The following discussion and analysis should be read in conjunction with the accompanying consolidated financial statements ofBluerock Residential Growth REIT, Inc. , and the notes thereto. As used herein, the terms "we," "our" and "us" refer toBluerock Residential Growth REIT, Inc. , aMaryland corporation, and, as required by context,Bluerock Residential Holdings, L.P. , aDelaware limited partnership, which we refer to as our "Operating Partnership," and to their subsidiaries. We refer toBluerock Real Estate, L.L.C. , aDelaware limited liability company, as "Bluerock", and we refer to our former external manager, BRG Manager, LLC, aDelaware limited liability company, as our "former Manager."
Both Bluerock and our former Manager are affiliated with the Company.
Forward-Looking Statements
Statements included in this Quarterly Report on Form 10-Q that are not historical facts (including any statements concerning investment objectives, other plans and objectives of management for future operations or economic performance, or assumptions or forecasts related thereto) are "forward-looking statements," within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are only predictions. We caution that forward-looking statements are not guarantees. Actual events or our investments and results of operations could differ materially from those expressed or implied in any forward-looking statements. Forward-looking statements are typically identified by the use of terms such as "may," "should," "expect," "could," "intend," "plan," "anticipate," "estimate," "believe," "continue," "predict," "potential" or the negative of such terms and other comparable terminology. The forward-looking statements included herein are based upon our current expectations, plans, estimates, assumptions and beliefs that involve numerous risks and uncertainties. Assumptions relating to the foregoing involve judgments with respect to, among other things, future economic, competitive and market conditions and future business decisions, all of which are difficult or impossible to predict accurately and many of which are beyond our control. Although we believe that the expectations reflected in such forward-looking statements are based on reasonable assumptions, our actual results and performance could differ materially from those set forth in the forward-looking statements. Currently, one of the most significant factors, however, is the potential adverse effect of the current pandemic of the novel coronavirus ("COVID-19") on the financial condition, results of operations, cash flows and performance of the Company and its tenants of our properties, business partners within our network and service providers, as well as the real estate market and the global economy and financial markets. The extent to which COVID-19 impacts the Company and its tenants will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact (including governmental actions that may vary by jurisdiction, such as mandated business closing; "stay-at-home" orders; limits on group activity; and actions to protect residential tenants from eviction), and the direct and indirect economic effects of the pandemic and containment measures, among others. Moreover, you should interpret many of the risks identified in this Quarterly Report on Form 10-Q, as well as the risks set forth below, as being heightened as a result of the ongoing and numerous adverse impacts of COVID-19.
Additional factors that could have a material adverse effect on our operations and future prospects include, but are not limited to:
the factors included in this Quarterly Report on Form 10-Q, including those set
? forth under the heading "Management's Discussion and Analysis of Financial
Condition and Results of Operations";
? use of proceeds of the Company's securities offerings;
? the competitive environment in which we operate;
? real estate risks, including fluctuations in real estate values and the general
economic climate in local markets and competition for tenants in such markets;
35 Table of Contents
? risks associated with geographic concentration of our investments;
? decreased rental rates or increasing vacancy rates;
? our ability to lease units in newly acquired or newly constructed apartment
properties;
? potential defaults on or non-renewal of leases by tenants;
? creditworthiness of tenants;
? our ability to obtain financing for and complete acquisitions under contract at
the contemplated terms, or at all;
development and acquisition risks, including rising and unanticipated costs,
? delays in timing, abandonment of opportunities, and failure of such
acquisitions and developments to perform in accordance with projections;
? the timing of acquisitions and dispositions;
the performance of our network of leading regional apartment owner/operators
? with which we invest, including through controlling positions in joint
ventures;
? potential natural disasters such as hurricanes, tornadoes and floods;
? national, international, regional and local economic conditions;
? Board determination as to timing and payment of dividends, and our ability to
pay future distributions at the dividend rates we have paid historically;
? the general level of interest rates;
potential changes in the law or governmental regulations that affect us and
? interpretations of those laws and regulations, including changes in real estate
and zoning or tax laws, and potential increases in real property tax rates;
financing risks, including the risks that our cash flows from operations may be
? insufficient to meet required payments of principal and interest and we may be
unable to refinance our existing debt upon maturity or obtain new financing on
attractive terms or at all;
? lack of or insufficient amounts of insurance;
? our ability to maintain our qualification as a REIT;
? litigation, including costs associated with prosecuting or defending claims and
any adverse outcomes; and
possible environmental liabilities, including costs, fines or penalties that
? may be incurred due to necessary remediation of contamination of properties
presently owned or previously owned by us or a subsidiary owned by us or acquired by us. 36 Table of Contents Any of the assumptions underlying forward-looking statements could be inaccurate. You are cautioned not to place undue reliance on any forward-looking statements included in this report. All forward-looking statements are made as of the date of this report and the risk that actual results will differ materially from the expectations expressed in this report will increase with the passage of time. Except as otherwise required by the federal securities laws, we undertake no obligation to publicly update or revise any forward-looking statements after the date of this report, whether as a result of new information, future events, changed circumstances or any other reason. The forward-looking statements should be read in light of the risk factors set forth in Item 1A of this Quarterly Report on Form 10-Q, in Item 1A of our Annual Report on Form 10-K filed with theSecurities and Exchange Commission ("SEC") onFebruary 24, 2020 , and subsequent filings by us with theSEC , or ("Risk Factors").
Overview
We were incorporated as aMaryland corporation onJuly 25, 2008 . Our objective is to maximize long-term stockholder value by acquiring and developing well-located institutional-quality apartment properties in knowledge economy growth markets acrossthe United States . We seek to maximize returns through investments where we believe we can drive substantial growth in our core funds from operations and net asset value primarily through our Value-Add and Invest-to-Own investment strategies. We conduct our operations throughBluerock Residential Holdings, L.P. , our operating partnership (the "Operating Partnership"), of which we are the sole general partner. The consolidated financial statements include our accounts and those of theOperating Partnership and its subsidiaries. As ofMarch 31, 2020 , our portfolio consisted of investments held in fifty-six real estate properties, consisting of thirty-seven consolidated operating properties and nineteen properties through preferred equity, mezzanine loan or ground lease investments. Of the property interests held through preferred equity, mezzanine loan or ground lease investments, four are under development, five are in lease-up and ten properties are stabilized. The fifty-six properties contain an aggregate of 16,466 units, comprised of 12,356 consolidated operating units and 4,110 units through preferred equity, mezzanine loan or ground lease investments. As ofMarch 31, 2020 , our consolidated operating properties were approximately 94.3% occupied. We have elected to be taxed as a REIT under Sections 856 through 860 of the Code and have qualified as a REIT commencing with our taxable year endedDecember 31, 2010 . In order to continue to qualify as a REIT, we must distribute to our stockholders each calendar year at least 90% of our taxable income (excluding net capital gains). If we qualify as a REIT for federal income tax purposes, we generally will not be subject to federal income tax on income that we distribute to our stockholders. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates and will not be permitted to qualify as a REIT for four years following the year in which our qualification is denied. 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. 37 Table of Contents COVID-19 We are closely monitoring the impact of the COVID-19 pandemic on all aspects of our business and apartment communities, including how it will impact our tenants and business partners. While we did not incur any significant impact on our performance during the three months endedMarch 31, 2020 from the COVID-19 pandemic, going forward we cannot predict the impact that the COVID-19 pandemic will have on our financial condition, results of operations and cash flows due to numerous uncertainties. These uncertainties include the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact and the direct and indirect economic effects of the pandemic and containment measures, among others. The outbreak of COVID-19 across the globe, includingthe United States , has significantly adversely impacted global economic activity and has contributed to significant volatility and negative pressure in financial markets. The global impact of the outbreak has been rapidly evolving and, as cases of COVID-19 have continued to be identified in additional countries, many countries, includingthe United States , have reacted by instituting quarantines, mandating business and school closures and restricting travel. Certain states and cities, including where we own communities, have developments and where our Company has places of business located, have also reacted by instituting quarantines, restrictions on travel, "stay-at-home" orders, restrictions on types of business that may continue to operate, and/or restrictions on the types of construction projects that may continue. We cannot predict if additional states and cities will implement similar restrictions or when restrictions currently in place will expire. As a result, the COVID-19 pandemic is negatively impacting almost every industry directly or indirectly, including industries in which our tenants are employed. Further, the impacts of a potential worsening of global economic conditions and the continued disruptions to, and volatility in, the credit and financial markets, consumer spending as well as other unanticipated consequences remain unknown. We also are unable to predict the impact that COVID-19 will have on our tenants, business partners within our network and service providers; and therefore, any material effect on these parties could adversely impact us. As ofMay 9, 2020 , we collected 96% of April rents and 90% of May rents, including the properties in our preferred and mezzanine loan investments. In addition, there are approximately 1% of tenants on rent deferral payment plans for April rents and approximately 2% of tenants on rent deferral payment plans for May rents, which we provided as a result of hardships these tenants are experiencing due to the COVID-19 impact. Although we expect to continue to receive tenant requests for rent deferrals in the coming months, we do not expect to waive our contractual rights under our lease agreements. Further, while occupancy remains strong at 94.3% as ofApril 30, 2020 , in future periods, we may experience reduced levels of tenant retention as well as reduced foot traffic and lease applications from prospective tenants as a result of the impact of COVID-19. The impact of the COVID-19 pandemic on our rental revenue for the second quarter of 2020 and thereafter cannot be determined at present. The situation surrounding the COVID-19 pandemic remains uncertain, and we are actively managing our response in collaboration with business partners in our network and service providers and assessing potential impacts to our financial position and operating results, as well as potential adverse developments in our business. For further information regarding the impact of COVID-19 on the Company, see Part II, Item 1A titled "Risk Factors." While we expect COVID-19 to adversely impact our tenants in the short term, we believe the knowledge economy renter by choice targeted by our Class A affordable rent strategy should be less impacted by COVID-19 related job loss, which should provide a downside buffer in the interim and allow us to reaccelerate rent growth more quickly once more economic certainty exists around the COVID-19 pandemic. Since the beginning of the COVID-19 pandemic, we have taken actions to prioritize the health and well-being of our tenants and our employees, while maintaining our high standard of service. As ofMay 9, 2020 , all our properties are open and are complying with federal, state and local shelter-in-place orders. In keeping with such orders, we have implemented, and may continue to implement, operational changes, including the adoption of social distancing practices and a virtual office philosophy. Our property offices have reduced hours of operation with staggered staffing to handle essential service requests only, and all communication with staff, as well as payment of rent and the execution and renewal of leases, are addressed via phone, e-mail, or our online tenant portal. Non-essential amenity areas at our communities, including on-site fitness centers, pools and clubhouses, have been closed, and protocols have been implemented for the sanitization of community common areas (including handrails, doors and elevators). 38 Table of Contents In response to shelter-in-place orders, our corporate offices have also transitioned to a remote work environment. There can be no assurances that the continuation of such remote work arrangements for an extended period of time will not strain our business continuity plans, introduce operational risk, including but not limited to cybersecurity risks, or impair our ability to manage our business.
Other Significant Developments
During the three months endedMarch 31, 2020 , we acquired two operating multifamily properties in which we have full ownership, representing an aggregate of 610 units, for an aggregate purchase price of$138.1 million . These properties are located inPhoenix, Arizona andCumming, Georgia . We also purchased a parcel of land inAustin, Texas and entered into a ground lease with an unaffiliated ground lease tenant. We increased our investment in a joint venture through increased preferred equity investments of approximately$8.0 million , representing an aggregate of 408 units. These properties are located inSavannah, Georgia andPensacola, Florida . We also increased our preferred equity investments in Alexan CityCentre,Alexan Southside Place ,North Creek Apartments ,Riverside Apartments and Wayforth atConcord by approximately$4.8 million . We provided increased mezzanine funding to Arlo and Domain at The One Forty of approximately$1.6 million and received mezzanine loan payments from Motif and The Park atChapel Hill of$29.0 million . We sold an asset underlying an unconsolidated joint venture and sold one operating property for an aggregate sale price of approximately$112.1 million . Acquisition of Real Estate Ownership Purchase Property Location Date Interest Price Mortgage Avenue 25 Phoenix, AZ January 23, 2020 100 %$ 55,600 $ 36,566 (1) Falls at Forsyth Cumming, GA March 6, 2020 100 % 82,500 (2)
(1) Mortgage balance includes a
supplemental loan secured by the Avenue 25 property.
(2) We funded
Senior Credit Facility secured by the Falls at
Note 8 "Revolving Credit Facilities" of our consolidated financial statements
for further information about our Amended Secured Credit Facility. Sale of Helios OnJanuary 8, 2020 , the underlying asset of an unconsolidated joint venture located inAtlanta, Georgia known as Helios was sold for approximately$65.6 million , subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of existing mortgage indebtedness encumbering the property in the amount of$39.5 million and the payment of early extinguishment of debt costs, closing costs and fees, our pro rata share of the net proceeds was$22.7 million , which included payment for our original investment of$19.2 million and our additional investment of approximately$3.5 million . We also received a$0.3 million profit share distribution recorded as a gain on sale on the consolidated statements of operations.
Sale of
OnJanuary 24, 2020 , through a subsidiary of ourOperating Partnership , we closed on the sale ofWhetstone Apartments located inDurham, North Carolina for approximately$46.5 million , subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of existing mortgage indebtedness encumbering the property in the amount of$25.4 million and the payment of early extinguishment of debt costs, closing costs and fees, our net proceeds were$19.6 million , which included payment for our original investment of$12.9 million , our accrued preferred return of$2.7 million and our additional investment of approximately$4.0 million . 39 Table of Contents Zoey Ground Lease OnMarch 4, 2020 , we acquired land for$3.1 million and simultaneously structured and entered into a ground lease (the "Zoey Ground Lease") as part of the ground lease tenant's development of a multi-family property inAustin, Texas . We committed to provide the ground lease tenant a$20.4 million leasehold improvement allowance with funding subject to certain conditions. As ofMarch 31, 2020 , none of the leasehold improvement allowance has been funded.
OnMarch 20, 2020 , we made an$8.0 million preferred equity investment in a joint venture (the "Strategic JV") with an unaffiliated third party for the following two stabilized properties:Georgetown Crossing , located inSavannah, Georgia , and Park on the Square, located inPensacola, Florida . These two properties, together withBelmont Crossing ,Sierra Terrace andSierra Village , are collectively known as the Strategic Portfolio. We will earn a 7.5% current return and a 3.0% accrued return on our total preferred equity investment in the Strategic JV, for a total preferred return of 10.5%. The Strategic JV is required to redeem our preferred membership interest plus any accrued but unpaid preferred return in each property on the earlier date which is: (i) the sale of the property, (ii) the refinancing of the loan related to the property, or (iii) the maturity date of the property loan.
Repayments
OnMarch 31, 2020 , we received a paydown of$8.0 million on the Motif Mezz Loan (formerly, the "Flagler Mezz Loan") and a paydown of$21.0 million on the ChapelHill Mezz Loan , reducing the outstanding principal balances to$66.6 million and$8.5 million , respectively. Held for sale We have entered into three separate purchase and sales agreements, and separate amendments thereto, for the sale of Ashton I and Ashton II (together, the "Ashton Reserve") and Marquis at TPC at amounts more than their carrying values. We have classified the properties as held for sale as ofMarch 31, 2020 . OnApril 14, 2020 , we closed on the sale of Ashton Reserve for approximately$84.6 million , subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of the existing mortgage indebtedness encumbering the properties in the amount of$45.4 million , the payment of early extinguishment of debt costs of$7.1 million and payment of closing costs and fees of$0.8 million , the sale of the properties generated net proceeds of approximately$31.2 million . OnApril 17, 2020 , we closed on the sale of Marquis at TPC for$22.5 million , subject to certain prorations and adjustments typical in such real estate transactions. After deduction for the payoff of the existing mortgage indebtedness encumbering the property in the amount of$16.3 million , the sale of the property generated net proceeds of approximately$5.9 million , of which our pro rata share of the proceeds was approximately$5.3 million .
Series T Preferred Stock Continuous Offering
We issued 2,297,112 shares of Series T Preferred Stock under a continuous
registered offering with net proceeds of approximately
Our total stockholders' equity decreased$13.3 million from$127.5 million as ofDecember 31, 2019 to$114.2 million as ofMarch 31, 2020 . The decrease in our total stockholders' equity is primarily attributable to dividends declared of$17.5 million and repurchase of Class A common stock of$11.6 million , offset by the issuance of Class A common stock for Company-initiated redemptions of Series B Preferred shares of$15.8 million during the three months endedMarch 31 ,
2020. 40 Table of Contents Results of Operations
The following is a summary of our stabilized consolidated operating real estate
investments as of
Number of Date Ownership Average % Multifamily Community Name Location units Built/Renovated(1) Interest Rent(2) Occupied(3) ARIUM Glenridge Atlanta, GA 480 1990 90 %$ 1,270 94.6 % ARIUM Grandewood Orlando, FL 306 2005 100 % 1,427 94.8 % ARIUM Hunter's Creek Orlando, FL 532 1999 100 % 1,444 96.1 % ARIUM Metrowest Orlando, FL 510 2001 100 % 1,435 95.7 % ARIUM Westside Atlanta, GA 336 2008 90 % 1,560 94.6 % Ashford Belmar Lakewood, CO 512 1988/1993 85 % 1,661 92.2 % Ashton Reserve Charlotte, NC 473 2015 100 % 1,133 95.1 % Avenue 25 Phoenix, AZ 254 2013 100 % 1,225 93.3 % Cade Boca Raton Boca Raton, FL 90 2019 81 % 2,703 95.6 % Chattahoochee Ridge Atlanta, GA 358 1996 90 % 1,366 93.0 % Citrus Tower Orlando, FL 336 2006 97 % 1,347 92.9 % Denim Scottsdale, AZ 645 1979 100 % 1,206 96.6 % Element Las Vegas, NV 200 1995 100 % 1,264 96.0 % Enders Place at Baldwin Park Orlando, FL 220 2003 92 % 1,807 92.7 % Falls at Forsyth Cumming, GA 356 2019 100 % 1,345 85.4 % Gulfshore Apartment Homes Naples, FL 368 2016 100 % 1,335 94.8 % James on South First Austin, TX 250 2016 90 % 1,334 94.8 % Marquis at The Cascades Tyler, TX 582 2009 90 % 1,239 93.6 % Marquis at TPC San Antonio, TX 139 2008 90 % 1,491 93.5 % Navigator Villas Pasco, WA 176 2013 90 % 1,092 93.8 % Outlook at Greystone Birmingham, AL 300 2007 100 % 1,033 93.0 % Park & Kingston Charlotte, NC 168 2015 100 % 1,337 95.2 % Pine Lakes Preserve Port St. Lucie, FL 320 2003 100 % 1,329 95.0 % Plantation Park Lake Jackson, TX 238 2016 80 % 1,344 91.2 %Providence Trail Mount Juliet, TN 334 2007 100 % 1,241 96.1 % Roswell City Walk Roswell, GA 320 2015 98 % 1,577 95.0 % Sands Parc Daytona Beach, FL 264 2017 100 % 1,390 93.2 % The Brodie Austin, TX 324 2001 93 % 1,325 96.6 % The District at Scottsdale Scottsdale, AZ 332 2018 100 % 2,191 68.1 % The Links at Plum Creek Castle Rock, CO 264 2000 88 % 1,438 94.3 % The Mills Greenville, SC 304 2013 100 % 1,059 91.8 %
The Preserve at Henderson Beach Destin, FL 340 2009 100 % 1,447 96.2 % The Reserve at Palmer Ranch Sarasota, FL 320 2016 100 % 1,332 96.3 % The Sanctuary Las Vegas, NV 320 1988 100 % 1,021 95.6 % Veranda at Centerfield Houston, TX 400 1999 93 % 997 94.3 % Villages of Cypress Creek Houston, TX 384
2001 80 % 1,167 94.8 % Wesley Village Charlotte, NC 301 2010 100 % 1,361 94.4 % Total/Average 12,356$ 1,331 94.3 %
(1) Represents date of last significant renovation or year built if there were no
renovations.
(2) Represents the average effective monthly rent per occupied unit for the
three months ended
ended
(3) Percent occupied is calculated as (i) the number of units occupied as ofMarch 31, 2020 divided by (ii) total number of units, expressed as a percentage. 41 Table of Contents
The following is a summary of our preferred equity, mezzanine loan and ground
lease investments as of
Total Actual/ Actual/ Estimated Actual/ Actual/ Actual/ Planned Construction Estimated Estimated Estimated Pro Forma Multifamily Community Number Cost Cost to Date Construction Initial Construction Average Name Location of Units (in millions) (in millions) Cost Per Unit Occupancy Completion Rent(1) Lease-up Investments Vickers Historic Roswell Roswell, GA 79 $ 31.9 $ 30.3$ 403,797 2Q18 3Q18$ 3,176 Arlo Charlotte, NC 286 60.0 58.6 209,790 2Q18 1Q19 1,507 Novel Perimeter Atlanta, GA 320 71.0 68.3 221,875 3Q18 1Q19 1,749 Motif Fort Lauderdale, FL 385 135.4 127.5 351,688 1Q20 3Q20 2,352 Wayforth at Concord Concord, NC 150 33.5 15.3 223,333 1Q20 3Q21 1,707 Total lease-up units 1,220 Development Investments North Creek Apartments Leander, TX 259 44.0 26.7 169,884 3Q20 4Q20 1,358 Riverside Apartments Austin, TX 222 37.9 16.4 170,721 1Q21 2Q21 1,408 Zoey Austin, TX 307 59.5 7.8 193,811 1Q22 2Q22 1,762 The Park at Chapel Hill (2) Chapel Hill, NC - - - - - - - Total development units 788 Multifamily Community Number of Average Name Location Units Rent (1) Operating Investments (3) Alexan CityCentre Houston, TX 340 1,736 Alexan Southside Place Houston, TX 270 1,722 Belmont Crossing Smyrna, GA 192 791 Domain at The One Forty Garland, TX 299 1,410 Georgetown Crossing Savannah, GA 168 1,012 Mira Vista Austin, TX 200 1,009 Park on the Square Pensacola, FL 240
1,103 Sierra Terrace Atlanta, GA 135 1,182 Sierra Village Atlanta, GA 154 1,066 Thornton Flats Austin, TX 104 1,493 Total operating units 2,102 Total 4,110$ 1,545
(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. For operating investments, represents the average
effective monthly rent per occupied unit.
(2) The development is in the planning phase; project specifications are in
process.
(3) Stabilized operating properties in which we have a preferred equity
investment. See Note 7 "Preferred Equity Investments and Investments in
statements for further information. 42 Table of Contents
Three Months Ended
Revenue
Rental and other property revenues increased$4.7 million , or 10%, to$50.4 million for the three months endedMarch 31, 2020 as compared to$45.7 million for the same prior year period. This increase was due to a$11.0 million increase from the acquisition of two properties in 2020 and the full period impact of eight properties acquired in 2019 and a$1.2 million increase from same store properties, partially offset by a$7.5 million decrease from the sale of six properties in 2019. Interest income from related parties and ground leases increased$0.1 million , or 2%, to$5.9 million for the three months endedMarch 31, 2020 as compared to$5.8 million for the same prior year period due to increases in the average balance of mezzanine loans outstanding.
Expenses
Property operating expenses increased$0.7 million , or 4%, to$19.3 million for the three months endedMarch 31, 2020 as compared to$18.6 million for the same prior year period. This increase was due to a$3.8 million increase from the acquisition of two properties in 2020 and the full period impact of eight properties acquired in 2019 and a$0.5 million increase from same store properties, partially offset by a$3.7 million decrease from the sale of six properties in 2019. Property NOI margins increased to 61.7% of total revenues for the three months endedMarch 31, 2020 from 59.3% in the prior year quarter. Property NOI margins are computed as total rental and other property revenues less property operating expenses, divided by total rental and other property revenues. Property management fees expense increased$0.1 million , or 6%, to$1.3 million for the three months endedMarch 31, 2020 as compared to$1.2 million in the same prior year period. This increase was due to a$0.3 million increase from the acquisition of two properties in 2020 and the full period impact of eight properties acquired in 2019 and a$0.02 million increase from same store properties, partially offset by a$0.2 million decrease from the sale of six properties in 2019. General and administrative expenses amounted to$6.4 million for the three months endedMarch 31, 2020 as compared to$5.6 million for the same prior year period. Excluding non-cash equity compensation expense of$3.6 million and$2.5 million for the three months endedMarch 31, 2020 and 2019, respectively, general and administrative expenses were$2.7 million , or 4.9%, of revenues for the three months endedMarch 31, 2020 , as compared to$3.2 million , or 6.1%, of revenues, for the same prior year period. Acquisition and pursuit costs amounted to$1.3 million for the three months endedMarch 31, 2020 as compared to$0.1 million for the same prior year period. Acquisition and pursuit costs incurred in the three months endedMarch 31, 2020 were primarily related to the write-off of pre-acquisition costs from abandoned deals due to the uncertainty from COVID-19, of which$1.0 million of the total costs related to one abandoned deal. Abandoned pursuit costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods. Depreciation and amortization expenses were$20.9 million for the three months endedMarch 31, 2020 as compared to$17.2 million for the same prior year period. This increase was due to a$7.2 million increase from the acquisition of two properties in 2020 and the full period impact of eight properties acquired in 2019, offset by a$2.7 million decrease from the sale of six properties in 2019 and a$0.8 million decrease from same store properties.
Other Income and Expense
Other income and expense amounted to expense of$12.2 million for the three months endedMarch 31, 2020 compared to expense of$13.1 million for the same prior year period. This was primarily due to a net increase in interest expense of$1.2 million and a net gain on sale of$0.3 million for Helios during the three months endedMarch 31, 2020 . This was partially offset by a gain on sale of$0.7 million for Wesley Village II during the three months endedMarch 31, 2019 . 43 Table of Contents Property Operations We define "same store" properties as those that we owned and operated for the entirety of both periods being compared, except for properties that are in the construction or lease-up phases, or properties that are undergoing development or significant redevelopment. We move properties previously excluded from our same store portfolio for these reasons into the same store designation once they have stabilized or the development or redevelopment is complete and such status has been reflected fully in all quarters during the applicable periods of comparison. For newly constructed or lease-up properties or properties undergoing significant redevelopment, we consider a property stabilized upon attainment of 90.0% physical occupancy. For comparison of our three months endedMarch 31, 2020 and 2019, the same store properties included properties owned atJanuary 1, 2019 . Our same store properties for the three months endedMarch 31, 2020 and 2019 consisted of 27 properties, representing 9,291 units. The following table presents the same store and non-same store results from operations for the three months endedMarch 31, 2020 and 2019 (dollars in thousands): Three Months Ended March 31, Change 2020 2019 $ % Property Revenues Same Store$ 39,380 $ 38,213 $ 1,167 3.1 % Non-Same Store 10,973 7,477 3,496 46.8 % Total property revenues 50,353 45,690 4,663 10.2 % Property Expenses Same Store 15,470 14,920 550 3.7 % Non-Same Store 3,829 3,682 147 4.0 % Total property expenses 19,299 18,602 697 3.7 % Same Store NOI 23,910 23,293 617 2.6 % Non-Same Store NOI 7,144 3,795 3,349 88.2 % Total NOI (1)$ 31,054 $ 27,088 $ 3,966 14.6 %
(1) See "Net Operating Income" below for a reconciliation of Same Store NOI,
Non-Same Store NOI and Total NOI to net income (loss) and a discussion of how
management uses this non-GAAP financial measure.
Three Months Ended
Same store NOI for the three months endedMarch 31, 2020 increased 2.6%, or$0.6 million , compared to the 2019 period. Same store property revenues increased 3.1% as compared to the 2019 period, primarily attributable to a 2.9% increase in average rental rates as twenty-five of our twenty-seven same store properties recognized rental rate increases during the period. In addition, bad debt decreased$0.14 million from prior year period. Same store expenses for the three months endedMarch 31, 2020 increased 3.7%, or$0.55 million , compared to the 2019 period, primarily due to non-controllable expense increases. Real estate taxes increased$0.3 million from prior year due to municipality tax increases. In addition, insurance expenses increased$0.2 million due to industrywide multifamily price increases stemming from carrier losses over the past two years from hurricanes, wildfires, and hail. Property revenues and property expenses for our non-same store properties increased significantly due to the properties acquired subsequent toJanuary 1, 2019 ; the 2020 non-same store property count was ten compared to six properties for the 2019 period. The results of operations for acquired properties have been included in our consolidated statements of operations from the date of acquisition and the results of operations for disposed properties have been excluded from the consolidated statements of operations since the date of disposition. 44 Table of Contents Net Operating Income We believe that net operating income ("NOI"), is a useful measure of our operating performance. 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. We believe that this measure provides an operating perspective not immediately apparent from GAAP operating income or net income. We use NOI to evaluate our performance on a same store and non-same store basis; NOI allows us to evaluate the operating performance of our properties because it measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance and captures trends in rental housing and property operating expenses.
However, NOI should only be used as a supplemental measure of our financial performance. The following table reflects net loss attributable to common stockholders together with a reconciliation to NOI and to same store and non-same store contributions to consolidated NOI, as computed in accordance with GAAP for the periods presented (amounts in thousands):
Three Months EndedMarch 31, 2020 2019
Net loss attributable to common stockholders$ (16,493) $ (12,093) Add back: Net loss attributable toOperating Partnership Units (5,822)
(4,051)
Net loss attributable to common stockholders and unit holders (22,315)
(16,144)
Add common stockholders and Operating Partnership Units pro-rata share of: Depreciation and amortization
19,900
16,142
Non-real estate depreciation and amortization 120
86
Non-cash interest expense 845
775
Unrealized (gain) loss on derivatives (26)
1,635 Property management fees 1,232 1,148 Acquisition and pursuit costs 1,269 58 Corporate operating expenses 6,296 5,554 Preferred dividends 13,547 10,384 Preferred stock accretion 3,925 1,887
Less common stockholders and Operating Partnership Units pro-rata share of: Other income
40
-
Preferred returns on unconsolidated real estate joint ventures 2,574
2,289
Interest income from related parties and ground leases 5,888
5,776
Gain on sale of real estate investments 110
-
Gain on sale of non-depreciable real estate investments -
679
Pro-rata share of properties' income 16,181
12,781
Add:
Noncontrolling interest pro-rata share of partially owned property income 803 729 Total property income 16,984 13,510 Add: Interest expense 14,070 13,578 Net operating income 31,054 27,088 Less:
Non-same store net operating income 7,144
3,795
Same store net operating income$ 23,910
$ 23,293 45 Table of Contents
Liquidity and Capital Resources
Liquidity is a measure of our ability to meet potential cash requirements, both short- and long-term. Our primary short-term liquidity requirements historically have related to (a) our operating expenses and other general business needs, (b) distributions to our stockholders, (c) committed investments and capital requirements to fund development and renovations at existing properties, (d) ongoing commitments to repay borrowings, including our credit facilities and our maturing short-term debt, and (e) Class A common stock repurchases under our stock repurchase program. 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, but not limited to, the effects of the COVID-19 pandemic and other risks detailed in Part II, Item 1A titled "Risk Factors" and in the other reports we have filed with theSEC . We did not incur significant disruptions to our results of operations and cash flows during the three months endedMarch 31, 2020 from the COVID-19 pandemic, and believe we currently have a stable financial condition. As ofMay 9, 2020 , we collected 96% of April rents and 90% of May rents, including the properties in our preferred and mezzanine loan investments. In addition, there are approximately 1% of tenants on rent deferral payment plans for April rents and approximately 2% of tenants on rent deferral payment plans for May rents, which we provided as a result of the hardships these tenants are experiencing due to the COVID-19 impact. Although we expect to continue to receive tenant requests for rent deferrals in the coming months, we do not expect to waive our contractual rights under our lease agreements. Further, while occupancy remains strong at 94.3% as ofApril 30, 2020 , in future periods, we may experience reduced levels of tenant retention as well as reduced foot traffic and lease applications from prospective tenants as a result of the impact of COVID-19. The properties underlying our real estate investments are performing well despite the challenges presented by the COVID-19 pandemic, with an occupancy of 94.3% and 94.3% as ofMarch 31, 2020 andApril 30, 2020 , respectively, exclusive of our development properties.
Due to the uncertainties presented by COVID-19 discussed above, however, as of
? sold three properties producing
? received
? drew down
? continued to raise capital through our Series T Preferred Offering;
? elected to not proceed on certain potential property acquisitions; and
? postponed future Class A common stock repurchases under our
We have approximately$117.9 million of cash and$51.0 million of capacity on our credit facilities as ofMay 8, 2020 . AtMarch 31, 2020 , we were in compliance with all covenants under our credit facilities. We continue to communicate with our key lenders and believe access to capacity under our credit facilities will remain available for the uses set forth in their terms. As we did in 2019, we expect to maintain a proactive capital allocation process and selectively sell assets at appropriate cap rates, which would be expected to generate cash sources for both our short-term and long-term liquidity needs. We have also paused our value-add renovation program at all but one property as part of assuming a more conservative posture; however, we expect to restart the program market-by-market once we have more visibility on the economic recovery nationally and within our specific markets. 46
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In general, we believe our available cash balances, the proceeds from our continuous Series T Preferred Offering, the Amended Senior and Second Amended Junior Credit Facilities, the Fannie Facility, other financing arrangements and cash flows from operations will be sufficient to fund our liquidity requirements with respect to our existing portfolio for the next 12 months. We expect that properties added to our portfolio with the proceeds from our continuous Series T Preferred Offering and credit facilities will have a positive impact on our future results of operations. In general, we expect that our results related to our portfolio will improve in future periods as a result of anticipated future investments in and acquisitions of real estate. However, there can be no assurance that the worldwide economic disruptions arising from the COVID-19 pandemic will not cause conditions in the lending, capital and other financial markets to deteriorate, nor that our future revenues or access to capital and other sources of funding will not become constrained, which could reduce the amount of liquidity and credit available for use in acquiring and further diversifying our portfolio of multifamily assets. We cannot provide any assurances that we will be able to add properties to our portfolio at the anticipated pace, or at all. Only 6.1%, or$89.2 million , of our mortgage debt is maturing through the remainder of 2020, of which$82.2 million is a loan in connection with a recent acquisition with aDecember 2020 maturity and contains a six-month extension option, subject to certain conditions. We anticipate approximately$25-30 million of investment activity during the second quarter of 2020 inclusive of additional investments into our existing preferred and mezzanine loan investments. We purchased 1,028,293 shares of Class A common stock during the three months endedMarch 31, 2020 , for a total purchase price of$11.6 million . As ofMarch 31, 2020 , the value of shares that may yet be purchased under the program is$37.7 million . We have postponed Class A common stock repurchases in light of continuing developments with the COVID-19 pandemic.
At the current time, we do not anticipate the need to establish any material contingency reserves related to the COVID-19 pandemic but will be assessing along with our network of business partners the possible need for such contingencies, whether at the corporate or property level.
As equity capital market conditions permit, we may supplement our capital for short-term liquidity needs with proceeds of our Class A ATM Offering and potential offerings of common and preferred stock through underwritten offerings, as well as issuance of units of limited partnership interest in ourOperating Partnership , or OP Units. Given the significant decrease in the trading price of our Class A common stock and REIT equities generally associated with the COVID-19 pandemic and our otherwise stable financial condition and liquidity position, we do not currently view these offerings as a likely source of capital to meet short-term liquidity needs. Our primary long-term liquidity requirements relate to (a) costs for additional apartment community investments, (b) repayment of long-term debt and our credit facilities, (c) capital expenditures, (d) cash redemption requirements related to our Series A Preferred Stock, Series B Preferred Stock, Series C Preferred Stock and Series T Preferred Stock, and (e) Class A common stock repurchases under our stock repurchase program. We intend to finance our long-term liquidity requirements with net proceeds of additional issuances of common and preferred stock, including our Class A ATM Offering, our continuous Series T Preferred Offering, our credit facilities, as well as future borrowings. 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 generally, market perceptions about us and our asset class, and current trading prices of our securities, all of which may continue to be adversely impacted by COVID-19 pandemic. 47
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We may also meet our long-term liquidity needs through borrowings from a number of sources, either at the corporate or project level. We believe the Amended Senior and Second Amended Junior Credit Facilities, as well as the Fannie Facility, will continue to enable us to deploy our capital more efficiently and provide capital structure flexibility as we grow our asset base. We expect the combination of these facilities to provide us flexibility by allowing us, among other things, to use borrowings under our Amended Senior and Second Amended Junior Credit Facilities to acquire properties pending placement of permanent mortgage indebtedness, including under the Fannie Facility. In addition to restrictive covenants, these credit facilities contain material financial covenants. AtMarch 31, 2020 , 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. We intend to continue to use prudent amounts of leverage in making our investments, which we define as having total indebtedness of approximately 65% of the fair market value of the properties in which we have invested. For purposes of calculating our leverage, we assume full consolidation of all our real estate investments, whether or not they would be consolidated under GAAP, include assets we have classified as held for sale, and include any joint venture level indebtedness in our total indebtedness. However, we are not subject to any limitations on the amount of leverage we may use, and accordingly, the amount of leverage we use may be significantly less or greater than we currently anticipate. We expect our leverage to decline commensurately as we execute our business plan to grow our net asset value. If we are unable to obtain financing on favorable terms or at all, we would likely need to curtail our investment activities, including acquisitions and improvements to and developments of, real properties, which could limit our growth prospects. This, in turn, could reduce cash available for distribution to our stockholders and may hinder our ability to raise capital by issuing more securities or borrowing more money. We also may be forced to dispose of assets at inopportune times to maintain our REIT qualification and Investment Company Act exemption. We expect to maintain distributions paid to our Series A Preferred Stock, our Series B Preferred Stock, our Series C Preferred Stock, our Series D Preferred Stock and our Series T Preferred Stock in accordance with the terms of those securities which require monthly or quarterly dividends depending on the series. While our policy is generally to pay distributions from cash flow from operations, our distributions throughMarch 31, 2020 have been paid from cash flow from operations, proceeds from our continuous preferred stock offerings, including our Series T Preferred Stock, proceeds from underwritten securities offerings, and sales of assets and may in the future be paid from additional sources, such as from borrowings. We have notes receivable to related parties in conjunction with development projects. The development projects are in various stages of completion and lease-up. To date, these investments have been structured as mezzanine loans, and in the future, we may also provide mortgage financing to these types of development projects. The notes receivable provide a stated return and required repayment based on a fixed maturity date, generally in relation to the development's construction loan maturity. If the development does not repay the notes receivable upon maturity, our income, FFO, CFFO and cash flows could be reduced below the stated returns currently being recognized if the development project does not produce sufficient cash flow to pay its operating expenses and debt service, or to refinance its debt obligations. In addition, we have, in certain cases, an option to purchase up to 100% of the common interest which holds an interest in the entity that owns the development project. If we were to convert into common ownership, our income, FFO, CFFO and cash flows would be reflective of our pro rata share of the property's results, which could be a reduction from what our notes receivable currently generate. We also have preferred membership interests in development projects in various stages of completion and lease-up. Our preferred equity investments are structured to provide a current preferred return during the development and lease-up phase. Each joint venture in which we own a preferred membership interest is required to redeem our preferred membership interests, plus any accrued but unpaid preferred return, based on a fixed maturity date, generally in relation to the development's construction loan maturity. Upon redemption of the preferred membership interests, our income, FFO, CFFO and cash flows could be reduced below the preferred returns currently being recognized. Alternatively, if the joint ventures do not redeem our preferred membership interest when required, our income, FFO, CFFO and cash flows could be reduced if the development project does not produce sufficient cash flow to pays its operating expenses, debt service and preferred return obligations. As we evaluate our capital position and capital allocation strategy, we may consider alternative means of financing the development loan and preferred equity investment activities at the subsidiary level. 48
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Off-Balance Sheet Arrangements
As ofMarch 31, 2020 , 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 ofMarch 31, 2020 , we own interests in thirteen joint ventures that are accounted for under the equity method as we exercise significant influence over, but do not control, the investee.
Cash Flows from Operating Activities
As ofMarch 31, 2020 , we owned indirect equity interests in fifty-six real estate properties, consisting of thirty-seven consolidated operating properties and nineteen through preferred equity, mezzanine loan or ground lease investments. During the three months endedMarch 31, 2020 , net cash provided by operating activities was$19.1 million after net loss of$5.1 million was adjusted for the following:
? non-cash items of
? distributions and preferred returns from unconsolidated joint ventures of
million;
? an increase in accounts payable and other accrued liabilities of
and
? an increase in due to affiliates of
? an increase in accounts receivable, prepaids and other assets of
Cash Flows from Investing Activities
During the three months ended
?
?
ventures and notes receivable;
?
?
partially offset by:
?
?
estate joint ventures.
Cash Flows from Financing Activities
During the three months ended
? net proceeds of
Stock;
? net proceeds of
? net proceeds of
? net borrowings of
? net proceeds of
? partially offset by
49 Table of Contents
?
?
?
?
?
?
?
Capital Expenditures
The following table summarizes our total capital expenditures for the
three months ended
Three Months Ended March 31, 2020 2019 Redevelopment/renovations$ 4,400 $ 3,986 Routine capital expenditures 747 454 Normally recurring capital expenditures 770 616 Total capital expenditures$ 5,917 $ 5,056 Redevelopment and renovation costs are non-recurring capital expenditures for significant projects that are revenue enhancing through unit or common area upgrades, such as clubhouse renovations and kitchen remodels. Routine capital expenditures are necessary non-revenue generating improvements that extend the useful life of the property and that are less frequent in nature, such as roof repairs and asphalt resurfacing. Normally recurring capital expenditures are necessary non-revenue generating improvements that occur on a regular ongoing basis, such as carpet and appliances.
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 theNational 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. 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. The historical accounting convention used for real estate assets requires straight-line depreciation of buildings and improvements, which implies that the value of real estate assets diminishes predictably over time. Since real estate values historically rise and fall with market conditions, presentations of operating results for a REIT, using historical accounting for depreciation, could be less informative. We define FFO, consistent with the NAREIT definition, as net income, computed in accordance with GAAP, excluding gains or losses on sales of depreciable real estate property, plus depreciation and amortization of real estate assets, plus impairment write-downs of depreciable real estate, and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect FFO on the same basis. 50 Table of Contents
CFFO makes certain adjustments to FFO, removing the effect of items that do not reflect ongoing property operations such as acquisition expenses, non-cash interest expense, unrealized gains or losses on derivatives, 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, gains or losses on sales of non-depreciable real estate property, shareholder activism, stock compensation expense and preferred stock accretion. CommencingJanuary 1, 2020 , we did not deduct the accrued portion of the preferred income on our preferred equity investments from FFO to determine CFFO as the income is deemed fully collectible. The amount totaled$0.4 million for the three months endedMarch 31, 2020 . We believe that CFFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core recurring property operations. As a result, we believe that CFFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential. Our calculation of CFFO differs from the methodology used for calculating CFFO by certain other REITs and, accordingly, our CFFO may not be comparable to CFFO reported by other REITs. 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. Furthermore, although FFO and CFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we also believe that FFO and CFFO may provide us and our stockholders with an additional useful measure to compare our financial performance to certain other REITs. Neither FFO nor CFFO is equivalent to net income, including net income attributable to common stockholders, or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and CFFO do not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO nor CFFO should be considered as an alternative to net income, including net income 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. We have acquired nine operating properties and made seven property investments through preferred equity interests or mezzanine loans and sold nine operating properties subsequent toMarch 31, 2019 . The results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance. 51
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The table below presents our calculation of FFO and CFFO for the three months
ended
Three Months EndedMarch 31, 2020 2019
Net loss attributable to common stockholders$ (16,493)
(5,822)
(4,051)
Net loss attributable to common stockholders and unit holders (22,315)
(16,144)
Common stockholders and Operating Partnership Units pro-rata share of: Real estate depreciation and amortization (1)
19,900
16,142
Gain on sale of real estate investments (110) - FFO Attributable to Common Stockholders and Unit Holders (2,525) (2) Common stockholders and Operating Partnership Units pro-rata share of: Acquisition and pursuit costs 1,269 58 Non-cash interest expense 845 775
Unrealized (gain) loss on derivatives (26)
1,635
Non-real estate depreciation and amortization 120 86 Gain on sale of non-depreciable real estate investments -
(679) Shareholder activism - 338 Non-recurring income (40) - Non-cash preferred returns on unconsolidated real estate joint ventures -
(212)
Non-cash equity compensation 3,547
2,391
Preferred stock accretion 3,925
1,887
CFFO Attributable to Common Stockholders and Unit Holders
Per Share and Unit Information: FFO Attributable to Common Stockholders and Unit Holders - diluted
$ (0.08)
$ 0.22
Weighted average common shares and units outstanding - diluted 32,668,294 30,885,006
(1) The real estate depreciation and amortization amount includes our share of
consolidated real estate-related depreciation and amortization of
intangibles, less amounts attributable to noncontrolling interests for
partially owned properties, and our similar estimated share of unconsolidated
depreciation and amortization, which is included in earnings of our
unconsolidated real estate joint venture investments.
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.
Presentation of this information is intended to assist the reader in comparing the sustainability of the operating performance of different REITs, although it should be noted that not all REITs calculate FFO or CFFO the same way, so comparisons with other REITs may not be meaningful. FFO or CFFO should not be considered as an alternative to net income (loss) attributable to common stockholders or as an indication of our liquidity, nor is either indicative of funds available to fund our cash needs, including our ability to make distributions. Both FFO and CFFO should be reviewed in connection with other GAAP measurements. 52 Table of Contents Contractual Obligations
The following table summarizes our contractual obligations as ofMarch 31, 2020 which consisted of (i) mortgage notes secured by our properties, and (ii) revolving credit facilities. AtMarch 31, 2020 , our estimated future required payments on these obligations were as follows (amounts in thousands): Remainder of Total 2020 2021-2022 2023-2024 Thereafter
Mortgages Payable (Principal)$ 1,469,677 $ 89,163 $ 76,026 $ 444,361 $ 860,127 Revolving Credit Facilities 102,753 - 22,253 80,500 - Estimated Interest Payments on Mortgages Payable and Revolving Credit Facilities 305,984 43,074 109,440 89,146 64,324 Total$ 1,878,414 $ 132,237 $ 207,719 $ 614,007 $ 924,451 Estimated interest payments are based on the stated rates for mortgage notes payable assuming the interest rate in effect for the most recent quarter remains in effect through the respective maturity dates. Distributions Payable to stockholders
Declaration Date of record as of Amount Date Paid or Payable Class A Common Stock December 6, 2019 December 24, 2019$ 0.162500 January 3, 2020 March 13, 2020 March 25, 2020$ 0.162500 April 3, 2020 Class C Common Stock December 6, 2019 December 24, 2019$ 0.162500 January 3, 2020 March 13, 2020 March 25, 2020$ 0.162500 April 3, 2020 Series A Preferred Stock December 6, 2019 December 24, 2019$ 0.515625 January 3, 2020 March 13, 2020 March 25, 2020$ 0.515625 April 3, 2020 Series B Preferred Stock October 31, 2019 December 24, 2019 $ 5.00 January 3, 2020 January 13, 2020 January 24, 2020 $ 5.00 February 5, 2020 January 13, 2020 February 25, 2020 $ 5.00 March 5, 2020 January 13, 2020 March 25, 2020 $ 5.00 April 3, 2020 Series C Preferred Stock December 6, 2019 December 24, 2019$ 0.4765625 January 3, 2020 March 13, 2020 March 25, 2020$ 0.4765625 April 3, 2020 Series D Preferred Stock December 6, 2019 December 24, 2019$ 0.4453125 January 3, 2020 March 13, 2020 March 25, 2020$ 0.4453125 April 3, 2020 Series T Preferred Stock (1) December 20, 2019 December 24, 2019$ 0.128125 January 3, 2020 January 13, 2020 January 24, 2020$ 0.128125 February 5, 2020 January 13, 2020 February 25, 2020$ 0.128125 March 5, 2020 January 13, 2020 March 25, 2020$ 0.128125 April 3, 2020
(1) Shares of newly issued Series T Preferred Stock 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 T Preferred Stock was outstanding. 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. Holders of OP Units and LTIP Units are entitled to receive "distribution equivalents" at the same time as dividends are paid to holders of our Class
A common stock. 53 Table of Contents Our Board will determine the amount of dividends to be paid to our stockholders. The Board's determination will be based on a number of factors, including funds available from operations, our capital expenditure requirements and the annual distribution requirements necessary to maintain our REIT status under the Internal Revenue Code. As a result, our distribution rate and payment frequency may vary from time to time. However, to qualify as a REIT for tax purposes, we must make distributions equal to at least 90% of our "REIT taxable income" each year. Distributions paid were funded from cash provided by operating activities except with respect to$4.7 million for the three months endedMarch 31, 2019 which was funded from sales of real estate, borrowings, and/or proceeds from our equity offerings. Three Months EndedMarch 31, 2020 2019 (in thousands)
Cash provided by operating activities
Cash distributions to preferred shareholders$ (13,323) $ (10,168) Cash distributions to common shareholders (3,828) (3,832) Cash distributions to noncontrolling interests (1,790) (1,533) Total distributions
(18,941) (15,533)
Excess (shortfall)
Proceeds from sale of real estate investments
-
Significant Accounting Policies and Critical Accounting Estimates
Our significant accounting policies and critical accounting estimates are
disclosed in our Annual Report on Form 10-K for the year ended
Subsequent Events
Other than the items disclosed in Note 15 "Subsequent Events" to our interim Consolidated Financial Statements for the period endedMarch 31, 2020 , no material events have occurred that required recognition or disclosure in these financial statements. Refer to Note 15 of our interim Consolidated Financial Statements for discussion.
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