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What changed in Bluerock Homes Trust, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of Bluerock Homes Trust, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+489 added−429 removedSource: 10-K (2025-03-20) vs 10-K (2024-03-12)

Top changes in Bluerock Homes Trust, Inc.'s 2024 10-K

489 paragraphs added · 429 removed · 331 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

25 edited+23 added−19 removed22 unchanged
Biggest changeThis 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.
Biggest changeSummary of Investments and Dispositions The following table presents a summary of our real estate investments during the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ Investment Name Location / Market Date of Investment Ownership Interest Number of Units 2023 Savannah-84 Savannah, GA February 23, 2023 100 % 18 Willow Park (1) Willow Park, TX October 26, 2023 — ​ 58 Chandler (2) Chandler, AZ November 15, 2023 — 208 Abode Wendell Falls (3) Wendell, NC December 20, 2023 100 % 170 The Woods at Forest Hill (4) Forest Hill, TX December 28, 2023 — ​ 76 ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ Wayford at Pringle (5) ​ Charlotte, NC ​ January 10, 2024 ​ — ​ 102 Villas at Huffmeister ​ Houston, TX ​ March 25, 2024 ​ 95 % 294 Indigo Cove (2) ​ Bluffton, SC ​ June 27, 2024 ​ — ​ 82 Avenue at Timberlin Park ​ Jacksonville, FL ​ July 31, 2024 ​ 100 % 200 Amira at Westly (6) ​ Tampa, FL ​ October 31, 2024 ​ 93 % 408 Allure at Southpark ​ Charlotte, NC ​ December 6, 2024 ​ 98 % 350 River Ford (2) ​ Brunswick, GA ​ December 6, 2024 ​ — ​ 170 Canvas at Wildwood (2) ​ Wildwood, FL ​ December 11, 2024 ​ — ​ 224 (1) Our investment in Willow Park is through a loan provided to an unaffiliated third party.
To satisfy the requirements for qualification as a REIT and generally not be subject to federal income and excise tax, we intend to make regular distributions of all or substantially all of our REIT taxable income, determined without regard to dividends paid, to our stockholders out of assets legally available for such purposes.
To satisfy the requirements for qualification as a REIT and generally not be subject to federal income and excise tax, we intend to make regular distributions of all or substantially all our REIT taxable income, determined without regard to dividends paid, to our stockholders out of assets legally available for such purposes.
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.
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 10 Table of Contents 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.
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).
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. 9 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) (the “Series A Preferred Regular Dividends”).
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.
The current term of our Management Agreement expires October 6, 2025 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.
If our operations do not generate sufficient cash flow to allow us to satisfy the REIT distribution requirements, we may be required to fund distributions from working capital, offering proceeds, borrowing funds, selling assets, making a taxable distribution of our equity or debt securities, or reducing such distributions.
If our operations do not generate sufficient cash flow to allow us to satisfy the REIT distribution requirements, we may be required to fund distributions from working capital, offering proceeds, proceeds from our DST Program, borrowing funds, selling assets, making a taxable distribution of our equity or debt securities, or reducing such distributions.
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.
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 residential rental properties with potential for long-term value creation for our stockholders.
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.
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. 11 Table of Contents
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.
As a REIT, we generally are not subject to corporate-level income taxes. 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.
On an opportunistic basis and subject to compliance with REIT restrictions, we intend to sell properties when we have executed our value creation plans and when we believe the investment has limited additional upside relative to other opportunities.
On an opportunistic basis and subject to compliance with REIT restrictions, we intend to sell properties when we have executed our value creation plans and when we believe the investment has limited additional upside relative to other opportunities. This allows us to harvest profits and reinvest proceeds to maximize stockholder value.
(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.
(2) Our investment in the portfolio, which was through a preferred equity investment with an unaffiliated third party, was fully redeemed in 2024 as units collateralizing our investment (such units collectively known as “Peak Housing”) were sold. Refer to Note 7 of our consolidated financial statements for further information.
Operational PropTech solutions include focus on streamlining value-add initiatives, integrating smart-home technology, automating the lease process and providing robust and coordinated maintenance services. Harvest and Redeploy Capital Selectively.
Operational PropTech solutions include focus on streamlining value-add initiatives, integrating smart-home technology, automating the lease process and providing robust and coordinated maintenance services. Invest in Institutional Residential Properties.
Substantially all our business is conducted through our Operating Partnership, of which we are the sole general partner. The principal executive offices of our Company and the Manager are located at 1345 Avenue of the Americas, 32 nd Floor, New York, New York 10105. Our telephone number is (212) 843-1601.
Substantially all our business is conducted through our Operating Partnership, of which we are the sole general partner. The principal executive offices of our Company and the Manager are located at 919 Third Avenue, 40 th Floor, New York, New York 10022.
Business and Growth Strategies Our principal business objective is to generate attractive risk-adjusted investment returns by assembling a portfolio of pre-existing single-family rental homes and developing build-to-rent communities.
Business and Growth Strategies Our principal business objective is to generate attractive risk-adjusted investment returns by assembling a portfolio of institutional residential properties including single-family homes, build-to-rent communities, and other residential communities, located across a diverse group of growth markets.
Our value-add strategy focuses on working with our local experts to reposition lower-quality, less current assets and drive rent growth and expand margins, increasing net operating income (“NOI”) and maximizing our return on investment. 8 Table of Contents ● Institutional Property Management / NOI Margin Expansion .
Our value-add strategy focuses on working with our local experts to reposition residential rental communities and drive rent growth and expand margins, increasing net operating income (“NOI”) and maximizing our return on investment. ● Income and Appreciation.
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.
Refer to Note 3 of our consolidated financial statements for further information. ​ The following table presents a summary of our loan payoff, real estate sales, and redemptions of preferred equity investments during the years ended December 31, 2024 and 2023: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ownership ​ ​ ​ ​ ​ ​ Date of Payoff, Sale ​ Interest in ​ Number Investment Name Location / Market or Redemption (1) Property of Units 2023 ​ ​ ​ ​ ​ ​ ​ ​ Golden Pacific ​ IN / MO ​ Various ​ 97 % 2 Peak Housing (2) ​ IN / MO / TX ​ Various ​ — ​ 196 Peak JV 2 ​ Various / TX ​ Various ​ 80 % 12 Peak JV 3 ​ Dallas-Fort Worth, TX ​ Various ​ 56 % 39 Willow Park (3) ​ Willow Park, TX ​ October 26, 2023 ​ — ​ 46 The Cottages at Warner Robins (3) ​ Warner Robins, GA ​ December 15, 2023 ​ — ​ 251 ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ ​ ILE ​ TX / SE US ​ Various ​ 95 % 4 Indy-Springfield ​ IN / MO ​ Various ​ 100 % 11 Peak Housing (2) ​ IN / MO / TX ​ Various ​ — ​ 452 Peak JV 2 ​ Various / TX ​ Various ​ 80 % 23 Peak JV 3 ​ Dallas-Fort Worth, TX ​ Various ​ 56 % 60 The Woods at Forest Hill (4) ​ Forest Hill, TX ​ Various ​ — ​ 76 Navigator Villas (5) ​ Pasco, WA ​ August 7, 2024 ​ 100 % 176 (1) For those dates where “Various” is listed, units were sold from the respective portfolios on various dates throughout that specified year.
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.
Refer to Note 6 of our consolidated financial statements for further information. 8 Table of Contents (2) Our investment in the property is through a preferred equity investment with an unaffiliated third party. Refer to Note 7 of our consolidated financial statements for further information. (3) Abode Wendell Falls is a build-to-rent development project that commenced construction in 2024.
We may use a convertible loan or convertible preferred equity structure to provide income during the development stage and/or the ability to capture development premiums at completion by exercising our conversion rights to take ownership. ● Value-Add Renovation . We see significant potential for capital appreciation through renovation of existing assets.
We generally make common equity investments or use a preferred equity structure which provides income during the development stage and/or the ability to capture development premiums at completion by exercising our conversion rights to take ownership. ● Institutional Property Management / NOI Margin Expansion .
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.
Item 1. Business Organization Bluerock Homes Trust, Inc. (“Bluerock Homes,” “the Company,” “we,” “us,” or “our”) was incorporated on December 16, 2021 under the laws of the state of Maryland. 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.
Industry Segments We own and operate residential investments that generate rental and other property-related income through the leasing of units to a diverse base of tenants. We evaluate operating performance on an individual property investment level and based on the investments’ similar economic characteristics.
Industry Segments We own and operate residential real estate assets that generate rental and other property-related income through the leasing of residential units to a diverse base of tenants. We view our residential real estate assets as two reportable segments, consisting of (i) scattered single-family homes, and (ii) residential communities.
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.
The twenty-three investments represent an aggregate of 5,087 residential units, comprised of 3,453 consolidated units, of which 170 units are under development, and 1,634 units through preferred equity and loan investments, which includes planned units and those under development.
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: ● Value-Add Renovation . We see significant potential for capital appreciation through renovation of existing assets.
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.
Abode Wendell Falls is classified as a consolidated investment. (4) Our investment in The Woods at Forest Hill, which was through a loan provided to an unaffiliated third party, was fully paid off in 2024. Refer to the table below.
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”).
As of December 31, 2024, our consolidated operating investments were approximately 91.6% occupied; excluding units classified as held for sale and down/renovation units, our consolidated operating investments were approximately 94.0% occupied. For more information regarding our investments, see “Item 2. Investments”.
(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.
(3) Our investment in the property, which was through a preferred equity investment with an unaffiliated third party, was redeemed. (4) We held both a loan investment and a preferred equity investment with unaffiliated third parties in The Woods at Forest Hill.
Removed
Item 1. Business Organization Bluerock Homes Trust, Inc. (“Bluerock Homes,” “the Company,” “we,” “us,” or “our”) was formed in Maryland as a wholly owned subsidiary of Bluerock Residential Growth REIT, Inc. (“Bluerock Residential” or “Parent”) on December 16, 2021, and historically operated as part of Bluerock Residential and not as a standalone company.
Added
Our telephone number is (212) 843-1601. 6 Table of Contents Investments in Real Estate As of December 31, 2024, we held twenty-three real estate investments, consisting of fourteen consolidated investments and nine preferred equity and loan investments.
Removed
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.
Added
We invest in well-located institutional residential properties with strong and stable cash flows in demographically attractive knowledge economy growth markets where we believe there exists significant potential for medium-term capital appreciation through renovation or redevelopment, to reposition the asset and drive future rental growth. ● Invest-to Own.
Removed
As contemplated by the Merger Agreement, on October 5, 2022, we entered into a Separation and Distribution Agreement with Bluerock Residential, Badger Parent, Badger Holdco LLC and the Operating Partnership, pursuant to which, among other things, Bluerock Residential contributed to us its single-family residential real estate business and certain other assets (the “Separation”). 7 Table of Contents On October 6, 2022, following the Separation, Bluerock Residential completed the spin-off of Bluerock Homes by distributing all our outstanding shares of Class A common stock and Class C common stock to the holders of Bluerock Residential common stock (the “Distribution”) as of the record date, September 29, 2022 (the “Spin-Off”).
Added
We selectively invest in the development of build-to rent and other residential properties in target markets where we believe we can capture significant development premiums upon completion.
Removed
Pursuant to the terms and conditions of the Merger Agreement, following the Separation, the Distribution and the Spin-Off, Bluerock Residential merged with and into Merger Sub, with Merger Sub continuing as the surviving company, and the separate existence of Bluerock Residential ceased.
Added
We intend to continue to acquire institutional residential properties targeting the high disposable income renter by choice, where we believe we can create long-term value growth for our stockholders. 7 Table of Contents Focus on Growth Markets.
Removed
As a result of the Separation, the Distribution and the Spin-Off, Bluerock Homes became an independent, publicly traded company and our Class A common stock is listed under the symbol “BHM” on the NYSE American.
Added
We intend to continue to focus on demographically attractive growth markets, which we define as markets with strong employment drivers in industries creating high disposable income jobs over the long term.
Removed
Following the Separation, the Distribution and the Spin-Off, the former holders of Bluerock Residential common stock who received shares of the Company’s common stock in the Distribution indirectly owned approximately 34% of the Company’s single-family residential business, and holders of units in the Operating Partnership (other than the holders of the Company’s common stock) indirectly owned approximately 66% of the Company’s single-family residential business.
Added
Employment growth is highly correlated with institutional property demand; therefore, we believe that selecting markets with job growth significantly above the national average will provide high potential for increased rental demand leading to revenue growth and attractive risk-adjusted returns. Implement our Value Creation Strategies.
Removed
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.
Added
We intend to continue to focus on creating value at our properties utilizing our Value-Add, Opportunistic and Invest-to-Own investment strategies in order to maximize our return on investment.
Removed
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.
Added
We work with each member of our network to evaluate property needs along with value-creation opportunities and create an asset-specific business plan to best position or reposition each property to drive rental growth and asset values.
Removed
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.
Added
We then provide an aggressive asset management presence to manage our network partner and ensure execution of the plan, with the goal of driving rental growth and values. Implement our Live/Work/Play Initiatives.
Removed
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.
Added
We intend to continue to implement our amenities and attributes to transform the residential community from a purely functional product (i.e., as solely a place to live), to a lifestyle product (i.e., as a place to live, interact, and socialize).
Removed
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.
Added
Our Live/Work/Play initiatives are property specific, and generally consist of attributes that go beyond traditional features, including highly amenitized common areas, cosmetic and architectural improvements, technology, music and other community-oriented activities to appeal to our residents’ desire for a “sense of community” by creating places to gather, socialize and interact in an amenity-rich environment.
Removed
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.
Added
We believe this creates an enhanced perception of value among residents, allowing for premium rental rates and improved resident retention. Diversify Across Markets, Strategies and Investment Size.
Removed
We believe we can generate economies of scale and enable transaction efficiencies by targeting individual or small portfolios of quality, scattered, single-family rental homes with strong and stable cash flows and aggregate them into larger portfolios, which will allow us to reduce per unit costs, including leasing, marketing, insurance and maintenance related costs through increased purchasing power and sharing of resources.
Added
We will seek to grow our institutional portfolio of residential properties diversified by geography and by investment strategy and by size to manage concentration risk, while driving both current income and capital appreciation throughout the portfolio.
Removed
We look for middle-market rents that deliver attractive unlevered yields relative to private market portfolio and public market dividend yields. To date, we have acquired scattered-site homes at year one nominal cap rates exceeding 5% and gross rental yields exceeding 9%.
Added
Our network enables us to diversify across multiple markets and multiple strategies efficiently, without the logistical burden and time delay of building operating infrastructure in multiple markets and across multiple investment strategies. Harvest and Redeploy Capital Selectively.
Removed
We see an opportunity to replicate this strategy across our markets utilizing our network as a force multiplier on the sourcing and execution fronts. ● Build-to-Rent. We develop build-to-rent communities at attractive stabilized unlevered yields, investing selectively in target markets that we believe will enable us to capture development premiums on completion.
Added
(5) Our investments in Wayford at Pringle are through a debt security investment and a loan investment, both made with an unaffiliated third party. Refer to Note 6 and Note 7 of our consolidated financial statements for further information. (6) Our investment in Amira at Westly is through a Delaware statutory trust.
Removed
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.
Added
At December 31, 2024, we hold a 93% ownership interest in the property.
Removed
(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.
Added
We received the final loan payoff amount in August 2024, and we received our final preferred equity redemption payment in November 2024. Refer to Note 6 and Note 7 of our consolidated financial statements for further information.
Removed
(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.
Added
(5) Prior to the sale of Navigator Villas, we purchased our unaffiliated joint venture partner ’ s interest in the property, increasing our interest from 90% to 100%. Distribution Policy We intend to maintain our qualification as a REIT for federal income tax purposes.
Removed
Our primary financial measure for operating performance is NOI as it measures the core operations of property performance by excluding corporate level expenses and those other items not related to property operating performance. We view our residential real estate assets as one reportable segment, and, accordingly, aggregate our properties into one reportable segment.
Added
In addition, for each month for which the Board declares the Series A Preferred Regular Dividends, holders of shares of the Series A Preferred Stock will be entitled to receive an enhanced special dividend, which will be aggregated with the Series A Preferred Regular Dividends so as to effect a dividend rate of the average one month Term Secured Overnight Financing Rate (“SOFR”) plus 2.0%, subject to a 6.5% minimum and 8.5% maximum annual rate, calculated and paid monthly.
Added
On March 11, 2025, we declared quarterly cash dividends of $0.125 per share, or $0.50 per share annually, for our Class A common stock and Class C common stock for each quarter of fiscal year 2025. The common share dividends will be paid on a quarterly basis.
Added
Our Chief Operating Decision Makers, which are our Chief Executive Officer, Chief Investment Officer and Chief Financial Officer, do not distinguish or group operations on a geographic, tenant or other basis when assessing the financial performance of our portfolio of properties/investments.
Added
Scattered single-family homes segment includes the acquisition, ownership, management, and renovation of scattered single-family homes, which are, generally, detached homes with no onsite property management. Residential communities segment includes the acquisition, ownership, management, renovation, construction, and development of residential communities, which include both detached single-family home communities and attached unit communities such as apartments, townhouses, and duplexes.
Added
Each residential community is, generally, located on a single, contiguous land parcel and has amenities including clubhouses, gyms, pools and common areas. In addition, these residential communities typically have onsite property management.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThe mandatory redemption feature of each share of the Series A Preferred Stock in connection with a Change of Control may each have the effect of inhibiting a third party from making an acquisition proposal for us, or of delaying, deferring or preventing a change of control of us, under circumstances that otherwise could provide the holders of our common stock and/or Series A Preferred Stock with the opportunity for liquidity or the opportunity to realize a premium over the then-current market price or that stockholders may otherwise believe is in their best interests. 46 Table of Contents A “Change of Control” is when after the initial issuance of the Series A Preferred Stock any of the following has occurred and is continuing: ● a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than our Company, its subsidiaries, and its and their employee benefit plans, has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of our common equity representing more than 50% of the total voting power of all outstanding shares of our common equity that are entitled to vote generally in the election of directors, with the exception of (A) the formation of a holding company, or (B) immediately prior to such transaction, such person or group, together with its or their related entities, including, without limitation, any trust established for the benefit of such person or any member of such group or any family member thereof (collectively, an “ Ownership Group ”), owned sufficient interests in the Operating Partnership such that the exercise by all or any members of such Ownership Group of the Common Unit Redemption Right (as defined in Section 8.04(a) of the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended) with respect to such interests would result in all or any members of such Ownership Group (individually or collectively) becoming the direct or indirect beneficial owner of our common equity representing more than 50% of the total voting power of all outstanding shares of Voting Stock; ● consummation of any share exchange, consolidation or merger of our Company or any other transaction or series of transactions pursuant to which our common stock will be converted into cash, securities or other property, (1) other than any such transaction where the shares of our common stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the common stock of the surviving person or any direct or indirect parent company of the surviving person immediately after giving effect to such transaction, and (2) expressly excluding any such transaction preceded by our Company’s acquisition of the capital stock of another company for cash, securities or other property, whether directly or indirectly through one of our subsidiaries, as a precursor to such transactions; or ● at least a majority of our Board ceases to be constituted of directors who were either (A) a member of our Board on October 6, 2022, for purposes of the Series A Preferred Stock, or (B) who became a member of our Board subsequent to such applicable date and whose appointment, election or nomination for election by our stockholders was duly approved by a majority of the Continuing Directors on our Board at the time of such approval, either by a specific vote or by approval of the proxy statement issued by our Company on behalf of our Board in which such individual is named as nominee for director (“Continuing Directors”).
Biggest changeA “Change of Control” is when after the initial issuance of the Series A Preferred Stock any of the following has occurred and is continuing: ● a “person” or “group” within the meaning of Section 13(d) of the Exchange Act, other than our Company, its subsidiaries, and its and their employee benefit plans, has become the direct or indirect “beneficial owner,” as defined in Rule 13d-3 under the Exchange Act, of our common equity representing more than 50% of the total voting power of all outstanding shares of our common equity that are entitled to vote generally in the election of directors, with the exception of (A) the formation of a holding company, or (B) immediately prior to such transaction, such person or group, together with its or their related entities, including, without limitation, any trust established for the benefit of such person or any member of such group or any family member thereof (collectively, an “ Ownership Group ”), owned sufficient interests in the Operating Partnership such that the exercise by all or any members of such Ownership Group of the Common Unit Redemption Right (as defined in Section 8.04(a) of the Second Amended and Restated Agreement of Limited Partnership of the Operating Partnership, as amended) with respect to such interests would result in all or any members of such Ownership Group (individually or collectively) becoming the direct or indirect beneficial owner of our common equity representing more than 50% of the total voting power of all outstanding shares of Voting Stock; ● consummation of any share exchange, consolidation or merger of our Company or any other transaction or series of transactions pursuant to which our common stock will be converted into cash, securities or other property, (1) other than any such transaction where the shares of our common stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the common stock of the surviving person or any direct or indirect parent company of the surviving person immediately after giving effect to such transaction, and (2) expressly excluding any such transaction preceded by our Company’s acquisition of the capital stock of another company for cash, securities or other property, whether directly or indirectly through one of our subsidiaries, as a precursor to such transactions; or ● at least a majority of our Board ceases to be constituted of directors who were either (A) a member of our Board on October 6, 2022, for purposes of the Series A Preferred Stock, or (B) who became a member of our Board subsequent to such applicable date and whose appointment, election or nomination for election by our stockholders was duly approved by a majority of the Continuing Directors on our Board at the time of such approval, either by a specific vote or by approval of the proxy statement issued by our Company on behalf of our Board in which such individual is named as nominee for director (“Continuing Directors”).
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.
Entry into this market by large, well-capitalized investors is a relatively recent trend, so few peer companies exist and none have yet established long-term track records that might assist us in predicting whether our business model and investment strategy can be implemented and sustained over an extended period of time.
Entry into this market by large, well-capitalized investors is a relatively recent trend, so few peer companies exist and none have yet established long-term track records that might assist us in predicting whether this aspect of our business model and investment strategy can be implemented and sustained over an extended period of time.
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.
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 ● 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.
In order to qualify and maintain our qualification as a REIT, five or fewer individuals, as defined in the Code to include specified private foundations, employee benefit plans and trusts, and charitable trusts, may not own, beneficially or constructively, more than 50% in value of our issued and outstanding stock at any time during the last half of a taxable year.
In order to maintain our qualification as a REIT, five or fewer individuals, as defined in the Code to include specified private foundations, employee benefit plans and trusts, and charitable trusts, may not own, beneficially or constructively, more than 50% in value of our issued and outstanding stock at any time during the last half of a taxable year.
In addition, any potential competitor may have higher risk tolerances or different risk assessments and may not be subject to the operating constraints associated with qualifying and maintaining qualification for taxation as a REIT, which could allow them to consider a wider variety of investments.
In addition, any potential competitor may have higher risk tolerances or different risk assessments and may not be subject to the operating constraints associated with maintaining qualification for taxation as a REIT, which could allow them to consider a wider variety of investments.
As a result, we may only be able to visually inspect properties from the street and will purchase these homes without a contingency period and in “as is” condition with the risk that unknown defects in the property may exist.
As a result, we may only be able to visually inspect properties from the street and will purchase these properties without a contingency period and in “as is” condition with the risk that unknown defects in the property may exist.
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.
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.
Stockholders are urged to consult their tax advisors regarding the effect of potential future changes to the U.S. federal income tax laws on an investment in our common stock.
Stockholders are urged to consult their tax advisors regarding the effect of potential future changes to the U.S. federal income tax laws on an investment in our stock.
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.
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 residential 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 properties; ● 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 residential 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.
A downturn or slowdown in the rental demand for single-family housing caused by adverse economic, regulatory, or environmental conditions, or other events, in our markets may have a greater impact on the value of our properties or our operating results than if we had more fully diversified our investments.
A downturn or slowdown in the rental demand for housing caused by adverse economic, regulatory, or environmental conditions, or other events, in our markets may have a greater impact on the value of our properties or our operating results than if we had more fully diversified our investments.
Any such issuance could result in dilution of the equity of our stockholders. Our Board may, in its sole discretion, authorize us to issue common stock or other equity or debt securities to persons from whom we purchase single-family residential properties, as part or all of the purchase price of the community.
Any such issuance could result in dilution of the equity of our stockholders. Our Board may, in its sole discretion, authorize us to issue common stock or other equity or debt securities to persons from whom we purchase residential properties, as part or all of the purchase price of the community.
Any decision by the government to eliminate or downscale Fannie Mae or Freddie Mac, to reduce their acquisitions or guarantees of single-family real estate mortgage loans, or to reduce government support for single-family housing more generally, may adversely affect interest rates, capital availability, development of single-family communities and our ability to refinance our existing mortgage obligations as they come due and to obtain additional long-term financing for the acquisition of additional single-family communities on favorable terms or at all.
Any decision by the government to eliminate or downscale Fannie Mae or Freddie Mac, to reduce their acquisitions or guarantees of residential real estate mortgage loans, or to reduce government support for residential housing more generally, may adversely affect interest rates, capital availability, development of residential communities and our ability to refinance our existing mortgage obligations as they come due and to obtain additional long-term financing for the acquisition of additional residential communities on favorable terms or at all.
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.
To help ensure 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.
The costs involved in locating and performing due diligence (when feasible) on portfolios of homes as well as negotiating and entering into transactions with potential portfolio sellers could be significant, and there is a risk that either the seller may withdraw from the entire transaction for failure to come to an agreement or the seller may not be willing to sell us the bulk portfolio on terms that we view as favorable.
The costs involved in locating and performing due diligence (when feasible) on portfolios of residential properties as well as negotiating and entering into transactions with potential portfolio sellers could be significant, and there is a risk that either the seller may withdraw from the entire transaction for failure to come to an agreement or the seller may not be willing to sell us the bulk portfolio on terms that we view as favorable.
These market and economic disruptions could negatively impact the operating results of our portfolio companies. 34 Table of Contents Our business, results of operations, financial condition, and cash flows may be adversely affected by pandemics and outbreaks of infectious disease, which may include COVID-19.
These market and economic disruptions could negatively impact the operating results of our portfolio companies. 33 Table of Contents Our business, results of operations, financial condition, and cash flows may be adversely affected by pandemics and outbreaks of infectious disease, which may include COVID-19.
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.
In addition, such downturns could result in reduced demand for residential rental properties, 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 residential rental properties; ● 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 residential rental properties; 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.
You must rely on the Manager and our Board to implement our investment policies, to evaluate our investment opportunities and to structure the terms of our investments. We may invest in any asset class, including those that present greater risk than single-family residential assets.
You must rely on the Manager and our Board to implement our investment policies, to evaluate our investment opportunities and to structure the terms of our investments. We may invest in any asset class, including those that present greater risk than residential assets.
We are also subject to the risk that, upon the expiration of leases, leases may not be renewed, the homes may not be re-leased or the terms of renewal or re-leasing (including the cost of required renovations or concessions to tenants) may be less favorable to us than current lease terms.
We are also subject to the risk that, upon the expiration of leases, leases may not be renewed, the properties may not be re-leased or the terms of renewal or re-leasing (including the cost of required renovations or concessions to tenants) may be less favorable to us than current lease terms.
Some HOAs impose limits on the number of property owners who may lease their homes, which, if met or exceeded, would cause us to incur additional costs to sell the property and opportunity costs from lost rental revenue.
Some HOAs impose limits on the number of property owners who may lease their properties, which, if met or exceeded, would cause us to incur additional costs to sell the property and opportunity costs from lost rental revenue.
Upon acquiring a new home, we may have to evict residents who are in unlawful possession before we can secure possession and control of the home. The holdover occupants may be the former owners or residents of a property or others who are illegally in possession.
Upon acquiring a new residential property, we may have to evict residents who are in unlawful possession before we can secure possession and control of the property. The holdover occupants may be the former owners or residents of a property or others who are illegally in possession.
These and other provisions of the MGCL could have the effect of delaying, deferring or preventing a proxy contest, tender offer, merger or other change in control, which may have a material adverse effect on our business, financial condition and results of operations. 54 Table of Contents Your rights as stockholders and our rights to recover claims against our officers and directors are limited.
These and other provisions of the MGCL could have the effect of delaying, deferring or preventing a proxy contest, tender offer, merger or other change in control, which may have a material adverse effect on our business, financial condition and results of operations. Your rights as stockholders and our rights to recover claims against our officers and directors are limited.
We depend on rental revenues and other property income from residents for substantially all of our revenues.
We depend on rental revenues and other property income from residents for substantially all our revenues.
If there is a downturn in the economy or an oversupply of or decrease in demand for single-family properties in these markets, our business could be materially adversely affected to a greater extent than if we owned a real estate portfolio that was more diversified in terms of both geography and industry focus.
If there is a downturn in the economy or an oversupply of or decrease in demand for residential properties in these markets, our business could be materially adversely affected to a greater extent than if we owned a real estate portfolio that was more diversified in terms of both geography and industry focus.
We base a substantial part of our business plan on our belief that property values and operating fundamentals for single-family properties in our markets will continue to improve over the near to intermediate term. However, these markets have experienced substantial economic downturns in recent years and could experience similar or worse economic downturns in the future.
We base a substantial part of our business plan on our belief that property values and operating fundamentals for residential properties in our markets will continue to improve over the near to intermediate term. However, these markets have experienced substantial economic downturns in recent years and could experience similar or worse economic downturns in the future.
We will continue to evaluate the availability and cost of additional insurance coverage from the insurance market. If we purchase insurance for asbestos, the cost could have a negative impact on our results of operations. 23 Table of Contents Costs associated with addressing indoor air quality issues, moisture infiltration and resulting mold remediation may be costly.
We will continue to evaluate the availability and cost of additional insurance coverage from the insurance market. If we purchase insurance for asbestos, the cost could have a negative impact on our results of operations. Costs associated with addressing indoor air quality issues, moisture infiltration and resulting mold remediation may be costly.
Many such consumer organizations have become more active and better funded in connection with mortgage foreclosure-related issues, and with the increased market for homes arising from displaced homeownership, some of these organizations may shift their litigation, lobbying, fundraising, and grassroots organizing activities to focus on landlord-resident issues.
Many such consumer organizations have become more active and better funded in connection with mortgage foreclosure-related issues, and with the increased market for residential properties arising from displaced homeownership, some of these organizations may shift their litigation, lobbying, fundraising, and grassroots organizing activities to focus on landlord-resident issues.
Costs associated with our business, such as mortgage payments, real estate taxes, insurance premiums and maintenance costs, are relatively inflexible and generally do not decrease, and may increase, when homes are not occupied, rental rates decrease, tenants fail to pay rent or other circumstances cause a reduction in property revenues.
Costs associated with our business, such as mortgage payments, real estate taxes, insurance premiums and maintenance costs, are relatively inflexible and generally do not decrease, and may increase, when residential properties are not occupied, rental rates decrease, tenants fail to pay rent or other circumstances cause a reduction in property revenues.
In addition, a security breach could require that we expend significant additional resources to enhance our information security systems and could result in a disruption to our operations. 29 Table of Contents Conflicts of interest may exist or could arise in the future with our Operating Partnership and its limited partners, which may impede business decisions that could benefit our stockholders.
In addition, a security breach could require that we expend significant additional resources to enhance our information security systems and could result in a disruption to our operations. Conflicts of interest may exist or could arise in the future with our Operating Partnership and its limited partners, which may impede business decisions that could benefit our stockholders.
Our Board, in its sole discretion, may determine the value of any common stock or other equity or debt securities issued in consideration of single-family residential properties or services provided, or to be provided, to us.
Our Board, in its sole discretion, may determine the value of any common stock or other equity or debt securities issued in consideration of residential properties or services provided, or to be provided, to us.
The occurrence of such events may also result in a general decline in business activity and demand for real estate transactions could adversely affect (1) our ability to acquire or dispose of single-family homes on terms that are attractive or at all and (2) the value of our homes and our business such that we may recognize impairment on the carrying value of our investments in single-family residential properties and other assets subject to impairment review, including, but not limited to, goodwill.
The occurrence of such events may also result in a general decline in business activity and demand for real estate transactions could adversely affect (1) our ability to acquire or dispose of residential rental properties on terms that are attractive or at all, and (2) the value of our residential properties and our business such that we may recognize impairment on the carrying value of our investments in residential rental properties and other assets subject to impairment review, including, but not limited to, goodwill.
We have in the past acquired and may from time to time in the future acquire some of our homes through the auction process, including auctions of homes that have been foreclosed upon by third-party lenders. Such auctions may occur simultaneously in a number of markets, including monthly auctions on the same day of the month in certain markets.
We have in the past acquired and may from time to time in the future acquire some of our residential properties through the auction process, including auctions of properties that have been foreclosed upon by third-party lenders. Such auctions may occur simultaneously in a number of markets, including monthly auctions on the same day of the month in certain markets.
For example, it is possible that the impact of the rate of inflation may not be adequately offset by annual rent escalations or the resetting of rents from our renewal and re-leasing activities, which may adversely affect our business, financial condition, results of operations, and cash flows.
For example, it is possible that the impact of the rate of inflation may not be adequately offset by annual rent escalations or the resetting of rents from our renewal and re-leasing activities, 12 Table of Contents which may adversely affect our business, financial condition, results of operations, and cash flows.
See “—Our business, results of operations, financial condition, and cash flows may be adversely affected by pandemics and outbreaks of infectious disease, which may include COVID-19.” In addition to general, regional, national, and international economic conditions, our operating performance will be impacted by the economic conditions in our markets.
See “—Our business, results of operations, financial condition, and cash flows may be adversely affected by pandemics and outbreaks of infectious disease, which may include COVID-19.” 15 Table of Contents In addition to general, regional, national, and international economic conditions, our operating performance will be impacted by the economic conditions in our markets.
Future outbreaks of highly infectious or contagious diseases may interfere with the ability of our residents to meet their lease obligations and make their rent payments on time or at all, and may also result in decreased overall demand for single-family rental properties and/or occupancy thereof.
Future outbreaks of highly infectious or contagious diseases may interfere with the ability of our residents to meet their lease obligations and make their rent payments on time or at all, and may also result in decreased overall demand for residential rental properties and/or occupancy thereof.
Our operating results depend, in large part, on revenues derived from leasing our single-family properties. We are subject to the credit risk of our tenants, and to the extent our tenants default on their leases or fail to make their required rental payments we may suffer a decrease in our revenue.
Our operating results depend, in large part, on revenues derived from leasing our residential properties. We are subject to the credit risk of our tenants, and to the extent our tenants default on their leases or fail to make their required rental payments we may suffer a decrease in our revenue.
There can be no assurance, however, that we will be able to comply with the 20% limitation or to avoid application of the 100% excise tax. The prohibited transactions tax may limit our ability to dispose of our properties. A REIT’s net income from prohibited transactions is subject to a 100% tax.
There can be no assurance, however, that we will be able to comply with the 20% limitation or to avoid application of the 100% excise tax. 52 Table of Contents The prohibited transactions tax may limit our ability to dispose of our properties. A REIT’s net income from prohibited transactions is subject to a 100% tax.
The current term of our Management Agreement with our Manager expires October 6, 2024, with automatic one-year renewals thereafter, and may be terminated earlier under certain circumstances.
The current term of our Management Agreement with our Manager expires October 6, 2025, with automatic one-year renewals thereafter, and may be terminated earlier under certain circumstances.
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.
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 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. 24 Table of Contents These events might subject us to costs or liabilities in excess of those contemplated and thus reduce your investment returns.
Any adverse developments in local economic conditions or the demand for single-family properties in these markets may negatively impact our results of operations. Our current portfolio of properties consists primarily of single-family properties geographically concentrated in the Sunbelt and Western United States, and our portfolio going forward may consist primarily of the same.
Any adverse developments in local economic conditions or the demand for residential properties in these markets may negatively impact our results of operations. Our current portfolio of properties consists primarily of residential properties geographically concentrated in the Sunbelt and Western United States, and our portfolio going forward may consist primarily of the same.
Because our portfolio consists of geographically dispersed properties, our ability to adequately monitor or manage any such renovations or maintenance may be more limited or subject to greater inefficiencies than if our properties were more geographically concentrated. 17 Table of Contents Our properties have infrastructure and appliances of varying ages and conditions.
Because our portfolio consists of geographically dispersed properties, our ability to adequately monitor or manage any such renovations or maintenance may be more limited or subject to greater inefficiencies than if our properties were more geographically concentrated. Our properties have infrastructure and appliances of varying ages and conditions.
Until and unless you receive shares of our Class A common stock upon redemption, you will have only those rights applicable to holders of our Series A Preferred Stock. 40 Table of Contents The Series A Preferred Stock has not been rated. We have not sought to obtain a rating for the Series A Preferred Stock.
Until and unless you receive shares of our Class A common stock upon redemption, you will have only those rights applicable to holders of our Series A Preferred Stock. The Series A Preferred Stock has not been rated. We have not sought to obtain a rating for the Series A Preferred Stock.
We encourage you to consult your tax advisor to determine the tax consequences applicable to you if you are a tax-exempt investor. Risks Related to Ownership of Our Common Stock You may be restricted from acquiring or transferring certain amounts of our common stock.
We encourage you to consult your tax advisor to determine the tax consequences applicable to you if you are a tax-exempt investor. 53 Table of Contents Risks Related to Ownership of Our Common Stock You may be restricted from acquiring or transferring certain amounts of our common stock.
We have in the past acquired and may from time to time in the future acquire some of our homes through the auction process, which could subject us to significant risks that could adversely affect us.
We have in the past acquired and may from time to time in the future acquire some of our residential properties through the auction process, which could subject us to significant risks that could adversely affect us.
Our investments are and will continue to be concentrated in our markets and in the single-family properties sector of the real estate industry, which exposes us to seasonal fluctuations in rental demand and downturns in our markets or in the single-family properties sector.
Our investments are and will continue to be concentrated in our markets and in the residential properties sector of the real estate industry, which exposes us to seasonal fluctuations in rental demand and downturns in our markets or in the residential properties sector.
Any future outbreaks of infectious disease, which may include COVID-19 or a future pandemic, could also result in demand for single-family rental properties decreasing substantially and/or occupancy decreasing materially.
Any future outbreaks of infectious disease, which may include COVID-19 or a future pandemic, could also result in demand for residential rental properties decreasing substantially and/or occupancy decreasing materially.
Since we may not have obtained title insurance policies for properties we acquired through the auction process, such instances or such proceedings may result in a complete loss without compensation. Title defects could lead to material losses on our investments in our properties.
Since we may not have obtained title insurance policies for properties we acquired through the auction process, such instances or such proceedings may result in a complete loss without compensation. 16 Table of Contents Title defects could lead to material losses on our investments in our properties.
In addition, a seller may require that a group of homes be purchased as a package even though we may not want to purchase certain individual assets in the bulk portfolio.
In addition, a seller may require that a group of residential properties be purchased as a package even though we may not want to purchase certain individual assets in the bulk portfolio.
As inflation occurs, the real value of the Series A Preferred Stock and dividends payable on such shares decline. 42 Table of Contents Holders of the Series A Preferred Stock have extremely limited voting rights. The voting rights of holders of shares of Series A Preferred Stock will be extremely limited.
As inflation occurs, the real value of the Series A Preferred Stock and dividends payable on such shares decline. Holders of the Series A Preferred Stock have extremely limited voting rights. The voting rights of holders of shares of Series A Preferred Stock will be extremely limited.
Our revenues are significantly influenced by demand for single-family home rental properties generally, and a decrease in such demand will likely have a greater adverse effect on our revenues than if we owned a more diversified real estate portfolio.
Our revenues are significantly influenced by demand for residential rental properties generally, and a decrease in such demand will likely have a greater adverse effect on our revenues than if we owned a more diversified real estate portfolio.
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.
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. Our current portfolio primarily consists of interests in residential properties, located primarily in markets in the Sunbelt and Western United States.
Our ability to pay dividends is limited by the requirements of Maryland law. Our ability to pay dividends on our common stock is limited by the laws of Maryland.
Our ability to pay dividends on our common stock is limited by the laws of Maryland.
As of March 5, 2024, our executive officers beneficially owned interests representing approximately 22.8% of the total economic interest in our Class A common stock and Class C common stock on a fully diluted basis, where “on a fully diluted basis” assumes that all outstanding OP Units, C-OP Units (as defined in the Partnership Agreement), LTIP Units and C-LTIP Units (as defined in the Partnership Agreement), whether vested or unvested, in each case are ultimately settled for shares of our common stock.
As of March 6, 2025, our executive officers beneficially owned interests representing approximately 24.6% of the total economic interest in our Class A common stock and Class C common stock on a fully diluted basis, where “on a fully diluted basis” assumes that all outstanding OP Units, C-OP Units (as defined in the Partnership Agreement), LTIP Units and C-LTIP Units (as defined in the Partnership Agreement), whether vested or unvested, in each case are ultimately settled for shares of our common stock.
Eminent domain could lead to material losses on our investments in our properties. Governmental authorities may exercise eminent domain to acquire the land on which our properties are built in order to build roads and other infrastructure. Any such exercise of eminent domain would allow us to recover only the fair value of the affected properties.
Governmental authorities may exercise eminent domain to acquire the land on which our properties are built in order to build roads and other infrastructure. Any such exercise of eminent domain would allow us to recover only the fair value of the affected properties.
As such, we are currently susceptible to local economic conditions and the supply of and demand for single-family properties in these markets.
As such, we are currently susceptible to local economic conditions and the supply of and demand for residential properties in these markets.
The Management Agreement with our Manager was not negotiated on an arm’s-length basis and may not be as favorable to us as if it had been negotiated with an unaffiliated third party. Our executive officers, including one of our five directors, are executives of our Manager or its affiliates.
The Management Agreement with our Manager was not negotiated on an arm’s-length basis and may not be as favorable to us as if it had been negotiated with an unaffiliated third party. Our executive officers, including one of our five directors, are executives of our Manager or its affiliates. Although the Bluerock Residential Growth REIT, Inc.
Our investments in real estate assets are and will continue to be concentrated in our markets and in the single-family properties sector of the real estate industry.
Our investments in real estate assets are and will continue to be concentrated in our markets and in the residential properties sector of the real estate industry.
In acquiring our properties, we compete with a variety of institutional investors, including other REITs, specialty finance companies, public and private funds, savings and loan associations, banks, mortgage bankers, insurance companies, institutional investors, investment banking firms, financial institutions, governmental bodies, and other entities.
In acquiring our properties, we compete with a variety of institutional investors, including other REITs, specialty finance companies, public and private funds, savings and loan associations, banks, mortgage bankers, insurance companies, institutional investors, investment banking firms, financial institutions, governmental bodies, and other entities. We also compete with individual private home buyers and small scale investors.
We have limited sources of capital other than proceeds from future mortgage debt financings for acquisition and/or development projects, cash generated from operating activities, our $150 million revolving credit facility, and the net proceeds of offerings of our securities to meet our primary liquidity requirements.
We have limited sources of capital other than proceeds from future mortgage debt financings for acquisition and/or development projects, cash generated from operating activities, our $200 million revolving credit facilities, the net proceeds of offerings of our securities, and the proceeds from our DST Program to meet our primary liquidity requirements.
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.
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.
Our ability to successfully operate our business and implement our operating policies and investment strategy depends on many factors, including: ● our ability to effectively manage renovation, maintenance, marketing, and other operating costs for our properties; ● economic conditions in our markets, including changes in employment and household earnings and expenses, as well as the condition of the financial and real estate markets and the economy, in general; ● our ability to maintain high occupancy rates and target rent levels; ● the availability of, and our ability to identify, attractive acquisition opportunities consistent with our investment strategy; ● our ability to compete with other investors entering the single-family rental industry; ● costs that are beyond our control, including title litigation, litigation with residents or tenant organizations, legal compliance, property taxes, HOA fees, and insurance; ● judicial and regulatory developments affecting landlord-tenant relations that may affect or delay our ability to dispossess or evict occupants or increase rental rates; ● reversal of population, employment, or homeownership trends in our markets; and ● interest rate levels and volatility, which may affect the accessibility of short-term and long-term financing on desirable terms. 15 Table of Contents In addition, we face significant competition in acquiring attractive properties on advantageous terms, and the value of the properties that we acquire may decline substantially after we purchase them.
Our ability to successfully operate our business and implement our operating policies and investment strategy depends on many factors, including: ● our ability to effectively manage renovation, maintenance, marketing, and other operating costs for our properties; ● economic conditions in our markets, including changes in employment and household earnings and expenses, as well as the condition of the financial and real estate markets and the economy, in general; ● our ability to maintain high occupancy rates and target rent levels; ● the availability of, and our ability to identify, attractive acquisition opportunities consistent with our investment strategy; ● our ability to compete with other investors entering the residential rental industry; ● costs that are beyond our control, including title litigation, litigation with residents or tenant organizations, legal compliance, property taxes, HOA fees, and insurance; ● judicial and regulatory developments affecting landlord-tenant relations that may affect or delay our ability to dispossess or evict occupants or increase rental rates; ● reversal of population, employment, or homeownership trends in our markets; and ● interest rate levels and volatility, which may affect the accessibility of short-term and long-term financing on desirable terms.
We have limited sources of capital other than proceeds from future mortgage debt financings for acquisition and/or development projects, cash generated from operating activities, our $150 million revolving credit facility, and the net proceeds of offerings of our securities.
We have limited sources of capital other than proceeds from future mortgage debt financings for acquisition and/or development projects, cash generated from operating activities, our $200 million revolving credit facilities, the net proceeds of offerings of our securities, and the proceeds from our DST Program.
In addition, changes in federal, state, and local legislation and regulation based on concerns about climate change could result in increased capital expenditures on our existing properties (for example, to improve their energy efficiency and/or resistance to inclement weather) without a corresponding increase in revenue, resulting in adverse impacts to our results of operations.
In addition, changes in federal, state, and local legislation and regulation based on concerns about climate change could result in increased capital expenditures on our existing properties (for example, to improve their energy efficiency and/or resistance to inclement weather) without a corresponding increase in revenue, resulting in adverse impacts to our results of operations. 18 Table of Contents Eminent domain could lead to material losses on our investments in our properties.
In addition, our charter currently authorizes the issuance of up to 250,000,000 shares of preferred stock in one or more classes or series, of which 30,000,000 have been classified as shares of Series A Preferred Stock. As of December 31, 2023, we had issued and outstanding 436,675 shares of Series A Preferred Stock.
In addition, our charter currently authorizes the issuance of up to 250,000,000 shares of preferred stock in one or more classes or series, of which 30,000,000 have been classified as shares of Series A Preferred Stock. As of December 31, 2024, we had issued and outstanding 4,628,681 shares of Series A Preferred Stock.
In late 2023, legislation was introduced that could, if enacted, discourage or deter the purchase of single-family properties by entities owned or controlled by institutional investors. It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect.
Since late 2023, legislation has been introduced that could, if enacted, discourage or deter the purchase of single-family properties by entities owned or controlled by 14 Table of Contents institutional investors. It is unclear whether these or similar changes will be enacted and, if enacted, how soon any such changes could take effect.
Also, the failure of any subsidiary partnerships or limited liability company to qualify as a disregarded entity or partnership for applicable income tax purposes could cause it to become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners or members, including us.
Also, the failure of any subsidiary partnerships or limited liability company to qualify as a disregarded entity or partnership for applicable income tax purposes could cause it to become subject to federal and state corporate income tax, which would reduce significantly the amount of cash available for debt service and for distribution to its partners or members, including us. 50 Table of Contents Distribution requirements imposed by law limit our flexibility.
In addition, as of March 5, 2024, the aggregate voting power of our executive officers represented approximately 9.5% of the total voting power of our outstanding Class A common stock and Class C common stock.
In addition, as of March 6, 2025, the aggregate voting power of our executive officers represented approximately 9.3% of the total voting power of our outstanding Class A common stock and Class C common stock.
The payment of fees and expenses to the Manager and its affiliates and the Dealer Manager reduces the cash available for distribution and increases the risk that you will not be able to recover the amount of your investment in shares of our stock.
The payment of fees and expenses to the Manager and its affiliates and Bluerock Capital Markets, LLC (the “Dealer Manager”) reduces the cash available for distribution and increases the risk that you will not be able to recover the amount of your investment in shares of our stock.
As of December 31, 2023, there are issued and outstanding 436,675 shares of Series A Preferred Stock, which are senior to our common stock with respect to priority of dividend payments and rights upon liquidation, dissolution or winding up.
As of December 31, 2024, there are issued and outstanding 4,628,681 shares of Series A Preferred Stock, which are senior to our common stock with respect to priority of dividend payments and rights upon liquidation, dissolution or winding up.
If we conclude that certain individual properties purchased in bulk portfolio sales do not fit our target investment criteria, we may decide to sell, rather than renovate and lease, such properties, which could take an extended period of time and may not result in a sale at an attractive price.
If we conclude that certain individual properties purchased in bulk portfolio sales do not fit our target investment criteria, we may decide to sell, rather than renovate and lease, such properties, which could take an extended period of time and may not result in a sale at an attractive price. 17 Table of Contents From time to time we engage in bulk portfolio dispositions of properties consistent with our business and investment strategy.
Our Board may amend or revise these and other policies without a vote of the stockholders. 48 Table of Contents Holders of shares of Series A Preferred Stock will generally have no voting rights under our charter, except with respect to any amendment of our charter that would alter only the contract rights, as expressly set forth therein, of either (a) the Series A Preferred Stock alone, 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.
Holders of shares of Series A Preferred Stock will generally have no voting rights under our charter, except with respect to any amendment of our charter that would alter only the contract rights, as expressly set forth therein, of either (a) the Series A Preferred Stock alone, 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.
As of December 31, 2023, we had approximately $83 million of mortgages payable and revolving credit facilities outstanding that are indexed to the Secured Overnight Financing Rate (“SOFR”), and our future variable rate debt may bear interest at a rate derived from SOFR. SOFR is a relatively new reference rate.
As of December 31, 2024, we had approximately $177 million of mortgages payable and revolving credit facilities outstanding that are indexed to SOFR, and our future variable rate debt may bear interest at a rate derived from SOFR. SOFR is a relatively new reference rate.
These or other limitations may limit our flexibility and prevent us from achieving our operating plans. If mortgage debt is unavailable at reasonable rates, it may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our cash flows from operations and the amount of cash distributions we can make.
If mortgage debt is unavailable at reasonable rates, it may make it difficult for us to finance or refinance properties, which could reduce the number of properties we can acquire, our cash flows from operations and the amount of cash distributions we can make.
For purposes of calculating our leverage, we include our consolidated real estate investments, include our preferred equity and loan investments at cost, include assets we have classified as held for sale, and include any joint venture level indebtedness in our total indebtedness.
Our policies do not limit us from incurring debt. For purposes of calculating our leverage, we include our consolidated real estate investments, include our preferred equity and loan investments at cost, include assets we have classified as held for sale, and include any joint venture level indebtedness in our total indebtedness.
In addition, any title insurance on a property, even if acquired, may not cover all defects or the significant legal costs associated with obtaining clear title. 18 Table of Contents Any of these risks could adversely affect our operating results, cash flows, and ability to make distributions to our stockholders.
In addition, any title insurance on a property, even if acquired, may not cover all defects or the significant legal costs associated with obtaining clear title. Any of these risks could adversely affect our operating results, cash flows, and ability to make distributions to our stockholders. We are subject to certain risks associated with bulk portfolio acquisitions and dispositions.
Several states have enacted laws that provide that a lien for unpaid monies owed to an HOA may be senior to our ownership interests and/or the priority of mortgage liens on properties, which, if not cured, may give rise to events of default under certain of our indebtedness or which otherwise could have a material adverse impact on us. 16 Table of Contents Increasing property taxes, HOA fees, and insurance costs may negatively affect our financial results.
Several states have enacted laws that provide that a lien for unpaid monies owed to an HOA may be senior to our ownership interests and/or the priority of mortgage liens on properties, which, if not cured, may give rise to events of default under certain of our indebtedness or which otherwise could have a material adverse impact on us.
Holders of the Series A Preferred Stock have no control over changes in our policies and operations. Our Board determines our major policies, including with regard to investment objectives, financing, growth, debt capitalization, REIT qualification and distributions.
Holders of the Series A Preferred Stock have no control over changes in our policies and operations. Our Board determines our major policies, including with regard to investment objectives, financing, growth, debt capitalization, REIT qualification and distributions. Our Board may amend or revise these and other policies without a vote of the stockholders.
Our current portfolio is focused predominately on single-family home properties, and we expect that our portfolio going forward will focus predominately on the same.
Our current portfolio is focused predominately on residential rental properties, and we expect that our portfolio going forward will focus predominately on the same.
Such preferred stock could also have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price to holders of our common stock.
Such preferred stock could also have the effect of delaying, deferring or preventing a change in control of us, including an extraordinary transaction (such as a merger, tender offer or sale of all or substantially all of our assets) that might provide a premium price to holders of our common stock. 54 Table of Contents Maryland law may limit the ability of a third party to acquire control of us.
In addition, a significant portion of our properties are located within HOAs and we are subject to HOA rules and regulations. HOAs have the power to increase monthly charges and make assessments for capital improvements and common area repairs and maintenance. Property taxes, HOA fees, and insurance premiums are subject to significant increases, which can be outside of our control.
HOAs have the power to increase monthly charges and make assessments for capital improvements and common area repairs and maintenance. Property taxes, HOA fees, and insurance premiums are subject to significant increases, which can be outside of our control.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeAs part of the above processes, we regularly engage external resources and consultants to assess our internal cybersecurity programs and compliance with applicable practices and standards. Our risk management program also assesses third party risks, and we perform third-party risk management to identify and mitigate risks from key third parties such as vendors, suppliers, and other business partners.
Biggest changeAs part of the above processes, we regularly engage external resources and consultants to assess our internal cybersecurity programs and compliance with applicable practices and standards. 57 Table of Contents Our risk management program also assesses third party risks, and we perform third-party risk management to identify and mitigate risks from key third parties such as vendors, suppliers, and other business partners.
Management is responsible for approving budgets, approving cybersecurity processes, and reviewing cybersecurity assessments and other cybersecurity-related matters. 57 Table of Contents
Management is responsible for approving budgets, approving cybersecurity processes, and reviewing cybersecurity assessments and other cybersecurity-related matters. 58 Table of Contents
We also engage top third-party security providers for applications and infrastructure to identify, prioritize, assess, mitigate, and remediate risks. 56 Table of Contents Our information technology (“IT”) department regularly assess risks from cybersecurity and technology threats and monitors our information systems for potential vulnerabilities.
We also engage top third-party security providers for applications and infrastructure to identify, prioritize, assess, mitigate, and remediate risks. Our information technology (“IT”) department regularly assess risks from cybersecurity and technology threats and monitors our information systems for potential vulnerabilities.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeConsolidated 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.
Biggest changeConsolidated Investments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Occupancy – ​ ​ ​ ​ ​ Number of ​ Average Year ​ Ownership ​ Average ​ Occupancy – ​ Excluding Held for ​ Operating Investment Name Market / Location Units (1) Built Interest Rent (2) All Units (3) ​ Sale/Reno Units (4) ​ Scattered Single-Family Homes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ballast AZ / CO / WA 84 1998 95 % $ 2,077 97.6 % 97.6 % Golden Pacific IN / KS / MO 169 1977 97 % 1,788 97.6 % 97.6 % ILE ​ TX / SE US ​ 478 ​ 1991 ​ 95 % ​ 1,871 ​ 89.7 % 91.5 % Indy-Springfield IN / MO 323 1999 100 % 1,337 93.8 % 96.2 % Peak JV 2 Various / TX 573 1981 80 % 1,322 88.0 % 92.9 % Peak JV 3 Dallas-Fort Worth, TX 90 1959 56 % 1,286 60.0 % — ​ Savannah-84 Savannah, GA 84 2022 100 % 1,823 92.9 % 92.9 % Total Scattered Single-Family Homes / Average ​ 1,801 ​ ​ ​ $ 1,579 89.7 % 93.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential Communities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allure at Southpark Charlotte, NC 350 2014 98 % $ 1,724 92.3 % 92.3 % Amira at Westly ​ Tampa, FL ​ 408 ​ 1999/2023 ​ 93 % ​ 1,945 ​ 92.6 % 92.9 % Avenue at Timberlin Park ​ Jacksonville, FL ​ 200 ​ 2001 ​ 100 % ​ 1,613 ​ 95.0 % 95.5 % Villas at Huffmeister ​ Houston, TX ​ 294 ​ 2007 ​ 95 % ​ 1,560 ​ 94.6 % 94.9 % Wayford at Concord ​ Concord, NC ​ 150 ​ 2019 ​ 83 % ​ 2,166 ​ 95.3 % 96.0 % Yauger Park Villas ​ Olympia, WA ​ 80 ​ 2010 ​ 95 % ​ 2,433 ​ 98.8 % 98.8 % Total Residential Communities Units / Average ​ ​ ​ 1,482 ​ ​ ​ ​ ​ $ 1,840 ​ 93.9 % 94.1 % Total Operating Units / Average ​ ​ ​ 3,283 ​ ​ ​ ​ ​ $ 1,689 ​ 91.6 % 94.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development Investment Name ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential Communities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Abode Wendell Fall (5) ​ Wendell, NC ​ 170 ​ — ​ 100 % ​ — ​ — ​ — ​ Total Development Units ​ ​ 170 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Units ​ ​ ​ 3,453 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Total operating units includes an aggregate of 167 units classified as held for sale, with such units included in the following portfolios: 8 units of ILE, 37 units of Indy-Springfield, 32 units of Peak JV 2, and all 90 units of Peak JV 3.
(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.
(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, 2024. (3) Percent occupied is calculated as (i) the number of units occupied as of December 31, 2024 divided by (ii) total number of units, expressed as a percentage.
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.
Item 2. Investments As of December 31, 2024, we held twenty-three real estate investments, consisting of fourteen consolidated investments and nine held through preferred equity and loan investments. The following tables provide summary information regarding our consolidated investments and preferred equity and loan investments.
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.
(5) Abode Wendell Falls is a build-to-rent development project that commenced construction in 2024. 59 Table of Contents 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 % Occupied Rent (1) Willow Park ​ Willow Park, TX ​ 58 ​ $ 17.1 ​ $ 17.1 ​ $ 294,828 ​ 2Q 2022 ​ 3Q 2023 ​ ​ 87.9 % $ 2,362 The Cottages at Myrtle Beach ​ Myrtle Beach, SC ​ 294 ​ ​ 63.2 ​ ​ 63.2 ​ ​ 214,966 ​ 2Q 2023 ​ 4Q 2023 ​ ​ 72.1 % ​ 1,743 The Cottage of Port St.
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.
Lucie, FL ​ 286 ​ 69.6 ​ ​ 69.5 ​ ​ 243,357 ​ 2Q 2023 ​ 2Q 2024 ​ ​ 85.7 % ​ 2,133 Chandler (2) ​ Chandler, AZ ​ 208 ​ ​ 48.2 ​ ​ 48.2 ​ ​ 231,731 ​ 2Q 2024 ​ 3Q 2024 ​ ​ 46.6 % ​ 1,920 Wayford at Innovation Park (3) Charlotte, NC 210 ​ 62.0 ​ 58.7 ​ 295,238 3Q 2023 4Q 2024 ​ 64.3 % 1,994 Wayford at Pringle Charlotte, NC 102 ​ 37.2 ​ 37.2 ​ 364,706 1Q 2024 4Q 2024 ​ 85.3 % 2,453 Total Lease-up Units ​ 1,158 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development Investment Name (4) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Indigo Cove Bluffton, SC 82 ​ 30.2 ​ 8.3 ​ 368,293 4Q 2025 1Q 2026 ​ — ​ 3,095 River Ford Brunswick, GA 170 ​ 51.6 ​ 10.6 ​ 303,529 4Q 2025 1Q 2027 ​ — ​ 2,004 Canvas at Wildwood ​ Wildwood, FL ​ 224 ​ ​ 60.3 ​ ​ 9.3 ​ ​ 269,196 ​ 4Q 2026 ​ 4Q 2027 ​ ​ — ​ ​ 1,937 Total Development Units ​ 476 ​ ​ ​ ​ ​ ​ ​ ​ Total Units/Average ​ 1,634 ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 2,072 (1) Represents the average pro forma effective monthly rent per occupied unit for all expected occupied units upon stabilization.
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
(2) Chandler commenced lease-up in June 2024. (3) Wayford at Innovation Park commenced lease-up in August 2023. (4) None of the development investments had commenced lease-up as of December 31, 2024. ​ Item 3. Legal Proceedings We are not party to, and none of our properties are subject to, any material pending legal proceeding. Item 4.
Removed
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.
Added
(4) Percent occupied is calculated as (i) the number of units occupied as of December 31, 2024 divided by (ii) total number of units, expressed as a percentage, and excludes 167 units classified as held for sale and an aggregate of 7 down/renovation units.
Removed
For operating investments, represents the average effective monthly rent per occupied unit for the three months ended December 31, 2023.
Added
Mining Safety Disclosures Not applicable. ​ 60 Table of Contents PART II
Removed
(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).

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeREIT 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.
Biggest changeDistributions 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.
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.
Unregistered Sales of Equity Securities We previously disclosed our issuances during the years ended December 31, 2024 and 2023 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 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, November 15, 2023, January 10, 2024, February 23, 2024, April 5, 2024, May 2, 2024, May 15, 2024, August 12, 2024 and November 13, 2024.
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.
On March 6, 2025, the closing price of our Class A common stock, as reported on the NYSE American, was $11.90. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Period Ending Index 10/06/22 12/31/22 12/31/23 12/31/24 Bluerock Homes Trust, Inc. 100.00 92.57 ​ 65.11 ​ 61.76 Russell 3000 Index 100.00 102.36 ​ 128.92 ​ 159.62 Russell 2000 Index 100.00 100.89 ​ 117.97 ​ 131.58 Dow Jones Equity All REIT Index 100.00 105.65 ​ 117.58 ​ 123.29 MSCI U.S.
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.
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, 2024 and 2023. 61 Table of Contents 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.
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.
The Series A Preferred Dividends and enhanced special dividends for the months of January and February were paid in cash on February 5, 2025 and March 5, 2025, respectively, with the March dividends to be paid in cash on April 4, 2025.
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.
On January 15, 2025, our Board authorized, and we declared, (i) regular monthly dividends for the first quarter 2025 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 24, February 25 and March 25 of 2025, and (ii) enhanced special dividends on shares of our Series A Preferred Stock for the first quarter 2025, which will be seamlessly aggregated with the regular monthly Series A Preferred Dividends so as to effect a dividend rate of the average one-month Term SOFR rate plus two percent, subject to a 6.5% minimum and an 8.5% maximum annual rate, calculated and paid monthly.
Removed
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.
Added
REIT Index 100.00 106.01 ​ 120.58 ​ 131.13 ​ Stockholder Information As of March 6, 2025, we had approximately 3,953,219 shares of Class A common stock outstanding held by a total of 496 stockholders, one of which is the holder for all beneficial owners who hold in street name.
Added
On March 11, 2025, we declared, and our Board previously authorized, quarterly cash dividends of $0.125 per share, or $0.50 per share annually, for our Class A common stock and Class C common stock for each quarter of fiscal year 2025.
Added
The common stock dividends will be payable quarterly to the stockholders of record as of (i) March 25, 2025, (ii) June 25, 2025, (iii) September 25, 2025, and (iv) December 24, 2025, which will be paid in cash on (i) April 4, 2025, (ii) July 3, 2025, (iii) October 3, 2025, and (iv) January 5, 2026, respectively.
Added
Return of Capital For the year ended December 31, 2024, 100% of the distributions received by the common stockholders were classified as a return of capital.
Added
The distributions received by the preferred stockholders were classified for income tax purposes as 8.0406% ordinary, 30.4154% as a return of capital, and 61.5440% as capital gains, with 30.2646% of the capital gains qualifying as long-term capital gains and 69.7354% qualifying as Section 1250 gains.
Added
For the year ended December 31, 2023, 100% of the distributions received by both the common and preferred stockholders were classified as capital gains for income tax purposes and none were a return of capital, with 0.4022% and 0.5665% of the capital gains qualifying as Section 1250 gains for the common and preferred stockholders, respectively.

Item 7. Management's Discussion & Analysis

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

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Biggest changeBoth FFO and CFFO should be reviewed in connection with other GAAP measurements. 73 Table of Contents Distributions ​ ​ ​ ​ ​ ​ ​ ​ Declaration Date Payable to stockholders of record as of Amount Paid / Payable Date Class A common stock Special Dividend ​ December 19, 2023 ​ December 29, 2023 ​ $ 1.00 ​ January 5, 2024 Class C common stock Special Dividend ​ ​ ​ ​ December 19, 2023 ​ December 29, 2023 ​ $ 1.00 ​ January 5, 2024 Series A Preferred Stock (1) ​ ​ ​ ​ September 11, 2023 ​ August 25, 2023 ​ $ 0.125000 ​ October 5, 2023 September 11, 2023 ​ September 25, 2023 ​ 0.125000 ​ October 5, 2023 October 13, 2023 ​ October 25, 2023 ​ 0.125000 ​ November 3, 2023 October 13, 2023 ​ November 24, 2023 ​ 0.125000 ​ December 5, 2023 October 13, 2023 ​ December 22, 2023 ​ 0.125000 ​ January 5, 2024 Series A Preferred Stock Special Dividend (2) ​ ​ ​ ​ November 7, 2023 ​ Each day November 1 - 30, 2023 ​ $ 0.012550 ​ December 5, 2023 November 7, 2023 ​ Each day December 1 - 31, 2023 ​ 0.002469 ​ January 5, 2024 (1) Holders of record of newly issued Series A Preferred Stock shares that are held only a portion of the applicable monthly dividend period will receive a prorated dividend based on the actual number of days in the applicable dividend period during which each such share of Series A Preferred Stock was outstanding.
Biggest changeBoth FFO and CFFO should be reviewed in connection with other GAAP measurements. 77 Table of Contents Distributions ​ ​ ​ ​ ​ ​ ​ ​ Declaration Date Record Date Amount Paid / Payable Date Class A common stock Special Dividend ​ December 19, 2023 ​ December 29, 2023 ​ $ 1.00 ​ January 5, 2024 Class C common stock Special Dividend ​ ​ ​ ​ ​ ​ December 19, 2023 ​ December 29, 2023 ​ $ 1.00 ​ January 5, 2024 Series A Preferred Stock (1) ​ ​ ​ ​ ​ ​ October 13, 2023 ​ December 22, 2023 ​ $ 0.125 ​ January 5, 2024 January 15, 2024 ​ January 25, 2024 ​ 0.125 ​ February 5, 2024 January 15, 2024 ​ February 23, 2024 ​ 0.125 ​ March 5, 2024 January 15, 2024 ​ March 25, 2024 ​ 0.125 ​ April 5, 2024 April 12, 2024 ​ April 25, 2024 ​ 0.125 ​ May 3, 2024 April 12, 2024 ​ May 24, 2024 ​ 0.125 ​ June 5, 2024 April 12, 2024 ​ June 25, 2024 ​ ​ 0.125 ​ July 5, 2024 July 12, 2024 ​ July 25, 2024 ​ ​ 0.125 ​ August 5, 2024 July 12, 2024 ​ August 23, 2024 ​ 0.125 ​ September 5, 2024 July 12, 2024 ​ September 25, 2024 ​ ​ 0.125 ​ October 4, 2024 October 14, 2024 ​ October 25, 2024 ​ ​ 0.125 ​ November 5, 2024 October 14, 2024 ​ November 25, 2024 ​ ​ 0.125 ​ December 5, 2024 October 14, 2024 ​ December 24, 2024 ​ ​ 0.125 ​ January 3, 2025 Series A Preferred Special Dividend (2) ​ ​ ​ ​ ​ ​ ​ November 7, 2023 ​ Each day of December 1 - 31, 2023 ​ $ 0.002469 ​ January 5, 2024 January 15, 2024 ​ Each day of January 1 - 31, 2024 ​ ​ 0.000337 ​ February 5, 2024 January 15, 2024 ​ Each day of February 1 - 29, 2024 ​ ​ 0.003458 ​ March 5, 2024 January 15, 2024 ​ Each day of March 1 - 31, 2024 ​ ​ 0.004603 ​ April 5, 2024 April 12, 2024 ​ Each day of April 1 - 30, 2024 ​ ​ 0.009953 ​ May 3, 2024 Series A Preferred Enhanced Special Dividend (3) ​ ​ ​ ​ ​ ​ ​ May 3, 2024 ​ May 24, 2024 ​ $ 0.027507 ​ June 5, 2024 May 3, 2024 ​ June 25, 2024 ​ ​ 0.027775 ​ July 5, 2024 July 12, 2024 ​ July 25, 2024 ​ ​ 0.027862 ​ August 5, 2024 July 12, 2024 ​ August 23, 2024 ​ ​ 0.027633 ​ September 5, 2024 July 12, 2024 ​ September 25, 2024 ​ ​ 0.022237 ​ October 4, 2024 October 14, 2024 ​ October 25, 2024 ​ ​ 0.016593 ​ November 5, 2024 October 14, 2024 ​ November 25, 2024 ​ ​ 0.013024 ​ December 5, 2024 October 14, 2024 ​ December 24, 2024 ​ ​ 0.010417 ​ January 3, 2025 (1) Holders of record of newly issued Series A Preferred Stock shares that are held only a portion of the applicable monthly dividend period will receive a prorated dividend based on the actual number of days in the applicable dividend period during which each such share of Series A Preferred Stock was outstanding.
New Accounting Pronouncements See Note 2, “Basis of Presentation and Summary of Significant Accounting Policies,” to our Notes to the Combined Consolidated Financial Statements for a description of accounting pronouncements. We do not believe these new pronouncements will have a significant impact on our Combined Consolidated Financial Statements, cash flows or results of operations.
New Accounting Pronouncements See Note 2, “Basis of Presentation and Summary of Significant Accounting Policies,” to our Notes to the Consolidated Financial Statements for a description of accounting pronouncements. We do not believe these new pronouncements will have a significant impact on our Consolidated Financial Statements, cash flows or results of operations.
We refer to Bluerock Real Estate, L.L.C., a Delaware limited liability company, and its affiliate, Bluerock Real Estate Holdings, LLC, a Delaware limited liability company, together as “BRE,” and we refer to our external manager, Bluerock Homes Manager, LLC, a Delaware limited liability company organized in 2022, as the “Manager.” Both BRE and our Manager are affiliated with us.
We refer to Bluerock Real Estate, L.L.C., a Delaware limited liability company, and its affiliate, Bluerock Real Estate Holdings, LLC, a Delaware limited liability company, together as “BRE,” and we refer to our external manager, Bluerock Homes Manager, LLC, a Delaware limited liability company organized in 2022, as our “Manager.” Both BRE and our Manager are affiliated with us.
We recognize interest income on our notes receivable on the accrual method unless a significant uncertainty of collection exists. If a significant uncertainty exists, interest income is recognized as collected. Costs incurred to originate our notes receivable are deferred and amortized using the effective interest method over the term of the related notes receivable.
We recognize interest income on our notes receivable on the accrual method unless a significant uncertainty of collection exists. If a significant uncertainty exists, interest income is recognized as collected. Costs incurred to originate our notes receivable are deferred and amortized using the effective interest method over the term of the related note receivable.
Real estate assets classified as held for sale are reported at the lower of their carrying value or estimated fair value less costs to sell and are presented separately within operating real estate held for sale, net on our combined consolidated balance sheets.
Real estate assets classified as held for sale are reported at the lower of their carrying value or estimated fair value less costs to sell and are presented separately within operating real estate held for sale, net on our consolidated balance sheets.
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.
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 ​ 81 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.
We also have preferred equity interests in properties that are in various stages of development, in lease-up and operating, and our preferred equity investments are structured to provide a current and/or accrued preferred return during all phases.
We also have preferred equity interests in properties that are in various stages of development and in lease-up, and our preferred equity investments are structured to provide a current and/or accrued preferred return during all phases.
(2) Holders of record of Series A Preferred Stock shares as of the close of business on each day of the applicable month are entitled to additional contingent special daily dividends for each such day, to be aggregated and payable (if at all) on the payable date, in each case equal to the amount (if any) by which (i) the Stated Value of the Series A Preferred Stock multiplied by (a) the sum of (I) the average 10-year Daily Treasury Par Yield Curve Rate for the period from the 26 th of the prior month to the 25 th of the applicable month (as reported by the United States Department of the Treasury), plus (II) two percent (2.0%), divided by (b) twelve (12), divided further by (c) the actual number of days in the applicable month, exceeds (ii) the quotient of (a) $0.125 divided by (b) the actual number of days in the applicable month.
(2) Holders of record of Series A Preferred Stock shares as of the close of business on each day of the applicable month were entitled to additional contingent special daily dividends for each such day, to be aggregated and payable (if at all) on the payable date, in each case equal to the amount (if any) by which (i) the Stated Value of the Series A Preferred Stock multiplied by (a) the sum of (I) the average 10-year Daily Treasury Par Yield Curve Rate for the period from the 26 th of the prior month to the 25 th of the applicable month (as reported by the United States Department of the Treasury), plus (II) two percent, divided by (b) twelve, divided further by (c) the actual number of days in the applicable month, exceeds (ii) the quotient of (a) $0.125 divided by (b) the actual number of days in the applicable month.
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.
Principles of Consolidation and Basis of Presentation We conduct our operations through the Operating Partnership, of which we are the sole general partner. The consolidated financial statements include our accounts and those of the Operating Partnership and its subsidiaries.
We have notes receivable in conjunction with properties that are in various stages of lease - up. To date, these investments have been structured as senior loans, and in the future, we may also provide mezzanine financing to these types of projects. The notes receivable provide a current stated return and require repayment based on a fixed maturity date.
We have notes receivable in conjunction with properties that are in lease-up. To date, these investments have been structured as senior loans, and in the future, we may also provide mezzanine financing to these types of projects. The notes receivable provide a current stated return and require repayment based on a fixed maturity date.
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.
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 investment.
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.
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, 2025 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.
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.
At December 31, 2024, 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.
(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.
(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, 2024. (3) Percent occupied is calculated as (i) the number of units occupied as of December 31, 2024 divided by (ii) total number of units, expressed as a percentage.
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.
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 other transaction 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.
We evaluate the collectability of each loan investment and estimate a provision for credit loss, as applicable. Real Estate Assets Real Estate Purchase Price Allocations Upon acquisition, we evaluate our acquired residential properties for purposes of determining whether a transaction should be accounted for as an asset acquisition or business combination.
We evaluate the collectability of each loan investment and estimate a provision for credit loss, as applicable. 80 Table of Contents Real Estate Assets Real Estate Purchase Price Allocations Upon acquisition, we evaluate our acquired residential properties for purposes of determining whether a transaction should be accounted for as an asset acquisition or business combination.
As we did in the year ended December 31, 2023, we may also selectively sell consolidated operating assets at appropriate times, which would be expected to generate cash sources for both our short - term and long - term liquidity needs. 68 Table of Contents We may also meet our long-term liquidity needs through borrowings from a number of sources, either at the corporate or project level.
As we did in the year ended December 31, 2024, we may also selectively sell consolidated operating assets at appropriate times, which would be expected to generate cash sources for both our short-term and long-term liquidity needs. 72 Table of Contents We may also meet our long-term liquidity needs through borrowings from a number of sources, either at the corporate or project level.
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”).
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”).
Holders of restricted stock, OP Units, LTIP Units and C-LTIP Units are entitled to receive “distribution equivalents” at the same time as dividends are paid to holders of our Class A common stock. Our Board will determine the amount of dividends to be paid to our stockholders.
Holders of restricted stock, OP Units, LTIP Units and C-LTIP Units are entitled to receive “distribution equivalents” at the same time as dividends are paid to holders of our Class A common stock. 78 Table of Contents Our Board will determine the amount of dividends to be paid to our stockholders.
We expect to repurchase shares of our Class A common stock through open market transactions subject to market conditions, certain price limitations and other conditions established under the plan. Open market repurchases will be structured to occur in conformity with the method, timing, price and volume requirements of Rule 10b-18 of the Exchange Act.
We expect that any repurchases of our Class A common stock will be through open market transactions, subject to market conditions, certain price limitations and other conditions established under the plan. Open market repurchases will be structured to occur in conformity with the method, timing, price and volume requirements of Rule 10b-18 of the Exchange Act.
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.
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 and we would not be permitted to qualify as a REIT for four years following the year in which we lost our qualification.
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.
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 based on the discounted cash flows of the operating asset.
In measuring the CECL provision for investments that share similar characteristics, we apply a default rate to the investments for the remaining loan or preferred equity investment hold period.
In measuring the CECL provision for investments that share similar characteristics, we apply a default rate to the investments for the remaining loan investment hold period.
While our distributions through December 31, 2023 have been paid from cash flow from operations and in accordance with our policy, distributions in the future may be paid from cash flow from operations, proceeds from our Series A Preferred Offering, the sales of assets and additional sources, such as from borrowings.
While our distributions through December 31, 2024 have been paid from cash flow from operations and in accordance with our policy, distributions in the future may be paid from cash flow from operations, proceeds from the offering of our Series A Preferred Stock, proceeds from the DST Program, the sales of assets, and additional sources, such as from borrowings.
As we do not have a significant historical population of loss data on our loan and preferred equity investments, our default rate utilized for CECL is based on an external historical loss rate for commercial real estate loans. In addition to analyzing investments as a pool, we perform an individual investment assessment of expected credit losses.
As we do not have a significant historical population of loss data on our loan investments, our default rate utilized for CECL is based on an external historical loss rate for commercial real estate loans. 82 Table of Contents In addition to analyzing investments as a pool, we perform an individual investment assessment of expected credit losses.
In general, we expect that our results related to our existing portfolio will improve in future periods as a result of anticipated future investments in and acquisitions of single-family residential properties and build-to-rent development properties.
In general, we expect that our results related to our existing portfolio will improve in future periods as a result of anticipated future investments in and acquisitions of residential properties and build-to-rent communities.
Our principal objective is to generate attractive risk-adjusted returns on investments where we believe we can drive growth in funds from operations and net asset value by acquiring pre-existing single-family residential units, developing build-to-rent communities, and through Value-Add renovations.
Our principal objective is to generate attractive risk-adjusted returns on investments where we believe we can drive growth in funds from operations and net asset value by acquiring residential units, developing residential communities, and through Value-Add renovations.
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.
Subsequent Events Issuance of LTIP Units under the BHM Incentive Plans On January 1, 2025, we granted 5,405 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.
As the investment no longer displays the characteristics that are similar to those of the pool of loans or preferred equity investments, the investment is removed from the CECL collective (pool) analysis described above.
As the investment no longer displays the characteristics that are similar to those of the pool of loan investments, the investment is removed from the CECL collective (pool) analysis described above.
(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.
(3) Represents the average of the ending average effective rent per occupied unit as of the last day of each month in the year presented. 67 Table of Contents The following is a summary of our preferred equity and loan investments as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 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 ​ % Occupied ​ Rent (1) Willow Park Willow Park, TX 58 $ 17.1 $ 17.1 $ 294,828 2Q 2022 ​ 3Q 2023 87.9 % $ 2,362 The Cottages at Myrtle Beach Myrtle Beach, SC 294 ​ ​ 63.2 ​ ​ 63.2 ​ ​ 214,966 2Q 2023 ​ 4Q 2023 72.1 % ​ 1,743 The Cottage of Port St.
Funds from Operations and Core Funds from Operations Attributable to Common Stockholders and Unit Holders We believe that funds from operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), and core funds from operations (“CFFO”) are important non-GAAP supplemental measures of operating performance for a REIT.
Funds from Operations and Core Funds from Operations Attributable to Common Stockholders and Unit Holders We believe that funds from operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), and core funds from operations (“CFFO”) are important non-GAAP supplemental measures of operating performance for a REIT. 75 Table of Contents FFO attributable to common stockholders and unit holders is a non-GAAP financial measure that is widely recognized as a measure of REIT operating performance.
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.
Off-Balance Sheet Arrangements As of December 31, 2024, 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, 2024, we own investments in eight joint ventures that are accounted for as available-for-sale debt securities.
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. Substantially all our business is conducted through our operating partnership, Bluerock Residential Holdings, L.P., a Delaware limited partnership (our “Operating Partnership”), of which we are the sole general partner.
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. Substantially all our business is conducted through our Operating Partnership, of which we are the sole general partner.
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.
Cash Flows from Financing Activities During the year ended December 31, 2024, net cash provided by financing activities was $260.7 million, primarily due to the following: ● net borrowings of $158.5 million on mortgages payable; ● net proceeds of $92.9 million from the issuance of Series A Preferred Stock; ● proceeds of $71.0 million from borrowings on revolving credit facilities; and ● capital contributions of $5.9 million from partially owned properties’ noncontrolling interests; offset by ● $22.3 million of repayments of our mortgages payable; ● $20.0 million of repayments on revolving credit facilities; ● $8.5 million of distributions to noncontrolling interests; ● $6.3 million in deferred financing costs; ● $3.9 million of distributions to common stockholders; ● $3.5 million in cash distributions paid to preferred stockholders; ● $2.9 million for purchase of interests from noncontrolling interests; and ● $0.1 million in cash distributions paid to partially owned properties’ noncontrolling interests.
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.
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, equity compensation expense, and preferred stock accretion.
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.
As a REIT, we generally are not subject to corporate-level income taxes. 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.
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.
Our success in meeting these requirements will therefore depend upon our ability to access capital. Further, our ability to access equity capital is dependent upon, among other things, general market conditions for REITs and the capital markets in general, market perceptions about us and our asset class, and current trading prices of our securities.
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”).
We believe we will be able to meet our primary liquidity requirements going forward through, among other sources: ● $115.2 million in cash available at December 31, 2024; ● capacity of $79 million, of which approximately $13 million was available at December 31, 2024, 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 the offering of our Series A Preferred Stock and potential offerings of common and preferred stock, as well as issuances of units of limited partnership interest in our Operating Partnership (“OP Units”). 71 Table of Contents The following table summarizes our contractual obligations as of December 31, 2024 related to our mortgage notes secured by our properties and revolving credit facilities.
As of February 29, 2024, we funded zero and $5.9 million of Note A and Note B, respectively. 79 Table of Contents Stock Repurchase Plan On February 13, 2024, our Board authorized a stock repurchase plan for the repurchase, from time to time, of up to an aggregate of $5 million of our outstanding shares of Class A common stock, with such repurchases to be conducted in accordance with the requirements of Rule 10b-18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) and subject to Rule 10b-5 of the Exchange Act.
On February 13, 2024, our Board authorized a stock repurchase plan that provided for the repurchase, from time to time, of up to an aggregate of $5 million of our outstanding shares of Class A common stock, with such repurchases to be conducted in accordance with the requirements of Rule 10b-18 of the Securities Exchange Act of 1934 (the “Exchange Act”) and subject to Rule 10b-5 of the Exchange Act.
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.
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 .
FFO attributable to common stockholders and unit holders is a non-GAAP financial measure that is widely recognized as a measure of REIT operating performance. We consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation.
We consider FFO to be an appropriate supplemental measure of our operating performance as it is based on a net income analysis of property portfolio performance that excludes non-cash items such as depreciation.
At December 31, 2023, we had 118 units classified as held for sale, with a recorded impairment related to held for sale units of $1.3 million which is included in gain on sale and impairment of real estate investments, net within our combined consolidated statements of operations.
At December 31, 2024 and 2023, we had 167 units and 118 units, respectively, classified as held for sale, and for the years ended December 31, 2024 and 2023, we had recorded impairments related to held for sale units of $3.3 million and $1.3 million, respectively, which is included in gain on sale and (impairment) of real estate investments, net in our consolidated statements of operations and comprehensive income.
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.
Our primary long-term liquidity requirements relate to (i) costs for additional residential investments, including development projects, (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, and (v) Class A common stock repurchases under our stock repurchase plan.
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.
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. NOI also is a computation made by analysts and investors to measure a real estate company’s operating performance.
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.
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 preferred equity investment is not considered fully recoverable and a provision for credit loss is recorded.
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.
We intend to finance our long-term liquidity requirements with net proceeds of additional issuances of common and preferred stock, including issuances in connection with the continuous registered offering of our Series A Preferred Stock, our revolving credit facilities, our DST Program, as well as future acquisition or project-based borrowings.
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.
Year ended December 31, 2024 as compared to the year ended December 31, 2023 Revenue Rental and other property revenues increased $ 7.6 million, or 18%, to $48.6 million for the year ended December 31, 2024 as compared to $41.0 million for the same prior year period.
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.
Current Expected Credit Losses (CECL) Notes Receivable We estimate provision for credit losses on our loan investments (notes receivable) under CECL. This method is based on expected credit losses for the life of the investment as of each balance sheet date.
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.
Cash Flows Cash Flows from Operating Activities As of December 31, 2024, we held twenty-three real estate investments, consisting of fourteen consolidated investments and nine preferred equity and loan investments, with the twenty-three investments representing an aggregate of 5,087 residential units.
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 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, 2024 and 2023 (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Net loss attributable to common stockholders ​ $ (4,234) ​ $ (4,503) Add back: Net loss attributable to Operating Partnership Units ​ (9,232) ​ (8,996) Net loss attributable to common stockholders and unit holders ​ (13,466) ​ (13,499) Net loss attributable to partially owned properties’ noncontrolling interests ​ (2,891) ​ (2,398) Real estate depreciation and amortization ​ 19,810 ​ 16,023 Non-real estate depreciation and amortization ​ 140 ​ 200 Non-cash interest expense ​ 1,755 ​ 2,775 Unrealized loss on derivatives ​ 3,885 ​ 2,933 (Recovery of) provision for credit losses ​ (93) ​ 174 Property management and asset management fees ​ 4,715 ​ 4,416 Management fees to related party ​ 9,111 ​ 7,922 Acquisition and other transaction costs ​ 255 ​ 1,820 Corporate operating expenses ​ 10,582 ​ 7,959 Weather-related losses, net ​ 170 ​ (17) Loss on extinguishment of debt costs ​ 151 ​ — Interest income ​ (5,424) ​ (2,609) Preferred stock dividends ​ 4,022 ​ 130 Preferred stock accretion ​ 244 ​ — Other income, net ​ (330) ​ (679) Income from preferred equity investments ​ ​ (11,937) ​ ​ (11,632) Interest income from loan investments ​ ​ (1,630) ​ ​ (94) (Gain) on sale and impairment of real estate investments, net ​ (7,081) ​ 1,017 Total property income ​ ​ 11,988 ​ ​ 14,441 Add back: Interest expense ​ 12,452 ​ 7,394 Net operating income ​ $ 24,440 ​ $ 21,835 ​ Liquidity and Capital Resources Liquidity is a measure of our ability to meet potential cash requirements, both short- and long-term.
Distributions declared and paid for the year ended December 31, 2023 were as follows (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Distributions 2023 Declared Paid Third Quarter ​ ​ ​ ​ Series A Preferred Stock (1) ​ $ 12 ​ $ — Total third quarter ​ $ 12 ​ $ — Fourth Quarter ​ ​ Class A common stock ​ $ 3,871 ​ $ — Class C common stock ​ 8 ​ — Series A Preferred Stock (1) ​ 118 ​ 78 OP Units ​ 7,366 ​ — LTIP / C-LTIP Units ​ 1,143 ​ — Total fourth quarter ​ $ 12,506 ​ $ 78 Total ​ $ 12,518 ​ $ 78 (1) For the third quarter 2023, amounts include only the standard dividend at an annual rate of 6.0% of the Stated Value.
Distributions declared and paid for the year ended December 31, 2024 were as follows (amounts in thousands): ​ ​ ​ ​ ​ ​ ​ ​ Distributions 2024 Declared Paid First Quarter ​ ​ ​ ​ Class A common stock ​ $ — ​ $ 3,871 Class C common stock ​ ​ — ​ ​ 8 Series A Preferred Stock (1) ​ ​ 253 ​ ​ 206 OP Units ​ ​ — ​ ​ 7,366 LTIP / C-LTIP Units ​ ​ — ​ ​ 1,143 Total First Quarter ​ $ 253 ​ $ 12,594 Second Quarter ​ ​ ​ ​ ​ Series A Preferred Stock (1) ​ $ 562 ​ $ 396 Total Second Quarter ​ $ 562 ​ $ 396 Third Quarter ​ ​ ​ ​ ​ ​ Series A Preferred Stock (1) ​ $ 1,412 ​ $ 1,129 Total Third Quarter ​ $ 1,412 ​ $ 1,129 Fourth Quarter ​ ​ ​ ​ ​ ​ Series A Preferred Stock (1) ​ $ 1,795 ​ $ 1,726 Total Fourth Quarter ​ $ 1,795 ​ $ 1,726 Total ​ $ 4,022 ​ $ 15,845 (1) Series A Preferred Stock amounts include the standard dividend at an annual rate of 6.0% of the Stated Value plus any special and enhanced special dividends.
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.
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.
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.
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. Significant Developments Investment Activity Summary Provided below is a summary of our investment activity during the year ended December 31, 2024.
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.
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.
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.
Neither FFO nor CFFO should be considered as an alternative to net income, including net income (loss) attributable to common stockholders, as an indicator of our operating performance or as an alternative to cash flow from operating activities as a measure of our liquidity. 76 Table of Contents The table below presents our calculation of FFO and CFFO for the years ended December 31, 2024 and 2023 ($ in thousands): ​ ​ ​ ​ ​ ​ ​ ​ 2024 2023 Net loss attributable to common stockholders ​ $ (4,234) ​ $ (4,503) Add back: Net loss attributable to Operating Partnership Units ​ ​ (9,232) ​ (8,996) Net loss attributable to common stockholders and unit holders ​ ​ (13,466) ​ (13,499) ​ ​ ​ ​ ​ ​ ​ Real estate depreciation and amortization ​ ​ 19,810 ​ 16,023 (Gain) on sale and impairment of real estate investments, net ​ ​ (7,081) ​ 1,017 Adjustment for partially owned properties’ noncontrolling interests ​ ​ (2,245) ​ (2,215) FFO attributable to common stockholders and unit holders ​ (2,982) ​ 1,326 ​ ​ ​ ​ ​ ​ ​ Acquisition and other transaction costs ​ 255 ​ 1,820 Non-cash interest expense ​ 1,755 ​ 2,775 Unrealized loss on derivatives ​ 3,885 ​ 2,933 (Recovery of) provision for credit losses, net ​ (93) ​ 174 Weather-related losses, net ​ ​ 170 ​ ​ (17) Loss on extinguishment of debt costs ​ 151 ​ — Non-real estate depreciation and amortization ​ 140 ​ 200 Other income, net ​ (330) ​ (679) Non-cash equity compensation ​ 6,872 ​ 13,040 Preferred stock accretion ​ 244 ​ — Adjustment for partially owned properties’ noncontrolling interests ​ (387) ​ (627) CFFO attributable to common stockholders and unit holders ​ $ 9,680 ​ $ 20,945 ​ ​ ​ ​ ​ ​ ​ Per Share and Unit Information: ​ ​ ​ ​ FFO attributable to common stockholders and unit holders – diluted ​ $ (0.24) ​ $ 0.12 CFFO attributable to common stockholders and unit holders – diluted ​ $ 0.79 ​ $ 1.82 ​ ​ ​ ​ ​ ​ ​ Weighted average common shares and units outstanding – diluted ​ 12,247,598 ​ 11,537,120 ​ 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.
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.
Rental revenue is included within rental and other property revenues on our consolidated statements of operations and comprehensive income. Amounts received in advance are recorded as a liability within other accrued liabilities on our consolidated balance sheet. Other property revenues are recognized in the period earned.
Normally recurring capital expenditures are necessary non-revenue generating improvements that occur on a regular ongoing basis, such as flooring and appliances.
Routine capital expenditures are necessary non-revenue generating improvements that extend the useful life of the property, such as roof repairs and concrete work/asphalt resurfacing. Normally recurring capital expenditures are necessary non-revenue generating improvements that occur on a regular ongoing basis, such as flooring and appliances.
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”).
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”).
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.
Year ended December 31, 2024 as compared to the year ended December 31, 2023 Operating Activities Net cash flow provided by operating activities decreased $4.8 million in 2024 compared to 2023 primarily due to: ● decrease in net distributions of income and income from preferred equity investments of $3.1 million; ● operating income, adjusted for non-cash activity, decreased $3.0 million; ● decrease in amounts due to affiliates, net of $1.9 million; ● decrease in accounts receivable, prepaid expenses and other assets of $1.5 million; and ● increase in notes and accrued interest receivable of $0.2 million; offset by ● increase in accounts payable and other accrued liabilities of $1.9 million. 74 Table of Contents Investing Activities Net cash used in investing activities increased $199.2 million in 2024 compared to 2023 primarily due to: ● net increase in acquisition of real estate investments and capital expenditures of $237.1 million; ● lower proceeds from redemption of preferred equity investments of $9.6 million; ● increase in investment in notes receivable of $4.6 million; and ● increase in purchase of interest rate cap of $2.7 million; offset by ● higher proceeds from the sales of real estate investments of $41.0 million; ● increased repayments on notes receivable of $8.3 million; and ● lower investments in preferred equity investments of $5.5 million.
Wayford at Pringle Loan Financing On January 10, 2024, we entered into an agreement to provide a loan in the maximum aggregate amount up to $30.1 million (the “Pringle Loan”) to an unaffiliated, third-party borrower to acquire 102-build for rent, single-family residential units in Charlotte, North Carolina to be known as Wayford at Pringle.
In addition, we entered into an agreement with an unaffiliated third party to provide capital in the maximum aggregate amount of $30.1 million, all of which was funded during 2024, for 102 build-to-rent, single-family residential units in Charlotte, North Carolina known as Wayford at Pringle.
Acquisition and other transaction costs amounted to $1.8 million for the year ended December 31, 2023 as compared to $0.2 million for the same prior year period. The 2023 expense primarily relates to the transition of property management services for over 1,000 homes.
Acquisition costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods. The 2023 expense primarily relates to the transition of property management services for over 1,000 homes. Weather-related losses amounted to $0.2 million for the year ended December 31, 2024 as compared to zero for the same prior year period.
Overview We were incorporated as a Maryland corporation on December 16, 2021. We own and operate high-quality single-family properties located in attractive markets with a focus on the knowledge-economy and high-quality of life growth markets of the Sunbelt and Western United States.
We own and operate a portfolio of institutional residential properties including single-family homes, build-to-rent communities, and other residential communities located in attractive markets with a focus on the knowledge-economy and high-quality of life growth markets of the Sunbelt and Western United States.
We account for these investments as preferred equity investments in unconsolidated real estate joint ventures in our combined consolidated balance sheets. For investments that do not meet the criteria of a security under ASC 320 Investments – Debt Securities , we have concluded that the characteristics and the facts and circumstances indicate that loan accounting treatment is appropriate.
As such, we have reclassified all our previously held-to-maturity debt securities to AFS debt securities. For investments that do not meet the criteria of a security under ASC 320 Investments – Debt Securities , we have concluded that the characteristics and the facts and circumstances indicate that loan accounting treatment is appropriate.
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.
As equity capital market conditions permit, we may supplement our capital for short-term liquidity needs with proceeds of potential offerings of our common and preferred stock, as well as the issuance of OP Units.
Commencing with the fourth quarter 2023, we reimbursed our manager for accounting and legal services totaling $0.8 million. Prior to the fourth quarter 2023, the Manager elected to not seek reimbursement for accounting and legal services during our first year of operations.
The expense reimbursement to our Manager included an increase of $2.1 million related to accounting and legal services compared to the same prior year period. Prior to the fourth quarter 2023, the Manager elected to not seek reimbursement for legal and accounting services during our first year of operations.
Declaration of Dividends ​ ​ ​ ​ ​ ​ ​ ​ Declaration Date Payable to stockholders of record as of Amount Paid / Payable Date Series A Preferred Stock (1) ​ January 15, 2024 ​ January 25, 2024 ​ $ 0.125 ​ February 5, 2024 January 15, 2024 ​ February 23, 2024 ​ 0.125 ​ March 5, 2024 January 15, 2024 ​ March 25, 2024 ​ 0.125 ​ April 5, 2024 Series A Preferred Stock Special Dividend ​ ​ ​ January 15, 2024 ​ Each day of January 1 - 31, 2024 ​ ​ (2) ​ ​ February 5, 2024 January 15, 2024 ​ Each day of February 1 - 29, 2024 ​ ​ (2) ​ ​ March 5, 2024 January 15, 2024 ​ Each day of March 1 - 31, 2024 ​ ​ (2) ​ ​ April 5, 2024 (1) Holders of record of newly issued Series A Preferred Stock shares that are held only a portion of the applicable monthly dividend period will receive a prorated dividend based on the actual number of days in the applicable dividend period during which each such share of Series A Preferred Stock was outstanding.
Declaration of Dividends ​ ​ ​ ​ ​ ​ ​ ​ Declaration Date Record Date Amount Paid / Payable Date Series A Preferred Stock (1) ​ January 15, 2025 ​ January 24, 2025 ​ $ 0.125 ​ February 5, 2025 January 15, 2025 ​ February 25, 2025 ​ 0.125 ​ March 5, 2025 January 15, 2025 ​ March 25, 2025 ​ 0.125 ​ April 4, 2025 Series A Preferred Enhanced Special Dividend ​ ​ ​ ​ ​ January 15, 2025 ​ January 24, 2025 ​ ​ (2) ​ ​ February 5, 2025 January 15, 2025 ​ February 25, 2025 ​ ​ (2) ​ ​ March 5, 2025 January 15, 2025 ​ March 25, 2025 ​ ​ (2) ​ ​ April 4, 2025 (1) Holders of record of newly issued Series A Preferred Stock shares that are held only a portion of the applicable monthly dividend period will receive a prorated dividend based on the actual number of days in the applicable dividend period during which each such share of Series A Preferred Stock was outstanding. 83 Table of Contents (2) Holders of record of Series A Preferred Stock shares are entitled to an enhanced special dividend equal to the amount by which (i) the Stated Value of the Series A Preferred Stock multiplied by (a) the sum of (I) the average of the one-month Term SOFR for each day commencing on the 26 th of the prior month to the 25 th of the applicable month, plus (II) two percent, divided by (b) twelve, exceeds (ii) the standard monthly dividend of $0.125 per share of Series A Preferred Stock.
A portion of each dividend may constitute a return of capital for tax purposes. There is no assurance that we will continue to declare dividends or at this rate.
There is no assurance that we will continue to declare dividends or at this rate.
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.
During the year ended December 31, 2024, net cash provided by operating activities was $9.1 million after net loss of $12.1 million was adjusted for the following: ● non-cash items of $16.6 million; ● distributions of income and income from preferred equity investments of $2.3 million; 73 Table of Contents ● an increase in accounts payable and other accrued liabilities of $1.9 million; and ● a decrease in accounts receivable, prepaids and other assets of $1.3 million; offset by ● a decrease in due from affiliates, net of $0.6 million; and ● an increase in notes and accrued interest receivable of $0.3 million.
The units are included in the following portfolios: 35 units of Indy-Springfield (formerly Peak JV 1), 13 units of Peak JV 2, and 70 units of Peak JV 3. These units were identified based on submarket analysis and individual unit-level operational review.
The 167 units classified as held for sale are all reported in our scattered single-family homes segment and are included in the following portfolios: 8 units of ILE, 37 units of Indy-Springfield, 32 units of Peak JV 2, and all 90 units of Peak JV 3. These units were identified based on submarket analysis and individual unit-level operational review.
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.
Results of Operations Note 3 “Acquisition of Real Estate”; Note 4 “Sale of Real Estate Assets and Held for Sale Real Estate Assets”; Note 5 “Investments in Real Estate”; Note 6 “Notes and Interest Receivable”; and Note 7 “Preferred Equity Investments,” to our Consolidated Financial Statements provide discussion of our various purchases and sales of consolidated investments, and our loan and preferred equity investments.
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.
The following is a summary of our consolidated real estate investments as of December 31, 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Occupancy – ​ ​ ​ ​ ​ Number of ​ Average Year ​ Ownership ​ Average ​ Occupancy – ​ Excluding Held for ​ Operating Investment Name Market / Location Units (1) Built Interest Rent (2) All Units (3) ​ Sale/Reno Units (4) ​ Scattered Single-Family Homes ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Ballast AZ / CO / WA 84 1998 95 % $ 2,077 97.6 % 97.6 % Golden Pacific IN / KS / MO 169 1977 97 % 1,788 97.6 % 97.6 % ILE ​ TX / SE US ​ 478 ​ 1991 ​ 95 % ​ 1,871 ​ 89.7 % 91.5 % Indy-Springfield IN / MO 323 1999 100 % 1,337 93.8 % 96.2 % Peak JV 2 Various / TX 573 1981 80 % 1,322 88.0 % 92.9 % Peak JV 3 Dallas-Fort Worth, TX 90 1959 56 % 1,286 60.0 % — ​ Savannah-84 Savannah, GA 84 2022 100 % 1,823 92.9 % 92.9 % Total Scattered Single-Family Homes / Average ​ 1,801 ​ ​ ​ $ 1,579 89.7 % 93.8 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential Communities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Allure at Southpark Charlotte, NC 350 2014 98 % $ 1,724 92.3 % 92.3 % Amira at Westly ​ Tampa, FL ​ 408 ​ 1999/2023 ​ 93 % ​ 1,945 ​ 92.6 % 92.9 % Avenue at Timberlin Park ​ Jacksonville, FL ​ 200 ​ 2001 ​ 100 % ​ 1,613 ​ 95.0 % 95.5 % Villas at Huffmeister ​ Houston, TX ​ 294 ​ 2007 ​ 95 % ​ 1,560 ​ 94.6 % 94.9 % Wayford at Concord ​ Concord, NC ​ 150 ​ 2019 ​ 83 % ​ 2,166 ​ 95.3 % 96.0 % Yauger Park Villas ​ Olympia, WA ​ 80 ​ 2010 ​ 95 % ​ 2,433 ​ 98.8 % 98.8 % Total Residential Communities Units / Average ​ ​ ​ 1,482 ​ ​ ​ ​ ​ $ 1,840 ​ 93.9 % 94.1 % Total Operating Units / Average ​ ​ ​ 3,283 ​ ​ ​ ​ ​ $ 1,689 ​ 91.6 % 94.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Development Investment Name ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Residential Communities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Abode Wendell Fall (5) ​ Wendell, NC ​ 170 ​ — ​ 100 % ​ — ​ — ​ — ​ Total Development Units ​ ​ 170 ​ ​ ​ ​ ​ ​ ​ ​ ​ Total Units ​ ​ ​ 3,453 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ (1) Total operating units includes an aggregate of 167 units classified as held for sale, with such units included in the following portfolios: 8 units of ILE, 37 units of Indy-Springfield, 32 units of Peak JV 2, and all 90 units of Peak JV 3.
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 increase was partially offset by the sale of Navigator Villas and single-family units in our portfolio since January 1, 2023. Other Income and Expense Other income and expense amounted to income of $6.6 million for the year ended December 31, 2024 compared to income of $0.6 million for the same prior year period.
Real Estate Investments, Preferred Equity Investments and Notes Receivable (Real Estate Loan Investment) We first analyze an investment to determine if it is a variable interest entity (“VIE”) in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810: Consolidation and, if so, whether we are the primary beneficiary requiring consolidation of the entity.
As of December 31, 2024, limited partners other than the Company owned approximately 69.48% of the common units of the Operating Partnership, of which 56.72% is held by holders of limited partnership interest in the Operating Partnership (“OP Units”) and 12.76% is held by holders of the Operating Partnership’s long-term incentive plan units (“LTIP Units”), including 3.09% which are not vested at December 31, 2024. 79 Table of Contents Real Estate Investments, Preferred Equity Investments and Notes Receivable We first analyze an investment to determine if it is a variable interest entity (“VIE”) in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 810: Consolidation and, if so, whether we are the primary beneficiary requiring consolidation of the entity.
The following is a summary of our consolidated operational results for the years ended December 31, 2023 and 2022 ($ 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.
The following is a summary of our consolidated operational results by reportable segment for the years ended December 31, 2024 and 2023 ($ in thousands, except average rental rates): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2024 ​ 2023 Variance Scattered single-family homes ​ $ 32,135 ​ $ 31,411 ​ 2.3 % Residential communities ​ ​ 16,449 ​ ​ 9,588 ​ 71.6 % Rental and other property revenues ​ $ 48,584 ​ $ 40,999 ​ 18.5 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Scattered single-family homes ​ $ 17,194 ​ $ 16,058 ​ 7.1 % Residential communities ​ ​ 6,950 ​ ​ 3,106 ​ 123.8 % Property operating expenses ​ $ 24,144 ​ $ 19,164 ​ 26.0 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Scattered single-family homes ​ $ 14,941 ​ $ 15,353 ​ -2.7 % Residential communities ​ ​ 9,499 ​ ​ 6,482 ​ 46.5 % Net operating income ​ $ 24,440 ​ $ 21,835 ​ 11.9 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Scattered single-family homes ​ ​ 90.2 % ​ 91.0 % (80) bps Residential communities ​ ​ 95.1 % ​ 95.5 % (40) bps Average occupancy percentage (1)(2) ​ 91.7 % 91.8 % (10) bps ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Scattered single-family homes ​ $ 1,556 ​ $ 1,487 ​ 4.6 % Residential communities ​ ​ 1,815 ​ ​ 1,939 ​ -6.4 % Average rental rate (2)(3) ​ $ 1,638 ​ $ 1,569 ​ 4.4 % (1) Represents the average of the ending occupancy as of the last day of each month in the year presented for all units in our consolidated portfolio.
Please refer to the section in Item 1 captioned “The Separation and the Distribution” for a description of the Separation and the Distribution. You should read the following discussion and analysis in conjunction with the accompanying financial statements of Bluerock Homes, and the notes thereto. This Management’s Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements.
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements of Bluerock Homes Trust, Inc., and the notes thereto.
Our primary short-term liquidity requirements historically have related to (i) our operating expenses and other general business needs, (ii) acquisition of properties, (iii) committed investments and capital requirements to fund development and renovations at existing properties, (iv) ongoing commitments to repay borrowings, including our revolving credit facilities and our maturing debt, and (v) distributions to stockholders.
Our primary short-term liquidity requirements historically have related to (i) our operating expenses and other general business needs, (ii) investments in real estate, (iii) distributions to stockholders, (iv) committed investments and capital requirements to fund development and renovations at existing properties, (v) ongoing commitments to repay borrowings, including our revolving credit facilities and our maturing debt, and (vi) Class A common stock repurchases under our stock repurchase plan. 70 Table of Contents 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 earn a fixed return on these investments which is included within preferred returns on unconsolidated real estate joint ventures in our combined consolidated statements of operations. We evaluate the collectability of each preferred equity investment and estimate a provision for credit loss, as applicable.
We account for these investments as preferred equity investments in our consolidated balance sheets, and we earn a fixed return on these investments which is included within income from preferred equity investments in our consolidated statements of operations and comprehensive income.
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.
In general, we believe our available cash balances, cash flows from operations, proceeds from the offering of our Series A Preferred Stock, proceeds from the Amended DB Credit Facility and KeyBank Credit Facility (as hereinafter defined, and collectively, the “revolving credit facilities”), proceeds from our DST Program, 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.
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”).
While consolidated occupancy excluding units classified as held for sale and down/renovation units remains strong at 94.0% as of December 31, 2024, in future periods we may experience reduced levels of tenant retention, and reduced foot traffic and lease applications from prospective tenants.
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.
Redevelopment and renovation costs are non-recurring capital expenditures for significant projects such as preparing a unit for rental. The renovation work varies, but may include flooring, cabinetry, paint, plumbing, appliances and other items required to make the unit rent ready.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeWe are not subject to foreign exchange rates or commodity price risk, and all of our financial instruments were entered into for other than trading purposes. Our interest rate risk is monitored using a variety of techniques.
Biggest changeThe extent of this risk is not quantifiable or predictable because of the variability of 84 Table of Contents future interest rates and our future financing requirements. We are not subject to foreign exchange rates or commodity price risk, and all our financial instruments were entered into for other than trading purposes.
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.
The table above incorporates those exposures that exist as of December 31, 2024; 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 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.
Based on our debt outstanding and interest rates in effect at December 31, 2024, 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 $0.6 million or decrease interest expense by approximately $0.6 million, respectively, on an annual basis.
The table below ($ 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.
Our interest rate risk is monitored using a variety of techniques. 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.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to interest rate risk primarily through borrowing activities. There is inherent roll-over risk for borrowings as they mature and are renewed at current market rates. The extent of this risk is not quantifiable or predictable because of the variability of future interest rates and our future financing requirements.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk We are exposed to interest rate risk primarily through borrowing activities. There is inherent roll-over risk for borrowings as they mature and are renewed at current market rates.
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.
At December 31, 2024, 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. Our interest rate caps and swaps effectively limit our exposure to interest rate risk by providing a ceiling on the underlying interest rate for $155.6 million of our debt.
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.
Fair value adjustments and unamortized deferred financing costs, net, of approximately $(7.8) million are excluded. ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 2025 2026 2027 2028 2029 Thereafter Total Mortgage Notes Payable ​ $ 1,871 ​ $ 36,652 ​ $ 24,107 ​ $ 5,702 ​ $ 80,450 ​ $ 111,816 ​ $ 260,598 ​ Weighted Average Interest Rate ​ 3.97 % 4.13 % 7.23 % 5.79 % 5.25 % 5.19 % 5.25 % ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revolving Credit Facilities ​ $ 121,000 ​ $ — ​ $ — ​ $ — ​ $ — ​ $ — ​ $ 121,000 ​ Weighted Average Interest Rate ​ 7.53 % — ​ — ​ — ​ — ​ — ​ 7.53 % ​ The fair value of mortgages payable is estimated at $250.2 million at December 31, 2024.
Removed
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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