BRT Apartments (BRT) - 2024 Q4 - Annual Report

Property Ownership and Investments - As of December 31, 2024, the company wholly owns 21 multi-family properties with a total of 5,420 units and a carrying value of $614.2 million[19] - The company has ownership interests in eight multi-family properties through unconsolidated entities, totaling 2,527 units with a net equity investment carrying value of$ 31.3 million[19] - The company invested an aggregate of $18.3 million in joint ventures for two multi-family properties, estimating approximately$ 1.2 million of interest income in 2025 from these investments[22] - The carrying value of preferred equity investments in two multi-family properties is $17.7 million[19] - The company owns other assets with a carrying value of$ 1.7 million through consolidated and unconsolidated subsidiaries[19] - The company invested an aggregate of $4.0 million for a 17.45% interest in a 240-unit development property located in Johns Island, SC, which is currently in lease-up as of January 1, 2024[33] Financial Performance - As of December 31, 2024, the total number of multi-family properties owned by the company is 21, with a total of 5,420 units generating$ 94.773 million in rental and other revenues, accounting for 100% of total revenues[26] - The average monthly rental rate per occupied unit across the properties increased from $1,486 in 2023 to$ 1,539 in 2024, representing a growth of approximately 3.6%[23] - The average physical occupancy rate for the properties was 94.4% in 2024, slightly down from 94.7% in 2023[23] - The company has a significant presence in Texas, with 3 properties generating $21.105 million in rental and other revenues, which is 46% of total joint venture revenues[27] - Approximately 75% of the company's 2024 revenues were generated from properties located in the Southeast, with an additional 10% from Texas[78] - The average rental revenue from properties in Tennessee was$ 14.048 million, representing 15% of total rental and other revenues in 2024[26] Share Repurchase and Stock Information - The company repurchased 193,529 shares of common stock for approximately $3.5 million, averaging$ 18.07 per share[22] - The board of directors increased the share repurchase program value to $10 million, extending it through December 31, 2026[21] Debt and Financing - A$ 27.4 million mortgage was obtained for the Woodland Trails-LaGrange, GA property, maturing in September 2031 with a fixed interest rate of 5.22%[22] - The company amended its credit facility with Valley National Bank, reducing borrowing capacity from $60 million to$ 40 million and extending maturity to September 2027[22] - As of December 31, 2024, the company had a total mortgage debt of $412.735 million for consolidated properties and$ 237.706 million for unconsolidated properties, with varying interest rates[90] - The total principal payments due for all multi-family properties is projected to be $703.3 million, with$ 451.3 million due from consolidated properties and $251.9 million from unconsolidated joint ventures[46] - The weighted average annual interest rate on fixed-rate mortgage debt for wholly owned properties is 4.09% with a remaining term to maturity of 6.1 years[45] Market and Economic Risks - The company faces risks from unfavorable market conditions that could adversely affect rental revenues, occupancy levels, and property values[74] - The company competes with various entities for property acquisitions and financing, with larger competitors having significant advantages[75] - The company faces risks from economic conditions, including inflation, interest rates, and tenant payment issues, which could decrease revenues or increase costs[110] - Climate change poses risks to properties located in coastal areas, potentially leading to increased costs and reduced demand for housing[114] Operational Risks - The company relies on property management companies for operations, and any failure in their performance could lead to decreased occupancy and increased expenses[80] - The company is working to acquire properties directly, which may involve greater risks compared to acquisitions with joint venture partners[81] - Joint venture investments introduce additional risks, including potential disagreements with partners over property management and financial decisions[83] - The company faces risks related to joint venture partners, including potential disputes and differing business objectives, which could adversely affect operations[87] Compliance and Regulatory Risks - The company believes it operates in substantial compliance with the Fair Housing Act and the Americans with Disabilities Act, mitigating potential legal risks[58][57] - The company is subject to regulatory risks, including potential changes to U.S. federal income tax laws that could adversely affect its business[98] - Compliance with the Americans with Disabilities Act (ADA) may require significant capital expenditures, adversely affecting financial condition and results[102] - The company is subject to various federal, state, and local regulatory requirements, which could lead to fines or unanticipated expenditures affecting cash flow and operations[103] Employee and Management Information - As of December 31, 2024, the company had eight full-time employees and utilized part-time personnel under a shared services agreement, with expenses allocated based on estimated time devoted[60] - The aggregate fees for services provided by related parties were$ 1.7 million in 2025, up from $1.62 million in 2024 and$ 1.54 million in 2023[61] - The company maintains a competitive benefits program to support employee retention and satisfaction, contributing to a long-tenured workforce[62] Insurance and Liability Risks - The company maintains all-risk property insurance for its multi-family properties, but coverage may be insufficient to compensate for losses from casualty events[85] - Insufficient insurance coverage could adversely affect the company's operating results and portfolio value[86] - Environmental liabilities could impact property values and result in substantial remediation costs for the company[100]