BRT Apartments Corp.BRT

BRT Apartments Corp. Leases Disclosure

10-KFiled Mar 12, 20252 min read
LEASES
Lessor Accounting

The Company owns a commercial property which is leased to two tenants under operating leases with current expirations ranging from 2028 to 2035, with options to extend or terminate the leases. Revenues from such leases are reported as rental income, net, and are comprised of (i) lease components, which includes fixed lease payments and (ii) non-lease components, which includes reimbursements of property level operating expenses. The Company does not separate non-lease components from the related lease components as the timing and pattern of transfer are the same, and accounts for the combined component in accordance with ASC 842.

Lessee Accounting

The Company is a lessee under a ground lease in Yonkers, NY which is classified as an operating lease. The ground lease is scheduled to expire on June 30, 2045. There are no renewal options. As of December 31, 2024, the remaining lease term is 20.5 years.

The Company is a lessee under a corporate office lease in Great Neck, NY, which is classified as an operating lease. The lease expires on December 31, 2031 and provides a five-year renewal option. As of December 31, 2024, the remaining lease term, including renewal options deemed exercised, is 12.0 years.

As of December 31, 2024, the Company's right-of-use ("ROU") assets and lease liabilities were $2,003,000 and $2,167,000, respectively and as of December 31, 2023, the Company's ROU assets and lease liabilities were $2,183,000 and
$2,318,000, respectively. The ROU assets and lease liabilities are reported on the consolidated balance sheets in Other assets and Accounts payable and accrued liabilities, respectively.

The discount rate applied to measure each ROU asset and lease liability is based on the Company’s incremental borrowing
rate (“IBR”). The Company considers the general economic environment and its historical borrowing rate activity and factors
in various financing and asset specific adjustments to ensure the IBR is appropriate to the intended use of the underlying lease.

As the Company did not elect to apply the hindsight practical expedient, lease term assumptions determined under ASC 840 were carried forward and applied in calculating the lease liabilities recorded under ASC 842.
NOTE 7—LEASES continued)

As of December 31, 2024, the minimum future lease payments related to the operating ground and office leases are as follows (dollars in thousands):

Year Ending December 31,Amount
2025$251 
2026257 
2027262 
2028267 
2029274 
Thereafter2,701 
Total undiscounted cash flows$4,012 
Present value discount(1,845)
Lease liability$2,167 

Historical Timeline

Fiscal YearFiled
2024Mar 12, 2025Showing above
2022Mar 15, 2023
2021Mar 16, 2022

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Other Available Disclosures

Income TaxesRevenueFair ValueSegmentsDebtCommitmentsNew Standards