Brt Apartments (BRT) Q2 Revenue Up 2%

Key Points

• Net loss per share (GAAP) was ($0.14) in Q2 2025, a slight improvement over the expected ($0.15) GAAP EPS.

• Revenue (GAAP) reached approximately $24.197 million in Q2 2025.

• FFO per diluted share remained flat at $0.29 in Q2 2025, while Adjusted funds from operations (AFFO) per diluted share was $0.36, compared to $0.35 in Q2 2024.

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Brt Apartments (NYSE:BRT), a real estate investment trust focused on multi-family residential properties, released its Q2 FY2025 results on August 7, 2025. The company reported a net loss per share of ($0.14) (GAAP) in Q2 2025, which was slightly better than analyst estimates of ($0.15) GAAP. Total revenues were $24.197 million (GAAP) in Q2 2025. Key earnings metrics—funds from operations (FFO) per diluted share and Adjusted funds from operations (AFFO) per diluted share was $0.36, compared to $0.35 in Q2 2024—were either unchanged or up modestly. Overall, the period saw steady execution amid signs of top-line and operating-income pressure, with cost controls helping to offset softer portfolio income and rising expenses.

Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.

Overview of Brt Apartments' Business and Key Focus Areas

Brt Apartments operates as a real estate investment trust (REIT) specializing in the ownership and management of multi-family apartment communities. The company directly owns 21 properties and holds interests in eight joint ventures, collectively totaling nearly 8,000 apartment units as of June 30, 2025. The portfolio focuses on Class B or better properties, which are typically well-located and generate steady cash flows.

In recent periods, Brt Apartments has emphasized four core priorities: portfolio management, financial structuring, partnerships through joint ventures, and a commitment to compliance. The company maintains a strategic focus on properties located in the Southeastern United States and Texas—markets known for strong population and job growth. Brt's performance depends on maximizing occupancy, adapting rent strategies, capitalizing on value-add opportunities through renovations, and making prudent financing choices.

Quarter in Review: Notable Events and Trends

During the quarter, the company’s financial results reflected both resilience and pressure. Net operating income (NOI), a widely used measure of property-level profitability in real estate, declined by 3.4% to $15.1 million in Q2 2025 compared to the previous year and signaled a modest drop in property-level cash flows. FFO per share held steady at $0.29, while AFFO per share (non-GAAP) improved slightly, driven by ongoing cost controls but not by meaningful revenue growth. Average occupancy across owned properties was 94.1%, compared to 94.3% in Q2 2024 Average rent per occupied unit rose 0.9% to $1,399, reflecting muted pricing power in the current environment.

The company’s focus on value-add projects, which involve renovating and upgrading apartment units to justify higher rents, continued with 26 units rehabilitated. These renovations achieved an average monthly rent increase of $121 per unit and achieved an estimated annualized return on investment of 23% for units completed. Brt Apartments estimated 98 units are still available for renovation over the next 24 months.

Brt Apartments pursued selective expansion, closing a joint venture deal in July for the 214-unit "1322 North" property in Auburn, Alabama. The company contributed $10.7 million in equity to this 80%-owned venture and secured a long-term, interest-only mortgage with a 5.38% fixed rate. The joint venture structure enables it to grow its portfolio with less exposure to single-property risk, an approach that continues to underpin its growth strategy. However, the earnings contribution from joint ventures declined, with equity in earnings from these partnerships fell to $299,000 from $389,000 in Q2 2024.

From a financing standpoint, the company’s debt-to-enterprise value ratio rose to 69% as of June 30, 2025 up four percentage points year over year. As of June 30, 2025, mortgages payable stood at $559.9 million, with an average interest rate of 4.08% as of June 30, 2025 and a weighted-average term of 5.2 years. Brt Apartments drew $7.0 million on its revolving credit facility after quarter-end to fund the Auburn acquisition. The debt service coverage ratio (non-GAAP) was 1.56 times. Rising leverage and ongoing expense growth will be important areas for monitoring going forward.

Looking Ahead: Guidance and Key Watch Points

Brt Apartments did not provide forward guidance for revenue, net operating income, or AFFO in its earnings release. The company’s comments highlighted a cautious outlook, noting risks such as inflation, higher interest rates, and the potential for economic slowdown, but stopped short of offering specific forecasts.

For investors, key factors to watch include rent and occupancy trends in Brt’s primary markets, cost inflation, and the impact of new joint venture investments. Rising leverage and flat property-level profitability mean that future growth will likely depend on successful acquisitions, further value-add activity, and expense discipline. The quarterly dividend was maintained at $0.25 per share.

Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.

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