The following discussion and analysis should be read in conjunction with the
accompanying consolidated financial statements of Bluerock Residential Growth
REIT, Inc., and the notes thereto. As used herein, the terms "we," "our" and
"us" refer to Bluerock Residential Growth REIT, Inc., a Maryland corporation,
and, as required by context, Bluerock Residential Holdings, L.P., a Delaware
limited partnership, which we refer to as our "Operating Partnership," and to
their subsidiaries. We refer to Bluerock Real Estate, L.L.C., a Delaware limited
liability company, as "Bluerock", and we refer to our former external manager,
BRG Manager, LLC, a Delaware 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;

? 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;


                                       39

  Table of Contents

? 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.




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 the Securities and Exchange Commission ("SEC") on
February 23, 2021, and subsequent filings by us with the SEC, or ("Risk
Factors").

                                       40

  Table of Contents

Overview

We were incorporated as a Maryland corporation on July 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 across the 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 through Bluerock 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 the Operating Partnership and its subsidiaries.

As of June 30, 2021, we held sixty real estate investments, consisting of
thirty-five consolidated operating properties and interests in twenty-five
properties held through preferred equity, mezzanine loan or ground lease
investments. Of the properties in which our interests are held through preferred
equity, mezzanine loan or ground lease investments, eight are under development
and seventeen are stabilized. The sixty investments contain an aggregate of
17,928 units, comprised of 11,532 consolidated multifamily operating units and
6,396 units through preferred equity, mezzanine loan or ground lease
investments. Of the 6,396 units held through preferred equity, mezzanine loan or
ground lease investments, 5,876 are multifamily units and 520 are single-family
residential homes. As of June 30, 2021, our consolidated operating properties
were approximately 96.2% 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 ended December 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.

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 ended June 30, 2021 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 the 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, including the United States, has significantly and 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, including mutating variants of
COVID-19, have continued to be identified in additional countries, many
countries, including the 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 our service providers; and therefore, any material effect on these
parties could adversely impact us.

                                       41

Table of Contents



As of June 30, 2021, we collected 98% of rents from our multifamily properties
for the three months ended June 30, 2021. As of July 31, 2021, we collected 97%
of July rents from our multifamily properties. In 2020, we had provided rent
deferral payment plans as a result of hardships certain tenants experienced due
to the impact of COVID-19; for the six months ended June 30, 2021, the Company
did not provide rent deferral payment plans, compared to the onset of the
COVID-19 pandemic (quarter ended June 30, 2020) in which 1% of our tenant base
was on payment plans. Although we may 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 96.2% and 96.5% as
of June 30, 2021 and July 31, 2021, respectively, in future periods, we may
experience reduced levels of tenant retention, and reduced foot traffic and
lease applications from prospective tenants, as a result of the impact of
COVID-19.

The impact of the COVID-19 pandemic on our rental revenue for the third quarter
of 2021 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 of June 30, 2021, all our
properties are open and are complying with federal, state and local government
orders. In keeping with such orders, we have implemented, and will continue to
implement, operational changes, including the adoption of social distancing
practices, additional use of PPE equipment and a virtual leasing/virtual office
structure. Our property offices are now open to the public and to residents by
appointment and with strict social distancing protocols in place. Work orders
are now being completed, also with strict safety protocols in place including
PPE equipment and a safety questionnaire of each resident at time of request.
Generally, the outdoor amenity areas at our communities, including pools, pet
parks, and outdoor social areas, have re-opened with strict social distancing
protocols, limited capacity and cleaning protocols implemented. Our properties
continue the cleaning protocols for the sanitization of all community common
areas (including handrails, doors and elevators).

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 cybersecurity risks, or impair our ability to manage our business.

Other Significant Developments

Acquisitions of and Investments in Real Estate

During the six months ended June 30, 2021, we acquired three operating properties representing an aggregate of 506 units.


Additionally, we entered into seven preferred equity investments, of which four
were fully funded during the period. One of the preferred equity investments is
in the operating partnership of Peak Housing REIT, an unaffiliated private REIT,
representing a portfolio of 474 single-family residential homes in Texas. We
also made an additional preferred equity investment in the Strategic Portfolio
of $11.4 million, and we increased our preferred equity investment in Alexan
CityCentre and The Conley by approximately $1.8 million in aggregate.

We increased our mezzanine loan investments in Avondale Hills, Domain at The One
Forty, Motif, Reunion Apartments and Vickers Historic Roswell by approximately
$18.9 million in aggregate.

We provided increased funding to the Zoey Ground Lease of approximately $8.3
million.

                                       42

  Table of Contents

Bluerock Residentia


                                                                                    Number of         Ownership       Purchase
Property                                Location            Date of Investment        Units            Interest         Price
Operating
Yauger Park Villas                      Olympia, WA         April 14, 2021                    80               95 %  $      24.5
Wayford at Concord (1)                  Concord, NC         June 4, 2021                     150               83 %         44.4
Windsor Falls                           Raleigh, NC         June 17, 2021                    276              100 %         48.8
Total Operating                                                                              506                     $     117.7

                                                                                  Actual/Planned
                                                                                    Number of         Commitment     Investment
Property                                Location            Date of Investment        Units             Amount         Amount
Preferred Equity
The Riley                               Richardson, TX      March 1, 2021                    262      $       7.0    $       7.0
Peak Housing                            Various, Texas      April 12, 2021                   474 (2)         10.7           10.7

The Reserve at Palmer Ranch (3)         Sarasota, FL        June 10, 2021  

                 320             11.4           11.4
Deerwood Apartments                     Houston, TX         June 16, 2021                    330             16.5              -
Wayford at Innovation Park              Charlotte, NC       June 17, 2021                    210             11.7              -
Willow Park                             Willow Park, TX     June 17, 2021                     46 (2)          3.8              -
Deercross                               Indianapolis, IN    June 25, 2021                    372              4.0            4.0
Total Preferred Equity                                                                     2,014                     $      33.1
Total                                                                                      2,520                     $     150.8

(1) We purchased the Wayford at Concord property from our unaffiliated joint

venture partner, and as part of the transaction, our preferred equity

investment was redeemed.

(2) The actual/planned number of units shown represents the number of

single-family residential homes within each respective portfolio.

(3) We sold The Reserve at Palmer Ranch to our unaffiliated joint venture

partner, and as part of the sale, we simultaneously made a preferred equity


    investment in the property as part of the Strategic Portfolio.



Sale of Real Estate Assets and Investments



We sold five operating properties for net proceeds of $95.1 million.
Additionally, two of the properties underlying our preferred equity investments
were sold for net proceeds of $26.6 million, of which $0.3 million is to be
received subsequent to June 30, 2021. We also received a mezzanine loan payoff
of approximately $12.9 million from the sale of one property.

                                       43

Table of Contents


The following is a summary of our real estate sales, mezzanine loan payoffs and
redemption of preferred equity investments during the six months ended June 30,
2021 (dollars in millions):




                                                                             Number of    Ownership      Sale        BRG Net
Property                            Location            Date Sold              Units       Interest      Price       Proceeds
Operating
ARIUM Grandewood                    Orlando, FL          January 28, 2021          306           100 %  $  65.3    $      25.1
James at South First                Austin, TX          February 24, 2021          250            90 %     50.0           18.1
Marquis at The Cascades             Tyler, TX               March 1, 2021          582            90 %     90.9           32.6
Plantation Park                     Lake Jackson, TX       April 26, 2021          238            80 %     32.0            2.7

The Reserve at Palmer Ranch (1)     Sarasota, FL            June 10, 2021  

       320           100 %     57.6           16.6
Total Operating                                                                  1,696                    295.8           95.1

Mezzanine Loan

Vickers Historic Roswell            Roswell, GA             June 29, 2021  

        79             -       40.3           12.9
Total Mezzanine Loan                                                                79                     40.3           12.9

Preferred Equity
The Conley                          Leander, TX            March 18, 2021          259             -       52.1           16.5

Alexan Southside Place              Houston, TX            March 25, 2021          270             -       45.1           10.1
Wayford at Concord (2)              Concord, NC              June 4, 2021          150             -       44.4            7.0
Total Preferred Equity                                                     

       679                    141.6           33.6
Total                                                                            2,454                  $ 477.7    $     141.6

(1) We sold The Reserve at Palmer Ranch to our unaffiliated joint venture

partner, and as part of the sale, we simultaneously made a preferred equity

investment in the property as part of the Strategic Portfolio.

(2) We purchased the Wayford at Concord property from our unaffiliated joint


    venture partner, and as part of the transaction, our preferred equity
    investment was redeemed.




Held for Sale

We entered into two separate purchase and sale agreements for the sales of the
following properties: Park & Kingston, located in Charlotte, North Carolina, and
The District at Scottsdale, located in Scottsdale, Arizona. We have classified
both properties as held for sale as of June 30, 2021.

On July 7, 2021, we closed on the sale of Park & Kingston located in Charlotte,
North Carolina. The property was sold for $44.9 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 $19.6 million, the payment of early extinguishment of
debt costs of $2.4 million and payment of closing costs and fees of $0.5
million, the sale of the property generated net proceeds of approximately $24.7
million.

On July 7, 2021, we closed on the sale of The District at Scottsdale located in
Scottsdale, Arizona. The property was sold for $150.5 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 $73.8 million, the payment of early extinguishment
of debt costs of $0.4 million and payment of closing costs and fees of $0.4
million, the sale of the property generated net proceeds of approximately $74.8
million, of which our pro rata share of the proceeds was approximately $69.5
million.

Series T Preferred Stock Continuous Offering



During the six months ended June 30, 2021, we issued 8,657,663 shares of Series
T Preferred Stock under a continuous registered offering with net proceeds of
approximately $194.8 million after commissions, dealer manager fees and
discounts of approximately $21.6 million.

                                       44

Table of Contents

Redemption of 8.250% Series A Cumulative Redeemable Preferred Stock



On February 26, 2021, we redeemed all 2,201,547 outstanding shares of our Series
A Preferred Stock at a redemption price of $25.00 per share, plus accrued and
unpaid dividends up to, and including, the date of redemption in an amount equal
to $0.320833 per share, for a total payment of $25.320833 per share, in cash.

Redemptions of Series B Redeemable Preferred Stock



During the six months ended June 30, 2021, we redeemed 152,851 shares of Series
B Preferred Stock through the issuance of 14,780,952 shares of Class A common
stock.

Our total stockholders' equity increased $67.3 million from $58.4 million as of
December 31, 2020 to $125.7 million as of June 30, 2021. The increase in our
total stockholders' equity is primarily attributable to the issuance of shares
of Class A common stock for the redemptions of shares of Series B Preferred
Stock of $152.8 million (of which, $150.7 million relates to Company-initiated
redemptions) and net income of $61.4 million, offset by dividends declared of
$37.7 million, the repurchase of shares of Class A common stock of $85.8 million
and preferred stock accretion of $14.3 million during the six months ended
June
30, 2021.

Results of Operations

The following is a summary of our stabilized consolidated operating real estate investments as of June 30, 2021:






                                                                              Number of      Date Built      Ownership        Average            %
Multifamily Community Name                              Location                units      /Renovated (1)    Interest        Rent (2)       Occupied (3)
ARIUM Glenridge                                         Atlanta, GA                 480              1990           90 %     $   1,346              95.8 %
ARIUM Westside                                          Atlanta, GA                 336              2008           90 %         1,509              93.8 %
Ashford Belmar                                          Lakewood, CO                512         1988/1993           85 %         1,691              96.9 %
Avenue 25                                               Phoenix, AZ                 254              2013          100 %         1,286              94.1 %

Burano Hunter's Creek, formerly ARIUM Hunter's Creek    Orlando, FL                 532              1999          100 %         1,427              96.8 %
Carrington at Perimeter Park                            Morrisville, NC    

        266              2007          100 %         1,291              96.6 %
Chattahoochee Ridge                                     Atlanta, GA                 358              1996           90 %         1,413              96.6 %
Chevy Chase                                             Austin, TX                  320              1971           92 %           983              97.8 %
Cielo on Gilbert                                        Mesa, AZ                    432              1985           90 %         1,123              97.2 %
Citrus Tower                                            Orlando, FL                 336              2006           97 %         1,381              96.1 %
Denim                                                   Scottsdale, AZ              645              1979          100 %         1,288              95.7 %
Elan                                                    Austin, TX                  270              2007          100 %         1,158              93.0 %
Element                                                 Las Vegas, NV               200              1995          100 %         1,306              97.0 %
Falls at Forsyth                                        Cumming, GA                 356              2019          100 %         1,439              97.8 %
Gulfshore Apartment Homes                               Naples, FL
        368              2016          100 %         1,298              97.6 %
Navigator Villas                                        Pasco, WA                   176              2013           90 %         1,173              99.4 %
Outlook at Greystone                                    Birmingham, AL              300              2007          100 %         1,118              95.3 %
Park & Kingston                                         Charlotte, NC               168              2015          100 %         1,321              94.6 %
Pine Lakes Preserve                                     Port St. Lucie, FL          320              2003          100 %         1,419              97.8 %
Providence Trail                                        Mount Juliet, TN            334              2007          100 %         1,304              94.6 %
Roswell City Walk                                       Roswell, GA                 320              2015           98 %         1,625              97.8 %
Sands Parc                                              Daytona Beach, FL           264              2017          100 %         1,370              96.6 %
The Brodie                                              Austin, TX                  324              2001          100 %         1,353              95.7 %

The Debra Metrowest, formerly ARIUM Metrowest           Orlando, FL                 510              2001          100 %         1,423              95.7 %
The District at Scottsdale                              Scottsdale, AZ     

        332              2018           99 % (4)     1,826              94.0 %
The Links at Plum Creek                                 Castle Rock, CO             264              2000           88 %         1,489              97.3 %
The Mills                                               Greenville, SC              304              2013          100 %         1,061              97.0 %

The Preserve at Henderson Beach                         Destin, FL
        340              2009          100 %         1,548              95.9 %
The Sanctuary                                           Las Vegas, NV               320              1988          100 %         1,169              96.3 %
Veranda at Centerfield                                  Houston, TX                 400              1999           93 %         1,034              96.5 %
Villages of Cypress Creek                               Houston, TX                 384              2001           80 %         1,203              94.5 %
Wayford at Concord                                      Concord, NC                 150              2019           83 %         1,830              95.3 %
Wesley Village                                          Charlotte, NC               301              2010          100 %         1,400              96.0 %
Windsor Falls                                           Raleigh, NC                 276              1994          100 %         1,102              97.5 %
Yauger Park Villas                                      Olympia, WA                  80              2010           95 %         1,982              96.3 %
Total/Average                                                                    11,532                                      $   1,350 (5)          96.2 %



(1)Represents date of last significant renovation or year built if there were no renovations.



                                       45

  Table of Contents

(2)Represents the average effective monthly rent per occupied unit for the three
months ended June 30, 2021. Total concessions for the three months ended June
30, 2021 amounted to approximately $0.2 million.
(3)Percent occupied is calculated as (i) the number of units occupied as of June
30, 2021 divided by (ii) total number of units, expressed as a percentage.
(4)On April 1, 2021, an unaffiliated third party acquired a 1% ownership
interest in The District at Scottsdale.
(5)The average effective monthly rent including sold properties was $1,351 for
the three months ended June 30, 2021.



The following is a summary of our preferred equity, mezzanine loan and ground lease investments as of June 30, 2021:






                                                                                     Total Actual/
                                                                    Actual/           Estimated                              Actual/          Actual/        Actual/
                                                                    Planned          Construction                           Estimated        Estimated      Estimated        Pro Forma
                                                                    Number               Cost           Cost to Date       Construction        Initial     Construction       Average
Investment/Community Name                  Location                 of Units         (in millions)      (in millions)      Cost Per Unit      Occupancy     Completion        Rent (1)
Development Investments (2)
Zoey                                       Austin, TX                      307      $          59.5    $          42.3    $       193,811       1Q 2022          2Q 2022    $      1,762
Reunion Apartments                         Orlando, FL                     280                 47.6               38.8            170,000       1Q 2022          3Q 2022           1,366
Willow Park                                Willow Park, TX                  46 (3)             13.5                3.7            293,478       2Q 2022          4Q 2022           2,362
Avondale Hills                             Decatur, GA                     240                 50.7               20.4            211,250       1Q 2023          1Q 2023           1,538
The Hartley at Blue Hill, formerly The
Park at Chapel Hill                        Chapel Hill, NC                 414                 99.2               50.9            239,614       4Q 2021          1Q 2023           1,599
Deerwood Apartments                        Houston, TX                     330                 65.8               11.0            199,394       4Q 2022          2Q 2023           1,590
Encore Chandler                            Chandler, AZ                    208                 47.7                7.5            229,327       2Q 2023          3Q 2023           1,457
Wayford at Innovation Park                 Charlotte, NC                   210                 58.7                4.8            279,524       1Q 2023          2Q 2024           1,994
Total development units                                                  2,035

                                                                     Number                                                                                                   Average
Multifamily Community Name                 Location                 of Units                                                                                                  Rent (1)
Operating Investments (2)
Alexan CityCentre                          Houston, TX                     340                                                                                                     1,583
Belmont Crossing                           Smyrna, GA                      192                                                                                                       888
Deercross                                  Indianapolis, IN                372                                                                                                       761
Domain at The One Forty                    Garland, TX                     299                                                                                                     1,363
Georgetown Crossing                        Savannah, GA                    168                                                                                                     1,036
Hunter's Pointe                            Pensacola, FL                   204                                                                                                       992
Mira Vista                                 Austin, TX                      200                                                                                                     1,115
Motif                                      Fort Lauderdale, FL             385                                                                                                     2,352
Park on the Square                         Pensacola, FL                   240                                                                                                     1,159
Peak Housing                               Various, Texas                  474 (3)                                                                                                   876
Sierra Terrace                             Atlanta, GA                     135                                                                                                     1,274
Sierra Village                             Atlanta, GA                     154                                                                                                     1,224
The Commons                                Jacksonville, FL                328                                                                                                       914
The Reserve at Palmer Ranch                Sarasota, FL                    320                                                                                                     1,417
The Riley                                  Richardson, TX                  262                                                                                                     1,455
Thornton Flats                             Austin, TX                      104                                                                                                     1,576
Water's Edge                               Pensacola, FL                   184                                                                                                     1,168
Total operating units                                                    4,361
Total                                                                    6,396                                                                                              $      1,368

(1) For 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) Properties in which the Company has a mezzanine loan, preferred equity or

ground lease investment. Operating investments represent stabilized operating

properties. Refer to Note 6 and Note 7 in our consolidated financial

statements for further information.

(3) Willow Park and Peak Housing are preferred equity investments made by us in

portfolios of single-family residential homes. The actual/planned number of

units shown represents the number of single-family residential homes within

each respective portfolio.

Three Months Ended June 30, 2021 Compared to Three Months Ended June 30, 2020

Revenue


Rental and other property revenues increased $2.0 million, or 4%, to $49.7
million for the three months ended June 30, 2021 as compared to $47.7 million
for the same prior year period. This  was due to a $5.5 million increase from
the acquisition of three properties in 2021 and the full period impact of four
properties acquired in 2020, a $2.3 million increase from same store properties,
and a $0.8 million increase from other non-same store properties, partially
offset by a $6.6 million decrease driven by the sales of five properties in 2021
and the full period impact of four properties sold in 2020.

                                       46

Table of Contents


Interest income from mezzanine loan and ground lease investments decreased $1.2
million, or 23%, to $4.1 million for the three months ended June 30, 2021 as
compared to $5.3 million for the same prior year period primarily due to the
sales of two underlying properties in 2020 and the impact of the deferred
interest income at Motif, partially offset by increases in the average balance
of mezzanine loans outstanding.

Expenses


Property operating expenses increased $0.3 million, or 2%, to $18.9 million for
the three months ended June 30, 2021 as compared to $18.6 million for the same
prior year period. This was primarily due to a $2.2 million increase from the
acquisition of properties in 2021 and 2020, a $0.9 million increase from same
store properties, and a $0.1 million increase from other non-same store
properties, partially offset by a $2.9 million decrease from sold properties.
Property NOI margins increased to 62.0% of total revenues for the three months
ended June 30, 2021 from 61.1% in the prior year period. 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 $0.06 million, or 4%, to $1.25 million for the three months ended June 30, 2021 as compared to $1.19 million in the same prior year period. Property management fees incurred are based on property level revenues.

General and administrative expenses amounted to $6.6 million for the three months ended June 30, 2021 as compared to $5.3 million for the same prior year period.

Acquisition and pursuit costs amounted to $0.4 million for the three months ended June 30, 2020. The 2020 expense primarily related to the write-off of pre-acquisition costs from abandoned deals due to the uncertainty from COVID-19.

Abandoned pursuit costs can vary greatly, and the costs incurred in any given period may be significantly different in future periods. Acquisition and pursuit costs for the same current year period were insignificant.



Depreciation and amortization expenses were $19.9 million for the three months
ended June 30, 2021 as compared to $20.1 million for the same prior year period.
This was due to a $1.9 million decrease from sold properties, a $1.1 million
decrease from other non-same store properties, and a $0.6 million decrease from
same store properties, partially offset by a $3.4 million increase from the
acquisition of properties in 2021 and 2020.

Other Income and Expense



Other income and expense amounted to income of $7.7 million for the three months
ended June 30, 2021 compared to income of $32.9 million for the same prior year
period. This was primarily due to a decrease in gains on sale of real estate
investments of $38.4 million, partially offset by a decrease in loss on early
extinguishment of debt of $13.3 million.

Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020

Revenue


Rental and other property revenues increased $2.8 million, or 3%, to $100.8
million for the six months ended June 30, 2021 as compared to $98.0 million for
the same prior year period. This was due to a $11.9 million increase from the
acquisition of three properties in 2021 and the full period impact of six
properties acquired in 2020, a $3.0 million increase from same store properties,
and a $1.0 million increase from other non-same store properties, partially
offset by a $13.1 million decrease driven by the sales of five properties in
2021 and the full period impact of four properties sold in 2020.

Interest income from related parties and ground leases decreased $2.4 million,
or 21%, to $8.8 million for the six months ended June 30, 2021 as compared to
$11.2 million for the same prior year period primarily due to the sales of two
underlying properties in 2020 and the impact of the deferred interest income at
Motif, partially offset by increases in the average balance of mezzanine loans
outstanding.

                                       47

  Table of Contents

Expenses

Property operating expenses increased $0.9 million, or 3%, to $38.8 million for
the six months ended June 30, 2021 as compared to $37.9 million for the same
prior year period. This was primarily due to a $4.8 million increase from the
acquisition of properties in 2021 and 2020, a $1.5 million increase from same
store properties, and a $0.1 million increase from other non-same store
properties, partially offset by a $5.5 million decrease from sold properties.
Property NOI margins increased to 61.5% of total revenues for the six months
ended June 30, 2021 from 61.4% in the prior year period. 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 $0.04 million, or 2%, to $2.53 million for the six months ended June 30, 2021 as compared to $2.49 million in the same prior year period. Property management fees incurred are based on property level revenues.

General and administrative expenses amounted to $13.2 million for the six months ended June 30, 2021 as compared to $11.7 million for the same prior year period.


Acquisition and pursuit costs amounted to $0.01 million for the six months ended
June 30, 2021 as compared to $1.69 million for the same prior year period. The
2020 expense primarily related to the write-off of pre-acquisition costs from
abandoned deals due to the uncertainty from COVID-19, of which $1.1 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.

Weather-related losses, net amounted to $0.4 million for the six months ended
June 30, 2021.  The 2021 expense related to freeze damages at eight properties
in Texas.  No weather-related losses were recorded in 2020.

Depreciation and amortization expenses were $40.3 million for the six months
ended June 30, 2021 as compared to $41.0 million for the same prior year period.
This was due to a $4.3 million decrease from sold properties, a $1.2 million
decrease from other non-same store properties, and a $0.8 million decrease from
same store properties, partially offset by a $5.6 million increase from the
acquisition of properties in 2021 and 2020.

Other Income and Expense



Other income and expense amounted to income of $61.6 million for the six months
ended June 30, 2021 compared to income of $20.6 million for the same prior year
period. This was primarily due to an increase in gains on sale of real estate
investments of $30.2 million and a decrease in loss on early extinguishment

of
debt of $10.3 million.

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, properties that are undergoing development or
significant redevelopment, or properties held for sale. 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 ended June 30, 2021 and 2020, the same store
properties included properties owned at April 1, 2020. Our same store properties
for the three months ended June 30, 2021 and 2020 consisted of 25 properties,
representing 8,882 units.

For comparison of our six months ended June 30, 2021 and 2020, the same store properties included properties owned at January 1, 2020. Our same store properties for the six months ended June 30, 2021 and 2020 consisted of 24 properties, representing 8,628 units.



                                       48

Table of Contents



The following table presents the same store and non-same store results from
operations for the three and six months ended June 30, 2021 and 2020 (dollars in
thousands):




                             Three Months Ended
                                 June 30,                 Change
                              2021         2020         $         %
Property Revenues
Same Store                 $   38,631    $ 36,306    $ 2,325       6.4 %
Non-Same Store                 11,090      11,389      (299)     (2.6) %
Total property revenues        49,721      47,695      2,026       4.2 %

Property Expenses
Same Store                     14,559      13,700        859       6.3 %
Non-Same Store                  4,350       4,871      (521)    (10.7) %
Total property expenses        18,909      18,571        338       1.8 %

Same Store NOI                 24,072      22,606      1,466       6.5 %
Non-Same Store NOI              6,740       6,518        222       3.4 %
Total NOI (1)              $   30,812    $ 29,124    $ 1,688       5.8 %





                             Six Months Ended
                                 June 30,                Change
                             2021         2020         $         %
Property Revenues
Same Store                 $  74,309    $ 71,345    $ 2,964      4.2 %
Non-Same Store                26,494      26,702      (208)    (0.8) %
Total property revenues      100,803      98,047      2,756      2.8 %

Property Expenses
Same Store                    28,267      26,814      1,453      5.4 %
Non-Same Store                10,574      11,056      (482)    (4.4) %
Total property expenses       38,841      37,870        971      2.6 %

Same Store NOI                46,042      44,531      1,511      3.4 %
Non-Same Store NOI            15,920      15,646        274      1.8 %
Total NOI (1)              $  61,962    $ 60,177    $ 1,785      3.0 %



(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 June 30, 2021 Compared to Three Months Ended June 30, 2020


Same store NOI for the three months ended June 30, 2021 increased 6.5%, or $1.5
million, compared to the 2020 period. Same store property revenues increased
6.4%, or $2.3 million, as compared to the 2020 period, primarily attributable to
a 3.0% increase in average rental rates and an 80-basis point increase in
occupancy; of our twenty-five same store properties, twenty-one recognized
rental rate increases and eighteen recognized increases in occupancy during the
period. In addition, bad debt decreased $0.7 million and ancillary income, such
as termination fees, late fees, and pet fees, increased $0.4 million.

Same store expenses for the three months ended June 30, 2021 increased 6.3%, or
$0.9 million, compared to the 2020 period. The increase was partially due to
non-controllable expenses; real estate taxes increased $0.2 million due to
municipality tax increases and insurance increased $0.2 million due to
industrywide multifamily price increases. The remaining increase was due to (i)
a $0.3 million increase in discretionary seasonal maintenance as discretionary
spending was limited in prior year due to COVID-19 and (ii) an increase of $0.2
million in administrative expenses.

                                       49

Table of Contents


Non-same store property revenues and property expenses for the three months
ended June 30, 2021 decreased $0.3 million and $0.5 million, respectively,
compared to the 2020 period due to the timing and volume of operating property
transactions. We acquired seven operating properties and sold nine properties
since April 1, 2020.

Six Months Ended June 30, 2021 Compared to Six Months Ended June 30, 2020



Same store NOI for the six months ended June 30, 2021 increased 3.4%, or $1.5
million, compared to the 2020 period. Same store property revenues increased
4.2%, or $3.0 million, as compared to the 2020 period, primarily attributable to
a 2.0% increase in average rental rates and a 110-basis point increase in
occupancy; of our twenty-four same store properties, nineteen recognized rental
rate increases and twenty-one recognized increases in occupancy during the
period. In addition, ancillary income, such as termination fees, late fees, and
pet fees, increased $0.6 million and bad debt decreased $0.36 million.

Same store expenses for the six months ended June 30, 2021 increased 5.4%, or
$1.5 million, compared to the 2020 period. The increase was primarily due to
non-controllable expenses; real estate taxes increased $0.42 million due to
municipality tax increases and insurance increased $0.35 million due to
industrywide multifamily price increases. The remaining increase was due to (i)
a $0.37 million increase in discretionary seasonal maintenance as discretionary
spending was limited in prior year due to COVID-19 and (ii) an increase of $0.25
million in administrative expenses.

Non-same store property revenues and property expenses for the six months ended
June 30, 2021 decreased $0.2 million and $0.5 million, respectively, compared to
the 2020 period due to the timing and volume of operating property transactions.
We acquired nine operating properties and sold nine properties since January 1,
2020.

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.

                                       50

Table of Contents


However, NOI should only be used as a supplemental measure of our financial
performance. The following table reflects net (loss) income 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 Ended        Six Months Ended
                                                   June 30,                  June 30,
                                                2021         2020        2021        2020
Net (loss) income attributable to common
stockholders                                 $  (5,429)    $ 15,090    $ 18,152    $ (1,403)
Add back: Net (loss) income attributable
to Operating Partnership Units                  (1,978)       5,413       8,182        (409)
Net (loss) income attributable to common
stockholders and unit holders                   (7,407)      20,503      26,334      (1,812)
Add common stockholders and Operating
Partnership Units pro-rata share of:
Real estate depreciation and amortization        19,036      19,144      38,440       39,045
Non-real estate depreciation and
amortization                                        122         122         244          242
Non-cash interest expense                           549         747       1,154        1,592
Unrealized loss (gain) on derivatives                20         (5)        (11)         (30)
Loss on extinguishment of debt and debt
modification costs                                  609      13,590       3,173       13,590
Provision for credit losses                          26           -         567            -
Property management fees                          1,194       1,135       2,417        2,367

Acquisition and pursuit costs                         3         423          15        1,691
Corporate operating expenses                      6,520       5,166      13,090       11,462
Weather-related losses, net                           -           -        

360            -
Preferred dividends                              14,367      14,237      28,984       27,784
Preferred stock accretion                         7,290       3,602      14,312        7,527
Less common stockholders and Operating
Partnership Units pro-rata share of:
Other income (expense), net                          57        (43)         108          (3)
Preferred returns on unconsolidated real
estate joint ventures                             2,329       2,834       4,616        5,408
Interest income from mezzanine loan and
ground lease investments                          4,114       5,338       8,835       11,227
Gain on sale of real estate investments          18,630      55,250      81,058       55,360
Pro-rata share of properties' income             17,199      15,285      34,462       31,466
Add:
Noncontrolling interest pro-rata share of
partially owned property income                     738         750       1,378        1,553
Total property income                            17,937      16,035      35,840       33,019
Add:
Interest expense                                 12,875      13,089      26,122       27,158
Net operating income                             30,812      29,124      61,962       60,177
Less:
Non-same store net operating income               6,740       6,518      15,920       15,646
Same store net operating income              $   24,072    $ 22,606    $ 46,042    $  44,531




                                       51

  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, Series C Preferred
Stock and Series D Preferred 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 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 the SEC.

We believe we currently have a stable financial condition; as of June 30, 2021,
we collected 98% of rents from our multifamily properties for the three months
ended June 30, 2021. As of July 31, 2021, we collected 97% of July rents from
our multifamily properties. In 2020, we had provided rent deferral payment plans
as a result of hardships certain tenants experienced due to the impact of
COVID-19; for the six months ended June 30, 2021, we did not provide rent
deferral payment plans, compared to the onset of the COVID-19 pandemic (quarter
ended June 30, 2020) in which 1% of our tenant base was on payment plans.
Although we may 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 96.2% and 96.5% as of June 30, 2021
and July 31, 2021, respectively, in future periods we may experience reduced
levels of tenant retention, and reduced foot traffic and lease applications from
prospective tenants, as a result of COVID-19 impact.

As we did in 2020 and to date in 2021, 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. Due to the uncertainty surrounding the COVID-19 impact, we had
suspended interior renovations at several properties as part of assuming a more
conservative posture; however, we have selectively restarted the program at
various properties as we gained more visibility on the economic recovery
nationally and within our specific markets.

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 from the  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.

We believe we will be able to meet our primary liquidity requirements going forward through:

? $136.8 million in cash available at June 30, 2021;

? $107.7 million of capacity on our credit facilities as of June 30, 2021;

? cash generated from operating activities; and

our continuous Series T Preferred Offering, proceeds from future borrowings and

? potential offerings, including potential offerings of common and preferred

stock through underwritten offerings, as well as issuances of units of limited

partnership interest in our Operating Partnership, or OP Units.

Only 5.5%, or $79.1 million, of our mortgage debt is maturing through the remainder of 2021, of which $73.8 million relates to The District at Scottsdale, a property which was sold on July 7, 2021.



                                       52

Table of Contents



In October 2020, our Board authorized new stock repurchase plans for the
repurchase, from time to time, of up to an aggregate of $75 million in
outstanding shares of our Class A common stock, Series A Preferred Stock, Series
C Preferred Stock and/or Series D Preferred Stock. On February 9, 2021, our
Board authorized the modification of the stock repurchase plans to increase the
maximum repurchase amount from an aggregate of $75 million in shares to $150
million in shares. The repurchase plans will terminate upon the earliest to
occur of certain specified events as set forth therein. During the six months
ended June 30, 2021, we purchased 8,163,160 shares of Class A common stock for a
total purchase price of approximately $85.8 million. Under the current
repurchase plans, the total purchase price of shares repurchased by the Company
is approximately $104.8 million, and as of June 30, 2021, the value of shares
that may yet be repurchased under the repurchase plans is $45.2 million.

At the current time, we do not anticipate the need to establish any material
contingency reserves related to the COVID-19 pandemic, but we continue to assess
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 potential offerings of common and
preferred stock through underwritten offerings, as well as issuance of units of
limited partnership interest in our Operating Partnership, or OP Units. Given
the significant volatility 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 cannot provide assurances
that these offerings are 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 B Preferred Stock, Series C Preferred Stock and Series T Preferred
Stock, and (e) Class A common stock repurchases under our stock repurchase
plans.

We intend to finance our long-term liquidity requirements with net proceeds of
additional issuances of common and preferred stock, including 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.

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. At June 30, 2021, 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  of
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 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

                                       53

Table of Contents


on the series. While our policy is generally to pay distributions from cash flow
from operations, our distributions through June 30, 2021 have been paid from
cash flow from operations, proceeds from our continuous preferred stock
offerings, including our Series T Preferred Stock, sales of assets, proceeds
from underwritten securities offerings, and may in the future be paid from
additional sources, such as from borrowings.

We have notes receivable in conjunction with properties that are in various
stages of development, in lease-up and operating. To date, these investments
have generally been structured as mezzanine loans, and in the future, we may
also provide mortgage financing to these types of projects. The notes receivable
provide a current stated return, and in certain cases, an accrued return, and
required repayment based on a fixed maturity date, generally in relation to the
property's construction loan or mortgage loan maturity. If the property 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
property 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 property. 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 equity interests in properties that are in various stages
of development, in lease-up and operating. Our preferred equity investments are
structured to provide a current preferred return, and in some cases, an accrued
return, during all phases. Each joint venture in which we own a preferred equity
interest is required to redeem our preferred equity interests, plus any accrued
preferred return, based on a fixed maturity date, generally in relation to the
property's construction loan or mortgage loan maturity. Upon redemption of our
preferred equity 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 equity interest when required,
our income, FFO, CFFO and cash flows could be reduced if the property does not
produce sufficient cash flow to pay 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 loan and
preferred equity investment activities at the subsidiary level.

Off-Balance Sheet Arrangements


As of June 30, 2021, 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 June 30,
2021, we own interests in thirteen joint ventures that are accounted for as held
to maturity debt securities or loans.

Cash Flows from Operating Activities



As of June 30, 2021, we held sixty real estate investments, consisting of
thirty-five consolidated operating properties and interests in twenty-five
properties held through preferred equity, mezzanine loan or ground lease
investments. During the six months ended June 30, 2021, net cash provided by
operating activities was $40.0 million after net income of $76.0 million was
adjusted for the following:

? non-cash items of $45.4 million;

? an increase in accounts receivable, prepaids and other assets of $5.1 million;

? an increase in amortization of deferred interest income on mezzanine loan of

$1.0 million; and

? an increase in notes and accrued interest receivable of $1.8 million, offset

by:

? distributions and preferred returns from unconsolidated joint ventures of $5.9

million;

? an increase in loss on extinguishment of debt and debt modification costs of

$3.7 million;

? an increase in accounts payable and other accrued liabilities of $7.6 million;

and

? an increase in due to affiliates of $0.1 million.

Cash Flows from Investing Activities

During the six months ended June 30, 2021, net cash provided by investing activities was $118.7 million, primarily due to the following:

? $224.1 million of proceeds from the sale of real estate investments;

? $31.4 million of proceeds from the sale and redemption of unconsolidated real

estate joint ventures; and




                                       54

  Table of Contents

? $12.4 million of repayments on notes receivable, offset by:

? $77.0 million used in acquiring consolidated real estate investments;

? $62.1 million used for investments in unconsolidated joint ventures, notes

receivable and a ground lease; and

? $10.1 million used on capital expenditures.

Cash Flows from Financing Activities

During the six months ended June 30, 2021, net cash used in financing activities was $104.6 million, primarily due to the following:

? $87.5 million of repayments of our mortgages payable;

? $85.8 million paid for the repurchase of Class A common stock;

? $63.0 million in repayments on revolving credit facilities;

? $55.1 million paid for the redemption of Series A Preferred Stock;

? $29.8 million paid in cash distributions to preferred stockholders;

? $14.5 million in distributions paid to our noncontrolling interests;

? $7.6 million paid in cash distributions to common stockholders;

? $1.1 million increase in deferred financing costs;

? $0.6 million of Class A common stock ATM issuance costs; and

? $0.1 million paid for the redemption of Series B Preferred Stock;

? partially offset by net proceeds of $193.6 million from issuance of units of

Series T Preferred Stock;

? net proceeds of $30.0 million from borrowings on revolving credit facilities;

? net borrowings of $12.9 million on mortgages payable;

? contributions from noncontrolling interests of $4.1 million; and

? net proceeds of $0.2 million from the exercise of Warrants.






Capital Expenditures

The following table summarizes our total capital expenditures for the six months ended June 30, 2021 and 2020 (amounts in thousands):




                                             Six Months Ended
                                                June 30,
                                             2021        2020
Redevelopment/renovations                  $   7,258    $ 5,481
Routine capital expenditures                   1,901      1,506

Normally recurring capital expenditures 1,566 1,428 Total capital expenditures

$  10,725    $ 8,415




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 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.

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

                                       55

Table of Contents



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 (loss), computed in accordance with GAAP, excluding gains or
losses on sales of depreciable real estate property, plus depreciation and
amortization of real estate assets, plus impairment write-downs of certain real
estate assets and investments in entities where the impairment is directly
attributable to decreases in the value of depreciable real estate held by the
entity, and after adjustments for unconsolidated partnerships and joint
ventures. Adjustments for notes receivable, unconsolidated partnerships and
joint ventures will be calculated to reflect FFO on the same basis.

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,
stock compensation expense and preferred stock accretion. Commencing in 2020, we
do 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 accrued portion of the preferred income totaled $1.5 million
and $0.4 million, and $2.7 million and $0.8 million for the three and six months
ended June 30, 2021 and 2020, respectively. 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 (loss), including net income
(loss) 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 (loss), 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.

We have acquired seven operating properties, made eight property investments
through preferred equity or mezzanine loan investments, sold six operating
properties and received payoffs of our mezzanine loan or preferred equity in
seven investments subsequent to June 30, 2020. We paid a quarterly common stock
dividend of $0.1625 per share and unit, or a 102% payout on a CFFO basis, during
the three months ended June 30, 2021. The results presented in the table below
are not directly comparable and should not be considered an indication of our
future operating performance.

                                       56

  Table of Contents

The table below presents our calculation of FFO and CFFO for the three and six
months ended June 30, 2021 and 2020 (in thousands, except per share amounts):


                                                                   Three Months Ended               Six Months Ended
                                                                       June 30,                        June 30,
                                                                  2021            2020            2021            2020

Net (loss) income attributable to common stockholders $ (5,429)

$ 15,090 $ 18,152 $ (1,403) Add back: Net (loss) income attributable to Operating Partnership Units

                                                  (1,978)           5,413           8,182           (409)
Net (loss) income attributable to common stockholders and
unit holders                                                       (7,407)          20,503          26,334         (1,812)
Common stockholders and Operating Partnership Units
pro-rata share of:
Real estate depreciation and amortization                           19,036          19,144          38,440          39,045
Provision for credit losses                                             26               -             567               -
Gain on sale of real estate investments                           (18,630)        (55,250)        (81,058)        (55,360)
FFO Attributable to Common Stockholders and Unit Holders           (6,975)        (15,603)        (15,717)        (18,127)
Common stockholders and Operating Partnership Units
pro-rata share of:
Acquisition and pursuit costs                                            3             423              15           1,691
Non-cash interest expense                                              549             747           1,154           1,592
Unrealized loss (gain) on derivatives                                   20             (5)            (11)            (30)
Loss on extinguishment of debt and debt modification costs             609          13,590           3,173          13,590
Amortization of deferred interest income on mezzanine loan             997               -             997               -
Weather-related losses, net                                              -               -             360               -
Non-real estate depreciation and amortization                          122             122             244             242
Other (income) expense, net                                           (49)              43              48               3
Non-cash equity compensation                                         3,479           2,191           6,789           5,738
Preferred stock accretion                                            7,290           3,602          14,312           7,527

CFFO Attributable to Common Stockholders and Unit Holders $ 6,045

$ 5,110 $ 11,364 $ 12,226

Per Share and Unit Information: FFO Attributable to Common Stockholders and Unit Holders - diluted

$     (0.18)

$ (0.47) $ (0.44) $ (0.55) CFFO Attributable to Common Stockholders and Unit Holders - diluted

$       0.16    $       0.15    $       0.32    $       0.37
Weighted average common shares and units outstanding -
diluted                                                         38,443,171      33,075,598      35,883,631      32,936,762



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.

                                       57

  Table of Contents

Contractual Obligations

The following table summarizes our contractual obligations as of June 30, 2021
which consisted of mortgage notes secured by our properties. At June 30, 2021,
our estimated future required payments on these obligations were as follows

(amounts in thousands):


                                                         Remainder of
                                            Total            2021         2022-2023     2024-2025      Thereafter

Mortgages Payable (Principal)            $ 1,437,881    $       79,082    $  139,500    $  532,827    $    686,472
Estimated Interest Payments on
Mortgages Payable                            270,340            24,670        95,822        75,042          74,806
Total                                    $ 1,708,221    $      103,752    $  235,322    $  607,869    $    761,278




                                       58

  Table of Contents

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                            Date
      Declaration Date           of record as of       Amount        Paid or Payable
    Class A Common Stock
     December 11, 2020          December 24, 2020    $ 0.162500      January 5, 2021
       March 12, 2021            March 25, 2021      $ 0.162500       April 5, 2021
       June 11, 2021              June 25, 2021      $ 0.162500       July 2, 2021
    Class C Common Stock
     December 11, 2020          December 24, 2020    $ 0.162500      January 5, 2021
       March 12, 2021            March 25, 2021      $ 0.162500       April 5, 2021
       June 11, 2021              June 25, 2021      $ 0.162500       July 2, 2021
  Series A Preferred Stock
     December 11, 2020          December 24, 2020    $ 0.515625      January 5, 2021
    January 27, 2021 (1)        February 26, 2021    $ 0.320833     February 26, 2021
  Series B Preferred Stock
      October 9, 2020           December 24, 2020    $   5.00        January 5, 2021
      January 13, 2021          January 25, 2021     $   5.00       February 5, 2021
      January 13, 2021          February 25, 2021    $   5.00         March 5, 2021
      January 13, 2021           March 25, 2021      $   5.00         April 5, 2021
       April 12, 2021            April 23, 2021      $   5.00          May 5, 2021
       April 12, 2021             May 25, 2021       $   5.00         June 4, 2021
       April 12, 2021             June 25, 2021      $   5.00         July 2, 2021
  Series C Preferred Stock
     December 11, 2020          December 24, 2020    $ 0.4765625     January 5, 2021
       March 12, 2021            March 25, 2021      $ 0.4765625      April 5, 2021
       June 11, 2021              June 25, 2021      $ 0.4765625      July 2, 2021
  Series D Preferred Stock
     December 11, 2020          December 24, 2020    $ 0.4453125     January 5, 2021
       March 12, 2021            March 25, 2021      $ 0.4453125      April 5, 2021
       June 11, 2021              June 25, 2021      $ 0.4453125      July 2, 2021
Series T Preferred Stock (2)
      October 9, 2020           December 24, 2020    $ 0.128125      January 5, 2021
      January 13, 2021          January 25, 2021     $ 0.128125     February 5, 2021
      January 13, 2021          February 25, 2021    $ 0.128125       March 5, 2021
      January 13, 2021           March 25, 2021      $ 0.128125       April 5, 2021
       April 12, 2021            April 23, 2021      $ 0.128125        May 5, 2021
       April 12, 2021             May 25, 2021       $ 0.128125       June 4, 2021
       April 12, 2021             June 25, 2021      $ 0.128125       July 2, 2021



(1) The dividend was paid on the date indicated to stockholders in conjunction

with the redemption of shares of Series A Preferred Stock.

(2) 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.

We have a dividend reinvestment plan that allows for participating stockholders
to have their Class A common stock dividend distributions automatically
reinvested in additional shares of Class A common stock based on the average
price of the Class A common stock on the investment date. We plan to issue
shares of Class A common stock to cover shares required for investment.

We also have a dividend reinvestment plan that allows for participating
stockholders to have their Series T Preferred Stock dividend distributions
automatically reinvested in additional shares of Series T Preferred Stock at a
price of $25.00 per share. We plan to issue shares of Series T Preferred Stock
to cover shares required for investment.

                                       59

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 several 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. While our policy is generally to pay distributions from cash flow from
operations, we may declare distributions in excess of funds from operations.

Distributions paid were funded from cash provided by operating activities except
with respect to $2.1 million for the six months ended June 30, 2021 which was
funded from sales of real estate, borrowings, and/or proceeds from our equity
offerings.


                                                                  Six Months Ended
                                                                     June 30,
                                                                 2021          2020

                                                                   (in thousands)

Cash provided by operating activities                         $   40,019

$ 43,338


Cash distributions to preferred stockholders                  $ (29,838)    $ (27,428)
Cash distributions to common stockholders                        (7,599)   

(7,742)

Cash distributions to noncontrolling interests, excluding $9.8 million and $2.7 million from the sale of real estate investments in 2021 and 2020, respectively

                       (4,719)       (3,976)
Total distributions                                             (42,156)      (39,146)

(Shortfall) excess                                            $  (2,137)

$ 4,192 Proceeds from sale of real estate investments, net of noncontrolling distributions of $9.8 million and $2.7 million in 2021 and 2020, respectively

$   95,128

$ 60,520 Proceeds from sale and redemption of our preferred equity investment in unconsolidated real estate joint ventures $ 31,412 $ 35,542

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 December 31, 2020 and Note 2 "Basis of Presentation and Summary of Significant Accounting Policies" of our interim Consolidated Financial Statements.

Subsequent Events



Other than the items disclosed in Note 15 "Subsequent Events" to our interim
Consolidated Financial Statements for the period ended June 30, 2021, 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.

© Edgar Online, source Glimpses