PR Newswire | Nov 4, 2021 08:31AM EDT

11/04 07:30 CDT

Bluerock Residential Growth REIT Announces Third Quarter 2021 Results- Quarterly Portfolio Lease Rate Growth of 16.5% -- October Portfolio Lease Rate Growth of 17.8% -- Same Store Rental Revenues Increased 7.7% - NEW YORK, Nov. 4, 2021

NEW YORK, Nov. 4, 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 September 30, 2021.

"The accelerated improvement in lease growth, same store revenue and NOI growth continues to validate our strategy focusing on building a highly amenitized Class A affordable first-ring suburban portfolio in knowledge economy growth markets," said Ramin Kamfar, Company Chairman and CEO. "In addition, we increased our investment pace throughout the quarter and expect it to carryforward into the end of the year. We also sold three investments at attractive cap rates below third-party NAV estimates which generated almost $100 million in net proceeds and will produce solid returns for shareholders upon capital reinvestment."

Third Quarter Highlights

Financial Results

* Net income attributable to common stockholders for the third quarter of 2021 was $12.5 million or $0.45 per diluted share, as compared to net loss attributable to common stockholders of ($17.1) million or ($0.71) per diluted share in the prior year period. * Core funds from operations attributable to common stockholders and unit holders ("CFFO") was $5.4 million, or $0.15 per diluted share, compared to $5.4 million, or $0.16 per diluted share, in the prior year period. This year's results were impacted by significant planned capital on the balance sheet in the first half of the quarter and is in the process of being fully invested into an attractive pipeline of opportunities through the year end.

Portfolio Performance

* Rental revenues grew 2.3% to $49.8 million from $48.7 million in the prior year period. * Property Net Operating Income ("NOI") increased 5.3% to $30.6 million from $29.1 million in the prior year period. * Same store revenues grew 7.7% and same store NOI increased 9.2%, as compared to the prior year period. * Same store average rent increased 7.1% and same store average occupancy expanded 30 basis points, as compared to the prior year period. * Blended lease rate growth was 16.5%, up 620 basis points on a sequential quarter-over-quarter basis. * September 2021 average lease growth accelerated to 17.9%, with renewals at 9.0% and new leases at 25.8%. Average lease growth was 17.8% in October. * Portfolio occupancy was 96.2% at September 30, 2021, up 110 basis points from the prior year. * Property operating margins improved 180 basis points to 61.6% compared to 59.8% in the prior year period.

Portfolio Activity

* Consolidated real estate investments, at cost, were approximately $2.1 billion. * Invested $83 million in operating assets with investment across multiple tranches of the capital structure. * Invested $33 million of preferred equity into unconsolidated operating properties. * Committed $68 million for four new preferred equity investments in development properties, of which $8 million has been funded. * Funded $8 million for seven existing preferred equity and mezzanine loan investments. * Sold two operating assets and one development property for $228 million with net proceeds of $100 million. * Completed 368 value-add unit upgrades during the quarter achieving an average 20.8% ROI through an average monthly rent premium of $137 per unit. * Subsequent to quarter end, we closed additional investments totaling $28 million in BRG equity.

Balance Sheet and Market Activity

* $300.7 million of unrestricted cash and availability under revolving credit facilities and $1.3 billion of indebtedness outstanding as of September 30, 2021. * Paid quarterly dividend of $0.1625 in cash per share of common stock. * Raised $115 million through the continuous registered Series T Preferred Stock offering with the issuance of 4.6 million shares at $25.00 per share. * Redeemed 673 shares of Series B Preferred Stock through the issuance of 58,552 shares of Class A common stock at an average price of $11.49 per share. Redeemed 24,476 shares of Series T Preferred Stock through the issuance of 54,170 shares of Class A common stock at an average price of $11.30 per share. * Repurchased 2,977,477 shares of Class A common stock during the quarter at an average price of $11.34 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.

Third Quarter 2021 Financial Results

Net income attributable to common stockholders for the third quarter of 2021 was $12.5 million, compared to net loss attributable to common stockholders of ($17.1) million in the prior year period. Net income in 2021 was positively impacted by gain on sales of real estate investments. Net income attributable to common stockholders included non-cash expenses of $19.3 million or $0.73 per share in the third quarter of 2021 compared to $19.4 million or $0.79 per share for the prior year period.

CFFO for the third quarter of 2021 was $5.4 million, or $0.15 per diluted share, compared to $5.4 million, or $0.16 per diluted share, in the prior year period. CFFO was positively impacted by an increase in property NOI of $1.6 million, an increase in preferred returns of $0.4 million, and a reduction in interest expense of $0.3 million. This was primarily offset by a year-over-year reduction of $0.9 million in interest income from mezzanine loan and ground lease investments, $0.4 million increase in general and administrative expense, and preferred stock dividend increase of $0.8 million.

Total Portfolio Performance

$ In thousands, except average rental rates 3Q21 3Q20 Variance YTD21 YTD20 Variance

Total Revenues ^(1) $ 53,796 $ 54,589 (1.5%) $163,434 $ 163,862 (0.3%)

Property Operating Expenses $ 19,138 $ 19,571 (2.2%) $ 57,978 $ 57,441 0.9%

NOI $ 30,645 $ 29,095 5.3% $ 92,608 $ 89,272 3.7%

Operating Margin 61.6% 59.8% 180 bps 61.5% 60.8% 70 bps

Average Occupancy Percentage 95.8% 95.1% 70 bps 95.6% 94.6% 100 bps

Average Rental Rate $ 1,384 $ 1,319 4.9% $ 1,350 $ 1,326 1.8%

^(1) Including interest income from loan and ground lease investments.

For the third quarter of 2021, property revenues increased by 2.3% compared to the same prior year period. Total portfolio NOI was $30.6 million, an increase of $1.6 million, or 5.3%, compared to the same period in the prior year. Property NOI margins were 61.6% for the quarter, compared to 59.8% in the prior year quarter.

Same Store Portfolio Performance

$ In thousands, except average rental rates 3Q21 3Q20 Variance YTD21 YTD20 Variance

Revenues $ 40,011 $ 37,138 7.7% $ 113,222 $ 107,479 5.3%

Property Operating Expenses $ 15,422 $ 14,620 5.5% $ 43,306 $ 41,089 5.4%

NOI $ 24,589 $ 22,518 9.2% $ 69,916 $ 66,390 5.3%

Operating Margin 61.5% 60.6% 90 bps 61.8% 61.8% 0 bps

Average Occupancy Percentage 95.5% 95.2% 30 bps 95.5% 94.7% 80 bps

Average Rental Rate $ 1,410 $ 1,317 7.1% $ 1,366 $ 1,319 3.6%

The Company's same store portfolio for the quarter ended September 30, 2021 included 25 properties. For the third quarter of 2021, same store NOI was $24.6 million, an increase of $2.1 million, or 9.2%, compared to the 2020 period. Same store property revenues grew by 7.7% compared to the 2020 period, primarily driven by a 7.1% increase in average rental rates and a 30-basis point increase in occupancy; all of the Company's 25 same store properties recognized rental rate increases and 14 recognized occupancy increases during the period. In addition, ancillary income, such as termination fees and late fees, increased $0.3 million.

Same store expenses increased 5.5%, or $0.8 million, partially due to non-controllable real estate tax increase of $0.2 million and insurance expense increase of $0.1 million due to industrywide multifamily insurance price increases. The remaining increase was due to a $0.2 million increase in repairs and maintenance and an increase of $0.3 million in administrative and marketing expenses.

Renovation Activity

The Company completed 368 value-add unit upgrades during the third quarter of 2021 achieving an average 20.8% ROI through an average monthly rent premium of $137 per unit. Since inception, the Company has completed 3,643 value-add unit upgrades at an average cost of $6,249 per unit and achieved an average monthly rental rate increase of $121 per unit, equating to an average 23.2% ROI on all unit upgrades leased as of September 30, 2021. The Company has identified approximately 5,096 remaining units within the existing portfolio for value-add upgrades with similar projected economics to the completed renovations.

Dividend

Through September 30, 2021, the Board of Directors has authorized, and the Company has declared, quarterly cash dividends as reflected in the following table.

Payable to stockholders Declarationof record as of Amount Date Paid or Payable Date

Class A Common Stock

June 11, June 25, 2021 $0.162500 July 2, 2021 2021

September September 24, 2021 $0.162500 October 5, 2021 10, 2021

Class C Common Stock

June 11, June 25, 2021 $0.162500 July 2, 2021 2021

September September 24, 2021 $0.162500 October 5, 2021 10, 2021

Series B Preferred Stock

April 12, June 25, 2021 $5.00 July 2, 2021 2021

July 12, July 23, 2021 $5.00 August 5, 2021 2021

July 12, August 25, 2021 $5.00 September 3, 2021 2021

July 12, September 24, 2021 $5.00 October 5, 2021 2021

Series C Preferred Stock

June 11, June 25, 2021 $0.4765625 July 2, 2021 2021

September September 24, 2021 $0.4765625 October 5, 2021 10, 2021

Series D Preferred Stock

June 11, June 25, 2021 $0.4453125 July 2, 2021 2021

September September 24, 2021 $0.4453125 October 5, 2021 10, 2021

Series T Preferred Stock ^(1)

April 12, June 25, 2021 $0.128125 July 2, 2021 2021

July 12, July 23, 2021 $0.128125 August 5, 2021 2021

July 12, August 25, 2021 $0.128125 September 3, 2021 2021

July 12, September 24, 2021 $0.128125 October 5, 2021 2021



Shares of newly issued Series T Preferred Stock that are held only a portion of the applicable monthly dividend period receive a prorated ^(1)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.



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. For additional guidance details underlying earnings guidance, please see page 35 of Company's Third 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 Thursday, November 4, 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 December 4, 2021 at https://services.choruscall.com/mediaframe/webcast.html?webcastid=zZxaUQU8, as well as by dialing +1 (877) 344-7529 in the U.S., or +1 (412) 317-0088 internationally, and requesting conference number 10159493.

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. 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 preferred equity/loan/ground lease investments as of September 30, 2021:

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

Consolidated Operating Investments:

Multifamily

ARIUM Glenridge Atlanta, GA 480 1990 90% $ 1,408 93.5%

ARIUM Westside Atlanta, GA 336 2008 90% 1,566 94.9%

Ashford Belmar Lakewood, CO 512 1988/1993 85% 1,732 95.9%

Avenue 25 Phoenix, AZ 254 2013 100% 1,351 94.1%

Burano Hunter's Creek, formerly ARIUM Hunter's Creek Orlando, FL 532 1999 100% 1,471 95.7%

Carrington at Perimeter Park Morrisville, NC 266 2007 100% 1,330 97.4%

Chattahoochee Ridge Atlanta, GA 358 1996 90% 1,453 97.5%

Chevy Chase Austin, TX 320 1971 92% 1,008 98.8%

Cielo on Gilbert Mesa, AZ 432 1985 90% 1,178 97.0%

Citrus Tower Orlando, FL 336 2006 97% 1,436 95.2%

Denim Scottsdale, AZ 645 1979 100% 1,344 96.1%

Elan Austin, TX 270 2007 100% 1,192 97.0%

Element Las Vegas, NV 200 1995 100% 1,365 94.5%

Falls at Forsyth Cumming, GA 356 2019 100% 1,491 98.3%

Gulfshore Apartment Homes Naples, FL 368 2016 100% 1,347 98.4%

Outlook at Greystone Birmingham, AL 300 2007 100% 1,196 95.7%

Pine Lakes Preserve Port St. Lucie, FL 320 2003 100% 1,524 95.9%

Providence Trail Mount Juliet, TN 334 2007 100% 1,355 97.9%

Roswell City Walk Roswell, GA 320 2015 98% 1,705 97.2%

Sands Parc Daytona Beach, FL 264 2017 100% 1,455 98.5%

The Brodie Austin, TX 324 2001 100% 1,392 96.0%

The Debra Metrowest, formerly ARIUM Metrowest Orlando, FL 510 2001 100% 1,477 95.5%

The Links at Plum Creek Castle Rock, CO 264 2000 88% 1,531 95.1%

The Mills Greenville, SC 304 2013 100% 1,099 98.7%

The Preserve at Henderson Beach Destin, FL 340 2009 100% 1,665 95.9%

The Sanctuary Las Vegas, NV 320 1988 100% 1,232 93.1%

Veranda at Centerfield Houston, TX 400 1999 93% 1,062 94.5%

Villages of Cypress Creek Houston, TX 384 2001 80% 1,222 96.4%

Wesley Village Charlotte, NC 301 2010 100% 1,429 95.7%

Windsor Falls Raleigh, NC 276 1994 100% 1,170 95.3%

Total Units 10,626

Single-Family Residential ^(4) Market Number Average of Homes Year Built

Granbury Granbury, TX 36 2020-2021 80% 1,556 97.2%

Indy Indianapolis, IN 44 1958 60% 753 88.6%

Lubbock Lubbock, TX 60 1955 80% 969 93.3%

Navigator Villas Pasco, WA 176 2013 90% 1,215 97.2%

Springfield Springfield, MO 290 2004 60% 1,126 96.2%

Springtown Springtown, TX 70 1991 80% 1,216 100.0%

Texarkana Texarkana, TX 29 1967 80% 940 93.1%

Wayford at Concord Concord, NC 150 2019 83% 1,868 98.0%

Yauger Park Villas Olympia, WA 80 2010 95% 2,043 97.5%

Total Homes 935

Total/Average Consolidated Operating Investments 11,561 $ 1,384 ^(5) 96.2%

Preferred Equity/Loan/Ground Lease Investments:

Multifamily

Alexan CityCentre Houston, TX 340 $ 1,628

Avondale Hills Decatur, GA 240 1,538

Belmont Crossing Smyrna, GA 192 924

Chandler Chandler, AZ 208 1,457

Deercross Indianapolis, IN 372 771

Deerwood Apartments Houston, TX 330 1,590

Domain at The One Forty Garland, TX 299 1,416

Georgetown Crossing Savannah, GA 168 1,105

Hunter's Pointe Pensacola, FL 204 1,009

Lower Broadway San Antonio, TX 386 1,769

Motif Fort Lauderdale, FL 385 2,263

Orange City Apartments Orange City, FL 298 1,457

Park on the Square Pensacola, FL 240 1,233

Renew 3030 Mesa, AZ 126 1,098

Reunion Apartments Orlando, FL 280 1,366

Sierra Terrace Atlanta, GA 135 1,292

Sierra Village Atlanta, GA 154 1,254

Spring Parc Dallas, TX 304 953

The Commons Jacksonville, FL 328 933

The Crossings at Dawsonville Dawsonville, GA 216 1,447

The Hartley at Blue Hill, formerly The Park at Chapel Hill Chapel Hill, NC 414 1,599

The Reserve at Palmer Ranch Sarasota, FL 320 1,448

The Riley Richardson, TX 262 1,485

Thornton Flats Austin, TX 104 1,628

Water's Edge Pensacola, FL 184 1,214

Wayford at Innovation Park Charlotte, NC 210 1,994

Zoey Austin, TX 307 1,762

Total Units 7,006

Single-Family Residential

Corpus Corpus Christi, TX 81 1,146

Jolin Weatherford, TX 24 1,360

Peak Housing Various ^(6) 474 968

The Cottages at Myrtle Beach Myrtle Beach, SC 294 1,743

The Cottages of Port St. Lucie Port St. Lucie, FL 286 2,133

Willow Park Willow Park, TX 46 2,362

Total Homes 1,205

Total/Average Preferred Equity/Loan/Ground Lease Investments 8,211 $ 1,440 ^(7)

Total/Average Portfolio 19,772 $ 1,407 ^(8)

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

For operating investments, represents the average effective^ monthly rent per occupied unit for the three months ended(2) September 30, 2021. For development investments, represents the average pro forma effective monthly rent per occupied unit for all expected occupied units upon stabilization.

^ Percent occupied is calculated as (i) the number of units(3) occupied as of September 30, 2021, divided by (ii) total number of units, expressed as a percentage.

^ Single-Family Residential includes single-family residential(4) homes and attached townhomes/flats.

^ The average effective monthly rent including sold properties(5) was $1,384 for the three months ended September 30, 2021.

^ Peak Housing includes portfolios of homes located in Indiana, Missouri and(6) Texas.

^ The average effective monthly rent including sold properties was $1,434(7) for the three months ended September 30, 2021.

^ The average effective monthly rent including sold properties was $1,405(8) for the three months ended September 30, 2021.

Consolidated Statement of OperationsFor the Three and Nine Months Ended September 30, 2021 and 2020(Unaudited and dollars in thousands except for share and per share data)

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Revenues

Rental and other $ 49,783 $ 48,666 $ 150,586 $ 146,713property revenues

Interest incomefrom loan and 4,013 5,923 12,848 17,149ground leaseinvestments

Total revenues 53,796 54,589 163,434 163,862

Expenses

Property operating 19,138 19,571 57,978 57,441

Property management 1,259 1,231 3,787 3,719fees

General and 6,856 5,901 20,097 17,575administrative

Acquisition and 413 2,242 428 3,933pursuit costs

Weather-related 140 - 540 -losses, net

Depreciation and 19,204 19,216 59,454 60,206amortization

Total expenses 47,010 48,161 142,284 142,874

Operating income 6,786 6,428 21,150 20,988

Other income(expense)

Other income 208 60 418 119

Preferred returnson unconsolidated 3,322 2,963 7,938 8,213real estate jointventures

Provision for (17) - (584) -credit losses

Gain on sale ofreal estate 48,943 - 137,285 58,096investments

Loss onextinguishment of (3,053) - (6,740) (13,985)debt and debtmodification costs

Interest expense, (12,755) (13,520) (40,050) (42,294)net

Total other income 36,648 (10,497) 98,267 10,149(expense)

Net income (loss) 43,434 (4,069) 119,417 31,137

Preferred stock (15,772) (15,003) (44,756) (42,787)dividends

Preferred stock (4,840) (4,451) (19,152) (11,978)accretion

Net income (loss)attributable tononcontrollinginterests

Operating 4,994 (6,270) 13,176 (6,679)Partnership units

Partially owned 5,284 (195) 11,637 1,512properties

Net income (loss)attributable to 10,278 (6,465) 24,813 (5,167)noncontrollinginterests

Net income (loss)attributable to $ 12,544 $ (17,058) $ 30,696 $ (18,461)common stockholders

Net income (loss)per common share - $ 0.46 $ (0.71) $ 1.14 $ (0.80)Basic

Net income (loss)per common share - $ 0.45 $ (0.71) $ 1.13 $ (0.80)Diluted

Weighted averagebasic common shares 26,567,269 24,566,196 25,941,571 24,321,282outstanding

Weighted averagediluted common 26,795,507 24,566,196 26,032,592 24,321,282shares outstanding

Consolidated Balance SheetsThird Quarter 2021(Unaudited and dollars in thousands except for share and per share amounts)

September December 30, 2021 31, 2020

ASSETS

Net Real Estate Investments

Land $ 263,361 $ 279,481

Buildings and improvements 1,772,822 1,889,471

Furniture, fixtures and equipment 84,221 78,438

Total Gross Real Estate Investments 2,120,404 2,247,390

Accumulated depreciation (205,124) (186,426)

Total Net Operating Real Estate Investments 1,915,280 2,060,964

Operating real estate held for sale, net - 36,213

Total Net Real Estate Investments 1,915,280 2,097,177

Cash and cash equivalents 163,349 83,868

Restricted cash 35,483 35,093

Notes and accrued interest receivable, net 179,395 157,734

Due from affiliates 682 339

Accounts receivable, prepaids and other assets, net 43,315 29,502

Preferred equity investments and investments in 127,421 83,485unconsolidated real estate joint ventures, net

In-place lease intangible assets, net 1,748 2,594

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

Total Assets $ 2,466,673 $ 2,489,937

LIABILITIES, REDEEMABLE PREFERRED STOCK AND EQUITY

Mortgages payable $ 1,341,241 $ 1,490,932

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

Revolving credit facilities - 33,000

Accounts payable 2,073 1,317

Other accrued liabilities 44,254 31,025

Due to affiliates 595 618

Distributions payable 14,177 13,421

Liabilities associated with operating real estate - 383held for sale

Total Liabilities 1,402,340 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 September 30, 2021 and December 31, 2020, respectively

6.000% Series B Redeemable Preferred Stock, liquidation preference $1,000 per share, 1,225,000 shares authorized; 359,925 and 513,489 shares 328,781 469,907 issued and outstanding as of September 30, 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 56,728 56,462 issued and outstanding as of September 30, 2021 and December 31, 2020

6.150% Series T Redeemable Preferred Stock, liquidation preference $25.00 per share, 32,000,000 shares authorized; 22,920,168 and 520,704 219,967 9,717,917 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

Equity

Stockholders' Equity

Preferred stock, $0.01 par value, 197,900,000 - -shares 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 September 30, 2021 and December31, 2020

Common stock - Class A, $0.01 par value,747,509,582 shares authorized; 26,120,780 and22,020,950 shares issued and outstanding as of 261 220September 30, 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 September 30, 2021 and December31, 2020

Additional paid-in-capital 339,815 304,710

Distributions in excess of cumulative earnings (295,672) (313,392)

Total Stockholders' Equity 111,272 58,406

Noncontrolling Interests

Operating Partnership units 15,730 (3,272)

Partially owned properties 31,118 24,666

Total Noncontrolling Interests 46,848 21,394

Total Equity 158,120 79,800

TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND $ 2,466,673 $ 2,489,937EQUITY

Non-GAAP Financial Measures

The 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 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 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, non-cash equity compensation 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 $1.9 million and $0.4 million, and $4.6 million and $1.2 million for the three and nine months ended September 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 twelve operating investments, made fifteen investments through preferred equity or loans, sold eight operating investments and received payoffs of our loan or preferred equity in eight investments subsequent to September 30, 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 and nine months ended September 30, 2021 and 2020 (in thousands, except per share amounts):

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Net income (loss)attributable to $ 12,544 $ (17,058) $ 30,696 $ (18,461)common stockholders

Add back: Net income(loss) attributable 4,994 (6,270) 13,176 (6,679)to OperatingPartnership Units

Net income (loss)attributable to 17,538 (23,328) 43,872 (25,140)common stockholdersand unit holders

Common stockholdersand OperatingPartnership Unitspro-rata share of:

Real estatedepreciation and 18,187 18,309 56,627 57,353amortization

Provision for credit 17 - 584 -losses

Gain on sale of real (43,359) - (124,416) (55,360)estate investments

FFO Attributable toCommon Stockholders (7,617) (5,019) (23,333) (23,147)and Unit Holders

Common stockholdersand OperatingPartnership Unitspro-rata share of:

Acquisition and 413 2,242 428 3,933pursuit costs

Non-cash interest 363 731 1,517 2,323expense

Unrealized loss on 41 98 31 67derivatives

Loss onextinguishment of 2,975 - 6,148 13,590debt and debtmodification costs

Amortization ofdeferred interest 984 - 1,981 -income on mezzanineloan

Weather-related 140 - 500 -losses, net

Non-real estatedepreciation and 122 122 365 364amortization

Other income, net (216) (52) (168) (49)

Non-cash equity 3,395 2,850 10,184 8,589compensation

Preferred stock 4,840 4,451 19,152 11,978accretion

CFFO Attributable toCommon Stockholders $ 5,440 $ 5,423 $ 16,805 $ 17,648and Unit Holders

Per Share and UnitInformation:

FFO Attributable to Common Stockholders $ (0.20) $ (0.15) $ (0.64) $ (0.70)and Unit Holders -diluted

CFFO Attributable to Common Stockholders $ 0.15 $ 0.16 $ 0.46 $ 0.53and Unit Holders -diluted

Weighted averagecommon shares and 37,461,558 33,688,877 36,360,295 33,187,360units outstanding -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 Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Net income (loss)attributable to common $ 12,544 $ (17,058) $ 30,696 $ (18,461)stockholders

Net income (loss) attributable to 10,278 (6,465) 24,813 (5,167) noncontrolling interests

Preferred stock dividends 15,772 15,003 44,756 42,787

Preferred stock accretion 4,840 4,451 19,152 11,978

Interest expense, net 12,755 13,520 40,050 42,294

Real estate depreciation 19,157 19,169 59,315 60,068 and amortization

Provision for credit 17 - 584 - losses

Gain on sale of real (48,943) - (137,285) (58,096) estate investments

Loss on extinguishment of debt and debt 3,053 - 6,740 13,985 modification costs

EBITDAre $ 29,473 $ 28,620 $ 88,821 $ 89,388

Acquisition and pursuit 413 2,242 428 3,933 costs

Amortization of deferred interest income on 984 - 1,981 - mezzanine loan

Non-real estate depreciation and 122 122 365 364 amortization

Weather-related losses, 140 - 540 - net

Non-cash equity 3,395 2,850 10,184 8,589 compensation

Other income, net (216) (52) (168) (49)

Adjusted EBITDAre $ 34,311 $ 33,782 $ 102,151 $ 102,225

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 allows us to evaluate the operating performance of our properties because it measures the core operations of property performance by excluding corporate level expenses and other items not related to property operating performance and captures trends in rental housing and property operating expenses. However, NOI should only be used as a supplemental measure of our financial performance.

The following table reflects net 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 Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Net income (loss) attributable $ 12,544 $ (17,058) $ 30,696 $ (18,461)to common stockholders

Add back: Net income(loss) attributable to 4,994 (6,270) 13,176 (6,679)Operating Partnership Units

Net income (loss) attributableto common stockholders and 17,538 (23,328) 43,872 (25,140)unit holders

Add common stockholders andOperating Partnership Unitspro-rata share of:

Real estate depreciation 18,187 18,309 56,627 57,353 and amortization

Non-real estate depreciation and 122 122 365 364 amortization

Non-cash interest expense 363 731 1,517 2,323

Unrealized loss on 41 98 31 67 derivatives

Loss on extinguishment of debt and debt 2,975 - 6,148 13,590 modification costs

Provision for credit 17 - 584 - losses

Property management fees 1,191 1,173 3,608 3,540

Acquisition and pursuit 413 2,242 428 3,933 costs

Corporate operating 6,781 5,817 19,871 17,279 expenses

Weather-related losses, 140 - 500 - net

Preferred dividends 15,772 15,003 44,756 42,787

Preferred stock accretion 4,840 4,451 19,152 11,978

Less common stockholders andOperating Partnership Unitspro-rata share of:

Other income, net 216 52 324 49

Preferred returns on unconsolidated real 3,322 2,935 7,938 8,343 estate joint ventures

Interest income from loan and ground lease 4,149 5,923 12,984 17,149 investments

Gain on sale of real 43,359 - 124,416 55,360 estate investments

Pro-rata share of properties' 17,334 15,708 51,797 47,173income

Add:

Noncontrolling interest pro-rata share of 977 725 2,356 2,278 partially owned property income

Total property income 18,311 16,433 54,153 49,451

Add:

Interest expense 12,334 12,662 38,455 39,821

Net operating income 30,645 29,095 92,608 89,272

Less:

Non-same store net 6,056 6,577 22,692 22,882 operating income

Same store net operating $ 24,589 $ 22,518 $ 69,916 $ 66,390income ^(1)

Same store portfolio for the three months ended September 30, 2021 consists^ ^ of 25 properties, which represent 8,882 units. Same store portfolio for(1) the nine months ended September 30, 2021 consists of 24 properties, which represent 8,628 units.

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SOURCE Bluerock Residential Growth REIT, Inc.