BRG - Earnings call transcript Q2 2020 | Bluerock Residential Growth REIT Inc

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Operator

Good morning ladies and gentlemen and welcome to the Bluerock Residential Growth REIT's Second Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note that this event is being recorded. I would now like to introduce you to your host for today's call; Christopher Vohs, Chief Financial Officer of Bluerock Residential. Mr. Vohs please go ahead.

Christopher Vohs

to Call. Growth welcome XXXX Second and Conference Earnings you Bluerock REIT Residential Quarter Thank prior market morning and This to supplement. press our release earnings open, we issued under on The website be release tab. found press at can bluerockresidential.com the Investors our

later In addition, today. our we filing anticipate XX-Q

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

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

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

Ramin Kamfar

everyone. and Chris Thank you good morning

EVP today are our Chief executive Investment In addition Chris President Operations. Acquisitions Jim Babb, key Officer; Chief of Officer; our with me including; Ryan members Officer; of Operating to Mike our Jordan Chief several remotely team and our Ruddy, MacDonald, DiFranco, our and

challenging thank wish our I and everyone for well getting all to Before is given results sincere to during hard continuation work employees and COVID into our that of also these their healthy want the times. the express our of pandemic, staying

A occupancy an a believe source, entirely strategy growth investing economic in believe transition strategy on virtual that when of to was affordable and investment a Economy access capital was to accelerated the basis well quarter rates markets realize challenging recovery front, a our growth positioned and growth with quarter quarter. portfolio the leasing which technology enhanced in pre-COVID we coupled the shape. we us a in allowed properties we're year-over-year facilitated during the takes unique by On execution to strong Knowledge as differentiated Class The seamless capture platform our to

to per a X% activity per Core impacted more by add-back a occupancy-focused results, during to basis, the dispositions which non-operating a hold GAAP cadence for up that quarter. partially to Initially, by a rest May per strategic of and was the slow much show which the the quarter. virus, Moving the on $X.XX with on non-cash, On items quarter. year. this investment share is balance to stockholders share exchange was report of throughout common year an the which the the and and pace was versus over operational certain year in the share NAREIT strength to our positive slow in but period which basis of driven first in of compared performance on of outbreak pleased cash -- throughout a share I'm income loss by X during prior this to for our initial strategy trends lease net quarter gained sequential the implemented FFO a $X.XX net continued we prior early is larger half XXXX $X.XX was $X.XX offset was our throughout the FFO decision quickly rate investment during rental for front, increases we pace offensive and in we some growth quarter into rate million second revenue to Shifting revenue continued pivoted which improvement to lease throughout accelerated sequential the July. result, quarter; quarter of generated half the as then a $XX the saw the strategy throughout as

rate to property delivered the property and positive points. results, average grew level growth XX year-over-year quarter. rental basis occupancy the million X.X% in on same-store We X% to $XX.X Moving of NOI in an we of

collection $XXX,XXX approximately and $XXX,XXX driven eviction unfortunately of was and was most loss fee this by due the of by that However reduction offset income COVID-XX. approximately moratorium in to

same-store NOI XX strong ended held came a year So revenue a X% plans. and which in basis the negative payment month negative includes prior period. XX% compared to Collections and at at X.X%, respectively quarter and consistently points the each

at the of assets very billion, quarter these through values of were netting beginning million our realize also a We $X.X our of from Dispositions in realized completing strength three high-quality continue to IRR we to grow million. active at executed our able year the our five and puts and multifamily total asset very rates to strong the portfolio. totaling post-COVID our We're larger with cap for small-cap for on front Economy invested prior the quarter dispositions peers. up capital $XXX $XXX transactions markets XX% Gross over highlights times first base. XX% while further two on dispositions the $XXX April year-to-date were which period BRG capital, proceeds. the quarter the X.X X.X% and blended on which allocation the completed We're dispositions at million. of of multiple Knowledge us in a Combined the and institutional averaging

investments. significantly operating continued value-add view preferred average with units slowed of During of to a completed equity XX%. we development conservative renovations. pace including in deliver in program, and loans posture At to scheduled six the of the returns of additional ROI COVID-XX the our trend partner beginning XX million took for we above new and one mezzanine and quarter, the one investment, preferred With and respect $XX we fundings invested quarter buyout

there over have then a and number continue property million economic environment potential we pandemic, flexibility million embedded $XXX is Shifting Even the time. significant during landscape. in quarter the depressed markets. the $XX of to opportunities raised our are We market our continue believe the and program Preferred we'll at as and the visibility T annual provides to evaluate pace. portfolio at of on uncertainties great we more in us level economic capital the running Series value to exceeding This liquidity with since review the to

noted then provides decoupled T at raise caps and our convert As the common inherent Series allows multifamily price. common us the distinctive today. to volatility flexibility small of markets Preferred trading to us into stock date from When capital it option and for to at at equity at before our choosing at common a a value significant future price and future because provides discounts team it the the like you advantage BRG have we've in our equity

continue work, recovery play more second and our initial our us deliver as pandemic, throughout amenitized well-located of losses A growth markets, live, worker and was which compensated, knowledge highly the side from other in assemblage While us performance help cycle highly the quickly COVID-driven quarter suburban impacted positions the partially reaccelerate portfolio on economic economy downturn Class job full our buffer the COVID-XX environment value targets including well first-ranked advances. a on of to economy lockdowns a educated the strategy allow shareholder knowledge growth that rent the to should highly us number for reasons we to affordable of believe

ROI We've which growth through with attractive maintain renovated an Second, X,XXX average XX%. very we delivering of units program, our inception to over returns value-add continue solid to-date. is from

provide both upgrades, over for opportunity X,XXX We based experience have grow per to-date meaningful embedded more identified than a significantly future units and NAV which on time. and CFFO growth our us would our share

demonstrate advantage Series of to Preferred Third, Fourth, to that we our are take in very capital dispositions decisions T allocation accretive consensus well generate capital arise and issuance we us gives will cap NAV rate rates to we're through able the proactively over accretive opportunities company inside flexibility of that balance and our sheet, continue including the attractive third-party potential cap time. which make prudence estimate. of for market-implied

confident we're us that well-positioned from portfolio serve to experienced, navigate being we to catalysts additional shift could business. flexibility operating Further, COVID believe for we've believe outperform. up sets ahead, look through over should savings we which challenges of potential there for expense of our large as the time to be the the balance sheet virtual As quality and in structural our long-term

note and that I'd With aligned has holdings its shareholders to equity the turn with continued increase Ryan? diluted and Finally, to now I'd significantly is company approximately over again call equity. management fully Ryan. is like like XX% in to that the BRG's of to

Ryan MacDonald

June wide, to same-store period. revenue quarter, good and improve XX the our at positive Ramin, average basis revenue Thank across second in – which the rental position we The and XX.X%. XX.X% prior points at in continued Austin Occupancy strength a XX a and XX availability, our sit morning, portfolio XX in Portfolio particular for higher saw of year resurgence of year you, and is rate posting the XX asset. X.X%. same-store quarter portfolio resiliency properties our and with for points our growth. which portfolio Atlanta, occupancy compared finished occupancy showed Overall, leading And We occupancy solid at with was prior Colorado the period. in at to decreased today, XX% was over properties, approximately basis throughout the the Houston everyone. growth indicator quarter operating

$XXX,XXX approximately bad and occupancy an at XX very debt offset period. in versus in income fee respectively by of but year a rate and rental this strong and points basis However, in the X.X% positive growth quarter the of reduction was were increase $XXX,XXX prior

NOI fee year-over-year and bad X.X% loss of the grown income, have basis. Excluding would debt a on

we to at don't conservative XX impact recognize collections quarter month realizing additional debt payment number. future end could numbers. of on would through assume a the During the XXX expiring end of plans months, collected this XX% future at the a cadence of X% existing this the And the financials basis rents, normal stimulus previous further quarters. have will current quarter, rent last upon ahead XX% CARES collections we prior days and the collections in month unemployment to quarters, point bad quarter improve are our of collections Act The Friday. a writing points I positive four COVID-impacted expect including like July. to approximately end, off and insurance uncollectible August by out, tracking approach and post any is despite point which quarter XXX post pre-COVID strong in and take after We

growth. rate to on Moving

with X.X%. lease and quarter, rate negative averaged growth coming X.X% positive in XX at growth new lease points basis rate remaining the renewals During at negative

base focus in XXX and was strong to into off growth the the and quarter positive the July, growth Birmingham, onset evident proceeded. quarter movement allowed it build up build crisis XXX a create over Vegas, XXX at with very accelerating occupancy lease was our sequentially initial on basis basis XX Our quarter. led combining strong year-over-year This a new year-over-year earlier to lease large point strong pace, points last is rate Atlanta. of occupancy and Las Execution and rates being Phoenix, us positive the the we Austin of as the throughout days a to sequential it by from retention basis in saw momentum in

year-over-year basis the despite board the the On the X% by a that in expense led costs. insurance. front, and pressure expenses taxes To same-store increased points significant lower during turnover quarter, across XX end, R&M quarter, and controllable from by expenses modest declined

investment the and area utilizing beginning and in savings a us controllable to As a both see results. growth modest drive for past, in that are line technology strategic focus is our we've communicated to revenue we benefit top of of expense

revenue additional significant realize XX for as out XXXX home roll next early we technology to package months. in expect smart in the residents XXXX, lift a and We

While To XX quarter measure, lower the the yielding halting we precautionary to due have unit across $X,XXX ROIs of cadence at the was of than XX% ROI. complete second units a roughly of quarter. X,XXX the renovations units date, unit an majority cost in in work and average healthy XX% XX approximately the realized completed of lease as renovations did a we typical per

consensus dispositions reserves were year buyer's estimates, In our capital the million the million portfolio our cap BRG proceeds. sold sales terms economic per rate net sale and three gross $XX rate allocation, was which NAV of in executed $XXX on yielded of The with at asset unit based during below and estimates. an value replacement cap assets in year X.X% last $XXX totaling we the and in one-tax three line quarter, substantially

on Moving investments. to

of annual preferred investment an During operating portfolio equity existing the one a yield equity XX.X%. we total asset assets added five in into of quarter, BRG of cross-collateralized million an for $X with

Knowledge grow We also our us million, wholly-owned and an buyout completed Economy to our asset footprint. in core the operating Austin, our portfolio of market for partner which continue Texas to allowed $X

Turning to the balance sheet.

accretively refinancings increase COVID approximately and a basis the we $XX existing buyout. Mae took million quarter, an million, loans in and BRG stands one pandemic, we to liquidity. our equity $XX investment base mezzanine liquidity million, by a approximately XX represents $XX made two proceeds measures assets, loans to and two into risk credit which mezzanine our preferred netting leases million the assets number in and quarter, $XXX and the borrowed under construction. BRG Fannie million equity, investments facility approximately the company. in of BRG's the additional being with cost or partner asset uncertainties corresponding During From The totaling $XXX proceeds reduced new preferred perspective, Also by at invested points. development net returned the is XX% and XX% capital the our million of refinanced our lower of of total loans to on north which $XXX net profile operating a presented of due have during than ground

continue the of grow available million end T expect credit and our offering. July, through base had revolving approximately of to capital we our to facilities for preferred As BRG on through Series our and combination cash $XXX of availability a investment

we view believe our portfolio portfolio believe pandemic. with our investment to of up continue pleased new to to arise. that, and parts to developments, provide outperformance strategy prudent that reiterate and actively be multifamily COVID conclude, We further as view potential investment we are of in July results. with open opportunities To intend in operational to the the we quality continue they execute and our the all in have quarter will will cycle. to capital of manage liquidity And And of Q&A. sufficient it Although, want second COVID Operator? we I on we

Operator

you. Thank

Gaurav question-and-answer with session. question Securities. begin Instructions] National We Mehta go will our the from ahead. And will Please first now [Operator come

Gaurav Mehta

Thanks. Good morning.

The allocations. first question on capital I have is

capital liquidity obviously, July. are the could position seeing you have you the wondering should talk strong and kind think I what, deployment a -- we you trends guys market? if You transaction as about of, how was in about of

Ramin Kamfar

be it's to Ramin. where that we looking position wanted Gaurav, defensive -- was downturn. into our We're Hi, going to the

the down investment, slowed of built position. we our So pace up cash

quarter. that market has the cash -- don't carried through stabilized, we, looking As we're significant we at position obviously, need the the

slow. investment The out we're So looking opportunities there. at is market

seeing some We are opportunities out there.

respect see and you'll -- have et So internal the our I we coming to preferred think with obviously Series cetera, the some et us redemption opportunities that's -- A cetera. up for

you'll the from keep still compared be see to in think normally significantly held compared lower there would forward, I but in we've lower that what the balance quarter, So, a held to above lower still we uncertainty we've us, what but past market. continues what going given cash to

We just there under a are stimulus -- going the consideration. fiscal new package into is support ended. There's

plans so and forth. through with new of election. terms going administration are on in We so people be may coming in an the There new and

We're we're waiting vaccine think on and of and the a period uncertainty. so for I in additional still for forth. so So,

will our the position conservative, than cash to previously be to but be we're higher little So, invest looking rest. a

front, investment I feel add add I'll there. the opportunities let anywhere looked But On And this or what we've quarter. -- quarter opportunities said. last we're to Ryan, Ryan on at expecting than in. subtract significantly free it's more out

Ryan MacDonald

of out cadence opportunities and pace there. the that agree I And No. is accelerating

forward front would we're during it were it's think bare operating we in a also with potentially advantage. to But an I XQ to certainly stages closing good capture I looking widened stages we mezzanine the we're pandemic returns the preferred of of initial opportunities here where and looking say that combination extremely at have think our assets. during to opportunity although on equity was COVID, pricing. really the excited initial the really, of

that that there's was even the XX discount So, than at front more opportunities I work lot are days that the But would today. to there of certainly would capture able say ago. say capture we volume that market to about pricing. be deals a significant It's we're -- to excited I trying today in of to we're that us certainly

Gaurav Mehta

XX, Okay. the up about Great. question, have the that is quarters, over redemption, still to And the you quarters. probably past course thought in redemption. that that in talked may Is I may your XX? And on for that that of a it when couple have redeem over T Series doing of of you or second be look couple done it's a

Ramin Kamfar

a what is quickly. that out it be in very piece to Well, -- like by of and like balanced it's redeem will for to terms of acquisition. are and it's we're the -- obviously getting It accretive we'd us there expensive we'd paper opportunities --

we money So use proceeds weeks that in our a two have could from every be it. T coming for Series of

cash have hand. on We significant

-- more credit, less We of lot much which have cost-effective. is and which much a availability more much is expensive

So that. it's of returns opportunities to higher go use we'll going that out have all be out higher of return proceeds. there, balance that's our -- going to be deliver don't If acquisition that a we first

So I there. given mix seeing think be it's out a what going we're to

Gaurav Mehta

Okay. I had. Thank you. all That’s

Operator

[Operator go Instructions] Ramin turn back question-and-answer closing I sir. to like Please conference our Kamfar over concludes This would session. the ahead for remarks. to

Ramin Kamfar

continuing thank for of rest time and fall wish the a to to summer over Well, forward you the on us coming and everyone you. Thank progress and I giving to look we safe our look today to the -- quarters. forward want everyone

Operator

conference presentation. Thank attending now concluded. today's The has you for

now disconnect. may You

Bluerock Residential Growth REIT (BRG) 10 Aug 202020 Q2 Earnings call transcript