Preferred Apartment Communities, Inc. Reports Results for Fourth Quarter 2020

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ATLANTA, March 1, 2021 /PRNewswire/ -- Preferred Apartment Communities, Inc. APTS ("we," "our," the "Company," "Preferred Apartment Communities" or "PAC") today reported results for the quarter and year ended December 31, 2020. Unless otherwise indicated, all per share results are reported based on the basic weighted average shares of Common Stock and Class A Units ("Class A Units") of the Preferred Apartment Communities Operating Partnership (our "Operating Partnership") outstanding. See Definitions of Non-GAAP Measures.

"We are very pleased with our fourth quarter and full year operational results across our entire portfolio which demonstrate the durability and quality of these assets located in the thriving Sunbelt region.  Our rent collections were very strong, and we credit this to our best in class teams and our focused Sunbelt strategy. Our Class A suburban multifamily portfolio continues to demonstrate solid growth due to broad positive economic and migration trends," stated Joel Murphy, Preferred Apartment Communities' President and Chief Executive Officer.

"2020 was also a transformational year for PAC. We went on offense and focused on several key strategic initiatives designed to streamline our business and position PAC for future growth. We completed our internalization, which simplified our platform, and completed the sale of our student housing portfolio for $478 million, which simplified our portfolio. With shareholder approval, we improved our governance by allowing shareholders to amend our bylaws, and we improved our balance sheet flexibility by reducing the call option on our Series A preferred stock from 10 years to 5 years. As a result of these steps, we ended the year having significantly reduced our preferred shares outstanding and invested $277 million in multifamily acquisitions.  We enter 2021 energized to continue our drive to further improve our balance sheet and to grow our multifamily portfolio by leveraging our deep relationships and local market knowledge in key suburban Sunbelt markets."

Our operating results are presented below.

































Three months ended

December 31,







Year ended December 31,











2020



2019



% change



2020



2019



% change

































Revenues (in thousands)

$

121,121





$

124,866





(3.0)

%



$

502,197





$

470,427





6.8

%

































Per share data:



























Net income (loss) (1)

$

(0.77)





$

(0.71)





(8.5)

%



$

(6.95)





$

(2.73)











FFO (2)

$

(0.20)





$

0.31









$

(3.36)





$

1.37











Core FFO (2)

$

0.31





$

0.35





(11.4)

%



$

1.07





$

1.49





(28.2)

%





AFFO (2)

$

0.25





$

0.35





(28.6)

%



$

0.83





$

1.02





(18.6)

%





Dividends (3)

$

0.175





$

0.2625





(33.3)

%



$

0.7875





$

1.0475





(24.8)

%































(1) 

Per weighted average share of Common Stock outstanding for the periods indicated.

(2) 

FFO, Core FFO and AFFO results are presented per basic weighted average share of Common Stock and Class A Unit in our Operating Partnership outstanding for the periods indicated. See Reconciliations of FFO Attributable to Common Stockholders and Unitholders, Core FFO and AFFO to Net Income (Loss) Attributable to Common Stockholders and Definitions of Non-GAAP Measures.

(3)

Per share of Common Stock and Class A Unit outstanding.

Financial

  • Our total revenues for the year ended December 31, 2020 increased 6.8% to approximately $502.2 million from the year ended December 31, 2019, largely due to incremental revenues from newly acquired real estate assets. Our total revenues declined for the quarter ended December 31, 2020 versus the 2019 period due to the sale on November 3, 2020 of our eight student housing properties.
  • Our net loss per share was $(0.77) and $(0.71) for the three-month periods ended December 31, 2020 and 2019, respectively. Funds From Operations, or FFO, was $(0.20) and $0.31 per weighted average share of Common Stock and Class A Unit outstanding for the three months ended December 31, 2020 and 2019, respectively. The decline in FFO per share was driven by:
    • deemed dividends resulting from our call of preferred stock and other cash redemptions of preferred stock in the fourth quarter 2020 that totaled approximately $0.49 per share;
    • decreased interest revenue from our smaller portfolio of real estate loan investments and lines of credit of approximately $0.06 per share; and
    • a gain from the sale of mortgage-backed securities in 2019 which did not recur in 2020 of approximately $0.03 per share;
    • partially offset by an increase of approximately $0.06 per share from improved property operational results and acquisitions.

       
  • Our Core FFO per share result increased to $0.31, up 19.2% from $0.26 for the third quarter 2020, primarily due to:
    • higher purchase option termination revenue of approximately $0.02 per share;
    • land easement proceeds received in the fourth quarter 2020 of approximately $0.01 per share; and
    • reduced monthly preferred stock dividends following the call of 208,786 shares of preferred stock of approximately $0.01 per share.

       
  • Our AFFO per share increased to $0.25 for the fourth quarter 2020 from $0.07 for the third quarter 2020, primarily due to:
    • an increase of accrued interest received of approximately $0.07 per share;
    • higher purchase option termination revenue of approximately $0.02 per share;
    • land easement proceeds received in the fourth quarter 2020 of approximately $0.01 per share;
    • reduced monthly preferred stock dividends following the call of 208,786 shares of preferred stock of approximately $0.01 per share; and
    • lower recurring capital expenditures on our real estate properties of approximately $0.02 per share.

       
  • Our Core FFO payout ratio to Common Stockholders and Unitholders was approximately 57.9% and our Core FFO payout ratio to our preferred stockholders was approximately 78.4% for the fourth quarter 2020. (A)
  • Our AFFO payout ratio to our preferred stockholders improved to approximately 81.7% for the fourth quarter 2020 from 90.9% for the third quarter 2020.(A) Our fourth quarter 2020 AFFO payout ratio reflects an increase of accrued interest received on our real estate loan investment portfolio of approximately $3.5 million versus the third quarter 2020. We have approximately $22.5 million of accrued interest revenue on our real estate loan investment portfolio, that will positively impact AFFO when collected.
  • As of December 31, 2020, our total assets were approximately $4.3 billion, a decrease from our total assets of approximately $4.8 billion at December 31, 2019 that mainly resulted from the sale of our student housing portfolio during the fourth quarter 2020 and the utilization of proceeds to fund a call of 208,786 shares of our preferred stock.

(A)

We calculate the Core FFO and AFFO payout ratios to Common Stockholders as the ratio of Common Stock dividends and distributions to Core FFO and AFFO. We calculate the Core FFO and AFFO payout ratios to preferred stockholders as the ratio of Preferred Stock dividends to the sum of Preferred Stock dividends and Core FFO and AFFO. Since our operations resulted in a net loss from continuing operations for the periods presented, a payout ratio based on net loss is not calculable.  See Definitions of Non-GAAP Measures.

 

The following chart details monthly cash collections of rental revenues before and after the effect of rent deferrals across all our operating business lines as of February 25, 2021:





Cash Collections of 2020 Recurring Rental Revenues (1)

Unadjusted for rent

deferrals:



First

quarter



Second

quarter



Third

quarter



October



November



December



























Multifamily



99.9

%



98.8

%



99.0

%



99.0

%



99.1

%



99.1

%

Office



99.9

%



98.1

%



99.7

%



99.9

%



100.0

%



99.4

%

Grocery-anchored retail (2)



99.5

%



91.7

%



95.9

%



97.3

%



97.2

%



97.8

%



























 





Cash Collections of 2020 Recurring Rental Revenues (1)

Adjusted for rent deferrals:



First

quarter



Second

quarter



Third

quarter



October



November



December



























Multifamily



99.9

%



99.4

%



99.0

%



99.0

%



99.1

%



99.1

%

Office



99.9

%



99.9

%



100.0

%



99.9

%



100.0

%



99.4

%

Grocery-anchored retail (2)



99.6

%



96.8

%



97.6

%



98.2

%



98.0

%



97.9

%



























(1)

Percent of revenue billed includes recurring charges for base rent, operating expense escalations, pet, garage, parking and storage rent, as well as receivables from U.S. Government tenants, from which collection is reasonably assured.

(2)

Includes an investment in an unconsolidated joint venture that is not prorated for our ownership percentage.

 

The following chart details monthly occupancy and percent leased rates across all our operating business lines:





2020 Monthly Occupancy and Percentages Leased





First

quarter



Second

quarter



Third

quarter



October



November



December



























Occupancy:

























Multifamily (stabilized) (1)



95.5

%



94.7

%



95.6

%



95.4

%



95.8

%



95.6

%

Percent leased: (2)

























Office



96.7

%



96.2

%



95.5

%



95.4

%



95.4

%



94.7

%

Grocery-anchored retail (3)



92.6

%



92.7

%



92.5

%



92.4

%



91.1

%



91.0

%





(1)  

For quarterly periods, calculated as the average of the number of occupied units on the 20th day of each of the trailing three months from the period end date.

(2)

Percent of total area leased as of the period end date.

(3)

Includes an investment in an unconsolidated joint venture that is not prorated for our ownership percentage.

Operational

  • Our multifamily communities' same store rental and other property revenues increased 0.6% and our same store net operating income increased 0.7% for the year ended December 31, 2020 versus 2019. For the fourth quarter, same store revenues increased 0.1% and same store net operating income decreased 1.9%. Real estate taxes and insurance costs increased 22% and 24%, respectively for the quarter and 6% and 26% respectively for the year to date periods in 2020 due to our increased exposure from property tax judgements that are currently in litigation or under appeal and from increased insurance costs related to adjustments for replacement cost underwriting results. Decreases in property operating and maintenance expense resulted from cost savings realized from the absence of property management fees to our Former Manager following Internalization and reduced advertising and marketing expenditures.
  • We collected 99% of rental revenues from residents in our multifamily communities for each month in 2020.
  • Our average recurring rental revenue collections before and after any effect of rent deferrals for the fourth quarter 2020 were approximately 99.1% and 99.1% for multifamily communities, 97.4% and 98.1% for grocery-anchored retail properties and 99.7% and 99.7% for office properties, respectively. Rent deferments provided to our residents and tenants are limited and are primarily related to a change of timing of rent payments with no significant changes to total payments or term.
  • As of December 31, 2020, we have deferred $1.9 million of retail recurring rental revenue, or approximately 2.7% cumulatively over the last three quarters. Including this deferred rent, we have accounted for 97.5%, 97.2% and 96.4% of fourth quarter, third quarter and second quarter retail recurring rental revenue, respectively. In addition to the deferrals, we granted approximately $542,000 of Covid-related rental abatements, or approximately 0.8% of retail recurring rental revenues cumulatively over the last three quarters. These rental abatements were generally accompanied by an increase in the tenant's lease term or the lease terms were amended to be more favorable to us. Our total retail reserves held steady at $2.5 million, or 2.3% of total retail revenues year to date, which is 0.6% of total company rental and other property revenues.
  • During the fourth quarter 2020, we received the full principal amounts totaling $44.6 million from the repayment of the Sanibel Straights, E-Town and Solis Kennesaw II real estate loan investments, plus approximately $4.2 million of deferred interest revenue from these loans. These transactions collectively returned $48.8 million of capital to us for investment during the fourth quarter.
  • For the full year 2020, we originated three real estate investment loans with a total commitment of $44.1 million.
  • As of December 31, 2020, the average age of our multifamily communities was approximately 6.3 years, which is the youngest in the public multifamily REIT industry.
  • As of December 31, 2020, all of our owned multifamily communities had achieved stabilization except for our two fourth quarter acquisitions, which we define as reaching 93% physical occupancy for three full months in a quarter. One fourth quarter multifamily acquisition will achieve stabilization on March 31, 2021, at which time we will have owned it for a full fiscal quarter.
  • The physical occupancy of our same-store multifamily communities increased to 95.4% at December 31, 2020 from 95.3% at December 31, 2019.

Financing and Capital Markets

  • As of December 31, 2020, approximately 97.4% of our permanent property-level mortgage debt has fixed interest rates and approximately 0.8% has variable interest rates which are capped. We believe we are well protected against potential increases in market interest rates. Our overall weighted average interest rate for our mortgage debt portfolio was 3.55% for multifamily communities, 4.13% for office properties, 3.91% for grocery-anchored retail properties and 3.77% in the aggregate.
  • At December 31, 2020, our leverage, as measured by the ratio of our debt to the undepreciated book value of our total assets, was approximately 55.6%.
  • At December 31, 2020, we had $178.0 million available to be drawn on our revolving line of credit and approximately $75.7 million of cash and restricted cash on hand. 
  • During the fourth quarter 2020, we issued and sold an aggregate of 52,333 shares of Preferred Stock and redeemed an aggregate of 49,105 shares of Preferred Stock, resulting in a net issuance of 3,228 shares of Preferred Stock. Also during the fourth quarter 2020, we called 208,786 shares of Preferred Stock for a net decrease of 205,558 shares of Preferred Stock outstanding and a net cash disbursement of approximately $209.3 million from these transactions.

Significant Transactions

  • On November 3, 2020, we announced via a press release the closing on that day of the sale of all of our student housing properties and one student housing related real estate loan investment to an unrelated third party for a sales price of $478.7 million.
  • During the fourth quarter 2020, we acquired The Blake, a 281-unit multifamily community located in Orlando, Florida and The Menlo, a 332-unit multifamily community located in Jacksonville, Florida.
  • On November 12, 2020, we closed on the sale of the Avenues at Creekside, a 395-unit multifamily community located in San Antonio, Texas that resulted in a gain of approximately $17.3 million.
  • On November 19, 2020, we announced an approval by our common stockholders of a reduction of our call option on our Series A Redeemable Preferred Stock from 10 years to 5 years.
  • On November 19, 2020, we announced a call of approximately $208.8 million of our Series A Redeemable Preferred Stock.
  • During the fourth quarter 2020, we received approximately $48.8 million in full satisfaction of the principal and all interest due on four previously issued real estate loan investments.

Real Estate Assets

At December 31, 2020, our portfolio of owned real estate assets and potential additions from purchase options we held from our real estate loan investments consisted of:





















Owned as of

December 31,

2020 (1)



Potential

additions from

real estate loan

investment

portfolio (2) (3)



Potential total





Residential properties:















Properties

37





10





47







Units

11,143





2,808





13,951







Grocery-anchored shopping centers:















Properties

54









54







Gross leasable area (square feet)

6,208,278









6,208,278







Office buildings:















Properties

9





1





10







Rentable square feet

3,169,000





195,000





3,364,000







Development properties

2









2







Rentable square feet

35,000









35,000







(1)

One multifamily community, two grocery-anchored shopping centers and two office buildings are owned through consolidated joint ventures. One grocery-anchored shopping center is an investment in an unconsolidated joint venture.

(2)

We evaluate each project individually and we make no assurance that we will acquire any of the underlying properties from our real estate loan investment portfolio.

(3)

The Company has terminated various purchase option agreements in exchange for termination fees. These properties are excluded from the potential additions from our real estate loan investment portfolio.

Same-Store Multifamily Communities Financial Data

The following chart presents same-store operating results for the Company's multifamily communities. We define our population of same-store multifamily communities as those that have achieved occupancy at or above 93% for all three consecutive months within a single quarter (stabilized) before the beginning of the prior year and that have been owned for at least 15 full months as of the end of the first quarter of the current year, enabling comparisons of the current year quarterly and annual reporting periods to the prior year comparative periods. The Company excludes the operating results of properties for which construction of adjacent phases has commenced and properties which are undergoing significant capital projects, have sustained significant casualty losses, or are being marketed for sale as of the end of the reporting period. For the periods presented, same-store operating results consist of the operating results of the following multifamily communities containing an aggregate 8,299 units, or 74.5% of our multifamily units:

Aster at Lely Resort



Avenues at Cypress



Avenues at Northpointe

Citi Lakes



Lenox Village



Retreat at Lenox Village

Overton Rise



Sorrel



Venue at Lakewood Ranch

Citrus Village



525 Avalon Park



Vineyards

Founders Village



Retreat at Greystone



City Vista

Summit Crossing I



Luxe at Lakewood Ranch



Adara at Overland Park

City Park View



Summit Crossing II



Aldridge at Town Village

Reserve at Summit Crossing



Crosstown Walk



Claiborne Crossing

Green Park



Colony at Centerpointe



Lux at Sorrel





Vestavia Reserve





 

Same-store net operating income is a non-GAAP measure that is most directly comparable to net income (loss), as shown in the reconciliations below. See Definitions of Non-GAAP Measures.

Reconciliation of Net Income (Loss) to Multifamily Communities' Same-Store Net Operating Income (NOI)















Three months ended:

(in thousands)



12/31/2020



12/31/2019











Net income (loss)



$

17,472





$

(1,364)



Add:









Equity stock compensation



586





301



Depreciation and amortization



48,581





47,874



Interest expense



27,950





28,798



Management fees







8,867



Corporate G&A and other

7,700





1,603



(Income) loss from unconsolidated joint venture



194







Management Internalization



288





1,844



Allowance for expected credit losses



640





2,038



Waived asset management and general and administrative expense fees







(3,259)



Less:









Interest revenue on notes receivable



12,115





13,553



Interest revenue on related party notes receivable



485





1,966



Miscellaneous revenues



977





1,000



Change in fair value of net assets of consolidated









VIEs from mortgage-backed pools







515



Gains on sales of real estate and mortgage-backed securities, net



20,195





1,563



Gain (loss) on sale of real estate loan investment and land condemnation, net



(11)





207













Property net operating income



69,650





67,898



Less:









Non-same-store property revenues



(71,468)





(72,312)



Add:









Non-same-store property operating expenses

22,591





25,579











Same-store net operating income



$

20,773





$

21,165













 

Multifamily Communities' Same Store Net Operating Income























Three months ended:









(in thousands)



12/31/2020



12/31/2019



$ change



% change

Revenues:

















Rental and other property revenues



$

36,077





$

36,036





$

41





0.1

%



















Operating expenses:

















Property operating and maintenance



6,078





6,843





(765)





(11.2)

%

Payroll



2,887





2,849





38





1.3

%

Real estate taxes and insurance



6,339





5,179





1,160





22.4

%

Total operating expenses



15,304





14,871





433





2.9

%



















Same-store net operating income



$

20,773





$

21,165





$

(392)





(1.9)

%



















Same-store average physical occupancy



95.6

%



95.1

%



























Corporate level expenses related to the management and operations of the Multifamily and Student housing property portfolios are allocated

on a per unit basis to Property NOI and are included in Multifamily Same Store NOI.

 

Reconciliation of Net Income (Loss) to Multifamily Communities' Same-Store Net Operating Income (NOI)















Years ended:

(in thousands)



12/31/2020



12/31/2019











Net loss



$

(181,603)





$

(7,458)



Add:









Equity stock compensation



1,644





1,223



Depreciation and amortization



201,677





185,065



Interest expense



118,558





111,964



Management fees



3,099





33,516



Corporate G&A and other

30,809





5,773



(Income) loss from unconsolidated joint venture



314







Management Internalization



180,116





2,987



Allowance for expected credit losses



6,103





2,038



Waived asset management and general and administrative expense fees



(1,136)





(11,764)



Less:









Interest revenue on notes receivable



46,610





49,542



Interest revenue on related party notes receivable



4,235





11,946



Miscellaneous revenues



5,537





2,023



Change in fair value of net assets of consolidated









VIEs from mortgage-backed pools







1,831



Loss on extinguishment of debt



(6,674)





(84)



Gains on sales of real estate and mortgage-backed securities, net



23,456





1,567



Gains on sale of real estate loan investment and land condemnation



517





954













Property net operating income



285,900





255,565



Less:









Non-same-store property revenues



(302,300)





(264,292)



Add:









Non-same-store property operating expenses

99,950





91,729











Same-store net operating income



$

83,550





$

83,002













 

Multifamily Communities' Same Store Net Operating Income























Years ended:









(in thousands)



12/31/2020



12/31/2019



$ change



% change

Revenues:

















Rental and other property revenues



$

143,514





$

142,624





$

890





0.6

%



















Operating expenses:

















Property operating and maintenance



24,714





26,439





(1,725)





(6.5)

%

Payroll



11,364





11,217





147





1.3

%

Real estate taxes and insurance



23,886





21,966





1,920





8.7

%

Total operating expenses



59,964





59,622





342





0.6

%



















Same-store net operating income



$

83,550





$

83,002





$

548





0.7

%



















Corporate level expenses related to the management and operations of the multifamily and student housing property portfolios are allocated on

a per unit basis to property NOI and are included in multifamily same store NOI.

 

Dividends

Quarterly Dividends on Common Stock and Class A OP Units

On November 5, 2020, our board of directors declared a quarterly dividend on our Common Stock of $0.175 per share, that was paid on January 15, 2021 to stockholders of record on December 15, 2020. In conjunction with the Common Stock dividend, our operating partnership declared a distribution on its Class A Units of $0.175 per unit for the fourth quarter 2020, which was paid on January 15, 2021 to all Class A Unit holders of record as of December 15, 2020.

Monthly Dividends on Preferred Stock

We declared monthly dividends of $5.00 per share on our Series A Redeemable Preferred Stock, which totaled approximately $52.7 million for the fourth quarter 2020 and represents a 6% annual yield. We declared monthly dividends of $5.00 per share on our Series A1 Redeemable Preferred Stock, which totaled approximately $1.9 million for the fourth quarter 2020 and also represents a 6% annual yield. We declared dividends totaling approximately $1.5 million on our Series M Redeemable Preferred Stock, or mShares, for the fourth quarter 2020. The mShares have a dividend rate that escalates from 5.75% in year one of issuance to 7.50% in year eight and thereafter. We declared dividends totaling approximately $271,000 on our Series M1 Redeemable Preferred Stock for the fourth quarter 2020. The Series M1 Redeemable Preferred Stock has a dividend rate that escalates from 6.1% in year one of issuance to 7.1% in year ten and thereafter.

Subsequent to Quarter End

Between January 1, 2021 and February 28, 2021, we issued 35,040 shares of Series A1 Preferred Stock and collected net proceeds of approximately $31.5 million after commissions and fees and we issued 2,858 shares of Series M1 Preferred Stock and collected net proceeds of approximately $2.8 million after commissions and fees. During the same period, we redeemed 17,363 shares of Series A Preferred Stock, 750 shares of Series M1 Preferred Stock and 461 shares of Series M Preferred Stock, or mShares.

On February 24, 2021, our board of directors declared a quarterly dividend on our Common Stock of $0.175 per share, payable on April 15, 2021 to stockholders of record on March 15, 2021.

Conference Call and Supplemental Data

We will hold our quarterly conference call on Tuesday, March 2, 2021 at 11:00 a.m. Eastern Time to discuss our fourth quarter and year ended 2020 results. To participate in the conference call, please dial in to the following:

Live Conference Call Details

Dial-in Number: 1-877-883-0383

International Dial-in Number: 1-412-902-6506

Company: Preferred Apartment Communities, Inc.

Date: Tuesday, March 2, 2021

Time: 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time)

Passcode: 7003443

The live broadcast of PAC's fourth quarter and year ended 2020 conference call will be available online on a listen-only basis at the company's website, www.pacapts.com, under "Investors" and then click on the "News and Events" heading.  

A replay of the call will be archived on PAC's' website under Investors/News and Events/Events.

2021 Guidance:  

Net income (loss) per share - We are continuing to add properties and real estate loan investments to our real estate portfolio and the specific timing of the closing of acquisitions is difficult to predict. Acquisition activity by its nature can cause material variation in our reported depreciation and amortization expense and interest income. Since net income (loss) per share is calculated net of depreciation and amortization expense, our net income (loss) results can fluctuate, possibly significantly, depending upon the timing of the closing of acquisitions. For this reason, we are unable to reasonably forecast this measure or provide a reconciliation of our projected FFO per share to this measure.

Core FFO - our forecasted range for the full year 2021 is $0.81 - $0.89 per weighted average share and unit.

Assumptions for our 2021 Core FFO guidance:

  • Same-store NOI growth for multifamily communities of 1.5% - 3.0%
  • Real estate loan investment originations of $50 million - $100 million

This guidance also includes the impact of a material decline in purchase option termination revenues. Please note that our guidance does not include any additional calls of our Series A Preferred Stock. We will update this guidance if, as and when it becomes appropriate.

We expect the growth in NOI for multifamily communities and the new investment loan originations to be weighted towards the second half of 2021. We will be active in the acquisition market for multifamily assets but will maintain investment discipline in a very competitive environment.

AFFO, Core FFO and FFO are calculated after deductions for all preferred stock dividends. Reconciliations of net income (loss) attributable to common stockholders to FFO, Core FFO and AFFO for the three-months and years ended December 31, 2020 and 2019 appear in the attached report, as well as on our website using the following link:

https://investors.pacapts.com/q4-2020-quarterly-supplemental-financial-data

Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:  Estimates of future earnings, guidance, goals and performance are, by definition, and certain other statements in this Earnings Release and Supplemental Financial Data Report may constitute, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, achievements or transactions to be materially different from the results, guidance, goals, performance, achievements or transactions expressed or implied by the forward-looking statements. These statements may be identified  by the use of forward-looking terminology such as "may," "trend," "will," "expects," "plans," "estimates," "anticipates," "projects," "intends," "believes," "strategy," "goals," "objectives," "outlook" and similar expressions. These risks, uncertainties and contingencies include, but are not limited to, (a) the impact of the COVID-19 pandemic and related federal, state and local government actions on PAC's business operations and the economic conditions in the markets in which PAC operates; (b) PAC's ability to mitigate the impacts arising from COVID-19 and (c) those disclosed in PAC's filings with the SEC. Factors that impact such forward-looking statements include, among others, our business and investment strategy; legislative or regulatory actions; the state of the U.S. economy generally or in specific geographic areas; economic trends and economic recoveries; changes in operating costs, including real estate taxes, utilities and insurance costs; our ability to obtain and maintain debt or equity financing; financing and advance rates for our target assets; our leverage level; changes in the values of our assets; the occurrence of natural or man-made disasters; availability of attractive investment opportunities in our target markets; our ability to maintain our qualification as a real estate investment trust, or REIT, for U.S. federal income tax purposes; availability of quality personnel; our understanding of our competition and market trends in our industry; and interest rates, real estate values, the debt securities markets and the general economy.

Except as otherwise required by the federal securities laws, we assume no liability to update the information in this Earnings Release and Supplemental Financial Data Report.

We refer you to the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2020 that was filed with the SEC on March 1, 2021, which discuss various factors that could adversely affect our financial results. Such risk factors and information may be updated or supplemented by our Form 10-K, Form 10-Q and Form 8-K filings and other documents filed from time to time with the SEC.

COVID-19

Our percentages of rent collected have stabilized at or near pre-pandemic levels during the fourth quarter 2020. While the impacts of COVID-19 are continuing into 2021, the effects on our operations have been manageable and we believe this condition will persist, barring a dramatic change in the trajectory of the pandemic.

Additional Information 

The SEC has declared effective the registration statement filed by the Company for each of our public offerings. Before you invest, you should read the final prospectus, and any prospectus supplements forming a part of the registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the offering. In particular, you should carefully read the risk factors described in the final prospectus and in any related prospectus supplement and in the documents incorporated by reference in the final prospectus and any related prospectus supplement. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the Company or its dealer manager, Preferred Capital Securities, LLC, will arrange to send you a prospectus with respect to the Series A1/M1 Offering upon request by contacting John A. Isakson at (770) 818-4109, 3284 Northside Parkway NW, Suite 150, Atlanta, Georgia 30327.

The final prospectus for the Series A1/M1 Offering, dated October 22, 2019, can be accessed through the following link:

https://www.sec.gov/Archives/edgar/data/1481832/000148183219000097/a424b5-2019seriesamshares.htm

 

Preferred Apartment Communities, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)



















Three months ended

December 31,



Years ended December 31,

(In thousands, except per-share figures)



2020



2019



2020



2019

Revenues:

















Rental and other property revenues



$

107,544





$

108,347





$

445,815





$

406,916



Interest income on loans and notes receivable



12,115





13,553





46,610





49,542



Interest income from related parties



485





1,966





4,235





11,946



Miscellaneous revenues



977





1,000





5,537





2,023





















Total revenues



121,121





124,866





502,197





470,427





















Operating expenses:

















Property operating and maintenance



16,336





16,608





69,255





59,845



Property salary and benefits

5,412





5,848





22,377





20,693



Property management costs

961





3,807





4,989





13,981



Real estate taxes and insurance



15,185





14,186





63,294





56,832



General and administrative



7,700





1,603





30,809





5,773



Equity compensation to directors and executives

586





301





1,644





1,223



Depreciation and amortization



48,581





47,874





201,677





185,065



Asset management and general and administrative expense

















fees to related party







8,867





3,099





33,516



Allowance for expected credit losses



640





2,038





6,103





2,038



Management Internalization expense



288





1,844





180,116





2,987





















Total operating expenses



95,689





102,976





583,363





381,953



Waived asset management and general and administrative















expense fees





(3,259)





(1,136)





(11,764)





















Net operating expenses



95,689





99,717





582,227





370,189



Operating income (loss) before gain on sale of real estate and loss from

















unconsolidated joint venture



25,432





25,149





(80,030)





100,238



Loss from unconsolidated joint venture



(194)









(314)







Gains on sales of real estate and mortgage-backed securities, net



20,195





1,563





23,456





1,567



Operating income (loss)



45,433





26,712





(56,888)





101,805





















Interest expense



27,950





28,798





118,558





111,964



Change in fair value of net assets of consolidated

















VIEs from mortgage-backed pools







515









1,831



Loss on extinguishments of debt











(6,674)





(84)



Gain (loss) on sale of real estate loan investment and land condemnation



(11)





207





517





954





















Net income (loss)



17,472





(1,364)





(181,603)





(7,458)



Net (income) loss attributable to non-controlling interests

300





76





3,815





214





















Net income (loss) attributable to the Company



17,772





(1,288)





(177,788)





(7,244)





















Dividends declared to preferred stockholders



(56,307)





(31,245)





(160,908)





(113,772)



Earnings attributable to unvested restricted stock



(96)





(3)





(205)





(17)





















Net loss attributable to common stockholders



$

(38,631)





$

(32,536)





$

(338,901)





$

(121,033)





















Net loss per share of Common Stock available to















 common stockholders, basic and diluted



$

(0.77)





$

(0.71)





$

(6.95)





$

(2.73)





















Weighted average number of shares of Common Stock outstanding,















basic and diluted



49,912





45,934





48,743





44,265



 

Reconciliation of FFO Attributable to Common Stockholders and Unitholders, Core FFO and AFFO

to Net (Loss) Income Attributable to Common Stockholders (A)



























Three months ended December 31,

(In thousands, except per-share figures)





2020



2019

















Net loss attributable to common stockholders (See note 1)

$

(38,631)





$

(32,536)



















Add:

Depreciation of real estate assets



39,447





38,626





Amortization of acquired intangible assets and deferred leasing costs

8,742





8,588





Net gain (loss) attributable to Class A Unitholders (See note 2)

260





(6)





Gain on sale of real estate

(20,195)







FFO attributable to common stockholders and unitholders

(10,377)





14,672





















Acquisition and pursuit costs

2









Loan cost amortization on acquisition term notes and loan coordination fees (See note 3)

451





604





Contingent management fees recognized upon property sales





11





Internalization costs (See note 4)

288





1,844





Deemed dividends for redemptions of and non-cash dividends on preferred stock

24,593





206





Expenses incurred on the call of preferred stock (See note 5)

520









Expenses related to the COVID-19 global pandemic (See note 6)

77









Earnest money forfeited by prospective asset purchaser





(1,000)



Core FFO attributable to common stockholders and unitholders

15,554





16,337















Add:

Non-cash equity compensation to directors and executives



586





301





Non-cash (income) expense for current expected credit losses (See note 7)

155





1,400





Amortization of loan closing costs (See note 8)



1,255





1,160





Depreciation/amortization of non-real estate assets



541





488





Net loan origination fees received (See note 9)



16





109





Deferred interest income received (See note 10)



3,852





5,436





Cash received for sale of K Program securities in excess of noncash revenues





1,474





Amortization of lease inducements (See note 11)



448





439





Cash received in excess of amortization of purchase option









termination revenues (See note 12)

560





49





Earnest money forfeited by prospective asset purchaser





1,000



Less:

Non-cash loan interest income (See note 10)



(3,193)





(3,686)





Cash paid for loan closing costs

(16)









Amortization of acquired real estate intangible liabilities and SLR (See note 13)

(4,333)





(4,268)





Amortization of deferred revenues (See note 14)



(941)





(941)





Normally recurring capital expenditures (See note 15)

(1,903)





(2,765)



















AFFO attributable to common stockholders and Unitholders

$

12,581





$

16,533















Common Stock dividends and distributions to Unitholders declared:









Common Stock dividends





$

8,877





$

12,156





Distributions to Unitholders (See note 2)



130





225





Total







$

9,007





$

12,381



















Common Stock dividends and Unitholder distributions per share



$

0.1750





$

0.2625



















FFO per weighted average basic share of Common Stock and Unit outstanding

$

(0.20)





$

0.31



Core FFO per weighted average basic share of Common Stock and Unit outstanding

$

0.31





$

0.35



AFFO per weighted average basic share of Common Stock and Unit outstanding

$

0.25





$

0.35











Weighted average shares of Common Stock and Units outstanding: (See note 16)









Basic:















Common Stock





49,912





45,934





Class A Units







731





856





Common Stock and Class A Units



50,643





46,790





















Diluted Common Stock and Class A Units (See note 17)



50,708





46,894



















Actual shares of Common Stock outstanding, including 548 and 13 unvested shares







 of restricted Common Stock at December 31, 2020 and 2019, respectively.

50,542





46,457



Actual Class A Units outstanding at December 31, 2020 and 2019, respectively.

649





856





Total







51,191





47,313



 

See Notes to Reconciliation of FFO, Core FFO and AFFO to Net Income (Loss) Attributable to Common Stockholders.





Reconciliation of FFO Attributable to Common Stockholders and Unitholders, Core FFO and AFFO

to Net (Loss) Income Attributable to Common Stockholders (A)











Years ended December 31,

(In thousands, except per-share figures)





2020



2019

















Net loss attributable to common stockholders (See note 1)

$

(338,901)





$

(121,033)



















Add:

Depreciation of real estate assets



161,500





148,034





Amortization of acquired intangible assets and deferred leasing costs

37,675





34,990





Net loss attributable to Class A Unitholders (See note 2)

(3,133)





(144)





Gain on sale of real estate

(23,456)







FFO attributable to common stockholders and unitholders

(166,315)





61,847





Acquisition and pursuit costs

383









Loan cost amortization on acquisition term notes and loan coordination fees (See note 3)

2,162





2,095





Contingent management fees recognized upon property sales





11





Payment of costs related to property refinancing

7,372





594





Internalization costs (See note 4)

180,116





2,987





Deemed dividends for redemptions of and non-cash dividends on preferred stock

30,970





577





Expenses incurred on the call of preferred stock (See note 5)

566









Expenses related to the COVID-19 global pandemic (See note 6)

663









Earnest money forfeited by prospective asset purchaser

(2,750)





(1,000)



Core FFO attributable to common stockholders and unitholders

53,167





67,111



Add:

Non-cash equity compensation to directors and executives

1,644





1,223





Non-cash (income) expense for current expected credit losses (See note 7)

3,802





1,400





Amortization of loan closing costs (See note 8)



4,886





4,618





Depreciation/amortization of non-real estate assets



2,334





1,869





Net loan origination fees received (See note 9)



898





783





Deferred interest income received (See note 10)



12,504





10,514





Amortization of lease inducements (See note 11)



1,782





1,734





Cash received in excess of (exceeded by) amortization of purchase option









 termination revenues (See note 12)

464





(2,321)





Non-cash revenues from mortgage-backed securities





778





Earnest money forfeited by prospective asset purchaser

2,750





1,000



Less:

Non-cash loan interest income (See note 10)



(12,638)





(14,431)





Cash paid for loan closing costs

(122)





(37)





Amortization of acquired real estate intangible liabilities and SLR (See note 13)

(18,017)





(16,643)





Amortization of deferred revenues (See note 14)



(3,762)





(3,762)





Normally recurring capital expenditures (See note 15)

(8,428)





(7,887)



















AFFO attributable to common stockholders and Unitholders

$

41,264





$

45,949















Common Stock dividends and distributions to Unitholders declared:









Common Stock dividends





$

38,868





$

46,755





Distributions to Unitholders (See note 2)



593





908





Total







$

39,461





$

47,663



















Common Stock dividends and Unitholder distributions per share



$

0.7875





$

1.0475



















FFO per weighted average basic share of Common Stock and Unit outstanding

$

(3.36)





$

1.37



Core FFO per weighted average basic share of Common Stock and Unit outstanding

$

1.07





$

1.49



AFFO per weighted average basic share of Common Stock and Unit outstanding

$

0.83





$

1.02



















Weighted average shares of Common Stock and Units outstanding: (See note 16)









Basic:















Common Stock





48,743





44,265





Class A Units







765





870





Common Stock and Class A Units



49,508





45,135





















Diluted Common Stock and Class A Units (See note 17)

49,549





45,772



















Actual shares of Common Stock outstanding, including 548 and 13 unvested shares







 of restricted Common Stock at December 31, 2020 and 2019, respectively.

50,542





46,457



Actual Class A Units outstanding at December 31, 2020 and 2019, respectively.

649





856





Total







51,191





47,313



















 

See Notes to Reconciliation of FFO, Core FFO and AFFO to Net Income (Loss) Attributable to Common Stockholders.

 

Notes to Reconciliations of FFO Attributable to Common Stockholders and Unitholders, Core FFO and AFFO to

Net Loss Attributable to Common Stockholders





1)

Rental and other property revenues and property operating expenses for the three-months and year ended December 31, 2020 include activity for the properties acquired during the period only from their respective dates of acquisition. In addition, these periods include activity for the properties acquired since December 31, 2019. Rental and other property revenues and expenses for the three-months and year ended December 31, 2019 include activity for the acquisitions made during that period only from their respective dates of acquisition.





2)

Non-controlling interests in Preferred Apartment Communities Operating Partnership, L.P., or our Operating Partnership, consisted of a total of 648,936 Class A Units as of December 31, 2020. Included in this total are 419,228 Class A Units which were granted as partial consideration to the seller in conjunction with the seller's contribution to us on February 29, 2016 of the Wade Green grocery-anchored shopping center. The remaining Class A units were awarded primarily to our key executive officers. The Class A Units are apportioned a percentage of our financial results as non-controlling interests. The weighted average ownership percentage of these holders of Class A Units was calculated to be 1.44% and 1.54% for the three-month periods ended December 31, 2020 and 2019, respectively.





3)

We paid loan coordination fees to Preferred Apartment Advisors, LLC, or our Former Manager, to reflect the administrative effort involved in arranging debt financing for acquired properties prior to the Internalization. The fees were calculated as 0.6% of the amount of any mortgage indebtedness on newly-acquired properties or refinancing and are amortized over the lives of the respective mortgage loans. This non-cash amortization expense is an addition to FFO in the calculation of Core FFO and AFFO. At December 31, 2020, aggregate unamortized loan coordination fees were approximately $11.7 million, which will be amortized over a weighted average remaining loan life of approximately 10.5 years.





4)

This adjustment reflects the add-back of (i) consideration paid to the owners of the Former Manager and Former Sub-Manager, (ii) accretion of the discount on the deferred liability payable to the owners of the Former Manager and (iii) due diligence and pursuit costs incurred by the Company related to the internalization of the functions performed by the Former Manager.





5)

This adjustment adds back expenses incurred by us to effect an amendment of the Company's charter necessary to allow us to redeem outstanding shares of our Series A Preferred Stock beginning on the fifth anniversary of the date of issuance of the shares of Series A Preferred Stock, rather than the tenth anniversary.





6)

This additive adjustment to FFO consists of non-recurring costs for signage, cleaning and supplies necessary to create and maintain work environments necessary to adhere to CDC guidelines during the current COVID-19 pandemic. Since we do not expect to incur similar costs once the COVID-19 pandemic has subsided, we add these costs back to FFO in our calculation of Core FFO.





7)

Effective January 1, 2020, we adopted ASU 2016-03, which requires us to estimate the amount of future credit losses we expect to incur over the lives of our real estate loan investments at the inception of each loan. This loss reserve may be adjusted upward or downward over the lives of our loans and therefore the aggregate net adjustment for each period could be positive (removing the non-cash effect of a net increase in aggregate loss reserves) or negative (removing the non-cash effect of a net decrease in aggregate loss reserves) in these adjustments to FFO in calculating Core FFO. More information on our expected credit loss reserves may be found in note 4 of our consolidated financial statements.





8)

We incur loan closing costs on our existing mortgage loans, which are secured on a property-by-property basis by each of our acquired real estate assets, and also for occasional amendments to our syndicated revolving line of credit with Key Bank National Association, or our Revolving Line of Credit. These loan closing costs are also amortized over the lives of the respective loans and the Revolving Line of Credit, and this non-cash amortization expense is an addition to FFO in the calculation of AFFO. Neither we nor the Operating Partnership have any recourse liability in connection with any of the mortgage loans, nor do we have any cross-collateralization arrangements with respect to the assets securing the mortgage loans, other than security interests in 49% of the equity interests of the subsidiaries owning such assets, granted in connection with our Revolving Line of Credit, which provides for full recourse liability. At December 31, 2020, unamortized loan costs on all the Company's indebtedness were approximately $31.1 million, which will be amortized over a weighted average remaining loan life of approximately 9.0 years.





9)

We receive loan origination fees in conjunction with the origination of certain real estate loan investments. These fees are then recognized as revenue over the lives of the applicable loans as adjustments of yield using the effective interest method. The total fees received are additive adjustments in the calculation of AFFO. Correspondingly, the amortized non-cash income is a deduction in the calculation of AFFO. Over the lives of certain loans, we accrue additional interest amounts that become due to us at the time of repayment of the loan or refinancing of the property, or when the property is sold. This non-cash interest income is subtracted from Core FFO in our calculation of AFFO. The amount of additional accrued interest becomes an additive adjustment to FFO once received from the borrower (see note 10).





10)

This adjustment reflects the receipt during the periods presented of additional interest income (described in note 9 above) which was earned and accrued on various real estate loans prior to those periods and previously deducted in our calculation of AFFO.





11)

This adjustment removes the non-cash amortization of costs incurred to induce tenants to lease space in our office buildings and grocery-anchored shopping centers.





12)

Occasionally we receive fees in exchange for the termination of our purchase options related to certain multifamily and student housing properties. These fees are recorded as revenue over the period beginning on the date of termination until the earlier of (i) the maturity of the real estate loan investment and (ii) the sale of the property. The receipt of the cash termination fees are an additive adjustment in our calculation of AFFO and the removal of non-cash revenue from the recognition of the termination fees are a reduction to Core FFO in our calculation of AFFO; both of these adjustments are presented in a single net number within this line. For periods in which recognized termination fee revenues exceeded the amount of cash received, a negative adjustment is shown to Core FFO in our calculation of AFFO; for periods in which cash received exceeded the amount of recognized termination fee revenues, an additive adjustment is shown to Core FFO in our calculation of AFFO.





13)

This adjustment reflects straight-line rent adjustments and the reversal of the non-cash amortization of below-market and above-market lease intangibles, which were recognized in conjunction with our acquisitions and which are amortized over the estimated average remaining lease terms from the acquisition date for multifamily communities and over the remaining lease terms for grocery-anchored shopping center assets and office buildings. At December 31, 2020, the balance of unamortized below-market lease intangibles was approximately $51.9 million, which will be recognized over a weighted average remaining lease period of approximately 8.7 years.





14)

This adjustment removes the non-cash amortization of deferred revenue recorded by us in conjunction with Company-owned lessee-funded tenant improvements in our office buildings.





15)

We deduct from Core FFO normally recurring capital expenditures that are necessary to maintain our assets' revenue streams in the calculation of AFFO. This adjustment also deducts from Core FFO capitalized amounts for third party costs during the period to originate or renew leases in our grocery-anchored shopping centers and office buildings. This adjustment includes approximately $31,000 and $131,000 of recurring capitalized expenditures incurred at our corporate offices during the three-months and year ended December 31, 2020, respectively. No adjustment is made in the calculation of AFFO for nonrecurring capital expenditures. See Capital Expenditures, Grocery-Anchored Shopping Center Portfolio, and Office Buildings Portfolio sections for definitions of these terms.





16)

Units and Unitholders refer to Class A Units in our Operating Partnership (as defined in note 2), or Class A Units, and holders of Class A Units, respectively. Unitholders include recipients of awards of Class B Units in our Operating Partnership, or Class B Units, for annual service which became vested and earned and automatically converted to Class A Units. Unitholders also include the entity that contributed the Wade Green grocery-anchored shopping center.





17)

Since our AFFO results are positive for the periods reflected, we are presenting recalculated diluted weighted average shares of Common Stock and Class A Units for these periods for purposes of this table, which includes the dilutive effect of common stock equivalents from grants of the Class B Units, warrants included in units of Series A Preferred Stock issued, as well as annual grants of restricted Common Stock and restricted stock units. The weighted average shares of Common Stock outstanding presented on the Consolidated Statements of Operations are the same for basic and diluted for any period for which we recorded a net loss available to common stockholders.



See Definitions of Non-GAAP Measures.

 

Preferred Apartment Communities, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except per-share par values)



December 31,

2020



December 31,

2019

Assets









Real estate 







Land



$

605,282





$

635,757



Building and improvements

3,034,727





3,256,223



Tenant improvements

184,288





167,275



Furniture, fixtures, and equipment

306,725





323,381



Construction in progress

12,269





11,893



Gross real estate

4,143,291





4,394,529



Less: accumulated depreciation

(509,547)





(421,551)



Net real estate

3,633,744





3,972,978



Real estate loan investments, net

279,895





325,790



Real estate loan investments to related parties, net





23,692



Total real estate and real estate loan investments, net

3,913,639





4,322,460













Cash and cash equivalents

28,657





94,381



Restricted cash

47,059





42,872



Notes receivable

1,863





17,079



Note receivable and revolving line of credit due from related party

9,011





24,838



Accrued interest receivable on real estate loans

22,528





25,755



Acquired intangible assets, net of amortization

127,138





154,803



Deferred loan costs on Revolving Line of Credit, net of amortization

714





1,286



Deferred offering costs

4,786





2,147



Tenant lease inducements, net

18,206





19,607



Investment in unconsolidated joint venture



6,657







Tenant receivables and other assets

100,821





65,332













Total assets

$

4,281,079





$

4,770,560













Liabilities and equity







Liabilities







Mortgage notes payable, net of deferred loan costs and mark-to-market adjustment

$

2,594,464





$

2,567,022



Revolving line of credit

22,000







Term note payable, net of deferred loan costs





69,489



Unearned purchase option termination fees

723





2,859



Deferred revenue

36,010





39,722



Accounts payable and accrued expenses

41,912





42,191



Deferred liability to Former Manager

23,335







Contingent liability due to Former Manager

14,814







Accrued interest payable

7,877





8,152



Dividends and partnership distributions payable

20,137





23,519



Acquired below market lease intangibles, net of amortization

51,934





62,611



Prepaid rent, security deposits and other liabilities

29,425





20,879



Total liabilities

2,842,631





2,836,444













Commitments and contingencies







Equity









Stockholders' equity









Series A Redeemable Preferred Stock, $0.01 par value per share; 3,050 shares authorized; 2,226 and 2,161 shares







 issued; 1,735 and 2,028 shares outstanding at December 31, 2020 and December 31, 2019, respectively

17





20



Series A1 Redeemable Preferred Stock, $0.01 par value per share; up to 1,000 shares authorized;







 149 and 5 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively

1







Series M Redeemable Preferred Stock, $0.01 par value per share; 500 shares authorized; 106 shares







  issued; 89 and 103 shares outstanding at December 31, 2020 and December 31, 2019, respectively

1





1



Series M1 Redeemable Preferred Stock, $0.01 par value per share; up to 1,000 shares authorized;







  19 and zero shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively







Common Stock, $0.01 par value per share; 400,067 shares authorized; 49,994 and 46,443 shares issued







and outstanding at December 31, 2020 and December 31, 2019, respectively

500





464



Additional paid-in capital



1,631,646





1,938,057



Accumulated (deficit) earnings



(192,446)





(7,244)



Total stockholders' equity



1,439,719





1,931,298



Non-controlling interest



(1,271)





2,818



Total equity



1,438,448





1,934,116



Total liabilities and equity



$

4,281,079





$

4,770,560







Preferred Apartment Communities, Inc.



Consolidated Statements of Cash Flows



(Unaudited)











Years ended December 31,



(In thousands)



2020



2019



Operating activities:











Net (loss) income



$

(181,603)





$

(7,458)





Reconciliation of net (loss) income to net cash provided by operating activities:









Depreciation and amortization expense

201,677





185,065





Amortization of above and below market leases

(8,021)





(5,765)





Deferred revenues and other non-cash revenues amortization

(5,059)





(6,275)





Purchase option termination fee amortization

(6,536)





(9,111)





Amortization of equity compensation, lease incentives and other non-cash expenses

4,267





3,220





Deferred loan cost amortization

6,855





6,450





Non-cash accrued interest income on real estate loan investments

(12,372)





(13,828)





Receipt of accrued interest income on real estate loan investments

14,391





8,063





Gains on the sales of real estate and mortgage-backed securities

(23,456)





(1,567)





Gains on the sales of real estate loan investments and land condemnation

(517)





(954)





Loss from unconsolidated joint ventures

314









Cash received for purchase option terminations

7,000





3,591





Loss on extinguishment of debt

6,674





84





Noncash settlement of related party line of credit from Internalization

20,864









Non-cash payment of interest on related party line of credit





(637)





Mortgage interest received from consolidated VIEs





18,750





Mortgage interest paid to other participants of consolidated VIEs





(18,750)





Increase in allowance for expected credit losses

6,103





2,038





Changes in operating assets and liabilities:









(Increase) in tenant receivables and other assets

(24,437)





(20,565)





(Increase) in tenant lease incentives

(382)





(644)





Increase in accounts payable and accrued expenses

7,084





1,518





Increase in deferred liability to Former Manager

22,851









Increase in contingent liability

15,000









(Decrease) increase in accrued interest, prepaid rents and other liabilities

(2,805)





2,406





Net cash provided by operating activities

47,892





145,631

















Investing activities:











Investments in real estate loans



(59,417)





(98,418)





Repayments of real estate loans



115,726





54,384





Notes receivable issued



(1,044)





(5,692)





Notes receivable repaid



16,293





3,089





Notes receivable issued to and draws on lines of credit by related parties

(9,624)





(40,458)





Repayments of notes receivable and lines of credit by related parties

4,546





35,239





Proceeds from sale of real estate loan investment, net

3,898





747





Origination fees received on real estate loan investments

898





1,565





Origination fees paid to Former Manager on real estate loan investments





(783)





Mortgage principal received from consolidated VIEs





6,570





Purchases of mortgage-backed securities





(30,841)





Proceeds from sales of mortgage-backed securities





79,558





Acquisition of properties



(321,962)





(619,089)





Dispositions of properties

515,477









Proceeds from sale of interest in unconsolidated joint venture

19,221









Return of capital from investment in unconsolidated joint venture

12,250









Receipt of insurance proceeds for capital improvements





746





Proceeds from land condemnation



787





643





Equity investment in property development

(50)





(100)





Capital improvements to real estate assets

(52,809)





(48,071)





Deposits paid on acquisitions

(65)





(146)





Net cash provided by (used in) investing activities

244,125





(661,057)

















Financing activities:











Proceeds from mortgage notes payable

469,184





405,430





Repayments of mortgage notes payable

(438,308)





(176,903)





Payments for deposits and other mortgage loan costs

(12,140)





(8,705)





Debt prepayment and other debt extinguishment costs

(5,733)









Payments to real estate loan participants





(5,223)





Proceeds from lines of credit



442,000





265,200





Payments on lines of credit



(420,000)





(322,200)





Proceeds from (repayment of) Term Loan

(70,000)





70,000





Mortgage principal paid to other participants of consolidated VIEs





(6,570)





Proceeds from repurchase agreements





4,857





Repayments of repurchase agreements





(4,857)





Proceeds from sales of preferred stock and Units, net of offering costs

206,381





501,076





Proceeds from sales of Common Stock

4,522









Proceeds from exercises of Warrants

24





11,659





Payments for redemptions of preferred stock

(314,154)





(12,124)





Common Stock dividends paid



(42,100)





(45,439)





Preferred stock dividends and Class A Unit distributions paid

(161,746)





(111,738)





Distributions to non-controlling interests

(161)









Payments for deferred offering costs

(11,509)





(4,013)





Contributions from non-controlling interests

186





4,539





Net cash (used in) provided by financing activities

(353,554)





564,989















Net (decrease) increase in cash, cash equivalents and restricted cash

(61,537)





49,563





Cash, cash equivalents and restricted cash, beginning of year

137,253





87,690





Cash, cash equivalents and restricted cash, end of period

$

75,716





$

137,253











































Real Estate Loan Investments

The following tables present details pertaining to our portfolio of fixed rate, interest-only real estate loan investments.

Project/Property



Location



Maturity

date



Optional

extension

date



Total loan

commitments



Carrying amount (1) as of

December 31,

2020

December 31,

2019



Current /

deferred

interest %

per annum







































Residential properties:











(in thousands)





Palisades



Northern VA



N/A



N/A



$





$





$

17,250





  (2)

Horizon at Wiregrass



Tampa, FL



N/A



N/A











14,976





(3)

Horizon at Wiregrass

Capital



Tampa, FL



N/A



N/A











4,240





(4)

Berryessa



San Jose, CA



2/13/2022



2/13/2023



137,616





126,237





115,819





8.5 / 3

The Anson



Nashville, TN



11/24/2021



11/24/2023



6,240





6,240





6,240





8.5 / 4.5

The Anson Capital



Nashville, TN



11/24/2021



11/24/2023



5,659





4,839





4,440





8.5 / 4.5

Sanibel Straights



Fort Myers, FL



N/A



N/A











8,846





(5)

Sanibel Straights Capital



Fort Myers, FL



N/A



N/A











5,930





(6)

Falls at Forsyth



Atlanta, GA



N/A



N/A











21,513





(7)

Newbergh



Atlanta, GA



3/31/2021



N/A



11,749





11,749





11,699





8.5 / 5.5

Newbergh Capital



Atlanta, GA



3/31/2021



N/A



6,176





6,176





5,653





8.5 / 5.5

V & Three



Charlotte, NC



8/15/2021



8/15/2022



10,336





10,335





10,336





8.5 / 5

V & Three Capital



Charlotte, NC



8/18/2021



8/18/2022



7,338





7,162





6,571





8.5 / 5

Cameron Square



Alexandria, VA



10/11/2021



10/11/2023



21,340





20,874





18,582





8.5 / 3

Cameron Square Capital



Alexandria, VA



10/11/2021



10/11/2023



8,850





8,850





8,235





8.5 / 3

Southpoint



Fredericksburg, VA

2/28/2022



2/28/2024



7,348





7,348





7,348





8.5 / 4

Southpoint Capital



Fredericksburg, VA

2/28/2022



2/28/2024



4,962





4,626





4,245





8.5 / 4

E-Town



Jacksonville, FL



N/A



N/A











14,550





(8)

Vintage Destin



Destin, FL



3/24/2022



3/24/2024



10,763





9,736





8,932





8.5 / 4

Hidden River II



Tampa, FL



10/11/2022



10/11/2024



4,462





4,462





3,012





8.5 / 3.5

Hidden River II Capital



Tampa, FL



10/11/2022



10/11/2024



2,763





2,461





2,258





8.5 / 3.5

Kennesaw Crossing



Atlanta, GA



9/1/2023



9/1/2024



14,810





13,025





7,616





8.5 / 5.5

Vintage Horizon West



Orlando, FL



10/11/2022



10/11/2024



10,900





9,019





8,275





8.5 / 5.5

Chestnut Farms



Charlotte, NC



2/28/2025



N/A



13,372





11,671









8.5 / 5.5

Vintage Jones Franklin



Raleigh, NC



11/14/2023



5/14/2025



10,000





7,904









8.5 / 5.5

Solis Cumming Town





























Center



Atlanta, GA



9/3/2024



9/3/2026



20,681





5,584









8.5 / 5.5

Haven 12



Starkville, MS



N/A



N/A











6,116





(9)

Solis Kennesaw II



Atlanta, GA



N/A



N/A











12,489





(10)































New Market Properties:





























Dawson Marketplace



Atlanta, GA



N/A



N/A











12,857





(11)































Office property:





























8West



Atlanta, GA



11/29/2022



11/29/2024



19,193





11,858





4,554





8.5 / 5















































$

334,558





290,156





352,582







Unamortized loan origination fees















(1,194)





(1,476)







Allowances for expected credit losses and doubtful accounts











(9,067)





(1,624)





































Carrying amount



















$

279,895





$

349,482























































(1) Carrying amounts presented per loan are amounts drawn.

(2) On July 31, 2020, we received approximately $18.7 million in full satisfaction of the principal and all interest due on the loan.

(3) On March 31, 2020, we received approximately $20.1 million in full satisfaction of the principal, purchase option termination fee, and all interest due on the loan.

(4) On March 31, 2020, we received approximately $5.1 million in full satisfaction of the principal and all interest due on the loan.

(5) On November 30, 2020, we received approximately $11.9 million in full satisfaction of the principal, purchase option termination fee, and all interest due on the loan.

(6) On November 30, 2020, we received approximately $7.3 million in full satisfaction of the principal and all interest due on the loan.

(7) On March 6, 2020, we received approximately $27.0 million in full satisfaction of the principal, purchase option termination fee, and all interest due on the loan.

(8) On December 15, 2020, we received approximately $16.7 million in full satisfaction of the principal and all interest due on the loan.

(9) The Company's Starkville loan had been in default since August 20, 2019 under the terms of the underlying mezzanine loan agreement. The Company recorded

a loan loss reserve related to this loan totaling $1.4 million, reducing its net investment in the Starkville loan from $7.3 million, including accrued interest of $1.2

million, to a carrying amount of $5.9 million as of December 31, 2019. This loan was included in the sale of the Company's eight student properties that closed

on November 3, 2020.

(10) On December 10, 2020, we received approximately $15.4 million in full satisfaction of the principal, purchase option termination fee, and all interest due on the loan.

(11) On February 3, 2020, we received approximately $15.7 million in full satisfaction of the principal and all interest due on the loan.

 

We hold options or rights of first offer, but not obligations, to purchase some of the properties which are partially financed by our real estate loan investments. Certain option purchase prices may be negotiated at the time of the loan closing and are to be calculated based upon market cap rates at the time of exercise of the purchase option, with discounts up to 15 basis points (if any), depending on the loan. As of December 31, 2020, potential property acquisitions and units from projects in our real estate loan investment portfolio consisted of:







Total units

upon



Purchase option window



Project/Property

Location



completion (1)



Begin



End





















Multifamily communities:

















V & Three

Charlotte, NC



338





S + 90 days (2)



S + 150 days (2)



The Anson

Nashville, TN



301





S + 90 days (2)



S + 150 days (2)



Southpoint

Fredericksburg, VA



240





S + 90 days (2)



S + 150 days (2)



Vintage Destin

Destin, FL



282





(3)



(3)



Hidden River II

Tampa, FL



204





S + 90 days (2)



S + 150 days (2)



Kennesaw Crossing

Atlanta, GA



250





(4)



(4)



Vintage Horizon West

Orlando, FL



340





(3)



(3)



Solis Chestnut Farm

Charlotte, NC



256





(4)



(4)



Vintage Jones Franklin

Raleigh, NC



277





(3)



(3)



Solis Cumming Town Center

Atlanta, GA



320





(4)



(4)





















Office property:

















8West

Atlanta, GA



(5)





(5)



(5)



























2,808

































(1) We evaluate each project individually and we make no assurance that we will acquire any of the underlying properties from our real estate loan investment portfolio.



(2) The option period window begins and ends at the number of days indicated beyond the achievement of a 93% physical occupancy rate by the underlying property.



(3) The option period window begins on the later of one year following receipt of final certificate of occupancy or 90 days  beyond the achievement of a 93% physical

occupancy rate by the underlying property and ends 60 days beyond the option period beginning date.



(4) We hold a right of first offer on the property.



(5) The project plans are for the construction of a class A office building consisting of approximately 195,000 rentable square feet; our purchase option window opens 90 days

following the achievement of 90% lease commencement and ends on November 30, 2024 (subject to adjustment). Our purchase option is at the to-be-agreed-upon market value.

In the event the property is sold to a third party, we would be due a fee based on a minimum multiple of 1.15 times the total commitment amount of the real estate loan investment,

less the amounts actually paid by the borrower, up to and including payment of accrued interest and repayment of principal at the time of the sale.



 



Mortgage Indebtedness

The following table presents certain details regarding our mortgage notes payable:









Principal balance as of



















Acquisition/

refinancing

date



December 31,

2020



December 31,

2019



Maturity

date



Interest

rate



Basis point

spread over 1

Month

LIBOR



Interest only

through date
(1
)





























Multifamily communities:





(in thousands)

















Summit Crossing

10/31/2017



$

36,929





$

37,651





11/1/2024



3.99

%



Fixed rate



N/A

Summit Crossing II

6/30/2020



20,700





13,221





7/1/2030



2.93

%



278



7/31/2022

Vineyards

9/26/2014



32,703





33,382





10/1/2021



3.68

%



Fixed rate



N/A

Avenues at Cypress

6/30/2020



28,366





20,704





7/1/2027



2.96

%



Fixed rate



7/31/2022

Avenues at Northpointe

6/29/2020



33,546





26,313





7/1/2027



2.79

%



Fixed rate



7/31/2022

Venue at Lakewood Ranch

6/30/2020



36,555





28,076





7/1/2030



2.99

%



Fixed rate



7/31/2022

Aster at Lely Resort

6/29/2020



50,400





31,094





7/1/2030



2.95

%



Fixed rate



7/31/2022

CityPark View

6/25/2020



29,000





20,089





7/1/2030



2.75

%



Fixed rate



7/31/2023

Avenues at Creekside

7/31/2015







38,871





N/A



N/A



N/A



N/A

Citi Lakes

7/29/2019



40,324





41,079





8/1/2029



3.66

%



Fixed rate



N/A

Stone Creek

6/22/2017



19,451





19,800





7/1/2052



3.22

%



Fixed rate



N/A

Lenox Village Town Center

2/28/2019



38,169





38,813





3/1/2029



4.34

%



Fixed rate



N/A

Retreat at Lenox

12/21/2015



16,751





17,114





1/1/2023



4.04

%



Fixed rate



N/A

Overton Rise

2/1/2016



37,607





38,428





8/1/2026



3.98

%



Fixed rate



N/A

Village at Baldwin Park

7/31/2020



69,608





70,607





1/1/2054



3.59

%



Fixed rate



N/A

Crosstown Walk

6/30/2020



46,500





30,246





7/1/2027



2.92

%



Fixed rate



7/31/2022

525 Avalon Park

6/15/2017



63,256





64,519





7/1/2024



3.98

%



Fixed rate



N/A

City Vista

7/1/2016



32,938





33,674





7/1/2026



3.68

%



Fixed rate



N/A

Sorrel

8/24/2016



30,740





31,449





9/1/2023



3.44

%



Fixed rate



N/A

Citrus Village

7/10/2020



40,900





28,796





8/1/2027



2.95

%



Fixed rate



8/31/2022

Retreat at Greystone

11/21/2017



33,439





34,053





12/1/2024



4.31

%



Fixed rate



N/A

Founders Village

3/31/2017



29,635





30,202





4/1/2027



4.31

%



Fixed rate



N/A

Claiborne Crossing

4/26/2017



25,503





25,948





6/1/2054



2.89

%



Fixed rate



N/A

Luxe at Lakewood Ranch

7/26/2017



36,922





37,662





8/1/2027



3.93

%



Fixed rate



N/A

Adara at Overland Park

9/27/2017



30,024





30,624





4/1/2028



3.90

%



Fixed rate



N/A

Aldridge at Town Village

10/31/2017



35,892





36,569





11/1/2024



4.19

%



Fixed rate



N/A

Reserve at Summit Crossing

9/29/2017



18,893





19,276





10/1/2024



3.87

%



Fixed rate



N/A

Overlook at Crosstown Walk

11/21/2017



21,038





21,450





12/1/2024



3.95

%



Fixed rate



N/A

Colony at Centerpointe

12/20/2017



31,445





32,120





10/1/2026



3.68

%



Fixed rate



N/A

Lux at Sorrel

1/9/2018



29,868





30,474





2/1/2030



3.91

%



Fixed rate



N/A

Green Park

2/28/2018



37,785





38,525





3/10/2028



4.09

%



Fixed rate



N/A

The Lodge at Hidden River

9/27/2018



40,204





40,903





10/1/2028



4.32

%



Fixed rate



N/A

Vestavia Reserve

11/9/2018



36,511





37,130





12/1/2030



4.40

%



Fixed rate



N/A

CityPark View South

11/15/2018



23,379





23,767





6/1/2029



4.51

%



Fixed rate



N/A

Artisan at Viera

8/8/2019



39,104





39,824





9/1/2029



3.93

%



Fixed rate



N/A

Five Oaks at Westchase

10/17/2019



30,818





31,448





11/1/2031



3.27

%



Fixed rate



N/A

Horizon at Wiregrass Ranch

4/23/2020



51,360









5/1/2030



2.90

%



Fixed rate



N/A

Parkside at the Beach

4/30/2020



45,037









5/1/2030



2.95

%



Fixed rate



N/A

The Blake

11/2/2020



44,435









5/1/2030



2.82

%



Fixed rate



12/31/2025

The Menlo

12/15/2020



47,000









1/1/2031



2.68

%



Fixed rate



1/31/2024





























Total multifamily communities





1,392,735





1,173,901















































Grocery-anchored shopping centers:

Spring Hill Plaza

9/17/2019



7,962





8,167





10/1/2031



3.72

%



Fixed rate



N/A

Parkway Town Centre

9/17/2019



7,866





8,067





10/1/2031



3.72

%



Fixed rate



N/A

Woodstock Crossing

8/8/2014



2,818





2,877





9/1/2021



4.71

%



Fixed rate



N/A

Deltona Landings

8/16/2019



6,141





6,289





9/1/2029



4.18

%



Fixed rate



N/A

Powder Springs

8/13/2019



7,749





7,951





9/1/2029



3.65

%



Fixed rate



(2)

Barclay Crossing

8/16/2019



6,086





6,233





9/1/2029



4.18

%



Fixed rate



N/A

Parkway Centre

8/16/2019



4,423





4,530





9/1/2029



4.18

%



Fixed rate



N/A

The Market at Salem Cove

10/6/2014



8,889





9,075





11/1/2024



4.21

%



Fixed rate



N/A

Independence Square

8/27/2015



11,184





11,455





9/1/2022



3.93

%



Fixed rate



N/A

Royal Lakes Marketplace

4/12/2019



9,345





9,572





5/1/2029



4.29

%



Fixed rate



N/A

The Overlook at Hamilton Place

12/22/2015



19,088





19,509





1/1/2026



4.19

%



Fixed rate



N/A

Summit Point

10/30/2015



11,118





11,494





11/1/2022



3.57

%



Fixed rate



N/A

East Gate Shopping Center

4/29/2016



5,118





5,277





5/1/2026



3.97

%



Fixed rate



N/A

Fury's Ferry

4/29/2016



5,912





6,096





5/1/2026



3.97

%



Fixed rate



N/A

Rosewood Shopping Center

4/29/2016



3,971





4,095





5/1/2026



3.97

%



Fixed rate



N/A

Southgate Village

4/29/2016



7,059





7,279





5/1/2026



3.97

%



Fixed rate



N/A

The Market at Victory Village

5/16/2016



8,751





8,911





9/11/2024



4.40

%



Fixed rate



N/A

Wade Green Village

4/7/2016



7,488





7,655





5/1/2026



4.00

%



Fixed rate



N/A

Lakeland Plaza

7/15/2016



26,632





27,459





8/1/2026



3.85

%



Fixed rate



N/A

University Palms

8/8/2016



12,030





12,421





9/1/2026



3.45

%



Fixed rate



N/A

Cherokee Plaza

4/12/2019



24,277





24,867





5/1/2027



4.28

%



Fixed rate



N/A

Sandy Plains Exchange

8/8/2016



8,404





8,676





9/1/2026



3.45

%



Fixed rate



N/A

Thompson Bridge Commons

8/8/2016



11,234





11,599





9/1/2026



3.45

%



Fixed rate



N/A

Heritage Station

8/8/2016



8,315





8,585





9/1/2026



3.45

%



Fixed rate



N/A

Oak Park Village

8/8/2016



8,580





8,859





9/1/2026



3.45

%



Fixed rate



N/A

Shoppes of Parkland

8/8/2016



15,414





15,702





9/1/2023



4.67

%



Fixed rate



N/A

Champions Village

10/18/2016



27,400





27,400





11/1/2021



3.25

%



300

(3)

11/1/2021

Castleberry-Southard

4/21/2017



10,734





10,959





5/1/2027



3.99

%



Fixed rate



N/A

Rockbridge Village

6/6/2017



13,310





13,597





7/5/2027



3.73

%



Fixed rate



N/A

Irmo Station

7/26/2017



9,758





10,038





8/1/2030



3.94

%



Fixed rate



N/A

Maynard Crossing

8/25/2017



16,953





17,449





9/1/2032



3.74

%



Fixed rate



N/A

Woodmont Village

9/8/2017



8,096





8,320





10/1/2027



4.13

%



Fixed rate



N/A

West Town Market

9/22/2017



8,260





8,503





10/1/2025



3.65

%



Fixed rate



N/A

Crossroads Market

12/5/2017



17,622





18,112





1/1/2030



3.95

%



Fixed rate



N/A

Anderson Central

3/16/2018



11,246





11,539





4/1/2028



4.32

%



Fixed rate



N/A

Greensboro Village

5/22/2018



8,040





8,250





6/1/2028



4.20

%



Fixed rate



N/A

Governors Towne Square

5/22/2018



10,696





10,976





6/1/2028



4.20

%



Fixed rate



N/A

Conway Plaza

6/29/2018



9,375





9,549





7/5/2028



4.29

%



Fixed rate



N/A

Brawley Commons

7/6/2018



17,519





17,963





8/1/2028



4.36

%



Fixed rate



N/A

Hollymead Town Center

12/21/2018



26,139





26,758





1/1/2029



4.64

%



Fixed rate



N/A

Gayton Crossing

1/17/2019



17,276





17,679





2/1/2029



4.71

%



Fixed rate



N/A

Free State Shopping Center

5/28/2019



45,549





46,391





6/1/2029



3.99

%



Fixed rate



N/A

Polo Grounds Mall

6/12/2019



12,986





13,227





7/1/2034



3.93

%



Fixed rate



N/A

Disston Plaza

6/12/2019



17,578





17,905





7/1/2034



3.93

%



Fixed rate



N/A

Fairfield Shopping Center

8/16/2019



19,750





19,750





8/16/2026



2.21

%



205



8/16/2022

Berry Town Center

11/14/2019



11,794





12,025





12/1/2034



3.49

%



Fixed rate



N/A

Hanover Shopping Center

12/19/2019



31,217





32,000





12/19/2026



3.62

%



Fixed rate



N/A

Wakefield Crossing

1/29/2020



7,728









2/1/2032



3.66

%



Fixed rate



N/A





























Total grocery-anchored shopping centers (4)



614,880





621,090















































Student housing properties:



























North by Northwest

6/1/2016







31,209





N/A



N/A



N/A



N/A

SoL

10/31/2018







35,656





N/A



N/A



N/A



N/A

Stadium Village

10/27/2017







45,228





N/A



N/A



N/A



N/A

Ursa

12/18/2017







31,400





N/A



N/A



N/A



N/A

The Tradition

5/10/2018







30,000





N/A



N/A



N/A



N/A

Knightshade

5/31/2018







47,125





N/A



N/A



N/A



N/A

The Bloc

6/27/2018







28,966





N/A



N/A



N/A



N/A





























Total student housing properties









249,584















































Office buildings:

Brookwood Center

8/29/2016



29,925





30,716





9/10/2031



3.52

%



Fixed rate



N/A

Galleria 75

11/4/2016



5,131





5,340





7/1/2022



4.25

%



Fixed rate



N/A

Three Ravinia

12/30/2016



115,500





115,500





1/1/2042



4.46

%



Fixed rate



1/31/2022

Westridge at La Cantera

11/13/2017



50,449





51,834





12/10/2028



4.10

%



Fixed rate



N/A

Armour Yards

1/29/2018



39,425





40,000





2/1/2028



4.10

%



Fixed rate



N/A

150 Fayetteville

7/31/2018



113,768





114,400





8/10/2028



4.27

%



Fixed rate



N/A

Capitol Towers

12/20/2018



122,720





124,814





1/10/2037



4.60

%



Fixed rate



N/A

CAPTRUST Tower

7/25/2019



82,650





82,650





8/1/2029



3.61

%



Fixed rate



7/31/2029

Morrocroft Centre

3/19/2020



70,000









4/10/2033



3.40

%



Fixed rate



4/10/2025

251 Armour Yards (5)

1/22/2020



3,522









1/22/2025



4.50

%



Fixed rate



1/21/2023





























Total office buildings





633,090





565,254



















Grand total





2,640,705





2,609,829



















Less: deferred loan costs





(42,233)





(38,185)



















Less: below market debt adjustment





(4,008)





(4,622)



















Mortgage notes, net





$

2,594,464





$

2,567,022



















 

Footnotes to Mortgage Notes Table







(1) Following the indicated interest only period (where applicable), monthly payments of accrued interest and principal are based on a 25 to 35-year amortization period through the maturity date.



(2) The mortgage has interest-only payment terms for the periods of June 1, 2023 through May 1, 2024 and from June 1, 2028 through May 1, 2029.



(3) The interest rate has a floor of 3.25%.



(4) Excludes mortgage debt on the Neapolitan Way grocery-anchored shopping center, which is held in an unconsolidated joint venture.



(5) A construction loan financing redevelopment of the property.



 

Multifamily Communities

As of December 31, 2020, our multifamily community portfolio consisted of the following properties:





















Three months ended

December 31, 2020

Property



Location



Number of

units



Average unit

size (sq. ft.)



Average

physical

occupancy



Average rent

per unit























Same-Store Communities:





















Aldridge at Town Village



Atlanta, GA



300





969





97.6

%



$

1,419



Green Park



Atlanta, GA



310





985





97.2

%



$

1,489



Overton Rise



Atlanta, GA



294





1,018





96.4

%



$

1,595



Summit Crossing I



Atlanta, GA



345





1,034





98.4

%



$

1,253



Summit Crossing II



Atlanta, GA



140





1,100





96.2

%



$

1,366



The Reserve at Summit Crossing



Atlanta, GA



172





1,002





96.1

%



$

1,344



Avenues at Cypress



Houston, TX



240





1,170





95.6

%



$

1,455



Avenues at Northpointe



Houston, TX



280





1,167





96.8

%



$

1,395



Vineyards



Houston, TX



369





1,122





96.2

%



$

1,202



Aster at Lely Resort



Naples, FL



308





1,071





95.3

%



$

1,439



Sorrel



Jacksonville, FL



290





1,048





95.1

%



$

1,342



Lux at Sorrel



Jacksonville, FL



265





1,025





95.1

%



$

1,383



525 Avalon Park



Orlando, FL



487





1,394





94.7

%



$

1,512



Citi Lakes



Orlando, FL



346





984





92.9

%



$

1,468



Luxe at Lakewood Ranch



Sarasota, FL



280





1,105





94.9

%



$

1,490



Venue at Lakewood Ranch



Sarasota, FL



237





1,001





91.6

%



$

1,515



Crosstown Walk



Tampa, FL



342





1,070





96.3

%



$

1,341



Overlook at Crosstown Walk



Tampa, FL



180





986





95.6

%



$

1,413



Citrus Village



Tampa, FL



296





980





95.5

%



$

1,353



Lenox Village



Nashville, TN



273





906





95.4

%



$

1,309



Regent at Lenox



Nashville, TN



18





1,072





90.7

%



$

1,399



Retreat at Lenox



Nashville, TN



183





773





94.5

%



$

1,254



CityPark View



Charlotte, NC



284





948





95.4

%



$

1,166



CityPark View South



Charlotte, NC



200





1,005





96.8

%



$

1,274



Colony at Centerpointe



Richmond, VA



255





1,149





95.9

%



$

1,397



Founders Village



Williamsburg, VA



247





1,070





95.8

%



$

1,399



Retreat at Greystone



Birmingham, AL



312





1,100





95.4

%



$

1,376



Vestavia Reserve



Birmingham, AL



272





1,113





97.8

%



$

1,554



Adara Overland Park



Kansas City, KS



260





1,116





95.1

%



$

1,374



Claiborne Crossing



Louisville, KY



242





1,204





96.8

%



$

1,345



City Vista



Pittsburgh, PA



272





1,023





93.5

%



$

1,457

























Total/Average Same-Store Communities







8,299









95.6

%



























Stabilized Communities:





















Stone Creek



Houston, TX



246





852





96.2

%



$

1,201



Artisan at Viera



Melbourne, FL



259





1,070





92.7

%



$

1,682



The Menlo



Jacksonville, FL



332





966











Village at Baldwin Park



Orlando, FL



528





1,069





95.6

%



$

1,661



The Blake



Orlando, FL



281





908











Parkside at the Beach



Panama City Beach, FL



288





1,041





95.1

%



$

1,390



Lodge at Hidden River



Tampa, FL



300





980





96.6

%



$

1,397



Five Oaks at Westchase



Tampa, FL



218





983





96.2

%



$

1,504



Horizon at Wiregrass



Tampa, FL



392





973





95.6

%



$

1,505

























Total/Average Stabilized Communities







2,844









95.6

%



























Total multifamily community units







11,143





































 

For the three-month period ended December 31, 2020, our average same-store multifamily communities' physical occupancy was 95.6%. We calculate average same-store physical occupancy for quarterly periods as the average of the number of occupied units on the 20th day of each of the trailing three months from the reporting period end date and that have been owned for at least 15 full months as of the end of the first quarter of each year. We exclude the operating results of properties for which construction of adjacent phases has commenced, properties which are undergoing significant capital projects, have sustained significant casualty losses, or are being marketed for sale as of the end of the reporting period. We believe "Same Property" information is useful as it allows both management and investors to gauge our management effectiveness via comparisons of financial and operational results between interim and annual periods for those subsets of multifamily communities owned for current and prior comparative periods.

For the three-month period ended December 31, 2020, our average stabilized physical occupancy was 95.6%. We calculate average stabilized physical occupancy for quarterly periods as the average number of occupied units on the 20th day of each of the trailing three months from the reporting period end date. All of our multifamily communities were stabilized for the three-month period ended December 31, 2020 except The Blake and The Menlo that were both acquired during the fourth quarter 2020.

For the three-month period ended December 31, 2020, our average economic occupancy was 95.5%. We define average economic occupancy as market rent reduced by vacancy losses, expressed as a percentage. All of our multifamily properties are included in these calculations except for properties which are not yet stabilized (which we define as properties having first achieved 93% physical occupancy for three full months in a quarter), properties which are owned for less than the entire reporting period and properties which are undergoing significant capital projects, have sustained significant casualty losses or are adding additional phases. We also exclude properties which are currently being marketed for sale, of which we had none at December 31, 2020. Average economic occupancy is useful both to management and investors as a gauge of our effectiveness in realizing the full revenue generating potential of our multifamily communities given market rents and occupancy rates. 

Capital Expenditures

We regularly incur capital expenditures related to our owned multifamily communities and student housing properties. Capital expenditures may be nonrecurring and discretionary, as part of a strategic plan intended to increase a property's value and corresponding revenue-generating ability, or may be normally recurring and necessary to maintain the income streams and present value of a property. Certain capital expenditures may be budgeted and reserved for upon acquiring a property as initial expenditures necessary to bring a property up to our standards or to add features or amenities that we believe make the property a compelling value to prospective residents in its individual market. These budgeted nonrecurring capital expenditures in connection with an acquisition are funded from the capital source(s) for the acquisition and are not dependent upon subsequent property operating cash flows for funding. Since the onset of the COVID-19 pandemic, all nonrecurring and discretionary capital expenditures have been reviewed individually and approved on as-needed basis. Certain recurring safety-related operational capital expenditures have continued without interruption as they remain necessary for the continued normal operation of our properties.

For the three-month period ended December 31, 2020, our capital expenditures for multifamily communities consisted of:               











Capital Expenditures - Multifamily Communities







Recurring



Non-recurring



Total

(in thousands, except per-unit figures)

Amount



Per Unit



Amount



Per Unit



Amount



Per Unit

Appliances

$

131





$

11.87





$





$





$

131





$

11.87



Carpets





490





44.85













490





44.85



Wood / vinyl flooring

36





3.34





72





6.44





108





9.78



Mini blinds and ceiling fans

29





2.60













29





2.60



Fire safety











117





10.63





117





10.63



HVAC



128





11.63













128





11.63



Computers, equipment, misc.

40





3.70





29





2.62





69





6.32



Elevators









29





2.68





29





2.68



Exterior painting









101





9.03





101





9.03



Leasing office and other common amenities 

36





3.24





101





8.98





137





12.22



Major structural projects 









704





64.51





704





64.51



Cabinets and countertop upgrades









376





34.42





376





34.42



Landscaping and fencing









203





18.65





203





18.65



Parking lot











224





20.79





224





20.79



Signage and sanitation









45





4.15





45





4.15



Totals





$

890





$

81.23





$

2,001





$

182.90





$

2,891





$

264.13



 

For the three-month period ended December 31, 2020, our capital expenditures for student housing properties consisted of:











Capital Expenditures - Student Housing Properties







Recurring



Non-recurring



Total

(in thousands, except per-bed figures)

Amount



Per Bed



Amount



Per Bed



Amount



Per Bed

Appliances

$

15





$

5.70





$





$





$

15





$

5.70



Carpets





2





6.70













2





6.70



Wood / vinyl flooring

1





0.28





1





0.28





2





0.56



Mini blinds and ceiling fans

2





0.98













2





0.98



Fire safety











29





7.85





29





7.85



HVAC



42





12.78













42





12.78



Computers, equipment, misc.

2





1.91





2





2.83





4





4.74



Elevators









7





1.84





7





1.84



Exterior painting























Leasing office and other common amenities 









1





3.79





1





3.79



Major structural projects 









6





27.10





6





27.10



Cabinets and counter top upgrades























Landscaping and fencing









1





1.65





1





1.65



Parking lot























Signage and sanitation























Unit furniture

54





25.17













54





25.17



Totals





$

118





$

53.52





$

47





$

45.34





$

165





$

98.86



 

Grocery-Anchored Shopping Center Portfolio                



As of December 31, 2020, our grocery-anchored shopping center portfolio consisted of the following properties:



Property name

Location



Year built



GLA (1)



Percent

leased



Grocery anchor

tenant





















Castleberry-Southard

 Atlanta, GA



2006



80,018





98.3

%



 Publix

Cherokee Plaza

 Atlanta, GA



1958



102,864





100.0

%



Kroger

Governors Towne Square

 Atlanta, GA



2004



68,658





95.9

%



 Publix

Lakeland Plaza

 Atlanta, GA



1990



301,711





95.3

%



Sprouts

Powder Springs

 Atlanta, GA



1999



77,853





92.5

%



 Publix

Rockbridge Village

 Atlanta, GA



2005



102,432





84.4

%



 Kroger

Roswell Wieuca Shopping Center

 Atlanta, GA



2007



74,370





97.8

%



 The Fresh Market

Royal Lakes Marketplace

 Atlanta, GA



2008



119,493





91.4

%



 Kroger

Sandy Plains Exchange

 Atlanta, GA



1997



72,784





98.8

%



Publix

Summit Point

 Atlanta, GA



2004



111,970





83.9

%



 Publix

Thompson Bridge Commons

 Atlanta, GA



2001



92,587





97.5

%



Kroger

Wade Green Village

 Atlanta, GA



1993



74,978





95.9

%



 Publix

Woodmont Village

 Atlanta, GA



2002



85,639





98.6

%



Kroger

Woodstock Crossing

 Atlanta, GA



1994



66,122





100.0

%



 Kroger

East Gate Shopping Center

 Augusta, GA



1995



75,716





90.4

%



 Publix

Fury's Ferry

 Augusta, GA



1996



70,458





93.2

%



 Publix

Parkway Centre

 Columbus, GA



1999



53,088





97.7

%



 Publix

Greensboro Village

 Nashville, TN



2005



70,203





98.3

%



 Publix

Spring Hill Plaza

 Nashville, TN



2005



66,693





100.0

%



 Publix

Parkway Town Centre

 Nashville, TN



2005



65,587





100.0

%



 Publix

The Market at Salem Cove

 Nashville, TN



2010



62,356





100.0

%



 Publix

The Market at Victory Village

 Nashville, TN



2007



71,300





100.0

%



 Publix

The Overlook at Hamilton Place

 Chattanooga, TN



1992



213,095





99.3

%



 The Fresh Market

Shoppes of Parkland

 Miami-Ft. Lauderdale, FL



2000



145,720





100.0

%



BJ's Wholesale Club

Crossroads Market

 Naples, FL



1993



126,895





98.6

%



Publix

Neapolitan Way (2)

 Naples, FL



1985



137,580





91.5

%



Publix

Berry Town Center

 Orlando, FL



2003



99,441





83.0

%



Publix

Deltona Landings

 Orlando, FL



1999



59,966





98.4

%



 Publix

University Palms

 Orlando, FL



1993



99,172





98.9

%



Publix

Disston Plaza

 Tampa-St. Petersburg, FL



1954



129,150





97.5

%



Publix

Barclay Crossing

 Tampa, FL



1998



54,958





100.0

%



 Publix

Polo Grounds Mall

 West Palm Beach, FL



1966



130,285





100.0

%



Publix

Kingwood Glen

 Houston, TX



1998



103,397





97.1

%



 Kroger

Independence Square

 Dallas, TX



1977



140,218





86.6

%



 Tom Thumb

Midway Market

 Dallas, TX



2002



85,599





90.3

%



Kroger

Oak Park Village

 San Antonio, TX



1970



64,855





100.0

%



H.E.B.

Irmo Station

 Columbia, SC



1980



99,384





90.8

%



Kroger

Rosewood Shopping Center

 Columbia, SC



2002



36,887





93.5

%



 Publix

Anderson Central

 Greenville Spartanburg, SC



1999



223,211





94.2

%



 Walmart

Fairview Market

 Greenville Spartanburg, SC



1998



46,303





97.0

%



Aldi

Brawley Commons

 Charlotte, NC



1997



122,028





99.2

%



 Publix

West Town Market

 Charlotte, NC



2004



67,883





100.0

%



Harris Teeter

Heritage Station

 Raleigh, NC



2004



72,946





100.0

%



Harris Teeter

Maynard Crossing

 Raleigh, NC



1996



122,781





92.7

%



Harris Teeter

Wakefield Crossing

 Raleigh, NC



2001



75,927





98.2

%



Food Lion

Southgate Village

 Birmingham, AL



1988



75,092





96.8

%



 Publix

Hollymead Town Center

 Charlottesville, VA



2005



158,807





92.8

%



Harris Teeter

Free State Shopping Center

 Washington, DC



1970



264,152





97.3

%



Giant































4,922,612





95.6

%





Redevelopment properties:



















Champions Village

 Houston, TX



1973



383,346





68.8

%



Randalls

Sweetgrass Corner

 Charleston, SC



1999



89,124





29.1

%



(3)

Conway Plaza

 Orlando, FL



1966



117,705





76.3

%



Publix

Hanover Center (4)

 Wilmington, NC



1954



305,346





81.1

%



Harris Teeter

Gayton Crossing

 Richmond, VA



1983



158,316



 (5)

76.1

%



Kroger

Fairfield Shopping Center (4)

Virginia Beach, VA



1985



231,829





86.2

%



Food Lion































1,285,666





73.7

%





Grand total/weighted average









6,208,278





91.0

%





 

(1) 

Gross leasable area, or GLA, represents the total amount of property square footage that can be leased to tenants.

(2) 

Investment in an unconsolidated joint venture that is not prorated for our ownership percentage.

(3) 

Bi-Lo (the former anchor tenant) had extended their term through April 30, 2019 and had no further right or option to extend their lease.

(4)

Property is owned through a consolidated joint venture.

(5)

The GLA figure shown excludes the GLA of the Kroger store, which is owned by others.

 

As of December 31, 2020, our grocery-anchored shopping center portfolio was 91.0% leased (95.6% excluding redevelopment properties). We define percent leased as the percentage of gross leasable area that is leased as of the period end date, including non-cancelable lease agreements that have been signed which have not yet commenced. This metric is used by management to gauge the extent to which our grocery-anchored shopping centers are delivering their total potential rental and other revenues.

 

Details regarding lease expirations (assuming no exercises of tenant renewal options) within our grocery-anchored shopping center portfolio as of December 31, 2020 were:

 





Totals





Number

of leases



Leased

GLA



Percent of

leased GLA















Month to month



14





26,085





0.5

%

2021



150





430,821





7.6

%

2022



183





634,522





11.3

%

2023



149





650,023





11.5

%

2024



129





1,184,959





21.0

%

2025



122





981,750





17.4

%

2026



48





368,268





6.5

%

2027



29





193,733





3.4

%

2028



28





357,227





6.3

%

2029



25





151,566





2.7

%

2030



16





114,687





2.0

%

2031 +



20





547,821





9.8

%















Total



913





5,641,462



5641462

100.0

%

 

The Company's grocery-anchored shopping center portfolio contained the following anchor tenants as of December 31, 2020:



Tenant



GLA



Percent of

total GLA

Publix



1,179,030





19.0

%

Kroger



581,593





9.4

%

Harris Teeter



273,273





4.4

%

Wal-Mart



183,211





3.0

%

BJ's Wholesale Club



108,532





1.7

%

Food Lion



76,523





1.2

%

Giant



73,149





1.2

%

Randall's



61,604





1.0

%

H.E.B



54,844





0.9

%

Tom Thumb



43,600





0.7

%

The Fresh Market



43,321





0.7

%

Sprouts



29,855





0.5

%

Aldi



23,622





0.4

%











Total



2,732,157





44.1%











 

The Company's Annual Report on Form 10-K for the year ended December 31, 2020 will present income statements of New Market Properties, LLC within the Results of Operations section of Management's Discussion and Analysis of Financial Condition and Results of Operations.

Second-generation capital expenditures within our grocery-anchored shopping center portfolio by property for the fourth quarter 2020 totaled approximately $501,000. Second-generation capital expenditures exclude those expenditures made in our grocery-anchored shopping center and office building portfolios (i) to lease space to "first generation" tenants (i.e. leasing capital for existing vacancies and known move-outs at the time of acquisition), (ii) to bring recently acquired properties up to our ownership standards, and (iii) for property redevelopments and repositioning.

 

Office Building Portfolio

As of December 31, 2020, our office building portfolio consisted of the following properties:



Property Name



Location



GLA



Percent leased

Three Ravinia



Atlanta, GA



814,000





92

%

150 Fayetteville



Raleigh, NC



560,000





91

%

Capitol Towers



Charlotte, NC



479,000





98

%

CAPTRUST Tower



Raleigh, NC



300,000





98

%

Westridge at La Cantera



San Antonio, TX



258,000





100

%

Morrocroft Centre



Charlotte, NC



291,000





95

%

Armour Yards



Atlanta, GA



187,000





93

%

Brookwood Center



Birmingham, AL



169,000





100

%

Galleria 75



Atlanta, GA



111,000





90

%















Total/Average







3,169,000





95

%















 

The Company's office building portfolio includes the following significant tenants:

               







Rentable square

footage



Percent of

Annual Base

Rent



Annual Base

Rent (in

 thousands)

InterContinental Hotels Group

495,000





13.8

%



$

11,876



Albemarle

162,000





6.6

%



5,727



CapFinancial

105,000





4.3

%



3,738



USAA

129,000





3.7

%



3,196



Vericast

129,000





3.4

%



2,953



















Total

1,020,000





31.8

%



$

27,490



               

The Company defines Annual Base Rent as the current monthly base rent annualized under the respective leases.



The Company's leased square footage of its office building portfolio expires according to the following schedule:











Percent of

Year of lease

expiration



Rented square



rented



feet



square feet

2021



215,000





7.3

%

2022



128,000





4.3

%

2023



124,000





4.2

%

2024



279,000





9.4

%

2025



255,000





8.6

%

2026



265,000





8.9

%

2027



328,000





11.1

%

2028



246,000





8.3

%

2029



57,000





1.9

%

2030



177,000





6.0

%

2031 +



888,000





30.0

%











Total



2,962,000





100.0

%

The Company recognized second-generation capital expenditures within its office building portfolio of approximately $366,000 during the fourth quarter 2020.

Definitions of Non-GAAP Measures

We disclose FFO, Core FFO, AFFO and NOI, each of which meet the definition of a "non-GAAP financial measure", as set forth in Item 10(e) of Regulation S-K promulgated by the SEC. As a result we are required to include in this filing a statement of why the Company believes that presentation of these measures provides useful information to investors. The non-GAAP measures of FFO, Core FFO, AFFO and NOI should be considered as an alternative to net income (determined in accordance with GAAP) as an indication of our performance, and we believe that to understand our performance further FFO, Core FFO, AFFO and NOI should be compared with our reported net income or net loss and considered in addition to cash flows in accordance with GAAP, as presented in our consolidated financial statements. FFO, Core FFO and AFFO are not considered measures of liquidity and are not alternatives to measures calculated under GAAP.

Funds From Operations Attributable to Common Stockholders and Unitholders ("FFO") 

FFO is one of the most commonly utilized Non-GAAP measures currently in practice. In its 2002 "White Paper on Funds From Operations," which was restated in 2018, the National Association of Real Estate Investment Trusts, or NAREIT, standardized the definition of how Net income/loss should be adjusted to arrive at FFO, in the interests of uniformity and comparability. We have adopted the NAREIT definition for computing FFO as a meaningful supplemental gauge of our operating results, and as is most often presented by other REIT industry participants.

The NAREIT definition of FFO (and the one reported by the Company) is:

Net income/loss, excluding:

  • depreciation and amortization related to real estate;
  • gains and losses from the sale of certain real estate assets;
  • gains and losses from change in control and
  • impairment writedowns 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. 

Not all companies necessarily utilize the standardized NAREIT definition of FFO, so caution should be taken in comparing the Company's reported FFO results to those of other companies. The Company's FFO results are comparable to the FFO results of other companies that follow the NAREIT definition of FFO and report these figures on that basis. FFO is a non-GAAP measure that is reconciled to its most comparable GAAP measure, net income/loss available to common stockholders.

Core Funds From Operations Attributable to Common Stockholders and Unitholders ("Core FFO")

The Company makes adjustments to FFO to remove costs incurred and revenues recorded that are singular in nature and outside the normal operations of the Company and portray its primary operational results. The Company calculates Core FFO as: 

FFO, plus:

  • acquisition and pursuit (dead deal) costs;
  • loan cost amortization on acquisition term notes and loan coordination fees;
  • contingent management fees recognized upon property sales;
  • losses on debt extinguishments or refinancing costs;
  • internalization costs;
  • expenses incurred on calls of preferred stock;
  • deemed dividends for redemptions of and non-cash dividends on preferred stock;
  • expenses related to the COVID-19 global pandemic; and

Less:

  • earnest money forfeitures by prospective asset purchasers.

Core FFO figures reported by us may not be comparable to Core FFO figures reported by other companies. We utilize Core FFO as a supplemental measure of the operating performance of our portfolio of real estate assets. We believe Core FFO is useful to investors as a supplemental gauge of our operating performance and may be useful in comparing our operating performance with other real estate companies. Since our calculation of Core FFO removes costs incurred and revenues recorded that are often singular in nature and outside the normal operations of the Company, we believe it improves comparability to investors in assessing our core operating results across periods. Core FFO is a non-GAAP measure that is reconciled to its most comparable GAAP measure, net income/loss available to common stockholders.

Adjusted Funds From Operations Attributable to Common Stockholders and Unitholders ("AFFO")

AFFO makes further adjustments to Core FFO results in order to arrive at a more refined measure of operating and financial performance. There is no industry standard definition of AFFO and practice is divergent across the industry. The Company calculates AFFO as:

Core FFO, plus:

  • non-cash equity compensation to directors and executives;
  • non-cash (income) expense for current expected credit losses;
  • amortization of loan closing costs;
  • depreciation and amortization of non-real estate assets;
  • net loan origination fees received;
  • deferred interest income received;
  • amortization of lease inducements;
  • cash received in excess of (exceeded by) amortization of purchase option termination revenues;
  • earnest money forfeiture from prospective asset purchaser;

Less:

  • non-cash loan interest income;
  • cash paid for loan closing costs;
  • amortization of acquired real estate intangible liabilities and straight-line rent adjustments;
  • amortization of deferred revenues; and
  • normally-recurring capital expenditures and capitalized second generation leasing costs.

AFFO figures reported by us may not be comparable to those AFFO figures reported by other companies. We utilize AFFO as another measure of the operating performance of our portfolio of real estate assets. We believe AFFO is useful to investors as a supplemental gauge of our operating performance and may be useful in comparing our operating performance with other real estate companies. Since our calculation of AFFO removes other significant non-cash charges and revenues and other costs which are not representative of our ongoing business operations, we believe it improves comparability to investors in assessing our core operating results across periods. AFFO is a non-GAAP measure that is reconciled to its most comparable GAAP measure, net income/loss available to common stockholders. FFO, Core FFO and AFFO are not considered measures of liquidity and are not alternatives to measures calculated under GAAP.

Multifamily Communities' Same-Store Net Operating Income ("NOI")

We use same store net operating income as an operational metric for our same-store communities, enabling comparisons of those properties' operating results between the current reporting period and the prior year comparative period. We define our population of same-store communities as those that are stabilized and that have been owned for at least 15 full months, as of the end of the first quarter of each year, and exclude the operating results of properties for which construction of adjacent phases has commenced, and properties which are undergoing significant capital projects, have sustained significant casualty losses, or are being marketed for sale as of the end of the reporting period. We define net operating income as rental and other property revenues, less total property and maintenance expenses, property management fees, real estate taxes, general and administrative expenses, and property insurance. We believe that net operating income is an important supplemental measure of operating performance for REITs because it provides measures of core operations, rather than factoring in depreciation and amortization, financing costs, acquisition costs, and other corporate expenses. Net operating income is a widely utilized measure of comparative operating performance in the REIT industry, but is not a substitute for the most comparable GAAP-compliant measure, net income/loss.

About Preferred Apartment Communities, Inc.   

Preferred Apartment Communities, Inc. APTS is a real estate investment trust engaged primarily in the ownership and operation of Class A multifamily properties, with select investments in grocery-anchored shopping centers and  Class A office buildings. Preferred Apartment Communities' investment objective is to generate attractive, stable returns for stockholders by investing in income-producing properties and acquiring or originating real estate loans for multifamily properties. As of December 31, 2020, the Company owned or was invested in 116 properties in 13 states, predominantly in the Southeast region of the United States.

Cision View original content to download multimedia:http://www.prnewswire.com/news-releases/preferred-apartment-communities-inc-reports-results-for-fourth-quarter-2020-301237825.html

SOURCE Preferred Apartment Communities, Inc.

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