BRT Apartments (US:BRT)2023-11-12 11:58Financial Data and Key Metrics Changes - The net loss attributable to common stockholders was $0.08 per diluted share compared to a net income of $0.37 per diluted share a year ago, primarily due to a $0.61 per share gain in the prior year from the sale of a property owned by an unconsolidated subsidiary [23] - FFO was $0.31 per diluted share compared to $0.29 per diluted share a year ago, primarily due to a reduction in early extinguishment of debt and an increase in other income [40] - AFFO was $0.41 per diluted share compared to $0.38 per diluted share a year ago, primarily due to a decrease in the income tax provision and an increase in other income [40] Business Line Data and Key Metrics Changes - Average occupancy for the multifamily portfolio was steady at 94.4%, compared to 94.3% in the second quarter and 96.2% a year ago [9] - Average monthly rents for the combined portfolio increased by 6.8% compared to the same quarter in 2022 [9] - Combined portfolio NOI decreased by 0.4% in the third quarter compared to the same quarter in 2022, with revenue growing by 4.1% and total expenses increasing by 10.1% [26] Market Data and Key Metrics Changes - The Nashville market is experiencing a general oversupply, with new housing starts and permits slowing down, which is expected to improve occupancy rates over time [31][39] - Insurance costs increased by 67% year-over-year due to policy changes and cancellations [10] Company Strategy and Development Direction - The company is focusing on consolidating ownership and control of properties while selling those that are not long-term holds, preparing for more opportunities in 2024 [6] - The management is prioritizing share repurchases as a capital allocation strategy, having purchased 671,000 shares for a total investment of $12.5 million [21] Management Comments on Operating Environment and Future Outlook - The management noted that inflation is impacting most expense categories, and they are controlling costs where possible [4] - The transaction market remains quiet, with expectations of more opportunities arising as private owners face financial pressures [5] - The company believes that the lack of new building permits will create a favorable environment for future growth [39] Other Important Information - The company affirmed its previously issued guidance ranges for 2023 based on year-to-date results [11] - The debt to enterprise value ratio as of September 30 was 67%, up from 62% a year ago, primarily due to lower market capitalization [24] Q&A Session Summary Question: What are you seeing in the Nashville market regarding occupancy? - Management believes that the market is softer due to new supply but expects it to improve as the supply is absorbed over time [31] Question: How are you weighing acquisition opportunities versus stock buybacks? - The company is not aggressively pursuing acquisitions due to current market conditions and finds buybacks to be a better opportunity [35] Question: Are the Nashville concessions widespread or limited to certain submarkets? - The oversupply issue is prevalent across the Nashville market, but management anticipates improvement as new permits slow down [39]