BRT APARTMENTS CORP. (NYSE:BRT) Files An 8-K Financial Statements and Exhibits

BRT APARTMENTS CORP. (NYSE:BRT) Files An 8-K Financial Statements and Exhibits

Story continues below

Item 9.01(a), the audited combined statement of revenues and
certain expenses of The Tower at OPOP, a 128 unit multi-family
high rise building located at 411 North 8th Street, St. Louis,
Missouri (“OPOP Tower”) and The Lofts at OPOP, a 53 unit
multi-family loft building located at 901 Locust Street, St.
Louis, Missouri (“OPOP Lofts”; and together with OPOP Tower,
the “OPOP Properties”), for the year ended December 31, 2016,
and (ii) Item 9.01(b) our unaudited pro forma financials
statements reflecting the acquisition of the OPOP Properties.

OPOP Tower was purchased on February 28, 2017 for $27.0 million,
including $20.0 million of mortgage debt obtained in connection
with the acquisition. The mortgage loan bears interest at a rate of
4.79%, matures in 2027, is interest only for 60 months and
amortizes over the remaining five years. We contributed $6.0
million to this venture for our 75.5% interest.
OPOP Lofts was purchased on February 28, 2017, for $8 million,
including $6.2 million of mortgage debt obtained in connection with
the acquisition. The mortgage loan bears interest at a rate of
4.48%, matures in 2027, is interest only for 60 months and
amortizes over the remaining five years. We contributed $2.0
million to this venture for our 75.5% interest.
Item 9.01
Financial Statements and Exhibits.
(a)
Financial Statement of property acquired – The OPOP
Properties
Page
(i) Independent Auditors Report
(ii) Combined Statement of Revenues and Certain
Expenses for the year ended
December 31, 2016
(iii) Notes to Combined Statement of Revenues and Certain
Expenses
(b)
Unaudited Pro Forma Consolidated Financial Statements
(i) Pro Forma Consolidated Balance Sheet at December 31,
2016
(ii) Pro Forma Consolidated Statements of Income:
For the year ended September 30, 2016
For the three months ended December 31, 2016
(ii) Notes to Pro Forma Consolidated Financial Statements
(d)
Exhibits
Exhibit No.
Title of Exhibit
23.1
Consent of BDO USA, LLP, dated April 19, 2017
Independent Auditors Report
Stockholders and Board of Directors
BRT Apartments Corp.
Great Neck, New York
We have audited the accompanying combined statement of revenues and
certain expenses of the properties located at 411 North 8th Street,
St. Louis, Missouri (“OPOP Tower”) and 901 Locust Street, St.
Louis, Missouri (“OPOP Lofts”, and collectively the “OPOP
Properties”) for the year ended December 31, 2016.
Managements Responsibility for the Combined Financial Statements
Management is responsible for the preparation and fair presentation
of the combined statement of revenues and certain expenses in
accordance with accounting principles generally accepted in the
United States of America; this includes the design, implementation,
and maintenance of internal control relevant to the preparation and
fair presentation of the combined statement of revenues and certain
expenses that is free from material misstatement, whether due to
fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on the combined
statement of revenues and certain expenses based on our audit. We
conducted our audit in accordance with auditing standards generally
accepted in the United States of America. Those standards require
that we plan and perform the audit to obtain reasonable assurance
about whether the combined statement of revenues and certain
expenses is free from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the combined statement of
revenues and certain expenses. The procedures selected depend on
the auditors judgment, including the assessment of the risks of
material misstatement of the combined statement of revenues and
certain expenses, whether due to fraud or error. In making those
risk assessments, the auditor considers internal controls relevant
to the entity’s preparation and fair presentation of the combined
statement of revenues and certain expenses in order to design audit
procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on the effectiveness of the
entitys internal controls. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall
presentation of the combined revenues and certain expenses.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the combined statement of revenues and certain
expenses referred to above presents fairly, in all material
respects, the revenues and certain expenses of OPOP Tower and OPOP
Lofts for the year ended December 31, 2016, in accordance with
accounting principles generally accepted in the United States of
America.
Emphasis of Matter
The accompanying combined statements of revenues and certain
expenses was prepared for the purpose of complying with rules and
regulations of the U.S. Securities and Exchange Commission and for
inclusion in a Current Report on Form 8-K of BRT Apartments Corp.
as described in Note 2 to the combined statement of revenues and
certain expenses and is not intended to be a complete presentation
of OPOP Tower’s and OPOP Lofts’ revenues and expenses.
/s/ BDO USA, LLP
New York, New York
April 19, 2017
/div>
The OPOP Properties
Combined Statement of Revenues and Certain Expenses
Year Ended December 31, 2016
Revenues:
Rental income
$
3,199,000
Other income
202,000
Rental and other income
3,401,000
Certain Expenses:
Real estate taxes
210,000
Management fees
167,000
Utilities
283,000
Payroll
232,000
Insurance
155,000
Repairs and maintenance
613,000
Total certain expenses
1,660,000
Revenues in excess of certain expenses
$
1,741,000
See Independent Auditors Report and accompanying notes to the
Combined Statement of Revenues and Certain Expenses
/div>
The OPOP Properties
Notes to Combined Statement of Revenues and Certain Expenses
1. Organization
The Tower at OPOP, located at 411 North 8th Street, St. Louis,
Missouri (“OPOP Tower”) is a 128 unit multi-family high rise
building and the Lofts at OPOP, located at 901 Locust Street,
St. Louis, Missouri (“OPOP Lofts”) is a multi-family loft
building with 53 units. OPOP Towers and OPOP Lofts are
collectively referred to as the “OPOP Properties” or the
“Properties”.
BRT Apartments Corp. (BRT or the Company) is a corporation
organized in Maryland. BRT is a real estate investment trust,
also known as a REIT, that is primarily focused on the
ownership, operation and development of multifamily properties.
On February 28, 2017, a consolidated joint venture comprised of
an indirect 94.4% owned subsidiary of the Company and
unaffiliated joint venture partners acquired the OPOP
Properties for $35.0 million, including $26.2 million of
mortgage debt. The OPOP Properties were acquired from the same
seller in a single transaction.
2. Basis of Presentation and Significant Accounting Policies
Basis of Presentation
The accompanying combined statement of revenues and certain
expenses of the OPOP Properties has been prepared in accordance
with Rule 3-14 of Regulation S-X of the U.S. Securities and
Exchange Commission for inclusion in the Companys Current
Report on Form 8-K. Accordingly, the combined statements of
revenues and certain expenses excludes certain expenses that
may not be comparable to those expected to be incurred in the
future operations of the aforementioned property. Items
excluded consist of interest expense, depreciation,
amortization, corporate expenses, and other costs not directly
related to future operations. The properties are being
presented together as they were purchased together from the
same seller.
Significant Accounting Policies
Use of Estimates
The preparation of the combined statement of revenues and
certain expenses in conformity with accounting principles
generally accepted in the United States requires management to
make estimates and assumptions that affect the amounts reported
in the statements of revenues and certain expenses. Actual
results could differ from those estimates.
Revenue Recognition
Rental revenue is recognized on an accrual basis when earned
and due from tenants. Leases are generally for a one-year term
and have no renewal options.
Repairs and Maintenance
Major replacements and betterments that improve or extend the
life of the OPOP Properties are capitalized. Expenditures for
ordinary repairs and maintenance are charged to operations as
incurred.
3. Subsequent Events
Subsequent events were evaluated through April 19, 2017, the
date on which the combined statement of revenues and certain
expenses was available to be issued.
/div>
BRT APARTMENTS CORP. AND SUBSIDIARIES
Pro Forma Consolidated Financial Statements
(Unaudited)
Conversion
BRT Apartments Corp., a Maryland corporation, is the
successor to BRT Realty Trust, a Massachusetts business
trust, to the conversion of BRT Realty Trust into BRT
Apartments Corp. on March 18, 2017.
Acquisitions
On February 28, 2017, TRB OPOP LLC, an indirect wholly owned
subsidiary of BRT Apartments Corp. (“BRT” or the
“Company”) and an unaffiliated joint venture partner,
acquired a 128 unit multi-family high rise building located
at 411 North 8th Street, St. Louis, Missouri (“OPOP Tower”)
and a 53 unit multi-family loft building located at 901
Locust Street, St. Louis, Missouri (“OPOP Lofts”; and
together with OPOP Tower, the “OPOP Properties”) for $27.0
million and $8.0 million, respectively, including $20.0
million and $6.2 million, respectively, of mortgage debt
obtained in connection with the acquisitions. The Company
owns a 75.5% interest in this venture.
On November 10, 2016, TRB Canalside Lofts, LLC, an indirect
wholly owned subsidiary of the Company and unaffiliated joint
venture partners, acquired a 374 unit multi-family property
located at 383 Taylor Street, Columbia, South Carolina
(Canalside Lofts”) for $58.3 million, including $41.0
million of mortgage debt assumed in connection with the
acquisitions. The Company owns a 32.12% interest in this
unconsolidated venture.
On November 4, 2016, Kilburn Crossing, LLC, an indirect
wholly owned subsidiary of the Company and an unaffiliated
joint venture partner, acquired a 220 unit multi-family
property located at 6601 Charmed Way, Fredericksburg,
Virginia (Kilburn Crossing) for $38.5 million, including
$29.9 million of mortgage debt obtained in connection with
the acquisition. The Company owns a 80% interest in this
venture.
The acquisitions of Canalside Lofts and Kilburn Crossing are
referred to collectively as the “Previously Reported
Acquisitions”.
Presentation
The unaudited pro forma consolidated balance sheet is
presented as if the acquisitions of the OPOP Properties had
been completed on December 31, 2016. The unaudited pro forma
consolidated statement of income for the year ended September
30, 2016 is presented as if the OPOP Properties and the
Previously Reported Acquisitions had been completed on
October 1, 2015. The unaudited pro forma consolidated
statement of income for the three months ended December 31,
2016, is presented as if the acquisition had been completed
on October 1, 2016.
These unaudited pro forma consolidated financial statements
are presented for informational purposes only and should be
read in conjunction with the Companys Annual Report on Form
10-K for the year ended September 30, 2016.
The unaudited pro forma consolidated financial statements are
based on assumptions and estimates considered appropriate by
the Companys management; however, such statements do not
purport to represent what the Companys financial position and
results of operations would have been assuming the completion
of the acquisition on October 1, 2015, nor do they purport to
project the Companys financial position and results of
operations at any future date or for any future period.
In the opinion of the Companys management, all adjustments
necessary to reflect the effects of the transactions
described above have been included in the pro forma
consolidated financial statements.
/div>
>>BRT APARTMENTS CORP. AND SUBSIDIARIES
PRO FORMA – UNAUDITED CONSOLIDATED BALANCE SHEET
At December 31, 2016
(Amounts in thousands, except per share data)
The Company Historical
Purchase of the OPOP Properties
The Company
Pro Forma
as Adjusted
ASSETS
Real estate properties, net of accumulated
depreciation
$
746,183
$
35,557
$
781,740
Real estate loan
5,900
5,900
Cash and cash equivalents
51,231
(8,172
)
43,059
Restricted cash
6,683
6,683
Deposits and escrows
18,283
18,861
Investment in unconsolidated joint ventures
14,672
14,672
Other assets
6,122
6,230
Total Assets
$
849,074
$
28,071
$
877,145
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net of deferred costs
$
573,577
$
25,855
$
599,432
Junior subordinated notes, net of deferred
costs
37,003
37,003
Accounts payable and accrued liabilities
18,873
18,969
Total Liabilities
629,453
25,951
655,404
Commitments and contingencies
Equity:
BRT Apartments Corp. stockholders’ equity:
Preferred shares, $.01 and $1 par value:
authorized 2,000 and 10,000 shares, none issued
Common stock $.01 par value, 300,000 shares
authorized;
Shares of beneficial interest, $3 par value:
authorized number of shares, unlimited, 13,306
issued
39,693
39,693
Additional paid-in capital
161,639
161,639
Accumulated other comprehensive loss
1,666
1,666
Accumulated deficit
(32,355
)
(32,355
)
Total BRT Apartments Corp. shareholders’
equity
170,643
170,643
Non-controlling interests
48,978
2,120
51,098
Total Equity
219,621
2,120
221,741
Total Liabilities and Equity
$
849,074
$
28,071
$
877,145
See accompanying notes to the unaudited pro forma
consolidated financial statements
/div>
BRT APARTMENTS CORP. AND SUBSIDIARIES
PRO FORMA – UNAUDITED CONSOLIDATED STATEMENT OF INCOME
For The Year Ended September 30, 2016
(Dollars in thousands, except share data)
The Company Historical
Previously Reported Acquisitions
Purchase of the OPOP Properties
The Company
Pro Forma
as Adjusted
Revenues:
Rental and other revenues from real estate
properties
$
90,945
$
3,466
$
3,727
$
98,138
Other income
3,319
3,319
Total revenues
94,264
3,466
3,727
101,457
Expenses:
Real estate operating expenses – including
$1,950 to related parties
43,262
1,151
1,627
46,040
Interest expense
23,878
1,159
(a)
1,254
26,291
Advisor’s fees, related party
Property acquisition costs – including $2,221
to related parties
3,852
3,852
General and administrative-including $1,020 to
related party
8,536
8,536
Provision for Federal tax
Depreciation
23,180
(b)
1,815
25,957
Total expenses
104,101
3,272
4,696
112,069
Total revenues less total expenses
(9,837
)
(969
)
(10,612
)
Gain on sale of real estate assets
46,477
46,477
Gain on sale of partnership interest
Loss on extinguishment of debt
(4,547
)
(4,547
)
Equity in earnings of unconsolidated joint
ventures
Income (loss) from continuing operations
32,479
(969
)
31,904
Discontinued Operations:
Loss from discontinued operations
(2,788
)
(2,788
)
Gain on sale of partnership interest
15,467
15,467
Income from discontinued operations
12,679
12,679
Net income
45,158
(969
)
44,583
Net (income) attributable to non-controlling
interests
(13,869
)
(39
)
(13,671
)
Net income attributable to common stockholders
$
31,289
$
$
(732
)
$
30,912
Basic and diluted per share amounts
attributable to common stockholders:
Basic and diluted earnings per share
$
2.23
$
0.03
$
(0.05
)
$
2.21
Weighted average number of shares of common
stock outstanding:
Basic and diluted
14,017,279
14,017,279
14,017,279
14,017,279
See accompanying notes to the pro forma unaudited
consolidated financial statements
/div>
BRT APARTMENTS CORP. AND SUBSIDIARIES
PRO FORMA – UNAUDITED CONSOLIDATED STATEMENT OF INCOME
For The Three Months Ended December 31, 2016
(Dollars in thousands, except share data)
The Company Historical
Previously Reported Acquisitions
Purchase of the OPOP Properties
The Company
Pro Forma
as Adjusted
Revenues:
Rental and other revenues from real estate
properties
$
25,029
$
$
$
26,313
Other income
Total revenues
25,640
26,924
Expenses:
Real estate operating expenses – including
$1,950 to related parties
12,446
12,986
Interest expense
6,687
(a)
7,112
Advisor’s fees, related party
Property acquisition costs – including $2,221
to related parties
General and administrative-including $1,020
to related party
2,597
2,597
Provision for Federal Tax
Depreciation
6,297
(b)
6,863
Total expenses
28,377
1,135
29,908
Total revenues less total expenses
(2,737
)
(44
)
(203
)
(2,984
)
Gain on sale of real estate assets
35,838
35,838
Loss on extinguishment of debt
(799
)
(799
)
Equity in earnings of unconsolidated joint
ventures
Net income
32,302
(203
)
32,105
Net (income) attributable to non-controlling
interests
(16,532
)
(16,473
)
Net income attributable to common
stockholders
$
15,770
$
$
(153
)
$
15,632
Basic and diluted per share amounts
attributable to common stockholders:
Basic and diluted earnings per share
$
1.13
$
$
(0.01
)
$
1.12
Weighted average number of shares of common
stock outstanding:
Basic and diluted
13,898,626
13,898,626
13,898,626
13,898,626
See accompanying notes to the unaudited pro forma
consolidated financial statements
/div>
BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Pro Forma Unaudited Consolidated Financial
Statements
(Unaudited)
Basis of Pro Forma Presentation
1.
The historical consolidated financial
statements of the Company include the accounts
of the Company and consolidated subsidiaries in
which the Company is presumed to have control
in accordance with the consolidation guidance
of the Financial Accounting Standards Board
Accounting Standards Codification (ASC).
Investments in entities for which the Company
has the ability to exercise significant
influence but does not have financial or
operating control, are accounted for under the
equity method of accounting. Accordingly, the
Companys share of the net earnings (or losses)
of entities accounted for under the equity
method are included in consolidated net income
(loss) under the caption Other Income.
Investments in entities for which the Company
does not have the ability to exercise any
influence are accounted for under the cost
method of accounting.
2.
Notes to the pro forma unaudited consolidated
balance sheet and statements of income for OPOP
Towers and OPOP Lofts for the year ended
September 30, 2016.
a)
To reflect the interest expense resulting from
the mortgages securing OPOP Towers and OPOP
Lofts which expense is calculated at interest
rates of 4.79% ($20.0 million) and 4.48% ($6.2
million) and includes amortization of deferred
financing costs.
b)
To reflect depreciation expense on the
estimated useful life of the properties of 30
years.
/div>


About BRT APARTMENTS CORP. (NYSE:BRT)

BRT Apartments Corp. is a real estate investment trust (REIT). The Trust is focused on the ownership, operation and development of multi-family properties. These activities are primarily conducted through joint ventures in which the Trust has an equity interest in the entity owning the property. The Trust’s segments include Multi-Family Real Estate and Other Assets. The Multi-Family Real Estate segment includes the ownership, operation and development of multi-family properties. The Other Assets segment includes the ownership and operation of the Trust’s other real estate assets and a real estate loan. As of December 31, 2016, the Trust owned 30 multi-family properties with 8,624 units located in 11 states (including 271 units at a property in the lease up stage), and interests in two unconsolidated joint ventures. The Trust also owns and operates various other real estate assets.

BRT APARTMENTS CORP. (NYSE:BRT) Recent Trading Information

BRT APARTMENTS CORP. (NYSE:BRT) closed its last trading session down -0.03 at 8.01 with 20,636 shares trading hands.

An ad to help with our costs