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Bluerock Homes Trust, Inc.

Bluerock Homes Trust, Inc.BHMEarnings & Financial Report

NYSE · Real Estate · Real Estate Investment Trusts

Bluerock Homes Trust, Inc. is a U.S.-headquartered real estate investment trust that acquires, owns and operates a portfolio of high-quality single-family rental residential properties. It caters to middle-market renters across high-growth suburban markets, prioritizing regions with strong demographic fundamentals and sustained rental housing demand.

What changed in Bluerock Homes Trust, Inc.'s 10-K — 2022 vs 2023

Top changes in Bluerock Homes Trust, Inc.'s 2023 10-K

440 paragraphs added · 470 removed · 341 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

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Cash dividends on each share of Series A Redeemable Preferred Stock will begin accruing on, and will be cumulative from, the date of original issuance or the end of the most recent dividend period for which cash dividends on the Series A Redeemable Preferred Stock have been paid on each such share, payable monthly in arrears on the 5 th day of each month to holders of record on the 25 th day of the prior month; provided, however, that any such cash dividend may vary among holders of Series A Redeemable Preferred Stock and may be prorated with respect to any shares of Series A Redeemable Preferred Stock that were outstanding less than the total number of days in the dividend period immediately preceding the applicable dividend payment date, with the amount of any such prorated dividend being computed on the basis of the actual number of days in such dividend period during which such shares of Series A Redeemable Preferred Stock were outstanding.
Cash dividends on each share of Series A Preferred Stock will begin accruing on, and will be cumulative from, the date of original issuance or the end of the most recent dividend period for which cash dividends on the Series A Preferred Stock have been paid on each such share, payable monthly in arrears on the 5 th day of each month to holders of record on the 25 th day of the prior month; provided, however, that any such cash dividend may vary among holders of Series A Preferred Stock and may be prorated with respect to any shares of Series A Preferred Stock that were outstanding less than the total number of days in the dividend period immediately preceding the applicable dividend payment date, with the amount of any such prorated dividend being computed on the basis of the actual number of days in such dividend period during which such shares of Series A Preferred Stock were outstanding.
To that end, our Manager or its affiliates have undertaken various initiatives, including the following: ● implementing an Environmental, Social, and Corporate Governance Initiative to codify and disclose its commitment to good corporate citizenship, including the appointment of an internal corporate responsibility committee in support of its ongoing commitment to sustainability, health and safety, corporate social responsibility, corporate governance, and other public policy matters; ● providing department-specific training, access to online training seminars and opportunities to participate in industry conferences; ● providing annual reviews and regular feedback to assist in employee development and providing opportunities for employees to provide suggestions to management and safely register complaints; ● providing family leave, for example, for the birth or adoption of a child, as well as sick leave; ● focusing on creating a workplace that values employee health and safety; ● committing to the full inclusion of all qualified employees and applicants and providing equal employment opportunities to all persons, in accordance with the principles and requirements of the Equal Employment Opportunities Commission and the principles and requirements of the Americans with Disabilities Act; and ● recognizing the importance and contributions of a diverse workforce, with an appreciation for the unique perspectives and insights offered by diverse backgrounds.
To that end, our Manager or its affiliates have undertaken various initiatives, including the following: ● implementing an Environmental, Social, and Corporate Governance Initiative to codify and disclose its commitment to good corporate citizenship, including the appointment of an internal corporate responsibility committee in support of its ongoing commitment to sustainability, health and safety, corporate social responsibility, corporate governance, and other public policy matters; ● providing department-specific training, access to online training seminars and opportunities to participate in industry conferences; ● providing annual reviews and regular feedback to assist in employee development and providing opportunities for employees to provide suggestions to management and safely register complaints; 12 Table of Contents ● providing family leave, for example, for the birth or adoption of a child, as well as sick leave; ● focusing on creating a workplace that values employee health and safety; ● committing to the full inclusion of all qualified employees and applicants and providing equal employment opportunities to all persons, in accordance with the principles and requirements of the Equal Employment Opportunities Commission and the principles and requirements of the Americans with Disabilities Act; and ● recognizing the importance and contributions of a diverse workforce, with an appreciation for the unique perspectives and insights offered by diverse backgrounds.
Our distribution policy enables us to review the alternative funding sources available to us from time to time. Our actual results of operations will be affected by a number of factors, including the revenues we receive from our properties, our operating expenses, interest expense, the ability of our tenants to meet their obligations and unanticipated expenditures.
Our distribution policy enables us to review the alternative funding sources available to us from time to time. Our actual results of operations will be affected by a number of factors, including the revenues we receive from our properties and other investments, our operating expenses, interest expense, the ability of our tenants to meet their obligations and unanticipated expenditures.
Refer to Note 8 of our combined consolidated financial statements for further information. (2) Our investment in the property, which was through one or more loans that we provided, was paid off in full.
(2) Our investment in the property, which was through one or more loans that we provided, was paid off in full. Refer to Note 7 of our combined consolidated financial statements for further information.
Copies of our filings with the SEC may be obtained from the SEC’s website at www.sec.gov , or downloaded from our website at www.bluerockhomes.com, as soon as reasonably practicable after such material has been filed with, or furnished to, the SEC. Access to these filings is free of charge. ​ 13 Table of Contents
Copies of our filings with the SEC may be obtained from the SEC’s website at www.sec.gov , or downloaded from our website at www.bluerockhomes.com, as soon as reasonably practicable after such material has been filed with, or furnished to, the SEC. Access to these filings is free of charge.
We believe that we have all permits and approvals necessary under current law to operate our investments. 12 Table of Contents Environmental As an owner of real estate, we are subject to various environmental laws of federal, state and local governments.
We believe that we have all permits and approvals necessary under current law to operate our investments. Environmental As an owner of real estate, we are subject to various environmental laws of federal, state and local governments.
All future distributions will be determined at the sole discretion of our Board of Directors (the “Board”) on a quarterly basis.
All future distributions will be determined at the sole discretion of our Board on a quarterly basis.
Our Management Agreement has a one-year term expiring October 6, 2023 and will be automatically renewed for a one-year term each year on October 6, unless previously terminated in accordance with the terms of the Management Agreement. The Manager is responsible for managing our affairs on a day-to-day basis and for identifying and making real estate investments on our behalf.
The current term of our Management Agreement expires October 6, 2024 and will be automatically renewed for a one-year term each year on October 6, unless previously terminated in accordance with the terms of the Management Agreement. The Manager is responsible for managing our affairs on a day-to-day basis and for identifying and making real estate investments on our behalf.
To qualify and maintain our REIT status, we will be required, among other requirements, to distribute annually at least 90% of our “REIT taxable income,” as defined by the Internal Revenue Code of 1986, as amended (the “Code”), to our stockholders.
In order to maintain our REIT status, we are required, among other requirements, to distribute annually at least 90% of our “REIT taxable income,” as defined by the Internal Revenue Code of 1986, as amended (the “Code”), to our stockholders.
All significant intercompany balances and transactions have been eliminated. Any references to “the Company,” “we,” “us,” or “our” for all periods ended October 6, 2022 and prior refer to Bluerock Homes as owned by Bluerock Residential, and for all periods subsequent to October 6, 2022 refer to Bluerock Homes as an independent, publicly traded company.
Any references to “the Company,” “we,” “us,” or “our” for all periods ended October 6, 2022 and prior refer to Bluerock Homes as owned by Bluerock Residential, and for all periods subsequent to October 6, 2022 refer to Bluerock Homes as an independent, publicly traded company.
Value Creation Execution. We acquire single-family rental properties with potential for long-term value creation for our stockholders. We utilize the following internal and external growth strategies to drive growth in FFO and NAV for our investors: ● Scattered-Site Aggregation . Currently, there is a high level of fragmentation in the single-family rental home market.
We utilize the following internal and external growth strategies to drive growth in FFO and NAV for our investors: ● Scattered-Site Aggregation . Currently, there is a high level of fragmentation in the single-family rental home market.
We intend to elect to be taxed and to operate in a manner that will allow us to qualify as a real estate investment trust (“REIT”) for federal income tax purposes beginning with our taxable year ended December 31, 2022. As a REIT, we generally will not be subject to corporate-level income taxes.
We have elected to be taxed and have qualified as a real estate investment trust (“REIT”) for federal income tax purposes beginning with our taxable year ended December 31, 2022. As a REIT, we generally are not subject to corporate-level income taxes.
If we fail to qualify as a REIT in any taxable year, we would be subject to federal income tax on our taxable income at regular corporate tax rates.
If we fail to maintain our qualification as a REIT in any taxable year, we would be subject to federal income tax on our taxable income at regular corporate tax rates and we would not be permitted to qualify as a REIT for four years following the year in which we lost our qualification.
When determining the amount of future distributions, we expect that our Board will consider, among other factors, (i) the amount of cash generated from our operating activities, (ii) our expectations of future operating cash flows, (iii) our determination of near-term cash needs for acquisitions of new properties, development investments, general property capital improvements and debt repayments, (iv) our ability to continue to access additional sources of capital, (v) the requirements of Maryland law, (vi) the amount required to be distributed to qualify and maintain our qualification as a REIT and to reduce any income and excise taxes that we otherwise would be required to pay and (vii) any limitations on our distributions contained in our credit or other agreements.
When determining the amount of future distributions, we expect that our Board will consider, among other factors, (i) the amount of cash generated from our operating activities, (ii) our expectations of future operating cash flows, (iii) our determination of near-term cash needs for acquisitions of new properties, development investments, general property capital improvements and debt repayments, (iv) our ability to continue to access additional sources of capital, (v) the requirements of Maryland law, (vi) the amount required to be distributed to maintain our qualification as a REIT and to reduce any income and excise taxes that we otherwise would be required to pay and (vii) any limitations on our distributions contained in our credit or other agreements. 11 Table of Contents Holders of shares of the Series A Preferred Stock will be entitled to receive, when and as authorized by our Board and declared by us out of legally available funds, cumulative cash dividends on each share of Series A Preferred Stock at an annual rate of six percent (6.0%) of the $25.00 liquidation preference per share (equivalent to the fixed annual amount of $1.50 per share).
These will be located across a diverse group of growth markets and will target a growing pool of middle-income renters seeking the single-family lifestyle without the upfront and ongoing investments associated with home ownership. By implementing our investment strategies and our institutional-quality management, we expect to be able to achieve sustainable long-term growth in both our FFO and NAV.
These will be located across a diverse group of growth markets and will target a growing pool of middle-income renters seeking the single-family lifestyle without the upfront and ongoing investments associated with home ownership.
(5) Our investment in the property is through a preferred equity investment with an unaffiliated third party. Refer to Note 8 of our combined consolidated financial statements for further information. (6) We recapitalized Corpus and Jolin on December 22, 2021 and received full payoffs of the bridge loans.
Refer to Note 7 of our combined consolidated financial statements for further information. (5) Our investment in Chandler is through a preferred equity investment with an unaffiliated third party. Refer to Note 8 of our combined consolidated financial statements for further information.
The Separation and the Distribution On December 20, 2021, Bluerock Residential entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Badger Parent and Badger Merger Sub LLC (“Merger Sub”).
As of December 31, 2023, our consolidated operating investments were approximately 94.1% occupied. For more information regarding our investments, see “Item 2. Investments”. The Separation and the Distribution On December 20, 2021, Bluerock Residential entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Badger Parent and Badger Merger Sub LLC (“Merger Sub”).
The financial statements also include allocations of certain general, administrative, sales and marketing expenses and operations from Bluerock Residential for the period ended and prior to October 6, 2022. However, amounts recognized by us are not necessarily representative of the amounts that would have been reflected in the financial statements had we operated independently of Bluerock Residential.
However, amounts recognized by us are not necessarily representative of the amounts that would have been reflected in the financial statements had we operated independently of Bluerock Residential during that period. All significant intercompany balances and transactions have been eliminated.
Lucie, FL August — 286 Peak JV 2 (8) Various / TX September 80 % 195 The Cottages at Myrtle Beach (4)(5) Myrtle Beach, SC September — 294 Fourth Quarter ILE TX / SE US October 95 % 279 Peak JV 2 (8) Various / TX October 80 % 111 Golden Pacific KS / MO November 97 % 7 Peak JV 2 (8) Various / TX November 80 % 20 Peak JV 2 (8) Various / TX December 80 % 248 Peak JV 3, formerly DFW 189 Dallas-Fort Worth, TX December 56 % 189 The Cottages at Warner Robins (4)(5) Warner Robins, GA December — 251 The Woods at Forest Hill (5) Forest Hill, TX December — 76 ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 First Quarter Weatherford 185 (9) Weatherford, TX February — 185 Peak JV 2 (8) Various / TX March 80 % 34 Peak JV 4, formerly Savannah 319 Savannah, GA March 80 % 19 Golden Pacific IN / KS / MO Various 97 % 62 ILE TX / SE US Various 95 % 31 Second Quarter Ballast AZ / CO / WA Various 95 % 65 Golden Pacific IN / KS / MO Various 97 % 66 ILE TX / SE US Various 95 % 108 Peak JV 4 Savannah, GA Various 80 % 20 Third Quarter Ballast AZ / CO / WA Various 95 % 19 Golden Pacific IN / KS / MO Various 97 % 35 ILE TX / SE US Various 95 % 64 Peak JV 4 Savannah, GA Various 80 % 14 Fourth Quarter Golden Pacific IN / KS / MO October 97 % 1 Peak JV 4 Savannah, GA Various 80 % 13 (1) For those months where “Various” is listed, we, on various dates throughout that specified quarter, acquired additional units that were added to the respective existing portfolios.
This allows us to harvest profits and reinvest proceeds to maximize stockholder value. 9 Table of Contents Summary of Investments and Dispositions The following table presents a summary of our real estate investments during the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment Name Location / Market Date of Investment (1) Ownership Interest Number of Units 2022 First Quarter Weatherford 185 (2) Weatherford, TX February 15,2022 — 185 Peak JV 2 Various / TX March 80 % 34 Savannah-84, formerly Peak JV 4 (3) Savannah, GA March 100 % 19 Golden Pacific IN / KS / MO Various 97 % 62 ILE TX / SE US Various 95 % 31 Second Quarter Ballast AZ / CO / WA Various 95 % 65 Golden Pacific IN / KS / MO Various 97 % 66 ILE TX / SE US Various 95 % 108 Savannah-84 (3) Savannah, GA Various 100 % 20 Third Quarter Ballast AZ / CO / WA Various 95 % 19 Golden Pacific IN / KS / MO Various 97 % 35 ILE TX / SE US Various 95 % 64 Savannah-84 (3) Savannah, GA Various 100 % 14 Fourth Quarter Golden Pacific IN / KS / MO October 97 % 1 Savannah-84 (3) Savannah, GA Various 100 % 13 ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 Savannah-84 Savannah, GA February 23,2023 100 % 18 Willow Park (4) Willow Park, TX October 26,2023 — ​ 58 Chandler (5) Chandler, AZ November 15,2023 — 208 Abode Wendell Falls (6) Wendell, NC December 20,2023 100 % 170 The Woods at Forest Hill (4) Forest Hill, TX December 28,2023 — ​ 76 (1) For those dates where a month is listed, additional units were acquired and added to the respective existing portfolio throughout that specified month.
(9) Our investment in the property was through a mezzanine loan to an unaffiliated third party. The loan was paid off in July 2022. Refer to the table below.
The loan was paid off in July 2022. Refer to the table below. (3) In January 2023, we acquired the unaffiliated joint venture partner’s interest in Savannah-84, increasing our interest from 80% to 100%. (4) Our investment is through a note receivable provided to an unaffiliated third party.
Financial statements representing the historical operations of Bluerock Residential’s residential rental business have been derived from Bluerock Residential’s historical accounting records and are presented on a carve-out basis. All revenues and costs as well as assets and liabilities directly associated with the business activity of Bluerock Homes are included in the financial statements.
Financial statements for the period ended and prior to October 6, 2022 represent the historical operations of Bluerock Residential’s single-family residential real estate business, have been derived from Bluerock Residential’s historical accounting records and are presented on a carve-out basis.
(3) We purchased the Wayford at Concord property from our unaffiliated joint venture partner, and as part of the transaction, our preferred equity investment was redeemed. Refer to Note 8 of our combined consolidated financial statements for further information. (4) The property is a development project.
(3) Our investment in the property, which is through a preferred equity investment with an unaffiliated third party, was partially redeemed as units collateralizing our investment (such units collectively known as “Peak Housing”) were sold. Refer to Note 8 of our combined consolidated financial statements for further information.
Investments in Real Estate As of December 31, 2022, we held an aggregate of 3,977 residential units held through seventeen real estate investments, consisting of ten consolidated operating investments and seven investments held through preferred equity investments. As of December 31, 2022, our consolidated operating investments were approximately 94.8% occupied. For more information regarding our investments, see “Item 2. Properties”.
Investments in Real Estate As of December 31, 2023, we held eighteen real estate investments, consisting of eleven consolidated investments and seven preferred equity and loan investments. The eighteen investments represent an aggregate of 4,059 residential units, comprised of 2,475 consolidated units, of which 170 units are under development, and 1,584 units through preferred equity and loan investments.
Removed
This allows us to harvest profits and reinvest proceeds to maximize stockholder value. 9 Table of Contents Summary of Investments and Dispositions The following table presents a summary of our real estate investments during the years ended December 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ Property Location Month Acquired (1) Ownership Interest Number of Units 2021 ​ ​ ​ ​ Second Quarter Peak Housing (2)(5) IN / MO / TX April — 474 Yauger Park Villas Olympia, WA April 95 % 80 Wayford at Concord (3) Concord, NC June 83 % 150 Wayford at Innovation Park (4)(5) Charlotte, NC June — 210 Willow Park (5) Willow Park, TX June — 46 Third Quarter Corpus (6) Corpus Christi, TX July — 81 Jolin (6) Weatherford, TX August — 24 Peak JV 1 (7) IN / MO August 60 % 334 The Cottages of Port St.
Added
We intend to continue to organize and operate in such a manner as to remain qualified as a REIT.
Removed
For Ballast, the units acquired in the second quarter 2022 were our first acquisitions for the portfolio. 10 Table of Contents (2) Peak Housing consists of our preferred equity investments in a private single-family home REIT (refer to Note 8 of our combined consolidated financial statements for further information). Unit count excludes consolidated operating investment units which are presented separately.
Added
All revenues and costs as well as assets and liabilities directly associated with the business activity of Bluerock Homes are included in the financial statements. The financial statements also include allocations of certain general, administrative, sales and marketing expenses and operations from Bluerock Residential for the period ended and prior to October 6, 2022.
Removed
As part of the recapitalization, both Corpus and Jolin, along with two portfolios of units previously owned solely by our unaffiliated joint venture partner, were combined into one portfolio and contributed into the existing Peak JV 2 joint venture. (7) Peak JV 1 includes the portfolios formerly presented as Indy and Springfield.
Added
These allocated expenses are for corporate office expenses and management including, but not limited to, executive oversight, asset management, treasury, finance, human resources, tax, accounting, financial reporting, information technology and investor relations.
Removed
(8) Peak JV 2 includes the portfolios formerly presented as Axelrod, Granbury, Granbury 2.0, Lubbock, Lubbock 2.0, Lubbock 3.0, Lynnwood, Lynnwood 2.0, Springtown, Springtown 2.0, Texarkana and Texas Portfolio 183, of which all are in Texas. The number of units presented reflect the aggregate of the portfolios acquired during the period specified.
Added
By implementing our investment strategies and our institutional-quality management, we expect to be able to achieve sustainable long-term growth in both our funds from operations (“FFO”) and net asset value (“NAV”) Value Creation Execution. We acquire single-family rental properties with potential for long-term value creation for our stockholders.
Removed
The following table presents a summary of our real estate sales, loan payoffs and redemption of preferred equity during the years ended December 31, 2022 and 2021: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ownership ​ ​ ​ ​ ​ ​ ​ ​ Interest in ​ Number Property Location Date Sold / Payoff Property of Units 2021 ​ ​ ​ ​ ​ ​ ​ ​ ARIUM Grandewood ​ Orlando, FL ​ January 28, 2021 ​ 100 % 306 James at South First ​ Austin, TX ​ February 24, 2021 ​ 90 % 250 Marquis at The Cascades Tyler, TX ​ March 1, 2021 90 % 582 The Conley (1) Leander, TX ​ March 18, 2021 — 259 Alexan Southside Place (1) Houston, TX ​ March 25, 2021 — 270 Plantation Park Lake Jackson, TX ​ April 26, 2021 80 % 238 Wayford at Concord (1) Concord, NC ​ June 4, 2021 — 150 Vickers Historic Roswell (2) Roswell, GA ​ June 29, 2021 — 79 Park & Kingston Charlotte, NC ​ July 7, 2021 100 % 168 The District at Scottsdale Scottsdale, AZ ​ July 7, 2021 99 % 332 Mira Vista (1) Austin, TX ​ September 23, 2021 — 200 Thornton Flats (1) Austin, TX ​ December 14, 2021 — 104 Corpus (3) Corpus Christi, TX ​ December 22, 2021 — 81 Jolin (3) Weatherford, TX ​ December 22, 2021 — 24 ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ ​ ​ ​ ​ ​ ​ ​ The Hartley at Blue Hill (2) Chapel Hill, NC ​ February 28, 2022 — 414 Weatherford 185 (2) Weatherford, TX ​ July 22, 2022 — 185 (1) Our investment in the property, which was through a preferred equity investment with an unaffiliated third party, was redeemed.
Added
For those dates where “Various” is listed, additional units were acquired and added to the respective existing portfolios on various dates throughout that specified quarter. For Ballast, the units acquired in the second quarter 2022 were our first acquisitions for the portfolio. (2) Our investment in the property was through a mezzanine loan to an unaffiliated third party.
Removed
Refer to Note 7 of our combined consolidated financial statements for further information. 11 Table of Contents (3) We recapitalized Corpus and Jolin on December 22, 2021 and received full payoffs of the bridge loans.
Added
(6) Abode Wendell Falls is a build to rent development project expected to commence construction in the second quarter 2024. The total estimated project cost is $56.0 million, of which $6.5 million was incurred as of December 31, 2023.
Removed
As part of the recapitalization, both Corpus and Jolin, along with two portfolios of units previously owned solely by our unaffiliated joint venture partner, were combined into one portfolio and contrib uted into the existing Peak JV 2 joint venture. Distribution Policy We intend to qualify and maintain our qualification as a REIT for federal income tax purposes.
Added
Abode Wendell Falls is classified as a consolidated investment. ​ 10 Table of Contents The following table presents a summary of our loan payoffs, real estate sales, and redemption of preferred equity investments during the years ended December 31, 2023 and 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ownership ​ ​ ​ ​ ​ ​ Date of Payoff, Sale ​ Interest in ​ Number Investment Name Location / Market or Redemption (1) Property of Units 2022 ​ ​ ​ ​ ​ ​ ​ ​ The Hartley at Blue Hill (2) Chapel Hill, NC ​ February 28, 2022 — 414 Weatherford 185 (2) Weatherford, TX ​ July 22, 2022 — 185 ​ ​ ​ ​ ​ ​ ​ 2023 ​ ​ ​ ​ ​ First Quarter ​ ​ ​ ​ ​ Peak Housing (3) IN / MO / TX ​ Various — ​ 9 Second Quarter ​ ​ ​ ​ ​ Golden Pacific Brownsburg, IN ​ May 2, 2023 97 % 1 Peak Housing (3) IN / MO / TX ​ Various — ​ 74 Peak JV 2 Various / TX ​ Various 80 % 6 Peak JV 3 Dallas-Fort Worth, TX ​ Various 56 % 2 Third Quarter ​ ​ ​ ​ ​ Peak Housing (3) IN / MO / TX ​ Various — 63 Peak JV 3 Dallas-Fort Worth, TX ​ Various 56 % 18 Fourth Quarter ​ ​ ​ ​ ​ ​ ​ ​ Golden Pacific ​ Lee’s Summit, MO ​ October 18, 2023 ​ 97 % 1 Peak Housing (3) ​ IN / MO / TX ​ Various ​ — ​ 50 Peak JV 2 ​ Various / TX ​ Various ​ 80 % 6 Peak JV 3 ​ Dallas-Fort Worth, TX ​ Various ​ 56 % 19 Willow Park (4) Willow Park, TX ​ October 26, 2023 — 46 The Cottages at Warner Robins (4) Warner Robins, GA ​ December 15, 2023 — 251 (1) For those dates where “Various” is listed, units were sold from the respective portfolios on various dates throughout that specified quarter.
Removed
Holders of shares of 6.0% Series A Redeemable Preferred Stock, $0.01 par value per share (the “Series A Redeemable Preferred Stock”), will be entitled to receive, when and as authorized by our Board and declared by us out of legally available funds, cumulative cash dividends on each share of Series A Redeemable Preferred Stock at an annual rate of six percent (6.0%) of the $25.00 liquidation preference per share (equivalent to the fixed annual amount of $1.50 per share).
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(4) Our investment in the property, which was through a preferred equity investment with an unaffiliated third party, was redeemed. Refer to Note 8 of our combined consolidated financial statements for further information. Distribution Policy We intend to maintain our qualification as a REIT for federal income tax purposes.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

215 edited+38 added−62 removed427 unchanged
Our ability to make investments on favorable terms may be constrained by several factors including, but not limited to, competition from other investors with significant capital, including other publicly-traded REITs and institutional investment funds, which may significantly increase investment costs; and/or the inability to finance an investment on favorable terms or at all.
Our ability to make investments on favorable terms may be constrained by several factors including, but not limited to, competition from other investors with significant capital, including other publicly-traded REITs and institutional investment funds, which may significantly increase investment costs; and/or the inability to finance an investment on favorable terms or at all.
Holders of Series A Redeemable Preferred Stock should not expect us to redeem all or any such shares on the date they first become redeemable or on any particular date after they become redeemable.
Holders of Series A Preferred Stock should not expect us to redeem all or any such shares on the date they first become redeemable or on any particular date after they become redeemable.
In addition, there is no penalty or premium payable on redemption, and the market price of the shares of such series of preferred stock may not exceed the liquidation preference at the time the shares become redeemable for any reason. Holders of the Series A Redeemable Preferred Stock will be subject to inflation risk.
In addition, there is no penalty or premium payable on redemption, and the market price of the shares of such series of preferred stock may not exceed the liquidation preference at the time the shares become redeemable for any reason. Holders of the Series A Preferred Stock will be subject to inflation risk.
There may not be a broad market for our Class A common stock, which may cause our Class A common stock to trade at a discount and make it difficult for you to sell the Class A common stock for which your Series A Redeemable Preferred Stock may be redeemable at our option.
There may not be a broad market for our Class A common stock, which may cause our Class A common stock to trade at a discount and make it difficult for you to sell the Class A common stock for which your Series A Preferred Stock may be redeemable at our option.
Our Class A common stock for which the shares of our Series A Redeemable Preferred Stock may be redeemable at our option trades on the NYSE American under the symbol “BHM.” Listing on the NYSE American or another national securities exchange does not ensure an actual or active market for our Class A common stock.
Our Class A common stock for which the shares of our Series A Preferred Stock may be redeemable at our option trades on the NYSE American under the symbol “BHM.” Listing on the NYSE American or another national securities exchange does not ensure an actual or active market for our Class A common stock.
To help insure that we meet these tests, among other purposes, our charter restricts the acquisition and ownership of shares of our capital stock. Our charter, with certain exceptions, authorizes our Board to take such actions as are necessary and desirable to preserve qualification as a REIT.
To help insure that we meet these tests, among other purposes, our charter restricts the acquisition and ownership of shares of our capital stock. Our charter, with certain exceptions, authorizes our Board to take such actions as are necessary and desirable to preserve our qualification as a REIT.
These conditions include: ● changes in national, regional and local economic conditions, which may be negatively impacted by concerns about inflation, deflation, government deficits, high unemployment rates, decreased consumer confidence and liquidity concerns, particularly in markets in which we have a high concentration of properties; ● fluctuations and relative increases in interest rates, which could adversely affect our ability to obtain financing 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 and safety record; ● increased operating costs, including increased real property taxes, HOA fees, maintenance, insurance and utilities costs; ● weather conditions that may increase or decrease energy costs and other weather-related expenses; ● oversupply of single-family housing or a reduction in demand for real estate in the markets in which our properties are located; 15 Table of Contents ● costs and time period required to convert acquisitions to rental homes; ● a favorable interest rate environment that may result in a significant number of potential residents of our properties deciding to purchase homes instead of renting; ● rules, regulations and/or policy initiatives by government and private actors, including HOAs, to discourage or deter the purchase of single-family properties by entities owned or controlled by institutional investors; ● construction of new supply; ● 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.
These conditions include: ● changes in national, regional and local economic conditions, which may be negatively impacted by concerns about inflation, deflation, government deficits, high unemployment rates, decreased consumer confidence and liquidity concerns, particularly in markets in which we have a high concentration of properties; ● fluctuations and relative increases in interest rates, which could adversely affect our ability to obtain financing 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 and safety record; ● increased operating costs, including increased real property taxes, HOA fees, maintenance, insurance and utilities costs; ● weather conditions that may increase or decrease energy costs and other weather-related expenses; ● oversupply of single-family housing or a reduction in demand for real estate in the markets in which our properties are located; ● costs and time period required to convert acquisitions to rental homes; 13 Table of Contents ● a favorable interest rate environment that may result in a significant number of potential residents of our properties deciding to purchase homes instead of renting; ● rules, regulations and/or policy initiatives by government and private actors, including HOAs, to discourage or deter the purchase of single-family properties by entities owned or controlled by institutional investors; ● construction of new supply; ● 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.
Examples of these potential conflicts of interest include: ● Competition for the time and services of personnel that work for us and our affiliates; ● Compensation payable by us to our Manager and its affiliates for their various services, which may not be on market terms and is payable, in some cases, whether or not our stockholders receive distributions; ● The possibility that our Manager, its officers and their respective affiliates will face conflicts of interest relating to the purchase and leasing of properties and that such conflicts may not be resolved in our favor, thus potentially limiting our investment opportunities, impairing our ability to make distributions and adversely affecting the trading price of our stock; ● The possibility that if we acquire properties from Bluerock or its affiliates, the price may be higher than we would pay if the transaction were the result of arm’s-length negotiations with a third party; ● The possibility that our Manager will face conflicts of interest caused by its indirect ownership by Bluerock, some of whose officers are also our officers and one of whom is a director of ours, resulting in actions that may not be in the long-term best interests of our stockholders; ● Our Manager will have considerable discretion with respect to the terms and timing of our acquisition, disposition and leasing transactions, and the Incentive Fee payable by us to our Manager will be determined based on AFFO (as defined in the Management Agreement), which may create an incentive for our Manager to make investments that are risky or more speculative than would otherwise be in our best interests; ● The possibility that we may acquire or merge with our Manager, resulting in an internalization of our management functions; and 38 Table of Contents ● The possibility that the competing demands for the time of our Manager, its affiliates and our officers may result in them spending insufficient time on our business, which may result in our missing investment opportunities or having less efficient operations, which could reduce our profitability and result in lower distributions to you.
Examples of these potential conflicts of interest include: ● Competition for the time and services of personnel that work for us and our affiliates; ● Compensation payable by us to our Manager and its affiliates for their various services, which may not be on market terms and is payable, in some cases, whether or not our stockholders receive distributions; ● The possibility that our Manager, its officers and their respective affiliates will face conflicts of interest relating to the purchase and leasing of properties and that such conflicts may not be resolved in our favor, thus potentially limiting our investment opportunities, impairing our ability to make distributions and adversely affecting the trading price of our stock; ● The possibility that if we acquire properties from Bluerock or its affiliates, the price may be higher than we would pay if the transaction were the result of arm’s-length negotiations with a third party; ● The possibility that our Manager will face conflicts of interest caused by its indirect ownership by Bluerock, some of whose officers are also our officers and one of whom is a director of ours, resulting in actions that may not be in the long-term best interests of our stockholders; ● Our Manager will have considerable discretion with respect to the terms and timing of our acquisition, disposition and leasing transactions, and the Incentive Fee payable by us to our Manager will be determined based on AFFO (as defined in the Management Agreement), which may create an incentive for our Manager to make investments that are risky or more speculative than would otherwise be in our best interests; ● The possibility that we may acquire or merge with our Manager, resulting in an internalization of our management functions; and 37 Table of Contents ● The possibility that the competing demands for the time of our Manager, its affiliates and our officers may result in them spending insufficient time on our business, which may result in our missing investment opportunities or having less efficient operations, which could reduce our profitability and result in lower distributions to you.
Such investments may involve risks not otherwise present when acquiring real estate directly, including, for example: ● joint venturers may share certain approval rights over major decisions and reduce our flexibility to maximize project values or limit property costs; 27 Table of Contents ● that such co-venturer, co-owner or partner may at any time have economic or business interests or goals which are or which become inconsistent with our business interests or goals, including inconsistent goals relating to the timing of the sale of properties held in the joint ventures and/or the timing of termination or liquidation of the joint ventures; ● the possibility that our co-venturer, co-owner or partner in an investment might become insolvent or bankrupt and thus be unable to fulfill its financial obligations to us in that investment; ● the possibility that we may incur liabilities as a result of an action or omission taken by our co-venturer, co-owner or partner; ● that such co-venturer, co-owner or partner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives, including our policy with respect to qualifying and maintaining our qualification as a REIT; ● disputes between us and our joint venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and result in subjecting the properties owned by the applicable joint venture to additional risk; or ● under certain joint venture arrangements, neither venture partner may have the power to control the venture, and an impasse could be reached which might have a negative influence on the joint venture.
Such investments may involve risks not otherwise present when acquiring real estate directly, including, for example: ● joint venturers may share certain approval rights over major decisions and reduce our flexibility to maximize project values or limit property costs; ● that such co-venturer, co-owner or partner may at any time have economic or business interests or goals which are or which become inconsistent with our business interests or goals, including inconsistent goals relating to the timing of the sale of properties held in the joint ventures and/or the timing of termination or liquidation of the joint ventures; ● the possibility that our co-venturer, co-owner or partner in an investment might become insolvent or bankrupt and thus be unable to fulfill its financial obligations to us in that investment; ● the possibility that we may incur liabilities as a result of an action or omission taken by our co-venturer, co-owner or partner; ● that such co-venturer, co-owner or partner may be in a position to take action contrary to our instructions or requests or contrary to our policies or objectives, including our policy with respect to qualifying and maintaining our qualification as a REIT; 25 Table of Contents ● disputes between us and our joint venturers may result in litigation or arbitration that would increase our expenses and prevent our officers and directors from focusing their time and effort on our business and result in subjecting the properties owned by the applicable joint venture to additional risk; or ● under certain joint venture arrangements, neither venture partner may have the power to control the venture, and an impasse could be reached which might have a negative influence on the joint venture.
Accordingly, we generally may not make a distribution on Series A Redeemable Preferred Stock if, after giving effect to the distribution, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities plus, unless the terms of such class or series provide otherwise, the amount that would be needed to satisfy the preferential rights upon dissolution of the holders of shares of any class or series of preferred stock then outstanding, if any, with preferences senior to those of the Series A Redeemable Preferred Stock.
Accordingly, we generally may not make a distribution on Series A Preferred Stock if, after giving effect to the distribution, we would not be able to pay our debts as they become due in the usual course of business or our total assets would be less than the sum of our total liabilities plus, unless the terms of such class or series provide otherwise, the amount that would be needed to satisfy the preferential rights upon dissolution of the holders of shares of any class or series of preferred stock then outstanding, if any, with preferences senior to those of the Series A Preferred Stock.
In order to qualify and maintain our qualification as a REIT, we must satisfy a number of requirements, including requirements regarding the ownership of our common shares, requirements regarding the composition of our assets and requirements that certain percentages of our gross income in any year must be derived from qualifying sources, such as “rents from real property.” Also, we must make distributions to stockholders aggregating annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains.
In order to maintain our qualification as a REIT, we must satisfy a number of requirements, including requirements regarding the ownership of our common shares, requirements regarding the composition of our assets and requirements that certain percentages of our gross income in any year must be derived from qualifying sources, such as “rents from real property.” Also, we must make distributions to stockholders aggregating annually at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains.
The selling price of the Series A Redeemable Preferred Stock was determined pursuant to negotiations among us and the dealer manager, which is an affiliate of Bluerock, based upon the following primary factors at the time of the offering: the economic conditions in and future prospects for the industry in which we compete; our prospects for future earnings; an assessment of our management; the state of our development; the prevailing condition of the equity securities market; the state of the market for non-traded REIT securities; and market valuations of public companies considered comparable to our Company.
The selling price of the Series A Preferred Stock was determined pursuant to negotiations among us and the dealer manager, which is an affiliate of Bluerock, based upon the following primary factors at the time of the offering: the economic conditions in and future prospects for the industry in which we compete; our prospects for future earnings; an assessment of our management; the state of our development; the prevailing condition of the equity securities market; the state of the market for non-traded REIT securities; and market valuations of public companies considered comparable to our Company.
Upon the occurrence of a Change of Control (as defined below) with respect to the Series A Redeemable Preferred Stock, we will be required to redeem all outstanding shares of the Series A Redeemable Preferred Stock, in whole, within 60 days after the first date on which such Change of Control occurred, in cash at a redemption price of $25.00 per share of Series A Redeemable Preferred Stock; plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date.
Upon the occurrence of a Change of Control (as defined below) with respect to the Series A Preferred Stock, we will be required to redeem all outstanding shares of the Series A Preferred Stock, in whole, within 60 days after the first date on which such Change of Control occurred, in cash at a redemption price of $25.00 per share of Series A Preferred Stock; plus an amount equal to all accrued and unpaid dividends, if any, to and including the redemption date.
Beginning immediately upon original issuance of any share of Series A Redeemable Preferred Stock, the holder thereof may require us to redeem, and beginning two years from the date of original issuance, we may redeem, any such share, in each case with the redemption price payable, in our sole discretion, in cash or in equal value of shares of our Class A common stock, based on the closing price per share of our Class A common stock for the single trading day prior to the date of redemption.
Beginning immediately upon original issuance of any share of Series A Preferred Stock, the holder thereof may require us to redeem, and beginning two years from the date of original issuance, we may redeem, any such share, in each case with the redemption price payable, in our sole discretion, in cash or in equal value of shares of our Class A common stock, based on the closing price per share of our Class A common stock for the single trading day prior to the date of redemption.
Our charter also authorizes our Board, without stockholder approval, to designate and issue one or more classes or series of preferred stock in addition to the Series A Redeemable Preferred Stock (including equity or debt securities convertible into preferred stock) and to set or change the voting, conversion or other rights, preferences, restrictions, limitations as to dividends or other distributions and qualifications or terms or conditions of redemption of each class or series of shares so issued.
Our charter also authorizes our Board, without stockholder approval, to designate and issue one or more classes or series of preferred stock in addition to the Series A Preferred Stock (including equity or debt securities convertible into preferred stock) and to set or change the voting, conversion or other rights, preferences, restrictions, limitations as to dividends or other distributions and qualifications or terms or conditions of redemption of each class or series of shares so issued.
The use of the sources described above for distributions and the ultimate repayment of any liabilities incurred, as well as the payment of distributions in excess of our FFO, could adversely impact our ability to pay distributions in future periods, decrease the amount of cash we have available for operations and new investments and reduce your overall return and adversely impact and dilute the value of your investment in shares of our Series A Redeemable Preferred Stock.
The use of the sources described above for distributions and the ultimate repayment of any liabilities incurred, as well as the payment of distributions in excess of our FFO, could adversely impact our ability to pay distributions in future periods, decrease the amount of cash we have available for operations and new investments and reduce your overall return and adversely impact and dilute the value of your investment in shares of our Series A Preferred Stock.
We also may borrow funds if necessary to satisfy the requirement that we distribute at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains, to our stockholders annually, or otherwise as is necessary or advisable to assure that we qualify and maintain our qualification as a REIT for U.S. federal income tax purposes.
We also may borrow funds if necessary to satisfy the requirement that we distribute at least 90% of our REIT taxable income, determined without regard to the deduction for dividends paid and excluding net capital gains, to our stockholders annually, or otherwise as is necessary or advisable to assure that we maintain our qualification as a REIT for U.S. federal income tax purposes.
Distribution requirements imposed by law limit our flexibility. To qualify and maintain our qualification as a REIT for U.S. federal income tax purposes, we generally will be required to distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains, each year.
Distribution requirements imposed by law limit our flexibility. To maintain our qualification as a REIT for U.S. federal income tax purposes, we generally will be required to distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding net capital gains, each year.
Holders of Series A Redeemable Preferred Stock will have certain limited voting rights with respect to amendments to our charter that alter only the contract rights set forth therein of either (a) the Series A Redeemable Preferred Stock, or (b) of any preferred stock (i) ranking on parity with the Series A Redeemable Preferred Stock with respect to dividend rights and rights upon our liquidation, dissolution or winding up, and (ii) upon which like voting rights have been conferred.
Holders of Series A Preferred Stock will have certain limited voting rights with respect to amendments to our charter that alter only the contract rights set forth therein of either (a) the Series A Preferred Stock, or (b) of any preferred stock (i) ranking on parity with the Series A Preferred Stock with respect to dividend rights and rights upon our liquidation, dissolution or winding up, and (ii) upon which like voting rights have been conferred.
To the extent consistent with qualifying and maintaining our qualification as a REIT, we may use derivative financial instruments to hedge exposures to interest rate fluctuations on loans secured by our assets and investments in collateralized mortgage-backed securities. Derivative instruments may include interest rate swap contracts, interest rate cap or floor contracts, futures or forward contracts, options or repurchase agreements.
To the extent consistent with maintaining our qualification as a REIT, we may use derivative financial instruments to hedge exposures to interest rate fluctuations on loans secured by our assets and investments in collateralized mortgage-backed securities. Derivative instruments may include interest rate swap contracts, interest rate cap or floor contracts, futures or forward contracts, options or repurchase agreements.
Upon liquidation, dissolution or winding up of our company, the holders of shares of our Series A Redeemable Preferred Stock are entitled to receive a liquidation preference of $25.00 per share, plus an amount equal to all accrued and unpaid dividends, in each case prior and in preference to any distribution to the holders of shares of our common stock or any other class of our equity securities.
Upon liquidation, dissolution or winding up of our company, the holders of shares of our Series A Preferred Stock are entitled to receive a liquidation preference of $25.00 per share, plus an amount equal to all accrued and unpaid dividends, in each case prior and in preference to any distribution to the holders of shares of our common stock or any other class of our equity securities.
For example, to assist us in qualifying as a REIT, the articles supplementary establishing the Series A Redeemable Preferred Stock prohibits anyone from owning, or being deemed to own by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding Series A Redeemable Preferred Stock.
For example, to assist us in qualifying as a REIT, the articles supplementary establishing the Series A Preferred Stock prohibits anyone from owning, or being deemed to own by virtue of the applicable constructive ownership provisions of the Code, more than 9.8% in value or number of shares, whichever is more restrictive, of the outstanding Series A Preferred Stock.
To qualify and maintain our qualification as a REIT, we will be required to distribute at least 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding net capital gains) to our stockholders in each taxable year, and thus our ability to retain internally generated cash is limited.
To maintain our qualification as a REIT, we will be required to distribute at least 90% of our REIT taxable income (determined without regard to the deduction for dividends paid and excluding net capital gains) to our stockholders in each taxable year, and thus our ability to retain internally generated cash is limited.
We intend to use a portion of the net proceeds from any offerings of our Series A Redeemable Preferred Stock to fund future investments and for other general corporate and working capital purposes. However, any such offerings will not be conditioned upon the closing of definitive agreements to acquire or invest in any properties.
We intend to use a portion of the net proceeds from any offerings of our Series A Preferred Stock to fund future investments and for other general corporate and working capital purposes. However, any such offerings will not be conditioned upon the closing of definitive agreements to acquire or invest in any properties.
In addition, if we experience a Change of Control, there can be no assurance that we would have sufficient financial resources available to satisfy our obligations to redeem the Series A Redeemable Preferred Stock, and any guarantees or indebtedness that may be required to be repaid or repurchased as a result of such event.
In addition, if we experience a Change of Control, there can be no assurance that we would have sufficient financial resources available to satisfy our obligations to redeem the Series A Preferred Stock, and any guarantees or indebtedness that may be required to be repaid or repurchased as a result of such event.
We intend to use the net proceeds from any offerings of the Series A Redeemable Preferred Stock to fund future investments and for other general corporate and working capital purposes, but any such offerings will not be conditioned upon the closing of pending property investments and we will have broad discretion to determine alternative uses of proceeds.
We intend to use the net proceeds from any offerings of the Series A Preferred Stock to fund future investments and for other general corporate and working capital purposes, but any such offerings will not be conditioned upon the closing of pending property investments and we will have broad discretion to determine alternative uses of proceeds.
Other than the investments disclosed in any applicable prospectus or prospectus supplement prior to your investment, you will not have the opportunity to evaluate the economic merits, transaction terms or other financial or operational data concerning our future investments that we have not yet identified prior to purchasing shares of our Series A Redeemable Preferred Stock.
Other than the investments disclosed in any applicable prospectus or prospectus supplement prior to your investment, you will not have the opportunity to evaluate the economic merits, transaction terms or other financial or operational data concerning our future investments that we have not yet identified prior to purchasing shares of our Series A Preferred Stock.
The Series A Redeemable Preferred Stock are “covered securities” and therefore are not subject to registration under the state securities, or “Blue Sky,” regulations in the various states in which it may be sold due to its seniority to our Class A common stock, which is listed on the NYSE American.
The Series A Preferred Stock are “covered securities” and therefore are not subject to registration under the state securities, or “Blue Sky,” regulations in the various states in which it may be sold due to its seniority to our Class A common stock, which is listed on the NYSE American.
While ratings do not reflect market prices or the suitability of a security for a particular investor, such downward revision or withdrawal of a rating could have an adverse effect on the market price of the Series A Redeemable Preferred Stock. It is also possible that the Series A Redeemable Preferred Stock will never be rated.
While ratings do not reflect market prices or the suitability of a security for a particular investor, such downward revision or withdrawal of a rating could have an adverse effect on the market price of the Series A Preferred Stock. It is also possible that the Series A Preferred Stock will never be rated.
Dividend payments on the Series A Redeemable Preferred Stock are not guaranteed. Although dividends on the Series A Redeemable Preferred Stock are cumulative, our Board must approve the actual payment of such distributions. Our Board can elect at any time or from time to time, and for an indefinite duration, not to pay any or all accrued distributions.
Dividend payments on the Series A Preferred Stock are not guaranteed. Although dividends on the Series A Preferred Stock are cumulative, our Board must approve the actual payment of such distributions. Our Board can elect at any time or from time to time, and for an indefinite duration, not to pay any or all accrued distributions.
The holders of shares of Series A Redeemable Preferred Stock may require us to redeem such shares, with the redemption price payable, in our sole discretion, in cash or in equal value of shares of our Class A common stock, based on the closing price per share of our Class A common stock for the single trading day prior to the date of redemption.
The holders of shares of Series A Preferred Stock may require us to redeem such shares, with the redemption price payable, in our sole discretion, in cash or in equal value of shares of our Class A common stock, based on the closing price per share of our Class A common stock for the single trading day prior to the date of redemption.
If we ever create and issue additional preferred stock or equity or debt securities convertible into preferred stock with a distribution preference over common stock or the Series A Redeemable Preferred Stock, payment of any distribution preferences of such new outstanding preferred stock would reduce the amount of funds available for the payment of distributions on our common stock and our Series A Redeemable Preferred Stock.
If we ever create and issue additional preferred stock or equity or debt securities convertible into preferred stock with a distribution preference over common stock or the Series A Preferred Stock, payment of any distribution preferences of such new outstanding preferred stock would reduce the amount of funds available for the payment of distributions on our common stock and our Series A Preferred Stock.
Given the potential for early redemption of the Series A Redeemable Preferred Stock, holders of such shares may face an increased reinvestment risk, which is the risk that the return on an investment purchased with proceeds from the sale or redemption of the Series A Redeemable Preferred Stock may be lower than the return previously obtained from the investment in such shares.
Given the potential for early redemption of the Series A Preferred Stock, holders of such shares may face an increased reinvestment risk, which is the risk that the return on an investment purchased with proceeds from the sale or redemption of the Series A Preferred Stock may be lower than the return previously obtained from the investment in such shares.
Any dividends or redemption payments may be delayed or prohibited. If our Class A common stock is no longer listed on the NYSE American or another national securities exchange, we will be required to terminate any continuous offering(s) of Series A Redeemable Preferred Stock.
Any dividends or redemption payments may be delayed or prohibited. If our Class A common stock is no longer listed on the NYSE American or another national securities exchange, we will be required to terminate any continuous offering(s) of Series A Preferred Stock.
This would require the termination of any continuous offering(s) of Series A Redeemable Preferred Stock and could result in our raising an amount of gross proceeds that is substantially less than the amount of the gross proceeds we expect to raise if the maximum offering amounts are sold.
This would require the termination of any continuous offering(s) of Series A Preferred Stock and could result in our raising an amount of gross proceeds that is substantially less than the amount of the gross proceeds we expect to raise if the maximum offering amounts are sold.
If that were to occur, it would result in the amount of distributions that exceed our earnings and profits being treated first as a return of capital to the extent of the stockholder’s adjusted tax basis in the stockholder’s Series A Redeemable Preferred Stock and then, to the extent of any excess over the stockholder’s adjusted tax basis in the stockholder’s Series A Redeemable Preferred Stock, as capital gain.
If that were to occur, it would result in the amount of distributions that exceed our earnings and profits being treated first as a return of capital to the extent of the stockholder’s adjusted tax basis in the stockholder’s Series A Preferred Stock and then, to the extent of any excess over the stockholder’s adjusted tax basis in the stockholder’s Series A Preferred Stock, as capital gain.
We may voluntarily redeem some or all of the Series A Redeemable Preferred Stock, for cash or equal value of shares of our Class A common stock, two years after the issuance date. Any such redemptions may occur at a time that is unfavorable to holders of such preferred stock.
We may voluntarily redeem some or all of the Series A Preferred Stock, for cash or equal value of shares of our Class A common stock, two years after the issuance date. Any such redemptions may occur at a time that is unfavorable to holders of such preferred stock.
Unless full cumulative dividends on shares of our Series A Redeemable Preferred Stock for all past dividend periods have been declared and paid (or set apart for payment), we will not declare or pay dividends with respect to any shares of our common stock for any period.
Unless full cumulative dividends on shares of our Series A Preferred Stock for all past dividend periods have been declared and paid (or set apart for payment), we will not declare or pay dividends with respect to any shares of our common stock for any period.
At that time, we will have the right to redeem, at our option, the outstanding shares of Series A Redeemable Preferred Stock, in whole or in part, at 100% of the Stated Value per share, plus an amount equal to any accrued and unpaid dividends.
At that time, we will have the right to redeem, at our option, the outstanding shares of Series A Preferred Stock, in whole or in part, at 100% of the Stated Value per share, plus an amount equal to any accrued and unpaid dividends.
The payment due upon liquidation is fixed at the liquidation preference of $25.00 per share of Series A Redeemable Preferred Stock, plus an amount equal to all accrued and unpaid dividends thereon, to and including the date of payment, whether or not authorized or declared.
The payment due upon liquidation is fixed at the liquidation preference of $25.00 per share of Series A Preferred Stock, plus an amount equal to all accrued and unpaid dividends thereon, to and including the date of payment, whether or not authorized or declared.
If our Class A common stock is no longer listed on the NYSE American or another appropriate exchange, we will be required to register any offering of Series A Redeemable Preferred Stock in any state in which such offering was subsequently made.
If our Class A common stock is no longer listed on the NYSE American or another appropriate exchange, we will be required to register any offering of Series A Preferred Stock in any state in which such offering was subsequently made.
We will have broad discretion in the application of the net proceeds from such offerings, and holders of our Series A Redeemable Preferred Stock will not have the opportunity as part of their investment decision to assess whether the net proceeds are being used appropriately.
We will have broad discretion in the application of the net proceeds from such offerings, and holders of our Series A Preferred Stock will not have the opportunity as part of their investment decision to assess whether the net proceeds are being used appropriately.
We may have an incentive to voluntarily redeem shares of Series A Redeemable Preferred Stock, if market conditions allow us to issue other preferred stock or debt securities at an interest or distribution rate that is lower than the distribution rate on the applicable series of preferred stock.
We may have an incentive to voluntarily redeem shares of Series A Preferred Stock, if market conditions allow us to issue other preferred stock or debt securities at an interest or distribution rate that is lower than the distribution rate on the applicable series of preferred stock.
We established the offering price for the Series A Redeemable Preferred Stock pursuant to negotiations among us and our affiliated dealer manager; as a result, the actual value of an investment in the Series A Redeemable Preferred Stock may be substantially less than the amount paid.
We established the offering price for the Series A Preferred Stock pursuant to negotiations among us and our affiliated dealer manager; as a result, the actual value of an investment in the Series A Preferred Stock may be substantially less than the amount paid.
In addition, depending on the terms and pricing of any additional offerings and the value of our investments, you also may experience dilution in the book value and fair market value of, and the amount of distributions paid on, your shares of Series A Redeemable Preferred Stock and Class A common stock, if any.
In addition, depending on the terms and pricing of any additional offerings and the value of our investments, you also may experience dilution in the book value and fair market value of, and the amount of distributions paid on, your shares of Series A Preferred Stock and Class A common stock, if any.
Under the terms of our Series A Redeemable Preferred Stock, we may make redemption payments in shares of our Class A common stock. Although the dollar amounts of such payments are unknown, the number of shares to be issued in connection with such payments may fluctuate based on the price of our Class A common stock.
Under the terms of our Series A Preferred Stock, we may make redemption payments in shares of our Class A common stock. Although the dollar amounts of such payments are unknown, the number of shares to be issued in connection with such payments may fluctuate based on the price of our Class A common stock.
Because we conduct substantially all of our operations through our Operating Partnership, our ability to pay dividends on our Series A Redeemable Preferred Stock will depend almost entirely on the distributions we receive from our Operating Partnership. We may not be able to pay dividends regularly on our Series A Redeemable Preferred Stock.
Because we conduct substantially all of our operations through our Operating Partnership, our ability to pay dividends on our Series A Preferred Stock will depend almost entirely on the distributions we receive from our Operating Partnership. We may not be able to pay dividends regularly on our Series A Preferred Stock.
No assurance can be given, however, that one or more rating agencies might not independently determine to issue such ratings or that such a rating, if issued, would not adversely affect the market price of the Series A Redeemable Preferred Stock.
No assurance can be given, however, that one or more rating agencies might not independently determine to issue such ratings or that such a rating, if issued, would not adversely affect the market price of the Series A Preferred Stock.
Beginning two years following the date of original issuance of the shares of Series A Redeemable Preferred Stock to be redeemed, we may voluntarily redeem some or all of such Series A Redeemable Preferred Stock for cash or shares of our Class A common stock, in our sole discretion.
Beginning two years following the date of original issuance of the shares of Series A Preferred Stock to be redeemed, we may voluntarily redeem some or all of such Series A Preferred Stock for cash or shares of our Class A common stock, in our sole discretion.
If this were to occur, the market price of shares of the Series A Redeemable Preferred Stock might be adversely affected, and stockholders entitled to a redemption payment may not receive payment. The Series A Redeemable Preferred Stock will bear a risk of early redemption by us.
If this were to occur, the market price of shares of the Series A Preferred Stock might be adversely affected, and stockholders entitled to a redemption payment may not receive payment. The Series A Preferred Stock will bear a risk of early redemption by us.
We may have an incentive to redeem the Series A Redeemable Preferred Stock voluntarily if market conditions allow us to issue other preferred stock or debt securities at an interest or distribution rate that is lower than the distribution rate on the Series A Redeemable Preferred Stock.
We may have an incentive to redeem the Series A Preferred Stock voluntarily if market conditions allow us to issue other preferred stock or debt securities at an interest or distribution rate that is lower than the distribution rate on the Series A Preferred Stock.
Other than in these limited circumstances, holders of Series A Redeemable Preferred Stock will generally not have voting rights. The amount of the liquidation preference is fixed and holders of Series A Redeemable Preferred Stock will have no right to receive any greater payment.
Other than in these limited circumstances, holders of Series A Preferred Stock will generally not have voting rights. The amount of the liquidation preference is fixed and holders of Series A Preferred Stock will have no right to receive any greater payment.
We will be able to call shares of Series A Redeemable Preferred Stock for redemption under certain circumstances without the consent of the holder. We will have the ability to call the outstanding shares of Series A Redeemable Preferred Stock after two years from the date of original issuance of such shares of Series A Redeemable Preferred Stock.
We will be able to call shares of Series A Preferred Stock for redemption under certain circumstances without the consent of the holder. We will have the ability to call the outstanding shares of Series A Preferred Stock after two years from the date of original issuance of such shares of Series A Preferred Stock.
Because we conduct substantially all of our operations through our Operating Partnership, our ability to pay dividends on the Series A Redeemable Preferred Stock will depend almost entirely on payments and distributions we receive on our interests in our Operating Partnership.
Because we conduct substantially all of our operations through our Operating Partnership, our ability to pay dividends on the Series A Preferred Stock will depend almost entirely on payments and distributions we receive on our interests in our Operating Partnership.
If we opt to pay the redemption price in shares of our common stock, holders of shares of Series A Redeemable Preferred Stock may receive publicly traded shares, as we currently expect to continue listing our Class A common stock on the NYSE American.
If we opt to pay the redemption price in shares of our common stock, holders of shares of Series A Preferred Stock may receive publicly traded shares, as we currently expect to continue listing our Class A common stock on the NYSE American.
Among the factors that could affect the market price of our common stock are: ● actual or anticipated quarterly fluctuations in our business, financial condition and operating results; ● changes in revenues or earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs; ● the ability of our tenants to pay rent to us and meet their other obligations to us under current lease terms; ● our ability to re-lease spaces as leases expire; ● our ability to refinance our indebtedness as it matures; ● any changes in our dividend policy; ● any future issuances of equity securities; ● strategic actions by us or our competitors, such as acquisitions or restructurings; ● general market conditions and, in particular, developments related to market conditions for the real estate industry; and ● domestic and international economic factors unrelated to our performance.
Among the factors that could affect the market price of our common stock are: ● actual or anticipated quarterly fluctuations in our business, financial condition and operating results; ● changes in revenues or earnings estimates or publication of research reports and recommendations by financial analysts or actions taken by rating agencies with respect to our securities or those of other REITs; ● the ability of our tenants to pay rent to us and meet their other obligations to us under current lease terms; ● our ability to re-lease spaces as leases expire; ● our ability to refinance our indebtedness as it matures; ● any changes in our dividend policy; ● any future issuances of equity securities; ● strategic actions by us or our competitors, such as acquisitions or restructurings; 45 Table of Contents ● general market conditions and, in particular, developments related to market conditions for the real estate industry; and ● domestic and international economic factors unrelated to our performance.
In addition, such downturns could result in reduced demand for homes, which may reduce home prices and make home purchases more affordable as an alternative to renting, which also may materially adversely reduce the demand for rental homes; ● the rate of household formation or population growth in our target markets or a continued or exacerbated economic slow-down experienced by the local economies where our properties are located or by the real estate industry generally may result in changes in supply of or demand for our homes; and ● the failure of the real estate market to attract the same level of capital investment in the future that it attracted at the time of our purchases or a reduction in the number of companies seeking to acquire properties may result in the value of our investments not appreciating or decreasing, possibly significantly, below the amount we pay for these investments.
In addition, such downturns could result in reduced demand for homes, which may reduce home prices and make home purchases more affordable as an alternative to renting, which also may materially adversely reduce the demand for rental homes; ● the rate of household formation or population growth in our target markets or a continued or exacerbated economic slow-down experienced by the local economies where our properties are located or by the real estate industry generally may result in changes in supply of or demand for our homes; and 21 Table of Contents ● the failure of the real estate market to attract the same level of capital investment in the future that it attracted at the time of our purchases or a reduction in the number of companies seeking to acquire properties may result in the value of our investments not appreciating or decreasing, possibly significantly, below the amount we pay for these investments.
We intend to contribute the entire net proceeds from any offerings of our Series A Redeemable Preferred Stock to our Operating Partnership in exchange for Series A Preferred Units that have substantially the same economic terms as the Series A Redeemable Preferred Stock.
We intend to contribute the entire net proceeds from any offerings of our Series A Preferred Stock to our Operating Partnership in exchange for Series A Preferred Units that have substantially the same economic terms as the Series A Preferred Stock.
If our Operating Partnership fails to operate profitably and to generate sufficient cash from operations (and the operations of its subsidiaries), we may not be able to pay dividends on the Series A Redeemable Preferred Stock.
If our Operating Partnership fails to operate profitably and to generate sufficient cash from operations (and the operations of its subsidiaries), we may not be able to pay dividends on the Series A Preferred Stock.
In the event a holder of our Series A Redeemable Preferred Stock exercises their redemption option we may redeem such shares of Series A Redeemable Preferred Stock either for cash, or for shares of our Class A common stock, or any combination thereof, in our sole discretion.
In the event a holder of our Series A Preferred Stock exercises their redemption option we may redeem such shares of Series A Preferred Stock either for cash, or for shares of our Class A common stock, or any combination thereof, in our sole discretion.
You should consider these ownership limitations prior to a purchase of shares of our Series A Redeemable Preferred Stock. Our ability to pay dividends or redeem shares is limited by the requirements of Maryland law. Our ability to pay dividends on or redeem shares of the Series A Redeemable Preferred Stock is limited by the laws of Maryland.
You should consider these ownership limitations prior to a purchase of shares of our Series A Preferred Stock. Our ability to pay dividends or redeem shares is limited by the requirements of Maryland law. Our ability to pay dividends on or redeem shares of the Series A Preferred Stock is limited by the laws of Maryland.
There is no public market for our Series A Redeemable Preferred Stock, and we currently have no plan to list the Series A Redeemable Preferred Stock on a securities exchange or to include such shares for quotation on any national securities market.
There is no public market for our Series A Preferred Stock, and we currently have no plan to list the Series A Preferred Stock on a securities exchange or to include such shares for quotation on any national securities market.
These restrictions on transferability and ownership will not apply, however, if our Board determines that it is no longer in our best interest to continue to qualify as a REIT or that compliance is no longer required for REIT qualification. 55 Table of Contents A limit on the percentage of our capital stock and common stock a person may own may discourage a takeover or business combination, which could prevent our common stockholders from realizing a premium price for their common stock.
These restrictions on transferability and ownership will not apply, however, if our Board determines that it is no longer in our best interest to continue to qualify as a REIT or that compliance is no longer required for REIT qualification. 53 Table of Contents A limit on the percentage of our capital stock and common stock a person may own may discourage a takeover or business combination, which could prevent our common stockholders from realizing a premium price for their common stock.
Also, in order to facilitate the sale of a property, we may allow the buyer to purchase the property subject to an existing loan whereby we remain responsible for the debt. 34 Table of Contents If we are required to make payments under any “bad boy” carve-out guaranties that we may provide in connection with certain mortgages and related loans, our business and financial results could be materially adversely affected.
Also, in order to facilitate the sale of a property, we may allow the buyer to purchase the property subject to an existing loan whereby we remain responsible for the debt. 32 Table of Contents If we are required to make payments under any “bad boy” carve-out guaranties that we may provide in connection with certain mortgages and related loans, our business and financial results could be materially adversely affected.
Additionally, our charter contains restrictions on the ownership and transfer of our securities, including our Series A Redeemable Preferred Stock, and these restrictions may inhibit the ability to sell shares of our Series A Redeemable Preferred Stock, promptly or at all.
Additionally, our charter contains restrictions on the ownership and transfer of our securities, including our Series A Preferred Stock, and these restrictions may inhibit the ability to sell shares of our Series A Preferred Stock, promptly or at all.
We may opt to pay the redemption price in shares of our Class A common stock. The rights of the holders of shares of Series A Redeemable Preferred Stock rank senior to the rights of the holders of shares of our common stock as to dividends and payments upon liquidation.
We may opt to pay the redemption price in shares of our Class A common stock. The rights of the holders of shares of Series A Preferred Stock rank senior to the rights of the holders of shares of our common stock as to dividends and payments upon liquidation.
Investors purchasing Series A Redeemable Preferred Stock in an offering of our Series A Redeemable Preferred Stock who do not participate in any future stock issuances will experience dilution in the percentage of the issued and outstanding stock they own.
Investors purchasing Series A Preferred Stock in an offering of our Series A Preferred Stock who do not participate in any future stock issuances will experience dilution in the percentage of the issued and outstanding stock they own.
In the event of a resident default or bankruptcy, we may experience delays in enforcing our rights as landlord at that property and will incur costs in protecting our investment and re-leasing the property. 21 Table of Contents Our leases are relatively short-term, exposing us to the risk that we may have to re-lease our properties frequently, which we may be unable to do on attractive terms, on a timely basis, or at all.
In the event of a resident default or bankruptcy, we may experience delays in enforcing our rights as landlord at that property and will incur costs in protecting our investment and re-leasing the property. 19 Table of Contents Our leases are relatively short-term, exposing us to the risk that we may have to re-lease our properties frequently, which we may be unable to do on attractive terms, on a timely basis, or at all.
The dividends payable by us on the Series A Redeemable Preferred Stock may exceed our current and accumulated earnings and profits as determined for U.S. federal income tax purposes.
The dividends payable by us on the Series A Preferred Stock may exceed our current and accumulated earnings and profits as determined for U.S. federal income tax purposes.
Because our Board has the power to establish the preferences and rights of each class or series of preferred stock, it may afford the holders of any series or class of preferred stock preferences, powers, and rights senior to the rights of holders of common stock or the Series A Redeemable Preferred Stock.
Because our Board has the power to establish the preferences and rights of each class or series of preferred stock, it may afford the holders of any series or class of preferred stock preferences, powers, and rights senior to the rights of holders of common stock or the Series A Preferred Stock.
In addition, the existence of Series A Redeemable Preferred Stock may encourage short selling by market participants because the existence of redemption payments could depress the market price of shares of our Class A common stock.
In addition, the existence of Series A Preferred Stock may encourage short selling by market participants because the existence of redemption payments could depress the market price of shares of our Class A common stock.
As a result, our business, financial condition, results of operations, cash flows, liquidity and ability to satisfy our debt service obligations and to pay dividends and distributions to security holders could be adversely affected over time. 16 Table of Contents Our current portfolio primarily consists of interests in single-family properties, located primarily in markets in the Sunbelt and Western United States.
As a result, our business, financial condition, results of operations, cash flows, liquidity and ability to satisfy our debt service obligations and to pay dividends and distributions to security holders could be adversely affected over time. 14 Table of Contents Our current portfolio primarily consists of interests in single-family properties, located primarily in markets in the Sunbelt and Western United States.
Any adverse changes in the financial condition of our Manager or its affiliates, or our relationship with our Manager, could hinder its ability to successfully manage our operations and our portfolio of investments, which would adversely affect us and our stockholders. 37 Table of Contents Our Board will approve very broad investment guidelines for our Manager and will not approve each investment and financing decision made by our Manager unless required by our investment guidelines.
Any adverse changes in the financial condition of our Manager or its affiliates, or our relationship with our Manager, could hinder its ability to successfully manage our operations and our portfolio of investments, which would adversely affect us and our stockholders. 36 Table of Contents Our Board will approve very broad investment guidelines for our Manager and will not approve each investment and financing decision made by our Manager unless required by our investment guidelines.
The trading price of the Class A common stock, for which the Series A Redeemable Preferred Stock may be redeemed, may be volatile and may expose investors to additional volatility risk.
The trading price of the Class A common stock, for which the Series A Preferred Stock may be redeemed, may be volatile and may expose investors to additional volatility risk.
Our requirement to redeem the Series A Redeemable Preferred Stock in the event of a Change of Control may, in either case, deter a change of control transaction otherwise in the best interests of our stockholders.
Our requirement to redeem the Series A Preferred Stock in the event of a Change of Control may, in either case, deter a change of control transaction otherwise in the best interests of our stockholders.
In addition, we may elect in the future to obtain a rating of the Series A Redeemable Preferred Stock, which could adversely impact the market price of the applicable series.
In addition, we may elect in the future to obtain a rating of the Series A Preferred Stock, which could adversely impact the market price of the applicable series.
We may not be able to pay dividends on a regular quarterly basis in the future on our Series A Redeemable Preferred Stock.
We may not be able to pay dividends on a regular quarterly basis in the future on our Series A Preferred Stock.
You will not have the opportunity to evaluate our future investments prior to purchasing shares of our Series A Redeemable Preferred Stock.
You will not have the opportunity to evaluate our future investments prior to purchasing shares of our Series A Preferred Stock.
Our failure to redeem the Series A Redeemable Preferred Stock could have material adverse consequences for us and the holders of the Series A Redeemable Preferred Stock.
Our failure to redeem the Series A Preferred Stock could have material adverse consequences for us and the holders of the Series A Preferred Stock.
We may not elect to distribute any proceeds from the sale of properties to our stockholders; for example, we may use such proceeds to: ● purchase additional properties; ● fund capital commitments to our joint ventures; ● repay debt, if any; ● buy out interests of any co-venturers or other partners in any joint venture in which we are a party; ● create working capital reserves; and/or ● make repairs, maintenance, tenant improvements or other capital improvements or expenditures to our remaining properties.
We may not elect to distribute any proceeds from the sale of properties to our stockholders; for example, we may use such proceeds to: ● purchase additional properties; ● fund capital commitments to our joint ventures; ● repay debt, if any; 24 Table of Contents ● buy out interests of any co-venturers or other partners in any joint venture in which we are a party; ● create working capital reserves; and/or ● make repairs, maintenance, tenant improvements or other capital improvements or expenditures to our remaining properties.

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Item 2. Properties

Properties — owned and leased real estate

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Unit count excludes units presented in the consolidated operating investments table above. Item 3. Legal Proceedings We are not party to, and none of our properties are subject to, any material pending legal proceeding. Item 4. Mining Safety Disclosures Not applicable. ​ 59 Table of Contents PART II
Unit count excludes units presented in the consolidated investments table above. 58 Table of Contents ​ Item 3. Legal Proceedings We are not party to, and none of our properties are subject to, any material pending legal proceeding. Item 4. Mining Safety Disclosures Not applicable. ​ 59 Table of Contents PART II
Item 2. Properties As of December 31, 2022, we held seventeen real estate investments, consisting of ten consolidated operating investments and seven investments held through preferred equity investments. The following tables provide summary information regarding our consolidated operating investments and preferred equity investments.
Item 2. Investments As of December 31, 2023, we held eighteen real estate investments, consisting of eleven consolidated investments and seven held through preferred equity and loan investments. The following tables provide summary information regarding our consolidated investments and preferred equity and loan investments.
Lucie, FL 286 ​ 69.6 ​ 41.6 ​ 243,357 2Q 2023 1Q 2024 ​ 2,133 Wayford at Innovation Park Charlotte, NC 210 ​ 62.0 ​ 19.1 ​ 295,238 3Q 2023 3Q 2024 ​ 1,994 Total Development Units ​ 1,041 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Investment ​ Number of Units ​ ​ ​ ​ Average Rent (1) Peak Housing (2) IN / MO / TX 474 ​ ​ ​ ​ ​ ​ $ 962 Total Operating Units ​ 474 ​ ​ ​ ​ Total Units / Average ​ ​ 1,637 ​ ​ ​ ​ $ 1,565 (1) For lease-up and development investments, represents the average pro forma effective monthly rent per occupied unit for all expected occupied units upon stabilization.
Lucie, FL ​ 286 ​ ​ 69.6 ​ ​ 63.8 ​ ​ 243,357 ​ 2Q 2023 ​ 1Q 2024 ​ ​ 2,133 Wayford at Innovation Park Charlotte, NC 210 ​ 62.0 ​ 40.4 ​ 295,238 3Q 2023 3Q 2024 ​ 1,994 Total Lease-up Units ​ 924 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development Investment Name ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Chandler Chandler, AZ 208 ​ 48.2 ​ 39.6 ​ 231,731 2Q 2024 3Q 2024 ​ 1,920 Total Development Units ​ 208 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Operating Investment Name ​ Number of Units ​ ​ ​ ​ Average Rent (1) Peak Housing (2) IN / MO / TX 452 ​ ​ ​ ​ ​ ​ $ 1,009 Total Operating Units ​ 452 ​ ​ ​ ​ Total Units / Average ​ ​ 1,584 ​ ​ ​ ​ $ 1,687 (1) For lease-up and development investments, represents the average pro forma effective monthly rent per occupied unit for all expected occupied units upon stabilization.
(4) Peak JV 2 includes the portfolios formerly presented as Axelrod, Granbury, Granbury 2.0, Lubbock, Lubbock 2.0, Lubbock 3.0, Lynnwood, Lynnwood 2.0, Springtown, Springtown 2.0, Texarkana and Texas Portfolio 183, of which all are in Texas. 58 Table of Contents Preferred Equity Investments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Actual/ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Actual/ ​ ​ Estimated ​ ​ ​ ​ Actual/ ​ Actual/ ​ Actual/ ​ ​ ​ ​ ​ ​ ​ Planned ​ ​ Construction ​ ​ ​ ​ Estimated ​ Estimated ​ Estimated ​ ​ Estimated ​ ​ ​ ​ Number ​ Cost ​ Cost to Date ​ Construction ​ Initial ​ Construction ​ ​ Average Name Location / Market of Units ​ (in millions) (in millions) Cost Per Unit Occupancy Completion Rent (1) Lease-up Investment ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ The Woods at Forest Hill ​ Forest Hill, TX ​ 76 ​ $ 14.8 ​ $ 14.5 ​ $ 194,737 ​ 4Q 2022 ​ 3Q 2023 ​ $ 1,625 Willow Park ​ Willow Park, TX ​ 46 ​ ​ 14.5 ​ ​ 13.6 ​ ​ 315,217 ​ 2Q 2022 ​ 3Q 2023 ​ ​ 2,362 Total Lease-up Units ​ ​ ​ 122 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development Investment ​ ​ ​ ​ The Cottages at Myrtle Beach Myrtle Beach, SC 294 ​ 63.2 ​ 45.3 ​ 214,966 2Q 2023 4Q 2023 ​ 1,743 The Cottages at Warner Robins Warner Robins, GA 251 ​ 53.1 ​ 39.7 ​ 211,554 3Q 2023 4Q 2023 ​ 1,346 The Cottages of Port St.
Preferred Equity and Loan Investments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Actual/ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Actual/ ​ Estimated ​ ​ ​ ​ Actual/ ​ Actual/ ​ Actual/ ​ ​ ​ ​ ​ ​ ​ Planned ​ Construction ​ ​ ​ ​ Estimated ​ Estimated ​ Estimated ​ ​ Estimated ​ ​ ​ ​ Number ​ Cost ​ Cost to Date ​ Construction ​ Initial ​ Construction ​ ​ Average Lease-up Investment Name Location / Market of Units (in millions) (in millions) Cost Per Unit Occupancy Completion Rent (1) The Woods at Forest Hill ​ Forest Hill, TX ​ 76 ​ $ 17.1 ​ $ 17.1 ​ $ 225,000 ​ 4Q 2022 ​ 3Q 2023 ​ $ 1,625 Willow Park ​ Willow Park, TX ​ 58 ​ ​ 17.1 ​ ​ 17.1 ​ ​ 294,828 ​ 2Q 2022 ​ 3Q 2023 ​ ​ 2,362 The Cottages at Myrtle Beach ​ Myrtle Beach, SC ​ 294 ​ 63.2 ​ ​ 61.7 ​ ​ 214,966 ​ 2Q 2023 ​ 4Q 2023 ​ ​ 1,743 The Cottages of Port St.
For operating investments, represents the average effective monthly rent per occupied unit for the three months ended December 31, 2022. (2) Peak Housing is a stabilized operating portfolio and consists of our preferred equity investments in a private single-family home REIT (refer to Note 8 of our combined consolidated financial statements for further information).
(2) Peak Housing is a stabilized operating portfolio and the number of units shown represents those collateralizing our preferred equity investment in the Peak REIT OP as of December 31,2023 (refer to Note 8 of our combined consolidated financial statements for further information).
Consolidated Operating Investments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Average Year ​ Ownership ​ Average ​ % ​ Name Market Units Built Interest Rent (1) Occupied (2) ​ Ballast AZ / CO / WA 84 1998 95 % $ 2,139 89.3 % Golden Pacific IN / KS / MO 171 1976 97 % 1,688 94.7 % ILE TX / SE US 482 1991 95 % 1,786 98.1 % Navigator Villas Pasco, WA 176 2013 90 % 1,493 96.6 % Peak ​ JV 1 (3) IN / MO 334 1997 60 % 1,174 97.0 % JV 2 (4) Various / TX 608 1980 80 % 1,285 89.7 % JV 3, formerly DFW 189 Dallas-Fort Worth, TX 189 1962 56 % 1,029 96.7 % JV 4, formerly Savannah 319 Savannah, GA 66 2022 80 % 1,689 98.5 % Wayford at Concord Concord, NC 150 2019 83 % 2,128 95.3 % Yauger Park Villas Olympia, WA 80 2010 95 % 2,364 96.3 % Total Units / Average ​ ​ 2,340 ​ ​ ​ $ 1,528 94.8 % (1) Represents the average of the ending average effective rent per occupied unit as of the last day of each month in the three months ended December 31, 2022.
Consolidated Investments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Average Year ​ Ownership ​ Average ​ % ​ Operating Investment Name Market / Location Units (1) Built Interest Rent (2) Occupied (3) ​ Ballast AZ / CO / WA 84 1998 95 % $ 2,104 90.5 % Golden Pacific IN / KS / MO 169 1977 97 % 1,715 92.3 % ILE TX / SE US 482 1991 95 % 1,838 95.8 % Indy-Springfield, formerly Peak JV 1 ​ IN / MO ​ 334 ​ 1999 ​ 100 % ​ 1,266 ​ 95.3 % Navigator Villas Pasco, WA 176 2013 90 % 1,587 97.7 % Peak JV 2 Various / TX 596 1980 80 % 1,292 89.3 % Peak JV 3 Dallas-Fort Worth, TX 150 1961 56 % 1,112 100.0 % Savannah-84, formerly Peak JV 4 Savannah, GA 84 2022 100 % 1,749 97.6 % Wayford at Concord Concord, NC 150 2019 83 % 2,176 97.3 % Yauger Park Villas Olympia, WA 80 2010 95 % 2,400 95.0 % Total Operating Units / Average ​ 2,305 ​ ​ ​ $ 1,597 94.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Development Investment Name ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Abode Wendell Falls (4) ​ Wendell, NC ​ 170 ​ — ​ 100 % ​ — ​ — ​ Total Development Units ​ ​ 170 ​ ​ ​ ​ ​ ​ ​ Total Units ​ ​ ​ 2,475 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Total operating units includes an aggregate of 118 units classified as held for sale and includes the following portfolios: 35 units in Indy-Springfield, 13 units in Peak JV 2, and 70 units in Peak JV 3.
(2) Percent occupied is calculated as (i) the number of units occupied as of December 31, 2022 divided by (ii) total number of units, expressed as a percentage. Percent occupied excludes an aggregate of 26 down/renovation units. (3) Peak JV 1 includes the portfolios formerly presented as Indy and Springfield.
(2) Represents the average of the ending average effective rent per occupied unit as of the last day of each month in the three months ended December 31, 2023. (3) Percent occupied is calculated as (i) the number of units occupied as of December 31, 2023 divided by (ii) total number of units, expressed as a percentage.
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Percent occupied excludes an aggregate of 60 down/renovation units. (4) Abode Wendell Falls is a build to rent development project expected to commence construction in the second quarter 2024. The total estimated project cost is $56.0 million, of which $6.5 million was incurred as of December 31, 2023.
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For operating investments, represents the average effective monthly rent per occupied unit for the three months ended December 31, 2023.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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REIT Index 100.00 106.01 ​ Stockholder Information As of March 15, 2023, we had approximately 3,835,013 shares of Class A common stock outstanding held by a total of 543 stockholders, one of which is the holder for all beneficial owners who hold in street name. 60 Table of Contents Distributions Future distributions paid by us will be at the discretion of our Board, and will depend upon our actual cash flow, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as our Board deems relevant.
REIT Index 100.00 106.01 ​ 120.58 ​ Stockholder Information As of March 5, 2024, we had approximately 3,871,265 shares of Class A common stock outstanding held by a total of 515 stockholders, one of which is the holder for all beneficial owners who hold in street name. 60 Table of Contents Distributions Future distributions paid by us on our Class A common stock and Class C common stock will be at the discretion of our Board, and will depend upon our actual cash flow, our financial condition, capital requirements, the annual distribution requirements under the REIT provisions of the Code and such other factors as our Board deems relevant.
On March 15, 2023, the closing price of our Class A common stock, as reported on the NYSE American, was $18.43. ​ ​ ​ ​ ​ ​ ​ Period Ending Index 10/06/22 12/31/22 Bluerock Homes Trust, Inc. 100.00 92.57 Russell 3000 Index 100.00 102.36 Russell 2000 Index 100.00 100.89 Dow Jones Equity All REIT Index 100.00 105.65 MSCI U.S.
On March 5, 2024, the closing price of our Class A common stock, as reported on the NYSE American, was $14.50. ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending Index 10/06/22 12/31/22 ​ 12/31/23 Bluerock Homes Trust, Inc. 100.00 92.57 ​ 65.11 Russell 3000 Index 100.00 102.36 ​ 128.92 Russell 2000 Index 100.00 100.89 ​ 117.97 Dow Jones Equity All REIT Index 100.00 105.65 ​ 117.58 MSCI U.S.
Unregistered Sales of Equity Securities We previously disclosed our issuances during the year ended December 31, 2022, of equity securities that were not registered under the Securities Act of 1933, as amended, in our Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission (the “SEC”) on November 4, 2022. Item 6. [Reserved] ​
Unregistered Sales of Equity Securities We previously disclosed our issuances during the years ended December 31, 2023 and 2022 of equity securities that were not registered under the Securities Act of 1933, as amended, in our Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission (the “SEC”) on November 4, 2022 and November 9, 2023, and on Form 8 - K filed with the SEC on January 5, 2023, February 23, 2023, May 19, 2023, May 26, 2023, August 16, 2023 and November 15, 2023.
No distributions were paid for the years ended December 31, 2022, and 2021.
Except for the special dividend addressed below, no distributions were paid on our Class A common stock and Class C common stock for the years ended December 31, 2023 and 2022.
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On December 19, 2023 our Board authorized, and we declared a special dividend of $1.00 per share on our Class A common stock, Class C common stock, OP Units and LTIP Units, which was payable to the stockholders of record as of December 29, 2023, and which was paid in cash on January 5, 2024.
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On January 15, 2024, our Board authorized and we declared (i) regular monthly dividends for the first quarter 2024 equal to a monthly rate of $0.125 per share on our Series A Preferred Stock (the “Series A Preferred Dividends”), payable monthly to the stockholders of record as of January 25, February 23 and March 25 of 2024, and (ii) special dividends on shares of our Series A Preferred Stock for the first quarter 2024, which will be seamlessly aggregated with the regular monthly Series A Preferred Dividends so as to effect a dividend rate of 2.0% over the 10-Year Daily Treasury Par Yield Curve Rate with a floor of 6.0% annually, calculated and paid monthly.
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Such special dividends will be payable to the extent the average 10-Year Treasury Rate exceeds 4.0%. The Series A Preferred Dividends and special dividends for the months of January and February were paid in cash on February 5, 2024 and March 5, 2024, respectively, with the March dividends to be paid in cash on April 5, 2024.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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If we fail to qualify and maintain our qualification as a REIT in any taxable year, we would be subject to federal income tax on our taxable income at regular corporate tax rates and we would not be permitted to qualify as a REIT for four years following the year in which our qualification is denied.
If we fail to maintain our qualification as a REIT in any taxable year, we would be subject to federal income tax on our taxable income at regular corporate tax rates and we would not be permitted to qualify as a REIT for four years following the year in which our qualification is denied.
The renovation work varies, but may include flooring, cabinetry, paint, plumbing, appliances and other items required to make the unit rent ready. Routine capital expenditures are necessary non-revenue generating improvements that extend the useful life of the property and that are less frequent in nature, such as roof repairs and asphalt resurfacing.
The renovation work varies, but may include flooring, cabinetry, paint, plumbing, appliances and other items required to make the unit rent ready. Routine capital expenditures are necessary non-revenue generating improvements that extend the useful life of the property and that are less frequent in nature, such as roof repairs and concrete work/asphalt resurfacing.
When indicators of potential impairment suggest that the carrying value of real estate and related intangible assets may not be recoverable, we assess the recoverability of the assets by estimating whether we will recover the carrying value of the asset through its undiscounted future cash flows and its eventual disposition.
When indicators of potential impairment suggest that the carrying value of operating real estate and related intangible assets may not be recoverable, we assess the recoverability of the assets by estimating whether we will recover the carrying value of the asset through its undiscounted future cash flows and its eventual disposition.
NOI also is a computation made by analysts and investors to measure a real estate company’s operating performance. 67 Table of Contents We believe that this measure provides an operating perspective not immediately apparent from operating income or net income prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
NOI also is a computation made by analysts and investors to measure a real estate company’s operating performance. 66 Table of Contents We believe that this measure provides an operating perspective not immediately apparent from operating income or net income prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Based on this analysis, if we do not believe that we will be able to recover the carrying value of the real estate and related intangible assets and liabilities, we will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the real estate and related intangible assets.
Based on this analysis, if we do not believe that we will be able to recover the carrying value of the operating real estate and related intangible assets, we will record an impairment loss to the extent that the carrying value exceeds the estimated fair value of the operating real estate and related intangible assets.
We consider the period of future benefit of an asset to determine its appropriate useful life and anticipate the estimated useful lives of assets by class to be generally as follows: ​ ​ ​ Buildings 30 – 40 years Building improvements 5 – 15 years Land improvements 5 – 15 years Furniture, fixtures and equipment 3 – 8 years In-place leases 6 months ​ Impairment of Real Estate Assets We continually monitor events and changes in circumstances that could indicate that the carrying amounts of our real estate and related intangible assets may not be recoverable.
We consider the period of future benefit of an asset to determine its appropriate useful life and anticipate the estimated useful lives of assets by class to be generally as follows: ​ ​ ​ Buildings 30 – 40 years Building improvements 5 – 15 years Land improvements 5 – 15 years Furniture, fixtures and equipment 3 – 8 years In-place leases 6 months ​ 76 Table of Contents Impairment of Operating Real Estate Assets We continually monitor events and changes in circumstances that could indicate that the carrying amounts of our operating real estate and related intangible assets may not be recoverable.
These provisions provide for consolidation of majority-owned entities through a majority voting interest held by the company providing control. 75 Table of Contents In assessing whether we are in control of and requiring consolidation of the limited liability company and partnership venture structures, we evaluate the respective rights and privileges afforded each member or partner (collectively referred to as “member”).
These provisions provide for consolidation of majority-owned entities through a majority voting interest held by the company providing control. In assessing whether we are in control of and requiring consolidation of the limited liability company and partnership venture structures, we evaluate the respective rights and privileges afforded each member or partner (collectively referred to as “member”).
Our management utilizes FFO and CFFO as measures of our operating 72 Table of Contents performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare our operating performance between periods.
Our management utilizes FFO and CFFO as measures of our operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare our operating performance between periods.
Other Income and Expense Other income and expense amounted to income of $3.7 million for the year ended December 31, 2022 compared to income of $0.6 million for the same prior year period.
Other Income and Expense Other income and expense amounted to income of $0.6 million for the year ended December 31, 2023 compared to income of $3.7 million for the same prior year period.
The following table summarizes our contractual obligations as of December 31, 2022 related to our mortgage notes secured by our properties and revolving credit facilities.
The following table summarizes our contractual obligations as of December 31, 2023 related to our mortgage notes secured by our properties and revolving credit facilities.
Capital Additions, Depreciation and Amortization We capitalize costs incurred in connection with our capital additions activities, including redevelopment, development and construction projects, other tangible improvements, and replacements of existing components. Repair and maintenance and tenant 76 Table of Contents turnover costs are expensed as incurred.
Capital Additions, Depreciation and Amortization We capitalize costs incurred in connection with our capital additions activities, including redevelopment, development and construction projects, other tangible improvements, and replacements of existing components. Repair and maintenance and tenant turnover costs are expensed as incurred.
Our Value-Add strategy focuses on repositioning lower-quality, less current assets to drive rent growth and expand margins to increase net operating income and maximize our return on investment. We have no employees and are supported by a related-party service agreement with the Manager (the “Management Agreement”).
Our Value-Add strategy focuses on repositioning lower-quality, less current assets to drive rent growth and expand margins to increase net operating income and maximize our return on investment. 61 Table of Contents We have no employees and are supported by a related-party service agreement with the Manager (the “Management Agreement”).
We intend to finance our long-term liquidity requirements with net proceeds of additional issuances of common and preferred stock, our revolving credit facilities, as well as future acquisition or project-based borrowings. Our success in meeting these requirements will therefore depend upon our ability to access capital.
We intend to finance our long-term liquidity requirements with net proceeds of additional issuances of common and preferred stock, including our Series A Preferred Offering, our revolving credit facilities, as well as future acquisition or project-based borrowings. Our success in meeting these requirements will therefore depend upon our ability to access capital.
Off-Balance Sheet Arrangements As of December 31, 2022, we have off-balance sheet arrangements that may have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital expenditures. As of December 31, 2022, we own investments in seven joint ventures that are accounted for as held to maturity debt securities.
Off-Balance Sheet Arrangements As of December 31, 2023, we have off-balance sheet arrangements that may have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital expenditures. As of December 31, 2023, we own investments in six joint ventures that are accounted for as held to maturity debt securities.
Such an event could materially and adversely affect our net income and results of operations. We intend to organize and operate in such a manner where we would remain qualified as a REIT.
Such an event could materially and adversely affect our net income and results of operations. We intend to continue to organize and operate in such a manner as to remain qualified as a REIT.
We define FFO, consistent with the NAREIT definition, as net income (loss), computed in accordance with GAAP, excluding gains or losses on sales of depreciable real estate property, plus depreciation and amortization of real estate assets, plus 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, and after adjustments for unconsolidated partnerships and joint ventures.
We define FFO, consistent with the NAREIT definition, as net income (loss), computed in accordance with GAAP, excluding gains or losses on sales of depreciable real estate property, plus depreciation and amortization of real estate assets, plus 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.
Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our short-term liquidity needs could be affected by various risks and uncertainties, including the effects of the COVID-19 pandemic and other risks detailed in Part I, Item 1A titled “Risk Factors”.
Our ability to access capital on favorable terms as well as to use cash from operations to continue to meet our short-term liquidity needs could be affected by various risks and uncertainties, including the risks detailed in Part I, Item 1A titled “Risk Factors”.
We are externally managed by the Manager, which manages our day-to-day operations under the Management Agreement. The Management Agreement has a one-year term expiring October 6, 2023 and will be automatically renewed for a one-year term each year on October 6, unless previously terminated in accordance with the terms of the Management Agreement.
We are externally managed by the Manager, which manages our day-to-day operations under the Management Agreement. The current term of the Management Agreement expires October 6, 2024 and will be automatically renewed for a one-year term each year on October 6, unless previously terminated in accordance with the terms of the Management Agreement.
Issuance of C-LTIP Units for Payment of the Fourth Quarter 2022 Base Management Fee and Operating Expense Reimbursement The Manager earned a base management fee of $1.8 million during the fourth quarter 2022. This amount was payable 50% in C-LTIP Units with the other 50% payable in either cash or C-LTIP Units, at the discretion of the Board.
Issuance of C-LTIP Units for Payment of the Fourth Quarter 2023 Base Management Fee and Operating Expense Reimbursement The Manager earned a base management fee of $2.0 million during the fourth quarter 2023. This amount was payable 50% in C-LTIP Units with the other 50% payable in either cash or C-LTIP Units, at the discretion of the Board.
Given the significant volatility in the trading price of REIT equities generally associated with the COVID-19 pandemic and our otherwise stable financial condition and liquidity position, we cannot provide assurances that these offerings are a likely source of capital to meet short-term liquidity needs.
Given the significant volatility in the trading price of REIT equities and our otherwise stable financial condition and liquidity position, we cannot provide assurances that these offerings are a likely source of capital to meet short-term liquidity needs.
In addition, the Manager was entitled to a $0.4 million reimbursement for operating expenses it incurred on our behalf for the fourth quarter 2022. This reimbursement was payable in cash or C-LTIP Units, at the discretion of the Board.
In addition, the Manager was entitled to a $1.3 million reimbursement for operating expenses it incurred on our behalf for the fourth quarter 2023. This reimbursement was payable in cash or C-LTIP Units, at the discretion of the Board.
All revenues and costs as well as assets and liabilities directly associated with the business activity of Bluerock Homes are included in the financial statements. The financial statements also include allocations of certain general, administrative, sales and marketing expenses and operations from Bluerock Residential for the period ended and prior to October 6, 2022.
All revenues and costs as well as assets and liabilities directly associated with our business activity are included in the financial statements. The financial statements for the period ended and prior to October 6, 2022 also include allocations of certain general, administrative, sales and marketing expenses that have been allocated to us from Bluerock Residential.
In addition to restrictive covenants, our revolving credit facilities contain material financial covenants. At December 31, 2022, we were in compliance with all covenants under our credit facilities. We will continue to monitor the debt markets, including Fannie Mae and Freddie Mac, and as market conditions permit, access borrowings that are advantageous to us.
At December 31, 2023, we were in compliance with all covenants under our credit facilities. We will continue to monitor the debt markets, including Fannie Mae and Freddie Mac, and as market conditions permit, access borrowings that are advantageous to us.
Subsequent Events Issuance of LTIP Units under the BHM Incentive Plans On January 1, 2023, we granted 3,303 LTIP Units pursuant to the BHM Incentive Plans to each independent member of the Board in payment of the equity portion of their respective annual retainers. Such LTIP Units were fully vested upon issuance.
Subsequent Events Issuance of LTIP Units under the BHM Incentive Plans On January 8, 2024, we granted 5,185 LTIP Units pursuant to the BHM Incentive Plans to each independent member of the Board in payment of the equity portion of their respective annual retainers. Such LTIP Units were fully vested upon issuance.
This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements. The matters discussed in these forward-looking statements are subject to risk, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. See also “Forward-Looking Statements” preceding Part I.
The matters discussed in these forward-looking statements are subject to risk, uncertainties and other factors that could cause actual results to differ materially from those made, projected or implied in the forward-looking statements. See also “Forward-Looking Statements” preceding Part I.
On October 6, 2022, Bluerock Residential completed a spin-off transaction that resulted in its single-family residential real estate business and certain other assets being contributed to us.
On October 6, 2022, Bluerock Residential completed a spin - off transaction that resulted in its single - family residential real estate business and certain other assets being contributed to us and Bluerock Homes becoming an independent publicly traded company.
Current Expected Credit Losses (CECL) We estimate provision for credit losses on our loans (notes receivable) and preferred equity investments under CECL. This method is based on expected credit losses for the life of the investment as of each balance sheet date.
Other property revenues are recognized in the period earned. Current Expected Credit Losses (CECL) We estimate provision for credit losses on our loans (notes receivable) and preferred equity investments under CECL. This method is based on expected credit losses for the life of the investment as of each balance sheet date.
FFO or CFFO should not be considered as an alternative to net income (loss) attributable to common stockholders or as an indication of our liquidity, nor is either indicative of funds available to fund our cash needs, including our ability to make distributions. Both FFO and CFFO should be reviewed in connection with other GAAP measurements.
FFO or CFFO should not be considered as an alternative to net income (loss) attributable to common stockholders or as an indication of our liquidity, nor is either indicative of funds available to fund our cash needs, including our ability to make distributions.
Capital Expenditures The following table summarizes our total capital expenditures incurred for the years ended December 31, 2022 and 2021 (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 Redevelopment/renovations ​ $ 16,122 ​ $ 1,875 Normally recurring capital expenditures ​ 314 ​ 132 Routine capital expenditures ​ 2,888 ​ 549 Total capital expenditures ​ $ 19,324 ​ $ 2,556 ​ Redevelopment and renovation costs are non-recurring capital expenditures for significant projects such as preparing a unit for rental.
Capital Expenditures The following table summarizes our total capital expenditures incurred for the years ended December 31, 2023 and 2022 (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 Redevelopment/renovations ​ $ 4,551 ​ $ 16,122 Routine capital expenditures ​ 3,193 ​ 2,888 Normally recurring capital expenditures ​ 436 ​ 314 Total capital expenditures ​ $ 8,180 ​ $ 19,324 ​ Redevelopment and renovation costs are non-recurring capital expenditures for significant projects such as preparing a unit for rental.
CFFO makes certain adjustments to FFO, removing the effect of items that do not reflect ongoing property operations such as acquisition expenses, non-cash interest, unrealized gains or losses on derivatives, provision for (recovery of) credit losses, losses on extinguishment of debt and debt modification costs (includes prepayment penalties incurred and the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt), one-time weather-related costs and stock compensation expense.
Adjustments for notes receivable, unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. 71 Table of Contents CFFO makes certain adjustments to FFO, removing the effect of items that do not reflect ongoing property operations such as acquisition and other transaction costs, non-cash interest, unrealized gains or losses on derivatives, provision for (recovery of) credit losses, losses on extinguishment of debt and debt modification costs (includes prepayment penalties incurred and the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt), one-time weather-related costs and equity compensation expense.
Further, our ability to access equity capital is dependent upon, among other things, general market conditions for REITs and the capital markets generally, market perceptions about us and our asset class, and current trading prices of our securities, all of which may continue to be adversely impacted by the COVID-19 pandemic .
Further, our ability to access equity capital is dependent upon, among other things, general market conditions for REITs and the capital markets generally, market perceptions about us and our asset class, and current trading prices of our securities.
We have evaluated our real estate investments as required by ASC 310-10 Receivables and concluded that no investments are considered an investment in a real estate acquisition, development, or construction arrangement. As such, we next evaluate if these investments are considered a security under ASC 320 Investments – Debt Securities .
We have evaluated our real estate investments as required by ASC 310-10 Receivables and concluded that no investments are considered an investment in a real estate acquisition, development, or construction arrangement.
For investments that meet the criteria of a security under ASC 320 Investments – Debt Securities , we classify each preferred equity investment as a held-to-maturity debt security as we have the intention and ability to hold the investment to maturity.
As such, we next evaluate if these investments are considered a security under ASC 320 Investments – Debt Securities . 75 Table of Contents For investments that meet the criteria of a security under ASC 320 Investments – Debt Securities , we classify each preferred equity investment as a held-to-maturity debt security as we have the intention and ability to hold the investment to maturity.
During the year ended December 31, 2022, net cash provided by operating activities was $3.5 million after net loss of $5.9 million was adjusted for the following: ● non-cash items of $7.0 million; ● a decrease in notes and accrued interest receivable of $2.9 million; ● distributions and preferred returns from unconsolidated joint ventures of $2.1 million; ● an increase in due to affiliates, net of $2.1 million; and ● a decrease in accounts receivable, prepaids and other assets of $0.1 million; offset by ● a decrease in accounts payable and other accrued liabilities of $4.9 million. 70 Table of Contents Cash Flows from Investing Activities During the year ended December 31, 2022, net cash used investing activities was $177.2 million, primarily due to the following: ● $147.8 million used in acquiring consolidated real estate investments; ● $56.4 million used in acquiring investments in unconsolidated joint ventures and notes receivable; and ● $18.6 million used on capital expenditures; offset by ● $45.6 million of repayments on notes receivable.
During the year ended December 31, 2023, net cash provided by operating activities was $13.9 million after net loss of $15.8 million was adjusted for the following: ● non-cash items of $23.3 million; ● distributions and preferred returns from unconsolidated joint ventures of $5.4 million; and ● an increase in due to affiliates, net of $1.3 million; offset by ● an increase in accounts receivable, prepaids and other assets of $0.2 million; and ● an increase in notes and accrued interest receivable of $0.1 million. 69 Table of Contents Cash Flows from Investing Activities During the year ended December 31, 2023, net cash used in investing activities was $25.7 million, primarily due to the following: ● $40.3 million used in acquiring investments in unconsolidated joint ventures and notes receivable; ● $10.8 million used in acquiring consolidated real estate investments; and ● $9.5 million used on capital expenditures; offset by ● $25.8 million of proceeds from the redemption of unconsolidated joint ventures; and ● $9.1 million of proceeds from the sale of real estate investments.
As of December 31, 2022, limited partners other than the Company owned approximately 67.0% of the common units of the Operating Partnership (35.03% is held by holders of limited partnership interest in the Operating Partnership (“OP Units”) and 31.97% is held by holders of the Operating Partnership’s long-term incentive plan units (“LTIP Units”), including 3.48% which are not vested at December 31, 2022).
As of December 31, 2023, limited partners other than the Company owned approximately 68.68% of the common units of the Operating Partnership (59.45% is held by holders of limited partnership interest in the Operating Partnership (“OP Units”) and 9.23% is held by holders of the Operating Partnership’s long-term incentive plan units (“LTIP Units”), including 3.76% which are not vested at December 31, 2023).
Upon consultation with the Manager, the Board elected to pay 100% of the base management fee and the operating expense reimbursement in C-LTIP Units. On February 22, 2023, we issued 85,750 and 17,462 C-LTIP Units in payment of the base management fee and the operating expense reimbursement, respectively, for the fourth quarter 2022.
Upon consultation with the Manager, the Board elected to pay 100% of the base management fee and the operating expense reimbursement in C-LTIP Units. On February 21, 2024, we issued 151,600 and 95,204 C-LTIP Units in payment of the base management fee and the operating expense reimbursement, respectively, for the fourth quarter 2023.
During this review process, if we determine that it is probable that we will not be able to collect all amounts due for both principal and interest according to the contractual terms of an investment, that loan or preferred equity investment is not considered fully recoverable and a provision for credit loss is recorded.
During this review process, if we determine that it is probable that we will not be able to collect all amounts due for both principal and interest according to the contractual terms of an investment, that loan or preferred equity investment is not considered fully recoverable and a provision for credit loss is recorded. 77 Table of Contents In estimating the value of the underlying collateral when determining if a loan or preferred equity investment is fully recoverable, we evaluate estimated future cash flows to be generated from the collateral underlying the investment.
Rental revenue is included within rental and other property revenues on our combined consolidated statement of operations. Amounts received in advance are recorded as a liability within other accrued liabilities on our combined consolidated balance sheet. Other property revenues are recognized in the period earned.
Rental revenue is recognized on an accrual basis and when the collectability of the amounts due from tenants is deemed probable. Rental revenue is included within rental and other property revenues on our combined consolidated statement of operations. Amounts received in advance are recorded as a liability within other accrued liabilities on our combined consolidated balance sheet.
Operating Activities Net cash flow provided by operating activities decreased $6.3 million in 2022 compared to 2021 primarily due to: ● Decrease of $6.2 million attributable to loss on extinguishment of debt; ● Decrease in accounts payable and other accrued liabilities of $5.6 million; ● Decrease in net distributions of income and preferred returns from preferred equity investments of $2.3 million; and ● Operating income, adjusted for non-cash activity, decreased $0.4 million; offset by ● Decrease in notes and accrued interest receivable of $4.8 million; ● Net increase in net due to affiliates of $2.0 million; and ● Decrease in accounts receivable, prepaid expenses and other assets of $1.4 million.
Year ended December 31, 2023 as compared to the year ended December 31, 2022 Operating Activities Net cash flow provided by operating activities increased $10.4 million in 2023 compared to 2022 primarily due to: ● operating income, adjusted for non-cash activity, increased $6.4 million; ● increase in accounts payable and other accrued liabilities of $4.9 million; and ● increase in net distributions of income and preferred returns from preferred equity investments of $3.3 million; offset by ● increase in notes and accrued interest receivable of $3.1 million; ● net decrease in net due to affiliates of $0.8 million; and ● increase in accounts receivable, prepaid expenses and other assets of $0.3 million.
Our primary long-term liquidity requirements relate to (a) costs for additional single-family residential investments, including build-to-rent development properties, (b) repayment of long-term debt and our revolving credit facilities, and (c) capital expenditures.
Our primary long-term liquidity requirements relate to (i) costs for additional single-family residential investments, including build-to-rent development properties, (ii) repayment of long-term debt and our revolving credit facilities, (iii) capital expenditures, and (iv) cash redemption requirements related to our Series A Preferred Stock.
Lucie, FL 286 ​ 69.6 ​ 41.6 ​ 243,357 2Q 2023 1Q 2024 ​ 2,133 Wayford at Innovation Park Charlotte, NC 210 ​ 62.0 ​ 19.1 ​ 295,238 3Q 2023 3Q 2024 ​ 1,994 Total Development Units ​ ​ 1,041 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number ​ ​ ​ ​ Average Operating Investment ​ ​ of Units ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rent (1) Peak Housing (2) IN / MO / TX 474 ​ ​ ​ ​ ​ ​ $ 962 Total Operating Units ​ ​ 474 ​ ​ ​ ​ Total Units/Average ​ ​ 1,637 ​ ​ ​ ​ $ 1,565 (1) For lease-up and development investments, represents the average pro forma effective monthly rent per occupied unit for all expected occupied units upon stabilization.
Lucie, FL 286 ​ 69.6 ​ 63.8 ​ 243,357 2Q 2023 1Q 2024 ​ 2,133 Wayford at Innovation Park ​ Charlotte, NC ​ 210 ​ ​ 62.0 ​ ​ 40.4 ​ ​ 295,238 ​ 3Q 2023 ​ 3Q 2024 ​ ​ 1,994 Total Lease-up Units ​ 924 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development Investment Name ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Chandler Chandler, AZ 208 ​ 48.2 ​ 39.6 ​ 231,731 2Q 2024 3Q 2024 ​ 1,920 Total Development Units ​ 208 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Average Operating Investment Name ​ ​ ​ of Units ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Rent (1) Peak Housing (2) ​ IN / MO / TX 452 ​ ​ ​ ​ $ 1,009 Total Operating Units ​ ​ 452 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Units/Average ​ 1,584 ​ ​ ​ ​ ​ ​ $ 1,687 (1) For lease-up and development investments, represents the average pro forma effective monthly rent per occupied unit for all expected occupied units upon stabilization.
If upon completion of the valuation the fair value of the underlying collateral securing the investment is less than the net carrying value, we record a provision for credit loss on that loan or preferred equity investment.
We may also obtain a third-party valuation which may value the collateral through an “as-is” or “stabilized value” methodology. If upon completion of the valuation the fair value of the underlying collateral securing the investment is less than the net carrying value, we record a provision for credit loss on that loan or preferred equity investment.
(2) Represents the average of the ending average effective rent per occupied unit as of the last day of each month in the year. 65 Table of Contents The following is a summary of our preferred equity investments as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Actual/ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Actual/ ​ Estimated ​ ​ ​ ​ Actual/ ​ Actual/ ​ Actual/ ​ ​ ​ ​ ​ ​ ​ Planned ​ Construction ​ ​ ​ ​ Estimated ​ Estimated ​ Estimated ​ Estimated ​ ​ ​ ​ Number ​ Cost ​ Cost to Date ​ Construction ​ Initial ​ Construction ​ Average Name ​ Location / Market ​ of Units ​ (in millions) ​ (in millions) ​ Cost Per Unit ​ Occupancy ​ Completion ​ Rent (1) Lease-up Investment ​ ​ ​ ​ The Woods at Forest Hill Forest Hill, TX 76 ​ $ 14.8 ​ $ 14.5 ​ $ 194,737 4Q 2022 3Q 2023 ​ $ 1,625 Willow Park Willow Park, TX 46 ​ 14.5 ​ 13.6 ​ 315,217 2Q 2022 3Q 2023 ​ 2,362 Total Lease-up Units ​ ​ 122 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development Investment ​ ​ ​ ​ The Cottages at Myrtle Beach Myrtle Beach, SC 294 ​ 63.2 ​ 45.3 ​ 214,966 2Q 2023 4Q 2023 ​ 1,743 The Cottages at Warner Robins Warner Robins, GA 251 ​ 53.1 ​ 39.7 ​ 211,554 3Q 2023 4Q 2023 ​ 1,346 The Cottages of Port St.
(2) Represents the average of the ending average effective rent per occupied unit as of the last day of each month in the year presented. 64 Table of Contents The following is a summary of our preferred equity and loan investments as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Actual/ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Actual/ ​ Estimated ​ ​ ​ ​ Actual/ ​ Actual/ ​ Actual/ ​ ​ ​ ​ ​ ​ ​ Planned ​ Construction ​ ​ ​ ​ Estimated ​ Estimated ​ Estimated ​ Estimated ​ ​ Location / ​ Number ​ Cost ​ Cost to Date ​ Construction ​ Initial ​ Construction ​ Average Lease-up Investment Name ​ Market ​ of Units ​ (in millions) ​ (in millions) ​ Cost Per Unit ​ Occupancy ​ Completion ​ Rent (1) The Woods at Forest Hill Forest Hill, TX 76 $ 17.1 $ 17.1 $ 225,000 4Q 2022 3Q 2023 $ 1,625 Willow Park Willow Park, TX 58 ​ ​ 17.1 ​ ​ 17.1 ​ ​ 294,828 2Q 2022 3Q 2023 ​ ​ 2,362 The Cottages at Myrtle Beach Myrtle Beach, SC 294 ​ 63.2 ​ 61.7 ​ 214,966 2Q 2023 4Q 2023 ​ 1,743 The Cottages of Port St.
As such, the results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance. 73 Table of Contents The table below presents our calculation of FFO and CFFO for the years ended December 31, 2022 and 2021 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 Net (loss) income attributable to common stockholders ​ $ (1,000) ​ $ 34,325 Add back: Net (loss) income attributable to Operating Partnership Units ​ (1,927) ​ 65,826 Net (loss) income attributable to common stockholders and unit holders ​ (2,927) ​ 100,151 ​ ​ ​ ​ ​ ​ ​ Real estate depreciation and amortization ​ 15,825 ​ 8,397 Gain on sale of real estate investments ​ (258) ​ (116,690) Adjustment for partially owned noncontrolling interests ​ (2,715) ​ 11,799 FFO attributable to Common Stockholders and Unit Holders ​ 9,925 ​ 3,657 ​ ​ ​ ​ ​ ​ ​ Acquisition and pursuit costs ​ 167 ​ — Non-cash interest expense ​ 2,441 ​ 982 Unrealized gain on derivatives ​ (3,084) ​ — Recovery of credit losses ​ (402) ​ (28) Loss on extinguishment of debt ​ ​ — ​ ​ 6,172 Non-real estate depreciation and amortization ​ 483 ​ 487 Weather-related losses, net ​ 25 ​ 87 Transaction costs ​ 24 ​ — Other income, net ​ (446) ​ (130) Non-cash equity compensation ​ 5,246 ​ 2,098 Adjustment for partially owned noncontrolling interests ​ (1,293) ​ (595) CFFO Attributable to Common Stockholders and Unit Holders ​ $ 13,086 ​ $ 12,730 ​ ​ ​ ​ ​ ​ ​ Per Share and Unit Information: ​ ​ FFO attributable to Common Stockholders and Unit Holders – diluted ​ $ 0.88 ​ $ 0.33 CFFO attributable to Common Stockholders and Unit Holders – diluted ​ $ 1.16 ​ $ 1.14 ​ ​ ​ ​ ​ ​ ​ Weighted average common shares and units outstanding – diluted ​ 11,239,378 ​ 11,214,229 ​ Operating cash flow, FFO and CFFO may also be used to fund all or a portion of certain capitalizable items that are excluded from FFO and CFFO.
As such, the results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance. 72 Table of Contents The table below presents our calculation of FFO and CFFO for the years ended December 31, 2023 and 2022 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 Net loss attributable to common stockholders ​ $ (4,503) ​ $ (1,000) Add back: Net loss attributable to Operating Partnership Units ​ (8,996) ​ (1,927) Net loss attributable to common stockholders and unit holders ​ (13,499) ​ (2,927) ​ ​ ​ ​ ​ ​ ​ Real estate depreciation and amortization ​ 16,023 ​ 15,825 Gain on sale and impairment of real estate investments, net ​ 1,017 ​ — Gain on sale of assets from discontinued operations ​ — ​ (258) Adjustment for partially owned properties’ noncontrolling interests ​ (2,215) ​ (2,715) FFO attributable to common stockholders and unit holders ​ 1,326 ​ 9,925 ​ ​ ​ ​ ​ ​ ​ Acquisition and other transaction costs ​ 1,820 ​ 167 Non-cash interest expense ​ 2,775 ​ 2,441 Unrealized loss (gain) on derivatives ​ 2,933 ​ (3,084) Provision for (recovery of) credit losses ​ 174 ​ (402) Weather-related losses, net ​ ​ (17) ​ ​ 25 Non-real estate depreciation and amortization ​ 200 ​ 483 Transaction costs ​ — ​ 24 Other income, net ​ (679) ​ (446) Non-cash equity compensation ​ 13,040 ​ 5,246 Adjustment for partially owned properties’ noncontrolling interests ​ (627) ​ (1,293) CFFO attributable to common stockholders and unit holders ​ $ 20,945 ​ $ 13,086 ​ ​ ​ ​ ​ ​ ​ Per Share and Unit Information: ​ ​ ​ FFO attributable to common stockholders and unit holders – diluted ​ $ 0.12 ​ $ 0.88 CFFO attributable to common stockholders and unit holders – diluted ​ $ 1.82 ​ $ 1.16 ​ ​ ​ ​ ​ ​ ​ Weighted average common shares and units outstanding – diluted ​ 11,537,120 ​ 11,239,378 ​ Operating cash flow, FFO and CFFO may also be used to fund all or a portion of certain capitalizable items that are excluded from FFO and CFFO.
As a REIT, we generally will not be subject to corporate-level income taxes. To qualify and maintain our REIT status, we will be required, among other requirements, to distribute annually at least 90% of our “REIT taxable income,” as defined by the Internal Revenue Code of 1986, as amended (the “Code”), to our stockholders.
In order to maintain our REIT status, we are required, among other requirements, to distribute annually at least 90% of our “REIT taxable income,” as defined by the Internal Revenue Code of 1986, as amended (the “Code”), to our stockholders.
We believe we will be able to meet our primary liquidity requirements going forward through, among other sources: ● $78.4 million in cash available at December 31, 2022; ● proceeds from our revolving credit facilities dedicated to single-family residential investments, which we expect to add additional collateral to increase our availability up to approximately $50 million during 2023 (there was no availability at December 31, 2022); ● proceeds from future mortgage debt financings for acquisition and/or development projects; ● cash generated from operating activities; and ● proceeds from potential offerings of common and preferred stock, as well as issuances of units of limited partnership interest in our Operating Partnership (“OP Units”).
We believe we will be able to meet our primary liquidity requirements going forward through, among other sources: ● $80.2 million in cash available at December 31, 2023; ● capacity of $100 million, of which approximately $56 million was available at December 31, 2023, on our revolving credit facilities; ● proceeds from future mortgage debt financings for acquisition and/or development projects; ● cash generated from operating activities; and ● proceeds from our Series A Preferred Offering and potential offerings of common and preferred stock, as well as issuances of units of limited partnership interest in our Operating Partnership (“OP Units”).
The following table reflects net (loss) income attributable to common stockholders together with a reconciliation to NOI, as computed in accordance with GAAP for the years ended December 31, 2022 and 2021 (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ 2022 2021 Net (loss) income attributable to common stockholders ​ $ (1,000) ​ $ 34,325 Add back: Net (loss) income attributable to Operating Partnership Units ​ (1,927) ​ 65,826 Net (loss) income attributable to common stockholders and unit holders ​ (2,927) ​ 100,151 ​ ​ ​ ​ ​ ​ ​ Net (loss) income attributable to partially owned noncontrolling interest ​ (2,998) ​ 11,652 Income from discontinued operations ​ (311) ​ (110,858) Real estate depreciation and amortization ​ 15,825 ​ 5,705 Non-real estate depreciation and amortization ​ 483 ​ 487 Non-cash interest expense ​ 2,441 ​ 746 Unrealized gain on derivatives ​ (3,084) ​ — Recovery of credit losses ​ (402) ​ (28) Property management and asset management fees ​ 3,834 ​ 550 Management fees to related party ​ 1,787 ​ — Acquisition and pursuit costs ​ 167 ​ — Corporate operating expenses ​ 6,801 ​ 4,269 Transaction costs ​ 24 ​ — Weather-related losses, net ​ 25 ​ — Other income, net ​ (446) ​ (253) Preferred returns on unconsolidated real estate joint ventures ​ (8,588) ​ (3,190) Interest income from loan investments ​ (1,285) ​ (5,355) Total property income ​ 11,346 ​ 3,876 Add back: Interest expense ​ 6,342 ​ 2,169 Net operating income ​ $ 17,688 ​ $ 6,045 ​ Liquidity and Capital Resources Liquidity is a measure of our ability to meet potential cash requirements, both short- and long-term.
The following table reflects net loss attributable to common stockholders together with a reconciliation to NOI, as computed in accordance with GAAP for the years ended December 31, 2023 and 2022 (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ 2023 2022 Net loss attributable to common stockholders ​ $ (4,503) ​ $ (1,000) Add back: Net loss attributable to Operating Partnership Units ​ (8,996) ​ (1,927) Net loss attributable to common stockholders and unit holders ​ (13,499) ​ (2,927) ​ ​ ​ ​ ​ ​ ​ Net loss attributable to partially owned properties’ noncontrolling interests ​ (2,398) ​ (2,998) Income from discontinued operations ​ — ​ (311) Real estate depreciation and amortization ​ 16,023 ​ 15,825 Non-real estate depreciation and amortization ​ 200 ​ 483 Non-cash interest expense ​ 2,775 ​ 2,441 Unrealized loss (gain) on derivatives ​ 2,933 ​ (3,084) Provision for (recovery of) credit losses ​ 174 ​ (402) Property management and asset management fees ​ 4,416 ​ 3,834 Management fees to related party ​ 7,922 ​ 1,787 Acquisition and other transaction costs ​ 1,820 ​ 167 Corporate operating expenses ​ 7,959 ​ 6,801 Transaction costs ​ — ​ 24 Weather-related losses, net ​ (17) ​ 25 Interest income ​ (2,609) ​ — Preferred dividends ​ 130 ​ — Other income, net ​ (679) ​ (446) Preferred returns on unconsolidated real estate joint ventures ​ ​ (11,632) ​ ​ (8,588) Interest income from loan investments ​ ​ (94) ​ ​ (1,285) Gain on sale and impairment of real estate investments, net ​ 1,017 ​ — Total property income ​ ​ 14,441 ​ ​ 11,346 Add back: Interest expense ​ 7,394 ​ 6,342 Net operating income ​ $ 21,835 ​ $ 17,688 ​ Liquidity and Capital Resources Liquidity is a measure of our ability to meet potential cash requirements, both short- and long-term.
The following is a summary of our consolidated operational results for the years ended December 31, 2022 and 2021 ($ in thousands, except average rental rates): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2022 ​ 2021 Variance Rental and other property revenues ​ $ 32,859 ​ $ 9,275 254 % Property operating expenses ​ $ 15,171 ​ $ 3,230 370 % Net operating income ​ $ 17,688 ​ $ 6,045 193 % Average occupancy percentage (1) ​ 92.4 % 95.8 % (340) bps Average rental rate (2) ​ $ 1,447 ​ $ 1,388 4 % (1) Represents the average of the ending occupancy as of the last day of each month in the year.
The following is a summary of our consolidated operational results for the years ended December 31, 2023 and 2022 ($ in thousands, except average rental rates): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 ​ 2022 Variance Rental and other property revenues ​ $ 40,999 ​ $ 32,859 24.8 % Property operating expenses ​ $ 19,164 ​ $ 15,171 26.3 % Net operating income ​ $ 21,835 ​ $ 17,688 23.4 % Average occupancy percentage (1) ​ 94.4 % 92.4 % 200 bps Average rental rate (2) ​ $ 1,569 ​ $ 1,447 8.4 % (1) Represents the average of the ending occupancy as of the last day of each month in the year presented.
Commencing on October 6, 2022, we are externally managed and advised by our Manager pursuant to the Management Agreement. Base management fees of $1.8 million were expensed in the year ended December 31, 2022. There was no management fee expense prior to October 6, 2022.
Management fees to related party amounted to $7.9 million for the year ended December 31, 2023 as compared to $1.8 million for the same prior year period. Commencing on October 6, 2022, we are externally managed and advised by our Manager pursuant to the Management Agreement. There was no management fee expense prior to October 6, 2022.
Our historical financial information for the year ended December 31, 2021 was prepared on the same basis as the carve-out period of 2022. As a result, results of operations for the year ended December 31, 2022 may not be comparative to our results of operations reported for the prior year presented.
As a result, results of operations for the year ended December 31, 2022 may not be comparative to our results of operations reported for the prior year presented.
Cash Flows from Financing Activities During the year ended December 31, 2022, net cash provided by financing activities was $119.3 million, primarily due to the following: ● $98.2 million of contributions from Parent; ● proceeds of $55.0 million from borrowings on revolving credit facilities; ● borrowings of $41.9 million on mortgages payable; and ● capital contributions of $7.2 million from noncontrolling interests; offset by ● $68.5 million cash distribution to Parent at spin-off; ● $5.8 million of repayments of our mortgages payable; ● $4.6 million in deferred financing costs; ● $2.3 million paid for interest rate caps; and ● $1.9 million in cash distributions paid to noncontrolling interests.
Cash Flows from Financing Activities During the year ended December 31, 2023, net cash provided by financing activities was $15.7 million, primarily due to the following: ● proceeds of $21.0 million from borrowings on revolving credit facilities; ● net proceeds of $8.7 million from the issuance of Series A Preferred Stock; and ● capital contributions of $0.4 million from partially owned properties; noncontrolling interests; offset by ● $6.0 million of repayments on revolving credit facilities; ● $5.0 million for purchase of interests from noncontrolling interests; ● $1.5 million of repayments of our mortgages payable; ● $1.5 million in deferred financing costs; ● $0.3 million in cash distributions paid to noncontrolling interests; and ● $0.1 million in cash distributions paid to preferred stockholders.
As a result, our distribution rate and payment frequency may vary from time to time. However, to qualify as a REIT for tax purposes, we must make distributions equal to at least 90% of our “REIT taxable income”, determined without regard to the dividends paid deduction and excluding net capital gains, each year.
However, to maintain our REIT status for tax purposes, we must make distributions equal to at least 90% of our “REIT taxable income”, as defined by the Internal Revenue Code of 1986, determined without regard to the dividends paid deduction and excluding net capital gains, to our stockholders each year.
The financial statements also include allocations of certain general, administrative, sales and marketing expenses and operations from Bluerock Residential for the period ended and prior to October 6, 2022.
For the period ended and prior to October 6, 2022, allocations of certain general, administrative, sales and marketing expenses were allocated to us from Bluerock Residential based on relative unit count.
Results of Operations Note 4 “Sale of Real Estate Assets”; Note 5 “Investments in Real Estate”; Note 6 “Acquisition of Real Estate”; Note 7 “Notes and Interest Receivable”; and Note 8 “Preferred Equity Investments in Unconsolidated Real Estate Joint Ventures,” to our Combined Consolidated Financial Statements provide discussion of the various purchases and sales of properties and joint venture equity interests.
We believe that a continued upswing in propensity to rent, coupled with the limited and depleting supply at the middle-income range, signals significant opportunity. 63 Table of Contents Results of Operations Note 4 “Sale of Real Estate Assets and Held for Sale Real Estate Assets”; Note 5 “Investments in Real Estate”; Note 6 “Acquisition of Real Estate”; Note 7 “Notes and Interest Receivable”; and Note 8 “Preferred Equity Investments in Unconsolidated Real Estate Joint Ventures,” to our Combined Consolidated Financial Statements provide discussion of the various purchases and sales of properties and joint venture equity interests.
General and administrative expenses increased $2.5 million, or 55%, to $7.1 million for the year ended December 31, 2022 as compared to $4.6 million for the same prior year period.
General and administrative expenses amounted to $8.0 million for the year ended December 31, 2023 as compared to $7.1 million for the same prior year period.
While our policy is generally to pay distributions from cash flow from operations, we may declare distributions in excess of funds from operations. There were no distributions for the years ended December 31, 2022, and 2021.
While our policy is generally to pay distributions from cash flow from operations, we may declare distributions in excess of funds from operations.
Prior to October 6, 2022, Bluerock Home’s sole stockholder was Bluerock Residential Growth REIT, Inc, a Maryland corporation (“Bluerock Residential” or “Parent”). We have historically operated as part of Bluerock Residential and not as a standalone company. You should read the following discussion and analysis in conjunction with the accompanying financial statements of Bluerock Homes, and the notes thereto.
Prior to October 6, 2022, Bluerock Home’s sole stockholder was Bluerock Residential Growth REIT, Inc, a Maryland corporation (“Bluerock Residential” or “Parent”). We previously operated as part of Bluerock Residential and not as a standalone company.
From an operational perspective, our average rent per occupied unit increased $59 or 4.3% to $1,447 as compared to $1,388 during the prior year period.
From an operational perspective, our average rent per occupied unit increased $122 or 8.4% to $1,569 as compared to $1,447 during the prior year period. Average occupancy increased 200 basis points from 92.4% to 94.4% on a year over year basis.
This was primarily due to a $3.2 million increase from the acquisition of investments in 2022 and 2021. Property management fees are based on a stated percentage of property revenues and asset management fees are based on a stated percentage of capital contributions or assets under management, where applicable.
The increase was primarily due to the acquisition of homes since January 1, 2022, partially offset by lower property management fees negotiated with two property managers in 2023. Property management fees are based on a stated percentage of property revenues and asset management fees are based on a stated percentage of capital contributions or assets under management, where applicable.
Critical Accounting Policies and Estimates Below is a discussion of the accounting policies that we consider critical to an understanding of our financial condition and operating results that may require complex or significant judgment in their application or require estimates about matters which are inherently uncertain. 74 Table of Contents Principles of Consolidation and Basis of Presentation We conduct our operations through the Operating Partnership, of which we are the sole general partner.
For the fourth quarter 2023, amounts include the standard dividend at an annual rate of 6.0% of the Stated Value and any special dividends. 74 Table of Contents Critical Accounting Policies and Estimates Below is a discussion of the accounting policies that we consider critical to an understanding of our financial condition and operating results that may require complex or significant judgment in their application or require estimates about matters which are inherently uncertain.
Financial statements representing the historical operations of Bluerock Homes’ single-family residential rental business have been derived from (i) Bluerock Residential’s historical accounting records and are presented on a carve-out basis for the period ended and prior to October 6, 2022, and (ii) the Company’s accounting records as a standalone company subsequent to the Spin-Off.
On October 6, 2022, Bluerock Residential completed a spin-off transaction that resulted in its single-family residential real estate business and certain other assets being contributed to us. Financial statements for the period ended and prior to October 6, 2022 have been derived from Bluerock Residential’s historical accounting records and are presented on a carve-out basis.
Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs.
We define NOI as total property revenues less total property operating expenses, excluding depreciation and amortization and interest. Other REITs may use different methodologies for calculating NOI, and accordingly, our NOI may not be comparable to other REITs.
The combined consolidated financial statements include our accounts and those of the Operating Partnership and its subsidiaries.
Principles of Consolidation and Basis of Presentation We conduct our operations through the Operating Partnership, of which we are the sole general partner. The combined consolidated financial statements include our accounts and those of the Operating Partnership and its subsidiaries.
Our Board will determine the amount of dividends to be paid to our stockholders. The determination of our Board will be based on several factors, including funds available from operations, our capital expenditure requirements and the annual distribution requirements necessary to qualify and maintain our REIT status under the Internal Revenue Code.
The determination of our Board will be based on several factors, including funds available from operations, our capital expenditure requirements and the annual distribution requirements necessary to maintain our REIT status for federal income tax purposes. As a result, our distribution rate and payment frequency may vary from time to time.
No impairment charges were recorded in 2022 or 2021. Revenue Recognition We recognize rental revenue on a straight-line basis over the terms of the rental agreements and in accordance with ASC Topic 842 Leases . Rental revenue is recognized on an accrual basis and when the collectability of the amounts due from tenants is deemed probable.
There were no real estate assets classified as held for sale at December 31, 2022 and no impairment charges were recorded in 2022. Revenue Recognition We recognize rental revenue on a straight-line basis over the terms of the rental agreements and in accordance with ASC Topic 842 Leases .
For operating investments, represents the average effective monthly rent per occupied unit for the three months ended December 31, 2022. (2) Peak Housing is a stabilized operating portfolio and consists of our preferred equity investments in a private single-family home REIT (refer to Note 8 of our combined consolidated financial statements for further information).
(2) Peak Housing is a stabilized operating portfolio and the number of units shown represents those collateralizing our preferred equity investment in the Peak REIT OP as of December 31, 2023 (refer to Note 8 of our combined consolidated financial statements for further information). Unit count excludes units presented in the consolidated investments table above.
Cash Flows Year ended December 31, 2022 as compared to the year ended December 31, 2021 As of December 31, 2022, we held an aggregate of 3,977 residential units held through seventeen real estate investments, consisting of ten consolidated operating investments and seven investments held through preferred equity investments.
Cash Flows Cash Flows from Operating Activities As of December 31, 2023, we held eighteen real estate investments, consisting of eleven consolidated investments and seven preferred equity and loan investments, with the eighteen investments representing an aggregate of 4,059 residential units.
Unit count excludes units presented in the consolidated operating investments table above. Year ended December 31, 2022 as compared to the year ended December 31, 2021 Revenue Rental and other property revenues increased $23.6 million, or 254%, to $32.9 million for the year ended December 31, 2022 as compared to $9.3 million for the same prior year period.
Year ended December 31, 2023 as compared to the year ended December 31, 2022 Revenue Rental and other property revenues increased $8.1 million, or 25%, to $41.0 million for the year ended December 31, 2023 as compared to $32.9 million for the same prior year period.
Interest income from loan investments decreased $4.1 million, or 76%, to $1.3 million for the year ended December 31, 2022 as compared to $5.4 million for the same prior year period due to the payoff of five loans totaling $72.0 million in 2022 and 2021. 66 Table of Contents Expenses Property operating expenses increased $12.0 million, or 370%, to $15.2 million for the year ended December 31, 2022 as compared to $3.2 million for the same prior year period.
Interest income from loan investments decreased $1.2 million, or 93%, to $0.1 million for the year ended December 31, 2023 as compared to $1.3 million for the same prior year period due to the payoff of two loans in 2022 partially offset by two new loan investments during the fourth quarter 2023.
However, amounts recognized by us are not necessarily representative of the amounts that would have been reflected in the financial statements had we operated independently of Bluerock Residential. All significant intercompany balances and transactions have been eliminated.
As such, expense amounts recognized during the year ended December 31, 2022 are not representative of the amounts that would have been reflected in the financial statements had we operated independently of Bluerock Residential.
While occupancy remains strong at 94.8% as of December 31, 2022, in future periods, we may experience reduced levels of tenant retention, and reduced foot traffic and lease applications from prospective tenants, as a result of the impact of COVID-19.
While consolidated occupancy remains strong at 94.1% as of December 31, 2023, in future periods we may experience reduced levels of tenant retention, and reduced foot traffic and lease applications from prospective tenants. On June 28, 2023, the SEC declared effective our registration statement on Form S-11 (File No. 333-269415) (the “2023 Registration Statement”).
Industry Outlook The single-family rental industry has historically been more resilient to economic cycles than the multi-family sector and is currently benefiting from significant industry tailwinds that have accelerated during the pandemic.
The remaining $1.7 million of our principal investment is collateralized by The Woods at Forest Hill and Peak REIT OP investments and is recorded within accounts receivable, prepaids and other assets of our consolidated balance sheet. ​ Industry Outlook The single-family rental industry has historically been more resilient to economic cycles than the multi-family sector and is currently benefiting from significant industry tailwinds that have accelerated during the pandemic.
We may also meet our long-term liquidity needs through borrowings from a number of sources, either at the corporate or project level. We believe our revolving credit facilities will serve as our primary debt source that will continue to enable us to deploy our capital more efficiently and provide capital structure flexibility as we grow our asset base.
We believe our revolving credit facilities will serve as our primary debt source that will continue to enable us to deploy our capital more efficiently and provide capital structure flexibility as we grow our asset base. In addition to restrictive covenants, our revolving credit facilities contain material financial covenants.
These transactions have resulted in material changes to the presentation of our financial statements. 64 Table of Contents The following is a summary of our consolidated operating real estate investments as of December 31, 2022: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Average Year ​ Ownership ​ Average ​ % ​ Name Market Units Built Interest Rent (1) Occupied (2) ​ Ballast AZ / CO / WA 84 1998 95 % $ 2,139 89.3 % Golden Pacific IN / KS / MO 171 1976 97 % 1,688 94.7 % ILE TX / SE US 482 1991 95 % 1,786 98.1 % Navigator Villas Pasco, WA 176 2013 90 % 1,493 96.6 % Peak ​ JV 1 (3) IN / MO 334 1997 60 % 1,174 97.0 % JV 2 (4) Various / TX 608 1980 80 % 1,285 89.7 % JV 3, formerly DFW 189 Dallas-Fort Worth, TX 189 1962 56 % 1,029 96.7 % JV 4, formerly Savannah 319 Savannah, GA 66 2022 80 % 1,689 98.5 % Wayford at Concord Concord, NC 150 2019 83 % 2,128 95.3 % Yauger Park Villas Olympia, WA 80 2010 95 % 2,364 96.3 % Total Units / Average ​ ​ 2,340 ​ ​ ​ $ 1,528 94.8 % (1) Represents the average of the ending average effective rent per occupied unit as of the last day of each month in the three months ended December 31, 2022.
The following is a summary of our consolidated real estate investments as of December 31, 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Average Year ​ Ownership ​ Average ​ % ​ Operating Investment Name Market / Location Units (1) Built Interest Rent (2) Occupied (3) ​ Ballast AZ / CO / WA 84 1998 95 % $ 2,104 90.5 % Golden Pacific IN / KS / MO 169 1977 97 % 1,715 92.3 % ILE TX / SE US 482 1991 95 % 1,838 95.8 % Indy-Springfield, formerly Peak JV 1 ​ IN / MO ​ 334 ​ 1999 ​ 100 % ​ 1,266 ​ 95.3 % Navigator Villas Pasco, WA 176 2013 90 % 1,587 97.7 % Peak JV 2 Various / TX 596 1980 80 % 1,292 89.3 % Peak JV 3 Dallas-Fort Worth, TX 150 1961 56 % 1,112 100.0 % Savannah-84, formerly Peak JV 4 Savannah, GA 84 2022 100 % 1,749 97.6 % Wayford at Concord Concord, NC 150 2019 83 % 2,176 97.3 % Yauger Park Villas Olympia, WA 80 2010 95 % 2,400 95.0 % Total Operating Units / Average ​ 2,305 ​ ​ ​ $ 1,597 94.1 % ​ ​ ​ ​ ​ ​ ​ ​ ​ Development Investment Name ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Abode Wendell Falls (4) ​ Wendell, NC ​ 170 ​ — ​ 100 % ​ — ​ — ​ Total Development Units ​ ​ 170 ​ ​ ​ ​ ​ ​ ​ Total Units ​ ​ ​ 2,475 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Total operating units includes an aggregate of 118 units classified as held for sale and includes the following portfolios: 35 units in Indy-Springfield, 13 units in Peak JV 2, and 70 units in Peak JV 3.
At December 31, 2022, our estimated future required payments on these obligations were as follows (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ ​ Total ​ One year ​ 2024-2025 ​ 2026-2027 ​ Thereafter Mortgages Payable (Principal) ​ $ 98,231 ​ $ 1,519 ​ $ 3,356 ​ $ 38,337 ​ $ 55,019 Revolving Credit Facilities ​ 55,000 ​ — ​ 55,000 ​ — ​ — Estimated Interest Payments on Mortgages Payable and Revolving Credit Facilities ​ 29,907 ​ 8,462 ​ 11,120 ​ 6,926 ​ 3,399 Total ​ $ 183,138 ​ $ 9,981 ​ $ 69,476 ​ $ 45,263 ​ $ 58,418 ​ Estimated interest payments are based on the stated rates for mortgage notes payable assuming the interest rate in effect for the most recent quarter remains in effect through the respective maturity dates.
At December 31, 2023, our estimated future required payments on these obligations were as follows (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Less than ​ ​ ​ ​ ​ ​ ​ ​ Total ​ One year ​ 2025-2026 ​ 2027-2028 ​ Thereafter Mortgages Payable (Principal) ​ $ 96,705 ​ $ 1,639 ​ $ 39,188 ​ $ 23,888 ​ $ 31,990 Revolving Credit Facilities ​ 70,000 ​ 20,000 ​ 50,000 ​ — ​ — Estimated Interest Payments on Mortgages Payable and Revolving Credit Facilities ​ 28,079 ​ 10,136 ​ 10,214 ​ 6,718 ​ 1,011 Total ​ $ 194,784 ​ $ 31,775 ​ $ 99,402 ​ $ 30,606 ​ $ 33,001 ​ Estimated interest payments are based on the stated rates for mortgage notes payable assuming the interest rate in effect for the most recent quarter remains in effect through the respective maturity dates.
This was due to a $11.9 million increase from the acquisition of investments in 2022 and 2021 and a $0.1 million increase from our same story property, Navigator Villas. Property management and asset management fees expense were $3.8 million for the year ended December 31, 2022 as compared to $0.6 million in the same prior year period.
Controllable expenses were $9.7 million and $7.6 million, and non-controllable expenses were $9.5 million and $7.6 million, for the years ended December 31, 2023 and 2022, respectively. 65 Table of Contents Property management and asset management fees expense were $4.4 million for the year ended December 31, 2023 as compared to $3.8 million in the same prior year period.
In general, we believe our available cash balances, cash flows from operations, proceeds from our revolving credit facilities dedicated to single-family residential investments, proceeds from future mortgage debt financings for acquisitions and/or development projects, and other financing arrangements will be sufficient to fund our liquidity requirements with respect to our existing portfolio for the next 12 months.
On June 30, 2023, we filed a prospectus supplement to the 2023 Registration Statement offering a maximum of 20,000,000 shares of 6.0% Series A Redeemable Preferred Stock (the “Series A Preferred Stock”) at $25.00 per share, for a maximum offering amount of $500,000,000 in Series A Preferred Stock (the “Series A Preferred Offering”), and on August 11, 2023, we made the initial issuance of Series A Preferred Stock pursuant to the Series A Preferred Offering. 67 Table of Contents In general, we believe our available cash balances, cash flows from operations, proceeds from the Series A Preferred Offering, proceeds from our revolving credit facilities, proceeds from future mortgage debt financings for acquisitions and/or development projects, and other financing arrangements will be sufficient to fund our liquidity requirements with respect to our existing portfolio for the next 12 months.
As of December 31, 2022, our consolidated operating investments were approximately 94.8% occupied. 61 Table of Contents We intend to elect to be taxed and to operate in a manner that will allow us to qualify as a real estate investment trust (“REIT”) for federal income tax purposes beginning with our taxable year ended December 31, 2022 upon the filing of our U.S. federal income tax return for such taxable year.
As of December 31, 2023, our consolidated operating investments were approximately 94.1% occupied. We have elected to be taxed and have qualified as a real estate investment trust (“REIT”) for federal income tax purposes commencing with our taxable year ended December 31, 2022. As a REIT, we generally are not subject to corporate-level income taxes.
On March 9, 2023, our preferred equity investment in the Peak REIT OP was partially redeemed for $4.1 million, which included principal investment of $4.0 million and accrued preferred return of $0.1 million, leaving our remaining preferred equity investment in the Peak REIT OP at $16.3 million.
(2) Our preferred equity investment in Willow Park was redeemed for net proceeds of $4.1 million, which included $2.9 million of our total $4.6 million principal investment and $1.2 million of accrued preferred return.
As of December 31, 2022, the aggregate amount of our contractual commitments to fund future cash obligations in certain of our preferred equity and joint venture investments was $3.4 million.
As of December 31, 2023, the aggregate amount of our contractual commitments to fund future cash obligations in certain of our joint venture investments was $0.2 million. As equity capital market conditions permit, we may supplement our capital for short-term liquidity needs with proceeds of potential offerings of common and preferred stock, as well as issuance of OP Units.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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The table above incorporates those exposures that exist as of December 31, 2022; it does not consider those exposures or positions which could arise after that date. As a result, our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period and interest rates.
The table above incorporates those exposures that exist as of December 31, 2023; it does not consider those exposures or positions which could arise after that date. As a result, our ultimate realized gain or loss with respect to interest rate fluctuations will depend on the exposures that arise during the period and interest rates.
Based on our debt and interest rates in effect at December 31, 2022, a 100 basis point increase or decrease in interest rates on the portion of our debt bearing interest at variable rates would increase future interest expense by approximately $0.2 million or decrease by $0.2 million, respectively, on an annual basis.
Based on our debt outstanding and interest rates in effect at December 31, 2023, a 100-basis point increase or decrease in interest rates on the portion of our debt bearing interest at variable rates would increase future interest expense by approximately $0.2 million or decrease interest expense by approximately $0.2 million, respectively, on an annual basis.
The table below ($ in thousands) presents the principal payments and the weighted average interest rates on outstanding debt, by year of expected maturity, to evaluate the expected cash flows and sensitivity to interest rate changes. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2023 2024 2025 2026 2027 Thereafter Total Mortgage Notes Payable ​ $ 1,519 ​ $ 1,639 ​ $ 1,717 ​ $ 37,471 ​ $ 866 ​ $ 55,019 ​ $ 98,231 ​ Weighted Average Interest Rate ​ 4.15 % 4.27 % 4.27 % 4.13 % 5.43 % 5.59 % 4.97 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving Credit Facilities ​ $ — ​ $ 55,000 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 55,000 ​ Weighted Average Interest Rate ​ — ​ 7.10 % — ​ — ​ — ​ — ​ 7.10 % ​ The fair value is estimated at $93.7 million for mortgages payable as of December 31, 2022.
A negligible amount of fair value adjustments and unamortized deferred financing costs, net, are excluded. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 2025 2026 2027 2028 Thereafter Total Mortgage Notes Payable ​ $ 1,639 ​ $ 1,717 ​ $ 37,471 ​ $ 866 ​ $ 23,022 ​ $ 31,990 ​ $ 96,705 ​ Weighted Average Interest Rate ​ 4.21 % 4.21 % 4.13 % 5.97 % 4.91 % 7.56 % 5.47 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving Credit Facilities ​ $ 20,000 ​ $ 50,000 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 70,000 ​ Weighted Average Interest Rate ​ 8.47 % 8.14 % — ​ — ​ — ​ — ​ 8.24 % ​ The fair value of mortgages payable is estimated at $93.0 million at December 31, 2023.
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The table below ($ in thousands) presents the principal payments and the weighted average interest rates on outstanding debt, by year of expected maturity, to evaluate the expected cash flows and sensitivity to interest rate changes.
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As of December 31, 2023, we had interest rate caps and swaps, which are not accounted for as hedges, that we primarily use as part of our interest rate risk management strategy.
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Our interest rate caps and swaps effectively limit our exposure to interest rate risk by providing a ceiling on the underlying interest rate for $94.0 million of our debt.

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