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Preferred Apartment Communities, Inc. Reports Results for Third Quarter 2020

11/09/2020

ATLANTA, Nov. 9, 2020 /PRNewswire/ -- Preferred Apartment Communities, Inc. (NYSE: APTS) ("we," "our," the "Company," "Preferred Apartment Communities" or "PAC") today reported results for the quarter ended September 30, 2020. Unless otherwise indicated, all per share results are reported based on the basic weighted average shares of Common Stock and Class A Units ("Class A Units") of the Preferred Apartment Communities Operating Partnership (our "Operating Partnership") outstanding. See Definitions of Non-GAAP Measures.

Our operating results are presented below.



Three months ended
September 30,




Nine months ended
September 30,






2020


2019


% change


2020


2019


% change

















Revenues (in thousands)

$

126,697



$

120,203



5.4

%


$

381,076



$

345,561



10.3

%

















Per share data:














Net income (loss) (1)

$

(0.79)



$

(0.71)





$

(6.21)



$

(2.02)






FFO (2)

$

0.17



$

0.31



(45.2)

%


$

(3.17)



$

1.06






Core FFO (2)

$

0.26



$

0.35



(25.7)

%


$

0.77



$

1.14



(32.5)

%



AFFO (2)

$

0.07



$

0.12



(41.7)

%


$

0.58



$

0.66



(12.1)

%



Dividends (3)

$

0.1750



$

0.2625



(33.3)

%


$

0.6125



$

0.785



(22.0)

%
















(1) Per weighted average share of Common Stock outstanding for the periods indicated.

(2) FFO, Core FFO and AFFO results are presented per basic weighted average share of Common Stock and Class A Unit in our Operating Partnership outstanding for the periods indicated. See Reconciliations of FFO Attributable to Common Stockholders and Unitholders, Core FFO and AFFO to Net Income (Loss) Attributable to Common Stockholders and Definitions of Non-GAAP Measures.

(3)  Per share of Common Stock and Class A Unit outstanding.

"We are very pleased to report another quarter of operational outperformance across all of our product types, as our high quality, Sunbelt-focused portfolio of Class A multifamily, grocery-anchored retail and office, continued to be a market leader in the third quarter. Our collections of recurring rent were in excess of 99%, 96%, and 99% for our multi-housing, grocery anchored retail, and office portfolios, respectively, adjusted for deferrals. While we continue to navigate the short and long term economic and human impacts of the COVID-19 pandemic, we believe that our best-in- class asset management, combined with our suburban Sunbelt focus, and its associated broad positive economic drivers, provides stability for our portfolio, in the current environment and over the longer term.

Due to our  operational success, we were able to focus our efforts on furthering key strategic goals for PAC, which includes closing the sale of our student housing assets for approximately $478 million. With our student housing rents and occupancy outperforming prior year, we were able to harvest meaningful capital for balance sheet enhancement and for investment in suburban, Sunbelt multifamily acquisitions. In September we also put two proposals to a common stockholder vote: the approval to give common stockholders the ability to amend the Company's bylaws and to reduce the Company's call option on its Series A Redeemable Preferred stock from 10 years to 5 years. Having recently extended the date for our stockholder meeting, we are very pleased with the significant support so far for these measures which we believe are both shareholder friendly and will allow us to better manage our balance sheet and cost structure. We believe all of these efforts should ultimately help drive long term earnings growth and value creation for our stockholders," stated Joel Murphy, Preferred Apartment Communities' President and Chief Executive Officer.

Financial

  • Our net loss per share was $(0.79) and $(0.71) for the three-month periods ended September 30, 2020 and 2019, respectively. Funds From Operations, or FFO, for the three months ended September 30, 2020 was $0.17 per weighted average share of Common Stock and Class A Unit outstanding and reflects lower purchase option termination revenues, lower interest income, higher preferred dividends and a higher share count. Core FFO was $0.26 for the three months ended September 30, 2020 as compared to $0.35 for the three months ended September 30, 2019 and was similarly impacted by the items listed above.
  • Our FFO per share result increased to $0.17 for the third quarter 2020 from $(0.01) for the second quarter 2020; our Core FFO per share result increased to $0.26 for the third quarter 2020 from $0.22 for the second quarter 2020 and our AFFO per share result increased to $0.07 for the third quarter 2020 from $0.05 for the second quarter 2020. Core FFO increased 22.1% for the third quarter 2020 from the second quarter 2020.
  • Our Core FFO payout ratio to Common Stockholders and Unitholders was approximately 67.8% and our Core FFO payout ratio to our preferred stockholders was approximately 73.0%. (A)
  • Our AFFO payout ratio to Common Stockholders and Unitholders was approximately 95.1% for the trailing twelve months ended September 30, 2020. Our AFFO payout ratio to our preferred stockholders was approximately 90.9% for the third quarter 2020, 78.5% for the nine months ended September 30, 2020 and 75.1% for the trailing twelve months ended September 30, 2020.(A) Our AFFO payout ratios were negatively impacted by the reduced level of accrued interest received on our real estate loan investment portfolio and increased property insurance rates. We have approximately $24.8 million of accrued interest revenue on our real estate loan investment portfolio, which will positively impact AFFO when collected.
  • As of September 30, 2020, our total assets were approximately $4.7 billion. Our total assets at September 30, 2019 of approximately $5.3 billion included approximately $585.8 million of VIE mortgage pool assets attributable to other mortgage pool participants that were consolidated due to our investments in the Freddie Mac K Program. During the fourth quarter 2019 we sold our K Program investments, realizing an internal rate of return of approximately 18%. Excluding the consolidated VIE mortgage pool assets from the September 30, 2019 total, our total assets grew approximately $49.3 million.

(A) We calculate the Core FFO and AFFO payout ratios to Common Stockholders as the ratio of Common Stock dividends and distributions to Core FFO and AFFO. We calculate the Core FFO and AFFO payout ratios to preferred stockholders as the ratio of Preferred Stock dividends to the sum of Preferred Stock dividends and Core FFO and AFFO. Since our operations resulted in a net loss from continuing operations for the periods presented, a payout ratio based on net loss is not calculable.  See Definitions of Non-GAAP Measures.

 

The following chart details monthly cash collections of rental revenues before and after the effect of rent deferrals across all our

operating business lines as of November 9, 2020:





2020 Cash Collections of Recurring Rental Revenues (1)



Unadjusted for rent
deferrals:


First
quarter


April


May


June


July


August


September


October


















Multifamily


99.9

%


98.8

%


98.8

%


98.8

%


98.8

%


99.0

%


99.0

%


98.5

%

Student housing


99.9

%


97.9

%


97.0

%


97.4

%


97.0

%


98.6

%


98.8

%


98.9

%

Office


99.8

%


98.8

%


97.3

%


97.8

%


98.9

%


99.7

%


99.9

%


99.8

%

Grocery-anchored retail (2)


99.4

%


91.5

%


89.7

%


91.5

%


94.1

%


95.0

%


96.4

%


95.6

%




















2020 Cash Collections of Recurring Rental Revenues (1)



Adjusted for rent deferrals:


First
quarter


April


May


June


July


August


September


October


















Multifamily


99.9

%


99.7

%


99.5

%


98.9

%


98.9

%


99.0

%


99.0

%


98.5

%

Student housing


99.9

%


98.4

%


97.4

%


97.4

%


97.0

%


98.6

%


98.8

%


98.9

%

Office


99.8

%


99.7

%


99.8

%


99.9

%


99.8

%


99.7

%


99.9

%


99.8

%

Grocery-anchored retail (2)


99.5

%


96.8

%


95.2

%


95.7

%


96.7

%


96.0

%


97.0

%


96.5

%


















(1) Percent of revenue billed includes recurring charges for base rent, operating expense escalations, pet, garage, parking and storage rent, as well as receivables

from U.S. Government tenants, from which collection is reasonably assured.

(2) Includes an investment in an unconsolidated joint venture that is not prorated for our ownership percentage.

 

The following chart details monthly occupancy and percent leased rates across all our operating business lines:




2020 Monthly Occupancy and Percentages Leased





First
quarter


April


May


June


July


August


September


October


















Occupancy:

















Multifamily (stabilized)


95.5

%


94.4

%


94.4

%


95.2

%


95.1

%


96.0

%


95.6

%


95.4

%

Student housing


96.1

%


96.0

%


95.8

%


95.8

%


95.9

%


95.1

%


95.3

%


95.5

%

Percent leased:

















Office


96.7

%


95.9

%


96.2

%


96.2

%


96.1

%


95.9

%


95.5

%


95.4

%

Grocery-anchored retail (1)


92.6

%


92.5

%


92.5

%


92.7

%


92.8

%


92.8

%


92.5

%


92.4

%


























(1) Includes an investment in an unconsolidated joint venture that is not prorated for our ownership percentage.

Operational

  • Our average recurring rental revenue collections before and after any effect of rent deferrals for the third quarter 2020 were approximately 99.0% and 99.0% for multifamily communities, 99.5% and 99.8% for office properties and 95.2% and 96.5% for grocery-anchored retail properties, respectively. Rent deferments provided to our residents/tenants primarily related to a change of timing of rent payments with no significant changes to total payments or term.
  • As of September 30, 2020, we have deferred $1.5 million of retail recurring rental revenue, or approximately 3.1% cumulatively over the last two quarters. Including this deferred rent, we have accounted for 96.6% and 95.9% of third quarter and second quarter retail recurring rental revenue, respectively. In addition to the deferrals, we granted approximately $324,000 of Covid related rental abatements, or approximately 0.7% of retail recurring rental revenues cumulatively over the last two quarters. These rental abatements were generally accompanied by an increase in the tenant's lease term or the lease terms were amended to be more favorable to us. We have also reserved $928,000 or 3.4% of total retail revenues (inclusive of straight line rent) in the third quarter, increasing our total reserves to $2.5 million or 3.0% of total retail revenues year to date, which is 0.7% of total company and other property revenues. 
  • On July 31, 2020, we received approximately $18.7 million in full satisfaction of the principal and all interest due on our Palisades real estate loan investment. Included in this total was the receipt of approximately $375,000 of deferred interest revenue on the loan, which was additive to AFFO for the quarter.
  • As of September 30, 2020, the average age of our multifamily communities was approximately 6.3 years, which is the youngest in the public multifamily REIT industry.
  • As of September 30, 2020, all of our owned multifamily communities had achieved stabilization, which we define as reaching 93% physical occupancy for three full months in a quarter.

Financing and Capital Markets

  • On July 10, 2020, we closed on a refinancing of the mortgage on our Citrus Village multifamily community. The new instrument has a principal amount of $40.9 million, bears interest at a fixed rate of 2.95% per annum and matures on August 1, 2027. Monthly interest-only payments are due through August 31, 2022.
  • As of September 30, 2020, approximately 94.1% of our permanent property-level mortgage debt has fixed interest rates and approximately 4.2% has variable interest rates which are capped. We believe we are well protected against potential increases in market interest rates. Our overall weighted average interest rate for our mortgage debt portfolio was 3.68% for residential properties, 4.13% for office properties and 3.91% for grocery-anchored retail properties.
  • At September 30, 2020, our leverage, as measured by the ratio of our debt to the undepreciated book value of our total assets, was approximately 54.0%.
  • During the third quarter 2020, we issued and sold an aggregate of 34,603 shares of Series A1 Redeemable Preferred Stock, resulting in net proceeds of approximately $31.1 million after commissions and other fees. During the third quarter 2020, we issued and sold an aggregate of 7,862 shares of Series M1 Redeemable Preferred Stock, resulting in net proceeds of approximately $7.6 million after dealer manager fees. During the third quarter 2020, we issued approximately 617,000 shares of Common Stock through our ATM program, and collected net proceeds of approximately $4.5 million.
  • During the third quarter 2020, we issued a total of 42,465 shares of preferred stock and redeemed 37,391 shares of preferred stock for a net total of 5,074 shares issued.

Significant Transactions

  • On July 15, 2020, we contributed our Neapolitan Way grocery-anchored shopping center into an unconsolidated 50/50 joint venture from which we collected approximately $19.2 million of proceeds and realized a gain on the transaction of approximately $3.3 million. Subsequently, the joint venture obtained a mortgage on the property, reducing our investment to approximately $6.9 million. We retain a 50% financial and voting interest in the property.
  • On September 3, 2020, we closed on a real estate loan investment of up to approximately $20.7 million to partially finance the development and construction of a 320-unit multifamily community to be located in suburban Atlanta, Georgia. The aggregate carrying amount of our real estate loan investment portfolio was approximately $309.6 million at September 30, 2020.

Business Update Related to COVID-19

Since the onset of COVID-19, the Company has taken various actions in response to the pandemic, including offering extended rent deferral options and abatements in only very limited circumstances. While the effects and trends in the pandemic range from market to market, we continue to adjust our business operations to address the needs of our residents, tenants and associates on an asset by asset basis. Our property management and asset management teams continuously respond and adapt appropriately to any onsite, tenant and/or property management request, while following all applicable safety and social distancing guidelines as the situation continues to evolve and change. All of our multifamily communities, student housing properties, grocery-anchored shopping centers and office buildings have operated throughout the pandemic and in compliance with government-imposed COVID-19 guidelines and mandates. While we expect the impacts of COVID-19 generally to continue into 2021, the effects on our operations have been manageable and we believe this will continue barring a dramatic change in the trajectory of the pandemic.

Real Estate Assets

At September 30, 2020, our portfolio of owned real estate assets and potential additions from purchase options we held from our real estate loan investments consisted of:











Owned as of
September 30,
2020 (1)


Potential
additions from
real estate loan

investment

portfolio (2) (3)


Potential total



Residential properties:








Properties

44



12



56




Units

12,936



3,315



16,251




Beds

6,095



543



6,638




Grocery-anchored shopping centers:








Properties

54





54




Gross leasable area (square feet)

6,208,278





6,208,278




Office buildings:








Properties

9


(4)

1



10




Rentable square feet

3,169,000



195,000



3,364,000













(1)

One multifamily community, two student housing properties, two grocery-anchored shopping centers and two office


     buildings are owned through consolidated joint ventures. One grocery-anchored shopping center is an investment in


     an unconsolidated joint venture.

(2)

We evaluate each project individually and we make no assurance that we will acquire any of the underlying properties


     from our real estate loan investment portfolio.

(3)

The Company has terminated various purchase option agreements in exchange for termination fees. These properties


     are excluded from the potential additions from our real estate loan investment portfolio.

(4)

  Excludes our 251 Armour property, comprising 35,000 rentable square feet that is under development and our 4th and


     Brevard land parcel that is slated for future development.

Same-Store Multifamily Communities Financial Data

The following chart presents same-store operating results for the Company's multifamily communities. We define our population of same-store multifamily communities as those that have achieved occupancy at or above 93% for all three consecutive months within a single quarter (stabilized) before the beginning of the prior year and that have been owned for at least 15 full months as of the end of the first quarter of the current year, enabling comparisons of the current year quarterly and annual reporting periods to the prior year comparative periods. The Company excludes the operating results of properties for which construction of adjacent phases has commenced and properties which are undergoing significant capital projects, have sustained significant casualty losses, or are being marketed for sale as of the end of the reporting period. For the periods presented, same-store operating results consist of the operating results of the following multifamily communities containing an aggregate 8,694 units, or 79.6% of our multifamily units:

Aster at Lely Resort


Avenues at Cypress


Avenues at Northpointe

Citi Lakes


Lenox Village


Retreat at Lenox Village

Overton Rise


Sorrel


Venue at Lakewood Ranch

Avenues at Creekside


525 Avalon Park


Vineyards

Citrus Village


Retreat at Greystone


City Vista

Founders Village


Luxe at Lakewood Ranch


Adara at Overland Park

Summit Crossing I


Summit Crossing II


Aldridge at Town Village

City Park View


Crosstown Walk


Claiborne Crossing

Reserve at Summit Crossing


Colony at Centerpointe


Lux at Sorrel

Green Park


Vestavia Reserve



Same-store net operating income is a non-GAAP measure that is most directly comparable to net income (loss), as shown in the reconciliations below. See Definitions of Non-GAAP Measures.

Reconciliation of Net Income (Loss) to Multifamily Communities' Same-Store Net Operating Income (NOI)








Three months ended:

(in thousands)


9/30/2020


9/30/2019






Net loss


$

(3,602)



$

(2,137)


Add:





Equity stock compensation


582



305


Depreciation and amortization


51,794



46,239


Interest expense


29,879



28,799


Management fees




8,611


Corporate G&A and other

7,898



1,364


Management Internalization


577



818


Provision for expected credit losses


(152)




Waived asset management and general and administrative expense fees




(3,081)


Less:





Interest revenue on notes receivable


10,649



12,608


Interest revenue on related party notes receivable


609



2,546


Miscellaneous revenues


608




Income from consolidated VIEs




591


Loss from unconsolidated joint venture


(120)




Loss on extinguishment of debt


(518)



(15)


Gains on sale of real estate and land condemnation


3,310









Property net operating income


72,438



65,188


Less:





Non-same-store property revenues


(77,447)



(67,559)


Add:





Non-same-store property operating expenses

26,524



23,872






Same-store net operating income


$

21,515



$

21,501


 

Multifamily Communities' Same Store Net Operating Income












Three months ended:





(in thousands)


9/30/2020


9/30/2019


$ change


% change

Revenues:









Rental and other property revenues


$

37,383



$

37,490



$

(107)



(0.3)

%










Operating expenses:









Property operating and maintenance


6,733



7,167



(434)



(6.1)

%

Payroll


3,022



3,019



3



0.1

%

Real estate taxes and insurance


6,113



5,803



310



5.3

%

Total operating expenses


15,868



15,989



(121)



(0.8)

%










Same-store net operating income


$

21,515



$

21,501



$

14



0.1

%










Same-store average physical occupancy


95.6

%


95.6

%














Corporate level expenses related to the management and operations of the Multifamily and Student housing property portfolios are allocated on a per unit basis to Property NOI and are included in Multifamily Same Store NOI.

 

Reconciliation of Net Income (Loss) to Multifamily Communities' Same-Store Net Operating Income (NOI)








Nine months ended:

(in thousands)


9/30/2020


9/30/2019






Net loss


$

(199,075)



$

(6,094)


Add:





Equity stock compensation


1,058



922


Depreciation and amortization


153,096



137,191


Interest expense


90,608



83,166


Management fees


3,099



24,649


Corporate G&A and other

23,109



4,171


Management Internalization


179,828



1,143


Provision for expected credit losses


5,463




Waived asset management and general and administrative expense fees


(1,136)



(8,505)


Less:





Interest revenue on notes receivable


34,495



35,989


Interest revenue on related party notes receivable


3,750



9,980


Miscellaneous revenues


4,560



1,023


Income from consolidated VIEs




1,316


Loss from unconsolidated joint venture


(120)




Loss on extinguishment of debt


(6,674)



(84)


Gains on sale of real estate and land condemnation


3,789



751







Property net operating income


216,250



187,668


Less:





Non-same-store property revenues


(226,417)



(187,737)


Add:





Non-same-store property operating expenses

75,318



64,282






Same-store net operating income


$

65,151



$

64,213


 

Multifamily Communities' Same Store Net Operating Income












Nine months ended:





(in thousands)


9/30/2020


9/30/2019


$ change


% change

Revenues:









Rental and other property revenues


$

111,855



$

110,833



$

1,022



0.9

%










Operating expenses:









Property operating and maintenance


19,473



20,388



(915)



(4.4)

%

Payroll


8,817



8,711



106



1.2

%

Real estate taxes and insurance


18,414



17,521



893



5.1

%

Total operating expenses


46,704



46,620



84



0.2

%










Same-store net operating income


$

65,151



$

64,213



$

938



1.5

%










Corporate level expenses related to the management and operations of the Multifamily and Student housing property portfolios are allocated on a per unit basis to Property NOI and are included in Multifamily Same Store NOI.

Dividends

Quarterly Dividends on Common Stock and Class A OP Units

On August 6, 2020, we declared a quarterly dividend on our Common Stock of $0.175 per share for the third quarter 2020. The third quarter dividend was paid on October 15, 2020 to all stockholders of record on September 15, 2020. In conjunction with the Common Stock dividend, the Company's operating partnership declared a distribution on its Class A Units of $0.175 per unit for the third quarter 2020, which was paid on October 15, 2020 to all Class A Unit holders of record as of September 15, 2020.

Monthly Dividends on Preferred Stock

We declared monthly dividends of $5.00 per share on our Series A Redeemable Preferred Stock, which totaled approximately $33.0 million for the third quarter 2020 and represents a 6% annual yield. We declared monthly dividends of $5.00 per share on our Series A1 Redeemable Preferred Stock, which totaled approximately $1.2 million for the third quarter 2020 and also represents a 6% annual yield. We declared dividends totaling approximately $1.5 million on our Series M Redeemable Preferred Stock, or mShares, for the third quarter 2020. The mShares have a dividend rate that escalates from 5.75% in year one of issuance to 7.50% in year eight and thereafter. We declared dividends totaling approximately $157,000 on our Series M1 Redeemable Preferred Stock for the third quarter 2020. The Series M1 Redeemable Preferred Stock has a dividend rate that escalates from 6.1% in year one of issuance to 7.1% in year ten and thereafter.

Subsequent to Quarter End

Between October 1, 2020 and October 31, 2020, we issued 13,986 shares of Series A1 Preferred Stock and collected net proceeds of approximately $12.6 million after commissions and fees and we issued 2,914 shares of Series M1 Preferred Stock and collected net proceeds of approximately $2.8 million after commissions and fees. During the same period, we redeemed 23,468 shares of Series A Preferred Stock and 862 shares of Series M Preferred Stock, or mShares.

On November 3, 2020, we announced via a press release the closing on that day of the sale of student housing assets to an unrelated third party for a sales price of $478.7 million.

On November 9, 2020, the Company adjourned its Special Meeting of Stockholders to November 19, 2020 to provide stockholders with additional time to vote on  Proposal 1 (Approval of the Articles of Amendment to the Company's charter to give bylaw access to stockholders) and Proposal 2 (Approval of the Articles of Amendment to the Company's charter to reduce the Company's call period on its Series A Redeemable Preferred Stock from 10 years to 5 years). The required vote to approve each Proposal is two-thirds of the Company's outstanding shares entitled to vote. As of November 5, 2020, approximately 65.4% of the Company's outstanding shares had been voted on Proposal 1 and Proposal 2 and, of these shares, approximately 97.9% and 95.7% had been voted in favor of Proposal 1 and Proposal 2, respectively.

On November 2, 2020, we closed on the acquisition of The Blake, a 281-unit multifamily community located in Orlando, Florida.

On November 5, 2020, our board of directors declared a quarterly dividend on our Common Stock of $0.175 per share, payable on January 15, 2021 to stockholders of record on December 15, 2020. Even though this dividend will be paid in 2021, if and to the extent this dividend is taxable, the Company intends for this dividend to be taxable in 2020.

Conference Call and Supplemental Data

We will hold our quarterly conference call on Tuesday, November 10, 2020 at 11:00 a.m. Eastern Time to discuss our third quarter 2020 results. To participate in the conference call, please dial in to the following:

Live Conference Call Details
Domestic Dial-in Number: 1-877-883-0383
International Dial-in Number: 1-412-902-6506
Company: Preferred Apartment Communities, Inc.
Date: Tuesday, November 10, 2020
Time: 11:00 a.m. Eastern Time (8:00 a.m. Pacific Time)
Passcode: 2463393

The live broadcast of PAC's third quarter 2020 conference call will be available online on a listen-only basis at the company's website, www.pacapts.com, under "Investors" and then click on the "News and Events" heading.  A replay of the call will be available from 3:00 PM Eastern Time on Tuesday, November 10, through 11:59 PM Eastern Time on Wednesday, December 9, 2020. The replay can be accessed by dialing 1-877-344-7529 or 1-412-317-0088 for international participants. The passcode for the replay is 10149020. A replay of the webcast will also be available on the Company's website for a limited time.

A replay of the call will be archived on PAC's' website under Investors/News and Events/Events.

2020 Guidance:   

Net income (loss) per share We are actively adding properties and real estate loan investments to our real estate portfolio and the specific timing of the closing of acquisitions is difficult to predict. Acquisition activity by its nature can cause material variation in our reported depreciation and amortization expense and interest income. Since net income (loss) per share is calculated net of depreciation and amortization expense, our net income (loss) results can fluctuate, possibly significantly, depending upon the timing of the closing of acquisitions. For this reason, we are unable to reasonably forecast this measure or provide a reconciliation of our projected FFO per share to this measure.

FFO per share - Due to the inherent uncertainty of the scope, duration and rapidly evolving nature of the economic and social disruption from the COVID-19 pandemic, we have withdrawn our guidance for 2020.

AFFO, Core FFO and FFO are calculated after deductions for all preferred stock dividends. Reconciliations of net income (loss) attributable to common stockholders to FFO, Core FFO and AFFO for the three-month and nine-month periods ended September 30, 2020 and 2019 appear in the attached report, as well as on our website using the following link:

https://investors.pacapts.com/q3-2020-quarterly-supplemental-financial-data

Forward-Looking Statements

"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995:  Estimates of future earnings, guidance, goals and performance are, by definition, and certain other statements in this Earnings Release and Supplemental Financial Data Report may constitute, "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 and involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance, achievements or transactions to be materially different from the results, guidance, goals, performance, achievements or transactions expressed or implied by the forward-looking statements. These statements may be identified  by the use of forward-looking terminology such as "may," "trend," "will," "expects," "plans," "estimates," "anticipates," "projects," "intends," "believes," "strategy," "goals," "objectives," "outlook" and similar expressions. These risks, uncertainties and contingencies include, but are not limited to, (a) the impact of the COVID-19 pandemic and related federal, state and local government actions on PAC's business operations and the economic conditions in the markets in which PAC operates; (b) PAC's ability to mitigate the impacts arising from COVID-19 and (c) those disclosed in PAC's filings with the SEC. Factors that impact such forward-looking statements include, among others, our business and investment strategy; legislative or regulatory actions; the state of the U.S. economy generally or in specific geographic areas; economic trends and economic recoveries; changes in operating costs, including real estate taxes, utilities and insurance costs; our ability to obtain and maintain debt or equity financing; financing and advance rates for our target assets; our leverage level; changes in the values of our assets; the occurrence of natural or man-made disasters; availability of attractive investment opportunities in our target markets; our ability to maintain our qualification as a real estate investment trust, or REIT, for U.S. federal income tax purposes; our ability to maintain our exemption from registration under the Investment Company Act of 1940, as amended; availability of quality personnel; our understanding of our competition and market trends in our industry; and interest rates, real estate values, the debt securities markets and the general economy.

Except as otherwise required by the federal securities laws, we assume no liability to update the information in this Earnings Release and Supplemental Financial Data Report.

We refer you to the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2019 that was filed with the SEC on March 3, 2020, which discuss various factors that could adversely affect our financial results. Such risk factors and information may be updated or supplemented by our Form 10-K, Form 10-Q and Form 8-K filings and other documents filed from time to time with the SEC.

Additional Information

The SEC has declared effective the registration statement filed by the Company for each of the offerings to which this communication may relate. Before you invest, you should read the final prospectus, and any prospectus supplements, forming a part of the registration statement and other documents the Company has filed with the SEC for more complete information about the Company and the offering to which this communication may relate. In particular, you should carefully read the risk factors described in the final prospectus and in any related prospectus supplement and in the documents incorporated by reference in the final prospectus and any related prospectus supplement to which this communication may relate. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the Company or its dealer manager, Preferred Capital Securities, LLC, will arrange to send you a prospectus with respect to the Series A1/M1 Offering upon request by contacting John A. Isakson at (770) 818-4109, 3284 Northside Parkway NW, Suite 150, Atlanta, Georgia 30327.

The final prospectus for the Series A1/M1 Offering, dated October 22, 2019, can be accessed through the following link:

https://www.sec.gov/Archives/edgar/data/1481832/000148183219000097/a424b5-2019seriesamshares.htm

 

Preferred Apartment Communities, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)






Three months ended
September 30,

(In thousands, except per-share figures)


2020


2019

Revenues:





Rental and other property revenues


$

114,831



$

105,049


Interest income on loans and notes receivable


10,649



12,608


Interest income from related parties


609



2,546


Miscellaneous revenues


608









Total revenues


126,697



120,203







Operating expenses:





Property operating and maintenance


19,278



16,493


Property salary and benefits

6,054



5,360


Property management costs

983



3,534


Real estate taxes and insurance


16,078



14,474


General and administrative


7,898



1,364


Equity compensation to directors and executives

582



305


Depreciation and amortization


51,794



46,239


Asset management and general and administrative expense





fees to related party




8,611


Provision for expected credit losses


(152)




Management internalization expense


577



818







Total operating expenses


103,092



97,198


Waived asset management and general and administrative




expense fees



(3,081)







Net operating expenses


103,092



94,117


Operating income before gain on sale of real estate and loss from





unconsolidated joint venture


23,605



26,086


Loss from unconsolidated joint venture


(120)




Gain on sale of real estate, net


3,261




Operating income


26,746



26,086







Interest expense


29,879



28,799


Change in fair value of net assets of consolidated





VIEs from mortgage-backed pools




591


Loss on extinguishment of debt


(518)



(15)


Gain on land condemnation


49









Net loss


(3,602)



(2,137)


Consolidated net loss attributable to non-controlling interests

108



59







Net loss attributable to the Company


(3,494)



(2,078)







Dividends declared to preferred stockholders


(35,909)



(29,446)


Earnings attributable to unvested restricted stock


(96)



(5)







Net loss attributable to common stockholders


$

(39,499)



$

(31,529)







Net loss per share of Common Stock available to




 common stockholders, basic and diluted


$

(0.79)



$

(0.71)







Weighted average number of shares of Common Stock outstanding,




basic and diluted


49,689



44,703


 

Reconciliation of FFO Attributable to Common Stockholders and Unitholders, Core FFO and AFFO

to Net (Loss) Income Attributable to Common Stockholders (A)






Three months ended September 30,

(In thousands, except per-share figures)



2020


2019









Net loss attributable to common stockholders (See note 1)

$

(39,499)



$

(31,529)










Add:

Depreciation of real estate assets


41,282



37,381



Amortization of acquired intangible assets and deferred leasing costs

9,978



8,386



Net loss attributable to Class A Unitholders (See note 2)

(50)



(59)



Gain on sale of real estate

(3,261)




FFO attributable to common stockholders and unitholders

8,450



14,179











Acquisition and pursuit costs

3





Loan cost amortization on acquisition term notes and loan coordination fees (See note 3)

505



511



Payment of costs related to property refinancing

509



170



Internalization costs (See note 4)

577



818



Deemed dividends for redemptions of and non-cash dividends on preferred stock

3,061



152



Expenses incurred on the potential call of preferred stock (See note 5)

46





Expenses related to the COVID-19 global pandemic (See note 6)

138




Core FFO attributable to common stockholders and unitholders

13,289



15,830








Add:

Non-cash equity compensation to directors and executives


582



305



Non-cash (income) expense for current expected credit losses (See note 7)

(761)





Amortization of loan closing costs (See note 8)


1,288



1,168



Depreciation/amortization of non-real estate assets


621



472



Net loan origination fees received (See note 9)


415



148



Deferred interest income received (See note 10)


375





Amortization of lease inducements (See note 11)


448



435


Less:

Amortization of purchase option termination revenues in excess of cash received (See note 12)

(421)



(1,283)



Non-cash loan interest income (See note 10)


(3,317)



(3,763)



Cash received for sale of K Program securities in excess of noncash revenues



(281)



Cash paid for loan closing costs

(106)



(29)



Amortization of acquired real estate intangible liabilities and SLR (See note 13)

(4,887)



(4,293)



Amortization of deferred revenues (See note 14)


(940)



(940)



Normally recurring capital expenditures (See note 15)

(2,983)



(2,379)










AFFO attributable to common stockholders and Unitholders

$

3,603



$

5,390








Common Stock dividends and distributions to Unitholders declared:





Common Stock dividends



$

8,780



$

11,823



Distributions to Unitholders (See note 2)


226



225



Total




$

9,006



$

12,048










Common Stock dividends and Unitholder distributions per share


$

0.1750



$

0.2625










FFO per weighted average basic share of Common Stock and Unit outstanding

$

0.17



$

0.31


Core FFO per weighted average basic share of Common Stock and Unit outstanding

$

0.26



$

0.35


AFFO per weighted average basic share of Common Stock and Unit outstanding

$

0.07



$

0.12






Weighted average shares of Common Stock and Units outstanding: (A)





Basic:








Common Stock



49,689



44,703



Class A Units




742



868



Common Stock and Class A Units


50,431



45,571











Diluted Common Stock and Class A Units (B)


50,433



45,768










Actual shares of Common Stock outstanding, including 548 and 20 unvested shares




 of restricted Common Stock at September 30, 2020 and 2019, respectively.

50,449



45,355


Actual Class A Units outstanding at September 30, 2020 and 2019, respectively.

742



856



Total




51,191



46,211










(A) Units and Unitholders refer to Class A Units in our Operating Partnership (as defined in note 2), or Class A Units, and holders of Class A Units, respectively. Unitholders include recipients of awards of Class B Units in our Operating Partnership, or Class B Units, for annual service which became vested and earned and automatically converted to Class A Units. Unitholders also include the entity that contributed the Wade Green grocery-anchored shopping center. The Class A Units collectively represent an approximate 1.47% weighted average non-controlling interest in the Operating Partnership for the three-month period ended September 30, 2020.

(B) Since our AFFO results are positive for the periods reflected above, we are presenting recalculated diluted weighted average shares of Common Stock and Class A Units for these periods for purposes of this table, which includes the dilutive effect of common stock equivalents from grants of the Class B Units, warrants included in units of Series A Preferred Stock issued, as well as annual grants of restricted Common Stock and restricted stock units. The weighted average shares of Common Stock outstanding presented on the Consolidated Statements of Operations are the same for basic and diluted for any period for which we recorded a net loss available to common stockholders.


See Notes to Reconciliation of FFO, Core FFO and AFFO to Net Income (Loss) Attributable to Common Stockholders

 

Reconciliation of FFO Attributable to Common Stockholders and Unitholders, Core FFO and AFFO

to Net (Loss) Income Attributable to Common Stockholders (A)






Nine months ended September 30,

(In thousands, except per-share figures)



2020


2019









Net loss attributable to common stockholders (See note 1)

$

(300,270)



$

(88,497)










Add:

Depreciation of real estate assets


122,053



109,408



Amortization of acquired intangible assets and deferred leasing costs

28,933



26,402



Net loss attributable to Class A Unitholders (See note 2)

(3,393)



(138)



Gain on sale of real estate

(3,261)




FFO attributable to common stockholders and unitholders

(155,938)



47,175



Acquisition and pursuit costs

381





Loan cost amortization on acquisition term notes and loan coordination fees (See note 3)

1,711



1,491



Payment of costs related to property refinancing

7,372



594



Internalization costs (See note 4)

179,828



1,143



Deemed dividends for redemptions of and non-cash dividends on preferred stock

6,377



371



Expenses incurred on the potential call of preferred stock (See note 5)

46





Expenses related to the COVID-19 global pandemic (See note 6)

586





Earnest money forfeited by prospective asset purchaser

(2,750)




Core FFO attributable to common stockholders and unitholders

37,613



50,774








Add:

Non-cash equity compensation to directors and executives


1,058



922



Non-cash (income) expense for current expected credit losses (See note 7)

3,647





Amortization of loan closing costs (See note 8)


3,631



3,458



Depreciation/amortization of non-real estate assets


1,793



1,381



Net loan origination fees received (See note 9)


882



674



Deferred interest income received (See note 10)


8,652



5,078



Amortization of lease inducements (See note 11)


1,334



1,295



Amortization of purchase option termination revenues in excess of cash received (See note 12)

(96)



(2,370)



Non-operating miscellaneous revenues

2,750




Less:

Non-cash loan interest income (See note 10)


(9,445)



(10,745)



Non-cash revenues from mortgage-backed securities



(696)



Cash paid for loan closing costs

(106)



(37)



Amortization of acquired real estate intangible liabilities and SLR (See note 13)

(13,684)



(12,375)



Amortization of deferred revenues (See note 14)


(2,821)



(2,821)



Normally recurring capital expenditures (See note 15)

(6,525)



(5,122)










AFFO attributable to common stockholders and Unitholders

$

28,683



$

29,416








Common Stock dividends and distributions to Unitholders declared:





Common Stock dividends



29,895



34,599



Distributions to Unitholders (See note 2)


559



683



Total




30,454



35,282










Common Stock dividends and Unitholder distributions per share


$

0.6125



$

0.785










FFO per weighted average basic share of Common Stock and Unit outstanding

$

(3.17)



$

1.06


Core FFO per weighted average basic share of Common Stock and Unit outstanding

$

0.77



$

1.14


AFFO per weighted average basic share of Common Stock and Unit outstanding

$

0.58



$

0.66






Weighted average shares of Common Stock and Units outstanding: (A)





Basic:








Common Stock



48,351



43,703



Class A Units




776



875



Common Stock and Class A Units


49,127



44,578











Diluted Common Stock and Class A Units (B)


49,144



45,235










Actual shares of Common Stock outstanding, including 548 and 20 unvested shares




 of restricted Common Stock at September 30, 2020 and 2019, respectively.

50,449



45,355


Actual Class A Units outstanding at September 30, 2020 and 2019, respectively.

742



856



Total




51,191



46,211










(A) Units and Unitholders refer to Class A Units in our Operating Partnership (as defined in note 2), or Class A Units, and holders of Class A Units, respectively. Unitholders include recipients of awards of Class B Units in our Operating Partnership, or Class B Units, for annual service which became vested and earned and automatically converted to Class A Units. Unitholders also include the entity that contributed the Wade Green grocery-anchored shopping center. The Class A Units collectively represent an approximate 1.58% weighted average non-controlling interest in the Operating Partnership for the nine-month period ended September 30, 2020.

(B) Since our AFFO results are positive for the periods reflected above, we are presenting recalculated diluted weighted average shares of Common Stock and Class A Units for these periods for purposes of this table, which includes the dilutive effect of common stock equivalents from grants of the Class B Units, warrants included in units of Series A Preferred Stock issued, as well as annual grants of restricted Common Stock and restricted stock units. The weighted average shares of Common Stock outstanding presented on the Consolidated Statements of Operations are the same for basic and diluted for any period for which we recorded a net loss available to common stockholders.


See Notes to Reconciliation of FFO, Core FFO and AFFO to Net Income (Loss) Attributable to Common Stockholders.

 

Notes to Reconciliations of FFO Attributable to Common Stockholders and Unitholders, Core FFO and AFFO to

Net Loss Attributable to Common Stockholders



1)

Rental and other property revenues and property operating expenses for the three-month and nine-month periods ended September 30, 2020 include activity for the properties acquired during the period only from their respective dates of acquisition. In addition, these periods include activity for the properties acquired since September 30, 2019. Rental and other property revenues and expenses for the three-month and nine-month periods ended September 30, 2019 include activity for the acquisitions made during that period only from their respective dates of acquisition.



2)

Non-controlling interests in Preferred Apartment Communities Operating Partnership, L.P., or our Operating Partnership, consisted of a total of 742,413 Class A Units as of September 30, 2020. Included in this total are 419,228 Class A Units which were granted as partial consideration to the seller in conjunction with the seller's contribution to us on February 29, 2016 of the Wade Green grocery-anchored shopping center. The remaining Class A units were awarded primarily to our key executive officers. The Class A Units are apportioned a percentage of our financial results as non-controlling interests. The weighted average ownership percentage of these holders of Class A Units was calculated to be 1.47% and 1.90% for the three-month periods ended September 30, 2020 and 2019, respectively.



3)

We paid loan coordination fees to Preferred Apartment Advisors, LLC, or our Former Manager, to reflect the administrative effort involved in arranging debt financing for acquired properties prior to the Internalization. The fees were calculated as 0.6% of the amount of any mortgage indebtedness on newly-acquired properties or refinancing and are amortized over the lives of the respective mortgage loans. This non-cash amortization expense is an addition to FFO in the calculation of Core FFO and AFFO. At September 30, 2020, aggregate unamortized loan coordination fees were approximately $12.8 million, which will be amortized over a weighted average remaining loan life of approximately 10.2 years.



4)

This adjustment reflects the add-back of (i) consideration paid to the owners of the Former Manager and Former Sub-Manager, (ii) accretion of the discount on the deferred liability payable to the owners of the Former Manager and (iii) due diligence and pursuit costs incurred by the Company related to the internalization of the functions performed by the Former Manager.



5)

This adjustment adds back expenses incurred by us to effect an amendment of the Company's charter necessary to allow us to redeem outstanding shares of our Series A Preferred Stock beginning on the fifth anniversary of the date of issuance of the shares of Series A Preferred Stock, rather than the tenth anniversary.



6)

This additive adjustment to FFO consists of one-time costs for signage, cleaning and supplies necessary to create and maintain work environments necessary to adhere to CDC guidelines during the current COVID-19 pandemic. Since we do not expect to incur similar costs once the COVID-19 pandemic has subsided, we add these costs back to FFO in our calculation of Core FFO.



7)

Effective January 1, 2020, we adopted ASU 2016-03, which requires us to estimate the amount of future credit losses we expect to incur over the lives of our real estate loan investments at the inception of each loan. This loss reserve may be adjusted upward or downward over the lives of our loans and therefore the aggregate net adjustment for each period could be positive (removing the non-cash effect of a net increase in aggregate loss reserves) or negative (removing the non-cash effect of a net decrease in aggregate loss reserves) in these adjustments to FFO in calculating Core FFO.



8)

We incur loan closing costs on our existing mortgage loans, which are secured on a property-by-property basis by each of our acquired real estate assets, and also for occasional amendments to our syndicated revolving line of credit with Key Bank National Association, or our Revolving Line of Credit. Effective April 13, 2018, the maximum borrowing capacity on the Revolving Line of Credit was increased from $150 million to $200 million. These loan closing costs are also amortized over the lives of the respective loans and the Revolving Line of Credit, and this non-cash amortization expense is an addition to FFO in the calculation of AFFO. Neither we nor the Operating Partnership have any recourse liability in connection with any of the mortgage loans, nor do we have any cross-collateralization arrangements with respect to the assets securing the mortgage loans, other than security interests in 49% of the equity interests of the subsidiaries owning such assets, granted in connection with our Revolving Line of Credit, which provides for full recourse liability. At September 30, 2020, unamortized loan costs on all the Company's indebtedness were approximately $32.3 million, which will be amortized over a weighted average remaining loan life of approximately 8.9 years.



9)

We receive loan origination fees in conjunction with the origination of certain real estate loan investments. These fees are then recognized as revenue over the lives of the applicable loans as adjustments of yield using the effective interest method. The total fees received are additive adjustments in the calculation of AFFO. Correspondingly, the amortized non-cash income is a deduction in the calculation of AFFO. Over the lives of certain loans, we accrue additional interest amounts that become due to us at the time of repayment of the loan or refinancing of the property, or when the property is sold. This non-cash interest income is subtracted from Core FFO in our calculation of AFFO. The amount of additional accrued interest becomes an additive adjustment to FFO once received from the borrower (see note 10).



10)

This adjustment reflects the receipt during the periods presented of additional interest income (described in note 9 above) which was earned and accrued on various real estate loans prior to those periods and previously deducted in our calculation of AFFO.



11)

This adjustment removes the non-cash amortization of costs incurred to induce tenants to lease space in our office buildings and grocery-anchored shopping centers.



12)

Effective March 6, 2020, our purchase option on the Falls at Forsyth multifamily community was extinguished in conjunction with the loan repayment; effective January 1, 2019, we terminated our purchase options on the Sanibel Straits, Newbergh, Wiregrass and Cameron Square multifamily communities and the Solis Kennesaw student housing property; on May 7, 2018, we terminated our purchase options on the Bishop Street multifamily community and the Haven Charlotte student housing property, both of which are (or were) partially supported by real estate loan investments held by us. In exchange, we arranged to receive termination fees aggregating approximately $17.2 million from the developers, which are recorded as revenue over the period beginning on the date of election until the earlier of (i) the maturity of the real estate loan investment and (ii) the sale of the property. The receipt of the cash termination fees are an additive adjustment in our calculation of AFFO and the removal of non-cash revenue from the recognition of the termination fees are a reduction to Core FFO in our calculation of AFFO; both of these adjustments are presented in a single net number within this line. For all periods presented, we had recognized termination fee revenues in excess of cash received, resulting in the negative adjustments shown to Core FFO in our calculation of AFFO.



13)

This adjustment reflects straight-line rent adjustments and the reversal of the non-cash amortization of below-market and above-market lease intangibles, which were recognized in conjunction with our acquisitions and which are amortized over the estimated average remaining lease terms from the acquisition date for multifamily communities and over the remaining lease terms for grocery-anchored shopping center assets and office buildings. At September 30, 2020, the balance of unamortized below-market lease intangibles was approximately $54.5 million, which will be recognized over a weighted average remaining lease period of approximately 8.7 years.



14)

This adjustment removes the non-cash amortization of deferred revenue recorded by us in conjunction with Company-owned lessee-funded tenant improvements in our office buildings.



15)

We deduct from Core FFO normally recurring capital expenditures that are necessary to maintain our assets' revenue streams in the calculation of AFFO. This adjustment also deducts from Core FFO capitalized amounts for third party costs during the period to originate or renew leases in our grocery-anchored shopping centers and office buildings. This adjustment includes approximately $28,000 and $100,000 of recurring capitalized expenditures incurred at our corporate offices during the three-month and nine-month periods ended September 30, 2020, respectively. No adjustment is made in the calculation of AFFO for nonrecurring capital expenditures. See Capital Expenditures, Grocery-Anchored Shopping Center Portfolio, and Office Buildings Portfolio sections for definitions of these terms.

 

See Definitions of Non-GAAP Measures.


Preferred Apartment Communities, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

(In thousands, except per-share par values)


September 30,
2020


December 31,
2019

Assets





Real estate 




Land


$

657,286



$

635,757


Building and improvements

3,361,174



3,256,223


Tenant improvements

175,400



167,275


Furniture, fixtures, and equipment

357,010



323,381


Construction in progress

23,677



11,893


Gross real estate

4,574,547



4,394,529


Less: accumulated depreciation

(542,161)



(421,551)


Net real estate

4,032,386



3,972,978


Real estate loan investments, net

307,033



325,790


Real estate loan investments to related parties, net

2,568



23,692


Total real estate and real estate loan investments, net

4,341,987



4,322,460







Cash and cash equivalents

30,337



94,381


Restricted cash

65,690



42,872


Notes receivable

2,894



17,079


Note receivable and revolving lines of credit due from related parties

9,011



24,838


Accrued interest receivable on real estate loans

24,784



25,755


Acquired intangible assets, net of amortization

133,297



154,803


Deferred loan costs on Revolving Line of Credit, net of amortization

879



1,286


Deferred offering costs

4,721



2,147


Tenant lease inducements, net

18,655



19,607


Investment in unconsolidated joint venture


6,851




Tenant receivables and other assets

91,956



65,332


Total assets

$

4,731,062



$

4,770,560







Liabilities and equity




Liabilities




Mortgage notes payable, net of deferred loan costs and mark-to-market adjustment

$

2,765,793



$

2,567,022


Revolving line of credit

33,000




Term note payable, net of deferred loan costs



69,489


Unearned purchase option termination fees

1,164



2,859


Deferred revenue

36,909



39,722


Accounts payable and accrued expenses

66,283



42,191


Deferred liability to Former Manager

23,373




Contingent liability due to Former Manager

14,867




Accrued interest payable

8,538



8,152


Dividends and partnership distributions payable

20,971



23,519


Acquired below market lease intangibles, net of amortization

54,483



62,611


Prepaid rent, security deposits and other liabilities

34,823



20,879


Total liabilities

3,060,204



2,836,444







Commitments and contingencies




Equity





Stockholders' equity





Series A Redeemable Preferred Stock, $0.01 par value per share; 3,050 shares authorized; 2,226 and 2,161 shares




 issued; 1,991 and 2,028 shares outstanding at September 30, 2020 and December 31, 2019, respectively

20



20


Series A1 Redeemable Preferred Stock, $0.01 par value per share; up to 1,000 shares authorized;




 103 and 5 shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively




Series M Redeemable Preferred Stock, $0.01 par value per share; 500 shares authorized; 106 shares




  issued; 91 and 103 shares outstanding at September 30, 2020 and December 31, 2019, respectively

1



1


Series M1 Redeemable Preferred Stock, $0.01 par value per share; up to 1,000 shares authorized;




  13 and zero shares issued and outstanding at September 30, 2020 and December 31, 2019, respectively




Common Stock, $0.01 par value per share; 400,067 shares authorized; 49,901 and 46,443 shares issued




and outstanding at September 30, 2020 and December 31, 2019, respectively

499



464


Additional paid-in capital


1,882,149



1,938,057


Accumulated (deficit) earnings


(210,218)



(7,244)


Total stockholders' equity


1,672,451



1,931,298


Non-controlling interest


(1,593)



2,818


Total equity


1,670,858



1,934,116







Total liabilities and equity


$

4,731,062



$

4,770,560


 

Preferred Apartment Communities, Inc.

Consolidated Statements of Cash Flows

(Unaudited)




Nine-month periods ended
September 30,

(In thousands)


2020


2019

Operating activities:





Net (loss) income


$

(199,075)



$

(6,094)


Reconciliation of net (loss) income to net cash provided by operating activities:




Depreciation and amortization expense

153,096



137,191


Amortization of above and below market leases

(6,145)



(4,525)


Deferred revenues and other noncash revenues amortization

(3,710)



(4,720)


Purchase option termination fee amortization

(4,896)



(6,900)


Amortization of equity compensation, lease incentives and other non-cash expenses

3,027



2,414


Deferred loan cost amortization

5,177



4,752


Non-cash accrued interest income on real estate loan investments

(9,208)



(10,206)


Receipt of accrued interest income on real estate loans

10,179



2,318


Gains on sales of real estate loan investments, net



(751)


Gain on sale of real estate loan and land condemnation

(3,789)




Loss from unconsolidated joint ventures

120




Cash received for purchase option terminations

4,800



1,330


Loss on extinguishment of debt

6,674



84


Non-cash payment of interest on related party line of credit



(637)


Mortgage interest received from consolidated VIEs



(13,398)


Mortgage interest paid to other participants of consolidated VIEs



13,398


Increase in provision for expected credit losses

5,463




Changes in operating assets and liabilities:




(Increase) in tenant receivables and other assets

(15,769)



(12,379)


(Increase) in tenant lease incentives

(382)



(570)


Increase in accounts payable and accrued expenses

46,821



22,399


Increase in deferred liability to Former Manager

22,851




Increase in contingent liability

15,013




Decrease in accrued interest, prepaid rents and other liabilities

(249)



730


Net cash provided by (used in) operating activities

29,998



124,436







Investing activities:





Investments in real estate loans


(42,193)



(74,668)


Repayments of real estate loans


71,146




Notes receivable issued


(793)



(5,399)


Notes receivable repaid


15,012



2,169


Notes receivable issued and draws on lines of credit by related parties

(9,624)



(30,434)


Repayments of notes receivable and lines of credit by related parties

4,546



26,222


Sale of real estate loan investment




747


Origination fees received on real estate loan investments

882



1,347


Origination fees paid to Former Manager on real estate loan investments



(674)


Purchases of mortgage backed securities (K program), net of acquisition costs



(18,656)


Mortgage principal received from consolidated VIEs



5,024


Purchases of mortgage-backed securities



(12,278)


Proceeds from sales of mortgage-backed securities



53,445


Acquisition of properties


(185,970)



(442,415)


Proceeds from sale of interest in unconsolidated joint venture

19,221




Return of capital from investment in unconsolidated joint venture

12,250




Proceeds from land condemnation

787




Receipt of insurance proceeds for capital improvements



746


Additions to real estate assets - improvements

(39,158)



(34,251)


Investment in property development


(50)




Deposits paid on acquisitions

(1,227)



(952)


Net cash used in investing activities

(155,171)



(530,027)





















Preferred Apartment Communities, Inc.

Consolidated Statements of Cash Flows - continued

(Unaudited)




Nine-month periods ended
September 30,

(In thousands)


2020


2019






Financing activities:





Proceeds from mortgage notes payable

377,749



329,905


Repayments of mortgage notes payable

(173,409)



(106,728)


Payments for deposits and other mortgage loan costs

(10,911)



(6,738)


Debt prepayment and other debt extinguishment costs

(5,733)




Payments to real estate loan participants



(5,223)


Proceeds from lines of credit


321,000



240,200


Payments on lines of credit


(288,000)



(247,200)


Repayment of Term Loan

(70,000)




Mortgage principal paid to other participants of consolidated VIEs



(5,024)


Proceeds from repurchase agreements



4,857


Payments for repurchase agreements



(4,857)


Proceeds from sales of preferred stock and Units, net of offering costs and redemptions

159,096



380,016


Proceeds from sales of Common Stock

4,522




Proceeds from exercises of Warrants

24



9,875


Payments for redemptions of preferred stock

(82,003)



(7,995)


Common Stock dividends paid


(33,271)



(33,617)


Preferred stock dividends and Class A Unit distributions paid

(104,428)



(81,025)


Payments for deferred offering costs

(10,669)



(3,386)


Contributions from non-controlling interests

99



2,050


Distributions to non-controlling interests

(119)




Net cash provided by financing activities

83,947



465,110






Net (decrease) increase in cash, cash equivalents and restricted cash

(41,226)



59,519


Cash, cash equivalents and restricted cash, beginning of year

137,253



87,690


Cash, cash equivalents and restricted cash, end of period

$

96,027



$

147,209


 

 

Real Estate Loan Investments


The following tables present details pertaining to our portfolio of fixed rate, interest-only real estate loan investments.


Project/Property


Location


Maturity
date


Optional
extension
date


Total loan
commitments


Carrying amount (1) as of


Current /
deferred
interest %
per annum






September 30,
2020


December 31,
2019

















Residential Properties:






(in thousands)



Palisades


Northern VA


5/17/2021


N/A


$



$



$

17,250



  (2)

Wiregrass


Tampa, FL


N/A


N/A






14,976



Wiregrass Capital


Tampa, FL


N/A


N/A






4,240



Berryessa


San Jose, CA


2/13/2021


2/13/2023


137,616



123,533



115,819



8.5 / 3

The Anson


Nashville, TN


11/24/2021


11/24/2023


6,240



6,240



6,240



8.5 / 4.5

The Anson Capital


Nashville, TN


11/24/2021


11/24/2023


5,659



4,736



4,440



8.5 / 4.5

Sanibel Straights


Fort Myers, FL


2/3/2021


2/3/2022


9,416



9,416



8,846



8.5 / 5.5

Sanibel Straights Capital


Fort Myers, FL


2/3/2021


2/3/2022


6,193



6,193



5,930



8.5 / 5.5

Falls at Forsyth


Atlanta, GA


N/A


N/A






21,513



Newbergh


Atlanta, GA


1/31/2021


1/31/2022


11,749



11,749



11,699



8.5 / 5.5

Newbergh Capital


Atlanta, GA


1/31/2021


1/31/2022


6,176



6,176



5,653



8.5 / 5.5

V & Three


Charlotte, NC


8/15/2021


8/15/2022


10,336



10,335



10,336



8.5 / 5

V & Three Capital


Charlotte, NC


8/18/2021


8/18/2022


7,338



7,008



6,571



8.5 / 5

Cameron Square


Alexandria, VA


10/11/2021


10/11/2023


21,340



19,887



18,582



8.5 / 3

Cameron Square Capital


Alexandria, VA


10/11/2021


10/11/2023


8,850



8,783



8,235



8.5 / 3

Southpoint


Fredericksburg, VA

2/28/2022


2/28/2024


7,348



7,348



7,348



8.5 / 4

Southpoint Capital


Fredericksburg, VA

2/28/2022


2/28/2024


4,962



4,527



4,245



8.5 / 4

E-Town


Jacksonville, FL


6/14/2022


6/14/2023


16,697



15,519



14,550



8.5 / 3.5

Vintage


Destin, FL


3/24/2022


3/24/2024


10,763



9,529



8,932



8.5 / 4

Hidden River II


Tampa, FL


10/11/2022


10/11/2024


4,462



4,462



3,012



8.5 / 3.5

Hidden River II Capital


Tampa, FL


10/11/2022


10/11/2024


2,763



2,408



2,258



8.5 / 3.5

Kennesaw Crossing


Atlanta, GA


9/1/2023


9/1/2024


14,810



12,746



7,616



8.5 / 5.5

Vintage Horizon West


Orlando, FL


10/11/2022


10/11/2024


10,900



8,826



8,275



8.5 / 5.5

Chestnut Farms


Charlotte, NC


2/28/2025


N/A


13,372



8,968





8.5 / 5.5

Vintage Jones Franklin


Raleigh, NC


11/14/2023


5/14/2025


10,000



3,251





8.5 / 5.5

Solis Cumming Town Center


Atlanta, GA


9/3/2024


9/3/2026


20,681



1,983





8.5 / 5.5

Haven 12


Starkville, MS


11/30/2020


N/A


6,116



6,116



6,116



8.5 / 0

Solis Kennesaw II


Atlanta, GA


5/5/2022


5/5/2024


13,613



13,227



12,489



8.5 / 4
















New Market Properties:















Dawson Marketplace


Atlanta, GA


N/A


N/A






12,857


















Office property:















8West


Atlanta, GA


11/29/2022


11/29/2024


19,193



10,663



4,554



8.5 / 5
























$

386,593



323,629



352,582




Unamortized loan origination fees








(1,567)



(1,476)




Allowances for expected loan losses and doubtful accounts






(12,461)



(1,624)



















Carrying amount










$

309,601



$

349,482



























(1) Carrying amounts presented per loan are amounts drawn, exclusive of deferred fee revenue.

(2) On July 31, 2020, we received approximately $18.7 million in full satisfaction of the principal and all interest due on the loan.

We hold options or rights of first offer, but not obligations, to purchase some of the properties which are partially financed by our real estate loan investments. Certain option purchase prices may be negotiated at the time of the loan closing and are to be calculated based upon market cap rates at the time of exercise of the purchase option, with discounts up to 15 basis points (if any), depending on the loan. As of September 30, 2020, potential property acquisitions and units from projects in our real estate loan investment portfolio consisted of:




Total units
upon


Purchase option window


Project/Property

Location


completion (1)


Begin


End











Residential properties:









V & Three

Charlotte, NC


338



S + 90 days (2)


S + 150 days (2)


The Anson

Nashville, TN


301



S + 90 days (2)


S + 150 days (2)


Southpoint

Fredericksburg, VA


240



S + 90 days (2)


S + 150 days (2)


E-Town

Jacksonville, FL


332



S + 90 days (3)


S + 150 days (3)


Vintage

Destin, FL


282



(4)


(4)


Hidden River II

Tampa, FL


204



S + 90 days (2)


S + 150 days (2)


Kennesaw Crossing

Atlanta, GA


250



(5)


(5)


Vintage Horizon West

Orlando, FL


340



(4)


(4)


Solis Chestnut Farm

Charlotte, NC


256



(5)


(5)


Vintage Jones Franklin

Raleigh, NC


277



(4)


(4)


Solis Kennesaw II

Atlanta, GA


175



(6)


(6)


Solis Cumming Town Center

Atlanta, GA


320



(5)


(5)











Office property:









8West

Atlanta, GA


(7)



(7)


(7)














3,315
















(1) We evaluate each project individually and we make no assurance that we will acquire any of the underlying properties from our

real estate loan investment portfolio.


(2) The option period window begins and ends at the number of days indicated beyond the achievement of a 93% physical occupancy

rate by the underlying property.


(3) The option period window begins on the earlier of June 21, 2024 and the number of days indicated beyond the achievement of

a 93% physical occupancy rate by the underlying property.


(4) The option period window begins on the later of one year following receipt of final certificate of occupancy or 90 days beyond

the achievement of a 93% physical occupancy rate by the underlying property and ends 60 days beyond the option period beginning date.


(5) We hold a right of first offer on the property.


(6) The option period begins on October 1 of the second academic year following project completion and ends on the following

December 31. The developer may elect to expedite the option period to begin December 1, 2020 and end on December 31, 2020.


(7) The project plans are for the construction of a class A office building consisting of approximately 195,000 rentable square feet;

our purchase option window opens 90 days following the achievement of 90% lease commencement and ends on November 30,

2024 (subject to adjustment). Our purchase option is at the to-be-agreed-upon market value. In the event the property is sold to a

third party, we would be due a fee based on a minimum multiple of 1.15 times the total commitment amount of the real estate loan

investment, less the amounts actually paid by the borrower, up to and including payment of accrued interest and repayment of

principal at the time of the sale.


 

 

Mortgage Indebtedness


The following table presents certain details regarding our mortgage notes payable:





Principal balance as of









Acquisition/
refinancing
date


September 30,
2020


December 31,
2019


Maturity
date


Interest
rate


Basis point
spread over
1 Month
LIBOR


 

Interest only
through date
(1)















Multifamily communities:



(in thousands)









Summit Crossing

10/31/2017


$

37,115



$

37,651



11/1/2024


3.99

%


Fixed rate


N/A

Summit Crossing II

6/30/2020


20,700



13,221



7/1/2030


2.94

%


278


7/31/2022

Vineyards

9/26/2014


32,877



33,382



10/1/2021


3.68

%


Fixed rate


N/A

Avenues at Cypress

6/30/2020


28,366



20,704



7/1/2027


2.96

%


Fixed rate


7/31/2022

Avenues at Northpointe

6/29/2020


33,546



26,313



7/1/2027


2.79

%


Fixed rate


7/31/2022

Venue at Lakewood Ranch

6/30/2020


36,555



28,076



7/1/2030


2.99

%


Fixed rate


7/31/2022

Aster at Lely Resort

6/29/2020


50,400



31,094



7/1/2030


2.95

%


Fixed rate


7/31/2022

CityPark View

6/25/2020


29,000



20,089



7/1/2030


2.75

%


Fixed rate


7/31/2023

Avenues at Creekside

7/31/2015


38,251



38,871



8/1/2024


1.76

%


160


N/A

Citi Lakes

7/29/2019


40,517



41,079



8/1/2029


3.66

%


Fixed rate


N/A

Stone Creek

6/22/2017


19,539



19,800



7/1/2052


3.22

%


Fixed rate


N/A

Lenox Village Town Center

2/28/2019


38,335



38,813



3/1/2029


4.34

%


Fixed rate


N/A

Retreat at Lenox

12/21/2015


16,844



17,114



1/1/2023


4.04

%


Fixed rate


N/A

Overton Rise

2/1/2016


37,818



38,428



8/1/2026


3.98

%


Fixed rate


N/A

Village at Baldwin Park

7/31/2020


69,881



70,607



1/1/2054


3.59

%


Fixed rate


N/A

Crosstown Walk

6/30/2020


46,500



30,246



7/1/2027


2.92

%


Fixed rate


7/31/2022

525 Avalon Park

6/15/2017


63,580



64,519



7/1/2024


3.98

%


Fixed rate


N/A

City Vista

7/1/2016


33,126



33,674



7/1/2026


3.68

%


Fixed rate


N/A

Sorrel

8/24/2016


30,921



31,449



9/1/2023


3.44

%


Fixed rate


N/A

Citrus Village

7/10/2020


40,900



28,796



8/1/2027


2.95

%


Fixed rate


8/31/2022

Retreat at Greystone

11/21/2017


33,597



34,053



12/1/2024


4.31

%


Fixed rate


N/A

Founders Village

3/31/2017


29,781



30,202



4/1/2027


4.31

%


Fixed rate


N/A

Claiborne Crossing

4/26/2017


25,615



25,948



6/1/2054


2.89

%


Fixed rate


N/A

Luxe at Lakewood Ranch

7/26/2017


37,112



37,662



8/1/2027


3.93

%


Fixed rate


N/A

Adara at Overland Park

9/27/2017


30,178



30,624



4/1/2028


3.90

%


Fixed rate


N/A

Aldridge at Town Village

10/31/2017


36,066



36,569



11/1/2024


4.19

%


Fixed rate


N/A

Reserve at Summit Crossing

9/29/2017


18,992



19,276



10/1/2024


3.87

%


Fixed rate


N/A

Overlook at Crosstown Walk

11/21/2017


21,144



21,450



12/1/2024


3.95

%


Fixed rate


N/A

Colony at Centerpointe

12/20/2017


31,616



32,120



10/1/2026


3.68

%


Fixed rate


N/A

Lux at Sorrel

1/9/2018


30,022



30,474



2/1/2030


3.91

%


Fixed rate


N/A

Green Park

2/28/2018


37,973



38,525



3/10/2028


4.09

%


Fixed rate


N/A

The Lodge at Hidden River

9/27/2018


40,384



40,903



10/1/2028


4.32

%


Fixed rate


N/A

Vestavia Reserve

11/9/2018


36,671



37,130



12/1/2030


4.40

%


Fixed rate


N/A

CityPark View South

11/15/2018


23,479



23,767



6/1/2029


4.51

%


Fixed rate


N/A

Artisan at Viera

8/8/2019


39,287



39,824



9/1/2029


3.93

%


Fixed rate


N/A

Five Oaks at Westchase

10/17/2019


30,978



31,448



11/1/2031


3.27

%


Fixed rate


N/A

Horizon at Wiregrass Ranch

4/23/2020


51,636





5/1/2030


2.90

%


Fixed rate


N/A

Parkside at the Beach

4/30/2020


45,037





5/1/2030


2.95

%


Fixed rate


N/A















Total multifamily communities



1,344,339



1,173,901
























Grocery-anchored shopping centers:

Spring Hill Plaza

9/17/2019


8,016



8,167



10/1/2031


3.72

%


Fixed rate


N/A

Parkway Town Centre

9/17/2019


7,917



8,067



10/1/2031


3.72

%


Fixed rate


N/A

Woodstock Crossing

8/8/2014


2,833



2,877



9/1/2021


4.71

%


Fixed rate


N/A

Deltona Landings

8/16/2019


6,178



6,289



9/1/2029


4.18

%


Fixed rate


N/A

Powder Springs

8/13/2019


7,800



7,951



9/1/2029


3.65

%


Fixed rate


(3)

Barclay Crossing

8/16/2019


6,124



6,233



9/1/2029


4.18

%


Fixed rate


N/A

Parkway Centre

8/16/2019


4,450



4,530



9/1/2029


4.18

%


Fixed rate


N/A

The Market at Salem Cove

10/6/2014


8,936



9,075



11/1/2024


4.21

%


Fixed rate


N/A

Independence Square

8/27/2015


11,253



11,455



9/1/2022


3.93

%


Fixed rate


N/A

Royal Lakes Marketplace

4/12/2019


9,403



9,572



5/1/2029


4.29

%


Fixed rate


N/A

The Overlook at Hamilton Place

12/22/2015


19,195



19,509



1/1/2026


4.19

%


Fixed rate


N/A

Summit Point

10/30/2015


11,213



11,494



11/1/2022


3.57

%


Fixed rate


N/A

East Gate Shopping Center

4/29/2016


5,158



5,277



5/1/2026


3.97

%


Fixed rate


N/A

Fury's Ferry

4/29/2016


5,959



6,096



5/1/2026


3.97

%


Fixed rate


N/A

Rosewood Shopping Center

4/29/2016


4,002



4,095



5/1/2026


3.97

%


Fixed rate


N/A

Southgate Village

4/29/2016


7,115



7,279



5/1/2026


3.97

%


Fixed rate


N/A

The Market at Victory Village

5/16/2016


8,792



8,911



9/11/2024


4.40

%


Fixed rate


N/A

Wade Green Village

4/7/2016


7,530



7,655



5/1/2026


4.00

%


Fixed rate


N/A

Lakeland Plaza

7/15/2016


26,842



27,459



8/1/2026


3.85

%


Fixed rate


N/A

University Palms

8/8/2016


12,129



12,421



9/1/2026


3.45

%


Fixed rate


N/A

Cherokee Plaza

4/12/2019


24,427



24,867



5/1/2027


4.28

%


Fixed rate


N/A

Sandy Plains Exchange

8/8/2016


8,473



8,676



9/1/2026


3.45

%


Fixed rate


N/A

Thompson Bridge Commons

8/8/2016


11,326



11,599



9/1/2026


3.45

%


Fixed rate


N/A

Heritage Station

8/8/2016


8,383



8,585



9/1/2026


3.45

%


Fixed rate


N/A

Oak Park Village

8/8/2016


8,651



8,859



9/1/2026


3.45

%


Fixed rate


N/A

Shoppes of Parkland

8/8/2016


15,489



15,702



9/1/2023


4.67

%


Fixed rate


N/A

Champions Village

10/18/2016


27,400



27,400



11/1/2021


3.25

%


300

(4)

11/1/2021

Castleberry-Southard

4/21/2017


10,791



10,959



5/1/2027


3.99

%


Fixed rate


N/A

Rockbridge Village

6/6/2017


13,383



13,597



7/5/2027


3.73

%


Fixed rate


N/A

Irmo Station

7/26/2017


9,829



10,038



8/1/2030


3.94

%


Fixed rate


N/A

Maynard Crossing

8/25/2017


17,079



17,449



9/1/2032


3.74

%


Fixed rate


N/A

Woodmont Village

9/8/2017


8,153



8,320



10/1/2027


4.13

%


Fixed rate


N/A

West Town Market

9/22/2017


8,321



8,503



10/1/2025


3.65

%


Fixed rate


N/A

Crossroads Market

12/5/2017


17,746



18,112



1/1/2030


3.95

%


Fixed rate


N/A

Anderson Central

3/16/2018


11,320



11,539



4/1/2028


4.32

%


Fixed rate


N/A

Greensboro Village

5/22/2018


8,093



8,250



6/1/2028


4.20

%


Fixed rate


N/A

Governors Towne Square

5/22/2018


10,768



10,976



6/1/2028


4.20

%


Fixed rate


N/A

Conway Plaza

6/29/2018


9,419



9,549



7/5/2028


4.29

%


Fixed rate


N/A

Brawley Commons

7/6/2018


17,632



17,963



8/1/2028


4.36

%


Fixed rate


N/A

Hollymead Town Center

12/21/2018


26,296



26,758



1/1/2029


4.64

%


Fixed rate


N/A

Gayton Crossing

1/17/2019


17,379



17,679



2/1/2029


4.71

%


Fixed rate


N/A

Free State Shopping Center

5/28/2019


45,763



46,391



6/1/2029


3.99

%


Fixed rate


N/A

Polo Grounds Mall

6/12/2019


13,047



13,227



7/1/2034


3.93

%


Fixed rate


N/A

Disston Plaza

6/12/2019


17,661



17,905



7/1/2034


3.93

%


Fixed rate


N/A

Fairfield Shopping Center

8/16/2019


19,750



19,750



8/16/2026


2.21

%


205


8/16/2022

Berry Town Center

11/14/2019


11,852



12,025



12/1/2034


3.49

%


Fixed rate


N/A

Hanover Shopping Center

12/19/2019


31,417



32,000



12/19/2026


3.62

%


Fixed rate


N/A

Wakefield Crossing

1/29/2020


7,777





2/1/2032


3.66

%


Fixed rate


N/A















Total grocery-anchored shopping centers (5)


618,470



621,090
























Student housing properties:














North by Northwest

6/1/2016


30,594



31,209



10/1/2022


4.02

%


Fixed rate


N/A

SoL

10/31/2018


35,238



35,656



11/1/2028


4.71

%


Fixed rate


N/A

Stadium Village

10/27/2017


44,561



45,228



11/1/2024


3.80

%


Fixed rate


N/A

Ursa

12/18/2017




31,400



1/5/2020


N/A


N/A


N/A

The Tradition

5/10/2018


30,000



30,000



6/6/2021


5.45

%


375

(6)

6/6/2021

Knightshade

5/31/2018


47,125



47,125



9/1/2025


4.09

%


Fixed rate


9/30/2020

The Bloc

6/27/2018


28,966



28,966



7/9/2021


5.25

%


355

(7)

7/9/2021















Total student housing properties



216,484



249,584
























Office buildings:

Brookwood Center

8/29/2016


30,124



30,716



9/10/2031


3.52

%


Fixed rate


N/A

Galleria 75

11/4/2016


5,184



5,340



7/1/2022


4.25

%


Fixed rate


N/A

Three Ravinia

12/30/2016


115,500



115,500



1/1/2042


4.46

%


Fixed rate


1/31/2022

Westridge at La Cantera

11/13/2017


50,801



51,834



12/10/2028


4.10

%


Fixed rate


N/A

Armour Yards

1/29/2018


39,600



40,000



2/1/2028


4.10

%


Fixed rate


N/A

150 Fayetteville

7/31/2018


114,243



114,400



8/10/2028


4.27

%


Fixed rate


9/9/2020

Capitol Towers

12/20/2018


123,252



124,814



1/10/2037


4.60

%


Fixed rate


N/A

CAPTRUST Tower

7/25/2019


82,650



82,650



8/1/2029


3.61

%


Fixed rate


7/31/2029

Morrocroft Centre

3/19/2020


70,000





4/10/2033


3.40

%


Fixed rate


4/10/2025

251 Armour Yards (8)

1/22/2020


3,522





1/22/2025


4.50

%


Fixed rate


1/21/2023















Total office buildings



634,876



565,254










Grand total



2,814,169



2,609,829










Less: deferred loan costs



(44,338)



(38,185)










Less: below market debt adjustment



(4,038)



(4,622)










Mortgage notes, net



$

2,765,793



$

2,567,022










 


Footnotes to Mortgage Notes Table




(1) Following the indicated interest only period (where applicable), monthly payments of accrued interest and principal are based on a 25 to 35-year amortization period through the maturity date.


(2)  The mortgage instrument was assumed as part of the sales transaction; the 1 Month LIBOR index is capped at 5.0%, resulting in a cap on the combined rate of 6.6%. 


(3) The mortgage has interest-only payment terms for the periods of June 1, 2023 through May 1, 2024 and from June 1, 2028 through May 1, 2029.


(4) The interest rate has a floor of 3.25%.


(5) Excludes mortgage debt on the Neapolitan Way grocery-anchored shopping center, which is held in an unconsolidated joint venture.


(6) The interest rate has a floor of 5.45%.


(7) The interest rate has a floor of 5.25%.


(8) A construction loan financing redevelopment of the property.


 

 

Multifamily Communities


As of September 30, 2020, our multifamily community portfolio consisted of the following properties:










Three months ended
September 30, 2020


Property


Location


Number of

units


Average unit

size (sq. ft.)


Average

physical

occupancy


Average rent

per unit














Same-Store Communities:












Aldridge at Town Village


Atlanta, GA


300


969



96.1

%


$

1,409



Green Park


Atlanta, GA


310


985



96.7

%


$

1,483



Overton Rise


Atlanta, GA


294


1,018



97.6

%


$

1,593



Summit Crossing I


Atlanta, GA


345


1,034



97.6

%


$

1,242



Summit Crossing II


Atlanta, GA


140


1,100



97.9

%


$

1,337



The Reserve at Summit Crossing


Atlanta, GA


172


1,002



95.5

%


$

1,374



Avenues at Cypress


Houston, TX


240


1,170



95.8

%


$

1,454



Avenues at Northpointe


Houston, TX


280


1,167



95.4

%


$

1,408



Vineyards


Houston, TX


369


1,122



95.1

%


$

1,205



Avenues at Creekside


San Antonio, TX


395


974



95.6

%


$

1,201



Aster at Lely Resort


Naples, FL


308


1,071



94.0

%


$

1,438



Sorrel


Jacksonville, FL


290


1,048



94.9

%


$

1,336



Lux at Sorrel


Jacksonville, FL


265


1,025



95.1

%


$

1,394



525 Avalon Park


Orlando, FL


487


1,394



94.4

%


$

1,512



Citi Lakes


Orlando, FL


346


984



94.0

%


$

1,465



Luxe at Lakewood Ranch


Sarasota, FL


280


1,105



96.0

%


$

1,492



Venue at Lakewood Ranch


Sarasota, FL


237


1,001



92.3

%


$

1,536



Crosstown Walk


Tampa, FL


342


1,070



96.0

%


$

1,334



Overlook at Crosstown Walk


Tampa, FL


180


986



96.9

%


$

1,404



Citrus Village


Tampa, FL


296


980



95.6

%


$

1,336



Lenox Village


Nashville, TN


273


906



95.5

%


$

1,319



Regent at Lenox


Nashville, TN


18


1,072



98.1

%


$

1,359



Retreat at Lenox


Nashville, TN


183


773



96.0

%


$

1,254



CityPark View


Charlotte, NC


284


948



96.0

%


$

1,169



CityPark View South


Charlotte, NC


200


1,005



93.7

%


$

1,283



Colony at Centerpointe


Richmond, VA


255


1,149



98.3

%


$

1,383



Founders Village


Williamsburg, VA


247


1,070



96.1

%


$

1,397



Retreat at Greystone


Birmingham, AL


312


1,100



97.0

%


$

1,356



Vestavia Reserve


Birmingham, AL


272


1,113



97.1

%


$

1,561



Adara Overland Park


Kansas City, KS


260


1,116



94.6

%


$

1,403



Claiborne Crossing


Louisville, KY


242


1,204



97.1

%


$

1,342



City Vista


Pittsburgh, PA


272


1,023



92.4

%


$

1,450















Total/Average Same-Store Communities




8,694




95.6

%
















Stabilized Communities:












Stone Creek


Houston, TX


246


852



94.4

%


$

1,203



Artisan at Viera


Melbourne, FL


259


1,070



94.3

%


$

1,694



Village at Baldwin Park


Orlando, FL


528


1,069



94.9

%


$

1,677



Parkside at the Beach


Panama City Beach, FL


288


1,041



95.5

%


$

1,398



Lodge at Hidden River


Tampa, FL


300


980



95.4

%


$

1,387



Five Oaks at Westchase


Tampa, FL


218


983



94.6

%


$

1,510



Wiregrass Ranch


Tampa, FL


392


973



96.9

%


$

1,479















Total/Average Stabilized Communities




2,231