Bluerock Homes Trust, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; balance sheet compared with December 31, 2023. The company owns and operates single-family rental homes, build-to-rent developments and related preferred-equity and loan investments, primarily in Sunbelt and Western U.S. markets. It reported 4,366 units across 20 investments; consolidated operating properties were 94.8% occupied at quarter-end.
Financial performance and position
| Metric | Q1 2024 | Q1 2023 / prior date |
|---|---|---|
| Total revenue | $11.2 million | $10.1 million |
| Net loss | $3.2 million | $5.3 million |
| Net loss attributable to common stockholders; per share | $1.0 million; $0.27 | $1.5 million; $0.40 |
| Property NOI (company-defined, non-GAAP) | $5.8 million | $5.6 million |
| Operating cash flow | $1.1 million | $(2.2) million |
| Investing cash flow | $(19.3) million | $(6.0) million |
| Financing cash flow | $30.9 million | $(11.3) million |
| Cash and restricted cash, March 31 | $99.1 million | $86.4 million at year-end 2023 |
| Total assets / total equity | $727.4 million / $472.4 million | $671.6 million / $470.6 million at year-end 2023 |
Rental and other property revenue rose 6.1%; average rent increased 3.8% to $1,600 and average occupancy improved 30 basis points to 94.5%. Property operating expenses rose 9.8% to $5.0 million, so NOI grew 3.1%. General and administrative expense increased to $2.9 million from $2.0 million, including a $0.8 million reimbursement for the manager’s accounting and legal services. Interest income from loan investments was $0.4 million, versus none in the prior-year quarter. The company reported FFO of $0.3 million and core FFO of $3.2 million, both attributable to common stockholders and unit holders; these are non-GAAP measures and not substitutes for cash flow or GAAP earnings.
Debt and liquidity: Principal debt was approximately $228.7 million, comprising $123.7 million of mortgages and $105.0 million drawn on revolving facilities. The balance-sheet carrying amount of mortgages was $120.2 million after fair-value and financing-cost adjustments. Revolver rates were 8.13% and 8.45%; the facilities mature in April 2025 and December 2024, respectively. The company reported approximately $15 million of availability on the DB facility and said it was in compliance with facility covenants. It estimated $31.8 million of principal and interest obligations due within one year, including $20.0 million of revolver principal. Interest-rate caps and swaps covered $128.9 million of debt; management estimated a 100-basis-point rate move would change quarterly interest expense by about $50,000.
Material changes and notable items
- Acquired a 294-unit Houston community for approximately $41.2 million, funded partly by assuming a $24.3 million senior loan and contributing approximately $17.4 million in cash.
- Sold 24 homes for approximately $3.9 million gross proceeds, generating about $0.3 million in gains; 96 additional units were classified as held for sale, with a $0.1 million impairment recorded.
- Funded $9.6 million of the Wayford at Pringle loan commitment and received approximately $4.1 million in principal and interest repayments on The Woods at Forest Hill loan. Preferred equity in Peak Housing was partially redeemed for $2.0 million.
- Issued 395,628 Series A redeemable preferred shares during the quarter, generating approximately $8.6 million net proceeds. The shares carry a stated 6.0% annual rate, subject to disclosed special-dividend terms.
- Cash rose despite investing outflows, principally because of $35.0 million of revolver proceeds and preferred-stock issuance. Cash distributions paid totaled $12.6 million, including $3.9 million to common stockholders and $8.5 million to noncontrolling interests.
Outlook, risks and contingencies
Management stated that available cash, operating cash flow, preferred-stock proceeds, borrowings and potential property-level financing should meet existing-portfolio liquidity needs for the next 12 months. It expects results to benefit from future acquisitions, investments and development, but provided no quantified earnings or revenue guidance. Abode Wendell Falls, a 170-unit build-to-rent project, is expected to begin construction in Q2 2024; estimated total cost is $56.0 million, with $6.6 million incurred by quarter-end. The company also has $20.7 million of contractual commitments to fund investments.
Key risks include inflation and higher borrowing, payroll, insurance, tax and construction costs; access to capital and refinancing; floating-rate exposure; leasing and occupancy; tenant ability to pay; and repayment or redemption of development loans and preferred-equity investments. Management cautioned that distributions are not assured and may be funded from sources beyond operating cash flow. The company reported no material legal proceedings and said it was unaware of legal matters expected to materially affect its financial position, results or liquidity. Disclosure controls were assessed as effective; no material internal-control changes were reported.
Investor verification points
- Confirm the debt and liquidity runway, particularly the December 2024 and April 2025 revolver maturities, borrowing availability, refinancing plans and covenant headroom.
- Track lease-up and repayment progress for development and loan investments, including Wayford at Pringle, Chandler, the Cottages and The Woods at Forest Hill; compare realized collections with accrued returns.
- Assess whether operating cash flow and recurring property NOI can support capital commitments, preferred dividends and other distributions without continued borrowing or asset sales.
- Review the costs and governance implications of the affiliated manager arrangement, including the increased expense reimbursements and fees paid partly in incentive units.
- Monitor execution and funding of the $56.0 million Abode Wendell Falls project and the company’s $20.7 million investment commitments.