BRT Apartments Corp. (BRT) Cash Flow Statement

The pattern is unambiguous: AFFO contracted from $3.2M in 2024Q4 to $1.4M in 2026Q2, a 56% decline, while the quarterly dividend held steady at approximately $4.7M. This means retained AFFO has turned materially negative, implying BRT must fund the gap through asset sales, debt draws, or equity issuance. For a residential REIT operating in an environment where several peers already show sub-1.0x coverage, this structural shortfall warrants close scrutiny of the sustainability of the current distribution policy. The 2025Q4 trough of $1.0M AFFO against the same dividend level is particularly alarming as a stress-case datapoint.

The FFO/NI ratio has been consistently and dramatically negative, swinging from -8.77x in 2024Q2 to -0.78x in 2026Q1, reflecting both persistent depreciation burdens and the widening accounting loss. While the depreciation gap itself is expected for a property owner, the narrowing of FFO/NI toward zero in recent quarters suggests the cash-adjusted earnings cushion is thinning—GAAP losses are becoming slightly less disconnected from reality because FFO is declining. Analysts should note that the magnitude of this distortion is not shrinking; rather, the FFO side is converging downward toward the loss line, which is a materially less reassuring interpretation.

The extreme OCF volatility relative to stable FFO implies that tenant receivables timing, straight-line rent adjustments, and property-level accrual swings distort the cash flow statement quarter-to-quarter. In 2026Q2, OCF of $6.3M versus FFO of $3.5M produced a seemingly comfortable conversion, but this appears inconsistent with the prior quarter's OCF of $2.1M and the 2025Q4 negative OCF reading. Investors should treat any single-quarter OCF print for BRT as noise-prone and rely instead on trailing FFO/AFFO averages, as the cash conversion picture is fundamentally unreliable on a discrete-quarter basis.

The capex intensity (capex as a percentage of FCF) has been modest, with several quarters showing zero reported capex. While this preserves near-term FCF, it raises the question of whether recurring maintenance and tenant improvement obligations are being adequately funded. If BRT's properties require standard multi-family reinvestment of 15–20% of NOI annually, the reported capex levels may be insufficient, potentially front-loading a larger capex cycle ahead. This would further compress the already-thin AFFO buffer and compound dividend coverage pressure.