On August 9, 2024, BRT Apartments Corp (BRT, Financial) released its 8-K filing for the second quarter of 2024. BRT Apartments Corp is a real estate investment trust (REIT) focused on the ownership, operation, and development of multi-family properties.
Company Performance and Challenges
BRT Apartments Corp reported a net loss of $2.3 million, or $(0.13) per diluted share, for Q2 2024. This result exceeded the analyst estimate of -$0.16 per share. However, the company reported revenues of $23.78 million, surpassing the estimated $23.60 million.
The company’s performance reflects the challenging operational environment, particularly in the Sunbelt markets where new supply has muted rent growth. Despite these challenges, BRT Apartments Corp managed to maintain stable average occupancy rates and modestly grow controllable expenses.
Financial Achievements and Importance
Despite the net loss, BRT Apartments Corp achieved several financial milestones. The company reported Funds from Operations (FFO) of $0.29 per diluted share and Adjusted Funds from Operations (AFFO) of $0.35 per diluted share. These metrics are crucial for REITs as they provide a clearer picture of operational performance by excluding depreciation and amortization.
Additionally, the company repurchased 53,619 shares at a weighted average price of $17.34, reflecting a strategic move to enhance shareholder value.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Net Loss | $(2.3) million | $11.2 million |
| FFO per Share | $0.29 | $0.28 |
| AFFO per Share | $0.35 | $0.37 |
| Revenue | $23.78 million | $23.26 million |
Income Statement Highlights
For the quarter ended June 30, 2024, BRT Apartments Corp reported total revenues of $23.86 million, up from $23.32 million in the same period last year. Real estate operating expenses increased slightly to $10.85 million from $10.55 million. The company also reported a decrease in depreciation and amortization expenses to $6.47 million from $7.54 million in Q2 2023.
Balance Sheet and Cash Flow
As of June 30, 2024, BRT Apartments Corp had cash and cash equivalents of $18.95 million. The company’s total debt outstanding was $574.60 million, including mortgages payable and subordinated notes. The debt to enterprise value ratio stood at 65%, indicating a moderate level of leverage.
Operational Insights and Future Outlook
BRT Apartments Corp’s operational focus remains on stabilizing occupancy and managing expenses. The company’s balance sheet shows no debt maturities until Q3 2025, providing financial stability and liquidity to navigate the current market conditions.
Looking ahead, BRT Apartments Corp anticipates a more favorable transaction environment in the latter half of 2024, with potential opportunities for asset acquisitions and rescue capital situations.
"The operational environment in BRT’s Combined Portfolio is expected to be consistent with other Sunbelt-focused operators with new supply muting new and renewal lease rent growth until at least the second half of 2024 as the new supply is absorbed."
For more detailed financial information, readers can access the full 8-K filing.
Explore the complete 8-K earnings release (here) from BRT Apartments Corp for further details.
