BRT 10-K & 10-Q changes, risk factors and insider trading

Set forth below is a discussion of certain risks affecting our business. The categorization of risks set forth below is meant to help you better understand the risks facing our business and is not intended to limit your consideration of the possible effects of these risks to the listed categories.Anycategories. Any adverse effects arising from the realization of any of the risks discussed, including our financial condition and results of operation, may, and likely will, adversely affect many aspects of our business.

General economic conditions in the U.S. have fluctuated significantly in recent quarters. Unfavorable market and economic conditions may significantly affect our occupancy levels, our rental rates and collections, the value of our properties and our ability to acquire or dispose of multifamilymulti-family properties on economically favorable terms. Our ability to lease units at our multifamilymulti-family properties at favorable rates is adversely affected by the increase in supply in the multifamilymulti-family and other rental markets and other housing alternatives, and is dependent upon the overall level in the economy, which may continue to be adversely affected by, among other things, inflationary conditions, job losses and unemployment levels, personal debt levels, a downturn in the housing market, stock market volatility, and uncertainty about the future. Some of our major expenses generally do not decline when related rents decline. We would expect that declines in our occupancy levels, rental revenues and/or the values of our multi-family properties would cause us to have less cash available to make payments on our debt and to pay dividends, which could adversely affect our financial condition or the market value of our securities.

In attracting and retaining residents to occupy our multi-family properties, we compete with numerous other housing providers. Our multi-family properties compete directly with other rental apartments, as well as condominiums and single-family homes that are available for rent or purchase in the markets in which our properties are located. Principal factors of competition include rent or price charged, attractiveness of the location of multi-family properties, and the quality and breadth of services. The number of competitive properties relative to demand in a particular area has a material effect on our ability to lease our properties andproperties, on the rents we charge.charge and our occupancy levels.

The cost of real estate taxes, utilities and insurance is a significant component of real estate operating expense. These expenses are subject to significant increases and fluctuations, including the impact of inflation, which we may be unable to control. For example, our real estate taxes have increased and will continue to increase as our properties are reassessed by taxing authorities and as property tax rates increase. Further, our real estate taxes have fluctuated and may not be comparable year-over-year because of, among other things, (i) the timing difference as to when we accrue real estate taxes and the results of any tax appeals with respect to such accrued taxes and (ii) determinations, over which we have no control, by governmental authorities to increase tax rates, assessments or procedures. In addition, our share of the insurance premiums at joint venture properties is determined by our joint venture partner at such properties. If the costs associated with real estate taxes, utilities and insurance premiums should rise, without being offset by a corresponding increase in revenues, our results of operations could be negatively impacted, and our ability to make payments on our debt and to make distributions couldwould be adversely affected.

The operating performance and value of our multi-family properties is impacted by the economic environment and other conditions of the specific markets in which our properties are concentrated. As of December 31, 20242025: (i) our wholly-owned properties generated approximately 75% and 10%9% of our 20242025 revenues from properties located in the Southeast and Texas, respectively, and (ii) the properties owned by unconsolidated joint ventures at December 31, 2024,2025, generated 54%59% and 46%41% of our 20242025 JV Rental and Other Revenues at properties located in the Southeast and Texas, respectively. Accordingly, adverse developments in such markets, including economic developments, pandemics, or natural or man-made disasters, couldwould adversely impact the cash flow and value of these properties. The concentration of our properties in the Southeast United States and Texas exposes us to risks of adverse developments which are greater than the risks of owning properties with a more geographically diverse portfolio.

We rely on property management companies to manage our properties. These management companies are responsible for, among other things, leasing and marketing rental units, selecting tenants (including an evaluation of the creditworthiness of tenants), collecting rent, paying operating expenses and maintaining our properties .properties. If these property management companies do not perform their duties properly, or, in the case of unconsolidated properties, we and/or our joint venture partners do not effectively supervise the activities of these managers, the occupancy rates and rental rates at thesuch properties managed by such property managers may decline and the expenses at such properties may increase. At December 31, 2024,2025, one property manager manages 11 properties, a second property manager manages eight properties, and fourfive other property managers manage three or fewer properties. Three properties are managed by a management company owned by or affiliated with a joint venture partner. The loss of our property managers, and in particular, the managers that manage multiple properties, could result in a decrease in occupancy rates, rental rates or both or an increase in expenses. Further, except for our multi-family properties covered by our master insurance program, property managers are also generally responsible for obtaining insurance coverage with respect to the properties they manage, which coverage is often obtained pursuant to blanket policies covering many properties in which we have no interest. Losses at properties managed by our property managers but in which we have no interest could reduce significantly the insurance coverage available at our properties managed by these property managers. It may be difficult to terminate a non-performing management company, particularly a management company owned or affiliated with a joint venture, because such termination may require the approval of the mortgagee, our joint venture partner or both. If we are unable to terminate an underperforming property manager on a timely basis, our occupancy and rental rates may decrease and our expenses may increase.

EightTen of our multi-family properties are owned through joint ventures with other persons or entities. Joint venture investments involve risks not otherwise present when acquiring real estate directly, including the following:

•our joint venture partner may not perform properly its property oversight responsibilities;

Our multi-family leases are generally for a term of one year or less. The short-term nature of these leases generally serves to reduce our risk to adverse effects of inflation as our leases allow for adjustments in the rental rate at the time of renewal, which may enable us to seek rent increases. However, since our leases typically permit the residents to leave at the end of the lease term without penalty,Accordingly, our revenues are impacted by declines in market rents more quickly than if our leases were for longer terms. If we are unable to promptly renew the leases or relet the units, or if the rental rates upon renewal or reletting are significantly lower than expectedthe previous rates, then our financial condition and results of operations may be adversely affected.

The following table sets forth, as of December 31,2024,31, 2025, the principal balance of the mortgage payments due at maturity on our wholly ownedwholly-owned and unconsolidated joint venture properties and the weighted average interest rate thereon (dollars in thousands):

Our ability to acquire additional multi-family properties, develop new properties and improve the properties in our portfolio is limited by the funds available to us (including funds available pursuant to our credit facility) and our ability to obtain, on acceptable terms, mortgage debt. At February 28,27, 2025,2026, we had approximately $62.7$24.8 million of cash and cash equivalents (of which a significant portion is at the property levelrequired for day-to-day operating expenses at the property level) and up to $40 million available to us under our credit facility. Our multi-family acquisition and value-add activities are constrained by funds available to us which will limit growth in our revenues and operating results.

In obtaining certain non-recourse loans, we have provided our lenders with standard carve out guarantees. These guarantees are only applicable if and when the borrower directly, or indirectly through an agreement with an affiliate, joint venture partner or other third party, voluntarily files a bankruptcy or similar liquidation or reorganization action or takes other actions that are fraudulent or improper (commonly referred to as “bad boy” guarantees). Although we believe that “bad boy” carve out guarantees are not guarantees of payment in the event of foreclosure or other actions of the foreclosing lender that are beyond the borrower’s control, some lenders in the real estate industry have recently sought to make claims for payment under such guarantees. In the event such a claim were made against us under a “bad boy” carve out guarantee, following foreclosure on mortgages or related loans, and such claim were successful, our business and financial results couldwould be materially adversely affected.

Fannie Mae and Freddie Mac have been a major source of financing for multi-family real estate in the United States and we have used loan programs sponsored by these agencies to finance most of our acquisitions of multi-family properties. There have been ongoing discussion by the government and other interested parties with regard to the long term structure and viability of Fannie Mae and Freddie Mac, which could result in adjustments to guidelines for their loan products. Should these agencies have their mandates changed or reduced, lose key personnel, be disbanded or reorganized by the government or otherwise discontinue providing liquidity for the multi-family sector, our ability to obtain financing through loan programs sponsored by the agencies could be negatively impacted. In addition, changes in our relationships with Fannie Mae and Freddie Mac, and the lenders that participate in these loan programs, with respect to our existing mortgage financing could impact our ability to obtain comparable financing for new acquisitions or refinancing for our existing multi-family real estate investments. Should our access to financing provided through Fannie Mae and Freddie Mac loan programs be reduced or impaired, it would significantly reduce our access to debt capital and/or increase borrowing costs and couldwould significantly limit our ability to acquire properties on acceptable terms and reduce the values to be realized upon property sales.

We conduct, and intend to conduct, substantially all of our business operations through our subsidiaries, including our unconsolidated subsidiaries. Accordingly, our only source of cash to fund our operations and pay our obligations are distributions from our subsidiaries. We cannot assure you that our subsidiaries will be able to, or be permitted to, make distributions to us that will enable us to fund our operations. Each of our subsidiaries is or will be a distinct legal entity and, under certain circumstances, legal and contractual restrictions (e.g., restrictions imposed pursuant to mortgage debt on a property), limit our ability to obtain cash from such entities. In addition, because we operate through our subsidiaries, your claims as stockholders will be structurally subordinated to all existing and future liabilities and obligations of our subsidiaries. Therefore, in the event of our bankruptcy, liquidation or reorganization, our assets and those of our subsidiaries will be able to satisfy your claims as stockholders only after all our and our subsidiaries' liabilities and obligations have been paid in full.

The ADA generally requires that public buildings, including the public areas at our properties,properties be made accessible to disabled persons. Non-compliance could result in the imposition of fines by governmental authorities or the award of damages to private litigants. From time-to-timetime-to-time, claims have been, and may becontinue to be, asserted against us with respect to some of our properties under the ADA. If, under the ADA, we are required to make substantial alterations and capital expenditures in one or more of our properties, it could adversely affect our financial condition and results of operations.

Our provision for credit losses is evaluated on a quarterly basis in accordance with current accounting guidance which uses the Current Expected Credit Loss model, or CECL. Under CECL, we are required to present certain financial assets such as loans held for investment, at the net amount expected to be collected. The determination of our provision for credit losses requires us to make highly subjective estimates and judgments. Our estimates and judgments are based on a number of factors, including projected cash flow from the collateralcollateral, if any, securing our loans,investments, debtthe structure,structure of our investment, including the availability of reserves and recourse guarantees, likelihood of repayment in full at the maturity of a loan, potential for refinancing and expected market discount rates for varying property types, and other macro economic data, all of which are uncertain and highly subjective. If our estimates and judgments are incorrect, our results of operations and financial condition could be materially and adversely impacted.

•oversupply of competitive housing opportunities, including apartments or single-family housinghousing, or a reduction in demand for real estate in the markets in which our properties are located;

REITs are generally required to distribute annually at least 90% of their ordinary taxable income to maintain our REIT status under the Internal Revenue Code of 1986, as amended, and the rules and regulations promulgated thereunder, which we refer to as the Code. Because we continue to generate operating losses primarily due to the impact of depreciation, we are not currently required, and may not be required in the future, to pay dividends to maintain our REIT status. Accordingly, we cannot assure you that we will pay dividends in the future. If we do not continue to pay cash dividends, the price of our common stock willmay decline.

Gould Investors from time-to time buys multi-family properties, including properties located in the Southeast United States. Although the properties purchased by Gould Investors are muchgenerally smaller than the properties in which we are interested, a conflict of interest couldwill arise should Gould Investors or we decide to pursue the acquisition of similar sizedlarge properties in such regions.region. See "Item 1 - Business - Our Acquisition Approach"

We depend on the services of Jeffrey A. Gould, our president and chief executive officer, and other members of senior management to carry out our business and investment strategies. Although Jeffrey A.GouldA. Gould devotes substantially all of his business time to our affairs, he devotes a portion of his business time to entities affiliated with us. In addition to Jeffrey A. Gould, only two other executive officers, MitchellMatthew Gibbons, our chief accounting officer, and Ryan Gould, our executivea vice president, and George Zweier, vice president and chief financial officer, devote all or substantially all of their business time to us. Beginning January 2025, Mitchell Gould is working for us four days per week and George Zweier has advised that he intends to relocate to North Carolina by June 2026 and resign. Many of our executivesexecutives, including Isaac Kalish, our chief financial officer (i) also provide the Services (see "Item 1. Business-Human Capital Resources") and (ii) provide their services on a part-time basis pursuant to the shared services agreement. We rely on part-time executive officers to provide certain services to us, including legal and certain financial reporting services, since we do not employ full-time executive officers to handle all of these services. If the shared services agreement is terminated orterminated, the executives performing Services are unwilling to continue to do so, or if we are dissatisfied with the services provided pursuant to these arrangements, we will have to obtain such services from other sources or hire employeespersonnel to perform them. We may not be able to replace these services or hire such employees in a timely manner or on terms, including cost and level of expertise,terms that are equivalent to or better than those we receive pursuant to the Services and the shared services agreement.

We are an internally managed real estate investment trust, also known as a REIT, that owns, operates and to a lesser extent holds interest in joint ventures that own and operate multi familymulti-family properties. At December 31, 2024,2025, we: (i) wholly-own 21 multi-family properties with an aggregate of 5,420 units and a carrying value of $614.2$595.2 million, (ii) have ownership interests, through unconsolidated entities, in eightten multi-family properties with an aggregate of 2,5272,891 units,units with a carrying value of $31.3$46.1 million; (iii) have preferred equity investments in two multi-family properties with a carrying value of $17.7 million; and (iv) own other assets, through consolidated and unconsolidated entities, with a carrying value of $1.7$1.6 million. The 2931 multi-family properties are located in 11 states; primarily in the Southeast United States and Texas.

•Wewe repurchased 193,529321,060 shares of our common stock for an aggregate purchase price of approximately $3.50$4.99 million (i.e., an average purchase price of $18.07$15.53 per share).

FromSubsequent Januaryto 1,December 2025 through February 28,31, 2025, we purchased 65,01875,155 shares of our common stock for an aggregate purchase price of approximately $1.1 million (i.e., an average price of $17.49$14.82 per share). In March 2025,2026, our board of directors increased up to $10 million the value of the shares that we can repurchase to up to $10 million and extended the repurchase program through December 31, 2026.2028.

Challenges and Uncertainties as a Result of the Uncertain Economic Environment; Pursuit of Joint Venture Acquisition and Alternative Investment Opportunities

Rental and other revenue from real estate properties. The components of the increase include:properties

•a $1.0 million increase$510,000 due to a 1.3%0.74% net increase in average rental rates year-over-year in the portfolio,year-over-year,

The•$261,000 due to an increase was offset by a $344,000 decrease in average occupancy year-over-year at the multi-family portfolio from 94.2%93.8% to 93.7%.93.9%,

The $1 million increase is due primarily to interestthe inclusion, for all of 2025, of the income of $197,000 receivedearned from the preferredPreferred equityEquity investments which wereInvestments originated in the fourth quarter of 2024. We estimate that these investments will generate an aggregate of $1.2 million of interest income in 2025.

•$293,000increases of $564,000 and $476,000 in utilitypayroll costsand utilities (primarily water/sewer charges), respectively, at manyseveral properties; and

•$189,000a primarilynet related$255,000 toincrease increasedin replacementreal costsestate taxes at several properties.

General and administrative. The components of the increase include:

In 2024,2025, we recorded a non-cash provision of $270,000$5,000 related to the preferredLoan equityReceivables investments.(i.e. Therethe wasPreferred noEquity comparable expenseInvestments) in 2023.comparison to $270,000 recorded in 2024.

Equity in earnings from unconsolidated joint ventures declineddecreased $649,000$1.8 tomillion, from $1.6 million in 2024, to a loss of $174,000 for the year ended December 31, 2024 from $2.3 million for the 2023.2025. The components of the declinedecrease include:

Casualty loss ; Insurance recovery of casualty loss

We own and operate multifamily properties. These properties may be wholly owned by us or by unconsolidated joint ventures in which we contributed a portion of the equity. At MarchJune 31,30, 2026, we: (i) wholly-own 21 multifamily properties with an aggregate of 5,420 units and a carrying value of $589.9$585.3 million; (ii) have ownership interests, through unconsolidated entities, in ten multifamily properties with 2,891 units and a carrying value of $44.8$43.3 million; (iii) have preferred equity interests in two multifamily properties with a carrying value of $17.7$17.8 million; and (iiiiv) own other assets, through consolidated and unconsolidated subsidiaries, with a carrying value of $1.5 million. The 31 multifamily properties are located in 11 states; most of these properties are located in the Southeast United States and Texas.

We anticipate that our mortgage interest expense will increase as we refinance the aggregate $88.6$51.4 million and $65.9$103.1 million of principal balances of mortgage debt maturing in 2026 and 2027, respectively (including $61.0$23.7 million and $23.1$60.3 million of such principal balances at unconsolidated subsidiaries maturing in 2026 and 2027, respectively) because current comparable mortgage interest rates are generally higher than the weighted average interest rate on such maturing mortgages (i.e, the weighted average interest rate on the mortgages on our consolidated and unconsolidated properties maturing through December 31, 2027 is 4.40%) and the weighted average interest rate on the mortgageCivic refinancing2 Refinancing we completed in mid-Decembermid-July was 4.95%.5.38%.

Three months ended MarchJune 31,30, 2026 compared to three months ended MarchJune 31,30, 2025.

The increase is due primarily to improvements(i) $177,000 in rental (which include the effect of straight line rent adjustments relatedimprovements to rentrental concessions)rates and occupancy rates.rates; Approximatelyand $349,000(ii) of$159,000 thein improvementother pertainsrevenue to(e.g., Bellscable Bluff.and cancellation fees).

Real estate operating expenseexpenses

The change is due primarily to the additional $357,000$363,000 mortgage interest expense related to the refinancing of the River Place, Boerne and Civic 1 mortgages in December 2025 (collectively, the "December Refinancings") which added $29 million to our debt and at a higher interest rate (a weighted average interest rate of 4.95%) than the debt that was paid off.

Equity in (loss) earnings of unconsolidated joint ventures

Equity in (loss) earnings from unconsolidated joint ventures decreased to a loss of $308,000$1,000 for the three months ended MarchJune 31,30, 2026 from earnings of $413,000$299,000 for the three months ended MarchJune 31,30, 2025. ApproximatelyThe $675,000 of the changedecrease is primarily due to our share of operating losses at properties acquired subsequent to the quarter ended MarchJune 31,30, 2025,2025 (i.e., 1322 North and Oaks at VictoryVictory, collectively, "North/Oaks"). Forincluding the(i) three month period ended March 31, 2026, the operating loss included $557,000$445,000 in non-cashdepreciation of tangible assets, and (ii) $262,000 in amortization of lease intangibles acquired in such purchases.intangibles. We anticipate that $262,000 and $121,000 of the non-cash expense associated with thein amortization of these lease intangibles will be incurred for the three month periodsmonths ending June 30, 2026 and September 30, 2026, respectively, at which point such intangibles will be fully amortized.

We require funds to pay operating expenses and debt service obligations, acquire and/or invest in properties (including alternative investments), make capital and other improvements, fund capital contributions, pay dividends and to continue to repurchase our common stock. Generally, our primary sources of capital and liquidity are the operations of our multifamily properties (including distributions and/or income from the preferred equity investments and the operations of the unconsolidated multifamily properties), mortgage debt financings and re-financingsrefinancings (including proceeds (in excess of refinanced amounts), from the refinancing of properties that appreciated in value since the original financing), property sales, the issuance of shares of our common stock pursuant to our at-the-market distribution and dividend reinvestment programs, borrowings from our credit facility and our available cash. At MayAugust 1,3, 2026, our available liquidity was approximately $61.8$53 million, including $21.8$13 million of cash and cash equivalents and $40 million available under our credit facility.

We anticipate that from AprilJuly 1, 2026 through December 31, 2028, our operating expenses, $88.4$80.6 million of mortgage amortization and interest expense (including $29.7$28.0 million from unconsolidated joint ventures), $88.6$51.4 million, $65.9$103.1 million and $104.6 million of balloon payments with respect to mortgages maturing in 2026, 2027 and 2028, respectively (including $61.0$23.7 million, $23.1$60.3 million and $66.6$66.7 million maturing in 2026, 2027 and 2028, respectively, from unconsolidated joint ventures), interest expense on our junior subordinated notes, estimated cash dividend payments of at least $52.2$46.9 million (assuming (i) the current quarterly dividend rate of $0.25 per share and (ii) 19.018.8 million shares outstanding), will be funded in part from cash generated from operations (including distributions from unconsolidated joint ventures). Our operating cash flow and available cash is insufficient to fully fund the $259.1 million (including $150.7 million at unconsolidated joint ventures) of balloon payments due through 2028, and if we are unable to refinance such debt on acceptable terms, we may need to issue additional equity or dispose of properties, in each case on potentially unfavorable terms.

Our ability to acquire or invest in additional multifamily property opportunities and implement value-add projects is limited by our available cash and our ability to (i) draw on our credit facility, (ii) obtain, on acceptable terms, mortgage debt from lenders, (iii) obtain proceeds from the sale and/or refinancing of properties that have appreciated in value, and (iv) raise capital from the saleissuance of our common stock.

At MarchJune 31,30, 2026, we had mortgage debt of $762.4$760.3 million (including $287.6$286.6 million of mortgage debt at of our unconsolidated subsidiaries). Our unconsolidated mortgage debt of $286.6 million is gross of $1.8 million in fair market value adjustments. The mortgage debt at our: (i) consolidated properties had a weighted average interest rate of 4.22% and a weighted average remaining term to maturity of approximately 6.15.9 years, and (ii) at our unconsolidated subsidiaries had a weighted average interest rate of 4.19% and a remaining term to maturity of approximately 3.1 years.

As of MarchJune 31,30, 2026, $37.4 million (excluding deferred costs of $212,000$207,000) in principal amount of our junior subordinated notes is outstanding. These notes mature in April 2036, contain limited covenants (including covenants prohibiting us from paying dividends or repurchasing capital stock if there is an event of default (as defined therein) on these notes), are redeemable at our option and bear an interest rate, which resets and is payable quarterly, at a rate of three-month term SOFR plus 250 basis points. At MarchJune 31,30, 2026 and 2025, the interest rate on these notes was 5.94%5.93% and 6.55%,6.54%, respectively.

Our credit facility with VNB New York, LLC, an affiliate of Valley National Bank (collectively, "VNB"), allows us to borrow, subject to compliance with borrowing base requirements and other conditions, up to $40 million, (i) for the acquisition of, and investment in, multifamily properties, (ii) to repay mortgage debt secured by multifamily properties and (iii) for Operating Expenses (i.e., working capital (including dividend payments) and operating expenses); provided, that not more than $25 million may be used for Operating Expenses. The credit facility is secured by cash accounts maintained by us at VNB (and we are required to maintain substantially all of our bank accounts at VNB), and the pledge of our interests in the entities that own the unencumbered multifamily properties used in calculating the borrowing base. The credit facility bears an annual interest rate, which resets monthly, equal to one-month term SOFR plus 250 basis points, with a floor of 6.00%. There is an annual fee of 0.25% on the total amount committed by VNB and unused by us. The credit facility matures in September 2027. Net proceeds received from the sale, financing or refinancing of our properties are generally required to be used to repay amounts outstanding on the facility. The interest rate in effect at MarchJune 31,30, 2026 and AprilJuly 30,31, 2026, was 6.18% and 6.16% respectively. As of AprilJuly 30,31, 2026, there was no outstanding balance on the credit facility and $40 million is available to be borrowed thereunder.

The terms of the credit facility include certain restrictions and covenants which, among other things, limit the incurrence of liens, require that we maintain and include in the collateral securing the facility at least two unencumbered properties with an aggregate value (as calculated pursuant to the facility) of at least $50 million, and require compliance with financial ratios relating to, among other things, maintaining a minimum tangible net worth of $140 million, the minimum amount of debt service coverage with respect to the properties (and amounts drawn on the credit facility) used in calculating the borrowing base. Net proceeds received from the sale, financing or refinancing of wholly-owned properties are generally required to be used to repay amounts outstanding under the credit facility. At MarchJune 31,30, 2026, we were in compliance in all material respects with the requirements of the facility.

At MarchJune 31,30, 2026, we are joint venture partners in unconsolidated joint ventures which own ten multifamily properties. Our investments in these joint venture properties had a net-equity carrying value of $43.3 million and the distributions to us from these joint venture properties of $1.0 million during the three months ended MarchJune 31,30, 2026 contributed $1.3 million to our liquidity and cash flow. Further, weWe may be required to make significant capital contributions with respect to these properties. At March 31, 2026, our investments in these joint venture properties had a net-equity carrying value of $44.8 million. The underlying properties are subject to mortgage debt, which is not reflected on our consolidated balance sheet, of $287.6$286.6 million. Although BRT Apartments Corp. is not the obligor with respect to such mortgage debt, the loss of any of these properties due to mortgage foreclosure or similar proceedings would have a material adverse effect on our results of operations and financial condition. See note 9 to our consolidated financial statements.