BRT

MKT CAP $248.3MP/E —DIV YIELD —FCF YIELD —REV TTM $97.8M +1.2%NET INCOME −$12.9MNET DEBT $600.4M52W 12.85 – 15.63SEC XBRL · TTM TO Invalid Date

How BRT rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

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The categorization of risks set forth below is meant to help you better understand the risks facing our business and is not intended to limit your consideration of the possible effects of these risks to the listed categories.
Any adverse effects arising from the realization of any of the risks discussed, including our financial condition and results of operation, may, and likely will, adversely affect many aspects of our business.
Unfavorable market and economic conditions significantly affect our occupancy levels, our rental rates and collections, the value of our properties and our ability to acquire or dispose of multi-family properties on favorable terms.
Our ability to lease units at our multi-family properties at favorable rates is adversely affected by the increase in supply in the multi-family and other rental markets and other housing alternatives, and is dependent upon the overall level in the economy, which may continue to be adversely affected by, among other things, inflationary conditions, job losses and unemployment levels, personal debt levels, a downturn in the housing market, stock market volatility, and uncertainty about the future.
The number of competitive properties relative to demand in a particular area has a material effect on our ability to lease our properties, on the rents we charge and our occupancy levels.
If the costs associated with real estate taxes, utilities and insurance premiums should rise, without being offset by a corresponding increase in revenues, our results of operations could be negatively impacted, and our ability to make payments on our debt and to make distributions would be adversely affected.
As of December 31, 2025: (i) our wholly-owned properties generated approximately 75% and 9% of our 2025 revenues from properties located in the Southeast and Texas, respectively, and (ii) the properties owned by unconsolidated joint ventures at December 31, 2025, generated 59% and 41% of our 2025 JV Rental and Other Revenues at properties located in the Southeast and Texas, respectively.
Accordingly, adverse developments in such markets, including economic developments, pandemics, or natural or man-made disasters, would adversely impact the cash flow and value of these properties.
If these property management companies do not perform their duties properly, the occupancy and rental rates at such properties may decline and the expenses at such properties may increase.
At December 31, 2025, one property manager manages 11 properties, a second property manager manages eight properties, and five other property managers manage three or fewer properties.
Ten of our multi-family properties are owned through joint ventures with other persons or entities.
Joint venture investments involve risks not otherwise present when acquiring real estate directly, including the following: • our joint venture partners may have economic or business interests or objectives which are or become inconsistent with our business interests or objectives, including differing objectives relating to the sale or refinancing of properties held by the joint venture or the timing of the termination or liquidation of the joint venture; • the more successful a joint venture project, the more likely that profits or distributions generated above a negotiated threshold will be allocated disproportionately in favor of our joint venture partner at a rate greater than that implied by our partner's equity interest in the venture; • several of our joint venture partners have other competing real estate interests in the markets in which our properties are located that could influence such partners to take actions favoring their properties to the detriment of the jointly owned properties; • our joint venture partners obtain blanket property casualty and business interruption insurance insuring properties we own jointly and other properties in which we have no ownership interest and as a result, claims or losses with respect to properties owned by our joint venture partners but in which we have no interest could significantly reduce or eliminate the insurance available to properties in which we have an interest; • our joint venture partner might become bankrupt, insolvent or otherwise refuse or be unable to meet their obligations to us or the venture (including their obligation to make capital contributions or property distributions when due); • we may incur liabilities as a result of action taken by our joint venture partner; • our joint venture partner may not perform properly its property oversight responsibilities; • our joint venture partner may be in a position to take action or withhold consent contrary to our instructions or requests, including actions that may make it more difficult to maintain our qualification as a REIT; • our joint venture partner might engage in unlawful or fraudulent conduct with respect to our jointly owned properties or other properties in which they have an ownership interest; • changes in personnel managing our joint venture partners have resulted in greater difficulty in working with the new personnel; • our joint venture partner may trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner's interest, at a time when we otherwise would not have initiated such a transaction; • disputes between us and our joint venture partners may result in litigation or arbitration that would increase our expenses and divert management's attention from operating our business; and • disagreements with our joint venture partners with respect to property management (including with respect to whether a property should be sold, refinanced, or improved) could result in an impasse resulting in the inability to operate the property effectively.
Accordingly, our revenues are impacted by declines in market rents more quickly than if our leases were for longer terms.
If we are unable to promptly renew the leases or relet the units, or if the rental rates upon renewal or reletting are significantly lower than the previous rates, our financial condition and results of operations may be adversely affected .
The following table sets forth, as of December 31, 2025, the principal balance of the mortgage payments due at maturity on our wholly-owned and unconsolidated joint venture properties and the weighted average interest rate thereon (dollars in thousands): Consolidated Properties Unconsolidated Properties Year Principal Balances Due at Maturity Weighed Average Interest Rate Principal Balances Due at Maturity (1) Weighed Average Interest Rate 2026 $ 27,767 3.73 % $ 60,910 5.18 % 2027 42,795 3.96 % 23,108 4.15 % 2028 37,951 4.47 % 67,631 4.26 % 2029 54,390 3.94 % — — 2030 21,265 4.71 % — — 2031 and thereafter 259,605 4.34 % 124,834 3.75 % Total $ 443,773 $ 276,483 _____________ (1) Includes our joint venture partner's "share" of such debt.
At February 27, 2026, we had approximately $24.8 million of cash and cash equivalents (of which a significant portion is required for day-to-day operating expenses at the property level) and up to $40 million available to us under our credit facility.
At December 31, 2025 the weighted average age (based on the number of units) of our multi-family properties is approximately 22 years.
In the event such a claim were made against us under a “bad boy” carve out guarantee, following foreclosure on mortgages or related loans, and such claim were successful, our business and financial results would be materially adversely affected.
Should access to financing provided through Fannie Mae and Freddie Mac loan programs be reduced or impaired, it would significantly reduce our access to debt capital and/or increase borrowing costs and would significantly limit our ability to acquire properties on acceptable terms and reduce the values to be realized upon property sales.
The ADA generally requires that the public areas at our properties be made accessible to disabled persons.
From time-to-time, claims have been, and may continue to be, asserted against us with respect to some of our properties under the ADA.
Our estimates and judgments are based on a number of factors, including projected cash flow from the collateral, if any, securing our investments, the structure of our investment, including the availability of reserves and recourse guarantees, likelihood of repayment in full at the maturity of a loan, potential for refinancing and expected market discount rates for varying property types, and other macro economic data, all of which are uncertain and highly subjective.
These conditions include: • changes in national, regional and local economic conditions, which may be negatively impacted by concerns about inflation, deflation, government deficits, unemployment rates and decreased consumer confidence particularly in markets in which we have a high concentration of properties; • increases in interest rates, which could adversely affect our ability to obtain financing or to buy or sell properties on favorable terms or at all; • the inability of tenants to pay rent; • the existence and quality of the competition, such as the attractiveness of our properties as compared to our competitors' properties based on considerations such as convenience of location, rental rates, amenities and safety record; • increased operating costs, including increased real property taxes, maintenance, insurance and utility costs (including increased prices for fossil fuels); • weather conditions that may increase or decrease energy costs and other weather-related expenses; • oversupply of competitive housing opportunities, including apartments or single-family housing, or a reduction in demand for real estate in the markets in which our properties are located; • a favorable interest rate environment that may result in a significant number of residents or potential residents of our multi-family properties deciding to purchase homes instead of renting; • changes in, or increased costs of compliance with, laws and/or governmental regulations, including those governing usage, zoning, the environment and taxes; and • rent control or stabilization laws, or other laws regulating rental housing, which could prevent us from raising rents to offset increases in operating costs.
We may incur impairment charges in 2026.
The aggregate fees to be paid for the Services in 2026, and paid in 2025 and 2024, are $1.8 million, $1.7 million and $1.6 million, respectively.
During 2025 and 2024, we reimbursed Gould Investors $750,000 and $698,000, respectively, for the personnel and facilities provided pursuant to the shared services agreement.
We also obtain certain insurance in conjunction with Gould Investors and reimbursed Gould Investors $30,000 and $28,000, in 2025 and 2024, respectively, for our share of the insurance cost.
Although the properties purchased by Gould Investors are generally smaller than the properties in which we are interested, a conflict of interest will arise should Gould Investors decide to pursue the acquisition of large properties in such region.
Gould devotes substantially all of his business time to our affairs, he devotes a portion of his business time to entities affiliated with us.
Gould, only two other executive officers, Matthew Gibbons, our chief accounting officer, and Ryan Gould, a vice president, devote all or substantially all of their business time to us.
Many of our executives, including Isaac Kalish, our chief financial officer (i) also provide the Services (see " Item 1.
If the shared services agreement is terminated, the executives performing Services are unwilling to continue to do so, or if we are dissatisfied with the services provided pursuant to these arrangements, we will have to obtain such services from other sources or hire personnel to perform them.
We may not be able to replace these services or hire such employees in a timely manner or on terms that are equivalent to or better than those we receive pursuant to the Services and the shared services agreement.
Based on information supplied to us, as of December 31, 2025, Gould Investors owns approximately 21.6% of the outstanding shares of common stock and, by virtue of the applicable attribution rules under the Code, these individuals beneficially own approximately 26.4% of outstanding shares of common stock.
As a result, the acquisition by each of four other individuals of 6% of our outstanding common stock, when combined with the ownership of our common stock of Gould Investors, Fredric H.
Gould, or their affiliates, acquire additional shares or our stock, or any other event occurs (including a repurchase of shares of our stock), that results in an individual beneficially or constructively owning 24.0% or more of the outstanding shares of our stock within the meaning of the Charter, the acquisition by four other individuals of 6.0% or less of our outstanding stock would violate the Five or Fewer Limit and, therefore, could cause the stock acquired by one or more of these other individuals to be transferred to the charitable trust, despite their compliance with the 6.0% ownership limits.
Artificial intelligence and other machine learning techniques could increase competitive, operational, legal and regulatory risks to our business in ways that we cannot predict.
The use of artificial intelligence (“AI”) by us and others, and the overall adoption of AI throughout society, may exacerbate or create new and unpredictable competitive, operational, legal and regulatory risks to our business.
There is substantial uncertainty about the extent to which AI will result in dramatic changes throughout the world, and we may not be able to anticipate, prevent, mitigate or remediate all of the potential risks, challenges or impacts of such changes.
These changes could potentially disrupt, among other things, our business and operational processes.

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We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this Annual 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 Annual Report or to reflect the occurrence of unanticipated events thereafter.
General We are an internally managed real estate investment trust, also known as a REIT, that owns, operates, and to a lesser extent, holds interests in joint ventures that own and operate multi-family properties.
At December 31, 2024, we (i) wholly-own 21 multi-family properties with an aggregate of 5,420 units and a carrying value of $614.2 million; (ii) have ownership interests, through unconsolidated entities, in eight multi-family properties with an aggregate of 2,527 units for which the carrying value of our net equity investment therein is $31.3 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 subsidiaries, with a carrying value of $1.7 million.
The 29 multi-family properties are located in 11 states; primarily in the Southeast United States and Texas.
Our website can be accessed at www.brtapartments.com , where copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission, or SEC, can be obtained free of charge. 2024 and Recent Developments.
During 2024: • We invested, in two separate and unrelated transactions, an aggregate of $18.3 million (with a carrying value of $17.7 million at December 31, 2024, after giving effect to deferred loan fees and allowance for credit loss), in joint ventures that purchased a 204-unit multi-family property in Wilmington, North Carolina and a 184-unit multi-family property in Kennesaw, Georgia.
These investments are unsecured and are subordinate, including the payment of the returns thereon, to an aggregate of $51.3 million of mortgage debt on these properties.
We estimate that in 2025, we will generate approximately $1.2 million of interest income on these investments.
For financial statement reporting purposes, these investments are treated as loans and are included in "Loan receivables, net of deferred loan fees and allowance for credit loss" on our consolidated balance sheet at December 31, 2024.
Business - Preferred Equity Investments" and Notes 1 and 5 to our consolidated financial statements. • We obtained a $27.4 million mortgage on our Woodland Trails-LaGrange, GA property (the "Woodlands Financing").
The debt matures in September 2031, bears a fixed rate of interest of 5.22%, and is interest only until maturity. • We and an affiliate of Valley National Bank ("VNB") amended our credit facility to, among other things, reduce the borrowing capacity from $60 million to $40 million, extend the maturity from September 2025 to September 2027 and revise certain financial and other covenents.
VNB required these changes as a condition to our obtaining the Woodlands Financing. • We sold a cooperative apartment unit in New York, NY for a sales price of approximately $1.1 million and recognized a gain of $806,000. • We repurchased 193,529 shares of our common stock for an aggregate purchase price of approximately $3.5 million ( i.e., an average purchase price of $18.07 per share).
From January 1, 2025 through February 28, 2025, we purchased 65,018 shares of our common stock for an aggregate purchase price of approximately $1.1 million ( i.e., average price of $17.49 per share).
In March 2025, our board of directors increased the value of the shares that we can repurchase to up to $10 million and extended the repurchase program through December 31, 2026.
Our Multi-Family Properties Generally, our multi-family properties are garden apartments and, to a lesser extent, mid-rise or town home style properties that provide residents with amenities, such as a clubhouse, swimming pool, laundry facilities and internet access.
Residential leases are typically for a one-year term and may require security deposits equal to one month's rent.
Substantially all of the units at these properties are leased at market rates.
Set forth below is selected information regarding the multi-family properties in which we have an interest (other than the properties involving the preferred equity investments), as of December 31, 2024; the properties in which we have a less than 100% ownership interest are owned by unconsolidated joint ventures: Our Percentage Ownership (%) (1) Average Monthly Rental Rate Per Occupied Unit ($) Average Physical Occupancy (%) Property Name and Location Number of Units Age Acquisition Date 2024 2023 2022 2021 2020 2024 2023 2022 2021 2020 Silvana Oaks Apartments—N.
Charleston, SC 208 14 10/4/2012 100 1,539 1,486 1,370 1,231 1,182 94.4 94.7 96.0 95.1 93.2 Avondale Station—Decatur, GA 212 70 11/19/2012 100 1,405 1,429 1,323 1,196 1,173 89.3 91.2 96.3 97.2 95.3 Brixworth at Bridge Street—Huntsville, AL 208 39 10/18/2013 100 1,061 1,079 950 879 828 95.1 93.9 94.3 96.1 97.6 Newbridge Commons—Columbus, OH 264 25 11/21/2013 100 1,157 1,104 1,031 947 929 95.2 96.5 97.3 97.5 95.2 Crossings of Bellevue—Nashville, TN 300 39 4/2/2014 100 1,453 1,459 1,328 1,186 1,186 95.4 95.0 96.7 97.1 96.3 Avalon Apartments—Pensacola, FL 276 16 12/22/2014 100 1,498 1,518 1,438 1,250 1,124 94.8 95.0 96.3 98.1 95.3 Parkway Grande—San Marcos, TX 192 10 9/10/2015 100 1,280 1,310 1,209 1,042 1,035 93.7 94.8 95.9 97.1 93.4 Woodland Trails—LaGrange, GA 236 14 11/18/2015 100 1,378 1,330 1,193 1,059 1,014 93.2 94.9 97.5 98.9 96.7 Grove at River Place — Macon, GA 240 36 2/1/2016 100 951 935 865 792 744 90.3 92.9 95.9 95.6 92.2 Civic Center I—Southaven, MS 392 22 2/29/2016 100 1,278 1,231 1,122 1,021 958 95.8 96.3 97.6 98.2 97.1 Civic Center II — Southaven, MS 384 19 9/1/2016 100 1,353 1,305 1,186 1,085 1,031 94.0 95.3 97.0 98.2 96.6 Verandas at Alamo Ranch—San Antonio, TX 288 9 9/19/2016 100 1,141 1,132 1,194 1,084 1,039 90.1 86.2 92.0 91.2 93.2 Kilburn Crossing — Fredericksburg, VA 220 19 11/4/2016 100 1,700 1,623 1,593 1,465 1,411 96.7 95.8 97.4 97.9 96.2 Bells Bluff — West Nashville, TN 402 5 6/2/2017 100 1,700 1,781 1,749 1,421 1,482 91.6 92.4 96.9 92.3 74.7 Vanguard Heights — Creve Coeur, MO 174 8 4/4/2017 100 1,684 1,711 1,598 1,583 1,604 94.9 94.9 94.2 93.6 95.9 Jackson Square — Tallahassee, FL 242 28 8/30/2017 100 1,432 1,375 1,270 1,131 1,090 95.1 95.6 94.3 94.2 94.8 Magnolia Pointe at Madison — Madison, AL 204 33 12/7/2017 100 1,215 1,234 1,154 1,036 924 93.2 92.6 92.1 96.6 97.6 The Woodland Apartments — Boerne, TX (2) 120 17 12/14/2017 100 1,208 1,224 1,138 974 980 96.5 96.0 97.3 87.0 96.3 Somerset at Trussville — Trussville, AL 328 17 5/7/2019 100 1,259 1,224 1,145 1,078 998 94.9 94.7 96.7 95.7 97.0 Crestmont at Thornblade — Greenville, SC 266 26 10/30/2018 100 1,393 1,346 1,232 1,104 1,051 94.8 95.7 97.8 96.3 91.8 Abbotts Run — Wilmington, NC 264 23 2/20/2020 100 1,286 1,251 1,110 978 873 95.3 94.7 96.8 95.3 93.5 The Pointe at Lenox Park— Atlanta, GA 271 35 8/15/2016 74 1,529 1,507 1,405 1,275 1,255 94.7 95.8 94.1 96.0 94.6 Canalside Lofts — Columbia, SC 374 16 11/10/2016 32 1,446 1,406 1,314 1,225 1,406 94.5 93.0 95.7 93.2 90.9 Canalside Sola — Columbia, SC (3) 339 9 11/10/2016 46 1,684 1,577 1,474 1,361 1,395 94.8 95.1 96.6 92.6 81.4 Mercer Crossing — Farmers Branch, TX 509 8 6/29/2017 50 1,657 1,701 1,570 1,374 1,314 91.4 93.0 94.8 95.9 90.6 Gateway Oaks — Forney, TX 313 8 9/15/2017 50 1,400 1,394 1,281 1,181 1,147 94.3 93.1 97.8 96.7 91.1 Landings of Carrier Parkway — Grand Prairie, TX 281 23 5/17/2018 50 1,320 1,367 1,288 1,149 1,098 91.9 90.2 93.2 94.1 94.5 Village at Lakeside — Auburn, AL 200 36 8/8/2019 80 1,167 1,073 983 907 859 97.7 97.5 97.7 97.1 96.0 Stono Oaks-Johns Island, SC (4) 240 1 1/1/2024 17 1,597 — — — — 38.4 — — — — Total 7,947 ____________________________________________ (1) Distributions to, and profit sharing between, joint venture partners, are determined pursuant to the applicable agreement governing the relationship between the parties and are generally not pro rata to the equity ownership percentage each joint venture partner has in the applicable joint venture.
(2) Occupancy in 2021 was effected by damage from the February ice storm in Texas (the "Texas Storm").
(3) This property was in lease up until September 2020.
(4) This property was in lease up during 2024.
Occupancy was 71.7% at December 31, 2024.
The following table sets forth certain information, presented by state, related to our consolidated properties as of December 31, 2024 (dollars in thousands): State Number of Properties Number of Units 2024 Rental and Other Revenues Percent of 2024 Rental and Other Revenues Tennessee 2 702 $ 14,048 15 % Mississippi 2 776 12,648 13 % Alabama 3 740 11,391 12 % Georgia 3 688 10,610 11 % Florida 2 518 9,458 10 % Texas 3 600 9,342 10 % South Carolina 2 474 8,813 9 % Virginia 1 220 4,868 5 % North Carolina 1 264 4,295 5 % Ohio 1 264 3,935 4 % Missouri 1 174 3,770 4 % Other (1) — — 1,595 2 % Total 21 5,420 $ 94,773 100 % __________________ _________ (1) Includes non-multi- family revenues primarily from a commercial property located in Yonkers, NY.
The following table sets forth certain information, presented by state, related to properties owned by unconsolidated joint ventures at of December 31, 2024 (dollars in thousands): State Number of Properties Number of Units 2024 JV Rental and Other Revenues (1) Percent of 2024 JV Rental and Other Revenues (1) Texas 3 1,103 $ 21,105 46 % South Carolina 3 953 15,835 35 % Alabama 1 200 5,225 12 % Georgia 1 271 3,017 7 % Total 8 2,527 $ 45,182 4,518,200,000 % 100 % ___________________________ (1) The term "JV Rental and other Revenues" refers to the revenues generated at multi-family properties owned by unconsolidated joint ventures Our Acquisition Process and Underwriting Criteria We identify multi-family property acquisition opportunities primarily through relationships developed with, among others, current or former joint venture partners, real estate investors and brokers.
We will acquire multi-family properties either with joint venture partners (and especially with partner’s experienced in the target market), which allows us to benefit from such partner’s experience, or directly ( i.e. , without a joint venture partner), which allows for the possibility for greater returns on our investment.
We emphasize acquiring the following types of multi-family properties: • Class B or better properties with strong and stable cash flows in markets where we believe there exists opportunity for rental growth and further value creation; • Class B or better properties that offer significant potential for capital appreciation through repositioning or rehabilitating the asset to drive rental growth; and • properties available at opportunistic prices providing an opportunity for a significant appreciation in value.
We seek properties that provide stable risk adjusted total returns ( i.e., operating income plus capital appreciation), including value-add opportunities ( i.e. , properties that can be repositioned or improved allowing us to generate higher rents or improved occupancy) and emphasize acquiring properties in the Southeast United States and Texas.
We have been opportunistic in pursuing multi-family property acquisitions and have not mandated any specific acquisition criteria, although we take the following, among other things, into account in evaluating an acquisition opportunity: location, demographics, size of the target market, property quality, availability and terms and conditions of long-term fixed-rate mortgage debt, potential for capital appreciation or recurring income, extent and nature of contemplated capital improvements and property age.
A key consideration in our acquisition process is the availability of mortgage debt to finance the acquisition (or the ability to assume the mortgage debt on the property) and the terms and conditions ( e.g ., interest rate, amortization and maturity) of such debt.
Generally, approximately 35% to 50% of the purchase price has been paid in cash (all or a portion of our share of which may be funded by borrowing from our credit facility) and the balance is financed with mortgage debt.
We believe that the use of leverage allows us the ability to earn a greater return on our investment than we would otherwise earn.
Generally, the mortgage debt obtained in connection with an acquisition matures in five to ten years, is interest only for one to five years, and provides for a fixed interest rate and for the amortization of the principal of such debt over 30 years.
Potential acquisitions are reviewed and approved by our investment committee.
Approval requires the assent of not less than five of the eight members of this committee, all of whom are our executive officers.
Board of director approval is required for any single multi-family property acquisition in which our equity investment exceeds $40 million.
From time-to-time we have pursued development opportunities with joint venture partners when we believe the potential higher returns justify the additional risks.
The factors considered in pursuing these opportunities generally include the factors considered in evaluating a standard acquisition opportunity, and we place additional emphasis on our joint venture partner's ability to execute a development project.
From 2022 through 2024, we invested an aggregate of $4.0 million for a 17.45% interest in a 240-unit development property located in Johns Island, SC ("Stono Oaks"); as of January 1, 2024 this property is in lease-up.

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