Bluerock Homes Trust(US:BHM)2025-03-20 20:10PART I Business Overview Bluerock Homes Trust, Inc. operates as a REIT, acquiring and managing residential properties in the Sunbelt and Western U.S - The company operates as a REIT, incorporated on December 16, 2021, and is externally managed by Bluerock Homes Manager, LLC, relying on its manager for day-to-day operations222325 Portfolio Summary as of December 31, 2024 | Category | Number of Investments | Total Units | Consolidated Units | Preferred Equity/Loan Units | | :--- | :--- | :--- | :--- | :--- | | Total | 23 | 5,087 | 3,453 | 1,634 | - The company's business is organized into two reportable segments: scattered single-family homes and residential communities505152 - Key growth strategies include value-add renovations, invest-to-own development projects, and institutional property management in demographically attractive growth markets293031 Summary of Real Estate Investments and Dispositions (2023-2024) | Year | Transaction Type | Number of Properties/Portfolios | Total Units | | :--- | :--- | :--- | :--- | | 2023 | Investments | 5 | 524 | | | Dispositions | 6 | 546 | | 2024 | Investments | 7 | 1,620 | | | Dispositions | 7 | 802 | Risk Factors The company faces diverse risks from economic conditions, external management, debt financing, and maintaining REIT status - Business and property risks include sensitivity to economic conditions, inflation, interest rate fluctuations, tenant inability to pay rent, and competition, with portfolio concentration in the Sunbelt and Western U.S. increasing susceptibility to local downturns555761 - The company is dependent on its external manager, Bluerock Homes Manager, LLC, and its key personnel, with a management agreement not negotiated at arm's-length and a potentially costly termination fee equal to 3 times the sum of the Base Management Fee and Incentive Fee from the preceding 12 months181187190 - Risks related to the Series A Preferred Stock include its subordination to all existing and future debt, the lack of a public trading market, and the company's option to redeem shares for cash or Class A common stock at its discretion two years after issuance204211222 - Failure to maintain REIT qualification would result in significant adverse tax consequences, including being subject to corporate-level income tax and being unable to re-elect REIT status for four years245247 - Ownership of common stock is subject to restrictions, including a 9.8% ownership limit in the company's charter to preserve REIT status, while Maryland corporate law and charter provisions may also discourage takeovers272273274 Unresolved Staff Comments The company reports no unresolved staff comments from the SEC - None288 Cybersecurity The company maintains an information security program, overseen by the Board, with no material cybersecurity threats identified - The company has an established information security program to identify, protect, detect, and respond to cybersecurity risks, utilizing security tools and third-party providers290 - Governance is managed by the Board's Audit Committee, a Leadership Committee (COO, CFO, General Counsel, SVP of FP&A), and the IT department, with regular updates provided to senior management296298 - As of the report date, no identified cybersecurity threats have materially affected or are reasonably likely to materially affect the company's business, operations, or financial condition295 Investments Portfolio As of December 31, 2024, the portfolio included 23 real estate investments totaling 5,087 units, with 91.6% consolidated occupancy Consolidated Investments Summary (as of Dec 31, 2024) | Segment | Number of Units | Average Rent | Occupancy (All Units) | Occupancy (Excl. Held for Sale/Reno) | | :--- | :--- | :--- | :--- | :--- | | Scattered Single-Family Homes | 1,801 | $1,579 | 89.7% | 93.8% | | Residential Communities | 1,482 | $1,840 | 93.9% | 94.1% | | Total Operating | 3,283 | $1,689 | 91.6% | 94.0% | | Development | 170 | N/A | N/A | N/A | | Total Consolidated | 3,453 | | | | Preferred Equity and Loan Investments Summary (as of Dec 31, 2024) | Stage | Number of Units | Estimated Avg. Rent (Stabilized) | | :--- | :--- | :--- | | Lease-up | 1,158 | Varies by property | | Development | 476 | Varies by property | | Total | 1,634 | $2,072 | Legal Proceedings The company is not a party to any material pending legal proceedings - The company is not party to, and none of its properties are subject to, any material pending legal proceeding308 Mining Safety Disclosures This item is not applicable to the company - Not applicable309 PART II Market for Common Equity and Stockholder Matters Class A common stock trades on NYSE American, with 3.95 million shares outstanding and declared quarterly dividends for 2025 - Class A common stock trades on the NYSE American under the symbol 'BHM', with 3,953,219 shares outstanding as of March 6, 2025311314 - A special dividend of $1.00 per share on Class A and Class C common stock was declared on December 19, 2023, and paid on January 5, 2024316 - On March 11, 2025, the company declared quarterly cash dividends of $0.125 per share ($0.50 annually) for Class A and Class C common stock for fiscal year 2025318 - For the year ended December 31, 2024, 100% of distributions to common stockholders were classified as a return of capital for tax purposes319 Management's Discussion and Analysis Fiscal year 2024 saw revenue and NOI growth, improved net loss, significant acquisitions, and new capital initiatives Consolidated Operational Results by Segment (2024 vs. 2023) | Metric (in thousands) | 2024 | 2023 | Variance | | :--- | :--- | :--- | :--- | | Rental and other property revenues | $48,584 | $40,999 | 18.5% | | Property operating expenses | $24,144 | $19,164 | 26.0% | | Net operating income | $24,440 | $21,835 | 11.9% | FFO and CFFO Reconciliation (2024 vs. 2023) | Metric (in thousands) | 2024 | 2023 | | :--- | :--- | :--- | | Net loss attributable to common stockholders and unit holders | $(13,466) | $(13,499) | | FFO attributable to common stockholders and unit holders | $(2,982) | $1,326 | | CFFO attributable to common stockholders and unit holders | $9,680 | $20,945 | | FFO per share – diluted | $(0.24) | $0.12 | | CFFO per share – diluted | $0.79 | $1.82 | - Significant 2024 activity includes the acquisition of four residential communities (Amira at Westly, Villas at Huffmeister, Avenue at Timberlin Park, Allure at Southpark) and the sale of Navigator Villas, which generated a $10.0 million gain328330334 - The company launched a Delaware statutory trust (DST) Program in October 2024 to raise capital, with one offering raising $4.5 million of a $66.0 million total by year-end368 - Liquidity sources include $115.2 million in cash, $13 million available on revolving credit facilities, proceeds from the Series A Preferred Stock offering, and the new DST Program370371 Market Risk Disclosures Primary market risk is interest rate fluctuations on its $381.6 million debt, mitigated by interest rate caps - The company's main market risk is interest rate risk from its borrowing activities437 Debt Maturity Schedule as of December 31, 2024 (Principal in thousands) | Year | Mortgages Payable | Revolving Credit Facilities | Total | | :--- | :--- | :--- | :--- | | 2025 | $1,871 | $121,000 | $122,871 | | 2026 | $36,652 | $0 | $36,652 | | 2027 | $24,107 | $0 | $24,107 | | 2028 | $5,702 | $0 | $5,702 | | 2029 | $80,450 | $0 | $80,450 | | Thereafter | $111,816 | $0 | $111,816 | | Total | $260,598 | $121,000 | $381,598 | - The company utilizes interest rate caps and swaps to limit exposure on $155.6 million of its debt442 - A 100-basis point change in interest rates on variable-rate debt would result in an approximate $0.6 million annual change in interest expense443 Financial Statements and Data This section incorporates the company's Consolidated Financial Statements by reference, starting on page F-1 - The required information is included in the Consolidated Financial Statements section of the report, starting on page F-1444 Accountant Changes and Disagreements The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None445 Controls and Procedures Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024448 - Based on the COSO framework (2013), management concluded that the company's internal control over financial reporting was effective as of December 31, 2024450 - No material changes to internal control over financial reporting occurred during the quarter ended December 31, 2024451 Other Information No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements in Q4 2024 - No directors or officers adopted or terminated a Rule 10b5-1 or non-Rule 10b5-1 trading arrangement during the fourth quarter of 2024452 Foreign Jurisdictions Disclosure This item is not applicable to the company - Not applicable453 PART III Directors, Officers, and Governance Information for this item is incorporated by reference from the forthcoming 2025 Proxy Statement - Information regarding directors, executive officers, and corporate governance is incorporated by reference from the forthcoming 2025 Proxy Statement455 Executive Compensation Information for this item is incorporated by reference from the forthcoming 2025 Proxy Statement - Information regarding executive compensation is incorporated by reference from the forthcoming 2025 Proxy Statement456 Security Ownership and Related Matters Information for this item is incorporated by reference from the forthcoming 2025 Proxy Statement - Information regarding security ownership is incorporated by reference from the forthcoming 2025 Proxy Statement457 Related Transactions and Director Independence Information for this item is incorporated by reference from the forthcoming 2025 Proxy Statement - Information regarding related party transactions and director independence is incorporated by reference from the forthcoming 2025 Proxy Statement458 Principal Accountant Fees and Services Information for this item is incorporated by reference from the forthcoming 2025 Proxy Statement - Information regarding principal accountant fees and services is incorporated by reference from the forthcoming 2025 Proxy Statement459 PART IV Exhibits and Financial Statement Schedules This section lists the financial statements, financial statement schedules, and exhibits filed with the Form 10-K - This item lists all documents filed with the report, including financial statements and exhibits as detailed in the Exhibit Index460 Form 10-K Summary The company did not provide a Form 10-K summary - None461 Financial Statements and Notes Consolidated Financial Statements The consolidated financial statements detail the company's financial position, operations, and cash flows for 2024 and 2023 Key Balance Sheet Data (in thousands) | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Net Real Estate Investments | $683,628 | $464,900 | | Cash and cash equivalents | $115,209 | $80,163 | | Total Assets | $966,993 | $671,620 | | Mortgages payable | $252,782 | $96,670 | | Revolving credit facilities | $121,000 | $70,000 | | Total Liabilities | $398,102 | $192,748 | | Total Equity | $466,737 | $470,599 | Key Income Statement Data (in thousands) | Account | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Total revenues | $50,214 | $41,093 | | Total expenses | $68,927 | $57,487 | | Net loss | $(12,091) | $(15,767) | | Net loss attributable to common stockholders | $(4,234) | $(4,503) | | Net loss per common share - Diluted | $(1.10) | $(1.30) | Key Cash Flow Data (in thousands) | Activity | Year Ended Dec 31, 2024 | Year Ended Dec 31, 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $9,058 | $13,880 | | Net cash used in investing activities | $(224,917) | $(25,722) | | Net cash provided by financing activities | $260,716 | $15,664 | Notes to Consolidated Financial Statements The notes detail accounting policies, real estate activities, debt, related party transactions, equity, and subsequent events - During 2024, the company acquired four properties (Villas at Huffmeister, Avenue at Timberlin Park, Amira at Westly, Allure at Southpark) for a total purchase price allocation of $274.6 million540541542544547 - The company sold Navigator Villas in August 2024 for $36.4 million, generating a $10.0 million gain, and as of year-end, 167 units were classified as held for sale, resulting in a $3.3 million impairment charge551555 - The company has two primary revolving credit facilities: a $150 million facility with Deutsche Bank (Amended DB Credit Facility) and a $50 million facility with KeyBank, with $85 million and $36 million drawn respectively as of December 31, 2024585587 - Related party transactions include a base management fee of $9.1 million paid to the Manager in 2024 and selling commissions and dealer manager fees of $10.4 million related to the Series A Preferred Stock offering616626 - Subsequent to year-end, the company authorized a new $5 million stock repurchase plan and declared a quarterly cash dividend of $0.125 per share for its common stock for fiscal year 2025680681