On Monaday, Shares of Bluerock Residential Growth REIT Inc (NYSEMKT:BRG), gains 2.20 percent and now trading at $12.56 in the current trading session. The current trading range of the stock ranges between $12.40 and $12.59.
Bluerock Residential Growth REIT, Inc. (NYSE MKT: BRG) declared recently its financial results for the quarter finished March 31, 2017.
- Total revenues grew 61.00 percent to $26.70M for the quarter from $16.60M for the previous year quarter mainly as a result of noteworthyinvestment activity in the past year.
- Net loss attributable to common stockholders for the 1st– quarter of 2017 was $(0.2) per share, as contrast to $(0.2) per share in the previous year period. Net loss attributable to common stockholders included non-cash operating cost of $0.550 per share in the 1st quarter of 2017 vs. $0.410 per share for the previous year period.
- Adjusted funds from operations attributable to common stockholders (“AFFO”) was $4.60M for the quarter contrast to $5.30M for the previous year quarter.
- AFFO per share is $0.180 for the 1st– quarter of 2017 as contrast to $0.260 for the 1st– quarter of 2016, and exceeded guidance of $0.030 – $0.040.
- Pro forma AFFO per share of $0.380 for the 1st– quarter exceeded pro forma guidance of $0.270 to $0.290 per share.
- The Company paid the full amount of the first quarter’s administration fees of $2.80M in LTIP Units in lieu of cash payment. This favorably influenced both AFFO per share and pro forma AFFO per share by $0.090.
- Property Net Operating Income (NOI) grew 53.00 percent to $15.30M for the quarter, from $10.00M in the previous year quarter.
- Property NOI margins were 60.90 percent of revenue for the quarter, an improvement from 60.40 percent of revenue in the previous year quarter.
- Same store NOI raised 10.90 percent for the quarter, as contrast to the previous year quarter.
- Merged real estate investments, at cost, raised 7 percent to $1.10B at March 31, 2017 from $1.00B at December 31, 2016.
- The Company invested in two operating properties totaling 683.00 units for a total purchase price of around $116.70M throughout the 1st– quarter.
- The Company declared monthly dividends for the 2nd– quarter of 2017 equal to a quarterly rate of $0.290 per share on the Company’s Class A common stock. This equates to an 9.40 percent annualized yield based on the closing price of $12.310 for the Class A common stock as of March 31, 2017.
- The Company sold 23,569.00 shares of Series B preferred stock with associated warrants at a public offering price of $1,000.00 per unit, for gross proceeds of about $23.60M throughout the first quarter, a increase of 86.00 percent over the 4th– quarter.
- On January 17, 2017, the Company accomplished an underwritten offering of 4.60M shares of Class A common stock at a public offering price of $13.150 per share for gross proceeds of $60.50M, counting the underwriters’ overallotment option, which closed on January 24, 2017.
“We are happy to report the acquisition of two operating properties totaling 683.00 units for about $117.00M, a Class A common stock capital raise with gross proceeds of approximately $60.00M and solid portfolio performance during the 1st– quarter,” said Ramin Kamfar, the Company’s Chairman and CEO. “We carried on to build a high quality portfolio in our current footprint of growth markets in the Sunbelt, from the Carolinas to Florida and Texas.”
1st– Quarter Acquisition, Development and Disposition Activity:
- On December 29, 2016, the Company was redeemed of its preferred equity interest in the West Morehead growth in Charlotte, North Carolina, and in exchange obtained a 0.50 percent common equity interest and offered an about $21.30M mezzanine loan for the growth. On January 5, 2017, the Company raised the mezzanine loan amount to about $24.60M.
- On January 6, 2017, the Company was redeemed of the substantial majority of its common equity ownership interest in the APOK Townhomes development in Boca Raton, Florida, and in exchange offered an about $11.20M mezzanine loan for the progress.
- On February 17, 2017, the Company attained a 91.80 percent interest in a 382.00-unit apartment community located in Morrisville, North Carolina, which is part of the Raleigh-Durham Combined Statistical Area, known as Preston View Apartments at a total purchase price of about $59.50M.
- On March 3, 2017, the Company was redeemed of its preferred equity interest in the Domain progress located in Garland, Texas, and in exchange obtained a 0.50 percent common equity interest and offered an about $20.30M mezzanine loan for the progress.
- On March 9, 2017, the Company attained a 91.80 percent interest in a 301.00-unit apartment community in Charlotte, North Carolina, known as Wesley Village Apartments at a total purchase price of about $57.20M.
- On February 22, 2017, the Company sold its interest in the Village Green of Ann Arbor apartments in Ann Arbor, Michigan at a total sale price of about $71.40M, recognized a pro rata gain of $7.80M, with net proceeds of about $13.60M to the Company, generating an internal rate of return of 38.00 percent on BRG’s equity investment in the project, for a return on equity of 2.320x.
- The Company has determined to abandon the pursuit of the East San Marco projected development in Jacksonville, Florida and has expensed all predevelopment costs amounting to about $2.90M which is included in acquisition and pursuit expenses on the statement of operations.
Pending Investments and Pending Sales at March 31, 2017:
The Company has a contract which entitles the Company to make a 90.00 percent investment in a 1,408.00-unit five-property portfolio of multifamily communities located in San Antonio and Tyler, Texas. The total purchase price of about $188.90M includes the assumption of about $147.70M of existing mortgage debt.
On April 26, 2017, the Company closed on the sale of Lansbrook Village, located in Palm Harbor, Florida after all sale contingencies were met. The 90.00 percent owned property was sold for about $82.40M. After deduction for assumption of the existing mortgage indebtedness of $57.20M and payment of closing costs and fees, the sale of the property generated net proceeds to the Company of about $19.10M, generating an internal rate of return of 23.00 percent on BRG’s equity investment, for a return on equity of 1.50x.
First Quarter 2017 Financial Results:
Net loss attributable to common stockholders for the first quarter of 2017 was $5.00M, contrast to a net loss of $4.10M in the previous year period. The change in net loss was mainly driven by positive increases in property NOI of $5.30M, interest income of $1.50M and a gain on sale of real estate investments of $16.50M, offset by increases in administration fees of $1.60M, acquisition and pursuit expenses of $2.00M, administration internalization process cost of $0.50M, depreciation and amortization cost of $3.40M, interest expense of $2.90M, preferred stock cost of $4.60M and non-controlling income allocation of $8.80M.
AFFO for the first quarter of 2017 was $4.60M, or $0.180 per diluted share, contrast to $5.30M, or $0.260 per share in the previous year period. AFFO was positively influenced by increases in property NOI of $5.30M arising from noteworthy investment activity, interest income of $1.50M and offset by interest cost of $2.50M and the expense of preferred stock dividends of $4.40M.
Same Store Portfolio Performance:
Same store NOI for the first quarter of 2017 increased by 10.90 percent from the similar period in the previous year. There was a 6.20 percent inclines in same store property revenues contrast to the similar preceding year period, mainly attributable to a 4.70 percent boost in average rental rates, an 80.00 basis point boost in average occupancy and an additional 12.00 units attained at our Lansbrook property. Same store operating cost decreased 0.80 percent because of lower real estate tax cost in 2017.
On November 7, 2016, the Company declared that it had started the process of internalizing the administration of the Company by forming a special committee of the board of directors comprised solely of the independent directors of the board to pursue the internalization, together with hiring other advisors. The Company is targeting internalizing the administration of the Company in the 3rd– quarter of 2017, though it provides no assurance as to the timing or completion of the internalization process.
On April 7, 2017, our board of directors authorized, and we declared, monthly dividends for the 2nd– quarter of 2017 equal to a quarterly rate of $0.290 per share on our Class A common stock, payable to the stockholders of record as of April 25, 2017, which was paid in cash on May 5, 2017, and as of May 25, 2017 and June 23, 2017, which will be paid in cash on June 5, 2017 and July 5, 2017, respectively. Holders of OP and LTIP Units are entitled to receive “distribution equivalents” at the same time as dividends are paid to holders of our Class A common stock.
The declared dividends equal a monthly dividend on the Class A common stock as follows: $0.0966660 per share for the dividend paid to stockholders of record as of April 25, 2017, $0.0966670 per share for the dividend which will be paid to stockholders of record as of May 25, 2017, and June 23, 2017. A section of each dividend may constitute a return of capital for tax purposes. There is no assurance that we will continue to declare dividends or at this rate.
On April 7, 2017, our board of directors authorized, and we declared, a monthly dividend of $5 per share of Series B preferred stock, payable to the stockholders of record as of April 25, 2017, which was paid in cash on May 5, 2017, and as of May 25, 2017, and June 23, 2017, which will be paid in cash on June 5, 2017 and July 5, 2017, respectively.
Q2 2017 Outlook:
For the second quarter of 2017, the Company anticipates AFFO in the range of $0.010 to $0.020 per share, and $0.260 to $0.280 per share on a pro forma basis. For assumptions underlying earnings guidance, please see page 29.00 of Company’s Q1 2017 Earnings Supplement available under Shareholder Relations on the Company’s website. Pro forma AFFO is used for illustrative purposes only, is hypothetical and does not represent historical performance or administration’s estimates or projections for future performance.
All interested parties can listen to the live conference or discussion call at 11:00 AM ET on Monday, May 8, 2017 by dialing +1 (866) 843-0890 within the United State., or +1 (412) 317-6597, and requesting the “Bluerock Residential Conference.”
For those who are not obtainable to listen to the live call, the meeting call will be accessible for replay on the Company’s website two hours after the call concludes, and will remain available until June 8, 2017 at http://services.choruscall.com/links/brg170508.html, in addition to by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10105342.
Analyst recommendation for this stock stands at 1.70.