BRT Apartments Corp.

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NOTE 1—ORGANIZATION, BACKGROUND AND SIGNIFICANT ACCOUNTING POLICIES

Organization and Background

BRT Apartments Corp. (“BRT” or the “Company”) owns, operates and, to a lesser extent, develops multi-family properties. These multi-family properties may be wholly-owned by us or by unconsolidated joint ventures in which the Company contributes a significant portion of the equity. At December 31, 2025, BRT: (i) wholly-owns 21 multi-family properties located ineleven states with an aggregate of 5,420 units and a carrying value of $595,245,000; (ii) has ownership interests, through unconsolidated entities, inten multi-family properties located infour states with an aggregate of 2,891 units, and the carrying value of its net equity investment is $46,121,000; (iii) have investments in joint ventures that owntwo multi-family properties which investments are treated for financial statement reporting purposes as loans (the "Preferred Equity Investments"), with a carrying value of $17,723,000, and (iv) owns other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $1,569,000. The Company's 31 multi-family properties are located primarily in the Southeast United States and Texas.

BRT conducts its operations to qualify as a real estate investment trust, or REIT, for Federal income tax purposes.

Most of the Company's assets are comprised of multi-family real estate assets generally leased to tenants on a one-year basis. Therefore, the Company aggregates real estate assets for reporting purposes and operates inone reportable segment.

Principles of Consolidation

The consolidated financial statements include the accounts and operations of the Company and its wholly-owned subsidiaries.

The joint venture that owns a commercial property in Yonkers, NY was determined not to be a variable interest entity ("VIE") but is consolidated because the Company has controlling rights in such entity.

Other than the preferred equity investments (described in the following paragraph), the Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting. For each joint venture, the Company evaluated the rights provided to each party and whether those rights are protective or participating, in order to assess the consolidation of the venture. Additionally, the Company evaluated the purpose and design of each entity over the duration of its expected life and determined which activities most significantly impacted the joint venture's economic performance, as well as which party has the rights to direct those activities. All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these joint ventures are VIEs. Additionally, the Company does not exercise substantial operating control over these entities, and therefore the entities are not consolidated. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for their share of equity in earnings, cash contributions and distributions. The distributions to each joint venture partner are determined pursuant to the applicable operating agreement and may not bepro-rata to the percentage equity interest each partner has in the applicable venture.

The joint ventures in which we have the preferred equity investments were determined to be VIE's, as it has been determined that the equity holders lack the ability to direct the activities of the legal entity that most significantly impact the entity's economic performance. It was determined that the Company is not the primary beneficiary as the Company does not have the power to direct the activities of the VIE that most significantly impact the VIE's performance, and therefore these entities are not consolidated.

The Company qualifies as a real estate investment trust under sections 856-860 of the Internal Revenue Code of 1986, as amended. The board of directors may, at its option, elect to revoke or terminate the Company's election to qualify as a real estate investment trust.

The Company will not be subject to federal, and generally state and local taxes on amounts it distributes to stockholders, provided it distributes 90% of its ordinary taxable income and meets other conditions.

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In accordance with Accounting Standards Codification ("ASC") Topic 740 - "Income Taxes", the Company believes that it has appropriate support for the income tax positions taken and, as such, does not have any uncertain tax positions that, if

successfully challenged, could result in a material impact on the Company's financial position or results of operations. The Company's income tax returns for the tax years 2022 through 2024 are subject to review by the Internal Revenue Service.

Revenue Recognition

Rental revenue from multi-family properties is recorded when due from residents and is recognized monthly as it is earned. Rental payments are due in advance. Lease concessions are generally reported on a straight line basis over the lease term. Leases on residential properties are generally for terms that do not exceedone year.

Rental revenue from commercial properties, including the base rent that each tenant is required to pay in accordance with the terms of their respective leases, net of any rent concessions and lease incentives, is reported on a straight-line basis over the non-cancellable term of the lease.

Current Returns (as defined in Note 5 - Loans) from our preferred equity investments are recorded as interest income when it is earned from the sponsor of the joint venture and Hurdle Returns (as defined in Note 5 - Loans) are recorded as interest income when it is probable that it will be received. Deferred loan fees are capitalized and recorded into income over the life of the investment.

Real Estate Properties

Real estate properties are stated at cost, net of accumulated depreciation, and include properties acquired through acquisition or development.

When the Company purchases real estate assets from third-parties, the Company allocates the purchase price of real estate, including direct transaction costs applicable to an asset acquisition, among land, building, improvements and intangibles (e.g., the value of above, below and at market leases, and origination costs associated with in-place leases and above or below-market mortgages assumed at the acquisition date). The value, as determined, is allocated to the gross assets acquired based on management’s determination of the relative fair values of these assets and liabilities.

Depreciation for multi-family properties is computed on a straight-line basis over an estimated useful life of 30 years. Intangible assets (and liabilities) are amortized over the remaining life of the related leases at the time of acquisition and are usually less than one year. Expenditures for maintenance and repairs are charged to operations as incurred.

Real estate is classified as held for sale when management has determined that the applicable criteria have been met. Real estate assets that are expected to be disposed of are valued at the lower of their carrying amount or their fair value less costs to sell on an individual asset basis. Real estate classified as held for sale is not depreciated.

The Company accounts for the sale of real estate when title passes to the buyer, sufficient equity payments have been received, there is no continuing involvement by the Company and there is reasonable assurance that the remaining receivable, if any, will be collected.

Real Estate Asset Impairments

The Company reviews each real estate asset owned quarterly to determine if there are indicators of impairment. If such indicators are present, the Company determines whether the carrying amount of the asset can be recovered. Recognition of impairment is required if the undiscounted cash flows estimated to be generated by the asset are less than the asset's carrying amount and that carrying amount exceeds the estimated fair value of the asset. The impairment recognized is the difference between the carrying value and the fair value. The estimated fair value is determined using a discounted cash flow model of the expected future cash flows through the useful life of the property. The analysis includes an estimate of the future cash flows that are expected to result from the real estate investment’s use and eventual disposition. These cash flows consider factors such as expected future operating income, trends, the effects of leasing demands, and other factors. In evaluating a property for impairment, various factors are considered, including estimated current and expected operating cash flow from the property during the projected holding period, costs necessary to extend the life or improve the asset, expected capitalization rates,

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projected stabilized net operating income, selling costs, and the ability to hold and dispose of such real estate in the ordinary course of business. Valuation adjustments may be necessary in the event that effective interest rates, rent-up periods, future economic conditions, and other relevant factors vary significantly from those assumed in valuing the property. If future evaluations result in a decrease in the value of the property below its carrying value, the reduction will be recognized as an impairment charge. The fair values related to the impaired real estate assets are considered to be a level 3 valuation within the fair value hierarchy because they are based on unobservable inputs and are subjective in nature.

For investment in real estate ventures, if indicators of impairment are present, the Company determines if the fair value of the investment is less than its carrying value. Fair value is determined using a discounted cash flow model of the expected future cash flows through the useful life of the asset. The fair values related to the impaired investments in real estate ventures are considered to be a level 3 valuation within the fair value hierarchy.

Loan receivables

Loan receivables represent preferred equity investments that were funded by the Company with the intent and ability to hold to maturity or payoff. At the inception of each investment, we determine whether such investment should be accounted for as a loan, equity interest or real estate. We have determined that all such investments are properly accounted for and reported as loans. Loans receivable are held for investment and may be subordinate to other senior loans. Loans receivable are reported at their unpaid principal balance, net of any deferred loan costs, and allowance for current expected credit losses (“CECL”). Unamortized premiums, discounts or deferred loans costs are deferred and amortized over the estimated life of the loan using the effective interest method and recognized in "Loan interest and other income" in the Company’s Consolidated Statement of Operations. The Company monitors the credit quality of its loans receivable on an ongoing basis and considers indicators of credit quality such as loan payment activity, the estimated fair value of the related property, the seniority of the Company’s loan in relation to other debt and the prospects of the borrower. Given the small number of loans outstanding, the Company believes the characteristics of these receivables are not sufficiently similar to allow an evaluation as a group for CECL allowance. As such, all of the Company’s loans are evaluated individually for this purpose. The Company evaluates the collectability of both principal and interest based upon an assessment of the underlying value of the investment to determine whether these receivables are impaired.

In accordance with accounting guidance, the Company is treating its preferred equity investments as loans. Despite participating in the expected residual profit, each borrower(i.e., the sponsor/owner of the multi-family property in which the Company made a preferred equity investment) has a cash equity investment substantial to the project that is not funded by the mortgage lender. As such, these arrangements are accounted for as loan receivables.

Allowance for Credit Losses on Loan Receivables

The CECL reserve required under ASU 2016-13 “Financial Instruments – Credit Losses – Measurement of Credit Losses on Financial Instruments (Topic 326)” (“ASU 2016-13”), reflects the Company's estimate as of the balance sheet date of potential credit losses related to its loan portfolio. Changes to the CECL reserve are recognized through a provision for or reversal of current expected credit loss reserve on the Company's consolidated statements of operations. ASU 2016-13 specifies the reserve should be based on relevant information about past events, including historical loss experience, current loan portfolio, market conditions and reasonable and supportable macroeconomic forecasts for the duration of each loan. The Company has elected to apply the practical expedient to exclude accrued interest receivable from the amortized cost basis of the receivables.

The Company considers key credit quality indicators in underwriting loans and estimating credit losses, including: the capitalization of borrowers and sponsors; the expertise of the sponsors in a particular real estate sector and geographic market; collateral type; geographic region; use and occupancy of the property; property market value; loan amount and lien position; industry risk rating for the same and similar loans; and prior experience with the sponsor. Such analyses are completed and reviewed by asset management personnel and evaluated by senior management on at least a quarterly basis, utilizing various

data sources, including, to the extent available, (i) periodic financial data such as property occupancy, rental rates, capitalization and discount rates, (ii) site inspections, (iii) sales and financing comparables, (iv) current credit spreads for refinancing and (v)

other relevant market data. Ultimate repayment of these loan receivables is sensitive to interest rate changes, general economic conditions, liquidity, existence of an active sales market for properties, and availability of replacement financing.

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Adjustments to the allowance are recorded on the Company's Consolidated Statements of Operations as "Provision for credit loss". If the Company has determined that a loan or a portion of the loan is uncollectable, it will write off the uncollectable portion of the loan through an adjustment to its CECL allowance based on the net present value of expected future cash flows. Write-offs are recorded in the period in which the loan balance is deemed uncollectible based on management’s judgment.

Equity Based Compensation

Compensation expense for grants of restricted stock, restricted stock units ("RSUs") and dividend equivalent rights are amortized over the vesting period of such awards, based upon the estimated fair value of such award at the grant date. The Company recognizes the effect of forfeitures when they occur and previously recognized compensation expense is reversed in the period the grant or unit is forfeited. The deferred compensation related to the performance based RSUs to be recognized as expense is net of certain performance assumptions which are re-evaluated quarterly. For accounting purposes, the shares of restricted stock and the RSUs are not included in the outstanding shares shown on the consolidated balance sheets until they vest; however, the restricted stock is included in the calculation of basic and diluted earnings per share as it participates in the earnings of the Company.

Per Share Data

Basic earnings (loss) per share is determined by dividing net income (loss) applicable to holders of common stock for the applicable year by the weighted average number of shares of common stock outstanding during such year. Net income is also allocated to the unvested restricted stock outstanding during each period, as the restricted stock is entitled to receive dividends and is therefore considered a participating security. The RSUs are excluded from the basic earnings per share calculation, as they are not participating securities.

Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue shares of common stock were exercised or converted into shares of common stock or resulted in the issuance of shares of common stock that share in the earnings of the Company. Diluted earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock deemed to be outstanding during such period.

In calculating diluted earnings per share, the Company includes only those shares underlying the RSUs that it anticipates will vest based on management's estimates which are evaluated quarterly. The Company excludes any shares underlying the RSUs from such calculation if their effect would have been anti-dilutive.

Cash Equivalents

Cash equivalents consist of highly liquid investments; primarily, direct United States treasury obligations with maturities of three months or less when purchased.

Restricted Cash

Restricted cash consists of cash held for construction costs and property improvements for specific joint venture properties as may be required by contractual arrangements.

Segment Reporting

On January 1, 2024, the Company adopted the FASB ASU No. 2023-07, Segment Reporting – Improvements to Reportable Segments Disclosures, as amended, which enhances disclosures of significant segment expenses regularly provided to the chief operating decision maker.

Substantially all of the Company’s real estate assets, at acquisition, are comprised of real estate owned that is leased to tenants on a short-term basis. Therefore, the Company aggregates real estate assets for reporting purposes and operates inone reportable segment.

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The Company’s Chief Operating Decision Maker (“CODM”) is its Chief Executive Officer. As the Company operates inone reportable segment, the CODM is provided financial reports which include (i) a consolidated income statements (detailing total revenues, operating income and net income) and (ii) Funds from Operations (“FFO”) and Adjusted Funds from Operations (“AFFO”). These financial reports assist the CODM in assessing the Company’s financial performance and in allocating resources appropriately.

Other Assets

Other assets consist of real estate tax, insurance and replacement escrows (all of the foregoing classified as restricted cash within the consolidated statement of cash flows), lease intangibles, tenant receivables, prepaid expenses and other receivables.

Deferred Costs

Fees and costs incurred in connection with multi-family property financings are deferred and amortized over the term of the related debt obligations. Fees and costs paid related to the successful negotiation of commercial leases are deferred and amortized on a straight-line basis over the terms of the respective leases and are included in other assets on the consolidated balance sheets.

Use of Estimates

The preparation of the financial statements 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 consolidated financial statements and accompanying notes. Actual results could differ from those estimates.

Stock Based Compensation

The fair value of restricted stock grants and restricted stock units (“RSUs”), determined as of the date of grant, is amortized into general and administrative expense over the respective vesting period. The deferred compensation to be recognized as expense is net of forfeitures. The Company recognizes the effect of forfeitures when they occur and previously recognized compensation expense is reversed in the period the grant or unit is forfeited. For share-based awards with a performance or market measure, the Company recognizes compensation expense over the requisite service period and the performance assumptions are re-evaluated quarterly. The requisite service period begins on the date the Compensation Committee of the Company’s Board of Directors authorizes the award, adopts any relevant performance measures and communicates the award to the recipient.

Concentration of Credit Risk

The Company maintains cash accounts at various financial institutions. While the Company attempts to limit any financial exposure, some of its deposit balances exceed federally insured limits. The Company has not experienced any losses on such accounts.

The Company’s properties are located in 11 states. Properties in each of Tennessee, Mississippi, Alabama, Georgia and Florida, contributed more than 10% to the Company’s total revenues.

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NOTE 2—REAL ESTATE PROPERTIES

Real estate properties consist of the following (dollars in thousands):

A summary of activity in real estate properties, net, for the year ended December 31, 2025 follows (dollars in thousands):

The following summarizes, by state, information for the year ended December 31, 2025 regarding consolidated properties (dollars in thousands):

(a) Represents non-multi-family revenues.

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NOTE 2—REAL ESTATE PROPERTIES (continued)

Future minimum rent to be received pursuant to non-cancellable operating leases with terms in excess of one year, from a commercial property owned by the Company at December 31, 2025, are as follows (dollars in thousands):

Leases at the Company's multi-family properties are generally for a term ofone year or less and are not reflected in this table.

NOTE 3—DISPOSITIONS

Property Dispositions

During the year ended December 31, 2025, the Company sold a cooperative apartment unit located in New York, NY for a sales price of $995,000 and, after closing costs, recognized a gain of $755,000 on the sale.

During the year ended December 31, 2024, the Company sold a cooperative apartment unit located in New York, NY for a sales price of $1,050,000 and, after closing costs, recognized a gain of $806,000 on the sale.

NOTE 4—RESTRICTED CASH

Restricted cash represents funds held for specific purposes and are therefore not available for general corporate purposes. The restricted cash reflected on the consolidated balance sheets represents funds that are held by the Company specifically for capital improvements at certain multi-family properties owned by unconsolidated joint ventures and at properties where we have a preferred equity investment; such funds are not generally available for general corporate purposes.

NOTE 5—LOANS

The Company made preferred equity investments intwo separate joint ventures which in turn acquired multi-family properties in the locations identified below. In accordance with GAAP, these investments are treated as loans. These investments are unsecured and are subordinate, including the payment of the returns thereon, to the mortgage debt encumbering the property acquired by the applicable joint venture. Information as to these investments at December 31, 2025 is summarized below (dollars in thousands):

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NOTE 5—LOANS (continued)

These investments provide for (1) an Annual Return ( as set forth in the table above) to the Company, of which the Current Return (as set forth in the table above) is payable monthly to the extent of remaining cash flow, if any, pari passu or after the sponsor's receipt of its management fees and specified returns on its investment and (2) the total amount invested by the Company, including any unpaid portion of the Current Return and the Hurdle Return, to be payable to the Company, prior to any payments to the sponsor, upon the earlier to occur of certain events (e.g., sale of the property or the refinancing of the mortgage underlying the property) and the redemption date specified above. The Current Return is recorded as interest income when it is due from the sponsor and the Hurdle Return is recognized as interest income when it is probable it will received. The Company's exposure to loss is limited to its original Invested Amount (as set forth in the table above).

The following table provides the net carrying value of our loans as of December 31, 2025 and 2024 (dollars in thousands):

The Company recorded $1,218,000 and$206,000 of interest income (including loan fee amortization of $61,000 and$9,000) related to these loans during the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025, these loans were current in their payment of the Current Return.

NOTE 6—ALLOWANCE FOR CREDIT LOSS

Changes in the Company's allowance for credit loss were as follows (in thousands):

NOTE 7—LEASES

Lessor Accounting

The Company owns a commercial property which is leased totwo tenants under operating leases with current expirations ranging from 2028 to 2035, with options to extend or terminate the leases. Revenues from such leases are reported as rental income, net, and are comprised of (i) lease components, which includes fixed lease payments and (ii) non-lease components, which includes reimbursements of property level operating expenses. The Company does not separate non-lease components from the related lease components as the timing and pattern of transfer are the same, and accounts for the combined component in accordance with ASC 842.

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NOTE 7—LEASES (continued)

Lessee Accounting

The Company is a lessee under a ground lease in Yonkers, NY which is classified as an operating lease. The ground lease is scheduled to expire on June 30, 2045. There are no renewal options. As of December 31, 2025, the remaining lease term is 19.5 years.

The Company is a lessee under a corporate office lease in Great Neck, NY, which is classified as an operating lease. The lease expires on December 31, 2031 and provides afive-year renewal option. As of December 31, 2025, the remaining lease term, including renewal options deemed exercised, is 11.0 years.

As of December 31, 2025, the Company's right-of-use ("ROU") assets and lease liabilities were $1,832,000 and $2,015,000, respectively and as of December 31, 2024, the Company's ROU assets and lease liabilities were $2,003,000 and

$2,167,000, respectively. The ROU assets and lease liabilities are reported on the consolidated balance sheets in Other assets and Accounts payable and accrued liabilities, respectively.

The discount rate applied to measure each ROU asset and lease liability is based on the Company’s incremental borrowing

rate (“IBR”). The Company considers the general economic environment and its historical borrowing rate activity and factors

in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease.

As the Company did not elect to apply the hindsight practical expedient, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842.

As of December 31, 2025, the minimum future lease payments related to the operating ground and office leases are as follows (dollars in thousands):

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NOTE 8—INVESTMENT IN UNCONSOLIDATED VENTURES

At December 31, 2025 and 2024, the Company owned interests in unconsolidated joint ventures (the "Unconsolidated Properties") that owns 10 and 8 multi-family properties (including Stono Oaks that was in lease-up at December 31, 2024), respectively. The condensed balance sheets below presents information regarding such investments (other than the preferred equity investments) (dollars in thousands):

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NOTE 8—INVESTMENT IN UNCONSOLIDATED VENTURES (continued)

At the indicated dates, real estate properties of the unconsolidated joint ventures consist of the following (dollars in thousands):

At December 31, 2025 and December 31, 2024, the weighted average interest rate on the mortgages payable is 4.21% and 4.30%, respectively, and the weighted average remaining term to maturity is 3.3 years and 3.9 years, respectively.

The condensed income statements below presents information regarding the Unconsolidated Properties (dollars in thousands):

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NOTE 8—INVESTMENT IN UNCONSOLIDATED VENTURES (continued)

On July 15, 2025, an unconsolidated joint venture in which the Company has 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 $36,500,000 (including a $24,419,000 mortgage). The mortgage matures in 2032, bears a 5.38% fixed interest rate, and is interest only through maturity. The Company contributed $10,750,000 to the joint venture for its equity interest and working capital purposes. In connection with this transaction, the Company borrowed $7,000,000 from its credit facility. See Note 9 - Debt Obligations.

On September 19, 2025, an unconsolidated joint venture in which the Company has an 80% interest, acquired Oaks at Victory, a 150 unit multi-family property located in Savannah, GA (the "Savannah Acquisition"). The venture acquired the property for $23,000,000 (including a $15,680,000 mortgage assumed as part of the transaction). The mortgage matures in 2031, bears a 2.71% fixed interest rate, and is interest only through September 30, 2027. The Company contributed $8,380,000 to the joint venture for its equity interest and working capital. In connection with this transaction, the Company borrowed $8,000,000 from its credit facility. See Note 9 - Debt Obligations.

NOTE 9—DEBT OBLIGATIONS

Debt obligations consist of the following (dollars in thousands):

(1) Draws associated with the acquisition of investments in unconsolidated ventures outlined in note 8 were repaid in full during 2025.

(2) Excludes $236 and $374 at December 31, 2025 and 2024, respectively, of deferred fees related to our credit facility which are reflected in Other Assets.

Mortgage Debt

A summary of activity in mortgage debt, net of deferred loan fees, for the year ended December 31, 2025 is as follows (dollars in thousands):

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NOTE 9—DEBT OBLIGATIONS (continued)

At December 31, 2025, $475,697,000 of mortgage debt, all of which is fixed rate, with a weighted average interest rate of 4.22% and a weighted average remaining term to maturity of 6.4 years, is outstanding on 19 of the Company's multi-family properties. Scheduled principal repayments for the periods indicated are as follows (dollars in thousands):

The unamortized balance of acquisition related mortgage intangibles, which is included in mortgages payable in the consolidated balance sheet, was $304 at December 31, 2025 and will be amortized as follows (dollars in thousands):

The following table summarizes mortgage debt obtained in the years ended December 31, 2025 and December 31, 2024 (dollars in thousands):

(1) All mortgages are interest only for the full term with the exception of Woodland Trails which is interest only forfive years.

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NOTE 9—DEBT OBLIGATIONS (continued)

Interest expense relating to mortgages for the years ended December 31, 2025 and 2024, which includes amortization of deferred loans fees and fair value adjustments, was $20,426,000 and $19,372,000 respectively.

Credit Facility

On July 9, 2024, the Company's credit facility, with an affiliate of Valley National Bank ("VNB"), was amended to, among other things, reduce the borrowing capacity from $60,000,000 to $40,000,000, extend the facility's maturity from September 2025 to September 2027 and revise certain financial and other covenants. The facility allows the Company to borrow, subject to compliance with borrowing base requirements and other conditions, up to $40,000,000. The facility can be used to facilitate the acquisition of multi-family properties, repay mortgage debt secured by multi-family properties and for operating expense (i.e., working capital (including dividend payments)); provided that no more than $25,000,000 may be used for operating expenses. The facility is secured by the cash available at VNB and the Company's pledge of the interests in the entities that own the properties, and matures in September 2027.

The interest rate on the credit facility, which adjusts monthly and is subject to a floor of 6.00%, equals one-month term SOFR plus 250 basis points. The interest rate in effect as of December 31, 2025 and February 27, 2026 was 6.37% and 6.18%, respectively. There is an unused facility fee of 0.25% per annum on the total amount committed by VNB and unused by the Company.

On July 9, 2025, in connection with the acquisition of 1322 North, the Company borrowed $7,000,000 from its credit facility. On September 19, 2025, in connection with the acquisition of Oaks at Victory, the Company borrowed $8,000,000. On September 30, 2025, in connection with supplementing working capital reserves, the Company borrowed $2,500,000. On December 17, 2025, the outstanding balance of $17,500,000 was repaid in full.

At December 31, 2025, and February 27, 2026, there wasno outstanding balance on the facility and $40,000,000 was available to be borrowed. At December 31, 2024, there wasno outstanding balance of on the facility. The average balance outstanding on the facility for 2025 and 2024 was $5,595,000 and $2,811,000, respectively. Interest expense for the years ended December 31, 2025 and 2024, which includes amortization of deferred financing costs and unused fees, was $601,000 and $365,000, respectively. Deferred costs of $236,000 and $374,000 are recorded in Other Assets on the consolidated balance sheets at December 31, 2025 and 2024, respectively.

Junior Subordinated Notes

At December 31, 2025 and 2024, the outstanding principal balance of the Company's junior subordinated notes was $37,400,000, before deferred financing costs of $217,000 and $237,000, respectively. The interest rate on the outstanding balance resets quarterly and is based on three month term SOFR +2.26%. The rate in effect at December 31, 2025 and 2024 was 6.10% and 6.85%, respectively. The notes mature April 30, 2036.

The notes require interest only payments through the maturity date, at which time repayment of all outstanding principal and unpaid interest is due. Interest expense for the years ended December 31, 2025 and 2024, which includes amortization of deferred costs, was $2,484,000 and $2,859,000, respectively.

NOTE 10—INCOME TAXES

The Company elected to be taxed as a REIT pursuant to the Code. As a REIT, the Company is generally not subject to Federal income taxes at the corporate level if it distributes 100% of its REIT taxable income, as defined, to its stockholders. To maintain its REIT status, the Company must distribute at least 90% of its ordinary taxable income; however, if it does not distribute 100% of its taxable income, it will be taxed on undistributed income. There are a number of organizational and operational requirements the Company must meet to remain a REIT. If the Company fails to qualify as a REIT in any taxable year, its taxable income will be subject to Federal income tax at regular corporate tax rates and it may not be able to qualify as a REIT for four subsequent tax years. Even if it is qualified as a REIT, the Company is subject to certain state and local income taxes and to Federal income and excise taxes on undistributed taxable income. For income tax purposes, the Company reports on a calendar year basis. As of December 31, 2025, tax returns for the calendar years 2022 through 2024 remain subject to examination by the Internal Revenue Service and various state and local tax jurisdictions.

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NOTE 10—INCOME TAXES (continued)

During the years ended December 31, 2025 and 2024, the Company recorded $174,000 and $(226,000), respectively, of state franchise tax (benefit) expense, net of refunds, relating to the 2025 and 2024 calendar years.

Earnings and profits, which determine the taxability of dividends to stockholders, differs from net income reported for financial statement purposes due to various items, including timing differences related to impairment charges, depreciation methods and carrying values.

NOTE 11—STOCKHOLDERS' EQUITY

Common Stock Dividend Distribution

During each of the years ended December 31, 2025 and 2024, the Company declared an aggregate of $1.00 per share in cash dividends.

Stock Based Compensation

In 2024, the Company's stockholders approved the 2024 Incentive Plan (the "2024 Plan"). This plan permits the Company to grant: (i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, for up to a maximum of 1,000,000 shares; and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards. As of December 31, 2025, (i)449,346 shares are available for issuance pursuant to awards under the 2024 Plan and (ii) awards with respect to 922,428 shares of common stock are outstanding under the 2024 Plan, the 2022 Incentive Plan (the "2022 Plan"), the 2020 Amended and Restated Incentive Plan (the "2020 Plan"), and the 2018 Amended and Restated Incentive Plan (the "2018 Plan; and together with the 2020 Plan and the 2022 Plan, the "Prior Plans"). No further awards may be granted pursuant to the Prior Plans.

The table below reflects activity under the 2024 Plan and the Prior Plans:

(1) Excludes 148,673 restricted shares issued in January 2026.

Restricted Stock

In January 2025 and January 2024, the Company granted shares of restricted stock pursuant to the 2024 Plan and 2022 Plan, respectively. The shares of restricted stock generally vest five years from the date of grant and under specified circumstances, including a change in control, may vest earlier. For financial statement purposes, the restricted stock is not included in the outstanding shares shown on the consolidated balance sheets until they vest, but are included in the basic and diluted earnings per share computation. The weighted average remaining vesting period of the outstanding restricted stock granted pursuant to the 2024 Plan and the Prior Plans is 1.81 years. Subsequent to December 31, 2025, the Company granted 148,673 shares of restricted stock pursuant to the 2024 Plan.

The tables below presents information regarding the changes in the number of shares of restricted stock outstanding under the Company's equity incentive plans, compensation expense and unearned compensation for the periods indicated (dollars in thousands):

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Restricted Stock Units

In July 2025 and June 2024, the Company, pursuant to the 2024 Plan, issued restricted stock units (the "RSUs") to acquire shares of common stock. The RSUs granted entitle the recipients, subject to continued service during the applicable performance period, to (i) shares of common stock, (the "TSR Award"), based on achieving, during thethree-year performance period (the "Measurement Period"), specified levels in compounded annual growth rate ("CAGR") in total stockholder return (“TSR”), and (ii) shares of common stock based on achieving, during the Measurement Period, specified levels in CAGR in adjusted funds from operations (the "AFFO Award"), in each case as determined pursuant to the award agreement. In addition, with respect to each of the TSR Awards granted in 2025 and 2024, additional shares (the "Peer Group Adjustment") may be added to or subtracted from such award based on attaining or failing to attain, as the case may be, during the Measurement Period, of specified levels of CAGR in TSR in comparison to the REITs that comprise, with specified exceptions, the FTSE NAREIT Equity Apartment Index.

The RSU recipients also received dividend equivalent rights entitling them to an amount equal to cash dividends they would have received with respect to the shares of common stock underlying their RSUs as if the underlying shares were outstanding during the Measurement Period, if, when, and to the extent, the related RSUs vest. The shares underlying the RSUs are not participating securities but are contingently issuable shares.

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The tables below presents activity and changes in the number of RSUs under the Company's equity incentive plans, compensation expense and unearned compensation for the periods indicated (dollars in thousands):

For the TSR Awards, a third party appraiser prepared a Monte Carlo simulation pricing model to assist management in determining fair value. The Monte Carlo valuation consisted of computing the grant date fair value of the awards using the Company's simulated stock price. For these TSR awards, the per unit of share fair value was estimated using the following assumptions:

For the AFFO Awards granted, fair value is based on the market value on the date of grant. Expense is not recognized on RSUs which the Company does not expect to vest because the performance conditions are not expected to be satisfied. Performance assumptions are re-evaluated quarterly. The total amount recorded at the grant date as deferred compensation with respect to the AFFO Awards granted in 2025 and 2024 was $749,000 and $1,132,000 respectively.

The following table reflects the compensation expense recorded for all equity incentive plans (dollars in thousands):

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Earnings Per Share

The following table sets forth the computation of basic and diluted earnings per share (dollars in thousands):

Equity Distribution Agreements

The Company has equity distribution agreements with three sales agents to sell up to $40,000,000 of shares of its common stock from time-to-time in an at-the-market offering. During the years ended December 31, 2025 and 2024, the Company didnot sell any shares. At December 31, 2025, the Company is authorized to sell an aggregate of $40,000,000 of shares pursuant to these agreements.

Share Repurchase

Pursuant to the Company’s repurchase program(s), as amended from time to time, the Company is authorized to repurchase shares of its common stock through open-market transactions, privately negotiated transactions, or otherwise.

During the year ended December 31, 2025, the Company purchased 321,060 shares of common stock for total consideration of approximately $4,987,000, net of commissions of $19,000. During the year ended December 31, 2024, the Company repurchased 193,529 shares of common stock for total consideration of approximately $3,495,000, net of commissions of $12,000.

Subsequent to December 31, 2025, the Company repurchased 75,155 shares of common stock at an average price per share of $14.82 for an aggregate cost of $1,114,000. At February 27, 2026, the Company is authorized to repurchase up to $5,037,000 of shares of common stock through December 31, 2028. On March 11, 2026, the Board of Directors authorized the increase of up to $10,000,000 of shares that may be repurchased pursuant to the repurchase plan and extended such plan through December 31, 2028.

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Dividend Reinvestment Plan

The Dividend Reinvestment Plan (the “DRP”), which was reauthorized in 2024, among other things, provides stockholders with the opportunity to reinvest all or a portion of their cash dividends paid on the Company’s common stock in additional shares of its common stock, at a discount, determined in the Company’s sole discretion, of up to 5% from the market price for the common stock (as such price is calculated pursuant to the DRP). The discount from the market price as of December 31, 2025 and 2024 was 3%. In the year ended December 31, 2025 and 2024, the Company issued 214,224 and 211,135 shares in lieu of cash dividends of $3,428,000 and $3,626,000, respectively.

NOTE 12—RELATED PARTY TRANSACTIONS

The Company has retained certain of its part-time executive officers and Fredric H. Gould, a director, to provide, among other things, the following services: participating in the Company's multi-family property analysis and approval process (which includes service on an investment committee), providing investment advice, and long-term planning and consulting with executives and employees with respect to other business matters, as required. The aggregate fees paid in 2025 and 2024 for these services were $1,699,000 and $1,618,000, respectively.

Management of certain properties owned by the Company and certain joint venture properties is provided by Majestic Property Management LLC ("Majestic Property"), a company which is indirectly owned by, among others, Jeffrey A. Gould, a director and Chief Executive Officer and President of the Company, and Matthew J. Gould, a director and Senior Vice President of the Company. Certain of the Company's officers and directors are also officers and directors of Majestic Property. Majestic Property provides real property management, real estate brokerage and construction supervision services for these (and other) properties. For the years ended December 31, 2025 and 2024, fees for these services were $36,000 and $37,000, respectively.

Pursuant to a shared services agreement between the Company and several affiliated entities, including Gould Investors L.P. ("Gould Investors"), the owner and operator of a diversified portfolio of real estate and other assets, and One Liberty Properties, Inc., a NYSE listed equity REIT ("One Liberty"), the (i) services of the part time personnel that perform certain executive, administrative, legal, accounting and clerical functions and (ii) certain facilities and other resources, are provided to the Company. The allocation of expenses for the facilities, personnel and other resources shared by, among others, the Company and Gould Investors, is computed in accordance with such agreement and is included in general and administrative expense on the Consolidated Statements of Operations. During the years ended December 31, 2025 and 2024, allocated general and administrative expenses reimbursed by the Company to Gould Investors pursuant to the shared services agreement aggregated $750,000 and $698,000, respectively. As of December 31, 2025 and 2024, $202,000 and $130,000, respectively, remains unpaid and is included in accounts payable and accrued liabilities on the consolidated balance sheets. At December 31, 2025, Gould Investors owned approximately 21.6% of BRT’s outstanding common stock. Certain of the Company's officers and directors are also officers and directors of One Liberty and Georgetown Partners, LLC, the managing general partner of Gould Investors.

The Company obtains certain insurance in conjunction with Gould Investors and reimburses Gould Investors for the Company's share of the insurance cost. Insurance reimbursements to Gould Investors for the years ended December 31, 2025 and 2024 were $30,000 and $28,000, respectively.

NOTE 13—FAIR VALUE OF FINANCIAL INSTRUMENTS

The Company estimates the fair value of financial assets and liabilities based on the framework established in fair value accounting guidance. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (an exit price). The hierarchy described below prioritizes inputs to the valuation techniques used in measuring the fair value of assets and liabilities. This hierarchy maximizes the use of observable inputs and minimizes the use of unobservable inputs by requiring the most observable inputs to be used when available. The hierarchy is broken down into three levels based on the reliability of inputs as follows:

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NOTE 13—FAIR VALUE OF FINANCIAL INSTRUMENTS (continued)

•Level 1 – inputs to the valuation methodology are quoted prices (unadjusted) for identical assets and liabilities in active markets

•Level 2— inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the asset or liability, either directly or indirectly, for substantially the full term of the financial instrument.

•Level 3— inputs to the valuation methodology are unobservable and significant to fair value.

The following methods and assumptions were used to estimate the fair value of each class of financial instruments that are not reported at fair value on the consolidated balance sheets:

Cash and cash equivalents, restricted cash, accounts receivable (included in other assets), accounts payable and accrued liabilities: The carrying amounts reported on the balance sheets for these instruments approximate their fair value due to the short term nature of these accounts.

Loan Receivables: At December 31, 2025, the estimated fair value of the Company's loan receivables is greater than their carrying value by approximately $193,000, based on market interest rates ranging from 5.87% to 6.06%. At December 31, 2024, the estimated fair value of the Company's loan receivables, equaled their carrying value due to their recent origination. The Company values its loan receivables using a discounted cash flow analysis of the expected cash flow of each instrument. Market interest rates were determined using current financing transaction information provided by third party institutions.

Junior subordinated notes: At December 31, 2025, and 2024, the estimated fair value of the Company's junior subordinated notes is less than their carrying value by approximately $3,897,000 and $3,578,000, respectively, based on market interest rates of 7.60% and 7.94%, respectively.

Mortgages payable: At December 31, 2025, the estimated fair value of the Company's mortgages payable is less than their carrying value by approximately $21,107,000, assuming market interest rates between 4.79% and 5.44%. At December 31, 2024, the estimated fair value was less than the carrying value by $39,277,000, assuming market interest rates between 5.38% and 6.61%. Market interest rates were determined using current financing transaction information provided by third party institutions.

Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value assumptions. The fair values of debt obligations are considered to be Level 2 valuations within the fair value hierarchy.

Financial Instruments Measured at Fair Value

The Company's fair value measurements are based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, there is a fair value hierarchy that distinguishes between markets participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity's own assumptions about market participant assumptions. Level 1 assets/liabilities are valued based on quoted prices for identical instruments in active markets, Level 2 assets/liabilities are valued based on quoted prices in active markets for similar instruments, on quoted prices in less active or inactive markets, or on other "observable" market inputs and Level 3 assets/liabilities are valued based significantly on "unobservable" market inputs. The Company does not currently own any financial instruments that are classified as Level 3.

At December 31, 2025 and 2024, the Company hadno financial assets or liabilities measured at fair value.

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NOTE 14—COMMITMENT AND CONTINGENCIES

From time to time, the Company and/or its subsidiaries are parties to legal proceedings that arise in the ordinary course of business, and in particular, personal injury claims involving the operations of the Company's properties. Although management believes that the primary and umbrella insurance coverage maintained with respect to such properties is sufficient to cover claims for compensatory damages, many of these personal injury claims also assert claims for exemplary (i.e. punitive) damages. Generally, insurance does not cover claims for punitive or exemplary damages.

The Company maintains a non-contributory defined contribution pension plan covering eligible employees and officers. Contributions by the Company are made through a money purchase plan and the amounts of such contributions are based upon a percent of qualified employees' total salary as defined therein. Pension expense approximated $464,000 and $515,000 during the years ended December 31, 2025 and 2024, respectively. At December 31, 2025 and 2024, $35,000 and $120,000, respectively, remains unpaid and is included in accounts payable and accrued liabilities on the consolidated balance sheets.

At December 31, 2025, the Company is the carve-out guarantor with respect to mortgage debt in principal amount of $468,079,042 at 19 multi-family properties.

NOTE 15—NEW ACCOUNTING PRONOUNCEMENT

In November 2024, the FASB issued ASU No. 2024–03, Income Statement – Reporting Comprehensive Income – Expense Disaggregation Disclosures (Subtopic 220–40): Disaggregation of Income Statement Expenses, which requires disaggregated disclosure of income statement expenses into specified categories within the footnotes to the financial statements. ASU No. 2024–03 is applicable for fiscal years beginning after December 15, 2026. The Company is in the process of evaluating the new guidance to determine the extent to which it will impact the Company’s consolidated financial statements.

NOTE 16—SUBSEQUENT EVENTS

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of December 31, 2025 that warrant additional disclosure have been included in the notes to the consolidated financial statements.