Company Update

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report (Date of earliest event reported): February 29, 2016 BRT REALTY TRUST (Exact name of Registrant as specified in charter) Massachusetts   001-07172   13-2755856 (State or other jurisdiction of incorporation)   (Commission file No.)   (IRS Employer I.D. No.) 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code 516-466-3100 Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below): Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Explanatory Note On March 8, 2016, we filed a Current Report on Form 8-K (the "Report") reporting our acquisition of a 392 unit multi-family property located at 4740 Highway 51 N, Southhaven, MS (“Civic Center I”). We are filing this amendment to the Report to include under (i) Item 9.01(a), the audited statement of revenues and certain expenses of Civic Center I, for the year ended December 31, 2015 and (ii) Item 9.01(b), our unaudited pro forma financial statements reflecting the acquisition of Civic Center I. Civic Center I was purchased on February 29, 2016 for $35 million, including $28 million of mortgage debt obtained in connection with the acquisition. The mortgage bears interest at a rate of 4.24%, matures in 2026, is interest only for the first 60 months and thereafter amortizes over a 30-year period. We contributed $5.9 million to this venture for our 60% interest. Item 9.01 Financial Statements and Exhibits.      (a) Financial Statement of Business Acquired-Civic Center I Page   (i) Independent Auditor’s Report 2   (ii) Statement of Revenues and Certain Expenses for the year ended        December 31, 2015 3   (iv) Notes to Statements of Revenues and Certain Expenses 4 (b) Unaudited Pro Forma Consolidated Financial Statements 5   (i) Pro Forma Consolidated Balance Sheet at September 30, 2015 6   (ii) Pro Forma Consolidated Statements of Income:            For the year ended September 30, 2015 7          For the three months ended December 31, 2015 8   (iii) Notes to Pro Forma Consolidated Financial Statements 9 (c) Exhibits             Exhibit No. Title of Exhibit     23.1 Consent of BDO USA, LLP dated March 18, 2016   1 Independent Auditor’s Report Shareholders and Board of Trustees BRT Realty Trust Great Neck, New York We have audited the accompanying statement of revenues and certain expenses of the property located at 4740 Highway 51 N, Southhaven, MS ("Civic Center I") for the year ended December 31, 2015. Management’s Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of the statement of revenues and certain expenses in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the statement of revenues and certain expenses that is free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on the statement of revenues and certain expenses based on our audit. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the statement of revenues and certain expenses is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the statement of revenues and certain expenses. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the statement of revenues and certain expenses, whether due to fraud or error. In making those risk assessments, the auditor considers internal controls relevant to Civic Center I's preparation and fair presentation of the statement of revenues and certain expenses in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal controls. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the revenues and certain expenses. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, the statement of revenues and certain expenses referred to above presents fairly, in all material respects, the statement of revenues and certain expenses of Civic Center I for the year ended December 31, 2015, in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter The accompanying statements of revenues and certain expenses was prepared for the purpose of complying with rules and regulations of the U.S. Securities and Exchange Commission and for inclusion in a Current Report on Form 8-K of BRT Realty Trust as described in Note 2 to the statement of revenues and certain expenses and is not intended to be a complete presentation of Civic Center I's revenues and expenses. /s/ BDO USA, LLP New York, New York March 18, 2016 2 Civic Center I Statement of Revenues and Certain Expenses     Year Ended December 31, 2015       Revenues:     Rental Income   $ 3,581,000 Other Income   254,000   Rental and other income   3,835,000       Certain Expenses:       Real estate taxes   427,000   Management fees   153,000   Utilities   129,000   Payroll   295,000   Insurance   69,000   Repairs and maintenance   285,000 Total certain expenses   1,358,000       Revenues in excess of certain expenses   $ 2,477,000 See Independent Auditor’s Report and accompanying notes to the Statements of Revenues and Certain Expenses. 3 Civic Center Notes to Statements of Revenues and Certain Expenses 1. Organization The property, located at 4740 Highway 51 N, Southhaven, MS (“Civic Center I” or the "Property"), is a multi-family complex containing 392 units. BRT Realty Trust (“BRT” or the “Trust”) is a business trust organized in Massachusetts. BRT owns, operates and develops multi‑family properties, commercial and mixed use real estate assets. On February 29, 2016, a consolidated joint venture comprised of an indirect wholly-owned subsidiary of the Trust and an unaffiliated joint venture partner acquired the Property for $35 million, including $28 million of mortgage debt obtained in connection with the acquisition. 2. Basis of Presentation and Significant Accounting Policies Basis of Presentation The accompanying statement of revenues and certain expenses of the Property has been prepared in accordance with Rule 3-14 of Regulation S-X of the U.S. Securities and Exchange Commission for inclusion in the Trust’s Current Report on Form 8-K. Accordingly, the statements of revenues and certain expenses excludes certain expenses that may not be comparable to those expected to be incurred in the future operations of the aforementioned property. Items excluded consist of interest expense, depreciation, amortization, corporate expenses, and other costs not directly related to future operations. Significant Accounting Policies Use of Estimates The preparation of the statements of revenues and certain expenses in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the statements of revenues and certain expenses. Actual results could differ from those estimates. Revenue Recognition Rental revenue is recognized on an accrual basis when earned and due from tenants. Leases are generally for a one-year term and have no renewal options. Income Taxes The entity that owns the Property was organized as a limited liability company and is not directly subject to federal or state income taxes. 3. Subsequent Events Subsequent events were evaluated from December 31, 2015 through March 18, 2016, the date on which the statements of revenues and certain expenses were available to be issued. 4 BRT REALTY TRUST AND SUBSIDIARIES Pro Forma Consolidated Financial Statements (Unaudited) Acquisitions On February 29, 2016, TRB Civic Center I, an indirect wholly owned subsidiary of BRT Realty Trust ("BRT" or the “Trust”) and an unaffiliated joint venture partner, acquired a 392 unit multi-family property located at 4740 Highway 51 N, Southhaven, MS (“Civic Center I”) for $35 million, including $28 million of mortgage debt obtained in connection with the acquisition. On February 1, 2016, TRB River Place LLC, an indirect wholly owned subsidiary of BRT Realty Trust and an unaffiliated joint venture partner, acquired a 240 unit multi-family property located at 4501 Sheraton Drive, Macon, GA (“River Place”) for $14.5 million, including $11.2 million of mortgage debt obtained in connection with the acquisition. On January 22, 2016, TRB Cinco Ranch LLC, an indirect wholly owned subsidiary of the Trust and an unaffiliated joint venture partner, acquired a multi-family property located at 3306 S. Fry Road, Katy, TX ("Retreat at Cinco Ranch") containing 268 units for $40.3 million, including $30.8 million of mortgage debt. The acquisitions of River Place and Retreat at Cinco Ranch are referred to collectively as the "Previously Reported Acquisitions". Dispositions On February 23, 2016, TRB Newark Assemblage, LLC and TRB Newark TRS, LLC, wholly owned subsidiaries of the Trust, sold (the "Disposition") their equity interest in the Newark Joint Venture for $16.9 million. Presentation The unaudited pro forma consolidated balance sheet is presented as if the acquisitions had been completed on December 31, 2015. The unaudited pro forma consolidated statement of income for the year ended September 30, 2015 is presented as if the acquisitions had been completed on October 1, 2014. The unaudited pro forma consolidated statement of income for the three months ended ended December 31, 2015, is presented as if the acquisitions had been completed on October 1, 2015. These unaudited pro forma consolidated financial statements are presented for informational purposes only and should be read in conjunction with the Trust’s Annual Report on Form 10-K for the year ended September 30, 2015. The unaudited pro forma consolidated financial statements are based on assumptions and estimates considered appropriate by the Trust’s management; however, such statements do not purport to represent what the Trust’s financial position and results of operations would have been assuming the completion of the acquisition on October 1, 2014 and October 1, 2015, nor do they purport to project the Trust’s financial position and results of operations at any future date or for any future period. In the opinion of the Trust’s management, all adjustments necessary to reflect the effects of the transactions described above have been included in the pro forma consolidated financial statements. 5 BRT REALTY TRUST AND SUBSIDIARIES PRO FORMA - UNAUDITED CONSOLIDATED BALANCE SHEET At December 31, 2015 (Amounts in thousands, except per share data)     The Trust Historical   Previously Reported Acquisitions   Previously Reported Dispositions   Purchase of Civic Center I   The Trust Pro Forma as Adjusted ASSETS                     Real estate properties, net of accumulated depreciation of $46,301   $ 769,320   $ 54,775   $ (147,688 )   $ 35,000   $ 711,407                       Cash and cash equivalents   21,379   (10,787 )   14,036   (5,502 )   19,126 Restricted cash - Newark   15,229   —   (15,229 )   —   — Restricted cash - multi-family   5,919   —   —   1,716   7,635 Real estate loan   —   —   19,500   —   19,500 Deferred costs, net   15,581   482   (9,808 )   193   6,448 Deposits and escrows   14,484   619   (63 )   402   15,442 Other assets   14,701   152   (8,756 )   17   6,114 Real estate property held-for-sale   23,869   —   —   —   23,869      Total Assets   $ 880,482   $ 45,241   $ (148,008 )   $ 31,826   $ 809,541                       LIABILITIES AND EQUITY                     Liabilities:                       Mortgages payable   $ 596,204   $ 41,950   $ (113,585 )   $ 28,000   $ 552,569   Junior subordinated notes   37,400   —   —   —   37,400   Other borrowings - including $8,000 to related party   14,001   —   (6,001 )   —   8,000   Accounts payable and accrued liabilities   21,019   65   (7,196 )   87   13,975   Deferred income   33,736   —   (33,736 )   —   —   Mortgage payable held-for-sale   19,248   —   —   —   19,248     Total Liabilities   721,608   42,015   (160,518 )   28,087   631,192                       Commitments and contingencies   —   —   —   —   —                       Equity:                     BRT Realty Trust shareholders' equity:                        Preferred shares, $1 par value:                          authorized 10,000 shares, none issued   —   —   —   —   —    Shares of beneficial interest, $3 par value:                          authorized number of shares, unlimited, 13,428 issued   40,285   —   —   —   40,285    Additional paid-in capital   162,072   —   —   —   162,072    Accumulated other comprehensive loss   (38 )   —   —   —   (38 )    Accumulated deficit   (81,448 )   —   15,000   —   (66,448 )      Total BRT Realty Trust shareholders' equity   120,871   —   15,000   —   135,871 Non-controlling interests   38,003   3,226   (2,490 )   3,739   42,478      Total Equity   158,874   3,226   12,510   3,739   178,349 Total Liabilities and Equity   $ 880,482   $ 45,241   $ (148,008 )   $ 31,826   $ 809,541 See accompanying notes to the unaudited pro forma consolidated financial statements 6 BRT REALTY TRUST AND SUBSIDIARIES PRO FORMA - UNAUDITED CONSOLIDATED STATEMENT OF INCOME For The Year Ended September 30, 2015 (Dollars in thousands, except share data)     The Trust Historical   Previously Reported Acquisitions   Previously Reported Disposition   Purchase of Civic Center I   The Trust Pro Forma as Adjusted Revenues:                        Rental and other revenue from real estate    properties   $ 81,358   $ 5,853   $ (4,335 )   $ 3,858   $ 86,734    Other income   1,139   —   635   —   1,774    Total revenues   82,497   5,853   (3,700 )   3,858   88,508 Expenses:                        Real estate operating expenses - including    $1,233 to related parties   43,219   2,776   (4,610 )   1,551   42,936    Interest expense   24,177   1,957 (a) (4,880 )   1,240 (a) 22,494    Advisor's fees, related party   2,448   —   (296 )   —   2,152    Property acquisition costs - including $1,293    to related parties   1,885   —   —   —   1,885    General and administrative-including $171 to    related party   6,683   —   —   —   6,683    Depreciation   20,695   1,644 (b) (2,241 )   1,050 (b) 21,148    Total expenses   99,107   6,377   (12,027 )   3,841   97,298 Total revenues less total expenses   (16,610 )   (524 )   8,327   17   (8,790 ) Gain on sale of real estate assets   15,005   —   —   —   15,005 Net (loss) income   (1,605 )   (524 )   8,327   17   6,215 Plus: net loss (income) attributable to non-controlling interests   (783 )   105   (4,186 )   (7 )   (4,871 ) Net (loss) income attributable to common shareholders   $ (2,388 )   $ (419 )   $ 4,141   $ 10   $ 1,344                       Basic and diluted per share amounts attributable to common shareholders:                        Basic and diluted (loss) earnings per share   $ (0.17 )   $ (0.03 )   $ 0.29   $ —   $ 0.09                       Weighted average number of common shares outstanding:                     Basic and diluted   14,133,352   14,133,352   14,133,352   14,133,352   14,133,352 See accompanying notes to the pro forma unaudited consolidated financial statements. 7 BRT REALTY TRUST AND SUBSIDIARIES PRO FORMA - UNAUDITED CONSOLIDATED STATEMENT OF INCOME For The Three Months Ended December 31, 2015 (Dollars in thousands, except share data)     The Trust Historical   Previously Reported Acquisitions   Previously Reported Disposition   Purchase of Civic Center I   The Trust Pro Forma as Adjusted Revenues:                        Rental and other revenue from real estate properties   $ 22,935   $ 1,464   $ (1,537 )   $ 965   $ 23,827    Other income   277   —   52       329    Total revenues   23,212   1,464   (1,485 )   965   24,156 Expenses:                        Real estate operating expenses - including $433 to    related parties   11,506   694   (1,333 )   388   11,255    Interest expense - including $24 to related party   6,928   488 (a) (1,397 )   306 (a) 6,325    Advisor's fees, related party   693   —   (85 )   —   608    Property acquisition costs   57   —   —   —   57    General and administrative-including $26 to related    party   1,749   —   —   —   1,749    Depreciation   5,661   411 (b) (677 )   263 (b) 5,658    Total expenses   26,594   1,593   (3,492 )   957   25,652 Total revenues less total expenses   (3,382 )   (129 )   2,007   8   (1,496 ) Gain on sale of real estate assets   609   —       —   609 Net (loss) income   (2,773 )   (129 )   2,007   8   (887 ) Plus: net loss (income) attributable to non-controlling interests   739   26   (959 )   (3 )   (197 ) Net loss (income) attributable to common shareholders   $ (2,034 )   $ (103 )   $ 1,048   $ 5   $ (1,084 )                       Basic and diluted per share amounts attributable to common shareholders:                        Basic and diluted (loss) income per share   $ (0.14 )   $ (0.01 )   $ 0.07   $ —   $ (0.08 )                       Weighted average number of common shares outstanding:                     Basic and diluted   14,101,056   14,101,056   14,101,056   14,101,056   14,101,056 8 BRT REALTY TRUST AND SUBSIDIARIES Notes to Pro Forma Unaudited Consolidated Financial Statements (Unaudited) Basis of Pro Forma Presentation 1. The historical consolidated financial statements of the Trust include the accounts of the Trust and consolidated subsidiaries in which the Trust is presumed to have control in accordance with the consolidation guidance of the Financial Accounting Standards Board Accounting Standards Codification (“ASC”). Investments in entities for which the Trust has the ability to exercise significant influence but does not have financial or operating control, are accounted for under the equity method of accounting. Accordingly, the Trust’s share of the net earnings (or losses) of entities accounted for under the equity method are included in consolidated net income (loss) under the caption “Other Income”. Investments in entities for which the Trust does not have the ability to exercise any influence are accounted for under the cost method of accounting. 2. Notes to the pro forma unaudited consolidated balance sheet and statements of income for Civic Center I and other previously reported acquisitions and a previously reported disposition for the year ended September 30, 2015. a) To reflect the interest expense resulting from the mortgages securing Civic Center I, and the previously reported acquisitions (Cinco Ranch and River Place ) which expense is calculated an interest rate of 4.24%, 4.44% and 4.39%, respectively, and includes amortization of loan related fees. b) To reflect depreciation expense on the estimated useful life of the properties of 30 years. 9 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.     BRT REALTY TRUST           By: /s/ George Zweier     George Zweier March 18, 2016   Vice President and Great Neck, NY   Chief Financial Officer                 10