BRG - Earnings call transcript Q3 2017 | Bluerock Residential Growth REIT Inc

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Operator

Good morning, ladies and gentlemen. And welcome to Bluerock Residential Growth REIT's Third Quarter 2017 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. to Accounting host Officer like Christopher today's now Chief Vohs, of would introduce for your call, I Bluerock Residential. Mr. ahead. go please Vohs,

Christopher Vohs

Thank release This under tab. Bluerock XXXX to earnings at press open, you, bluerockresidential.com REIT's supplement. our found and quarter The on and third website press we Residential issued Relations earnings be prior the morning, Growth call. Investor release to can market conference welcome our

addition, In anticipate XX-Q filing week. this we our

to of answer conclusion remarks, our may be pleased questions the have. any Following we'll you

begin, please statements. differ statements associated Act uncertainties variety we those from Securities under note Before a may that in and may Reform contain as the with set forth this forward-looking forward-looking of Litigation defined are risks call XXXX. statements There they such and are of results Private actual

respect forma a For and And well to turn these for earnings of forward-looking this disclosure forma remarks. in and CEO should supplement and we call call, management to including Growth for our the pro Residential assumptions inherent REIT, the earnings you uses their used over as his reconciliation with reasons measures morning use SEC Ramin non-GAAP with statements pro please our any to uncertainties, issued a discussion that, refer measures release With measures press we Kamfar, Chairman non-GAAP limitations. to respect the these GAAP, I'll in to as this and review the risks the measures of Bluerock filings.

Ramin Kamfar

morning, everyone. you, Good Chris. Thank

Afterwards, and detail. highlights on operational ask Babb, team, today, will transactional Chief President Jordan MacDonald, Officer; focus additional and members Chris I'll additional capital our to Operating our executive key close commentary. and Investment and me Ryan Chief I with markets Ryan the several our quarter have Officer. Chief our addition remarks In Officer; Jim key provide to with some internalization I and Ruddy, of you with Acquisitions financial my from

highlights. financial our with start me Let

On revenue growth. front, the achieve to significant we're continuing

the top from was million, activity quarter the revenue a asset our year and was by XX% a share, of will of reinvestment since increase loss to million this impacted proceeds line in numbers. investment Net $XX.X the second in of quarter year the our sales quarter. revenue quarter year occur of as share as expected and I our the for to growth to the common through year those compared net the then. prior $XX.X that Our for $X.XX $X.XX prior note stockholders significant our per of largely revenue attributable was third loss our for end in result reflect which per is quarter,

quarter. quarter, For attributable was to short, guidance came a year basis, adjusted million our to AFFO the in million $X.X On from the for stockholders of prior to share which or negative compared per at in $X.X our $X.XX, operations exceeded negative common $X.XX. funds AFFO significantly $X.XX

and Florida that about in onetime Our impacted which and costs asset resulting by AFFO from the a slightly above temporarily Hurricane by also were impacted in eight Georgia, across sales I $X.XX Irma. $XXX,XXX was noted by charge properties

of which AFFO, versus a $X.XX. cash as supplement our show fully investible the was $X.XX to quarter of average your The assumes forma in review. pro earnings Our guidance earnings the basis, per of that was we forma our detail beginning for include fully available our the invested third which indicate, for is we pro invested range to our share $X.XX on power

to the of Board pay in goal BRG's consecutive XXth the the our AFFO impacted of our full the per of the of share $X.XX, fees confidence pro business in cash, by For forma determined and quarter, in signal continuing numbers value payment executing The and of shares. our lieu underlying management favorably our $X.XX LTIPs plan the LTIPs respectively. fee management amount of our by and with to in AFFO

quarter the NOI operational on versus down the year our going additional increase Same-store for property prior of for and in Fort property Moving assets $XX.X at to XX the the volatility quarter, year. to two is from impacted was which the quarter. to and dollars provide operations; was million detail This basis MSA is Dallas NOI grew $XX Worth prior in points by you. a Ryan XX% million

billion up gross up basis. our XX% $X.X is of year-over-year quarter, Our asset quarter-to-quarter of basis are on a assets base on and end the as continues to which grow; over X% the a

the totaling front, approximately preferred $XX the operating closed X% our capital B offering Series to continues million. to Shifting for us quarter offer capital. the side, we On on properties two access to effective during cost acquisition XXX units market

Third quarter expect $XX million $XX to million maintain and sales $XX.X quarterly XXXX the rate through we totaled the around run to level. million

enable us capital to deploy base provide $XX were grow and post through a assets goal added max as more facility to start capital credit of to we Additionally revolver revolving quarter Initially, us the structure end, our borrowing is will $XXX closed we the capacity base the half first to our which business. efficiently million XXXX. and increase capacity of two giving million about the borrowing flexibility

the the that October million, the management manager. our be time million meeting, The IPO. numbers with $X.X will paid formula align our further We internalization of previously AFFO of in those Moving management we on XXst, a based equity. management current at was on agreement our significantly pursuant on our function To was benefit annual over the estimate the calculated external approval to by at rate by basis XX.X% established stockholders growing of performed run a of to approximately the to was internalization closed the consideration the accretive team internalization; with our on stockholders, in following the time. of $XX.X interests of consideration our

about $XX would per million For example, savings be equity at size $X.X the we billion in year. estimate

refining the policy and the the We're third December undertaken a expect review also our the also $X.XX dividend quarter, to budget and of currently be stock we between, dividend that announced XXXX would timeframe. dividend in announce XXXX announced that During position sometime the we in to a estimated the common Board has to $X.XX. be

Finally, our note share. guidance the AFFO per to call handing quarter to before per like the that $X.XX share I'd $X.XX over fourth for Ryan, is to

the expect our significantly We complete end cash quarter. as and that at grow the the to balance was move number this substantial through XXXX of we Ryan? on investing third sheet

Ryan MacDonald

I'd captured by for XX%. firm finished same well us noting into our across October continued reinvesting targeted quarter capital X.X% the our and we previous decreased the asset time. the Ramin, store rental store basis transitionary real off revenues we Thank be a morning, good store quarter increased note year not like be I 'XX increased an Occupancy store month from to progress BRG's occupancy. a efforts increase prior our basis performance you, driven as performance the disposition turnover decrease in began in period the perspective average Frisco year expect rates DFW XX XX%. same occupancy for assets XX and oriented average attributable this of points points R&M, the assets, was performance assessments. increase versus pool to some increase as period particularly by finishing through will with year, Portfolio primarily whose and in the the held XX Same like impacted everyone. prior by volatility quarter for estate assets same the cost, from was store a and disproportionately operational the start growth in Same which quarter in at supply wide, that persist negative the store by of in third to to by the want basis in MSA, a period property expenses XXXX. in same where that a quarter tax to two with a this challenged new remains X.X% from prior and points in NOI

same X%, Excluding NOI and respectively. and X.X% store increased assets, year-over-year two the revenue DFW

assets to amenitized includes executing plans unit The in interior select and yield to live, cap exited interest recent work, further grow of rate activity. funded approximately quarter, value Subsequent units X.X% and the cap upfront investments cash asset properties. to plans, million. one pro and reinvestment of a on stabilize assets totaling $XXX projected blended in On onetime million. credit is attributable migrate mature the quarter to core+ which partially cap to recycled so XXX% investment versus play we opportunities asset X% can end X.X% Two Grandewood lifestyle third and our the million our are to XXX a the stabilized closed and standard $XX investments that X,XXX invested four assets growth projected flowing the the our X.X% business the into drive X% area product. forma equity, $X strategy for to met investments that couple were are through totaling value for front, is be to to gross Shifting minority the decline [jobs] renovation three margin going in take initial into approximately ARIUM closed to our for BRG and year focused stabilized steady rate cap the in market $XXX a activity. a rates targeted in capital with and we to margin state. higher can new high million volatility opportunity million quarters the from disposition distort from on purchased of front; our ranging and ownership X.X%. cap two floor we rate core+ in totaling period We The to and highly with approximately units for strategy. both our investment improvements line interest. gross assets rate of during of in Takeover typically $XX BRG across approximately a property ownership primarily average an renovation our the XX% The million $XX margins expenses disproportionately of operational capital

at from fixed Creek funded Our Hunter's Freddie was purchase X.XX%. $XX rate with million loan Mac

one pending customary is a invest under risks in Carolina projected and transactions purchase BRG contract to total approximately multifamily purchase of million. real ownership investment investment. typically associated $XX is with Greenville, equity to asset. million $XX a XXX to subject additional asset the approximately terms conditions price closing estate XXX% for South for in we In in The are of

mezzanine are to common AFFO. convert terms existing Perimeter equity end remaining commitments, of year in Vickers spent In to projecting we million Atlanta, for Crescent common development equity by have investments in we investments annualized in Village and $XX Georgia. loans XX% earning three To-date,

The to-be-built the development remaining two combined million. additional investment a to capital total of of As Lauderdale, million $X projected investment in the invested mezzanine estimating we this million. total convert a mezzanine a Flagler invest approximating investment of a across common mezzanine investment are for $XX conversion part mezzanine amount is $XX investment, Village expect to million To-date has Florida. of $XX we Fort equity additional been in and and for developments

projects mezzanine equity, hand three opportunities, three remaining conversion of inclusive the are projecting in BRG of loans with any the on investment million raise. the and outlined of existing of cash And Series projected acquisition and Following estimated B preferred the our the approximately the additional year to in fourth finish equity in quarter approximately million. the $XX mezzanine we total additional preferred development $XXX is to development common development following be investment

to will our the coming now forward pipeline look our on investment to the to call feedback with conclude. in very additional that, Ramin And robust continues to Finally, return I reporting we continued quarters. be activity and

Ramin Kamfar

end Thank remarks you, That's open our I'm it to happy Ryan. of to prepared up operator. Q&A and the

Operator

Kamfar. Mr. you, Thank

question-and-answer Janney. you. come begin first now Thank the Stevenson [Operator And Please Instructions] go question morning Rob will this of We ahead. session will our from

Rob Stevenson

was guys. occupancy indicated Good third in -- you the in change the same-store What what the same-store the morning, the quarter? occupancy Ryan, that was.

Ryan MacDonald

It was XX%.

Rob Stevenson

then And do a you same-store Okay. for quarter? sequential growth guys revenue have the

Ryan MacDonald

including do, the X.X%. assets two We Dallas it was

Rob Stevenson

Okay.

wasn't I it? that think though was Now year-over-year

Ramin Kamfar

year-over-year. Definitely,

Ryan MacDonald

assets it X.X%. was it two Dallas X.X%, excluding Excuse me, the was

Rob Stevenson

initial the four Perfect. last leasing then And Southside at occupancy that about had currently guys place [Boone -- and had CityCentre, over you Helios, that properties initial can those is months development assets how talk Okay. few Trail]? going the

Ramin Kamfar

about units to about are about Sure. I CityCentre think today we XX were leased. We we're leased we X/XX doing and are currently as pre-Harvey. XX of XX% XX%

we did XXX units, think post-Harvey. I about

House units quarter no are with of averaging concessions back had a we XX you pretty think leased to in of course we units. we the there, think we're medical on good I forma. expect timeframe, And have again But units Helios, out there center track XX about are leased we're our months. of its if the So, opened normal by about then X/XX forma. about that XX% are month the post-Harvey albeit over I well, as pro end at we on accelerate north units deals On leased almost actually about -- Leigh Houston to on the there the we finally average start just on and is XX% XX. to which XX month XX we've Rob, of averaging Southside is there to October XX% Alexan pro XX that actually as a rents units in we other and in coming had

Rob Stevenson

going there already? and are most disaffected wind you hurricane delivered you Are sort you are seeing to are it of staggered or by is completion asset the seeing people Houston your -- being -- of running in of units the in up sort a

Ramin Kamfar

Southside completion, With respect majority of the units. a substantial we've delivered it's CityCentre the to actually staggered have

Rob Stevenson

how then did mean And been going that amount at XX has raise be point? thus anticipating the quarter that significant some you fourth third you far to B of pretty the the this a to quarter, equal greater Okay. or fourth decent preferred quarter, I is million in in guys

Ramin Kamfar

robust would the up, to out. holidays hard a to can be we estimate Thanksgiving got good last we to is It's at the that run coming tell the to look be which our you've and project tad as of level outside far remains a where maybe rate or That because but will million higher. as be same

Rob Stevenson

policy, things you then Ramin decision? lastly Okay. three any are -- that before if on the the the that two Board now or is as known you contemplating? finalize still guys to dividend contemplates not changes the ratchet to you guys what's just key And that down trying are It

Ramin Kamfar

going announced repeated going estimated to Well, is we XX in -- August and I be that we back to number my range in the the number remarks. we in XX announced that when is to be the that

So comfortable that we range. with are

we So the think because to is are sure budgets I want just what we to do cover we make trying number. finalizing the that

are comfortable are obviously but said, cash we today that We where to significant continuing invest. have we we

until we people don't it it. and to where on quarter timing. numbers comfortable XXXX end. sensitive with We investment part we sit got invested what a size this significant which be, make given it's we we have we to are announce -- and are we to of are the call to really number December it's promised. But We've do get some in so February, our that do additional to and going to that know -- as today announce are a our early sensitive able you to -- Obviously to comfortable really an going earlier we is be as on our peers QX that we need making do are going call they don't so are in an

Rob Stevenson

Thanks Okay. guys.

Ramin Kamfar

Thank you.

Operator

ahead. FBR. Kucera will Craig Riley next of go Please question come B. The from

Craig Kucera

morning had and accrual. you the that going asset I on I to are will know about now? How anticipated would right good there. guys. improve Whetstone you like how looks it's things which market circle feeling guys still the Hey, that at like asset operations are to

Ryan MacDonald

the Sure, hi, immediate to The in be obviously market to still market supply impacted continues be The of by Craig. continues Durham sub-market. little impacted. micro

quarters. versus trend of work the we the some coming through but Let's of supply that over the going are kind immediate quarters, to it's take see sub-market supply last asset to say right -- in the operationally work starting at couple the to

Ramin Kamfar

market Again or are -- Ramin. forma preferred dependent benefit there. But provide you as you're can preferred unexpected, off protection the on -- of some pro issues obviously, hi you anything the because it's not obviously but is of that's Craig, which

Craig Kucera

the to asset be operations cash anticipate recoup you You improve or it selling your then then investment think to eventually will flowing?

Ryan MacDonald

that think throughout I not to absolutely the into think and 'XX? asset we will certainly 'XX we're 'XX in market improve looking the sell and

Craig Kucera

Okay.

think should tenant guess, fees. out things and and thought NOI, of I forward? going utility that -- a we the sorry couple expect process what management was I'm property of re-classified I You reimbursements reimbursements there

Ramin Kamfar

going should it you is forward. expect answer that The yes,

it's reducing a to was an better just from an because as peers the on need of and going fees more revenues the you're and And expect can in yes, operating what what That we a our the came classified the that have -- of terms that Chris that see to be as management have were that's and bit margins to whether reimbursements, thought property expenses our In so to the impact of series walk looked the sense through of you a forward. our But we broke doing tells go as margins represent to principal does said comfortable numerator going people tests. we agent. that if denominator our way that's they based you'll in We numbers at obviously that -- a and tests -- work. those It us you'd can what a numbers you direction utility we go of like accountants should and with opposed accountants our forward. a because you when are to the detail through way provided our true a through. to

investors. one and transparency -- accounting the because to done one additional is guidance first done done was all and it's the to clarity so So of provide second and the visibility

Craig Kucera

Okay.

why us expensed some You had give color was quarter. related -- what you on losses that expensed? the during the some weather Can you

Ramin Kamfar

want you Chris, to do take that?

Christopher Vohs

Sure yeah.

our was Gulfshore Naples approximately So and limitation, of damages hit and a eight about which from insurance took claim we one the direct property from across their reached so, Irma. properties that which properties in incurred -- $XXX,XXX $XXX,XXX was in

from expected proceeds. on are losses expected properties the those specific And [less] insurance those the amount so our

Craig Kucera

in I'll jump Thanks back Okay. queue.

Operator

Paul Please come will from question next of the Northland Penny go And Securities. ahead.

Greg Baufield

This guys. Greg Paul. on questions. is for Thanks my Hi, for taking

will any are many the for you be how that First, areas expect in needing employees post and additional internalization REIT there personnel?

Ramin Kamfar

I think the around is number XX.

cheaper HR that with there such that But in-house. and staffed our at option, example. at -- find size that you've on for a it have to flexibility the and at we'll Bluerock fully we there. is at path from cancellable if not efficient bigger source is it administrative Bluerock to in-house into provides efficient price cost third we're the normal think team Marketing services another to we have the do us have pretty these to We're we a from it's tied on renewable our happen we as option enough -- non-core as support and so cost. There got Investor is and/or Resources is and at a getting Human If agreement a than which it and the should I and our not think is contract. I is that forth party bring so We're cheaper over. a continue as Relations some our growth get functions big for services just team idea we becomes vendor. so to We're get cost -- is the switch that contract more the

Greg Baufield

hurricanes. Florida wondering, from know in there to benefit and markets following damages bit and term then a And you expect secondly, are about the talked was Thanks. the sense. Houston supply hurricanes? from demand Make little intermediate you've I any But, that dynamics I the

Ramin Kamfar

the that got others take from that to Well, through had you of what's happened that through, taken eaten Houston, is got we going we expected and and in out a Camden have in basically lot I to overhang heard hurricane. a that, it is think the market eat probably stock by year Houston --

that I XXX month number. hurricane -- as to question ramped leases which mentioned of So, gone a That today. couple up the beforehand. average rate we away took after response an but earlier leases our that immediately kind concessions of And up in we have had down, has Ryan property per obviously now hurricane think post slowed to of the leasing, concessions a months and

the the Houston our in higher in is same are then it And in occupancy property you market market cases sellers values. higher you're numbers valuable today where Anecdotally they Irma. markets a where an numbers at more post in people going to in accepted had up they're rental see valuable tightened our accepting property out take property and the they've supply can across Florida -- are offer and properties than we who and or to re-market to to -- over back in higher of it higher their Our and that pulled were that pre-hurricane. with view time I tell more going and price thing has we -- property had it, Houston their are close to know saw off

that point suffering has So, obviously hurricanes that been notwithstanding for the it's view, been value a from on horrible cause of performance front impact positive. and property -- of a all us that

Greg Baufield

Got it. Thank you.

Operator

follow-up we And Please go do have Paul question Instructions] [Operator Securities. from ahead. Northland a Penny of

Greg Baufield

came and Yeah, higher mind. cause of what I think guide the more that you the modeling the that main not had do than consensus one noticed QX wondering, to little difference Street's $X.XX, maybe was in? a just I thing the is for AFFO bit

Ramin Kamfar

think giving has the report Board and us we've to our about I we've may been -- -- taking been had share. has per in what difference $X.XX and delta LTIPs we between our a been that because management actually Street -- of $X.XX be not guidance fee the

the us goes Now pay away LTIPs internalization. about to in LTIP, ability the after

month. going think share that's would I see but $X.XX that about going a that see are QX, rest you impact. of not So the probably you're for a about to to in

we are of that $X.XX on delta So guidance to end the the delta, exceeding what at organically, guidance the historically at we've not is that one of we've then but only or if the things changing it. that our that top look top -- and $X.XX reported as maybe had

We've costs a We've to couple QX that the that's related number guessing has to had this costs quarter sales. internalization. I'm But of issue. had also hurricane. a to asset noisy So with that had the it had we've the we related the of do quarters. fact

see to cash have. going are you costs the and internalization quarter, we we're Next to again that deploy continuing

milestone is, milestone we So been internalization, so didn't big emphasize about is credit of for us that's another goal help efficient have The line this. has didn't be management. cash this We're for talk to big a going and us. happy lot our this another, a that although in has behind to call, it the us terms on been of more

our put lot that build good the and So, goal that and is less through in let more and a a noise behind creating people XXXX and portfolio of continuing through have be to value to invested we've property going so fully lot noise built that a can we're and really sense at us. come all get level the this tremendous the we're

Greg Baufield

Thanks Understood. again.

Ramin Kamfar

good a question. That's

Operator

Thank you. at questions time. no this And additional showing I'm

back the session. the would like for to closing conclude Kamfar question-and-answer over to his will conference We I Ramin hand remarks.

Ramin Kamfar

Thank you, operator.

to continuing you delivering support. first your great to Look our a on increase put our shareholders. the it's a portfolio, behind you forward a As everyone We've on to look of internalization as We've some happy year for and that been milestones. noisy big us a today and sponsorship value, working to I are Thank the class said, progress to class deliver actually. had quarters. first continuing to going returns the our build to bring coming and team been team, in-house quarters. in couple equity of We're build we shareholder reporting forward for

Operator

you Thank the disconnect time attending sir. once for this your and may At concluded. conference has you today's presentation. gentlemen, you, Ladies again, Thank lines. has the conference concluded. And

may lines. You your disconnect

Bluerock Residential Growth REIT (BRG) 7 Nov 172017 Q3 Earnings call transcript