Press Release

Bluerock Residential Growth REIT Announces First Quarter 2018 Results

- Total Revenues Grew 49% YoY to $41.9 Million -

- Reaffirms Full Year 2018 AFFO Guidance -

Company Release - 5/8/2018 8:30 AM ET

NEW YORK, May 8, 2018 /PRNewswire/ -- Bluerock Residential Growth REIT, Inc. (NYSE American: BRG) ("the Company"), an owner of highly amenitized multi-family apartment communities, announced today its financial results for the quarter ended March 31, 2018.

 (PRNewsfoto/Bluerock Residential Growth REI)

First Quarter Highlights 

  • Total revenues grew 49% to $41.9 million for the quarter from $28.2 million in the prior year period.
  • Net loss attributable to common stockholders for the first quarter of 2018 was ($0.40) per share, as compared to net loss attributable to common stockholders of ($0.20) per share in the prior year period.
  • Property Net Operating Income ("NOI") grew 31% to $21.0 million, from $16.0 million in the prior year period.
  • Same store Revenue and NOI increased 5.4% and 3.5% respectively, as compared to the prior year period.
  • Adjusted funds from operations attributable to common shares and units ("AFFO") grew 21% to $5.6 million, from $4.6 million in the prior year period.  AFFO per share is $0.18 for the quarter as compared to $0.18 in first quarter 2017.
  • Consolidated real estate investments, at cost, increased approximately $65 million to $1.5 billion. 
  • The Company invested approximately $61 million in a 264-unit highly amenitized community and grew development mezzanine loans by approximately $22 million.
  • Repurchased 530,693 shares of stock during the first quarter at an average price of $7.92 per share, for a total cost of approximately $4.2 million.
  • The Company entered into a $50 million junior credit facility agreement.

"We had an active start to the year as we produced strong results for the first quarter, and delivered AFFO which exceeded our dividend payment," said Ramin Kamfar, Company Chairman and CEO. "We also closed on the acquisition of a multi-family community for $61 million and strengthened our balance sheet as we established a $50 million junior revolving credit facility. We enter the second quarter with greater financial flexibility and capacity in pursuing our strategy of owning highly amenitized communities in targeted knowledge-economy growth markets."

Financial Results

Net loss attributable to common stockholders for the first quarter of 2018 was $9.4 million, compared to a net loss of $5.0 million in the prior year period.  Net loss attributable to common stockholders included non-cash expenses of $18.2 million or $0.59 per share in the first quarter of 2018 compared to $13.9 million or $0.55 per share for the prior year period. 

AFFO for the first quarter of 2018 was $5.6 million, or $0.18 per diluted share, compared to $4.6 million, or $0.18 per diluted share in the prior year period.  AFFO was primarily impacted by growth in property NOI of $5.0 million and interest income of $3.7 million arising from significant investment activity. This was primarily offset by a year-over-year rise in interest expense of $3.0 million, general and administrative expenses of $1.9 million, and preferred stock dividends of $2.4 million.

Total Portfolio Performance

$ In thousands, except average rental rates

1Q18

1Q17

Variance


Total Revenues (1)

$

41,871

$

28,183

48.6%


Property Operating Expenses

$

15,658

$

10,619

47.5%


NOI

$

21,017

$

16,041

31.0%


Operating Margin

57.3%

60.2%

(290)

bps

Occupancy Percentage

93.5%

94.3%

(80)

bps

Average Rental Rate

$

1,227

$

1,254

-2.2%


(1) Including interest income from related parties





For the first quarter of 2018, property revenues increased by 37.6% compared to the same prior year period primarily attributable to the increased size of the portfolio.  Total portfolio NOI was $21.0 million, an increase of $5.0 million, or 31.0%, compared to the same period in the prior year. 

Property NOI margins were 57.3% of revenue for the quarter, compared to 60.2% of revenue in the prior year quarter.  Property NOI margins were impacted by the sales of stabilized assets owned for longer time periods and the recent purchase of replacement properties that have not yet achieved the same level of operational efficiency. Property operating expenses were up primarily due to the increased size of the portfolio.

Same Store Portfolio Performance

$ In thousands, except average rental rates

1Q18

1Q17

Variance


Revenues

$

20,781

$

19,725

5.4%


Property Operating Expenses

$

8,594

$

7,946

8.2%


NOI

$

12,187

$

11,779

3.5%


Operating Margin

58.6%

59.7%

(110)

bps

Occupancy Percentage

93.8%

94.0%

(20)

bps

 Average Rental Rate

$

1,284

$

1,225

4.8%


For the first quarter of 2018, same store NOI was $12.2 million, an increase of $408,000, or 3.5%, compared to the same period in the prior year. Same store property revenues increased by 5.4% compared to the same prior year period, primarily attributable to a 4.8% increase in average rental rates, offset by average occupancy decreasing 20 basis points to 93.8%.   Same store expenses were impacted by an approximate $400,000 increase in real estate taxes due to higher valuations by municipalities and lower 2017 tax expense as a result of 2016 real estate tax true-ups recorded in the 2017 period.  The Company's same store portfolio for the quarter ended March 31, 2018 included 16 properties. 

First Quarter Acquisition Activity

  • On March 26, 2018, acquired an 88% indirect interest in a 264-unit apartment community located in Castle Rock, Colorado, known as Links at Plum Creek.  The total purchase price was approximately $61.1 million, funded in part with a $40.0 million mortgage loan on the Links at Plum Creek.
  • On March 28, 2018, increased its mezzanine loan in the Flagler Village development by $21.0 million.

Balance Sheet

On March 20, 2018, the Company, through its operating partnership, entered into a $50 million credit agreement (the "Junior Credit Facility") with KeyBank National Association and other lenders.  The Junior Credit Facility matures in March 2019, and borrowings bear interest, at the Company's option, at LIBOR plus 4.00%, or the base rate plus 3.00%.

The Company raised gross proceeds of approximately $18.5 million through the sale of 18,531 shares of Series B preferred stock with associated warrants at $1,000 per unit.

As of March 31, 2018, the Company had $31.5 million of unrestricted cash on its balance sheet, approximately $23.2 million available among its revolving credit facilities, and $1.1 billion of debt outstanding.

Dividend Details

The Board of Directors authorized, and the Company declared, a quarterly dividend for the first quarter of 2018 equal to a quarterly rate of $0.1625 per share on its Class A common stock, payable to the stockholders of record as of March 23, 2018, which was paid in cash on April 5, 2018. A portion of each dividend may constitute a return of capital for tax purposes. There is no assurance that we will continue to declare dividends or at this rate.

On April 13, 2018, the Board of Directors authorized, and the Company declared, a monthly dividend of $5.00 per share of Series B preferred stock, payable to the stockholders of record as of April 25, 2018, which was paid in cash on May 4, 2018, and as of May 25, 2018, and June 25, 2018, which will be paid in cash on June 5, 2018 and July 5, 2018, respectively.

2018 Guidance

Based on the Company's current outlook and market conditions, the Company reiterates 2018 AFFO in the range of $0.65 to $0.70 per share.  For additional guidance details, please see page 28 of Company's First Quarter 2018 Earnings Supplement available under Investor Relations on the Company's website (www.bluerockresidential.com).  Subsequent to issuing 2018 guidance in February 2018, the Company revised its presentation of AFFO attributable to common stockholders to reflect AFFO attributable to common shares and units.  The estimated weighted average diluted shares and units outstanding used to calculate AFFO per share now includes noncontrolling interests – operating partnership units.  As the Company's presentation now also includes the impact of AFFO attributable to operating partnership units, and as shares and units are treated on a one-for-one basis, there is no change to projected AFFO per share for purposes of 2018 AFFO guidance.

Conference Call

All interested parties can listen to the live conference call at 11:00 AM ET on Tuesday, May 8, 2018 by dialing +1 (866) 843-0890 within the U.S., or +1 (412) 317-6597, and requesting the "Bluerock Residential Conference."

For those who are not available to listen to the live call, the conference call will be available for replay on the Company's website two hours after the call concludes, and will remain available until June 8, 2018 at http://services.choruscall.com/links/brg180508.html, as well as by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10119871.

The full text of this Earnings Release and additional Supplemental Information is available in the Investor Relations section on the Company's website at http://www.bluerockresidential.com.

About Bluerock Residential Growth REIT, Inc.

Bluerock Residential Growth REIT, Inc. (NYSE American: BRG) is a real estate investment trust that focuses on developing and acquiring a diversified portfolio of institutional-quality highly amenitized live/work/play apartment communities in demographically attractive knowledge economy growth markets to appeal to the renter by choice. The Company's objective is to generate value through off-market/relationship-based transactions and, at the asset level, through Core+ improvements to properties and operations.  The Company is included in the Russell 2000 and Russell 3000 Indexes.  BRG has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes. 

For more information, please visit the Company's website at www.bluerockresidential.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company's present expectations, but these statements are not guaranteed to occur.  Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. For further discussion of the factors that could affect outcomes, please refer to the risk factors set forth in Item 1A of the Company's Annual Report on Form 10-K filed by the Company with the U.S. Securities and Exchange Commission ("SEC") on March 13, 2018, and subsequent filings by the Company with the SEC. We claim the safe harbor protection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995.

Portfolio Summary

The following is a summary of our operating real estate and mezzanine/preferred investments as of March 31, 2018:

Consolidated Operating
Properties


Location


Number
of Units


Year Built/
Renovated (1)


Ownership
Interest


Average
Rent (2)


%
Occupied
(3)

ARIUM at Palmer Ranch


Sarasota, FL


320


2016


95%


$    1,269


97%

ARIUM Glenridge


Atlanta, GA


480


1990


90%


1,122


96%

ARIUM Grandewood


Orlando, FL


306


2005


100%


1,323


97%

ARIUM Gulfshore


Naples, FL


368


2016


95%


1,288


95%

ARIUM Hunter's Creek


Orlando, FL


532


1999


100%


1,330


97%

ARIUM Metrowest


Orlando, FL


510


2001


100%


1,294


96%

ARIUM Palms


Orlando, FL


252


2008


95%


1,309


97%

ARIUM Pine Lakes


Port St. Lucie, FL


320


2003


85%


1,208


99%

ARIUM Westside


Atlanta, GA


336


2008


90%


1,492


93%

Ashton Reserve


Charlotte, NC


473


2015


100%


1,061


92%

Citrus Tower


Orlando, FL


336


2006


97%


1,234


97%

Enders Place at Baldwin Park


Orlando, FL


220


2003


92%


1,712


96%

James on South First


Austin, TX


250


2016


90%


1,264


94%

Marquis at Crown Ridge


San Antonio, TX


352


2009


90%


926


94%

Marquis at Stone Oak


San Antonio, TX


335


2007


90%


1,407


91%

Marquis at The Cascades


Tyler, TX


582


2009


90%


1,076


91%

Marquis at TPC


San Antonio, TX


139


2008


90%


1,413


96%

Outlook at Greystone


Birmingham, AL


300


2007


100%


929


89%

Park & Kingston


Charlotte, NC


168


2015


100%


1,251


92%

Preston View


Morrisville, NC


382


2000


100%


1,065


96%

Roswell City Walk


Roswell, GA


320


2015


98%


1,486


95%

Sorrel


Frisco, TX


352


2015


95%


1,235


91%

Sovereign


Fort Worth, TX


322


2015


95%


1,321


92%

The Brodie


Austin, TX


324


2001


93%


1,176


96%

The Links at Plum Creek


Castle Rock, CO


264


2000


88%


1,271


94%

The Mills


Greenville, SC


304


2013


100%


973


90%

The Preserve at Henderson Beach


Destin, FL


340


2009


100%


1,320


94%

Villages at Cypress Creek


Houston, TX


384


2001


80%


1,056


95%

Wesley Village


Charlotte, NC


301


2010


100%


1,223


93%

Consolidated Operating Properties Subtotal/Average


9,872






$    1,227


94%














Mezzanine/Preferred
Investments


Location


Planned Number of Units






Pro
Forma
Average
Rent (4)



Alexan CityCentre


Houston, TX


340






$    2,144



Alexan Southside Place


Houston, TX


270






2,012



APOK Townhomes


Boca Raton, FL


90






2,549



Crescent Perimeter


Atlanta, GA


320






1,749



Domain


Garland, TX


299






1,469



Flagler Village


Fort Lauderdale, FL


385






2,352



Helios


Atlanta, GA


282






1,486



Lake Boone Trail


Raleigh, NC


245






1,271



Vickers Village


Roswell, GA


79






3,176



West Morehead


Charlotte, NC


286






1,507



Whetstone


Durham, NC


204






1,233

(2)


Mezzanine and Preferred Investments Subtotal/Average


2,800






$    1,813
















Portfolio Properties Total/Average


12,672






$    1,360




(1) Represents date of last significant renovation or year built if there were no renovations. 

(2) Represents the average effective monthly rent per occupied unit for the three months ended March 31, 2018.

(3) Percent occupied is calculated as (i) the number of units occupied as of March 31, 2018, divided by (ii) total number of units, expressed as a percentage.

(4) Alexan CityCentre, Alexan Southside Place, Helios, and Lake Boone Trail are preferred equity investments with an option to convert into partial ownership upon stabilization.  APOK Townhomes, Crescent Perimeter, Domain, Flagler Village, Vickers Village, and West Morehead are mezzanine loan investments. Additionally, APOK Townhomes, Domain, and West Morehead have an option to purchase an indirect property interest upon maturity.  Whetstone is currently a preferred equity investment providing a stated investment return. Pro forma average rent represents the average pro forma effective monthly rent per occupied unit for all expected occupied units upon stabilization.

 

 

Consolidated Statement of Operations

For the Three Months Ended March 31, 2018 and 2017

(Unaudited and dollars in thousands except for share and per share data)




Three Months Ended





March 31,





2018



2017



Revenues










Net rental income


$

32,729



$

23,859



Other property revenues



3,946




2,801



Interest income from related parties



5,196




1,523



Total revenues



41,871




28,183



Expenses










Property operating



15,658




10,619



Property management fees



992




732



General and administrative



4,669




1,449



Management fees to related parties






2,768



Acquisition and pursuit costs



43




3,182



Management internalization






481



Weather-related losses, net



168






Depreciation and amortization



15,640




10,944



Total expenses



37,170




30,175



Operating income (loss)



4,701




(1,992)



Other income (expense)










Preferred returns and equity in income of unconsolidated real estate joint ventures



2,461




2,572



Gain on sale of real estate investments






16,466



Interest expense, net



(10,117)




(7,118)



Total other (expense) income



(7,656)




11,920



Net (loss) income



(2,955)




9,928



Preferred stock dividends



(8,248)




(5,851)



Preferred stock accretion



(1,112)




(338)



Net (loss) income attributable to noncontrolling interests










Operating partnership units



(2,675)




(56)



Partially owned properties



(215)




8,785



Net (loss) income attributable to noncontrolling interests



(2,890)




8,729



Net loss attributable to common stockholders


$

(9,425)



$

(4,990)













Net loss per common share – Basic


$

(0.40)



$

(0.20)













Net loss per common share – Diluted


$

(0.40)



$

(0.20)













Weighted average basic common shares outstanding



24,143,382




24,989,621



Weighted average diluted common shares outstanding



24,143,382




24,989,621



 

 

Consolidated Balance Sheets

First Quarter 2018

(Unaudited and dollars in thousands except for share and per share amounts)




March 31,  2018



December 31,
2017


ASSETS









Net Real Estate Investments









Land


$

172,095



$

169,135


Buildings and improvements



1,302,990




1,244,193


Furniture, fixtures and equipment



40,998




38,446


Construction in progress



1,571




985


   Total Gross Real Estate Investments



1,517,654




1,452,759


Accumulated depreciation



(67,163)




(55,177)


Total Net Real Estate Investments



1,450,491




1,397,582


Cash and cash equivalents



31,509




35,015


Restricted cash



25,376




29,575


Notes and accrued interest receivable from related parties



162,912




140,903


Due from affiliates



2,243




2,003


Accounts receivable, prepaid and other assets



13,950




9,689


Preferred equity investments and investments in unconsolidated real estate joint ventures



71,309




71,145


In-place lease intangible assets, net



2,038




4,635


Total Assets


$

1,759,828



$

1,690,547











LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY









Mortgages payable


$

978,473



$

939,494


Revolving credit facilities



99,165




67,670


Accounts payable



1,168




1,652


Other accrued liabilities



20,052




22,952


Due to affiliates



700




1,575


Distributions payable



11,483




14,287


Total Liabilities



1,111,041




1,047,630


8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share,
10,875,000 shares authorized; and 5,721,460 issued and outstanding as of March 31, 2018 and December
31, 2017



138,939




138,801



6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 725,000 shares authorized; 202,144 and 184,130 issued and outstanding as of March 31, 2018 and December 31, 2017, respectively



178,433




161,742



7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; and 2,323,750 issued and outstanding as of March 31, 2018 and December 31, 2017



56,250




56,196












Equity









Stockholders' Equity









    Preferred stock, $0.01 par value, 230,400,000 shares authorized; none issued and outstanding







    7.125% Series D Cumulative Preferred Stock, liquidation preference $25.00 per share, 4,000,000   shares authorized; 2,850,602 issued and outstanding at March 31, 2018 and December 31, 2017



68,705




68,705


Common stock - Class A, $0.01 par value, 747,509,582 shares authorized; 23,733,296 and 24,218,359 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively



237




242


Common stock - Class C, $0.01 par value, 76,603 shares authorized; 76,603 shares issued and outstanding as of March 31, 2018 and December 31, 2017



1




1


Additional paid-in-capital



315,833




318,170


Distributions in excess of cumulative earnings



(173,632)




(164,286))


Total Stockholders' Equity



211,144




222,832


Noncontrolling Interests









Operating partnership units



41,428




42,999


    Partially owned properties



22,593




20,347


Total Noncontrolling Interests



64,021




63,346


Total Equity



275,165




286,178


TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY


$

1,759,828



$

1,690,547


 

Non-GAAP Financial Measures

The foregoing supplemental financial data includes certain non-GAAP financial measures that we believe are helpful in understanding our business and performance, as further described below. Our definition and calculation of these non-GAAP financial measures may differ from those of other REITs, and may, therefore, not be comparable.

Funds from Operations and Adjusted Funds from Operations

Funds from operations attributable to common shares and units ("FFO") is a non-GAAP financial measure that is widely recognized as a measure of REIT operating performance. We consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative. We define FFO, consistent with the National Association of Real Estate Investment Trusts, or ("NAREIT's") definition, as net income, computed in accordance with GAAP, excluding gains (or losses) from sales of property, plus depreciation and amortization of real estate assets, plus impairment write-downs of depreciable real estate, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis.

In addition to FFO, we use adjusted funds from operations attributable to common shares and units ("AFFO"). AFFO is a computation made by analysts and investors to measure a real estate company's operating performance by removing the effect of items that do not reflect ongoing property operations. To calculate AFFO, we further adjust FFO by adding back certain items that are not added to net income in NAREIT's definition of FFO, such as acquisition and pursuit costs, equity based compensation expenses, and any other non-recurring or non-cash expenses, which are costs that do not relate to the operating performance of our properties, and subtracting recurring capital expenditures (and when calculating the quarterly incentive fee paid to our former Manager only, we further adjusted FFO to include any realized gains or losses on our real estate investments).

Our calculation of AFFO differs from the methodology used for calculating AFFO by certain other REITs and, accordingly, our AFFO may not be comparable to AFFO reported by other REITs. Our management utilizes FFO and AFFO as measures of our operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare our operating performance between periods. Furthermore, although FFO, AFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we also believe that FFO and AFFO may provide us and our stockholders with an additional useful measure to compare our financial performance to certain other REITs. We also used AFFO for purposes of determining the quarterly incentive fee paid to our former Manager in prior periods.

Neither FFO nor AFFO is equivalent to net income, including net income attributable to common stockholders, or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and AFFO do not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO nor AFFO should be considered as an alternative to net income, including net income attributable to common stockholders, as an indicator of our operating performance or as an alternative to cash flow from operating activities as a measure of our liquidity.

We have acquired interests in eleven additional operating properties and sold three properties subsequent to March 31, 2017.  Therefore, the results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance.



Three Months Ended





March 31,





2018



2017



Net loss attributable to common shares


$

(9,425)



$

(4,990)



Add back: Net loss attributable to operating partnership units



(2,675)




(56)



Net loss attributable to common shares and units



(12,100)




(5,046)













Common stockholders and operating partnership units pro-rata share of:










Real estate depreciation and amortization(1)   



14,831




9,914



Gain on sale of real estate investments






(7,481)



FFO Attributable to Common Shares and Units



2,731




(2,613)



Common stockholders and operating partnership units pro-rata share of:










 Amortization of non-cash interest expense



461




478



Acquisition and pursuit costs



43




3,040



Management internalization






481



Non-real estate depreciation and amortization



64






Weather-related losses, net



165






Non-cash preferred returns and equity in income of unconsolidated real estate joint
ventures



(231)






Normally recurring capital expenditures



(517)




(294)



Preferred stock accretion



1,112




338



Non-cash equity compensation



1,780




3,201



AFFO Attributable to Common Shares and Units


$

5,608



$

4,631








Weighted average common shares and units outstanding - diluted



30,995,775




25,273,480








PER SHARE INFORMATION:





FFO Attributable to Common Shares and Units - diluted


$

0.09



$

(0.10)



AFFO Attributable to Common Shares and Units - diluted


$

0.18



$

0.18





























(1)    The real estate depreciation and amortization amount includes our share of consolidated real estate-related depreciation and amortization of
intangibles, less amounts attributable to noncontrolling interests – partially owned properties, and our similar estimated share of unconsolidated
depreciation and amortization, which is included in earnings of our unconsolidated real estate joint venture investments. 

 

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate ("EBITDAre")

NAREIT defines earnings before interest, taxes, depreciation and amortization for real estate ("EBITDAre") (September 2017 White Paper) as net income, computed in accordance with GAAP, before interest expense, income taxes, depreciation and amortization expense, and further adjusted for gains and losses from sales of depreciated operating properties, and impairment write-downs of depreciated operating properties. 

We consider EBITDAre to be an appropriate supplemental measure of our performance because it eliminates depreciation, income taxes, interest and non-recurring items, which permits investors to view income from operations unobscured by non-cash items such as depreciation, amortization, the cost of debt or non-recurring items.

Adjusted EBITDAre represents EBITDAre further adjusted for non-comparable items and it is not intended to be a measure of free cash flow for our management's discretionary use, as it does not consider certain cash requirements such as income tax payments, debt service requirements, capital expenditures and other fixed charges.

EBITDAre and Adjusted EBITDAre are not recognized measurements under GAAP. Because not all companies use identical calculations, our presentation of EBITDAre and Adjusted EBITDAre may not be comparable to similarly titled measures of other companies.

Below is a reconciliation of net loss attributable to common stockholders to EBITDAre (unaudited and dollars in thousands).



Three Months Ended





March 31,





2018



2017



Net loss attributable to common stockholders


$

(9,425)



$

(4,990)



Net (loss) income attributable to noncontrolling interests



(2,890)




8,729



Preferred stock dividends



8,248




5,851



Preferred stock accretion



1,112




338



Interest expense, net



10,117




7,118



Depreciation and amortization



15,576




10,944



Gain on sale of real estate investments



-




(16,466)



EBITDAre


$

22,738



$

11,524



Acquisition and pursuit costs



43




3,182



Management internalization



-




481



Non-real estate depreciation and amortization



64




-



Weather-related losses, net



168




-



Non-cash equity compensation



1,780




3,201



Non-cash preferred returns and equity in income of unconsolidated real estate joint
ventures



(231)




-



Adjusted EBITDAre


$

24,562



$

18,388






















Recurring Capital Expenditures

We define recurring capital expenditures as expenditures that are incurred at every property and exclude development, investment, revenue enhancing and non-recurring capital expenditures.

Non-Recurring Capital Expenditures

We define non-recurring capital expenditures as expenditures for significant projects that upgrade units or common areas and projects that are revenue enhancing.

Same Store Properties

Same store properties are conventional multifamily residential apartments which were owned and operational for the entire periods presented, including each comparative period.

Property Net Operating Income ("Property NOI")

We believe that net operating income, or NOI, is a useful measure of our operating performance. We define NOI as total property revenues less total property operating expenses, excluding depreciation and amortization and interest. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs. We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. We use NOI to evaluate our performance on a same store and non-same store basis because NOI measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance and captures trends in rental housing and property operating expenses. However, NOI should only be used as an alternative measure of our financial performance.

Certain amounts in prior periods, related to tenant reimbursements for utility expenses amounting to $1.4 million for the three months ended March 31, 2017, have been reclassified to other property revenues from property operating expenses, to conform to the current period.  In addition, property management fees have been reclassified from property operating expenses.

The following table reflects net loss attributable to common stockholders together with a reconciliation to NOI and to same store and non-same store contributions to consolidated NOI, as computed in accordance with GAAP for the periods presented (unaudited and amounts in thousands):



Three Months Ended (1)



March 31,



2018

2017

Net loss attributable to common shares

$            (9,425)

$            (4,990)

Add back: Net loss attributable to operating partnership units

(2,675)

(56)

Net loss attributable to common shares and units

(12,100)

(5,046)

Add Common stockholders and operating partnership units pro-rata share of:




Depreciation and amortization

14,831

9,914


Non-real estate depreciation and amortization

64

-


Amortization of non-cash interest expense

461

478


Property management fees

939

649


Management fees

-

2,768


Acquisition and pursuit costs

43

3,040


Corporate operating expenses

4,669

1,449


Management internalization

-

481


Weather-related losses, net

165

-


Preferred dividends

8,248

5,851


Preferred stock accretion

1,112

338

Less Common stockholders and operating partnership units pro-rata share of:




Preferred returns and equity in income of unconsolidated real estate joint ventures

2,461

2,572


Interest income from related parties

5,196

1,523


Gain on sale of real estate investments

-

7,481

Pro-rata share of properties' income

10,775

8,346

Add:





Noncontrolling interest pro-rata share of partially owned property income

607

1,086

Total property income

11,382

9,432

Add:





Interest expense

9,635

6,609

Net operating income

21,017

16,041

Less:





Non-same store net operating income

8,830

4,262

Same store net operating income

$             12,187

$             11,779


(1) Same Store sales for the three months ended March 31, 2018 related to the following properties: Enders Place at Baldwin Park, ARIUM Grandewood, Park & Kingston, ARIUM Palms, Ashton Reserve, Sovereign, Sorrel, ARIUM at Palmer Ranch, ARIUM Gulfshore, The Preserve at Henderson Beach, ARIUM Westside, ARIUM Pine Lakes, James on South First, ARIUM Glenridge, Roswell City Walk, and The Brodie.

 

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SOURCE Bluerock Residential Growth REIT, Inc.