BRT Apartments Corp. (BRT)

CIK: 0000014846. SIC: 6798 Real Estate Investment Trusts. Latest 10-K as of: 2026-03-13.

SIC breadcrumb: Finance, Insurance, And Real Estate > Holding And Other Investment Offices > SIC 6798 Real Estate Investment Trusts

SEC company page: https://www.sec.gov/edgar/browse/?CIK=14846. Latest filing source: 0000014846-26-000007.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-13. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000014846.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-07. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0000014846.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0000014846-26-000017.

Extracted structurally from real Item 2 body heading to real Item 3/4 boundary. Confidence: high. Filing date: 2026-05-07. Report date: 2026-03-31.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q (the "Quarterly Report"), together with other statements and information publicly disseminated by us, contains certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends concerning matters that are not historical facts. Forward looking statements are generally identifiable by use of words such as "may," "will," "will likely result," "shall," "should," "could," "believe," "expect," "intend," "anticipate," "estimate," "project," "apparent," "experiencing," or similar expressions or variations thereof.

Forward-looking statements contained in this Quarterly Report are based on our beliefs, assumptions and expectations of our future performance taking into account the information currently available to us. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or within our control, and which could materially affect actual results, performance or achievements. Factors which may cause actual results to vary from our forward-looking statements include, but are not limited to:

•inability to generate sufficient cash flows due to unfavorable economic and market conditions (e.g., inflation, volatile interest rates and the possibility of a recession), changes in supply and/or demand, competition, uninsured losses, changes in tax and housing laws or other factors;

•adverse changes in real estate markets, including, but not limited to, the extent of future demand for multifamily units in our significant markets, barriers of entry into new markets which we may seek to enter in the future, limitations on our ability to maintain or increase rental or occupancy rates, competition, our ability to identify and consummate attractive acquisitions and dispositions on favorable terms, and our ability to reinvest sale proceeds in a manner that generates favorable returns;

•general and local real estate conditions, including any changes in the value of our real estate;

•decreasing rental rates or increasing vacancy rates;

•challenges in acquiring or investing in multifamily properties (including challenges in (i) buying properties directly without the participation of joint venture partners and (ii) making alternative investments in multifamily properties, and the limited number of multifamily property investment/acquisition opportunities available to us), which transactions may not be completed or may not produce the cash flows or income expected;

•the competitive environment in which we operate, including competition that could adversely affect our ability to acquire properties and/or limit our ability to lease apartments or increase or maintain rental rates;

•exposure to risks inherent in investments in a single industry and sector;

•the concentration of our multifamily properties in the Southeastern United States and Texas, which makes us more susceptible to adverse developments in those markets;

•increases in expenses over which we have limited control, such as real estate taxes, insurance and utilities, due to inflation or other factors such as the ongoing conflicts between (i) Ukraine and Russia and (ii) Israel / the United States of America and Iran;

•impairment in the value of real estate we own;

•failure of property managers to properly manage properties;

•accessibility of debt and equity capital markets;

•disagreements with, or misconduct by, joint venture partners;

•inability to obtain financing at favorable rates, if at all, or refinance existing debt as it matures due to the level and volatility of interest or capitalization rates or capital market conditions

•extreme weather and natural disasters such as hurricanes, tornadoes and floods;

•lack of or insufficient amounts of insurance to cover, among other things, losses from catastrophes;

•risks associated with acquiring value-add multifamily properties, which involves greater risks than more conservative approaches;

•the condition of Fannie Mae or Freddie Mac, which could adversely impact us;

•changes in Federal, state and local governmental laws and regulations, including laws and regulations relating to taxes and real estate and related investments;

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•our failure to comply with laws, including those requiring access to our properties by disabled persons, which could result in substantial costs;

•board determinations as to timing and payment of dividends, if any, and our ability or willingness to pay future dividends;

•our ability to satisfy the complex rules required to maintain our qualification as a REIT for federal income tax purposes;

•possible environmental liabilities, including costs, fines or penalties that may be incurred due to necessary remediation of contamination of properties presently owned or previously owned by us or a subsidiary owned by us or acquired by us;

•our dependence on information systems, risks associated with breaches of such systems and the impact on us and our competitors from the use of artificial intelligence;

•disease outbreaks and other public health events, and measures that are taken by federal, state, and local governmental authorities in response to such outbreaks and events;

•impact of climate change on our properties or operations;

•risks associated with the stock ownership restrictions of the Internal Revenue Code of 1986, as amended (the "Code") for REITs and the stock ownership limit imposed by our charter; and

•the other factors described in our Annual Report on Form 10-K for the year ended December 31, 2025 (the "Annual Report") including those set forth in such report under the captions "Item 1. Business," "Item 1A. Risk Factors," and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations".

We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this report. Except to the extent otherwise required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the filing of this report or to reflect the occurrence of unanticipated events thereafter.

Overview

We own and operate multifamily properties. These properties may be wholly owned by us or by unconsolidated joint ventures in which we contributed a portion of the equity. At March 31, 2026, we: (i) wholly-own 21 multifamily properties with an aggregate of 5,420 units and a carrying value of $589.9 million; (ii) have ownership interests, through unconsolidated entities, in ten multifamily properties with 2,891 units and a carrying value of $44.8 million; (iii) have preferred equity interests in two multifamily properties with a carrying value of $17.7 million; and (iii) own other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $1.5 million. The 31 multifamily properties are located in 11 states; most of these properties are located in the Southeast United States and Texas.

Challenges and Uncertainties

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

We anticipate that our mortgage interest expense will increase as we refinance the aggregate $88.6 million and $65.9 million of principal balances of mortgage debt maturing in 2026 and 2027, respectively (including $61.0 million and $23.1 million of such principal balances at unconsolidated subsidiaries maturing in 2026 and 2027, respectively) because current comparable mortgage interest rates are generally higher than the weighted average interest rate on such maturing mortgages (i.e, the weighted average interest rate on the mortgages on our consolidated and unconsolidated properties maturing through December 31, 2027 is 4.40%) and the weighted average interest rate on the mortgage refinancing we completed in mid-December was 4.95%.

20

Results of Operations

Three months ended March 31, 2026 compared to three months ended March 31, 2025.

As used herein, the term "same store properties" refers to multifamily properties that were wholly owned for the entirety of the periods presented. For the three months ended March 31, 2026 and 2025, all of our multifamily properties in our consolidated portfolio are same store properties.

Revenues

The following table compares our revenues for the periods indicated:

Three Months Ended March 31,

(Dollars in thousands):

2026

2025

Increase

(Decrease)

%

Change

Rental and other revenue from real estate properties

$

24,170 

$

23,619 

$

551 

2.3 

%

Loan interest and other income

435 

487 

(52)

(10.7)

%

Total revenues

$

24,605 

$

24,106 

$

499 

2.1 

%

Rental and other revenue from real estate properties

The increase is due primarily to improvements in rental (which include the effect of straight line rent adjustments related to rent concessions) and occupancy rates. Approximately $349,000 of the improvement pertains to Bells Bluff.

Expenses

The following table compares our expenses for the periods indicated:

Three Months Ended March 31,

(Dollars in thousands)

2026

2025

Increase

(Decrease)

% Change

Real estate operating expenses

$

10,489 

$

10,550 

$

(61)

(0.6)

%

Interest expense

5,960 

5,676 

284 

5.0 

%

General and administrative

3,867 

4,070 

(203)

(5.0)

%

Depreciation and amortization

6,683 

6,541 

142 

2.2 

%

Total expenses

$

26,999 

$

26,837 

$

162 

0.6 

%

Real estate operating expense

The change is due primarily to decreases of $162,000 of payroll costs across the portfolio and $109,000 of insurance expenses due to lower premium rates. The decrease was offset by an increase of $182,000 of expense primarily due to remediating damage from casualty events at River Place and Bells Bluff.

We believe that real estate operating expense will increase in 2026 due to, among other things, anticipated increases in payroll expense and that due to, among other things, the conflict in Iran, utility expense.

Interest expense

The change is due primarily to the additional $357,000 mortgage interest expense related to the refinancing of the River Place, Boerne and Civic 1 mortgages in December 2025 which added $29 million to our debt and at a higher interest rate (a weighted average interest rate of 4.95%) than the debt that was paid o

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted structurally from real Item 7 body heading to real Item 7A/8 boundary. Published MD&A gate trimmed front/tail over-capture. Confidence: high. Filing date: 2026-03-13. Report date: 2025-12-31.

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations.

Overview

We are an internally managed real estate investment trust, also known as a REIT, that owns, operates and to a lesser extent holds interest in joint ventures that own and operate multi-family properties. At December 31, 2025, we: (i) wholly-own 21 multi-family properties with an aggregate of 5,420 units and a carrying value of $595.2 million, (ii) have ownership interests, through unconsolidated entities, in ten multi-family properties with an aggregate of 2,891 units with a carrying value of $46.1 million; (iii) have preferred equity investments in two multi-family properties with a carrying value of $17.7 million; and (iv) own other assets, through consolidated and unconsolidated entities, with a carrying value of $1.6 million. The 31 multi-family properties are located in 11 states; primarily in the Southeast United States and Texas.

2025 and Recent Developments.

During 2025:

•we acquired, through two unconsolidated joint ventures in two separate and unrelated transactions, an 80% interest in two multi-family properties (referred to collectively as the "2025 Acquisitions") with an aggregate of 364 units for an aggregate purchase price of $59.5 million, including $40.1 million of mortgage debt. The mortgage debt bears a weighted average interest rate of 4.34% and a weighted average remaining term to maturity of 6.6 years.

.

•we refinanced four mortgages maturing in 2025 and 2026 in aggregate principal amount of $58.0 million (the “Prior Mortgages”) and bearing a weighted average fixed interest rate of 4.38% with four replacement mortgages in aggregate principal amount $87.7 million (the "2025 Financings"). The replacement mortgages (the “Replacement Mortgages”) have a weighted average remaining term to maturity of 8.5 years, a weighted average fixed interest rate of 4.97%, and unlike the Prior Mortgages, are interest only until maturity (other than with respect to a mortgage in principal amount of $15.8 million, which is interest only until 2030, one year prior to its maturity). As a result of the 2025 Financing, our aggregate annual principal payments are expected to decrease by $1.2 million (until 2030), and our annual interest expense is expected to increase by $1.8 million from the corresponding amounts under the Prior Mortgages.

•we sold a cooperative apartment unit in New York, NY for a sales price of approximately $1.0 million and recognized a gain of $755,000.

•we repurchased 321,060 shares of our common stock for an aggregate purchase price of approximately $4.99 million (i.e., an average purchase price of $15.53 per share).

Subsequent to December 31, 2025, we purchased 75,155 shares of our common stock for an aggregate purchase price of approximately $1.1 million (i.e., an average price of $14.82 per share). In March 2026, our board of directors increased up to $10 million the value of the shares that we can repurchase and extended the repurchase program through December 31, 2028.

Challenges and Uncertainties as a Result of the Uncertain Economic Environment

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

We anticipate that our mortgage interest expense will increase as we refinance the aggregate $154.6 million of principal balances of mortgage debt maturing through 2027 (including $84.0 million of such principal balances at unconsolidated subsidiaries) because current comparable mortgage interest rates are generally higher than the weighted average interest rate on such maturing mortgages. For comparison purposes, the weighted average interest rate on the mortgages on our consolidated and unconsolidated properties maturing through December 31, 2027 is 4.43% and the weighted average interest rate on the 2025 Financings that were completed in December 2025 was 4.97%.

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Results of Operations

Comparison of Years Ended December 31, 2025 and 2024

The term "same store properties" refers to 21 multi-family properties with an aggregate of 5,420 units that were owned for all of 2025 and 2024.

Revenues

The following table compares our revenues for the years indicated:

(Dollars in thousands):

2025

2024

Change

% Change

Rental and other revenue from real estate properties

$

95,265 

$

94,773 

$

492 

0.5 

%

Loan interest and other income

1,763 

857 

906 

105.7 

%

Total revenues

$

97,028 

$

95,630 

$

1,398 

1.5 

%

Rental and other revenue from real estate properties  

The components of the increase include:

•$510,000 due to a 0.74% net increase in average rental rates year-over-year,

•$261,000 due to an increase in average occupancy year-over-year from 93.8% to 93.9%,

•$149,000 in other rental income (tenant reimbursements such as trash and utilities); and

•$114,000 increase at our commercial property in Yonkers, NY (the "Yonkers' Property") due to an increase in the rental rate obtained in connection with a lease extension.

The increase was offset primarily by a $532,000 decrease in revenue recognized from straight line adjustments of rent concessions, net of amortization, with approximately 50% related to Bells Bluff.

Loan interest and other income

The $1 million increase is due primarily to the inclusion, for all of 2025, of the income earned from the Preferred Equity Investments originated in the fourth quarter of 2024.

Expenses

The following table compares our expenses for the periods indicated:

(Dollars in thousands)

2025

2024

Change

% Change

Real estate operating expenses

$

44,082 

$

43,555 

$

527 

1.2 

%

Interest expense

23,511 

22,596 

915 

4.0 

%

General and administrative

15,530 

15,595 

(65)

(0.4)

%

Provision for credit loss

5 

270 

(265)

(98.1)

%

Depreciation and amortization

26,396 

25,926 

470 

1.8 

%

Total expenses

$

109,524 

$

107,942 

$

1,582 

1.5 

%

Real estate operating expenses.  

The components of the increase include:

•increases of $564,000 and $476,000 in payroll and utilities (primarily water/sewer charges), respectively, at several properties;

•$354,000 increase in other expenses, including $100,000 related to advertising and $90,000 related to a loan modification; and

•a net $255,000 increase in real estate taxes at several properties.

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Offsetting the change was a $927,000 decrease in insurance expense due to reduced premiums in 2025 (and we estimate that 2026 insurance premiums will be approximately $500,000 less in 2026 than in 2025) and a $221,000 reduction in repairs and maintenance expenses.

Interest expense

Approximately $1 million of the increase is due to the $27.4 million mortgage obtained in August 2024 on Woodland Trails-La Grange, GA (the "Woodlands Financing"), $318,000 due to the 2025 Financings, and $237,000 due to increased draws on the credit facility. The increase was offset by a $375,000 decrease on our floating rate junior subordinated notes due to the decrease in SOFR and a $275,000 decrease of mortgage interest due to the impact of amortization of mortgage principal amounts.

General and administrative.

The components of the decrease include $521,000 due to the reduction in the number of employees and the inclusion, in 2024, of $141,000 of expense related to the vesting of restricted stock units that vest based on the satisfaction of metrics related to adjusted funds from operations (the "AFFO Awards"); no expense was recorded with respect to the AFFO Awards outstanding in 2025 as such awards are not expected to vest. The decrease was offset due to a (i) $272,000 increase in internal and external audit costs, including approximately $100,000 in out of scope audit costs expensed in 2025 for the 2024 audit, and (ii) $294,000 increase due to higher levels of employee compensation.

Provision for credit loss

In 2025, we recorded a non-cash provision of $5,000 related to the Loan Receivables (i.e. the Preferred Equity Investments) in comparison to $270,000 recorded in 2024.

Depreciation and amortization

The increase is related to property improvements in 2025 and 2024.

Equity in earnings of unconsolidated joint ventures

Equity in earnings from unconsolidated joint ventures decreased $1.8 million, from $1.6 million in 2024, to a loss of $174,000 for the year ended December 31, 2025. The components of the decrease include:

•$1.5 million from the 2025 Acquisitions, primarily due to the amortization of the lease intangibles acquired in such transactions. We estimate that through the quarter ending September 30, 2026, approximately $1 million of expense will be recognized in connection with the amortization of these intangibles.

•$408,000 at same store properties, due to a decrease in operating margins (i.e.,a decrease in rental revenues, a decrease in straight-line rent adjustments of rent concessions, net of amortization, and an increase in operating expense primarily due to increased payroll and repairs and maintenance expense).

Insurance recovery of casualty loss

During 2025, we received an aggregate of $313,000 from insurance recoveries primarily related to the Silvana Oaks and Avalon properties. There were no comparable recoveries in 2024.

Gain on sale of real estate

In 2025, we sold a cooperative apartment in New York for a sales price of $995,000 and a gain of $755,000. In 2024, we sold a cooperative apartment in NY for a sales price of approximately $1.1 million and a gain of $806,000.

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Provision (benefit) for taxes

Income tax provision for 2025 was $174,000, a $400,000 increase from the $226,000 benefit recorded in 2024. The benefit recorded in 2024 is the result of a $534,000 refund of franchise tax received as a result of a change in Tennessee law, offset by the 2024 estimated state tax expense of $318,000.

Comparison of Years Ended December 31, 2024 and 2023

As we are a smaller reporting company, this comparison is omitted in accordance with Instruction 1 to Item 303(a) of Regulation S-K.

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Funds from Operations; Adjusted Funds from Operations; Net Operating Income.

In view of our multi-family property activities, we disclose funds from operations ("FFO"), adjusted funds from operations ("AFFO") and net operating income ("NOI") because we believe that such metrics are a widely recognized and appropriate measure of the performance of a multi-family REIT.

We compute FFO in accordance with the "White Paper on Funds From Operations" issued by the National Association of Real Estate Investment Trusts ("NAREIT") and NAREITs related guidance. FFO is defined in the White Paper as net income (calculated in accordance with GAAP), excluding depreciation and amortization related to real estate, gains and losses from the sale of certain real estate assets, gains and losses from change in control, 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 unconsolidated partnerships and joint ventures are calculated to reflect funds from operations on the same basis. In computing FFO, we do not add back to net income the amortization of costs in connection with our financing activities or depreciation of non-real estate assets.

We compute AFFO by adjusting FFO for loss on extinguishment of debt, our straight-line rent accruals, restricted stock and RSU compensation expense, fair value adjustment of mortgage debt, gain on insurance recovery, insurance recovery from casualty loss and deferred mortgage and debt costs (including, in each case as applicable, from our share from our unconsolidated joint ventures). Since the NAREIT White Paper does not provide guidelines for computing AFFO, the computation of AFFO may vary from one REIT to another.

We believe that FFO and AFFO are useful and standard supplemental measures of the operating performance for equity REITs and are used frequently by securities analysts, investors and other interested parties in evaluating equity REITs, many of which present FFO and AFFO when reporting their operating results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate assets, which assures that the value of real estate assets diminish predictability over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, we believe that FFO and AFFO provide a performance measure that, when compared year-over-year, should reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs and other matters without the inclusion of depreciation and amortization, providing a perspective that may not be necessarily apparent from net income. We also consider FFO and AFFO to be useful to us in evaluating potential property acquisitions.

FFO and AFFO do not represent net income or cash flows from operations as defined by GAAP. FFO and AFFO should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor should FFO and AFFO be considered an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.

FFO and AFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization and capital improvements. FFO and AFFO do not represent cash flows from operating, investing or financing activities as defined by GAAP.

Management recognizes that there are limitations in the use of FFO and AFFO. In evaluating our performance, management is careful to examine GAAP measures such as net income (loss) and cash flows from operating, investing and financing activities. Management also reviews the reconciliation of net income (loss) to FFO and AFFO.

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The table below provides a reconciliation of net income determined in accordance with GAAP to FFO and AFFO for each of the indicated years (amounts in thousands):

2025

2024

GAAP Net loss attributable to common stockholders

$

(11,946)

$

(9,791)

Add: depreciation of properties

26,396 

25,926 

Add: our share of depreciation in unconsolidated joint venture properties

7,625 

5,545 

Add: provision for credit loss

5 

270 

Deduct: gain on sales of real estate

(755)

(806)

Deduct: our share of earnings in earnings from sale of unconsolidated joint

             venture properties

(52)

(209)

Adjustment for non-controlling interests

(17)

(16)

Funds from operations

21,256 

20,919 

Adjust for: straight line rent concession, net of amortization

(315)

(801)

Adjust for: our share of straight-line rent concession, net of amortization from unconsolidated joint ventures

(33)

(147)

Add: amortization of restricted stock and RSU expense

4,692 

4,877 

Add: amortization of deferred mortgage and debt costs

1,202 

1,150 

Add: our share of deferred mortgage costs from unconsolidated joint venture properties

119 

120 

Add: amortization of fair value adjustment for mortgage debt

525 

558 

Adjustment for non-controlling interests

— 

(8)

Adjusted funds from operations

$

27,446 

$

26,668 

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The table below provides a reconciliation of net income per common share (on a diluted basis) determined in accordance with GAAP to FFO and AFFO.

2025

2024

Net loss attributable to common stockholders

$

(0.63)

$

(0.52)

Add: depreciation of properties

1.39 

1.38 

Add: our share of depreciation in unconsolidated joint venture properties

0.40 

0.30 

Add: provision for credit loss

— 

0.01 

Deduct: gain on sales of real estate

(0.04)

(0.04)

Deduct: our share of earnings from sale of unconsolidated joint venture properties

— 

(0.01)

Adjustment for non-controlling interests

— 

— 

Funds from operations

1.12 

1.12 

Adjust for: straight line rent concessions, net of amortization

(0.02)

(0.04)

Adjust for: our share of straight-line rent concession, net of amortization from unconsolidated joint ventures

— 

— 

Add: amortization of restricted stock and RSU expense

0.25 

0.25 

Add: amortization of deferred mortgage and debt costs

0.06 

0.06 

Add: our share of amortization of deferred mortgage and debt costs from

         unconsolidated ventures

0.01 

0.01 

Add: amortization of fair value adjustment for mortgage debt

0.03 

0.03 

Adjustment for non-controlling interests

— 

— 

Adjusted funds from operations

$

1.45 

$

1.43 

Diluted shares outstanding for FFO and AFFO

18,930,284 

18,710,615 

FFO for 2025 increased $337,000, or 1.6%, to $21.3 million from $20.9 million in 2024. Contributing to the increase was a:

•$1.6 million increase in operating margins (i.e., rental and other revenues from real estate properties less real estate operating expenses) across our portfolio (i.e. consolidated and unconsolidated multi-family properties);

•$906,000 increase in loan interest and other income;

•$314,000 increase in insurance recoveries; and

•$184,000 decrease in equity-based compensation.

The increase was offset by a:

•$1.5 million increase in interest expense;

•$607,000 decrease in straight line rent concessions, net of amortization;

•$400,000 increase in income tax expense; and

•$119,000 increase in general and administrative expense (excluding the impact of equity based compensation).

AFFO increased $778,000 or 2.9%, to $27.4 million in 2025 from $26.7 million in 2024. The increase is primarily due to the factors impacting the changes in FFO, other than the changes to net straight-line deferred rent concessions and equity-based compensation.

See “Comparison of Years Ended December 31, 2025 and 2024” for further information regarding these changes.

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NOI is a non-GAAP measure of performance. NOI is used by our management and many investors to evaluate and compare the performance of our properties to other comparable properties, to determine trends at our properties and to determine the estimated fair value of our properties. The usefulness of NOI may be limited in that it does not take into account, among other things, general and administrative expense, interest expense, loss on extinguishment of debt, casualty losses, insurance recoveries and gains or losses as determined by GAAP. NOI is a property specific performance metric and does not measure our performance as a whole. Same store NOI reflects the operations of all of our wholly-owned multi-family properties.

NOI is defined as "Rental and other revenue from real estate properties" less "Real estate operating expenses" in each case as presented on our statements of operations. Real estate operating expenses include real estate taxes, insurance, property management expense, utilities, repairs and maintenance, administrative and marketing. Other REIT’s may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REIT’s. We believe NOI provides an operating perspective not immediately apparent from GAAP operating income or net income (loss). NOI is one of the measures we use to evaluate our performance because it (i) measures the core operations of property performance by excluding corporate level expenses and other items unrelated to property operating performance and (ii) captures trends in rental housing and property operating expenses. However, NOI should only be used as an alternative measure of our financial performance.

The following table provides a reconciliation of net income attributable to common stockholders as computed in accordance with GAAP to NOI for the periods presented (dollars in thousands):

For the year ended December 31,

2025

2024

GAAP Net loss attributable to common stockholders

$

(11,946)

$

(9,791)

Less: Loan interest and other income

(1,763)

(857)

Add: Interest expense

23,511 

22,596 

         General and administrative

15,530 

15,595 

         Depreciation

26,396 

25,926 

Provision for credit loss

5 

270 

         Provision (benefit) for taxes

174 

(226)

Less: Gain on sale of real estate

(755)

(806)

Adjust for: Equity in loss (earnings) of unconsolidated joint venture properties

174 

(1,644)

Less: Insurance recovery of casualty loss

(313)

— 

Add: Net income attributable to non-controlling interests

170 

155 

Net Operating Income

$

51,183 

$

51,218 

Less: Non same store and non multi-family

         Revenues

$

1,698 

$

1,594 

         Operating Expenses

461 

460 

         Non-same store NOI

1,237 

$

1,134 

Same Store Net Operating Income

$

49,946 

$

50,084 

_____________________________________

In 2025, NOI decreased by $35,000 from 2024 due primarily to a $527,000 increase in real estate operating expenses, offset by a $389,000 increase in rental revenue at wholly-owned multi-family properties and a $114,000 increase in rental revenue at the Yonkers' Property. Same store NOI decreased $138,000 in 2025 from 2024 primarily due to the factors impacting NOI, other than the Yonkers' Property. See "Results of Operations -Year Ended December 31, 2025 Compared to the Year Ended December 31, 2024" for a discussion of these changes.

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Liquidity and Capital Resources

We require funds to pay operating expenses and debt service obligations, acquire properties, make capital and other improvements, fund capital contributions, pay dividends and repurchase shares of our common stock. Generally, in 2025, our primary sources of capital and liquidity were the operations of our multi-family properties (including distributions of $4.2 million from the operations of our unconsolidated joint ventures), $29.7 million from the 2025 Financing, $1.2 million from interests in our Preferred Equity Investments and our available cash. Excluding funds held at our unconsolidated subsidiaries, at December 31, 2025 and February 27, 2026, our available liquidity was approximately $65.1 million and $64.8 million, respectively, including $25.1 million and $24.8 million, respectively, of cash and cash equivalents, and subject to compliance with borrowing base and other requirements, up to $40 million available under our credit facility. A significant amount of our cash and cash equivalents is maintained at our properties for general working capital purposes.

We anticipate that for the four years beginning January 1, 2026, our operating expenses, $120 million of mortgage amortization and interest expense (including $38.8 million from unconsolidated joint ventures) and $314.6 million of balloon payments due with respect to mortgages maturing through 2029 (including $151.7 million from unconsolidated joint ventures), anticipated capital expenditures (for 2026 only) of an aggregate of $12.1 million for consolidated and unconsolidated properties, estimated cash dividend payments of at least $75.6 million (assuming (i) the current quarterly dividend rate of $0.25 per share and (ii) 18.9 million shares outstanding), will be funded from cash generated from operations (including distributions from unconsolidated joint ventures), mortgage financings and re-financings, sales of properties, the issuance of additional equity and, if available, our $40 million credit facility. Our operating cash flow and available cash is insufficient to fully fund the $314.6 million of balloon payments, and if we are unable to refinance such debt on acceptable terms, we may need to issue additional equity or dispose of properties, in each case on potentially unfavorable terms.

Our ability to acquire multi-family properties (including making alternative investments such as preferred equity investments), and implement value-add projects is limited by our available cash and our ability to (i) draw on our credit facility, (ii) obtain, on acceptable terms, mortgage debt and (iii) raise capital from the sale of our common stock.

Disclosure of Known Material Contractual Obligations

The following table sets forth as of December 31, 2025 our known material contractual obligations:

Payment Due by Period

(Dollars in thousands)

Less than

1 Year

1 - 3

Years

3 - 5

Years

More than

5 Years

Total

Long-Term Debt Obligations (1)

Interest and Principal Amortization

$

40,133 

$

65,112 

$

48,033 

$

114,414 

$

267,692 

Balloon Principal Payments (2)

88,677 

171,485 

75,655 

384,440 

720,257 

Operating Lease Obligations

392 

586 

552 

2,425 

3,955 

Purchase Obligations (3) (4)

6,082 

12,164 

12,164 

— 

30,410 

Total

$

135,284 

$

249,347 

$

136,404 

$

501,279 

$

1,022,314 

____________________________

(1) Reflects payments of principal (including amortization payments) and interest and excludes deferred costs. Includes all of the debt of unconsolidated joint ventures. See the following table for information regarding same. Assumes that the interest rate on the junior subordinated notes will be 6.10% per annum, which was the rate in effect at December 31, 2025.

(2) During the year ending December 31, 2026, $37.2 million and $51.5 million is due in March and September, respectively. We anticipate that the amount due in March under the Stono Oaks floating rate construction loan will be extended until March 2027.

(3) Assumes that $1 million and $1.8 million will be paid annually through December 31, 2030 pursuant to the shared services agreement and for the Services, respectively.

(4) Assumes that approximately $2.5 million of property management fees will be paid annually to the property managers of our multi-family properties, including $760,000 related to unconsolidated joint ventures. Such sum reflects the amount we anticipate paying in 2026 on the multi-family properties we own at December 31, 2025. These fees are typically charges based on a percentage of rental revenues from a property. No amount has been reflected as payable pursuant thereto after five years as such amount is not determinable.

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The following table sets forth as of December 31, 2025 information regarding the components of our long-term debt obligations:

Payment due by Period

(Dollars in thousands)

Less than

1 Year

1 - 3

Years

3 - 5

Years

More than

5 Years

Total

Mortgages on consolidated properties (1)

$

51,872 

$

121,376 

$

105,881 

$

321,320 

$

600,449 

Mortgages on unconsolidated properties (1)

74,657 

110,658 

13,244 

127,974 

326,533 

Junior subordinated notes and credit facility (2)

2,281 

4,563 

4,563 

49,560 

60,967 

Total

$

128,810 

$

236,597 

$

123,688 

$

498,854 

$

987,949 

___________________________

(1) Includes payments of principal (including amortization payments), and interest, and excludes deferred financing costs.

(2) Assumes that the interest rate on the junior subordinated notes will be 6.10% per annum and that no amounts are outstanding under the credit facility.

Corporate Level Financing Arrangements

Junior Subordinated Notes

As of December 31, 2025, $37.4 million (excluding deferred costs of $217,000) in principal amount of our junior subordinated notes is outstanding. These notes mature in April 2036, contain limited covenants (including covenants prohibiting us from paying dividends or repurchasing capital stock if there is an event of default (as defined therein) on these notes), are redeemable at our option and bear an interest rate, which resets and is payable quarterly, of three-month term SOFR plus 226 basis points. At December 31, 2025 and 2024, the interest rate on these notes was 6.1% and 6.85%, respectively.

Credit Facility

Our credit facility with VNB New York, LLC, an affiliate of Valley National Bank (collectively, "VNB"), allows us to borrow, subject to compliance with borrowing base requirements and other conditions, up to $40 million, (i) for the acquisition of, and investment in, multi-family properties, (ii) to repay mortgage debt secured by multi-family properties and (iii) for Operating Expenses (i.e., working capital (including dividend payments) and operating expenses); provided, that not more than $25 million may be used for Operating Expenses. The credit facility is secured by cash accounts maintained by us at VNB (we are required to maintain substantially all of our bank accounts at VNB), and the pledge of our interests in the entities that own three unencumbered multi-family properties used in calculating the borrowing base. The credit facility bears an annual interest rate, which resets monthly, equal to one-month term SOFR plus 250 basis points, with a floor of 6.00%. The interest rate at December 31, 2025 and February 27, 2026, was 6.37% and 6.18% respectively. There is an annual fee of 0.25% on the total amount committed by VNB and unused by us. The credit facility matures in September 2027. As of February 27, 2026, there was no balance outstanding and up to $40 million was available to be borrowed thereunder.

The terms of the credit facility include certain restrictions and covenants which, among other things, limit the incurrence of liens, require that we maintain and include in the collateral securing the facility at least two unencumbered properties with an aggregate value(as calculated pursuant to the facility) of at least $50 million, and require compliance with financial ratios relating to, among other things maintaining a minimum tangible net worth of $140 million, the minimum amount of debt service coverage with respect to the properties (and amounts drawn on the credit facility) used in calculating the borrowing base. Net proceeds received from the sale, financing or refinancing of wholly-owned properties are generally required to be used to repay amounts outstanding under the credit facility.

As of December 31, 2025, we were in compliance in all material respects with the requirements of the facility.

Other Financing Sources and Arrangements

At December 31, 2025, we are joint venture partners in unconsolidated joint ventures which own ten multi-family properties which distributed $3.9 million to us in 2025. We may be required to make capital contributions with respect to these properties. At December 31, 2025, our investment in these joint venture properties have a net equity carrying value of $46.1 million and are subject to mortgage debt, which is not reflected on our consolidated balance sheet, of $286.5 million. Although BRT Apartments Corp. is not the obligor with respect to such mortgage debt, the loss of any of these properties due to mortgage foreclosure or similar proceedings would have a material adverse effect on our results of operations and financial condition. See note 6 to our consolidated financial statements.

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At December 31, 2025, we had preferred equity investments in unconsolidated joint ventures that own multi-family properties. These joint ventures paid us $1.2 million in 2025 and we anticipate that, subject to the underlying property generating sufficient cash flow, that such joint ventures will pay us $1.3 million in 2026. At December 31, 2025, the carrying value of these investments was $17.7 million and these investments are subordinate to mortgage debt of $51.0 million, which debt is not reflected on our consolidated balance sheet.

See "Item 1. Business-Mortgage Debt" for information regarding our mortgage debt at consolidated and unconsolidated subsidiaries.

Inflation

Substantially all of our multi-family property leases are for periods of one-year or less. The short-term nature of these leases generally serves to reduce, but does not eliminate, the affect of inflation on our net income. During 2025, we continued to experience inflationary pressures that drove higher operating expenses, primarily in personnel, repairs and maintenance, and real estate taxes; such increases may continue in 2026 and thereafter, which would adversely affect our operating results.

Inflation affects the overall cost of our debt. We mitigate the risks presented by inflation through the use of fixed interest rate mortgage debt and by paying down, when we deem appropriate, our credit facility debt. However, increasing interest rates, which generally correlates to increasing inflation, increases the interest expense on our junior subordinated notes and makes it less attractive to obtain mortgage debt (including the refinancing of an aggregate of $88.7 million of mortgage debt (including $60.9 million of mortgage debt at unconsolidated joint ventures, that matures in 2026)) or use our credit facility in connection with acquisition and value add activities.

Cash Distribution Policy

We have elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. Accordingly, we must, among other things, meet a number of organizational and operational requirements, including a requirement that we distribute currently at least 90% of our ordinary taxable income to our stockholders. It is our current intention to comply with these requirements and maintain our REIT status. As a REIT, we generally will not be subject to corporate federal, state or local income taxes on taxable income we distribute currently (in accordance with the Internal Revenue Code and applicable regulations) to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal, state and local income taxes at regular corporate rates and may not be able to qualify as a REIT for four subsequent tax years. Even if we qualify for federal taxation as a REIT, we may be subject to certain state and local taxes on our income and to federal income taxes on our undistributed taxable income (i.e., taxable income not distributed in the amounts and in the time frames prescribed by the Internal Revenue Code and applicable regulations thereunder) and are subject to Federal excise taxes on our undistributed taxable income.

It is our intention to pay to our stockholders within the time periods prescribed by the Internal Revenue Code no less than 90%, and, if possible, 100% of our annual taxable income, including taxable gains from the sale of real estate. It will continue to be our policy to make sufficient distributions to stockholders in order for us to maintain our REIT status under the Internal Revenue Code.

We anticipate that if we do not sell any multi-family properties this year, that a significant amount of the dividends we will pay in 2026, if any, will be treated for federal income tax purposes as a return of capital.

Our board of directors will continue to evaluate, on a quarterly basis, the amount of dividend payments based on its assessment of, among other things, our short and long-term cash and liquidity requirements, prospects, debt maturities, net income, funds from operations, and adjusted funds from operations.

Critical Accounting Estimates

Our discussion and analysis of financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”). The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting periods. On an ongoing basis, we reconsider and evaluate our estimates and assumptions.

We base our estimates on historical experience, current trends and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results could materially differ from any of our estimates under different assumptions or conditions. Our significant accounting policies are discussed in Note 1 of our

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consolidated financial statements in this report. We believe the accounting estimates listed below are the most critical to aid in fully understanding and evaluating our reported financial results, and they require our most difficult, subjective or complex judgments, resulting from the need to make estimates about the effect of matters that are inherently uncertain.

Equity method investments

We report our investments in unconsolidated entities, over whose operating and financial policies we do not control, under the equity method of accounting. Under this method of accounting, our pro rata share of the applicable entity's earnings or losses is included in our consolidated statements of operations. We initially record our investments based on either the carrying value for properties contributed or the cash invested.

We evaluate our equity-method investments for impairment whenever events or changes in circumstances indicate that the carrying value of our investments may exceed the fair value. If it is determined that a decline in the fair value of our investments is not temporary, and if such reduced fair value is below its carrying value, an impairment is recorded. Determining fair value involves significant judgment. Our estimates consider available evidence including the present value of the expected future cash flows discounted at market rates, general economic conditions and other relevant factors.

Carrying Value of Real Estate Portfolio

We conduct a quarterly review of each real estate asset owned by us and through our joint ventures. This review is conducted in order to determine if indicators of impairment are present on the real estate.

In reviewing the value of the real estate assets owned, if there is an indicator of impairment and the carrying value of the real estate asset is determined to be unrecoverable, we seek to arrive at the fair value of each real estate asset by using one or more valuation techniques, such as comparable sales, discounted cash flow analysis or replacement cost analysis. A real estate asset is considered to be unrecoverable when an analysis suggests that the undiscounted cash flows to be generated by the property will be insufficient to recover our investment. Any impairment taken with respect to our real estate assets reduces our net income, assets and stockholders' equity to the extent of the amount of the allowance, but it will not affect our cash flow until such time as the property is sold.

Allowance for credit losses

We estimate the allowance for credit losses in accordance with the Current Expected Credit Loss (CECL) model under Accounting Standards Codification ("ASC") Topic 326. This model requires us to estimate expected lifetime credit losses for our loan portfolio (i.e., our preferred equity investments) by considering historical loss experience, current economic conditions, and reasonable and supportable forecasts of future economic trends. The estimate is highly subjective and involves significant judgment in the following areas:

•Historical Loss Data: We segment our loan portfolio based on risk characteristics such as borrower type, loan term, and collateral. We will use historical loss experience when available, as a basis for expected credit losses.

•Macroeconomic Forecasts: We incorporate forward-looking macroeconomic indicators, such as GDP growth, unemployment rates, and interest rate trends, to adjust historical loss trends.

•Qualitative Adjustments: We apply management judgments to adjust the allowance for factors that may not be fully captured in the quantitative model, including changes in emerging risks such as regulatory, geopolitical, or credit risks.

•The estimate of expected credit losses is inherently uncertain and sensitive to changes in economic conditions. For example, a 100-basis-point increase in unemployment rates or a prolonged downturn in the real estate market could result in a higher allowance for credit losses, negatively impacting our financial results. Conversely, improvements in economic conditions could result in a lower allowance.

•We continually evaluate the adequacy of our allowance for credit losses and adjust it as necessary. However, actual losses may differ from our estimates due to unforeseen changes in economic conditions or borrower behavior.

Purchase Price Allocations

We allocate the purchase price of properties, including acquisition costs and assumed debt, when appropriate, to the tangible and identified intangible assets and liabilities acquired based on their relative fair values. In making estimates of fair values for purposes of allocating purchase price, we use a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property, our own analysis of recently acquired and existing comparable properties in our portfolio and other market data. We also consider information obtained about each

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property as a result of its pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired.

Equity-Based Compensation

We grant shares of restricted stock and restricted stock units ("RSUs") to eligible plan participants, subject to the recipient's continued service over a specified period and, with respect to the RSUs, the satisfaction of specified conditions over a specified period. A portion of the RSUs vest based upon satisfaction of specified metrics with respect to (i) total stockholder return(“TSR Awards”) and (ii) adjusted funds from operations(“AFFO Awards”), in each case as calculated pursuant to the applicable award agreement. We account for the restricted stock awards and RSUs in accordance with ASC 718, Compensation - Stock Compensation, which requires that such compensation be recognized in the financial statements based on its estimated grant-date fair value. The value of such awards is recognized as compensation expense in general and administrative expenses in the accompanying consolidated statements of operations over the applicable service periods. Grant date fair value is determined with respect to the (i) the restricted stock awards, by the closing stock price on the date of grant, (ii) TSR Awards, by using a Monte Carlo simulation relying upon various assumptions and (iii) AFFO Awards, by using the closing stock price on the grant date, subject to quarterly adjustment based upon management’s subjective projections as to the achievability of the specified metrics related to the AFFO Awards (the “AFFO” Metrics).There is substantial subjectivity in (i) the inputs selected for the Monte Carlo simulation used in determining the grant date fair value of the TSR Awards and the use of different inputs would change the expense we recognize with respect to such awards and (ii) management’s projections as to the achievability of the AFFO Metrics and changes in such projections will cause fluctuations in our results of operations. See Note 11 to our consolidated financial statements.