Bluerock Homes Trust, Inc.
For the period ended Dec 31, 2024. Filed Mar 20, 2025.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2024 · Filed Mar 20, 2025
BHM$7.26+3.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2023-12-31; filed 2024-03-12.
0001410578-24-000183
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2024-12-31; filed 2025-03-20.
0001410578-25-000400
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 144 previous paragraphs and 160 current paragraphs.
67 unchanged; 51 reworded; 40 added; 25 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 78 previous and 82 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (40)
Current report
Investment Activity Summary
Current report
Provided below is a summary of our investment activity during the year ended December 31, 2024.
Current report
Acquisition of Amira at Westly
Current report
On October 31, 2024, we, through BR Amira DST, a Delaware statutory trust and a wholly owned subsidiary of our Operating Partnership (the “Amira DST”), acquired a 408-unit residential community located in Tampa, Florida known as Amira at Westly. The purchase price of $103.0 million was funded with (i) a $56.7 million senior loan secured by Amira at Westly, (ii) borrowings of $36.0 million on a revolving credit facility, and (iii) cash of $14.5 million that we funded, inclusive of certain adjustments typical in such real estate transactions. Amira at Westly is the first property that we acquired through a Delaware statutory trust to be part of a private placement offering through which interests in the Amira DST will be issued to third party accredited investors therein (as further described below).
Current report
Following the acquisition of Amira at Westly, the organizational structure with respect to the ownership of Amira at Westly is such that Amira at Westly is owned by the Amira DST, and the Amira DST is wholly owned by BHM Amira Investment Co, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Operating Partnership (“BHM Amira Investment Co”). BHM Amira Investment Co initially owns all Class 2 DST Interests in the Amira DST, which will be redeemed over time to permit the issuance of Class 1 DST Interests in the Amira DST to third party accredited investors therein as part of a private placement offering. Amira at Westly is subject to a Master Lease Agreement with BHM Amira Leaseco, LLC, a Delaware limited liability company and a wholly owned subsidiary of the Operating Partnership (“BHM Amira Leaseco”), pursuant to which we, through BHM Amira Leaseco, receive and are obligated to pay rent received from Amira at Westly to the Amira DST.
Current report
Acquisition of Residential Communities
Current report
In addition to the acquisition of Amira at Westly presented above, we acquired three operating residential communities as follows: Villas at Huffmeister with 294 units located in Houston, Texas and acquired through a 95% owned joint venture entity, Avenue at Timberlin Park with 200 units located in Jacksonville, Florida and acquired with full ownership interests, and Allure at Southpark with 350 units located in Charlotte, North Carolina and acquired through a 98.05% owned joint venture entity. The aggregate purchase price of these three communities was approximately $167.0 million.
Current report
Preferred Equity and Loan Investment Summary
Current report
We entered into three new joint venture agreements with unaffiliated third parties to develop build-to-rent, single-family residential units. We made commitments to invest capital for preferred equity interests in the three joint ventures as follows: (i) $5.3 million for 82 units located in Bluffton, South Carolina known as Indigo Cove, (ii) $7.0 million for 170 units located in Brunswick, Georgia known as River Ford, and (iii) $14.6 million for 224 units located in Wildwood, Florida known as Canvas at Wildwood. Of our aggregate commitment to invest approximately $26.9 million in the three joint ventures, $9.3 million had been funded as of December 31, 2024.
Current report
In addition, we entered into an agreement with an unaffiliated third party to provide capital in the maximum aggregate amount of $30.1 million, all of which was funded during 2024, for 102 build-to-rent, single-family residential units in Charlotte, North Carolina known as Wayford at Pringle. Our investment in Wayford at Pringle is comprised of the following: (i) a debt security investment in the aggregate amount of $7.8 million, and (ii) a loan investment in the aggregate amount of $22.3 million.
Current report
We held both a loan investment (the “Woods Loan”) and a preferred equity investment with unaffiliated third parties in The Woods at Forest Hill. The Woods Loan was fully paid off in the principal amount of $8.3 million, and our preferred equity investment in the principal amount of $5.6 million was fully redeemed. In addition, our remaining $1.7 million of preferred equity investment in Willow Park, which was redeemed in 2023 and collateralized by The Woods at Forest Hill and other investments held by the operating partnership of Peak Housing REIT (the “Peak REIT OP”), was received in full in 2024. Also, our remaining preferred equity investment in the Peak REIT OP, which was collateralized by single-family residential units collectively known as Peak Housing, in the principal amount of $10.6 million was fully redeemed.
Current report
Sale of Navigator Villas
Current report
Prior to the sale of the property, and to effectuate a tax-deferred exchange under Section 1031 of the Code, we purchased our joint venture partner’s interest in Navigator Villas for $2.9 million, inclusive of estimated post-close adjustments. On August 7, 2024, we closed on the sale of Navigator Villas located in Pasco, Washington for a sale price of $36.4 million, subject to certain prorations and adjustments typical in such real estate transactions. After deductions for the payoff of existing mortgage indebtedness encumbering the property in the amount of $19.5 million, the purchase price of the joint venture partner’s interest, the payment of early extinguishment of debt costs, and closing costs and fees, the sale of Navigator Villas generated net proceeds of approximately $12.7 million and a gain on sale of approximately $10.0 million. We recorded a loss on extinguishment of debt of $0.1 million related to the sale.
Current report
Sale of Consolidated Operating Units
Current report
We closed on the following sales: four units in the ILE portfolio, eleven units in the Indy-Springfield portfolio, twenty-three units in the Peak JV 2 portfolio, and sixty units in the Peak JV 3 portfolio, pursuant to the terms and conditions of multiple separate purchase and sales agreements. The ninety-eight units were sold for an aggregate of approximately $15.3 million, subject to certain closing costs, prorations and adjustments typical in such real estate transactions, and generated net proceeds of approximately $14.4 million and a gain on sales of approximately $1.8 million.
Current report
Series A Redeemable Preferred Stock
Current report
During the year ended December 31, 2024, we issued 4,198,566 shares of 6.0% Series A Redeemable Preferred Stock (the “Series A Preferred Stock”) at $25.00 per share (the “Stated Value”) under a continuous registered offering with net proceeds of approximately $92.9 million after (i) commissions, dealer manager fees and sales discounts of approximately $10.6 million, and (ii) costs related to establishing the offering of Series A Preferred Stock of approximately $1.5 million. As of December 31, 2024, we had issued a total of 4,635,241 shares of Series A Preferred Stock with total net proceeds of approximately $101.1 million after commissions, dealer manager fees, sales discounts and offering costs. During the year ended December 31, 2024, we, at the request of holders, redeemed 6,560 shares of Series A Preferred Stock through the issuance of 9,103 shares of Class A common stock.
Current report
In November 2023, we announced the payment of additional contingent special daily dividends with respect to our Series A Preferred Stock. This dividend was aggregated with the regular monthly dividend so as to effect a dividend rate of two percent over the average 10-Year Daily Treasury Par Yield Curve Rate with a floor of 6% annually, calculated and paid monthly. Commencing in November 2023, the Series A Preferred Stock additional contingent special dividend was declared for each month for which the Board declared the regular monthly dividend of $0.125 per outstanding share of Series A Preferred Stock. In May 2024, we announced the payment of an enhanced special dividend replacing the additional contingent special daily dividend. The enhanced special dividend is aggregated with the regular monthly dividend so as to effect a dividend rate of the average one-month Term SOFR rate plus two percent, subject to a 6.5% minimum and an 8.5% maximum annual rate, calculated and paid monthly. Commencing in May 2024, the Series A Preferred enhanced special dividend was declared for each month for which the Board declared the regular monthly dividend of $0.125 per outstanding share of Series A Preferred Stock.
Current report
Stockholders’ Equity
Current report
Our total stockholders’ equity decreased $8.0 million from $147.4 million as of December 31, 2023 to $139.4 million as of December 31, 2024. The decrease in our total stockholders’ equity is primarily attributable to $2.2 million related to the acquisition of noncontrolling interests, preferred dividends declared of $4.0 million, and an adjustment of $2.3 million for noncontrolling interest ownership in the Operating Partnership, partially offset by net income of $0.4 million.
Current report
Rental and other property revenuesincreased $ 7.6 million, or 18%, to $48.6 million for the year ended December 31, 2024 as compared to $41.0 million for the same prior year period. The increase was primarily due to: (i) the acquisition of 294 units at Villas at Huffmeister during the first quarter 2024, 200 units at Avenue at Timberlin Park during the third quarter 2024, 408 units at Amira at Westly and 350 units at Allure at Southpark during the fourth quarter 2024, and (ii) rental rate improvement from our active management and organic market rent growth. The increase was partially offset by the sale of 176 units at Navigator Villas and 151 single-family units in our portfolio since January 1, 2023. Our average rent per occupied unit increased $69, or 4.4%, to $1,638 as compared to $1,569 during the prior year period. Average occupancy decreased 10 basis points from 91.8% to 91.7% on a year over year basis.
Current report
Property operating expenses increased $ 4.9 million, or 26%, to $24.1 million for the year ended December 31, 2024 as compared to $19.2 million for the same prior year period. The increase was primarily due to: (i) the acquisition of 294 units at Villas at Huffmeister during the first quarter 2024, 200 units at Avenue at Timberlin Park during the third quarter 2024, 408 units at Amira at Westly and 350 units at Allure at Southpark during the fourth quarter 2024, and (ii) an increase in turnover expense subsequent to initial renovation completed on units in previous years. The increase was partially offset by the sale of 176 units at Navigator Villas and 151 single-family units since January 1, 2023.
Current report
General and administrative expenses amounted to $10.6 million for the year ended December 31, 2024 as compared to $8.0 million for the same prior year period. Of the $10.6 million total expense for the year ended December 31, 2024, $6.2 million related to direct costs incurred by us, while the remaining $4.4 million related to the operating expense reimbursement to our Manager, which included rent, utilities, accounting and legal services, and IT expenses. The expense reimbursement to our Manager included an increase of $2.1 million related to accounting and legal services compared to the same prior year period. Prior to the fourth quarter 2023, the Manager elected to not seek reimbursement for legal and accounting services during our first year of operations. Commencing with the operating expense reimbursement for the first quarter 2024, we paid the operating expense reimbursement to the Manager entirely in cash; prior to the first quarter 2024, we paid the full operating expense reimbursement to the Manager through the issuance of C-LTIP Units.
Current report
Management fees to related party amounted to $9.1 million for the year ended December 31, 2024 as compared to $7.9 million for the same prior year period. The increase was due to an increase in equity primarily from our continuous registered offering of Series A Preferred Stock, which began in the third quarter of 2023. For the first three quarters of 2024, we paid the base management fee to the Manager as one half (50%) in C-LTIP Units and the remainder in cash, and for the fourth quarter of 2024, we will pay $0.2 million of the base management fee in C-LTIP Units with the remainder in cash. Prior to the first quarter of 2024, we paid the full base management fee to the Manager through the issuance of C-LTIP Units
Current report
Weather-related losses amounted to $0.2 million for the year ended December 31, 2024 as compared to zero for the same prior year period. The 2024 expense primarily relates to hurricane damage in Texas.
Current report
Depreciation and amortization expenses were $19.9 million for the year ended December 31, 2024 as compared to $16.2 million for the same prior year period, with the increase primarily due to the acquisition of Villas at Huffmeister during the first quarter 2024, Avenue at Timberlin Park during the third quarter 2024, and Amira at Westly and Allure at Southpark during the fourth quarter 2024. The increase was partially offset by the sale of Navigator Villas and single-family units in our portfolio since January 1, 2023.
Current report
In addition, in October 2024, we launched a program to sponsor and raise capital through private placement offerings of Delaware statutory trusts (each, a “DST”) holding residential properties (collectively, the “DST Program”). We expect that the DST Program will give us the opportunity to expand and diversify our capital raise strategies by offering what we believe to be an attractive investment product for investors that may be seeking replacement properties to complete like-kind exchange transactions and create future pipeline acquisition opportunities. In conjunction with the DST Program, our Operating Partnership has issued certain non-interest bearing demand notes in relation to its role as the master tenant (the “Master Tenant”) under certain master leases (the “Master Leases”) related to the DST Program (the “Demand Notes”), which could be called upon if the net operating cash flow is insufficient to pay the rent required under the Master Leases (subject to limited deferral rights) or satisfy its other obligations under the Master Leases. As compensation for the Operating Partnership’s obligations under the Master Leases, we will share in the rent paid by the tenants of the underlying properties in accordance with the waterfall set forth in the applicable Master Lease. As of December 31, 2024, we had one offering in our DST Program and had raised $4.5 million in offering proceeds of the $66.0 million total offering, issued a demand note of $0.7 million, and had $103.4 million in total net real estate investments associated with the DST Program.
Current report
In conjunction with sponsoring of the DST Program, our Operating Partnership is granted an option to acquire DST Interests from the DST Program’s beneficial owners at a later date for an aggregate value equal to such beneficial owner’s pro rata share of the appraised value of the properties, as determined by an independent appraisal firm, less any indebtedness encumbering such beneficial owner’s DST Interest or the beneficial owner’s pro rata share of any indebtedness encumbering the properties, which will be assumed or paid off by our Operating Partnership.
Current report
●non-cash items of $16.6 million;
Current report
●distributions of income and income from preferred equity investments of $2.3 million;
Current report
●an increase in accounts payable and other accrued liabilities of $1.9 million; and
Current report
●a decrease in due from affiliates, net of $0.6 million; and
Current report
We previously classified our preferred equity investments as held-to-maturity debt securities as the investments met the criteria of a security under ASC 320Investments – Debt Securities. As of December 31, 2024, we do not have the positive intent to hold all the securities to maturity. As such, we have reclassified all our previously held-to-maturity debt securities to AFS debt securities.
Current report
Notes Receivable
Current report
Preferred Equity Investments
Current report
The following distributions were declared and/or paid to our stockholders subsequent to December 31, 2024 (amounts in thousands):
Current report
Series A Preferred Stock Redemption Safeguard Policy
Current report
On February 6, 2025, we implemented a new Series A Preferred Stock Redemption Safeguard Policy (the “Policy”) with respect to our Series A Preferred Stock. The Policy is applicable in the event of any redemption of shares of Series A Preferred Stock in shares of our Class A common stock rather than in cash (each, a “Preferred Redemption in common stock”). The Policy provides that if, within 10 business days of any such Preferred Redemption in common stock, any such shares of Class A common stock are sold at a loss (i.e. a lower price than the Aggregate Redemption Value), the holder can apply to us for a cash payment to the holder in an amount equal to the difference between (i) the Aggregate Redemption Value of the Class A common stock so issued, and (ii) the Aggregate Sale Price at which such shares of Class A common stock were sold, subject to certain conditions and requirements as set forth in the Policy. The Policy applies both retroactively, and on a go-forward basis, to holders of our Series A Preferred Stock.
Current report
Commencement of Common Stock Dividends
Current report
On March 11, 2025, we declared, and our Board previously authorized, quarterly cash dividends of $0.125 per share, or $0.50 per share annually, for our Class A common stock and Class C common stock for each quarter of fiscal year 2025. The common stock dividends will be payable quarterly to the stockholders of record as of (i) March 25, 2025, (ii) June 25, 2025, (iii) September 25, 2025, and (iv) December 24, 2025, which will be paid in cash on (i) April 4, 2025, (ii) July 3, 2025, (iii) October 3, 2025, and (iv) January 5, 2026, respectively.
Removed paragraphs (25)
Previous report
In addition to the new investments summarized in the table below, we (i) increased our preferred equity investment commitments in (a) the Willow Park joint venture by $2.1 million, for a total commitment of $4.6 million, and (b) The Woods at Forest Hill joint venture by $2.3 million, for a total commitment of $5.6 million, and (ii) funded an aggregate of approximately $7.6 million of preferred equity investments in The Woods at Forest Hill, Wayford at Innovation Park and Willow Park.
Previous report
The following is a summary of our real estate investments made during the year ended December 31, 2023 ($ in millions):
Previous report
Sale of Real Estate Investments
Previous report
In addition to the sales summarized in the table below, our preferred equity investment in the operating partnership of Peak Housing REIT (the “Peak REIT OP”) was partially redeemed in the aggregate amount of $10.7 million, which included principal investment of $9.7 million and accrued preferred return of $1.0 million. The partial redemption of our preferred equity investment was a result of the sale by Peak REIT OP of 196 of the 648 units that collateralized our investment. As of December 31, 2023, our remaining preferred equity investment in the Peak REIT OP was $10.6 million, with a remaining 452 units as collateral underlying our investment.
Previous report
The following is a summary of our real estate sales and redemptions of our preferred equity investments during the year ended December 31, 2023 ($ in millions):
Previous report
Rental and other property revenuesincreased $8.1 million, or 25%, to $41.0 million for the year ended December 31, 2023 as compared to $32.9 million for the same prior year period. The increase was primarily due to operating unit count growth of 516 homes, net of 53 homes sold, in our portfolio since January 1, 2022 and operational improvements from our active management and organic market rent growth.
Previous report
From an operational perspective, our average rent per occupied unit increased $122 or 8.4% to $1,569 as compared to $1,447 during the prior year period. Average occupancy increased 200 basis points from 92.4% to 94.4% on a year over year basis. The improvement was partially driven by: (i) stabilization of homes under renovation within our value-enhancement strategy, and (ii) stabilization of homes that are sometimes purchased from owner occupants which can create modest frictional vacancy for a brief period of time after acquisition.
Previous report
Property operating expenses increased $4.0 million, or 26%, to $19.2 million for the year ended December 31, 2023 as compared to $15.2 million for the same prior year period. The increase was primarily due to the acquisition of homes since January 1, 2022 and additional repairs and maintenance as part of our lease up stabilization strategy. Property operating expenses consist of controllable (payroll, repairs and maintenance, turnover, administrative, advertising, and utilities) and non-controllable (real estate taxes and insurance) expenses. Controllable expenses were $9.7 million and $7.6 million, and non-controllable expenses were $9.5 million and $7.6 million, for the years ended December 31, 2023 and 2022, respectively.
Previous report
General and administrative expenses amounted to $8.0 million for the year ended December 31, 2023 as compared to $7.1 million for the same prior year period. Amounts recognized during the year ended December 31, 2023 represent our operations as a standalone company, of which $5.6 million were direct costs incurred by us and $2.4 million were costs allocated from our Manager, such as rent, utilities, information technology, and accounting and legal services. Commencing with the fourth quarter 2023, we reimbursed our manager for accounting and legal services totaling $0.8 million. Prior to the fourth quarter 2023, the Manager elected to not seek reimbursement for accounting and legal services during our first year of operations. For the period ended and prior to October 6, 2022, allocations of certain general, administrative, sales and marketing expenses were allocated to us from Bluerock Residential based on relative unit count. As such, expense amounts recognized during the year ended December 31, 2022 are not representative of the amounts that would have been reflected in the financial statements had we operated independently of Bluerock Residential.
Previous report
Management fees to related party amounted to $7.9 million for the year ended December 31, 2023 as compared to $1.8 million for the same prior year period. Commencing on October 6, 2022, we are externally managed and advised by our Manager pursuant to the Management Agreement. There was no management fee expense prior to October 6, 2022.
Previous report
Depreciation and amortization expenses were $16.2 million for the year ended December 31, 2023 as compared to $16.0 million for the same prior year period, with the increase primarily attributable to the acquisition of homes since January 1, 2022, partially offset by in-place leases being fully amortized prior to 2023.
Previous report
These expenses were partially offset by (i) an increase in preferred returns on unconsolidated real estate joint ventures of $3.0 million as funding to our preferred equity investments increased to $81.3 million at December 31, 2023 as compared to $39.6 million at December 31, 2021, (ii) a $2.6 million increase in interest income from our short-term investments, (iii) a $0.3 million gain on sales of real estate investments from the sale of 53 homes during 2023, and (iv) a $0.2 million increase in other income.
Previous report
Discontinued Operations
Previous report
Income from discontinued operationsamounted to income of zero for the year ended December 31, 2023 as compared to income of $0.3 million for the same prior year period due to trailing sales activity of multifamily investments in 2021.
Previous report
On June 28, 2023, the SEC declared effective our registration statement on Form S-11 (File No. 333-269415) (the “2023 Registration Statement”). On June 30, 2023, we filed a prospectus supplement to the 2023 Registration Statement offering a maximum of 20,000,000 shares of 6.0% Series A Redeemable Preferred Stock (the “Series A Preferred Stock”) at $25.00 per share, for a maximum offering amount of $500,000,000 in Series A Preferred Stock (the “Series A Preferred Offering”), and on August 11, 2023, we made the initial issuance of Series A Preferred Stock pursuant to the Series A Preferred Offering.
Previous report
●non-cash items of $23.3 million;
Previous report
●distributions and preferred returns from unconsolidated joint ventures of $5.4 million; and
Previous report
●an increase in due to affiliates, net of $1.3 million; offset by
Previous report
We historically operated as part of Bluerock Residential and not as a standalone company. On October 6, 2022, Bluerock Residential completed a spin-off transaction that resulted in its single-family residential real estate business and certain other assets being contributed to us. Financial statements for the period ended and prior to October 6, 2022 have been derived from Bluerock Residential’s historical accounting records and are presented on a carve-out basis. All revenues and costs as well as assets and liabilities directly associated with our business activity are included in the financial statements. The financial statements for the period ended and prior to October 6, 2022 also include allocations of certain general, administrative, sales and marketing expenses that have been allocated to us from Bluerock Residential. However, amounts recognized by us are not representative of the amounts that would have been reflected in the financial statements had we operated independently of Bluerock Residential. As such, the results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance.
Previous report
The combined consolidated statement of operations for the year ended December 31, 2022 includes (i) Bluerock Homes’ results of operations for the period of October 6 – December 31, 2022, which represents the results of operations following our spin-off from Bluerock Residential, and (ii) Bluerock Homes’ results of operations for the period ending and prior to October 6, 2022, which represents a carve-out of revenues and expenses attributable to us related to Bluerock Residential’s single-family residential home business. As a result, results of operations for the year ended December 31, 2022 may not be comparative to our results of operations reported for the prior year presented.
Previous report
Issuance of C-LTIP Units for Payment of the Fourth Quarter 2023 Base Management Fee and Operating Expense Reimbursement
Previous report
The Manager earned a base management fee of $2.0 million during the fourth quarter 2023. This amount was payable 50% in C-LTIP Units with the other 50% payable in either cash or C-LTIP Units, at the discretion of the Board. In addition, the Manager was entitled to a $1.3 million reimbursement for operating expenses it incurred on our behalf for the fourth quarter 2023. This reimbursement was payable in cash or C-LTIP Units, at the discretion of the Board. Upon consultation with the Manager, the Board elected to pay 100% of the base management fee and the operating expense reimbursement in C-LTIP Units. On February 21, 2024, we issued 151,600 and 95,204 C-LTIP Units in payment of the base management fee and the operating expense reimbursement, respectively, for the fourth quarter 2023.
Previous report
Wayford at Pringle Loan Financing
Previous report
On January 10, 2024, we entered into an agreement to provide a loan in the maximum aggregate amount up to $30.1 million (the “Pringle Loan”) to an unaffiliated, third-party borrower to acquire 102-build for rent, single-family residential units in Charlotte, North Carolina to be known as Wayford at Pringle. The units are currently under development, and we will disburse loan proceeds to the borrower for unit acquisitions as construction is completed. The Pringle Loan is comprised of two notes as follows: Note A in the maximum principal amount up to $22.3 million and Note B in the maximum principal amount up to $7.8 million. Both notes have an initial maturity of January 12, 2026 and contain four (4) six-month extension options subject to certain conditions. Note A bears interest on the amount drawn at one-month SOFR plus 4.50% through initial maturity, and if extended, such rate becomes subject to a 5.31% rate floor. Note A has regular monthly payments that are interest-only during the term of the loan, and no prepayment of Note A, in part or in whole, can be made prior to prepayment of Note B subject to certain conditions. On Note B, interest shall accrue on the amount drawn at a rate of 15.00% per annum, compounded monthly, with outstanding principal and accrued interest amounts due upon maturity. Note B can be prepaid in part or in whole subject to minimum interest. As of February 29, 2024, we funded zero and $5.9 million of Note A and Note B, respectively.
Previous report
Stock Repurchase Plan
Reworded paragraphs (51)
Previous wording
The following is a discussion of the historical results of operations and liquidity and capital resources of Bluerock Homes Trust, Inc. (“Bluerock Homes,” “the Company,” “we,” “us,” or “our”), which was incorporated as a Maryland corporation on December 16, 2021. Prior to October 6, 2022, Bluerock Home’s sole stockholder was Bluerock Residential Growth REIT, Inc, a Maryland corporation (“Bluerock Residential” or “Parent”). We previously operated as part of Bluerock Residential and not as a standalone company. On October 6, 2022, Bluerock Residential completed a spin - off transaction that resulted in its single - family residential real estate business and certain other assets being contributed to us and Bluerock Homes becoming an independent publicly traded company. Please refer to the section in Item 1 captioned “The Separation and the Distribution” for a description of the Separation and the Distribution. You should read the following discussion and analysis in conjunction with the accompanying financial statements of Bluerock Homes, and the notes thereto. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. See also “Forward-Looking Statements” preceding Part I. We refer to Bluerock Real Estate, L.L.C., a Delaware limited liability company, and its affiliate, Bluerock Real Estate Holdings, LLC, a Delaware limited liability company, together as “BRE,” and we refer to our external manager, Bluerock Homes Manager, LLC, a Delaware limited liability company organized in 2022, as the “Manager.” Both BRE and our Manager are affiliated with us.
Current wording
The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Bluerock Homes Trust, Inc., and the notes thereto. As used herein, the terms “we,” “our” and “us” refer to Bluerock Homes Trust, Inc., a Maryland corporation, and, as required by context, Bluerock Residential Holdings, L.P., a Delaware limited partnership, which we refer to as our “Operating Partnership,” and to their subsidiaries. We refer to Bluerock Real Estate, L.L.C., a Delaware limited liability company, and its affiliate, Bluerock Real Estate Holdings, LLC, a Delaware limited liability company, together as “BRE,” and we refer to our external manager, Bluerock Homes Manager, LLC, a Delaware limited liability company organized in 2022, as our “Manager.” Both BRE and our Manager are affiliated with us. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. See also “Forward-Looking Statements” preceding Part I.
Previous wording
We were incorporated as a Maryland corporation on December 16, 2021. We own and operate high-quality single-family properties located in attractive markets with a focus on the knowledge-economy and high-quality of life growth markets of the Sunbelt and Western United States. Our principal objective is to generate attractive risk-adjusted returns on investments where we believe we can drive growth in funds from operations and net asset value by acquiring pre-existing single-family residential units, developing build-to-rent communities, and through Value-Add renovations. Our Value-Add strategy focuses on repositioning lower-quality, less current assets to drive rent growth and expand margins to increase net operating income and maximize our return on investment.
Current wording
We were incorporated as a Maryland corporation on December 16, 2021. We own and operate a portfolio of institutional residential properties including single-family homes, build-to-rent communities, and other residential communities located in attractive markets with a focus on the knowledge-economy and high-quality of life growth markets of the Sunbelt and Western United States. Our principal objective is to generate attractive risk-adjusted returns on investments where we believe we can drive growth in funds from operations and net asset value by acquiring residential units, developing residential communities, and through Value-Add renovations. Our Value-Add strategy focuses on repositioning lower-quality, less current assets to drive rent growth and expand margins to increase net operating income and maximize our return on investment.
Previous wording
We have no employees and are supported by a related-party service agreement with the Manager (the “Management Agreement”). We are externally managed by the Manager, which manages our day-to-day operations under the Management Agreement. The current term of the Management Agreement expires October 6, 2024 and will be automatically renewed for a one-year term each year on October 6, unless previously terminated in accordance with the terms of the Management Agreement. The Manager is responsible for managing our affairs on a day-to-day basis and for identifying and making real estate investments on our behalf. Substantially all our business is conducted through our operating partnership, Bluerock Residential Holdings, L.P., a Delaware limited partnership (our “Operating Partnership”), of which we are the sole general partner.
Current wording
We have no employees and are supported by a related-party service agreement with the Manager (the “Management Agreement”). We are externally managed by the Manager, which manages our day-to-day operations under the Management Agreement. The current term of the Management Agreement expires October 6, 2025 and will be automatically renewed for a one-year term each year on October 6, unless previously terminated in accordance with the terms of the Management Agreement. The Manager is responsible for managing our affairs on a day-to-day basis and for identifying and making real estate investments on our behalf. Substantially all our business is conducted through our Operating Partnership, of which we are the sole general partner.
Previous wording
As of December 31, 2023, we held eighteen real estate investments, consisting of eleven consolidated investments and seven preferred equity and loan investments. The eighteen investments represent an aggregate of 4,059 residential units, comprised of 2,475 consolidated units, of which 170 units are under development, and 1,584 units through preferred equity and loan investments. As of December 31, 2023, our consolidated operating investments were approximately 94.1% occupied.
Current wording
As of December 31, 2024, we held twenty-three real estate investments, consisting of fourteen consolidated investments and nine preferred equity and loan investments. The twenty-three investments represent an aggregate of 5,087 residential units, comprised of 3,453 consolidated units, of which 170 units are under development, and 1,634 units through preferred equity and loan investments, which includes planned units and those under development. As of December 31, 2024, our consolidated operating investments were approximately 91.6% occupied; excluding units classified as held for sale and down/renovation units, our consolidated operating investments were approximately 94.0% occupied.
Previous wording
We have elected to be taxed and have qualified as a real estate investment trust (“REIT”) for federal income tax purposes commencing with our taxable year ended December 31, 2022. As a REIT, we generally are not subject to corporate-level income taxes. In order to maintain our REIT status, we are required, among other requirements, to distribute annually at least 90% of our “REIT taxable income,” as defined by the Internal Revenue Code of 1986, as amended (the “Code”), to our stockholders. If we fail to maintain our qualification as a REIT in any taxable year, we would be subject to federal income tax on our taxable income at regular corporate tax rates and we would not be permitted to qualify as a REIT for four years following the year in which our qualification is denied. Such an event could materially and adversely affect our net income and results of operations. We intend to continue to organize and operate in such a manner as to remain qualified as a REIT.
Current wording
We have elected to be treated, and currently qualify, as a real estate investment trust (“REIT”) for federal income tax purposes. As a REIT, we generally are not subject to corporate-level income taxes. To maintain our REIT status, we are required, among other requirements, to distribute annually at least 90% of our “REIT taxable income,” as defined by the Internal Revenue Code of 1986, as amended (the “Code”), to our stockholders. If we fail to qualify as a REIT in any taxable year, we would be subject to federal income tax on our taxable income at regular corporate tax rates and we would not be permitted to qualify as a REIT for four years following the year in which we lost our qualification. Such an event could materially and adversely affect our net income and results of operations. We intend to continue to organize and operate in such a manner as to remain qualified as a REIT.
Previous wording
As of December 31, 2023, we classified an aggregate of 118 units as held for sale in our combined consolidated balance sheets, with a $1.3 million recorded impairment related to held for sale units which is included in gain on sale and impairment of real estate investments, net on our combined consolidated statements of operations. The units are included in the following portfolios: 35 units of Indy-Springfield (formerly Peak JV 1), 13 units of Peak JV 2, and 70 units of Peak JV 3. These units were identified based on submarket analysis and individual unit-level operational review.
Current wording
At December 31, 2024, we classified an aggregate of 167 units as held for sale in our consolidated balance sheets, and for the year ended December 31, 2024, we recorded an impairment of $3.3 million related to held for sale units which is included in gain on sale and (impairment) of real estate investments, net in our consolidated statements of operations and comprehensive income. The 167 units classified as held for sale are all reported in our scattered single-family homes segment and are included in the following portfolios: 8 units of ILE, 37 units of Indy-Springfield, 32 units of Peak JV 2, and all 90 units of Peak JV 3. These units were identified based on submarket analysis and individual unit-level operational review. Real estate assets classified as held for sale are reported at the lower of their carrying value or estimated fair value less costs to sell and are presented separately within operating real estate held for sale, net on our consolidated balance sheets.
Previous wording
The single-family rental industry has historically been more resilient to economic cycles than the multi-family sector and is currently benefiting from significant industry tailwinds that have accelerated during the pandemic. We believe industry dynamics present a compelling investment opportunity for us, including:
Current wording
The residential rental industry has historically been more resilient to economic cycles than other commercial real estate sectors and is currently benefiting from significant industry tailwinds that began during the pandemic. We believe industry dynamics present a compelling investment opportunity for us, including:
Previous wording
Note 4 “Sale of Real Estate Assets and Held for Sale Real Estate Assets”; Note 5 “Investments in Real Estate”; Note 6 “Acquisition of Real Estate”; Note 7 “Notes and Interest Receivable”; and Note 8 “Preferred Equity Investments in Unconsolidated Real Estate Joint Ventures,” to our Combined Consolidated Financial Statements provide discussion of the various purchases and sales of properties and joint venture equity interests. These transactions have resulted in material changes to the presentation of our financial statements.
Current wording
Note 3 “Acquisition of Real Estate”; Note 4 “Sale of Real Estate Assets and Held for Sale Real Estate Assets”; Note 5 “Investments in Real Estate”; Note 6 “Notes and Interest Receivable”; and Note 7 “Preferred Equity Investments,” to our Consolidated Financial Statements provide discussion of our various purchases and sales of consolidated investments, and our loan and preferred equity investments. These transactions have resulted in material changes to the presentation of our financial statements.
Previous wording
The following is a summary of our consolidated operational results for the years ended December 31, 2023 and 2022 ($ in thousands, except average rental rates):
Current wording
The following is a summary of our consolidated operational results by reportable segment for the years ended December 31, 2024 and 2023 ($ in thousands, except average rental rates):
Previous wording
Interest income from loan investments decreased $1.2 million, or 93%, to $0.1 million for the year ended December 31, 2023 as compared to $1.3 million for the same prior year period due to the payoff of two loans in 2022 partially offset by two new loan investments during the fourth quarter 2023.
Current wording
Interest income from loan investments amounted to $1.6 million for the year ended December 31, 2024 as compared to $0.1 million for the same prior year period due to three new loan investments, one of which was fully paid off during the year ended December 31, 2024.
Previous wording
Property management and asset management fees expense were $4.4 million for the year ended December 31, 2023 as compared to $3.8 million in the same prior year period. The increase was primarily due to the acquisition of homes since January 1, 2022, partially offset by lower property management fees negotiated with two property managers in 2023. Property management fees are based on a stated percentage of property revenues and asset management fees are based on a stated percentage of capital contributions or assets under management, where applicable.
Current wording
Property management and asset management fees expense were $ 4.7 million for the year ended December 31, 2024 as compared to $4.4 million in the same prior year period. Property management fees are based on a stated percentage of property revenues and asset management fees are based on a stated percentage of capital contributions or assets under management, where applicable.
Previous wording
Acquisition and other transaction costs amounted to $1.8 million for the year ended December 31, 2023 as compared to $0.2 million for the same prior year period. The 2023 expense primarily relates to the transition of property management services for over 1,000 homes.
Current wording
Acquisition and other transaction costs amounted to $0.3 million for the year ended December 31, 2024 as compared to $1.8 million for the same prior year period. Acquisition costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods. The 2023 expense primarily relates to the transition of property management services for over 1,000 homes.
Previous wording
Other income and expenseamounted to income of $0.6 million for the year ended December 31, 2023 compared to income of $3.7 million for the same prior year period. This was due to (i) a $7.4 million net increase in interest expense attributable to a $6.0 million decrease in the fair value of interest rate caps and swaps and a $1.4 million increase in interest expense attributable to an increase in the outstanding debt ($166.7 million at December 31, 2023 as compared to $153.2 million at December 31, 2022), (ii) a $1.3 million impairment related to real estate assets held for sale at December 31, 2023, and (iii) a $0.5 million increase in the provision for credit losses.
Current wording
Other income and expense amounted to income of $6.6 million for the year ended December 31, 2024 compared to income of $0.6 million for the same prior year period. This was primarily due to a $11.5 million increase in gain on sales of real estate investments and a $2.8 million increase in interest income from our short-term cash investments. These income sources were partially offset by a $5.0 million net increase in interest expense primarily attributable to a decrease in the fair value of the interest rate caps and swaps and an increase in the outstanding debt to $381.6 million at December 31, 2024 as compared to $166.7 million at December 31, 2023, and a $3.4 million increase in impairment on real estate.
Previous wording
Liquidity is a measure of our ability to meet potential cash requirements, both short- and long-term. Our primary short-term liquidity requirements historically have related to (i) our operating expenses and other general business needs, (ii) acquisition of properties, (iii) committed investments and capital requirements to fund development and renovations at existing properties, (iv) ongoing commitments to repay borrowings, including our revolving credit facilities and our maturing debt, and (v) distributions to stockholders.
Current wording
Liquidity is a measure of our ability to meet potential cash requirements, both short- and long-term. Our primary short-term liquidity requirements historically have related to (i) our operating expenses and other general business needs, (ii) investments in real estate, (iii) distributions to stockholders, (iv) committed investments and capital requirements to fund development and renovations at existing properties, (v) ongoing commitments to repay borrowings, including our revolving credit facilities and our maturing debt, and (vi) Class A common stock repurchases under our stock repurchase plan.
Previous wording
Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our short-term liquidity needs could be affected by various risks and uncertainties, including the risks detailed in Part I, Item 1A titled “Risk Factors”. While consolidated occupancy remains strong at 94.1% as of December 31, 2023, in future periods we may experience reduced levels of tenant retention, and reduced foot traffic and lease applications from prospective tenants.
Current wording
Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our short-term liquidity needs could be affected by various risks and uncertainties, including the risks detailed in Part I, Item 1A titled “Risk Factors”. While consolidated occupancy excluding units classified as held for sale and down/renovation units remains strong at 94.0% as of December 31, 2024, in future periods we may experience reduced levels of tenant retention, and reduced foot traffic and lease applications from prospective tenants.
Previous wording
In general, we believe our available cash balances, cash flows from operations, proceeds from the Series A Preferred Offering, proceeds from our revolving credit facilities, proceeds from future mortgage debt financings for acquisitions and/or development projects, and other financing arrangements will be sufficient to fund our liquidity requirements with respect to our existing portfolio for the next 12 months. In general, we expect that our results related to our existing portfolio will improve in future periods as a result of anticipated future investments in and acquisitions of single-family residential properties and build-to-rent development properties.
Current wording
In general, we believe our available cash balances, cash flows from operations, proceeds from the offering of our Series A Preferred Stock, proceeds from the Amended DB Credit Facility and KeyBank Credit Facility (as hereinafter defined, and collectively, the “revolving credit facilities”), proceeds from our DST Program, proceeds from future mortgage debt financings for acquisitions and/or development projects, and other financing arrangements will be sufficient to fund our liquidity requirements with respect to our existing portfolio for the next 12 months. In general, we expect that our results related to our existing portfolio will improve in future periods as a result of anticipated future investments in and acquisitions of residential properties and build-to-rent communities.
Previous wording
As of December 31, 2023, the aggregate amount of our contractual commitments to fund future cash obligations in certain of our joint venture investments was $0.2 million.
Current wording
As of December 31, 2024, we had contractual commitments to fund future cash obligations in certain of our preferred equity investments and loan investments in the aggregate of $17.6 million and zero, respectively. In addition, we made a commitment to fund the total estimated project costs of $56.9 million for the development of Abode Wendell Falls, a 170-unit build-to-rent development project in Wendell, North Carolina. As of December 31, 2024, the remaining estimated project costs to complete Abode Wendell Falls was $49.4 million.
Previous wording
As equity capital market conditions permit, we may supplement our capital for short-term liquidity needs with proceeds of potential offerings of common and preferred stock, as well as issuance of OP Units. Given the significant volatility in the trading price of REIT equities and our otherwise stable financial condition and liquidity position, we cannot provide assurances that these offerings are a likely source of capital to meet short-term liquidity needs.
Current wording
As equity capital market conditions permit, we may supplement our capital for short-term liquidity needs with proceeds of potential offerings of our common and preferred stock, as well as the issuance of OP Units. Given the significant volatility in the trading price of REIT equities and our otherwise stable financial condition and liquidity position, we cannot provide assurances that these offerings are a likely source of capital to meet short-term liquidity needs.
Previous wording
Our primary long-term liquidity requirements relate to (i) costs for additional single-family residential investments, including build-to-rent development properties, (ii) repayment of long-term debt and our revolving credit facilities, (iii) capital expenditures, and (iv) cash redemption requirements related to our Series A Preferred Stock.
Current wording
Our primary long-term liquidity requirements relate to (i) costs for additional residential investments, including development projects, (ii) repayment of long-term debt and our revolving credit facilities, (iii) capital expenditures, and (iv) cash redemption requirements related to our Series A Preferred Stock, and (v) Class A common stock repurchases under our stock repurchase plan.
Previous wording
We intend to finance our long-term liquidity requirements with net proceeds of additional issuances of common and preferred stock, including our Series A Preferred Offering, our revolving credit facilities, as well as future acquisition or project-based borrowings. Our success in meeting these requirements will therefore depend upon our ability to access capital. Further, our ability to access equity capital is dependent upon, among other things, general market conditions for REITs and the capital markets generally, market perceptions about us and our asset class, and current trading prices of our securities.
Current wording
We intend to finance our long-term liquidity requirements with net proceeds of additional issuances of common and preferred stock, including issuances in connection with the continuous registered offering of our Series A Preferred Stock, our revolving credit facilities, our DST Program, as well as future acquisition or project-based borrowings. Our success in meeting these requirements will therefore depend upon our ability to access capital. Further, our ability to access equity capital is dependent upon, among other things, general market conditions for REITs and the capital markets in general, market perceptions about us and our asset class, and current trading prices of our securities.
Previous wording
We may also meet our long-term liquidity needs through borrowings from a number of sources, either at the corporate or project level. We believe our revolving credit facilities will serve as our primary debt source that will continue to enable us to deploy our capital more efficiently and provide capital structure flexibility as we grow our asset base. In addition to restrictive covenants, our revolving credit facilities contain material financial covenants. At December 31, 2023, we were in compliance with all covenants under our credit facilities. We will continue to monitor the debt markets, including Fannie Mae and Freddie Mac, and as market conditions permit, access borrowings that are advantageous to us.
Current wording
We may also meet our long-term liquidity needs through borrowings from a number of sources, either at the corporate or project level. In December 2023, we entered into an amended and restated credit agreement with Deutsche Bank Securities, Inc. and a syndicate of other lenders, which provides for a revolving loan with a maximum commitment amount of $150 million (the “Amended DB Credit Facility”). In addition, in October 2024, we entered into a credit agreement with KeyBank National Association and a syndicate of other lenders, which provides for a revolving loan with a maximum commitment amount of $50 million (the “KeyBank Credit Facility”). We believe our revolving credit facilities will serve as our primary debt source that will continue to enable us to deploy our capital more efficiently and provide capital structure flexibility as we grow our asset base. In addition to restrictive covenants, our revolving credit facilities contain material financial covenants. At December 31, 2024, we were in compliance with all covenants under our credit facilities. We will continue to monitor the debt markets, including Fannie Mae and Freddie Mac, and as market conditions permit, access borrowings that are advantageous to us.
Previous wording
We expect to maintain a distribution on our Series A Preferred Stock in accordance with the terms which require monthly dividends. While our distributions through December 31, 2023 have been paid from cash flow from operations and in accordance with our policy, distributions in the future may be paid from cash flow from operations, proceeds from our Series A Preferred Offering, the sales of assets and additional sources, such as from borrowings.
Current wording
We expect to maintain a distribution on our Series A Preferred Stock in accordance with the terms which require monthly dividends. While our distributions through December 31, 2024 have been paid from cash flow from operations and in accordance with our policy, distributions in the future may be paid from cash flow from operations, proceeds from the offering of our Series A Preferred Stock, proceeds from the DST Program, the sales of assets, and additional sources, such as from borrowings.
Previous wording
We have notes receivable in conjunction with properties that are in various stages of lease - up. To date, these investments have been structured as senior loans, and in the future, we may also provide mezzanine financing to these types of projects. The notes receivable provide a current stated return and require repayment based on a fixed maturity date. If the property does not repay the notes receivable upon maturity, our income, FFO, CFFO and cash flows could be reduced below the stated returns currently being recognized if the property does not produce sufficient cash flow to pay its operating expenses and debt service, or to refinance its debt obligations.
Current wording
We have notes receivable in conjunction with properties that are in lease-up. To date, these investments have been structured as senior loans, and in the future, we may also provide mezzanine financing to these types of projects. The notes receivable provide a current stated return and require repayment based on a fixed maturity date. If the property does not repay the notes receivable upon maturity, our income, FFO, CFFO and cash flows could be reduced below the stated returns currently being recognized if the property does not produce sufficient cash flow to pay its operating expenses and debt service, or to refinance its debt obligations.
Previous wording
We also have preferred equity interests in properties that are in various stages of development, in lease-up and operating, and our preferred equity investments are structured to provide a current and/or accrued preferred return during all phases. Each joint venture in which we own a preferred equity interest is required to redeem our preferred equity interests, plus any accrued preferred return, based on a fixed maturity date, generally in relation to the property’s construction loan or mortgage loan maturity. Upon redemption of the preferred equity interests, our income, FFO, CFFO and cash flows could be reduced below the preferred returns currently being recognized. Alternatively, if the joint ventures do not redeem our preferred membership interest when required, our income, FFO, CFFO and cash flows could be reduced if the development project does not produce sufficient cash flow to pays its operating expenses, debt service and preferred return obligations. As we evaluate our capital position and capital allocation strategy, we may consider alternative means of financing our development loan and preferred equity investment activities at the subsidiary level.
Current wording
We also have preferred equity interests in properties that are in various stages of development and in lease-up, and our preferred equity investments are structured to provide a current and/or accrued preferred return during all phases. Each joint venture in which we own a preferred equity interest is required to redeem our preferred equity interests, plus any accrued preferred return, based on a fixed maturity date, generally in relation to the property’s construction loan or mortgage loan maturity. Upon redemption of the preferred equity interests, our income, FFO, CFFO and cash flows could be reduced below the preferred returns currently being recognized. Alternatively, if the joint ventures do not redeem our preferred membership interest when required, our income, FFO, CFFO and cash flows could be reduced if the development project does not produce sufficient cash flow to pays its operating expenses, debt service and preferred return obligations. As we evaluate our capital position and capital allocation strategy, we may consider alternative means of financing our development loan and preferred equity investment activities at the subsidiary level.
Previous wording
As of December 31, 2023, we have off-balance sheet arrangements that may have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital expenditures. As of December 31, 2023, we own investments in six joint ventures that are accounted for as held to maturity debt securities.
Current wording
As of December 31, 2024, we have off-balance sheet arrangements that may have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital expenditures. As of December 31, 2024, we own investments in eight joint ventures that are accounted for as available-for-sale debt securities.
Previous wording
As of December 31, 2023, we held eighteen real estate investments, consisting of eleven consolidated investments and seven preferred equity and loan investments, with the eighteen investments representing an aggregate of 4,059 residential units. During the year ended December 31, 2023, net cash provided by operating activities was $13.9 million after net loss of $15.8 million was adjusted for the following:
Current wording
As of December 31, 2024, we held twenty-three real estate investments, consisting of fourteen consolidated investments and nine preferred equity and loan investments, with the twenty-three investments representing an aggregate of 5,087 residential units. During the year ended December 31, 2024, net cash provided by operating activities was $9.1 million after net loss of $12.1 million was adjusted for the following:
Previous wording
●an increase in accounts receivable, prepaids and other assets of $0.2 million; and
Current wording
●a decrease in accounts receivable, prepaids and other assets of $1.3 million; offset by
Previous wording
●an increase in notes and accrued interest receivable of $0.1 million.
Current wording
●an increase in notes and accrued interest receivable of $0.3 million.
Previous wording
During the year ended December 31, 2023, net cash used in investing activities was $25.7 million, primarily due to the following:
Current wording
During the year ended December 31, 2024, net cash used in investing activities was $224.9 million, primarily due to the following:
Previous wording
During the year ended December 31, 2023, net cash provided by financing activities was $15.7 million, primarily due to the following:
Current wording
During the year ended December 31, 2024, net cash provided by financing activities was $260.7 million, primarily due to the following:
Previous wording
Net cash flow provided by operating activities increased $10.4 million in 2023 compared to 2022 primarily due to:
Current wording
Net cash flow provided by operating activities decreased $4.8 million in 2024 compared to 2023 primarily due to:
Previous wording
Net cash used in investing activities decreased $151.5 million in 2023 compared to 2022 primarily due to:
Current wording
Net cash used in investing activities increased $199.2 million in 2024 compared to 2023 primarily due to:
Previous wording
Net cash provided by financing activities decreased $103.6 million in 2023 compared to 2022 primarily due to:
Current wording
Net cash provided by financing activities increased $245.1 million in 2024 compared to 2023 primarily due to:
Previous wording
Redevelopment and renovation costs are non-recurring capital expenditures for significant projects such as preparing a unit for rental. The renovation work varies, but may include flooring, cabinetry, paint, plumbing, appliances and other items required to make the unit rent ready. Routine capital expenditures are necessary non-revenue generating improvements that extend the useful life of the property and that are less frequent in nature, such as roof repairs and concrete work/asphalt resurfacing. Normally recurring capital expenditures are necessary non-revenue generating improvements that occur on a regular ongoing basis, such as flooring and appliances.
Current wording
New development represents the expenditures for the planning, land development, and construction of residential homes and communities. Redevelopment and renovation costs are non-recurring capital expenditures for significant projects such as preparing a unit for rental. The renovation work varies, but may include flooring, cabinetry, paint, plumbing, appliances and other items required to make the unit rent ready. Routine capital expenditures are necessary non-revenue generating improvements that extend the useful life of the property, such as roof repairs and concrete work/asphalt resurfacing. Normally recurring capital expenditures are necessary non-revenue generating improvements that occur on a regular ongoing basis, such as flooring and appliances.
Previous wording
FFO attributable to common stockholders and unit holders is a non-GAAP financial measure that is widely recognized as a measure of REIT operating performance. We consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative. We define FFO, consistent with the NAREIT definition, as net income (loss), computed in accordance with GAAP, excluding gains or losses on sales of depreciable real estate property, plus depreciation and amortization of real estate assets, plus impairment write-downs of certain real estate assets and investments in entities where the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for notes receivable, unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis.
Current wording
FFO attributable to common stockholders and unit holders is a non-GAAP financial measure that is widely recognized as a measure of REIT operating performance. We consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative. We define FFO, consistent with the NAREIT definition, as net income (loss), computed in accordance with GAAP, excluding gains or losses on sales of depreciable real estate property, plus depreciation and amortization of real estate assets, plus impairment write-downs of certain real estate assets and investments in entities where the impairment is directly attributable to decreases in the value of depreciable real estate held by the entity. Adjustments for notes receivable, preferred equity investments and joint ventures will be calculated to reflect FFO on the same basis.
Previous wording
CFFO makes certain adjustments to FFO, removing the effect of items that do not reflect ongoing property operations such as acquisition and other transaction costs, non-cash interest, unrealized gains or losses on derivatives, provision for (recovery of) credit losses, losses on extinguishment of debt and debt modification costs (includes prepayment penalties incurred and the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt), one-time weather-related costs and equity compensation expense. We believe that CFFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core recurring property operations. As a result, we believe that CFFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential.
Current wording
CFFO makes certain adjustments to FFO, removing the effect of items that do not reflect ongoing property operations such as acquisition and other transaction costs, non-cash interest, unrealized gains or losses on derivatives, provision for (recovery of) credit losses, losses on extinguishment of debt and debt modification costs (includes prepayment penalties incurred and the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt), one-time weather-related costs, equity compensation expense, and preferred stock accretion. We believe that CFFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core recurring property operations. As a result, we believe that CFFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential.
Previous wording
Our calculation of CFFO differs from the methodology used for calculating CFFO by certain other REITs and, accordingly, our CFFO may not be comparable to CFFO reported by other REITs. Our management utilizes FFO and CFFO as measures of our operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare our operating performance between periods. Furthermore, although FFO and CFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we also believe that FFO and CFFO may provide us and our stockholders with an additional useful measure to compare our financial performance to certain other REITs.
Current wording
Our calculation of CFFO differs from the methodology used for calculating CFFO by certain other REITs and, accordingly, our CFFO may not be comparable to CFFO reported by other REITs. Our management utilizes FFO and CFFO as measures of our operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition and other transaction costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare our operating performance between periods. Furthermore, although FFO and CFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we also believe that FFO and CFFO may provide us and our stockholders with an additional useful measure to compare our financial performance to certain other REITs.
Previous wording
We conduct our operations through the Operating Partnership, of which we are the sole general partner. The combined consolidated financial statements include our accounts and those of the Operating Partnership and its subsidiaries. As of December 31, 2023, limited partners other than the Company owned approximately 68.68% of the common units of the Operating Partnership (59.45% is held by holders of limited partnership interest in the Operating Partnership (“OP Units”) and 9.23% is held by holders of the Operating Partnership’s long-term incentive plan units (“LTIP Units”), including 3.76% which are not vested at December 31, 2023).
Current wording
We conduct our operations through the Operating Partnership, of which we are the sole general partner. The consolidated financial statements include our accounts and those of the Operating Partnership and its subsidiaries. As of December 31, 2024, limited partners other than the Company owned approximately 69.48% of the common units of the Operating Partnership, of which 56.72% is held by holders of limited partnership interest in the Operating Partnership (“OP Units”) and 12.76% is held by holders of the Operating Partnership’s long-term incentive plan units (“LTIP Units”), including 3.09% which are not vested at December 31, 2024.
Previous wording
Real Estate Investments, Preferred Equity Investments and Notes Receivable (Real Estate Loan Investment)
Current wording
Real Estate Investments, Preferred Equity Investments and Notes Receivable
Previous wording
For investments that meet the criteria of a security under ASC 320Investments – Debt Securities, we classify each preferred equity investment as a held-to-maturity debt security as we have the intention and ability to hold the investment to maturity. We earn a fixed return on these investments which is included within preferred returns on unconsolidated real estate joint ventures in our combined consolidated statements of operations. We evaluate the collectability of each preferred equity investment and estimate a provision for credit loss, as applicable. We account for these investments as preferred equity investments in unconsolidated real estate joint ventures in our combined consolidated balance sheets.
Current wording
For investments that meet the criteria of a security under ASC 320Investments – Debt Securities, we classify each investment as an available-for-sale (“AFS”) debt security as we do not have the positive intent to hold all investments to maturity. We account for these investments as preferred equity investments in our consolidated balance sheets, and we earn a fixed return on these investments which is included within income from preferred equity investments in our consolidated statements of operations and comprehensive income. AFS debt securities are carried at fair value in our consolidated balance sheets, and any unrealized gains or losses on AFS debt securities are reported as a component of accumulated other comprehensive income in our consolidated balance sheets, and as a component of other comprehensive income in our consolidated statements of operations and comprehensive income. We evaluate the collectability of each preferred equity investment and estimate a provision for credit loss, as applicable. Refer to the Current Expected Credit Losses (“CECL”) section below for further information regarding CECL and our provision for credit losses.
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Current report — wording carried from elsewhere
On February 13, 2024, our Board authorized a stock repurchase plan that provided for the repurchase, from time to time, of up to an aggregate of $5 million of our outstanding shares of Class A common stock, with such repurchases to be conducted in accordance with the requirements of Rule 10b-18 of the Securities Exchange Act of 1934 (the “Exchange Act”) and subject to Rule 10b-5 of the Exchange Act. The repurchase plan had a term of one year and ended in February 2025. We made no repurchases of our Class A common stock under the stock repurchase plan. Our Board did authorize a new stock repurchase plan in late February 2025; refer to Subsequent Events further below in this section for additional information.
Current report — wording carried from elsewhere
We perform an individual assessment of expected credit losses for our preferred equity investments, which are accounted for as AFS debt securities, that have an unrealized loss recorded at the reporting date. If it is determined that the borrower is experiencing financial difficulty, or a foreclosure is probable, or we expect repayment through the sale of the collateral, we calculate expected credit losses based on the value of the underlying collateral as of the reporting date. During this review process, if we determine that it is probable that we will not be able to collect all amounts due for both principal and interest according to the contractual terms of an investment, that preferred equity investment is not considered fully recoverable and a provision for credit loss is recorded.
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Previous report — wording carried elsewhere
Acquisitions of and Investments in Real Estate