NEW YORK, May 7, 2019 /PRNewswire/ -- Bluerock
Residential Growth REIT, Inc. (NYSE American: BRG) ("the Company"),
an owner of highly amenitized multifamily apartment communities,
announced today its financial results for the quarter ended
March 31, 2019.
First Quarter Highlights
-
Total revenues grew 23% to $51.5 million for the quarter, from $41.9 million
in the prior year period.
- Net loss
attributable to common stockholders for the first quarter of 2019 was ($0.53)
per share, as compared to ($0.40) per
share in the prior year period. Net
loss attributable to common stockholders includes non-cash items,
including depreciation and amortization expense, of $0.74 per share in the first quarter of 2019
compared to $0.59 per share for the
prior year period.
- Property Net Operating Income
("NOI") grew 29% to $27.1 million, from $21.0 million in the prior year
period.
- Same store revenue and NOI increased 5.8%
and 9.0%
respectively, as compared to the prior year
period.
- Core funds from operations attributable to common shares and
units ("CFFO") increased 3% to $6.3
million, from $6.1 million in
the prior year period. CFFO per share was $0.20 for the first quarter as compared to
$0.20 in the prior year
period.
- Paid quarterly common stock dividend of $0.1625, an 81% payout ratio on a CFFO
basis.
- Consolidated
real estate investments, at cost, were approximately
$1.8 billion.
- Completed 273 value-add unit upgrades during the quarter
achieving a 26.3% ROI.
- Invested $7.8 million to buy out
the noncontrolling interest in one asset and invested $8.6 million in senior and mezzanine loans for a
redevelopment property.
- Repurchased 505,797 shares of common stock during the first
quarter at an average price of $10.01
per share, for a total cost of approximately $5.1 million.
"We are pleased to deliver another strong quarter of operating
results, further validating our investment thesis of owning highly
amenitized apartment communities in knowledge economy growth
markets," said Ramin Kamfar, Company
Chairman and CEO. "Property NOI is up over 29% and same store
NOI is up 9.0% over the prior year. These results demonstrate
the continued success of our strategic initiatives and the ability
to realize attractive returns on our value-add unit renovation
investments. With a robust pipeline of opportunities, we remain
committed to our investment strategy and are optimistic about our
outlook."
Financial Results
Net loss attributable to common stockholders
for the first
quarter of 2019 was $12.1
million, compared to $9.4
million in the prior year period.
Net loss attributable to common stockholders included
non-cash expenses of $17.2 million or
$0.74 per share in the first quarter
of 2019 compared to $14.2 million or
$0.59 per share for the prior year
period.
CFFO for the first quarter of 2019 was $6.3 million, or $0.20 per diluted share, compared to $6.1 million, or $0.20 per diluted share, in the prior year
period. CFFO adds back non-cash, non-operating expenses such
as accretion on the Company's Series B preferred stock.
CFFO was primarily driven by growth in property NOI of
$6.1 million and interest income of
$0.6 million arising from
significant investment activity. This was primarily offset by a
year-over-year increase in interest expense of $4.0 million, general and administrative expenses
of $0.3 million, and preferred stock
dividends of $2.1 million.
Total Portfolio
Performance
|
|
$ In thousands,
except average rental
rates
|
1Q19
|
|
1Q18
|
|
Variance
|
|
Total Revenues
(1)
|
$ 51,466
|
|
$ 41,871
|
|
22.9%
|
|
Property Operating
Expenses
|
$ 18,602
|
|
$ 15,658
|
|
18.8%
|
|
NOI
|
$ 27,088
|
|
$ 21,017
|
|
28.9%
|
|
Operating
Margin
|
59.3%
|
|
57.3%
|
|
200
|
bps
|
Occupancy
Percentage
|
93.9%
|
|
93.5%
|
|
40
|
bps
|
Average Rental
Rate
|
$
1,299
|
|
$
1,227
|
|
5.9%
|
|
(1) Including interest income from
related parties
|
|
|
For the first quarter of 2019, property revenues increased by
24.6% compared to the same prior year period primarily attributable
to the increased size of the portfolio. Total portfolio NOI
was $27.1 million, an increase of
$6.1 million, or 28.9%, compared to
the same period in the prior year. Property operating
expenses were up primarily due to the increased size of the
portfolio.
Property NOI margins expanded by 200 basis points to 59.3% of
revenue for the quarter, compared to 57.3% of revenue in the prior
year quarter.
Same Store Portfolio Performance
|
|
$ In thousands,
except average rental
rates
|
1Q19
|
|
1Q18
|
|
Variance
|
|
Revenues
|
$
38,725
|
|
$
36,612
|
|
5.8%
|
|
Property Operating
Expenses
|
$
15,854
|
|
$
15,628
|
|
1.4%
|
|
NOI
|
$
22,871
|
|
$
20,984
|
|
9.0%
|
|
Operating
Margin
|
59.1%
|
|
57.3%
|
|
180
|
bps
|
Occupancy
Percentage
|
93.9%
|
|
93.5%
|
|
40
|
bps
|
Average Rental
Rate
|
$
1,290
|
|
$
1,225
|
|
5.3%
|
|
The Company's same store portfolio for the quarter ended
March 31, 2019 included 28
properties. For the first quarter of 2019, same store NOI was
$22.9 million, an increase of
$1.9 million, or 9.0%, compared to
the same period in the prior year. Same store property revenues
increased by 5.8% compared to the same prior year period, primarily
attributable to a 5.3% increase in average rental rates, as well as
average occupancy increasing 40 basis points to 93.9%. Same
store expenses increased $0.23
million, primarily due to $0.11
million increase in trash, cable and landscaping,
$0.06 million of additional real
estate taxes due to higher valuations by municipalities, and
$0.05 million increase in
insurance.
Renovation Activity
The Company completed 273 value-add unit upgrades during the
first quarter achieving a 26.3% rent premium.
Since inception within the existing portfolio, the Company has
completed 1,939 value-add unit upgrades at an average cost of
$4,902 per unit and achieved an
average monthly rental rate increase of $108 per unit, equating to a 26.3% ROI on all
unit upgrades leased as of March 31,
2019. The Company has identified approximately 4,550
remaining units within the existing portfolio for value-add
upgrades with similar projected economics to the completed
renovations. The Company expects to complete between 900 and 1,200
unit renovations in 2019.
Acquisition Activity
On January 23, 2019, the Company
provided a $7.8 million senior loan
and a $0.8 million mezzanine loan for
a multifamily property undergoing redevelopment.
On January 29, 2019, the Company
invested approximately $7.8 million
to increase its ownership interest from 85% to 100% in its ARIUM
Pine Lakes property.
Balance Sheet
During the first quarter, the Company raised gross proceeds of
approximately $44.0 million through
the issuance of 43,955 shares of Series B preferred stock with
associated warrants at $1,000 per
unit.
As of March 31, 2019, the Company
had $24.3 million of unrestricted
cash on its balance sheet, approximately $54.4 million available among its revolving and
term credit facilities, and $1.3
billion of debt outstanding.
Dividend
The Board of Directors authorized, and the Company declared, a
quarterly dividend for the first quarter of 2019 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 25, 2019, which was paid
in cash on April 5, 2019.
A portion of each dividend may constitute a return of capital for tax purposes.
The Board of Directors authorized, and the Company declared a
quarterly cash dividend on its 8.250% Series A Cumulative
Redeemable Preferred Stock for the first quarter of 2019, in the
amount of $0.515625 per share. In
addition, the Company declared a quarterly cash dividend on its
7.625% Series C Cumulative Redeemable Preferred Stock for the first
quarter of 2019, in the amount of $0.4765625 per share. Further, the Company
declared a quarterly cash dividend on its 7.125% Series D
Cumulative Preferred Stock for the first quarter of 2019, in the
amount of $0.4453125 per share.
The dividends were payable to the stockholders of record on
March 25, 2019, and were paid on
April 5, 2019.
On April 12, 2019, 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, 2019, which was paid in
cash on May 3, 2019, and as of
May 24, 2019 and June 25, 2019 which will be paid in cash on
June 5, 2019, and July 5, 2019, respectively.
2019 Guidance
The Company is reaffirming its prior guidance. Based on
the Company's current outlook and market conditions, the Company
anticipates 2019 CFFO in the range of $0.80 to $0.84 per
share. For additional guidance details underlying earnings
guidance, please see page 30 of Company's First Quarter 2019
Earnings Supplement available under Investor Relations on the
Company's website (www.bluerockresidential.com).
Conference Call
All interested parties can listen to the live conference
call at 11:00 AM ET on Tuesday, May 7,
2019 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 July 7,
2019 at http://services.choruscall.com/links/brg190507.html,
as well as by dialing +1 (877) 344-7529
in the U.S.,
or +1 (412) 317-0088 internationally,
and requesting conference number 10130647.
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 value add 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 February 27,
2019, 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, 2019:
|
|
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
|
|
100%
|
|
$
1,311
|
|
97%
|
ARIUM
Glenridge
|
|
Atlanta,
GA
|
|
480
|
|
1990
|
|
90%
|
|
1,215
|
|
95%
|
ARIUM
Grandewood
|
|
Orlando,
FL
|
|
306
|
|
2005
|
|
100%
|
|
1,394
|
|
94%
|
ARIUM
Gulfshore
|
|
Naples, FL
|
|
368
|
|
2016
|
|
100%
|
|
1,325
|
|
95%
|
ARIUM Hunter's
Creek
|
|
Orlando,
FL
|
|
532
|
|
1999
|
|
100%
|
|
1,401
|
|
97%
|
ARIUM
Metrowest
|
|
Orlando,
FL
|
|
510
|
|
2001
|
|
100%
|
|
1,382
|
|
94%
|
ARIUM
Palms
|
|
Orlando,
FL
|
|
252
|
|
2008
|
|
100%
|
|
1,315
|
|
94%
|
ARIUM Pine
Lakes
|
|
Port St. Lucie,
FL
|
|
320
|
|
2003
|
|
100%
|
|
1,287
|
|
94%
|
ARIUM
Westside
|
|
Atlanta,
GA
|
|
336
|
|
2008
|
|
90%
|
|
1,532
|
|
94%
|
Ashford
Belmar
|
|
Lakewood,
CO
|
|
512
|
|
1988/1993
|
|
85%
|
|
1,607
|
|
92%
|
Ashton
Reserve
|
|
Charlotte,
NC
|
|
473
|
|
2015
|
|
100%
|
|
1,122
|
|
94%
|
Citrus
Tower
|
|
Orlando,
FL
|
|
336
|
|
2006
|
|
97%
|
|
1,292
|
|
94%
|
Enders Place at
Baldwin Park
|
|
Orlando,
FL
|
|
220
|
|
2003
|
|
92%
|
|
1,778
|
|
93%
|
James on South
First
|
|
Austin, TX
|
|
250
|
|
2016
|
|
90%
|
|
1,244
|
|
93%
|
Marquis at Crown
Ridge
|
|
San Antonio,
TX
|
|
352
|
|
2009
|
|
90%
|
|
1,014
|
|
91%
|
Marquis at Stone
Oak
|
|
San Antonio,
TX
|
|
335
|
|
2007
|
|
90%
|
|
1,444
|
|
95%
|
Marquis at The
Cascades
|
|
Tyler, TX
|
|
582
|
|
2009
|
|
90%
|
|
1,206
|
|
92%
|
Marquis at
TPC
|
|
San Antonio,
TX
|
|
139
|
|
2008
|
|
90%
|
|
1,485
|
|
92%
|
Outlook at
Greystone
|
|
Birmingham,
AL
|
|
300
|
|
2007
|
|
100%
|
|
954
|
|
94%
|
Park &
Kingston
|
|
Charlotte,
NC
|
|
168
|
|
2015
|
|
100%
|
|
1,294
|
|
98%
|
Plantation
Park
|
|
Lake Jackson,
TX
|
|
238
|
|
2016
|
|
80%
|
|
1,393
|
|
92%
|
Preston
View
|
|
Morrisville,
NC
|
|
382
|
|
2000
|
|
100%
|
|
1,121
|
|
94%
|
Roswell City
Walk
|
|
Roswell,
GA
|
|
320
|
|
2015
|
|
98%
|
|
1,526
|
|
98%
|
Sands Parc
|
|
Daytona Beach,
FL
|
|
264
|
|
2017
|
|
100%
|
|
1,354
|
|
97%
|
Sorrel
|
|
Frisco, TX
|
|
352
|
|
2015
|
|
95%
|
|
1,279
|
|
85%
|
Sovereign
|
|
Fort Worth,
TX
|
|
322
|
|
2015
|
|
95%
|
|
1,365
|
|
93%
|
The Brodie
|
|
Austin, TX
|
|
324
|
|
2001
|
|
93%
|
|
1,247
|
|
94%
|
The Links at Plum
Creek
|
|
Castle Rock,
CO
|
|
264
|
|
2000
|
|
88%
|
|
1,411
|
|
94%
|
The Mills
|
|
Greenville,
SC
|
|
304
|
|
2013
|
|
100%
|
|
1,037
|
|
96%
|
The Preserve at
Henderson Beach
|
|
Destin, FL
|
|
340
|
|
2009
|
|
100%
|
|
1,412
|
|
97%
|
Veranda at
Centerfield
|
|
Houston,
TX
|
|
400
|
|
1999
|
|
93%
|
|
947
|
|
90%
|
Villages of Cypress
Creek
|
|
Houston,
TX
|
|
384
|
|
2001
|
|
80%
|
|
1,129
|
|
96%
|
Wesley
Village
|
|
Charlotte,
NC
|
|
301
|
|
2010
|
|
100%
|
|
1,371
|
|
95%
|
Consolidated
Operating Properties Subtotal/Average
|
|
11,286
|
|
|
|
|
|
$
1,299
|
|
94%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mezzanine/Preferred Investments
|
|
Location
|
|
Planned
Number
of Units
|
|
|
|
|
|
Pro Forma
Average Rent
|
|
|
|
Alexan
CityCentre
|
|
Houston,
TX
|
|
340
|
|
|
|
|
|
$
1,733
|
(2)
|
|
|
Alexan Southside
Place
|
|
Houston,
TX
|
|
270
|
|
|
|
|
|
2,012
|
|
|
|
Arlo
|
|
Charlotte,
NC
|
|
286
|
|
|
|
|
|
1,507
|
|
|
|
Cade Boca
Raton
|
|
Boca Raton,
FL
|
|
90
|
|
|
|
|
|
2,549
|
|
|
|
Domain at The One
Forty
|
|
Garland,
TX
|
|
299
|
|
|
|
|
|
1,469
|
|
|
|
Flagler
Village
|
|
Fort Lauderdale,
FL
|
|
385
|
|
|
|
|
|
2,352
|
|
|
|
Helios
|
|
Atlanta,
GA
|
|
282
|
|
|
|
|
|
1,436
|
(2)
|
|
|
Leigh
House
|
|
Raleigh,
NC
|
|
245
|
|
|
|
|
|
1,271
|
|
|
|
North Creek
Apartments
|
|
Leander,
TX
|
|
259
|
|
|
|
|
|
1,358
|
|
|
|
Novel
Perimeter
|
|
Atlanta,
GA
|
|
320
|
|
|
|
|
|
1,749
|
|
|
|
Riverside
Apartments
|
|
Austin, TX
|
|
222
|
|
|
|
|
|
1,408
|
|
|
|
The Park at Chapel
Hill
|
|
Chapel Hill,
NC
|
|
*
|
|
|
|
|
|
*
|
|
|
|
Vickers Historic
Roswell
|
|
Roswell,
GA
|
|
79
|
|
|
|
|
|
3,176
|
|
|
|
Wayforth at
Concord
|
|
Concord,
NC
|
|
150
|
|
|
|
|
|
1,707
|
|
|
|
Whetstone
Apartments
|
|
Durham, NC
|
|
204
|
|
|
|
|
|
1,278
|
(2)
|
|
|
Mezzanine and
Preferred Investments Subtotal/Average
|
|
3,431
|
|
|
|
|
|
$
1,704
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Portfolio
Properties Total/Average
|
|
14,717
|
|
|
|
|
|
$
1,393
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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,
2019.
|
(3) Percent occupied is calculated as
(i) the number of units occupied as of March 31, 2019, divided by
(ii) total number of units, expressed as a percentage.
|
* The development is
in the planning phase; project specifications are in
process.
|
Consolidated
Statement of Operations
|
For the Three
Months Ended March 31, 2019 and 2018
|
(Unaudited and
dollars in thousands except for share and per share
data)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rental and other
property revenues
|
|
|
|
|
|
|
|
|
|
$
|
45,690
|
|
|
$
|
36,675
|
|
Interest income from
related parties
|
|
|
|
|
|
|
|
|
|
|
5,776
|
|
|
|
5,196
|
|
Total
revenues
|
|
|
|
|
|
|
|
|
|
|
51,466
|
|
|
|
41,871
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
operating
|
|
|
|
|
|
|
|
|
|
|
18,602
|
|
|
|
15,658
|
|
Property management
fees
|
|
|
|
|
|
|
|
|
|
|
1,215
|
|
|
|
992
|
|
General and
administrative
|
|
|
|
|
|
|
|
|
|
|
5,627
|
|
|
|
4,669
|
|
Acquisition and
pursuit costs
|
|
|
|
|
|
|
|
|
|
|
58
|
|
|
|
43
|
|
Weather-related
losses, net
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
168
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
17,230
|
|
|
|
15,640
|
|
Total
expenses
|
|
|
|
|
|
|
|
|
|
|
42,732
|
|
|
|
37,170
|
|
Operating
income
|
|
|
|
|
|
|
|
|
|
|
8,734
|
|
|
|
4,701
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred returns on
unconsolidated real estate joint ventures
|
|
|
|
|
|
|
|
|
|
|
2,289
|
|
|
|
2,461
|
|
Gain on sale of
non-depreciable real estate investments
|
|
|
|
|
|
|
|
|
|
|
679
|
|
|
|
—
|
|
Interest expense,
net
|
|
|
|
|
|
|
|
|
|
|
(16,067)
|
|
|
|
(10,117)
|
|
Total other
expense
|
|
|
|
|
|
|
|
|
|
|
(13,099)
|
|
|
|
(7,656)
|
|
Net
loss
|
|
|
|
|
|
|
|
|
|
|
(4,365)
|
|
|
|
(2,955)
|
|
Preferred stock
dividends
|
|
|
|
|
|
|
|
|
|
|
(10,384)
|
|
|
|
(8,248)
|
|
Preferred stock
accretion
|
|
|
|
|
|
|
|
|
|
|
(1,887)
|
|
|
|
(1,112)
|
|
Net loss
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating partnership
units
|
|
|
|
|
|
|
|
|
|
|
(4,051)
|
|
|
|
(2,675)
|
|
Partially owned
properties
|
|
|
|
|
|
|
|
|
|
|
(492)
|
|
|
|
(215)
|
|
Net loss
attributable to noncontrolling interests
|
|
|
|
|
|
|
|
|
|
|
(4,543)
|
|
|
|
(2,890)
|
|
Net loss
attributable to common stockholders
|
|
|
|
|
|
|
|
|
|
$
|
(12,093)
|
|
|
$
|
(9,425)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
common share - Basic
|
|
|
|
|
|
|
|
|
|
$
|
(0.53)
|
|
|
$
|
(0.40)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per
common share – Diluted
|
|
|
|
|
|
|
|
|
|
$
|
(0.53)
|
|
|
$
|
(0.40)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
basic common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
23,123,616
|
|
|
|
24,143,382
|
|
Weighted average
diluted common shares outstanding
|
|
|
|
|
|
|
|
|
|
|
23,123,616
|
|
|
|
24,143,382
|
|
Consolidated Balance Sheets
|
First Quarter
2019
|
(Unaudited and
dollars in thousands except for share and per share
amounts)
|
|
|
|
March 31,
2019
|
|
|
December 31,
2018
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Net Real Estate
Investments
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
200,114
|
|
|
$
|
200,385
|
|
Buildings and
improvements
|
|
|
1,548,167
|
|
|
|
1,546,244
|
|
Furniture, fixtures
and equipment
|
|
|
58,422
|
|
|
|
55,050
|
|
Construction in
progress
|
|
|
659
|
|
|
|
989
|
|
Total Gross Real
Estate Investments
|
|
|
1,807,362
|
|
|
|
1,802,668
|
|
Accumulated
depreciation
|
|
|
(124,605)
|
|
|
|
(108,911)
|
|
Total Net Real Estate
Investments
|
|
|
1,682,757
|
|
|
|
1,693,757
|
|
Cash and cash
equivalents
|
|
|
24,337
|
|
|
|
24,775
|
|
Restricted
cash
|
|
|
22,659
|
|
|
|
27,469
|
|
Notes and accrued
interest receivable from related parties
|
|
|
174,068
|
|
|
|
164,084
|
|
Due from
affiliates
|
|
|
3,123
|
|
|
|
2,854
|
|
Accounts receivable,
prepaids and other assets
|
|
|
12,332
|
|
|
|
14,395
|
|
Preferred equity
investments and investments in unconsolidated real estate joint
ventures
|
|
|
93,728
|
|
|
|
89,033
|
|
In-place lease
intangible assets, net
|
|
|
443
|
|
|
|
1,768
|
|
Total
Assets
|
|
$
|
2,013,447
|
|
|
$
|
2,018,135
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES,
REDEEMABLE PREFERRED STOCK AND EQUITY
|
|
|
|
|
|
|
|
|
Mortgages
payable
|
|
$
|
1,204,905
|
|
|
$
|
1,206,136
|
|
Revolving credit
facilities
|
|
|
78,000
|
|
|
|
82,209
|
|
Accounts
payable
|
|
|
1,215
|
|
|
|
1,486
|
|
Other accrued
liabilities
|
|
|
25,444
|
|
|
|
31,690
|
|
Due to
affiliates
|
|
|
798
|
|
|
|
726
|
|
Distributions
payable
|
|
|
12,317
|
|
|
|
12,073
|
|
Total
Liabilities
|
|
|
1,322,679
|
|
|
|
1,334,320
|
|
|
8.250% Series A
Cumulative Redeemable Preferred Stock, liquidation preference
$25.00 per share,
10,875,000 shares authorized; 5,721,460 shares issued and
outstanding as of March 31, 2019 and
December 31, 2018
|
|
|
139,698
|
|
|
|
139,545
|
|
|
|
6.000% Series B
Redeemable Preferred Stock, liquidation preference $1,000 per
share, 1,225,000 shares
authorized; 349,423 and 306,009 shares issued and outstanding as of
March 31, 2019 and December 31,
2018, respectively
|
|
|
311,555
|
|
|
|
272,842
|
|
|
|
7.625% Series C
Cumulative Redeemable Preferred Stock, liquidation preference
$25.00 per share,
4,000,000 shares authorized; 2,323,750 shares issued and
outstanding as of March 31, 2019 and
December 31, 2018
|
|
|
56,545
|
|
|
|
56,485
|
|
Equity
|
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
|
|
|
|
|
Preferred stock,
$0.01 par value, 229,900,000 shares authorized; no shares issued
and outstanding
|
|
|
—
|
|
|
|
—
|
|
7.125% Series D
Cumulative Preferred Stock, liquidation preference $25.00 per
share, 4,000,000 shares
authorized; 2,850,602 shares issued and outstanding as of March 31,
2019 and December 31, 2018
|
|
|
68,705
|
|
|
|
68,705
|
|
Common stock - Class
A, $0.01 par value, 747,509,582 shares authorized; 22,861,084 and
23,322,211
shares issued and outstanding as of March 31, 2019 and December 31,
2018, respectively
|
|
|
228
|
|
|
|
233
|
|
Common stock - Class
C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued
and
outstanding as of March 31, 2019 and December 31, 2018
|
|
|
1
|
|
|
|
1
|
|
Additional
paid-in-capital
|
|
|
300,407
|
|
|
|
307,938
|
|
Distributions in
excess of cumulative earnings
|
|
|
(234,363)
|
|
|
|
(218,531)
|
|
Total Stockholders'
Equity
|
|
|
134,978
|
|
|
|
158,346
|
|
Noncontrolling
Interests
|
|
|
|
|
|
|
|
|
Operating partnership
units
|
|
|
21,143
|
|
|
|
27,613
|
|
Partially owned properties
|
|
|
26,849
|
|
|
|
28,984
|
|
Total
Noncontrolling Interests
|
|
|
47,992
|
|
|
|
56,597
|
|
Total
Equity
|
|
|
182,970
|
|
|
|
214,943
|
|
TOTAL LIABILITIES,
REDEEMABLE PREFERRED STOCK AND EQUITY
|
|
$
|
2,013,447
|
|
|
$
|
2,018,135
|
|
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 Core Funds from
Operations
We believe that funds from operations ("FFO"), as defined by the
National Association of Real Estate Investment Trusts ("NAREIT")
and core funds from operations ("CFFO) are important non-GAAP
supplemental measures of operating performance for a REIT.
FFO attributable to common shares and units 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 NAREIT definition,
as net income, computed in accordance with GAAP, excluding gains or
losses on sales of depreciable real estate 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.
CFFO makes certain adjustments to FFO, removing the effect
of items that do not reflect ongoing property operations such as
stock compensation expense, acquisition expenses, unrealized gains
and losses on derivatives, losses on extinguishment of debt and
debt modification costs (includes prepayment penalties incurred and
the write-off of unamortized deferred financing costs and fair
market value adjustments of assumed debt), non-cash interest,
one-time weather-related costs, gain or losses on sales of
non-depreciable real estate property, and preferred stock
accretion. We believe that CFFO is helpful to investors as a
supplemental performance measure because it excludes the effects of
certain items which can create significant earnings volatility, but
which do not directly relate to our core recurring property
operations. As a result, we believe that CFFO can help facilitate
comparisons of operating performance between periods and provides a
more meaningful predictor of future earnings potential.
Our calculation of CFFO differs from the methodology used for
calculating CFFO by certain other REITs and, accordingly, our CFFO
may not be comparable to CFFO reported by other REITs. Our
management utilizes FFO and CFFO 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 and CFFO and other supplemental
performance measures are defined in various ways throughout the
REIT industry, we also believe that FFO and CFFO may provide us and
our stockholders with an additional useful measure to compare our
financial performance to certain other REITs.
Neither FFO nor CFFO 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 CFFO 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 CFFO 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 four operating properties and four properties
held through preferred equity or mezzanine loan investments
subsequent to March 31, 2018.
Therefore, the results presented in the table below are not
directly comparable and should not be considered an indication of
our future operating performance.
The table below reconciles our calculations of FFO and CFFO to
net loss, the most directly comparable GAAP financial measure, for
the three months ended March 31, 2019
and 2018 (in thousands, except per share amounts):
|
|
|
|
Three Months Ended
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
Net loss
attributable to common shares
|
|
|
|
|
|
|
|
|
$
|
(12,093)
|
|
|
$
|
(9,425)
|
|
Add back: Net loss
attributable to operating partnership units
|
|
|
|
|
|
|
|
|
|
(4,051)
|
|
|
|
(2,675)
|
|
Net loss
attributable to common shares and units
|
|
|
|
|
|
|
|
|
|
(16,144)
|
|
|
|
(12,100)
|
|
Common stockholders and
operating partnership units pro-rata share of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Real estate
depreciation and amortization (1)
|
|
|
|
|
|
|
|
|
|
16,142
|
|
|
|
14,831
|
|
FFO Attributable
to Common Shares and Units
|
|
|
|
|
|
|
|
|
|
(2)
|
|
|
|
2,731
|
|
Common stockholders
and operating partnership units pro-rata share of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Acquisition and pursuit
costs
|
|
|
|
|
|
|
|
|
|
58
|
|
|
|
43
|
|
Non-cash
interest expense
|
|
|
|
|
|
|
|
|
|
775
|
|
|
|
461
|
|
Unrealized loss on
derivatives
|
|
|
|
|
|
|
|
|
|
1,635
|
|
|
|
—
|
|
Weather-related
losses, net
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
165
|
|
Non-real estate
depreciation and amortization
|
|
|
|
|
|
|
|
|
|
86
|
|
|
|
64
|
|
Gain on sale of
non-depreciable real estate investments
|
|
|
|
|
|
|
|
|
|
(679)
|
|
|
|
—
|
|
Shareholder
activism
|
|
|
|
|
|
|
|
|
|
338
|
|
|
|
—
|
|
Non-cash preferred
returns on unconsolidated real estate joint ventures
|
|
|
|
|
|
|
|
|
|
(212)
|
|
|
|
(231)
|
|
Non-cash equity
compensation
|
|
|
|
|
|
|
|
|
|
2,391
|
|
|
|
1,780
|
|
Preferred stock
accretion
|
|
|
|
|
|
|
|
|
|
1,887
|
|
|
|
1,112
|
|
CFFO Attributable
to Common Shares and Units
|
|
|
|
|
|
|
|
|
$
|
6,277
|
|
|
$
|
6,125
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Share and Unit
Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FFO Attributable
to Common Shares and Units - diluted
|
|
|
|
|
|
|
|
|
$
|
(0.00)
|
|
|
$
|
0.09
|
|
CFFO Attributable
to Common Shares and Units - diluted
|
|
|
|
|
|
|
|
|
$
|
0.20
|
|
|
$
|
0.20
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
common shares and units outstanding - diluted
|
|
|
|
|
|
|
|
|
|
30,885,006
|
|
|
|
30,995,775
|
|
|
(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 (loss),
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,
|
|
|
|
|
2019
|
|
2018
|
|
Net loss
attributable to common stockholders
|
|
$
|
(12,093)
|
|
|
$
|
(9,425)
|
|
|
|
Net loss income
attributable to noncontrolling interests
|
|
|
(4,543)
|
|
|
|
(2,890)
|
|
|
|
Preferred stock
dividends
|
|
|
10,384
|
|
|
|
8,248
|
|
|
|
Preferred stock
accretion
|
|
|
1,887
|
|
|
|
1,112
|
|
|
|
Interest expense,
net
|
|
|
16,067
|
|
|
|
10,117
|
|
|
|
Depreciation and
amortization
|
|
|
17,144
|
|
|
|
15,576
|
|
|
EBITDAre
|
|
$
|
28,846
|
|
|
$
|
22,738
|
|
|
|
Acquisition and
pursuit costs
|
|
|
58
|
|
|
|
43
|
|
|
|
Non-real estate
depreciation and amortization
|
|
|
86
|
|
|
|
64
|
|
|
|
Weather-related
losses, net
|
|
|
-
|
|
|
|
168
|
|
|
|
Gain on sale of
non-depreciable real estate investments
|
|
|
(679)
|
|
|
|
—
|
|
|
|
Shareholder
activism
|
|
|
338
|
|
|
|
—
|
|
|
|
Non-cash equity
compensation
|
|
|
2,391
|
|
|
|
1,780
|
|
|
|
Non-cash preferred
returns on unconsolidated real estate joint ventures
|
|
|
(212)
|
|
|
|
(231)
|
|
|
Adjusted
EBITDAre
|
|
$
|
30,828
|
|
|
$
|
24,562
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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; 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 a
supplemental measure of our financial performance.
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
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
Net loss
attributable to common shares
|
|
|
|
|
|
|
|
|
|
|
$
|
(12,093)
|
|
|
$
|
(9,425)
|
|
|
Add back: Net loss
attributable to operating partnership units
|
|
|
|
|
|
|
|
|
|
|
|
(4,051)
|
|
|
|
(2,675)
|
|
Net loss
attributable to common shares and units
|
|
|
|
|
|
|
|
|
|
|
|
(16,144)
|
|
|
|
(12,100)
|
|
Add common
stockholders and operating partnership units pro-rata share
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
|
|
|
|
|
|
|
|
|
16,142
|
|
|
|
14,831
|
|
|
Non-real estate
depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
86
|
|
|
|
64
|
|
|
Non-cash interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
775
|
|
|
|
461
|
|
|
Unrealized loss on
derivatives
|
|
|
|
|
|
|
|
|
|
|
|
1,635
|
|
|
|
—
|
|
|
Property management
fees
|
|
|
|
|
|
|
|
|
|
|
|
1,148
|
|
|
|
939
|
|
|
Acquisition and
pursuit costs
|
|
|
|
|
|
|
|
|
|
|
|
58
|
|
|
|
43
|
|
|
Corporate operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
5,554
|
|
|
|
4,669
|
|
|
Weather-related
losses, net
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|
|
|
165
|
|
|
Preferred
dividends
|
|
|
|
|
|
|
|
|
|
|
|
10,384
|
|
|
|
8,248
|
|
|
Preferred stock
accretion
|
|
|
|
|
|
|
|
|
|
|
|
1,887
|
|
|
|
1,112
|
|
Less common
stockholders and operating partnership units pro-rata share
of:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred returns on
unconsolidated real estate joint ventures
|
|
|
|
|
|
|
|
|
|
|
|
2,289
|
|
|
|
2,461
|
|
|
Interest income from
related parties
|
|
|
|
|
|
|
|
|
|
|
|
5,776
|
|
|
|
5,196
|
|
|
Gain on sale of
non-depreciable real estate investments
|
|
|
|
|
|
|
|
|
|
|
|
679
|
|
|
|
—
|
|
Pro-rata share of
properties' income
|
|
|
|
|
|
|
|
|
|
|
|
12,781
|
|
|
|
10,775
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling
interest pro-rata share of partially owned property
income
|
|
|
|
|
|
|
|
|
|
|
|
729
|
|
|
|
607
|
|
Total property
income
|
|
|
|
|
|
|
|
|
|
|
|
13,510
|
|
|
|
11,382
|
|
Add:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
|
|
|
|
|
|
|
|
13,578
|
|
|
|
9,635
|
|
Net operating
income
|
|
|
|
|
|
|
|
|
|
|
|
27,088
|
|
|
|
21,017
|
|
Less:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-same store net
operating income
|
|
|
|
|
|
|
|
|
|
|
|
4,217
|
|
|
|
33
|
|
Same store net
operating income (1)
|
|
|
|
|
|
|
|
|
|
|
$
|
22,871
|
|
|
$
|
20,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Same store portfolio for the
three months ended March 31, 2019 consists of 28 properties, which
represent 9,608 units.
|
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SOURCE Bluerock Residential Growth REIT, Inc.