Market Overview

Bluerock Residential Growth REIT Announces First Quarter 2019 Results

Share:

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

(PRNewsfoto/Bluerock Residential Growth REI)

First Quarter Highlights 

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

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

Financial Results

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

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

Total Portfolio Performance


$ In thousands, except average rental
rates

1Q19


1Q18


Variance


Total Revenues (1)

$ 51,466


$ 41,871


22.9%


Property Operating Expenses

$ 18,602


$ 15,658


18.8%


NOI

$ 27,088


$ 21,017


28.9%


Operating Margin

59.3%


57.3%


200

bps

Occupancy Percentage

93.9%


93.5%


40

bps

Average Rental Rate

$    1,299


$    1,227


5.9%


(1) Including interest income from related parties



 

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

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

Same Store Portfolio Performance


$ In thousands, except average rental
rates

1Q19


1Q18


Variance


Revenues

$   38,725


$   36,612


5.8%


Property Operating Expenses

$   15,854


$   15,628


1.4%


NOI

$   22,871


$   20,984


9.0%


Operating Margin

59.1%


57.3%


180

bps

Occupancy Percentage

93.9%


93.5%


40

bps

Average Rental Rate

$     1,290


$     1,225


5.3%


 

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

Renovation Activity

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

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

Acquisition Activity

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

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

Balance Sheet

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

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

Dividend 

The Board of Directors authorized, and the Company declared, a quarterly dividend for the first quarter of 2019

View Comments and Join the Discussion!
 
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Daily Analyst Rating
A summary of each day’s top rating changes from sell-side analysts on the street.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com