Bluerock Residential Growth REIT Announces First Quarter 2019 Results

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NEW YORK, May 7, 2019 /PRNewswire/ -- Bluerock Residential Growth REIT, Inc. BRG ("the Company"), an owner of highly amenitized multifamily apartment communities, announced today its financial results for the quarter ended March 31, 2019.

(PRNewsfoto/Bluerock Residential Growth REI)

First Quarter Highlights 

  • Total revenues grew 23% to $51.5 million for the quarter, from $41.9 million in the prior year period.
  • Net loss attributable to common stockholders for the first quarter of 2019 was ($0.53) per share, as compared to ($0.40) per share in the prior year period.  Net loss attributable to common stockholders includes non-cash items, including depreciation and amortization expense, of $0.74 per share in the first quarter of 2019 compared to $0.59 per share for the prior year period.
  • Property Net Operating Income ("NOI") grew 29% to $27.1 million, from $21.0 million in the prior year period.
  • Same store revenue and NOI increased 5.8% and 9.0% respectively, as compared to the prior year period.
  • Core funds from operations attributable to common shares and units ("CFFO") increased 3% to $6.3 million, from $6.1 million in the prior year period.  CFFO per share was $0.20 for the first quarter as compared to $0.20 in the prior year period. 
  • Paid quarterly common stock dividend of $0.1625, an 81% payout ratio on a CFFO basis.
  • Consolidated real estate investments, at cost, were approximately $1.8 billion. 
  • Completed 273 value-add unit upgrades during the quarter achieving a 26.3% ROI.
  • Invested $7.8 million to buy out the noncontrolling interest in one asset and invested $8.6 million in senior and mezzanine loans for a redevelopment property.
  • Repurchased 505,797 shares of common stock during the first quarter at an average price of $10.01 per share, for a total cost of approximately $5.1 million.

"We are pleased to deliver another strong quarter of operating results, further validating our investment thesis of owning highly amenitized apartment communities in knowledge economy growth markets," said Ramin Kamfar, Company Chairman and CEO.  "Property NOI is up over 29% and same store NOI is up 9.0% over the prior year.  These results demonstrate the continued success of our strategic initiatives and the ability to realize attractive returns on our value-add unit renovation investments. With a robust pipeline of opportunities, we remain committed to our investment strategy and are optimistic about our outlook."

Financial Results

Net loss attributable to common stockholders for the first quarter of 2019 was $12.1 million, compared to $9.4 million in the prior year period.  Net loss attributable to common stockholders included non-cash expenses of $17.2 million or $0.74 per share in the first quarter of 2019 compared to $14.2 million or $0.59 per share for the prior year period. 

CFFO for the first quarter of 2019 was $6.3 million, or $0.20 per diluted share, compared to $6.1 million, or $0.20 per diluted share, in the prior year period.  CFFO adds back non-cash, non-operating expenses such as accretion on the Company's Series B preferred stock.  CFFO was primarily driven by growth in property NOI of $6.1 million and interest income of $0.6 million arising from significant investment activity. This was primarily offset by a year-over-year increase in interest expense of $4.0 million, general and administrative expenses of $0.3 million, and preferred stock dividends of $2.1 million.

Total Portfolio Performance



$ In thousands, except average rental

rates

1Q19



1Q18



Variance



Total Revenues (1)

$ 51,466



$ 41,871



22.9%



Property Operating Expenses

$ 18,602



$ 15,658



18.8%



NOI

$ 27,088



$ 21,017



28.9%



Operating Margin

59.3%



57.3%



200

bps

Occupancy Percentage

93.9%



93.5%



40

bps

Average Rental Rate

$    1,299



$    1,227



5.9%



(1) Including interest income from related parties





 

For the first quarter of 2019, property revenues increased by 24.6% compared to the same prior year period primarily attributable to the increased size of the portfolio.  Total portfolio NOI was $27.1 million, an increase of $6.1 million, or 28.9%, compared to the same period in the prior year.  Property operating expenses were up primarily due to the increased size of the portfolio.

Property NOI margins expanded by 200 basis points to 59.3% of revenue for the quarter, compared to 57.3% of revenue in the prior year quarter. 

Same Store Portfolio Performance



$ In thousands, except average rental

rates

1Q19



1Q18



Variance



Revenues

$   38,725



$   36,612



5.8%



Property Operating Expenses

$   15,854



$   15,628



1.4%



NOI

$   22,871



$   20,984



9.0%



Operating Margin

59.1%



57.3%



180

bps

Occupancy Percentage

93.9%



93.5%



40

bps

Average Rental Rate

$     1,290



$     1,225



5.3%



 

The Company's same store portfolio for the quarter ended March 31, 2019 included 28 properties.  For the first quarter of 2019, same store NOI was $22.9 million, an increase of $1.9 million, or 9.0%, compared to the same period in the prior year. Same store property revenues increased by 5.8% compared to the same prior year period, primarily attributable to a 5.3% increase in average rental rates, as well as average occupancy increasing 40 basis points to 93.9%.  Same store expenses increased $0.23 million, primarily due to $0.11 million increase in trash, cable and landscaping, $0.06 million of additional real estate taxes due to higher valuations by municipalities, and $0.05 million increase in insurance.

Renovation Activity

The Company completed 273 value-add unit upgrades during the first quarter achieving a 26.3% rent premium. 

Since inception within the existing portfolio, the Company has completed 1,939 value-add unit upgrades at an average cost of $4,902 per unit and achieved an average monthly rental rate increase of $108 per unit, equating to a 26.3% ROI on all unit upgrades leased as of March 31, 2019.  The Company has identified approximately 4,550 remaining units within the existing portfolio for value-add upgrades with similar projected economics to the completed renovations. The Company expects to complete between 900 and 1,200 unit renovations in 2019. 

Acquisition Activity

On January 23, 2019, the Company provided a $7.8 million senior loan and a $0.8 million mezzanine loan for a multifamily property undergoing redevelopment.

On January 29, 2019, the Company invested approximately $7.8 million to increase its ownership interest from 85% to 100% in its ARIUM Pine Lakes property.

Balance Sheet

During the first quarter, the Company raised gross proceeds of approximately $44.0 million through the issuance of 43,955 shares of Series B preferred stock with associated warrants at $1,000 per unit. 

As of March 31, 2019, the Company had $24.3 million of unrestricted cash on its balance sheet, approximately $54.4 million available among its revolving and term credit facilities, and $1.3 billion of debt outstanding.

Dividend 

The Board of Directors authorized, and the Company declared, a quarterly dividend for the first quarter of 2019 equal to a quarterly rate of $0.1625 per share on its Class A common stock, payable to the stockholders of record as of March 25, 2019, which was paid in cash on April 5, 2019. 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 first quarter of 2019, in the amount of $0.515625 per share. In addition, the Company declared a quarterly cash dividend on its 7.625% Series C Cumulative Redeemable Preferred Stock for the first quarter of 2019, in the amount of $0.4765625 per share. Further, the Company declared a quarterly cash dividend on its 7.125% Series D Cumulative Preferred Stock for the first quarter of 2019, in the amount of $0.4453125 per share.  The dividends were payable to the stockholders of record on March 25, 2019, and were paid on April 5, 2019.

On April 12, 2019, 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 April 25, 2019, which was paid in cash on May 3, 2019, and as of May 24, 2019 and June 25, 2019 which will be paid in cash on June 5, 2019, and July 5, 2019, respectively.

2019 Guidance

The Company is reaffirming its prior guidance.  Based on the Company's current outlook and market conditions, the Company anticipates 2019 CFFO in the range of $0.80 to $0.84 per share.  For additional guidance details underlying earnings guidance, please see page 30 of Company's First Quarter 2019 Earnings Supplement available under Investor Relations 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 Tuesday, May 7, 2019 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 July 7, 2019 at http://services.choruscall.com/links/brg190507.html, as well as by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10130647.

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

About Bluerock Residential Growth REIT, Inc.

Bluerock Residential Growth REIT, Inc. 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.

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. 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 27, 2019, 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.

 

Portfolio Summary 



The following is a summary of our operating real estate and mezzanine/preferred investments as of March 31, 2019:



Consolidated Operating Properties



Location



Number

of Units



Year Built/

Renovated

(1)



Ownership

Interest



Average

Rent (2)



% Occupied

(3)

ARIUM at Palmer Ranch



Sarasota, FL



320



2016



100%



$           1,311



97%

ARIUM Glenridge



Atlanta, GA



480



1990



90%



1,215



95%

ARIUM Grandewood



Orlando, FL



306



2005



100%



1,394



94%

ARIUM Gulfshore



Naples, FL



368



2016



100%



1,325



95%

ARIUM Hunter's Creek



Orlando, FL



532



1999



100%



1,401



97%

ARIUM Metrowest



Orlando, FL



510



2001



100%



1,382



94%

ARIUM Palms



Orlando, FL



252



2008



100%



1,315



94%

ARIUM Pine Lakes



Port St. Lucie, FL



320



2003



100%



1,287



94%

ARIUM Westside



Atlanta, GA



336



2008



90%



1,532



94%

Ashford Belmar



Lakewood, CO



512



1988/1993



85%



1,607



92%

Ashton Reserve



Charlotte, NC



473



2015



100%



1,122



94%

Citrus Tower



Orlando, FL



336



2006



97%



1,292



94%

Enders Place at Baldwin Park



Orlando, FL



220



2003



92%



1,778



93%

James on South First



Austin, TX



250



2016



90%



1,244



93%

Marquis at Crown Ridge



San Antonio, TX



352



2009



90%



1,014



91%

Marquis at Stone Oak



San Antonio, TX



335



2007



90%



1,444



95%

Marquis at The Cascades



Tyler, TX



582



2009



90%



1,206



92%

Marquis at TPC



San Antonio, TX



139



2008



90%



1,485



92%

Outlook at Greystone



Birmingham, AL



300



2007



100%



954



94%

Park & Kingston



Charlotte, NC



168



2015



100%



1,294



98%

Plantation Park



Lake Jackson, TX



238



2016



80%



1,393



92%

Preston View



Morrisville, NC



382



2000



100%



1,121



94%

Roswell City Walk



Roswell, GA



320



2015



98%



1,526



98%

Sands Parc



Daytona Beach, FL



264



2017



100%



1,354



97%

Sorrel



Frisco, TX



352



2015



95%



1,279



85%

Sovereign



Fort Worth, TX



322



2015



95%



1,365



93%

The Brodie



Austin, TX



324



2001



93%



1,247



94%

The Links at Plum Creek



Castle Rock, CO



264



2000



88%



1,411



94%

The Mills



Greenville, SC



304



2013



100%



1,037



96%

The Preserve at Henderson Beach



Destin, FL



340



2009



100%



1,412



97%

Veranda at Centerfield



Houston, TX



400



1999



93%



947



90%

Villages of Cypress Creek



Houston, TX



384



2001



80%



1,129



96%

Wesley Village



Charlotte, NC



301



2010



100%



1,371



95%

Consolidated Operating Properties Subtotal/Average



11,286











$         1,299



94%



























Mezzanine/Preferred Investments



Location



Planned

Number

of Units











Pro Forma

Average Rent







Alexan CityCentre



Houston, TX



340











$         1,733

(2)





Alexan Southside Place



Houston, TX



270











2,012







Arlo



Charlotte, NC



286











1,507







Cade Boca Raton



Boca Raton, FL



90











2,549







Domain at The One Forty



Garland, TX



299











1,469







Flagler Village



Fort Lauderdale, FL



385











2,352







Helios



Atlanta, GA



282











1,436

(2)





Leigh House



Raleigh, NC



245











1,271







North Creek Apartments



Leander, TX



259











1,358







Novel Perimeter



Atlanta, GA



320











1,749







Riverside Apartments



Austin, TX



222











1,408







The Park at Chapel Hill



Chapel Hill, NC



*











*







Vickers Historic Roswell



Roswell, GA



79











3,176







Wayforth at Concord



Concord, NC



150











1,707







Whetstone Apartments



Durham, NC



204











1,278

(2)





Mezzanine and Preferred Investments Subtotal/Average



3,431











$         1,704



































Portfolio Properties Total/Average



14,717











$         1,393







































(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 March 31, 2019.

(3) Percent occupied is calculated as (i) the number of units occupied as of March 31, 2019, divided by (ii) total number of units, expressed as a percentage.

* The development is in the planning phase; project specifications are in process.

 

 

Consolidated Statement of Operations

For the Three Months Ended March 31, 2019 and 2018

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

























Three Months Ended













March 31,



















2019





2018



Revenues

































Rental and other property revenues



















$

45,690





$

36,675



Interest income from related parties





















5,776







5,196



Total revenues





















51,466







41,871



Expenses

































Property operating





















18,602







15,658



Property management fees





















1,215







992



General and administrative





















5,627







4,669



Acquisition and pursuit costs





















58







43



Weather-related losses, net



























168



Depreciation and amortization





















17,230







15,640



Total expenses





















42,732







37,170



Operating income





















8,734







4,701



Other income (expense)

































Preferred returns on unconsolidated real estate joint ventures





















2,289







2,461



Gain on sale of non-depreciable real estate investments





















679









Interest expense, net





















(16,067)







(10,117)



Total other expense





















(13,099)







(7,656)



Net loss





















(4,365)







(2,955)



Preferred stock dividends





















(10,384)







(8,248)



Preferred stock accretion





















(1,887)







(1,112)



Net loss attributable to noncontrolling interests

































Operating partnership units





















(4,051)







(2,675)



Partially owned properties





















(492)







(215)



Net loss attributable to noncontrolling interests





















(4,543)







(2,890)



Net loss attributable to common stockholders



















$

(12,093)





$

(9,425)





































Net loss per common share - Basic



















$

(0.53)





$

(0.40)





































Net loss per common share – Diluted



















$

(0.53)





$

(0.40)





































Weighted average basic common shares outstanding





















23,123,616







24,143,382



Weighted average diluted common shares outstanding





















23,123,616







24,143,382



 

 

Consolidated Balance Sheets

First Quarter 2019

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







March 31,

2019





December 31,

2018



ASSETS

















Net Real Estate Investments

















Land



$

200,114





$

200,385



Buildings and improvements





1,548,167







1,546,244



Furniture, fixtures and equipment





58,422







55,050



Construction in progress





659







989



Total Gross Real Estate Investments





1,807,362







1,802,668



Accumulated depreciation





(124,605)







(108,911)



Total Net Real Estate Investments





1,682,757







1,693,757



Cash and cash equivalents





24,337







24,775



Restricted cash





22,659







27,469



Notes and accrued interest receivable from related parties





174,068







164,084



Due from affiliates





3,123







2,854



Accounts receivable, prepaids and other assets





12,332







14,395



Preferred equity investments and investments in unconsolidated real estate joint ventures





93,728







89,033



In-place lease intangible assets, net





443







1,768



Total Assets



$

2,013,447





$

2,018,135





















LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY

















Mortgages payable



$

1,204,905





$

1,206,136



Revolving credit facilities





78,000







82,209



Accounts payable





1,215







1,486



Other accrued liabilities





25,444







31,690



Due to affiliates





798







726



Distributions payable





12,317







12,073



Total Liabilities





1,322,679







1,334,320





8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share,

10,875,000 shares authorized; 5,721,460 shares issued and outstanding as of March 31, 2019 and

December 31, 2018





139,698







139,545







6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares

authorized; 349,423 and 306,009 shares issued and outstanding as of March 31, 2019 and December 31,

2018, respectively





311,555







272,842







7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share,

4,000,000 shares authorized; 2,323,750 shares issued and outstanding as of March 31, 2019 and

December 31, 2018





56,545







56,485



Equity

















Stockholders' Equity

















Preferred stock, $0.01 par value, 229,900,000 shares authorized; no shares issued and outstanding













7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares

authorized; 2,850,602 shares issued and outstanding as of March 31, 2019 and December 31, 2018





68,705







68,705



Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 22,861,084 and 23,322,211

shares issued and outstanding as of March 31, 2019 and December 31, 2018, respectively





228







233



Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and

outstanding as of March 31, 2019 and December 31, 2018





1







1



Additional paid-in-capital





300,407







307,938



Distributions in excess of cumulative earnings





(234,363)







(218,531)



Total Stockholders' Equity





134,978







158,346



Noncontrolling Interests

















Operating partnership units





21,143







27,613



    Partially owned properties





26,849







28,984



Total Noncontrolling Interests





47,992







56,597



Total Equity





182,970







214,943



TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY



$

2,013,447





$

2,018,135



 

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, 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 depreciable real estate, 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 stock compensation expense, acquisition expenses, 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), non-cash interest, one-time weather-related costs, gain or losses on sales of non-depreciable real estate property, and preferred stock accretion. 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 four operating properties and four properties held through preferred equity or mezzanine loan investments subsequent to March 31, 2018.  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 table below reconciles our calculations of FFO and CFFO to net loss, the most directly comparable GAAP financial measure, for the three months ended March 31, 2019 and 2018 (in thousands, except per share amounts):









Three Months Ended











March 31,

















2019





2018



Net loss attributable to common shares

















$

(12,093)





$

(9,425)



Add back: Net loss attributable to operating partnership units



















(4,051)







(2,675)



Net loss attributable to common shares and units



















(16,144)







(12,100)



Common stockholders and operating partnership units pro-rata share of:































Real estate depreciation and amortization (1)



















16,142







14,831



FFO Attributable to Common Shares and Units



















(2)







2,731



Common stockholders and operating partnership units pro-rata share of:































Acquisition and pursuit costs



















58







43



 Non-cash interest expense



















775







461



Unrealized loss on derivatives



















1,635









Weather-related losses, net

























165



Non-real estate depreciation and amortization



















86







64



Gain on sale of non-depreciable real estate investments



















(679)









Shareholder activism



















338









Non-cash preferred returns on unconsolidated real estate joint ventures



















(212)







(231)



Non-cash equity compensation



















2,391







1,780



Preferred stock accretion



















1,887







1,112



CFFO Attributable to Common Shares and Units

















$

6,277





$

6,125



































Per Share and Unit Information:































FFO Attributable to Common Shares and Units - diluted

















$

(0.00)





$

0.09



CFFO Attributable to Common Shares and Units - diluted

















$

0.20





$

0.20



































Weighted average common shares and units outstanding - diluted



















30,885,006







30,995,775





(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 – 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. 

 

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







Three Months Ended









March 31,









2019



2018



Net loss attributable to common stockholders



$

(12,093)





$

(9,425)







Net loss income attributable to noncontrolling interests





(4,543)







(2,890)







Preferred stock dividends





10,384







8,248







Preferred stock accretion





1,887







1,112







Interest expense, net





16,067







10,117







Depreciation and amortization





17,144







15,576





EBITDAre



$

28,846





$

22,738







Acquisition and pursuit costs





58







43







Non-real estate depreciation and amortization





86







64







Weather-related losses, net





-







168







Gain on sale of non-depreciable real estate investments





(679)













Shareholder activism





338













Non-cash equity compensation





2,391







1,780







Non-cash preferred returns on unconsolidated real estate joint ventures





(212)







(231)





Adjusted EBITDAre



$

30,828





$

24,562



























 

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.

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

























March 31, 

























2019





2018



Net loss attributable to common shares





















$

(12,093)





$

(9,425)





Add back: Net loss attributable to operating partnership units























(4,051)







(2,675)



Net loss attributable to common shares and units























(16,144)







(12,100)



Add common stockholders and operating partnership units pro-rata share of:





































Depreciation and amortization























16,142







14,831





Non-real estate depreciation and amortization























86







64





Non-cash interest expense























775







461





Unrealized loss on derivatives























1,635











Property management fees























1,148







939





Acquisition and pursuit costs























58







43





Corporate operating expenses























5,554







4,669





Weather-related losses, net





























165





Preferred dividends























10,384







8,248





Preferred stock accretion























1,887







1,112



Less common stockholders and operating partnership units pro-rata share of:





































Preferred returns on unconsolidated real estate joint ventures























2,289







2,461





Interest income from related parties























5,776







5,196





Gain on sale of non-depreciable real estate investments























679









Pro-rata share of properties' income























12,781







10,775



Add:





































Noncontrolling interest pro-rata share of partially owned property income























729







607



Total property income























13,510







11,382



Add:





































Interest expense























13,578







9,635



Net operating income























27,088







21,017



Less:





































Non-same store net operating income























4,217







33



Same store net operating income (1)





















$

22,871





$

20,984







































(1) Same store portfolio for the three months ended March 31, 2019 consists of 28 properties, which represent 9,608 units.

 

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/bluerock-residential-growth-reit-announces-first-quarter-2019-results-300845162.html

SOURCE Bluerock Residential Growth REIT, Inc.

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