BRT Apartments Corp. (MD)

Good day and welcome to BRT Apartments Corps' fourth quarter and year-end earnings conference call. Today's conference is being recorded. If you require operator assistance, please press star then zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. To withdraw your question, please press star then two. At this time, I would like to turn the floor over to Tripp Sullivan of Investor Relations. Thank you. You may begin.

Thank you for joining us today. On the call are Jeffrey Gould, President and Chief Executive Officer, George Zweier, Chief Financial Officer, Ryan Baltimore, Chief Operating Officer, as well as David Kalish, Senior Vice President. I would like to remind everyone that this conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's current expectations, assumptions, and beliefs. Listeners should not place undue reliance on any forward-looking statements and are encouraged to review the company's SEC filings, including its Form 10-K, for more complete discussion of risk and other factors that could affect these forward-looking statements. Except as required by law, BRT does not undertake any obligation to publicly update or revise any forward-looking statements. This call also includes a discussion of non-GAAP measures, including FFO, AFFO, NOI, combined portfolio NOI, and information regarding our pro-rata share of revenues, expenses, NOI, assets, and liabilities of BRTs unconsolidated. All the non-GAAP information discussed today has certain limitations and should be used with caution and in conjunction with the GAAP data presented in our supplemental earnings release and in our reports filed with the SEC. Please see these reports and filings for the definitions of each non-GAAP measure. As a reminder, the company's supplemental information and earnings release have been posted on the Best Relations section of BRT's website at www.brtapartments.com. I'd now like to turn the call over to President and CEO, Jeffrey Gould. Please go ahead, Jeff.

Good morning. We're approaching the end of the Q4 earnings cycle, and the commentary we've all heard this quarter has focused on rental rates, transaction activity, expenses, and the impact of new supply in the Sun Belt. We'll be very brief with our commentary today so we can drill down into those topics in Q&A. To quickly summarize 2023, I want to highlight the ongoing simplification of the business that we started in 2021 by taking full ownership of a majority of our properties, the improvement in our balance sheet, and the disciplined approach to our capital allocation. We do not have any significant mortgage debt maturities until early 2026, and pulling back on acquisitions the past year and investing disposition proceeds to repurchase $16.7 million of shares during the year and to date in 2024 were the right decisions. We made it a priority to focus on property operations and look to maximize portfolio performance where possible. It made for a relatively quiet year, but an important one nonetheless. While we're not providing specific earning targets, the 2024 outlook we provided in our earnings release last night outlines our views on portfolio operations, transactions, and other moving parts of the P&L. The big takeaways are that operational environment we're anticipating this year is much like other operators. New supply is expected to impact the ability to grow rents. There will be continued pressure on occupancy, and the ongoing inflationary headwinds are expected to impact operating margins. We intend to prioritize stabilizing occupancy this year with a view to being more constructive on potential transaction action activity later in the year. Long term, we're in the right region in the Sun Belt. We will be aggressive in how we manage the portfolio during what we anticipate will be a challenging 2024, but we will remain very patient on asset growth. We believe this strikes the right balance to position us for better growth in 2025 and 26. Operator, will you please open the call to questions?