owns a multi-family property in Decatur, GA from 80% to 100% by purchasing its partner's interest in the venture for $1,850,000. The Trust incurred $153,000 in professional fees related to these transactions. |
Real_Estate_Assets_Held_For_Sa
Real Estate Assets Held For Sale | 3 Months Ended |
Dec. 31, 2014 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment Disclosure | Real Estate Assets Held For Sale |
At December 31, 2014, the Trust reclassified its Lawrenceville, GA multi-family property to Asset held for sale and reclassified the related mortgage on the property to Liability held for sale. On December 11, 2014, the joint venture entered into an agreement to sell the property for $9.7 million. The transaction closed on February 5, 2015. |
Debt_Obligations
Debt Obligations | 3 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Debt Disclosure [Abstract] | ||||||||||||||
Debt Obligations | Debt Obligations | |||||||||||||
Debt obligations consist of the following (dollars in thousands): | ||||||||||||||
31-Dec-14 | 30-Sep-14 | |||||||||||||
Mortgages payable | $ | 502,103 | $ | 482,406 | ||||||||||
Junior subordinated notes | 37,400 | 37,400 | ||||||||||||
Total debt obligations | $ | 539,503 | $ | 519,806 | ||||||||||
Mortgages Payable | ||||||||||||||
During the three months ended December 31, 2014, the Trust purchased a multi-family property and incurred the following debt (dollars in thousands): | ||||||||||||||
Location | Purchase Date | Acquisition | Interest Rate | Interest Only Period | Maturity Date | |||||||||
Mortgage Debt | ||||||||||||||
Pensacola, FL | 12/22/14 | $ | 17,173 | 4.85 | % | 12 months | Oct-18 | |||||||
Contemporaneously with the Trust's increased ownership interest in a joint venture that owns multi-family properties in Houston, TX, the Trust refinanced a $6,494,000 adjustable rate mortgage and obtained a $7,500,000 fixed rate mortgage bearing interest at 4.19%. The new mortgage is interest only until November 2015 and matures in November 2024. | ||||||||||||||
Junior Subordinated Notes | ||||||||||||||
At December 31, 2014 and September 30, 2014, the Trust's junior subordinated notes had an outstanding principal balance of $37,400,000. The interest rates on the outstanding notes is set forth in the table below: | ||||||||||||||
Interest Period | Interest Rate | |||||||||||||
August 1, 2012 through April 29, 2016 | 4.9 | % | ||||||||||||
April 30, 2016 through April 30, 2036 | Libor + 2.00% | |||||||||||||
Interest expense relating to the junior subordinated notes was $458,000 for each of the three months ended December 31, 2014 and 2013. Amortization of the deferred costs, a component of interest expense, was $5,000 for each of the three months ended December 31, 2014 and 2013. |
Deferred_Income_New_Markets_Ta
Deferred Income (New Markets Tax Credit Transaction) | 3 Months Ended |
Dec. 31, 2014 | |
Deferred Revenue Disclosure [Abstract] | |
Deferred Income (New Markets Tax Credit Transaction) | Deferred Income (New Markets Tax Credit Transaction) |
In connection with the Teachers Village project, on September 30, 2014, affiliates of JP Morgan Chase (“Chase”) contributed $5,100,000, and on September 12, 2012 and February 3, 2012, affiliates of Goldman Sachs (“ Goldman”) contributed $16,400,000 and $11,200,000, respectively, to special purpose subsidiaries of the Newark Joint Venture and these subsidiaries received the proceeds from the sale of New Markets Tax Credits (“NMTC”) for which the project qualified. Chase and Goldman are entitled to receive tax credits against their qualified investments in the project over the seven years commencing as of the dates of their respective contributions. At the end of the 7 years, the Newark Joint Venture subsidiaries have the option to acquire the special purpose entities for a nominal fee. | |
Note 7 – Deferred Income (New Markets Tax Credit Transaction) - continued | |
The NMTC program was enacted by Congress to serve low-income and distressed communities by providing investors with tax credit incentives to make capital investments in those communities. The program permits taxpayers to claim credits against their Federal income tax for up to 39% of qualified investments. | |
Included in deferred income on the Trust’s consolidated balance sheet at December 31, 2014 and September 30, 2014 are $30,990,000 of the Chase and Goldman contributions, which are net of fees of the NMTC transactions and Newark Joint Venture financing transactions. These amounts will be recognized into income when the obligations to comply with the requirements of the NMTC program as set forth in the applicable provisions of the Internal Revenue Code of 1986, as amended (the “Code”), is eliminated. The failure of the Newark Joint Venture to comply with the requirements of the NMTC program may result in the reversal of the tax credit benefits and the related obligation of the Newark Joint Venture to indemnify the beneficiaries of such credits. The tax credits are subject to recapture for a seven year period as provided in the Code. | |
Costs incurred in structuring these transactions are deferred and will be recognized as an expense based on the maturities of the various mortgage financings, including the debt financing obtained by the Newark Joint Venture contemporaneously with the NMTC transactions. At December 31, 2014 and September 30, 2014, these costs totaled $10.4 million and $8.7 million, respectively, and are included in deferred costs on the consolidated balance sheets. | |
The Trust determined that the special purpose subsidiaries are VIE’s. The VIE’s ongoing activities, which include collecting and remitting interest and fees and NMTC compliance, were all considered in the design of the special purpose entities and are not anticipated to affect the economic performance during the life of the VIE’s. | |
Management considered the obligation to deliver tax benefits, provide guarantees to Chase and Goldman and the Trust’s obligation to absorb the losses of the VIE. Management also considered Chase’s and Goldman’s lack of a material interest in the underlying economics of the project. Management concluded that the Newark joint venture (a consolidated subsidiary of the Trust) is the primary beneficiary and has therefore consolidated the VIE’s. |
Segment_Reporting
Segment Reporting | 3 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Segment Reporting | Segment Reporting | ||||||||||||
Management determined that it operates in two reportable segments: a multi-family property segment which includes the ownership, operation and developing of its multi-family properties; and an other real estate segment which includes the ownership, operation and developing of the its other real estate assets and, in particular, the Newark Joint Venture. In the period ended December 31, 2013, The Trust also operated in a third segment that included the origination and servicing of the Trust's Loan Portfolio. The Trust no longer operates in the third segment and the operations of the segment are reported as discontinued operations. | |||||||||||||
The following table summarizes our segment reporting for the period indicated (dollars in thousands): | |||||||||||||
Three Months Ended December 31, 2014 | |||||||||||||
Multi-Family | Other | Total | |||||||||||
Real Estate | Real Estate | ||||||||||||
Rental and other revenues from real estate properties | $ | 18,161 | $ | 1,320 | $ | 19,481 | |||||||
Other income | — | 296 | 296 | ||||||||||
Total revenues | 18,161 | 1,616 | 19,777 | ||||||||||
Operating expenses relating to real estate properties | 9,215 | 1,194 | 10,409 | ||||||||||
Interest expense | 4,709 | 1,492 | 6,201 | ||||||||||
Advisor’s fee, related party | 485 | 99 | 584 | ||||||||||
Property acquisition costs | 295 | — | 295 | ||||||||||
General and administrative | 1,557 | 100 | 1,657 | ||||||||||
Depreciation and amortization | 3,502 | 656 | 4,158 | ||||||||||
Total expenses | 19,763 | 3,541 | 23,304 | ||||||||||
Loss from continuing operations | (1,602 | ) | (1,925 | ) | (3,527 | ) | |||||||
Plus: net loss attributable to non-controlling interests | 197 | 832 | 1,029 | ||||||||||
Net (loss) income attributable to common shareholders | $ | (1,405 | ) | $ | (1,093 | ) | $ | (2,498 | ) | ||||
Segment assets at December 31, 2014 | $ | 580,309 | $ | 169,984 | 750.293 | ||||||||
The following table summarizes our segment reporting for the period indicated (dollars in thousands): | |||||||||||||
Three Months Ended December 31, 2013 | |||||||||||||
Multi-Family | Other | Total | |||||||||||
Real Estate | Real Estate | ||||||||||||
Rental and other revenues from real estate properties | $ | 12,607 | $ | 1,200 | $ | 13,807 | |||||||
Other income | — | 271 | 271 | ||||||||||
Total revenues | 12,607 | 1,471 | 14,078 | ||||||||||
Operating expenses related to real estate properties | 6,560 | 1,074 | 7,634 | ||||||||||
Interest expense | 3,485 | 1,199 | 4,684 | ||||||||||
Advisor’s fees, related party | 293 | 69 | 362 | ||||||||||
Property acquisition costs | 1,181 | — | 1,181 | ||||||||||
General and administrative | 1,512 | 117 | 1,629 | ||||||||||
Depreciation and amortization | 2,764 | 426 | 3,190 | ||||||||||
Total expenses | 15,795 | 2,885 | 18,680 | ||||||||||
Loss from continuing operations | (3,188 | ) | (1,414 | ) | (4,602 | ) | |||||||
Plus net loss attributable to non-controlling interests | 187 | 831 | 1,018 | ||||||||||
Net (loss) income attributable to common shareholders before reconciling items | $ | (3,001 | ) | $ | (583 | ) | $ | (3,584 | ) | ||||
Reconciling adjustments: | |||||||||||||
Discontinued operations | — | — | 851 | ||||||||||
Net loss attributable to common shareholders | $ | (3,001 | ) | $ | (583 | ) | $ | (2,733 | ) | ||||
Segment assets at December 31, 2013 (a) | $ | 397,618 | $ | 149,275 | $ | 546,893 | |||||||
(a) excludes $66,678 of assets related to discontinued operations |
Fair_Value_of_Financial_Instru
Fair Value of Financial Instruments | 3 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Fair Value Disclosures [Abstract] | |||||||||||
Fair Value of Financial Instruments | Fair Value of Financial Instruments | ||||||||||
Financial Instruments Not Measured at Fair Value | |||||||||||
The following methods and assumptions were used to estimate the fair value of each class of financial instruments that are not recorded at fair value on the consolidated balance sheets: | |||||||||||
Cash and cash equivalents, restricted cash, accounts receivable (included in other assets), accounts payable and accrued liabilities: The carrying amounts reported in the consolidated balance sheets for these instruments approximate their fair value due to the short term nature of these accounts. | |||||||||||
Junior subordinated notes: At December 31, 2014 and 2013, the estimated fair value of the Trust’s junior subordinated notes is lower than their carrying value by approximately $21.4 and $24.3 million based on a market interest rate of 6.37% and 7.53%, respectively. | |||||||||||
Mortgages payable: At December 31, 2014, the estimated fair value of the Trust’s mortgages payable is greater than their carrying value by approximately $729,000 assuming market interest rates between 2.05% and 9.09% and | |||||||||||
Note 9 – Fair Value of Financial Instruments - continued | |||||||||||
at December 31, 2013, the estimated fair value of the Trust's mortgages payable was lower than their carrying value by approximately $17.8 million assuming market interest rates between 2.42% and 9.64% . Market interest rates were determined using rates which the Trust believes reflects institutional lender yields requirements. | |||||||||||
Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value assumptions. | |||||||||||
Financial Instruments Measured at Fair Value | |||||||||||
The Trust’s fair value measurements are based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, there is a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. Level 1 assets/liabilities are valued based on quoted prices for identical instruments in active markets, Level 2 assets/liabilities are valued based on quoted prices in active markets for similar instruments, on quoted prices in less active or inactive markets, or on other “observable” market inputs, and Level 3 assets/liabilities are valued based significantly on “unobservable” market inputs. The Trust does not currently own any financial instruments that are classified as Level 3. | |||||||||||
Set forth below is information regarding the Trust’s financial liabilities measured at fair value as of December 31, 2014 (dollars in thousands): | |||||||||||
Carrying and Fair Value | Fair Value Measurements | ||||||||||
Using Fair Value Hierarchy | |||||||||||
Level 1 | Level 2 | ||||||||||
Financial Liabilities: | |||||||||||
Interest rate swap | $ | 33 | — | $ | 33 | ||||||
Derivative financial instrument: Fair values are approximated using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. At December 31, 2014, this derivative is included in other accounts payable and accrued liabilities on the consolidated balance sheet. | |||||||||||
Although the Trust has determined that the majority of the inputs used to value its derivative fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with it utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparty. As of December 31, 2014, the Trust assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative position and determined that the credit valuation adjustments are not significant to the overall valuation of its derivative. As a result, the Trust determined that its derivative valuation is classified in Level 2 of the fair value hierarchy. |
Derivative_Financial_Instrumen
Derivative Financial Instruments | 3 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||
Derivative Financial Instruments | Derivative Financial Instruments | ||||||||||
Cash Flow Hedges of Interest Rate Risk | |||||||||||
The Trust’s objectives in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Trust primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt | |||||||||||
of variable amounts from a counterparty in exchange for the Trust making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. | |||||||||||
The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive income (loss) on our consolidated balance sheets and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings. | |||||||||||
As of December 31, 2014, the Trust had the following outstanding interest rate derivative that was designated as a cash flow hedge of interest rate risk (dollars in thousands): | |||||||||||
Interest Rate Derivative | Notional | Rate | Maturity | ||||||||
Interest rate swap | $ | 1,743,000 | 5.25 | % | 1-Apr-22 | ||||||
The table below presents the fair value of the Trust’s derivative financial instrument as well as its classification on the consolidated balance sheets as of the dates indicated (amounts in thousands): | |||||||||||
Derivatives as of: | |||||||||||
31-Dec-14 | 30-Sep-14 | ||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Accounts payable and accrued liabilities | $ | 33 | Accounts payable and accrued liabilities | $ | 8 | ||||||
The following table presents the effect of the Trust’s interest rate swap on the consolidated statements of comprehensive (loss) income for the dates indicated (dollars in thousands): | |||||||||||
Three Months Ended | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Amount of gain recognized on derivative in Other Comprehensive Income | $ | 31 | $ | 18 | |||||||
Amount of loss reclassified from Accumulated | $ | (9 | ) | $ | (9 | ) | |||||
Other Comprehensive Income into Interest Expense | |||||||||||
No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Trust’s cash flow hedges during the three months ended December 31, 2014 and December 31, 2013. During the twelve months ending December 31, 2015, the Trust estimates an additional $30,000 will be reclassified from other comprehensive income (loss) as an increase to interest expense. | |||||||||||
Note 10 – Derivative Financial Instruments - continued | |||||||||||
Credit-risk-related Contingent Features | |||||||||||
The agreement between the Trust and its derivatives counterparty provides that if the Trust defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, the Trust could be declared in default on its derivative obligation. | |||||||||||
As of December 31, 2014, the fair value of the derivative in a net asset position, which includes accrued interest, but excludes any adjustment for nonperformance risk related to this agreement, was $33,000 . As of December 31, 2014, the Trust has not posted any collateral related to this agreement. If the Trust had been in breach of this agreement at December 31, 2014, it could have been required to settle it obligations thereunder at its termination value of $33,000. |
Subsequent_Events
Subsequent Events | 3 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events |
Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of December 31, 2014 that warrant additional disclosure, have been included in the notes to the consolidated financial statements |
Basis_of_Preparation_Policies
Basis of Preparation (Policies) | 3 Months Ended |
Dec. 31, 2014 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Preparation | The accompanying interim unaudited consolidated financial statements as of December 31, 2014, and for the three months ended December 31, 2014 and 2013, reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the results for such interim periods. The results of operations for the three months ended December 31, 2014, are not necessarily indicative of the results for the full year. The consolidated balance sheet as of September 30, 2014, has been derived from the audited financial statements at that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States for complete financial statements. |
Consolidated Financial Statements and Variable Interest Entities | The consolidated financial statements include the accounts and operations of BRT Realty Trust, its wholly owned subsidiaries, and its majority owned or controlled real estate entities and its interests in variable interest entities in which the Trust is determined to be the primary beneficiary. Material intercompany balances and transactions have been eliminated. |
RBH‑TRB Newark Holdings LLC, referred to herein as the Newark Joint Venture, was determined to be a variable interest entity (“VIE”) because the total equity investment at risk is not sufficient to permit it to finance its activities without additional subordinated financial support by its equity holders. The Trust was determined to be the primary beneficiary of this joint venture because it has a controlling interest in that it has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and it has the obligation to absorb losses of the entity and the right to receive benefits from the entity that could potentially be significant to the VIE. | |
The Trust’s consolidated joint ventures that own multi‑family properties, other than the joint venture which owns a multi-family property in Kennesaw, GA were determined to be VIE’s because the voting rights of some equity investors are not proportional to their obligations to absorb the expected losses of the entity and their right to receive the expected residual returns. In addition substantially all of the entity’s activities either involved or are conducted on behalf of the investor that has disproportionately fewer voting rights, it was determined that the Trust is the primary beneficiary of these joint ventures because it has a controlling interest in that it has the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and it has the obligation to absorb losses of the entity and the right to receive benefits from the entity that could potentially be significant to the VIE. | |
The joint venture that owns the Kennesaw, GA property was determined not to be a VIE but is consolidated because the Trust has substantive participating rights in the entity giving it a controlling financial interest in the entity. | |
With respect to its unconsolidated joint ventures, as (i) the Trust is primarily the managing member but does not exercise substantial operating control over these entities or the Trust is not the managing member and (ii) such entities are not VIE’s, the Trust has determined that such joint ventures should be accounted for under the equity method of accounting for financial statement purposes. | |
Estimates | The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results could differ from those estimates |
Real_Estate_Properties_Tables
Real Estate Properties (Tables) | 3 Months Ended | |||||||||||||||||||||
Dec. 31, 2014 | ||||||||||||||||||||||
Real Estate [Abstract] | ||||||||||||||||||||||
Summary of real estate properties owned | A summary of real estate properties owned is as follows (dollars in thousands): | |||||||||||||||||||||
30-Sep-14 | Additions (a) | Capitalized Costs and Improvements | Depreciation, | 31-Dec-14 | ||||||||||||||||||
Balance | Amortization and other reductions (b) | Balance | ||||||||||||||||||||
Multi-family | $ | 511,866 | $ | 27,950 | $ | 9,007 | $ | (10,374 | ) | $ | 538,449 | |||||||||||
Commercial/mixed use (c) | 113,021 | — | 8,216 | (500 | ) | 120,737 | ||||||||||||||||
Land | 7,972 | — | — | — | 7,972 | |||||||||||||||||
Shopping centers/Retail | 2,678 | — | 4 | (27 | ) | 2,655 | ||||||||||||||||
Co-op/condo apartments | 75 | — | — | (1 | ) | 74 | ||||||||||||||||
Total real estate properties | $ | 635,612 | $ | 27,950 | $ | 17,227 | $ | (10,902 | ) | $ | 669,887 | |||||||||||
_________________ | ||||||||||||||||||||||
(a) | During the three months ended December 31, 2014, the Trust purchased the following multi‑family property (dollars in thousands): | |||||||||||||||||||||
Location | Purchase | No of Units | Contract Purchase Price | Acquisition | BRT Equity | Property Acquisition Costs | ||||||||||||||||
Date | Mortgage Debt | |||||||||||||||||||||
Pensacola, FL | 12/22/14 | 276 | $ | 27,950 | $ | 17,173 | $ | 11,380 | $ | 295 | ||||||||||||
(b) Includes the re-classification of a property which is held-for-sale. See Note 5 - Asset held for sale. | ||||||||||||||||||||||
(c) Represents the real estate assets of RBH‑TRB Newark Holdings LLC, a consolidated VIE which owns operating and development properties in Newark, New Jersey. These properties contain a mix of office, retail space, charter schools and surface parking totaling approximately 690,000 square feet of commercial space and 61 residential apartment units (excluding 6,000 square feet of commercial space and 62 residential apartments currently under construction). Certain of these assets are subject to a mortgage with a principal balance of $19,500,000 held by the Trust, which is eliminated in consolidation. Several of the assets are also encumbered by other mortgages which are discussed in Note 6 - Debt Obligations. The Trust contributed capital of $4,972,000 to this venture in the year ended September 30, 2014, representing its proportionate share of capital required to fund the operations of the venture for the venture’s current fiscal year and to purchase additional land parcels. This contribution includes $2,489,000 for the payment of deferred interest on the loan held by the Trust. | ||||||||||||||||||||||
Schedule of multi-family properties purchased through joint ventures | ||||||||||||||||||||||
(a) | During the three months ended December 31, 2014, the Trust purchased the following multi‑family property (dollars in thousands): | |||||||||||||||||||||
Location | Purchase | No of Units | Contract Purchase Price | Acquisition | BRT Equity | Property Acquisition Costs | ||||||||||||||||
Date | Mortgage Debt | |||||||||||||||||||||
Pensacola, FL | 12/22/14 | 276 | $ | 27,950 | $ | 17,173 | $ | 11,380 | $ | 295 | ||||||||||||
Debt_Obligations_Tables
Debt Obligations (Tables) | 3 Months Ended | |||||||||||||
Dec. 31, 2014 | ||||||||||||||
Debt Obligations | ||||||||||||||
Schedule of debt obligations | Debt obligations consist of the following (dollars in thousands): | |||||||||||||
31-Dec-14 | 30-Sep-14 | |||||||||||||
Mortgages payable | $ | 502,103 | $ | 482,406 | ||||||||||
Junior subordinated notes | 37,400 | 37,400 | ||||||||||||
Total debt obligations | $ | 539,503 | $ | 519,806 | ||||||||||
Mortgages [Member] | ||||||||||||||
Debt Obligations | ||||||||||||||
Schedule of debt information | During the three months ended December 31, 2014, the Trust purchased a multi-family property and incurred the following debt (dollars in thousands): | |||||||||||||
Location | Purchase Date | Acquisition | Interest Rate | Interest Only Period | Maturity Date | |||||||||
Mortgage Debt | ||||||||||||||
Pensacola, FL | 12/22/14 | $ | 17,173 | 4.85 | % | 12 months | Oct-18 | |||||||
Junior Subordinated Debt [Member] | ||||||||||||||
Debt Obligations | ||||||||||||||
Schedule of debt information | The interest rates on the outstanding notes is set forth in the table below: | |||||||||||||
Interest Period | Interest Rate | |||||||||||||
August 1, 2012 through April 29, 2016 | 4.9 | % | ||||||||||||
April 30, 2016 through April 30, 2036 | Libor + 2.00% | |||||||||||||
Segment_Reporting_Tables
Segment Reporting (Tables) | 3 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Segment Reporting [Abstract] | |||||||||||||
Summary of segment reporting | The following table summarizes our segment reporting for the period indicated (dollars in thousands): | ||||||||||||
Three Months Ended December 31, 2014 | |||||||||||||
Multi-Family | Other | Total | |||||||||||
Real Estate | Real Estate | ||||||||||||
Rental and other revenues from real estate properties | $ | 18,161 | $ | 1,320 | $ | 19,481 | |||||||
Other income | — | 296 | 296 | ||||||||||
Total revenues | 18,161 | 1,616 | 19,777 | ||||||||||
Operating expenses relating to real estate properties | 9,215 | 1,194 | 10,409 | ||||||||||
Interest expense | 4,709 | 1,492 | 6,201 | ||||||||||
Advisor’s fee, related party | 485 | 99 | 584 | ||||||||||
Property acquisition costs | 295 | — | 295 | ||||||||||
General and administrative | 1,557 | 100 | 1,657 | ||||||||||
Depreciation and amortization | 3,502 | 656 | 4,158 | ||||||||||
Total expenses | 19,763 | 3,541 | 23,304 | ||||||||||
Loss from continuing operations | (1,602 | ) | (1,925 | ) | (3,527 | ) | |||||||
Plus: net loss attributable to non-controlling interests | 197 | 832 | 1,029 | ||||||||||
Net (loss) income attributable to common shareholders | $ | (1,405 | ) | $ | (1,093 | ) | $ | (2,498 | ) | ||||
Segment assets at December 31, 2014 | $ | 580,309 | $ | 169,984 | 750.293 | ||||||||
The following table summarizes our segment reporting for the period indicated (dollars in thousands): | |||||||||||||
Three Months Ended December 31, 2013 | |||||||||||||
Multi-Family | Other | Total | |||||||||||
Real Estate | Real Estate | ||||||||||||
Rental and other revenues from real estate properties | $ | 12,607 | $ | 1,200 | $ | 13,807 | |||||||
Other income | — | 271 | 271 | ||||||||||
Total revenues | 12,607 | 1,471 | 14,078 | ||||||||||
Operating expenses related to real estate properties | 6,560 | 1,074 | 7,634 | ||||||||||
Interest expense | 3,485 | 1,199 | 4,684 | ||||||||||
Advisor’s fees, related party | 293 | 69 | 362 | ||||||||||
Property acquisition costs | 1,181 | — | 1,181 | ||||||||||
General and administrative | 1,512 | 117 | 1,629 | ||||||||||
Depreciation and amortization | 2,764 | 426 | 3,190 | ||||||||||
Total expenses | 15,795 | 2,885 | 18,680 | ||||||||||
Loss from continuing operations | (3,188 | ) | (1,414 | ) | (4,602 | ) | |||||||
Plus net loss attributable to non-controlling interests | 187 | 831 | 1,018 | ||||||||||
Net (loss) income attributable to common shareholders before reconciling items | $ | (3,001 | ) | $ | (583 | ) | $ | (3,584 | ) | ||||
Reconciling adjustments: | |||||||||||||
Discontinued operations | — | — | 851 | ||||||||||
Net loss attributable to common shareholders | $ | (3,001 | ) | $ | (583 | ) | $ | (2,733 | ) | ||||
Segment assets at December 31, 2013 (a) | $ | 397,618 | $ | 149,275 | $ | 546,893 | |||||||
(a) excludes $66,678 of assets related to discontinued operations |
Fair_Value_of_Financial_Instru1
Fair Value of Financial Instruments (Tables) | 3 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Fair Value Disclosures [Abstract] | |||||||||||
Schedule of financial assets measured at fair value | Set forth below is information regarding the Trust’s financial liabilities measured at fair value as of December 31, 2014 (dollars in thousands): | ||||||||||
Carrying and Fair Value | Fair Value Measurements | ||||||||||
Using Fair Value Hierarchy | |||||||||||
Level 1 | Level 2 | ||||||||||
Financial Liabilities: | |||||||||||
Interest rate swap | $ | 33 | — | $ | 33 | ||||||
Derivative_Financial_Instrumen1
Derivative Financial Instruments (Tables) | 3 Months Ended | ||||||||||
Dec. 31, 2014 | |||||||||||
Interest Rate Derivatives | |||||||||||
Schedule of fair value of derivative financial instruments and classification on consolidated balance sheets | The table below presents the fair value of the Trust’s derivative financial instrument as well as its classification on the consolidated balance sheets as of the dates indicated (amounts in thousands): | ||||||||||
Derivatives as of: | |||||||||||
31-Dec-14 | 30-Sep-14 | ||||||||||
Balance Sheet Location | Fair Value | Balance Sheet Location | Fair Value | ||||||||
Accounts payable and accrued liabilities | $ | 33 | Accounts payable and accrued liabilities | $ | 8 | ||||||
Schedule of effect of derivative financial instrument on consolidated statements of comprehensive (loss) income | The following table presents the effect of the Trust’s interest rate swap on the consolidated statements of comprehensive (loss) income for the dates indicated (dollars in thousands): | ||||||||||
Three Months Ended | |||||||||||
December 31, | |||||||||||
2014 | 2013 | ||||||||||
Amount of gain recognized on derivative in Other Comprehensive Income | $ | 31 | $ | 18 | |||||||
Amount of loss reclassified from Accumulated | $ | (9 | ) | $ | (9 | ) | |||||
Other Comprehensive Income into Interest Expense | |||||||||||
Designated As Hedging Instrument [Member] | |||||||||||
Interest Rate Derivatives | |||||||||||
Schedule of outstanding interest rate derivatives | As of December 31, 2014, the Trust had the following outstanding interest rate derivative that was designated as a cash flow hedge of interest rate risk (dollars in thousands): | ||||||||||
Interest Rate Derivative | Notional | Rate | Maturity | ||||||||
Interest rate swap | $ | 1,743,000 | 5.25 | % | 1-Apr-22 | ||||||
Organization_and_Background_De
Organization and Background (Details) (Corporate Joint Venture [Member], Property Acquisition [Member], Apartment Building [Member]) | 3 Months Ended |
Dec. 31, 2014 | |
Minimum [Member] | |
Organization, background and significant accounting policies | |
Equity contribution in each transaction (as a percent) | 50.00% |
Maximum [Member] | |
Organization, background and significant accounting policies | |
Equity contribution in each transaction (as a percent) | 90.00% |
Equity_Details
Equity (Details) (USD $) | 3 Months Ended | 1 Months Ended | |
In Thousands, except Share data, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Jan. 31, 2015 |
Restricted Shares | |||
Shares Repurchased | 345,081 | ||
Price per share | $7.02 | ||
Value of shares repurchased and retired | $2,422 | ||
Per Share Data | |||
Basic and diluted shares outstanding | 14,243,173 | 14,162,887 | |
Restricted Stock [Member] | |||
Restricted Shares | |||
Compensation expense | 206 | 180 | |
Unearned compensation | $1,872 | ||
Remaining weighted average vesting period | 2 years 1 month 6 days | ||
Stock Incentive Plan2012 [Member] | |||
Restricted Shares | |||
Shares authorized for issuance | 600,000 | ||
Stock Incentive Plan2012 [Member] | Restricted Stock [Member] | |||
Restricted Shares | |||
Shares outstanding | 271,975 | ||
Vesting period for shares issued | 5 years | ||
Equity Incentive Plan2003 And Equity Incentive Plan2009 [Member] | |||
Restricted Shares | |||
Number of additional awards available for grant (shares) | 0 | ||
Equity Incentive Plan2003 And Equity Incentive Plan2009 [Member] | Restricted Stock [Member] | |||
Restricted Shares | |||
Shares outstanding | 376,300 | ||
Vesting period for shares issued | 5 years | ||
Subsequent Event [Member] | Stock Incentive Plan2012 [Member] | Restricted Stock [Member] | |||
Restricted Shares | |||
Issued (in shares) | 142,950 |
Real_Estate_Properties_Details
Real Estate Properties (Details) (USD $) | 3 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Reconciliation of Carrying Amount of Real Estate Investments [Roll Forward] | |
Balance at the beginning of the period | $635,612 |
Additions | 27,950 |
Capitalized Costs and Improvements | 17,227 |
Depreciation, amortization and other changes | -10,902 |
Balance at the end of the period | 669,887 |
Apartment Building [Member] | |
Reconciliation of Carrying Amount of Real Estate Investments [Roll Forward] | |
Balance at the beginning of the period | 511,866 |
Additions | 27,950 |
Capitalized Costs and Improvements | 9,007 |
Depreciation, amortization and other changes | -10,374 |
Balance at the end of the period | 538,449 |
Commercial Mixed Use Property [Member] | Variable Interest Entity Primary Beneficiary [Member] | RBHTRB Newark Holdings LLC [Member] | |
Reconciliation of Carrying Amount of Real Estate Investments [Roll Forward] | |
Balance at the beginning of the period | 113,021 |
Additions | 0 |
Capitalized Costs and Improvements | 8,216 |
Depreciation, amortization and other changes | -500 |
Balance at the end of the period | 120,737 |
Land [Member] | |
Reconciliation of Carrying Amount of Real Estate Investments [Roll Forward] | |
Balance at the beginning of the period | 7,972 |
Additions | 0 |
Capitalized Costs and Improvements | 0 |
Depreciation, amortization and other changes | 0 |
Balance at the end of the period | 7,972 |
Retail Site [Member] | Variable Interest Entity Primary Beneficiary [Member] | RBHTRB Newark Holdings LLC [Member] | |
Reconciliation of Carrying Amount of Real Estate Investments [Roll Forward] | |
Balance at the beginning of the period | 2,678 |
Additions | 0 |
Capitalized Costs and Improvements | 4 |
Depreciation, amortization and other changes | -27 |
Balance at the end of the period | 2,655 |
Co Op Condominium Apartment Building [Member] | |
Reconciliation of Carrying Amount of Real Estate Investments [Roll Forward] | |
Balance at the beginning of the period | 75 |
Additions | 0 |
Capitalized Costs and Improvements | 0 |
Depreciation, amortization and other changes | -1 |
Balance at the end of the period | $74 |
Real_Estate_Properties_Additio
Real Estate Properties - Additional Information (Details) (USD $) | 3 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
Real Estate Properties | |||
Cash paid during the period for interest | $6,273,000 | $4,158,000 | |
Property acquisition costs | 295,000 | 1,181,000 | |
Corporate Joint Venture [Member] | Houston TX [Member] | |||
Real Estate Properties | |||
Interest in joint venture (as a percent) | 91.00% | 80.00% | |
Payments to Acquire Interest in Joint Venture | 2,036,000 | ||
Corporate Joint Venture [Member] | Decatur, GA [Member] | |||
Real Estate Properties | |||
Interest in joint venture (as a percent) | 100.00% | 80.00% | |
Payments to Acquire Interest in Joint Venture | 1,850,000 | ||
Corporate Joint Venture [Member] | Houston, TX and Decatur, GA [Member] | |||
Real Estate Properties | |||
Professional fees | 153,000 | ||
Mortgages [Member] | Apartment Building [Member] | Property Acquisition [Member] | Affiliated Entity [Member] | Pensacola, FL [Member] | |||
Real Estate Properties | |||
Number of Units in Real Estate Property | 276 | ||
Real Estate Investment Property Contract Purchase Price | 27,950,000 | ||
Debt Instrument, Face Amount | 17,173,000 | ||
Payments to Acquire Interest in Subsidiaries and Affiliates | 11,380,000 | ||
Property acquisition costs | 295,000 | ||
Variable Interest Entity Primary Beneficiary [Member] | Commercial Mixed Use Property [Member] | RBHTRB Newark Holdings LLC [Member] | Newark NJ [Member] | |||
Real Estate Properties | |||
Area of Real Estate Property | 690,000 | ||
Number of Units in Real Estate Property | 61 | ||
Payments to Acquire Interest in Joint Venture | 4,972,000 | ||
Cash paid during the period for interest | 2,489,000 | ||
Variable Interest Entity Primary Beneficiary [Member] | Mortgages [Member] | Commercial Mixed Use Property [Member] | RBHTRB Newark Holdings LLC [Member] | Newark NJ [Member] | |||
Real Estate Properties | |||
Notes Payable, Related Parties | $19,500,000 | ||
Construction in Progress [Member] | Variable Interest Entity Primary Beneficiary [Member] | Commercial Mixed Use Property [Member] | RBHTRB Newark Holdings LLC [Member] | Newark NJ [Member] | |||
Real Estate Properties | |||
Area of Real Estate Property | 6,000 | ||
Number of Units in Real Estate Property | 62 |
Real_Estate_Assets_Held_For_Sa1
Real Estate Assets Held For Sale (Details) (Water Vista Property [Member], Subsequent Event [Member], Water Vista Property [Member], USD $) | Feb. 05, 2015 |
In Millions, unless otherwise specified | |
Water Vista Property [Member] | Subsequent Event [Member] | Water Vista Property [Member] | |
Property, Plant and Equipment [Line Items] | |
Sales price of assets held for sale | $9.70 |
Debt_Obligations_Details
Debt Obligations (Details) (USD $) | Dec. 31, 2014 | Sep. 30, 2014 |
In Thousands, unless otherwise specified | ||
Debt Obligations | ||
Total debt obligations | $539,503 | $519,806 |
Mortgages [Member] | ||
Debt Obligations | ||
Total debt obligations | 502,103 | 482,406 |
Junior Subordinated Debt [Member] | ||
Debt Obligations | ||
Total debt obligations | $37,400 | $37,400 |
Debt_Obligations_Mortgage_Paya
Debt Obligations - Mortgage Payable (Details) (USD $) | 3 Months Ended | |
Dec. 31, 2014 | Oct. 04, 2013 | |
Mortgages [Member] | Mortgages Maturing In October2018 [Member] | Pensacola, FL [Member] | ||
Debt Obligations | ||
Acquisition Mortgage Debt | $17,173,000 | |
Interest Rate | 4.85% | |
Interest Only Period | 12 months | |
Adjustable Rate Residential Mortgage [Member] | Mortgage Maturing in November 2014 [Member] | Houston TX [Member] | ||
Debt Obligations | ||
Acquisition Mortgage Debt | 6,494,000 | |
Fixed Rate Residential Mortgage [Member] | Mortgage Maturing in November 2014 [Member] | Houston TX [Member] | ||
Debt Obligations | ||
Acquisition Mortgage Debt | $7,500,000 | |
Interest Rate | 4.19% |
Debt_Obligations_Junior_Subord
Debt Obligations - Junior Subordinated Notes (Details) (USD $) | 3 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 |
Debt Instrument [Line Items] | |||
Total debt obligations | $539,503 | 519,806 | |
Junior Subordinated Debt [Member] | |||
Debt Instrument [Line Items] | |||
Total debt obligations | 37,400 | 37,400 | |
Interest Expense | 458 | 458 | |
Amortization of deferred costs included in interest expense | $5 | $5 | |
Debt Instrument, Interest Rate 30 April, 2016 Through 30 April, 2036 [Member] | Junior Subordinated Debt [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Description of Variable Rate Basis | LIBOR | LIBOR | |
Debt Instrument, Basis Spread on Variable Rate | 2.00% | 2.00% | |
Debt Instrument, Interest Rate 1 August, 2012 Through 29 April, 2016 [Member] | Junior Subordinated Debt [Member] | |||
Debt Instrument [Line Items] | |||
Interest Rate | 4.90% | 4.90% |
Deferred_Income_New_Markets_Ta1
Deferred Income (New Markets Tax Credit Transaction) (Details) (USD $) | 0 Months Ended | 12 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 11, 2012 | Feb. 03, 2012 | Sep. 30, 2014 | Sep. 30, 2012 | Dec. 31, 2014 |
Deferred Income (New Markets Tax Credit Transaction) | |||||
Deferred income | $30,990 | $30,990 | |||
Deferred costs, net | 13,515 | 15,112 | |||
New Markets Tax Credit Program Special Purpose Entity [Member] | Federal New Markets Tax Credit Transaction [Member] | |||||
Deferred Income (New Markets Tax Credit Transaction) | |||||
Maximum percentage of qualified investment permitted in NMTC to claim credits against Federal income tax | 39.00% | ||||
Variable Interest Entity Primary Beneficiary [Member] | Investor [Member] | New Markets Tax Credit Program Special Purpose Entity [Member] | Federal New Markets Tax Credit Transaction [Member] | |||||
Deferred Income (New Markets Tax Credit Transaction) | |||||
Period over which tax credits is receivable | 7 years | 7 years | |||
Deferred income | 30,990 | ||||
Variable Interest Entity Primary Beneficiary [Member] | RBHTRB Newark Holdings LLC [Member] | Investor [Member] | New Markets Tax Credit Program Special Purpose Entity [Member] | Federal New Markets Tax Credit Transaction [Member] | |||||
Deferred Income (New Markets Tax Credit Transaction) | |||||
Amount contributed to effect financing transaction | 16,400 | 11,200 | 5,100 | ||
Deferred costs, net | $8,700 | $10,400 | |||
Variable Interest Entity Primary Beneficiary [Member] | RBHTRB Newark Holdings LLC [Member] | Subsidiaries [Member] | New Markets Tax Credit Program Special Purpose Entity [Member] | |||||
Deferred Income (New Markets Tax Credit Transaction) | |||||
Period after which option to acquire special purpose entity may be exercised | 7 years |
Segment_Reporting_Details
Segment Reporting (Details) (USD $) | 3 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
segment | |||
Segment Reporting [Abstract] | |||
Number of reportable segments | 2 | ||
Revenues: | |||
Rental and other revenues from real estate properties | $19,481,000 | $13,807,000 | |
Other income | 296,000 | 271,000 | |
Total revenues | 19,777,000 | 14,078,000 | |
Expenses: | |||
Operating expenses related to real estate properties | 10,409,000 | 7,634,000 | |
Interest expense | 6,201,000 | 4,684,000 | |
Advisorbs fees, related party | 584,000 | 362,000 | |
Property acquisition costs | 295,000 | 1,181,000 | |
General and administrative | 1,657,000 | 1,629,000 | |
Depreciation and amortization | 4,158,000 | 3,190,000 | |
Total expenses | 23,304,000 | 18,680,000 | |
Loss from continuing operations | -3,527,000 | -4,602,000 | |
Plus net loss attributable to non-controlling interests | 1,029,000 | 1,018,000 | |
Net (loss) income attributable to common shareholders before reconciling items | -2,498,000 | -3,584,000 | |
Discontinued operations | 0 | 851,000 | |
Net loss attributable to common shareholders | -2,498,000 | -2,733,000 | |
Total Assets | 750,293,000 | 546,893,000 | 734,620,000 |
Assets of discontinued operations | 0 | 2,017,000 | |
Multi-Family Real Estate [Member] | |||
Revenues: | |||
Rental and other revenues from real estate properties | 18,161,000 | 12,607,000 | |
Other income | 0 | ||
Total revenues | 18,161,000 | 12,607,000 | |
Expenses: | |||
Operating expenses related to real estate properties | 9,215,000 | 6,560,000 | |
Interest expense | 4,709,000 | 3,485,000 | |
Advisorbs fees, related party | 485,000 | 293,000 | |
Property acquisition costs | 295,000 | 1,181,000 | |
General and administrative | 1,557,000 | 1,512,000 | |
Depreciation and amortization | 3,502,000 | 2,764,000 | |
Total expenses | 19,763,000 | 15,795,000 | |
Loss from continuing operations | -1,602,000 | -3,188,000 | |
Plus net loss attributable to non-controlling interests | 197,000 | 187,000 | |
Net (loss) income attributable to common shareholders before reconciling items | -3,001,000 | ||
Discontinued operations | 0 | ||
Net loss attributable to common shareholders | -1,405,000 | -3,001,000 | |
Total Assets | 580,309,000 | 397,618,000 | |
Other Real Estate [Member] | |||
Revenues: | |||
Rental and other revenues from real estate properties | 1,320,000 | 1,200,000 | |
Other income | 296,000 | 271,000 | |
Total revenues | 1,616,000 | 1,471,000 | |
Expenses: | |||
Operating expenses related to real estate properties | 1,194,000 | 1,074,000 | |
Interest expense | 1,492,000 | 1,199,000 | |
Advisorbs fees, related party | 99,000 | 69,000 | |
Property acquisition costs | 0 | ||
General and administrative | 100,000 | 117,000 | |
Depreciation and amortization | 656,000 | 426,000 | |
Total expenses | 3,541,000 | 2,885,000 | |
Loss from continuing operations | -1,925,000 | -1,414,000 | |
Plus net loss attributable to non-controlling interests | 832,000 | 831,000 | |
Net (loss) income attributable to common shareholders before reconciling items | -583,000 | ||
Discontinued operations | 0 | ||
Net loss attributable to common shareholders | -1,093,000 | -583,000 | |
Total Assets | 169,984,000 | 149,275,000 | |
Loan and Investment [Member] | |||
Expenses: | |||
Assets of discontinued operations | $66,678 |
Fair_Value_of_Financial_Instru2
Fair Value of Financial Instruments (Details) (Fair Value Inputs Level2 [Member], USD $) | 3 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
Market Approach Valuation Technique [Member] | Junior Subordinated Debt [Member] | ||
Financial Instruments Not Measured at Fair Value | ||
Market interest rate (as a percent) | 6.37% | 7.53% |
Market Approach Valuation Technique [Member] | Mortgages [Member] | Minimum [Member] | ||
Financial Instruments Not Measured at Fair Value | ||
Market interest rate (as a percent) | 2.05% | 2.42% |
Market Approach Valuation Technique [Member] | Mortgages [Member] | Maximum [Member] | ||
Financial Instruments Not Measured at Fair Value | ||
Market interest rate (as a percent) | 9.09% | 9.64% |
Estimate of Fair Value Measurement [Member] | Junior Subordinated Debt [Member] | ||
Financial Instruments Not Measured at Fair Value | ||
Estimated fair value lower than carrying value | 21,400 | 24,300 |
Estimate of Fair Value Measurement [Member] | Mortgages [Member] | ||
Financial Instruments Not Measured at Fair Value | ||
Estimated fair value lower than carrying value | 729 | 17,800 |
Fair_Value_of_Financial_Instru3
Fair Value of Financial Instruments - Financial Instruments Measured at Fair Value (Details) (Fair Value Measurements Recurring [Member], Interest Rate Swap [Member], USD $) | Dec. 31, 2014 |
In Thousands, unless otherwise specified | |
Fair Value Inputs Level2 [Member] | |
Financial Instruments Measured at Fair Value: Available-for-sale securities - (Corporate equity securities) | |
Derivative financial instruments | ($33) |
Fair Value Inputs Level1 [Member] | |
Financial Instruments Measured at Fair Value: Available-for-sale securities - (Corporate equity securities) | |
Derivative financial instruments | 0 |
Estimate of Fair Value Measurement [Member] | |
Financial Instruments Measured at Fair Value: Available-for-sale securities - (Corporate equity securities) | |
Derivative financial instruments | ($33) |
Derivative_Financial_Instrumen2
Derivative Financial Instruments (Details) (USD $) | 3 Months Ended | ||
Dec. 31, 2014 | Dec. 31, 2013 | Sep. 30, 2014 | |
Effect of derivative financial instrument on the consolidated statements of comprehensive (loss) income | |||
Amount of gain recognized on derivative in Other Comprehensive Income | $31,000 | $18,000 | |
Gain or loss recognized related to hedge ineffectiveness | 0 | 0 | |
Gain from components excluded from assessment of cash flow hedge effectiveness | 0 | 0 | |
Estimated amount to be reclassified from Accumulated other comprehensive income (loss) as an increase to interest expense | 30,000 | ||
Credit-risk-related Contingent Features | |||
Fair value of the derivative in a net asset position | 33,000 | ||
Termination value for settlement of obligation | 33,000 | ||
Interest Expense [Member] | |||
Effect of derivative financial instrument on the consolidated statements of comprehensive (loss) income | |||
Amount of loss reclassified from Accumulated Other Comprehensive Income into Interest Expense | -9,000 | -9,000 | |
Accounts Payable And Accrued Liabilities [Member] | |||
Fair value of derivative financial instruments | |||
Fair value of derivative financial instrument liability | 33,000 | 8,000 | |
Designated As Hedging Instrument [Member] | Interest Rate Swap [Member] | |||
Interest Rate Derivatives | |||
Notional Amount | $1,743,000 | ||
Rate (as a percent) | 5.25% |