Real Estate Investments - As of September 30, 2024, the company held 20 real estate investments, comprising 4,000 residential units, with consolidated operating investments approximately 90.5% occupied[142] - The company acquired the Villas at Huffmeister for $41.2 million, funded by a $24.3 million senior loan and $18.1 million in cash[147] - A joint venture was established to develop 82 build-to-rent units in Bluffton, South Carolina, with a commitment of $5.3 million, earning a 17.0% annual return[148] - The company acquired Avenue at Timberlin Park for $33.8 million, funded by a $23.7 million senior loan and $12.9 million in cash[149] - The sale of Navigator Villas generated net proceeds of approximately $12.7 million and a gain on sale of approximately $10.0 million[150] - The company recorded an impairment of $0.9 million and $2.1 million for held-for-sale units for the three and nine months ended September 30, 2024, respectively[155] - The company has a remaining commitment of $5.5 million for the Wayford at Pringle loan investment[152] - The company’s strategy includes acquiring pre-existing single-family residential units and developing build-to-rent communities to drive growth in funds from operations[141] - The total estimated project cost for the Abode Wendell Falls development is $56.9 million, with $6.9 million incurred as of September 30, 2024[160] - The company acquired 294 units at Villas at Huffmeister and 200 units at Avenue at Timberlin Park during 2024, contributing to revenue growth[163] Financial Performance - Rental and other property revenues increased by $1.8 million, or 18%, to $12.0 million for the three months ended September 30, 2024, compared to $10.2 million for the same prior year period[163] - Average rent per occupied unit increased by $54, or 3.4%, to $1,635 compared to $1,581 during the prior year period[164] - Average occupancy decreased by 20 basis points from 91.1% to 90.9% on a year-over-year basis[164] - Property operating expenses increased by 26.3% to $6.4 million for the three months ended September 30, 2024, compared to $5.1 million for the same prior year period[161] - Net operating income for the three months ended September 30, 2024, was $5.5 million, an increase of 8.9% from $5.1 million in the same prior year period[161] - Other income increased to $8.4 million for Q3 2024, compared to $0.2 million in Q3 2023, driven by a $10.3 million increase in gains on real estate sales[171] - Rental and other property revenues increased by $4.1 million, or 13%, to $34.7 million for the nine months ended September 30, 2024, due to acquisitions and rental rate improvements[172] - Average rent per occupied unit increased by $57, or 3.7%, to $1,617 for the nine months ended September 30, 2024[173] - Property operating expenses for the nine months ended September 30, 2024, increased by $3.2 million, or 23%, to $17.4 million, primarily due to acquisitions[174] - Net income attributable to common stockholders for the three months ended September 30, 2024, was $921,000, compared to a loss of $1,068,000 for the same period in 2023[185] - Net operating income (NOI) for the nine months ended September 30, 2024, was $17,279,000, an increase from $16,358,000 for the same period in 2023[185] Capital Structure and Financing - The company issued 3,459,331 shares of 6.0% Series A Redeemable Preferred Stock, raising approximately $76.7 million in net proceeds[156] - Total stockholders' equity decreased by $4.5 million from $147.4 million as of December 31, 2023, to $142.9 million as of September 30, 2024, primarily due to $2.2 million related to the acquisition of noncontrolling interests and preferred dividends declared[158] - Cash available as of September 30, 2024, was $155.1 million, with an additional capacity of $65 million on revolving credit facilities[189] - Contractual obligations include $126.8 million in mortgages payable and $105 million in revolving credit facilities as of September 30, 2024[190] - The company plans to finance long-term liquidity needs through additional issuances of common and preferred stock, as well as project-based borrowings[195] - The board authorized a stock repurchase plan for up to $5 million of Class A common stock, which may be conducted over one year[193] - Net cash provided by financing activities during the same period was $96.8 million, driven by $76.7 million from the issuance of Series A Preferred Stock and $35.0 million from revolving credit facilities[205] Expenses and Cash Flow - General and administrative expenses rose to $2.5 million for Q3 2024, up from $1.7 million in Q3 2023, with $1.5 million related to direct costs and $1.0 million for operating expense reimbursement[168] - Net cash provided by operating activities for the nine months ended September 30, 2024, was $4.1 million, despite a net loss of $4.8 million[203] - Net cash used in investing activities for the nine months ended September 30, 2024, was $22.4 million, primarily due to $51.5 million for acquiring real estate investments and $24.6 million for investments in notes receivable[204] - Total capital expenditures for the nine months ended September 30, 2024, amounted to $5.977 million, a decrease from $6.499 million in the same period of 2023[206] Funds from Operations - Funds from Operations (FFO) attributable to common stockholders for the nine months ended September 30, 2024, was $(2.092) million compared to $1.361 million in 2023[213] - Core Funds from Operations (CFFO) attributable to common stockholders for the nine months ended September 30, 2024, was $8.695 million, down from $15.269 million in 2023[213] - FFO per share for the nine months ended September 30, 2024, was $(0.17), compared to $0.12 in the same period of 2023[213] - CFFO per share for the nine months ended September 30, 2024, was $0.71, compared to $1.33 in 2023[213] Interest Rate and Risk Management - As of September 30, 2024, the company had interest rate caps and swaps covering $128.5 million of its debt to manage interest rate risk[223] - A 100-basis point increase in interest rates would increase interest expense by approximately $50,000 for the quarter ended September 30, 2024[224] - The weighted average interest rate on mortgage notes payable is 5.22% as of September 30, 2024, with total mortgage notes payable amounting to $126.8 million[225] - The fair value of mortgages payable is estimated at $124.1 million as of September 30, 2024[225] - The company is exposed to interest rate risk primarily through borrowing activities, with inherent roll-over risk for borrowings[220] Corporate Governance and Compliance - The company has instituted additional procedures to ensure timely filings following a delinquent Form 8-K related to a real estate acquisition[229] - There have been no changes in internal controls over financial reporting that materially affected the company during the quarter ended September 30, 2024[230] - As of September 30, 2024, total indebtedness was approximately $231.8 million, including $105.0 million under revolving credit facilities[234] - The company has issued and outstanding 3,889,446 shares of Series A Preferred Stock as of September 30, 2024[234] - The Board modified and extended the Original Exemption, with the new Revocation Date set for December 31, 2025[238] - The Aggregate Share Ownership Limit and the Common Share Ownership Limit were decreased from 9.8% to 8.75% for stockholders not classified as Excepted Holders[237] Dividends and Distributions - The Series A Preferred Stock regular monthly dividend is $0.125 per outstanding share, with an enhanced special dividend commencing in May 2024, subject to a minimum of 6.5% and a maximum of 8.5% annual rate[157] - The company declared a special dividend of $1.00 for both Class A and Class C common stock, payable on January 5, 2024[215] - The company has a policy to maintain distributions equal to at least 90% of its REIT taxable income to maintain its REIT status[217] - The company’s distribution rate and payment frequency may vary based on funds available from operations and capital expenditure requirements[217]
Bluerock Homes Trust(BHM) - 2024 Q3 - Quarterly Report