BRT - Earnings call transcript Q2 2022

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Thank you for standing by. This is the conference operator. Welcome to the BRT Apartments Corp, Second Quarter 2022 Earnings Conference Call.

As a reminder, all participants are in listen-only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. time, Stephen like Swett, this floor turn At to over Investor Instructions] I to would the [Operator Relations. Thank you.

You may begin.

Stephen Swett

joining earnings Thank second for us BRT for you Apartment quarter XXXX conference call. today Corp.'s

Act everyone Private Also Operating today assumptions statements would is President. Financial President remind to Executive Zweier, On Reform the David XXXX available Baltimore, Kalish within Securities Jeff that the George meaning Chief call are Ryan of I and and and Gould, Chief call Officer. Officer; based Officer; forward-looking Vice like are this Chief contains the expectations, Litigation on of that current conference management's beliefs. Senior

differ the filings and results a can but strategy risks and encouraged estimate, not results place these to, as negatives statements or adjusted information revenues, or as of guarantees any BRT's operating also expenses, of not funds be a and complete and in forward-looking all statements. a cause used unconsolidated are statements. results any respect such forward-looking statements These future non-GAAP Form AFFO, subject operating liabilities actual regarding non-GAAP of variations that words discussions or its other company's and expressed believe, any those substitute unconsolidated and Unless for computed revise includes that in share such measures These of discussion should anticipate, funds ventures, and to Except context materially be statements. required reliance statements the subsidiaries, or forward-looking call to, SEC statements these review which of They not or assets share Forward-looking pro words. financial are income supplement should factors from expect, future. are assumptions from BRT's and of obligation for, conference regarding accordance limited income, by with risks, GAAP. not BRT's otherwise are to uncertainties FFO, law, the include, operations, identified forward-looking operations, reflect measures rata similar often publicly as rata any Listeners pro to expectations net on by undertake forward-looking of and Form are BRT indicated, a results. XX-Q intend from expressions affect the including NOI, XX-K undue requires, at of discussion could with NOI, our more or for does performance. This of to not and net to update otherwise and could

For subsidiaries. BRT a requires, owned otherwise earnings or its rata GAAP, tab currently and share otherwise its provide a of filed portfolio, BRT's help better indicated, uses subsidiaries more and results or portfolio and All the things, approximate to expenses, pro website. refer at of and pro complete company's revenues, of unconsolidated other with and financial of ventures. accounts to to our assets reflect the rounding. release reported our as context Investor and XX-Q see which accordance information are and, our under amounts discussion supplemental among Relations are results, available, multifamily in NOI, and references unconsolidated references wholly liabilities, rata joint to understanding share BRT's Unless

the references June quarter our the ended reports filed quarter in Accordingly, be should references refer XXXX to data XX, XX, the quarter ended presented with supplemental as not with information of GAAP. representative pro However, SEC. is information in current rata to Further used presented June the with to and caution quarter conjunction with certain refer and and to accordance rata and operations use of our in pro the limitations, the accounts XXXX, our in has XXXX. GAAP and the

information supplemental turn I'd President earnings company's Relations now call Chief and the posted like to and section at over As website have ahead, Officer, a www.brtapartments.com. the Executive been release of the Investor go Gould. Please, Jeff. to BRT's on reminder, Jeffrey

Jeffrey Gould

the and call. welcome Thank to you

quarter our these most strong well portfolio across by quarter was continue job to fundamentals growth strong population markets benefit housing performance our from we many quality in another of second shortage significant ongoing and as of in the as driven as The of of areas.

interests. simplify have our to value allow us made on wholly-owned the capital balance and of additional significant our sheet. our assets progress as portfolio through as income, our Additionally, adding capture efforts to by partners’ grow to These acquisitions structure well incremental we transactions

our of announced completed as of the well all company. for gains most as have We produced have previously strong announced the buyouts, now which sales,

As a the last considering XX nine completed increased consisting all today by result, X,XXX this over year. units our of includes now X,XXX time from the transactions approximately months units last wholly-owned properties portfolio

and in the AFFO compared subsidiaries, share million, offset or XXXX, our quarter Contributing of income to was increase per share, share reduced in unconsolidated second XX% to income quarter to Turning in for second results, share quarter were share million subsidiaries. $X.X XXXX. compared to primarily was at of $X.XX interest improvement $XX.X diluted per properties million, per or per million, our common margins owned the state was $X.X the or increase the gains $X.XX from two $X to tax. net operating of the of $X.XX diluted $X.XX by our diluted our share the The attributable million, or expense same of improved by the per share, diluted $XX.X of AFFO to shareholders in due XXXX. unconsolidated sale

amounts share programs. per incentive AFFO shares equity addition, and of ATM were on issuance our the by also affected In

wholly-owned portfolio, X,XXX of to units. portfolio communities consisted multifamily at containing June XX XXXX, Turning our XX, our

the was We XX.X% the also owned basis ended in portfolio Average June compared quarter. for points XXXX rents quarter. quarter for XXXX XXXX compared to entities interest containing $X,XXX the through of to occupancy second up communities in another XXXX XX.X% XX XX, were month, units. portfolio per unconsolidated for the Average up the the X,XXX quarter XX

For spreads the of units, were units overall XXXX of of the on saw XX.X%, for of quarter pool unconsolidated signed In of quarter X,XXX units in leases XXXX, and at which X,XXX portfolio X,XXX renewal spreads consolidated joint and our the by owned were including XX.X% XX.X%. leases favorable second we new same-store spreads second ventures.

For same-store case same-store increased quarter. these properties revenue in same-store the X.X% XX%, by and each XX.X% XXXX expenses grew grew NOI from

active quarter of during venture transactions have in partners. to second year-to-date, quarter subsequent interests we and very our Regarding both out end buying the been the joint

me Let highlight recent our activity. buyout

million reflect our XX quarter, believe aggregate properties an growth. quarter of for all is completed subsequent purchase price through to that purchase units an for properties aggregate these there assets those the interest consolidated approximately and of the million X,XXX purchases end, upside $XXX of estate remaining aggregate million. approximately the After sheet aggregate debt. remaining in of we purchase have that of buyout estimate second mortgage Subsequent with we During efficiencies acquisitions million. an aggregate for completed purchase announced real interest ventures XXX the the including previously $XXX now to of We of joint an giving the owned completed value-add with in ventures of five price the $XX.X multifamily completed $XX units purchase $XXX.X market an balance price We of owned quarter, in and joint that effect management transactions of will second the million. five we opportunities, the to multifamily

of of for million. to million, unit Turning sold our gain was IRR the it over $XX.X XXXX, $XX.X June, property Retreat over was Katy, and Kannapolis, transaction debt Carolina in we owned. Also June share X.X The of a in excluding $XX.X years unit Ranch, This the We share us multifamily a of capital Texas debt with prepayment million million. North recycling, fees mortgage $XX.X an XXX for in we of sold sale Vive, XX% $XXX,XXX at approximately BRT’s on Cinco property XXX and retired of provided in

debt the debt community this million. with a at sale to excluding $XX.X We’re $XXX,XXX it us transaction of on of was share fees share gain BRT of interest and and the we of over Carolina years mortgage which $XX.X equity IRR in the owned. three XX% quarter, Waters Also multifamily retired South XX% Harbison, provided during prepayment of for $XX.X approximately plus BRT’s over million our Columbia, Edge an second was in holds XXX-unit agreed sell million

will debt September, retiring million be with will that or customary We conditions. August transaction this closing of $XX.X this late We be subject to anticipate disposition. early completed

down planned $XX.X our the we over approximately and $XXX,XXX was IRR owned. share debt of the be sale share our to that fees prepayment We the gain to will million, XX% excluding it proceeds pay be We’ve will of our approximately expect use our credit years estimate facility. six of that

per XXX return the $X,XXX we of estimated yielding unit and XX%. on annualized approximately an front, average investment On value-add units investment the repositioned of approximately

our portion couple portfolio, in released. incurred financial renovation we supplemental over for approximately reflected the a been our the cost may investment units in entire prior have units next Across return report but period As on we the XXX have available the of of information, when the years.

to assets equity of of for equivalents, cash end balance million, we cash BRT primarily $X.X credit restricted $XX $XX had available total $XXX at our quarter of included stockholder million Turning to liquidity and XXXX, $XXX improvements, $XXX million million Available sheet, up facility. and and June debt total of XX, million the capital total at million. cash under of

rata At of mortgage liquidity and base million equivalents, applicable The maturity of debt term other aggregate equivalents and a for rate working remaining of combined weighted In subject with interest renovations. used our approximately addition, had to of credit cash X.X mortgage million approximately our our facility. and XXXX, June average $XXX.X and to million $XX was our of wholly-owned compliance $X.X years. August capital $XX $XX.X cash for cash joint our a for unconsolidated and available unconsolidated restricted with up ventures weighted share which of cash ventures million million to X.XX%, and cash XX totals available pro with X, comprised day-to-day at average requirements, is borrowing joint our $XX.X properties, of ventures the debt purposes under million

on shares to sold second our down We keep were proceeds share $X.X sales a from XXX,XXX weighted million. at our XX, pursuant XX, of of XXXX at per approximately In XXXX. focus value to average XX%, ATM our price June continue approximately the as ratios $XX.XX. and to we quarter, to program, debt leverage June a Net XX% enterprise

paid continued very we share, price properties close a of of we value make considerable July which our which we was dividend $XX.XX, of our business X.XX%, progress. partners’ on believe another have X.X% acquisition efficiently to we quarterly during strong there current into This second of on quarter targeted the familiar from stock quarter based yield the is with equates through prior conclusion, of dividend. capital XXXX, proceeds we in on annualized are $X.XX the reinvested XXXX. In interest where per at August to We of dispositions we for Finally, an which quarterly believe and X, dividend increase as the potential. an BRT, recycled of maximized upside X, and

half growth XXXX the with we wholly-owned the As second the pleased and we ahead and of look beyond, markets. strength portfolio in of to our our ongoing are very

call. successes. further in to We entire for the That work the may I their opportunity. the that hard our lead and be thank will and our team current chance are hopeful to uncertainty completes as to disruption want BRT contribution there grow to economy

We will now Operator? the your call open to questions.

Operator

[Operator go is question ahead. Thank EF Mehta you. Please with Hutton. Our Gaurav from Instructions] first

Gaurav Mehta

morning. Good

help First buyout I asset and JV portfolio much year. in more this is dispositions? understand wondering far a left of us your of of as opportunity if was partners and – how bit quite done question your on could as recycling portfolio you as obviously

Jeffrey Gould

to Hi, obviously, there. pretty the buyouts, been Gaurav, we’ve up yeah, good on

which are some of we going to are the to of I opportunities we We going a but to that hanging it potential the I we be period Edge think remaining is almost be say, would don’t time, of one earlier. get consolidated. we some still couple deals contemplated but at think successful low able and last the easier point, were buyout Waters be resolve go, to partners. we as where we’ve taken to the point fairly And are care buyout far partners in fruit also itself it’s fully of, have the mentioned remaining situations. the all point sales something we portfolio a on will trying the have more that short able to are time, will over this at I with

have we and other or no possible, up right targeted. of come as do things New but it’s sales now specifically focused

Gaurav Mehta

seeing question, and market? What some you cap Great. on as as second And transaction provide the rates? are then, a can far you valuations color

Jeffrey Gould

since Yeah, as on today. pricing, And have rates interest May understand I few that volume slowed, reset norm. will months has the as far new obviously, is in I mean, a changing with better June and the pricing we sellers believe think to opportunities than it be

So or busier. fall, but right and we in pulled that – things have will been expect now. haven’t get I trigger we the looking of as much anything the would

all place It’s in my tell has XX XX on forward was be gone think the I expectation be you some opportunity to that give and probably basis some point. might as maybe estimate, up disruption low Obviously, interest, of the really but over point think it looking which a there points too. can’t that, was I from it are will mentioned, will changed new the come sellers’ we I excited see we lot, we – view. understanding from it’s some threes transactional could a rates, have opportunity now. because where and right at about that from you which in cap I to leased volume specifics of in

higher So, months but than six low still I been say simply let’s cap very rates, say would ago. it’s

Gaurav Mehta

Thank you. Okay.

Jeffrey Gould

you. Thank

Operator

go is question Securities. ahead. with Riley Please Craig from next The B. Kucera

Craig Kucera

Yeah, hi, good morning, guys.

capital, to want to maybe notes source of with swap? considering been refinance start sheet, the you out rising to there, there very continue sort while a quite short-term and for a the balance and a junior you rise, rates Just subordinated a are perhaps likely in of have excessive with any had but

George Zweier

cheap but it’s it time. of we as at look We you rising. piece rates regularly, said and at relatively still are all obviously something the paper a look It’s the

then are But do interest it this show may we it that likely think pretty subordinated plans become today. regularly. We have more watching it But the rates right something But about and at do we we no will point, as watch if keep we anything I is now. further, immediate on. we debt something to climb it’s it focus

Craig Kucera

second across Okay, pretty great. Changing in trending? growth strong across rent border was the the quarter. board should say much the I very gears, How – July

Jeffrey Gould

ask any confident be pretty to we to is forever. pretty on seeing well well. else speak direct managers would increases say, because looks can’t continue daily daily are everything very you you And Everything are things much a well still this what that my Are am and and I slowdown? generally basis, lost I to say pretty I going lease going obviously nice any them is, resistance are I and and significant. seeing very seeing

few seen So similar over the quarters. we’ve we what last seen trends have

Craig Kucera

particularly any pretty would you feel be led And helpful. there up has any NOI cetera, thus it. et costs, XX%. labor rent a quarter management I that aggressive anything operating expense think or was Got driving to Are about some particular higher growth categories of plus, growth, far, property out pretty it same-store have seen sizable that pick this expense, in in color

Jeffrey Gould

you normally I’d is turn is is say not this detail. Ryan are you but items the to many can give has a some you I it – general that relation taxes. to case, I’ll Ryan about, so that inflation give talking more then specifics, expenses to line in give will increase Yeah, over it you In actually definitely causing It’s expenses. but answer

Ryan Baltimore

little at of it’s to did hit was to keep it Craig, and mainly on we ready. the good the on side, kind the demand to the have And increase, had lot these to you payroll maintenance so a hi, other in Yes, side at order people occupancy really a piece the keep get main increased property cost increase items properties with payroll bit it turn units of two as real there. more maintenance have cost you and them talent

as across on that well portfolio. most increased, So board of the kind of the

some small lines two there and side. on really utility was the those it were So, increases

as As the turns the were unit on real work the for on as water. more drivers. the home, usage inflationary part, is main people electricity But and there continue pressures payroll, well the to most from

Craig Kucera

of you getting on it Got acquisitions the just what fall, one potentially seeing I stands Jeff, or balance maybe total those where me. commentary some a And in sheet of about recycling something and know, you made the pricing more appetite utilizing that? you perhaps little else? do the debt today? equity to is Or capital from more but combination would would for some bring about company's on and active think better more and just sort

Jeffrey Gould

sales, pay earmarked we some – base the completely. these et line have credit from facility to off credit have cetera, have we of Well, ability the we

have a lot we of So availability.

We and effectively. to grow strong a and desire have grow smart

spreads with asset, really considerably on assets trying significant the and and wanting appropriate and that the do to when when the believe and to value-add along in So are become and buy a if pricing opportunity the to the more go out and willing time. the appreciation to something we we make wanting difference,

of mentioned in keep stay that to There in buyers, with we've it. in more it's the the pretty not There – spend So obviously new the it funds our the I different and to get space disciplined sensitive lot needing financing months down. they I are seen partner lot going down think, is earlier, in and to buyouts, what on to focused is we last mortgage needed on some think come spreads were not will they're relatively was But are tight too to extent. about that order the and getting. a the think change X, players spend quiet more now and just rates money been I X these of a lot that the a will had acquisitions, and market be. disruption to that on over that's rate, And I and pricing

the at it daily. they were as are the So think far as too time we're just tight going interest cap watching spreads I rates rates. to think get to I and wider

Craig Kucera

Thanks. Okay. Appreciated.

Operator

Please The with BTIG. next ahead. question from Gorman go Michael is

Michael Gorman

Yeah, thanks. your conversations if Good morning. having about partners. talk I more wondering little a Jeff, was the just you're with could bit you

low-hanging of where the is am some you are transaction partners? and of about have and You you're mentioned versus you're being out of there? here. of market, just the else curious, the of I fruits that in function how a stuff way expectations may the the talking about something conversations in flavor having terms structure there maybe is shifted kind it thinking Or the assets a for

Jeffrey Gould

Yes.

the about structure, So not remaining it's no. unconsolidated

to discipline things. We the have that that they It's own the to certain remaining all need with us want all upside to the partners the in and continue structures to the to asset specifics all unconsolidated asset. continue our do they in believe the of documentation run us the the we and and allow want and asset really

a are been able do belief we asset So, aggressive buy and haven't so it's when will come hard to such and make terms that to well in just they them buyout deal on a to out so price. the to

that event have believe run in more these us our with lot So, that's and the position really assets and partners then along of But they couple future of partners with causes seen usually, an upside. loans we that potential is deals maturity likely to a remaining we've have that remaining and happens of what the historically usually a these what we sale. some on see

think what to now. great it's because buys. we very market market were were is the asking at But very think to to we price potential They out the too actually hard that partners able were them. because is we was are otherwise But upside better at prices good - they agree and for us them hard would slightly I of still the say buy the We convince it's get with to probably closer there then. deal. to than So

a difficult out. the sell way capital to sorted we is will will that say more years buy I or to over the and assets directly find get that buy But buying to recycle what's it's now. XXX% to we happen to are why going in them may that's them So, hopefully we Either right owned that come time assets

Michael Gorman

good just on is the financial sense That's side all picture just how wondering for the maybe renewing you cost any lives. have helpful. if fairing Fair are leases. see now, kind in new the situation health, And the pressures to on the resident rent you enough. and residents then, Obviously, pricing power are and am of financial continuing residents front. I the that underwriting on their of going the that their on likely are other right financial given the

Jeffrey Gould

question. good very Yeah,

the times get are a make times, might to least or obviously, to on of with background and property work coverage X.X all all do new they sure given So rent. the be you tenants, to their That's whatever X it that easy. at

right. You are

lease in the get There we but bump pretty to don't and renewal, a management. expirations know obviously have On get updated from They tenants typically is well. we them. from know history the we the payment but information, rent,

to seen get are just layoffs, tenants they mean, doing are time everything understanding to good have those what are hear of to and just potential typically we us how will and have that, be doing. we've we solid. us that on solid, they continue of are pay. paid But tenants So believe are general and we And that guidance. like else, historically that from things pretty I paying an tenants that and

financials as don't very information new on strong get on the it's new we gone been and collections right, have renewed you're renewal. – tenants. updated from far But those So as

pretty pleased it. with we're So,

Michael Gorman

time for guys. Thanks the Excellent.

Jeffrey Gould

Thank you.

Operator

Jeffrey for closing to . I'd turn concludes conference the remarks. back today's Gould any questions allocated to This time for on call. the like over

Jeffrey Gould

a today all interest you your all we soon. you will day time thank good in for I Well, good and your Wish and speak and questions have BRT.

up just with you anything, or please and you. call much. questions If Thank very we'll have need either Ryan any follow or you myself

Operator

call. This concludes today's conference

have a pleasant participating, lines. your disconnect may day. Thank and you for You

BRT Apartments (BRT) 9 Aug 222022 Q2 Earnings call transcript