BRT Apartments (BRT) 12 Aug 192019 Q2 Earnings call transcript

Good day, and welcome to BRT Apartments Corp Conference Call for the Second Quarter of 2019. Today's conference is being recorded. At this time, I would like to turn the conference over to Morey Marcus of ICR.

You may begin, sir. Please proceed.

you. Thank and BRT everyone conference to welcome day Apartments the call. Good

David Gould, call Georgia Chief Officer; President; today President. the Senior President Ryan Zweier, Senior Baltimore, and is Financial are On available Jeffrey and Vice Vice Also Executive Chief Kalish, Officer.

As being through website call the is www.brtapartments.com. this a company's reminder, webcast at

and on company's will website. be XX-Q supplemental release the Additionally, the company's Relations and the of are available later today the earnings information for Investor section your review available BRT's

to like contains current would that everyone that the I of call begin, we on Securities expectations, XXXX remind this conference beliefs. Act forward-looking meaning management Before and are based of within statements assumptions Litigation the Private Reform

and words. future can subject that and negatives for expressed guarantees the identified Forward-looking be future. similar regarding They forward-looking as These by from materially and forward-looking often actual believe, variations statements and in include limited assumptions of not to such are not or but anticipate, uncertainties BRT those any are are statements. these statements results of could words to differ expressions statements intend risks, strategy expect, and results cause expectations estimate, to

operating operations NOI. statements. adjusted publicly review any these annual a the not conference of required affect or and from include reliance should by or undue or a call complete Except encouraged as most does from forward-looking for and or filings undertake could more with statements other AFFO funds other of that obligation report forward-looking BRT This discussion company's risks company's on funds FFO, discussion place net are and to on Listeners operations update statements. income form and not factors the recent forward-looking any XX-K the revise SEC any law, to also

measures with and are measures which performance. financial in GAAP. net a of a accordance to substitute not non-GAAP supplement should income used computed be These as non-GAAP for of All

AFFO filed will FFO, release were today. company's complete and that earnings NOI that see discussion yesterday and For be of supplemental later XX-Q a more filed the the and

company so As year fiscal the it a on reminder, XX. recently ends its December changed that

like Jeff. Please turn Gould, of Jeffrey to CEO ahead, Corp. go BRT I the call to Apartments President would now over and

Thank you, BRT's to second welcome would conference like to I Morey. everyone quarter call.

start overview me multifamily an business differentiated Let model. with our of

and United is ownership, are BRT primarily population are focused the located owned markets concentrated These in limited XX% Texas development primarily of XX% consolidated employment properties ventures, on contribute properties. States joint the of and a high operation growth. multifamily equity. extent to we The the in southeast through secondary generally to in and which properties with

properties properties is acquiring As XX,XXX of Xth, joint we that in properties ventures. multifamily XX lease We that strategy. joint our owned currently states, August believe are of efficient most owned consisting including unconsolidated by XX units ventures and through

us we We may that We stockholders. are win. management local expertise have property waste off-market expertise. our possess not partners' which local deals contract deals returns the These risk-adjusted operators allows in produce operators our are valuable to that a opportunities under resources likely leverage close. to We not on with record proven of us We that target aligning transactions. to select that present focus with best pursuing for do our platforms

this Our given approach but unlike in relationships. size, our the is our approach multifamily space and acquiring in models resources other assets maximizes believe we

of the in XXXX the per FFO to or $X.XX share interest from increased ended per loss XXXX or $XX.X or be million by to quarter the less includes the $X.XX or our or share million XXXX, XXXX diluted and the the in June without June of effect $XX.X share. the current to will $X.X versus quarter for the per quarter. current compared second the $X.XX $XXX,XXX quarter $XXX,XXX of giving results; the $X.XX $X.X non-controlling per in diluted a for a our quarter diluted quarter. share. share AFFO quarter than property. ended quarter million per for FFO NOI share the loss diluted or per gain in share. current recovery as million the from as share, quarter per was $X.X quarter for or to diluted the $X.X net for the per XXXX insurance diluted $X.X referring on XXXX is current the quarter we $X.X diluted current million XXXX or XX, quarter Indianapolis quarter. XXXX, million Net was million This on Moving $X.X was related X.X% compared XX, quarter $X.XX XXXX $X.X to diluted to $X.XX loss million to

Rental million revenues XX.X% $XX.X in to million grew estate from quarter, X.X%. the $XX.X by the from XXXX $XX.X in million and real increased million by operating driving NOI quarter X.X% growth $XX to expenses XXXX

was On our achieved we X.X% X.X% In XX.X%. rental leases, achieved quarter increases. rate Our we rate rental increases. new renewal the renewals, percentage for

approximately on On we XX%. properties, front unit approximately quarter, the a value-add spending XX the investment per and XXX average of $X,XXX at units achieving for reposition return on

the our in reflected a the unit information, Overall, period, return released. on we program. pleased with we add prior been financial value have costs very where a of portion will performance our supplemental of As is investment the in the incurred may are report when

over continue sales to the term. drive expect rent be growth NOI will for a strategy factor in our the to long and We ability

to $XXX,XXX $X.X located early we million July interest. XXXX, is of which non-controlling the non-controlling mortgage prepayment $X.X million disclosed is in of an previously and Texas, As properties sold interest. charge Houston, allocated incurred $XXX,XXX of estimated gain to $XX.X allocated for a multifamily the two in We million which

to the interest charge million. non-controlling prepayment Our share our approximately giving after effect the gain of and $X.X is

in to comprised quarter million quarter. NOI Our quarter Same-store from current and quarter by $XX.X costs turnover were from current higher and as X.X% same-store the current XXXX several same-store as year. the the grew increased in vacant the the resulting XX higher expenses at maintenance from properties filled prior Same-store staff X.X% X,XXX well the quarter totaling we expense X.X% pool as rose for properties for driven payroll repairs replacements increased by and units. XXXX revenue that vacancies

respectively increased rental $X,XXX our X.X%, X.X%, to rate A growth was $XXX which in Alabama driven of both by of and by per rate X.X% grew Ohio same-store earlier. unit X.X% increases for Mississippi markets year unit rental Virginia, X.X%. Georgia X.X%, of per a Florida Same-store led along and with rate in

call remain our on properties shared we our first most As our quarter's assets. St. Louis challenging downtown

current in ways there exposure to conditions. our continue look revenue light to market pursue of We and maximize manage and to NOI

sheet stockholders’ Turning assets XX, cash $XXX.X we June of of XXXX, million dollars. $XX.X had total of and total cash the at billion, balance and million $XXX.X equity of to $X.X debt million equivalents, total

opportunistic that weighted over an our is an time cash delever of understand of million, in X, million to available balance $XX of million equivalents, At We to up property $XX.X XXXX, aspect $XX and our important $X.X for including restricted of rate fixed credit business leverage ways approximately maturity and the BRT's Approximately a mortgage and liquidity cash terms has sheet at at August interest we and equivalents level for A looking manner. held and of million improvements X.X are its was bears operating cash the debt facility. capital property cash amounts of a under working weighted of purposes. X.XX% XX% a mortgage average include property years. the rate. $XXX.X average available interest Cash of at million remaining

yield of X.X% Finally, is the share, $XX.XX August per on close Xth. of equivalent to an board approved which on based dividend business our annualized XXth, stock our of of quarterly June the price of $X.XX on as

We continue team's progress proud make effort. I'm to of great and the

to portfolio can extract we where will incremental As looked on finding add our to value. focus we we right multifamily ahead the assets

Operator? our operator Thank the over And on joining with will that, you conference your I for us for the today call to call. turn questions.

Gueva National [Operator ahead instructions] Security, you. Our go Neta from first question. with please comes question the with Thank

Thanks, good of A questions. guys. morning couple quick

expect talk And should your you forward? opportunity in portfolio? can First, value the going about we add

Yes.

technical I can had okay. First, you little me all a here. hope hear issue We

renovation years right. to to cetera. program, continuing more all renovation subject we after are have plan we're It's renewals getting to off come you we our estimating in the X,XXX do and obviously hear units program. to rent Obviously, hope value next with and We're and paying about two to program. et when the anticipate don't turnover have available continue that I move they're We're add our want over market. we that. tenants and have the generally those place plan with subsidy units forward and So can renovate our a still But me take we to

organic? year by on question same-store has Okay. your renovations how driven much and is growth, the been your And growth how same-store much second of for

two. the back the We if have renovation a that of get know numbers if of at will. you to each much can combination, of and don't was I that. for I to there to you part And were next The have as we'll I definitely information. get that the back meeting specific specific. frankly, specifics with how the know I you that can increases

expect Okay. And remain the your lastly, do elevated them on near seeing for can you same-store future? to discuss expenses and what you you're

Yes.

payroll lot besides and talked do -- the But all we've time So of uncertain. property And margins bring I prior the vacancies that's taxes was past same-store the what the taxes, specific filled on to And really growth our been were spending in which additional which a that we had the of overall, to some spent carefully. margins. X.X% had. staff on expense say increases. of about quarter, particular would time and very had to we in some we see on expenses the fighting properties taxes staff turnover increase again, we the repairs our up and our that and costs we It focused expense in cetera. this higher an we vacant But year. some resulted watching maintenance. That's can situation We're tax really can replacements we're primarily from vacancies side as where at the et we've

questions. for you taking thank Okay, the

you. Thank

Oxford D.A. with Our from comes question Barry question. next Please proceed with Davidson. your

guys. Thanks, Great.

you On the daving the to now joint seeing continue do opportunities that of perspective? want right lot to in of a ventures [ph] that acquisition. people kind marketplace Are from

say The money to to answer partner have XX and group our we out we have we basically Generally that deals. we is partners we XX of capital, or available potential them, so reach have when for look, yes. available to speaking,

pick had and but in and some opportunities. more interesting market partner competition we obviously, the at to same look strategy to the is market we a under or a position of nice recently that there's that such doubt thing no is cash -- for at funding we XX deals have XX network sale There's looking at. in get efficiencies -- we And the are to is that the one our still have X our now time, plenty us we deals might in we're two like. So, we in the

busy And we've our when looking this. had to acquisitions. this overall, it dollars and of plenty are opportunities put back whenever work. -- goes So Whenever to potential partners available, we've we at to started had

seeing of rates you're now? of cap shortlist type your looking What are Perfect. right at you currently, kind when

be have renovated but we X% sub-five. And to and so cap Yes, selling focusing realistic the frankly, add once really value at add we're deals on strategy. about we're value stabilized much of in we're expecting the primarily stabilized generally not a going deals program then we're rate doing

renewals with a the north of in that and going We're management the we're on. probably flows renovations it's and overall. good taking steadily the rising seeing and strategy X and cash pretty So efficiencies

Perfect.

be Now of structure source going are of kind your capital given capital to now? the primary dispositions right

a dependent things. few That's on

opportunity that we've have we for evaluate to pretty we we're some as definitely much properties the few completed we First looking I realizing to basically Also, of there's and sale. sold that. couple feel have there properties program where and see high of aren't versus fits at of do there new other did that ratios equity and that say a and we're like are already. growth and every -- is the properties all, property our we a property and add from we definitely trying where a there's like And but the more very to for wouldn't have possibility into add those Houston of that may move where we margins good that asset be selling. situations of selling think it new the older a really very portfolio properties that company. is like in opportunity converting candidates a we value beneficial basis. when the are We're there considering as lot properties expense something the We're overall age a that carefully younger we value each in looking have

Right.

showing would of imagine? a kind On up of these dispositions investors lot are I

example. amazing. front the must will of It's but say you I must we the have I property some late market. rate. the of sold bidders been had favorable use don't to have very And I'll And on Houston Again, XX XX this XXs I construction. me to inspections that an the very, or it just -- was at have as you could tell it in numbers XX of just you gives property cap XX we sense And like idea. give it the a property. a

is it competitive, no doubt. yeah, So

guys. Thanks, Perfect.

Thank you.

the Craig B. question next question. Kucera comes from Our proceed Please FBR. with with Riley

the of XX been are add and do saying that? be of a of the guys. a morning, this you've sort know quarter. of that Are on color thinking how hey, quarter as kind running conservative saying you to Appreciate it units XX Or XXX thinking XXX sort are I likely about, months? size you're months can Good we it we just slow you the down Thanks. thoughts about pace the But you is program. to think potential about over incremental value on

over that to me Let that turn for question answer Baltimore Ryan to you.

you? Hey, the annual kind the value at the been to it, seeing really of so rate bit we of turnover terms are dependent it's rents substantial program. budget the keep on more Again, we an Basically, on properties occupied get how basis units kind renewal add Craig and look in of growth able the when we that been little can we've and grow a way. We've back. pretty way

lot our kind year over the we it's deal numbers of recent or depending X. much the we turnover numbers larger year how lot with So could acquisitions, quickly lot pretty It an can of next X. the the A based first of do on of have. a number on estimated projected numbers over a change the or

This So should well. as we current be more that is number more of acquisitions just as opportunity. new so the acquire up there'll go portfolio

Any were great. that you the going that? and that X.X it how Got to a would or it assets Houston you they sub-five I mentioned closer pin it just color with can Was sold. know back down was but be that you X.X? was

looking such that the I honest better. I -- it but are and the numbers our are on underwriting. so I on you it and don't around represent in was think X.X hope numbers, so packages of I with probably the X.X. was don't or know I'm phone trailing actual our about how or buyers at I be they're to brokers But our their numbers mean neighbor

what's to process of -- there disappointed game your it. bit. trying sell St. or been around Got And there? kind kind are performance know and the stabilize them the discussions Louis. appreciate them of sort on I maybe of you've in the plan for color a then you thought maybe the Is that

as and all much two the were the expected. are we is one as lot reason are friends a the expected. we trouble asset have not more as high more encompassing than There's for it's really the a We not had renewals or rent as we The that's -- more good is, bit properties having that that And in turnover is a good transient bumps first had not frankly, trouble, as hoped. with. of population as we downtown rents

working the trying and we can as some far element to with parking And down can bringing The expenses. good. actually that, involved on there's bring down because in is it, actually expense things. numbers it. as to We city some we're reserve where where are We spots pretty we accuracy stabilize are a

Louis another have great. in acid We which in St. principle is doing

really the Louis want market I be -- not it's we we're entire possible. don't it's St. downtown transparent And want that So of, speaking to to as market. the as

something we any it's that on making killed identify what and just asset that to wanted we're we return the expected us not something so it's troublesome on. for So that. like it's getting or It's not we're not

you. Thank

you. Thank

done. for the allotted you. Q&A session time Thank The is

So I turn would management back like closing call for to the to comments.

your you, you everyone, thank We for time. appreciate today. So

have in to any look your email speaking out future. today reach Thank further And have by to time And you investors If with to the we at good day. free appreciate and questions, forward www.brtapartment.com. feel you a you.

This concludes today's teleconference.

You lines at have your may time disconnect a this and great day.