BRT Apartments Corp.

Previous wording

We are an internally managed real estate investment trust, also known as a REIT, that owns, operates and, to a lesser extent, holds interests in joint ventures that own and operate multi-family properties. At June 30, 2025, we: (i) wholly-own 21 multi-family properties with an aggregate of 5,420 units and a carrying value of $605.3 million; (ii) have ownership interests, through unconsolidated entities, in eight multi-family properties with 2,527 units and a carrying value of $30.0 million; (iii) have preferred equity interests in two multi-family properties with a carrying value of $17.7 million and (iii) own other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $1.8 million. The 29 multi-family properties are located in 11 states; most of these properties are located in the Southeast United States and Texas.

Current wording

We are an internally managed real estate investment trust, also known as a REIT, that owns, operates and, to a lesser extent, holds interests in joint ventures that own and operate multi-family properties. At September 30, 2025, we: (i) wholly-own 21 multi-family properties with an aggregate of 5,420 units and a carrying value of $600.5 million; (ii) have ownership interests, through unconsolidated entities, in ten multi-family properties with 2,891 units and a carrying value of $48.2 million; (iii) have preferred equity interests in two multi-family properties with a carrying value of $17.7 million and (iii) own other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $1.6 million. The 31 multi-family properties are located in 11 states; most of these properties are located in the Southeast United States and Texas.

Previous wording

On July 10, 2025, a joint venture in which we have an 80% interest, acquired 1322 North, a 214-unit multi-family property located in Auburn, AL. The Company acquired the property for $36.5 million, including a $24.4 million mortgage. The mortgage matures in 2032, bears a 5.38% fixed interest rate, and is interest only through maturity. We contributed $10.7 million to the joint venture for our equity interest. In connection with this transaction, we borrowed $7 million from our credit facility. See Notes 9 and 10 to our consolidated financial statements.

Current wording

On July 15, 2025, a joint venture in which we have an 80% interest, acquired 1322 North, a 214-unit multi-family property located in Auburn, AL (the "Auburn Acquisition"). The venture acquired the property for $36.5 million, including a $24.4 million mortgage. The mortgage matures in 2032, bears a 5.38% fixed interest rate, and is interest only through maturity. We contributed $10.7 million to the joint venture for our equity interest and planned improvements. In connection with this transaction, we borrowed $7 million from our credit facility.

Previous wording

We face challenges due to the uncertain national economic environment(e.g., the possibility of inflation, recession and/or stagflation, the potential impact of tariffs and trade wars, and/or volatile interest rates), and uncertainties in the multifamily property market(e.g., limited acquisition opportunities due to the mispricing of assets (i.e., cap rates that do not, in our belief, correlate appropriately to interest rates and other market factors) and oversupply of multifamily properties in several markets in which we compete (including Atlanta, GA, Huntsville, AL, Dallas, TX, San Antonio, TX, Nashville TN, LaGrange, GA and San Marcos, TX). In addition, we use concessions (and in particular, in markets that are especially competitive) as a means to improve occupancy. The use of concessions will reduce our rental income and may add to the variability of our operating results. These challenges and uncertainties have, and we anticipate will continue to (i) adversely impact the rental and occupancy rates at our properties, which will adversely impact our operating results, and (ii) as further noted below, limit our ability or willingness to acquire properties, grow rental income and/or control our real estate operating expenses, some of which, such as real estate taxes and insurance expense, we have a very limited ability to control.

Current wording

We face challenges due to the uncertain national economic environment(e.g., the possibility of inflation, recession and/or stagflation, the potential impact of tariffs and trade wars, and/or volatile interest rates), and the oversupply of multifamily properties in several markets in which we compete (including Atlanta, GA, Huntsville, AL, Dallas, TX, San Antonio, TX, Nashville TN, Pensacola, FL, LaGrange, GA and San Marcos, TX). In addition, we use concessions (and in particular, in markets that are especially competitive) as a means to improve occupancy. The use of concessions reduces our rental income and may add to the variability of our operating results. These challenges and uncertainties have, and we anticipate will continue to adversely impact (i) the rental and occupancy rates at our properties, and (ii) our ability to grow rental income and/or control our real estate operating expenses, some of which, such as real estate taxes, we have a very limited ability to control and frequently increase, with limited notice of the increase.

Previous wording

In light of the challenging acquisition environment and the limited funds available to us to acquire properties, we are pursuing (i) alternative investments in the multi-family property arena, including preferred equity investments (e.g., an investment entitling us to a fixed rate of return prior to distributions to more junior investors) or bridge loans (e.g., a loan secured by a first mortgage on the subject property) and/or (ii) the acquisition of multi-family properties through joint ventures. We do not anticipate that in the near term, these type of investments (other than joint ventures already included in our portfolio), will constitute a significant part of our portfolio, and can provide no assurance that such investments will be profitable.

Current wording

In light of the limited funds available to us to acquire properties (the cash and cash equivalents reflected on our consolidated balance sheet are earmarked for working capital purposes and generally not available for acquisitions or mortgage repayments), we are pursuing (i) alternative investments in the multi-family property arena, including preferred equity investments (e.g., an investment entitling us to a fixed rate of return prior to distributions to more junior investors) or bridge loans (e.g., a loan secured by a first mortgage on the subject property) and/or (ii) the acquisition of multi-family properties through joint ventures. We do not anticipate that in the near term, these type of investments (other than joint ventures already included in our portfolio), will constitute a significant part of our portfolio, and can provide no assurance that these investment / acquisition activities will be profitable.

Previous wording

We anticipate that our mortgage interest expense will increase as we refinance the aggregate $174.5 million of principal balances of mortgage debt maturing through 2027 (including $46.8 million of such principal balances at unconsolidated subsidiaries) because current comparable mortgage interest rates are generally higher than the weighted average interest rate on such maturing mortgages (i.e, the weighted average interest rate on the mortgages on our consolidated and unconsolidated properties maturing through December 31, 2027 is 4.09%). For comparison purposes, the interest rate on the mortgage obtained in connection with the Auburn Acquisition was 5.38%.

Current wording

We anticipate that our mortgage interest expense will increase as we refinance the aggregate $196.3 million of principal balances of mortgage debt maturing through 2027 (including $84.0 million of such principal balances at unconsolidated subsidiaries) because current comparable mortgage interest rates are generally higher than the weighted average interest rate on such maturing mortgages (i.e, the weighted average interest rate on the mortgages on our consolidated and unconsolidated properties maturing through December 31, 2027 is 4.51%). For comparison purposes, the interest rate on the mortgage obtained in connection with the Auburn Acquisition was 5.38%.

Previous wording

Interest expense increased primarily due to $393,000 of interest from the financing of our Woodland Trails - LaGrange, GA property which occurred in the third quarter of 2024, offset by a $98,000 decrease in interest on our subordinated debt due to a reduction in interest rates. We anticipate that interest expense may increase in the short term as we borrowed $7.0 million from our credit facility in connection with the Auburn Acquisition.

Current wording

The increase is primarily due to $228,000 of interest from the financing of our Woodland Trails - LaGrange, GA property which occurred in the third quarter of 2024 (the "Woodlands Refinancing"), offset primarily by a $93,000 decrease in interest on our subordinated debt due to a reduction in interest rates. We anticipate that interest expense may increase by approximately $295,000 for the three months ending December 31, 2025 from the three months ended December 31, 2024, as we borrowed an aggregate $17.5 million from our credit facility during the quarter ended September 30, 2025 in connection with the acquisitions and working capital purposes. Further increases in interest expense may occur if the Contemplated Re-financings are completed.

Previous wording

As used herein, the term "same store properties" refers to multi-family properties that were wholly owned for the entirety of the periods presented. For the six months ended June 30, 2025 and 2024, all of our properties in our consolidated portfolio are same store properties.

Current wording

As used herein, the term "same store properties" refers to multi-family properties that were wholly owned for the entirety of the periods presented. For the nine months ended September 30, 2025 and 2024, all of our properties in our consolidated portfolio are same store properties.

Previous wording

The increase is due to a lease extension and tenant reimbursements at our commercial property and, to a lesser extent, an increase in rental rates (which includes the effect of straight line rent adjustments related to rent concessions).

Current wording

The increase is due to increases in occupancy and rental rates (which includes the effect of straight line rent adjustments related to rent concessions).

Previous wording

The increase is due primarily to interest income (including fee amortization) of $315,000 earned from the preferred equity investments originated in the fourth quarter of 2024.

Current wording

The increase is due primarily to interest income of $903,000 earned from the preferred equity investments.

Previous wording

The change is due primarily to increases of (i) $213,000 in repairs and maintenance a portion of which was reimbursed from insurance proceeds; (ii) $173,000 in utilities, primarily water and sewer; (iii) $164,000 in real estate taxes due primarily to increased assessments; and (iv) $145,000, primarily due to leasing expense.

Current wording

The change is due primarily to increases of (i) $297,000 in real estate taxes due primarily to increased assessments; (ii) $267,000 in utilities, primarily water and sewer; (iii) $258,000 in repairs and maintenance, a portion of which was reimbursed from insurance proceeds; and (iv) $242,000, primarily due to leasing expense.

Previous wording

The increase was offset by $508,000 decrease in premium on our master insurance policy.

Current wording

The increase was offset by $756,000 reduction in the premium on our master insurance policy.

Previous wording

The change is due primarily to the additional $782,000 related to the Woodlands Financing, offset by $204,000 due to the decrease on the interest rate on our junior subordinated notes.

Current wording

The change is due primarily to the additional $1 million related to the Woodlands Financing, offset by decreases of $297,000 due to the decrease on the interest rate on our junior subordinated notes and $205,000 due to amortization of our mortgage debt.

Previous wording

In the six months ended June 30, 2025, the Company received and aggregate of $257,000 insurance reimbursements (net of an aggregate of $200,000 in deductibles) from casualty events that occurred at our Silvana Oaks and Avalon properties. There was no comparable recovery in the six months ended June 30, 2024.

Current wording

In the nine months ended September 30, 2025, we received an aggregate of $257,000 insurance reimbursements (net of an aggregate of $200,000 in deductibles) from casualty events that occurred at our Silvana Oaks and Avalon properties. There was no comparable recovery in the nine months ended September 30, 2024.

Previous wording

We require funds to pay operating expenses and debt service obligations, acquire and/or invest in properties (including alternative investments), make capital and other improvements, fund capital contributions, and pay dividends. Generally, our primary sources of capital and liquidity are the operations of our multi-family properties (including distributions and/or income from the preferred equity investments and the operations of the unconsolidated multi-family properties), mortgage debt financings and re-financings, the issuance of shares of our common stock pursuant to our at-the-market distribution and dividend reinvestment programs, borrowings from our credit facility and our available cash. At August 1, 2025, our available liquidity was approximately $49.0 million, including $16.0 million of cash and cash equivalents and $33 million available under our credit facility.

Current wording

We require funds to pay operating expenses and debt service obligations, acquire and/or invest in properties (including alternative investments), make capital and other improvements, fund capital contributions, and pay dividends. Generally, our primary sources of capital and liquidity are the operations of our multi-family properties (including distributions and/or income from the preferred equity investments and the operations of the unconsolidated multi-family properties), mortgage debt financings and re-financings, the issuance of shares of our common stock pursuant to our at-the-market distribution and dividend reinvestment programs, borrowings from our credit facility and our available cash. At October 31, 2025, our available liquidity was approximately $37.1 million, including $14.6 million of cash and cash equivalents and $22.5 million available under our credit facility.

Previous wording

We anticipate that from July 1, 2025 through December 31, 2027, our operating expenses, $77.4 million of mortgage amortization and interest expense (including $27.6 million from unconsolidated joint ventures), $15.4 million, $130.4 million and $65.9 million of balloon payments with respect to mortgages maturing in 2025, 2026 and 2027, respectively (including $60.9 and $23.1 million maturing in 2026 and 2027, respectively, from unconsolidated joint ventures), interest expense on our junior subordinated notes, estimated cash dividend payments of at least $47.2 million (assuming (i) the current quarterly dividend rate of $0.25 per share and (ii) 18.9 million shares outstanding), will be funded from cash generated from operations (including distributions from unconsolidated joint ventures). Our operating cash flow and available cash is insufficient to fully fund the $211.7 million (including $84.0 million at unconsolidated joint ventures) of balloon payments due through 2027, and if we are unable to refinance such debt on acceptable terms, we may need to issue additional equity or dispose of properties, in each case on potentially unfavorable terms.

Current wording

We anticipate that from October 1, 2025 through December 31, 2027, our operating expenses, $100.9 million of mortgage amortization and interest expense (including $29.7 million from unconsolidated joint ventures), $130.4 million and $65.9 million of balloon payments with respect to mortgages maturing in 2026 and 2027, respectively (including $60.9 and $23.1 million maturing in 2026 and 2027, respectively, from unconsolidated joint ventures), interest expense on our junior subordinated notes, estimated cash dividend payments of at least $42.8 million (assuming (i) the current quarterly dividend rate of $0.25 per share and (ii) 19.0 million shares outstanding), will be funded from cash generated from operations (including distributions from unconsolidated joint ventures). Our operating cash flow and available cash is insufficient to fully fund the $196.3 million (including $84 million at unconsolidated joint ventures) of balloon payments due through 2027, and if we are unable to refinance such debt on acceptable terms, we may need to issue additional equity or dispose of properties, in each case on potentially unfavorable terms.

Previous wording

At June 30, 2025, we had mortgage debt of $699.3 million (including $250.2 million of mortgage debt at of our unconsolidated subsidiaries). The mortgage debt at our: (i) consolidated properties had a weighted average interest rate of 4.09% and a weighted average remaining term to maturity of approximately 5.6 years, and (ii) at our unconsolidated subsidiaries had a weighted average interest rate of 4.26% and a remaining term to maturity of approximately 3.4 years.

Current wording

At September 30, 2025, we had mortgage debt of $737.6 million (including $289.5 million of mortgage debt at of our unconsolidated subsidiaries). The mortgage debt at our: (i) consolidated properties had a weighted average interest rate of 4.12% and a weighted average remaining term to maturity of approximately 5.6 years, and (ii) at our unconsolidated subsidiaries had a weighted average interest rate of 4.27% and a remaining term to maturity of approximately 3.6 years.

Previous wording

As of June 30, 2025, $37.4 million (excluding deferred costs of $232,000) in principal amount of our junior subordinated notes is outstanding. These notes mature in April 2036, contain limited covenants (including covenants prohibiting us from paying dividends or repurchasing capital stock if there is an event of default (as defined therein) on these notes), are redeemable at our option and bear an interest rate, which resets and is payable quarterly, at a rate of three-month term SOFR plus 250 basis points. At June 30, 2025 and 2024, the interest rate on these notes was 6.54% and 7.59%, respectively.

Current wording

As of September 30, 2025, $37.4 million (excluding deferred costs of $222,000) in principal amount of our junior subordinated notes is outstanding. These notes mature in April 2036, contain limited covenants (including covenants prohibiting us from paying dividends or repurchasing capital stock if there is an event of default (as defined therein) on these notes), are redeemable at our option and bear an interest rate, which resets and is payable quarterly, at a rate of three-month term SOFR plus 250 basis points. At September 30, 2025 and 2024, the interest rate on these notes was 6.57% and 7.52%, respectively.

Previous wording

Our credit facility with VNB New York, LLC, an affiliate of Valley National Bank (collectively, "VNB"), allows us to borrow, subject to compliance with borrowing base requirements and other conditions, up to $40 million, (i) for the acquisition of, and investment in, multi-family properties, (ii) to repay mortgage debt secured by multi-family properties and (iii) for Operating Expenses (i.e., working capital (including dividend payments) and operating expenses); provided, that not more than $25 million may be used for Operating Expenses. The credit facility is secured by cash accounts maintained by us at VNB (and we are required to maintain substantially all of our bank accounts at VNB), and the pledge of our interests in the entities that own the unencumbered multi-family properties used in calculating the borrowing base. The credit facility bears an annual interest rate, which resets monthly, equal to one-month term SOFR plus 250 basis points, with a floor of 6.00%. There is an annual fee of 0.25% on the total amount committed by VNB and unused by us. The credit facility matures in September 2027. Net proceeds received from the sale, financing or refinancing of our properties are generally required to be used to repay amounts outstanding on the facility. The interest rate in effect at June 30, 2025 and August 1, 2025, was 6.95% and 6.83% respectively. As of August 1, 2025, there was an outstanding balance of $7 million on the credit facility and $33 million is available to be borrowed thereunder.

Current wording

Our credit facility with VNB New York, LLC, an affiliate of Valley National Bank (collectively, "VNB"), allows us to borrow, subject to compliance with borrowing base requirements and other conditions, up to $40 million, (i) for the acquisition of, and investment in, multi-family properties, (ii) to repay mortgage debt secured by multi-family properties and (iii) for Operating Expenses (i.e., working capital (including dividend payments) and operating expenses); provided, that not more than $25 million may be used for Operating Expenses. The credit facility is secured by cash accounts maintained by us at VNB (and we are required to maintain substantially all of our bank accounts at VNB), and the pledge of our interests in the entities that own the unencumbered multi-family properties used in calculating the borrowing base. The credit facility bears an annual interest rate, which resets monthly, equal to one-month term SOFR plus 250 basis points, with a floor of 6.00%. There is an annual fee of 0.25% on the total amount committed by VNB and unused by us. The credit facility matures in September 2027. Net proceeds received from the sale, financing or refinancing of our properties are generally required to be used to repay amounts outstanding on the facility. The interest rate in effect at September 30, 2025 and October 31, 2025, was 6.77% and 6.63% respectively. As of October 31, 2025, there was an outstanding balance of $17.5 million on the credit facility and $22.5 million is available to be borrowed thereunder.

Previous wording

At June 30, 2025, we are joint venture partners in unconsolidated joint ventures which own eight multi-family properties and the distributions to us from these joint venture properties of $603,000 during the quarter ended June 30, 2025 contributed to our liquidity and cash flow. Further, we may be required to make significant capital contributions with respect to these properties. At June 30, 2025, our investments in these joint venture properties had a net-equity carrying value of $30.0 million. The underlying properties are subject to mortgage debt, which is not reflected on our consolidated balance sheet, of $251.1 million. Although BRT Apartments Corp. is not the obligor with respect to such mortgage debt, the loss of any of these properties due to mortgage foreclosure or similar proceedings would have a material adverse effect on our results of operations and financial condition. See note 9 to our consolidated financial statements.

Current wording

At September 30, 2025, we are joint venture partners in unconsolidated joint ventures which own ten multi-family properties and the distributions to us from these joint venture properties of $2.9 million during the nine months ended September 30, 2025 contributed to our liquidity and cash flow. Further, we may be required to make significant capital contributions with respect to these properties. At September 30, 2025, our investments in these joint venture properties had a net-equity carrying value of $48.1 million. The underlying properties are subject to mortgage debt, which is not reflected on our consolidated balance sheet, of $289.5 million. Although BRT Apartments Corp. is not the obligor with respect to such mortgage debt, the loss of any of these properties due to mortgage foreclosure or similar proceedings would have a material adverse effect on our results of operations and financial condition. See note 9 to our consolidated financial statements.

Previous wording

At June 30, 2025, we had preferred equity investments in two multi-family properties and during the quarter ended June 30, 2025, we generated $301,000 of loan interest income from these investments. At June 30, 2025, these investments had a carrying value of $17.7 million, are unsecured and are structurally subordinate to (including the payment of the returns thereon), to an aggregate of $51.2 million of mortgage debt (which is not reflected on our consolidated balance sheet) bearing a weighted average interest rate of 4.81% and a weighted average remaining term to maturity of 5.4 years. Although we are not the obligor with respect to such mortgage debt, the loss of any of these investments due to mortgage foreclosure or similar proceedings would have a material adverse effect on our results of operations and financial condition. See note 6 to our consolidated financial statements.

Current wording

At September 30, 2025, we had preferred equity investments in two multi-family properties and during the quarter ended September 30, 2025, we generated $309,000 of loan interest income from these investments. At September 30, 2025, these investments had a carrying value of $17.7 million, are unsecured and are structurally subordinate to (including the payment of the returns thereon), an aggregate of $51.1 million of mortgage debt (which is not reflected on our consolidated balance sheet) bearing a weighted average interest rate of 4.81% and a weighted average remaining term to maturity of 5.1 years. Although we are not the obligor with respect to such mortgage debt, the loss of any of these investments due to mortgage foreclosure or similar proceedings would have a material adverse effect on our results of operations and financial condition. See note 6 to our consolidated financial statements.

Previous wording

FFO for the three months ended June 30, 2025 decreased on an absolute basis (but not a per share basis) from the corresponding quarter in the prior year primarily due to (i) increased interest expense, (ii) a decrease in rental income (which includes the effect of straight line rent adjustments related to concessions) and (iii) increased tax expense. The decrease was offset primarily due to the increases in loan interest and other income and insurance proceeds from a casualty event, and a decline in general and administrative expense.

Current wording

FFO for the three months ended September 30, 2025 decreased from the corresponding quarter in the prior year primarily due to (i) a decrease in straight line rent adjustments related to concessions recognized as a component of rental revenue, (ii) increased interest expense, and (iii) increased tax expense. The decrease was offset primarily due to an improvement in operating margins at our consolidated and unconsolidated properties and an increases in loan interest and other income.

Previous wording

AFFO for the three months ended June 30, 2025 increased from the corresponding period in the prior year primarily due to the factors contributing to the changes in FFO, excluding the impact of the straight line rent adjustments.

Current wording

AFFO for the three months ended September 30, 2025 decreased (on an absolute, but not a per share basis) from the corresponding period in the prior year primarily due to the factors contributing to the changes in FFO, excluding the impact of the straight line rent adjustments.

Previous wording

FFO for the six months ended June 30, 2025 increased from the corresponding period in the prior year primarily due to (i) an increase in loan interest and other income, (ii) an improvement in operating margins (including the impact of the lease extension at a commercial property) at consolidated and unconsolidated properties , (iii) an increase in insurance recoveries and (iv) a decrease in expense related to equity awards. This increase was offset by (i) an increase in interest expense and (ii) an increase in income tax expense.

Current wording

FFO for the nine months ended September 30, 2025 increased from the corresponding period in the prior year primarily due to (i) an improvement in operating margins at our consolidated and unconsolidated properties, (ii) an increase in loan interest and other income, (iii) a decrease in general and administrative expense related to the net impact of activity associated with equity awards, and (iv) an increase in insurance proceeds from a casualty event. This increase was offset by (i) an increase in interest expense, (ii) an increase in income tax expense, and (iii) a decrease in straight line rent adjustments related to concessions recognized as a component of rental revenue.

Previous wording

AFFO for the six months ended June 30, 2025 increased from the corresponding period in the prior year due to the factors contributing to the change in FFO, other than the changes in straight line rent adjustments and the expense related to equity awards.

Current wording

AFFO for the nine months ended September 30, 2025 increased from the corresponding period in the prior year due to the factors contributing to the change in FFO, other than the changes in straight line rent adjustments and the expense related to equity awards.

Previous wording

For the six months ended June 30, 2025, NOI increased from the corresponding period in 2024 primarily to a $272,000 increase in rental revenue offset by a $242,000 increase in real estate operating expenses. See "Results of Operations - Six months Ended June 30, 2025 compared to the Six Months ended June 30, 2024" for a discussion of these changes.

Current wording

For the three months ended September 30, 2025, NOI decreased from the corresponding period in 2024 primarily due to (i) a $155,000 increase in real estate operating expenses; and (ii) a $146,000 decrease in rental revenue (including the effects of straight-line rent adjustments related to lease concessions). See"Results of Operations - Three Months Ended September 30, 2025 Compared to the Three Months ended September 30, 2024" for a discussion of these changes.

Previous wording

For the three months ended June 30, 2025, NOI decreased from the corresponding period in 2024 primarily due to a $271,000 increase in real estate operating expenses. See"Results of Operations - Three Months Ended June 30, 2025 Compared to the Three Months ended June 30, 2024" for a discussion of these changes.

Current wording

For the nine months ended September 30, 2025, NOI decreased from the corresponding period in 2024 primarily due to a $381,000 increase in real estate operating expenses. See "Results of Operations - Nine months Ended September 30, 2025 compared to the Nine Months ended September 30, 2024" for a discussion of these changes.