Market Overview

Bluerock Residential Growth REIT Announces Second Quarter 2019 Results

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NEW YORK, Aug. 6, 2019 /PRNewswire/ -- Bluerock Residential Growth REIT, Inc. (NYSE:BRG) ("the Company"), an owner of highly amenitized multi-family apartment communities, announced today its financial results for the quarter ended June 30, 2019.

(PRNewsfoto/Bluerock Residential Growth REI)

Highlights 

  • Total revenues grew 16.6% to $52.4 million for the quarter from $45.0 million in the prior year period.
  • Net loss attributable to common stockholders for the second quarter of 2019 was ($0.50) per share, as compared to net loss attributable to common stockholders of ($0.44) per share in the prior year period.
  • Property Net Operating Income ("NOI") grew 22.9% to $27.6 million, from $22.5 million in the prior year period.
  • Same store revenue and NOI increased 5.3% and 9.0% respectively, as compared to the prior year period.
  • Core funds from operations attributable to common shares and units ("CFFO") grew 12.4% to $6.7 million, from $5.9 million in the prior year period. CFFO per share is $0.22 for the quarter as compared to $0.19 in second quarter 2018.
  • Paid quarterly common stock dividend of $0.1625, a 74% payout on a CFFO basis.
  • Consolidated real estate investments, at cost, increased approximately $119.4 million to $1.9 billion, from year end.
  • Including activity completed subsequent to quarter end, invested approximately $108.0 million, comprising $106.1 million in four multifamily communities totaling 1,499 units with total purchase prices of $303.3 million, and $1.9 million to buy out minority ownership interests in two assets. The four new acquisitions are projected to yield a year one economic cap rate of 4.9%.
  • Completed the sale of four assets subsequent to quarter end, with an additional property expected to close in August, totaling approximately $274 million and an economic cap rate of 4.5%.
  • Completed 232 value-add unit upgrades during the quarter achieving a 23.8% ROI.
  • Repurchased 749,648 shares of stock during the second quarter at an average price of $11.13 per share, for a total cost of approximately $8.3 million.
  • Increased the midpoint of its full year 2019 CFFO guidance by narrowing it to a range of $0.81 to $0.84 per share from the prior range of $0.80 to $0.84 per share.

"We continued to produce strong operating results in the second quarter with property NOI up 23%, same store NOI that increased 9.0% and CFFO increasingly exceeding our dividend payment," said Ramin Kamfar, Company Chairman and CEO. "Subsequent to quarter end, we executed an accretive portfolio sale and recycled the proceeds into attractive assets with a stronger long-term growth profile and immediate value-add renovation opportunity.  We remain focused on ongoing operational improvements and creating value through our value-add unit upgrade programs. Furthermore, with access to accretive capital with our Series B redeemable preferred stock issuance, we continue to identify attractive investments to grow our portfolio of highly amenitized communities in targeted growth markets."

Financial Results

Net loss attributable to common stockholders for the second quarter of 2019 was $11.0 million, compared to a net loss of $10.2 million in the prior year period.  Net loss attributable to common stockholders included non-cash expenses of $15.9 million or $0.72 per share in the second quarter of 2019 compared to $14.4 million or $0.62 per share for the prior year period.

CFFO for the second quarter of 2019 was $6.7 million, or $0.22 per diluted share, compared to $5.9 million, or $0.19 per diluted share in the prior year period.  CFFO was primarily driven by growth in property NOI of $5.1 million and interest income of $0.3 million arising from investment activity. This was primarily offset by a year-over-year rise in interest expense of $2.2 million and preferred stock dividends of $2.4 million.

Total Portfolio Performance

$ In thousands, except average rental rates

2Q19


2Q18


Variance


YTD19


YTD18


Variance


Total Revenues (1)

$ 52,437


$ 44,959


16.6%


$103,902


$   86,828


19.7%


Property Operating Expenses

$ 18,868


$ 16,874


11.8%


$ 37,470


$   32,533


15.2%


NOI

$ 27,596


$ 22,450


22.9%


$ 54,683


$   43,465


25.8%


Operating Margin

59.4%


57.1%


230

bps

59.3%


57.2%


210

bps

Occupancy Percentage

93.8%


93.9%


(10)

bps

93.8%


93.7%


10

bps

Average Rental Rate

$    1,312


$    1,239


5.9%


$    1,306


$     1,233


5.9%


(1) Including interest income from related parties









For the second quarter of 2019, property revenues increased by 16.6% compared to the same prior year period primarily attributable to the increased size of the portfolio.  Total portfolio NOI was $27.6 million, an increase of $5.1 million, or 22.9%, compared to the same period in the prior year. 

Property NOI margins were 59.4% of revenue for the quarter, compared to 57.1% of revenue in the prior year quarter.  Property operating expenses were up primarily due to the increased size of the portfolio.

Same Store Portfolio Performance

$ In thousands, except average rental rates

2Q19


2Q18


Variance


YTD19


YTD18


Variance


Revenues

$   40,441


$   38,414


5.3%


$   78,023


$   73,908


5.6%


Property Operating Expenses

$   16,597


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