Berkshire Income Realty Announces Year End Funds from Operations of $10,443,094

  Berkshire Income Realty Announces Year End Funds from Operations of
  $10,443,094

Business Wire

BOSTON -- April 9, 2013

Berkshire Income Realty, Inc. (NYSE Amex Equities: "BIR_pa"), (NYSE Amex
Equities: "BIRPRA"), (NYSE Amex Equities: "BIR-A"), (NYSE Amex Equities:
"BIR.PR.A") ("Berkshire" or the "Company") reported its results for the year
ended December31, 2012. Financial highlights for the year ended December31,
2012 include:

- The Company's Funds From Operations ("FFO") grew approximately 6.9% for the
year ended December31, 2012 - The Company's FFO, a non-GAAP financial
measure, for the year ended December31, 2012 was $10,443,094 compared to
$9,766,693 for the year ended December31, 2011. Solid gains in rental revenue
and lower interest expenses helped drive the Company's FFO growth.

- Same Property Net Operating Income ("Same Property NOI") increased
approximately 6.7% - Same Property NOI, a non-GAAP financial measure,
increased as a result of growth in revenue for properties acquired or placed
in service prior to January 1, 2011 ("Same Property"). The Same Property
portfolio had a total revenue increase of approximately 4.7% for the year
ended December31, 2012 compared to the same period a year ago. Strong revenue
growth outpaced increases in operating expenses for the Same Property
portfolio.

- A presentation and reconciliation of net income (loss), the most directly
comparable financial measure, calculated and presented in accordance with
accounting principles generally accepted in the United States of America
("GAAP"), to FFO and Same Property NOI, is set forth on pages 2 and 3 of this
press release. For the years ended December31, 2012, 2011 and 2010, the net
income (loss) was $29,021,154, $1,922,299 and $(25,726,511), respectively.

- Development Activities - The Company owns interests in three development
joint ventures, of which two were nearing completion at the end of 2012 and
the third was progressing through the regulatory entitlement process. The 2020
Lawrence development, a mid-rise, 231-unit LEED-gold certified multifamily
building, located in downtown Denver, Colorado, has been well received by the
market and leased its first units in late December 2012. The Trilogy NoMa
development is a three building multifamily community in downtown Washington,
DC, and also leased units as of the end of 2012. The lease up of both projects
is ongoing and substantially in line with operational forecasts. The Walnut
Creek development, located in Walnut Creek, California, is nearing the
completion of the regulatory and environmental entitlement processes. Start of
construction activities is anticipated to begin in late 2013.

- Economic Conditions - During 2012, on a national basis, the multifamily
sector continued to exhibit strong fundamentals and improved performance due
to sustained increases in rents and stable occupancies resulting from
continued favorable apartment unit supply and demand dynamics. Decreased
levels of new units constructed, as well as reduced home ownership rates
driving demand in the apartment sector have contributed to a 10-year low in
the national vacancy rate. Capital markets improvements have had a favorable
impact on sales of multifamily assets with transaction volumes reaching
five-year highs in the third quarter of 2012. With the continued improvement
in the economy, the Company was able to continue to implement its operating
model and continue to grow rental rates in select sub markets that exhibited
positive indicators.

President David Quade comments: "The fourth quarter was highlighted by strong
operating results, successful sales and related gains, as well as the
continued progress of the Company's ongoing development projects. Gains from
the sale of five assets contributed significantly to the positive results of
Berkshire in 2012, which included nearly a 7% increase in net operating income
for the Same Property portfolio. The success of 2012 has positioned the
Company for future growth as the development projects continue to lease up and
contribute to the operations of the Company."

Funds From Operations

The Company has adopted the revised definition of FFO adopted by the Board of
Governors of the National Association of Real Estate Investment Trusts
("NAREIT"). FFO falls within the definition of a "non-GAAP financial measure"
as stated in Item 10(e) of Regulation S-K promulgated by the Securities and
Exchange Commission (the "SEC"). Management considers FFO to be an appropriate
measure of performance of an equity Real Estate Investment Trust ("REIT"). We
calculate FFO by adjusting net income (loss) (computed in accordance with
GAAP, including non-recurring items), for gains (or losses) from dispositions
of properties, impairments, real estate related depreciation and amortization,
and adjustment for unconsolidated partnerships and ventures. Management
believes that in order to facilitate a clear understanding of the historical
operating results of the Company, FFO should be considered in conjunction with
net income (loss) as presented in the consolidated financial statements
included elsewhere herein. Management considers FFO to be a useful measure for
reviewing the comparative operating and financial performance of the Company
because, by excluding gains and losses related to sales of previously
depreciated operating real estate assets and excluding real estate asset
depreciation and amortization (which can vary among owners of identical assets
in similar condition based on historical cost accounting and useful life
estimates), FFO can help one compare the operating performance of a company's
real estate between periods or to different companies.

The Company's calculation of FFO may not be directly comparable to FFO
reported by other REITs or similar real estate companies that have not adopted
the term in accordance with the current NAREIT definition or that interpret
the current NAREIT definition differently. FFO is not a GAAP financial measure
and should not be considered as an alternative to net income (loss), the most
directly comparable financial measure of our performance calculated and
presented in accordance with GAAP, as an indication of our performance. FFO
does not represent cash generated from operating activities determined in
accordance with GAAP and is not a measure of liquidity or an indicator of our
ability to make cash distributions. We believe that to further understand our
performance; FFO should be compared with our reported net income (loss) and
considered in addition to operating cash flows determined in accordance with
GAAP, as presented in our consolidated financial statements.

The following table presents a reconciliation of net income (loss) to FFO for
the years ended December31, 2012, 2011 and 2010:

                        Year ended December 31,
                          2012             2011            2010
Net income (loss)         $ 29,021,154       $ 1,922,299       $ (25,726,511 )
Add:
Depreciation of real      23,165,635         24,819,898        24,615,373
property
Depreciation of real
property included in
results of                1,575,979          3,006,646         3,449,495
discontinued
operations
Amortization of
acquired in-place         68,280             531,422           44,550
leases and tenant
relationships
Amortization of
acquired in-place
leases and tenant
relationships             —                  8,916             73,298
included in results
of discontinued
operations
Equity in loss of
unconsolidated            268,921            3,430,015         4,080,225
multifamily entities
Funds from operations
of unconsolidated         941,789            1,286,493         860,673
multifamily entities,
net of impairments
Less:
Funds from operations
of noncontrolling         (1,015,799   )     (1,322,049  )     (1,044,553    )
interest in
properties
Gain on disposition       (43,582,865  )     (23,916,947 )     —             
of real estate assets
Funds from Operations     $ 10,443,094      $ 9,766,693      $ 6,352,550   

FFO for the year ended December31, 2012 increased as compared to FFO for the
year ended December31, 2011. The increase in FFO is due primarily to the
increased revenue, lower interest expenses as a result of reduced revolving
credit facility balance outstanding, and transaction costs for the acquisition
of Estancia Townhomes of $620,779 incurred during the year ended December31,
2011 for which there was no comparative expense recorded in 2012. The increase
was partially offset by higher incentive advisory fees and losses from
discontinued operations during the year ended December31, 2012 compared to
the same period in 2011.

Other Non-GAAP Measures

The Company believes that the use of certain other non-GAAP measures for
comparative presentation between reporting periods allows for more meaningful
comparisons of the periods presented.

Same Property NOI falls within the definition of a "non-GAAP financial
measure" as stated in Item 10(e) of Regulation S-K promulgated by the SEC and
should not be considered as an alternative to net income (loss), the most
directly comparable financial measure of our performance calculated and
presented in accordance with GAAP. The Company believes Same Property NOI is a
measure of operating results that is useful to investors to analyze the
performance of a real estate company because it provides a direct measure of
the operating results of the Company's multifamily apartment communities. The
Company also believes it is a useful measure to facilitate the comparison of
operating performance among competitors. The calculation of Same Property NOI
requires classification of income statement items between operating and
non-operating expenses, where operating items include only those items of
revenue and expense which are directly related to the income producing
activities of the properties. We believe that to achieve a more complete
understanding of the Company's performance, Same Property NOI should be
compared with our reported net income (loss). Management uses Same Property
NOI to evaluate the operating results of properties without reflecting the
effect of capital decisions such as the issuance of mortgage debt and
investments in capital items; in turn, these capital decisions have an impact
on interest expense and depreciation and amortization. The Same Property
portfolio consist of 20 properties acquired or placed in service on or prior
to January 1, 2011 and owned through December 31, 2012.

The following table represents the reconciliation of GAAP net income (loss) to
the other non-GAAP measures presented for the years ended December31, 2012,
2011 and 2010:

                       Year ended December 31,
                         2012             2011             2010
Net income (loss)        $ 29,021,154       $ 1,922,299        $ (25,726,511 )
Add:
Depreciation             25,642,064         27,694,551         27,321,332
Interest, inclusive
of amortization of       24,716,864         26,827,061         24,604,555
deferred financing
fees
Amortization of
acquired in-place        68,280             531,422            44,550
leases and tenant
relationships
Net income (loss)
from discontinued        (42,068,782  )     (24,519,249  )     482,755
operations
Equity in loss of
unconsolidated           268,921           3,430,015         4,080,225     
multifamily entities
Net operating income     37,648,501         35,886,099         30,806,906
Add:
Net operating income
related to
properties acquired
or placed in             4,653,148         3,740,976         7,178,832     
service after
January 1, 2011 and
non-property
activities
Same Property net        $ 42,301,649      $ 39,627,075      $ 37,985,738  
operating income

The Company

The Company is a Real Estate Investment Trust ("REIT") whose objective is to
acquire, own, operate, develop and rehabilitate multifamily apartment
communities. The Company owns interests in twenty-one multifamily apartment
communities and two multifamily development projects, of which six are located
in the Baltimore/Washington, D.C. metropolitan area; four are Houston, Texas;
three are located in Dallas, Texas; three are located in Virginia; and one is
located in each of Austin, Texas; Atlanta, Georgia; Sherwood, Oregon; Tampa,
Florida; Philadelphia, Pennsylvania; Walnut Creek, California; and Denver,
Colorado.

Forward Looking Statements

With the exception of the historical information contained in this release,
the matters described herein may contain forward-looking statements that are
made pursuant to the Safe Harbor provisions of the Private Securities
Litigation Reform Act of 1995. Forward-looking statements, including
statements about prospects for the Company's ongoing development projects,
apartment rental demand and fundamentals, involve a number of risks,
uncertainties or other factors beyond the Company's control, which may cause
material differences in actual results, performance or other expectations.
These factors include, but are not limited to, changes in economic conditions
generally and the real estate and bond markets specifically, especially as
they may affect rental markets, legislative/regulatory changes (including
changes to laws governing the taxation of REITs), possible sales of assets,
the acquisition restrictions placed on the Company by its investment in
Berkshire Multifamily Equity Fund, LP, availability of capital, interest rates
and interest rate spreads, changes in accounting principles generally accepted
in the United States of America and policies and guidelines applicable to
REITs, those set forth in Part I, Item 1A - Risk Factors of the Company's
Annual Report on Form 10-K for the fiscal year ended December31, 2012 and
other risks and uncertainties as may be detailed from time to time in the
Company's public announcements and SEC filings. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as
of the date hereof. The Company assumes no obligation to update such
information.

                                                          
BERKSHIRE INCOME REALTY, INC.
CONSOLIDATED BALANCE SHEETS
                                                               
                                           December 31,        December 31,
                                           2012                2011
                                                               
ASSETS
Multifamily apartment communities, net
of accumulated depreciation of             $ 402,999,104       $ 422,662,237
$235,825,752 and $227,600,092,
respectively
Cash and cash equivalents                  12,224,361          9,645,420
Cash restricted for tenant security        1,332,178           1,455,751
deposits
Replacement reserve escrow                 986,790             1,361,997
Prepaid expenses and other assets          9,545,966           11,786,836
Investments in unconsolidated              16,873,924          17,721,959
multifamily entities
Acquired in-place leases and tenant
relationships, net of accumulated          5,377               73,657
amortization
of $599,702 and $531,422, respectively
Deferred expenses, net of accumulated
amortization of $3,096,284 and             3,210,510          4,041,785     
$2,840,437,
respectively
Total assets                               $ 447,178,210      $ 468,749,642 
                                                               
LIABILITIES AND DEFICIT
                                                               
Liabilities:
Mortgage notes payable                     $ 478,185,998       $ 484,748,358
Revolving credit facility - affiliate      —                   8,349,422
Note payable - other                       1,250,000           —
Due to affiliates, net                     3,446,460           1,245,147
Due to affiliate, incentive advisory       6,634,261           3,904,280
fees
Dividend and distributions payable         1,137,607           837,607
Accrued expenses and other liabilities     15,081,550          16,030,287
Tenant security deposits                   1,475,298          1,651,665     
Total liabilities                          507,211,174        516,766,766   
                                                               
Commitments and contingencies              —                   —
                                                               
Deficit:
Noncontrolling interest in properties      1,527,431           346,524
Noncontrolling interest in Operating       (89,708,267   )     (76,785,818   )
Partnership
Series A 9% Cumulative Redeemable
Preferred Stock, no par value, $25
stated
value, 5,000,000 shares authorized,        70,210,830          70,210,830
2,978,110 shares issued and
outstanding at
December 31, 2012 and 2011,
respectively
Class A common stock, $.01 par value,
5,000,000 shares authorized, 0 shares      —                   —
issued and outstanding at December 31,
2012 and 2011, respectively
Class B common stock, $.01 par value,
5,000,000 shares authorized, 1,406,196
shares issued and outstanding at           14,062              14,062
December 31, 2012 and 2011,
respectively
Excess stock, $.01 par value,
15,000,000 shares authorized, 0 shares
issued and                                 —                   —
outstanding at December 31, 2012 and
2011, respectively
Accumulated deficit                        (42,077,020   )     (41,802,722   )
Total deficit                              (60,032,964   )     (48,017,124   )
                                                               
Total liabilities and deficit              $ 447,178,210      $ 468,749,642 

                       
BERKSHIRE INCOME REALTY, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
                          
                          For the years ended December 31,
                          2012             2011             2010
Revenue:
Rental                    $ 72,491,955       $ 68,980,213       $ 62,822,629
Utility reimbursement     3,254,552          2,974,858          2,370,379
Other                     3,209,041         2,908,823         2,672,364    
Total revenue             78,955,548        74,863,894        67,865,372   
Expenses:
Operating                 19,874,491         19,246,976         18,170,277
Maintenance               4,626,525          4,681,091          4,283,240
Real estate taxes         7,335,118          7,103,137          6,207,346
General and               1,538,889          1,686,985          1,859,034
administrative
Management fees           4,818,924          4,563,121          4,330,774
Incentive advisory        3,113,100          1,696,485          2,207,795
fees
Depreciation              25,642,064         27,694,551         27,321,332
Interest, inclusive
of amortization of        24,716,864         26,827,061         24,604,555
deferred financing
fees
Amortization of
acquired in-place         68,280            531,422           44,550       
leases and tenant
relationships
Total expenses            91,734,255        94,030,829        89,028,903   
Loss before equity in
loss of                   (12,778,707  )     (19,166,935  )     (21,163,531  )
unconsolidated
multifamily entities
Equity in loss of
unconsolidated            (268,921     )     (3,430,015   )     (4,080,225   )
multifamily entities
Loss from continuing      (13,047,628  )     (22,596,950  )     (25,243,756  )
operations
Discontinued
operations:
Income (loss) from
discontinued              (1,514,083   )     602,302            (482,755     )
operations
Gain on disposition
of real estate            43,582,865        23,916,947        —            
assets, net
Net income (loss)
from discontinued         42,068,782        24,519,249        (482,755     )
operations
Net income (loss)         29,021,154         1,922,299          (25,726,511  )
Net (income) loss
attributable to
noncontrolling            (9,797,304   )     (6,306,178   )     18,981
interest in
properties
Net (income) loss
attributable to
noncontrolling            (12,223,771  )     10,819,718        31,633,734   
interest in Operating
Partnership
Net income
attributable to the       7,000,079          6,435,839          5,926,204
Company
Preferred dividend        (6,700,777   )     (6,700,763   )     (6,700,765   )
Net income (loss)
available to common       $ 299,302         $ (264,924   )     $ (774,561   )
shareholders
Net loss from
continuing operations
attributable to the       (29.71       )     (17.63       )     (0.21        )
Company per common
share,
basic and diluted
Net income (loss)
from discontinued
operations
attributable to the       29.92             17.44             (0.34        )
Company per
common share, basic
and diluted
Net income (loss)
available to common
shareholders per          0.21              (0.19        )     (0.55        )
common share, basic
and
diluted
Weighted average
number of common          1,406,196         1,406,196         1,406,196    
shares outstanding,
basic and diluted

Contact:

Berkshire Income Realty, Inc.
Stephen Lyons, 1-617-574-8367
stephen.lyons@bpadv.com
Facsimile: 1-617-574-8312
 
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