NEW YORK, Feb. 16, 2017 /PRNewswire/ -- Bluerock
Residential Growth REIT, Inc. (NYSE MKT: BRG) ("the Company")
announced today its financial results for the quarter ended
December 31, 2016.
Highlights
- Total revenues grew 70% to $22.4
million for the quarter from $13.2
million for the prior year quarter primarily as a result of
significant investment activity in the past year.
- Net loss attributable to common stockholders for the fourth
quarter of 2016 was $7.3 million, or
$(0.34) per share, as compared to a
net loss of $1.5 million, or
$(0.07) per share, in the prior year
period. Net loss attributable to common stockholders included
non-cash expenses of $10.8 million in
the fourth quarter of 2016 vs. $6.7
million for the prior year period.
- Adjusted funds from operations attributable to common
stockholders ("AFFO") was $3.7
million for the quarter compared to $4.3 million for the prior year quarter.
- AFFO per diluted share is $0.18
for the fourth quarter of 2016 as compared to $0.21 for the fourth quarter of 2015, and
exceeded guidance of $0.05 -
$0.07.
- Pro forma AFFO per share of $0.41
for the fourth quarter exceeded pro forma guidance of $0.31 to $0.33 per share.
- The Company paid the full amount of the fourth quarter's
management fee of $2.0 million in
LTIP Units in lieu of cash payment. This favorably impacted both
AFFO per share and pro forma AFFO per share by $0.09.
- Property Net Operating Income (NOI) grew 69% to $14.0 million for the quarter, from $8.3 million in the prior year quarter.
- Property NOI margins were 62.7% of revenue for the quarter,
consistent with 62.7% of revenue in the prior year quarter.
- Same store NOI increased 6.1% for the quarter, as compared to
the prior year quarter.
- Consolidated real estate investments, at cost, increased 80% to
$1.0 billion at December 31, 2016 from $557 million at December
31, 2015.
- The Company invested in five operating properties totaling
1,694 units for a total purchase price of approximately
$270 million and two properties for
the development of 399 units during the fourth quarter.
- The Company declared monthly dividends for the first quarter of
2017 equal to a quarterly rate of $0.29 per share on the Company's Class A common
stock. This equates to an 8.5% annualized yield based on the
closing price of $13.72 for the Class
A common stock as of December 31,
2016.
- The Company sold 12,655 shares of Series B preferred stock with
associated warrants at a public offering price of $1,000 per unit, for gross proceeds of
approximately $12.7 million during
the fourth quarter, an increase of 82% over the third quarter.
- On October 13, 2016, the Company
completed an underwritten offering of 2.85 million shares of 7.125%
Series D perpetual preferred stock at a public offering price of
$25.00 per share for gross proceeds
of $71.3 million, including the
underwriters' overallotment option, which closed on November 3, 2016.
- On January 17, 2017, the Company
completed an underwritten offering of 4.6 million shares of Class A
common stock at a public offering price of $13.15 per share for gross proceeds of
$60.5 million, including the
underwriters' overallotment option, which closed on January 24, 2016.
Management Commentary
"We are pleased to report record acquisition volume of five
operating properties totaling 1,700 units for approximately
$270 million, a Series D preferred
stock capital raise with gross proceeds of approximately
$71 million and our portfolio
continued to perform well during the fourth quarter," said
Ramin Kamfar, the Company's Chairman
and CEO. "We also raised approximately $60 million of common stock in January 2017, to provide capital to continue to
build a high quality portfolio in our current footprint of growth
markets in the Sunbelt, from the Carolinas to Florida and Texas."
Fourth Quarter Acquisition, Development and Disposition
Activity
- On October 13, 2016, the Company
acquired a 90% interest in a 480-unit apartment community located
in Atlanta, Georgia, known as
Nevadan Apartments at a total purchase price of $68.3 million.
- On October 31, 2016, the Company
acquired an 85% interest in a 320-unit, garden-style apartment
community in Port St. Lucie,
Florida, now known as ARIUM Pine Lakes at a total purchase
price of $38.3 million.
- On November 10, 2016, the Company
acquired a 92.5% interest in a 324-unit, garden-style apartment
community located in Austin,
Texas, now known as The Brodie at a total purchase price of
approximately $48.9 million.
- On December 19, 2016, the Company
sold its interest in the EOS apartments at a total sale price of
$52 million, recognized a gain of
$3.8 million, with net proceeds of
approximately $5.1 million to the
Company, when combined with distributions to us during the
investment period, represented an internal rate of return of
approximately 31%.
- On December 1, 2016, the Company
acquired a 98% interest in a 320-unit apartment community in the
Roswell submarket of Atlanta, Georgia, known as Roswell City Walk,
at a total purchase price of approximately $76.0 million.
- On December 12, 2016, the Company
made a common equity investment of approximately $15.3 million in a 320-unit to-be-built Class A
apartment community located in Atlanta,
Georgia.
- On December 15, 2016, the Company
acquired a 90% interest in a 250-unit apartment community located
in Austin, Texas, known as Legacy
at Southpark at a total purchase price of approximately
$36.8 million.
- On December 20, 2016, the Company
made a common equity investment of approximately $8.5 million in a 79-unit to-be-built Class A
apartment community located in Roswell,
Georgia.
- On December 29, 2016, the Company
was redeemed of its preferred equity interest in the West Morehead
development, and in exchange obtained a 0.5% common equity interest
and provided an approximately $21.3
million mezzanine loan for the development. Subsequent to
December 31, 2016, the Company
increased the mezzanine loan amount to approximately $24.6 million.
- Subsequent to December 31, 2016,
the Company was redeemed of the substantial majority of its common
equity ownership interest in the APOK Townhomes development, and in
exchange provided an approximately $11.2
million mezzanine loan for the development.
Pending Investments at December 31,
2016
- The Company has an agreement to acquire a 91.9% interest in a
382-unit Class A apartment community located in Morrisville, North Carolina, which is part of
the Raleigh-Durham Combined Statistical Area, known as the Preston
View Apartments. The total purchase price is expected to be
approximately $59.5 million.
- The Company has an agreement to acquire a 91.9% interest in a
301-unit Class A apartment community located in the West Charlotte submarket of Charlotte, North Carolina, known as the Wesley
Village. The total purchase price is expected to be approximately
$57.7 million.
- The Company has an agreement which entitles the Company to
invest in a 266-unit to-be-built Class A apartment community
located in Jacksonville, Florida.
The investment of approximately $25.1
million is expected to be structured as a mezzanine loan
with an option to purchase a majority indirect equity interest in
the underlying property upon stabilization.
Fourth Quarter 2016 Financial Results
Net loss attributable to common stockholders for the fourth
quarter of 2016 was $7.3 million,
compared to a net loss of $1.5
million in the prior year period. The change in net loss was
primarily driven by positive increases in property NOI of
$5.8 million, income of
unconsolidated real estate joint ventures of $0.8 million due to the increase in the size of
the invest-to-own portfolio, and a gain on revaluation of equity of
business combination of $3.8 million,
offset by increases in general and administrative expense of
$0.5 million, management fees of
$0.9 million, acquisition costs of
$0.3 million, depreciation and
amortization expense of $3.0 million,
interest expense of $2.4 million, and
the preferred stock expense of $4.5
million.
AFFO for the fourth quarter of 2016 was $3.7 million, or $0.18 per diluted share, compared to $4.3 million, or $0.21 per share in the prior year period.
AFFO was positively impacted by increases in property NOI of
$5.8 million arising from significant
investment activity and in income of unconsolidated real estate
joint ventures of $0.8 million caused
by expanding the size of the invest-to-own portfolio, offset by
higher interest expense of $2.3
million and the expense of preferred stock dividends of
$4.2 million.
Same Store Portfolio Performance
Same store NOI for the fourth quarter of 2016 increased by 6.1%
from the same period in the prior year. There was a 5.7% increase
in same store property revenues compared to the same prior year
period, primarily attributable to a 4.0% increase in average rental
rates, an 80 basis point increase in average occupancy and an
additional 17 units acquired at our Lansbrook property and 15
additional units at Park & Kingston. Same store expenses
increased 5.1% with increases in several operating expense
categories and were driven by various factors.
Management Internalization
On November 7, 2016, the Company
announced that it had begun the process of internalizing the
management of the Company by forming a special committee of the
board of directors comprised solely of the independent directors of
the board to pursue the internalization, along with hiring other
advisors. The Company is targeting internalizing the
management of the Company at the beginning of the third quarter of
2017, though it provides no assurance as to the timing or
completion of the internalization process.
Dividend Details
On January 6, 2017, our board of
directors authorized, and we declared, monthly dividends for the
first quarter of 2017 equal to a quarterly rate of $0.29 per share on our Class A common stock,
payable to the stockholders of record as of January 25, 2017, which was paid in cash on
February 3, 2017, and as of
February 24, 2017 and March 24, 2017, which will be paid in cash on
March 3, 2017 and April 5, 2017, respectively. Holders of OP and
LTIP Units are entitled to receive "distribution equivalents" at
the same time as dividends are paid to holders of our Class A
common stock.
The declared dividends equal a monthly dividend on the Class A
common stock as follows: $0.096666
per share for the dividend paid to stockholders of record as of
January 25, 2017, $0.096667 per share for the dividend which will
be paid to stockholders of record as of February 24, 2017, and March 24, 2017. A portion of each dividend may
constitute a return of capital for tax purposes. There is no
assurance that we will continue to declare dividends or at this
rate.
On January 6, 2017, our board of
directors authorized, and we declared, a monthly dividend of
$5.00 per share of Series B preferred
stock, payable to the stockholders of record as of January 25, 2017, which was paid in cash on
February 3, 2017, and as of
February 24, 2017, and March 24, 2017, which will be paid in cash on
March 3, 2017 and April 5, 2017, respectively.
Q1 2017 Outlook
For the first quarter of 2017, the Company anticipates AFFO in
the range of $0.03 to $0.04 per
share, and $0.27 to $0.29 per share
on a pro forma basis. For assumptions underlying earnings guidance,
please see page 29 of Company's Q4 2016 Earnings Supplement
available under Investor Relations on the Company's website
(www.bluerockresidential.com). Pro forma AFFO is used for
illustrative purposes only, is hypothetical and does not represent
historical performance or management's estimates or projections for
future performance.
Conference Call
All interested parties can listen to the live conference call at
11:00 AM ET on Thursday, February 16, 2017 by dialing +1 (866)
843-0890 within the U.S., or +1 (412) 317-6597, and requesting the
"Bluerock Residential Conference."
For those who are not available to listen to the live call, the
conference call will be available for replay on the Company's
website two hours after the call concludes, and will remain
available until March 16, 2017 at
http://services.choruscall.com/links/brg170216.html, as well as by
dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088
internationally, and requesting conference number 10100147.
The full text of this Earnings Release and additional
Supplemental Information is available in the Investor Relations
section on the Company's website at
http://www.bluerockresidential.com.
About Bluerock Residential Growth REIT, Inc.
Bluerock Residential Growth REIT, Inc. (NYSE MKT: BRG) is a real
estate investment trust that focuses on acquiring a diversified
portfolio of Class A institutional-quality apartment properties in
demographically attractive growth markets to appeal to the renter
by choice. The Company's objective is to generate value through
off-market/relationship-based transactions and, at the asset level,
through improvements to operations and properties. BRG
generally invests with strategic regional partners, including some
of the best-regarded private owner-operators in the United States, making it possible to
operate as a local sharpshooter in each of its markets while
enhancing off-market sourcing capabilities. The Company is included
in the Russell 2000 and Russell 3000 Indexes. BRG has elected
to be taxed as a real estate investment trust (REIT) for U.S.
federal income tax purposes.
For more information, please visit the Company's website at
www.bluerockresidential.com.
Forward Looking Statements
This press release contains
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995 and other federal
securities laws. These forward-looking statements are based upon
the Company's present expectations, but these statements are not
guaranteed to occur. Furthermore, the Company disclaims any
obligation to publicly update or revise any forward-looking
statement to reflect changes in underlying assumptions or factors,
of new information, data or methods, future events or other
changes. Investors should not place undue reliance upon
forward-looking statements. For further discussion of the factors
that could affect outcomes, please refer to the risk factors set
forth in Item 1A of the Company's Annual Report on Form 10-K filed
by the Company with the U.S. Securities and Exchange Commission
("SEC") on February 24, 2016, and
subsequent filings by the Company with the SEC. We claim the safe
harbor protection for forward looking statements contained in the
Private Securities Litigation Reform Act of 1995.
Portfolio
Summary
|
|
|
|
|
The following is a
summary of our investments, operating properties and convertible
preferred equity investments, as of December 31, 2016:
|
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|
|
|
|
|
|
|
|
|
|
|
|
Operating
Properties
|
|
Location
|
|
Year Built/
Renovated (1)
|
|
Ownership
Interest
|
|
Units
|
|
Average
Rent (2)
|
|
%
Occupied
|
ARIUM at Palmer
Ranch
|
|
Sarasota,
FL
|
|
2016
|
|
95%
|
|
320
|
|
$
1,168
|
|
96%
|
ARIUM
Grandewood
|
|
Orlando,
FL
|
|
2005
|
|
95%
|
|
306
|
|
1,226
|
|
97%
|
ARIUM
Gulfshore
|
|
Naples, FL
|
|
2016
|
|
95%
|
|
368
|
|
1,171
|
|
96%
|
ARIUM
Palms
|
|
Orlando,
FL
|
|
2008
|
|
95%
|
|
252
|
|
1,222
|
|
96%
|
ARIUM Pine
Lakes
|
|
Port St. Lucie,
FL
|
|
2003
|
|
85%
|
|
320
|
|
1,075
|
|
96%
|
ARIUM
Westside
|
|
Atlanta,
GA
|
|
2008
|
|
90%
|
|
336
|
|
1,451
|
|
95%
|
Ashton
Reserve
|
|
Charlotte,
NC
|
|
2015
|
|
100%
|
|
473
|
|
1,041
|
|
95%
|
Enders Place at
Baldwin Park
|
|
Orlando,
FL
|
|
2003
|
|
90%
|
|
220
|
|
1,648
|
|
95%
|
Fox Hill
|
|
Austin, TX
|
|
2010
|
|
95%
|
|
288
|
|
1,176
|
|
98%
|
Lansbrook
Village
|
|
Palm Harbor,
FL
|
|
2004
|
|
90%
|
|
619
|
|
1,258
|
|
91%
|
Legacy at
Southpark
|
|
Austin, TX
|
|
2016
|
|
90%
|
|
250
|
|
1,265
|
|
91%
|
MDA
Apartments
|
|
Chicago,
IL
|
|
2006
|
|
35%
|
|
190
|
|
2,283
|
|
97%
|
Nevadan
|
|
Atlanta,
GA
|
|
1990
|
|
90%
|
|
480
|
|
1,090
|
|
93%
|
Park &
Kingston
|
|
Charlotte,
NC
|
|
2015
|
|
96%
|
|
168
|
|
1,183
|
|
96%
|
Roswell City
Walk
|
|
Roswell,
GA
|
|
2015
|
|
98%
|
|
320
|
|
1,438
|
|
86%
|
Sorrel
|
|
Frisco, TX
|
|
2015
|
|
95%
|
|
352
|
|
1,300
|
|
91%
|
Sovereign
|
|
Fort Worth,
TX
|
|
2015
|
|
95%
|
|
322
|
|
1,306
|
|
95%
|
The Brodie
|
|
Austin, TX
|
|
2001
|
|
93%
|
|
324
|
|
1,166
|
|
93%
|
The Preserve at
Henderson Beach
|
|
Destin, FL
|
|
2009
|
|
100%
|
|
340
|
|
1,284
|
|
93%
|
Village Green of Ann
Arbor
|
|
Ann Arbor,
MI
|
|
2013
|
|
49%
|
|
520
|
|
1,216
|
|
94%
|
Operating
Properties Subtotal/Average
|
|
|
|
|
|
6,768
|
|
$
1,267
|
|
94%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible
Preferred Equity/Mezzanine Loan Investments
|
|
|
|
|
|
|
|
Pro Forma
Average
Rent (3)
|
|
|
Alexan
CityCentre(4)
|
|
Houston,
TX
|
|
2017
|
|
|
|
340
|
|
$
2,144
|
|
-
|
Alexan Southside
Place (4)
|
|
Houston,
TX
|
|
2018
|
|
|
|
270
|
|
2,012
|
|
-
|
APOK Townhomes
(4)
|
|
Boca Raton,
FL
|
|
2018
|
|
|
|
90
|
|
2,549
|
|
-
|
Crescent Perimeter
(4)
|
|
Atlanta,
GA
|
|
2019
|
|
|
|
320
|
|
1,749
|
|
|
Domain Phase 1
(4)
|
|
Garland,
TX
|
|
2019
|
|
|
|
299
|
|
1,469
|
|
-
|
Flagler Village
(4)
|
|
Fort Lauderdale,
FL
|
|
2020
|
|
|
|
384
|
|
2,481
|
|
-
|
Helios
(4)
|
|
Atlanta,
GA
|
|
2017
|
|
|
|
285
|
|
1,486
|
|
-
|
Lake Boone Trail
(4)
|
|
Raleigh,
NC
|
|
2018
|
|
|
|
245
|
|
1,271
|
|
-
|
Vickers Village
(4)
|
|
Roswell,
GA
|
|
2018
|
|
|
|
79
|
|
3,176
|
|
|
West Morehead
(4)
|
|
Charlotte,
NC
|
|
2019
|
|
|
|
286
|
|
1,507
|
|
-
|
Whetstone
|
|
Durham, NC
|
|
2015
|
|
|
|
204
|
|
1,252
|
|
90%
|
Convertible
Preferred Equity/Mezzanine Loan Investments
Subtotal/Average
|
|
|
|
2,802
|
|
$
1,834
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Properties and Convertible Preferred Equity/Mezzanine Loan
Investments Total/Average
|
|
9,570
|
|
$
1,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
|
|
|
(1) Represents date of last
significant renovation or year built if there were no
renovations.
|
(2)Represents the average monthly rent per
occupied unit for all occupied units for the three months ended
December 31, 2016.
|
(3)The
Company holds a preferred equity investment with an option to
convert into partial ownership of the underlying asset upon
stabilization, except Flagler Village and APOK Townhomes, which are
currently common ownership investments. West Morehead is a
mezzanine loan investment with an option to purchase indirect
property interest upon maturity. Average rent is pro forma
based on underwriting.
|
(4) Property is currently in
development.
|
Consolidated
Statement of Operations
|
For the Three
Months and Twelve Months Ended December 31, 2016 and
2015
|
(Unaudited and
dollars in thousands except for share and per share
data)
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
December
31,
|
|
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Revenues
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
|
(Unaudited)
|
Net rental
income
|
$
|
21,353
|
|
$
|
12,648
|
|
$
|
73,366
|
|
$
|
42,259
|
Other property
revenues
|
|
1,024
|
|
|
552
|
|
|
3,668
|
|
|
1,996
|
Interest income
from related parties
|
|
17
|
|
|
-
|
|
|
17
|
|
|
-
|
Total
revenues
|
|
22,394
|
|
|
13,200
|
|
|
77,051
|
|
|
44,255
|
Expenses
|
|
|
|
|
|
|
|
Property
operating
|
|
8,351
|
|
|
4,927
|
|
|
29,870
|
|
|
17,851
|
General and
administrative
|
|
1,709
|
|
|
1,196
|
|
|
5,863
|
|
|
4,108
|
Management
fees
|
|
2,015
|
|
|
1,133
|
|
|
6,510
|
|
|
4,185
|
Acquisition
costs
|
|
2,444
|
|
|
2,100
|
|
|
4,590
|
|
|
3,508
|
Management
internalization process
|
|
63
|
|
|
-
|
|
|
63
|
|
|
-
|
Depreciation
and amortization
|
|
8,725
|
|
|
5,727
|
|
|
31,187
|
|
|
16,226
|
Total
expenses
|
|
23,307
|
|
|
15,083
|
|
|
78,083
|
|
|
45,878
|
Operating
loss
|
|
(913)
|
|
|
(1,883)
|
|
|
(1,032)
|
|
|
(1,623)
|
Other income
(expense)
|
|
|
|
|
|
|
|
Other
income
|
|
-
|
|
|
-
|
|
|
26
|
|
|
62
|
Preferred
returns and equity in income of unconsolidated real estate
joint
ventures
|
|
3,015
|
|
|
2,199
|
|
|
11,632
|
|
|
6,590
|
Equity in gain
on sale of unconsolidated real estate joint venture
interests
|
|
-
|
|
|
-
|
|
|
-
|
|
|
11,303
|
Gain on sale of
real estate investments
|
|
-
|
|
|
2,677
|
|
|
4,947
|
|
|
2,677
|
Gain on
revaluation of equity of business combination
|
|
3,761
|
|
|
-
|
|
|
3,761
|
|
|
-
|
Loss on early
extinguishment of debt
|
|
-
|
|
|
-
|
|
|
(2,393)
|
|
|
-
|
Interest
expense, net
|
|
(5,824)
|
|
|
(3,391)
|
|
|
(19,915)
|
|
|
(11,366)
|
Total
other income (expense)
|
|
952
|
|
|
1,485
|
|
|
(1,942)
|
|
|
9,266
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
39
|
|
|
(398)
|
|
|
(2,974)
|
|
|
7,643
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock
dividends
|
|
(5,373)
|
|
|
(1,153)
|
|
|
(13,763)
|
|
|
(1,153)
|
Preferred stock
accretion
|
|
(324)
|
|
|
-
|
|
|
(893)
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
Operating
partnership units
|
|
(102)
|
|
|
(21)
|
|
|
(276)
|
|
|
35
|
Partially-owned
properties
|
|
1,704
|
|
|
(7)
|
|
|
1,631
|
|
|
5,820
|
Net (loss) income
attributable to noncontrolling interests
|
|
1,602
|
|
|
(28)
|
|
|
1,355
|
|
|
5,855
|
Net (loss) income
attributable to common stockholders
|
$
|
(7,260)
|
|
$
|
(1,523)
|
|
$
|
(18,985)
|
|
$
|
635
|
Consolidated
Balance Sheets
|
Fourth Quarter
2016
|
(Unaudited and
dollars in thousands except for share and per share
amounts)
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2016
|
|
2015
|
|
|
(Unaudited)
|
|
|
ASSETS
|
|
|
|
|
Net Real Estate
Investments
|
|
|
|
|
|
Land
|
|
$
142,274
|
|
$
65,057
|
|
Building and
improvements
|
|
848,445
|
|
474,608
|
|
Furniture, fixtures
and equipment
|
|
27,617
|
|
17,155
|
|
Construction in
progress
|
|
10,878
|
|
-
|
Total Gross Real
Estate Investments
|
|
1,029,214
|
|
556,820
|
|
Accumulated
depreciation
|
|
(42,137)
|
|
(23,437)
|
Total Net Real
Estate Investments
|
|
987,077
|
|
533,383
|
|
Cash and cash
equivalents
|
|
82,047
|
|
68,960
|
|
Restricted
cash
|
|
45,402
|
|
11,669
|
|
Notes and accrued
interest receivable from related parties
|
|
21,267
|
|
-
|
|
Due from
affiliates
|
|
948
|
|
861
|
|
Accounts receivable,
prepaid and other assets
|
|
8,610
|
|
6,742
|
|
Preferred equity
investments and investments in unconsolidated real estate joint
ventures
|
|
91,132
|
|
75,223
|
|
In-place lease
intangible assets, net
|
|
4,839
|
|
2,389
|
Total
Assets
|
|
$
1,241,322
|
|
$
699,227
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
REDEEMABLE PREFERRED STOCK AND EQUITY
|
|
|
|
|
|
Mortgages
payable
|
|
$
710,575
|
|
$
380,102
|
|
Accounts
payable
|
|
1,669
|
|
587
|
|
Other accrued
liabilities
|
|
13,431
|
|
7,013
|
|
Due to
affiliates
|
|
2,409
|
|
1,485
|
|
Distributions
payable
|
|
7,328
|
|
3,163
|
Total
Liabilities
|
|
735,412
|
|
392,350
|
|
|
|
|
|
|
8.250% Series A
Cumulative Redeemable Preferred Stock, liquidation preference
$25.00 per share,
|
|
|
|
|
|
10,875,000 and
2,875,000 shares authorized; and 5,721,460 and 2,875,000 issued and
outstanding, as of
|
|
|
|
|
|
December 31,
2016 and 2015, respectively
|
|
138,316
|
|
69,165
|
|
Series B Redeemable
Preferred Stock, liquidation preference $1,000 per share, 150,000
and 150,000 shares
|
|
|
|
|
|
authorized,
21,482 and none issued and outstanding, as of December 31, 2016 and
2015,
|
|
|
|
|
|
respectively
|
|
18,938
|
|
-
|
|
7.625% Series C
Cumulative Redeemable Preferred Stock, liquidation preference
$25.00 per share,
|
|
|
|
|
|
4,000,000 and
no shares authorized; and 2,323,750 and none issued and outstanding
as of
|
|
|
|
|
|
December 31,
2016 and 2015, respectively
|
|
56,095
|
|
-
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
Preferred stock,
$0.01 par value, 230,975,000 and 246,975,000 shares authorized;
none issued and outstanding
|
|
-
|
|
-
|
|
as of December 31,
2016 and 2015, respectively
|
|
|
|
|
|
7.1250% Series D
Cumulative Preferred Stock, liquidation preference $25.00 per
share,
|
|
|
|
|
|
4,000,000 and
no shares authorized; and 2,850,602 and none issued and outstanding
as of
|
|
68,760
|
|
-
|
|
December 31,
2016 and 2015, respectively
|
|
|
|
|
|
Common stock - Class
A, $0.01 par value, 747,586,185 shares authorized; 19,567,506 and
19,202,112
|
|
|
|
|
|
shares issued and
outstanding as of December 31, 2016 and 2015,
respectively
|
|
196
|
|
192
|
|
Common stock - Class
B-3, $0.01 par value, 804,605 shares authorized; none and 353,629
shares
|
|
|
|
|
|
issued and
outstanding as of December 31, 2016 and 2015,
respectively
|
|
-
|
|
4
|
|
Additional
paid-in-capital
|
|
257,403
|
|
248,484
|
|
Distributions in
excess of cumulative earnings
|
|
(84,631)
|
|
(41,496)
|
Total
Stockholders' Equity
|
|
241,728
|
|
207,184
|
|
|
|
|
|
Noncontrolling
Interests
|
|
|
|
|
|
Operating partnership
units
|
|
2,216
|
|
2,908
|
|
Partially owned
properties
|
|
48,617
|
|
27,620
|
Total
Noncontrolling Interests
|
|
50,833
|
|
30,528
|
Total
Equity
|
|
292,561
|
|
237,712
|
TOTAL LIABILITIES,
REDEEMABLE PREFERRED STOCK AND EQUITY
|
|
$
1,241,322
|
|
$
699,227
|
Non-GAAP Financial Measures
The foregoing supplemental financial data includes certain
non-GAAP financial measures that we believe are helpful in
understanding our business and performance, as further described
below. Our definition and calculation of these non-GAAP financial
measures may differ from those of other REITs, and may, therefore,
not be comparable.
Funds from Operations and Adjusted Funds from
Operations
Funds from operations attributable to common stockholders
("FFO") is a non-GAAP financial measure that is widely recognized
as a measure of REIT operating performance. We consider FFO to be
an appropriate supplemental measure of our operating performance as
it is based on a net income analysis of property portfolio
performance that excludes non-cash items such as depreciation. The
historical accounting convention used for real estate assets
requires straight-line depreciation of buildings and improvements,
which implies that the value of real estate assets diminishes
predictably over time. Since real estate values historically rise
and fall with market conditions, presentations of operating results
for a REIT, using historical accounting for depreciation, could be
less informative. We define FFO, consistent with the National
Association of Real Estate Investment Trusts, or ("NAREIT's")
definition, as net income, computed in accordance with GAAP,
excluding gains (or losses) from sales of property, plus
depreciation and amortization of real estate assets, plus
impairment write-downs of depreciable real estate, and after
adjustments for unconsolidated partnerships and joint ventures.
Adjustments for unconsolidated partnerships and joint ventures will
be calculated to reflect FFO on the same basis.
In addition to FFO, we use adjusted funds from operations
attributable to common stockholders ("AFFO"). AFFO is a computation
made by analysts and investors to measure a real estate company's
operating performance by removing the effect of items that do not
reflect ongoing property operations. To calculate AFFO, we further
adjust FFO by adding back certain items that are not added to net
income in NAREIT's definition of FFO, such as acquisition expenses,
equity based compensation expenses, and any other non-recurring or
non-cash expenses, which are costs that do not relate to the
operating performance of our properties, and subtracting recurring
capital expenditures (and when calculating the quarterly incentive
fee payable to our Manager only, we further adjust FFO to include
any realized gains or losses on our real estate investments).
Our calculation of AFFO differs from the methodology used for
calculating AFFO by certain other REITs and, accordingly, our AFFO
may not be comparable to AFFO reported by other REITs. Our
management utilizes FFO and AFFO as measures of our operating
performance after adjustment for certain non-cash items, such as
depreciation and amortization expenses, and acquisition expenses
and pursuit costs that are required by GAAP to be expensed but may
not necessarily be indicative of current operating performance and
that may not accurately compare our operating performance between
periods. Furthermore, although FFO, AFFO and other supplemental
performance measures are defined in various ways throughout the
REIT industry, we also believe that FFO and AFFO may provide us and
our stockholders with an additional useful measure to compare our
financial performance to certain other REITs. We also use AFFO for
purposes of determining the quarterly incentive fee, if any,
payable to our Manager.
Neither FFO nor AFFO is equivalent to net income, including net
income attributable to common stockholders, or cash generated from
operating activities determined in accordance with GAAP.
Furthermore, FFO and AFFO do not represent amounts available for
management's discretionary use because of needed capital
replacement or expansion, debt service obligations or other
commitments or uncertainties. Neither FFO nor AFFO should be
considered as an alternative to net income, including net income
attributable to common stockholders, as an indicator of our
operating performance or as an alternative to cash flow from
operating activities as a measure of our liquidity.
We have acquired interests in nine additional properties and
four investments accounted for on the equity method of accounting
and sold two properties subsequent to December 31, 2015. The results presented in
the table below are not directly comparable and should not be
considered an indication of our future operating performance.
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
Net (loss) income
attributable to common stockholders
|
$
(7,260)
|
|
$
(1,523)
|
|
$
(18,985)
|
|
$
635
|
|
|
|
|
|
|
|
|
|
|
Common stockholders
pro-rata share of:
|
|
|
|
|
|
|
|
|
Real estate depreciation and amortization(1)
|
7,527
|
|
4,728
|
|
26,963
|
|
12,369
|
|
Gain on sale of joint venture interests
|
-
|
|
-
|
|
-
|
|
(5,320)
|
|
Gain on sale of real estate assets
|
(1,828)
|
|
(2,640)
|
|
(6,704)
|
|
(2,640)
|
|
FFO Attributable
to Common Stockholders
|
$
(1,561)
|
|
$
565
|
|
$
1,274
|
|
$
5,044
|
|
|
|
|
|
|
|
|
|
|
Common stockholders
pro-rata share of:
|
|
|
|
|
|
|
|
|
Amortization of non-cash interest expense
|
171
|
|
83
|
|
790
|
|
326
|
|
Acquisition and disposition costs
|
2,130
|
|
2,008
|
|
4,123
|
|
3,375
|
|
Management internalization process expense
|
63
|
|
-
|
|
63
|
|
-
|
|
Loss on early extinguishment of debt
|
-
|
|
-
|
|
2,269
|
|
-
|
|
Normally recurring capital expenditures
|
(252)
|
|
(147)
|
|
(907)
|
|
(660)
|
|
Preferred stock accretion
|
320
|
|
-
|
|
880
|
|
-
|
|
Non-cash equity compensation
|
2,805
|
|
1,910
|
|
9,405
|
|
5,731
|
|
Non-cash tax abatement
|
85
|
|
-
|
|
85
|
|
-
|
|
Non-recurring income
|
(23)
|
|
(121)
|
|
(254)
|
|
(410)
|
|
AFFO Attributable
to Common Stockholders
|
$
3,738
|
|
$
4,298
|
|
$
17,728
|
|
$
13,406
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares outstanding-diluted
|
21,102,894
|
|
20,447,381
|
|
20,810,134
|
|
17,417,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PER SHARE
INFORMATION:
|
|
|
|
|
|
|
|
|
FFO Attributable
to Common Stockholders - diluted
|
$
(0.07)
|
|
$
0.03
|
|
$
0.06
|
|
$
0.29
|
|
AFFO Attributable
to Common Stockholders - diluted
|
$
0.18
|
|
$
0.21
|
|
$
0.85
|
|
$
0.77
|
|
Pro forma AFFO
Attributable to Common Stockholders -
diluted(2)
|
$
0.41
|
|
N/A
|
|
N/A
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
(1) The real estate depreciation and
amortization amount includes our share of consolidated real
estate-related depreciation and amortization of intangibles, less
amounts attributable to noncontrolling interests, and our similar
estimated share of unconsolidated depreciation and amortization,
which is included in earnings of our unconsolidated real estate
joint venture investments.
|
|
(2)Pro
forma AFFO for the three months ended December 31, 2016 assumes the
investment of the $209 million in estimated available cash had
occurred on October 1, 2016: (i) additional investment of
approximately $2 million in the Lake Boone preferred equity
investment, (ii) additional investment of approximately $18 million
in West Morehead and amending the investment to a mezzanine loan
structure; (iii) investment of approximately $24 million in a
mezzanine loan structure in connection with a joint venture, which
entitles us to invest in Jacksonville MSA; (iv) additional
investment of approximately $19 million in Domain and amending the
investment to a mezzanine loan structure; (v) investment of
approximately $11 million in a mezzanine loan structure in
connection with a joint venture, which entitles us to invest Boca
Raton MSA; (vi) investment of approximately $24 million in
Nevadan Apartments in Georgia which closed on October 13, 2016;
(vii) investment of approximately $16 million in a Class B+ asset
the Company has under agreement in Austin, Texas; (viii) investment
of approximately $11 million in APEX Apartments in Port St. Lucie,
Florida which closed on October 31, 2016; (ix) investment of
approximately $26 million in a Class A asset the Company has under
agreement in Georgia; (x) investment of approximately $11 million
in a Class A asset the Company has under agreement in Austin,
Texas; (xi) investment of approximately $20 million in mezzanine
loan structure in a development asset in the Atlanta, Georgia;
(xii) investment of approximately $11 million in mezzanine loan
structure in a development asset in the Atlanta, Georgia. Proforma
guidance also assumes that $16 million is invested in stabilized
properties at a nominal 5.75% cap rate with interest expense at a
rate of 3.75%. The pro forma guidance is being presented solely for
purposes of illustrating the potential impact of these pipeline
transactions, as well as future investments to be made with funds
we have available for investment, as if they had occurred at
October 1, 2016, based on information currently available to
management and assumptions management has made with respect to our
future pipeline. The Company is providing no assurances that any of
the above transactions are probable, or that they will close or
that management will identify or acquire investments consistent
with our pipeline assumptions, and the failure to do so would
significantly impact proforma guidance. The actual timing of these
investments, if and when made, will vary materially from the
assumed timing reflected in the proforma guidance, and actual
quarterly results will differ significantly from the proforma
guidance shown above. Investors should not rely on pro forma
guidance as a forecast of the actual performance of the
Company.
|
Earnings Before Interest, Income Taxes, Depreciation and
Amortization ("EBITDA")
EBITDA is defined as earnings before interest, income taxes,
depreciation and amortization, calculated on a consolidated basis.
We consider EBITDA to be an appropriate supplemental measure of our
performance because it eliminates depreciation, income taxes,
interest and non-recurring items, which permits investors to view
income from operations unobscured by non-cash items such as
depreciation, amortization, the cost of debt or non-recurring
items. Below is a reconciliation of net (loss) income attributable
to common stockholders to EBITDA (unaudited and dollars in
thousands).
|
Three Months
Ended
|
|
Year
Ended
|
|
December
31,
|
|
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
Net (loss) income
attributable to common stockholders
|
$
(7,260)
|
|
$
(1,523)
|
|
$
(18,985)
|
|
$
635
|
Net (loss) income
attributable to noncontrolling interest
|
1,602
|
|
(28)
|
|
1,355
|
|
5,855
|
Interest
expense
|
5,824
|
|
3,391
|
|
19,915
|
|
11,366
|
Depreciation and
amortization
|
8,725
|
|
5,727
|
|
31,187
|
|
16,226
|
Acquisition
costs
|
2,444
|
|
2,100
|
|
4,590
|
|
3,508
|
Management
internalization process expense
|
63
|
|
-
|
|
63
|
|
-
|
Preferred stock
accretion
|
324
|
|
-
|
|
893
|
|
-
|
Non-cash equity
compensation
|
2,844
|
|
1,937
|
|
9,543
|
|
5,812
|
Non-cash tax
abatement
|
96
|
|
-
|
|
96
|
|
-
|
Non-recurring
income
|
(24)
|
|
-
|
|
(258)
|
|
-
|
Equity in gain on
sale of unconsolidated real estate joint venture
interests
|
-
|
|
-
|
|
-
|
|
(11,303)
|
Gain on sale of real
estate investments
|
-
|
|
(2,677)
|
|
(4,947)
|
|
(2,677)
|
Gain on revaluation
of equity on business combination
|
(3,761)
|
|
-
|
|
(3,761)
|
|
-
|
Loss on early
extinguishment of debt
|
-
|
|
-
|
|
(2,393)
|
|
-
|
EBITDA
|
$
10,877
|
|
$
8,927
|
|
$
37,298
|
|
$
29,422
|
|
|
|
|
|
|
|
|
Recurring Capital Expenditures
We define recurring capital expenditures as expenditures that
are incurred at every property and exclude development, investment,
revenue enhancing and non-recurring capital expenditures.
Non-Recurring Capital Expenditures
We define non-recurring capital expenditures as expenditures for
significant projects that upgrade units or common areas and
projects that are revenue enhancing.
Same Store Properties
Same store properties are conventional multifamily residential
apartments which were owned and operational for the entire periods
presented, including each comparative period.
Property Net Operating Income ("Property NOI")
We believe that net operating income, or NOI, is a useful
measure of our operating performance. We define NOI as total
property revenues less total property operating expenses, excluding
depreciation and amortization and interest. Other REITs may use
different methodologies for calculating NOI, and accordingly, our
NOI may not be comparable to other REITs. We believe that this
measure provides an operating perspective not immediately apparent
from GAAP operating income or net income. We use NOI to evaluate
our performance on a same store and non-same store basis because
NOI measures the core operations of property performance by
excluding corporate level expenses and other items not related to
property operating performance and captures trends in rental
housing and property operating expenses. However, NOI should only
be used as an alternative measure of our financial performance.
The following table reflects same store and non-same store
contributions to consolidated NOI together with a reconciliation of
NOI to net (loss) income attributable to common stockholders as
computed in accordance with GAAP for the periods presented
(unaudited and amounts in thousands):
|
|
Three Months
Ended(1)
|
|
Year Ended
(2)
|
|
|
December
31,
|
|
December
31,
|
|
|
2016
|
2015
|
|
2016
|
2015
|
Net income (loss)
attributable to common stockholders
|
$
(7,260)
|
$
(1,523)
|
|
$
(18,985)
|
$
635
|
Add pro-rata
share:
|
|
|
|
|
|
|
Depreciation and
amortization
|
7,527
|
4,728
|
|
26,963
|
12,369
|
|
Amortization of
non-cash interest expense
|
171
|
83
|
|
790
|
326
|
|
Management
fees
|
1,987
|
1,144
|
|
6,417
|
4,154
|
|
Acquisition and
disposition costs
|
2,130
|
2,008
|
|
4,123
|
3,375
|
|
Loss on early
extinguishment of debt
|
-
|
-
|
|
2,269
|
-
|
|
Corporate operating
expenses
|
1,680
|
1,166
|
|
5,779
|
4,050
|
|
Management
internalization process expense
|
63
|
-
|
|
63
|
-
|
|
Preferred
dividends
|
5,298
|
1,153
|
|
13,567
|
1,153
|
|
Preferred stock
accretion
|
320
|
-
|
|
880
|
-
|
Less pro-rata
share:
|
|
|
|
|
|
|
Other
income
|
-
|
1
|
|
26
|
93
|
|
Preferred returns and
equity in income of unconsolidated
real estate joint ventures
|
2,973
|
2,276
|
|
11,464
|
6,605
|
|
Interest income from
related parties
|
17
|
-
|
|
17
|
-
|
|
(Loss) gain on sale
of joint venture interest, net of fees
|
-
|
-
|
|
-
|
5,320
|
|
Gain on sale of real
estate assets
|
1,828
|
2,640
|
|
6,704
|
2,640
|
Pro-rata share of
properties' income
|
7,098
|
3,842
|
|
23,655
|
11,404
|
Add:
|
|
|
|
|
|
|
Noncontrolling
interest pro-rata share of property income
|
1,300
|
965
|
|
4,500
|
3,669
|
Total property
income
|
8,398
|
4,807
|
|
28,155
|
15,073
|
Add:
|
|
|
|
|
|
|
Interest
expense
|
5,628
|
3,448
|
|
19,009
|
11,429
|
Net operating
income
|
14,026
|
8,255
|
|
47,164
|
26,502
|
Less:
|
|
|
|
|
|
|
Non-same store net
operating income
|
7,606
|
2,206
|
|
28,311
|
8,945
|
Same store net
operating income
|
$
6,420
|
$
6,049
|
|
$
18,853
|
$
17,557
|
|
|
|
|
|
|
|
(1)Same
Store sales for the three months ended December 31, 2016 related to
the following properties: Enders Place at Baldwin Park, MDA
Apartments, Village Green of Ann Arbor, Lansbrook Village, ARIUM
Grandewood, Fox Hill, Park & Kingston, and ARIUM
Palms.
|
(2) Same
Store sales for the year ended December 31, 2016 related to the
following properties: Enders Place at Baldwin Park, MDA
Apartments,Village Green of Ann Arbor, Lansbrook Village, and ARIUM
Grandewood.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/bluerock-residential-growth-reit-announces-fourth-quarter-2016-results-300408762.html
SOURCE Bluerock Residential Growth REIT, Inc.