Attachment: FORM 8-K


Exhibit 99.1

 

 

 

For Immediate Release

Bluerock Residential Growth REIT Announces Second Quarter 2021 Results

 

-                  Quarterly Portfolio Lease Rate Growth of 10.3% -

-                  July Portfolio Lease Rate Growth of 15.3% -

-                  Same Store Rental Revenues Increased 6.4% -

 

New York, NY (August 5, 2021) – 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 June 30, 2021.

 

“We are very pleased with our operating results led by rapid acceleration of rent growth throughout the quarter, demonstrating the high quality and favorable locations of our communities,” said Ramin Kamfar, Company Chairman and CEO. “In addition, as anticipated in our 2021 guidance, our investment pace increased in the second quarter, including our first investments in single family homes. Our renovation pace also returned to pre-COVID levels, as we delivered almost 250 unit upgrades, with an average ROI of 24%. We are continuing to effectively source attractive investment opportunities and accretively put our capital to work.”

 

Second Quarter Highlights

 

Financial Results

 

-Net loss attributable to common stockholders for the second quarter of 2021 was ($5.4) million or ($0.21) per diluted share, as compared to net income attributable to common stockholders of $15.1 million or $0.61 per diluted share in the prior year period.

 

-Core funds from operations attributable to common stockholders and unit holders (“CFFO”) was $6.0 million, or $0.16 per diluted share, compared to $5.1 million, or $0.15 per diluted share, in the prior year period. This year’s results continue to be impacted by additional capital on the balance sheet.

 

Portfolio Performance

 

-Rental revenues grew 4.2% to $49.7 million from $47.7 million in the prior year period.

 

-Property Net Operating Income (“NOI”) increased 5.8% to $30.8 million from $29.1 million in the prior year period.

 

-Same store revenues grew 6.4% and same store NOI increased 6.5%, as compared to the prior year period.

 

-Blended lease rate growth was 10.3%, up 680 basis points on a sequential quarter-over-quarter basis.

 

-June 2021 average lease growth accelerated to 12.0%, with renewals at 6.5% and new leases at 17.9%. Average lease growth accelerated to 15.3% in July.

 

-Portfolio occupancy was 96.2% at June 30, 2021, up 90 basis points from the prior year.

 

-Property operating margins improved 90 basis points to 62.0% compared to 61.1% in the prior year period.

 

-Same store average rent increased 3.0% and same store average occupancy expanded 80 basis points, as compared to the prior year period.

 

 

 

 

Portfolio Activity

 

-Consolidated real estate investments, at cost, were approximately $2.2 billion.

 

-Acquired three operating properties totaling 506 units for $118 million.

 

-Sold two operating assets and two development properties for $174 million with net proceeds of $39 million.

 

-Invested $26 million in preferred equity in three new stabilized properties, and funded $8 million for five existing preferred equity and mezzanine loan investments. Committed $32 million for three new preferred equity investments.

 

-Increased renovation pace back to pre-COVID levels, completing 248 value-add unit upgrades during the quarter achieving an average 24.4% ROI through an average monthly rent premium of $144 per unit.

 

Balance Sheet and Market Activity

 

-$244.5 million of unrestricted cash and availability under revolving credit facilities and $1.4 billion of indebtedness outstanding as of June 30, 2021.

 

-Paid quarterly dividend of $0.1625 in cash per share of common stock.

 

-Raised a quarterly record of $119 million through the continuous registered Series T Preferred Stock offering with the issuance of 4.8 million shares at $25.00 per share.

 

-Redeemed 80,316 shares of Series B Preferred Stock through the issuance of 8,262,685 shares of Class A common stock at an average price of $9.72 per share.

 

-Repurchased 4,605,598 shares of Class A common stock during the quarter at an average price of $9.79 per share.

 

Included later in this release are definitions of NOI, CFFO and other Non-GAAP financial measures and reconciliations of such measures to their most comparable financial measures as calculated and presented under GAAP.

 

Second Quarter 2021 Financial Results

 

Net loss attributable to common stockholders for the second quarter of 2021 was ($5.4) million, compared to net income attributable to common stockholders of $15.1 million in the prior year period. Net income in 2021 was impacted by two asset sales generating $19 million in gain on sale of real estate investments compared to $58 million in the second quarter of 2020. Net (loss) income attributable to common stockholders included non-cash expenses of $22.4 million or $0.80 per share in the second quarter of 2021 compared to $19.0 million or $0.79 per share for the prior year period.

 

CFFO for the second quarter of 2021 was $6.0 million, or $0.16 per diluted share, compared to $5.1 million, or $0.15 per diluted share, in the prior year period. CFFO was positively impacted by an increase in property NOI of $1.7 million and a reduction in interest expense of $0.2 million. This was primarily offset by a year-over-year reduction of $0.2 million in interest income from mezzanine loan and ground lease investments, $0.5 million in preferred returns, and preferred stock dividend increase of $0.1 million.

 

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Total Portfolio Performance

 

$ In thousands, except average rental rates   2Q21   2Q20   Variance    YTD21    YTD20    Variance 
Total Revenues (1)  $53,835   $53,033    1.5%  $109,638   $109,274    0.3%
Property Operating Expenses  $18,909   $18,571    1.8%  $38,841   $37,870    2.6%
NOI  $30,812   $29,124    5.8%  $61,962   $60,177    3.0%
Operating Margin   62.0%   61.1%   90bps   61.5%   61.4%   10bps
Average Occupancy Percentage   95.8%   94.4%   140bps   95.5%   94.3%   120bps
Average Rental Rate  $1,351   $1,330    1.6%  $1,333   $1,330    0.2%
(1) Including interest income from related parties                              

 

For the second quarter of 2021, property revenues increased by 4.2% compared to the same prior year period. Total portfolio NOI was $30.8 million, an increase of $1.7 million, or 5.8%, compared to the same period in the prior year. Property NOI margins were 62.0% for the quarter, compared to 61.1% in the prior year quarter.

 

Same Store Portfolio Performance

 

$ In thousands, except average rental rates   2Q21   2Q20   Variance    YTD21    YTD20    Variance 
Revenues  $38,631   $36,306    6.4%  $74,309   $71,345    4.2%
Property Operating Expenses  $14,559   $13,700    6.3%  $28,267   $26,814    5.4%
NOI  $24,072   $22,606    6.5%  $46,042   $44,531    3.4%
Operating Margin   62.3%   62.3%   0bps   62.0%   62.4%   (40)bps
Average Occupancy Percentage   95.7%   94.9%   80 bps   95.6%   94.5%   110bps
Average Rental Rate  $1,355   $1,315    3.0%  $1,344   $1,318    2.0%

 

The Company’s same store portfolio for the quarter ended June 30, 2021 included 25 properties. For the second quarter of 2021, same store NOI was $24.1 million, an increase of $1.5 million, or 6.5%, compared to the 2020 period. Same store property revenues grew by 6.4% compared to the 2020 period, primarily driven by an 80-basis point increase in occupancy and 3.0% increase in average rental rates; of the Company’s 25 same store properties, 21 recognized rental rate increases and 18 recognized occupancy increases during the period. In addition, bad debt expense improved $0.7 million, while ancillary income, such as termination fees and late fees, increased $0.4 million.

 

Same store expenses increased 6.3%, or $0.9 million, partially due to non-controllable real estate tax increase of $0.2 million and insurance expense increase of $0.2 million due to industrywide multifamily insurance price increases. The remaining increase was due to a $0.3 million increase in discretionary seasonal maintenance as discretionary spending was limited in the prior year due to COVID-19 and an increase of $0.2 million in administrative and marketing expenses.

 

Renovation Activity

 

The Company completed 248 value-add unit upgrades during the second quarter of 2021 achieving an average 24.4% ROI through an average monthly rent premium of $144 per unit. Since inception, the Company has completed 3,275 value-add unit upgrades at an average cost of $6,065 per unit and achieved an average monthly rental rate increase of $119 per unit, equating to an average 23.6% ROI on all unit upgrades leased as of June 30, 2021. The Company has identified approximately 4,158 remaining units within the existing portfolio for value-add upgrades with similar projected economics to the completed renovations.

 

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Portfolio Activity

 

The following activities were completed during the second quarter:

 

-On April 12, 2021, the Company made a $10.7 million preferred equity investment in the operating partnership of Peak Housing, a private REIT invested in a portfolio of 474 single-family homes located throughout Texas.

 

-On April 14, 2021, the Company acquired a 95% interest in an 80-unit apartment community located in Olympia, Washington, known as Yauger Park. The total purchase price was $24.5 million.

 

-On April 26, 2021, the Company sold Plantation Park for a gross sales price of $32 million and net proceeds to the Company of $2.7 million.

 

-On June 4, 2021, the Company acquired an 83% interest in a 150-unit apartment community located in Concord, North Carolina known as Wayford at Concord. The total purchase price was $44 million. The Company’s previous preferred investment of $7 million was redeemed in conjunction with the purchase.

 

-On June 10, 2021, the Company sold The Reserve at Palmer Ranch for $58 million to the Strategic Portfolio partner for net proceeds to the Company of $16.6 million. With the addition of the property to the Strategic Portfolio, the Company made an $11 million preferred investment in the Strategic Portfolio.

 

-On June 17, 2021, the Company acquired a 100% interest in a 276-unit apartment community located in Raleigh, North Carolina, known as Windsor Falls, for a total purchase price of $49 million.

 

-Entered into three preferred equity commitments to invest $32 million in two multifamily and one single family home development projects located in Houston and Willow Park, Texas and Charlotte, North Carolina.

 

-On June 25, 2021, the Company made a $4 million preferred equity investment in a stabilized asset with 372-units known as Deercross, located in Indianapolis, Indiana.

 

-On June 29, 2021, Vickers Historic Roswell was sold and the Company’s mezzanine loan and accrued interest of $12.9 million were paid off.

 

The Company completed the following activity subsequent to June 30, 2021:

 

-On July 7, 2021, the Company sold Park & Kingston and The District at Scottsdale for gross sales prices of $45 million and $151 million, respectively, with net proceeds to the Company of $24.7 million and $69.5 million, respectively.

 

-In July 2021, the Company made $19 million of preferred equity investments and provided a bridge loan of $7 million for properties located in Corpus Christi and Dallas, Texas, and Dawsonville, Georgia.

 

-Entered into two preferred equity commitments to invest $31 million in multifamily development projects located in San Antonio, Texas and Orange City, Florida.

 

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Dividend

 

The Board of Directors has authorized, and the Company has declared, quarterly cash dividends as reflected in the following table.

 

 

Declaration Date

Payable to stockholders

of record as of

 

Amount

 

Date Paid or Payable

Class A Common Stock      
March 12, 2021 March 25, 2021 $0.162500 April 5, 2021
June 11, 2021 June 25, 2021 $0.162500 July 2, 2021
Class C Common Stock      
March 12, 2021 March 25, 2021 $0.162500 April 5, 2021
June 11, 2021 June 25, 2021 $0.162500 July 2, 2021
Series B Preferred Stock      
January 13, 2021 March 25, 2021 $5.00 April 5, 2021
April 12, 2021 April 23, 2021 $5.00 May 5, 2021
April 12, 2021 May 25, 2021 $5.00 June 4, 2021
April 12, 2021 June 25, 2021 $5.00 July 2, 2021
Series C Preferred Stock      
March 12, 2021 March 25, 2021 $0.4765625 April 5, 2021
June 11, 2021 June 25, 2021 $0.4765625 July 2, 2021
Series D Preferred Stock      
March 12, 2021 March 25, 2021 $0.4453125 April 5, 2021
June 11, 2021 June 25, 2021 $0.4453125 July 2, 2021
Series T Preferred Stock (1)      
January 13, 2021 March 25, 2021 $0.128125 April 5, 2021
April 12, 2021 April 23, 2021 $0.128125 May 5, 2021
April 12, 2021 May 25, 2021 $0.128125 June 4, 2021
April 12, 2021 June 25, 2021 $0.128125 July 2, 2021

 

(1) Shares of newly issued Series T Preferred Stock that are held only a portion of the applicable monthly dividend period will receive a prorated dividend based on the actual number of days in the applicable dividend period during which each such share of Series T Preferred Stock was outstanding.

 

2021 Guidance

 

The Company is reaffirming its prior 2021 CFFO guidance. Based on the Company’s current outlook and market conditions, the Company anticipates 2021 CFFO in the range of $0.65 to $0.70 per share. For additional guidance details underlying earnings guidance, please see page 34 of Company’s Second Quarter 2021 Earnings Supplement available under the Investors section 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 Thursday, August 5, 2021 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 September 5, 2021 at  https://services.choruscall.com/mediaframe/webcast.html?webcastid=KjK0qgS7, as well as by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10158807.

 

The full text of this Earnings Release and additional Supplemental Information is available in the Investors section on the Company’s website at http://www.bluerockresidential.com.

 

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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 primarily affordable Class A 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. 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. Although the Company believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, the Company’s actual results and performance could differ materially from those set forth in these forward-looking statements due to numerous factors. Currently, one of the most significant factors is the potential adverse effect of the COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company and its tenants, partners and employees, as well as the real estate market and the global economy and financial markets. The extent to which COVID-19 impacts the Company and its tenants, partners and employees will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact (including governmental actions that may vary by jurisdiction, such as mandated business closing; stay-at-home orders; limits on group activity; and actions to protect residential tenants from eviction), and the direct and indirect economic effects of the pandemic and containment measures, including national and local employment rates and the corresponding impact on the Company’s tenants’ ability to pay their rent on time or at all, among others. 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 23, 2021, 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.

 

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Portfolio Summary

 

The following is a summary of our operating real estate and mezzanine/preferred/ground lease investments as of June 30, 2021:

 

Multifamily Community Name  Location  Number of Units   Year Built/ Renovated (1)   Ownership Interest   Average Rent (2)   % Occupied (3) 
Consolidated Operating Properties:                            
ARIUM Glenridge  Atlanta, GA   480    1990    90%  $1,346    95.8%
ARIUM Westside  Atlanta, GA   336    2008    90%   1,509    93.8%
Ashford Belmar  Lakewood, CO   512    1988/1993   85%   1,691    96.9%
Avenue 25  Phoenix, AZ   254    2013    100%   1,286    94.1%
Burano Hunter’s Creek, formerly ARIUM Hunter’s Creek  Orlando, FL   532    1999    100%   1,427    96.8%
Carrington at Perimeter Park  Morrisville, NC   266    2007    100%   1,291    96.6%
Chattahoochee Ridge  Atlanta, GA   358    1996    90%   1,413    96.6%
Chevy Chase  Austin, TX   320    1971    92%   983    97.8%
Cielo on Gilbert  Mesa, AZ   432    1985    90%   1,123    97.2%
Citrus Tower  Orlando, FL   336    2006    97%   1,381    96.1%
Denim  Scottsdale, AZ   645    1979    100%   1,288    95.7%
Elan  Austin, TX   270    2007    100%   1,158    93.0%
Element  Las Vegas, NV   200    1995    100%   1,306    97.0%
Falls at Forsyth  Cumming, GA   356    2019    100%   1,439    97.8%
Gulfshore Apartment Homes  Naples, FL   368    2016    100%   1,298    97.6%
Navigator Villas  Pasco, WA   176    2013    90%   1,173    99.4%
Outlook at Greystone  Birmingham, AL   300    2007    100%   1,118    95.3%
Park & Kingston  Charlotte, NC   168    2015    100%   1,321    94.6%
Pine Lakes Preserve  Port St. Lucie, FL   320    2003    100%   1,419    97.8%
Providence Trail  Mount Juliet, TN   334    2007    100%   1,304    94.6%
Roswell City Walk  Roswell, GA   320    2015    98%   1,625    97.8%
Sands Parc  Daytona Beach, FL   264    2017    100%   1,370    96.6%
The Brodie  Austin, TX   324    2001    100%   1,353    95.7%
The Debra Metrowest, formerly ARIUM Metrowest  Orlando, FL   510    2001    100%   1,423    95.7%
The District at Scottsdale  Scottsdale, AZ   332    2018    99%   1,826    94.0%
The Links at Plum Creek  Castle Rock, CO   264    2000    88%   1,489    97.3%
The Mills  Greenville, SC   304    2013    100%   1,061    97.0%
The Preserve at Henderson Beach  Destin, FL   340    2009    100%   1,548    95.9%
The Sanctuary  Las Vegas, NV   320    1988    100%   1,169    96.3%
Veranda at Centerfield  Houston, TX   400    1999    93%   1,034    96.5%
Villages of Cypress Creek  Houston, TX   384    2001    80%   1,203    94.5%
Wayford at Concord  Concord, NC   150    2019    83%   1,830    95.3%
Wesley Village  Charlotte, NC   301    2010    100%   1,400    96.0%
Windsor Falls  Raleigh, NC   276    1994    100%   1,102    97.5%
Yauger Park Villas  Olympia, WA   80    2010    95%   1,982    96.3%
                             
Total/Average Consolidated Operating Properties   11,532             $1,350(6)   96.2%
                             
Mezzanine/Preferred/Ground Lease Investments:                            
Alexan CityCentre  Houston, TX   340             $1,583      
Avondale Hills  Decatur, GA   240              1,538(4)     
Belmont Crossing  Smyrna, GA   192              888      
Deercross  Indianapolis, IN   372              761      
Deerwood Apartments  Houston, TX   330              1,590(4)     
Domain at The One Forty  Garland, TX   299              1,363      
Encore Chandler  Chandler, AZ   208              1,457(4)     
Georgetown Crossing  Savannah, GA   168              1,036      
Hunter’s Pointe  Pensacola, FL   204              992      
Mira Vista  Austin, TX   200              1,115      
Motif  Fort Lauderdale, FL   385              2,352(4)     
Park on the Square  Pensacola, FL   240              1,159      
Peak Housing (5)  Various, Texas   474              876      
Reunion Apartments  Orlando, FL   280              1,366(4)     
Sierra Terrace  Atlanta, GA   135              1,274      
Sierra Village  Atlanta, GA   154              1,224      
The Commons  Jacksonville, FL   328              914      
The Hartley at Blue Hill, formerly The Park at Chapel Hill  Chapel Hill, NC   414              1,599(4)     
The Reserve at Palmer Ranch  Sarasota, FL   320              1,417      
The Riley  Richardson, TX   262              1,455      
Thornton Flats  Austin, TX   104              1,576      
Water’s Edge  Pensacola, FL   184              1,168      
Wayford at Innovation Park  Charlotte, NC   210              1,994(4)     
Willow Park (5)  Willow Park, TX   46              2,362(4)     
Zoey  Austin, TX   307              1,762(4)     
                             
Total/Average Mezzanine/Preferred/Ground Lease Investments   6,396             $1,368(7)     
                             
Total/Average Portfolio      17,928             $1,357(8)     

 

(1) Represents date of last significant renovation or year built if no renovations.  

 

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(2) Represents the average effective monthly rent per occupied unit for the three months ended June 30, 2021.  
(3) Percent occupied is calculated as (i) the number of units occupied as of June 30, 2021, divided by (ii) total number of units, expressed as a percentage.
(4) Represents the average pro forma effective monthly rent per occupied unit for all expected units upon stabilization.
(5) Peak Housing and Willow Park are preferred equity investments in portfolios of single-family residential homes.  The actual/planned number of units shown represents the number of single-family residential homes within each portfolio.
(6) The average effective monthly rent including sold properties was $1,351 for the three months ended June 30, 2021.
(7) The average effective monthly rent including sold properties was $1,399 for the three months ended June 30, 2021.
(8) The average effective monthly rent including sold properties was $1,368 for the three months ended June 30, 2021.

 

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Consolidated Statement of Operations

For the Three and Six Months Ended June 30, 2021 and 2020

(Unaudited and dollars in thousands except for share and per share data)

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2021   2020   2021   2020 
Revenues                    
Rental and other property revenues  $49,721   $47,695   $100,803   $98,047 
Interest income from mezzanine loan and ground lease investments   4,114    5,338    8,835    11,227 
Total revenues   53,835    53,033    109,638    109,274 
Expenses                    
Property operating   18,909    18,571    38,841    37,870 
Property management fees   1,247    1,194    2,528    2,488 
General and administrative   6,595    5,303    13,240    11,674 
Acquisition and pursuit costs   3    423    15    1,691 
Weather-related losses, net           400     
Depreciation and amortization   19,926    20,067    40,250    40,990 
Total expenses   46,680    45,558    95,274    94,713 
Operating income   7,155    7,475    14,364    14,561 
Other income (expense)                    
Other income   57    19    209    59 
Preferred returns on unconsolidated real estate joint ventures   2,329    2,834    4,616    5,249 
Provision for credit losses   (26)       (567)    
Gain on sale of real estate investments   19,429    57,843    88,342    58,096 
Loss on extinguishment of debt and debt modification costs   (647)   (13,985)   (3,687)   (13,985)
Interest expense, net   (13,460)   (13,859)   (27,294)   (28,774)
Total other income   7,682    32,852    61,619    20,645 
Net income   14,837    40,327    75,983    35,206 
Preferred stock dividends   (14,367)   (14,237)   (28,984)   (27,784)
Preferred stock accretion   (7,290)   (3,602)   (14,312)   (7,527)
Net (loss) income attributable to noncontrolling interests                    
Operating Partnership units   (1,978)   5,413    8,182    (409)
Partially-owned properties   587    1,985    6,353    1,707 
Net (loss) income attributable to noncontrolling interests   (1,391)   7,398    14,535    1,298 
Net (loss) income attributable to common stockholders  $(5,429)  $15,090   $18,152   $(1,403)
                     
Net (loss) income per common share - Basic  $(0.21)  $0.61   $0.68   $(0.09)
                     
Net (loss) income per common share – Diluted  $(0.21)  $0.61   $0.68   $(0.09)
                     
Weighted average basic common shares outstanding   28,129,862    24,307,147    25,623,537    24,197,479 
Weighted average diluted common shares outstanding   28,129,862    24,345,034    25,688,530    24,197,479 

 

9 

 

 

Consolidated Balance Sheets

Second Quarter 2021

(Unaudited and dollars in thousands except for share and per share amounts)

 

    June 30,
2021
    December 31,
2020
 
ASSETS          
Net Real Estate Investments          
Land  $251,691   $279,481 
Buildings and improvements   1,703,536    1,889,471 
Furniture, fixtures and equipment   75,488    78,438 
Total Gross Real Estate Investments   2,030,715    2,247,390 
Accumulated depreciation   (187,066)   (186,426)
Total Net Operating Real Estate Investments   1,843,649    2,060,964 
Operating real estate held for sale, net   144,878    36,213 
Total Net Real Estate Investments   1,988,527    2,097,177 
Cash and cash equivalents   136,766    83,868 
Restricted cash   36,308    35,093 
Notes and accrued interest receivable, net   165,654    157,734 
Due from affiliates   667    339 
Accounts receivable, prepaids and other assets, net   40,783    29,502 
Preferred equity investments and investments in unconsolidated real estate joint ventures, net   86,328    83,485 
In-place lease intangible assets, net   1,531    2,594 
Non-real estate assets associated with operating real estate held for sale   271    145 
Total Assets  $2,456,835   $2,489,937 
           
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY          
Mortgages payable  $1,343,454   $1,490,932 
Mortgages payable associated with operating real estate held for sale   93,137    38,773 
Revolving credit facilities       33,000 
Accounts payable   1,972    1,317 
Other accrued liabilities   34,677    31,025 
Due to affiliates   635    618 
Distributions payable   13,879    13,421 
Liabilities associated with operating real estate held for sale   1,135    383 
Total Liabilities   1,488,889    1,609,469 
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; no shares and 2,201,547 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively       54,332 
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 360,608 and 513,489 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively   327,124    469,907 
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,295,845 shares issued and outstanding as of June 30, 2021 and December 31, 2020   56,627    56,462 
6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 18,353,252 and 9,717,917 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively   415,718    219,967 
Equity          
Stockholders’ Equity          
Preferred stock, $0.01 par value, 197,900,000 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; 2,774,338 shares issued and outstanding as of June 30, 2021 and December 31, 2020   66,867    66,867 
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 28,861,937 and 22,020,950 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively   289    220 
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding as of June 30, 2021 and December 31, 2020   1    1 
Additional paid-in-capital   362,507    304,710 
Distributions in excess of cumulative earnings   (303,960)   (313,392)
Total Stockholders’ Equity   125,704    58,406 
Noncontrolling Interests          
Operating Partnership units   18,751    (3,272)
Partially owned properties   24,022    24,666 
Total Noncontrolling Interests   42,773    21,394 
Total Equity   168,477    79,800 
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY  $2,456,835   $2,489,937 

 

10 

 

 

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 stockholders and unit holders 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 (loss), 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 certain real estate assets and investments in entities where the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for notes receivable, 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 acquisition expenses, non-cash interest, 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), one-time weather-related costs, stock compensation expense and preferred stock accretion. Commencing in 2020, we do not deduct the accrued portion of the preferred income on our preferred equity investments from FFO to determine CFFO as the income is deemed fully collectible. The accrued portion of the preferred income totaled $1.5 million and $2.7 million for the three and six months ended June 30, 2021, respectively. 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 (loss), including net income (loss) 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 (loss), including net income (loss) 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.

 

11 

 

 

We have acquired seven operating properties, made eight property investments through preferred equity or mezzanine loan investments, sold six operating properties and received payoffs of our mezzanine loan or preferred equity in seven investments subsequent to June 30, 2020. 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 income (loss), the most directly comparable GAAP financial measure, for the three and six months ended June 30, 2021 and 2020 (in thousands, except per share amounts):

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2021   2020   2021   2020 
Net (loss) income attributable to common stockholders  $(5,429)  $15,090   $18,152   $(1,403)
Add back: Net (loss) income attributable to Operating Partnership Units   (1,978)   5,413    8,182    (409)
Net (loss) income attributable to common stockholders and unit holders   (7,407)   20,503    26,334    (1,812)
Common stockholders and Operating Partnership Units pro-rata share of:                    
Real estate depreciation and amortization (1)   19,036    19,144    38,440    39,045 
Provision for credit losses   26        567     
Gain on sale of real estate investments   (18,630)   (55,250)   (81,058)   (55,360)
FFO Attributable to Common Stockholders and Unit Holders   (6,975)   (15,603)   (15,717)   (18,127)
Common stockholders and Operating Partnership Units pro-rata share of:                    
Acquisition and pursuit costs   3    423    15    1,691 
Non-cash interest expense   549    747    1,154    1,592 
Unrealized loss (gain) on derivatives   20    (5)   (11)   (30)
Loss on extinguishment of debt and debt modification costs   609    13,590    3,173    13,590 
Amortization of deferred interest income on mezzanine loan   997        997     
Weather-related losses, net           360     
Non-real estate depreciation and amortization   122    122    244    242 
Other (income) expense, net   (49)   43    48    3 
Non-cash equity compensation   3,479    2,191    6,789    5,738 
Preferred stock accretion   7,290    3,602    14,312    7,527 
CFFO Attributable to Common Stockholders and Unit Holders  $6,045   $5,110   $11,364   $12,226 
                     
Per Share and Unit Information:                    
FFO Attributable to Common Stockholders and Unit Holders - diluted  $(0.18)  $(0.47)  $(0.44)  $(0.55)
CFFO Attributable to Common Stockholders and Unit Holders - diluted  $0.16   $0.15   $0.32   $0.37 
                     
Weighted average common shares and units outstanding - diluted   38,443,171    33,075,598    35,883,631    32,936,762 

 

(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 for 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. 

 

12 

 

 

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) income attributable to common stockholders to EBITDAre and Adjusted EBITDAre (unaudited and dollars in thousands).

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2021   2020   2021   2020 
Net (loss) income attributable to common stockholders  $(5,429)  $15,090   $18,152   $(1,403)
Net (loss) income attributable to noncontrolling interests   (1,391)   7,398    14,535    1,298 
Preferred stock dividends   14,367    14,237    28,984    27,784 
Preferred stock accretion   7,290    3,602    14,312    7,527 
Interest expense, net   13,460    13,859    27,294    28,774 
Real estate depreciation and amortization   19,879    20,020    40,157    40,899 
Provision for credit losses   26        567     
Gain on sale of real estate investments   (19,429)   (57,843)   (88,342)   (58,096)
Loss on extinguishment of debt and debt modification costs   647    13,985    3,687    13,985 
EBITDAre  $29,420   $30,348   $59,346   $60,768 
Acquisition and pursuit costs   3    423    15    1,691 
Amortization of deferred interest income on mezzanine loan   997        997     
Non-real estate depreciation and amortization   122    122    244    242 
Weather-related losses, net           400     
Non-cash equity compensation   3,479    2,191    6,789    5,738 
Other (income) expense, net   (49)   43    48    3 
Adjusted EBITDAre  $33,972   $33,127   $67,839   $68,442 

 

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.

 

13 

 

 

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 income (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   Six Months Ended 
   June 30,   June 30, 
   2021   2020   2021   2020 
Net (loss) income attributable to common stockholders  $(5,429)  $15,090   $18,152   $(1,403)
Add back: Net (loss) income attributable to Operating Partnership Units   (1,978)   5,413    8,182    (409)
Net (loss) income attributable to common stockholders and unit holders   (7,407)   20,503    26,334    (1,812)
Add common stockholders and Operating Partnership Units pro-rata share of:                    
Real estate depreciation and amortization   19,036    19,144    38,440    39,045 
Non-real estate depreciation and amortization   122    122    244    242 
Non-cash interest expense   549    747    1,154    1,592 
Unrealized loss (gain) on derivatives   20    (5)   (11)   (30)
Loss on extinguishment of debt and debt modification costs   609    13,590    3,173    13,590 
Provision for credit losses   26        567     
Property management fees   1,194    1,135    2,417    2,367 
Acquisition and pursuit costs   3    423    15    1,691 
Corporate operating expenses   6,520    5,166    13,090    11,462 
Weather-related losses, net           360     
Preferred dividends   14,367    14,237    28,984    27,784 
Preferred stock accretion   7,290    3,602    14,312    7,527 
Less common stockholders and Operating Partnership Units pro-rata share of:                    
Other income (expense), net   57    (43)   108    (3)
Preferred returns on unconsolidated real estate joint ventures   2,329    2,834    4,616    5,408 
Interest income from mezzanine loan and ground lease investments   4,114    5,338    8,835    11,227 
Gain on sale of real estate investments   18,630    55,250    81,058    55,360 
Pro-rata share of properties’ income   17,199    15,285    34,462    31,466 
Add:                    
Noncontrolling interest pro-rata share of partially owned property income   738    750    1,378    1,553 
Total property income   17,937    16,035    35,840    33,019 
Add:                    
Interest expense   12,875    13,089    26,122    27,158 
Net operating income   30,812    29,124    61,962    60,177 
Less:                    
Non-same store net operating income   6,740    6,518    15,920    15,646 
Same store net operating income (1)  $24,072   $22,606   $46,042   $44,531 

 

 (1) Same store portfolio for the three months ended June 30, 2021 consists of 25 properties, which represent 8,882 units.  Same store portfolio for the six months ended June 30, 2021 consists of 24 properties, which represent 8,628 units.  

 

14 

 

 

Contact

Investors:

(888) 558.1031
investor.relations@bluerockre.com

 

Media:

Josh Hoffman

(208) 475.2380

jhoffman@bluerockre.com

#

 

15 

 


Exhibit 99.2

 

Avenue 25 | Phoenix, AZ Elan | Austin, TX

 

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter 2021

Supplemental Financial Information

(Unaudited)

 

Table of Contents

Second Quarter Earnings Release 3
   
Financial and Operating Highlights 18
   
Share and Unit Information 19
   
EBITDAre and Interest Information 20
   
Financial Statistics 21
   
Recent Acquisitions and Investments 22
   
Recent Dispositions 23
   
Preferred Equity Investments, Notes and Accrued Interest Receivable, and Ground Lease 24
   
Portfolio Information 25
   
Renovation Table 27
   
Development Mezzanine/Preferred/Ground Lease Investments 28
   
Condensed Consolidated Balance Sheets 29
   
Consolidated Statements of Operations 30
   
Reconciliation of Funds from Operations (FFO) and Core Funds from Operations (CFFO) 31
   
Mortgages Payable Summary Information 32
   
2021 Projected Guidance Information 34
   
Definitions of Non-GAAP Financial Measures 35

 

This document 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. Although the Company believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, the Company’s actual results and performance could differ materially from those set forth in these forward-looking statements due to numerous factors. Currently, one of the most significant factors is the potential adverse effect of the COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company and its tenants, partners and employees, as well as the real estate market and the global economy and financial markets. The extent to which COVID-19 impacts the Company and its tenants, partners and employees will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact (including governmental actions that may vary by jurisdiction, such as mandated business closing; stay-at-home orders; limits on group activity; and actions to protect residential tenants from eviction), and the direct and indirect economic effects of the pandemic and containment measures, including national and local employment rates and the corresponding impact on the Company’s tenants’ ability to pay their rent on time or at all, among others.  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 23, 2021, 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.

 

2

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

  

 

 

For Immediate Release

Bluerock Residential Growth REIT Announces Second Quarter 2021 Results

 

-                  Quarterly Portfolio Lease Rate Growth of 10.3% -

-                  July Portfolio Lease Rate Growth of 15.3% -

-                  Same Store Rental Revenues Increased 6.4% -

 

New York, NY (August 5, 2021) – 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 June 30, 2021.

 

“We are very pleased with our operating results led by rapid acceleration of rent growth throughout the quarter, demonstrating the high quality and favorable locations of our communities,” said Ramin Kamfar, Company Chairman and CEO. “In addition, as anticipated in our 2021 guidance, our investment pace increased in the second quarter, including our first investments in single family homes. Our renovation pace also returned to pre-COVID levels, as we delivered almost 250 unit upgrades, with an average ROI of 24%. We are continuing to effectively source attractive investment opportunities and accretively put our capital to work.”

 

Second Quarter Highlights

 

Financial Results

 

-Net loss attributable to common stockholders for the second quarter of 2021 was ($5.4) million or ($0.21) per diluted share, as compared to net income attributable to common stockholders of $15.1 million or $0.61 per diluted share in the prior year period.

 

-Core funds from operations attributable to common stockholders and unit holders (“CFFO”) was $6.0 million, or $0.16 per diluted share, compared to $5.1 million, or $0.15 per diluted share, in the prior year period. This year’s results continue to be impacted by additional capital on the balance sheet.

 

Portfolio Performance

 

-Rental revenues grew 4.2% to $49.7 million from $47.7 million in the prior year period.

 

-Property Net Operating Income (“NOI”) increased 5.8% to $30.8 million from $29.1 million in the prior year period.

 

-Same store revenues grew 6.4% and same store NOI increased 6.5%, as compared to the prior year period.

 

-Blended lease rate growth was 10.3%, up 680 basis points on a sequential quarter-over-quarter basis.

 

-June 2021 average lease growth accelerated to 12.0%, with renewals at 6.5% and new leases at 17.9%. Average lease growth accelerated to 15.3% in July.

 

-Portfolio occupancy was 96.2% at June 30, 2021, up 90 basis points from the prior year.

 

-Property operating margins improved 90 basis points to 62.0% compared to 61.1% in the prior year period.

 

-Same store average rent increased 3.0% and same store average occupancy expanded 80 basis points, as compared to the prior year period.

 

3

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

  

Portfolio Activity

 

-Consolidated real estate investments, at cost, were approximately $2.2 billion.

 

-Acquired three operating properties totaling 506 units for $118 million.

 

-Sold two operating assets and two development properties for $174 million with net proceeds of $39 million.

 

-Invested $26 million in preferred equity in three new stabilized properties, and funded $8 million for five existing preferred equity and mezzanine loan investments. Committed $32 million for three new preferred equity investments.

 

-Increased renovation pace back to pre-COVID levels, completing 248 value-add unit upgrades during the quarter achieving an average 24.4% ROI through an average monthly rent premium of $144 per unit.

 

Balance Sheet and Market Activity

 

-$244.5 million of unrestricted cash and availability under revolving credit facilities and $1.4 billion of indebtedness outstanding as of June 30, 2021.

 

-Paid quarterly dividend of $0.1625 in cash per share of common stock.

 

-Raised a quarterly record of $119 million through the continuous registered Series T Preferred Stock offering with the issuance of 4.8 million shares at $25.00 per share.

 

-Redeemed 80,316 shares of Series B Preferred Stock through the issuance of 8,262,685 shares of Class A common stock at an average price of $9.72 per share.

 

-Repurchased 4,605,598 shares of Class A common stock during the quarter at an average price of $9.79 per share.

 

Included later in this release are definitions of NOI, CFFO and other Non-GAAP financial measures and reconciliations of such measures to their most comparable financial measures as calculated and presented under GAAP.

 

Second Quarter 2021 Financial Results

 

Net loss attributable to common stockholders for the second quarter of 2021 was ($5.4) million, compared to net income attributable to common stockholders of $15.1 million in the prior year period. Net income in 2021 was impacted by two asset sales generating $19 million in gain on sale of real estate investments compared to $58 million in the second quarter of 2020. Net (loss) income attributable to common stockholders included non-cash expenses of $22.4 million or $0.80 per share in the second quarter of 2021 compared to $19.0 million or $0.79 per share for the prior year period.

 

CFFO for the second quarter of 2021 was $6.0 million, or $0.16 per diluted share, compared to $5.1 million, or $0.15 per diluted share, in the prior year period. CFFO was positively impacted by an increase in property NOI of $1.7 million and a reduction in interest expense of $0.2 million. This was primarily offset by a year-over-year reduction of $0.2 million in interest income from mezzanine loan and ground lease investments, $0.5 million in preferred returns, and preferred stock dividend increase of $0.1 million.

 

4

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

  

Total Portfolio Performance

 

$ In thousands, except average rental rates   2Q21   2Q20   Variance    YTD21    YTD20    Variance 
Total Revenues (1)  $53,835   $53,033    1.5%  $109,638   $109,274    0.3%
Property Operating Expenses  $18,909   $18,571    1.8%  $38,841   $37,870    2.6%
NOI  $30,812   $29,124    5.8%  $61,962   $60,177    3.0%
Operating Margin   62.0%   61.1%   90bps   61.5%   61.4%   10bps
Average Occupancy Percentage   95.8%   94.4%   140bps   95.5%   94.3%   120bps
Average Rental Rate  $1,351   $1,330    1.6%  $1,333   $1,330    0.2%
(1) Including interest income from related parties                              

 

For the second quarter of 2021, property revenues increased by 4.2% compared to the same prior year period. Total portfolio NOI was $30.8 million, an increase of $1.7 million, or 5.8%, compared to the same period in the prior year. Property NOI margins were 62.0% for the quarter, compared to 61.1% in the prior year quarter.

 

Same Store Portfolio Performance

 

$ In thousands, except average rental rates   2Q21   2Q20   Variance    YTD21    YTD20    Variance 
Revenues  $38,631   $36,306    6.4%  $74,309   $71,345    4.2%
Property Operating Expenses  $14,559   $13,700    6.3%  $28,267   $26,814    5.4%
NOI  $24,072   $22,606    6.5%  $46,042   $44,531    3.4%
Operating Margin   62.3%   62.3%   0bps   62.0%   62.4%   (40)bps
Average Occupancy Percentage   95.7%   94.9%   80 bps   95.6%   94.5%   110bps
Average Rental Rate  $1,355   $1,315    3.0%  $1,344   $1,318    2.0%

 

The Company’s same store portfolio for the quarter ended June 30, 2021 included 25 properties. For the second quarter of 2021, same store NOI was $24.1 million, an increase of $1.5 million, or 6.5%, compared to the 2020 period. Same store property revenues grew by 6.4% compared to the 2020 period, primarily driven by an 80-basis point increase in occupancy and 3.0% increase in average rental rates; of the Company’s 25 same store properties, 21 recognized rental rate increases and 18 recognized occupancy increases during the period. In addition, bad debt expense improved $0.7 million, while ancillary income, such as termination fees and late fees, increased $0.4 million.

 

Same store expenses increased 6.3%, or $0.9 million, partially due to non-controllable real estate tax increase of $0.2 million and insurance expense increase of $0.2 million due to industrywide multifamily insurance price increases. The remaining increase was due to a $0.3 million increase in discretionary seasonal maintenance as discretionary spending was limited in the prior year due to COVID-19 and an increase of $0.2 million in administrative and marketing expenses.

 

Renovation Activity

 

The Company completed 248 value-add unit upgrades during the second quarter of 2021 achieving an average 24.4% ROI through an average monthly rent premium of $144 per unit. Since inception, the Company has completed 3,275 value-add unit upgrades at an average cost of $6,065 per unit and achieved an average monthly rental rate increase of $119 per unit, equating to an average 23.6% ROI on all unit upgrades leased as of June 30, 2021. The Company has identified approximately 4,158 remaining units within the existing portfolio for value-add upgrades with similar projected economics to the completed renovations.

 

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Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

  

Portfolio Activity

 

The following activities were completed during the second quarter:

 

-On April 12, 2021, the Company made a $10.7 million preferred equity investment in the operating partnership of Peak Housing, a private REIT invested in a portfolio of 474 single-family homes located throughout Texas.

 

-On April 14, 2021, the Company acquired a 95% interest in an 80-unit apartment community located in Olympia, Washington, known as Yauger Park. The total purchase price was $24.5 million.

 

-On April 26, 2021, the Company sold Plantation Park for a gross sales price of $32 million and net proceeds to the Company of $2.7 million.

 

-On June 4, 2021, the Company acquired an 83% interest in a 150-unit apartment community located in Concord, North Carolina known as Wayford at Concord. The total purchase price was $44 million. The Company’s previous preferred investment of $7 million was redeemed in conjunction with the purchase.

 

-On June 10, 2021, the Company sold The Reserve at Palmer Ranch for $58 million to the Strategic Portfolio partner for net proceeds to the Company of $16.6 million. With the addition of the property to the Strategic Portfolio, the Company made an $11 million preferred investment in the Strategic Portfolio.

 

-On June 17, 2021, the Company acquired a 100% interest in a 276-unit apartment community located in Raleigh, North Carolina, known as Windsor Falls, for a total purchase price of $49 million.

 

-Entered into three preferred equity commitments to invest $32 million in two multifamily and one single family home development projects located in Houston and Willow Park, Texas and Charlotte, North Carolina.

 

-On June 25, 2021, the Company made a $4 million preferred equity investment in a stabilized asset with 372-units known as Deercross, located in Indianapolis, Indiana.

 

-On June 29, 2021, Vickers Historic Roswell was sold and the Company’s mezzanine loan and accrued interest of $12.9 million were paid off.

 

The Company completed the following activity subsequent to June 30, 2021:

 

-On July 7, 2021, the Company sold Park & Kingston and The District at Scottsdale for gross sales prices of $45 million and $151 million, respectively, with net proceeds to the Company of $24.7 million and $69.5 million, respectively.

 

-In July 2021, the Company made $19 million of preferred equity investments and provided a bridge loan of $7 million for properties located in Corpus Christi and Dallas, Texas, and Dawsonville, Georgia.

 

-Entered into two preferred equity commitments to invest $31 million in multifamily development projects located in San Antonio, Texas and Orange City, Florida.

 

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Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

  

Dividend

 

The Board of Directors has authorized, and the Company has declared, quarterly cash dividends as reflected in the following table.

 

 

Declaration Date

Payable to stockholders

of record as of

 

Amount

 

Date Paid or Payable

Class A Common Stock      
March 12, 2021 March 25, 2021 $0.162500 April 5, 2021
June 11, 2021 June 25, 2021 $0.162500 July 2, 2021
Class C Common Stock      
March 12, 2021 March 25, 2021 $0.162500 April 5, 2021
June 11, 2021 June 25, 2021 $0.162500 July 2, 2021
Series B Preferred Stock      
January 13, 2021 March 25, 2021 $5.00 April 5, 2021
April 12, 2021 April 23, 2021 $5.00 May 5, 2021
April 12, 2021 May 25, 2021 $5.00 June 4, 2021
April 12, 2021 June 25, 2021 $5.00 July 2, 2021
Series C Preferred Stock      
March 12, 2021 March 25, 2021 $0.4765625 April 5, 2021
June 11, 2021 June 25, 2021 $0.4765625 July 2, 2021
Series D Preferred Stock      
March 12, 2021 March 25, 2021 $0.4453125 April 5, 2021
June 11, 2021 June 25, 2021 $0.4453125 July 2, 2021
Series T Preferred Stock (1)      
January 13, 2021 March 25, 2021 $0.128125 April 5, 2021
April 12, 2021 April 23, 2021 $0.128125 May 5, 2021
April 12, 2021 May 25, 2021 $0.128125 June 4, 2021
April 12, 2021 June 25, 2021 $0.128125 July 2, 2021

 

(1) Shares of newly issued Series T Preferred Stock that are held only a portion of the applicable monthly dividend period will receive a prorated dividend based on the actual number of days in the applicable dividend period during which each such share of Series T Preferred Stock was outstanding.

 

2021 Guidance

 

The Company is reaffirming its prior 2021 CFFO guidance. Based on the Company’s current outlook and market conditions, the Company anticipates 2021 CFFO in the range of $0.65 to $0.70 per share. For additional guidance details underlying earnings guidance, please see page 34 of Company’s Second Quarter 2021 Earnings Supplement available under the Investors section 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 Thursday, August 5, 2021 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 September 5, 2021 at  https://services.choruscall.com/mediaframe/webcast.html?webcastid=KjK0qgS7, as well as by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10158807.

 

The full text of this Earnings Release and additional Supplemental Information is available in the Investors section on the Company’s website at http://www.bluerockresidential.com.

 

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Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

  

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 primarily affordable Class A 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. 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. Although the Company believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, the Company’s actual results and performance could differ materially from those set forth in these forward-looking statements due to numerous factors. Currently, one of the most significant factors is the potential adverse effect of the COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company and its tenants, partners and employees, as well as the real estate market and the global economy and financial markets. The extent to which COVID-19 impacts the Company and its tenants, partners and employees will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact (including governmental actions that may vary by jurisdiction, such as mandated business closing; stay-at-home orders; limits on group activity; and actions to protect residential tenants from eviction), and the direct and indirect economic effects of the pandemic and containment measures, including national and local employment rates and the corresponding impact on the Company’s tenants’ ability to pay their rent on time or at all, among others. 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 23, 2021, 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.

 

8

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

  

Portfolio Summary

 

The following is a summary of our operating real estate and mezzanine/preferred/ground lease investments as of June 30, 2021:

 

Multifamily Community Name  Location  Number of Units   Year Built/ Renovated (1)   Ownership Interest   Average Rent (2)   % Occupied (3) 
Consolidated Operating Properties:                            
ARIUM Glenridge  Atlanta, GA   480    1990    90%  $1,346    95.8%
ARIUM Westside  Atlanta, GA   336    2008    90%   1,509    93.8%
Ashford Belmar  Lakewood, CO   512    1988/1993   85%   1,691    96.9%
Avenue 25  Phoenix, AZ   254    2013    100%   1,286    94.1%
Burano Hunter’s Creek, formerly ARIUM Hunter’s Creek  Orlando, FL   532    1999    100%   1,427    96.8%
Carrington at Perimeter Park  Morrisville, NC   266    2007    100%   1,291    96.6%
Chattahoochee Ridge  Atlanta, GA   358    1996    90%   1,413    96.6%
Chevy Chase  Austin, TX   320    1971    92%   983    97.8%
Cielo on Gilbert  Mesa, AZ   432    1985    90%   1,123    97.2%
Citrus Tower  Orlando, FL   336    2006    97%   1,381    96.1%
Denim  Scottsdale, AZ   645    1979    100%   1,288    95.7%
Elan  Austin, TX   270    2007    100%   1,158    93.0%
Element  Las Vegas, NV   200    1995    100%   1,306    97.0%
Falls at Forsyth  Cumming, GA   356    2019    100%   1,439    97.8%
Gulfshore Apartment Homes  Naples, FL   368    2016    100%   1,298    97.6%
Navigator Villas  Pasco, WA   176    2013    90%   1,173    99.4%
Outlook at Greystone  Birmingham, AL   300    2007    100%   1,118    95.3%
Park & Kingston  Charlotte, NC   168    2015    100%   1,321    94.6%
Pine Lakes Preserve  Port St. Lucie, FL   320    2003    100%   1,419    97.8%
Providence Trail  Mount Juliet, TN   334    2007    100%   1,304    94.6%
Roswell City Walk  Roswell, GA   320    2015    98%   1,625    97.8%
Sands Parc  Daytona Beach, FL   264    2017    100%   1,370    96.6%
The Brodie  Austin, TX   324    2001    100%   1,353    95.7%
The Debra Metrowest, formerly ARIUM Metrowest  Orlando, FL   510    2001    100%   1,423    95.7%
The District at Scottsdale  Scottsdale, AZ   332    2018    99%   1,826    94.0%
The Links at Plum Creek  Castle Rock, CO   264    2000    88%   1,489    97.3%
The Mills  Greenville, SC   304    2013    100%   1,061    97.0%
The Preserve at Henderson Beach  Destin, FL   340    2009    100%   1,548    95.9%
The Sanctuary  Las Vegas, NV   320    1988    100%   1,169    96.3%
Veranda at Centerfield  Houston, TX   400    1999    93%   1,034    96.5%
Villages of Cypress Creek  Houston, TX   384    2001    80%   1,203    94.5%
Wayford at Concord  Concord, NC   150    2019    83%   1,830    95.3%
Wesley Village  Charlotte, NC   301    2010    100%   1,400    96.0%
Windsor Falls  Raleigh, NC   276    1994    100%   1,102    97.5%
Yauger Park Villas  Olympia, WA   80    2010    95%   1,982    96.3%
                             
Total/Average Consolidated Operating Properties   11,532             $1,350(6)   96.2%
                             
Mezzanine/Preferred/Ground Lease Investments:                            
Alexan CityCentre  Houston, TX   340             $1,583      
Avondale Hills  Decatur, GA   240              1,538(4)     
Belmont Crossing  Smyrna, GA   192              888      
Deercross  Indianapolis, IN   372              761      
Deerwood Apartments  Houston, TX   330              1,590(4)     
Domain at The One Forty  Garland, TX   299              1,363      
Encore Chandler  Chandler, AZ   208              1,457(4)     
Georgetown Crossing  Savannah, GA   168              1,036      
Hunter’s Pointe  Pensacola, FL   204              992      
Mira Vista  Austin, TX   200              1,115      
Motif  Fort Lauderdale, FL   385              2,352(4)     
Park on the Square  Pensacola, FL   240              1,159      
Peak Housing (5)  Various, Texas   474              876      
Reunion Apartments  Orlando, FL   280              1,366(4)     
Sierra Terrace  Atlanta, GA   135              1,274      
Sierra Village  Atlanta, GA   154              1,224      
The Commons  Jacksonville, FL   328              914      
The Hartley at Blue Hill, formerly The Park at Chapel Hill  Chapel Hill, NC   414              1,599(4)     
The Reserve at Palmer Ranch  Sarasota, FL   320              1,417      
The Riley  Richardson, TX   262              1,455      
Thornton Flats  Austin, TX   104              1,576      
Water’s Edge  Pensacola, FL   184              1,168      
Wayford at Innovation Park  Charlotte, NC   210              1,994(4)     
Willow Park (5)  Willow Park, TX   46              2,362(4)     
Zoey  Austin, TX   307              1,762(4)     
                             
Total/Average Mezzanine/Preferred/Ground Lease Investments   6,396             $1,368(7)     
                             
Total/Average Portfolio      17,928             $1,357(8)     

 

(1) Represents date of last significant renovation or year built if no renovations.  

 

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Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

  

(2) Represents the average effective monthly rent per occupied unit for the three months ended June 30, 2021.  
(3) Percent occupied is calculated as (i) the number of units occupied as of June 30, 2021, divided by (ii) total number of units, expressed as a percentage.
(4) Represents the average pro forma effective monthly rent per occupied unit for all expected units upon stabilization.
(5) Peak Housing and Willow Park are preferred equity investments in portfolios of single-family residential homes.  The actual/planned number of units shown represents the number of single-family residential homes within each portfolio.
(6) The average effective monthly rent including sold properties was $1,351 for the three months ended June 30, 2021.
(7) The average effective monthly rent including sold properties was $1,399 for the three months ended June 30, 2021.
(8) The average effective monthly rent including sold properties was $1,368 for the three months ended June 30, 2021.

 

10

 

 

 

Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

  

Consolidated Statement of Operations

For the Three and Six Months Ended June 30, 2021 and 2020

(Unaudited and dollars in thousands except for share and per share data)

 

   Three Months Ended   Six Months Ended 
   June 30,   June 30, 
   2021   2020   2021   2020 
Revenues                    
Rental and other property revenues  $49,721   $47,695   $100,803   $98,047 
Interest income from mezzanine loan and ground lease investments   4,114    5,338    8,835    11,227 
Total revenues   53,835    53,033    109,638    109,274 
Expenses                    
Property operating   18,909    18,571    38,841    37,870 
Property management fees   1,247    1,194    2,528    2,488 
General and administrative   6,595    5,303    13,240    11,674 
Acquisition and pursuit costs   3    423    15    1,691 
Weather-related losses, net           400     
Depreciation and amortization   19,926    20,067    40,250    40,990 
Total expenses   46,680    45,558    95,274    94,713 
Operating income   7,155    7,475    14,364    14,561 
Other income (expense)                    
Other income   57    19    209    59 
Preferred returns on unconsolidated real estate joint ventures   2,329    2,834    4,616    5,249 
Provision for credit losses   (26)       (567)    
Gain on sale of real estate investments   19,429    57,843    88,342    58,096 
Loss on extinguishment of debt and debt modification costs   (647)   (13,985)   (3,687)   (13,985)
Interest expense, net   (13,460)   (13,859)   (27,294)   (28,774)
Total other income   7,682    32,852    61,619    20,645 
Net income   14,837    40,327    75,983    35,206 
Preferred stock dividends   (14,367)   (14,237)   (28,984)   (27,784)
Preferred stock accretion   (7,290)   (3,602)   (14,312)   (7,527)
Net (loss) income attributable to noncontrolling interests                    
Operating Partnership units   (1,978)   5,413    8,182    (409)
Partially-owned properties   587    1,985    6,353    1,707 
Net (loss) income attributable to noncontrolling interests   (1,391)   7,398    14,535    1,298 
Net (loss) income attributable to common stockholders  $(5,429)  $15,090   $18,152   $(1,403)
                     
Net (loss) income per common share - Basic  $(0.21)  $0.61   $0.68   $(0.09)
                     
Net (loss) income per common share – Diluted  $(0.21)  $0.61   $0.68   $(0.09)
                     
Weighted average basic common shares outstanding   28,129,862    24,307,147    25,623,537    24,197,479 
Weighted average diluted common shares outstanding   28,129,862    24,345,034    25,688,530    24,197,479 

 

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Bluerock Residential Growth REIT, Inc.

Second Quarter Earnings Release

  

Consolidated Balance Sheets

Second Quarter 2021

(Unaudited and dollars in thousands except for share and per share amounts)

 

    June 30,
2021
    December 31,
2020
 
ASSETS          
Net Real Estate Investments    &nb