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Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC  20549
 
FORM 10-Q

Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 
For the quarterly period ended June 30, 2020

OR
 
  \Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

      Commission File Number 001-07172
 
BRT APARTMENTS CORP.
(Exact name of Registrant as specified in its charter)
Maryland13-2755856
(State or other jurisdiction of(I.R.S. Employer Identification No.)
incorporation or organization)

60 Cutter Mill Road, Great Neck, NY
11021
(Address of principal executive offices)(Zip Code)

516-466-3100
(Registrant’s telephone number, including area code)


Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common StockBRTNYSE

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  No 
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Date File required to be submitted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). 
Yes  No 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company.  See definition of “large accelerated filer” “accelerated filer”, “smaller reporting company”and "emerging growth company" in Rule 12b-2 of the Exchange Act.  (Check one):
Large accelerated filer ☐
Accelerated filer
Non-accelerated filer ☐
Smaller reporting company
Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes   No 
 
Indicate the number of shares outstanding of each of the issuer’s classes of stock, as of the latest practicable date.
 
17,176,401 Shares of Common Stock,
par value $0.01 per share, outstanding on August 1, 2020


Table of Contents
BRT APARTMENTS CORP. AND SUBSIDIARIES
Table of Contents


Page No.
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 2.
Item 6.


1

Table of Contents
Explanatory Note

Unless otherwise indicated or the context otherwise requires, all references to (i) “us”, “we”, “BRT” or the “Company” refer to BRT Apartments Corp. and its consolidated and unconsolidated subsidiaries; (ii) all interest rates give effect to the related interest rate derivative, if any; (iii) "acquisitions" include investments in and by unconsolidated joint ventures; (iv) units under rehabilitation for which we have received or accrued rental income from business interruption insurance, while not physically occupied, are treated as leased (i.e., occupied) at rental rates in effect at the time of the casualty, and (v) "same store properties" refer to properties that we owned and operated for the entirety of both periods being compared, except for properties that are under construction, in lease-up, or are undergoing development or redevelopment. We move properties previously excluded from our same store portfolio (because they were under construction, in lease up or are in development or redevelopment) into the same store designation once they have stabilized (as described below) and such status has been reflected fully in all quarters during the applicable periods of comparison. Newly constructed, lease-up, development and redevelopment properties are deemed stabilized upon attainment of at least 90% physical occupancy.

See "Explanatory Note", "Risk Factors", "Management's Discussion and Analysis of Financial Condition and Results of Operations - Recent Developments - Non Reliance on Previously Reported Information" and Notes 2 and 16 to the consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2019 (the "Annual Report") for information regarding the restatement (the "Restatement") of prior period financial statements and a material weakness in internal control over financial reporting.
2

Table of Contents
Part I ‑ FINANCIAL INFORMATION
Item 1. Financial Statements
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Amounts in thousands, except per share data)

June 30.2020
(unaudited)
December 31, 2019
(audited)
ASSETS
Real estate properties, net of accumulated depreciation and amortization of $27,464 and $24,094$166,760  $169,689  
Investments in unconsolidated joint ventures180,768  177,071  
Real estate loan4,000  4,150  
Cash and cash equivalents16,874  22,699  
Restricted cash9,462  9,719  
Other assets7,738  7,282  
Total Assets $385,602  $390,610  
LIABILITIES AND EQUITY
Liabilities:
Mortgages payable, net of deferred costs of $693 and $823$131,840  $133,215  
Junior subordinated notes, net of deferred costs of $327 and $33737,073  37,063  
Accounts payable and accrued liabilities21,538  20,772  
Total Liabilities 190,451  191,050  
Commitments and contingencies
Equity:
BRT Apartments Corp. stockholders' equity:
Preferred shares $.01 par value 2,000 shares authorized, none outstanding    
 Common stock, $.01 par value, 300,000 shares authorized;
16,432 and 15,638 shares outstanding
164  156  
Additional paid-in capital244,683  232,331  
Accumulated other comprehensive loss(28) (10) 
Accumulated deficit(49,545) (32,824) 
Total BRT Apartments Corp. stockholders’ equity195,274  199,653  
Non-controlling interests(123) (93) 
Total Equity195,151  199,560  
Total Liabilities and Equity$385,602  $390,610  

See accompanying notes to consolidated financial statements.

3

Table of Contents
BRT APARTMENTS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in thousands, except per share data)


Three Months Ended
June 30,
Six Months Ended
June 30,
2020201920202019
Revenues:
Rental revenue $6,657  $7,097  $13,402  $13,983  
Other income159  190  338  434  
Total revenues6,816  7,287  13,740  14,417  
Expenses:
Real estate operating expenses - including $8 and $40 to related parties for the three months ended and $16 and $79 for the six months ended3,004  3,325  6,062  6,501  
Interest expense1,809  2,049  3,669  3,995  
General and administrative - including $238 and $155 to related parties for the three months ended and $464 and $297 for the six months ended2,957  2,481  6,324  5,025  
Depreciation1,809  1,428  3,370  2,975  
Total expenses9,579  9,283  19,425  18,496  
Total revenues less total expenses(2,763) (1,996) (5,685) (4,079) 
Equity in loss of unconsolidated joint ventures(1,387) (2,218) (3,202) (4,286) 
Loss from continuing operations(4,150) (4,214) (8,887) (8,365) 
 Income tax provision65  59  127  121  
Net loss from continuing operations, net of taxes(4,215) (4,273) (9,014) (8,486) 
Net income attributable to non-controlling interests(31) (44) (63) (78) 
Net loss attributable to common stockholders$(4,246) $(4,317) $(9,077) $(8,564) 
Weighted average number of shares of common stock outstanding:
Basic and diluted 17,176,401  15,900,316  17,054,327  15,893,443  
Per share amounts attributable to common stockholders:
Basic and diluted$(0.25) $(0.27) $(0.53) $(0.54) 

See accompanying notes to consolidated financial statements.
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BRT APARTMENTS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(Dollars in thousands)

Three Months Ended
June 30,
Six Months Ended
June 30,
2020201920202019
Net loss$(4,215) $(4,273) $(9,014) $(8,486) 
Other comprehensive income (loss):
Unrealized gain (loss) on derivative instruments1  (15) (22) (24) 
Other comprehensive income (loss) 1  (15) (22) (24) 
Comprehensive loss (4,214) (4,288) (9,036) (8,510) 
Comprehensive income attributable to non-controlling interests(30) (42) (59) (74) 
Comprehensive loss attributable to common stockholders$(4,244) $(4,330) $(9,095) $(8,584) 

See accompanying notes to consolidated financial statements.

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BRT APARTMENTS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(Dollars in thousands, except per share data)

Common StockAdditional
Paid-In Capital
Accumulated
Other Comprehensive Income
Accumulated DeficitNon- Controlling InterestTotal
Balances, December 31, 2019$156  $232,331  $(10) $(32,824) $(93) $199,560  
Distributions - common stock - $0.22 per share—  —  —  (3,822) —  (3,822) 
Restricted stock vesting1  (1) —  —  —    
Compensation expense - restricted stock and restricted stock units—  438  —  —  —  438  
Distributions to non-controlling interests—  —  —  —  (89) (89) 
Shares issued through equity offering program, net7  12,070  12,077  
Shares repurchased—  (616) (616) 
Net income (loss)—  —  —  (4,831) 32  (4,799) 
Other comprehensive loss—  —  (20) —  (3) (23) 
Comprehensive loss(4,822) 
Balances, March 31, 2020$164  $244,222  $(30) $(41,477) $(153) $202,726  
Distributions - common stock - $0.22 per share—  —  —  (3,822) —  (3,822) 
Compensation expense - restricted stock and restricted stock units—  461  —  —  —  461  
Net income (loss)—  —  —  (4,246) 31  (4,215) 
Other comprehensive income (loss)—  —  2  —  (1) 1  
Comprehensive loss(4,214) 
Balances, June 30, 2020$164  $244,683  $(28) $(49,545) $(123) $195,151  

See accompanying notes to consolidated financial statements.


















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BRT APARTMENTS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(Dollars in thousands, except per share data)


Common StockAdditional
Paid-In Capital
Accumulated
Other Comprehensive Income
Accumulated DeficitNon- Controlling InterestTotal
Balances, December 31, 2018$150  $223,373  $9  $(20,044) $331  $203,819  
Distributions - common stock - $0.20 per share—  —  —  (3,221) —  (3,221) 
Restricted stock vesting2  (2) —  —  —    
Compensation expense - restricted stock and restricted stock units—  365  —  —  —  365  
Distributions to non-controlling interests—  —  —  —  (46) (46) 
Net income (loss)—  —  —  (4,247) 34  (4,213) 
Other comprehensive loss—  —  (7) —  (2) (9) 
Comprehensive loss(4,222) 
Balances, March 31, 2019$152  $223,736  $2  $(27,512) $317  $196,695  
Distributions - common stock - $0.20 per share—  —  —  (3,220) —  (3,220) 
Compensation expense - restricted stock and restricted stock units—  373  —  —  —  373  
Distributions to non-controlling interests—  —  —  —  (39) (39) 
Shares issued through equity offering program, net—  (46) —  —  —  (46) 
Net income (loss)—  —  —  (4,317) 44  (4,273) 
Other comprehensive loss—  —  (13) —  (2) (15) 
Comprehensive loss(4,288) 
Balances, June 30, 2019$152  $224,063  $(11) $(35,049) $320  $189,475  

See accompanying notes to consolidated financial statements.


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BRT APARTMENTS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)

Six Months Ended June 30,
20202019
Cash flows from operating activities:
 Net loss$(9,014) $(8,486) 
 Adjustments to reconcile net loss to net cash (used in) provided by operating activities:
  Depreciation3,370  2,975  
  Amortization of deferred financing costs140  157  
  Amortization of restricted stock and restricted stock units899  738  
  Equity in loss of unconsolidated joint ventures3,202  4,286  
  Decrease (increase) in other assets(457) (2,404) 
  Increase in accounts payable and accrued liabilities657  4,772  
Net cash (used in) provided by operating activities(1,203) 2,038  
Cash flows from investing activities:
  Collections from real estate loan150  300  
  Improvements to real estate properties(441) (861) 
  Distributions from unconsolidated joint ventures6,801  8,523  
  Contributions to unconsolidated joint ventures(13,700) (24,348) 
Net cash used in investing activities(7,190) (16,386) 
Cash flows from financing activities:
  Mortgage principal payments(1,505) (1,528) 
  Proceeds from credit facility5,000  9,000  
  Repayment of credit facility(5,000)   
  Increase in deferred financing costs  (83) 
  Dividends paid(7,556) (6,361) 
  Distributions to non-controlling interests(89) (86) 
    Proceeds from the sale of common stock 12,077    
  Repurchase of shares of common stock(616) (46) 
Net cash provided by financing activities2,311  896  
  Net decrease in cash, cash equivalents and restricted cash(6,082) (13,452) 
  Cash, cash equivalents and restricted cash at beginning of period32,418  31,719  
  Cash, cash equivalents and restricted cash at end of period$26,336  $18,267  
Supplemental disclosure of cash flow information:
Cash paid during the period for interest$3,552  $3,789  
Cash paid for income taxes$30  $44  

See accompanying notes to consolidated financial statements.


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BRT APARTMENTS CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(Dollars in Thousands)

       The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated balance sheets that sum to the total of the same such amounts shown in the consolidated statements of cash flows.
Six Months Ended June 30,
20202019
  Cash and cash equivalents 16,874  8,305  
  Restricted cash9,462  9,962  
Total cash, cash equivalents and restricted cash, shown in consolidated statement of cash flows$26,336  $18,267  


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BRT APARTMENTS CORP. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 2020


Note 1 – Organization and Background

BRT Apartments Corp. (the "Company"), a Maryland corporation, owns and operates multi-family properties. The Company conducts its operations to qualify as a real estate investment trust, or REIT, for federal income tax purposes.
Generally, the multi-family properties are acquired with joint venture partners in transactions in which the Company contributes a significant portion of the equity. At June 30, 2020, the Company: (a) wholly owns eight multi-family properties located in six states with an aggregate of 1,880 units, and a carrying value of $156,560,000; and (b) has interests, through unconsolidated entities, in 31 multi-family properties located in nine states with an aggregate of 9,162 units (including 741 units at two properties currently in lease-up) and the carrying value of this net equity investment is $180,678,000. BRT's equity interests in these unconsolidated entities range from 32% to 90%. Most of the Company's properties are located in the Southeast United States and Texas.

The Company also owns and operates various other real estate assets. At June 30, 2020, the carrying value of the other real estate assets was $14,291,000, including a real estate loan of $4,000,000.

Note 2 – Basis of Preparation

The accompanying interim unaudited consolidated financial statements as of June 30, 2020, and for the three and six months ended June 30, 2020 and 2019, reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair presentation of the results for such interim periods. The results of operations for the three and six months ended June 30, 2020 and 2019, are not necessarily indicative of the results for the full year. The consolidated audited balance sheet as of December 31, 2019, has been derived from the audited financial statements at that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States ("GAAP"). Accordingly, these unaudited statements should be read in conjunction with the Company's audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2019, filed with the Securities and Exchange Commission ("SEC") on May 15, 2020, for complete financial statements.
The consolidated financial statements include the accounts and operations of the Company and its wholly owned subsidiaries.
The joint venture that owns a property in Yonkers New York, was determined not to be a variable interest entity ("VIE") but is consolidated because the Company has controlling rights in such entity.
The Company accounts for its investments in unconsolidated joint ventures under the equity method of accounting. All investments in unconsolidated joint ventures have sufficient equity at risk to permit the entity to finance its activities without additional subordinated financial support and, as a group, the holders of the equity at risk have power through voting rights to direct the activities of these ventures. As a result, none of these joint ventures are VIEs. Additionally, the Company does not exercise substantial operating control over these entities, and therefore the entities are not consolidated. These investments are recorded initially at cost, as investments in unconsolidated joint ventures, and subsequently adjusted for their share of equity in earnings, cash contributions and distributions. The distributions to each joint venture partner are determined pursuant to the applicable operating agreement and may not be pro-rata to the percentage equity interest each partner has in the applicable venture.  
The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results could differ from those estimates. Substantially all of the Company's assets are comprised of multi- family real estate assets generally leased to tenants on a one-year basis. Therefore, the Company aggregates real estate assets for reporting purposes and operates in one reportable segment.



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Note 3 - Equity

Equity Distribution Agreements

In November 2019, the Company entered into equity distribution agreements, with three sales agents to sell up to an aggregate of $30,000,000 of its common stock from time-to-time in an at-the-market offering. During the six months ended June 30, 2020, the Company sold 694,298 shares for an aggregate sales price of $12,293,000 (all of which shares were sold during the three months ended March 31, 2020), before commissions and fees of $185,000 and offering related expenses of $31,000. From the commencement of this program through June 30, 2020, the Company sold 806,261 shares for an aggregate sales price of $14,316,000 before commissions and fees of $314,000 and offering related expenses of $56,000.
Common Stock Dividend Distribution

The Company declared quarterly cash distributions of $0.22 per share, payable on July 9, 2020 to stockholders of record on June 26, 2020.

Stock Based Compensation

During the six months ended June 30, 2020, the Company's board of directors adopted and the stockholders' approved the 2020 Incentive Plan-this plan permits the Company to grant: (i) stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, up to a maximum of 1,000,000 shares; and (ii) cash settled dividend equivalent rights in tandem with the grant of restricted stock units and certain performance based awards.

Restricted Stock Units

In June 2016, the Company issued restricted stock units (the "Units") to acquire up to 450,000 shares of common stock pursuant to the 2016 Amended and Restated Incentive Plan (the "2016 Incentive Plan"). The Units entitle the recipients, subject to continued service through the March 31, 2021 vesting date, to receive (i) the underlying shares if and to the extent certain performance and/or market conditions are satisfied at the vesting date, and (ii) an amount equal to the cash dividends paid from the grant date through the vesting date with respect to the shares of common stock underlying the Units if, when, and to the extent, the related Units vest. For financial statement purposes, because the Units are not participating securities, the shares underlying the Units are excluded in the outstanding shares reflected on the consolidated balance sheet and from the calculation of basic earnings per share. The shares underlying the Units are contingently issuable shares.
Expense is recognized over the five-year vesting period on the Units which the Company expects to vest. For the three months ended June 30, 2020 and 2019, the Company recorded $35,000 and $36,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the Units. For the six months ended June 30, 2020 and 2019, the Company recorded $70,000 and $71,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the Units. At June 30, 2020 and December 31, 2019, $107,000 and $177,000 of compensation expense, respectively, had been deferred and will be charged to expense over the remaining vesting period.
Restricted Stock
In January 2020, the Company granted 158,299 shares of restricted stock pursuant to the 2018 Incentive Plan. As of June 30, 2020, an aggregate of 744,145 shares of unvested restricted stock are outstanding pursuant to the 2018 Incentive Plan, the 2016 Incentive Plan and the 2012 Incentive Plan (collectively, the "Prior Plans"). No additional awards may be granted under the Prior Plans. The shares of restricted stock vest five years from the date of grant and under specified circumstances, including a change in control, may vest earlier. For financial statement purposes, the restricted stock is not included in the outstanding shares shown on the consolidated balance sheets until they vest, but are included in the earnings per share computation. 
For the three months ended June 30, 2020 and 2019, the Company recorded $426,000 and $337,000, respectively, and for the six months ended June 30, 2020 and 2019, the Company recorded $829,000 and $667,000, respectively, of compensation expense related to the amortization of unearned compensation with respect to the restricted stock awards. At June 30, 2020 and December 31, 2019, $5,263,000 and $3,328,000 has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods of these restricted stock awards. The weighted average remaining vesting period of these shares of restricted stock is 2.6 years.

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Stock Buyback
On September 12, 2019, the Board of Directors approved a repurchase plan authorizing the Company, effective as of October 1, 2019, to repurchase up to $5,000,000 of shares of common stock through September 30, 2021. During the six months ended June 30, 2020, the Company repurchased 39,093 shares of common stock (all of which were repurchased during the three months ended March 31, 2020), at an average market price of $15.76 for an aggregate cost of $616,000. During the three and six months ended June 30, 2019, the Company repurchase 3,590 shares of common stock at an average market price of $12.80 at an aggregate cost of $46,000.
Per Share Data
Basic earnings (loss) per share is determined by dividing net income (loss) applicable to common stockholders for the applicable period by the weighted average number of shares of common stock outstanding during such period. The Units are excluded from the basic earnings per share calculation, as they are not participating securities. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into shares of common stock or resulted in the issuance of shares of common stock that share in the earnings of the Company. Diluted earnings per share is determined by dividing net income applicable to common stockholders for the applicable period by the weighted average number of shares of common stock deemed to be outstanding during such period. In calculating diluted earnings per share for the three and six months ended June 30, 2020 and 2019, the Company did not include any shares underlying the Units as their effect would have been anti-dilutive.
The following table sets forth the computation of basic and diluted earnings per share (dollars in thousands, except share amounts):
Three Months Ended June 30,Six Months Ended June 30,
2020201920202019
Numerator for basic and diluted earnings (loss) per share attributable to common stockholders:
Net loss attributable to common stockholders$(4,246) $(4,317) (9,077) (8,564) 
Denominator:
Denominator for basic earnings per share—weighted average number of shares17,161,401  15,900,316  17,054,327  15,893,443  
Effect of diluted securities         
Denominator for diluted earnings per share—adjusted weighted average number of shares and assumed conversions17,161,401  15,900,316  17,054,327  15,893,443  
Basic loss per share$(0.25) $(0.27) $(0.53) $(0.54) 
Diluted loss per share$(0.25) $(0.27) $(0.53) $(0.54) 

Note 4 - Leases

Lessor Accounting

The Company owns one commercial rental property which is leased to two tenants under operating leases with current expirations ranging from 2024 to 2028, with options to extend or terminate the leases. Revenues from such leases are reported as rental income, net and are comprised of (i) lease components, which includes fixed lease payments and (ii) non-lease components which includes reimbursements of property level operating expenses. The Company does not separate non-lease components from the related lease components, as the timing and pattern of transfer are the same, and account for the combined component in accordance with ASC 842.

Due to the impact of the COVID-19 pandemic, concession agreements have been executed with the Company’s two tenants. In accordance with the FASB Staff Q&A, Topic 842 and 840 - Accounting for Lease Concessions Related to the Effects of COVID-19 Pandemic, a lessor may make an accounting policy election to (i) not evaluate whether such COVID-19 pandemic related rent-relief is a lease modification under ASC 842 and (ii) treat each tenant rent deferral or forgiveness as if it were contemplated as part of the existing lease contract. The Company elected to apply this accounting policy to the two lease
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agreements, based on the type of concession provided to the tenant, where the revised cash flows are substantially the same or less than the original lease agreement. As a result, during the three months ended June 30, 2020, the Company issued a total concession of $75,000 for the two tenants. The Company has assessed the collectability of all other lease payments as probable as of June 30, 2020.

Lessee Accounting

The Company is a lessee under a ground lease in Yonkers, NY which is classified as an operating lease. The ground lease expires September 30, 2024 and provides for one 21-year renewal option. As of June 30, 2020, the remaining lease term is 4.25 years.

The Company is also a lessee under a corporate office lease in Great Neck, New York, which is classified as an operating lease. The lease expires on December 31, 2031 and provides a 5-year renewal option. As of June 30, 2020, the remaining lease term, including renewal options deemed exercised, is 16.5 years.

On March 31, 2019, the Company recorded $2.9 million of right of use assets ("ROU") and lease liabilities related to these operating leases. As of June 30, 2020, the Company's ROU assets and lease liabilities were $2.75 million and $2.77 million, respectively. As of December 31, 2019, the Company's ROU assets and lease liabilities were $2.82 million and $2.83 million, respectively.

The discount rate applied to measure each ROU asset and lease liability is based on the Company’s incremental borrowing rate (“IBR”). The Company considers the general economic environment and its historical borrowing rate activity and factors in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease. As the Company did not elect to apply hindsight, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842. Certain of the Company’s ground leases offer renewal options which it assesses against relevant economic factors to determine whether it is reasonably certain of exercising or not exercising the option. Lease payments associated with renewal periods that the Company is reasonably certain will be exercised, if any, are included in the measurement of the corresponding lease liability and ROU asset.

Note 5 ‑ Real Estate Properties

Real estate properties consist of the following (dollars in thousands):
June 30, 2020December 31, 2019
Land$29,227  $29,227  
Building154,854  154,854  
Building improvements10,143  9,702  
  Real estate properties194,224  193,783  
Accumulated depreciation(27,464) (24,094) 
  Total real estate properties, net$166,760  $169,689  


A summary of real estate properties owned is as follows (dollars in thousands):
      

December 31, 2019
Balance
AdditionsDepreciation June 30, 2020
Balance
Multi-family$159,434  $441  $(3,315) $156,560  
Land - Daytona, FL8,021      8,021  
Shopping centers/Retail - Yonkers, NY2,234    (55) 2,179  
Total real estate properties$169,689  $441  $(3,370) $166,760  
         


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Note 6 - Acquisitions and Dispositions

Property Acquisitions

The table below provides information regarding the Company's acquisition of a multi-family property, through an unconsolidated joint venture, during the six months ended June 30, 2020 (dollars in thousands):

LocationPurchase DateNo. of UnitsPurchase PriceAcquisition Mortgage DebtInitial BRT EquityOwnership PercentageCapitalized Acquisition Costs
Wilmington, North Carolina2/20/2020264  $38,000  $23,160  $13,700  80 %$459  

The table below provides information regarding the Company's acquisition of multi-family properties, through unconsolidated joint ventures, during the six months ended June 30, 2019 (dollars in thousands):
LocationPurchase DateNo. of UnitsPurchase PriceAcquisition Mortgage DebtInitial BRT EquityOwnership PercentageCapitalized Acquisition Costs
Kannapolis, North Carolina3/12/2019312  $48,065  $33,347  $11,231  65 %$559  
Birmingham, Alabama5/7/2019328  43,000  32,250  11,625  80 %546  
640  $91,065  $65,597  $22,856  $1,105  


Property Dispositions

The Company did not dispose of any real estate properties during the three and six months ended June 30, 2020 and 2019.

Impairment Charges

The Company reviews each real estate asset owned, including those held through investments in unconsolidated joint ventures, for impairment when there is an event or a change in circumstances indicating that the carrying amount may not be recoverable.

The Company measures and records impairment losses, and reduces the carrying value of owned properties, when indicators of impairment are present and the expected undiscounted cash flows related to those properties are less than their carrying amounts. For its unconsolidated joint venture investments, the Company measures and records impairment losses, and reduces the carrying value of the equity investment when indicators of impairment are present and the expected discounted cash flows related to the investment is less than the carrying value.

In cases where the Company does not expect to recover its carrying costs on properties held for use, the Company reduces its carrying costs to fair value, and for properties held for sale, the Company reduces its carrying value to the fair value less costs to sell. During the three and six months ended June 30, 2020 and 2019, no impairment charges were recorded.
Note 7 - Real Estate Loan
The Company has a loan receivable secured by several properties in Newark, NJ. At June 30, 2020 the principal balance of this loan was $4,000,000. This receivable bears interest, payable monthly, at a rate of 11% per year and matured June 30, 2020. The borrower did not pay the loan balance at maturity. The Company has assessed this loan for impairment and as a result of the assessment believes no impairment allowance is needed as we believe the loan balance and accrued interest is collectible.
Note 8 - Restricted Cash
Restricted cash represents funds held for specific purposes and are therefore not available for general corporate purposes. The restricted cash reflected on the consolidated balance sheets represents funds that are held by the Company specifically for capital improvements at certain multi-family properties owned by unconsolidated joint ventures.


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Note 9 – Investment in Unconsolidated Ventures

At June 30, 2020 and December 31, 2019, the Company held interests in unconsolidated joint ventures that own 31 and 30 multi-family properties, respectively (the "Unconsolidated Properties"). The condensed balance sheets below present information regarding such properties (dollars in thousands):

June 30, 2020December 31, 2019
ASSETS
Real estate properties, net of accumulated depreciation of $124,715 and $104,001$1,091,791  $1,070,941  
Cash and cash equivalents14,700  12,804