ITEM
9.01
|
FINANCIAL STATEMENTS
AND EXHIBITS
|
(a)
|
Financial Statements
of Real Estate Acquired
Tenside Apartments
Independent Auditor’s Report
Historical Statements of Revenues
and Certain Direct Operating Expenses for the Year Ended December 31, 2015 and the Six Months Ended June 30, 2016 and
2015
Notes to Historical Statements of Revenues and Certain
Direct Operating Expenses
|
|
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(b)
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Pro Forma Financial Information
Bluerock Residential Growth
REIT, Inc.
Pro Forma Condensed Consolidated
Balance Sheet as of June 30, 2016 (unaudited)
Notes to Pro Forma Condensed Consolidated
Balance Sheet as of June 30, 2016 (unaudited)
Pro Forma Condensed Consolidated
Balance Sheet as of December 31, 2015 (unaudited)
Notes to Pro Forma Condensed Consolidated
Balance Sheet as of December 31, 2015 (unaudited)
Pro Forma Condensed Consolidated
Statement of Operations for the six months ended June 30, 2016 (unaudited)
Notes to Pro Forma Condensed Consolidated
Statement of Operations for the six months ended June 30, 2016 (unaudited)
Pro Forma Condensed Consolidated
Statement of Operations for the year ended December 31, 2015 (unaudited)
Notes to Pro Forma Condensed Consolidated
Statement of Operations for the year ended December 31, 2015 (unaudited)
|
Statements in this
Current Report on Form 8-K, including intentions, beliefs, expectations or projections relating to items such as the long-term
performance of the Company’s portfolio are forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based on current
expectations and assumptions with respect to, among other things, future economic, competitive and market conditions and future
business decisions that may prove incorrect or inaccurate. Important factors that could cause actual results to differ materially
from those in the forward looking statements include the risks described under the heading “Risk Factors” in the Company’s
Annual Report on Form 10-K filed with the SEC on February 24, 2016 and its other filings with the SEC.
(c)
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Exhibit No.
|
Description
|
|
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23.1
|
Consent of BDO USA, LLP
|
Independent Auditor’s Report
Board of Directors and Stockholders
Bluerock Residential Growth REIT, Inc.
New York, New York
We have audited the accompanying Historical
Statement of Revenues and Certain Direct Operating Expenses for the year ended December 31, 2015 of Tenside Apartments (the “Property”)
and the related notes (“Historical Statement”).
Management’s Responsibility for the Historical
Statement
Management is responsible for the preparation
and fair presentation of the Historical Statement in accordance with accounting principles generally accepted in the United States
of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair
presentation of the Historical Statement that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion
on the Historical Statement based on our audit. We conducted our audit in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the Historical Statement is free from material misstatement.
An audit involves performing procedures
to obtain audit evidence about the amounts and disclosures in the Historical Statement. The procedures selected depend on the
auditor’s judgment, including the assessment of the risks of material misstatement of the Historical Statement, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the Historical Statement in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. Accordingly,
we express no such opinion.
An audit also includes evaluating the appropriateness of accounting policies used and
the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the
Historical Statement.
We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the Historical Statement
referred to above presents fairly, in all material respects, the revenues and certain direct operating expenses of Tenside Apartments
for the year ended December 31, 2015, in accordance with accounting principles generally accepted in the United States of America.
Emphasis of Matter
The accompanying Historical Statement
was prepared for the purpose of complying with Rule 3-14 of the Securities and Exchange Commission Regulation S-X, as described
in Note 2, and is not intended to be a complete presentation of Tenside Apartments’ revenues and expenses. Our opinion is
not modified with respect to this matter.
/s/ BDO USA, LLP
New York, New York
September 29, 2016
Tenside Apartments
Historical Statements
of Revenues and
Certain Direct
Operating Expense
(Dollars
in thousands)
|
|
Year Ended
December 31, 2015
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|
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Six Months Ended
June 30, 2016
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|
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Six Months Ended
June 30, 2015
|
|
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(Unaudited)
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|
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(Unaudited)
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Revenues
|
|
|
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|
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|
|
|
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Rental income
|
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$
|
5,741
|
|
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$
|
2,942
|
|
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$
|
2,779
|
|
Other rental revenue
|
|
|
212
|
|
|
|
112
|
|
|
|
108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Total Revenues
|
|
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5,953
|
|
|
|
3,054
|
|
|
|
2,887
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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Certain Direct Operating Expenses
|
|
|
|
|
|
|
|
|
|
|
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Property operating expenses
|
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1,244
|
|
|
|
617
|
|
|
|
579
|
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Property taxes
|
|
|
741
|
|
|
|
414
|
|
|
|
321
|
|
|
|
|
|
|
|
|
|
|
|
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Total Certain Direct Operating Expenses
|
|
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1,985
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|
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1,031
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|
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900
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|
|
|
|
|
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Revenues
in Excess of Certain Direct Operating Expenses
|
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$
|
3,968
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|
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$
|
2,023
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|
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$
|
1,987
|
|
See accompanying notes to historical
statements of revenues and
certain direct operating expenses.
Tenside Apartments
Notes
to Historical Statements of Revenues and Certain Direct Operating Expenses
Tenside Apartments (the “Property”),
a multi-family apartment community located in Atlanta, Georgia, was acquired pursuant to a purchase agreement between an affiliate
of Bluerock Residential Holdings, L.P. (Bluerock Residential Growth REIT, Inc.’s operating partnership) and Waterton Tenside
Owner, LLC on July 14, 2016.
The
accompanying Historical Statements of Revenues and Certain Direct Operating Expenses (“Historical Statement”) have
been prepared for the purpose of complying with Rule 3-14 of the United States Securities and Exchange Commission Regulation S-X
and are not intended to be a complete presentation of the Property’s revenues and expenses. The Historical Statements have
been prepared on the accrual basis of accounting and requires management of the Property to make estimates and assumptions that
affect the reported amounts of the revenues and expenses during the reporting period. Actual results may differ from those estimates.
In preparation of the accompanying Historical
Statements, subsequent events were evaluated for recognition or disclosure through September 29, 2016, which is the date the Historical
Statements were available to be issued.
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3.
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Unaudited Interim
Information
|
In
the opinion of the Property’s management, all adjustments, consisting only of normal and recurring adjustments, necessary
for a fair presentation (in accordance with the Basis of Presentation as described in Note 2) have been made to the accompanying
unaudited amounts for the six month periods ended June 30, 2016 and 2015.
The
Property contains 336 units that are rented to tenants under various lease agreements that are generally one year in length. All
leases are accounted for as operating leases. Rental income is recognized as earned over the life of the lease agreements on a
straight-line basis. Some of the leases include provisions under which the Property is reimbursed for certain operating costs.
Revenue related to these reimbursed costs is recognized in the period the applicable costs are incurred and billed to tenants
pursuant to the lease agreements. Other rental revenue consists of charges billed to tenants for pet, administrative,
application and other fees and is recognized when earned.
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5.
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Certain Direct Operating
Expenses
|
Certain direct operating expenses include
only those costs expected to be comparable to the proposed future operations of the Property. Property operating costs include
administrative, maintenance, marketing, personnel costs, utilities, taxes and insurance, repairs, and improvements. Costs such
as depreciation, amortization, interest, and professional fees are excluded.
BLUEROCK RESIDENTIAL
GROWTH REIT, INC.
Unaudited Pro
Forma Condensed Consolidated Financial Statements Information
The following unaudited pro forma condensed consolidated financial
statements of Bluerock Residential Growth REIT, Inc. (together with its consolidated subsidiaries, the “Company,”
“we,” “our” or “us”) should be read in conjunction with our historical audited consolidated
financial statements as of and for the year ended December 31, 2015, and as of and for the six months ended June 30, 2016 (unaudited),
and the related notes thereto.
The unaudited pro forma condensed consolidated balance sheets,
as of December 31, 2015 and June 30, 2016, and statement of operations for the year ended December 31, 2015, and six months ended
June 30, 2016, have been prepared to provide pro forma financial information with regard to the Tenside Apartments acquisition
on July 14, 2016, which the Company expects to consolidate and includes pro forma information for each of the transactions described
below for which pro forma information has been provided in previous filings. The unaudited pro forma financial information gives
effect to:
|
(1)
|
The purchase of a 96.0% indirect
interest in Park & Kingston on March 16, 2015, which the Company consolidates on its balance sheet.
The purchase of a 94.6% indirect interest in Fox Hill
on March 26, 2015, which the Company consolidates on its balance sheet.
The preferred investment in Whetstone on May 20, 2015,
which the Company records under the equity method on its balance sheet. To date the Company has funded $12.9 million,
and the preferred investment will earn 15% annually.
The purchase of a 100.0% direct interest in Ashton
I on August 19, 2015, which the Company consolidates on its balance sheet.
The purchase of a 95.0% indirect interest in ARIUM
Palms on August 20, 2015, which the Company consolidates on its balance sheet.
The purchase of a 95.0% indirect interest in Sovereign
Property on October 29, 2015, which the Company consolidates on its balance sheet.
The purchase of a 95.0% indirect interest in Sorrel
Property, formerly referred to as the Phillips Creek Property, on October 29, 2015, which the Company consolidates on its
balance sheet.
The purchase of a 100.0% interest in Park & Kingston
II on November 30, 2015, which the Company consolidates on its balance sheet.
The purchase of a 100.0% interest in Ashton II on December
14, 2015, which the Company consolidates on its balance sheet.
The purchase of a 95.0% indirect interest in ARIUM
Gulfshore, formerly referred to as Summer Wind, on January 5, 2016, which the Company consolidates on its balance sheet.
The purchase of a 95.0% indirect interest in ARIUM
at Palmer Ranch, formerly referred to as Citation Club, on January 5, 2016, which the Company consolidates on its balance
sheet.
The purchase of a 100.0% indirect interest in The Preserve
at Henderson Beach, formerly referred to as Alexan Henderson Beach, on March 15, 2016, which the Company consolidates on
its balance sheet.
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|
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The preferred investment in Alexan
Southside on January 12, 2015, which the Company records under the equity method on its balance sheet.
To date the Company has funded $17.3 million, and the preferred investment will earn 15.0% annually.
The preferred investment in Cheshire Bridge Property
on May 29, 2015, which the Company records under the equity method on its balance sheet. To date the Company has funded
$16.4 million, and the preferred investment will earn 15% annually.
The preferred investment in Domain 1 on November 20,
2015, which the Company records under the equity method on its balance sheet. To date the Company has funded
$3.7 million, and the preferred investment will earn 15.0% annually.
The preferred investment in Lake Boone on December
18, 2015, which the Company records under the equity method on its balance sheet. To date the Company has funded
$9.9 million, and the preferred investment will earn 15.0% annually.
The preferred investment in West Morehead on January
6, 2016, which the Company records under the equity method on its balance sheet. To date the Company has funded
$3.5 million, and the preferred investment will earn 15.0% annually.
The completion of the Company’s underwritten
offering of 2,875,000 shares of 8.250% Series A Cumulative Redeemable Preferred Stock on October 21, 2015, or the October
2015 Series A Preferred Offering.
The completion of the Company’s underwritten
offering of 2,300,000 shares of 8.250% Series A Cumulative Redeemable Preferred Stock on April 25, 2016, or the April
2016 Series A Preferred Offering.
The completion of the Company’s underwritten
offering of 400,000 shares of 8.250% Series A Cumulative Redeemable Preferred Stock on May 26, 2016, or the May 2016 Series
A Preferred Offering.
The completion of the Company’s underwritten
offering of 2,300,000 shares of 7.625% Series C Cumulative Redeemable Preferred Stock on July 19, 2016, or the Series
C Preferred Offering.
|
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(2)
|
The sale of the Company’s
100.00% direct equity interest in the North Park Towers property, to non-affiliated buyers, which was
included in the Company’s historical consolidated balance sheet. The pro forma financial statements
do not reflect the net proceeds from the sale of the North Park Towers asset and the subsequent reinvestment.
The sale of the Company’s 75.0% indirect equity
interest in the Springhouse at Newport News property, to non-affiliated buyers, which was included in the Company’s
historical consolidated balance sheet. The pro forma financial statements do not reflect the net proceeds from the sale
of the Springhouse at Newport News asset and the subsequent reinvestment.
|
The pro forma condensed consolidated balance sheets assumes
that the Tenside Apartments acquisition and the April 2016 Series A Preferred Offering, the April 2016 Series A Preferred Offering
and the Series C Preferred Offering transactions referred to above occurred on December 31, 2015.
The pro forma consolidated statement of operations assume the
transactions referred to above occurred on January 1, 2015.
BLUEROCK RESIDENTIAL
GROWTH REIT, INC.
Unaudited Pro
Forma Condensed Consolidated Financial Statements Information
(Continued)
Our pro forma financial information is not necessarily indicative
of what our actual financial position and results of operations would have been as of the date and for the periods indicated,
nor does it purport to represent our future financial position or results of operations.
The pro forma financial statements do not reflect the following:
|
·
|
the operations of the Estates
at Perimeter, Grove at Waterford, Berry Hill, Oak Crest Villas, North Park Towers, and Springhouse at Newport News properties
in the statement of operations, as these assets have been sold; and
|
|
·
|
the net proceeds
from the sale of the North Park Towers Property and the Springhouse at Newport News Property and subsequent reinvestment; and
|
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·
|
the
investment of net proceeds from the October 2015 Series A Preferred Offering, the April 2016 Series A Preferred Offering, the
May 2016 Series A Preferred Offering and the Series C Preferred Offering.
|
All completed acquisitions are accounted for using the acquisition
method of accounting. The fair value of these assets and liabilities is allocated in accordance with Accounting Standards Codification
805, Business Combinations (“ASC 805”). The purchase prices were allocated to the acquired assets and liabilities
based on their estimated fair values at the dates of acquisition. The preliminary measurements of fair value reflected below are
subject to change. The Company expects to finalize the purchase price allocations as soon as practicable, but no later than one
year from each property’s respective acquisition date.
These unaudited pro forma condensed consolidated financial
statements are prepared for informational purposes only. In management’s opinion, all material adjustments necessary to
reflect the effects of the transactions referred to above, have been made. Our pro forma condensed consolidated financial statements
are based on assumptions and estimates considered appropriate by the Company’s management. However, they are not necessarily
indicative of what our consolidated financial condition or results of operations actually would have been assuming the transactions
referred to above had occurred as of the dates indicated, nor do they purport to represent our consolidated financial position
or results of operations for future periods.
BLUEROCK RESIDENTIAL
GROWTH REIT, INC.
UNAUDITED PRO
FORMA CONSOLIDATED BALANCE SHEET
AS OF JUNE 30,
2016
(In thousands,
except share and per share amounts)
|
|
|
|
|
Pro
Forma Adjustments for
|
|
|
|
|
|
|
Bluerock
Residential
Growth REIT, INC.
Historical
(a)
|
|
|
Tenside
Property
(b)
|
|
|
Series
A Preferred
Offering
(c)
|
|
|
Series
C Preferred
Offering
(d)
|
|
|
Disposals
/ Held for
Sale Items
(e)
|
|
|
Pro
Forma
Total
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Real Estate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
80,637
|
|
|
$
|
8,657
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
89,294
|
|
Building and improvements
|
|
|
562,769
|
|
|
|
63,208
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
625,977
|
|
Furniture, fixtures and equipment
|
|
|
19,846
|
|
|
|
590
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
20,436
|
|
Total Gross Operating Real Estate Investments
|
|
|
663,252
|
|
|
|
72,455
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
735,707
|
|
Accumulated depreciation
|
|
|
(29,403
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(29,403
|
)
|
Total Net Operating Real Estate Investments
|
|
|
633,849
|
|
|
|
72,455
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
706,304
|
|
Operating real estate held for sale, net
|
|
|
30,931
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(30,931
|
)
|
|
|
-
|
|
Total Net Real Estate Investments
|
|
|
664,780
|
|
|
|
72,455
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(30,931
|
)
|
|
|
706,304
|
|
Cash and cash equivalents
|
|
|
91,110
|
|
|
|
(20,493
|
)
|
|
|
-
|
|
|
|
55,289
|
|
|
|
-
|
|
|
|
125,906
|
|
Restricted cash
|
|
|
9,642
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
9,642
|
|
Due from affiliates
|
|
|
951
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
951
|
|
Accounts receivables, prepaid and other assets
|
|
|
7,787
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,787
|
|
Preferred equity investments and investments
in unconsolidated real estate joint ventures
|
|
|
83,564
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
83,564
|
|
In-place lease intangible assets, net
|
|
|
851
|
|
|
|
2,045
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,896
|
|
Non-real estate assets associated with operating
real estate held for sale
|
|
|
346
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(346
|
)
|
|
|
-
|
|
Total Assets
|
|
$
|
859,031
|
|
|
$
|
54,007
|
|
|
$
|
-
|
|
|
$
|
55,289
|
|
|
$
|
(31,277
|
)
|
|
$
|
937,050
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgages payable
|
|
$
|
456,451
|
|
|
$
|
51,730
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
508,181
|
|
Mortgage payable associated with operating
real estate held for sale
|
|
|
23,505
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(23,505
|
)
|
|
|
-
|
|
Accounts payable
|
|
|
691
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
691
|
|
Other accrued liabilities
|
|
|
10,719
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
10,719
|
|
Due to affiliates
|
|
|
1,680
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,680
|
|
Distributions payable
|
|
|
4,994
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,994
|
|
Liabilities associated with operating real
estate held for sale
|
|
|
406
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(406
|
)
|
|
|
-
|
|
Total Liabilities
|
|
|
498,446
|
|
|
|
51,730
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(23,911
|
)
|
|
|
526,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.250% Series A Cumulative Redeemable Preferred
Stock
|
|
|
138,024
|
|
|
|
-
|
|
|
|
75
|
|
|
|
-
|
|
|
|
-
|
|
|
|
138,099
|
|
Series B Redeemable Preferred Stock
|
|
|
1,658
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,658
|
|
7.625% Series C Cumulative Redeemable Preferred
Stock
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
55,409
|
|
|
|
-
|
|
|
|
55,409
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par value, 238,975,000
shares authorized; none issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Class A common stock, $0.01 par value,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
747,586,185 shares authorized;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,565,468 shares issued and outstanding, historical and pro forma
|
|
|
196
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
196
|
|
Additional paid-in-capital
|
|
|
252,648
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
572
|
|
|
|
253,220
|
|
Distributions
in excess of cumulative earnings
|
|
|
(62,633
|
)
|
|
|
-
|
|
|
|
(75
|
)
|
|
|
(120
|
)
|
|
|
(5,922
|
)
|
|
|
(68,750
|
)
|
Total Stockholders' Equity
|
|
|
190,211
|
|
|
|
-
|
|
|
|
(75
|
)
|
|
|
(120
|
)
|
|
|
(5,350
|
)
|
|
|
184,666
|
|
Noncontrolling Interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Partnership Units
|
|
|
2,595
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,595
|
|
Partially Owned Properties
|
|
|
28,097
|
|
|
|
2,277
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,016
|
)
|
|
|
28,358
|
|
Total Noncontrolling interests
|
|
|
30,692
|
|
|
|
2,277
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,016
|
)
|
|
|
30,953
|
|
Total Equity
|
|
|
220,903
|
|
|
|
2,277
|
|
|
|
(75
|
)
|
|
|
(120
|
)
|
|
|
(7,366
|
)
|
|
|
215,619
|
|
TOTAL LIABILITIES AND
EQUITY
|
|
$
|
859,031
|
|
|
$
|
54,007
|
|
|
$
|
-
|
|
|
$
|
55,289
|
|
|
$
|
(31,277
|
)
|
|
$
|
937,050
|
|
See Notes to Unaudited Pro Forma
Consolidated Balance Sheet
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED
BALANCE SHEET
AS OF JUNE 30, 2016
(a)
|
Historical consolidated financial
information derived from the Company’s Quarterly Report on Form 10-Q as of June 30, 2016.
|
|
|
(b)
|
The purchase of a 90.0% direct interest in Tenside
Apartments for a purchase price of $74.5 million, which the Company expects to consolidate on its balance sheet. The
Company also expects to consolidate a $52.2 million mortgage loan associated with this asset.
|
|
|
(c)
|
Reflects
an adjustment for accretion on the Company’s underwritten offerings of 2,700,000 shares of 8.250% Series A Cumulative Redeemable
Preferred Stock in 2016.
|
|
|
(d)
|
The
completion of the Company’s underwritten offering of 2,300,000 shares of 7.625% Series C Cumulative Redeemable Preferred
Stock on July 19, 2016, or the Series C Preferred Offering, including accretion.
|
|
|
(e)
|
Reflect the sale
of the Company’s 75.0% indirect equity interest in the Springhouse at Newport News property, to a
non-affiliated buyer, and the paydown of the mortgage payable, which was included in the Company’s historical
consolidated balance sheet. The pro forma financial statements do not reflect the net proceeds from the sale
of the Springhouse at Newport News asset and the subsequent reinvestment.
|
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED BALANCE
SHEET
AS OF DECEMBER 31, 2015
(In thousands, except share and per
share amounts)
|
|
|
|
|
Pro
Forma Adjustments for
|
|
|
|
|
|
|
Bluerock
Residential
Growth REIT, INC.
Historical
(a)
|
|
|
Tenside
Property
(b)
|
|
|
ARIUM
Gulfshore
(c)
|
|
|
ARIUM
at Palmer
Ranch
(d)
|
|
|
Preserve
at
Henderson Beach
(e)
|
|
|
Series
A Preferred
Offering
(f)
|
|
|
Series
C Preferred
Offering
(g)
|
|
|
Sold
and Held for
Sale Properties
(h)
|
|
|
Pro
Forma
Total
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Real Estate Investments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Land
|
|
$
|
65,057
|
|
|
$
|
8,657
|
|
|
$
|
10,000
|
|
|
$
|
7,800
|
|
|
$
|
4,100
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(6,500
|
)
|
|
$
|
89,114
|
|
Building and improvements
|
|
|
474,608
|
|
|
|
63,208
|
|
|
|
35,161
|
|
|
|
29,712
|
|
|
|
49,408
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(27,860
|
)
|
|
|
624,237
|
|
Furniture, fixtures and
equipment
|
|
|
17,155
|
|
|
|
590
|
|
|
|
886
|
|
|
|
885
|
|
|
|
708
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(1,371
|
)
|
|
|
18,853
|
|
Total Gross Operating Real Estate Investments
|
|
|
556,820
|
|
|
|
72,455
|
|
|
|
46,047
|
|
|
|
38,397
|
|
|
|
54,216
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(35,731
|
)
|
|
|
732,204
|
|
Accumulated depreciation
|
|
|
(23,437
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,236
|
|
|
|
(19,201
|
)
|
Total Net Operating Real Estate Investments
|
|
|
533,383
|
|
|
|
72,455
|
|
|
|
46,047
|
|
|
|
38,397
|
|
|
|
54,216
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(31,495
|
)
|
|
|
713,003
|
|
Operating real estate held
for sale, net
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Net Real Estate Investments
|
|
|
533,383
|
|
|
|
72,455
|
|
|
|
46,047
|
|
|
|
38,397
|
|
|
|
54,216
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(31,495
|
)
|
|
|
713,003
|
|
Cash and cash equivalents
|
|
|
68,960
|
|
|
|
(20,493
|
)
|
|
|
(13,913
|
)
|
|
|
(11,928
|
)
|
|
|
(10,291
|
)
|
|
|
64,749
|
|
|
|
55,289
|
|
|
|
-
|
|
|
|
132,373
|
|
Restricted cash
|
|
|
11,669
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,733
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(266
|
)
|
|
|
4,670
|
|
Due from affiliates
|
|
|
861
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
861
|
|
Accounts receivables, prepaid
and other assets
|
|
|
6,742
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(80
|
)
|
|
|
6,662
|
|
Preferred equity investments
and investments in unconsolidated real estate joint ventures
|
|
|
75,223
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
75,223
|
|
In-place lease intangible
assets, net
|
|
|
2,389
|
|
|
|
2,045
|
|
|
|
953
|
|
|
|
853
|
|
|
|
1,061
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
7,301
|
|
Deferred financing costs,
net
|
|
|
3,535
|
|
|
|
420
|
|
|
|
271
|
|
|
|
231
|
|
|
|
748
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(4
|
)
|
|
|
5,201
|
|
Non-real estate assets associated
with operating real estate held for sale
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Assets
|
|
$
|
702,762
|
|
|
$
|
54,427
|
|
|
$
|
33,358
|
|
|
$
|
27,553
|
|
|
$
|
39,001
|
|
|
$
|
64,749
|
|
|
$
|
55,289
|
|
|
$
|
(31,845
|
)
|
|
$
|
945,294
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mortgages payable
|
|
$
|
383,637
|
|
|
$
|
52,150
|
|
|
$
|
32,626
|
|
|
$
|
26,925
|
|
|
$
|
39,001
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
(23,895
|
)
|
|
$
|
510,444
|
|
Mortgage payable associated
with operating real estate held for sale
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Accounts payable
|
|
|
587
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(40
|
)
|
|
|
547
|
|
Other accrued liabilities
|
|
|
7,013
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(364
|
)
|
|
|
6,649
|
|
Due to affiliates
|
|
|
1,485
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,485
|
|
Distributions payable
|
|
|
3,163
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,163
|
|
Liabilities associated with
operating real estate held for sale
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Total Liabilities
|
|
|
395,885
|
|
|
|
52,150
|
|
|
|
32,626
|
|
|
|
26,925
|
|
|
|
39,001
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(24,299
|
)
|
|
|
522,288
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.250% Series A Cumulative Redeemable Preferred
Stock
|
|
|
69,165
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
65,354
|
|
|
|
-
|
|
|
|
-
|
|
|
|
134,519
|
|
Series B Redeemable Preferred Stock
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
7.625% Series C Cumulative Redeemable Preferred
Stock
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
55,530
|
|
|
|
-
|
|
|
|
55,530
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.01 par
value, 246,975,000 shares authorized; none issued and outstanding
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Class A common stock, $0.01
par value,
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
747,586,185 shares authorized;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
19,202,112 shares issued and outstanding, historical and pro forma
|
|
|
192
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
192
|
|
Class B-3 common
stock, $0.01 par value;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
804,605 shares authorized;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
353,629 shares issued and outstanding, historical and pro forma
|
|
|
4
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4
|
|
Additional paid-in-capital
|
|
|
248,484
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
572
|
|
|
|
249,056
|
|
Distributions
in excess of cumulative earnings
|
|
|
(41,496
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(605
|
)
|
|
|
(241
|
)
|
|
|
(6,096
|
)
|
|
|
(48,438
|
)
|
Total Stockholders' Equity
|
|
|
207,184
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(605
|
)
|
|
|
(241
|
)
|
|
|
(5,524
|
)
|
|
|
200,814
|
|
Noncontrolling Interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Partnership Units
|
|
|
2,908
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,908
|
|
Partially Owned Properties
|
|
|
27,620
|
|
|
|
2,277
|
|
|
|
732
|
|
|
|
628
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,022
|
)
|
|
|
29,235
|
|
Total Noncontrolling interests
|
|
|
30,528
|
|
|
|
2,277
|
|
|
|
732
|
|
|
|
628
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,022
|
)
|
|
|
32,143
|
|
Total Equity
|
|
|
237,712
|
|
|
|
2,277
|
|
|
|
732
|
|
|
|
628
|
|
|
|
-
|
|
|
|
605
|
|
|
|
(241
|
)
|
|
|
(7,546
|
)
|
|
|
232,957
|
|
TOTAL LIABILITIES AND
EQUITY
|
|
$
|
702,762
|
|
|
$
|
54,427
|
|
|
$
|
33,358
|
|
|
$
|
27,553
|
|
|
$
|
39,001
|
|
|
$
|
64,749
|
|
|
$
|
55,289
|
|
|
$
|
(31,845
|
)
|
|
$
|
945,294
|
|
See Notes to Unaudited Pro Forma Consolidated
Balance Sheet
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED
BALANCE SHEET
AS OF DECEMBER 31, 2015
(a)
|
Historical consolidated financial
information derived from the Company’s Quarterly Report on Form 10-K as of December 31, 2015.
|
|
|
(b)
|
The purchase of a 90.0% direct interest in Tenside
Apartments for a purchase price of $74.5 million, which the Company expects to consolidate on its balance sheet. The
Company also expects to consolidate a $52.2 million mortgage loan associated with this asset.
|
|
|
(c)
|
The purchase of a 95.0% indirect interest in the ARIUM
Gulfshore, formerly referred to as Summer Wind Apartments, on January 5, 2016 for a purchase price of $47.0 million, which the
Company expects to consolidate on its balance sheet. The Company also expects to consolidate a $32.6 million mortgage loan associated
with this asset.
|
|
|
(d)
|
The purchase of a 95.0% indirect interest in
the ARIUM at Palmer Ranch, formerly referred to as Citation Club on Palmer Ranch, on January 5, 2016 for a purchase price
of $39.3 million, which the Company expects to consolidate on its balance sheet. The Company also expects to consolidate a
$26.9 million mortgage loan associated with this asset.
|
|
|
(e)
|
The purchase of a 100% interest in The Preserve
at Henderson Beach, formerly referred to as Alexan Henderson Beach, on March 15, 2016 for a purchase price of $53.7 million,
which the Company expects to consolidate on its balance sheet. The Company also expects to consolidate a $37.3 million mortgage
loan along with a fair value adjustment of $1.7 million associated with this acquisition.
|
|
|
(f)
|
The completion of the Company’s underwritten
offering of 2,300,000 shares of 8.250% Series A Cumulative Redeemable Preferred Stock on April 25, 2016, or the April 2016
Series A Preferred Offering, and 400,000 shares of 8.250% Series A Cumulative Redeemable Preferred Stock on May 26, 2016,
or the May 2016 Series A Preferred Offering, including accretion.
|
|
|
(g)
|
The completion of the Company’s underwritten
offering of 2,300,000 shares of 7.625% Series C Cumulative Redeemable Preferred Stock on July 19, 2016, or the Series C Preferred
Offering, including accretion.
|
|
|
(h)
|
Reflect the sale
of the Company’s 75.0% indirect equity interest in the Springhouse at Newport News property, to a
non-affiliated buyer, and the paydown of the mortgage payable, which was included in the Company’s historical
consolidated balance sheet. The pro forma financial statements do not reflect the net proceeds from the sale
of the Springhouse at Newport News asset and the subsequent reinvestment.
|
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED STATEMENT
OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2016
|
|
|
|
|
Pro
Forma Adjustments for
|
|
|
|
|
|
|
Bluerock
Residential
Growth REIT, INC.
Historical
(a)
|
|
|
Tenside
Property
(b)
|
|
|
ARIUM
Gulfshore
(c)
|
|
|
ARIUM
at Palmer
Ranch
(d)
|
|
|
Preserve
at
Henderson Beach
(e)
|
|
|
Sold
and Held for
Sale Properties
(f)
|
|
|
Other
items
(g)
|
|
|
Pro
Forma
Total
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net rental
income
|
|
$
|
33,441
|
|
|
$
|
2,942
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
983
|
|
|
$
|
(2,027
|
)
|
|
$
|
-
|
|
|
$
|
35,339
|
|
Other property revenues
|
|
|
1,592
|
|
|
|
112
|
|
|
|
-
|
|
|
|
-
|
|
|
|
58
|
|
|
|
(112
|
)
|
|
|
-
|
|
|
|
1,650
|
|
Total revenues
|
|
|
35,033
|
|
|
|
3,054
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,041
|
|
|
|
(2,139
|
)
|
|
|
-
|
|
|
|
36,989
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property operating
|
|
|
13,982
|
|
|
|
1,149
|
|
|
|
-
|
|
|
|
-
|
|
|
|
324
|
|
|
|
(822
|
)
|
|
|
-
|
|
|
|
14,633
|
|
General and administrative
|
|
|
2,978
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,978
|
|
Management fees
|
|
|
2,629
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
2,629
|
|
Acquisition costs
|
|
|
1,457
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,457
|
|
Depreciation
and amortization
|
|
|
15,298
|
|
|
|
757
|
(h)
|
|
|
(672
|
)(h)
|
|
|
(605
|
)(h)
|
|
|
(114
|
)(h)
|
|
|
(644
|
)
|
|
|
(2,357
|
)
|
|
|
11,663
|
|
Total expenses
|
|
|
36,344
|
|
|
|
1,906
|
|
|
|
(672
|
)
|
|
|
(605
|
)
|
|
|
210
|
|
|
|
(1,466
|
)
|
|
|
(2,357
|
)
|
|
|
33,360
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating (loss) income
|
|
|
(1,311
|
)
|
|
|
1,148
|
|
|
|
672
|
|
|
|
605
|
|
|
|
831
|
|
|
|
(673
|
)
|
|
|
2,357
|
|
|
|
3,629
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Preferred returns and
equity in income of unconsolidated
real estate joint ventures
|
|
|
5,543
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,543
|
|
Interest
expense, net
|
|
|
(8,817
|
)
|
|
|
(990
|
)(i)
|
|
|
(15
|
)(j)
|
|
|
(13
|
)(k)
|
|
|
(328
|
)(l)
|
|
|
421
|
|
|
|
-
|
|
|
|
(9,742
|
)
|
Total other (expense)
income
|
|
|
(3,274
|
)
|
|
|
(990
|
)
|
|
|
(15
|
)
|
|
|
(13
|
)
|
|
|
(328
|
)
|
|
|
421
|
|
|
|
-
|
|
|
|
(4,199
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(4,585
|
)
|
|
|
158
|
|
|
|
657
|
|
|
|
592
|
|
|
|
503
|
|
|
|
(252
|
)
|
|
|
2,357
|
|
|
|
(570
|
)
|
Preferred stock dividends
|
|
|
(4,451
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(3,584
|
)
|
|
|
(8,035
|
)
|
Preferred stock accretion
|
|
|
(293
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(130
|
)
|
|
|
(423
|
)
|
Net (loss) income attributable to noncontrolling
interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating partnership
units
|
|
|
(136
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
128
|
|
|
|
(8
|
)
|
Partially-owned
properties
|
|
|
(14
|
)
|
|
|
16
|
|
|
|
33
|
|
|
|
30
|
|
|
|
-
|
|
|
|
(59
|
)
|
|
|
-
|
|
|
|
6
|
|
Net (loss) income attributable
to noncontrolling interests
|
|
|
(150
|
)
|
|
|
16
|
|
|
|
33
|
|
|
|
30
|
|
|
|
-
|
|
|
|
(59
|
)
|
|
|
128
|
|
|
|
(2
|
)
|
Net (loss) income attributable
to common stockholders
|
|
$
|
(9,179
|
)
|
|
$
|
142
|
|
|
$
|
624
|
|
|
$
|
562
|
|
|
$
|
503
|
|
|
$
|
(193
|
)
|
|
$
|
(1,485
|
)
|
|
$
|
(9,026
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Common Share - Basic
|
|
$
|
(0.45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.44
|
)
|
Net Loss Per Common Share - Diluted
|
|
$
|
(0.45
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(0.44
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Basic Common Shares Outstanding
|
|
|
20,604,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,604,124
|
|
Weighted Average Diluted Common Shares Outstanding
|
|
|
20,604,124
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,604,124
|
|
See Notes to Unaudited Pro Forma Consolidated
Statement of Operations
BLUEROCK RESIDENTIAL GROWTH REIT, INC.
NOTES TO UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 2016
(a)
|
Historical
consolidated financial information derived from the Company’s quarterly report on Form 10-Q for the six months ended
June 30, 2016.
|
|
|
(b)
|
Represents adjustments
to historical operations of the Company to give effect to the purchase of the Tenside Property on July 14, 2016 as if these
assets had been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual results of
operations, including pro forma adjustments for the six months ended June 30, 2016. Pro forma adjustments to historical results
included: increasing depreciation and amortization $0.76 million and increasing interest expense $0.99 million.
|
|
|
(c)
|
Represents adjustments
to historical operations of the Company to give effect to the purchase of the ARIUM Gulfshore Property on January 5, 2016
as if this asset had been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual
results of operations, including pro forma adjustments for the six months ended June 30, 2016. Pro forma adjustments to historical
results included: decreasing depreciation and amortization $0.67 million and increasing interest expense $0.02 million.
|
|
|
(d)
|
Represents adjustments
to historical operations of the Company to give effect to the purchase of the ARIUM at Palmer Ranch Property on January 5,
2016 as if this asset had been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual
results of operations, including pro forma adjustments for the six months ended June 30, 2016. Pro forma adjustments to historical
results included: decreasing depreciation and amortization $0.61 million and increasing interest expense $0.01 million.
|
|
|
(e)
|
Represents adjustments to historical operations of
the Company to give effect to the purchase of the Preserve at Henderson Beach Property on March 15, 2016 as if this asset had
been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual results of operations, including
pro forma adjustments for the six months ended June 30, 2016. Pro forma adjustments to historical results included: decreasing
depreciation and amortization $0.11 million and increasing interest expense $0.33 million.
|
|
|
(f)
|
Reflect the sale of
the Company’s 75.0% indirect equity interest in the Springhouse at Newport News property, to a non-affiliated buyer,
which was included in the Company’s historical consolidated statement of operations.
|
|
|
(g)
|
Other items have been
adjusted to reflect:
|
|
·
|
Ashton I
amortization expense decreasing by $0.28 million related to amortization of in-place leases as if this asset had been acquired
on January 1, 2015.
|
|
|
|
|
·
|
ARIUM Palms amortization
expense decreasing by $0.24 million related to amortization of in-place leases as if this asset had been acquired on January
1, 2015.
|
|
|
|
|
·
|
Sorrel amortization expense decreasing by $0.75 million
related to amortization of in-place leases as if this asset had been acquired on January 1, 2015.
|
|
|
|
|
·
|
Sovereign amortization expense decreasing by $0.68
million related to amortization of in-place leases as if this asset had been acquired on January 1, 2015.
|
|
|
|
|
·
|
Ashton II amortization expense decreasing by $0.40
million related to amortization of in-place leases as if this asset had been acquired on January 1, 2015.
|
|
|
|
|
·
|
increasing preferred
distributions by $2.19 million to reflect the 7.625% Series C Cumulative Redeemable Preferred Stock
distributions as if the proceeds of the July 2016 Preferred Offering were received on January 1, 2015.
|
|
·
|
increasing preferred distributions
by $1.4 million to reflect the 8.250% Series A Cumulative Redeemable Preferred Stock distributions as if the proceeds
of the April 2016 Preferred Offering and the May 2016 Preferred Offering were received on January 1, 2015.
|
|
|
|
|
·
|
increasing preferred accretion by $0.13 million for
the 8.250% Series A and 7.625% Series C Cumulative Redeemable Preferred Stock distributions.
|
|
|
|
|
·
|
the
operating partnership units’ interest in the consolidated property’s net income (loss).
|
(h)
|
Represents
depreciation and amortization expense adjustment to historical results for the six months ended June 30, 2016 based on the
preliminary allocation of the purchase price. Depreciation expense is calculated using the straight-line method over the estimated
useful lives of 30 – 35 years for the building, 15 years for building and land improvements and 3-7 years for furniture,
fixtures and equipment. Amortization expense on identifiable intangible assets is recognized using the straight-line method
over the life of the lease, which is generally less than one year. Amortization expense on the lender loan assumption fees
have been recognized using the straight-line method over the life of the remaining term of the mortgages.
|
|
|
(i)
|
Represents interest
expense for the Tenside Property estimated to have been incurred on the $52.2 million mortgage loan which bears a fixed interest
rate of 3.68% and matures on August 1, 2023, calculated as if the loan were acquired on January 1, 2015. The amounts in the
pro forma balance sheet are presented at fair value.
|
|
|
(j)
|
Represents interest expense for the ARIUM Gulfshore
Property incurred on the $32.6 million mortgage loan which bears a floating interest rate of 2.17% plus one-month LIBOR and matures
on February 1, 2023, based on the fair value of debt, calculated as if the loan were acquired on January 1, 2015. The amounts
in the pro forma balance sheet are presented at fair value.
|
|
|
(k)
|
Represents interest expense for the ARIUM at Palmer
Ranch Property estimated to have been incurred on the $26.9 million mortgage loan which bears a floating interest rate of 2.17%
plus one-month LIBOR and matures on February 1, 2023, based on the fair value of debt, calculated as if the loan were acquired
on January 1, 2015. The amounts in the pro forma balance sheet are presented at fair value.
|
|
|
(l)
|
Represents interest
expense for the Preserve at Henderson Beach Property estimated to have been incurred on the $37.3 million mortgage loan which
bears a fixed interest rate of 4.65% and matures on January 5, 2023, calculated as if the loan were acquired on January 1,
2015. The amounts in the pro forma balance sheet are presented at fair value.
|
|
|
(m)
|
Loss
per share is calculated in accordance with Accounting Standards Codification 260 – “Earnings per
Share.” The historical loss per share amounts are the amounts reported in the
Registrant’s Form 10-Q for the six months ended June 30, 2016.
|
BLUEROCK RESIDENTIAL
GROWTH REIT, INC.
UNAUDITED PRO FORMA CONSOLIDATED
STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER
31, 2015
|
|
|
|
|
Pro
Forma Adjustments for
|
|
|
|
|
|
|
Bluerock
Residential
Growth REIT, INC.
Historical
(a)
|
|
|
Tenside
Property
(b)
|
|
|
Park
& Kingston
(c)
|
|
|
Fox
Hill
(d)
|
|
|
Ashton
I
(e)
|
|
|
ARIUM
Palms
(f)
|
|
|
Sovereign
(g)
|
|
|
Sorrel
(h)
|
|
|
Ashton
II
(i)
|
|
|
ARIUM
Gulfshore
(j)
|
|
|
ARIUM
at Palmer
Ranch
(k)
|
|
|
Preserve
at
Henderson
Beach
(l)
|
|
|
Preferred
Equity
Investments
(m)
|
|
|
Sold
and Held for
Sale Properties
(n)
|
|
|
Other
items
(o)
|
|
|
Pro
Forma
Total
|
|
Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
rental income
|
|
$
|
42,259
|
|
|
$
|
5,741
|
|
|
$
|
338
|
|
|
$
|
838
|
|
|
$
|
2,323
|
|
|
$
|
2,088
|
|
|
$
|
1,511
|
|
|
$
|
1,113
|
|
|
$
|
452
|
|
|
$
|
4,097
|
|
|
$
|
3,613
|
|
|
$
|
4,711
|
|
|
$
|
-
|
|
|
$
|
(6,624
|
)
|
|
$
|
-
|
|
|
$
|
62,460
|
|
Other
property revenues
|
|
|
1,996
|
|
|
|
212
|
|
|
|
31
|
|
|
|
88
|
|
|
|
339
|
|
|
|
169
|
|
|
|
177
|
|
|
|
240
|
|
|
|
79
|
|
|
|
461
|
|
|
|
410
|
|
|
|
296
|
|
|
|
-
|
|
|
|
(448
|
)
|
|
|
-
|
|
|
|
4,050
|
|
Total revenues
|
|
|
44,255
|
|
|
|
5,953
|
|
|
|
369
|
|
|
|
926
|
|
|
|
2,662
|
|
|
|
2,257
|
|
|
|
1,688
|
|
|
|
1,353
|
|
|
|
531
|
|
|
|
4,558
|
|
|
|
4,023
|
|
|
|
5,007
|
|
|
|
-
|
|
|
|
(7,072
|
)
|
|
|
-
|
|
|
|
66,510
|
|
Expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property
operating
|
|
|
17,851
|
|
|
|
2,218
|
|
|
|
156
|
|
|
|
453
|
|
|
|
993
|
|
|
|
1,163
|
|
|
|
704
|
|
|
|
1,129
|
|
|
|
471
|
|
|
|
2,004
|
|
|
|
2,020
|
|
|
|
1,387
|
|
|
|
-
|
|
|
|
(3,510
|
)
|
|
|
-
|
|
|
|
27,039
|
|
General
and administrative
|
|
|
4,108
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,108
|
|
Management
fees
|
|
|
4,185
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
4,185
|
|
Acquisition
costs
|
|
|
3,508
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(11
|
)
|
|
|
-
|
|
|
|
3,497
|
|
Depreciation
and amortization
|
|
|
16,226
|
|
|
|
3,559
|
(p)
|
|
|
361
|
(p)
|
|
|
338
|
(p)
|
|
|
1,268
|
(p)
|
|
|
1,164
|
(p)
|
|
|
2,058
|
(p)
|
|
|
2,426
|
(p)
|
|
|
1,094
|
(p)
|
|
|
2,215
|
(p)
|
|
|
1,948
|
(p)
|
|
|
2,724
|
(p)
|
|
|
-
|
|
|
|
(1,259
|
)
|
|
|
-
|
|
|
|
34,122
|
|
Total expenses
|
|
|
45,878
|
|
|
|
5,777
|
|
|
|
517
|
|
|
|
791
|
|
|
|
2,261
|
|
|
|
2,327
|
|
|
|
2,762
|
|
|
|
3,555
|
|
|
|
1,565
|
|
|
|
4,219
|
|
|
|
3,968
|
|
|
|
4,111
|
|
|
|
-
|
|
|
|
(4,780
|
)
|
|
|
-
|
|
|
|
72,951
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
(loss) income
|
|
|
(1,623
|
)
|
|
|
176
|
|
|
|
(148
|
)
|
|
|
135
|
|
|
|
401
|
|
|
|
(70
|
)
|
|
|
(1,074
|
)
|
|
|
(2,202
|
)
|
|
|
(1,034
|
)
|
|
|
339
|
|
|
|
55
|
|
|
|
896
|
|
|
|
-
|
|
|
|
(2,292
|
)
|
|
|
-
|
|
|
|
(6,441
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income (expense)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income
|
|
|
62
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
62
|
|
Preferred
returns and equity in income of unconsolidated real estate joint ventures
|
|
|
6,590
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,080
|
|
|
|
12
|
|
|
|
-
|
|
|
|
11,682
|
|
Equity
in gain on sale of real estate asset of unconsolidated joint venture
|
|
|
11,303
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(11,303
|
)
|
|
|
-
|
|
|
|
-
|
|
Gain
on sale of joint venture interests
|
|
|
2,677
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(2,677
|
)
|
|
|
-
|
|
|
|
-
|
|
Interest
expense, net
|
|
|
(11,366
|
)
|
|
|
(1,979
|
)(q)
|
|
|
(258
|
)(r)
|
|
|
(217
|
)(s)
|
|
|
(889
|
)(t)
|
|
|
(483
|
)(u)
|
|
|
(852
|
)(v)
|
|
|
(928
|
)(w)
|
|
|
(489
|
)(x)
|
|
|
(922
|
)(y)
|
|
|
(768
|
)(z)
|
|
|
(1,614
|
)(aa)
|
|
|
-
|
|
|
|
1,426
|
|
|
|
-
|
|
|
|
(19,339
|
)
|
Total
other income (expense)
|
|
|
9,266
|
|
|
|
(1,979
|
)
|
|
|
(258
|
)
|
|
|
(217
|
)
|
|
|
(889
|
)
|
|
|
(483
|
)
|
|
|
(852
|
)
|
|
|
(928
|
)
|
|
|
(489
|
)
|
|
|
(922
|
)
|
|
|
(768
|
)
|
|
|
(1,614
|
)
|
|
|
5,080
|
|
|
|
(12,542
|
)
|
|
|
-
|
|
|
|
(7,595
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income (loss)
|
|
|
7,643
|
|
|
|
(1,803
|
)
|
|
|
(406
|
)
|
|
|
(82
|
)
|
|
|
(488
|
)
|
|
|
(553
|
)
|
|
|
(1,926
|
)
|
|
|
(3,130
|
)
|
|
|
(1,523
|
)
|
|
|
(583
|
)
|
|
|
(713
|
)
|
|
|
(718
|
)
|
|
|
5,080
|
|
|
|
(14,834
|
)
|
|
|
-
|
|
|
|
(14,036
|
)
|
Preferred
stock dividends
|
|
|
(1,153
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(14,730
|
)
|
|
|
(15,883
|
)
|
Preferred
stock accretion
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(846
|
)
|
|
|
(846
|
)
|
Net
income (loss) income attributable to noncontrolling interests
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
Operating
partnership units
|
|
|
35
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(229
|
)
|
|
|
(194
|
)
|
Partially-owned
properties
|
|
|
5,820
|
|
|
|
(180
|
)
|
|
|
(18
|
)
|
|
|
1
|
|
|
|
-
|
|
|
|
(28
|
)
|
|
|
(29
|
)
|
|
|
(141
|
)
|
|
|
10
|
|
|
|
(29
|
)
|
|
|
(36
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,066
|
)
|
|
|
1
|
|
|
|
(695
|
)
|
Net
income (loss) attributable to noncontrolling interests
|
|
|
5,855
|
|
|
|
(180
|
)
|
|
|
(18
|
)
|
|
|
1
|
|
|
|
-
|
|
|
|
(28
|
)
|
|
|
(29
|
)
|
|
|
(141
|
)
|
|
|
10
|
|
|
|
(29
|
)
|
|
|
(36
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,066
|
)
|
|
|
(228
|
)
|
|
|
(889
|
)
|
Net
income (loss) attributable to common stockholders
|
|
$
|
635
|
|
|
$
|
(1,623
|
)
|
|
$
|
(388
|
)
|
|
$
|
(83
|
)
|
|
$
|
(488
|
)
|
|
$
|
(525
|
)
|
|
$
|
(1,897
|
)
|
|
$
|
(2,989
|
)
|
|
$
|
(1,533
|
)
|
|
$
|
(554
|
)
|
|
$
|
(677
|
)
|
|
$
|
(718
|
)
|
|
$
|
5,080
|
|
|
$
|
(8,768
|
)
|
|
$
|
(15,348
|
)
|
|
$
|
(29,876
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings
(loss) per common share
(ab)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
Income (Loss) Per Common Share - Basic
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1.72
|
)
|
Net
Income (Loss) Per Common Share - Diluted
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(1.72
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
Average Basic Common Shares Outstanding
|
|
|
17,404,348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,404,348
|
|
Weighted
Average Diluted Common Shares Outstanding
|
|
|
17,417,198
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17,417,198
|
|
See Notes to Unaudited Pro Forma Consolidated
Statement of Operations
BLUEROCK RESIDENTIAL
GROWTH REIT, INC.
NOTES TO UNAUDITED
PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEAR ENDED
DECEMBER 31, 2015
(a)
|
Historical
consolidated financial information derived from the Company’s annual report on Form 10-K for the year ended December
31, 2015.
|
|
|
(b)
|
Represents adjustments
to historical operations of the Company to give effect to the purchase of the Tenside Property on July 14, 2016 as if this
asset had been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual results of
operations, including pro forma adjustments for the year ended December 31, 2015. Pro forma adjustments to historical results
included: increasing depreciation and amortization $3.56 million and increasing interest expense $1.98 million.
|
|
|
(c)
|
Represents adjustments
to historical operations of the Company to give effect to the purchase of the Park & Kingston Property on March 16, 2015
as if this asset had been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual
results of operations, including pro forma adjustments for the year ended December 31, 2015. Pro forma adjustments to historical
results included: increasing depreciation and amortization $0.36 million and increasing interest expense $0.26 million.
|
|
|
(d)
|
Represents adjustments
to historical operations of the Company to give effect to the purchase of the Fox Hill Property on March 26, 2016 as if this
asset had been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual results of
operations, including pro forma adjustments for the year ended December 31, 2015. Pro forma adjustments to historical results
included: increasing depreciation and amortization $0.34 million and increasing interest expense $0.22 million.
|
|
|
(e)
|
Represents adjustments
to historical operations of the Company to give effect to the purchase of the Ashton I Property on August 19, 2015 as if these
assets had been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual results of
operations, including pro forma adjustments for the year ended December 31, 2015. Pro forma adjustments to historical results
included: increasing depreciation and amortization $1.27 million and increasing interest expense $0.89 million.
|
|
|
(f)
|
Represents adjustments
to historical operations of the Company to give effect to the purchase of the ARIUM Palms Property on August 20, 2015 as if
this asset had been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual results
of operations, including pro forma adjustments for the year ended December 31, 2015. Pro forma adjustments to historical results
included: increasing depreciation and amortization $1.16 million and increasing interest expense $0.48 million.
|
|
|
(g)
|
Represents
adjustments to historical operations of the Company to give effect to the purchase of the Sovereign Property on October 29, 2015
as if this asset had been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual results
of operations, including pro forma adjustments for the year ended December 31, 2015. Pro forma adjustments to historical results
included: increasing depreciation and amortization $2.06 million and increasing interest expense $0.85 million.
|
|
|
(h)
|
Represents
adjustments to historical operations of the Company to give effect to the purchase of the Sorrel Property on October 29, 2015
as if this asset had been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual results
of operations, including pro forma adjustments for the year ended December 31, 2015. Pro forma adjustments to historical results
included: increasing depreciation and amortization $2.43 million and increasing interest expense $0.93 million.
|
|
|
(i)
|
Represents adjustments
to historical operations of the Company to give effect to the purchase of the Ashton II Property on December 14, 2015 as if
this asset had been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual results
of operations, including pro forma adjustments for the year ended December 31, 2015. Pro forma adjustments to historical results
included: increasing depreciation and amortization $1.09 million and increasing interest expense $0.49 million.
|
(j)
|
Represents adjustments to historical
operations of the Company to give effect to the purchase of the ARIUM Gulfshore Property on January 5, 2016 as if this asset had
been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual results of operations, including
pro forma adjustments for the year ended December 31, 2015. Pro forma adjustments to historical results included: increasing depreciation
and amortization $2.21 million and increasing interest expense $0.92 million.
|
|
|
(k)
|
Represents adjustments to historical operations of
the Company to give effect to the purchase of the ARIUM at Palmer Ranch Property on January 5, 2016 as if this asset had been
acquired on January 1, 2015. Adjustments were derived directly from the property’s actual results of operations, including
pro forma adjustments for the year ended December 31, 2015. Pro forma adjustments to historical results included: increasing depreciation
and amortization $1.95 million and increasing interest expense $0.77 million.
|
|
|
(l)
|
Represents adjustments to historical operations of
the Company to give effect to the purchase of the Preserve at Henderson Beach Property on March 15, 2016 as if this asset had
been acquired on January 1, 2015. Adjustments were derived directly from the property’s actual results of operations, including
pro forma adjustments for the year ended December 31, 2015. Pro forma adjustments to historical results included: increasing depreciation
and amortization $2.72 million and increasing interest expense $1.61 million.
|
|
|
(m)
|
Represents a convertible preferred
equity investment in the West Morehead property on January 6, 2016, Lake Boone Trail on December 18, 2015, Domain
Phase 1 on November 20, 2015, Cheshire Bridge on May 29, 2015, Whetstone on May 20, 2015, and Alexan Southside Place
on January 12, 2015 as if the assets had been acquired on January 1, 2015 and recorded under the equity method.
Additionally, represents an additional convertible preferred equity investment in Alexan CityCentre as if it had
taken place on January 1, 2015 and recorded under the equity method. Per the joint venture agreements, the interests
the Company acquired earn an annual 15.0% preferred return. Therefore, in accordance with the joint venture
agreements, the pro forma statement of operations was adjusted for the following:
Equity in earnings from unconsolidated joint ventures was increased $0.52 million to reflect preferred equity return from
the West Morehead property.
Equity in earnings from unconsolidated joint ventures
was increased $1.44 million to reflect preferred equity return from Lake Boone Trail.
Equity in earnings from unconsolidated joint ventures
was increased $0.50 million to reflect preferred equity return from Domain Phase 1.
Equity in earnings from unconsolidated joint ventures
was increased $1.07 million to reflect preferred equity return from Cheshire Bridge.
Equity in earnings from unconsolidated joint ventures
was increased $0.81 million to reflect preferred equity return from Whestone.
Equity in earnings from unconsolidated joint ventures was increased $0.60 million to reflect preferred equity return from
Alexan Southside Place.
Equity in earnings from unconsolidated
joint ventures was increased $0.13 million to reflect preferred equity return from Alexan CityCentre.
|
|
|
(n)
|
Reflects the sale of
the Company’s 100.00% direct equity interest in the North Park Towers property and the Company’s 75.0% indirect
equity interest in the Springhouse at Newport News property, both to non-affiliated buyers, which was included in the Company’s
historical consolidated statement of operations. Additionally, reflects the sales of the Company’s 25.00%
indirect equity interest in the Estates at Perimeter property and the 42.23% indirect equity interest in the Berry Hill property,
to non-affiliated buyers, which were consolidated in the Company’s historical consolidated statement of operations,
in each case to non-affiliated buyers.
|
(o)
|
Other items
have been adjusted to reflect:
|
|
·
|
the Company’s
purchase of an additional 13.19% indirect interest in Lansbrook Village, which the Company already has a controlling interest
in, as if this additional interest had been acquired on January 1, 2015.
|
|
|
|
|
·
|
increasing
preferred distributions by $4.78 million to reflect full year of 8.250% Series A Cumulative Redeemable Preferred Stock distributions
as if the proceeds of the October 2015 Preferred Offering were received on January 1, 2015.
|
|
|
|
|
·
|
increasing preferred distributions by
$5.57 million to reflect full year of 8.250% Series A Cumulative Redeemable Preferred Stock distributions as if the proceeds
of the April 2016 Preferred Offering and May 2016 Preferred Offering were received on January 1, 2015.
|
|
|
|
|
·
|
increasing
preferred distributions by $4.38 million to reflect full year of 7.625% Series C Cumulative Redeemable Preferred Stock distributions
as if the proceeds of the July 2016 Preferred Offering were received on January 1, 2015.
|
|
|
|
|
·
|
increasing preferred accretion by
$0.85 million for the 8.250% Series A and 7.625% Series C Cumulative Redeemable Preferred Stock distributions.
|
|
|
|
|
·
|
the
operating partnership units’ interest in the consolidated property’s net income (loss).
|
(p)
|
Represents
depreciation and amortization expense adjustment to historical results for the year ended December 31, 2015 based on the preliminary
allocation of the purchase price. Depreciation expense is calculated using the straight-line method over the estimated useful
lives of 30 – 35 years for the building, 15 years for building and land improvements and three to seven years for furniture,
fixtures and equipment. Amortization expense on identifiable intangible assets is recognized using the straight-line method
over the life of the lease, which is generally less than one year. Amortization expense on the lender loan assumption fees
have been recognized using the straight-line method over the life of the remaining term of the mortgages.
|
|
|
(q)
|
Represents interest
expense for the Tenside Property estimated to have been incurred on the $52.2 million mortgage loan which bears a fixed interest
rate of 3.68% and matures on August 1, 2023, calculated as if the loan were acquired on January 1, 2015. The amounts in the
pro forma balance sheet are presented at fair value.
|
|
|
(r)
|
Represents
interest expense for the Park & Kingston Property estimated to have been incurred on the $18.43 million mortgage loan which
bears a fixed interest rate of 3.41% and matures on April 1, 2020, calculated as if the loan were acquired on January 1, 2015.
The amounts in the pro forma balance sheet are presented at fair value.
|
|
|
(s)
|
Represents
interest expense for the Fox Hill Property estimated to have been incurred on the $26.71 million mortgage loan which bears a fixed
interest rate of 3.57% and matures on April 1, 2022, calculated as if the loan were acquired on January 1, 2015. The amounts in
the pro forma balance sheet are presented at fair value.
|
|
|
(t)
|
Represents interest
expense for the Ashton I Property estimated to have incurred on the $31.9 million mortgage loan which bears a fixed interest
rate of 4.67% and matures on December 1, 2025, based on the fair value of debt, calculated as if the loan were acquired on
January 1, 2015. The amounts in the pro forma balance sheet are presented at fair value.
|
(u)
|
Represents
interest expense for the ARIUM Palms Property estimated to have been incurred on the $25.0 million mortgage loan which bears a
floating interest rate of 2.22% plus one-month LIBOR and matures on September 1, 2022, calculated as if the loan were acquired
on January 1, 2015. The amounts in the pro forma balance sheet are presented at fair value.
|
|
|
(v)
|
Represents interest
expense for the Sovereign Property estimated to have been incurred on the $28.9 million mortgage loan which bears a fixed
interest rate of 3.46% and matures on November 10, 2022, calculated as if the loan were acquired on January 1, 2015. The amounts
in the pro forma balance sheet are presented at fair value.
|
|
|
(w)
|
Represents
interest expense for the Sorrel Property estimated to have been incurred on the $38.7 million mortgage loan which bears a floating
interest rate of 2.29% plus one-month LIBOR and matures on May 1, 2023, calculated as if the loan were acquired on January 1,
2015. The amounts in the pro forma balance sheet are presented at fair value.
|
|
|
(x)
|
Represents
interest expense for the Ashton II Property estimated to have been incurred on the $15.27 million mortgage loan which bears a
floating interest rate of 2.62% plus one-month LIBOR and matures on January 1, 2026, calculated as if the loan were acquired on
January 1, 2015. The amounts in the pro forma balance sheet are presented at fair value.
|
|
|
(y)
|
Represents
interest expense for the ARIUM Gulfshore Property incurred on the $32.6 million mortgage loan which bears a floating interest
rate of 2.17% plus one-month LIBOR and matures on February 1, 2023, based on the fair value of debt, calculated as if the loan
were acquired on January 1, 2015. The amounts in the pro forma balance sheet are presented at fair value.
|
|
|
(z)
|
Represents
interest expense for the ARIUM at Palmer Ranch Property estimated to have been incurred on the $26.9 million mortgage loan which
bears a floating interest rate of 2.17% plus one-month LIBOR and matures on February 1, 2023, based on the fair value of debt,
calculated as if the loan were acquired on January 1, 2015. The amounts in the pro forma balance sheet are presented at fair value.
|
|
|
(aa)
|
Represents interest
expense for the Preserve at Henderson Beach Property estimated to have been incurred on the $37.3 million mortgage loan which
bears a fixed interest rate of 4.65% and matures on January 5, 2023, calculated as if the loan were acquired on January 1,
2015. The amounts in the pro forma balance sheet are presented at fair value.
|
|
|
(ab)
|
Earnings per share is calculated in accordance with
Accounting Standards Codification 260 – “Earnings per Share.” The historical earnings per share amounts
are the amounts reported in the Registrant’s Form 10-K for the year ended December 31, 2015.
|