Brt Apartments Corp. (md) · NYSE:BRT
Brt Apartments Corp. (md) — BRT Apartments — Investor Presentation (June 2022)
30 slides from Brt Apartments Corp. (md)'s investor presentation, June 2022
Slide 1: Investor Presentation
Investor Presentation June 2022
Slide 2: Safe Harbor
Safe Harbor Certain information contained in this presentation, together with thereafter, and in particular, the sections of such documents other statements and information publicly disseminated by BRT entitled “Risk Factors” and “Management’s Discussion and Apartments Corp. (the “Company”), constit
Slide 3: BRT Today
BRT Today BRT Apartments is an owner and operator of Class B and better multi-family assets primarily in well-situated Sun Belt locations. The Company uses its real estate and investment expertise to maximize risk-adjusted return for its stockholders. 33 8,985 $1,215 $111mm Q1 2022 Annualized Proper
Slide 4: Investments Highlights
Investments Highlights Differentiated Stable Portfolio and Proven Management Scalable Growth Strategy Historically Robust team, closely aligned Opportunity Pipeline with Stockholders Continued focus on Primarily acquire Management and Target assets in the growth markets, properties with 90+%
Slide 5: Valuation Upside
Valuation Upside Significant Valuation Upside Supported by Current Discount to Competitors 26x 24.2 24.2 23.3 23.3 22.0 Average 23.4x BRT trades at a ~40% discount to the 22x 2022E AFFOx ¹ 6.8x average competitor 2022E AFFO 18x multiple, which could be suggestive 14x 16.6 of potential upside 10x CPT
Slide 6: Valuation Upside (Cont'd.)
Valuation Upside (Cont’d.) Material AFFO per Share Growth Above Competitors ¹ 20% 16.2% BRT’s high-quality portfolio has 5-Year AFFO CAGR 15% 10.9% generated above-average AFFO 10% 8.8% 7.3% 6.9% Average 8.6% growth compared to multi-family 4.0% 5% Non-Gateway Companies 0% NXRT BRT IRT CPT MAA CSR S
Slide 7: Proven Senior Management Team
Proven Senior Management Team Jeffrey A. Gould Ryan W. Baltimore David W. Kalish George E. Zweier Mitchell K. Gould President and CEO Chief Operating Officer Senior Vice President Chief Financial Officer Executive Vice President 36 Years 9 Years 30+ Years 24 Years 28 Years 6
Slide 8: Decades of Demonstrated Success in Multi-Family
Decades of Demonstrated Success in Multi-Family Focus on buying out Joint Venture partner interests, thereby growing our wholly owned portfolio Focusing on direct acquisitions to Commenced multi-family investing strategy continue to expand the platform Transacted on over 18,000 units Incre
Slide 9: BRT's Total Return Since 2017
BRT’s Total Return Since 2017 Since January 1, 2017, BRT’s total return has been outperforming the S&P 500, the MSCI U.S. REIT Index, and multi-family Companies 1 over the same time period 300 269.1% 250 Cumulative Total Shareholder Return (%) 200 150 102.9% 100 92.6% 50 39.9% 0 (50) Dec-16 Oct-17 J
Slide 10: Portfolio Evolution
Portfolio Evolution Thoughtful growth and disciplined capital recycling have allowed BRT to curate the portfolio while delivering meaningful AFFO growth for shareholders 2017 2022 Change No. of Units 9,166 8,985 (2.0%) No. of Units Wholly Owned 920 5,420 1 489.1% Average Rent per Unit $933 $1,215 30
Slide 11: Capital Recycling and Strategy Evolution
Capital Recycling and Strategy Evolution • BRT has been focused on transforming the portfolio through thoughtful capital recycling • Over the last twelve months, BRT has focused on the acquisition of JV partner interests on terms we believe to be attractive • Taking advantage of embedded gains throu
Slide 12: Capitalizing on Favorable Multi-Family Trends
Capitalizing on Favorable Multi-Family Trends The multi-Family apartment sector has seen tremendous growth in recent years due to high demand, driven partially by millennials’ preference to rent rather than to buy Focus on opportunities in Sun Belt markets due to positive net migration in the mi
Slide 13: Focus on Growth Markets
Focus on Growth Markets Strategically Diversified in Sun Belt Markets KEY PORTFOLIO FIGURES Key portfolio figures Average Monthly Rental Rate3,5 $1,088 Average Monthly Rental Rate3,4 $1,215 % Of NOI Average Property Age (Years)2,3 20 Average Property Age (Years)2,3 20 State Units 2 Contribution 3 Av
Slide 14: Upside in Rents Due to Strong Demand and Stable Occupancy
Upside in Rents Due to Strong Demand and Stable Occupancy Average Rent Per Unit ($) Portfolio Occupancy (%) 1 2,500 100 96.9 96.4 95.4 95.0 94.2 93.9 2,000 1,773 80 1,476 1,500 1,374 1,310 1,292 60 1,215 1,000 40 500 20 0 0 CPT MAA IRT NXRT CSR BRT CPT BRT IRT MAA NXRT CSR Average Property Age (Year
Slide 15: Improved Balance Sheet
Improved Balance Sheet Decreasing Debt to Enterprise Value coupled with well laddered debt maturities Balance Sheet Lower Leverage (Debt as % of Total Enterprise Value) ² Overview 100 90 Weighted average interest rate on property 81.5 % 80 debt is 3.94% with a weighted averaged remaining term to m
Slide 16: History of Value Creation
History of Value Creation Dispositions Disposition date Property name Location # Of units BRT share of gain on sale1 IRR1 Feb-15 Water Vista Lawrenceville, GA 170 1.5 25.9% Jul-15 Ivy Ridge Marietta, GA 207 4.6 31.7% Jul-15 The Palms Houston, TX 798 3.1 14.8% Mar-16 Grove at Trinity Pointe Cordova,
Slide 17: Value-Add Case Study: Mississippi Portfolio
Value-Add Case Study: Mississippi Portfolio Southhaven, MS Property description Acquisition data Value add upgrades 2 class B multi-family properties Civic Center 1 purchased for Upgraded interior units with new located in Southaven, Mississippi. $35mm, or $89,286, per unit cabinet doors, resu
Slide 18: Investment Highlights
Investment Highlights Differentiated Strategy Scalable Growth Opportunity Stable Portfolio Proven Management with Close Alignment of Interests 17
Slide 19: Non-GAAP Financial Measures, Definitions and Reconciliations
Appendix Non-GAAP Financial Measures, Definitions and Reconciliations
Slide 20: Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)
A-1 Funds from Operations (FFO) FFO is a non-GAAP financial performance measure defined by the National Association of Real Estate Investment Trusts and is widely recognized by investors and analysts as one measure of operating performance of a REIT. The FFO calculation excludes items such as real e
Slide 21: Net Operating Income (NOI) and Total Debt Service
A-2 Net Operating Income (NOI) 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)
Slide 22: Same Store, Stabilized Properties, Pro-Rata Share
A-3 Same Store Same store properties refer to stabilized properties that we owned and operated for the entirety of 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 s
Slide 23: Enterprise Value
A-4 Enterprise Value Enterprise Value is equal to debt plus market capitalization less cash and cash equivalents, including BRT's pro-rata share of cash and cash equivalents at the unconsolidated Joint Ventures. Cash and cash equivalents excludes restricted cash. Debt is equal to 100% of the debt at
Slide 24: Unconsolidated Joint Ventures Condensed Balance Sheet
A-5 At March 31, 2022, the Company held interests in unconsolidated joint ventures that own 22 multi-family properties (the Unconsolidated Properties") including an interest in a development project. The condensed balance sheet below present information regarding such properties (dollars in thousand
Slide 25: Unconsolidated Properties Condensed Income Statements
A-6 The condensed income statements for the unconsolidated properties below, present, for the periods indicated, a reconciliation of the information that appears in note 8 to the consolidated financial statements included in BRT's Quarterly Report on Form 10-Q for the period ended March 31, 2022 to
Slide 26: Debt Summary: Consolidated and Unconsolidated
A-7 The following 2 pages outline the debt summary for both the consolidated and unconsolidated properties as well as the corporate subordinated debt and credit facility Consolidated Percent of Total Total Principal Scheduled Principal Payments Principal Payments Weighted Average Year Payments Amort
Slide 27: Combined Debt and Junior Subordinated Notes
A-8 Combined (2) Total Principal Scheduled Principal Payments Due at Percent of Total Principal Weighted Average Interest Year Payments Amortization Maturity Payments Due At Maturity Rate (1) 2022 $ 19,065 $ 4,161 $ 14,904 3% 4.04% 2023 14,995 6,338 8,657 2% 4.12% 2024 7,357 7,357 — — —% 2025 23,816
Slide 28: Reconciliation of NOI: Consolidated Properties
A-9 The following tables provides a reconciliation of NOI to net income attributable to common stockholders as computed in accordance with GAAP for the periods presented for the consolidated properties: Consolidated Three Months Ended March 31, (000’s) 2022 2021 GAAP Net income (loss) attributable t
Slide 29: Reconciliation of NOI: Unconsolidated Properties
A-10 The following tables provides a reconciliation of NOI to net income attributable to common stockholders as computed in accordance with GAAP for the periods presented for BRT's pro rata share of the unconsolidated properties: Unconsolidated Three Months Ended March 31, (000’s) 2022 2021 BRT equi
Slide 30: Historical Dividend Tax Treatment (Per Share)
A-11 The following tables provides historic tax treatment of dividends Historical Dividend Tax Treatment (Per Share) Year Total Distribution Ordinary Income Capital Gains Return of Capital 2021 $ 1.12 $ - $ 1.12 $ - 2020 $ 0.66 $ - $ - $ 0.66 2019 $ 0.84 $ - $ 0.84 $ - 2018 $ 0.80 $ - $ 0.80 $ - Not