UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the quarterly period ended ~~September 30, 2021~~March 31, 2022

☐ Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Commission File Number 001-07172

BRT APARTMENTS CORP.

(Exact name of Registrant as specified in its charter)


Maryland						13-2755856
(State or other jurisdiction of						(I.R.S. Employer Identification No.)
incorporation or organization)


60 Cutter Mill Road, Great Neck, NY						11021
(Address of principal executive offices)						(Zip Code)

516-466-3100

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	BRT	NYSE

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See definition of “large accelerated filer” “accelerated filer”, “smaller reporting company”and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer ☐						Accelerated filer ☐
Non-accelerated filer ☒						Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of stock, as of the latest practicable date.

~~18,236,367~~18,603,490 Shares of Common Stock,

par value $0.01 per share, outstanding on ~~November 1, 2021~~May 2, 2022

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

Table of Contents


Part I - Financial Information		Page No.
Item 1.	Financial Statements
	Consolidated Balance Sheets - Consolidated Balance Sheets - ~~September~~March 3 ~~30, 2021~~1 , 202 2 (unaudited) and December 31, ~~2020~~202 1 (audited)	3
	Consolidated Statements of Operations – Three ~~and~~ ~~Nine~~months ended ~~September~~March ~~30, 2021~~3 1 , 202 2 and ~~2020~~202 1 (unaudited)	4
	Consolidated Statements of Comprehensive Income (loss) – Three ~~and~~ ~~nine~~m ~~months~~onths ended ~~September~~March ~~30, 2021~~3 1 , 202 2 and ~~2020~~202 1 (unaudited)	5
	Consolidated Statements of Equity – Three ~~and~~ ~~nine~~months ended ~~September~~March ~~30, 2021~~3 1 , 202 2 and 202 ~~and 2020~~1 (unaudited)	6
	Consolidated Statements of Cash Flows –~~Nine~~Three months ended March 3 ~~September~~1 , 202 2 ~~30, 2021~~ and ~~2020~~202 1 (unaudited)	87
	Notes to Consolidated Financial Statements	1110

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2420

Item 3.	Quantitative and Qualitative Disclosures About Market Risks	4034

Item 4.	Controls and Procedures	4034

Part II – Other Information

Item 2.	~~Unregistered Sales of Equity Securities and Use of Proceeds~~	31

~~Item~~ 6.	Exhibits	4135

Table of Contents

Explanatory Note

Unless otherwise indicated or the context otherwise requires, all references to (i) “us”, “we”, “BRT” or the “Company” refer to BRT Apartments Corp. and its consolidated and unconsolidated subsidiaries; (ii) all interest rates give effect to the related interest rate derivative, if any; (iii) "acquisitions" include investments in and by unconsolidated joint ventures; (iv) ~~units under rehabilitation for which we have received or accrued rental income from business interruption insurance, while not physically occupied, are treated as leased (i.e., occupied) at rental rates in effect at~~references to the ~~time~~impact of the ~~casualty,~~COVID-19 pandemic include the impact of the governmental and non-governmental responses thereto and the economic consequences thereof, and (v) "same store properties" refer to properties that we owned and operated for the entirety of ~~both~~the periods being compared, except for properties that are under construction, in lease-up, or are undergoing development or redevelopment. We move properties previously excluded from our same store portfolio (because they were under construction, in lease up or are in development or redevelopment) into the same store designation once they have stabilized (as described below) and such status has been reflected fully in all quarters during the applicable periods of comparison. Newly constructed, lease-up, development and redevelopment properties are deemed stabilized upon the earlier to occur of the first full calendar quarter beginning (a) 12 months after the property is fully completed and put in service and (b) attainment of at least 90% physical occupancy.

Table of Contents

Part I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Amounts in thousands, except per share data)


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
		(unaudited)		(audited)			(unaudited)		(audited)
ASSETS	ASSETS					ASSETS
Real estate properties, net of accumulated depreciation and amortization of $33,980 and $30,837		$	224,620	$	160,192
Real estate properties, net of accumulated depreciation and amortization of $39,259 and $36,467						Real estate properties, net of accumulated depreciation and amortization of $39,259 and $36,467	$	328,334	$	293,550
Investments in unconsolidated joint ventures	Investments in unconsolidated joint ventures	128,478		169,474		Investments in unconsolidated joint ventures	106,025		112,347
Cash and cash equivalents	Cash and cash equivalents	29,598		19,885		Cash and cash equivalents	29,688		32,339
Restricted cash	Restricted cash	7,560		8,800		Restricted cash	6,543		6,582
Other assets	Other assets	7,792		7,390		Other assets	12,410		10,341

Real estate property held for sale						Real estate property held for sale	—		4,379
Total Assets	Total Assets	$	398,048	$	365,741	Total Assets	$	483,000	$	459,538
LIABILITIES AND EQUITY	LIABILITIES AND EQUITY					LIABILITIES AND EQUITY
Liabilities:	Liabilities:					Liabilities:
Mortgages payable, net of deferred costs of $485 and $563		$	134,193	$	130,434
Junior subordinated notes, net of deferred costs of $302 and $317		37,098		37,083
Mortgages payable, net of deferred costs of $1,297 and $980						Mortgages payable, net of deferred costs of $1,297 and $980	$	211,565	$	199,877
Junior subordinated notes, net of deferred costs of $292 and $297						Junior subordinated notes, net of deferred costs of $292 and $297	37,108		37,103

Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	20,464		20,536		Accounts payable and accrued liabilities	20,125		19,607
Total Liabilities	Total Liabilities	191,755		188,053		Total Liabilities	268,798		256,587

Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0
Equity:	Equity:					Equity:
BRT Apartments Corp. stockholders' equity:	BRT Apartments Corp. stockholders' equity:					BRT Apartments Corp. stockholders' equity:
Preferred shares $0.01 par value 2,000 shares authorized, none outstanding	Preferred shares $0.01 par value 2,000 shares authorized, none outstanding	—		—		Preferred shares $0.01 par value 2,000 shares authorized, none outstanding	—		—
Common stock,$0.01 par value, 300,000 shares authorized; 17,289 and 16,432 shares outstanding		173		164
Common stock, $0.01 par value, 300,000 shares authorized; 17,632 and 17,349 shares outstanding						Common stock, $0.01 par value, 300,000 shares authorized; 17,632 and 17,349 shares outstanding	176		173
Additional paid-in capital	Additional paid-in capital	255,960		245,605		Additional paid-in capital	262,170		258,161
Accumulated other comprehensive loss		—		(19)

Accumulated deficit	Accumulated deficit	(49,861)		(67,978)		Accumulated deficit	(48,175)		(55,378)
Total BRT Apartments Corp. stockholders’ equity	Total BRT Apartments Corp. stockholders’ equity	206,272		177,772		Total BRT Apartments Corp. stockholders’ equity	214,171		202,956
Non-controlling interests		21		(84)
Non-controlling interest						Non-controlling interest	31		(5)
Total Equity	Total Equity	206,293		177,688		Total Equity	214,202		202,951
Total Liabilities and Equity	Total Liabilities and Equity	$	398,048	$	365,741	Total Liabilities and Equity	$	483,000	$	459,538

See accompanying notes to consolidated financial statements.

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Amounts in thousands, except shares and per share data)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Revenues:	Revenues:									Revenues:
Rental and other revenue from real estate properties	Rental and other revenue from real estate properties	$	7,709	$	7,020	$	21,762	$	20,422	Rental and other revenue from real estate properties	$	11,430	$	7,095
Other income	Other income	5		293		12		631		Other income	4		4
Total revenues	Total revenues	7,714		7,313		21,774		21,053		Total revenues	11,434		7,099
Expenses:	Expenses:									Expenses:
Real estate operating expenses - including $8 and $8 to related parties for the three months ended and $23 and $24 for the nine months ended		3,404		3,289		9,687		9,351
Real estate operating expenses - including $11 and $7 to related parties										Real estate operating expenses - including $11 and $7 to related parties	4,753		3,117
Interest expense	Interest expense	1,535		1,731		4,804		5,400		Interest expense	2,021		1,660
General and administrative - including $172 and $167 to related parties for the three months ended and $523 and $631 for the nine months ended		3,114		2,730		9,382		9,054
Impairment charge		—		3,642		520		3,642
Depreciation		1,787		1,777		4,740		5,147
General and administrative - including $246 and $172 to related parties										General and administrative - including $246 and $172 to related parties	3,633		3,114

Depreciation and amortization										Depreciation and amortization	3,606		1,537
Total expenses	Total expenses	9,840		13,169		29,133		32,594		Total expenses	14,013		9,428
Total revenues less total expenses	Total revenues less total expenses	(2,126)		(5,856)		(7,359)		(11,541)		Total revenues less total expenses	(2,579)		(2,329)
Equity in loss of unconsolidated joint ventures		(4,196)		(1,529)		(6,033)		(4,731)
Equity in earnings (loss) of unconsolidated joint ventures										Equity in earnings (loss) of unconsolidated joint ventures	1,230		(1,345)
Equity in earnings from sale of unconsolidated joint ventures properties	Equity in earnings from sale of unconsolidated joint ventures properties	34,982		—		34,982		—		Equity in earnings from sale of unconsolidated joint ventures properties	12,961		—
Gain on sale of real estate	Gain on sale of real estate	414		—		7,693		—		Gain on sale of real estate	6		—
Gain on sale of partnership interest		—		—		2,244		—

Loss on extinguishment of debt		(902)		—		(902)		—

Income (loss) from continuing operations	Income (loss) from continuing operations	28,172		(7,385)		30,625		(16,272)		Income (loss) from continuing operations	11,618		(3,674)
Income tax provision	Income tax provision	31		65		155		192		Income tax provision	74		57
Net income (loss) from continuing operations, net of taxes	Net income (loss) from continuing operations, net of taxes	28,141		(7,450)		30,470		(16,464)		Net income (loss) from continuing operations, net of taxes	11,544		(3,731)
Net income attributable to non-controlling interests		(35)		(34)		(102)		(97)
Net income attributable to non-controlling interest										Net income attributable to non-controlling interest	(36)		(34)
Net income (loss) attributable to common stockholders	Net income (loss) attributable to common stockholders	$	28,106	$	(7,484)	$	30,368	$	(16,561)	Net income (loss) attributable to common stockholders	$	11,508	$	(3,765)

Weighted average number of shares of common stock outstanding:	Weighted average number of shares of common stock outstanding:									Weighted average number of shares of common stock outstanding:
Basic	Basic	17,261,520		17,176,401		16,916,623		17,095,315		Basic	17,561,802		17,319,222
Diluted	Diluted	17,292,988		17,176,401		16,992,974		17,095,315		Diluted	17,654,349		17,319,222

Per share amounts attributable to common stockholders:	Per share amounts attributable to common stockholders:									Per share amounts attributable to common stockholders:
Basic		$	1.55	$	(0.44)	$	1.71	$	(0.97)
Diluted		$	1.54	$	(0.44)	$	1.70	$	(0.97)
Basic and Diluted										Basic and Diluted	$	0.62	$	(0.22)

See accompanying notes to consolidated financial statements.

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(Dollars in thousands)


		Three Months Ended September 30,					Nine Months Ended September 30,							Three Months Ended March 31,

						2021			2020			2021				2020			2022	2021
Net income (loss)	Net income (loss)	$	28,141	$	(7,450)		$	30,470		$	(16,464)		Net income (loss)	$	11,544		$	(3,731)
Other comprehensive income (loss):
Unrealized income (loss) on derivative instruments		12		5			22			(17)
Other comprehensive income (loss)		12		5			22			(17)
Other comprehensive income :													Other comprehensive income :
Unrealized income on derivative instruments													Unrealized income on derivative instruments	—			5
Other comprehensive income													Other comprehensive income	—			5
Comprehensive income (loss)	Comprehensive income (loss)	28,153		(7,445)			30,492			(16,481)			Comprehensive income (loss)	11,544			(3,726)
Comprehensive (income) attributable to non-controlling interests	Comprehensive (income) attributable to non-controlling interests	(37)		(36)			(106)			(95)			Comprehensive (income) attributable to non-controlling interests	(36)			(35)
Comprehensive income (loss) attributable to common stockholders	Comprehensive income (loss) attributable to common stockholders	$	28,116	$	(7,481)		$	30,386		$	(16,576)		Comprehensive income (loss) attributable to common stockholders	$	11,508		$	(3,761)

See accompanying notes to consolidated financial statements.

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)

(Dollars in thousands, except per share data)


		Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) income		Accumulated Deficit		Non- Controlling Interest		Total			Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) income		Accumulated Deficit		Non- Controlling Interest		Total
Balances, December 31, 2020		$	164	$	245,605	$	(19)	$	(67,978)	$	(84)	$	177,688
Distributions - common stock - $0.22 per share		—		—		—		(4,011)		—		(4,011)
Balances, December 31, 2021														Balances, December 31, 2021	$	173	$	258,161	$	—	$	(55,378)	$	(5)	$	202,951
Distributions - common stock - $0.23 per share														Distributions - common stock - $0.23 per share	—		—		—		(4,305)		—		(4,305)
Restricted stock and restricted stock units vesting	Restricted stock and restricted stock units vesting	4		(4)		—		—		—		—		Restricted stock and restricted stock units vesting	2		(2)		—		—		—		—
Compensation expense - restricted stock and restricted stock units	Compensation expense - restricted stock and restricted stock units	—		538		—		—		—		538		Compensation expense - restricted stock and restricted stock units	—		974		—		—		—		974

Net (loss) income		—		—		—		(3,765)		34		(3,731)
Other comprehensive income		—		—		4		—		1		5
Comprehensive loss												(3,726)
Balances, March 31, 2021		$	168	$	246,139	$	(15)	$	(75,754)	$	(49)	$	170,489

Distributions - common stock - $0.22 per share		—		—		—		(4,007)		—		(4,007)
Compensation expense - restricted stock and restricted stock units		—		569		—		—		—		569

Shares issued through equity offering program, net	Shares issued through equity offering program, net	4		7,345		—		—		—		7,349		Shares issued through equity offering program, net	1		3,037		—		—		—		3,038

Net income	Net income	—		—		—		6,027		33		6,060		Net income	—		—		—		11,508		36		11,544
Other comprehensive income	Other comprehensive income	—		—		4		—		1		5		Other comprehensive income	—		—		—		—		—		—
Comprehensive income	Comprehensive income											6,065		Comprehensive income											11,544
Balances, June 30, 2021		$	172	$	254,053	$	(11)	$	(73,734)	$	(15)	$	180,465

Distributions - common stock - $0.23 per share		—		—		—		(4,233)		—		(4,233)
Compensation expense - restricted stock and restricted stock units		—		842		—		—		—		842
Balances, March 31, 2022														Balances, March 31, 2022	$	176	$	262,170	$	—	$	(48,175)	$	31	$	214,202

Shares issued through equity offering program, net		1		1,065		—		—		—		1,066
Net income		—		—		—		28,106		35		28,141
Other comprehensive income		—		—		11		—		1		12
Comprehensive income												28,153
Balances, September 30, 2021		$	173	$	255,960	$	—	$	(49,861)	$	21	$	206,293

~~Table of Contents~~

~~BRT APARTMENTS CORP. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF EQUITY~~

~~(Unaudited)~~

~~(Dollars in thousands, except per share data)~~

Common Stock Additional
Paid-In Capital Accumulated
Other Comprehensive (Loss) income Accumulated Deficit Non- Controlling Interest Total
Balances, December 31, 2019 $ 156 $ 232,331 $ (10) $ (32,824) $ (93) $ 199,560
Distributions - common stock - $0.22 per share — — — (3,822) — (3,822)
Restricted stock vesting 1 (1) — — — —
Compensation expense - restricted stock and restricted stock units — 438 — — — 438
Distributions to non-controlling interests — — — — (89) (89)
Shares issued through equity offering program, net 7 12,070 — — — 12,077
Shares repurchased — (616) (616)
Net (loss) income — — — (4,831) 32 (4,799)
Other comprehensive loss — — (20) — (3) (23)
Comprehensive loss (4,822)
Balances, March 31, 2020 $ 164 $ 244,222 $ (30) $ (41,477) $ (153) $ 202,726
Distributions - common stock - $0.22 per share — — — (3,822) — (3,822)
Compensation expense - restricted stock and restricted stock units — 461 — — — 461
Net (loss) income — — — (4,246) 31 (4,215)
Other comprehensive income (loss) — — 2 — (1) 1
Comprehensive loss (4,214)
Balances, June 30, 2020 $ 164 $ 244,683 $ (28) $ (49,545) $ (123) $ 195,151
Distributions - common stock - $0.22 per share — — — (3,824) — (3,824)
Compensation expense - restricted stock and restricted stock units — 461 — — — 461
Net (loss) income — — — (7,484) 34 (7,450)
Other comprehensive income — — 4 — 1 5
Comprehensive loss (7,445)
Balances, September 30, 2020 $ 164 $ 245,144 $ (24) $ (60,853) $ (88) $ 184,343


	Common Stock		Additional Paid-In Capital		Accumulated Other Comprehensive (Loss) income		Accumulated Deficit		Non- Controlling Interest		Total
Balances, December 31, 2020	$	164	$	245,605	$	(19)	$	(67,978)	$	(84)	$	177,688
Distributions - common stock - $0.22 per share	—		—		—		(4,011)		—		(4,011)
Restricted stock vesting	4		(4)		—		—		—		—
Compensation expense - restricted stock and restricted stock units	—		538		—		—		—		538



Net (loss) income	—		—		—		(3,765)		34		(3,731)
Other comprehensive income	—		—		4		—		1		5
Comprehensive loss											(3,726)
Balances, March 31, 2021	$	168	$	246,139	$	(15)	$	(75,754)	$	(49)	$	170,489

See accompanying notes to consolidated financial statements

Table of Contents

BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Thousands)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	30,470	$	(16,464)	Net income (loss)	$	11,544	$	(3,731)
Adjustments to reconcile net income(loss) to net cash used in operating activities:
Depreciation		4,740		5,147
Adjustments to reconcile net income(loss) to net cash provided by operating activities:						Adjustments to reconcile net income(loss) to net cash provided by operating activities:
Depreciation and amortization						Depreciation and amortization	3,606		1,537
Amortization of deferred financing costs	Amortization of deferred financing costs	216		210		Amortization of deferred financing costs	52		80
Amortization of debt fair value adjustment						Amortization of debt fair value adjustment	(89)		—
Amortization of restricted stock and restricted stock units	Amortization of restricted stock and restricted stock units	1,949		1,360		Amortization of restricted stock and restricted stock units	974		538
Equity in loss of unconsolidated joint ventures		6,033		4,731
Equity in earnings of unconsolidated joint ventures						Equity in earnings of unconsolidated joint ventures	(1,230)		1,345
Equity in earnings of sale of real estate of unconsolidated venture	Equity in earnings of sale of real estate of unconsolidated venture	(34,982)		—		Equity in earnings of sale of real estate of unconsolidated venture	(12,961)		—
Impairment charge		520		3,642

Gain on sale of real estate	Gain on sale of real estate	(7,693)		—		Gain on sale of real estate	(6)		—
Gain on sale of partnership interest		(2,244)		—

Loss on extinguishment of debt		902		—

Increases and decreases from changes in other assets and liabilities:	Increases and decreases from changes in other assets and liabilities:					Increases and decreases from changes in other assets and liabilities:

Decrease (increase) in other assets		1,868		(1,108)
Decrease (increase) in accounts payable and accrued liabilities		(2,000)		757
Net cash used in operating activities		(221)		(1,725)
(Increase) decrease in other assets						(Increase) decrease in other assets	(1,071)		470
Decrease in accounts payable and accrued liabilities						Decrease in accounts payable and accrued liabilities	(350)		(87)
Net cash provided by operating activities						Net cash provided by operating activities	469		152

Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Collections from real estate loan		—		150

Improvements to real estate properties	Improvements to real estate properties	(794)		(694)		Improvements to real estate properties	(802)		(223)
Purchase of investment in joint venture	Purchase of investment in joint venture	(22,420)		—		Purchase of investment in joint venture	(8,288)		—
Proceeds from the sale of real estate	Proceeds from the sale of real estate	24,632		—		Proceeds from the sale of real estate	4,385		—
Proceeds from the sale of partnership interest		7,540		—

Distributions from unconsolidated joint ventures	Distributions from unconsolidated joint ventures	58,312		10,556		Distributions from unconsolidated joint ventures	19,796		3,881
Contributions to unconsolidated joint ventures	Contributions to unconsolidated joint ventures	(6,031)		(13,700)		Contributions to unconsolidated joint ventures	(2,122)		—
Net cash provided by (used in) investing activities		61,239		(3,688)
Net cash provided by investing activities						Net cash provided by investing activities	12,969		3,658

Cash flows from financing activities:	Cash flows from financing activities:					Cash flows from financing activities:

Mortgage payoffs	Mortgage payoffs	(46,963)		—		Mortgage payoffs	(14,558)		—
Mortgage principal payments	Mortgage principal payments	(2,180)		(2,262)		Mortgage principal payments	(410)		(801)
Proceeds from credit facility		—		5,000
Repayment of credit facility		—		(5,000)
Increase in deferred financing costs		(38)		—

Dividends paid	Dividends paid	(11,779)		(11,336)		Dividends paid	(4,198)		(3,777)

Distributions to non-controlling interests		—		(89)

Proceeds from the sale of common stock	Proceeds from the sale of common stock	8,415		12,077		Proceeds from the sale of common stock	3,038		—
Repurchase of shares of common stock		—		(616)

Net cash used in financing activities	Net cash used in financing activities	(52,545)		(2,226)		Net cash used in financing activities	(16,128)		(4,578)

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~~BRT APARTMENTS CORP. AND SUBSIDIARIES~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~(Unaudited)~~

~~(Dollars in Thousands)~~

Nine Months Ended September 30,
2021 2020
Net increase (decrease) in cash, cash equivalents and restricted cash: 8,473 (7,639)
Cash, cash equivalents and restricted cash at beginning of period 28,685 32,418
Cash, cash equivalents and restricted cash at end of period $ 37,158 $ 24,779
Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 4,591 $ 5,261
Cash paid for income taxes $ 174 $ 297
Consolidation on buyout of partnership interest:
Increase in real estate assets $ (85,301)
Increase in other assets (2,263)
Increase in mortgage payable 52,000
Increase in deferred loan costs (178)
Increase on accounts payable and accrued liabilities 1,474
Decrease in investment in unconsolidated joint ventures 11,848
$ (22,420)

~~See accompanying notes to consolidated financial statements~~

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BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Thousands)

The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.
September 30,
2021 2020
Cash and cash equivalents $ 29,598 $ 15,650
Restricted cash 7,560 9,129
Total cash, cash equivalents and restricted cash, shown in consolidated statement of cash flows $ 37,158 $ 24,779


	Three Months Ended March 31,
	2022		2021
Net decrease in cash, cash equivalents and restricted cash:	(2,690)		(768)
Cash, cash equivalents and restricted cash at beginning of period	38,921		28,685
Cash, cash equivalents and restricted cash at end of period	$	36,231	$	27,917

Supplemental disclosure of cash flow information:
Cash paid during the period for interest	$	2,021	$	1,587
Cash paid for income taxes	$	1	$	6
Reclassification of property to held for sale	$	—	$	16,800

Consolidation on buyout of partnership interest:
Increase in real estate assets	$	(36,802)
Increase in other assets	(1,784)
Increase in mortgage payable	27,062
Increase in deferred loan costs	(364)
Increase on accounts payable and accrued liabilities	761
Decrease in investment in unconsolidated joint ventures	2,839
	$	(8,288)

See accompanying notes to consolidated financial statements

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BRT APARTMENTS CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Thousands)


The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.

	March 31,
	2022		2021
Cash and cash equivalents	$	29,688	$	19,406
Restricted cash	6,543		8,511
Total cash, cash equivalents and restricted cash, shown in consolidated statement of cash flows	$	36,231	$	27,917

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BRT APARTMENTS CORP. AND SUBSIDIARIES

Notes to Consolidated Financial Statements

~~September 30, 2021~~March 31, 2022

Note 1 – Organization and Background

BRT Apartments Corp. (the "Company" or "BRT"), a Maryland corporation, owns, operates and ~~operates~~to a lesser extent develops multi-family properties. The Company conducts its operations to qualify as a real estate investment trust, or REIT, for federal income tax purposes.

~~Historically, the~~These multi-family properties ~~have been acquired with~~may be wholly owned by us or by unconsolidated joint ~~venture partners in transactions~~ventures in which the Company contributes a significant portion of the equity. At ~~September 30, 2021,~~March 31, 2022, the Company: (a) wholly owns 811 multi-family properties located in 7 states with an aggregate of ~~2,010~~2,864 units, and a carrying value of ~~$218,201,000; and~~$326,350,000; (b) has interests, through unconsolidated entities, in 2721 multi-family properties located in 98 states with an aggregate of ~~7,444~~6,121 units ~~and the~~with a carrying value of ~~this net equity investment is $128,478,000.~~$103,917,000 and; (c) has a 17.45% interest in a development project with a carrying value of $2,122,000. BRT's equity interests in these unconsolidated entities range from ~~32%~~17.45% to ~~90%~~80%. Most of the Company's properties are located in the Southeast United States and Texas.

The Company also owns and operates various other real estate assets. At ~~September 30, 2021,~~March 31, 2022, the carrying value of the other real estate assets was ~~$6,419,000.~~$1,984,000.

Note 2 – Basis of Preparation

The accompanying interim unaudited consolidated financial statements, reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for such interim periods. The results of operations for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ are not necessarily indicative of the results for the full year. The consolidated audited balance sheet as of December 31, ~~2020,~~2021, has been derived from the audited financial statements at that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States ("GAAP"). Accordingly, these unaudited statements should be read in conjunction with the Company's audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, ~~2020, as amended,~~2021 filed with the Securities and Exchange Commission ("SEC").

The consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries.

The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting. For each venture, the Company evaluated the rights provided to each party in the venture to assess the consolidation of the venture. All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these joint ventures are variable interest entities ("VIEs"). Additionally, as determined in accordance with GAAP, the Company does not exercise substantial operating control over these entities, and therefore the entities are not consolidated. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for their share of equity in earnings, cash contributions and distributions. The distributions to each joint venture partner are determined pursuant to the applicable operating agreement and may not be pro-rata to the percentage equity interest each partner has in the applicable venture.

The joint venture that owns a property in Yonkers, New York, was determined not to be a VIE but is consolidated because the Company has controlling rights in such entity.

The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results could differ from those estimates. Substantially all of the Company's assets are comprised of multi- family real estate assets generally leased to tenants on a one-year basis. Therefore, the Company aggregates real estate assets for reporting purposes and operates in 1 reportable segment.

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Note 3 - Equity

Equity Distribution Agreements

~~In November 2019,~~On March 18, 2022, the Company entered into separate equity distribution agreements ~~as amended March 31, 2021,~~ with 32 sales agents to sell an aggregate sales price of up to ~~an aggregate of $30,000,000~~$40,000,000 of its common stock from time-to-time in an at-the-market offering. Effective as of March 18, 2022, the Company terminated the equity distribution agreements dated November 26, 2019, as amended March 31, 2021. During the three months ended ~~September 30, 2021,~~March 31, 2022, the Company sold ~~59,269~~136,279 shares for an aggregate sales price of ~~$1,080,000~~$3,081,825 before commissions and fees of ~~$14,000.~~$44,079. During the ~~nine~~three months ended ~~September 30,~~March 31, 2021, the Company sold 469,490 shares for an aggregate sales price of $8,542,000 before commissions and fees of $126,000. During the nine months ended September 30, 2020, the Company sold 694,298 shares for an aggregate sales price of $12,293,000, before commissions and fees of $185,000 and offering related expenses of $31,000. From the commencement of this program through September 30, 2021, the Company sold 1,275,751 shares for an aggregate sales price of $22,858,000 before commissions and fees of $344,000 and offering related expenses of $56,000.

did not sell shares.

Common Stock Dividend Distribution

The Company declared a quarterly cash distribution of $0.23 per share, payable on ~~October~~April 7, ~~2021~~2022 to stockholders of record on ~~September 21, 2021.~~March 24, 2022.

Stock Based Compensation

The Company's 2020 Incentive Plan (the "2020 Plan") permits the Company to grant: (i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, for up to a maximum of 1,000,000 shares; and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards. As of ~~September 30, 2021, 473,101~~March 31, 2022, 314,128 shares are available for issuance pursuant to awards under the 2020 Plan.

Restricted Stock Units

In June ~~2016 and~~ 2021, the Company issued restricted stock units (the "RSUs") to acquire up to ~~450,000 shares and~~ 210,375 shares of common stock ~~respectively,~~ pursuant to the ~~2016 Amended and Restated Incentive Plan (the "2016 Plan") and the~~ 2020 ~~Plan, respectively.~~Plan. The RSUs entitled the recipients, subject to continued service through the applicable vesting ~~dates~~date (i.e.;,March 31, ~~2021 for the 2016 grants and March 31, 2024 for the 2021 grants)~~2024) to receive (i) the underlying shares if and to the extent certain performance and/or market conditions are satisfied at the vesting date, and (ii) an amount equal to the cash dividends ~~(the "RSU Dividend Equivalent")~~that would have been paid from the grant date through the vesting date with respect to the shares of common stock underlying the RSUs if, when, and to the extent, the related ~~RSU's~~RSUs vest. The shares underlying the RSUs are not participating securities but are contingently issuable shares.

For the quarter ended June 30, 2021, it was determined that the market conditions with respect to 250,000 shares underlying RSUs issued under the 2016 Plan had been satisfied; such shares, with an aggregate market value of $4,200,000 as of the vesting date, were issued and an aggregate of $775,000 of RSU Dividend Equivalents was paid. It was also determined that the performance conditions with respect to 200,000 shares underlying RSUs under the 2016 plan had not been satisfied; the 200,000 RSUs did not vest.

Expense is recognized over the applicable vesting period on the RSUs which the Company expects to vest. For the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company recorded ~~$200,000~~$250,000 and $35,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the RSUs and for the nine months ended September 30, 2021 and 2020, the Company recorded $271,000 and $105,000,$37,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the RSUs. At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020, $1,761,000~~2021, $1,997,000 and ~~$35,000~~$2,248,000 of compensation expense, respectively, has been deferred and will be charged to expense over the remaining vesting period.

Restricted Stock

In ~~June 2021 and~~ January ~~2021,~~2022, the Company granted ~~160,000 and 156,774~~158,973 shares, ~~respectively,~~ of restricted stock pursuant to the 2020 Plan. As of ~~September 30, 2021~~March 31, 2022, an aggregate of ~~922,719~~934,342 shares of unvested restricted stock are outstanding pursuant to the 2020 Incentive Plan and the 2018 Incentive Plan (the "2018 Plan") ~~and the 2016 Plan.~~. No additional awards may be granted under the 2018 ~~Plan or the 2016~~ Plan. The shares of restricted stock vest five years from the date of grant and under specified circumstances, including a change in control, may vest earlier. For financial statement purposes, the restricted stock is not included in the outstanding shares shown on the consolidated balance sheets until they vest, but is

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included in the earnings per share computation.

For the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the Company recorded ~~$642,000~~$724,000 and ~~$426,000 respectively, and for the nine months ended September 30, 2021 and 2020, the Company recorded $1,678,000 and $1,255,000,~~$501,000 respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards. At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020~~2021, $~~7,978,000~~9,986,000 and ~~$4,411,000,~~$7,332,000, respectively, has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards. The weighted average remaining vesting period of these shares of restricted stock is ~~2.76~~3.1 years.

Stock Buyback

On September 12, 2019, the Board of Directors approved a stock repurchase plan authorizing the Company, effective as of October 1, 2019, to repurchase up to $5,000,000 of shares of common stock through September 30, 2021. During the three and nine months ended September 30, 2021, the Company did not repurchase any shares. During the nine months ended September 30, 2020, the Company repurchased 39,093 shares of common stock at an average market price of $15.76 for an aggregate cost of $616,000.

On September 13, 2021, the Board of Directors approved a new stock repurchase plan authorizing the Company, effective as of October 1, 2021, to repurchase up to $5,000,000 of shares of common stock through December 31, 2023. During the three months ended March 31, 2022, the Company did not repurchase any shares of common stock.

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Per Share Data

Basic earnings (loss) per share is determined by dividing net income (loss) applicable to common stockholders for the applicable period by the weighted average number of shares of common stock outstanding during such period. Net income is also allocated to the unvested restricted stock outstanding during each period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security. The RSUs are excluded from the basic earnings per share calculation, as they are not participating securities.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock or resulted in the issuance of shares of common stock that share in the earnings of the Company. Diluted earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock deemed to be outstanding during such period.

In calculating diluted earnings per share, the Company, includes only those shares underlying the RSUs that it anticipates will vest based on management's current estimates. The Company excludes any shares underlying the RSUs from such calculation if their effect would have been anti-dilutive.

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The following table provides a reconciliation of the numerator and denominator of earnings per share calculations ~~( amounts~~(amounts in thousands, except per share amounts):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Numerator for basic and diluted earnings per share:	Numerator for basic and diluted earnings per share:									Numerator for basic and diluted earnings per share:
Net Income (loss)	Net Income (loss)	$	28,141	$	(7,450)	$	30,470	$	(16,464)	Net Income (loss)	$	11,544	$	(3,731)
(Deduct) add net (income) loss attributable to non-controlling interests		(35)		(34)		(102)		(97)
Deduct earnings (loss) allocated to unvested restricted stock		(1,426)		324		(1,441)		710
Deduct net income attributable to non-controlling interests										Deduct net income attributable to non-controlling interests	(36)		(34)
Deduct (earnings) loss allocated to unvested restricted stock										Deduct (earnings) loss allocated to unvested restricted stock	(574)		163
Net income (loss) available for common stockholders: basic and diluted	Net income (loss) available for common stockholders: basic and diluted	$	26,680	$	(7,160)	$	28,927	$	(15,851)	Net income (loss) available for common stockholders: basic and diluted	$	10,934	$	(3,602)

Denominator for basic earnings per share:	Denominator for basic earnings per share:									Denominator for basic earnings per share:
Weighted average number of common shares outstanding	Weighted average number of common shares outstanding	17,261,520		17,176,401		16,916,623		17,095,315		Weighted average number of common shares outstanding	17,561,802		17,319,222
Effect of dilutive securities:	Effect of dilutive securities:									Effect of dilutive securities:
RSUs ~~(1)~~	RSUs ~~(1)~~	31,468		—		76,351		—		RSUs ~~(1)~~	92,547		—		(1)
Denominator for diluted earnings per share:	Denominator for diluted earnings per share:									Denominator for diluted earnings per share:
Weighted average number of shares	Weighted average number of shares	17,292,988		17,176,401		16,992,974		17,095,315		Weighted average number of shares	17,654,349		17,319,222

Earnings (loss) per common share, basic	Earnings (loss) per common share, basic	$	1.55	$	(0.44)	$	1.71	$	(0.97)	Earnings (loss) per common share, basic	$	0.62	$	(0.22)
Earnings (loss) per common share, diluted	Earnings (loss) per common share, diluted	$	1.54	$	(0.44)	$	1.70	$	(0.97)	Earnings (loss) per common share, diluted	$	0.62	$	(0.22)

______________________

(1) E~~For the three and nine months ended September 30, 2020, excludes~~xcludes the shares underlying RSU's as their effect would have been anti-dilutive.

Note 4 - Leases

Lessor Accounting

The Company owns a commercial building leased to 2 tenants under operating leases expiring from 2024 to 2028, with tenant options to extend or terminate the leases. Revenues from such leases are reported as rental income, net, and are comprised of (i) lease components, which includes fixed lease payments and (ii) non-lease components, which includes reimbursements of property level operating expenses. The Company does not separate non-lease components from the related lease components, as the timing and pattern of transfer are the same, and accounts for the combined component in accordance with ASC 842.

Lessee Accounting

The Company is a lessee under a ground lease in Yonkers, NY which is classified as an operating lease. The ground lease expires September 30, 2024 and provides for 1 21-year renewal option. As of ~~September 30, 2021,~~March 31, 2022, the remaining lease term, including the renewal option deemed exercised, is ~~24.0~~23.5 years.

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The Company is a lessee under a corporate office lease in Great Neck, New York, which is classified as an operating lease. The lease expires on December 31, 2031 and provides a five-year renewal option. As of ~~September 30, 2021,~~March 31, 2022, the remaining lease term, including renewal options deemed exercised, is ~~15.3~~14.8 years.

As of ~~September 30, 2021,~~March 31, 2022, the Company's Right of Use ("ROU") assets and lease liabilities were ~~$2,618,000~~$2,518,000 and ~~$2,675,000,~~$2,589,000, respectively. As of December 31, ~~2020,~~2021, the Company's ROU assets and lease liabilities were ~~$2,652,000~~$2,568,000 and ~~$2,674,000,~~$2,629,000, respectively.

The discount rate applied to measure each ROU asset and lease liability is based on the Company’s incremental borrowing rate (“IBR”). The Company considers the general economic environment and its historical borrowing rate activity and factors in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease. As the Company did not elect to apply the hindsight practical expedient, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842. The Company’s ground lease offers a renewal option which it assesses against relevant economic factors to determine whether it is reasonably certain of

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exercising or not exercising the option. Lease payments associated with renewal periods that the Company is reasonably certain will be exercised, if any, are included in the measurement of the corresponding lease liability and ROU asset.

Note 5 ‑ Real Estate Properties

Real estate properties, ~~consist~~excluding real estate held for sale, consists of the following (dollars in thousands):

September 30, 2021 December 31, 2020
Land $ 29,489 $ 25,585
Building 220,272 154,854
Building improvements 8,839 10,590
Real estate properties 258,600 191,029
Accumulated depreciation (33,980) (30,837)
Total real estate properties, net $ 224,620 $ 160,192


	March 31, 2022		December 31, 2021
Land	$	42,158	$	38,822
Building	315,279		281,841
Building improvements	10,156		9,354
Real estate properties	367,593		330,017
Accumulated depreciation	(39,259)		(36,467)
Total real estate properties, net	$	328,334	$	293,550

A summary of real estate properties owned is as follows (dollars in thousands):


		December 31, 2020 Balance		Additions		Capitalized Costs and Improvements		Depreciation		Sale of Property		September 30, 2021 Balance			December 31, 2021 Balance		Additions		Capitalized Costs and Improvements		Depreciation		Sale of Property		March 31, 2022 Balance
Multi-family	Multi-family	$	153,604	$	85,301	$	794	$	(4,657)	$	(16,841)	$	218,201	Multi-family	$	291,538	$	36,802	$	802	$	(2,792)	$	—	$	326,350
Land - Daytona, FL	Land - Daytona, FL	4,379		—		—		—		—		4,379		Land - Daytona, FL	4,379		—		—		—		(4,379)		—
Retail shopping center and other	Retail shopping center and other	2,209		—		—		(83)		(86)		2,040		Retail shopping center and other	2,012		—		—		(28)		—		1,984
Total real estate properties	Total real estate properties	$	160,192	$	85,301	$	794	$	(4,740)	$	(16,927)	$	224,620	Total real estate properties	$	297,929	$	36,802	$	802	$	(2,820)	$	(4,379)	$	328,334

Property Acquisition

On ~~August 18, 2021,~~March 23, 2022, the Company ~~purchased~~completed the purchase of its partners' ~~interests~~remaining 28.1% interest in ~~Bells Bluff,~~Verandas at Alamo, San Antonio, TX, for a ~~previously unconsolidated joint venture. The~~ purchase price ~~to acquire the 41.95% interest in the venture was $27,860,000.~~of $8,721,000. As a result of this purchase, ~~Bells Bluff~~this property is wholly-owned byand effective March 23, 2022, is included in the ~~Company. In connection with the purchase, the $47,043,000 construction loan on the property was refinanced with 20-year fixed rate (i.e., 3.48%~~Company's consolidated results of operations and ~~interest only for 10 years)~~accounts, including mortgage debt ~~in principal amount of $52,000,000.~~(see note 9 - "Debt Obligations").

The Company determined that ~~with respect to this acquisition,~~ the gross assets ~~acquired~~purchased in this acquisition are concentrated in a single identifiable asset. Therefore, the transaction does not meet the definition of a business and is accounted for as an asset acquisition. The Company assessed the fair value of the tangible assets of the property as of the acquisition date using anthe cost accumulation and income approach ~~utilizing~~which utilized a market capitalization rate of ~~4.75%~~4.5% which is a Level 3 unobservable input in the fair value hierarchy.

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The following table summarizes the allocation of the book value based on the proportionate share of the estimated fair value of the property on the acquisition ~~date:~~date (dollars in thousands):


	Purchase Price Allocation
Land	$	~~6,172,000~~3,336
Building and ~~Improvements~~improvements	~~77,532,000~~33,404
Total land and buildings	36,740

Acquisition related intangible assets	~~1,597,000~~797
Total Asset	$	37,537

Acquisition related mortgage intangible	$	~~85,301,000~~62

On October 1, 2021, the Company acquired the 10% interest owned by its joint venture partners in the entity that owns Crestmont at Thornblade, a 266-unit multi-family property located in Greenville, SC. The purchase price for the interest, after giving effect to the joint venture partner's carried interest, was $1,570,000. As a result, Crestmont at Thornblade, effective as of the purchase date, is wholly-owned by the Company.

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Property ~~Dispositions~~

Disposition

On May 26, 2021 the Company sold its Kendall Manor-Houston, TX property, which had a book value of $16,842,000, for $24,500,000, and recognized a gain on the sale of the property of $7,279,000. In connection with the sale, the Company paid-off the related mortgage debt of $14,260,000.

~~On August 20, 2021,~~February 2, 2022 the Company sold a ~~cooperative apartment unit~~vacant land parcel located in ~~New York, NY,~~Daytona, Florida for a sales price of ~~$545,000~~$4,700,000, and, after closing costs, recognized a ~~gain on the sale~~nominal gain. In 2020, we recognized an impairment charge of ~~$414,000.~~$3,600,000 in connection with this property. At December 31, 2021, this property was classified as held-for-sale.

Note 6 - Impairment Charges

The Company reviews each real estate asset owned, including those held through investments in unconsolidated joint ventures, for impairment when there is an event or a change in circumstances indicating that the carrying amount may not be recoverable.

The Company measures and records impairment charges, and reduces the carrying value of owned properties, when indicators of impairment are present and the expected undiscounted cash flows related to those properties are less than their carrying amounts. For its unconsolidated joint venture investments, the Company measures and records impairment losses, and reduces the carrying value of the equity investment when indicators of impairment are present and the expected discounted cash flows related to the investment is less than the carrying value.

When the Company does not expect to recover its carrying value on properties held for use, the Company reduces its carrying value to fair value, and for properties held for sale, the Company reduces its carrying value to the fair value less costs to sell. When the Company does not expect to recover its carrying value on unconsolidated joint ventures that are under contract for sale, the Company, when it is determined that the sale is probable, reduces its carrying value to its fair value.

~~During~~For the ~~nine~~three months ended ~~September 30,~~March 31, 2022 and 2021, the Company ~~recorded an~~did not record any impairment charge of $520,000 related to its investment in the OPOP Tower and OPOP Lofts properties, St Louis, MO, as the carrying value exceeded the fair value by that amount. The fair value is based upon the sale price at which the Company contracted to sell these properties.charges.

Note 7 - Restricted Cash

Restricted cash represents funds held for specific purposes and are therefore not available for general corporate purposes. The restricted cash reflected on the consolidated balance sheets represents funds that are held by the Company specifically for capital improvements at certain multi-family properties owned by unconsolidated joint ventures.

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Note 8 – Investment in Unconsolidated Ventures

At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the Company held interests in unconsolidated joint ventures that own 2721 and 3123 multi-family properties (the "Unconsolidated Properties"), respectively. The condensed balance sheets below present

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information regarding such properties (dollars in thousands):
September 30, 2021 December 31, 2020
ASSETS
Real estate properties, net of accumulated depreciation of $144,299 and $145,600 $ 824,624 $ 1,075,178
Cash and cash equivalents 13,328 16,939
Other assets 34,415 29,392
Total Assets $ 872,367 $ 1,121,509
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net of deferred costs of $3,954 and $5,537 $ 659,148 $ 829,646
Accounts payable and accrued liabilities 21,046 20,237
Total Liabilities 680,194 849,883
Commitments and contingencies 0 0
Equity:
Total unconsolidated joint venture equity 192,173 271,626
Total Liabilities and Equity $ 872,367 $ 1,121,509
BRT's interest in joint venture equity $ 128,478 $ 169,474


	March 31, 2022		December 31, 2021
ASSETS
Real estate properties, net of accumulated depreciation of $125,930 and $133,615	$	675,246	$	734,247
Cash and cash equivalents	11,567		13,741
Other assets	25,944		25,535

Total Assets	$	712,757	$	773,523

LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net of deferred costs of $3,244 and $3,423	$	531,246	$	584,479
Accounts payable and accrued liabilities	10,266		17,064
Total Liabilities	541,512		601,543
Commitments and contingencies	0		0
Equity:
Total unconsolidated joint venture equity	171,245		171,980
Total Liabilities and Equity	$	712,757	$	773,523

BRT's interest in joint venture equity	$	106,025	$	112,347

At the indicated dates, real estate properties of the unconsolidated joint ventures consist of the following (dollars in thousands):


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Land	Land	$	105,480	$	148,341	Land	$	92,378	$	97,230
Building	Building	827,494		1,029,739		Building	678,140		739,577
Building improvements	Building improvements	35,949		42,698		Building improvements	30,658		31,055
Real estate properties	Real estate properties	968,923		1,220,778		Real estate properties	801,176		867,862
Accumulated depreciation	Accumulated depreciation	(144,299)		(145,600)		Accumulated depreciation	(125,930)		(133,615)
Total real estate properties, net	Total real estate properties, net	$	824,624	$	1,075,178	Total real estate properties, net	$	675,246	$	734,247

At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the weighted average interest rate on the mortgages payable is ~~4.03%~~4.07% and ~~3.96%~~3.97%, respectively, and the weighted average remaining term to maturity is ~~7.51~~7.64 years and ~~7.67~~7.60 years , respectively.

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The condensed income statement below presents information regarding the Unconsolidated Properties (dollars in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
Revenues:	Revenues:									Revenues:
Rental and other revenue	Rental and other revenue	$	29,818	$	32,341	$	95,495	$	94,726	Rental and other revenue	$	25,231	$	32,672
Total revenues	Total revenues	29,818		32,341		95,495		94,726		Total revenues	25,231		32,672

Expenses:	Expenses:									Expenses:
Real estate operating expenses	Real estate operating expenses	14,587		16,092		45,523		45,298		Real estate operating expenses	11,169		15,703
Interest expense	Interest expense	7,568		8,663		24,562		26,186		Interest expense	6,026		8,522
Depreciation	Depreciation	8,288		10,411		28,464		31,184		Depreciation	6,636		10,385
Total expenses	Total expenses	30,443		35,166		98,549		102,668		Total expenses	23,831		34,610
Total revenues less total expenses	Total revenues less total expenses	(625)		(2,825)		(3,054)		(7,942)		Total revenues less total expenses	1,400		(1,938)
Other equity earnings	Other equity earnings	7		97		21		34		Other equity earnings	55		9
Impairment of assets	Impairment of assets	—		—		(2,813)		—		Impairment of assets	—		(2,323)
Insurance recoveries	Insurance recoveries	—		—		2,813		—		Insurance recoveries	—		2,323
Gain on insurance recoveries	Gain on insurance recoveries	1,246		427		1,246		765		Gain on insurance recoveries	515		—
Gain on sale of real estate	Gain on sale of real estate	83,984		—		83,984		—		Gain on sale of real estate	23,652		—
Loss on extinguishment of debt	Loss on extinguishment of debt	(9,401)		—		(9,401)		—		Loss on extinguishment of debt	(30)		—
Net income (loss) from joint ventures	Net income (loss) from joint ventures	$	75,211	$	(2,301)	$	72,796	$	(7,143)	Net income (loss) from joint ventures	$	25,592	$	(1,929)

BRT's equity in loss and equity in earnings from sale of unconsolidated joint venture properties		$	30,786	$	(1,529)	$	28,949	$	(4,731)
BRT's equity in earnings (loss) and equity in earnings from sale of unconsolidated joint venture properties										BRT's equity in earnings (loss) and equity in earnings from sale of unconsolidated joint venture properties	$	14,191	$	(1,345)

During the three and nine months ended September 30, 2021, three unconsolidated Texas joint ventures recognized an aggregate of (i) $2,813,000 of impairment charges as a result of ice storm damage and (ii) $2,813,000 of related insurance recoveries.Joint Venture Sales

On ~~April 20, 2021,~~February 8, 2022, the unconsolidated joint venture in which the Company had a 65% equity interest sold ~~its interest~~The Verandas at Shavano, a 288-unit multi-family property in ~~the joint venture that owns Anatole Apartments,~~San Antonio, TX, for a ~~property located in Daytona Beach, FL.~~sales price of $53,750,000. The ~~Company recognized a gain of $2,244,000 on the sale.~~

On May 4, 2021, the Company purchased a 14.69% interest in Civic Center I and Civic Center II - Southaven, MS, from its joint venture partner, for $6,031,000. After giving effect to this purchase, the Company owns 74.69% of the equity interests in the venture that owns these properties.

~~On July 20, 2021, the joint venture which owns The Avenue Apartments, Ocoee, FL sold the property for $107,661,000 and recognized a~~ gain on the sale of this property ~~of $39,668,000. As a result~~was $23,652,000 and BRT's share of the ~~sale, the Company recorded a~~ gain ~~of $19,518,000. The joint venture also recognized a loss on the extinguishment of debt of $9,093,000 in~~was $12,961,000. In connection with the ~~payoff~~sale, mortgage debt of $25,100,000 with 1.2 years of remaining term to maturity and bearing an interest rate of 3.61% was repaid.

Subsequent to March 31, 2022, the ~~related $53,060,000 mortgage debt.~~unconsolidated joint ventures in which the Company has a (i) 75% equity interest entered into a contract dated as of April 16, 2022 to sell Retreat at Cinco Ranch, a 268-unit multi family property in San Antonio, TX for $68,500,000 and (ii) 65% equity interest entered into a contract dated as of May 3, 2022 to sell The ~~Company's share~~Vive, a 312-unit multi-family property in Kannapolis, NC for $92,000,000. The completion of ~~this loss was $4,474,000.~~these 2 sales are subject to the satisfaction of customary closing conditions and are not contingent upon the closing of one-another; it is anticipated that such sales will be completed during the quarter ending June 30, 2022.

Joint Venture Acquisitions

On July 28, 2021, the joint venture which owns Parc at 980, Lawrenceville, GA sold the property for $118,250,000 and recognized a gain on the sale of this property of $44,316,000. As a result of the sale,March 10, 2022, the Company ~~recorded~~purchased a ~~gain of $15,464,000. The joint venture also recognized~~17.45% interest in a ~~loss on the extinguishment of debt of $308,000 in connection with the payoff of the related $54,447,000 mortgage debt. The Company's share of this loss was $107,000~~

~~On August 18, 2021, the Company acquired the 41.9% interest owned by its joint venture partners in the entity that owns Bells Bluff, a 402-unit multi-family~~planned 240-unit development property, Stono Oaks, located in ~~West Nashville, TN.~~Johns Island, SC. The purchase price for the interest, was ~~$27,860,000.~~$3,500,000, which includes $2,122,000 held in escrow at March 31, 2022.

Joint Venture Buyouts

On March 23, 2022, the Company completed its acquisition of the remaining 28.1% interest owned by its joint venture partner in the entity that owns Verandas at Alamo, a 288-unit multi-family property located in San Antonio, TX. The purchase price for the interest was $8,721,000. As a result of ~~the~~this purchase, ~~Bells Bluff ,~~Verandas at Alamo, effective as of the purchase date, is wholly-owned, ~~by,~~ and its ~~accounts~~operations and ~~operations~~accounts are consolidated, ~~with, the Company. In connection with the purchase, the $47,043,000 construction loan on the property was refinanced with 20-year fixed rate (i.e., 3.48% and interest only for 10 years)~~including mortgage debt (see note 9 - "Debt Obligations").

Subsequent to March 31, 2022, the Company completed its acquisition of the remaining 21.6% interest owned by its joint venture partner in the ~~principal amount~~entity that owns Vanguard Heights, a 174-unit multi-family property located in Creve Coeur, MO. The purchase price for the interest was $4,800,000. As a result of ~~$52,000,000.~~

this purchase, Vanguard Heights, effective as of the purchase

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~~On October 1, 2021, the Company acquired the 10%~~date, is wholly-owned and its operations and accounts will be consolidated, including mortgage debt in principal amount of $29,700,000 with an interest ~~owned by its joint venture partners~~rate of 4.41% (interest only until July 2025) and maturing in the entity that owns Crestmont at Thornblade, a 266-unit multi-family property located in Greenville, SC. The purchase price for the interest, after giving effect to the joint venture partners' carried interest, was $1,570,000. Crestmont at Thornblade is now wholly-owned by the Company.July 2031.

On November 4, 2021, the Company sold its interest in the joint venture that own OPOP Towers and OPOP Lofts, 2 properties located in St. Louis, MO., for $3,000,000. The Company anticipates it will record a gain of approximately $385,000. on the sale. During the nine months ended September 30, 2021, the Company recorded an impairment charge of $520,000 related to its investment in the joint venture.

Note 9 – Debt Obligations

Debt obligations consist of the following (dollars in thousands):


		September 30, 2021		December 31, 2020			March 31, 2022		December 31, 2021
Mortgages payable	Mortgages payable	$	134,678	$	130,997	Mortgages payable	$	212,862	$	200,857
Junior subordinated notes	Junior subordinated notes	37,400		37,400		Junior subordinated notes	37,400		37,400

Deferred financing costs	Deferred financing costs	(787)		(880)		Deferred financing costs	(1,589)		(1,277)
Total debt obligations, net of deferred costs	Total debt obligations, net of deferred costs	$	171,291	$	167,517	Total debt obligations, net of deferred costs	$	248,673	$	236,980

Mortgages Payable

At ~~September 30, 2021,~~March 31, 2022, the weighted average interest rate on the Company's mortgage payables was ~~3.79%~~3.73% and the weighted average remaining term to maturity is ~~11.01~~10.2 years. For the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ interest expense, which includes amortization of deferred financing costs, was ~~$1,305,000~~$1,763,000 and ~~$1,475,000, respectively. For the nine months ended September 30, 2021 and 2020, interest expense, which includes amortization of deferred financing costs, was $4,113,000 and $4,418,000,~~$1,430,000, respectively.

During the three ~~and nine~~ months ended ~~September 30, 2021,~~March 31, 2022, the Company paid off mortgage debt of ~~$31,879,000 pertaining to 3 first mortgage loans~~$14,558,000 on ~~3 properties and 3 supplemental loans on 2 properties. In connection with the payoff, the Company recognized~~ a ~~loss on the extinguishment of debt of $902,000. Such debt was scheduled to mature in 2022 and bore a weighted average interest rate of 4.53%.~~property.

On ~~September 18, 2021, in connection with~~March 23, 2022, as a result of the ~~buyout~~purchase of its partners' remaining interests in ~~Bells Bluff~~Verandas at Alamo - ~~West Nashville, TN, the $47,043,000 construction loan~~San Antonio, TX, mortgage debt in principal amount of $27,000,000 with a fixed rate (i.e., 3.64% and interest only until October 2024 and a maturity of December 2029) will be included on the ~~property was refinanced~~Company's consolidated balance sheet.

On April 7, 2022, as a result of the purchase of its partners' remaining interests in Vanguard Heights - Creve Coeur, MO, mortgage debt in principal amount of $29,700,000 with a ~~20-year~~ fixed rate ((i.e., ~~3.48%~~4.41% and interest only for ~~10 years), mortgage in~~until July 2025 and a maturity of July 2031) will be included on the ~~principal amount of $52,000,000.~~Company's consolidated balance sheet.

Credit Facility

The Company's amended and restated credit facility dated November 18, 2021 with an affiliate of Valley National Bank ~~as amended and modified from time-to-time,~~("VNB") allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to ~~$15,000,000~~$35,000,000 to facilitate the acquisition of multi-family properties, repay mortgage debt secured by multi family properties and for operating expense (i.e.,working capital (including dividend payments) ~~and~~); provided that no more than $15,000,000 may be used for operating expenses. The facility is secured by the cash available in certain cash accounts maintained by the Company at ~~Valley National Bank,~~VNB, matures ~~April 2023~~November 2024 and bears an adjustable interest rate of 5025 basis points over the prime rate, with a floor of ~~4.25%~~3.5%. The interest rate in effect as of ~~September 30, 2021~~March 31, 2022 is ~~4.25%~~3.75%. There is an unused facility fee of 0.25% per annum on the ~~difference between~~total amount committed by Valley National Bank and unused by the ~~outstanding loan balance and maximum amount then available~~Company. At March 31, 2022, the Company is in compliance with all material respects with its obligations under the facility. ~~For~~

At March 31, 2022 and December 31, 2021, there was no outstanding balance on the facility and $35,000,000 was available to be borrowed in both periods. Interest expense for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, interest expense,~~ which includes amortization of deferred financing costs and unused fees, was ~~$18,000~~$45,000 and ~~$17,000. For the nine months ended September 30, 2021 and 2020, interest expense, which includes amortization of deferred financing costs and unused fees, was $54,000 and $79,000.~~$17,000, respectively. Deferred financing costs of ~~$20,000~~$247,000 and ~~$12,000,~~$270,000, are recorded in other assets on the Consolidated balance sheets at ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, respectively. At September 30, 2021, the Company is in compliance in all material respects with its obligation under the facility. At September 30, 2021 and November 1, 2021, there was no outstanding balance on the facility.

~~Table of Contents~~

Junior Subordinated Notes

At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the outstanding principal balance of the Company's junior subordinated notes was $37,400,000, before deferred financing costs of ~~$302,000~~$292,000 and ~~$317,000,~~$297,000, respectively. The interest rate on the outstanding balance resets quarterly and is based on three months LIBOR + 2.00%. The rate in effect at ~~September 30,~~March 31, 2022 and 2021 was 2.30% and ~~2020 was 2.13% and 2.27%~~2.21%, respectively. The notes mature April 30, 2036.

The junior subordinated notes require interest only payments through the maturity date of April 30, 2036, at which time repayment of the outstanding principal and unpaid interest become due. Interest expense for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ which includes amortization of deferred financing costs, was ~~$210,000~~$212,000 and ~~$240,000,~~$214,000, respectively. ~~Interest expense for the nine months ended September 30, 2021 and 2020, which includes amortization~~

Table of ~~deferred financing costs, was $636,000 and $903,000, respectively.~~Contents

Note 10 – Related Party Transactions

The Company has retained certain of its executive officers and Fredric H. Gould, a director, among other things, to participate in the Company's multi-family property analysis and approval process (which includes service on an investment committee), provide investment advice, and provide long-term planning and consulting with executives and employees with respect to other business matters, as required. The aggregate fees incurred for these services in each of the three months ended ~~September 30,~~March 31, 2022 and 2021 were $367,000 and ~~2020 were~~ $350,000 ~~and for each of the nine months ended September 30, 2021 and 2020 were $1,049,000.~~, respectively.

Management of certain properties owned by the Company and certain joint venture properties is provided by Majestic Property Management Corp. ("Majestic Property"), a company wholly owned by Fredric H. Gould. Certain of the Company's officers and directors are also officers and directors of Majestic Property. Majestic Property may also provide real estate brokerage and construction supervision services to these properties. These fees amounted to ~~$9,000~~$11,000 and ~~$8,000~~$7,000 for the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020, respectively, and $23,000 and $24,000 for the nine months ended September 30, 2021 and 2020,~~ respectively.

Pursuant to a shared services agreement between the Company and several affiliated entities, including Gould Investors

L.P. ("Gould Investors"), the owner and operator of a diversified portfolio of real estate and other assets, and One Liberty Properties, Inc., a NYSE listed equity REIT, the (i) services of the part- time personnel that perform certain executive, administrative, legal, accounting and clerical functions and (ii) certain facilities and other resources, are provided to the Company. The allocation of expenses for the facilities, personnel and other resources shared by, among others, the Company and Gould Investors, is computed in accordance with such agreement and is included in general and administrative expense on the consolidated statements of operations. During the three months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated $246,000 and $172,000, respectively. Jeffrey A. Gould and ~~$167,000, respectively,~~Matthew J. Gould, executive officers and ~~$523,000 and $631,000 for~~directors of the ~~nine months ended September 30, 2021 and 2020, respectively. Fredric H. Gould is~~Company are executive ~~officer and sole stockholder~~officers of Georgetown Partners, ~~Inc.,~~LLC, the managing general partner of Gould Investors. Mr. Gould is also the vice chairman of the board of directors of One Liberty Properties and certain of the Company's officers and directors are also officers or directors of One Liberty Properties and Georgetown Partners.

Note 11 – Fair Value Measurements

Financial Instruments Not Carried at Fair Value

The following methods and assumptions were used to estimate the fair value of each class of financial instruments that are not recorded at fair value on the consolidated balance sheets:

Cash and cash equivalents, restricted cash, accounts receivable (included in other assets), accounts payable and accrued liabilities: The carrying amounts reported in the balance sheets for these instruments approximate their fair value due to the short term nature of these accounts.

Junior subordinated notes: At ~~September 30, 2021~~March 31, 2022 and December 31, ~~2020,~~2021, the estimated fair value of the notes is lower than their carrying value by approximately ~~$8,445,000~~$8,150,000 and ~~$8,670,000,~~$8,296,000, respectively, based on a market interest rate of ~~4.12%~~4.30% and ~~4.22%~~4.21%, respectively.

~~Table of Contents~~

Mortgages payable: At ~~September 30, 2021,~~March 31, 2022, the estimated fair value of the Company’s mortgages payable is lower than their carrying value by approximately ~~$2,156,000,~~$36,739,000, assuming market interest rates between ~~3.49%~~3.92% and ~~3.87%~~4.67%. At December 31, ~~2020,~~2021, the estimated fair value of the Company's mortgages payable was greater than their carrying value by approximately ~~$3,831,000,~~$511,000, assuming market interest rates between ~~2.87%~~3.12% and ~~3.28%~~3.87%. Market interest rates were determined using rates which the Company believes reflects institutional lender yield requirements at the balance sheet dates.

Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value.

~~Financial Instruments Carried at Fair Value~~

The Company’s fair value measurements are based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, there is a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity’s own assumptions about market participant assumptions. Level 1 assets/liabilities are valued based on quoted prices for identical instruments in active markets, Level 2 assets/liabilities are valued based on quoted prices in active markets for similar instruments, on quoted prices in less active or inactive markets, or on other “observable” market inputs, and Level 3 assets/liabilities are valued based significantly on “unobservable” market inputs. The Company does not currently own any financial instruments that are classified as Level 3.

~~At September 30, 2021, the Company has no financial assets or liabilities measured at fair value.~~

~~Set forth below is information regarding the Company’s financial assets and liabilities measured at fair value as of December 31, 2020 (dollars in thousands):~~
Carrying and Fair Value Fair Value Measurements Using Fair Value Hierarchy
Level 1 Level 2 Level 3
Financial Liabilities:
Interest rate swap $ 23 $ — $ 23 $ —

~~Derivative financial instruments:~~ Fair values are approximated using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, and implied volatilities. At December 31, 2020, this derivative is included in other liabilities on the consolidated balance sheet.

Although the Company has determined that the majority of the inputs used to value its derivative fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with it utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparties. As of December 31, 2020, the Company assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative position and determined that the credit valuation adjustments are not significant to the overall valuation of its derivative. As a result, the Company determined that its derivative valuation is classified in Level 2 of the fair value hierarchy.

Non-recurring fair value measurements

The Company reviews each investment in real estate and joint venture interests when events or circumstances change, indicating the carrying value of the investment may not be recoverable. In the evaluation of an investment for impairment, many factors are considered, including estimated current and expected cash flows from the asset during the projected hold period, costs necessary to extend the life of the asset, expected capitalization rates, projected stabilized net operating income, and the ability to hold or dispose of the asset in the ordinary course of business. On June 8, 2021, we entered into a contract, completion of which is subject to the satisfaction of specified conditions, including the approval of the lender, to sell our interests in OPOP Tower and OPOP Lofts to our joint venture partner for $3,000,000, which was below the asset carrying value as of June 30, 2021. As a result, we recorded an impairment charge of $520,000. As the estimate of fair value was based on a privately negotiated contract, the Company classified the fair value estimate of the asset to determine impairment in Level 2 of the fair value hierarchy.

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Note 12 – Derivative Financial Instruments

Cash Flow Hedges of Interest Rate Risk

The Company's objective in using interest rate derivatives are to add stability to interest expense and to manage its exposure to interest rate movements. To accomplish this objective, the Company primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Company making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in Accumulated Other Comprehensive income and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

As of ~~September 30,~~March 31, 2022 and December 31, 2021, the Company did not have any outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk.

The table below presents the fair value of the Company’s derivative financial instruments as well as its classification on the consolidated balance sheets as of the dates indicated (dollars in thousands):

~~Derivatives as of:~~

~~September 30, 2021~~

~~December 31, 2020~~

~~Balance Sheet Location~~

~~Fair Value~~

~~Balance Sheet Location~~

~~Fair Value~~

~~Accounts payable and accrued liabilities~~

—

~~Accounts payable and accrued liabilities~~

The following table presents the effect of the Company’s interest rate swaps on the consolidated statements of comprehensive income (loss) for the dates indicated (dollars in thousands):
Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Amount of (loss) gain recognized on derivative in Other Comprehensive Income $ (1) $ — $ (1) $ (25)
Amount of (loss) gain reclassified from Accumulated Other Comprehensive Income into Interest expense $ (2) $ (5) $ (12) $ 5
Total amount of Interest expense presented in the Consolidated Statements of Operations $ 1,535 $ 1,731 $ 4,804 $ 5,400


	Three Months Ended March 31,
	2021
Amount of (loss) gain recognized on derivative in Other Comprehensive Income	$	—
Amount of (loss) gain reclassified from Accumulated Other Comprehensive Income into Interest expense	$	(5)
Total amount of Interest expense presented in the Consolidated Statements of Operations	$	1,660

During the three and nine months ended September 30, 2021, the Company accelerated the reclassification of losses of $12,000 from other comprehensive income to earnings as a result of the hedged forecasted transactions becoming probable not to occur.

~~Table of Contents~~

Note 13 – New Accounting Pronouncements

In March 2020, the Financial Accounting Standard Board issued ASU 2020-04, Reference Rate Reform (Topic 848). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, lease, derivatives and other contracts. This guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. During the first quarter of 2020, the Company has elected to apply hedge accounting expedients related to probability and the assessments of effectiveness for future LIBOR-indexed cash flows to assume that the index upon which future hedged transactions will be based matches the index on the corresponding derivatives. Application of these expedients preserves the presentation of derivatives consistent with past presentation. The Company continues to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In August 2018, the FASB issued ASU 2018-13, Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement, which removes, modifies, and adds certain disclosure requirements related to fair value measurements in ASC Topic 820. This guidance is effective for public companies in fiscal years beginning after December 15, 2019, with early adoption permitted. The Company adopted this guidance effective January 1, 2020. The adoption of this guidance did not have a material effect on the consolidated financial statements.

~~In June 2018, the FASB issued ASU 2018-07, Compensation—Stock Compensation (Topic 718): Improvements to~~

~~Non-employee Share-Based Payment Accounting. This update provides specific guidance for transactions for acquiring goods~~

and services from non-employees and specifies that Topic 718 applies to all share-based payment transactions in which a grantor acquires goods or services to be used or consumed in a grantor’s own operations by issuing share-based payment awards. The amendments also clarify that Topic 718 does not apply to share-based payments used to effectively provide (i) financing to the issuer or (ii) awards granted in conjunction with selling goods or services to customers as part of a contract accounted for under ASC Topic 606, Revenue from Contracts with Customers. The Company adopted this guidance effective January 1, 2020. The adoption of this guidance did not have a material effect on the consolidated financial statements.

In February 2016, the FASB issued ASU 2016-13, Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”) establishing ASC Topic 326, Financial Instruments - Credit Losses (“ASC 326”), as amended by subsequent ASUs on the topic. ASU 2016-13 changes how entities will account for credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The guidance replaces the current “incurred loss” model with an “expected loss” model that requires consideration of a broader range of information to estimate expected credit losses over the lifetime of the financial asset. ASU 2016-13 is effective for interim and annual reporting periods in fiscal years beginning after December 15, 2022. We are currently evaluating the impact of the adoption of ASU 2016-13 on our consolidated financial statements.

Note 14 – Subsequent Events

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of ~~September 30, 2021,~~March 31, 2022, that warrant additional disclosure, have been included in the notes to the consolidated financial statements.

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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (the "Quarterly Report"), together with other statements and information publicly disseminated by us, contains certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends concerning matters that are not historical facts. Forward looking statements are generally identifiable by use of words such as "may," "will," "will likely result," "shall," "should," "could," "believe," "expect," "intend," "anticipate," "estimate," ~~"project"~~"project," "apparent," "experiencing," or similar expressions or variations thereof.

Forward-looking statements contained in this Quarterly Report are based on our beliefs, assumptions and expectations of our future performance taking into account the information currently available to us. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or within our control, and which could materially affect actual results, performance or achievements. Factors which may cause actual results to vary from our forward-looking statements include, but are not limited to:

•the impact of the COVID-19 pandemic and the governmental and non-governmental responses thereto;

•general economic and business conditions, including those currently affecting our nation’s economy and real estate markets;

•the availability of, and costs associated with, sources of capital and liquidity;

•accessibility of debt and equity capital markets;

•general and local real estate conditions, including any changes in the value of our real estate;

•changes in Federal, state and local governmental laws and regulations, including laws and regulations relating to taxes and real estate and related investments;

•the level and volatility of interest rates;

•our acquisition strategy, which may not produce the cash flows or income expected;

•the competitive environment in which we operate, including competition that could adversely affect our ability to acquire properties and/or limit our ability to lease apartments or increase or maintain rental income;

•a limited number of multi-family property acquisition opportunities acceptable to us;

•our multi-family properties are concentrated in the Southeastern United States and Texas, which makes us more susceptible to adverse developments in those markets;

•risks associated with our strategy of acquiring value-add multi-family properties, which involves greater risks than more conservative strategies;

•the condition of Fannie Mae or Freddie Mac, which could adversely impact us;

•our failure to comply with laws, including those requiring access to our properties by disabled persons, which could result in substantial costs;

•insufficient cash flows, which could limit our ability to make required payments on our debt obligations;

•our ability and the ability of our joint venture partners to maintain compliance with the covenants contained in our and our joint venture partners' debt facilities and debt instruments;

•impairment in the value of real estate we own;

•failure of property managers to properly manage properties;

•disagreements with, or misconduct by, joint venture partners;

•decreased rental rates or ancillary revenues, or increasing vacancy rates;

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•our ability to lease units in newly acquired or newly constructed multi-family properties;

•potential defaults on or non-renewal of leases by tenants;

•creditworthiness of tenants;

•our ability to successfully evaluate, finance, complete and integrate acquisitions, including the ~~acquisition~~acquisitions of the ~~Remaining Interest (as defined), successfully;~~interests of our joint venture partners in unconsolidated subsidiaries;

•development and acquisition risks, including rising or unanticipated costs and failure of such acquisitions and developments to perform in accordance with projections;

•the timing of acquisitions and dispositions;

•our ability to reinvest the net proceeds of dispositions into more, or as favorable, acquisition opportunities;

•potential natural disasters such as hurricanes, tornadoes and floods;

•board determinations as to timing and payment of dividends, if any, and our ability or willingness to pay future dividends;

•financing risks, including the risks that our cash flows from operations may be insufficient to meet required debt service obligations and we may be unable to refinance our existing debt upon maturity or obtain new financing on attractive terms or at all;

•lack of or insufficient amounts of insurance to cover, among other things, losses from catastrophes;

•our ability to maintain our qualification as a REIT;

•possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us or a subsidiary owned by us or acquired by us;

•our dependence on information systems;

•risks associated with breaches of our or our joint venture partners' information technology systems;

•failure to comply with, or obtain waivers of, the provisions of, and covenants and coverage ratios in, our debt instruments;

•risks associated with the stock ownership restrictions of the Code for REITs and the stock ownership limit imposed by our charter;

•increases in real estate taxes at properties we acquire due to such acquisitions or other factors;

•the other factors described in this Quarterly Report on Form 10-Q and our Annual Report on Form 10-K for the year ended December 31, ~~2020,as amended~~2021 (the "Annual Report"), including those factors set forth under the sections of such reports, as applicable, entitled ~~"Cautionary~~"Cautionary Statement Regarding Forward-Looking ~~Statements",~~Statements," "Risk Factors," "Business," and ~~"Management's~~"Management's Discussion and Analysis of Financial Condition and Results of Operations".

We caution you not to ~~place undue reliance~~rely on forward-looking statements since they involve known and unknown risks, uncertainties and other factors which ~~speak only as of the date of this Quarterly Report.~~are, in some cases, beyond our control, and which could materially affect actual results, performance or achievements. Except to the extent otherwise required by applicable law or regulation, we undertake no obligation to update ~~these~~ forward-looking statements to reflect events or circumstances after the date of the filing of this Quarterly Report or to reflect the occurrence of unanticipated events.

~~Table~~ ~~of Contents~~

Overview

We are an internally managed real estate investment trust, also known as a REIT, that is focused on the ownership, operation and, ~~operation~~to a lesser extent, development of multi-family properties. These properties ~~derive revenue from tenant rental payments. Generally, these properties are~~may be wholly owned or by unconsolidated joint ventures in which we ~~contributed 32% to 90%~~generally contribute a significant portion of the equity. At ~~September 30, 2021,~~March 31, 2022, we: (i) wholly-own ~~eight~~eleven multi-family ~~properties located in seven states~~ with an aggregate of ~~2,010~~2,864 units and a carrying value of ~~$218.2~~$326.3 million; ~~and~~ (ii) have ownership interests, through unconsolidated entities, in 2721 multi-family properties ~~located in nine states~~ with ~~7,444~~6,121 units ~~- the~~and a carrying value of ~~our net equity investment therein is $128.5 million. Most~~$103.9 million; and (iii) have a 17.45% interest in a 240-unit multi-family development property with a carrying value of ~~our~~$2.1 million

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(excluding $1.4 million held in escrow). The 33 properties are located in 11 states; most of the properties are located in the ~~southeast~~Southeast United States and Texas. See ~~"-Off~~"-Off Balance Sheet ~~Arrangements"~~Arrangements" for information regarding the contributions ~~of our unconsolidated subsidiaries~~to, and our reliance ~~upon~~on, the cash flow and liquidity provided by the properties owned by our unconsolidated subsidiaries.

Challenges and Uncertainties Presented by COVID-19

The pandemic did not have a direct material adverse effect on our financial condition and results of operations; however, there were some direct negative effects (e.g., we were more conservative in raising rents, pursuing acquisitions and in implementing our value add program, all of which, if more aggressively pursued, may have allowed us to generate additional income). The impact of the pandemic on our business, financial condition, liquidity, results of operations and prospects will depend on future developments, which are highly uncertain and cannot be predicted with confidence.

Buyout of Interests in Joint Ventures

As disclosed in our Annual Report, our acquisition efforts in 2022 are focused on purchasing the remaining interests of our joint venture partners in joint ventures that own multifamily properties. We refer to such ~~subsidiaries.~~purchases as the “Partner Buyouts”. After a Partner Buyout is completed, such multifamily property will be wholly owned and the accounts and operations of such property will be included in our consolidated balance sheet and statements of operations, respectively, as of the date of completion of such purchase. We anticipate that our assets, liabilities, revenues and expenses will increase significantly as a result of these Partner Buyouts.

Due to the timing that contemplates that the sales of Retreat at Cinco Ranch and The Vive (the "Cinco/Vive Sales") described below ("-Property Dispositions - Dispositions of Joint Venture Properties - Contracts to Dispose of Joint Venture Properties") will be completed before all the Partner Buyouts described below (i.e., the Partner Buyouts completed or to be completed after March 31, 2022) are completed, and after giving effect to the Shavano Sale (as described below), it is expected that there may be a slight decline in operating results in the quarter ending June 30, 2022, and that after the Cinco/Vive Sales and the Partner Buyouts described below are completed, such transactions will not have a material impact in the short-term on our net income, funds from operations or adjusted funds from operations. After giving effect to the Cinco/Vive Sales and the Partner Buyouts described below, our consolidated balance sheet will include an additional (i) $217.4 million of mortgage debt with a weighted average remaining term to maturity of 6.5 years and a weighted average interest rate of 4.24 % and (ii) $302.2 million of real estate assets.

Completed Purchases of the Remaining Interests of Joint Venture Partners

During the Three Months Ended March 31, 2022

On March 23, 2022, we completed the acquisition of the remaining 28.1% interest owned by our joint venture partners in the entity that owns Verandas at Alamo Ranch, a 288-unit multi-family property located in San Antonio, TX. The purchase price for the interest, which gives effect to the cost of purchasing the promote interest (as described under "-Contracts to Purchase the Remaining Interests of Joint Venture Partners") of our joint venture partner, was $8.7 million. As a result, this property is wholly-owned and effective March 23, 2022, is included in our consolidated operations and accounts, including mortgage debt in principal amount of $27 million with an interest rate of 3.64% and maturing in December 2029. We anticipate that in the quarter ending June 30, 2022, this property will generate approximately $1.2 million of rental revenues, $579,000 of real estate operating expenses, $258,000 of interest expense and $518,000 of depreciation. For the quarter ended March 31, 2022, the average occupancy rate at this property was 94.7% and the average monthly rental rate was $1,206.

Subsequent to the Three Months Ended March 31, 2022

On April 7, 2022, we acquired the remaining 21.6% interest owned by our joint venture partners in the entity that owns Vanguard Heights, a 174-unit multi-family property located in Creve Couer, MO. The purchase price for the interest, which gives effect to the cost of purchasing the promote interest of our joint venture partner, was $4.8 million. As a result, this property is wholly-owned by us and effective April 7, 2022, is included in our consolidated operations and accounts, including mortgage debt of $29.7 million with an interest rate of 4.41% and maturing in July 2031. We anticipate that in the quarter ending June 30, 2022, this property will generate approximately $900,000 of rental revenues, $367,000 of real estate operating expenses, $337,000 of interest expense and $495,000 of depreciation. For the quarter ended March 31, 2022, the average occupancy rate at this property was 93.1% and the average monthly rental rate was $1,569.

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Contracts to Purchase the Remaining Interests of Joint Venture Partners in Nine Unconsolidated Ventures

From February 17, 2022 through April 6, 2022, we entered into agreements to acquire the remaining interests of our joint venture partners in the unconsolidated joint ventures that own the properties identified below. It is anticipated that these transactions, subject to the satisfaction of customary closing conditions, including the approval of the holders of the applicable mortgage debt, will be completed by August 1, 2022. Except as otherwise indicated, the mortgage debt reflected is currently on the property and after the completion of the applicable acquisition, will be included in our consolidated balance sheet (dollars in thousands):


Date of Agreement	Property Name	Location	Units	Remaining Interest to be Purchased		Book Value of Property at 3/31/22		Purchase Price (1)		Estimated Amount of Debt to be Included on our Consolidated Balance Sheet
February 2022	Jackson Square	Tallahassee, FL	242	20	%	$	25,102	$	6,220	$	21,524
February 2022	Grove at River Place	Macon, GA	240	20	%	12,829		7,485		11,481
February 2022	The Woodland Apartments	Boerne, TX	120	20	%	11,394		3,550		7,935
March 2022	Brixworth at Bridge Street	Huntsville, AL	208	20	%	11,844		10,851		18,500		(2)
April 2022	Abbotts Run	Willmington, NC	264	20	%	37,552		8,560		23,160
April 2022	Civic Center I (3)	Southaven, MS	392	25	%	30,831		18,063		27,544
April 2022	Civic Center II (3)	Southaven, MS	384	25	%	32,725		17,694		30,288
April 2022	Magnolia Pointe at Madison	Madison, AL	204	20	%	18,474		7,132		15,000
April 2022	Somerset at Trussville	Birmingham, AL	328	20	%	40,300		9,785		32,250
		Total	2,382			$	221,051	$	89,340	$	187,682

____________________

(1) The purchase (i) price gives effect to the purchase of the "promote interest" (as more fully described in the Annual Report) of our joint venture partners and

(ii) is subject to customary closing and similar adjustments.

(2) The current mortgage debt of $11,184 is to be refinanced with approximately $18,500 of new ten-year mortgage debt with an anticipated interest rate of

4.25% (the "New Mortgage Debt").

(3) The completion of the sale of each of Civic Center I and Civic Center II is conditioned upon the closing of one another. The purchase price reflected for

each represents an allocation of the total purchase price based on number of units.

To fund these purchases, we anticipate using our available cash, a portion of the proceeds from the Cinco/Vive Sales, a portion of the proceeds of the New Mortgage Debt, funds from our at-the-market equity offering program and, funds from our credit facility. After a purchase is completed, such property will be wholly-owned and the accounts (i.e., the assets and liabilities), and operations of such property will be included directly, from the date of such purchase, in our consolidated balance sheets and consolidated statement of operations, respectively.

Property Dispositions

Dispositions of Joint Venture Properties

Completed Dispositions

On February 8, 2022, the unconsolidated joint venture which owned Verandas At Shavano, a 288-unit multi-family property in which we had a 65% interest, sold the property for $53.8 million and recognized a gain on the sale of this property of $23.7 million (the "Shavano Sale"). As a result of the sale, we recorded a gain of $13.0 million. The mortgage debt secured by this property and paid-off in connection with the sale was in principal amount of $25.1 million, had an interest rate of 3.61% and was scheduled to mature in May 2023. During 2021, this property contributed $526,000 of equity in earnings of unconsolidated joint ventures.

Contracts to Dispose of Joint Venture Properties

In April 2022, the unconsolidated joint venture that owns Retreat at Cinco Ranch, located in Katy, Texas, in which we hold a 75% equity interest, entered into an agreement to sell the property for $68.5 million. This property, which as of March 31, 2022, had mortgage debt of $30.2 million, with a remaining term to maturity of 3.8 years and an interest rate of 4.44%, contributed $336,000 of equity in loss of unconsolidated joint ventures in 2021. We anticipate that our share of the gain, after giving effect to our approximate $1.1 million share of the mortgage prepayment charge, will be approximately $16.4 million.

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In May 2022, the unconsolidated joint venture that owns The Vive, a 312-unit multi-family property located in Kannapolis, NC, in which we hold a 65% equity interest, entered into an agreement to sell the property for $92.0 million. This property, which as of March 31, 2022, had mortgage debt of $31.6 million, with a remaining term to maturity of 30 years and an interest rate of 3.52%, contributed $77,000 of equity in earnings of unconsolidated joint ventures in 2021. We anticipate that our share of the gain, after giving effect to our approximate $738,000 share of the mortgage prepayment charge, will be approximately $21.5 million.

We anticipate that the Cinco/Vive Sales will be completed, subject to the satisfaction of customary closing conditions, during the quarter ending June 30, 2022.

Sale of Vacant Land Parcel

On February 2, 2022, we completed the sale of a vacant land parcel located in Daytona, Florida for a sales price of $4.7 million, and, after closing costs, recognized a nominal gain. In 2020, we recognized an impairment charge of $3.6 million in connection with this property. At December 31, 2021, this property was classified as held-for-sale.

Other Activities During the Three Months Ended March 31, 2022

Investment in Multi-Family Development Project

On March 10, 2022, we purchased a 17.45% interest in Stono Oaks, a planned 240-unit ground-up multi-family development, located in Johns Island, SC. The purchase price for the interest was $3.5 million, including $1.4 million held in escrow. We anticipate that this project will be completed in the fourth quarter of 2023.

Debt Reduction

In addition to the debt pay-offs described in "-Completed Purchases of the Remaining Interests of Joint Venture Partner" in connection with property dispositions, we paid-off, one month prior to its maturity, mortgage debt of $14.6 million bearing an interest rate of 4.29% on the Avalon Apartments-Pensacola, FL (the "Avalon Debt").

Sale of Common Stock Pursuant to the ATM Program

We sold 136,279 shares pursuant to our ATM sales program at an average price of $22.61 per share. Net proceeds after commissions and fees was $3.0 million.

Results of Operations – Three months ended March 31, 2022 compared to three months ended March 31, 2021.

As used herein, the term "same store properties" refers to operating properties that were owned for the entirety of the periods presented. For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ there were seven same store ~~properties.~~

~~Challenges and Uncertainties Presented by COVID-19~~

While the nation-wide economic hardships resulting from the responses to the pandemic did not have a material adverse effect on our results of operations for the three and nine months ended September 30, 2021, the pandemic, among other things, may adversely affect the ability of our residents to pay rent (due to furloughs, layoffs and/or the expiration of, or reduction in, unemployment benefits or other governmental assistance programs or our ability to evict non paying tenants) and as a result, our ability to pay dividends and/or the debt service on our mortgages.

~~Activities and Transactions During the Three Months Ended September 30, 2021~~

~~Acquisitions~~

On August 18, 2021, we acquired the 41.9% interest owned by our joint venture partners in the entity that owns Bells Bluff, a 402-unit multi-family property located in West Nashville, TN. As a result, this property is wholly-owned by us and effective August 18, 2021, is includedproperties in our consolidated accounts and results of operations (the "Consolidating Transaction"). The purchase price for this interest was $27.9 million. In connection with the purchase, the $47.0 million floating-rate construction loan on the property was refinanced with 20-year fixed-rate (i.e; 3.48% and interest only for 10 years) mortgage debt in the principal amount of $52.0 million. We anticipate that in the quarter ending December 31, 2021, this property will generate approximately $2.0 million of rental revenues, $805,000 of operating expenses, $460,000 of interest expense and $1.2 million of depreciation. For the quarter ended September 30, 2021, the average occupancy rate at this property was 97.7% and the average monthly rental rate was $1,483.

~~Dispositions~~

On July 20, 2021, the unconsolidated joint venture which owned The Avenue Apartments, Ocoee, FL, sold the property for $107.7 million and recognized a gain on the sale of this property of $39.7 million (the "Avenue Sale"). As a result of the sale, we recorded a gain of $19.5 million. The mortgage debt secured by this property and discharged in connection with the sale was in principal amount of $53.1 million, had an interest rate of 3.90% and was scheduled to mature in January 2028. The joint venture recognized a loss on the extinguishment of debt of $9.1 million, of which our share was $4.5 million. During 2020, this property contributed $51,000 of equity in loss of unconsolidated joint ventures.

On July 28, 2021, the unconsolidated joint venture which owned Parc at 980, Lawrenceville, GA, sold the property for $118.3 million and recognized a gain on the sale of this property of $44.3 million (the "Parc Sale"; and together with the Avenue Sale, the "Avenue/Parc Sale"). As a result of the sale, we recorded again of $15.5 million. The mortgage debt secured by this property and discharged in connection with the sale was in principal amount of $54.4 million, had an interest rate of 3.97% and was scheduled to mature in March 2028. The joint venture recognized a loss on the extinguishment of debt of $308,000, of which our share was $107,000. During 2020, this property contributed $3,000 of equity in loss of unconsolidated joint ventures.

~~On August 20, 2021, we sold a cooperative apartment in New York, NY, for a sales price of $545,000 and recognized a gain of $414,000 on the sale(the “Coop Sale”).~~

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~~Debt Reduction~~

During the quarter ended September 30, 2021, our consolidated subsidiaries paid-off three first mortgages and three supplemental mortgages with an aggregate balance of $31.9 million. These mortgages had a weighted average interest rate of 4.53% and a remaining term to maturity of nine months. In connection with the payoffs, we incurred a loss on the extinguishment of debt of $902,000.

~~Other Activities~~

On September 13, 2021, the Board of Directors approved a stock repurchase plan authorizing us, effective as of October 1, 2021, to repurchase up to $5,000,000 of shares of our common stock through December 31, 2023.

~~During the quarter ended September 30, 2021, we sold 59,269 shares pursuant to our ATM sales program at an average price of $18.23 per share. Net proceeds after commissions and fees was $1.1 million.~~

~~We increased the dividend declared on our common stock in September 2021 by 4.5% to $0.23 per share.~~

~~Recent Transactions~~

On October 1, 2021, we purchased for $1.6 million, our joint venture partner’s 10.0% interest in the entity that owns Crestmont at Thornblade-Greenville SC. As a result, this property is wholly owned by us. We anticipate that during the quarter ending December 31, 2021, this property will generate approximately $970,000, $485,000, $320,000, and $350,000 of rental revenues, operating expenses, interest expense and depreciation, respectively.

On November 4, 2021, we sold our interest in the joint venture that own OPOP Towers and OPOP Lofts, two properties located in St. Louis, MO. (the "OPOP Properties"), for $3,000,000. The Company, during the quarter ended June 30, 2021, recorded a $520,000 impairment charge with respect to this property and anticipates that during the quarter ended December 31, 2021,it will record a gain of approximately $385,000 on the sale. During the nine months ended September 30, 2021, these properties generated $879,000 in equity in loss from unconsolidated joint ventures.

~~Results of Operations~~ ~~– Three months ended September 30, 2021 compared to three months ended September 30, 2020.~~portfolio.

Revenues

The following table compares our revenues for the periods indicated:


		Three Months Ended September 30,								Three Months Ended March 31,
(Dollars in thousands):	(Dollars in thousands):	2021		2020		Increase (Decrease)		% Change	(Dollars in thousands):	2022		2021		Increase (Decrease)		% Change
Rental and other revenue from real estate properties	Rental and other revenue from real estate properties	$	7,709	$	7,020	$	689	9.8	Rental and other revenue from real estate properties	$	11,430	$	7,095	$	4,335	61.1
Other income	Other income	5		293		(288)		(98.3)	Other income	4		4		—		—
Total revenues	Total revenues	$	7,714	$	7,313	$	401	5.5	Total revenues	$	11,434	$	7,099	$	4,335	61.1

Rental and other revenue from real estate properties

The increase is due to the following changes:

•$~~964,000~~4.4 million due to the ~~Consolidating Transaction,~~Partner Buyouts at four properties(i.e., primarily Bells Bluff, Crestmont at Thornblade, Crossings of Bellevue in 2021 and, to a lesser extent, Verandas at Alamo Ranch in February 2022 (collectively, the “Consolidating Transactions”)); and

•$~~268,000~~614,000 primarily due to an increase in average rental rates at same store ~~properties, and~~properties.

•Table~~$100,000 due to an increase in ancillary income (~~ of Contents~~e.g.,~~ ~~late fees, utility reimbursements, etc) at same store properties.~~

Offsetting the increase is a ~~$717,000~~$739,000 decrease due to the sale of the Kendall Manor property in ~~the quarter ended June 30,~~May 2021 (the "Kendall Sale").

~~Other income~~

The decrease is due to the inclusion, in the three months ended September 30, 2020, of the interest collected on the Newark loan receivable which was sold on September 30, 2020 (the "Newark Receivable").

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Expenses

The following table compares our expenses for the periods indicated:


		Three Months Ended September 30,								Three Months Ended March 31,
(Dollars in thousands)	(Dollars in thousands)	2021		2020		Increase (Decrease)		% Change	(Dollars in thousands)	2022		2021		Increase (Decrease)		% Change
Real estate operating expenses	Real estate operating expenses	$	3,404	$	3,289	$	115	3.5	Real estate operating expenses	$	4,753	$	3,117	$	1,636	52.5
Interest expense	Interest expense	1,535		1,731		(196)		(11.3)	Interest expense	2,021		1,660		361		21.7
General and administrative	General and administrative	3,114		2,730		384		14.1	General and administrative	3,633		3,114		519		16.7
Impairment charge		—		3,642		(3,642)		N/A
Depreciation		1,787		1,777		10		0.6
Depreciation and amortization									Depreciation and amortization	3,606		1,537		2,069		134.6
Total expenses	Total expenses	$	9,840	$	13,169	$	(3,329)	(25.3)	Total expenses	$	14,013	$	9,428	$	4,585	48.6

Real estate operating ~~expense~~expense.

The increase is due primarily to to:

•the inclusion of ~~$368,000~~$1.9 million relating to the Consolidating ~~Transaction~~Transactions; and ~~a $100,000 increase in real estate taxes~~

•$224,000 at same store properties due to increases across most expense categories.

The increase was offset by a ~~$464,000 decrease in operating expenses from~~decline of $456,000 due to the Kendall Sale.

Interest expense.

The change is due to a ~~$216,000 decrease due to the payoff of mortgage debt in the current period and $169,000 due to the Kendall Sale, offset by a $218,000~~$1.0 million increase from the inclusion of interest expense related to the Consolidating ~~Transaction.~~Transactions. This was offset by a $664,000 decrease due to the payoff of $31.9 million of mortgage debt in 2021 and, to a lesser extent, the payoff of the Avalon Debt in the current period. See Item 3 "Quantitative and Qualitative Disclosures About Market Risks" for information regarding the impact of changing interest rates on our floating rate junior subordinated notes.

General and administrative.

The increase is due primarily to a ~~$381,000~~$436,000 increase in non-cash compensation expense including ~~$165,000~~increased amortization of:

•$213,000 relating to the grant of performance and market based restricted stock units (the "RSUs") in June ~~2021, $105,000~~2021;

•$130,000 with respect to restricted stock granted in June 2021; and

•$93,000 due to the ~~increased amortization of~~ restricted stock ~~expense~~granted in January 2021 (as a result of the higher fair value of the shares granted in ~~January~~in 2021 in comparison to the restricted stock granted in 2016) ~~and $111,000 with respect to the restricted stock granted in June 2021.~~

~~Impairment charge~~

In the 2020 period, in connection with entering into a contract to sell a vacant 8.7 acre land parcel in South Daytona Beach, FL (the "South Daytona Property") we recorded an impairment charge of $3.6 million representing the excess of the book value over the parcel's fair value . We anticipate that this transaction will be completed in early 2022. There was no comparable charge in the current period.

Depreciation and amortization

The increase is due primarily to the inclusion of ~~$364,000~~$2.2 million of such expense from the Consolidating ~~Transaction, offset by a $326,000 decrease due to the Kendall Sale.~~Transactions.

Unconsolidated Joint Ventures - Results of Operations

Equity in earnings (loss) of unconsolidated joint ventures.

The table below reflects the condensed income statements of our Unconsolidated Properties. In accordance with US generally accepted accounting principles, each of the line items in the chart below (other than equity in income (loss) of unconsolidated joint ventures) is presented as if these properties are wholly owned by us although our equity interests in these properties ranges from ~~32%~~17.45% to ~~90%~~80% (see note 8 of our consolidated financial statements) (dollars in thousands):

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		Three Months Ended September 30,									Three Months Ended March 31,
		2021		2020		Increase (Decrease)		% change			2022		2021		Increase (Decrease)		% change
Rental and other revenues from unconsolidated joint ventures	Rental and other revenues from unconsolidated joint ventures	$	29,818	$	32,341	$	(2,523)	(7.8)	%	Rental and other revenues from unconsolidated joint ventures	$	25,231	$	32,672	$	(7,441)	(22.8)	%

Real estate operating expense from unconsolidated joint ventures	Real estate operating expense from unconsolidated joint ventures	14,587		16,092		(1,505)		(9.4)	%	Real estate operating expense from unconsolidated joint ventures	11,169		15,703		(4,534)		(28.9)	%
Interest expense from unconsolidated joint ventures	Interest expense from unconsolidated joint ventures	7,568		8,663		(1,095)		(12.6)	%	Interest expense from unconsolidated joint ventures	6,026		8,522		(2,496)		(29.3)	%
Depreciation from unconsolidated joint ventures	Depreciation from unconsolidated joint ventures	8,288		10,411		(2,123)		(20.4)	%	Depreciation from unconsolidated joint ventures	6,636		10,385		(3,749)		(36.1)	%
Total expenses from unconsolidated joint ventures	Total expenses from unconsolidated joint ventures	30,443		35,166		(4,723)		(13.4)	%	Total expenses from unconsolidated joint ventures	23,831		34,610		(10,779)		(31.1)	%

Total revenues less total expenses from unconsolidated joint ventures	Total revenues less total expenses from unconsolidated joint ventures	(625)		(2,825)		2,200		77.9	%	Total revenues less total expenses from unconsolidated joint ventures	1,400		(1,938)		3,338		172.2	%

Other equity earnings	Other equity earnings	7		97		(90)		(92.8)	%	Other equity earnings	55		9		46		511.1	%

Impairment of assets from unconsolidated joint ventures										Impairment of assets from unconsolidated joint ventures	—		(2,323)		2,323		N/A
Insurance recoveries from unconsolidated joint ventures										Insurance recoveries from unconsolidated joint ventures	—		2,323		(2323)		N/A
Gain on insurance recoveries	Gain on insurance recoveries	1,246		427		819		191.8	%	Gain on insurance recoveries	515		—		515		N/A
Loss on extinguishment of debt	Loss on extinguishment of debt	(9,401)		—		(9,401)		N/A		Loss on extinguishment of debt	(30)		—		(30)		N/A
Gain on sale of real estate	Gain on sale of real estate	83,984		—		83,984		N/A		Gain on sale of real estate	23,652		—		23,652		N/A
Net income (loss)	Net income (loss)	75,211		(2,301)		77,512		N/M		Net income (loss)	$	25,592	$	(1,929)	$	27,521	N/A

Equity in earnings (loss) of unconsolidated joint ventures and equity in earnings from sale of unconsolidated joint venture properties	Equity in earnings (loss) of unconsolidated joint ventures and equity in earnings from sale of unconsolidated joint venture properties	$	30,786	$	(1,529)	$	32,315			Equity in earnings (loss) of unconsolidated joint ventures and equity in earnings from sale of unconsolidated joint venture properties	$	14,191	$	(1,345)	$	15,536

Set forth below is an explanation of the most significant changes in the components of the equity in earnings (loss) of unconsolidated joint ventures. Same store properties at Unconsolidated Properties represent 27 properties that were owned for the entirety of the periods being compared and excludes four properties, three of which were sold and the fourth which is the subject of the Consolidating Transaction.

Rental and other revenues from unconsolidated joint ventures

The decrease is composed of :

•$~~3.2~~4.5 million ~~due to~~from the ~~Avenue/~~sale in 2021 of the properties by the unconsolidated joint ventures which owned The Avenue Apartments-Ocoee, FL and Parc ~~Sale,~~at 980-Lawrenceville, GA (collectively, the "Avenue/Parc Sales");

•$~~655,000 due to~~3.4 million from the Consolidating Transactions;

•$1.4 million from the sale in 2021 of our ~~partnership interest~~interests in the unconsolidated joint ventures that owned Anatole ~~Apartments - Daytona~~Apartments-Daytona Beach, FL (and Tower at Opop and Lofts at Opop-St. Louis, MO (collectively, the ~~"Anatole Sale"~~"Anatole/Opop Sales") ~~in the second quarter of 2021,~~; and

•$~~570,000 from~~514,000 due to the ~~Consolidating Transaction.~~Shavano Sale.

Offsetting the decrease was an$2.4 million increase from same store sales, ~~of $1.9~~including $1.7 million ~~including $940,000 from increased occupancy, $625,000~~ from increased rental rates, $545,000 from increased occupancy, and ~~$346,000~~$177,000 from increased ancillary fees.

Real estate operating expenses from unconsolidated joint ventures

The decrease is composed of:

•$~~1.3~~1.9 million from the Avenue/Parc ~~Sale,~~Sales;

•$~~452,000~~1.7 million from the ~~Anatole Sale,~~Consolidating Transactions;

•$843,000 from the Anatole/Opop Sales; and

•$~~367,000~~239,000 from the ~~Consolidating Transaction.~~Shavano Sale.

Offsetting this decrease was a ~~$608,000~~$193,000 increase in such expenses at same store properties, ~~including increases of $227,000 of labor costs (including leasing commissions), $253,000 of utility costs and $182,000 of advertising, leasing (other than commissions) and administrative costs.~~with expenses generally increasing across most expense categories.

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Interest expense from unconsolidated joint ventures.

The decrease is ~~composed of:~~due to the decrease in mortgage debt due to property sales and the Consolidated Transactions-in particular:

•$~~768,000~~1.1 million from the Avenue/Parc ~~Sale,~~Sales;

•$~~178,000~~913,000 from the Consolidating ~~Transaction,~~Transactions; and

•$~~145,000~~464,000 from the ~~Anatole Sale.~~Anatole/Opop Sales.

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Depreciation from unconsolidated joint ventures

The decrease is composed of:

•$~~1.3~~1.4 million from the ~~Sold Properties,~~Avenue/Parc Sale;

•$~~367,000~~1.4 million from the Consolidating ~~Transaction,~~Transactions;

•$~~284,000~~511,000 from ~~same store properties, due to~~ the ~~inclusion, in the 2020 period, of such expense related to assets that in the current quarter have been fully depreciated,~~Anatole/Opop Sales; and

•$~~176,000~~314,000 from the ~~Anatole~~Shavano Sale.

Impairment charges from unconsolidated joint ventures

During the three months ended March 31, 2021, we recognized $2.3 million of impairment charges at three properties located in Texas due to storm damage in 2021 (the "Texas Storm"); there were no comparable charges in the current period.

Insurance recoveries from unconsolidated joint ventures

During the three months ended March 31, 2021, we recognized $2.3 million of insurance recoveries related to the impairment charges resulting from the Texas Storm; there were no comparable recoveries in the current period.

Gain on insurance recoveries from unconsolidated joint ventures.

In the three months ended ~~September 30, 2021~~March 31, 2022, we recognized ~~$1.3 million~~$515,000 in gains primarily ~~related~~due to ~~two properties (Verandas at Shavano and Retreat at Cinco Ranch, both located in San Antonio, TX),~~the fact that ~~were damaged by the February 2021 Texas winter storm (the "Texas Storm"), as~~ the amounts we received on claims related to insurance recoveries from the Texas Storm exceeded the assets previously written-off. ~~During the three months ended September 30, 2020,we recognized a gain of $338,000 on insurance recoveries related to fire damaged units at a property.~~

~~Loss on extinguishment of debt from unconsolidated joint ventures~~

In the three months ended September 30, 2021, we incurred a prepayment charge in connection with the payoff of the mortgage in the Avenue/Parc Sale. There was no comparable charge in the three months ended September 30, 2020.

~~Gain on sale of real estate from unconsolidated joint ventures~~

~~See "-~~ ~~Transactions During the Third Quarter"~~ ~~for information about the gains from the Avenue/Parc Sale. There was no comparable gain in the three months ended September 30, 2020.~~

~~Gain on sale of real estate~~

~~In the three months ended September 30, 2021, we sold a cooperative apartment in New York, NY for a sales price of $545,000 and recognized a gain of $414,000 on the sale.~~

~~Loss on extinguishment of debt~~

In the three months ended September 30, 2021, our consolidated subsidiaries paid off three first mortgage loans and three supplemental loans with an aggregate outstanding principal balance of $37.9 million and incurred an aggregate $902,000 of prepayment charges and deferred loan fee write-offs.

~~Results of Operations~~ ~~– Nine months ended September 30, 2021 compared to nine months ended September 30, 2020.~~

~~Revenues~~

~~The following table compares our revenues for the periods indicated:~~

Nine Months Ended September 30,
(Dollars in thousands): 2021 2020 Increase
(Decrease) %
Change
Rental and other revenue from real estate properties $ 21,762 $ 20,422 $ 1,340 6.6
Other income 12 631 (619) (98.1)
Total revenues $ 21,774 $ 21,053 $ 721 3.4

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~~Rental and other revenue from real estate properties~~

~~The increase is primarily due to:~~

•~~$1.3 million from same store properties, including $567,000 due to an increase in occupancy, $449,000 due to an increase in rental rates and $283,000 due to an increase in ancillary income (e.g.,~~ ~~late fees, utility reimbursements, etc), and~~

•~~$964,000 relating to the Consolidating Transaction.~~

~~Offsetting the increase is a $1.0 million decrease due to the Kendall Sale.~~

~~Other income~~

~~The decrease is due to the inclusion, in the nine months ended September 30, 2020, of interest collected on the Newark Receivable.~~

~~Expenses~~

~~The following table compares our expenses for the periods indicated:~~

Nine Months Ended September 30,
(Dollars in thousands) 2021 2020 Increase
(Decrease) % Change
Real estate operating expenses $ 9,687 $ 9,351 $ 336 3.6
Interest expense 4,804 5,400 (596) (11.0)
General and administrative 9,382 9,054 328 3.6
Impairment charge 520 3,642 (3,122) (85.7)
Depreciation 4,740 5,147 (407) (7.9)
Total expenses $ 29,133 $ 32,594 $ (3,461) (10.6)

~~Real estate operating expense~~

~~The increase is due primarily to~~

•$474,000 at same store properties, including a $277,000 increase in real estate taxes at Avondale Station - Decatur, GA due to an increased assessment and a $124,000 increase in insurance premiums, and

•~~$368,000 due to the Consolidating Transaction.~~

~~This was offset by a decline of $549,000 from the Kendall Sale.~~

~~Interest expense~~

~~The decrease is primarily due to :~~

•~~$297,000 from a decline in the the interest rate paid on our junior subordinated notes due to the decrease in LIBOR,~~

•~~$235,000 from the Kendall Sale, and~~

•~~$212,000 from the payoff of mortgage debt.~~

~~The decline was offset by an increase in interest expense from the Consolidating Transaction.~~

~~General and administrative.~~

~~The increase is due to:~~

•a $615,000 increase in compensation expense, including $423,000 due to the non-cash amortization of restricted stock (primarily related to the higher fair value of the shares granted in January 2021 in comparison to the shares issued in 2016), $166,000 of amortization of related to the RSUs granted in 2021 and $143,000 due to the non-cash amortization of restricted stock in June 2021, and

•a $479,000 increase in professional expenses incurred during the 2021 period, including $307,000 related to the follow-on-equity offering terminated in May 2021 and $ 89,000 in insurance an compensation consulting fees..

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~~This increase was offset by the inclusion, in the corresponding period of 2020, of $698,000 of professional fees and expenses related to the restatement of our financial statements in 2020.~~

~~Impairment charge~~

In the nine months ended September 30, 2021, we recorded an impairment charge of $520,000 representing the excess of the book value of our investment in the "OPOP Properties" over the sale price of the investment. In the corresponding period of the prior year, we recorded a $3.6 million impairment charge with respect to the South Daytona Property.

~~Depreciation~~

~~The decrease is due to:~~

•~~a $541,000 decline due to the Kendall Sale, and~~

•~~the inclusion, in the nine months ended September 30, 2020, of a $231,000 adjustment (i.e., to reflect an increase in the asset value) to such expense in connection with our buyout of a joint venture partner's interest.~~

~~This decrease was offset by $364,000 of depreciation from the Consolidating Transaction.~~

~~Equity in earnings (loss) of unconsolidated joint ventures.~~

The table below reflects the condensed income statements of our Unconsolidated Properties. See the discussion with respect to this line item for the three months ended September 30, 2021 and 2020 for additional information about this presentation (dollars in thousands):

Nine Months Ended September 30,
2021 2020 Increase
(Decrease) % change
Rental revenues from unconsolidated joint ventures $ 95,495 $ 94,726 $ 769 0.8 %
Real estate operating expense from unconsolidated joint ventures 45,523 45,298 225 0.5 %
Interest expense from unconsolidated joint ventures 24,562 26,186 (1,624) (6.2) %
Depreciation from unconsolidated joint ventures 28,464 31,184 (2,720) (8.7) %
Total expenses from unconsolidated joint ventures 98,549 102,668 (4,119) (4.0) %
Total revenues less total expenses from unconsolidated joint ventures (3,054) (7,942) 4,888 61.5 %
Other equity earnings 21 34 (13) (38.2) %
Impairment charges (2,813) — (2,813) N/A
Insurance recoveries 2,813 — 2,813 N/A
Gain on insurance recoveries 1,246 765 481 62.9 %
Loss on extinguishment of debt (9,401) — (9,401) N/A
Gain on sale of real estate 83,984 — 83,984 N/A
Net income (loss) 72,796 (7,143) $ 79,939
Equity in earnings (loss) of unconsolidated joint ventures $ 28,949 $ (4,731) $ 33,680

Set forth below is an explanation of the most significant changes in the components of the net earnings of our unconsolidated joint ventures. Same store properties at unconsolidated joint ventures represent 25 properties that have been owned for the entirety of the periods being compared and exclude any properties that were in lease up, sold or purchased during such periods.

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~~Rental revenue from unconsolidated joint ventures~~

~~The increase is due primarily to:~~

•~~$3.6 million from unconsolidated same store properties - $1.4 million from an increase in rental rates, $1.0 million due to the increase in ancillary fees (e.g.,~~ ~~late fees, waiver fees and tech/cable package) and $1.0 million from increased occupancy,~~

•$494,000 from the inclusion, for the entire nine months ended September 30, 2021, of Abbotts Run-Wilmington, NC ("Abbots Run"), that was only owned for a portion of the corresponding period in the prior year, and

•~~$391,000 from a property (i.e., Sola Station- Columbia, SC) that was in lease-up in the corresponding period in the prior year.~~

~~The increases were offset by $2.5 million from the Avenue/Parc Sale, $1.1 million from the Anatole Sale, and $112,000 from the Consolidating Transaction.~~

~~Real estate operating expenses from unconsolidated joint ventures~~

~~The increase is due to:~~

•~~$1.9 million from unconsolidated same store properties, including increases of $897,000 in utility costs, $347,000 in insurance costs, and $308,000 in payroll and leasing commissions, and~~

•~~$416,000 from the inclusion, for the entire nine months ended September 30, 2021, of Abbotts Run.~~

~~The increase was offset by a $1.3 million due to the Avenue/Parc Sale and $716,000 from the Anatole Sale.~~

~~Interest expense from unconsolidated joint ventures.~~ The decrease is due to the the Avenue/Parc Sale ($779,000), the Consolidating Transaction ($379,000), from the Anatole Sale ($259,000) and $178,000 due to reduced principal balances as a result of mortgage amortization.

~~Impairment charges from joint ventures.~~ During the nine months ended September 30, 2021, we recognized $2.8 million of impairment charges related to the Texas Storm. There were no comparable charges in the corresponding period of the prior year.

~~Insurance recoveries from joint ventures.~~ ~~During the nine months ended September 30, 2021, we recognized $2.8 million of insurance recoveries related to the Texas Storm.~~

~~Loss on early extinguishment of debt from unconsolidated joint ventures~~

~~The loss in the nine months ended September 30, 2021, is due primarily to a prepayment charge in connection with the payoff of the mortgage upon the Avenue/Parc Sale.~~

Gain on sale of real estate from unconsolidated joint ventures

See "-~~"- Transactions During the Third Quarter"~~ Completed Dispositions" for information about the ~~Avenue/Parc~~gain from the Shavano Sale. There was no comparable gain in the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2021.

~~Gain on sale of real estate~~

In the nine months ended September 30, 2021, we recognized gains of $7.3 million from the Kendall Manor Sale and $414,000 from the Coop Sale. See note 5 to our consolidated financial statements. There was no comparable gain in the nine months ended September 30, 2020.

~~Gain on sale of partnership interest~~

~~In the nine months ended September 30, 2021, we recognized a gain of $2,244,000 in connection with the Anatole Sale. There was no comparable gain in the nine months ended September 30, 2020.~~

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~~Loss on extinguishment of debt~~

~~See “-~~ ~~Transactions During the Three Months Ended September 30, 2021” and “-~~ ~~Results of Operations for the Three Months ended September 30, 2021 compared to the Three Months ended September 30, 2020” for information about the payoff of $37.9 million of mortgage debt and the loss incurred in connection therewith. There was no comparable charge in the nine month period ended September 30, 2020.~~

Liquidity and Capital Resources

We require funds to pay operating expenses and debt service obligations, acquire properties (including the acquisition of interests of our joint venture partners) , make capital and other improvements, fund capital contributions, pay dividends and, to the extent we deem appropriate, reduce, other than in the ordinary course, our indebtedness over time. Generally, our primary sources of capital and liquidity are the operations of our multi-family properties (including distributions from the operations of our multi-family joint ventures ~~that own such properties)~~and distributions from sale transactions), mortgage debt financings and re-financings, ~~equity contributions for acquisitions from our joint venture partners,~~ our share of the proceeds from the sale of properties, the sale of shares of our common stock pursuant to our at-the-market equity distribution program, borrowings from our credit facility and our available cash (including restricted cash). On ~~September 30, 2021~~March 31, 2022 and ~~November 1, 2021,~~May 2, 2022, our cash and cash equivalents, were approximately ~~$29.6~~$29.7 million and ~~$30.4~~$21.5 million, respectively, and excludes funds held at our unconsolidated joint ventures.

We anticipate that from April 1, 2022 through ~~2023,~~2024, our operating expenses, ~~$75.1~~$104.5 million of mortgage amortization and interest expense, and ~~$88.2~~$25.7 million of balloon payments (including ~~$66.8~~$78.8 million and ~~$56.0~~$10.8 million, respectively, from unconsolidated joint ventures) due with respect to mortgages maturing from ~~2021~~2022 to ~~2023,~~2024, estimated cash dividend payments of at least ~~$37.6~~$47.0 million (assuming (i) the current quarterly dividend rate of $0.23 per share and (ii) ~~18.2~~18.6 million shares outstanding), will be funded from cash generated from operations (including distributions from unconsolidated joint ventures), sales of properties and, to the extent available, our credit facility. Our operating cash flow and available cash is insufficient to fully fund the ~~$88.2~~$25.7 million of balloon payments, and if we are unable to refinance such debt, we may need to issue additional equity or dispose of properties, in each case on potentially unfavorable terms.

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See "– Contracts to Purchase the Remaining Interests of Joint Venture Partners in Nine Unconsolidated Ventures" for information regarding the source of funding to effectuate the Partner Buyouts of nine multi-family properties owned by unconsolidated joint ventures.

At ~~September 30, 2021~~March 31, 2022, we had mortgage debt of ~~$797.8~~$747.3 million (including ~~$663.1~~$534.5 million of mortgage debt of our unconsolidated subsidiaries). The mortgage debt at our: (i) consolidated subsidiaries had a weighted average interest rate of ~~3.79%~~3.73% and a weighted average remaining term to maturity of approximately 1110.2 years, and (ii) at our unconsolidated subsidiaries had a weighted average interest rate of ~~4.03%~~4.07% and a remaining term to maturity of approximately ~~7.5~~7.6 years.

Capital improvements at (i) 1613 multi-family properties will be funded by approximately ~~$7.6~~$6.5 million of restricted cash available at ~~September 30, 2021~~March 31, 2022 and the cash flow from operations at such properties and (ii) other properties will be funded from the cash flow from operations of such properties.

In addition to the challenges presented by the current highly competitive environment to acquire properties, our ability to acquire additional multi-family properties (or the interests of joint venture partners in properties owned by our unconsolidated subsidiaries), is limited by our available cash, and our ability to (i) draw on our credit facility, (ii) obtain, on acceptable terms, equity contributions from joint venture partners and mortgage debt from lenders, (iii) raise capital from the sale of our common stock, and (iv) use the net proceeds available to us from other property sales. Further, if and to the extent we generate ordinary taxable income, we will be required to make distributions to stockholders to maintain our REIT status and as a result, will be limited in our ability to use gains, if any, from property sales, as a source of funds for operating expenses, debt service and property acquisitions.

Junior Subordinated Notes

As of ~~September 30, 2021,~~March 31, 2022, $37.4 million (excluding deferred costs of ~~$302,000)~~$292,000) in principal amount of our junior subordinated notes is outstanding. These notes mature in April 2036, contain limited covenants (including covenants prohibiting us from paying dividends or repurchasing capital stock if there is an event of default (as defined therein) on these notes), are redeemable at our option and bear an interest rate, which resets and is payable quarterly, of three-month LIBOR plus 200 basis points. At ~~September 30,~~March 31, 2022 and 2021, ~~and 2020,~~ the interest rate on these notes was ~~2.13%~~2.30% and ~~2.27%~~2.21%, respectively.

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Credit Facility

Our credit facility with VNB New York, LLC, an affiliate of Valley National Bank (collectively, "VNB"), as amended and ~~modified from time to time,~~restated, allows us to borrow, subject to compliance with borrowing base requirements and other conditions, up to ~~$15 million. The facility is available for the~~$35 million, (i) for the acquisition of, and investment in, multi-family properties, (ii) to repay mortgage debt secured by multi-family properties and ~~(ii)~~(iii) for Operating Expenses (i.e., working capital (including dividend payments) and operating ~~expenses. It~~expenses); provided, that not more than $15 million may be used for Operating Expenses. (The facility provides that it may be expanded to provide for up to $60 million of availability if another lender(s) is willing to provide an additional $25 million of availability). The credit facility is secured by ~~the cash available in certain~~ cash accounts maintained by ~~the Company~~us at VNB (and we are required to maintain substantially all of our bank accounts at VNB), ~~matures April 2023~~ and the pledge of our interests in the entities that own the unencumbered multi-family properties used in calculating the borrowing base. The credit facility bears an annual interest rate, which resets daily, of 5025 basis points over the prime rate, with a floor of ~~4.25%. At September 30, 2021, the annual interest rate on this facility was 4.25%~~3.50%. There is an ~~unused facility~~annual fee of 0.25% ~~per annum~~ on the ~~difference between~~total amount committed by VNB and unused by us. The credit facility matures in November 2024. As of the date of this filing, no amounts are outstanding ~~loan balance~~on the credit facility and ~~the maximum amount then~~$35 million is available ~~under the facility.~~to be borrowed thereunder.

The terms of the credit facility ~~includes~~include certain restrictions and covenants which, ~~limit,~~ among other things, limit the incurrence of liens, require that we maintain and ~~which~~include in the collateral securing the facility at least two unencumbered properties with an aggregate value(as calculated pursuant to the facility) of at least $50 million, and require compliance with financial ratios relating to, among other things, the minimum amount of debt service coverage with respect to the properties (and amounts drawn on the credit facility) ~~used in calculating the borrowing base, the minimum number of wholly owned properties and the minimum number of properties~~ used in calculating the borrowing base. Net proceeds received from the sale, financing or refinancing of ~~wholly owned~~wholly-owned properties are generally required to be used to repay amounts outstanding under the credit facility.

At ~~September 30, 2021,~~March 31, 2022, we were in compliance in all material respects with the requirements of the facility.

~~Off Balance Sheet~~Other Financing Sources and Arrangements

~~Although we are not a party to any off-balance sheet arrangements (as such term is defined in Item 303(a)(4) of Regulation S-K), the following information may be of interest to investors.~~ At ~~September 30, 2021,~~March 31, 2022, we are joint venture partners in approximately 2522 unconsolidated joint ventures which own 2723 multi-family properties (including a development project) and that the distributions to us from these joint venture properties ($~~3.0~~19.7 million (including $14.9 million from the sale of the property) in the quarter ended ~~September 30, 2021)~~March 31, 2022) are a material source of our liquidity and cash flow. Further, we may be required to make significant capital contributions with respect to these properties. At ~~September 30, 2021,~~March 31, 2022, these joint venture properties have a net equity carrying value of ~~$128.5~~$109.4 million and are subject to net mortgage debt, which is not reflected on our consolidated balance sheet, of ~~$663.1~~$534.5 million. Although BRT Apartments Corp. is not the obligor with respect to such mortgage debt, the loss of any of these properties due to mortgage foreclosure or similar proceedings would have a material adverse effect on our results of operations and financial condition. These joint venture arrangements have been, and we anticipate that they will continue to be, material to our liquidity and capital resource position. See note 8 to our consolidated financial statements.

Cash Distribution Policy

We have elected to be treated as a REIT under the Internal Revenue Code of 1986, as amended, which we refer to as the “Code.” To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement

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that we distribute to our stockholders within the time frames prescribed by the Code at least 90% of our ordinary taxable income. Management currently intends to maintain our REIT status. As a REIT, we generally will not be subject to corporate Federal income tax on taxable income we distribute to stockholders in accordance with the Code. If we fail to qualify as a REIT in any taxable year, we will be subject to Federal income taxes at regular corporate rates and may not be able to qualify as a REIT for four subsequent tax years. Even if we qualify for Federal taxation as a REIT, we are subject to certain state and local taxes on our income and to Federal income and excise taxes on undistributed taxable income, (i.e., taxable income not distributed in the amounts and in the time frames prescribed by the Code).

Our net operating loss at December 31, ~~2020~~2021 was ~~$36.2~~approximately $35.7 million; therefore, we are not currently required by Code provisions relating to REITs to pay cash dividends to maintain our status as a REIT. Notwithstanding the foregoing, on April 7, ~~2021 and July 9, 2021,~~2022, we paid a quarterly cash dividend of ~~$0.22 per share and on October 7, 2021 paid a quarterly cash dividend of $.23~~$0.23 per share.

We ~~are~~ carefully ~~monitoring~~monitor our discretionary ~~spending in light of the pandemic.~~spending. Our largest recurring discretionary expenditure has been our quarterly dividend (which was $0.23 per share of common stock, or in the approximate amount of ~~$4.2~~$4.3 million, for the most recent quarter). Each quarter, our board of directors evaluates the timing and amount of our dividend based on its assessment of, among other things, our short and long- term cash and liquidity requirements, prospects, debt maturities, projections of our REIT taxable income, net income, funds from operations, and adjusted funds from operations.

Application of Critical Accounting Estimates

A complete discussion of our critical accounting estimates is included in our Annual Report. There have been no significant changes in such estimates since December 31, 2021.

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Funds from Operations; Adjusted Funds from Operations; Net Operating Income

We disclose below funds from operations (“FFO”) ~~and~~, adjusted funds from operations (“AFFO”) and net operating income ("NOI") because we believe that such metrics are a widely recognized and appropriate measure of the performance of an equity REIT.

We compute FFO in accordance with the “White Paper on Funds From Operations” issued by the National Association of Real Estate Investment Trusts (“NAREIT”) and NAREIT’s related guidance. FFO is defined in the White Paper as net income (calculated in accordance with GAAP), 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, impairment write-downs 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. Adjustments for unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis. In computing FFO, we do not add back to net income the amortization of costs in connection with our financing activities or depreciation of ~~non- real~~non-real estate assets. We compute AFFO by deducting from FFO our straight-line rent accruals, loss on extinguishment of debt, restricted stock and restricted stock unit expense, deferred mortgage costs and gain on insurance recovery. Since the NAREIT White Paper only provides guidelines for computing FFO, the computation of AFFO may vary from one REIT to another.

We believe that FFO and AFFO are useful and standard supplemental measures of the operating performance for equity REITs and are used frequently by securities analysts, investors and other interested parties in evaluating equity REITs, many of which present FFO and AFFO when reporting their operating results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate assets, which assumes that the carrying value of real estate assets diminishes predictably over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, we believe that FFO and AFFO provide a performance measure that when compared year over year, should reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs and other matters without the inclusion of depreciation and amortization, providing a perspective that may not be necessarily apparent from net income. We also consider FFO and AFFO to be useful to us in evaluating potential property acquisitions.

FFO and AFFO do not represent net income or cash flows from operations as defined by GAAP. FFO and AFFO should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor should FFO and AFFO be considered an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity. FFO and AFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization and capital improvements. FFO and AFFO do not represent cash flows from operating, investing or financing activities as defined by GAAP.

Management recognizes that there are limitations in the use of FFO and AFFO. In evaluating our performance, management is careful to examine GAAP measures such as net income and cash flows from operating, investing and financing activities.

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The tables below provides a reconciliation of net loss determined in accordance with GAAP to FFO and AFFO on a dollar and per share basis for each of the indicated periods (dollars in thousands, except per share amounts):

Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
GAAP Net income (loss) attributable to common stockholders $ 28,106 $ (7,484) $ 30,368 $ (16,561)
Add: depreciation of properties 1,787 1,777 4,740 5,147
Add: our share of depreciation in unconsolidated joint ventures 5,514 6,624 18,389 19,823
Add: Impairment charge — 3,642 520 3,642
Add: our share of impairment charge in unconsolidated joint venture — — 2,010 —
Deduct: our share of equity in earnings from sale of unconsolidated joint venture (34,982) — (34,982) —
Deduct: gain on sale of real estate and partnership interest (414) — (9,937) —
Adjustments for non-controlling interests (4) (4) (12) (12)
NAREIT Funds from operations attributable to common stockholders 7 4,555 11,096 12,039
Adjustments for: straight-line rent accruals (10) (10) (30) (30)
Add: loss on extinguishment of debt 902 — 902 —
Add: our share of loss on extinguishment of debt from unconsolidated joint ventures 4,581 — 4,581 —
Add: amortization of restricted stock and restricted stock units 843 461 1,950 1,360
Add: amortization of deferred borrowing costs 62 80 215 240
Add: our share of deferred mortgage costs from unconsolidated joint venture properties 148 156 439 479
Less: our share of insurance recovery — — (2,010) —
Less: our share of gain on insurance proceeds from unconsolidated joint venture (880) (350) (880) (519)
Adjustments for non-controlling interests 2 2 6 5
Adjusted funds from operations attributable to common stockholders $ 5,655 $ 4,894 $ 16,269 $ 13,574


	Three Months Ended March 31,
	2022		2021
GAAP Net income (loss) attributable to common stockholders	$	11,508	$	(3,765)
Add: depreciation of properties	3,606		1,537
Add: our share of depreciation in unconsolidated joint venture properties	4,318		6,599

Add: our share of impairment charge in unconsolidated joint venture properties	—		1,662
Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties	(12,961)		—
Deduct: gain on sale of real estate and partnership interests	(6)		—
Adjustments for non-controlling interests	(4)		(4)
NAREIT Funds from operations attributable to common stockholders	6,461		6,029

Adjustments for: straight-line rent accruals	6		(10)

Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties	19		—
Add: amortization of restricted stock and RSU expense	974		538
Add: amortization of deferred mortgage and debt costs	77		80
Add: our share of deferred mortgage costs from unconsolidated joint venture properties	93		148
Less: our share of insurance recovery	—		(1,662)
Less: our share of gain on insurance proceeds from unconsolidated joint venture properties	(386)		—
Adjustments for non-controlling interests	(1)		2
Adjusted funds from operations attributable to common stockholders	$	7,243	$	5,125

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Three Months Ended September 30, Nine Months Ended September 30,
2021 2020 2021 2020
Net income (loss) attributable to common stockholders $ 1.54 $ (0.44) $ 1.69 $ (0.97)
Add: depreciation of properties 0.10 0.11 0.29 0.31
Add: our share of depreciation in unconsolidated joint ventures 0.30 0.39 1.04 1.16
Add: Impairment charge — 0.21 0.03 0.21
Add: our share of impairment charge in unconsolidated joint venture — — 0.11 —
Deduct: our share of equity in earnings from sale of unconsolidated joint venture (1.92) — (1.97) —
Deduct: gain on sale of real estate (0.02) — (0.56) —
Adjustment for non-controlling interests — — — —
NAREIT Funds from operations per diluted common share — 0.27 0.63 0.71
Adjustments for: straight line rent accruals — — — —
Add: loss on extinguishment of debt 0.05 — 0.05 —
Add: our share of loss on extinguishment of debt from unconsolidated joint ventures 0.25 — 0.26 —
Add: amortization of restricted stock and restricted stock units 0.05 0.02 0.11 0.08
Add: amortization of deferred borrowing costs — — 0.01 0.01
Add: our share of deferred mortgage costs from unconsolidated joint venture properties 0.01 0.01 0.02 0.03
Less: our share of insurance recovery — — (0.11) —
Less: our share of gain on insurance proceeds from unconsolidated joint venture (0.05) (0.02) (0.05) (0.03)
Adjustments for non-controlling interests — — — —
Adjusted funds from operations per diluted common share $ 0.31 $ 0.28 $ 0.92 $ 0.80
Diluted shares outstanding for FFO and AFFO 18,215,924 17,176,401 17,820,909 17,095,315


	Three Months Ended March 31,
	2022		2021
Net income (loss) attributable to common stockholders	$	0.62	$	(0.22)
Add: depreciation of properties	0.20		0.09
Add: our share of depreciation in unconsolidated joint venture properties	0.23		0.38

Add: our share of impairment charge in unconsolidated joint venture properties	—		0.10
Deduct: our share of equity in earnings from sale of unconsolidated joint venture properties	(0.70)		—
Deduct: gain on sale of real estate and partnership interests	—		—
Adjustment for non-controlling interests	—		—
NAREIT Funds from operations per diluted common share	0.35		0.35

Adjustments for: straight line rent accruals	—		—

Add: our share of loss on extinguishment of debt from unconsolidated joint venture properties	—		—
Add: amortization of restricted stock and RSU expense	0.05		0.04
Add: amortization of deferred mortgage and debt costs	—		—
Add: our share of deferred mortgage and debt costs from unconsolidated joint venture properties	0.01		0.01
Less: our share of insurance recovery from unconsolidated joint venture properties	—		(0.10)
Less: our share of gain on insurance proceeds from unconsolidated joint venture properties	(0.02)		—
Adjustments for non-controlling interests	—		—
Adjusted funds from operations per diluted common share	$	0.39	$	0.30

Diluted shares outstanding for FFO and AFFO	18,570,639		17,319,222

~~For~~FFO increased on an absolute basis for the three months ended ~~September 30, 2021, FFO decreased~~March 31, 2022, from the corresponding ~~2020~~2021 period primarily due to the ~~loss on extinguishment of debt offset by a reduction in interest expense~~improved operating margins at ~~both our~~ consolidated and unconsolidated ~~properties.~~

~~For~~same store properties, the Consolidating Transactions and reduced interest expense. The increase was offset by the Kendall Sale, the Avenue/Parc Sales, the Anatole/Opop Sales, the inclusion in the three months ended ~~September 30,~~March 31, 2021 ~~AFFO increased~~of significant insurance recoveries and the increase, in the three months ended March 31, 2022 from the corresponding period in ~~2020~~2021, of non-cash amortization of equity award expense.

AFFO increased on an absolute and diluted per share basis for the three months ended March 31, 2022 from the corresponding period in 2021 primarily due to ~~reduced interest expense~~the factors impacting the improvement in FFO, other than the effects of the significant insurance recoveries in 2021 and ~~to a lesser extent, improved operating margins at our same store consolidated and unconsolidated properties, offset by~~ the ~~impact of dispositions.~~

~~For the nine months ended September 30, 2021, FFO decreased from the corresponding 2020 period due to the loss on extinguishment of debt, the increase in~~non-cash compensation expense related to equity awards ~~and the inclusion,~~ in the corresponding 2020 period, of other income related to the Newark Receivable. The decrease was offset by insurance recoveries and gain on insurance proceeds at unconsolidated properties, and improved operating margins and reduced interest expense at our consolidated and unconsolidated properties.

~~For the nine~~three months ended September 30, 2021, AFFO increased from the corresponding period in 2020, primarily due to improved operating margins and reduced interest expense at our consolidated and unconsolidated properties offset by the inclusion, in the corresponding 2020 period, of other income from the Newark Receivable.March 31, 2022.

Diluted per share FFO and AFFO were impacted ~~during~~in the three ~~and nine~~ months ended ~~September 30, 2021~~March 31, 2022 by ~~the~~a 1.25 million increase ~~of 1,039,523 and 725,594, respectively,~~in the weighted average shares of common stock outstanding from the ~~third~~first quarter of ~~2020~~2021 through the current quarter, primarily due to stock issuances pursuant to ~~the Company’s~~our at-the -market equity offering and equity incentive ~~and at-the-market equity offering~~ programs.

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Net Operating Income, or NOI, is a non-GAAP measure of performance. NOI is used by our management and many investors to evaluate and compare the performance of our properties to other comparable properties, to determine trends at our properties and to determine the estimated fair value of our properties. The usefulness of NOI may be limited in that it does not take into account, among other things, general and administrative expense, interest expense, loss on extinguishment of debt, casualty losses, insurance recoveries and gains or losses as determined by GAAP. NOI is a property specific performance metric and does not measure our performance as a whole.

We compute NOI, by adjusting net income (loss) to (a) add back (1) depreciation expense, (2) general and administrative expenses, (3) interest expense, (4) loss on extinguishment of debt, (5) equity in loss of unconsolidated joint ventures, (6) provision for taxes, (7) the impact of non-controlling interests, and (b) deduct (1) other income, (2) gain on sale of real estate, and (3) gain on insurance recoveries related to casualty loss. Other REIT’s may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REIT’s. We believe NOI provides an operating perspective not immediately apparent from GAAP operating income or net income (loss). NOI is one of the measures we use to evaluate our performance because it (i) measures the core operations of property performance by excluding corporate level expenses and other items unrelated to property operating performance and (ii) captures trends in rental housing and property operating expenses. However, NOI should only be used as an alternative measure of our financial performance.

The following table provides a reconciliation of net income attributable to common stockholders as computed in accordance with GAAP to NOI of our consolidated properties for the periods presented (dollars in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2021		2020		2021		2020			2022		2021
GAAP Net income (loss) attributable to common stockholders	GAAP Net income (loss) attributable to common stockholders	$	28,106	$	(7,484)	$	30,368	$	(16,561)	GAAP Net income (loss) attributable to common stockholders	$	11,508	$	(3,765)
Less: Other Income	Less: Other Income	(5)		(293)		(12)		(631)		Less: Other Income	(4)		(4)
Add: Interest expense	Add: Interest expense	1,535		1,731		4,804		5,400		Add: Interest expense	2,021		1,660
General and administrative	General and administrative	3,114		2,730		9,382		9,054		General and administrative	3,633		3,114
Impairment charge	Impairment charge	—		3,642		520		3,642		Impairment charge	—		—
Depreciation	Depreciation	1,787		1,777		4,740		5,147		Depreciation	3,606		1,537
Provision for taxes	Provision for taxes	31		65		155		192		Provision for taxes	74		57
Less: Gain on sale of real estate	Less: Gain on sale of real estate	(414)		—		(7,693)		—		Less: Gain on sale of real estate	(6)		—
Gain on sale of partnership interest		—		—		(2,244)		—

Equity in earnings from sale of unconsolidated joint venture properties	Equity in earnings from sale of unconsolidated joint venture properties	(34,982)		—		(34,982)		—		Equity in earnings from sale of unconsolidated joint venture properties	(12,961)		—
Add: Loss on extinguishment of debt	Add: Loss on extinguishment of debt	902		—		902		—		Add: Loss on extinguishment of debt	—		—
Equity in loss of unconsolidated joint venture properties		4,196		1,529		6,033		4,731
Adjust for: Equity in (earnings) loss of unconsolidated joint venture properties										Adjust for: Equity in (earnings) loss of unconsolidated joint venture properties	(1,230)		1,345
Add: Net income attributable to non-controlling interests	Add: Net income attributable to non-controlling interests	35		34		102		97		Add: Net income attributable to non-controlling interests	36		34
Net Operating Income	Net Operating Income	$	4,305	$	3,731	$	12,075	$	11,071	Net Operating Income	$	6,677	$	3,978

Less: Non-same store Net Operating Income	Less: Non-same store Net Operating Income	$	(845)	$	(476)	$	(1,690)	$	(1,511)	Less: Non-same store Net Operating Income	$	2,841	$	532
Same store Net Operating Income	Same store Net Operating Income	$	3,460	$	3,255	$	10,385	$	9,560	Same store Net Operating Income	$	3,836	$	3,446

For the three months ended ~~September 30, 2021,~~March 31, 2022, NOI increased ~~$574,000~~$2.7 million from the corresponding period in ~~2020~~2021 primarily due to a ~~$689,000~~$4.4 million increase in rental revenues (and in particular, the impact of the Consolidating Transactions) offset by a ~~$115,000~~$1.9 million increase, primarily from the Consolidating Transactions, in real estate operating expenses. Same store NOI in the three months ended ~~September 30, 2021,~~March 31, 2022, increased by ~~$205,000~~$390,000 from the corresponding period in ~~2020,~~2021, due to a ~~$433,000~~$614,000 increase in rental revenues (and in particular, the increase in average rental rates) offset by a ~~$228,000~~$224,000 increase in ~~operating expenses.~~

For the nine months ended September 30, 2021, NOI increased $1.0 million from the corresponding period in 2020, primarily due to a $1.3 million increase in rental revenues offset by a $336,000 increase inreal estate operating expenses. Same store NOI in the nine months ended September 30, 2021, increased by $825,000 from the corresponding period in 2020, due to a $1.3 million increase in rental revenues offset by a $474,000 increase in operating expenses.

See "-Results of Operations" for a discussion of ~~the improvement in operating margins.~~these changes.

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Item 3. Quantitative and Qualitative Disclosures About Market Risks

All of our mortgage debt bears interest at fixed rates. Our junior subordinated notes bear interest at the rate of three month LIBOR plus 200 basis points. At ~~September 30, 2021,~~March 31, 2022, the interest rate on these notes was ~~2.13%~~2.30%. A 100 basis point increase in the rate would increase our related interest expense by approximately $374,000 annually and a 100 basis point decrease in the rate would decrease our related interest expense by ~~$46,000~~$112,000 annually.

Item 4. Controls and Procedures

As required under Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, we carried out an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer, Senior Vice President-Finance and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures as of ~~September 30, 2021.~~March 31, 2022. Based upon that evaluation, these officers concluded that as of ~~September 30, 2021~~March 31, 2022 our disclosure controls and procedures were effective.

There have been no changes in our internal control over financial reporting during the quarter ended ~~September 30, 2021~~March 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

For further information about our remediation of a weakness in internal controls over financial reporting, see “Item 4. Controls and Procedures” in our Quarterly Report on Form 10-Q for the period ended June 30, 2021.

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Part II - Other Information

~~Item 2. Unregistered Sales of Equity Securities and Use of Proceeds~~

On September 13, 2021, the Board of Directors approved a stock repurchase plan authorizing the Company, effective as of October 1, 2021, to repurchase up to $5,000,000 of shares of common stock through December 31, 2023. During the quarter ended September 30, 2021, we did not repurchase any common stock.

~~Item 5. Other Information~~

~~The information set forth with respect to the sale of the investment in the OPOP Properties is incorporated herein be reference from the disclosures with respect thereto in~~ ~~"Management's Discussion and Analysis of Financial Condition and Results of Operations - Recent Transactions".~~

Item 6. Exhibits


Exhibit No.						Title of Exhibits
10.1						Form of Membership Interest Agreement used to effectuate Partner Buyouts
31.1						Certification of President and Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2						Certification of Senior Vice President—Finance pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.3						Certification of Vice President and Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1						Certification of President and Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2						Certification of Senior Vice President—Finance pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.3						Certification of Vice President and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101						The following financial information from the Company's Quarterly Report on Form 10-Q for the quarter ended ~~September 30, 2021,~~March 31, 2022, formatted in Inline XBRL: (i) Consolidated Balance Sheets, (ii) Consolidated Statements of Operations, (iii) Statements of Comprehensive Income (Loss), (iv) Consolidated Statements of Equity, (v) Consolidated Statements of Cash Flows and (vi) Notes to Consolidated Financial Statements. XBRL Instance Document – the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
104						Cover Page Interactive Date File (formatted as inline XBRL and contained in Exhibit 101)

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

BRT APARTMENTS CORP.




~~November 9, 2021~~May 10, 2022			/s/Jeffrey A. Gould
			Jeffrey A. Gould, President and
			Chief Executive Officer





~~November 9, 2021~~May 10, 2022			/s/George Zweier
			George Zweier, Vice President
			and Chief Financial Officer
			(principal financial officer)

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The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.

	September 30,
	2021		2020
Cash and cash equivalents	$	29,598	$	15,650
Restricted cash	7,560		9,129
Total cash, cash equivalents and restricted cash, shown in consolidated statement of cash flows	$	37,158	$	24,779


	Carrying and Fair Value		Fair Value Measurements Using Fair Value Hierarchy
			Level 1		Level 2		Level 3





Financial Liabilities:
Interest rate swap	$	23	$	—	$	23	$	—