BRT Apartments Corp.

What they do

BRT Apartments Corp. (BRT) is an internally managed real estate investment trust that owns, operates, and holds interests in joint ventures that own and operate multi-family properties. At June 30, 2026, the company wholly-owned 21 multifamily properties with 5,420 units, had ownership interests in ten additional properties through unconsolidated entities, and held preferred equity interests in two properties. The portfolio is concentrated in the Southeast United States and Texas.

Revenue drivers

• Rental and other revenue from real estate properties — This is the primary revenue source, contributing $95.3 million in 2025, driven by rental rates and occupancy across the wholly-owned and consolidated portfolio.
• Loan interest and other income — This includes interest from loans and other income, which was $1.8 million in 2025, a 105.7% increase from the prior year.

Recent performance

In the second quarter of 2026, quarterly revenue was $24.5 million, slightly down from $24.6 million in the prior quarter. For the full year 2025, revenue grew 1.5% to $97.0 million, driven by a 0.74% increase in average rental rates and a slight increase in occupancy to 93.9%. However, net income has been negative, with a loss of $11.9 million in 2025 and a loss of $9.8 million in 2024. Operating cash flow declined to $14.1 million in 2025 from $24.1 million in 2024. The company has maintained a $1.00 annual dividend per share over the past three years.

Strategy

BRT plans to grow through acquisitions, as evidenced by the agreement to acquire Ranch Lake Apartments for approximately $80 million and a planned joint venture acquisition in Houston for about $33 million. The company is also actively refinancing maturing mortgages, often with larger, interest-only loans at higher interest rates, and has increased its share repurchase program to $10 million. Management is focused on managing the impact of inflation and oversupply in key markets, using concessions to maintain occupancy. The company plans to continue distributing at least 90% of ordinary taxable income to maintain REIT status.

Risks

• Market oversupply and competition — The company faces oversupply of multifamily properties in several markets including Atlanta, Dallas, and Nashville, which pressures occupancy and rental rates.
• Inflation and rising expenses — Inflation has driven higher operating expenses, particularly in personnel, repairs and maintenance, and real estate taxes, which may continue to adversely affect results.
• Interest rate and refinancing risk — Refinancing upcoming debt maturities is expected to increase interest expense as new mortgages carry higher rates than expiring debt.
• Economic uncertainty — General economic conditions, including potential recession, tariffs, and volatile interest rates, could reduce rental revenues and property values.

Outlook

Management anticipates continued challenges from economic uncertainty and oversupply, which may pressure rental and occupancy rates. They expect to close the Ranch Lake acquisition in the first quarter of 2027 and complete the Houston acquisition in August 2026 subject to conditions. Refinancing activities are expected to increase mortgage debt by $23.6 million and raise the weighted average interest rate to 4.35%, increasing quarterly interest expense by approximately $480,000. The company also anticipates that dividends paid in 2026 may be largely a return of capital if no significant property sales occur.