Table of Contents

•

A statement that the candidate is willing to be considered and willing to serve as a trustee if nominated and elected.

        Before nominating a sitting trustee for re-election at an annual meeting of shareholders, the nominating and corporate governance committee will consider:

•

The trustee's performance on the board; and



•

Whether the trustee's re-election would be consistent with our corporate governance guidelines.

        When seeking candidates for trustee, the nominating and corporate governance committee may solicit suggestions from management, incumbent trustees or others. The nominating and corporate governance committee or its chairman will interview a candidate if it believesis believed the candidate might be suitable to be a trustee. The nominating and corporate governance committee may also ask the candidate to meet with management. If the nominating and corporate governance committee believes a candidate would be a valuable addition to the board, it will recommend the candidate's election to the full board.

        The committee generally intends to recommend that the board nominate incumbent trustees whom the committee believes will continue to make important contributions to us, inasmuch as the committee believes that the continuing service of qualified incumbents promotes stability and continuity, giving us the benefit of the familiarity and insight into our affairs that its trustees have accumulated during their tenure, while contributing to the board's ability to work as a collective body.

Special Committee

        The Special Committee, which is comprised of Elie Weiss (Chairman), Louis Grassi and Jeffrey Rubin, all of whom are independent, met seven times in fiscal 2011. This committee was established in March 2011 to, among other things, review, analyze and make recommendations with respect to our management structure and the advisory agreement pursuant to which we make payments to our advisor, REIT Management Corp., which is wholly-owned by Fredric H. Gould, our Chairman of the Board.

Independence of Trustees

        The following standards for "director" independenceIn determining whether our trustees are applicable to us in accordance withindependent, we apply the New York Stock ExchangeExchange's corporate governance listing standards:standards. Such standards provide:

•

No trustee qualifies as "independent" unless the board affirmatively determines that the trustee has no material relationship with us or any of our subsidiaries (either directly or as a partner,

shareholder or officer of an organization that has a relationship with us or any of our subsidiaries);





•

A trustee who is an employee, or whose immediate family member is an executive officer, of ours or any of our subsidiaries is not independent until three years after the end of such employment relationship;



•

A trustee who received, or whose immediate family member received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from us or any of our subsidiaries, other than director and committee fees and pension or other forms of deferred compensation for prior services (provided such compensation is not contingent in any way on continued service), is not independent until three years after he or she ceases to receive more than $120,000 in any twelve-month period;



•

A trustee who is, or who has an immediate family member who is, a current partner of our internal or external auditor, a trustee who is a current employee of our internal or external auditor, a trustee who has an immediate family member who is a current employee of our

internal or external auditor and who personally participates in our audit, assurance or tax compliance (but not tax planning) practice, or a trustee who was, or whose immediate family member was, within the last three years, (but is no longer) a partner or employee of our internal or external auditor and personally worked on our audit within that time, can notcannot be considered independent;



•

A trustee who is employed, or whose immediate family member is employed, as an executive officer of another company where any of our or any of our subsidiaries' present executivesexecutive officers serve on that company's compensation committee is not "independent" until three years after the end of such service or employment relationship; and



•

A trustee who is a current employee, or whose immediate family member is a current executive officer, of a company that has made payments to, or received payments from, us or any of our subsidiaries for property or services in an amount which, in any single fiscal year, exceeds the greater of $1 million, or 2% of such other company's consolidated gross revenues, is not "independent" until the commencement of the third fiscal year following the fiscal year in which such payments fall below such threshold.

        Under "director" independence standards, the board must affirmatively determine that a trustee has no relationship that would interfere with the exercise of independent judgment in carrying out the responsibilities of a trustee. The board has not adopted any requirements or standardsaffirmatively determined that each of Kenneth F. Bernstein, Alan H. Ginsburg, Louis C. Grassi, Gary Hurand, Jeffrey Rubin, Jonathan H. Simon and Elie Weiss, constituting more than two-thirds of our trustees, is "independent" for "director" independence beyondthe purposes of Section 303A of the Listed Company Manual of the New York Stock Exchange, corporate governance listing standards.and all of the members of our committees are independent for the purposes of Section 303A. The board based these determinations primarily on a review of the responses of our trustees to questions regarding employment and compensation history, affiliations and family and other relationships, discussions with trustees and relevant facts and circumstances provided to management of any relationships bearing on the independence of a trustee.

        In determining the independence of each of the foregoing trustees, the board considered that Gary Hurand holds approximately a 40% beneficial interest in a family entity which owns a preferred limited partnership interest in Gould Investors L.P. (an affiliate of our company—see "Certain Relationships and Related Transactions"). The preferred limited partnership interest owned by the Hurand family entity had, as of December 31, 2011, a deemed value of $14,678,000 (the redemption price of the interest) and very limited voting rights, and no member of the Hurand family, including Mr. Hurand, has any management involvement in Gould Investors L.P. In fiscal 2011, Gould Investors paid distributions of approximately $1.17 million on the interests owned by the Hurand family entity. Pursuant to the governing documents, in January 2012, Gould Investors exercised its right to repurchase and the Hurand family entity exercised its right to require Gould Investors to repurchase, $2,935,600 or 20% of such preferred limited partnership interests. The board concluded that the foregoing did not disqualify Mr. Hurand from being independent.

Compensation Committee Interlocks and Insider Participation

        The members of the compensation committee are Jeffrey Rubin (Chairman), Alan H. Ginsburg and Jonathan H. Simon. None of the members of the compensation committee has ever been an officer or employee of our company or any of our subsidiaries or has had any relationship with the Trust that would require disclosure under Item 404 of Regulation S-K (Certain Relationships and Related Party Transactions) and no "compensation committee interlocks" existed during fiscal 2010.

Table of Contents.

Compensation of Trustees

        Non-management members of our board of trustees are paid an annual retainer of $20,000. In addition, each member of the audit committee is paid an annual retainer of $5,000, the chairman of the audit committee is paid an additional annual retainer of $10,000, each member of the compensation committee is paid an annual retainer of $4,000, the chairman of the compensation committee is paid an additional annual retainer of $8,000, each member of the nominating and corporate governance

Table of Contents

committee is paid an annual retainer of $3,000 and the chairman of the nominating and corporate governance committee is paid an additional annual retainer of $4,000. Each member of the special committee is paid $1,000 for each meeting of such committee in which such member participates. Each non-management member of our board of trustees is also paid $1,200 for each board meeting and $1,000 for each committee meeting attended in person and $750 for each board meeting and committee meeting attended by telephone conference. The board, effective as of January 1, 2012, approved the payment of an annual fee of $200,000 to the chairman of our board. In each of fiscal 2010,2011 and 2012, each non-management member of our board of trustees was awarded 3,0003,100 restricted common shares under the BRT Realty Trust 2009 Incentive Plan. The restricted shares have a five year vesting period during which period the registered owner is entitled to vote and receive distributions on such shares. Non-management trustees who reside outside of the local area in which our executive office is located also receive reimbursement for travel expenses incurred in attending board and committee meetings.

        The following table sets forth the cash and non-cash compensation of trustees for the fiscal year ended September 30, 2010:2011:

Table of Contents

Table of Contents

        The table below shows the aggregate number of unvested restricted shares awarded to and held by the named trustees and the value thereof as of September 30, 2010:2011:

Non-Management Trustee Executive Sessions

        In accordance with New York Stock Exchange listing standards, our non-management trustees meet regularly in executive sessions without management. "Non-management" trustees are all those trustees who are not employees or officers of our company and include trustees, if any, who are not employees or officers but who were not determined to be "independent" by our board of trustees. The board has not designated a "Lead Director" or a single trustee to preside at executive sessions. The person who presides over executive sessions of non-management trustees is one of the committee chairmen. To the extent practicable, the presiding trustee at the executive sessions is rotated among the chairmen of the board's committees. See "Governance of our Company—Leadership Structure" for information about the decision not to appoint a "lead trustee."

Table of Contents

Communications with Trustees

        Shareholders and interested persons who want to communicate with our board or any individual trustee can write to:

BRT Realty Trust
60 Cutter Mill Road, Suite 303
Great Neck, NY 11021
Attention: Secretary

        Your letter should indicate that you are a shareholder of BRT Realty Trust. Depending on the subject matter, the Secretary will:

•

Forward the communication to the trustee or trustees to whom it is addressed;



•

Attempt to handle the inquiry directly; for example where it is a request for information about our company or it is a stock-related matter; or



•

Not forward the communication if it is primarily commercial in nature or if it relates to an improper or irrelevant topic.

        At each board meeting, the Secretary will present a summary of communications received, if any, since the last meeting that were not forwarded and make those communications available to the trustees on request.

        In the event that a shareholder, employee or other interested person would like to communicate with our non-management trustees confidentially, they may do so by sending a letter to "Non-Management Trustees" at the address set forth above. Please note that the envelope should contain a clear notation that it is confidential.

Table of Contents

INFORMATION REGARDING BENEFICIAL OWNERSHIP OF PRINCIPAL
SHAREHOLDERS, TRUSTEES AND MANAGEMENT

        The following table sets forth information concerning our common shares owned as of January 17, 201123, 2012 by (i) each person beneficially owning five percent or more of our common shares, (ii) each trustee, (ii) each executive officer named in the Summary Compensation Table, and (iii) all trustees and executive officers as a group.

Table of Contents

Table of Contents

Table of Contents

ELECTION OF TRUSTEES
(Proposal 1)

        The board of trustees is divided into three classes, each of which is elected for a staggered term of three years. Our Third Amended and Restated Declaration of Trust provides for the number of trustees to be between five and fifteen, the exact number to be determined by our board of trustees. The board has fixed the number of trustees at ten. The board may, following the meeting, increase or decrease the size of the board and fill any resulting vacancy or vacancies.

        At the annual meeting of shareholders, fourthree Class IIII Trustees (Kenneth F. Bernstein, Fredric(Alan H. Ginsburg, Jeffrey A. Gould Gary Hurand and Elie Weiss)Jonathan H. Simon) are standing for election to our board of trustees. Each nominee has been recommended to our board of trustees by the nominating and corporate governance committee for election at the annual meeting and each nominee has been nominated by our board of trustees to stand for election at the annual meeting, to hold office until our 20142015 annual meeting and until his successor is elected and qualified. Class I Trustees will be considered for election at our 2012 annual meeting and Class II Trustees will be considered for election at our 2013 annual meeting and Class III Trustees will be considered for election at our 2014 annual meeting. Proxies will not be voted for a greater number of persons than the number of nominees named in the proxy statement.

Table of Contents

        We expect each nominee to be able to serve if elected. However, if any nominee is unable to serve as a trustee, unless a shareholder withholds authority, the persons named in the proxy card may vote for any substitute nominee proposed by the board of trustees. Each nominee, if elected, will serve until the annual meeting of shareholders to be held in 2014.2015. Each other trustee whose current term will continue after the date of our 20112012 annual meeting will serve until the annual meeting of shareholders to be held in 2012 with respect to the Class I Trustees, and 2013 with respect to the Class II Trustees, and 2014 with respect to the Class III Trustees.

        The following table sets forth certain information regarding each nominee for election to the board of trustees:

Nominees for Election As Class I Trustees Whose Term Expires in 2015

Vote Required for Approval of Proposal 1

        The affirmative vote of a majority of the outstanding common shares is required for the election of each nominee for trustee. Abstentions and broker non-votes have the effect of a vote against the nominee(s).

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE ELECTION OF ALAN H. GINSBURG, JEFFREY A. GOULD AND JONATHAN H. SIMON AS CLASS I TRUSTEES. THE PERSONS NAMED IN THE PROXY CARD INTEND TO VOTE SUCH PROXY FOR THE ELECTION OF SUCH PERSONS AS TRUSTEES.

Table of Contents

        The following tables set forth information regarding trustees whose terms will continue after the date of the annual meeting:

Class II Trustees Whose Term Will Expire in 2013

Class III Trustees Whose Term ExpiresWill Expire in 2014

Table of Contents

Vote Required for Approval of Proposal 1BRT REALTY TRUST 2012 INCENTIVE PLAN
(PROPOSAL 2)

General

        The affirmative voteboard of directors has approved, subject to shareholder approval, the adoption of the BRT Realty Trust 2012 Incentive Plan (the "2012 Plan" or the "Plan").

        The board believes that granting equity based compensation is an important component of our compensation structure. The purpose of the Plan is to motivate, retain and attract employees, officers and trustees of experience and ability and to further the financial success of our company by aligning

Table of Contents

the interests of participants in the Plan, through the ownership of common shares, with the interests of our shareholders.

        An aggregate of 628,355 shares of restricted stock issued pursuant to all of our equity incentive plans were outstanding on January 23, 2012. Since all these restricted shares have a five year cliff-vesting requirement, the outstanding restricted shares vest in approximately equal annual amounts through 2017. There are 133,790 shares available to be awarded pursuant to our 2009 Incentive Plan, as amended (the "2009 Plan") and we propose the adoption of the 2012 Plan pursuant to which up to 600,000 shares may be awarded. If shareholders adopt the 2012 Plan, no further awards will be made under the 2009 Plan. As of January 23, 2012, there were 14,077,173 shares outstanding. Generally, the awards granted each year have represented less than 1% of our outstanding shares at the time of grant.

        It is anticipated that awards will be granted under the Plan to: eleven full-time and part-time executive officers; seven non-management trustees; and approximately 41 full-time and part-time non-executive officers and employees.

        The following summary of major features of the Plan is qualified in its entirety by reference to the actual text of the Plan, set forth as Annex A.

Shares Subject to the Plan

        The total number of shares available for grant under the Plan will not exceed 600,000 shares. The Plan authorizes the discretionary grant of (i) incentive stock options intended to qualify under Section 422 of the Internal Revenue Code of 1986, as amended, (ii) non-qualified stock options, (iii) restricted stock, (iv) restricted stock units and (v) performance-based awards. The shares available for issuance under the Plan will be authorized but unissued common shares. Shares related to awards that are forfeited, cancelled, terminated or expire unexercised will be available for grant under the Plan. Neither shares tendered by a participant to pay the exercise price of an award, nor any shares withheld by us for taxes will be available for future grants under the Plan. In the event of a majoritystock dividend or stock split affecting our shares, the number of shares issuable and issued under the Plan and the number of shares covered by and the exercise price and other terms of outstanding awards will be adjusted to reflect such event to prevent dilution or diminution of awards.

Administration of the outstanding common shares is requiredPlan

        The Plan will be administered by our compensation committee which, to the extent deemed necessary by the board, will consist of two or more persons who satisfy the requirements for a "non-employee director" under Rule 16(b) under the Securities Exchange Act of 1934, and/or the requirements for an "outside director" under Section 162(m) of the Internal Revenue Code of 1986, as amended. The compensation committee has authority to administer and construe the Plan in accordance with its provisions. The compensation committee's authority also includes the power to (a) determine persons eligible for awards, (b) prescribe the terms and conditions of awards granted under the Plan, (c) adopt rules for the electionadministration, interpretation and application of the Plan which are consistent with the Plan and (d) establish, interpret, amend or revoke any such rules.

Options

        Stock options entitle the holder to purchase a specified number of shares at a specified exercise price subject to the terms and conditions of the option grant. The purchase price per share for each incentive stock option is determined by the compensation committee, but must be at least 100% of the fair market value per share on the date of grant. The aggregate fair market value of shares with respect to which incentive stock options are exercisable for the first time by an individual during any calendar year cannot exceed $100,000. To the extent that the fair market value of shares with respect to which incentive stock options become exercisable for the first time during any calendar year exceeds $100,000,

Table of Contents

the portion in excess of $100,000 will be treated as a non-qualified option. Options granted under the Plan may be exercisable for a term up to ten years. If a participant owns more than 10% of the total voting power of all classes of our shares at the time the participant is granted an incentive stock option, the option price per share cannot be less than 110% of the fair market value per share on the date of grant and the term of the option cannot exceed five years.

        Non-qualified options may not be granted at an exercise price per share that is less than 100% of the fair market value per share on the date of the grant. The maximum aggregate number of shares underlying options that may be granted in one calendar year to an individual participant is 60,000.

        The closing price for our shares on the New York Stock Exchange on January 23, 2012 was $6.50 per share.

Restricted Stock and Restricted Stock Units

        Restricted stock are shares that may not be sold, transferred, gifted, bequeathed, pledged, assigned or otherwise disposed of until the end of a specified restriction period. Restricted stock units or RSU's represent the right, upon satisfaction of specified conditions, to receive shares and are subject to the same restrictions on transferability applicable to restricted stock. RSU's and shares of restricted stock will be issued at the beginning of the restriction period and the compensation committee shall set restrictions and other conditions applicable to the vesting of such award, including restrictions based on the achievement of specific performance goals, time based restrictions or any other basis determined by the compensation committee.

        Recipients of restricted stock have the right to vote such shares and to receive and retain cash dividends and other distributions, if any, paid thereon, even if such restricted stock is forfeited in the future. Recipients of RSU's are not entitled to vote or receive dividends with respect to the underlying shares until such shares have been issued. Recipients of such awards will not be entitled to delivery of the stock certificate representing the shares until all the restrictions have been fulfilled.

        Generally, it is anticipated that any restricted stock or RSU that does not vest on the vesting date, or on a date prior to the vesting date if it is determined that it cannot vest (for example due to the termination of employment prior to achievement of a time based restriction), will be forfeited to us and the recipient will not thereafter have any rights (including rights to dividends and distributions) with respect to these securities.

        No more than 60,000 shares of each nomineeof restricted stock and RSU's will be awarded to any participant in any calendar year. We will not repurchase outstanding restricted stock or RSU's in exchange for trustee.

THE BOARD OF TRUSTEES RECOMMENDS A VOTE FOR THE ELECTION OF CLASS III TRUSTEES. THE PERSONS NAMED IN THE PROXY CARD INTEND TO VOTE SUCH PROXY FOR THE ELECTION AS TRUSTEES OF KENNETH F. BERNSTEIN, FREDRIC H. GOULD, GARY HURAND AND ELIE WEISS.cash. Except as otherwise provided in an award agreement, in the event of the death, disability or retirement (as defined in the Plan) the restriction period shall not automatically terminate. The compensation committee may grant restricted stock or RSU's and set restrictions based upon performance goals so that such grant would qualify as "performance based compensation" under Section 162(m) of the Internal Revenue Code.

Table of Contents

Performance Based Awards

        In view of our relatively small market capitalization in comparison to our peers, and our small number of executive officers, it has been our judgment that fair and equitable compensation of our executive officers and the alignment of the interests of our executive officers with the interests of our shareholders could be accomplished by our compensation committee, with input from our chairman and senior management, analyzing our performance and the performance of each executive officer, and by awarding restricted stock to our executive officers in reasonable amounts. In view of the pay for performance emphasis of many of our peers and institutional investors, the Plan authorizes the compensation committee to grant performance based awards. Our compensation committee has commenced the process for establishing performance goals for the grant of performance based awards to senior executives, including our president and chief executive officer. It is currently anticipated that performance based goals will be established in 2012 for performance based awards to be granted in 2012. Performance based awards will be made by the issuance of restricted stock units or other Awards, or a combination thereof, contingent upon the attainment of one or more performance goals (described below) that our compensation committee establishes. The minimum period with respect to which performance goals are measured is one year, but the compensation committee generally intends to establish a performance cycle of not less than three years. The maximum number of shares with respect to which a participant may be granted performance based awards in any calendar year is 60,000 shares.

        The terms and conditions of a performance based award will provide for the vesting of the award to be contingent upon the achievement of one or more specified performance goals that the compensation committee establishes. For this purpose, "performance goals" means for a performance cycle, the specific goals that the compensation committee establishes that may be based on one or more of the following tables set forth information regarding trustees whose terms will continueperformance criteria:

•

pre-tax income,



•

after-tax income,



•

net income (meaning net income as reflected in our financial reports for the applicable period, on an aggregate, diluted and/or per share basis),



•

operating income (including net operating income),



•

cash flow,



•

earnings per share,



•

return on equity,



•

return on invested capital or assets,



•

funds available for distribution, on aggregate, diluted or per share basis,



•

appreciation in the fair market value of our shares,



•

return on investment,



•

total shareholder return on an absolute or peer comparable basis,



•

net earnings growth or growth in funds from operations ("FFO") as FFO is computed in accordance with standards established by the National Association of Real Estate Investment Trusts, Inc.,



•

stock appreciation (meaning an increase in the price or value of the shares after the date of grant of an award and during the annual meeting:applicable period),



•

related return ratios,

Table of Contents

•

increase in revenues,



•

published ranking against a peer group of real estate investment trusts based on total shareholder return,



•

net earnings,



•

changes (or the absence of changes) in the per share or aggregate market price of the Shares,



•

asset growth,



•

earnings before any one or more of the following items: interest, taxes, depreciation or amortization for the applicable period, as reflected in our financial reports for the applicable period, and



•

total revenue growth (meaning the increase in total revenues after the date of grant of an award and during the applicable period, as reflected in our financial reports for the applicable period).

        The performance goals need not be the same with respect to all participants and may be established for the Trust as a whole, on a per share basis or may be based on our performance compared to the performance of businesses specified by the compensation committee or compared to any prior period.

Class I Trustees Whose Term Expires inAmendment and Termination of the 2012 Incentive Plan

        No awards may be made under the 2012 Incentive Plan on or after the tenth anniversary of the plan's effective date. Our board of directors may amend, suspend or terminate the Plan at any time for any reason. However, no amendment shall permit the repricing, replacing or regranting of an option in connection with the cancellation of the Option or by amending an Award Agreement to lower the exercise price of an option or the cancellation of any award in exchange for cash without shareholder approval. In addition, before the plan can be amended, modified or terminated, where such amendment, modification or termination would adversely affect a participant who has already been granted an award, such participant's consent must be obtained.

Change in Control

        Any awards granted under the Plan that are outstanding and not then exercisable or subject to restrictions at the time of a change in control (as defined in the Plan) shall become immediately exercisable and all restrictions shall be removed effective as of such change in control. The Plan defines a change in control as follows:

        (a)   the acquisition in one or more transactions by any person (as defined in Section 13(d) of the Securities Exchange Act of 1934) of the beneficial ownership (within the meaning of Rule 13d-3 under the Securities Exchange Act of 1934) of 25% or more of the outstanding shares or the combined voting power of the then outstanding securities entitled to vote in the election of directors (provided that this provision is not applicable to acquisitions made individually, or as a group, by Fredric H. Gould, Matthew J. Gould and Jeffrey A. Gould and their respective spouses, lineal descendants and affiliates);

        (b)   individuals who, at the date of the award, constitute our board of trustees cease for any reason to constitute at least a majority of the board, provided an individual becoming a trustee subsequent to the date of an award whose election or nomination for election was approved by a vote of at least a majority of the trustees then comprising the board shall be considered as though such individuals were a member of the board, but excluding any individual whose initial assumption of office occurs as a result either of an actual or threatened election contest or other

Table of Contents

Table of Contents

Class II Trustees Whose Term Will Expire in 2013

PROPOSAL 2
ADVISORY APPROVAL OF
COMPENSATION OF EXECUTIVES

        The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the "Dodd-Frank Act") requires that we seek a non-binding advisory vote from our shareholders to approve the compensation awarded to our named executive officers as disclosed in this proxy statement. Although the advisory vote is non-binding, the Compensation Committee and the Board will review the results of the vote and will consider our shareholders' concerns and take them into account in future determinations concerning our executive compensation program. The Board of Trustees recommends that you indicate your support for the Company's compensation policies and procedures for its named executive officers, as outlinedperformance criteria set forth in the resolution below. Accordingly, the following resolution will be submitted forPlan, as established and certified by a shareholder vote at the 2011 Annual Meeting:

        "RESOLVED, that the shareholders approve, on an advisory basis, the compensationcommittee consisting solely of the individuals identified in the Summary Compensation Table, as disclosed in the BRT Realty Trust 2011

Table of Contents

proxy statement pursuant to the compensation disclosure rules of the Securities and Exchange Commission (which disclosure includes the Compensation Discussion and Analysis and accompanying compensation tables and related information disclosed in the Executive Compensation section of such proxy statement)."two or more outside directors.

New Plan Benefits Table

        We have not determined the type, amount or recipients of awards under the 2012 plan. Accordingly, we provide the following table which reflects the awards granted in fiscal 2011 pursuant to the 2009 Incentive Plan to the persons and groups indicated. All of such awards were in the form of restricted stock that vest on a "cliff-vesting" basis five years after grant.

        The affirmative vote of a majority of the votes cast at the meeting is required to adopt the Plan, provided that a majority of the shares entitled to vote actually vote on this proposal. Abstentions and broker non-votes have the effect of a vote against this proposal.

THE BOARD OF TRUSTEES RECOMMENDS
A THAT SHAREHOLDERS VOTE IN FAVOR OF THE ADOPTION OF THIS RESOLUTION

PROPOSAL 3
ADVISORY VOTE ONTO ADOPT THE FREQUENCY
AT WHICH WE WILL SEEK SHAREHOLDER ADVISORY
VOTES ON EXECUTIVE COMPENSATION

        In addition to requesting the shareholder advisory approval of the executive compensation program, the Dodd-Frank Act also requires that once every six years we seek shareholder approval of how often we will seek advisory approval of executive compensation. The Dodd-Frank Act requires that we present every one, two or three years, or abstain as alternatives for shareholders.

        The Board has determined that an advisory vote on executive compensation every three years is the best approach for the Trust based on a number of considerations, including the following:

•

the elements of our executive compensation program should not change in a significant manner from year to year;



•

shareholders have various methods of providing feedback on executive compensation matters even in years in which there is no advisory vote on executive compensation—for example, by communicating directly with the Board, as discussed under "Governance of our Company—Communications with Trustees;"



•

a three-year vote cycle gives the Board sufficient time to thoughtfully consider the results of the advisory vote and to implement any desired changes to our executive compensation policies and procedures; and



•

a three-year cycle will provide investors sufficient time to evaluate the effectiveness of our short- and long-term compensation programs.

        Although the vote on this Proposal is advisory and non-binding, the Board will carefully consider the voting results. The alternative (i.e., one year, two years, or three years) that receives the most votes will be deemed approved by the shareholders.

BRT REALTY TRUST 2012 INCENTIVE PLAN. PROXIES SOLICITED BY THE BOARD OF TRUSTEES RECOMMENDS
A VOTEWILL BE VOTED IN FAVOR OF EVERY THREE YEARS FOR THE FREQUENCY
AT WHICH WE WILL PRESENT TO
PROPOSAL UNLESS SHAREHOLDERS AN ADVISORY VOTE ON COMPENSATION OF EXECUTIVES
SPECIFY OTHERWISE.

INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
(Proposal 4)3)

General

        The audit committee and the board of trustees is seeking ratification of the appointment of BDO USA, LLP ("BDO") as our independent registered public accounting firm for the fiscal year ending September 30, 2011.2012. Representatives of BDO, and Ernst & Young LLP, our auditors for more than the past three fiscal years,2011, are expected to be present at the annual meeting and will have the opportunity

Table of Contents

to make a statement if such representatives desire to do so and will be available to respond to appropriate questions.

        We are not required to have our shareholders ratify the selection of BDO as our independent registered public accounting firm. We are doing so because we believe it is good corporate practice. If our shareholders do not ratify the selection, the audit committee will reconsider whether or not to

Table of Contents

retain BDO, but may, after reconsidering, still decide to retain such independent registered public accounting firm. Even if the selection is ratified, the audit committee, in its discretion, may change the appointment at any time during the year if it determines that such a change would be in our best interests.

        The affirmative vote of the holders of a majority of outstanding common shares present at the meeting, in person or by proxy, is required to ratify the appointment of BDO as our independent registered public accounting firm for fiscal 2011.

THE BOARD OF TRUSTEES UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE FOR RATIFICATION OF THE APPOINTMENT OF BDO AS OUR INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR FISCAL 2011.2012.

Change in Auditors

        On December 14, 2010, the audit committee of our board of trustees dismissed Ernst & Young LLP as our independent registered public accounting firm.

        Ernst & Young's reports on our consolidated financial statements for the fiscal years ended September 30, 2010 and 2009 did not contain an adverse opinion or a disclaimer of opinion, nor were such reports qualified or modified as to uncertainty, audit scope or accounting principles. During the fiscal years ended September 30, 2010 and 2009 and through December 14, 2010, (i) there were no disagreements with Ernst & Young on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which, if not resolved to the satisfaction of Ernst & Young, would have caused Ernst & Young to make a reference thereto in its reports on our consolidated financial statements for such periods and (ii) there have beenwere no "reportable events" as defined in Item 304(a)(1)(v) of Regulation S-K.

        On December 28, 2010, the audit committee of our board of trustees engaged BDO as our independent registered public accountants, as of and for the fiscal year ending September 30, 2011 and the interim periods prior to such year-end.

        During our two most recent fiscal 2010 and 2009 years and through December 28, 2010, we did not consult with BDO regarding the application of accounting principles to a specific transaction, either completed or proposed, or the type of audit opinion that might be rendered on our financial statements, nor did BDO provide advice to us, either written or oral, that was an important factor considered by us in reaching a decision as to an accounting, auditing or financial reporting issue. Further, during our two most recent fiscal years2010 and 2009 and through December 28, 2010, we did not consult with BDO on any matter described in Item 304(a)(2)(i) or (ii) of Regulation S-K.

Table of Contents

Audit and Other Fees

        The following table presents, except as otherwise indicated, the fees for professional auditthe services indicated billed by BDO for fiscal 2011 and Ernst & Young LLP for the audit of our annual consolidated financial statements for the years ended September 30, 2010 and 2009 and the audit of internal control over financial reporting for the years ended September 30, 2010 and 2009 and fees billed for other services rendered to us by Ernst & Young LLP for each of such years:fiscal 2010:

Table of Contents

Approval Policy for Audit and Non-Audit Services

        The audit committee annually reviews and approves the retention of our independent registered public accounting firm for each fiscal year and the audit of our financial statements for such fiscal year, including the fee associated with the audit. In addition, the audit committee approves the provision of tax related and other non-audit services. Any fees for the audit and any fees for non-audit services in excess of those approved by the audit committee must receive the prior approval of the audit committee.

        Proposals for any non-audit services to be performed by our independent registered public accounting firm must be approved by the audit committee in advance at a regularly scheduled meeting, by unanimous consent or at a meeting held by telephone conference.

        For fiscal 2010,2011, the audit committee pre-approved all of the audit, tax and non-audit services rendered by our independent registered public accounting firm.

Table of Contents

REPORT OF THE AUDIT COMMITTEE

        The board of trustees has determined that each member of the audit committee is "independent," as required by Section 10A(m)(3) of the Exchange Act and the rules and regulations promulgated thereunder and by the listing standards of the New York Stock Exchange.

        The audit committee is appointed by the board of trustees to oversee and monitor, among other things, the financial reporting process, the independence and performance of the independent registered public accounting firm, the Trust's internal controls and the performance of the accounting firm performing the internal audit function on behalf of the Trust. It is the responsibility of executive management to prepare the Trust's financial statements in accordance with generally accepted accounting principles, and it is the responsibility of the independent registered public accounting firm to perform an independent audit of the Trust's financial statements and to express an opinion on the conformity of those financial statements with generally accepted accounting principles.

        In this context, the audit committee met on five occasions in fiscal 20102011 and held discussions with management and the independent registered public accounting firm. Management represented to the audit committee that the fiscal 20102011 year end consolidated financial statements were prepared in accordance with generally accepted accounting principles, and the audit committee reviewed and discussed the audited consolidated financial statements with management and the independent registered public accounting firm. The audit committee also reviewed and discussed the Trust's internal control procedures with management, the independent registered public accounting firm and the accounting firm performing the internal audit function on behalf of the Trust. In addition, the audit committee reviewed the activities of management's disclosure controls and procedures committee and confirmed prior to approving each quarterly filing and the annual filing with the Securities and Exchange Commission that the requisite officers of the Trust were in accord with the certifications required under the Sarbanes-Oxley Act of 2002 and would execute and deliver such certifications. In fiscal 2010,2011, the audit committee reviewed the unaudited quarterly financial statements prior to the filing of each Quarterly Report on Form 10-Q with the Securities and Exchange Commission and each earnings press release prior to issuance. The audit committee discussed with the independent registered public accounting firm the matters required to be discussed by Statement on Auditing Standards No. 61, (Communication With Audit Committee)as amended, as adopted by the Public Company Accounting Oversight Board (the "PCAOB").

        In addition, the audit committee discussed with the independent registered public accounting firm the auditor's independence, and received the written disclosures and the letter from the independent registered public accounting firm required by Independence Standards Board Standard No. 1 (Independence Discussions WithPCAOB Rule 3526 (Communications with Audit Committees)Committee Concerning Independence). Further, the audit committee reviewed and approved the auditors' fees for both for performing audit and non-audit services. The committee also considered whether the provision of non-audit services by the independent registered public accounting firm was compatible with maintaining the auditor's independence and concluded that it was compatible with maintaining its independence.

        The audit committee was provided with a report by the independent registered public accounting firm that included a description of material issues raised by its most recent "peer review" and any inquiry or investigation by governmental or professional authorities within the past few years respecting one or more independent audits carried out by the independent registered public accounting firm.

        The audit committee meets with the independent registered public accounting firm and the accounting firm performing the internal audit function, with and without management present, to discuss the results of their examinations, their evaluations of the internal controls, and the overall quality of the Trust's financial reporting. In fiscal 2010,2011, the audit committee reviewed and discussed with the independent registered public accounting firm, the accounting firm performing the Trust's internal audit function and management, the Trust's compliance with Section 404 of the Sarbanes-Oxley Act of 2002 regarding the audit of internal controls over financial reporting.

Table of Contents

        Based on the reviews and discussions referred to above, the audit committee recommended that the Trust's audited consolidated financial statements for the year ended September 30, 20102011 be included in the Trust's Annual Report on Form 10-K for the year ended September 30, 20102011 for filing with the Securities and Exchange Commission.

Table of Contents

EXECUTIVE COMPENSATION

Compensation Discussion and Analysis

Highlights

        The following are highlights of our compensation practices; we encourage you to read the more detailed information set forth herein:

•

all of our named executive officers (as defined herein) are employees at will—none of these officers have employment agreements with us;



•

though we do not have a formal policy requiring a minimum level of ownership of our shares by our named executive officers, these officers own beneficially in the aggregate approximately 1,072,130 shares or 7.7% of our outstanding shares and none of such officers has sold any of their shares in more than the past five years;



•

there are no severance or similar arrangements for our named executive officers, other than the accelerated vesting of restricted share awards upon a changethe occurrence of controlspecified events as described herein;



•

there are no excise tax gross ups or similar arrangements for our executive officers;



•

the restricted shares awarded to our named executive officers generally vest five years after the grant date on a "cliff-vesting" basis—the shares do not vest incrementally on a quarterly or annual basis;



•

the compensation we pay our named executive officers is generally related (though not formulaically tied to) to our financial performance. Specifically,



•

when our net loss attributableperformance and to common shareholders increased to $47.8 million in fiscal 2009 from a net loss attributable to common shareholders of $260,000 in fiscal 2008, the aggregatesubjective evaluation of the cash bonus and valueindividual performance of stock awards granted to Jeffrey A. Gould, George Zweier and Mitchell Gould(i.e., our full-timea named executive officers) for fiscal 2009 decreased by $77,160 (62.9%), $23,070 (44.9%) and $32,515 (42.3%), respectively, from fiscal 2008 and the total compensation of Jeffrey A. Gould, George Zweier and Mitchell Gould decreased from fiscal 2009 by $261,044 (27.3%), $13,574 (4.9%) and $53,434 (13.3%), respectively, from their total compensation in fiscal 2008.officer;



•

in fiscal 2010,an amendment to our net loss attributableadvisory agreement became effective January 1, 2012, pursuant to common shareholders decreasedwhich a floor and ceiling was established on the fees paid to $8 million from a net loss attributable to common shareholders of $47.8 million in fiscal 2009. The aggregate of the cash bonus and value of stock awards granted to Jeffrey A. Gould, George Zweier and Mitchell Gould for fiscal 2010 increased by $6,920 (15.2%), $4,338 (15.3%) and $4,120 (9.3%), respectively,our advisor and the total compensation payable to Jeffrey A. Gouldadvisor will no longer receive any portion of origination fees for loans we originate; and Mitchell Gould, increased by $20,413 (2.9%), and $5,276 (1.5%), respectively, from their total compensation in fiscal 2009. Mr. Zweier's total compensation in fiscal 2010 decreased slightly from his total compensation in fiscal 2009.



•

the total compensation paid tothough we do not have a formal policy requiring a minimum level of ownership of our namedshares by our executive officers and trustees, these insiders beneficially own in the aggregate approximately 5.64 million shares or 40.1% of our outstanding shares and during the past eight fiscal 2010 was significantly less than the compensation paid to such officers in fiscal 2008.

years, only an aggregate of 7,800 shares have been sold by two insiders.

General

        This compensation discussion and analysis describes our compensation objectives and policies as applied to our namedchief executive officer, chief financial officer and our three other most highly compensated officers (collectively, the "named executive officers") in fiscal 2010.2011. This discussion and analysis focuses on the information contained in the compensation tables that follow this discussion and analysis. We also describe compensation actions taken historically to the extent it enhances an understanding of our executive compensation disclosure. OurGenerally, our compensation committee oversees our compensation program, recommends the compensation of executive officers employed by us on a full-time basis to our board of

Table of Contents

trustees for its approval, and our audit committee reviews the appropriateness of the allocation to us under a shared services agreement of the compensation of executive officers who perform services for us on a part time basis. Another element of our compensation program is the fee paid by us to our advisor, REIT Management Corp., pursuant to an amended and restatedthe advisory agreement, and the related payment by our advisor of compensation to certain of our executive officers, including certain of our named executive officers.

        Historically, we have used the following compensation structure with respect to the compensation paid by us to our executive officers:

•

executive officers who devote all, or substantially all, their business time to our affairs are compensated directly by us. The named executive officers who fit into this category are Jeffrey A. Gould, our president and chief executive officer, Mitchell Gould, our executive vice

president and George Zweier, our vice president and chief financial officer. These named executive officers are primarily involved in activities related to our basic lending business, including loan originations, loan underwriting, due diligence activities, loan portfolio management, loan workout and enforcement, and financial reporting;



•

executive officers who devote their time to us on a part-time basis, whose basic annual compensation (base salary, bonus, if any, and perquisites) is allocated to us under a shared services agreement based upon the estimated time each devotes to us and to the other entities which are parties to the shared services agreement. These executive officers perform services to us related primarily to legal, accounting and tax matters, corporate governance, Securities and Exchange Commission and New York Stock Exchange reporting and other regulatory matters, and consult with our executives and employees in areas involving loan originations, loan workouts, litigation (including foreclosure actions) and capital raising. David W. Kalish and Mark H. Lundy, senior vice presidents, who also serve as our senior vice president, finance and general counsel, respectively, are the only named executive officers who fit into this category;



•

executive officers who devote their time to us on a part-time basis, who receive compensation from our advisor, but do not receive basic annual compensation from us and whose basic annual compensation is not allocated to us under the shared services agreement. We pay a fee to our advisor for the services it performs for us pursuant to anthe advisory agreement, as amended. The advisor compensates these executive officers for the services they perform for our advisor for our benefit. The advisory agreement was entered into in 1983, and amended and restated effective as of January 1, 2007. This agreement, which was to expire on December 31, 2010, was extended until April 30, 2011.agreement. None of our named executive officers fit into this category in fiscal 2010.2011. Jeffrey A. Gould, David W. Kalish and Mark H. Lundy, named executive officers, receive compensation from our advisor in the form of consulting fees.advisor. The services which the advisor performs for us include, among other services, arranging and negotiating credit lines and mortgage financing for us and our joint ventures, interfacing with our lenders, participating in our loan analysis and approvals (which includes its executives serving on our loan committee), providing investment advice, workout and litigation strategy (including foreclosure actions and borrower bankruptcies), long-term planning and consulting with our executives and employees in many other aspects of our business, as required. Of the named executive officers who receive compensation from the advisor, Jeffrey A. Gould is the only one who receives direct compensation from us. The basic annual compensation of David W. Kalish and Mark H. Lundy, both of whom receive compensation from our advisor, is allocated to us under the shared services agreement.

Table
Say-on-Pay

Table of Contents

commitment, of 0.5% of the total commitment amount. Our advisor in turn compensated our loan origination fees. Our main assets are real estate loansexecutive officers. See "Certain Relationships and real estate acquired in foreclosure proceedings, which generates interest and fee and rental income.Related Transactions." Fredric H. Gould, chairman of our board, is the sole shareholder of our advisor. The advisory agreement was renegotiated between the independent trustees and management in November and December 2006 and amended effective January 1, 2007. At that time, there were four years remaining on the term of the existing agreement. The two basic changes made in the amended agreement were (i) a reduction of the percentage of assets on which the fee is based from 1% (in most instances) to⁶/10 of 1% and (ii) a change in the origination fee payments to the advisor by our borrowers from 1% to¹/2 of 1%, with the proviso that no origination fee is to be paid to the advisor unless we receive an origination fee of at least 1%. The advisory agreement,Prior Advisory Agreement, which was to terminate on December 31, 2010, has beenwas extended from time-to-time until December 31, 2011.

        In fiscal 2011, our Special Committee, comprised solely of independent trustees, was formed to April 30, 2011. During this extension period, certainreview our management structure and the Prior Advisory Agreement. This committee, which met eleven times in fiscal 2011, selected and retained independent counsel and The Delves Group, an independent compensation consultant that had not previously performed services on our or any of our independent trustees willaffiliates behalf. The Delves Group reviewed and analyzed our management's analysis of three different management structures including the current structure. The Delves Group concluded that the assumptions and methodologies used by management in its analysis were sound and justified and that the fees paid pursuant to the Prior Advisory Agreement for fiscal 2007 through 2010 were within the range of competitive practices presented in its report.

        The Special Committee concluded that based upon the report of The Delves Group and such committee's analysis of our business and personnel, our management structure was preferable to other available structures, and that it would be discussingin our shareholders' best interest to negotiate amendments to the Prior Advisory Agreement to, among other things, cap the fees payable to our advisor, decrease compensation payable for non-performing loans and examining various alternativesallow, in the short-term, for compensatinga further review of the impact on us of changes to the Prior Advisory Agreement. In furtherance thereof, the Special Committee negotiated amendments, which became effective January 1, 2012 to the Prior Advisory Agreement (as so amended by such amendments, the "New Advisory Agreement"). Pursuant to the New Advisory Agreement, (i) the stated termination date of such agreement was extended until June 30, 2014, (ii) the minimum and maximum fees payable in a fiscal year to our full-tineadvisor were set at $750,000 and part-time executive officers$4 million, respectively, subject to adjustment for any fiscal year of less than twelve months, and employees.(iii) we are to pay our advisor the following annual fees, which are to be paid on a quarterly basis:

•

1.0% of the average principal amount of earning loans;



•

0.35% of the average amount of the fair market value of non-earning loans;



•

0.45% of the average book value of all real estate properties, excluding depreciation ("BVRE");



•

0. 25% of the average amount of the fair market value of marketable securities;



•

0.15% of the average amount of cash and cash equivalents;

        The New Advisory Agreement reflect that in certain cases, we may own real estate assets or hold loans with another person or entity (a "co-venturer") pursuant to a joint venture, participation or other form of joint ownership arrangement. Accordingly, with respect to real estate assets held by us and a co-venturer, the New Advisory Agreement provides for the payment of the following fees:

•

for real estate assets that we manage: (0.45% × our percentage interest in the venture × BVRE) + (0.4% × investor's percentage interest in the venture × BVRE); and



•

for real estate assets we do not manage: (0.45% × our percentage interest in the venture × BVRE).

        With respect to loans held by us and a co-venturer, the New Advisory Agreement provides for the payment of the following fees:

•

for earning loans held by a venture we manage: (1.0% × our percentage interest in the venture × the average amount of the loan) + (0.4% × our co-venturer's percentage interest in the venture × the average amount of such loan);

Table of Contents

•

for non-earning loans held by a venture we manage: (0.35 × the average amount of such loan × our percentage interest in the venture) + (0.35% × our co-venturer's percentage interest in the venture × the average amount of such loan);



•

for earning loans held by ventures we do not manage: (1.0 × our percentage interest in the venture × the average amount of such loans); and



•

for non-earning loans held by ventures we do not manage: (0.35% × our percentage interest in the venture × the average amount of such loans).

        Since the fee paid by us to the advisor under the advisory agreement is based on an agreement which was approved by our board of trustees, the compensation committee does not review the fee nor the determinations made by Fredric H. Gould as to the payment of compensation by the advisor to any of our senior executive officers.

        Three of our named executive officers (Jeffrey A. Gould, David W. Kalish and Mark H. Lundy) receive compensation from our advisor. The compensation committee is advised of such payments. The compensation committee has determined that if the compensation paid by us to our executive officers is reasonable, then the amounts paid to them by the advisor should not be considered as a factor in the determination of compensation relating to such executive's performance for us as long as these persons are satisfactorily performing their duties on our behalf. The compensation committee has determined that all persons who receive compensation from us and also from our advisor satisfactorily performed their duties on our behalf.

Table of Contents

Stock Ownership Policy

        We do not have any policy regarding ownership requirements for officers or trustees. In view of the fact that all of our executive officers and trustees beneficially own somein the aggregate more than 40% of our common shares (and manyand that only two of our officers hold a significant numbersuch insiders sold an aggregate of common shares), and none of the current trustees or named executive officers has sold any7,800 shares during more than the past fiveeight fiscal years, we do not believe there is a need to adopt a policy regarding ownership of our common shares by executive officers and trustees.trustees since their 40% ownership interest aligns their interest with the interests of our shareholders.

Perquisites

        The perquisites we provide to our executive officers, which are in addition to the benefits we provide to all our employees, account for a small percentage of the compensation paid by us to or allocated to us for our executive officers. We believe that such perquisites are competitive and appropriate.

Severance and Change of Control AgreementsPost-Employment Benefits Program

        Except for provisions for accelerated vesting of awards of our restricted stock in a "change of control" transaction, we do not provide for any severance, termination or change of control payment or protection to our officers, trustees or employees. Accordingly, upon a change of control, the restricted stock issued to our officers, trustees, employees and consultants would automatically vest. This is the only automatic compensation benefit our officers would receive in a change of control transaction. In the event that a change of control occurred as of September 30, 2010, the restricted stock held by our named executives officers would have automatically vested andThe following table sets forth the value of each such officer's restricted stock, based(based on the closing price of our stock on September 30, 20102011 of $6.39$6.22 per share,share) and the number of shares subject to of restricted stock awards held by our named executive officers that would have beenvest upon death, disability or a change in control as follows:of September 30, 2011:

Table of Contents

Summary Compensation Table

        The following summary compensation table discloses the compensation paid and accrued for services rendered in all capacities to us during the 2010, 2009 and 2008 fiscal years indicated for our chiefnamed executive officer, chief financial officer and the three other most highly compensated executive officers other than our chief executive officer and chief financial officer:officers:

Table of Contents

Table of Contents

Table of Contents

Grant of Plan-Based Awards

        The following table discloses the grants of plan-based awards during the 2010 fiscal year for2011 to our chiefnamed executive officer, chief financial officer and the three other most highly compensated executive officers other than our chief executive officer and chief financial officer:officers:

Table of our named executive officers. These shares of restricted stock vest five years from the grant date, and any dividends we may pay to our shareholders are also paid to holders of our restricted stock at the same dividend rate.

Outstanding Equity Awards at Fiscal Year-End

        The following table discloses the outstanding equity awards at September 30, 20102011 for our chiefnamed executive officer, chief financial officer and the three other most highly compensated executive officers other than our chief executive officer and chief financial officer:officers: