Exhibit 99.2

 

 

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter 2020

Supplemental Financial Information

(Unaudited)

 

Table of Contents
Fourth Quarter Earnings Release	3
Financial and Operating Highlights	20
Share and Unit Information	21
EBITDAre and Interest Information	22
Financial Statistics	23
Recent Acquisitions and Investments	24
Recent Dispositions	25
Preferred Equity Investments, Notes and Accrued Interest Receivable, and Ground Lease	26
Portfolio Information	27
Renovation Table	28
Lease-up and Development Mezzanine/Preferred/Ground Lease Investments	29
Condensed Consolidated Balance Sheets	30
Consolidated Statements of Operations	31
Reconciliation of Funds from Operations (FFO) and Core Funds from Operations (CFFO)	32
Mortgages Payable Summary Information	33
2021 Projected Guidance Information	35
Definitions of Non-GAAP Financial Measures	36

 

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 24, 2020, 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.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

 

  

For Immediate Release

 

Bluerock Residential Growth REIT Announces Fourth Quarter 2020 Results

 

-                  Total Revenues Grew 6.6% YoY -

-                  Same Store Average Occupancy Increased 1.4% -

-                  Collected 97% of Fourth Quarter Rents -

 

New York, NY (February 11, 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 December 31, 2020.

 

“We continue to drive solid same store occupancy, average rent, and operating margins performance in our investments in highly amenitized, live/work/play apartment communities, even with the challenges of COVID-19,” said Ramin Kamfar, Company Chairman and CEO. “Our increased occupancy, sequential quarterly rent growth improvement, and consistent elevated rental collections throughout the pandemic reflect a resilient Class A affordable suburban based portfolio well positioned to outperform in the coming quarters. We will also continue to opportunistically allocate capital through dispositions and new investments, as well as opportunistic share repurchases and redemption of our preferred equity.”

 

Fourth Quarter Highlights

 

-

Total revenues grew 6.6% to $56.0 million for the quarter from $52.5 million in the prior year period.

 

-

Net loss attributable to common stockholders for the fourth quarter of 2020 was ($1.13) per diluted share, as compared to net loss attributable to common stockholders of ($0.62) per diluted share in the prior year period.

 

-

Property Net Operating Income (“NOI”) grew 9.7% to $30.9 million from $28.2 million in the prior year period.

 

-

Portfolio occupancy was 95.4% at December 31, 2020, up 140 basis points from the prior year.

 

-

Same store average occupancy increased 140 basis points and same store average rent increased 0.2%, as compared to the prior year period.

 

-

Same store revenue increased 0.6% and same store NOI increased 0.2%, as compared to the prior year period.

 

-

Improved operating margins by 50 basis points year over year to 62.1%.

 

-

Blended lease rate growth of 1.0%, up 60 basis points on a sequential quarter-over-quarter basis. January 2021 average lease growth accelerated to 1.4%, led by renewals at 4.4% and new leases at negative 1%.

 

-

Collected 97% of rents from its multifamily properties for the three months ended December 31, 2020.

 

-

Core funds from operations attributable to common shares and units (“CFFO”) was $6.1 million, compared to $6.7 million in the prior year period. CFFO per diluted share was $0.18 for the fourth quarter as compared to $0.21 in the prior year period.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

-

Consolidated real estate investments, at cost, were approximately $2.3 billion.

 

-

Acquired three multifamily communities totaling 968 units for a total purchase price of $166 million.

 

-

Made two additional Strategic Portfolio preferred equity investments in stabilized properties totaling $5 million and committed to another preferred equity investment in a development project for $10 million.

 

-

Completed additional funding for eleven preferred equity, mezzanine loan, and ground lease investments totaling $20 million.

 

-

Sold one operating asset for a sale price of $38 million and net proceeds of $10 million. The asset was sold at an in-place cap rate of 3.3% adjusting for the buyer’s year one taxes and $300 per unit replacement reserves.

 

-

Sold three development investments for gross sales pricing of $218 million netting the Company proceeds of $70 million – two mezzanine loan repayments yielded $55 million and one preferred equity investment returned $15 million in net proceeds to the Company.

 

-

Completed 65 value-add unit upgrades during the quarter achieving an average 23.9% ROI.

 

-

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

 

-

Raised $76.2 million through its continuous registered Series T Preferred Stock offering in the quarter.

 

-

Completed partial redemptions of its 8.25% Series A Cumulative Redeemable Preferred Stock totaling $85 million, including accrued and unpaid dividends. Subsequent to quarter end, the Company announced it will redeem the remaining $55 million outstanding on February 26th.

 

-

Repurchased 2,851,975 shares of Class A common stock during the quarter at an average price of $9.81 per share.

 

-

As of December 31, 2020, had $208.3 million of unrestricted cash and availability under its revolving credit facilities.

 

Full Year Highlights

 

-

Total revenues grew 4.7% to $219.8 million for the year from $210.0 million in the prior year.

 

-

Net loss attributable to common stockholders for 2020 was ($1.91) per diluted share, as compared to ($0.91) per diluted share in the prior year.

 

-

Property NOI grew 8.4% to $120.2 million, from $110.9 million in the prior year.

 

-

Same store revenue and NOI increased 0.9% and 0.3%, respectively, as compared to the prior year.

 

-

Completed 310 value-add unit upgrades during the year producing an average 23.3% ROI through increased monthly rental rates.

 

-

Improved operating margin by 140 basis points year over year to 61.2%.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

  

-

CFFO was $23.7 million, compared to $25.4 million in the prior year. CFFO per diluted share was $0.72 for the year as compared to $0.82 in the prior year.

 

-

Acquired six multifamily communities totaling 1,898 units for a total purchase price of $338 million.

 

-

Made five additional Strategic Portfolio preferred equity investments in stabilized properties totaling $17 million and committed to another preferred equity investment in a development project for $10 million.

 

-

Committed to two mezzanine loan investments in development properties for $22 million.

 

-

Purchased land for a ground lease for $3 million and committed $20 million for the ground lease tenant’s multifamily development.

 

-

Completed additional funding for thirteen preferred equity, mezzanine loan, and ground lease investments totaling $38 million and invested $4 million to buyout the noncontrolling interests in an asset.

 

-

Sold five operating assets for a sales price of $245 million and net proceeds of $90 million.

 

-

Sold four development investments for gross sales pricing of $283 million netting the Company proceeds of $92 million – two mezzanine loan repayments yielded $55 million and two preferred equity investments returned $38 million in net proceeds to the Company.

 

-

Paid quarterly dividends amounting to $0.65 on an annual basis in cash per share of common stock.

 

-

Raised $243 million through its continuous registered Series T Preferred Stock offering during the year.

 

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.

 

COVID-19 Pandemic Update

 

Since the beginning of the COVID-19 pandemic, the Company has executed on actions to prioritize the health and well-being of its tenants, business partners, service providers and employees, while striving to provide the highest quality living experience possible and facilitating virtual leasing and services.

 

Post-Quarter Operational Performance

 

•

As of January 31, 2021, the Company had collected 97% of January rents from its multifamily properties.

 

•

Occupancy and availability remains strong at 95.6% and 7.4%, respectively, as of January 31, 2021.

 

•

In January, average lease rate grew 1.4% year over year.

 

Current Liquidity

 

Due to the uncertainties presented by the COVID-19 pandemic, the Company continues to take measures to ensure an appropriate level of liquidity and believes it has sufficient liquidity through this uncertain period.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

•

The Company has approximately $158 million in unrestricted cash and availability under its revolving credit facilities as of January 31, 2021.

 

•

Over $43 million was raised from the Company’s continuous registered Series T Preferred Stock offering to date in 2021.

 

Fourth Quarter 2020 Financial Results

 

Net loss attributable to common stockholders for the fourth quarter of 2020 was ($26.2) million, compared to net loss attributable to common stockholders of ($13.8) million in the prior year period. Net loss attributable to common stockholders included non-cash expenses of $31.2 million or $1.33 per share in the fourth quarter of 2020 compared to $18.6 million or $0.83 per share for the prior year period, which included a $16.4 million provision for credit loss on a preferred equity investment, primarily due to the submarket conditions in Houston, Texas impacting the underlying property operations.

 

CFFO for the fourth quarter of 2020 was $6.1 million, or $0.18 per diluted share, compared to $6.7 million, or $0.21 per diluted share, in the prior year period. CFFO was positively impacted by growth in property NOI of $2.7 million and preferred returns of $0.7 million. This was primarily offset by a year-over-year decrease in interest income of $0.5 million, an increase in general and administrative expense of $0.1 million, and preferred stock dividends of $2.8 million.

 

Total Portfolio Performance

 

$ In thousands, except average rental rates			4Q20				4Q19				Variance				YTD20				YTD19				Variance
Total Revenues (1)		$	55,987			$	52,520				6.6	%		$	219,848			$	209,971				4.7	%
Property Operating Expenses		$	18,861			$	17,600				7.2	%		$	76,301			$	74,449				2.5	%
NOI		$	30,949			$	28,200				9.7	%		$	120,221			$	110,927				8.4	%
Operating Margin			62.1	%			61.6	%			50	bps			61.2	%			59.8	%			140	bps
Average Occupancy Percentage			94.9	%			93.6	%			130	bps			94.7	%			93.8	%			90	bps
Average Rental Rate		$	1,318			$	1,319				(0.1	%)		$	1,324			$	1,311				1.0	%

 

(1)	Including interest income

 

For the fourth quarter of 2020, property revenues increased by 8.8% compared to the same prior year period. Total portfolio NOI was $30.9 million, an increase of $2.7 million, or 9.7%, compared to the same period in the prior year. Property NOI margins expanded by 50 basis points to 62.1% of revenue for the quarter, compared to 61.6% of revenue in the prior year quarter.

 

Same Store Portfolio Performance

 

 

$ In thousands, except average rental rates			4Q20				4Q19				Variance				YTD20				YTD19				Variance
Revenues		$	41,325			$	41,092				0.6	%		$	142,199			$	140,900				0.9	%
Property Operating Expenses		$	15,779			$	15,609				1.1	%		$	56,660			$	55,598				1.9	%
NOI		$	25,546			$	25,483				0.2	%		$	85,539			$	85,302				0.3	%
Operating Margin			61.8	%			62.0	%			(20	)bps			60.2	%			60.5	%			(30	)bps
Average Occupancy Percentage			94.9	%			93.5	%			140	bps			94.7	%			93.8	%			90	bps
Average Rental Rate		$	1,318			$	1,315				0.2	%		$	1,341			$	1,325				1.2	%

 

The Company’s same store portfolio for the quarter ended December 31, 2020 included 28 properties. For the fourth quarter of 2020, same store NOI was $25.5 million, an increase of $0.1 million, or 0.2%, compared to the 2019 period. Same store property revenues increased by 0.6% compared to the 2019 period, primarily driven by a 140-basis point increase in occupancy and 0.2% increase in average rental rates; of our 28 same store properties, 22 recognized occupancy increases and 15 recognized rental rate increases during the period. This was offset by $0.3 million increase in bad debt expense due to the impact of COVID-19.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Same store expenses increased 1.1%, or $0.2 million, primarily because of a $0.2 million repairs and maintenance expense increase due to timing. Non-controllable expenses were essentially flat; insurance expenses increased $0.2 million due to industrywide multifamily price increases offset by a $0.2 million real estate tax decrease from prior year. Real estate tax decrease was due to a $0.4 million credit in the current year offset by $0.2 million of municipality tax increases.

 

Renovation Activity

 

The Company completed 65 value-add unit upgrades during the fourth quarter achieving an average 23.9% ROI. Since inception, within the existing portfolio, the Company has completed 2,955 value-add unit upgrades at an average cost of $5,916 per unit and achieved an average monthly rental rate increase of $116 per unit, equating to an average 23.6% ROI on all unit upgrades leased as of December 31, 2020. The Company has identified approximately 4,421 remaining units within the existing portfolio for value-add upgrades with similar projected economics to the completed renovations.

 

Portfolio Activity

 

The Company completed the following investments:

 

-

Acquired a 100% interest in a 266-unit apartment community located in Morrisville, North Carolina, known as Carrington at Perimeter Park. The total purchase price was $52.0 million, funded in part by a $31.3 million mortgage loan secured by the property.

 

-

Acquired a 100% interest in a 270-unit apartment community located in Austin, Texas, known as Elan. The total purchase price was $39.5 million, funded in part by a $25.6 million mortgage loan secured by the property.

 

-

Acquired a 90% interest in a 432-unit apartment community located in Mesa, Arizona, known as Cielo on Gilbert. The total purchase price was $74.3 million, funded in part by a $58.0 million mortgage loan secured by the property.

 

-

Made additional Strategic Portfolio preferred equity investments totaling $5 million in two stabilized assets with 388-units called Water’s Edge and Hunter’s Pointe, both located in Pensacola, Florida.

 

-

Entered into a preferred equity commitment to invest $10.2 million in a 208-unit development called Encore Chandler located in Chandler, Arizona.

 

-

Funded $20 million under existing preferred equity, mezzanine loan, and ground lease commitments in eleven investments.

 

The Company completed the following activity subsequent to December 31, 2020:

 

	-	On January 28, 2021, the Company sold ARIUM Grandewood for a gross sales price of $65 million and net proceeds to the Company of $25 million.
	-	Announced the redemption of its remaining outstanding Series A Preferred Stock totaling $55 million.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Balance Sheet

 

As of December 31, 2020, the Company had $208.3 million of unrestricted cash and availability under its revolving credit facilities, and $1.6 billion of indebtedness outstanding.

 

During the fourth quarter, the Company raised gross proceeds of approximately $76.2 million through the issuance of 3.0 million shares of Series T Preferred Stock at $25.00 per share. The Series T Preferred Stock continuous offering offers 20,000,000 preferred shares in the primary offering, along with 12,000,000 preferred shares pursuant to a dividend reinvestment plan. The preferred shares are offered at $25.00 per share and pay cumulative monthly dividends at a 6.15% annual rate, along with an annual stock dividend of up to 0.2% for five years.

 

The Company repurchased 2,851,975 shares of Class A Common Stock during the fourth quarter at an average price of $9.81 per share.

 

On October 21, 2020, the Company redeemed 1,393,294 shares of its 8.25% Series A Cumulative Redeemable Preferred Stock, representing approximately 25% of the total outstanding shares of Series A Preferred Stock.  The total cost to redeem the shares was $35 million, including accrued and unpaid dividends. In addition, on December 21, 2020, the Company redeemed 1,963,551 shares of its 8.25% Series A Cumulative Redeemable Preferred Stock, representing approximately 47% of the then total outstanding shares of Series A Preferred Stock. The total cost to redeem the shares was $50 million, including accrued and unpaid dividends.

 

Dividend

 

The Board of Directors authorized, and the Company declared, a quarterly cash dividend for the fourth quarter of 2020 equal to a quarterly rate of $0.1625 per share on its Class A and Class C Common Stock, payable to the stockholders of record as of December 24, 2020, which was paid on January 5, 2021. A portion of each dividend may constitute a return of capital for tax purposes.

 

The Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 8.250% Series A Cumulative Redeemable Preferred Stock for the fourth quarter of 2020, in the amount of $0.515625 per share. In addition, the Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 7.625% Series C Cumulative Redeemable Preferred Stock for the fourth quarter of 2020, in the amount of $0.4765625 per share. Further, the Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 7.125% Series D Cumulative Preferred Stock for the fourth quarter of 2020, in the amount of $0.4453125 per share.  The dividends were payable to the stockholders of record as of December 24, 2020, and were paid on January 5, 2021.

 

The Board of Directors authorized, and the Company declared, a monthly dividend of $5.00 per share of Series B Preferred Stock, payable to the stockholders of record as of October 23, 2020, November 25, 2020, and December 24, 2020, which were paid in cash on November 5, 2020, December 4, 2020 and January 5, 2021, respectively.

 

The Board of Directors authorized, and the Company declared, a monthly dividend of $0.128125 per share of Series T Preferred Stock, prorated on the basis of the actual number of days in the applicable dividend period during which each share was outstanding.  Such pro-rated dividends were payable to the stockholders of record as of October 23, 2020, November 25, 2020, and December 24, 2020, and were paid in cash on November 5, 2020, December 4, 2020 and January 5, 2021, respectively.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

The Board authorized, and the Company declared, an annual Series T Preferred Stock dividend of 0.20% per share of Series T Preferred Stock. Shares of Series T Preferred Stock that are held only for a portion of the applicable annual stock dividend period received a prorated Series T Preferred Stock dividend based on the actual number of months in the applicable annual stock dividend period during which each such share of Series T Preferred Stock was outstanding. The annual stock dividend was payable to stockholders of record on December 24, 2020 and was paid on December 29, 2020.

 

On January 13, 2021, the Board of Directors authorized, and the Company declared, a monthly dividend of $5.00 per share of Series B Preferred Stock, payable to the stockholders of record as of January 25, 2021, which was paid in cash on February 5, 2021, and as of February 25, 2021, and March 25, 2021, which will be paid in cash on March 5, 2021 and April 5, 2021, respectively.

 

On January 13, 2021, the Board of Directors authorized, and the Company declared, a monthly dividend of $0.128125 per share of Series T Preferred Stock, prorated on the basis of the actual number of days in the applicable dividend period during which each share was outstanding.  Such pro-rated dividends are payable to the stockholders of record as of January 25, 2021, which was paid in cash on February 5, 2021, and as of February 25, 2021, and March 25, 2021, which will be paid in cash on March 5, 2021 and April 5, 2021, respectively.

 

2021 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. The Company anticipates that earnings growth will be more heavily weighted towards the second half of 2021 as it realizes the upside opportunity from deploying the proceeds from opportunistic dispositions in late 2020 and early 2021, plus the implementation of institutional property management, lease-ups, and value-add renovations at its recent acquisitions. For additional guidance details underlying earnings guidance, please see page 35 of Company’s Fourth Quarter 2020 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, February 11, 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 March 11, 2021 at http://services.choruscall.com/links/brg210211.html, as well as by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10151415.

 

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.

 

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 institutional-quality 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. The Company is included in the Russell 2000 and Russell 3000 Indexes. BRG has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

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 24, 2020, 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.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Portfolio Summary

 

The following is a summary of our operating real estate and mezzanine/preferred/ground lease investments as of December 31, 2020:

 

Consolidated Operating Properties		Location		Number of Units				Year Built/ Renovated (1)				Ownership Interest			Average Rent (2)				% Occupied (3)
ARIUM Glenridge		Atlanta, GA			480				1990			90	%		$	1,289				95.4	%
ARIUM Grandewood		Orlando, FL			306				2005			100	%			1,407				93.1	%
ARIUM Hunter’s Creek		Orlando, FL			532				1999			100	%			1,413				95.7	%
ARIUM Metrowest		Orlando, FL			510				2001			100	%			1,406				93.9	%
ARIUM Westside		Atlanta, GA			336				2008			90	%			1,442				94.3	%
Ashford Belmar		Lakewood, CO			512				1988/1993			85	%			1,677				96.5	%
Avenue 25		Phoenix, AZ			254				2013			100	%			1,239				94.9	%
Carrington at Perimeter Park		Morrisville, NC			266				2007			100	%			1,247				95.9	%
Chattahoochee Ridge		Atlanta, GA			358				1996			90	%			1,388				96.6	%
Chevy Chase		Austin, TX			320				1971			92	%			964				98.1	%
Cielo on Gilbert		Mesa, AZ			432				1985			90	%			1,050				95.4	%
Citrus Tower		Orlando, FL			336				2006			97	%			1,364				96.4	%
Denim		Scottsdale, AZ			645				1979			100	%			1,236				96.6	%
Elan		Austin, TX			270				2007			100	%			1,133				93.7	%
Element		Las Vegas, NV			200				1995			100	%			1,250				97.5	%
Falls at Forsyth		Cumming, GA			356				2019			100	%			1,412				95.5	%
Gulfshore Apartment Homes		Naples, FL			368				2016			100	%			1,292				95.4	%
James on South First		Austin, TX			250				2016			90	%			1,348				93.6	%
Marquis at The Cascades		Tyler, TX			582				2009			90	%			1,214				96.0	%
Navigator Villas		Pasco, WA			176				2013			90	%			1,133				94.9	%
Outlook at Greystone		Birmingham, AL			300				2007			100	%			1,072				96.3	%
Park & Kingston		Charlotte, NC			168				2015			100	%			1,280				96.4	%
Pine Lakes Preserve		Port St. Lucie, FL			320				2003			100	%			1,377				96.9	%
Plantation Park		Lake Jackson, TX			238				2016			80	%			1,261				91.2	%
Providence Trail		Mount Juliet, TN			334				2007			100	%			1,260				95.8	%
Roswell City Walk		Roswell, GA			320				2015			98	%			1,584				94.4	%
Sands Parc		Daytona Beach, FL			264				2017			100	%			1,362				95.8	%
The Brodie		Austin, TX			324				2001			100	%			1,315				95.4	%
The District at Scottsdale		Scottsdale, AZ			332				2018			100	%			1,650				91.3	%
The Links at Plum Creek		Castle Rock, CO			264				2000			88	%			1,461				93.9	%
The Mills		Greenville, SC			304				2013			100	%			1,052				96.4	%
The Preserve at Henderson Beach		Destin, FL			340				2009			100	%			1,481				94.1	%
The Reserve at Palmer Ranch		Sarasota, FL			320				2016			100	%			1,350				95.9	%
The Sanctuary		Las Vegas, NV			320				1988			100	%			1,084				97.2	%
Veranda at Centerfield		Houston, TX			400				1999			93	%			1,017				94.8	%
Villages of Cypress Creek		Houston, TX			384				2001			80	%			1,174				94.8	%
Wesley Village		Charlotte, NC			301				2010			100	%			1,367				95.7	%
Subtotal/Average					12,722										$	1,315				95.4	%

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Mezzanine/Preferred/Ground Lease Investments		Location		Actual/ Planned Number of Units												Pro Forma Average Rent
Alexan CityCentre		Houston, TX			340											$	1,513		(2)
Alexan Southside Place		Houston, TX			270												1,639		(2)
Avondale Hills		Decatur, GA			240												1,538
Belmont Crossing		Smyrna, GA			192												831		(2)
Domain at The One Forty		Garland, TX			299												1,282		(2)
Encore Chandler		Chandler, AZ			208												1,457
Georgetown Crossing		Savannah, GA			168												1,006		(2)
Hunter’s Pointe		Pensacola, FL			204												975		(2)
Mira Vista		Austin, TX			200												1,078		(2)
Motif		Fort Lauderdale, FL			385												2,352
Park on the Square		Pensacola, FL			240												1,121		(2)
Reunion Apartments		Orlando, FL			280												1,366
Sierra Terrace		Atlanta, GA			135												1,215		(2)
Sierra Village		Atlanta, GA			154												1,212		(2)
The Commons		Jacksonville, FL			328												896		(2)
The Conley, formerly North Creek Apartments		Leander, TX			259												1,358
The Park at Chapel Hill		Chapel Hill, NC			414												1,599
Thornton Flats		Austin, TX			104												1,541		(2)
Vickers Historic Roswell		Roswell, GA			79												2,783		(2)
Water’s Edge		Pensacola, FL			184												1,118		(2)
Wayford at Concord, formerly Wayforth at Concord		Concord, NC			150												1,707
Zoey		Austin, TX			307												1,762
Subtotal/Average					5,140											$	1,443
Portfolio Properties Total/Average					17,862											$	1,353

  

(1)	Represents date of last significant renovation or year built if there were no renovations.
(2)	Represents the average effective monthly rent per occupied unit for the three months ended December 31, 2020.
(3)	Percent occupied is calculated as (i) the number of units occupied as of December 31, 2020, divided by (ii) total number of units, expressed as a percentage.

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Consolidated Statement of Operations

For the Three and Twelve Months Ended December 31, 2020 and 2019

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

 

		Three Months Ended								Year Ended
		December 31,								December 31,
		2020				2019				2020				2019
Revenues
Rental and other property revenues		$	49,810			$	45,800			$	196,522			$	185,376
Interest income from mezzanine loan and ground lease investments			6,177				6,720				23,326				24,595
Total revenues			55,987				52,520				219,848				209,971
Expenses
Property operating			18,861				17,600				76,301				74,449
Property management fees			1,269				1,192				4,988				4,899
General and administrative			6,566				5,620				24,141				22,553
Acquisition and pursuit costs			219				210				4,152				556
Weather-related losses, net			—				7				—				355
Depreciation and amortization			19,246				19,355				79,452				70,452
Total expenses			46,161				43,984				189,034				173,264
Operating income			9,826				8,536				30,814				36,707
Other income (expense)
Other income			25				68				144				68
Preferred returns on unconsolidated real estate joint ventures			3,037				2,700				11,250				9,797
Provision for credit losses			(16,369	)			—				(16,369	)			—
Gain on sale of real estate investments			1,412				—				59,508				48,680
Gain on sale of non-depreciable real estate investments			—				—				—				679
Loss on extinguishment of debt and debt modification costs			(645	)			(335	)			(14,630	)			(7,258	)
Interest expense, net			(13,700	)			(13,728	)			(55,994	)			(59,554	)
Total other expense			(26,240	)			(11,295	)			(16,091	)			(7,588	)
Net (loss) income			(16,414	)			(2,759	)			14,723				29,119
Preferred stock dividends			(15,676	)			(12,868	)			(58,463	)			(46,159	)
Preferred stock accretion			(4,873	)			(3,415	)			(16,851	)			(10,335	)
Net (loss) income attributable to noncontrolling interests
Operating Partnership units			(10,634	)			(5,032	)			(17,313	)			(6,779	)
Partially-owned properties			(116	)			(183	)			1,396				(845	)
Net loss attributable to noncontrolling interests			(10,750	)			(5,215	)			(15,917	)			(7,624	)
Net loss attributable to common stockholders		$	(26,213	)		$	(13,827	)		$	(44,674	)		$	(19,751	)
Net loss per common share - Basic		$	(1.13	)		$	(0.62	)		$	(1.91	)		$	(0.91	)
Net loss per common share – Diluted		$	(1.13	)		$	(0.62	)		$	(1.91	)		$	(0.91	)
Weighted average basic common shares outstanding			23,378,695				22,729,882				24,084,347				22,649,222
Weighted average diluted common shares outstanding			23,378,695				22,729,882				24,084,347				22,649,222

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Consolidated Balance Sheets

Fourth Quarter 2020

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

 

		December 31, 2020				December 31, 2019
ASSETS
Net Real Estate Investments
Land		$	279,481			$	268,244
Buildings and improvements			1,889,471				1,752,738
Furniture, fixtures and equipment			78,438				67,904
Total Gross Real Estate Investments			2,247,390				2,088,886
Accumulated depreciation			(186,426	)			(141,566	)
Total Net Operating Real Estate Investments			2,060,964				1,947,320
Operating real estate held for sale, net			36,213				—
Total Net Real Estate Investments			2,097,177				1,947,320
Cash and cash equivalents			83,868				31,683
Restricted cash			35,093				19,085
Notes and accrued interest receivable, net			157,734				193,781
Due from affiliates			339				2,969
Accounts receivable, prepaids and other assets, net			29,502				16,317
Preferred equity investments and investments in unconsolidated real estate joint ventures, net			83,485				126,444
In-place lease intangible assets, net			2,594				3,098
Non-real estate assets associated with operating real estate held for sale			145				—
TOTAL ASSETS		$	2,489,937			$	2,340,697
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY
Mortgages payable		$	1,490,932			$	1,425,257
Mortgages payable associated with operating real estate held for sale			38,773				—
Revolving credit facilities			33,000				18,000
Accounts payable			1,317				1,488
Other accrued liabilities			31,025				27,499
Due to affiliates			618				790
Distributions payable			13,421				13,541
Liabilities associated with operating real estate held for sale			383				—
Total Liabilities			1,609,469				1,486,575
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; 2,201,547 and 5,721,460 shares issued and outstanding at December 31, 2020 and 2019, respectively			54,332				140,355
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 513,489 and 536,695 shares issued and outstanding at December 31, 2020 and 2019, respectively			469,907				480,921
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,295,845 and 2,323,750 shares issued and outstanding at December 31, 2020 and 2019, respectively			56,462				56,797
6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 9,717,917 and 17,400 shares issued and outstanding at December 31, 2020 and 2019, respectively			219,967				388
Equity
Stockholders’ Equity
Preferred stock, $0.01 par value, 197,900,000 shares authorized; no shares issued and outstanding at December 31, 2020 and 2019			—				—
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,774,338 and 2,850,602 shares issued and outstanding at December 31, 2020 and 2019, respectively			66,867				68,705
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 22,020,950 and 23,422,557 shares issued and outstanding at December 31, 2020 and 2019, respectively			220				234
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding at December 31, 2020 and 2019			1				1
Additional paid-in-capital			304,710				311,683
Distributions in excess of cumulative earnings			(313,392	)			(253,132	)
Total Stockholders’ Equity			58,406				127,491
Noncontrolling Interests
Operating partnership units			(3,272	)			19,331
Partially owned properties			24,666				28,839
Total Noncontrolling Interests			21,394				48,170
Total Equity			79,800				175,661
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY		$	2,489,937			$	2,340,697

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

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 shares and units 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 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, gain or losses on sales of non-depreciable real estate property, shareholder activism, stock compensation expense and preferred stock accretion. Commencing January 1, 2020, we did 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 $0.3 million and $1.5 million for the three and twelve months ended December 31, 2020, 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.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Neither FFO nor CFFO is equivalent to net income, including net income 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, including net income 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.

 

We have acquired six operating properties, made eight investments through mezzanine loans, preferred equity interests or ground lease investments, and sold six operating properties subsequent to December 31, 2019. 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 loss, the most directly comparable GAAP financial measure, for the three and twelve months ended December 31, 2020 and 2019 (in thousands, except per share amounts):

 

		Three Months Ended							Year Ended
		December 31,							December 31,
		2020				2019			2020				2019
Net loss attributable to common stockholders		$	(26,213	)		$	(13,827	)	$	(44,674	)		$	(19,751	)
Add back: Net loss attributable to Operating Partnership Units			(10,634	)			(5,032	)		(17,313	)			(6,779	)
Net loss attributable to common stockholders and unit holders			(36,847	)			(18,859	)		(61,987	)			(26,530	)
Common stockholders and Operating Partnership Units pro-rata share of:
Real estate depreciation and amortization (1)			18,373				18,483			75,727				66,670
Provision for credit losses			16,369				—			16,369				—
Gain on sale of real estate investments			(1,417	)			—			(56,777	)			(48,172	)
FFO Attributable to Common Stockholders and Unit Holders			(3,522	)			(376	)		(26,668	)			(8,032	)
Common stockholders and Operating Partnership Units pro-rata share of:
Acquisition and pursuit costs			219				210			4,152				556
Non-cash interest expense			701				826			3,025				3,174
Unrealized loss on derivatives			48				32			115				2,450
Loss on extinguishment of debt and debt modification costs			647				335			14,238				7,199
Weather-related losses, net			—				7			—				313
Non-real estate depreciation and amortization			122				121			486				448
Gain on sale of non-depreciable real estate investments			—				—			—				(679	)
Shareholder activism			—				—			—				393
Other income, net			(351	)			(68	)		(400	)			(68	)
Non-cash preferred returns on unconsolidated real estate joint ventures			—				(353	)		—				(1,291	)
Non-cash equity compensation			3,329				2,506			11,917				10,615
Preferred stock accretion			4,873				3,415			16,851				10,335
CFFO Attributable to Common Stockholders and Unit Holders		$	6,066			$	6,655		$	23,716			$	25,413
Per Share and Unit Information:
FFO Attributable to Common Stockholders and Unit Holders - diluted		$	(0.11	)		$	(0.01	)	$	(0.81	)		$	(0.26	)
CFFO Attributable to Common Stockholders and Unit Holders - diluted		$	0.18			$	0.21		$	0.72			$	0.82
Weighted average common shares and units outstanding - diluted			32,994,897				31,455,630			33,116,871				30,899,927
(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.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

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 (unaudited and dollars in thousands).

 

		Three Months Ended								Year Ended
		December 31,								December 31,
		2020				2019				2020				2019
Net loss attributable to common stockholders		$	(26,213	)		$	(13,827	)		$	(44,674	)		$	(19,751	)
Net loss attributable to noncontrolling interests			(10,750	)			(5,215	)			(15,917	)			(7,624	)
Preferred stock dividends			15,676				12,868				58,463				46,159
Preferred stock accretion			4,873				3,415				16,851				10,335
Interest expense, net			13,700				13,728				55,994				59,554
Real estate depreciation and amortization			19,199				19,309				79,267				70,079
Provision for credit losses			16,369				—				16,369				—
Gain on sale of real estate investments			(1,412	)			—				(59,508	)			(48,680	)
Loss on extinguishment of debt and debt modification costs			645				335				14,630				7,258
EBITDAre		$	32,087			$	30,613			$	121,475			$	117,330
Acquisition and pursuit costs			219				210				4,152				556
Non-real estate depreciation and amortization			122				121				486				448
Weather-related losses, net			—				7				—				355
Gain on sale of non-depreciable real estate investments			—				—				—				(679	)
Shareholder activism			—				—				—				393
Non-cash equity compensation			3,329				2,506				11,917				10,615
Other income, net			(351	)			(68	)			(400	)			(68	)
Non-cash preferred returns on unconsolidated real estate joint ventures			—				(353	)			—				(1,291	)
Adjusted EBITDAre		$	35,406			$	33,036			$	137,630			$	127,659

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.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

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 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								Year Ended
		December 31,								December 31,
		2020				2019				2020				2019
Net loss attributable to common stockholders		$	(26,213	)		$	(13,827	)		$	(44,674	)		$	(19,751	)
Add back: Net loss attributable to Operating Partnership Units			(10,634	)			(5,032	)			(17,313	)			(6,779	)
Net loss attributable to common stockholders and unit holders			(36,847	)			(18,859	)			(61,987	)			(26,530	)
Add common stockholders and Operating Partnership Units pro-rata share of:
Real estate depreciation and amortization			18,373				18,483				75,727				66,670
Non-real estate depreciation and amortization			122				121				486				448
Non-cash interest expense			701				826				3,025				3,174
Unrealized loss on derivatives			48				32				115				2,450
Loss on extinguishment of debt and debt modification costs			647				335				14,238				7,199
Provision for credit losses			16,369				—				16,369				—
Property management fees			1,211				1,135				4,751				4,645
Acquisition and pursuit costs			219				210				4,152				556
Corporate operating expenses			6,490				5,545				23,770				22,261
Weather-related losses, net			—				7				—				313
Preferred dividends			15,676				12,868				58,463				46,159
Preferred stock accretion			4,873				3,415				16,851				10,335
Less common stockholders and Operating Partnership Units pro-rata share of:
Other income, net			25				68				74				68
Preferred returns on unconsolidated real estate joint ventures			3,037				2,700				11,381				9,797
Interest income from mezzanine loan and ground lease investments			6,177				6,720				23,326				24,595
Gain on sale of real estate investments			1,417				—				56,777				48,172
Gain on sale of non-depreciable real estate investments			—				—				—				679
Pro-rata share of properties’ income			17,226				14,630				64,402				54,369
Add:
Noncontrolling interest pro-rata share of partially owned property income			799				724				3,074				2,810
Total property income			18,025				15,354				67,476				57,179
Add:
Interest expense			12,924				12,846				52,745				53,748
Net operating income			30,949				28,200				120,221				110,927
Less:
Non-same store net operating income			5,403				2,717				34,682				25,625
Same store net operating income (1)		$	25,546			$	25,483			$	85,539			$	85,302

 

(1)	Same store portfolio for the three months ended December 31, 2020 consists of 28 properties, which represent 9,958 units.  Same store portfolio for the year ended December 31, 2020 consists of 24 properties, which represent 8,459 units.

 

 

Bluerock Residential Growth REIT, Inc.

Fourth Quarter Earnings Release

 

Contact

Investors:

(888) 558.1031

investor.relations@bluerockre.com

 

Media:

Josh Hoffman

(208) 475.2380

jhoffman@bluerockre.com

#

  

 

Bluerock Residential Growth REIT, Inc.

Financial and Operating Highlights

For the Three and Twelve Months Ended December 31, 2020

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

 

		Three Months Ended												Year Ended
		December 31,												December 31,
OPERATING INFORMATION		2020				2019				% Change				2020				2019				% Change
Total revenue		$	55,987			$	52,520				6.6	%		$	219,848			$	209,971				4.7	%
Total assets		$	2,489,937			$	2,340,697				6.4	%		$	2,489,937			$	2,340,697				6.4	%
Property NOI (1)		$	30,949			$	28,200				9.7	%		$	120,221			$	110,927				8.4	%
Property NOI margins			62.1	%			61.6	%			0.8	%			61.2	%			59.8	%			2.3	%
Net loss per common share - Diluted		$	(1.13	)		$	(0.62	)			-			$	(1.91	)		$	(0.91	)			-
CFFO attributable to common stockholders and unit holders per share (2)		$	0.18			$	0.21				(14.3	%)		$	0.72			$	0.82				(12.2	%)

 

(1)	See page 38 for the Company's definition of this non-GAAP measurement and reasons for using it.
(2)	See page 36 for the Company's definition of this non-GAAP measurement and reasons for using it.

 

 

Bluerock Residential Growth REIT, Inc.

Share and Unit Information

Fourth Quarter 2020

(Unaudited)

 

Weighted Average Common Stock and Units Outstanding for the quarter ended December 31, 2020
Class A Common Stock			23,302,092
Class C Common Stock			76,603
Weighted Average Common Stock Outstanding, Diluted			23,378,695
Restricted Stock Grants (1)			92,865
Weighted Average Common Stock Outstanding, Diluted			23,471,560
OP Units			6,314,926
LTIP Units			3,208,411
Weighted Average Common Stock and Total Units Outstanding, Diluted			32,994,897
Outstanding Common Stock and Units at December 31, 2020			32,455,018
Outstanding 8.250% Series A Cumulative Redeemable Preferred Stock at December 31, 2020			2,201,547
Outstanding 6.000% Series B Redeemable Preferred Stock at December 31, 2020			513,489
Outstanding 7.625% Series C Cumulative Redeemable Preferred Stock at December 31, 2020			2,295,845
Outstanding 7.125% Series D Cumulative Preferred Stock at December 31, 2020			2,774,338
Outstanding 6.150% Series T Redeemable Preferred Stock at December 31, 2020			9,717,917

 

(1)	Potential dilution from vesting of restricted stock grants issued to employees for 92,865 shares of common stock.

 

The following table reflects the impact of various LTIP Unit issuances, share repurchases, and other share/unit changes subsequent to September 30, 2020:

 

Share Type		Shares and units outstanding September 30, 2020				Class A common share repurchase				Class A common from Series B and Series T holder redemptions				LTIP Issuances				Other				Shares and units outstanding December 31, 2020				Ownership %
Class A Common Stock			24,589,389				(2,851,975	)			281,437				-				2,099				22,020,950				67.85	%
Class C Common Stock			76,603				-				-				-				-				76,603				0.24	%
Total share equivalents			24,665,992				(2,851,975	)			281,437				-				2,099				22,097,553				68.09	%
OP Units			6,314,754				-				-				-				(3,898	)			6,310,856				19.44	%
LTIP Units			3,983,578				-				-				65,221				(2,190	)			4,046,609				12.47	%
Total noncontrolling interest			10,298,332				-				-				65,221				(6,088	)			10,357,465				31.91	%
Total shares, OP and LTIP Units			34,964,324				(2,851,975	)			281,437				65,221				(3,989	)			32,455,018				100.00	%

 

 

Bluerock Residential Growth REIT, Inc.

EBITDAre and Interest Information

Fourth Quarter 2020

(Unaudited and dollars in thousands)

 

		Three Months Ended
		December 31,
		2020
Q4 EBITDAre Calculation
Net loss attributable to common stockholders		$	(26,213	)
Net loss attributable to noncontrolling interests			(10,750	)
Preferred stock dividends			15,676
Preferred stock accretion			4,873
Interest expense, net			13,700
Real estate depreciation and amortization			19,199
Provision for credit losses			16,369
Gain on sale of real estate investments			(1,412	)
Loss on extinguishment of debt and debt modification costs			645
EBITDAre (1)		$	32,087
Acquisition and pursuit costs			219
Non-real estate depreciation and amortization			122
Non-cash equity compensation			3,329
Other income, net			(351	)
Adjusted EBITDAre		$	35,406
Modified Q4 EBITDAre Calculation (2)
Adjusted EBITDAre		$	35,406
Adjustment			(573	)
Modified Q4 EBITDAre		$	34,833
Modified Q4 EBITDAre annualized		$	139,332
Modified Q4 Interest Calculation (2)(3)
Interest expense		$	12,924
Adjustment			700
Modified Q4 interest expense		$	13,624
Modified Q4 interest expense annualized		$	54,496

 

(1)	See page 37 for a reconciliation of net income attributable to common stockholders to EBITDAre and the Company's definition of EBITDAre and reasons for using it.
(2)	Adjustment to EBITDAre and interest expense represents the estimated impact over the full period of the following activity assuming the transactions had occurred on October 1, 2020: (i) acquisitions of Elan, Carrington at Perimeter Park, and Cielo on Gilbert, (ii) sale of Cade Boca Raton, (iii) sales of Arlo, Novel Perimeter, and Riverside Apartments, and (iv) changes in investments at Alexan CityCentre, Avondale Hills, Domain at The One Forty, Reunion Apartments, Strategic Portfolio, The Conley (formerly North Creek Apartments), Vickers Historic Roswell, and Zoey.  Actual results may differ significantly from the presented, adjusted amounts including annualized amounts.
(3)	Interest expense excludes non-cash interest expense.

 

 

Bluerock Residential Growth REIT, Inc.

Financial Statistics

Fourth Quarter 2020

(Unaudited and dollars in thousands)

 

		Three Months  Ended
		December 31,
		2020
Interest Coverage Ratio
Modified Q4 EBITDAre *		$	34,833
Modified Q4 interest expense (4) *			13,624
Interest coverage ratio			2.56	x
Quarterly Fixed Charge Coverage Ratio
Modified Q4 interest expense (4) *		$	13,624
Preferred stock dividends			15,676
Total fixed charges		$	29,300
Modified Q4 EBITDAre *			34,833
Modified Q4 EBITDAre fixed charge coverage ratio			1.19	x
Net Debt / Modified EBITDAre Ratio
Total debt (1)		$	1,567,643
Less: cash (3)			(118,961	)
Net debt (total debt less cash)		$	1,448,682
Modified Q4 EBITDAre (annualized)*			139,332
Net debt / modified EBITDAre ratio			10.40	x
Leverage as a Percentage of Assets
Total debt (1)		$	1,567,643
Total undepreciated assets (2)			2,684,692
Total debt / total undepreciated assets			58.4	%
Net debt / net undepreciated assets (less cash)			56.5	%
Leverage as a Percentage of Enterprise Value
Total market cap (5)		$	1,353,870
Total debt (1)			1,567,643
Total enterprise value		$	2,921,513
Total debt / total enterprise value			53.7	%
Net debt / total enterprise value			49.6	%

 

(1)	Total debt excludes amortization of fair market value adjustments of $6.5 million and deferred financing costs of $11.4 million.
(2)	Total undepreciated assets is calculated as total assets plus accumulated depreciation on real estate assets.
(3)	Cash includes cash, cash equivalents, and restricted cash.
(4)	Interest expense excludes non-cash interest expense.
(5)	Total market cap is calculated by using common shares, preferred shares, and equivalents (OP Units/LTIP Units) multiplied by the December 31, 2020 closing share prices.
*	Adjustment to EBITDAre and interest expense represents the estimated impact over the full period of the following activity assuming the transactions had occurred on October 1, 2020: (i) acquisitions of Elan, Carrington at Perimeter Park, and Cielo on Gilbert, (ii) sale of Cade Boca Raton, (iii) sales of Arlo, Novel Perimeter, and Riverside Apartments, and (iv) changes in investments at Alexan CityCentre, Avondale Hills, Domain at The One Forty, Reunion Apartments, Strategic Portfolio, The Conley (formerly North Creek Apartments), Vickers Historic Roswell, and Zoey.  Actual results may differ significantly from the presented, adjusted amounts including annualized amounts.  See prior page for calculations.

 

 

Bluerock Residential Growth REIT, Inc.

Recent Acquisitions and Investments

(Unaudited)

 

Property		MSA		Date of Investment				Year Built/ Renovated (1)				Number of Units				Ownership Interest in Property				Purchase Price (in millions)				Average Rent (2)
Operating Properties
Avenue 25		Phoenix, AZ			1/23/2020				2013				254				100	%		$	55.6			$	1,239
Falls at Forsyth		Atlanta, GA			3/06/2020				2019				356				100	%			82.5				1,412
Chevy Chase		Austin, TX			8/11/2020				1971				320				92	%			34.5				964
Carrington at Perimeter Park		Raleigh, NC			12/01/2020				2007				266				100	%			52.0				1,247
Elan		Austin, TX			12/01/2020				2007				270				100	%			39.5				1,133
Cielo on Gilbert		Phoenix, AZ			12/23/2020				1985				432				90	%			74.3				1,050
Total/Average													1,898							$	338.4			$	1,200

 

Property		MSA		Date of Investment				Year Built/ Renovated (1)				Number of Units				Commitment Amount (in millions)				Investment Amount (in millions)				Average Rent (2)
Preferred Equity
Strategic Portfolio
Georgetown Crossing		Savannah, GA			3/20/2020				1994				168			$	2.2			$	2.2			$	1,006
Park on the Square		Pensacola, FL			3/20/2020				1999				240				5.8				5.8				1,121
The Commons		Jacksonville, FL			5/08/2020				1975				328				3.9				3.9				896
Water’s Edge		Pensacola, FL			10/01/2020				2004				184				3.3				3.3				1,118
Hunter’s Pointe		Pensacola, FL			12/16/2020				1986				204				1.7				1.7				975
Encore Chandler		Phoenix, AZ			12/31/2020				2023				208				10.2				-				1,457
Total Preferred Equity													1,332				27.1				16.9				1,094
Mezzanine
Reunion Apartments		Orlando, FL			7/01/2020				2022				280				10.0				8.0				1,366
Avondale Hills		Atlanta, GA			9/30/2020				2023				240				11.7				1.0				1,538
Total Mezzanine													520				21.7				9.0				1,445
Ground Lease
Zoey (3)		Austin, TX			3/04/2020				2022				307				23.5				15.1				1,762
Total Ground Lease													307				23.5				15.1				1,762
Total/Average													2,159			$	72.3			$	41.0			$	1,286

 

(1)	All dates are for the year construction was or is expected to be completed, or the date that a significant renovation has or will be completed.
(2)	Represents the average effective monthly rent per occupied unit for the three months ended December 31, 2020.  The average rent for the development project represents the average pro forma effective monthly rent per occupied unit for all expected units upon stabilization.
(3)	Property is a development project.  The Company acquired land and entered into a ground lease.  The purchase price includes the land acquisition of $3.1 million plus funding of $12.0 million of the $20.4 million leasehold improvement allowance.

 

 

Bluerock Residential Growth REIT, Inc.

Recent Dispositions

(Unaudited and dollars in millions)

 

Property		Location		Date Sold		Number of Units				Ownership Interest in Property				Sale Price				BRG Net Proceeds
Operating Properties
Ashton Reserve		Charlotte, NC		4/14/2020			473				100	%		$	84.6			$	31.2
Marquis at TPC		San Antonio, TX		4/17/2020			139				90	%			22.5				5.3
Enders Place at Baldwin Park		Orlando, FL		4/21/2020			220				92	%			53.2				24.0
Cade Boca Raton		Boca Raton, FL		10/26/2020			90				81	%			37.8				10.2
Total Operating Properties							922								198.1				70.7
Mezzanine
Novel Perimeter		Atlanta, GA		12/9/2020			320				—				90.6				23.6
Arlo		Charlotte, NC		12/15/2020			286				—				79.5				31.1
Total Mezzanine							606								170.1				54.7
Preferred Equity
Helios		Atlanta, GA		1/08/2020			282				—				65.6				22.7
Whetstone Apartments		Durham, NC		1/24/2020			204				—				46.5				19.6
Riverside Apartments		Austin, TX		12/22/2020			222				—				47.5				14.8
Total Preferred Equity							708								159.6				57.1
Total							2,236							$	527.8			$	182.5

 

 

Bluerock Residential Growth REIT, Inc.

Preferred Equity Investments, Notes and Accrued Interest Receivable, and Ground Lease

For the Three and Twelve Months Ended December 31, 2020

(Unaudited and dollars in thousands)

 

Multifamily Community Name		Investment Balance as of September 30, 2020				Change				Investment Balance as of December 31, 2020				Return as of December 31, 2020				CFFO Earned for the Three Months Ended December 31, 2020				CFFO Earned for the Year Ended December 31, 2020
Preferred Equity Investments
Operating – Stabilized
Alexan CityCentre		$	14,416			$	647			$	15,063				17.8	%		$	664			$	2,502
Alexan Southside Place			25,717				321				26,038				0.0	%			-				955
Mira Vista			5,250				-				5,250				10.1	%			136				539
Strategic Portfolio			22,105				4,949				27,054				10.5	%			687				2,121
Thornton Flats			4,600				-				4,600				9.0	%			104				415
Total operating - stabilized			72,088				5,917				78,005								1,591				6,532
Lease-up
The Conley, formerly North Creek Apartments			15,735				(699	)			15,036				12.5	%			505				1,966
Wayford at Concord, formerly Wayforth at Concord			6,500				-				6,500				13.0	%			216				839
Total lease-up			22,235				(699	)			21,536								721				2,805
Development
Encore Chandler (1)			-				-				-				13.0	%			-				-
Total development			-				-				-								-				-
Sold
Riverside Apartments			13,679				(13,679	)			-								399				1,662
Total sold			13,679				(13,679	)			-								399				1,730
Other			96				1				97					(2)			-				68	(3)
Provision for credit losses (4)(5)			-				(16,153	)			(16,153	)							-				-
		$	108,098			$	(24,613	)		$	83,485							$	2,711			$	11,067
Mezzanine Loans (6)
Operating - Stabilized
Domain at The One Forty (2)		$	24,017			$	298			$	24,315				5.5	%		$	334			$	1,311
Vickers Historic Roswell (2)			11,654				394				12,048				15.0	%			440				1,733
Total operating - stabilized			35,671				692				36,363								774				3,044
Lease-up
Motif (2)			75,409				27				75,436				12.9	%			2,427				9,549
Total lease-up			75,409				27				75,436								2,427				9,549
Development
Avondale Hills			-				1,021				1,021				12.0	%			3				3
Reunion Apartments			1,934				6,227				8,161				12.0	%			161				176
The Park at Chapel Hill (7)			36,413				514				36,927				11.5	%			1,046				3,077
Total development			38,347				7,762				46,109								1,210				3,256
Sold
Arlo			30,242				(30,242	)			-								962				4,161
Novel Perimeter			22,980				(22,980	)			-								673				3,084
Total sold			53,222				(53,222	)			-								1,635				7,245
Provision for credit losses (5)			-				(174	)			(174	)							-				-
		$	202,649			$	(44,915	)		$	157,734							$	6,046			$	23,094
Ground Lease - Development (6)(8)
Zoey		$	6,827				8,569				15,396				5.0	%		$	131			$	232
Provision for credit losses (5)			-				(42	)			(42	)							-				-
		$	6,827			$	8,527			$	15,354							$	131			$	232

 

(1)	The investment closed on December 31, 2020 with a loan commitment of $10.2 million, none of which had been funded as of December 31, 2020.
(2)	The Company also holds an equity method investment with 0.5% common ownership.
(3)	Represents preferred equity investments sold in early 2020, including Helios and Whetstone.
(4)	The Company recorded a credit loss of $15.9 million on the Alexan Southside Place investment under Current Expected Credit Losses ("CECL")
(5)	The Company recorded a general provision for credit losses of $439 or 18 bps on its total preferred equity, mezzanine loans and ground lease investments..
(6)	Investment balances include accrued interest.
(7)	The investment includes a $5.0 million senior loan and a $31.0 million mezzanine loan.
(8)	Ground lease investments are included in accounts receivable, prepaids and other assets.

 

 

Bluerock Residential Growth REIT, Inc.

Portfolio Information

Fourth Quarter 2020

(Unaudited) 

Multifamily Community Name		Location		Number of Units		Year Built/ Renovated(1)			Average Rent (2)				Revenue per Occupied Unit (3)			Average Occupancy
Consolidated Operating Properties:
ARIUM Glenridge		Atlanta, GA		480		1990			$	1,289			$	1,379			92.7	%
ARIUM Grandewood		Orlando, FL		306		2005				1,407				1,500			94.5	%
ARIUM Hunter’s Creek		Orlando, FL		532		1999				1,413				1,562			93.0	%
ARIUM Metrowest		Orlando, FL		510		2001				1,406				1,577			92.3	%
ARIUM Westside		Atlanta, GA		336		2008				1,442				1,602			93.3	%
Ashford Belmar		Lakewood, CO		512		1988/1993				1,677				1,862			95.4	%
Avenue 25		Phoenix, AZ		254		2013				1,239				1,399			94.1	%
Carrington at Perimeter Park		Morrisville, NC		266		2007				1,247				1,333			92.2	%
Chattahoochee Ridge		Atlanta, GA		358		1996				1,388				1,463			96.1	%
Chevy Chase		Austin, TX		320		1971				964				1,091			98.3	%
Cielo on Gilbert		Mesa, AZ		432		1985				1,050				1,186			97.2	%
Citrus Tower		Orlando, FL		336		2006				1,364				1,521			96.7	%
Denim		Scottsdale, AZ		645		1979				1,236				1,390			96.3	%
Elan		Austin, TX		270		2007				1,133				1,245			94.0	%
Element		Las Vegas, NV		200		1995				1,250				1,515			96.9	%
Falls at Forsyth		Cumming, GA		356		2019				1,412				1,536			96.1	%
Gulfshore Apartment Homes		Naples, FL		368		2016				1,292				1,399			92.4	%
James on South First		Austin, TX		250		2016				1,348				1,490			96.2	%
Marquis at The Cascades		Tyler, TX		582		2009				1,214				1,312			96.2	%
Navigator Villas		Pasco, WA		176		2013				1,133				1,207			96.0	%
Outlook at Greystone		Birmingham, AL		300		2007				1,072				1,253			94.0	%
Park & Kingston		Charlotte, NC		168		2015				1,280				1,366			95.9	%
Pine Lakes Preserve		Port St. Lucie, FL		320		2003				1,377				1,535			95.2	%
Plantation Park		Lake Jackson, TX		238		2016				1,261				1,350			92.8	%
Providence Trail		Mount Juliet, TN		334		2007				1,260				1,418			93.8	%
Roswell City Walk		Roswell, GA		320		2015				1,584				1,816			96.4	%
Sands Parc		Daytona Beach, FL		264		2017				1,362				1,486			95.3	%
The Brodie		Austin, TX		324		2001				1,315				1,484			94.7	%
The District at Scottsdale		Scottsdale, AZ		332		2018				1,650				1,829			92.0	%
The Links at Plum Creek		Castle Rock, CO		264		2000				1,461				1,540			95.9	%
The Mills		Greenville, SC		304		2013				1,052				1,191			96.8	%
The Preserve at Henderson Beach		Destin, FL		340		2009				1,481				1,631			95.9	%
The Reserve at Palmer Ranch		Sarasota, FL		320		2016				1,350				1,471			95.6	%
The Sanctuary		Las Vegas, NV		320		1988				1,084				1,130			94.6	%
Veranda at Centerfield		Houston, TX		400		1999				1,017				1,136			96.4	%
Villages of Cypress Creek		Houston, TX		384		2001				1,174				1,263			94.1	%
Wesley Village		Charlotte, NC		301		2010				1,367				1,456			94.6	%
Total Consolidated Operating Properties				12,722					$	1,315	(5)		$	1,449	(5)		94.9	%(5)
Mezzanine/Preferred/Ground Lease Investments:
Alexan CityCentre		Houston, TX		340					$	1,513			$	1,594			93.9	%
Alexan Southside Place		Houston, TX		270						1,639				1,770			93.5	%
Avondale Hills		Decatur, GA		240						1,538	(4)			N/A			N/A
Belmont Crossing		Smyrna, GA		192						831				950			96.7	%
Domain at The One Forty		Garland, TX		299						1,282				1,447			94.5	%
Encore Chandler		Chandler, AZ		208						1,457	(4)			N/A			N/A
Georgetown Crossing		Savannah, GA		168						1,006				1,115			96.0	%
Hunter’s Pointe		Pensacola, FL		204						975				1,097			99.0	%
Mira Vista		Austin, TX		200						1,078				1,188			93.3	%
Motif		Fort Lauderdale, FL		385						2,352	(4)			N/A			N/A
Park on the Square		Pensacola, FL		240						1,121				1,304			99.5	%
Reunion Apartments		Orlando, FL		280						1,366	(4)			N/A			N/A
Sierra Terrace		Atlanta, GA		135						1,215				1,365			99.3	%
Sierra Village		Atlanta, GA		154						1,212				1,330			90.5	%
The Commons		Jacksonville, FL		328						896				1,016			97.5	%
The Conley, formerly North Creek Apartments		Leander, TX		259						1,358	(4)			N/A			N/A
The Park at Chapel Hill		Chapel Hill, NC		414						1,599	(4)			N/A			N/A
Thornton Flats		Austin, TX		104						1,541				1,764			90.1	%
Vickers Historic Roswell		Roswell, GA		79						2,783				2,999			97.9	%
Water’s Edge		Pensacola, FL		184						1,118				1,328			98.6	%
Wayford at Concord, formerly Wayforth at Concord		Concord, NC		150						1,707	(4)			N/A			N/A
Zoey		Austin, TX		307						1,762	(4)			N/A			N/A
Total Mezzanine/Preferred/Ground Lease Investments				5,140					$	1,443	(6)		$	1,390	(6)		95.3	%(6)
Total Portfolio				17,862					$	1,353	(7)		$	1,438	(7)		95.0	%(7)

 

(1)	Represents date of last significant renovation or year built if no renovations.
(2)	Represents the average effective monthly rent per occupied unit for the three months ended December 31, 2020.
(3)	Revenue per occupied unit is total revenue divided by average number of occupied units for the three months ended December 31, 2020.
(4)	Represents the average pro forma effective monthly rent per occupied unit for all expected units upon stabilization.
(5)	The average effective monthly rent, revenue per occupied unit, and average occupancy including sold properties was $1,318, $1,452, and 94.9%, respectively, for the three months ended December 31, 2020.
(6)	The average effective monthly rent, revenue per occupied unit, and average occupancy including sold properties was $1,442, $1,411, and 94.6%, respectively, for the three months ended December 31, 2020.
(7)	The average effective monthly rent, revenue per occupied unit, and average occupancy including sold properties was $1,358, $1,443, and 94.8%, respectively, for the three months ended December 31, 2020.

 

 

Bluerock Residential Growth REIT, Inc.

Renovation Table

As of December 31, 2020

(Unaudited)

Units and Investment
	2020						To Date
	Completed			Completed			Total			Unrenovated Units
	in 4Q			Year-to-date			Completed			Remaining
Number of Renovations		65			310			2,955			4,421
Renovation Cost per Unit	$	7,299		$	7,719

 

Returns
		Inception-to-date
		Cost				Monthly Rent				Return on
		per Unit				Premium				Investment
Weighted Average Returns to Date		$	5,916			$	116				23.6	%

 

 

Bluerock Residential Growth REIT, Inc.

Lease-up and Development Mezzanine/Preferred/Ground Lease Investments

As of December 31, 2020

(Unaudited)

 

This table includes forward-looking statements based on current judgments and current knowledge of management, which are subject to certain risks, trends and uncertainties that could cause results to vary from those projected. Please see the paragraph on forward-looking statements on page 2 of this document for a discussion of risks and uncertainties.

 

											Actual/Estimated Dates for
Multifamily Community Name	Actual/ Planned Number of Units		Total Actual/ Estimated Construction Cost (in millions)		Cost to Date (in millions)		Actual/ Estimated Construction Cost Per Unit		Total Available Financing (in millions) (1)		Construction Start		Initial Occupancy		Construction Completion		Stabilized Operations (2)
Lease-up Investments
Motif (3)	385		138.4		133.5		359,481		70.4		1Q18		1Q20		2Q20		2Q22
The Conley, formerly North Creek Apartments (4)	259		44.0		38.4		169,884		23.6		4Q18		2Q20		4Q20		3Q21
Wayford at Concord, formerly Wayforth at Concord (4)	150		33.5		29.5		223,333		22.3		4Q18		1Q20		4Q20		1Q21
Total lease-up units	794
Development Investments
Zoey (5)	307		59.5		29.7		193,811		25.5		1Q20		1Q22		2Q22		1Q23
Reunion Apartments (3)	280		47.6		18.6		170,000		30.5		3Q20		1Q22		3Q22		1Q23
The Park at Chapel Hill (3)	414		99.2		32.5		239,614		64.3		2Q20		3Q21		4Q22		2Q23
Avondale Hills (3)	240		51.8		10.8		215,833		31.4		4Q20		1Q23		1Q23		1Q24
Encore Chandler (4)	208		47.7		7.0		229,327		31.0		3Q21		1Q23		2Q23		2Q24
Total development units	1,449
Total units	2,243

 

(1)	Represents property level only and excludes mezzanine loan financing.
(2)	We define stabilized occupancy as attainment of 90% physical occupancy.
(3)	Represents a mezzanine loan investment.
(4)	Represents a preferred equity investment. Encore Chandler, The Conley (formerly North Creek Apartments), and Wayford at Concord (formerly Wayforth at Concord) have an option to purchase the property at stabilization.
(5)	Represents a ground lease investment.

  

 

Bluerock Residential Growth REIT, Inc.

Condensed Consolidated Balance Sheets

Fourth Quarter 2020

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

	December 31, 2020			December 31, 2019
ASSETS
Net Real Estate Investments
Land	$	279,481		$	268,244
Buildings and improvements		1,889,471			1,752,738
Furniture, fixtures and equipment		78,438			67,904
Total Gross Real Estate Investments		2,247,390			2,088,886
Accumulated depreciation		(186,426	)		(141,566	)
Total Net Operating Real Estate Investments		2,060,964			1,947,320
Operating real estate held for sale, net		36,213			—
Total Net Real Estate Investments		2,097,177			1,947,320
Cash and cash equivalents		83,868			31,683
Restricted cash		35,093			19,085
Notes and accrued interest receivable, net		157,734			193,781
Due from affiliates		339			2,969
Accounts receivable, prepaids and other assets, net		29,502			16,317
Preferred equity investments and investments in unconsolidated real estate joint ventures, net		83,485			126,444
In-place lease intangible assets, net		2,594			3,098
Non-real estate assets associated with operating real estate held for sale		145			—
TOTAL ASSETS	$	2,489,937		$	2,340,697
LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY
Mortgages payable	$	1,490,932		$	1,425,257
Mortgages payable associated with operating real estate held for sale		38,773			—
Revolving credit facilities		33,000			18,000
Accounts payable		1,317			1,488
Other accrued liabilities		31,025			27,499
Due to affiliates		618			790
Distributions payable		13,421			13,541
Liabilities associated with operating real estate held for sale		383			—
Total Liabilities		1,609,469			1,486,575
8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; 2,201,547 and 5,721,460 shares issued and outstanding at December 31, 2020 and 2019, respectively		54,332			140,355
6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 513,489 and 536,695 shares issued and outstanding at December 31, 2020 and 2019, respectively		469,907			480,921
7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,295,845 and 2,323,750 shares issued and outstanding at December 31, 2020 and 2019, respectively		56,462			56,797
6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 9,717,917 and 17,400 shares issued and outstanding at December 31, 2020 and 2019, respectively		219,967			388
Equity
Stockholders’ Equity
Preferred stock, $0.01 par value, 197,900,000 shares authorized; no shares issued and outstanding at December 31, 2020 and 2019		—			—
7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,774,338 and 2,850,602 shares issued and outstanding at December 31, 2020 and 2019, respectively		66,867			68,705
Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 22,020,950 and 23,422,557 shares issued and outstanding at December 31, 2020 and 2019, respectively		220			234
Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding at December 31, 2020 and 2019		1			1
Additional paid-in-capital		304,710			311,683
Distributions in excess of cumulative earnings		(313,392	)		(253,132	)
Total Stockholders’ Equity		58,406			127,491
Noncontrolling Interests
Operating partnership units		(3,272	)		19,331
Partially owned properties		24,666			28,839
Total Noncontrolling Interests		21,394			48,170
Total Equity		79,800			175,661
TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY	$	2,489,937		$	2,340,697

 

 

Bluerock Residential Growth REIT, Inc.

Consolidated Statements of Operations

For the Three and Twelve Months Ended December 31, 2020 and 2019

(Dollars in thousands) 

 

		Three Months Ended								Year Ended
		December 31,								December 31,
		2020				2019				2020				2019
Revenues
Rental and other property revenues		$	49,810			$	45,800			$	196,522			$	185,376
Interest income from mezzanine loan and ground lease investments			6,177				6,720				23,326				24,595
Total revenues			55,987				52,520				219,848				209,971
Expenses
Property operating			18,861				17,600				76,301				74,449
Property management fees			1,269				1,192				4,988				4,899
General and administrative			6,566				5,620				24,141				22,553
Acquisition and pursuit costs			219				210				4,152				556
Weather-related losses, net			—				7				—				355
Depreciation and amortization			19,246				19,355				79,452				70,452
Total expenses			46,161				43,984				189,034				173,264
Operating income			9,826				8,536				30,814				36,707
Other income (expense)
Other income			25				68				144				68
Preferred returns on unconsolidated real estate joint ventures			3,037				2,700				11,250				9,797
Provision for credit losses			(16,369	)			—				(16,369	)			—
Gain on sale of real estate investments			1,412				—				59,508				48,680
Gain on sale of non-depreciable real estate investments			—				—				—				679
Loss on extinguishment of debt and debt modification costs			(645	)			(335	)			(14,630	)			(7,258	)
Interest expense, net			(13,700	)			(13,728	)			(55,994	)			(59,554	)
Total other expense			(26,240	)			(11,295	)			(16,091	)			(7,588	)
Net (loss) income			(16,414	)			(2,759	)			14,723				29,119
Preferred stock dividends			(15,676	)			(12,868	)			(58,463	)			(46,159	)
Preferred stock accretion			(4,873	)			(3,415	)			(16,851	)			(10,335	)
Net (loss) income attributable to noncontrolling interests
Operating Partnership units			(10,634	)			(5,032	)			(17,313	)			(6,779	)
Partially owned properties			(116	)			(183	)			1,396				(845	)
Net loss attributable to noncontrolling interests			(10,750	)			(5,215	)			(15,917	)			(7,624	)
Net loss attributable to common stockholders		$	(26,213	)		$	(13,827	)		$	(44,674	)		$	(19,751	)
Net loss per common share - Basic		$	(1.13	)		$	(0.62	)		$	(1.91	)		$	(0.91	)
Net loss per common share – Diluted		$	(1.13	)		$	(0.62	)		$	(1.91	)		$	(0.91	)
Weighted average basic common shares outstanding			23,378,695				22,729,882				24,084,347				22,649,222
Weighted average diluted common shares outstanding			23,378,695				22,729,882				24,084,347				22,649,222

 

 

Bluerock Residential Growth REIT, Inc.

Reconciliation of Funds from Operations (FFO) and Core FFO (CFFO) Attributable to Common Stockholders and Unit Holders

For the Three and Twelve Months Ended December 31, 2020 and 2019

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

 

		Three Months Ended								Year Ended
		December 31,								December 31,
		2020				2019				2020				2019
Net loss attributable to common stockholders		$	(26,213	)		$	(13,827	)		$	(44,674	)		$	(19,751	)
Add back: Net loss attributable to Operating Partnership Units			(10,634	)			(5,032	)			(17,313	)			(6,779	)
Net loss attributable to common stockholders and unit holders			(36,847	)			(18,859	)			(61,987	)			(26,530	)
Common stockholders and Operating Partnership Units pro-rata share of:
Real estate depreciation and amortization (1)			18,373				18,483				75,727				66,670
Provision for credit losses			16,369				—				16,369				—
Gain on sale of real estate investments			(1,417	)			—				(56,777	)			(48,172	)
FFO Attributable to Common Stockholders and Unit Holders			(3,522	)			(376	)			(26,668	)			(8,032	)
Common stockholders and Operating Partnership Units pro-rata share of:
Acquisition and pursuit costs			219				210				4,152				556
Non-cash interest expense			701				826				3,025				3,174
Unrealized loss on derivatives			48				32				115				2,450
Loss on extinguishment of debt and debt modification costs			647				335				14,238				7,199
Weather-related losses, net			—				7				—				313
Non-real estate depreciation and amortization			122				121				486				448
Gain on sale of non-depreciable real estate investments			—				—				—				(679	)
Shareholder activism			—				—				—				393
Other income, net			(351	)			(68	)			(400	)			(68	)
Non-cash preferred returns on unconsolidated real estate joint ventures			—				(353	)			—				(1,291	)
Non-cash equity compensation			3,329				2,506				11,917				10,615
Preferred stock accretion			4,873				3,415				16,851				10,335
CFFO Attributable to Common Stockholders and Unit Holders		$	6,066			$	6,655			$	23,716			$	25,413
Per Share and Unit Information:
FFO Attributable to Common Stockholders and Unit Holders - diluted		$	(0.11	)		$	(0.01	)		$	(0.81	)		$	(0.26	)
CFFO Attributable to Common Stockholders and Unit Holders - diluted		$	0.18			$	0.21			$	0.72			$	0.82
Weighted average common shares and units outstanding - diluted			32,994,897				31,455,630				33,116,871				30,899,927

 

(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.

 

 

Bluerock Residential Growth REIT, Inc.

Mortgages Payable Summary Information

As of December 31, 2020

(Unaudited and dollars in thousands)

 

Property		Outstanding Principal				Interest Rate				Fixed/ Floating		Maturity Date
ARIUM Glenridge		$	49,500				1.48	%		LIBOR + 1.33% subject to Cap (1)		September 1, 2025
ARIUM Hunter’s Creek			70,871				3.65	%		Fixed		November 1, 2024
ARIUM Metrowest			64,559				4.43	%		Fixed		May 1, 2025
ARIUM Westside			52,150				3.68	%		Fixed		August 1, 2023
Ashford Belmar			100,675				4.53	%		Fixed		December 1, 2025
Avenue 25 (2)			36,566				4.18	%		Fixed		July 1, 2027
Carrington at Perimeter Park (3)			31,301				4.16	%		Fixed		July 1, 2027
Chattahoochee Ridge			45,338				3.25	%		Fixed		December 5, 2024
Chevy Chase			24,400				2.47	%		LIBOR + 2.32% subject to Cap (1)		September 1, 2027
Cielo on Gilbert			58,000				2.70	%		SOFR + 2.61% subject to Cap (1)		January 1, 2031
Citrus Tower			40,627				4.07	%		Fixed		October 1, 2024
Denim (4)			101,205				3.41	%		Fixed		August 1, 2029
Elan (5)			25,574				4.19	%		Fixed		July 1, 2027
Element			29,260				3.63	%		Fixed		July 1, 2026
Fannie Facility Advance			13,936				2.75	%		LIBOR + 2.60% subject to Cap (1)		June 1, 2027
Gulfshore Apartment Homes			46,345				3.26	%		Fixed		September 1, 2029
James on South First			25,674				4.35	%		Fixed		January 1, 2024
Marquis at The Cascades I			31,668				1.76	%		LIBOR + 1.61% subject to Cap (1)		June 1, 2024
Marquis at The Cascades II			22,101				1.76	%		LIBOR + 1.61% subject to Cap (1)		June 1, 2024
Navigator Villas (6)			20,515				4.56	%		Fixed		June 1, 2028
Outlook at Greystone			22,105				4.30	%		Fixed		June 1, 2025
Park & Kingston			19,600				3.32	%		Fixed		November 1, 2026
Pine Lakes Preserve			42,728				3.13	%		LIBOR + 2.98% subject to Cap (1)		July 1, 2030
Plantation Park			26,625				4.64	%		Fixed		July 1, 2028
Providence Trail			47,950				3.54	%		Fixed		July 1, 2026
Roswell City Walk			50,043				3.63	%		Fixed		December 1, 2026
The Brodie			33,551				3.71	%		Fixed		December 1, 2023
The District at Scottsdale			75,577				1.85	%		LIBOR + 1.60% (1)		June 11, 2021
The Links at Plum Creek			39,578				4.31	%		Fixed		October 1, 2025
The Mills			25,275				4.21	%		Fixed		January 1, 2025
The Preserve at Henderson Beach			48,490				3.26	%		Fixed		September 1, 2029
The Reserve at Palmer Ranch			40,977				4.41	%		Fixed		May 1, 2025
The Sanctuary			33,707				3.31	%		Fixed		August 1, 2029
Veranda at Centerfield			26,100				1.40	%		LIBOR + 1.25% subject to Cap (1)		July 26, 2023
Villages of Cypress Creek			33,520				2.70	%		LIBOR + 2.55% subject to Cap (1)		July 1, 2027
Wesley Village			39,438				4.25	%		Fixed		April 1, 2024
Total			1,495,529
Fair value adjustments			6,489
Deferred financing costs, net			(11,086	)
Total continuing operations		$	1,490,932
Held for sale
ARIUM Grandewood (7)		$	39,114				2.95	%		(8)		July 1, 2025
Deferred financing costs, net			(341	)
Total held for sale		$	38,773
Total		$	1,529,705
Weighted Average Interest Rate			3.45	%

 

(1)	In December 2020, one-month LIBOR in effect was 0.15% and the 30-day average SOFR in effect was 0.09%.
(2)	The principal balance includes a $29.7 million senior loan at a fixed rate of 4.02% and a $6.9 million supplemental loan at a fixed rate of 4.86%.
(3)	The principal balance includes a $27.5 million senior loan at a fixed rate of 4.09% and a $3.8 million supplemental loan at a fixed rate of 4.66%.
(4)	The principal balance includes a $91.6 million senior loan at a fixed rate of 3.32% and a $9.6 million supplemental loan at a fixed rate of 4.22%.
(5)	The principal balance includes a $21.2 million senior loan at a fixed rate of 4.09% and a $4.4 million supplemental loan at a fixed rate of 4.66%.
(6)	The principal balance includes a $14.8 million senior loan at a fixed rate of 4.31% and a $5.7 million supplemental loan at a fixed rate of 5.23%.
(7)	The property was subsequently sold in January 2021.
(8)	The principal balance includes a $19.6 million advance at a fixed rate of 4.35% and a $19.5 million advance at a variable rate of 1.55% as of December 31, 2020.

 

 

Bluerock Residential Growth REIT, Inc.

Mortgages Payable Summary Information Continued

As of December 31, 2020

(Unaudited and dollars in thousands)

 

Mortgages Payable Maturity Schedules

 

Year		Fixed Rate				Floating Rate				Total				% of Total
2021		$	8,796			$	77,418			$	86,214	(1)			5.62	%
2022			11,749				3,588				15,337				1.00	%
2023			97,388				29,963				127,351				8.30	%
2024			222,223				53,935				276,158				17.99	%
2025			303,520				65,322				368,842				24.03	%
Thereafter			493,908				166,833				660,741				43.06	%
		$	1,137,584			$	397,059			$	1,534,643				100.00	%
Fair Value Adjustments			6,489				-				6,489
Subtotal		$	1,144,073			$	397,059			$	1,541,132
Deferred Financing Costs, net			(8,231	)			(3,196	)			(11,427	)
Total		$	1,135,842			$	393,863			$	1,529,705

 

		Amounts				% of Total				Weighted Average Interest Rates				Weighted Average Maturities (years)
Continuing Operations
Secured Fixed Rate Debt		$	1,124,488				74.9	%			3.90	%			5.5
Secured Floating Rate Debt			377,530				25.1	%			2.18	%			5.2
Total/Average Continuing Operations		$	1,502,018				100.0	%			3.47	%			5.4
Held for Sale
Secured Fixed Rate Debt		$	19,585				50.1	%			4.35	%			4.5
Secured Floating Rate Debt			19,529				49.9	%			1.55	%			4.5
Total/Average Held for Sale		$	39,114				100.0	%			2.95	%			4.5
Total/Average		$	1,541,132				100.0	%			3.45	%			5.4

 

(1)	$75.6 million represents a loan in connection with The District at Scottsdale. The loan has a June 2021 maturity date and contains two (2) three-month extension options, subject to certain conditions.

 

 

Bluerock Residential Growth REIT, Inc.

2021 Projected Guidance

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

 

		2021 Outlook (3)
		Low				High
Core Funds from Operations Attributable to Common Stockholders and Unit Holders per share		$	0.65			$	0.70
Same Store Growth
Rental income growth			2.0	%			4.0	%
Property operating expense growth			4.0	%			6.0	%
NOI growth			0.0	%			3.0	%
Property management fee as a percentage of revenue			2.4	%			2.2	%
General and administrative expenses (1)			12,500				12,000
Income from preferred equity and mezzanine investments			29,100				29,100
Normal recurring capital expenditures (2)			2,900				2,700
Value-add Upgrades
Forecasted unit count			250				750
Return on investment			15	%			20	%
Investments
Total gross asset value			600,000				800,000
Dispositions
Total gross asset value			350,000				500,000
Noncontrolling Interest, Preferred Stock and Share Count Assumptions
Noncontrolling interest percentage of CFFO - partially owned properties			4.0	%			3.9	%
Series T preferred stock raise			200,000				350,000
Preferred stock dividends			54,000				58,000
Estimated weighted average diluted common shares and units outstanding			39,100				39,100

 

(1)	General and administrative expenses exclude non-cash expenses, such as depreciation and non-cash equity compensation.
(2)	Normally recurring capital expenditures exclude development, investment, revenue enhancing and non-recurring capital expenditures.
(3)	The Company has not reconciled projected Core Funds from Operations Attributable to Common Stockholders and Unit Holders per share (“CFFO”) guidance to the corresponding GAAP financial measure because it does not provide guidance for various reconciling items. The Company is unable to provide guidance for these reconciling items since certain items that impact net income are outside of its control and cannot be reasonably predicted. Accordingly, reconciliations to the corresponding GAAP financial measures are not available.

 

 

Bluerock Residential Growth REIT, Inc.

Definitions of Non-GAAP Financial Measures

 

The foregoing supplemental financial data includes certain non-GAAP financial measures that we believe are helpful in understanding our business, 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, Attributable to Common Stockholders and Unit Holders

 

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 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 expense, unrealized gains or 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, gains or losses on sales of non-depreciable real estate property, shareholder activism, stock compensation expense and preferred stock accretion. Commencing January 1, 2020, we did 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 $0.3 million and $1.5 million for the three and twelve months ended December 31, 2020, 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, including net income 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, including net income 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.

 

We have acquired six operating properties, made eight investments through mezzanine loans, preferred equity interests or ground lease investments, and sold six operating properties subsequent to December 31, 2019. The results presented are not directly comparable and should not be considered an indication of our future operating performance (unaudited and dollars in thousands, except share and per share data).

 

Same Store Properties

 

Same store properties are conventional multifamily residential apartments which were owned and operational for the entire periods presented.

 

 

Bluerock Residential Growth REIT, Inc.

Definitions of Non-GAAP Financial Measures

(Unaudited and dollars in thousands)

 

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, 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.

 

The reconciliations of net loss attributable to common stockholders to EBITDAre and Adjusted EBITDAre are presented in the table below:

 

		Three Months Ended								Year Ended
		December 31,								December 31,
		2020				2019				2020				2019
Net loss attributable to common stockholders		$	(26,213	)		$	(13,827	)		$	(44,674	)		$	(19,751	)
Net loss attributable to noncontrolling interests			(10,750	)			(5,215	)			(15,917	)			(7,624	)
Preferred stock dividends			15,676				12,868				58,463				46,159
Preferred stock accretion			4,873				3,415				16,851				10,335
Interest expense, net			13,700				13,728				55,994				59,554
Real estate depreciation and amortization			19,199				19,309				79,267				70,079
Provision for credit losses			16,369				—				16,369				—
Gain on sale of real estate investments			(1,412	)			—				(59,508	)			(48,680	)
Loss on extinguishment of debt and debt modification costs			645				335				14,630				7,258
EBITDAre		$	32,087			$	30,613			$	121,475			$	117,330
Acquisition and pursuit costs			219				210				4,152				556
Non-real estate depreciation and amortization			122				121				486				448
Weather-related losses, net			—				7				—				355
Gain on sale of non-depreciable real estate investments			—				—				—				(679	)
Shareholder activism			—				—				—				393
Non-cash equity compensation			3,329				2,506				11,917				10,615
Other income, net			(351	)			(68	)			(400	)			(68	)
Non-cash preferred returns on unconsolidated real estate joint ventures			—				(353	)			—				(1,291	)
Adjusted EBITDAre		$	35,406			$	33,036			$	137,630			$	127,659

 

 

Bluerock Residential Growth REIT, Inc.

Definitions of Non-GAAP Financial Measures

(Unaudited and dollars in thousands)

 

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.

 

We have acquired six operating properties, made eight investments through mezzanine loans, preferred equity interests or ground lease investments, and sold six operating properties subsequent to December 31, 2019. Therefore, the results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance.

 

The following table reflects net 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:

 

		Three Months Ended								Year Ended
		December 31,								December 31,
		2020				2019				2020				2019
Net loss attributable to common stockholders		$	(26,213	)		$	(13,827	)		$	(44,674	)		$	(19,751	)
Add back: Net loss attributable to Operating Partnership Units			(10,634	)			(5,032	)			(17,313	)			(6,779	)
Net loss attributable to common stockholders and unit holders			(36,847	)			(18,859	)			(61,987	)			(26,530	)
Add common stockholders and Operating Partnership Units pro-rata share of:
Real estate depreciation and amortization			18,373				18,483				75,727				66,670
Non-real estate depreciation and amortization			122				121				486				448
Non-cash interest expense			701				826				3,025				3,174
Unrealized loss on derivatives			48				32				115				2,450
Loss on extinguishment of debt and debt modification costs			647				335				14,238				7,199
Provision for credit losses			16,369				—				16,369				—
Property management fees			1,211				1,135				4,751				4,645
Acquisition and pursuit costs			219				210				4,152				556
Corporate operating expenses			6,490				5,545				23,770				22,261
Weather-related losses, net			—				7				—				313
Preferred dividends			15,676				12,868				58,463				46,159
Preferred stock accretion			4,873				3,415				16,851				10,335
Less common stockholders and Operating Partnership Units pro-rata share of:
Other income, net			25				68				74				68
Preferred returns on unconsolidated real estate joint ventures			3,037				2,700				11,381				9,797
Interest income from mezzanine loan and ground lease investments			6,177				6,720				23,326				24,595
Gain on sale of real estate investments			1,417				—				56,777				48,172
Gain on sale of non-depreciable real estate investments			—				—				—				679
Pro-rata share of properties’ income			17,226				14,630				64,402				54,369
Add:
Noncontrolling interest pro-rata share of partially owned property income			799				724				3,074				2,810
Total property income			18,025				15,354				67,476				57,179
Add:
Interest expense			12,924				12,846				52,745				53,748
Net operating income			30,949				28,200				120,221				110,927
Less:
Non-same store net operating income			5,403				2,717				34,682				25,625
Same store net operating income (1)		$	25,546			$	25,483			$	85,539			$	85,302

 

(1)

Same store portfolio for the three months ended December 31, 2020 consists of 28 properties, which represent 9,958 units.  Same store portfolio for the year ended December 31, 2020 consists of 24 properties, which represent 8,459 units.