Business Context and Reporting Period
Company: Bluerock Homes Trust, Inc. (BHM)
Filing Type: Form 8-K (Current Report)
Date of Report: February 10, 2026
Reporting Period: Valuation as of September 30, 2025
Primary Event: Establishment of an estimated value per share for Series A Redeemable Preferred Stock to assist broker-dealers with FINRA reporting obligations (Rules 2340 and 2310).
Key Financial Metrics and Valuation Data
Valuation Outcome: The Board of Directors established an estimated value of $25.00 plus accreted dividends per share of Series A Preferred Stock.
Portfolio Composition (as of Sept 30, 2025):
- Total Investments: 22 real estate investments (17 consolidated operating, 5 preferred equity).
- Total Units: 5,282 residential units (4,170 consolidated; 1,112 preferred equity).
- Units Under Development: 358 consolidated units.
Valuation Methodology Inputs:
- Valuation Firm: Kroll, LLC (independent).
- Primary Approach: Income capitalization approach, supported by sales comparison.
- Capitalization Rates Used: Overall (4.13% - 5.27%), Terminal (5.00% - 6.00%).
- Discount Rates Used: 6.00% - 7.00%.
- Liquidation Value of Series A Preferred Stock: Approximately $152.2 million (liquidation value plus accreted dividends).
Liquidity and Debt: The filing states that the "Adjusted Portfolio Equity" (Portfolio Equity + Cash - other liabilities) significantly exceeds the Series A Preferred Stock Liquidation Value. Specific cash balance and total debt figures are not explicitly stated in this text, though they were utilized in the calculation.
Material Changes and Comparisons
This filing does not present comparative financial performance metrics (e.g., revenue or profit growth) against a prior period. The material change reported is the formal determination of the estimated value per share for the Series A Preferred Stock based on the portfolio valuation as of September 30, 2025. The filing notes that the Adjusted Portfolio Equity significantly exceeds the liquidation value of the preferred stock, supporting the $25.00 valuation.
Guidance, Outlook, Risks, and Unusual Items
Management Commentary: The Board of Directors approved the valuation after reviewing Kroll's report and management recommendations. The valuation is intended solely for broker-dealer reporting and does not represent a GAAP fair value determination or a liquidation value of the Company.
Sensitivity Analysis: Management determined that even if discount rates were adjusted by 25 basis points (with all other factors constant), the value per share would remain at least $25.00 plus accreted dividends.
Risks and Limitations:
- Valuation Uncertainty: The estimated value is based on assumptions that may not be accurate. Different methodologies could yield significantly different results.
- Market Realization: No assurance that shareholders can resell shares at the estimated value or that the stock will trade at this price.
- Asset Concentration: High concentration of assets in real estate means changes in individual asset values or assumptions could significantly impact the valuation.
- Unverified Inputs: Kroll did not verify Company-provided data regarding ownership interests, promote/waterfall models, or cash balances, assuming them to be accurate.
- Exclusions: The valuation does not account for transactions occurring after September 30, 2025, debt prepayment penalties, or restrictions on debt assumption.
Investor Verification Checklist
- Verify Portfolio Equity: Confirm the "Adjusted Portfolio Equity" calculation in the most recent Form 10-Q to ensure it continues to exceed the $152.2 million Series A liquidation value.
- Review Valuation Assumptions: Examine the specific capitalization and discount rates used by Kroll in the full Valuation Report (Exhibit 99.1) to assess sensitivity to interest rate changes.
- Check Subsequent Events: Review post-September 30, 2025 transactions, including new investments, dispositions, or changes in tenancy that are not reflected in this valuation.
- Confirm Debt Terms: Investigate potential debt prepayment penalties or restrictions on debt assumption that were excluded from the valuation but could impact actual liquidation proceeds.
- Monitor Trading Price: Compare the $25.00 estimated value against the actual market trading price of the Series A Preferred Stock to identify potential discounts or premiums.