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Nov 5, 2026, 4:50 PM ETReal Estate

BRT Apartments Corp. — Third Quarter 2026 Earnings Summary

BRTBRT APARTMENTS CORP
Source

Financial Performance

  • Reported a net loss of $3.9 million ($0.23 per diluted share) for the three months ended September 30, 2026, compared to a net loss of $2.7 million ($0.14 per diluted share) in the same period in 2025.
  • Funds from Operations (FFO) per diluted share was $0.26 for Q3 2026, down from $0.28 in Q3 2025.
  • Adjusted Funds from Operations (AFFO) per diluted share was $0.31 for Q3 2026, down from $0.36 in Q3 2025.
  • Combined Portfolio Net Operating Income (NOI) was $15.1 million for Q3 2026, a decrease from $15.3 million in Q3 2025.
  • Consolidated revenues for Q3 2026 were $24.7 million, compared to $24.4 million in Q3 2025.
  • Consolidated net loss attributable to common stockholders for the nine months ended September 30, 2026, was $9.9 million, compared to $7.6 million in the prior year period.
  • Total debt outstanding as of September 30, 2026, was $676.6 million, consisting of $479.5 million in consolidated mortgages, $37.2 million in subordinated notes, and $159.9 million in unconsolidated pro-rata debt.
  • Debt to Enterprise Value was 76% as of September 30, 2026, compared to 70% in 2025.
  • Debt Service Coverage Ratio for the quarter ended September 30, 2026, was 1.45.
  • Weighted average interest rate on combined debt was 4.38% as of September 30, 2026.

Guidance and Future Outlook

  • The acquisition of Ranch Lake Apartments (336 units in Bradenton, FL) is anticipated to close in the first quarter of 2027.
  • The Company has 160 estimated units available to be renovated over the next 24 months under its Value-Add Program.
  • The stock repurchase program was extended through December 31, 2028.

Business Segments and Product Lines

  • The portfolio consists of 32 consolidated and unconsolidated properties with 8,503 total units as of September 30, 2026.
  • Consolidated properties increased from 21 in 2025 to 21 in 2026 (excluding the new acquisition pending), while unconsolidated properties increased from 10 to 11.
  • On August 17, 2026, a joint venture with a 70% interest acquired Riverbend Apartments (192 units in League City, TX) for $32.7 million.
  • On June 2, 2026, the Company entered into an agreement to acquire Ranch Lake Apartments for approximately $80 million, including the assumption of a $45.7 million HUD-insured mortgage.
  • 24 units were rehabilitated during the quarter ended September 30, 2026, with estimated rehab costs of $211,000 and an estimated average monthly rent increase of $126.
  • Weighted average monthly rent per occupied unit for the combined portfolio was $1,429 in Q3 2026, up from $1,404 in Q3 2025.
  • Combined portfolio occupancy was 94.4% in Q3 2026, unchanged from Q3 2025.

Market and Competitive Landscape

  • The portfolio is concentrated in the Southeastern United States and Texas, making it susceptible to adverse developments in those specific markets.
  • Combined portfolio revenues grew 0.7% year-over-year in Q3 2026, while combined operating expenses increased 3.2%.
  • Consolidated same-store revenues increased 1.2% in Q3 2026, while same-store NOI increased 0.1%.
  • Unconsolidated same-store revenues decreased 1.5% in Q3 2026, while same-store NOI decreased 8.8%.
  • Mississippi contributed the highest percentage of consolidated NOI at 17.3% in Q3 2026, followed by Tennessee at 16.7%.

Risks and Challenges

  • Risks include unfavorable economic conditions, inflation, volatile interest rates, and the possibility of a recession.
  • The Company faces risks related to the concentration of properties in the Southeastern U.S. and Texas.
  • Potential challenges include the inability to generate sufficient cash flows, adverse changes in real estate markets, and barriers to entry in new markets.
  • Risks associated with acquiring value-add multifamily properties involve greater uncertainty than conservative approaches.
  • Exposure to risks inherent in investments in a single industry and sector is noted.
  • The Company is subject to risks regarding the condition of Fannie Mae or Freddie Mac and changes in federal, state, and local laws.

Management Commentary and Tone

  • Management highlighted the completion of several refinancings and acquisitions to optimize the portfolio's debt profile and expand unit count.
  • The Company paid off a $7.7 million HUD-insured mortgage on Newbridge Commons without incurring a prepayment penalty.
  • The credit facility was amended to reduce the interest rate to one-month SOFR plus 210 basis points, with a minimum interest rate of 5%.

Analyst Questions and Answers

  • No specific analyst questions and answers were included in the provided press release text.

Other Key Points

  • The Company repurchased 276,014 shares during Q3 2026 at a weighted average price of $14.34.
  • From October 1, 2026, to November 2, 2026, the Company repurchased an additional 242,631 shares at a weighted average price of $13.51.
  • As of November 2, 2026, the Company is authorized to repurchase up to approximately $5.4 million of shares.
  • A dividend of $0.25 per share was declared for the third quarter of 2026.
  • On July 30, 2026, the Company refinanced a $27.8 million mortgage on Civic Center 2 - Southaven, MS, with a new $47.9 million mortgage at 5.38% interest.
  • On August 25, 2026, an unconsolidated joint venture refinanced a $23.8 million mortgage on The Pointe at Lenox Park-Atlanta, GA, with a new $26.1 million mortgage at 5.45% interest.
  • The Company holds preferred equity investments in Wilmington, NC ($7 million) and Kennesaw, GA ($11.25 million) with annual returns of 13%.
  • Estimated total capital expenditures for the quarter were $3.08 million, with a BRT share of $2.7 million.
  • Equity in loss of unconsolidated joint ventures was $411,000 for Q3 2026, compared to a $75,000 loss in Q3 2025.