BRT Apartments Acquires Auburn Apartment Complex, Boosting Portfolio

BRT Apartments has acquired 1322 North, a Class A apartment complex in Auburn, Alabama, for $36.5 million through a joint venture. The property comprises 214 units and is situated near Auburn University and East Alabama Medical Center. BRT holds an 80% equity stake and plans to settle a $7 million loan from a $40 million credit facility using mortgage financing opportunities available until March 31, 2026. The acquisition enhances BRT's existing portfolio and complements its other Auburn property, The Village at Lakeside.

BRT Apartments Corp. has announced the acquisition of 1322 North, a 214-unit Class A apartment complex in Auburn, Alabama, for $36.5 million. The property, strategically located near Auburn University and East Alabama Medical Center, complements BRT's existing portfolio, enhancing its presence in the growing Southeastern market.

The acquisition was completed through a joint venture where BRT holds an 80% equity interest. The transaction involved a $24.4 million mortgage, with BRT contributing $13.4 million of equity, including a $10.7 million contribution from BRT and a $2.7 million contribution from the joint venture partner. Additionally, BRT borrowed $7.0 million from its $40 million credit facility to facilitate the acquisition.

The mortgage on 1322 North has a 5.38% fixed interest rate and is interest-only through maturity in 2032. BRT plans to settle the $7.0 million loan from its credit facility using mortgage financing opportunities available until March 31, 2026.

BRT Apartments Corp. currently owns or has interests in 30 multi-family properties across 11 states, totaling 8,161 units. The acquisition of 1322 North is expected to drive AFFO (Adjusted Funds from Operations) and NAV (Net Asset Value) per share growth by integrating the new property into its existing portfolio.

Potential Positives
The acquisition expands BRT's portfolio and enhances its presence in the growing Auburn market. Operational synergies and potential cost efficiencies can be realized by integrating the new property with its existing portfolio. The joint venture structure demonstrates strategic financial management, allowing BRT to leverage existing resources effectively.

Potential Negatives
The acquisition involves significant debt, with a $24.4 million mortgage and a $7.0 million loan from its credit facility, increasing BRT's financial leverage and potential risk. The reliance on mortgage financings and refinancings to pay off outstanding debt introduces uncertainty. The use of forward-looking statements highlights the inherent risks and uncertainties involved in BRT's acquisition strategy, which may undermine investor confidence.

References:
[1] https://www.nasdaq.com/articles/brt-apartments-corp-acquires-214-unit-class-apartment-complex-1322-north-auburn-alabama