NEW YORK, May 8, 2018 /PRNewswire/ -- Bluerock
Residential Growth REIT, Inc. (NYSE
American: BRG) ("the Company"), an owner of highly
amenitized multi-family apartment communities, announced today its
financial results for the quarter ended March 31, 2018.
First Quarter Highlights
- Total revenues grew 49% to $41.9
million for the quarter from $28.2
million in the prior year period.
- Net loss attributable to common stockholders for the first
quarter of 2018 was ($0.40) per
share, as compared to net loss attributable to common stockholders
of ($0.20) per share in the prior
year period.
- Property Net Operating Income ("NOI") grew 31% to $21.0 million, from $16.0
million in the prior year period.
- Same store Revenue and NOI increased 5.4% and 3.5%
respectively, as compared to the prior year period.
- Adjusted funds from operations attributable to common
shares and units ("AFFO") grew 21% to $5.6 million, from $4.6
million in the prior year period. AFFO per share is
$0.18 for the quarter as compared to
$0.18 in first quarter 2017.
- Consolidated real estate investments, at cost, increased
approximately $65 million to
$1.5 billion.
- The Company invested approximately $61
million in a 264-unit highly amenitized community and grew
development mezzanine loans by approximately $22 million.
- Repurchased 530,693 shares of stock during the first quarter at
an average price of $7.92 per share,
for a total cost of approximately $4.2
million.
- The Company entered into a $50
million junior credit facility agreement.
"We had an active start to the year as we produced strong
results for the first quarter, and delivered AFFO which exceeded
our dividend payment," said Ramin
Kamfar, Company Chairman and CEO. "We also closed on the
acquisition of a multi-family community for $61 million and strengthened our balance sheet as
we established a $50 million junior
revolving credit facility. We enter the second quarter with greater
financial flexibility and capacity in pursuing our strategy of
owning highly amenitized communities in targeted knowledge-economy
growth markets."
Financial Results
Net loss attributable to common stockholders for the first
quarter of 2018 was $9.4 million,
compared to a net loss of $5.0
million in the prior year period. Net loss
attributable to common stockholders included non-cash expenses of
$18.2 million or $0.59 per share in the first quarter of 2018
compared to $13.9 million or
$0.55 per share for the prior year
period.
AFFO for the first quarter of 2018 was $5.6 million, or $0.18 per diluted share, compared to $4.6 million, or $0.18 per diluted share in the prior year
period. AFFO was primarily impacted by growth in property NOI
of $5.0 million and interest income
of $3.7 million arising from
significant investment activity. This was primarily offset by a
year-over-year rise in interest expense of $3.0 million, general and administrative expenses
of $1.9 million, and preferred stock
dividends of $2.4 million.
Total Portfolio Performance
$ In thousands,
except average rental rates
|
1Q18
|
1Q17
|
Variance
|
|
Total Revenues
(1)
|
$
|
41,871
|
$
|
28,183
|
48.6%
|
|
Property Operating
Expenses
|
$
|
15,658
|
$
|
10,619
|
47.5%
|
|
NOI
|
$
|
21,017
|
$
|
16,041
|
31.0%
|
|
Operating
Margin
|
57.3%
|
60.2%
|
(290)
|
bps
|
Occupancy
Percentage
|
93.5%
|
94.3%
|
(80)
|
bps
|
Average Rental
Rate
|
$
|
1,227
|
$
|
1,254
|
-2.2%
|
|
(1)
Including interest income from related parties
|
|
|
|
|
For the first quarter of 2018, property revenues increased by
37.6% compared to the same prior year period primarily attributable
to the increased size of the portfolio. Total portfolio NOI
was $21.0 million, an increase of
$5.0 million, or 31.0%, compared to
the same period in the prior year.
Property NOI margins were 57.3% of revenue for the quarter,
compared to 60.2% of revenue in the prior year quarter.
Property NOI margins were impacted by the sales of stabilized
assets owned for longer time periods and the recent purchase of
replacement properties that have not yet achieved the same level of
operational efficiency. Property operating expenses were up
primarily due to the increased size of the portfolio.
Same Store Portfolio Performance
$ In thousands,
except average rental rates
|
1Q18
|
1Q17
|
Variance
|
|
Revenues
|
$
|
20,781
|
$
|
19,725
|
5.4%
|
|
Property Operating
Expenses
|
$
|
8,594
|
$
|
7,946
|
8.2%
|
|
NOI
|
$
|
12,187
|
$
|
11,779
|
3.5%
|
|
Operating
Margin
|
58.6%
|
59.7%
|
(110)
|
bps
|
Occupancy
Percentage
|
93.8%
|
94.0%
|
(20)
|
bps
|
Average Rental
Rate
|
$
|
1,284
|
$
|
1,225
|
4.8%
|
|
For the first quarter of 2018, same store NOI was $12.2 million, an increase of $408,000, or 3.5%, compared to the same period in
the prior year. Same store property revenues increased by 5.4%
compared to the same prior year period, primarily attributable to a
4.8% increase in average rental rates, offset by average occupancy
decreasing 20 basis points to 93.8%. Same store
expenses were impacted by an approximate $400,000 increase in real estate taxes due to
higher valuations by municipalities and lower 2017 tax expense as a
result of 2016 real estate tax true-ups recorded in the 2017
period. The Company's same store portfolio for the quarter
ended March 31, 2018 included 16
properties.
First Quarter Acquisition Activity
- On March 26, 2018, acquired an
88% indirect interest in a 264-unit apartment community located in
Castle Rock, Colorado, known as
Links at Plum Creek. The total purchase price was
approximately $61.1 million, funded
in part with a $40.0 million mortgage
loan on the Links at Plum Creek.
- On March 28, 2018, increased its
mezzanine loan in the Flagler
Village development by $21.0
million.
Balance Sheet
On March 20, 2018, the Company,
through its operating partnership, entered into a $50 million credit agreement (the "Junior Credit
Facility") with KeyBank National Association and other
lenders. The Junior Credit Facility matures in March 2019, and borrowings bear interest, at the
Company's option, at LIBOR plus 4.00%, or the base rate plus
3.00%.
The Company raised gross proceeds of approximately $18.5 million through the sale of 18,531 shares
of Series B preferred stock with associated warrants at
$1,000 per unit.
As of March 31, 2018, the Company
had $31.5 million of unrestricted
cash on its balance sheet, approximately $23.2 million available among its revolving
credit facilities, and $1.1 billion
of debt outstanding.
Dividend Details
The Board of Directors authorized, and the Company declared, a
quarterly dividend for the first quarter of 2018 equal to a
quarterly rate of $0.1625 per share
on its Class A common stock, payable to the stockholders of record
as of March 23, 2018, which was paid
in cash on April 5, 2018. 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 April 13, 2018, the Board of
Directors authorized, and the Company declared, a monthly dividend
of $5.00 per share of Series B
preferred stock, payable to the stockholders of record as of
April 25, 2018, which was paid in
cash on May 4, 2018, and as of
May 25, 2018, and June 25, 2018, which will be paid in cash on
June 5, 2018 and July 5, 2018, respectively.
2018 Guidance
Based on the Company's current outlook and market conditions,
the Company reiterates 2018 AFFO in the range of $0.65 to $0.70 per
share. For additional guidance details, please see page 28 of
Company's First Quarter 2018 Earnings Supplement available under
Investor Relations on the Company's website
(www.bluerockresidential.com). Subsequent to
issuing 2018 guidance in
February 2018, the Company revised
its presentation of AFFO attributable to common stockholders to
reflect AFFO attributable to common shares and units. The
estimated weighted average diluted shares and units outstanding
used to calculate AFFO per share now includes noncontrolling
interests – operating partnership units. As the Company's
presentation now also includes the impact of AFFO attributable to
operating partnership units, and as shares and units are treated on
a one-for-one basis, there is no change to projected AFFO per share
for purposes of 2018 AFFO guidance.
Conference Call
All interested parties can listen to the live conference call at
11:00 AM ET on Tuesday, May 8, 2018
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 June 8, 2018 at
http://services.choruscall.com/links/brg180508.html, as well as by
dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088
internationally, and requesting conference number 10119871.
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 American: BRG) is a real estate
investment trust that focuses on developing and acquiring a
diversified portfolio of institutional-quality highly amenitized
live/work/play apartment communities in demographically attractive
knowledge economy 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 Core+ improvements to properties and operations. 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 March 13, 2018, 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 operating real estate and
mezzanine/preferred investments as of March
31, 2018:
Consolidated
Operating
Properties
|
|
Location
|
|
Number
of Units
|
|
Year Built/
Renovated (1)
|
|
Ownership
Interest
|
|
Average
Rent (2)
|
|
%
Occupied
(3)
|
ARIUM at Palmer
Ranch
|
|
Sarasota,
FL
|
|
320
|
|
2016
|
|
95%
|
|
$
1,269
|
|
97%
|
ARIUM
Glenridge
|
|
Atlanta,
GA
|
|
480
|
|
1990
|
|
90%
|
|
1,122
|
|
96%
|
ARIUM
Grandewood
|
|
Orlando,
FL
|
|
306
|
|
2005
|
|
100%
|
|
1,323
|
|
97%
|
ARIUM
Gulfshore
|
|
Naples, FL
|
|
368
|
|
2016
|
|
95%
|
|
1,288
|
|
95%
|
ARIUM Hunter's
Creek
|
|
Orlando,
FL
|
|
532
|
|
1999
|
|
100%
|
|
1,330
|
|
97%
|
ARIUM
Metrowest
|
|
Orlando,
FL
|
|
510
|
|
2001
|
|
100%
|
|
1,294
|
|
96%
|
ARIUM
Palms
|
|
Orlando,
FL
|
|
252
|
|
2008
|
|
95%
|
|
1,309
|
|
97%
|
ARIUM Pine
Lakes
|
|
Port St. Lucie,
FL
|
|
320
|
|
2003
|
|
85%
|
|
1,208
|
|
99%
|
ARIUM
Westside
|
|
Atlanta,
GA
|
|
336
|
|
2008
|
|
90%
|
|
1,492
|
|
93%
|
Ashton
Reserve
|
|
Charlotte,
NC
|
|
473
|
|
2015
|
|
100%
|
|
1,061
|
|
92%
|
Citrus
Tower
|
|
Orlando,
FL
|
|
336
|
|
2006
|
|
97%
|
|
1,234
|
|
97%
|
Enders Place at
Baldwin Park
|
|
Orlando,
FL
|
|
220
|
|
2003
|
|
92%
|
|
1,712
|
|
96%
|
James on South
First
|
|
Austin, TX
|
|
250
|
|
2016
|
|
90%
|
|
1,264
|
|
94%
|
Marquis at Crown
Ridge
|
|
San Antonio,
TX
|
|
352
|
|
2009
|
|
90%
|
|
926
|
|
94%
|
Marquis at Stone
Oak
|
|
San Antonio,
TX
|
|
335
|
|
2007
|
|
90%
|
|
1,407
|
|
91%
|
Marquis at The
Cascades
|
|
Tyler, TX
|
|
582
|
|
2009
|
|
90%
|
|
1,076
|
|
91%
|
Marquis at
TPC
|
|
San Antonio,
TX
|
|
139
|
|
2008
|
|
90%
|
|
1,413
|
|
96%
|
Outlook at
Greystone
|
|
Birmingham,
AL
|
|
300
|
|
2007
|
|
100%
|
|
929
|
|
89%
|
Park &
Kingston
|
|
Charlotte,
NC
|
|
168
|
|
2015
|
|
100%
|
|
1,251
|
|
92%
|
Preston
View
|
|
Morrisville,
NC
|
|
382
|
|
2000
|
|
100%
|
|
1,065
|
|
96%
|
Roswell City
Walk
|
|
Roswell,
GA
|
|
320
|
|
2015
|
|
98%
|
|
1,486
|
|
95%
|
Sorrel
|
|
Frisco, TX
|
|
352
|
|
2015
|
|
95%
|
|
1,235
|
|
91%
|
Sovereign
|
|
Fort Worth,
TX
|
|
322
|
|
2015
|
|
95%
|
|
1,321
|
|
92%
|
The Brodie
|
|
Austin, TX
|
|
324
|
|
2001
|
|
93%
|
|
1,176
|
|
96%
|
The Links at Plum
Creek
|
|
Castle Rock,
CO
|
|
264
|
|
2000
|
|
88%
|
|
1,271
|
|
94%
|
The Mills
|
|
Greenville,
SC
|
|
304
|
|
2013
|
|
100%
|
|
973
|
|
90%
|
The Preserve at
Henderson Beach
|
|
Destin, FL
|
|
340
|
|
2009
|
|
100%
|
|
1,320
|
|
94%
|
Villages at Cypress
Creek
|
|
Houston,
TX
|
|
384
|
|
2001
|
|
80%
|
|
1,056
|
|
95%
|
Wesley
Village
|
|
Charlotte,
NC
|
|
301
|
|
2010
|
|
100%
|
|
1,223
|
|
93%
|
Consolidated
Operating Properties Subtotal/Average
|
|
9,872
|
|
|
|
|
|
$
1,227
|
|
94%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine/Preferred
Investments
|
|
Location
|
|
Planned Number of
Units
|
|
|
|
|
|
Pro
Forma
Average
Rent (4)
|
|
|
Alexan
CityCentre
|
|
Houston,
TX
|
|
340
|
|
|
|
|
|
$
2,144
|
|
|
Alexan Southside
Place
|
|
Houston,
TX
|
|
270
|
|
|
|
|
|
2,012
|
|
|
APOK
Townhomes
|
|
Boca Raton,
FL
|
|
90
|
|
|
|
|
|
2,549
|
|
|
Crescent
Perimeter
|
|
Atlanta,
GA
|
|
320
|
|
|
|
|
|
1,749
|
|
|
Domain
|
|
Garland,
TX
|
|
299
|
|
|
|
|
|
1,469
|
|
|
Flagler
Village
|
|
Fort Lauderdale,
FL
|
|
385
|
|
|
|
|
|
2,352
|
|
|
Helios
|
|
Atlanta,
GA
|
|
282
|
|
|
|
|
|
1,486
|
|
|
Lake Boone
Trail
|
|
Raleigh,
NC
|
|
245
|
|
|
|
|
|
1,271
|
|
|
Vickers
Village
|
|
Roswell,
GA
|
|
79
|
|
|
|
|
|
3,176
|
|
|
West
Morehead
|
|
Charlotte,
NC
|
|
286
|
|
|
|
|
|
1,507
|
|
|
Whetstone
|
|
Durham, NC
|
|
204
|
|
|
|
|
|
1,233
|
(2)
|
|
Mezzanine and
Preferred Investments Subtotal/Average
|
|
2,800
|
|
|
|
|
|
$
1,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio
Properties Total/Average
|
|
12,672
|
|
|
|
|
|
$
1,360
|
|
|
|
(1) Represents date of last
significant renovation or year built if there were no
renovations.
|
(2)
Represents the average effective monthly rent per occupied unit for
the three months ended March 31, 2018.
|
(3)
Percent occupied is calculated as (i) the number of units occupied
as of March 31, 2018, divided by (ii) total number of units,
expressed as a percentage.
|
(4) Alexan
CityCentre, Alexan Southside Place, Helios, and Lake Boone Trail
are preferred equity investments with an option to convert into
partial ownership upon stabilization. APOK Townhomes,
Crescent Perimeter, Domain, Flagler Village, Vickers Village, and
West Morehead are mezzanine loan investments. Additionally, APOK
Townhomes, Domain, and West Morehead have an option to purchase an
indirect property interest upon maturity. Whetstone is
currently a preferred equity investment providing a stated
investment return. Pro forma average rent represents the average
pro forma effective monthly rent per occupied unit for all expected
occupied units upon stabilization.
|
Consolidated
Statement of Operations
|
For the Three
Months Ended March 31, 2018 and 2017
|
(Unaudited and
dollars in thousands except for share and per share
data)
|
|
|
|
Three Months
Ended
|
|
|
|
|
March
31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
Net rental
income
|
|
$
|
32,729
|
|
|
$
|
23,859
|
|
|
Other property
revenues
|
|
|
3,946
|
|
|
|
2,801
|
|
|
Interest income from
related parties
|
|
|
5,196
|
|
|
|
1,523
|
|
|
Total
revenues
|
|
|
41,871
|
|
|
|
28,183
|
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
Property
operating
|
|
|
15,658
|
|
|
|
10,619
|
|
|
Property management
fees
|
|
|
992
|
|
|
|
732
|
|
|
General and
administrative
|
|
|
4,669
|
|
|
|
1,449
|
|
|
Management fees to
related parties
|
|
|
—
|
|
|
|
2,768
|
|
|
Acquisition and
pursuit costs
|
|
|
43
|
|
|
|
3,182
|
|
|
Management
internalization
|
|
|
—
|
|
|
|
481
|
|
|
Weather-related
losses, net
|
|
|
168
|
|
|
|
—
|
|
|
Depreciation and
amortization
|
|
|
15,640
|
|
|
|
10,944
|
|
|
Total
expenses
|
|
|
37,170
|
|
|
|
30,175
|
|
|
Operating income
(loss)
|
|
|
4,701
|
|
|
|
(1,992)
|
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
Preferred returns and
equity in income of unconsolidated real estate joint
ventures
|
|
|
2,461
|
|
|
|
2,572
|
|
|
Gain on sale of real
estate investments
|
|
|
—
|
|
|
|
16,466
|
|
|
Interest expense,
net
|
|
|
(10,117)
|
|
|
|
(7,118)
|
|
|
Total other
(expense) income
|
|
|
(7,656)
|
|
|
|
11,920
|
|
|
Net (loss)
income
|
|
|
(2,955)
|
|
|
|
9,928
|
|
|
Preferred stock
dividends
|
|
|
(8,248)
|
|
|
|
(5,851)
|
|
|
Preferred stock
accretion
|
|
|
(1,112)
|
|
|
|
(338)
|
|
|
Net (loss) income
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
Operating partnership
units
|
|
|
(2,675)
|
|
|
|
(56)
|
|
|
Partially owned
properties
|
|
|
(215)
|
|
|
|
8,785
|
|
|
Net (loss) income
attributable to noncontrolling interests
|
|
|
(2,890)
|
|
|
|
8,729
|
|
|
Net loss
attributable to common stockholders
|
|
$
|
(9,425)
|
|
|
$
|
(4,990)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
common share – Basic
|
|
$
|
(0.40)
|
|
|
$
|
(0.20)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
common share – Diluted
|
|
$
|
(0.40)
|
|
|
$
|
(0.20)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
basic common shares outstanding
|
|
|
24,143,382
|
|
|
|
24,989,621
|
|
|
Weighted average
diluted common shares outstanding
|
|
|
24,143,382
|
|
|
|
24,989,621
|
|
|
Consolidated
Balance Sheets
|
First Quarter
2018
|
(Unaudited and
dollars in thousands except for share and per share
amounts)
|
|
|
|
March 31,
2018
|
|
|
December 31,
2017
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Net Real Estate
Investments
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
172,095
|
|
|
$
|
169,135
|
|
Buildings and
improvements
|
|
|
1,302,990
|
|
|
|
1,244,193
|
|
Furniture, fixtures
and equipment
|
|
|
40,998
|
|
|
|
38,446
|
|
Construction in
progress
|
|
|
1,571
|
|
|
|
985
|
|
Total
Gross Real Estate Investments
|
|
|
1,517,654
|
|
|
|
1,452,759
|
|
Accumulated
depreciation
|
|
|
(67,163)
|
|
|
|
(55,177)
|
|
Total Net Real Estate
Investments
|
|
|
1,450,491
|
|
|
|
1,397,582
|
|
Cash and cash
equivalents
|
|
|
31,509
|
|
|
|
35,015
|
|
Restricted
cash
|
|
|
25,376
|
|
|
|
29,575
|
|
Notes and accrued
interest receivable from related parties
|
|
|
162,912
|
|
|
|
140,903
|
|
Due from
affiliates
|
|
|
2,243
|
|
|
|
2,003
|
|
Accounts receivable,
prepaid and other assets
|
|
|
13,950
|
|
|
|
9,689
|
|
Preferred equity
investments and investments in unconsolidated real estate joint
ventures
|
|
|
71,309
|
|
|
|
71,145
|
|
In-place lease
intangible assets, net
|
|
|
2,038
|
|
|
|
4,635
|
|
Total
Assets
|
|
$
|
1,759,828
|
|
|
$
|
1,690,547
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
REDEEMABLE PREFERRED STOCK AND EQUITY
|
|
|
|
|
|
|
|
|
Mortgages
payable
|
|
$
|
978,473
|
|
|
$
|
939,494
|
|
Revolving credit
facilities
|
|
|
99,165
|
|
|
|
67,670
|
|
Accounts
payable
|
|
|
1,168
|
|
|
|
1,652
|
|
Other accrued
liabilities
|
|
|
20,052
|
|
|
|
22,952
|
|
Due to
affiliates
|
|
|
700
|
|
|
|
1,575
|
|
Distributions
payable
|
|
|
11,483
|
|
|
|
14,287
|
|
Total
Liabilities
|
|
|
1,111,041
|
|
|
|
1,047,630
|
|
8.250% Series A
Cumulative Redeemable Preferred Stock, liquidation preference
$25.00 per share,
10,875,000 shares authorized; and 5,721,460 issued and outstanding
as of March 31, 2018 and December
31, 2017
|
|
|
138,939
|
|
|
|
138,801
|
|
|
6.000% Series B
Redeemable Preferred Stock, liquidation preference $1,000 per
share, 725,000 shares authorized; 202,144 and 184,130 issued and
outstanding as of March 31, 2018 and December 31, 2017,
respectively
|
|
|
178,433
|
|
|
|
161,742
|
|
|
7.625% Series C
Cumulative Redeemable Preferred Stock, liquidation preference
$25.00 per share, 4,000,000 shares authorized; and 2,323,750 issued
and outstanding as of March 31, 2018 and December 31,
2017
|
|
|
56,250
|
|
|
|
56,196
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value, 230,400,000 shares authorized;
none issued and outstanding
|
|
|
—
|
|
|
|
—
|
|
7.125% Series D Cumulative Preferred Stock, liquidation preference
$25.00 per share, 4,000,000 shares authorized;
2,850,602 issued and outstanding at March 31, 2018 and December 31,
2017
|
|
|
68,705
|
|
|
|
68,705
|
|
Common stock - Class
A, $0.01 par value, 747,509,582 shares authorized; 23,733,296 and
24,218,359 shares issued and outstanding as of March 31, 2018 and
December 31, 2017, respectively
|
|
|
237
|
|
|
|
242
|
|
Common stock - Class
C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued
and outstanding as of March 31, 2018 and December 31,
2017
|
|
|
1
|
|
|
|
1
|
|
Additional
paid-in-capital
|
|
|
315,833
|
|
|
|
318,170
|
|
Distributions in
excess of cumulative earnings
|
|
|
(173,632)
|
|
|
|
(164,286))
|
|
Total Stockholders'
Equity
|
|
|
211,144
|
|
|
|
222,832
|
|
Noncontrolling
Interests
|
|
|
|
|
|
|
|
|
Operating partnership
units
|
|
|
41,428
|
|
|
|
42,999
|
|
Partially owned properties
|
|
|
22,593
|
|
|
|
20,347
|
|
Total Noncontrolling
Interests
|
|
|
64,021
|
|
|
|
63,346
|
|
Total
Equity
|
|
|
275,165
|
|
|
|
286,178
|
|
TOTAL LIABILITIES,
REDEEMABLE PREFERRED STOCK AND EQUITY
|
|
$
|
1,759,828
|
|
|
$
|
1,690,547
|
|
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 shares and units
("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 shares and units ("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 and pursuit costs, 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 paid to our former Manager
only, we further adjusted 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 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 used AFFO for
purposes of determining the quarterly incentive fee paid to our
former Manager in prior periods.
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 eleven additional operating
properties and sold three properties subsequent to March 31, 2017. Therefore, 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
|
|
|
|
|
March
31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
Net loss
attributable to common shares
|
|
$
|
(9,425)
|
|
|
$
|
(4,990)
|
|
|
Add back: Net loss
attributable to operating partnership units
|
|
|
(2,675)
|
|
|
|
(56)
|
|
|
Net loss
attributable to common shares and units
|
|
|
(12,100)
|
|
|
|
(5,046)
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stockholders
and operating partnership units pro-rata share of:
|
|
|
|
|
|
|
|
|
|
Real estate
depreciation and
amortization(1)
|
|
|
14,831
|
|
|
|
9,914
|
|
|
Gain on sale of real
estate investments
|
|
|
—
|
|
|
|
(7,481)
|
|
|
FFO Attributable
to Common Shares and Units
|
|
|
2,731
|
|
|
|
(2,613)
|
|
|
Common stockholders
and operating partnership units pro-rata share of:
|
|
|
|
|
|
|
|
|
|
Amortization of
non-cash interest expense
|
|
|
461
|
|
|
|
478
|
|
|
Acquisition and
pursuit costs
|
|
|
43
|
|
|
|
3,040
|
|
|
Management
internalization
|
|
|
—
|
|
|
|
481
|
|
|
Non-real estate
depreciation and amortization
|
|
|
64
|
|
|
|
—
|
|
|
Weather-related
losses, net
|
|
|
165
|
|
|
|
—
|
|
|
Non-cash preferred
returns and equity in income of unconsolidated real estate
joint
ventures
|
|
|
(231)
|
|
|
|
—
|
|
|
Normally recurring
capital expenditures
|
|
|
(517)
|
|
|
|
(294)
|
|
|
Preferred stock
accretion
|
|
|
1,112
|
|
|
|
338
|
|
|
Non-cash equity
compensation
|
|
|
1,780
|
|
|
|
3,201
|
|
|
AFFO Attributable
to Common Shares and Units
|
|
$
|
5,608
|
|
|
$
|
4,631
|
|
|
|
|
|
|
|
Weighted average
common shares and units outstanding - diluted
|
|
|
30,995,775
|
|
|
|
25,273,480
|
|
|
|
|
|
|
|
PER SHARE
INFORMATION:
|
|
|
|
|
FFO Attributable
to Common Shares and Units - diluted
|
|
$
|
0.09
|
|
|
$
|
(0.10)
|
|
|
AFFO Attributable
to Common Shares and Units - diluted
|
|
$
|
0.18
|
|
|
$
|
0.18
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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
– partially owned properties, and our similar estimated share of
unconsolidated
depreciation and amortization, which is included in earnings of our
unconsolidated real estate joint venture
investments.
|
Earnings Before Interest, Taxes, Depreciation and
Amortization for Real Estate ("EBITDAre")
NAREIT defines earnings before interest, taxes, depreciation and
amortization for real estate ("EBITDAre") (September 2017 White Paper) as net income,
computed in accordance with GAAP, before interest expense, income
taxes, depreciation and amortization expense, and further adjusted
for gains and losses from sales of depreciated operating
properties, and impairment write-downs of depreciated operating
properties.
We consider EBITDAre 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.
Adjusted EBITDAre represents EBITDAre further adjusted for
non-comparable items and it is not intended to be a measure of free
cash flow for our management's discretionary use, as it does not
consider certain cash requirements such as income tax payments,
debt service requirements, capital expenditures and other fixed
charges.
EBITDAre and Adjusted EBITDAre are not recognized measurements
under GAAP. Because not all companies use identical calculations,
our presentation of EBITDAre and Adjusted EBITDAre may not be
comparable to similarly titled measures of other companies.
Below is a reconciliation of net loss attributable to common
stockholders to EBITDAre (unaudited and dollars in thousands).
|
|
Three Months Ended
|
|
|
|
|
March
31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
Net loss attributable
to common stockholders
|
|
$
|
(9,425)
|
|
|
$
|
(4,990)
|
|
|
Net (loss) income
attributable to noncontrolling interests
|
|
|
(2,890)
|
|
|
|
8,729
|
|
|
Preferred stock
dividends
|
|
|
8,248
|
|
|
|
5,851
|
|
|
Preferred stock
accretion
|
|
|
1,112
|
|
|
|
338
|
|
|
Interest expense,
net
|
|
|
10,117
|
|
|
|
7,118
|
|
|
Depreciation and
amortization
|
|
|
15,576
|
|
|
|
10,944
|
|
|
Gain on sale of real
estate investments
|
|
|
-
|
|
|
|
(16,466)
|
|
|
EBITDAre
|
|
$
|
22,738
|
|
|
$
|
11,524
|
|
|
Acquisition and
pursuit costs
|
|
|
43
|
|
|
|
3,182
|
|
|
Management
internalization
|
|
|
-
|
|
|
|
481
|
|
|
Non-real estate
depreciation and amortization
|
|
|
64
|
|
|
|
-
|
|
|
Weather-related
losses, net
|
|
|
168
|
|
|
|
-
|
|
|
Non-cash equity
compensation
|
|
|
1,780
|
|
|
|
3,201
|
|
|
Non-cash preferred
returns and equity in income of unconsolidated real estate
joint
ventures
|
|
|
(231)
|
|
|
|
-
|
|
|
Adjusted
EBITDAre
|
|
$
|
24,562
|
|
|
$
|
18,388
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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.
Certain amounts in prior periods, related to tenant
reimbursements for utility expenses amounting to $1.4 million for the three months ended
March 31, 2017, have been
reclassified to other property revenues from property operating
expenses, to conform to the current period. In addition,
property management fees have been reclassified from property
operating expenses.
The following table reflects net loss attributable to common
stockholders together with a reconciliation to NOI and to same
store and non-same store contributions to consolidated NOI, as
computed in accordance with GAAP for the periods presented
(unaudited and amounts in thousands):
|
|
Three Months Ended
(1)
|
|
|
March
31,
|
|
|
2018
|
2017
|
Net loss
attributable to common shares
|
$
(9,425)
|
$
(4,990)
|
Add back: Net loss
attributable to operating partnership units
|
(2,675)
|
(56)
|
Net loss
attributable to common shares and units
|
(12,100)
|
(5,046)
|
Add Common
stockholders and operating partnership units pro-rata share
of:
|
|
|
|
Depreciation and
amortization
|
14,831
|
9,914
|
|
Non-real estate
depreciation and amortization
|
64
|
-
|
|
Amortization of
non-cash interest expense
|
461
|
478
|
|
Property management
fees
|
939
|
649
|
|
Management
fees
|
-
|
2,768
|
|
Acquisition and
pursuit costs
|
43
|
3,040
|
|
Corporate operating
expenses
|
4,669
|
1,449
|
|
Management
internalization
|
-
|
481
|
|
Weather-related
losses, net
|
165
|
-
|
|
Preferred
dividends
|
8,248
|
5,851
|
|
Preferred stock
accretion
|
1,112
|
338
|
Less Common
stockholders and operating partnership units pro-rata share
of:
|
|
|
|
Preferred returns and
equity in income of unconsolidated real estate joint
ventures
|
2,461
|
2,572
|
|
Interest income from
related parties
|
5,196
|
1,523
|
|
Gain on sale of real
estate investments
|
-
|
7,481
|
Pro-rata share of
properties' income
|
10,775
|
8,346
|
Add:
|
|
|
|
|
Noncontrolling
interest pro-rata share of partially owned property
income
|
607
|
1,086
|
Total property
income
|
11,382
|
9,432
|
Add:
|
|
|
|
|
Interest
expense
|
9,635
|
6,609
|
Net operating
income
|
21,017
|
16,041
|
Less:
|
|
|
|
|
Non-same store net
operating income
|
8,830
|
4,262
|
Same store net
operating income
|
$
12,187
|
$
11,779
|
|
(1) Same
Store sales for the three months ended March 31, 2018 related to
the following properties: Enders Place at Baldwin Park, ARIUM
Grandewood, Park & Kingston, ARIUM Palms, Ashton Reserve,
Sovereign, Sorrel, ARIUM at Palmer Ranch, ARIUM Gulfshore, The
Preserve at Henderson Beach, ARIUM Westside, ARIUM Pine Lakes,
James on South First, ARIUM Glenridge, Roswell City Walk, and The
Brodie.
|
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SOURCE Bluerock Residential Growth REIT, Inc.