PR Newswire | May 10, 2021 08:31AM EDT

05/10 07:30 CDT

Bluerock Residential Growth REIT Announces First Quarter 2021 Results- Portfolio Lease Rate Growth of 3.5% -- April Portfolio Lease Rate Growth of 7.7% -- Same Store Average Occupancy Increased 1.2% -- Repurchased 3.6 Million Common Shares - NEW YORK, May 10, 2021

NEW YORK, May 10, 2021 /PRNewswire/ -- Bluerock Residential Growth REIT, Inc. (NYSE American: BRG) ("the Company"), an owner of highly amenitized multifamily apartment communities, announced today its financial results for the quarter ended March 31, 2021.

"We are encouraged by the substantial sequential reacceleration of rent growth and year over year improvement in same store occupancy which reflect a high-quality affordable Class A portfolio of highly amenitized live/work/play apartment communities," said Ramin Kamfar, Company Chairman and CEO. "Our strategy of maintaining occupancy over the past year, along with the favorable positioning of our portfolio, is allowing us to achieve industry-leading lease rate growth."

First Quarter Highlights

Financial Results

* Net income attributable to common stockholders for the first quarter of 2021 was $23.6 million or $1.00 per diluted share, as compared to net loss attributable to common stockholders of ($16.5) million or ($0.70) per diluted share in the prior year period. * Core funds from operations attributable to common stockholders and unit holders ("CFFO") was $5.3 million, or $0.16 per diluted share, compared to $7.1 million, or $0.22 per diluted share, in the prior year period, as this year's results were partially impacted by additional capital on the balance sheet.

Portfolio Performance

* Collected 97% of rents from multifamily properties for the three months ended March 31, 2021. * Total rental and other property revenues grew 1.4% to $51.1 million for the quarter from $50.4 million in the prior year period. * Blended lease rate growth of 3.5%, up 300 basis points on a sequential quarter-over-quarter basis. * March 2021 average lease growth finished at 5.8%, with renewals at 5.5% and new leases at 6.1%. Average lease growth accelerated to 7.7% growth in April. * Portfolio occupancy was 95.8% at March 31, 2021, up 150 basis points from the prior year. * Property Net Operating Income ("NOI") was $31.1 million, consistent with $31.1 million in the prior year period. * Property operating margins were 61.0% compared to 61.7% in the prior year period. * Same store average occupancy expanded 120 basis points and same store average rent increased 1.0%, as compared to the prior year period. * Same store revenue grew 2.0% and same store NOI increased 0.6%, as compared to the prior year period.

Portfolio Activity

* Consolidated real estate investments, at cost, were approximately $2.1 billion. * Sold three operating assets and two development properties for aggregate gross sales prices of $303 million with net proceeds of $102 million. The assets were sold at in-place cap rates of 4.0% adjusting for the buyer's year one taxes and $300 per unit replacement reserves. * Invested $7 million in preferred equity in a new stabilized property, and completed funding for eight existing preferred equity, mezzanine loan, and ground lease investments for $21 million. * Completed 72 value-add unit upgrades during the quarter achieving an average 24.3% ROI.

Balance Sheet and Market Activity

* Had $260.5 million of unrestricted cash and availability under revolving credit facilities as of March 31, 2021. * Paid quarterly dividend of $0.1625 in cash per share of common stock. * Raised $98 million through its continuous registered Series T Preferred Stock offering in the quarter. * Completed redemptions of its remaining 8.25% Series A Cumulative Redeemable Preferred Stock totaling $56 million, including accrued and unpaid dividends. * Redeemed 72,535 shares of Series B Preferred Stock through the issuance of 6,518,267 shares of Class A common stock. * Repurchased 3,557,562 shares of Class A common stock during the quarter at an average price of $11.45 per share.

Included later in this release are definitions of NOI, CFFO and other Non-GAAP financial measures and reconciliations of such measures to their most comparable financial measures as calculated and presented under GAAP.

First Quarter 2021 Financial Results

Net income attributable to common stockholders for the first quarter of 2021 was $23.6 million, compared to net loss attributable to common stockholders of ($16.5) million in the prior year period. Net income in 2021 was positively impacted by three asset sales generating $69 million in gain on sale of real estate investments. Net income (loss) attributable to common stockholders included non-cash expenses of $21.6 million or $0.93 per share in the first quarter of 2021 compared to $20.9 million or $0.88 per share for the prior year period.

CFFO for the first quarter of 2021 was $5.3 million, or $0.16 per diluted share, compared to $7.1 million, or $0.22 per diluted share, in the prior year period. CFFO was positively impacted by an increase in property NOI of $0.1 million and a decrease in interest expense of $0.8 million. This was primarily offset by a year-over-year reduction of $1.2 million in interest income from mezzanine loan and ground lease investments, $0.1 million in preferred returns, a $0.5 million increase in general and administrative expenses and preferred stock dividends of $1.1 million.

Total Portfolio Performance

$ In thousands, except average rental rates 1Q21 1Q20 Variance

Total Revenues ^(1) $ 55,802 $ 56,241 (0.8%)

Property Operating Expenses $ 19,932 $ 19,299 3.3%

NOI $ 31,149 $ 31,054 0.3%

Operating Margin 61.0% 61.7% (70) bps

Average Occupancy Percentage 95.2% 94.2% 100 bps

Average Rental Rate $ 1,315 $ 1,331 (1.2%)

^(1) Including interest income from mezzanine loan and ground leaseinvestments.

For the first quarter of 2021, property revenues increased by 1.4% compared to the same prior year period. Total portfolio NOI was $31.1 million, an increase of $0.1 million, or 0.3%, compared to the same period in the prior year. Property NOI margins were 61.0% of revenue for the quarter, compared to 61.7% in the prior year quarter.

SameStorePortfolioPerformance

$ In thousands, except average rental rates 1Q21 1Q20 Variance

Revenues $ 38,798 $ 38,028 2.0%

Property Operating Expenses $ 14,837 $ 14,209 4.4%

NOI $ 23,961 $ 23,819 0.6%

Operating Margin 61.8% 62.6% (80) bps

Average Occupancy Percentage 95.4% 94.2% 120 bps

Average Rental Rate $ 1,332 $ 1,319 1.0%

The Company's same store portfolio for the quarter ended March 31, 2021 included 26 properties. For the first quarter of 2021, same store NOI was $24.0 million, an increase of $0.1 million, or 0.6%, compared to the 2020 period. Same store property revenues grew by 2.0% compared to the 2020 period, primarily driven by a 120-basis point increase in occupancy and 1.0% increase in average rental rates; of the Company's 26 same store properties, 21 recognized occupancy increases and 18 recognized rental rate increases during the period. This was offset by $0.3 million increase in bad debt expense due to the impact of COVID-19.

Same store expenses increased 4.4%, or $0.6 million, primarily due to non-controllable real estate tax and insurance expense increases of $0.42 million due to municipality tax increases and industrywide multifamily insurance price increases, with the remaining $0.18 million due to administrative and repairs and maintenance expense increases.

Renovation Activity

The Company completed 72 value-add unit upgrades during the first quarter of 2021 achieving an average 24.3% ROI. Since inception, the Company has completed 3,027 value-add unit upgrades at an average cost of $5,953 per unit and achieved an average monthly rental rate increase of $117 per unit, equating to an average 23.6% ROI on all unit upgrades leased as of March 31, 2021. The Company has identified approximately 4,349 remaining units within the existing portfolio for value-add upgrades with similar projected economics to the completed renovations.

Portfolio Activity

The following activities were completed during the first quarter:

* Made a preferred equity investment of $7 million in a stabilized asset with 262-units called The Riley, located in Richardson, Texas. * Funded $21 million under existing preferred equity, mezzanine loan, and ground lease commitments in eight investments. * On January 28, 2021, the Company sold ARIUM Grandewood for a gross sales price of $65 million and net proceeds to the Company of $25 million. * On February 24, 2021, the Company sold James at South First for a gross sales price of $50 million and net proceeds to the Company of $18 million. * On March 1, 2021, the Company sold Marquis at the Cascades for a gross sales price of $91 million and net proceeds to the Company of $33 million. * On March 18, 2021, the Company's preferred equity investment in The Conley was redeemed for $17 million. * On March 25, 2021, Alexan Southside Place was sold and the Company's preferred equity investment was redeemed for $9.8 million in April 2021, with an additional $0.3 million expected to be received before year end.

The Company completed the following activity subsequent to March 31, 2021:

* On April 12, 2021, the Company made a $10.7 million preferred equity investment in the operating partnership of Peak Housing, a private REIT invested in a portfolio of 474 single-family homes located throughout Texas. * On April 14, 2021, the Company acquired a 95% interest in an 80-unit apartment community located in Olympia, Washington, known as Yauger Park. The total purchase price was $24.5 million, funded in part through the assumption of $15.1 million in mortgage loans secured by the property. * On April 26, 2021, the Company sold Plantation Park for a gross sales price of $32 million and net proceeds to the Company of $2.7 million.

Balance Sheet

As of March 31, 2021, the Company had $260.5 million of unrestricted cash and availability under its revolving credit facilities, and $1.5 billion of indebtedness outstanding.

During the first quarter, the Company raised gross proceeds of approximately $98.0 million through the issuance of 3.9 million shares of Series T Preferred Stock at $25.00 per share.

The Company repurchased 3,557,562 shares of Class A Common Stock during the first quarter at an average price of $11.45 per share and increased its repurchase program up to an aggregate $150 million.

On February 26, 2021, the Company redeemed the remaining 2,201,547 shares of its 8.25% Series A Cumulative Redeemable Preferred Stock. The total cost to redeem the shares was $55.7 million, including accrued and unpaid dividends.

The Company redeemed 72,535 shares of Series B Preferred Stock through the issuance of 6,518,267 shares of Class A common stock.

Dividend

On March 12, 2021, the Board of Directors authorized, and the Company declared, a quarterly cash dividend for the first quarter of 2021 equal to a quarterly rate of $0.1625 per share on its Class A and Class C Common Stock, payable to the stockholders of record as of March 25, 2021, which was paid on April 5, 2021. A portion of each dividend may constitute a return of capital for tax purposes.

On March 12, 2021, the Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 7.625% Series C Cumulative Redeemable Preferred Stock for the first quarter of 2021, in the amount of $0.4765625 per share. Further, the Board of Directors authorized, and the Company declared, a quarterly cash dividend on its 7.125% Series D Cumulative Preferred Stock for the first quarter of 2021, in the amount of $0.4453125 per share. The dividends were payable to the stockholders of record as of March 25, 2021 and were paid on April 5, 2021.

On January 13, 2021, the Board of Directors authorized, and the Company declared, a monthly dividend of $5.00 per share of Series B Preferred Stock, payable to the stockholders of record as of January 25, 2021, February 25, 2021, and March 25, 2021, which were paid in cash on February 5, 2021, March 5, 2021 and April 5, 2021, respectively.

On January 13, 2021, the Board of Directors authorized, and the Company declared, a monthly dividend of $0.128125 per share of Series T Preferred Stock, prorated on the basis of the actual number of days in the applicable dividend period during which each share was outstanding. Such pro-rated dividends were payable to the stockholders of record as of January 25, 2021, February 25, 2021, and March 25, 2021, and were paid in cash on February 5, 2021, March 5, 2021 and April 5, 2021, respectively.

On April 12, 2021, the Board of Directors authorized, and the Company declared, a monthly dividend of $5.00 per share of Series B Preferred Stock, payable to the stockholders of record as of April 23, 2021, which was paid in cash on May 5, 2021, and as of May 25, 2021, and June 25, 2021, which will be paid in cash on June 4, 2021 and July 2, 2021, respectively.

On April 12, 2021, the Board of Directors authorized, and the Company declared, a monthly dividend of $0.128125 per share of Series T Preferred Stock, prorated on the basis of the actual number of days in the applicable dividend period during which each share was outstanding. Such pro-rated dividends are payable to the stockholders of record as of April 23, 2021, which was paid in cash on May 5, 2021, and as of May 25, 2021, and June 25, 2021, which will be paid in cash on June 4, 2021 and July 2, 2021, respectively.

2021 Guidance

The Company is reaffirming its prior 2021 CFFO guidance. Based on the Company's current outlook and market conditions, the Company anticipates 2021 CFFO in the range of $0.65 to $0.70 per share. The Company anticipates that earnings growth will be more heavily weighted towards the second half of 2021 as it realizes the upside opportunity from deploying the proceeds from opportunistic dispositions in late 2020 and early 2021, plus the implementation of institutional property management, lease-ups, and value-add renovations at its recent acquisitions. For additional guidance details underlying earnings guidance, please see page 32 of Company's First Quarter 2021 Earnings Supplement available under the Investors section on the Company's website (www.bluerockresidential.com).

Conference Call

All interested parties can listen to the live conference call at 11:00 AM ET on Monday, May 10, 2021 by dialing +1 (866) 843-0890 within the U.S., or +1 (412) 317-6597, and requesting the "Bluerock Residential Conference."

For those who are not available to listen to the live call, the conference call will be available for replay on the Company's website two hours after the call concludes, and will remain available until June 10, 2021 at https://services.choruscall.com/mediaframe/webcast.html?webcastid=VDVxOVOq, as well as by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10155057.

The full text of this Earnings Release and additional Supplemental Information is available in the Investors section on the Company's website at http://www.bluerockresidential.com.

AboutBluerockResidentialGrowthREIT,Inc.

Bluerock Residential Growth REIT, Inc. (NYSE American: BRG) is a real estate investment trust that focuses on developing and acquiring a diversified portfolio of primarily affordable Class A highly amenitized live/work/play apartment communities in demographically attractive knowledge economy growth markets to appeal to the renter by choice. The Company's objective is to generate value through off-market/relationship-based transactions and, at the asset level, through value add improvements to properties and operations. The Company is included in the Russell 2000 and Russell 3000 Indexes. BRG has elected to be taxed as a real estate investment trust (REIT) for U.S. federal income tax purposes.

For more information, please visit the Company's website at www.bluerockresidential.com.

Forward Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other federal securities laws. These forward-looking statements are based upon the Company's present expectations, but these statements are not guaranteed to occur. Furthermore, the Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Investors should not place undue reliance upon forward-looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are based on reasonable assumptions, the Company's actual results and performance could differ materially from those set forth in these forward-looking statements due to numerous factors. Currently, one of the most significant factors is the potential adverse effect of the COVID-19 pandemic on the financial condition, results of operations, cash flows and performance of the Company and its tenants, partners and employees, 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, partners and employees 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, including national and local employment rates and the corresponding impact on the Company's tenants' ability to pay their rent on time or at all, among others. For further discussion of the factors that could affect outcomes, please refer to the risk factors set forth in Item 1A of the Company's Annual Report on Form 10-K filed by the Company with the U.S. Securities and Exchange Commission ("SEC") on February 23, 2021, and subsequent filings by the Company with the SEC. We claim the safe harbor protection for forward looking statements contained in the Private Securities Litigation Reform Act of 1995.

Portfolio Summary

The following is a summary of our operating real estate and mezzanine/preferred/ground lease investments as of March 31, 2021:

Multifamily Community Name Location Number Year Built/ Ownership Average % of Units Renovated ^(1) Interest Rent ^(2) Occupied ^(3)

Consolidated Operating Properties:

ARIUM Glenridge Atlanta, GA 480 1990 90% $ 1,293 94.6%

ARIUM Hunter's Creek Orlando, FL 532 1999 100% 1,417 96.4%

ARIUM Metrowest Orlando, FL 510 2001 100% 1,412 96.7%

ARIUM Westside Atlanta, GA 336 2008 90% 1,503 93.5%

Ashford Belmar Lakewood, CO 512 1988/1993 85% 1,674 92.8%

Avenue 25 Phoenix, AZ 254 2013 100% 1,252 96.9%

Carrington at Perimeter Park Morrisville, NC 266 2007 100% 1,263 95.9%

Chattahoochee Ridge Atlanta, GA 358 1996 90% 1,387 97.5%

Chevy Chase Austin, TX 320 1971 92% 964 98.1%

Cielo on Gilbert Mesa, AZ 432 1985 90% 1,087 97.2%

Citrus Tower Orlando, FL 336 2006 97% 1,364 95.5%

Denim Scottsdale, AZ 645 1979 100% 1,246 97.2%

Elan Austin, TX 270 2007 100% 1,134 95.6%

Element Las Vegas, NV 200 1995 100% 1,274 94.5%

Falls at Forsyth Cumming, GA 356 2019 100% 1,408 98.6%

Gulfshore Apartment Homes Naples, FL 368 2016 100% 1,287 95.4%

Navigator Villas Pasco, WA 176 2013 90% 1,143 99.4%

Outlook at Greystone Birmingham, AL 300 2007 100% 1,090 93.7%

Park & Kingston Charlotte, NC 168 2015 100% 1,303 97.0%

Pine Lakes Preserve Port St. Lucie, FL 320 2003 100% 1,380 97.8%

Plantation Park Lake Jackson, TX 238 2016 80% 1,232 94.5%

Providence Trail Mount Juliet, TN 334 2007 100% 1,264 95.5%

Roswell City Walk Roswell, GA 320 2015 98% 1,586 95.9%

Sands Parc Daytona Beach, FL 264 2017 100% 1,374 94.7%

The Brodie Austin, TX 324 2001 100% 1,313 95.1%

The District at Scottsdale Scottsdale, AZ 332 2018 100% 1,799 91.6%

The Links at Plum Creek Castle Rock, CO 264 2000 88% 1,466 95.5%

The Mills Greenville, SC 304 2013 100% 1,051 95.1%

The Preserve at Henderson Beach Destin, FL 340 2009 100% 1,498 97.9%

The Reserve at Palmer Ranch Sarasota, FL 320 2016 100% 1,376 96.6%

The Sanctuary Las Vegas, NV 320 1988 100% 1,132 95.3%

Veranda at Centerfield Houston, TX 400 1999 93% 1,021 95.5%

Villages of Cypress Creek Houston, TX 384 2001 80% 1,181 95.1%

Wesley Village Charlotte, NC 301 2010 100% 1,373 96.0%

Total/Average Consolidated Operating Properties 11,584 $ 1,318 ^(5) 95.8%

Mezzanine/Preferred/Ground Lease Investments:

Alexan CityCentre Houston, TX 340 $ 1,525

Avondale Hills Decatur, GA 240 1,538 ^(4)

Belmont Crossing Smyrna, GA 192 863

Domain at The One Forty Garland, TX 299 1,290

Encore Chandler Chandler, AZ 208 1,457 ^(4)

Georgetown Crossing Savannah, GA 168 993

Hunter's Pointe Pensacola, FL 204 983

Mira Vista Austin, TX 200 1,087

Motif Fort Lauderdale, FL 385 2,352 ^(4)

Park on the Square Pensacola, FL 240 1,140

Reunion Apartments Orlando, FL 280 1,366 ^(4)

Sierra Terrace Atlanta, GA 135 1,278

Sierra Village Atlanta, GA 154 1,224

The Commons Jacksonville, FL 328 902

The Hartley at Blue Hill, formerly The Park at Chapel Hill Chapel Hill, NC 414 1,599 ^(4)

The Riley Richardson, TX 262 1,430

Thornton Flats Austin, TX 104 1,499

Vickers Historic Roswell Roswell, GA 79 3,134

Water's Edge Pensacola, FL 184 1,141

Wayford at Concord Concord, NC 150 1,707 ^(4)

Zoey Austin, TX 307 1,762 ^(4)

Total/Average Mezzanine/Preferred/Ground Lease Investments 4,873 $ 1,432 ^(6)

Total/Average Portfolio 16,457 $ 1,351 ^(7)

^(1) Represents date of last significant renovation or year built if norenovations.

^(2) Represents the average effective monthly rent per occupied unit for thethree months ended March 31, 2021.

^(3) Percent occupied is calculated as (i) the number of units occupied as ofMarch 31, 2021, divided by (ii) total number of units, expressed as apercentage.

^(4) Represents the average pro forma effective monthly rent per occupied unitfor all expected units upon stabilization.

^(5) The average effective monthly rent including sold properties was $1,315for the three months ended March 31, 2021.

^(6) The average effective monthly rent including sold properties was $1,438for the three months ended March 31, 2021.

^(7) The average effective monthly rent including sold properties was $1,352for the three months ended March 31, 2021.

Consolidated Statement of Operations

For the Three Months Ended March 31, 2021 and 2020

(Unaudited and dollars in thousands except for share and per share data)

Three Months Ended

March 31,

2021 2020

Revenues

Rental and other property revenues $ 51,081 $ 50,353

Interest income from mezzanine loan and 4,721 5,888ground lease investments

Total revenues 55,802 56,241

Expenses

Property operating 19,932 19,299

Property management fees 1,281 1,294

General and administrative 6,645 6,371

Acquisition and pursuit costs 11 1,269

Weather-related losses, net 400 -

Depreciation and amortization 20,322 20,921

Total expenses 48,591 49,154

Operating income 7,211 7,087

Other income (expense)

Other income 152 40

Preferred returns on unconsolidated real 2,287 2,415estate joint ventures

Provision for credit losses (542) -

Gain on sale of real estate investments 68,913 253

Loss on extinguishment of debt and debt (3,040) -modification costs

Interest expense, net (13,835) (14,916)

Total other income (expense) 53,935 (12,208)

Net income (loss) 61,146 (5,121)

Preferred stock dividends (14,617) (13,547)

Preferred stock accretion (7,022) (3,925)

Net income (loss) attributable tononcontrolling interests

Operating Partnership units 10,160 (5,822)

Partially owned properties 5,766 (278)

Net income (loss) attributable to 15,926 (6,100)noncontrolling interests

Net income (loss) attributable to common $ 23,581 $ (16,493)stockholders

Net income (loss) per common share - $ 1.00 $ (0.70)Basic

Net income (loss) per common share - $ 1.00 $ (0.70)Diluted

Weighted average basic common shares 23,089,364 24,087,811outstanding

Weighted average diluted common shares 23,288,089 24,087,811outstanding

Consolidated Balance Sheets

First Quarter 2021

(Unaudited and dollars in thousands except for share and per share amounts)

March 31, December 31, 2021 2020

ASSETS

Net Real Estate Investments

Land $ 268,731 $ 279,481

Buildings and improvements 1,757,833 1,889,471

Furniture, fixtures and equipment 76,790 78,438

Total Gross Real Estate Investments 2,103,354 2,247,390

Accumulated depreciation (187,553) (186,426)

Total Net Operating Real Estate Investments 1,915,801 2,060,964

Operating real estate held for sale, net 32,518 36,213

Total Net Real Estate Investments 1,948,319 2,097,177

Cash and cash equivalents 148,070 83,868

Restricted cash 32,618 35,093

Notes and accrued interest receivable, net 169,712 157,734

Due from affiliates 10,447 339

Accounts receivable, prepaids and other assets, 39,198 29,502net

Preferred equity investments and investments in 65,874 83,485unconsolidated real estate joint ventures, net

In-place lease intangible assets, net 1,111 2,594

Non-real estate assets associated with operating 176 145real estate held for sale

Total Assets $ 2,415,525 $ 2,489,937

LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY

Mortgages payable $ 1,434,318 $ 1,490,932

Mortgages payable associated with operating real 26,433 38,773estate held for sale

Revolving credit facilities - 33,000

Accounts payable 1,500 1,317

Other accrued liabilities 29,023 31,025

Due to affiliates 665 618

Distributions payable 13,035 13,421

Liabilities associated with operating real estate 624 383held for sale

Total Liabilities 1,505,598 1,609,469

8.250% Series A Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 10,875,000 shares authorized; no shares and - 54,332 2,201,547 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 440,934 and 513,489 402,243 469,907 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

7.625% Series C Cumulative Redeemable Preferred Stock, liquidation preference $25.00 per share, 4,000,000 shares authorized; 2,295,845 shares 56,533 56,462 issued and outstanding as of March 31, 2021 and December 31, 2020

6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 13,622,291 and 308,362 219,967 9,717,917 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively

Equity

Stockholders' Equity

Preferred stock, $0.01 par value, 197,900,000shares authorized; no shares issued and - -outstanding

7.125% Series D Cumulative Preferred Stock,liquidation preference $25.00 per share, 4,000,000shares authorized; 2,774,338 shares issued and 66,867 66,867outstanding as of March 31, 2021 and December 31,2020

Common stock - Class A, $0.01 par value,747,509,582 shares authorized; 25,110,432 and 251 22022,020,950 shares issued and outstanding as ofMarch 31, 2021 and December 31, 2020, respectively

Common stock - Class C, $0.01 par value, 76,603shares authorized; 76,603 shares issued and 1 1outstanding as of March 31, 2021 and December 31,2020

Additional paid-in-capital 332,926 304,710

Distributions in excess of cumulative earnings (293,766) (313,392)

Total Stockholders' Equity 106,279 58,406

Noncontrolling Interests

Operating Partnership units 14,427 (3,272)

Partially owned properties 22,083 24,666

Total Noncontrolling Interests 36,510 21,394

Total Equity 142,789 79,800

TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND $ 2,415,525 $ 2,489,937EQUITY

Non-GAAP Financial MeasuresThe foregoing supplemental financial data includes certain non-GAAP financial measures that we believe are helpful in understanding our business and performance, as further described below. Our definition and calculation of these non-GAAP financial measures may differ from those of other REITs, and may, therefore, not be comparable.

Funds from Operations and Core Funds from Operations

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 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 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, unrealized gains and 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. We believe that CFFO is helpful to investors as a supplemental performance measure because it excludes the effects of certain items which can create significant earnings volatility, but which do not directly relate to our core recurring property operations. As a result, we believe that CFFO can help facilitate comparisons of operating performance between periods and provides a more meaningful predictor of future earnings potential.

Our calculation of CFFO differs from the methodology used for calculating CFFO by certain other REITs and, accordingly, our CFFO may not be comparable to CFFO reported by other REITs. Our management utilizes FFO and CFFO as measures of our operating performance after adjustment for certain non-cash items, such as depreciation and amortization expenses, and acquisition and pursuit costs that are required by GAAP to be expensed but may not necessarily be indicative of current operating performance and that may not accurately compare our operating performance between periods. Furthermore, although FFO and CFFO and other supplemental performance measures are defined in various ways throughout the REIT industry, we also believe that FFO and CFFO may provide us and our stockholders with an additional useful measure to compare our financial performance to certain other REITs.

Neither FFO nor CFFO is equivalent to net income, including net income attributable to common stockholders, or cash generated from operating activities determined in accordance with GAAP. Furthermore, FFO and CFFO do not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO nor CFFO should be considered as an alternative to net income, including net income attributable to common stockholders, as an indicator of our operating performance or as an alternative to cash flow from operating activities as a measure of our liquidity.

We have acquired four operating properties, made six property investments through preferred equity or mezzanine loan investments, sold seven operating properties and received our full mezzanine loan or preferred equity in four investments subsequent to March 31, 2020. The results presented in the table below are not directly comparable and should not be considered an indication of our future operating performance.

The table below reconciles our calculations of FFO and CFFO to net income (loss), the most directly comparable GAAP financial measure, for the three months ended March 31, 2021 and 2020 (in thousands, except per share amounts):

Three Months Ended

March 31,

2021 2020

Net income (loss) attributable to common $ 23,581 $ (16,493)stockholders

Add back: Net income (loss) attributable to 10,160 (5,822)Operating Partnership Units

Net income (loss) attributable to common 33,741 (22,315)stockholders and unit holders

Common stockholders and Operating PartnershipUnits pro-rata share of:

Real estate depreciation and amortization 19,405 19,900

Provision for credit losses 542 -

Gain on sale of real estate investments (62,427) (110)

FFO Attributable to Common Stockholders and (8,739) (2,525)Unit Holders

Common stockholders and Operating PartnershipUnits pro-rata share of:

Acquisition and pursuit costs 11 1,269

Non-cash interest expense 604 845

Unrealized gain on derivatives (30) (26)

Loss on extinguishment of debt and debt 2,564 -modification costs

Weather-related losses, net 360 -

Non-real estate depreciation and amortization 122 120

Other expense (income), net 98 (40)

Non-cash equity compensation 3,311 3,547

Preferred stock accretion 7,022 3,925

CFFO Attributable to Common Stockholders and $ 5,323 $ 7,115Unit Holders

Per Share and Unit Information:

FFO Attributable to Common Stockholders and $ (0.26) $ (0.08)Unit Holders - diluted

CFFO Attributable to Common Stockholders and $ 0.16 $ 0.22Unit Holders - diluted

Weighted average common shares and units 33,319,020 32,668,294outstanding - diluted

Earnings Before Interest, Taxes, Depreciation and Amortization for Real Estate ("EBITDAre")

NAREIT defines earnings before interest, taxes, depreciation and amortization for real estate ("EBITDAre") (September 2017 White Paper) as net income (loss), computed in accordance with GAAP, before interest expense, income taxes, depreciation and amortization expense, and further adjusted for gains and losses from sales of depreciated operating properties, and impairment write-downs of depreciated operating properties.

We consider EBITDAre to be an appropriate supplemental measure of our performance because it eliminates depreciation, income taxes, interest and non-recurring items, which permits investors to view income from operations unobscured by non-cash items such as depreciation, amortization, the cost of debt or non-recurring items.

Adjusted EBITDAre represents EBITDAre further adjusted for non-comparable items and it is not intended to be a measure of free cash flow for our management's discretionary use, as it does not consider certain cash requirements such as income tax payments, debt service requirements, capital expenditures and other fixed charges.

EBITDAre and Adjusted EBITDAre are not recognized measurements under GAAP. Because not all companies use identical calculations, our presentation of EBITDAre and Adjusted EBITDAre may not be comparable to similarly titled measures of other companies.

Below is a reconciliation of net income (loss) attributable to common stockholders to EBITDAre and Adjusted EBITDAre (unaudited and dollars in thousands).

Three Months Ended

March 31,

2021 2020

Net income (loss) attributable to common $ 23,581 $ (16,493)stockholders

Net income (loss) attributable to 15,926 (6,100) noncontrolling interests

Preferred stock dividends 14,617 13,547

Preferred stock accretion 7,022 3,925

Interest expense, net 13,835 14,916

Real estate depreciation and amortization 20,275 20,876

Provision for credit losses 542 -

Gain on sale of real estate investments (68,913) (253)

Loss on extinguishment of debt and debt 3,040 - modification costs

EBITDAre $ 29,925 $ 30,418

Acquisition and pursuit costs 11 1,269

Non-real estate depreciation and amortization 122 120

Weather-related losses, net 400 -

Non-cash equity compensation 3,311 3,547

Other expense (income), net 98 (40)

Adjusted EBITDAre $ 33,867 $ 35,314

Same Store Properties

Same store properties are conventional multifamily residential apartments which were owned and operational for the entire periods presented, including each comparative period.

Property Net Operating Income ("Property NOI")

We believe that net operating income, or 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. 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 measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance and captures trends in rental housing and property operating expenses. However, NOI should only be used as a supplemental measure of our financial performance.

The following table reflects net income (loss) attributable to common stockholders together with a reconciliation to NOI and to same store and non-same store contributions to consolidated NOI, as computed in accordance with GAAP for the periods presented (unaudited and amounts in thousands):

Three Months Ended

March 31,

2021 2020

Net income (loss) attributable to common $ 23,581 $ (16,493)stockholders

Add back: Net income (loss) attributable to 10,160 (5,822) Operating Partnership Units

Net income (loss) attributable to common 33,741 (22,315)stockholders and unit holders

Add common stockholders and Operating PartnershipUnits pro-rata share of:

Real estate depreciation and amortization 19,405 19,900

Non-real estate depreciation and 122 120 amortization

Non-cash interest expense 604 845

Unrealized gain on derivatives (30) (26)

Loss on extinguishment of debt and debt 2,564 - modification costs

Provision for credit losses 542 -

Property management fees 1,223 1,232

Acquisition and pursuit costs 11 1,269

Corporate operating expenses 6,570 6,296

Weather-related losses, net 360 -

Preferred dividends 14,617 13,547

Preferred stock accretion 7,022 3,925

Less common stockholders and Operating PartnershipUnits pro-rata share of:

Other income, net 51 40

Preferred returns on unconsolidated real 2,287 2,574 estate joint ventures

Interest income from mezzanine loan and 4,721 5,888 ground lease investments

Gain on sale of real estate investments 62,427 110

Pro-rata share of properties' income 17,265 16,181

Add:

Noncontrolling interest pro-rata share of 637 803 partially owned property income

Total property income 17,902 16,984

Add:

Interest expense 13,247 14,070

Net operating income 31,149 31,054

Less:

Non-same store net operating income 7,188 7,235

Same store net operating income ^(1) $ 23,961 $ 23,819

^ ^ Same store portfolio for the three months ended March 31, 2021 consists of(1) 26 properties, which represent 9,116 units.

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SOURCE Bluerock Residential Growth REIT, Inc.