BRT Apartments Corp. has completed a refinancing that replaces $42.7 million of maturing mortgages with $71.9 million of new debt, extending the average remaining term to roughly nine years. The new loans carry a weighted‑average interest rate of 4.95%, up from the 4.36% rate on the maturing mortgages, and $17.5 million of the proceeds were used to retire the company’s existing credit facility.
The refinancing increases BRT’s total debt load but also consolidates its borrowing into a single, longer‑term structure. By paying off the credit facility—previously capped at $60 million and maturing in September 2025—the company removes a higher‑rate, more restrictive source of liquidity, improving its balance‑sheet profile and freeing cash for future acquisitions.
BRT’s strategy focuses on value‑add multi‑family properties in high‑growth Sun Belt markets. The new debt structure aligns with that strategy by providing a stable, predictable financing base that can support renovations and rent‑growth initiatives in those markets, while mitigating the risk of rolling over low‑rate debt at higher current rates.
The higher weighted‑average interest rate means BRT will face increased interest expense, which could compress future Funds From Operations (FFO) and Adjusted Funds From Operations (AFFO). Management acknowledges this trade‑off, noting that the extended maturity and removal of the credit facility outweigh the cost increase and provide a more resilient capital structure in a rising‑rate environment.
Analysts have noted that BRT’s refinancing comes at a time when the company’s portfolio faces headwinds from Sun Belt oversupply and rising refinancing costs. The move is seen as a proactive step to reduce refinancing risk, but the higher interest expense remains a concern for long‑term profitability.
Overall, the refinancing positions BRT to pursue growth opportunities in its core markets while managing debt risk, but investors should monitor the impact of the higher interest rate on the company’s cash‑flow metrics in upcoming quarters.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.