BRT Apartments Corp. Q3 FY2023 earnings call

• Current operating environment: Blended rent growth with occupancy around 94%, strong fundamentals except Nashville and Dallas with new supply causing higher concessions. - Transaction environment: Quiet, with sellers needing to sell and buyers using all cash; expecting more opportunities in 2024. - Capital allocation: Focus on share repurchases, having purchased 671,000 shares for $12.5 million since May. - Third quarter results: Impacted by inflationary headwinds and underperformance of 2 properties; NOI growth muted. - Balance sheet: Debt to enterprise value increased, liquidity noted. - Portfolio performance: Occupancy steady at 94.4%, rent growth, but underperformance of Alamo Ranch and Bells Bluff; efforts to improve with marketing spend and technology exploration.

For the third quarter, net loss attributable to common stockholders was $0.08 per diluted share compared to net income of $0.37 per diluted share a year ago. FFO was $0.31 per diluted share vs $0.29 per diluted share prior year, primarily due to reduction in early extinguishment of debt and increase in other income. AFFO was $0.41 per diluted share vs $0.38 per diluted share prior year, due to decrease in income tax provision and increase in other income. Combined portfolio recurring CapEx was $1.4 million, with replacements totaling approx $2.1 million or $269 per unit. Nonrecurring CapEx was $1.4 million. Debt to enterprise value was 67% as of Sept 30 vs 62% a year ago. Available liquidity was $88 million at quarter end.

Based on year-to-date results and share repurchase proceeds, affirmed previously issued guidance ranges for 2023.

• Inflationary headwinds affecting expense growth, including real estate taxes and insurance. - Transaction market being quiet with limited read-throughs on cap rates. - Underperformance of Alamo Ranch and Bells Bluff impacting portfolio NOI growth.

Q: When looking at acquisition opportunities versus stock, how are you weighing that?

A: Acquisition market is difficult now, not seeing good buying opportunities, and see share buybacks as a great opportunity.

Q: What's seeing in the Nashville market? Can occupancy get where it needs to be?

A: Nashville has softer market due to new supply, but think occupancy will improve as new housing starts slow and existing supply is absorbed; also seeing concession needs but expect improvement over time.

Q: Are Nashville concessions across the board?

A: Pretty much across the board, general oversupply in Nashville similar to past issues.