Commission file number 001-07172

(Exact name of registrant as specified in its charter)

516-466-3100

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Securities registered pursuant to Section 12(g) of the Act:

NONE

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes  o     No  ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes  o     No  ý

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  ý     No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  ý     No  o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (Check one):

Indicate by check mark whether registrant is a shell company (as defined in Exchange Act Rule 12b-2). Yes  o     No  ý

The aggregate market value of voting and non-voting common equity held by non-affiliates of the registrant was approximately $58.4 million based on the last sale price of the common equity on March 31, 2015, which is the last business day of the registrant's most recently completed second quarter.

As of December 1, 2015, the registrant had 14,101,056 Shares of Beneficial Interest outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the proxy statement for the annual meeting of shareholders of BRT Realty Trust to be filed not later than January 28, 2016 are incorporated by reference into Part III of this Form 10-K.

TABLE OF CONTENTS

Form 10-K

Forward-Looking Statements

This Annual Report on Form 10-K, together with other statements and information publicly disseminated by us, contains certain forward looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends concerning matters that are not historical facts. Forward looking statements are generally identifiable by use of words such as "may," "will," "will likely result," "shall," "should," "could," "believe," "expect," "intend," "anticipate," "estimate," "project" or similar expressions or variations thereof.

Forward-looking statements contained in this Annual Report on Form 10- K are based on our beliefs, assumptions and expectations of our future performance taking into account all information currently available to us. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to us or within our control, and which could materially affect actual results, performance or achievements. Factors which may cause actual results to vary from our forward-looking statements include, but are not limited to:

We caution you not to place undue reliance on forward-looking statements, which speak only as of the date of this Annual Report on Form 10-K. Except to the extent required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of the filing of this Annual Report on Form 10-K or to reflect the occurrence of unanticipated events.

PART I

Item l.    Business.

General

We are a real estate investment trust, also known as a REIT. During the past three years, we engaged in three principal business activities: the ownership, operation and development of multi-family properties; the ownership, operation and development of commercial, mixed use and other real estate assets; and real estate lending. Beginning in March 2012, we commenced and expanded our multi-family activities, and in 2014, we de-emphasized our real estate lending activities. As of November 1, 2014, we are no longer engaged in real estate lending and the financial information, including our consolidated financial statements included herein, have been reclassified to present our real estate lending activities as discontinued operations. See Note 1 to our consolidated financial statements.

Our multi-family property activities involve the ownership, operation and development, primarily through joint ventures in which we typically have an 80% equity interest, of such properties. We acquired five multi-family properties with 1,451 units in 2012, nine multi-family properties with 2,334 units in 2013, 13 multi-family properties with 4,184 units in 2014, four multi-family properties with 1,560 units in 2015 and, since October 1, 2015, two multi-family properties, with an aggregate of 507 units. During 2015, we sold three multi-family properties with an aggregate of 1,176 units for an aggregate gain of $14.3 million, of which $5.1 million was allocated to our joint venture partners. At September 30, 2015, we own 28 multi-family properties located in 11 states with an aggregate of 8,300 units and our equity investment in, and the net book value of, these properties is approximately $113.0 million and $604.9 million, respectively. At December 1, 2015, we own 30 multi-family properties (four of which are wholly owned) located in 11 states with an aggregate of 8,807 units.

We own, operate and develop various other real estate assets, the most significant of which are properties (including development properties) located in Newark, New Jersey. Since 2012, the joint venture that owns the Newark assets has obtained, through three financing phases, an aggregate of $93.1 million in debt financing and an aggregate of $31.4 million in New Markets Tax Credit proceeds to fund the construction of six buildings with an aggregate of 153,432 square feet of commercial space and 204 residential units. To date, four buildings have been completed, a fifth building is partially complete, 50% occupied and is expected to be completed in February 2016, and the sixth building is under construction and is expected to be completed by July 2016. At September 30, 2015, the net book value of the real property included in these other real estate assets was $152.0 million, including $141.4 million related to our Newark, New Jersey activities. See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Other Developments" for information regarding the possible (i) sale by BRT of its equity interest in the Newark Joint Venture and (ii) repayment of $19.5 million in principal amount of secured mortgage debt owed to BRT eliminated in consolidation.

Our real estate lending activities decreased during the past three years ( i.e ., $0, $5.5 million and $70.3 million of loan originations in 2015, 2014 and 2013, respectively) and we are no longer engaged in lending activities.

Information regarding our multi-family property and other real estate assets segments is included in Note 12 to our consolidated financial statements and is incorporated herein by this reference.

We were organized as a business trust under the laws of the Commonwealth of Massachusetts in June 1972. Our address is 60 Cutter Mill Road, Suite 303, Great Neck, New York 11021, telephone number 516-466-3100. Our website can be accessed at www.brtrealty.com , where copies of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and other filings with the Securities and Exchange Commission, or SEC, can be obtained free of charge. These SEC filings are added to our website as soon as reasonably practicable.

Unless otherwise indicated or the context otherwise requires, all references to (i) "us", "we" or terms of like import refer to BRT Realty Trust and its consolidated subsidiaries and the term "BRT" refers to BRT Realty Trust and its wholly owned subsidiaries, (ii) a year ( e.g ., 2015) refer to the applicable fiscal year ended September 30 th  and (iii) the multi-family properties we owned or acquired in 2015 or thereafter and the residential units associated with such properties, include a development property in Greenville, SC, which contemplates the construction of 360 units (of which 190 units were completed as of December 1, 2015) and a development property in N. Charleston, SC, which contemplates the construction of 271 units, none of which, as of December 1, 2015, had been constructed.

Our Multi-Family Property Activities

Generally, our multifamily properties are garden apartment, mid rise or town home style properties that provide residents with amenities, such as a clubhouse, swimming pool, laundry facilities and cable television access. Residential leases are typically for a one year term and may require security deposits equal to one month's rent. Substantially all of the units at these properties are leased at market rates and are not subject to rent control or similar requirements. Set forth below is selected information regarding our multi-family properties. Except as otherwise indicated in the notes to the table below, all of these properties are owned by joint ventures in which we have an 80% equity interest and our joint venture partner has a 20% equity interest

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(1) Reflects the approximate age of the property based on the year original construction was completed.

(2) Gives effect to rent concessions. Average physical occupancy and monthly rental rate per unit reflects our period of

ownership.

Apartments at Venue, respectively. We are the sole owner of Silvana Oaks Apartments, Avondale Station, Newbridge Commons and Woodland Trails.

(6) This joint venture is developing a 271 unit multi-family property. We anticipate that this project will be completed in stages from December 2016 to July 2017.

The following table set forth certain information, presented by state, related to our properties as of December 1, 2015 (dollars in thousands):

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Joint Venture Arrangements

The arrangements with our multi-family property joint venture partners are deal specific and vary from transaction to transaction. Generally, these arrangements provide for us and our partner to receive net cash flow available for distribution in the following order of priority (and in certain cases, we are entitled to these distributions on a senior or preferential basis):

Though, as noted above, each joint venture operating agreement contains different terms, such agreements generally provide for a buy-sell procedure under specified circumstances (including (i) after the passage of time ( e.g ., two years after the acquisition), (ii) if the partners are unable to agree on major decisions, (iii) upon a change in control of our subsidiary owning the interest in the joint venture, or (iv) one or more of the foregoing). Further, these arrangements may also allow us, and in some cases, our joint venture partner, to force the sale of the property after it has been owned by the joint venture for a specified period ( e.g ., four to five years after the acquisition).

Our Acquisition Process and Underwriting Criteria

We identify multi-family property acquisition opportunities primarily through relationships developed over time by our officers with our former borrowers, current joint venture partners, real estate investors and brokers.

Our current goal is to acquire properties with cap rates ranging from 5.25% to 6.25% and that will provide stable risk adjusted total returns ( i.e. , operating income plus capital appreciation). In identifying opportunities that will achieve such goal, we seek acquisitions that will achieve an approximate 6% to 10% annual return on invested cash and an internal rate of return of approximately 9% to 20%. We have also focused, but have not limited ourselves, to acquiring properties located in the South and in particular, the Southeast and Southwest United States. Subject to the foregoing, we are opportunistic in pursuing multi-family property acquisitions and do not mandate any specific acquisition criteria, though we take the following into account in evaluating an acquisition opportunity: location, size of the target market, property quality, availability and terms and conditions of long term fixed rate mortgage debt, potential for capital appreciation or recurring income, extent and nature of contemplated capital improvements and property age. We generally acquire properties with a joint venture partner with knowledge and experience in owning and operating multi-family properties in the target market as this enhances our understanding of such market and assists us in managing our risk with respect to a particular acquisition.

Approvals of the acquisition of a multi-family property are based on a review of property information as well as other due diligence activities undertaken by us and, as applicable, our venture partner. Those activities include a consideration of economic, demographic and other factors with respect to the target market and sub-market (including the stability of its population and the potential for population growth, the economic and employment base, presence of and barriers to entry of alternative housing stock, market prices for comparable properties, the competitive positioning of the proposed acquisition and the regulatory environment ( i.e . applicable rent regulation)), a review of an independent third party property condition report, a Phase I environmental report with respect to the property, a review of recent and projected results of operations for the property prepared by the seller, us or our joint venture partner, an assessment of our joint venture partner's knowledge and expertise with respect to the acquisition and operation of multi-family properties and the relevant market and sub-market, a site visit to the property and the surrounding area, an inspection of a sample of units at the property, the potential for rent increases and the possibility of enhancing the property and the costs thereof. To the extent a property to be acquired requires renovations or improvements, or if we and our joint venture partner believe that improving a property will generate greater rent, funds are generally set aside by us and our joint venture partner at the time of acquisition to provide the capital needed for such renovation and improvements. At September 30, 2015, we have approximately $6.5 million to fund improvements at our multi-family properties.

A key consideration in our acquisition process is the evaluation of the availability of mortgage debt to finance the acquisition (or the ability to assume the mortgage debt on the property) and the terms and conditions ( e.g . interest rate, amortization and maturity) of such debt. Typically, approximately 25% to 35% of the purchase price is paid in cash and the balance is financed with mortgage debt. We believe that the use of leverage of up to 75% allows us the ability to earn a greater return on our investment than we would otherwise earn. Generally, the mortgage debt obtained in connection with an acquisition matures five to ten years thereafter, is interest only for one to three years after the acquisition, and provides for a fixed interest rate and for the amortization of the principal of such debt over 30 years.

Before a property is acquired, the acquisition must be reviewed and approved by our investment committee. Approval occurs after the assent of not less than four of the seven members of this committee, all of whom are our executive officers. The approval of our board of trustees is required for any single multi-family property acquisition in which our equity investment exceeds $15 million.

We are partners in two multi-family development opportunities with the same joint venture partner or its affiliates. We pursue these opportunities when we believe the potential higher returns justify the additional risks. The factors considered in pursuing these opportunities generally include the factors considered in evaluating a standard acquisition opportunity, and we place additional emphasis on our joint venture partner's ability to execute a development project. Though we may from time-to-time pursue other development activities, we do not anticipate they will constitute a significant part of our portfolio.

Property Sales

We monitor our portfolio to identify appropriate disposition candidates. Factors considered in deciding whether to dispose of a property generally include our evaluation of the current market price of such property compared to projected economics for such property and adverse changes in the factors considered in acquiring such property. In February 2015, we sold Water Vista Apartments, Lawrenceville, GA, recognizing a gain of $2.7 million, and in July 2015, we sold our Ivy Ridge Apartments, Marietta,GA, and The Palms on Westheimer Apartments, Houston, TX, recognizing gains of $7.8 million and $3.8 million, respectively. We have entered into a contract to sell Grove at Trinity Pointe and at September 30, 2015, this property is reflected on our consolidated balance sheet as held for sale. We estimate that the gain from such sale will be approximately $6.8 million. and the amount of such gain to be allocated to the non-controlling interest is $2.7 million

Property Management

The day-to-day management of our multi-family properties is overseen by property management companies operating in the market in which the property is located. Some of these management companies are owned by our joint venture partners or their affiliates. Generally, we can terminate these management companies upon specified notice or for cause, subject to the approval of the mortgage lender and, in some cases, our joint venture partner. We believe satisfactory replacements for property managers are available, if required.

Insurance

The multi-family properties are covered by all risk property insurance covering 100% of the replacement cost for each building and business interruption and rental loss insurance (covering up to twelve months of loss). On a case-by-case basis, based on an assessment of the likelihood of the risk, availability of insurance, cost of insurance and in accordance with standard market practice, we obtain earthquake, windstorm, flood, terrorism and boiler and machinery insurance. We carry comprehensive liability insurance and umbrella policies for each of our properties which provide no less than $5 million of coverage per incident. We request certain extension of coverage, valuation clauses, and deductibles in accordance with standard market practice and availability.

Although we may carry insurance for potential losses associated with our multi-family properties, we may still incur losses due to uninsured risks, deductibles, co-payments or losses in excess of applicable insurance coverage and those losses may be material. In addition, certain insurance coverage is part of blanket policies in which a loss on an unrelated property could affect the coverage limits on a joint venture property.

Mortgage Debt

The following table sets forth scheduled principal (including amortization) mortgage payments due for our multi-family properties as of September 30, 2015:

As of September 30, 2015, the weighted average annual interest rate of the mortgage debt on our 28 multi-family properties is 3.99% and the weighted average remaining term of such debt is approximately 6.5 years. The mortgage debt associated with our multi-family properties is generally non-recourse to (i) the joint venture that owns the property, subject to standard carve-outs and (ii) to us and our subsidiary acquiring the equity interest in such joint venture. We, at the parent entity level ( i.e ., BRT Realty Trust), are the standard carve-out guarantor with respect to the Avalon, Silvana Oaks,Woodland Trails, Stonecrossing, Pathway and Avondale properties. (The term "standard carve-outs" refers to recourse items to an otherwise non-recourse mortgage and are customary to mortgage financing. While carve-outs vary from lender to lender and transaction to transaction, the carve-outs may include, among other things, a voluntary bankruptcy filing, environmental liabilities, the sale, financing or encumbrance of the property in violation of loan documents, damage to property as a result of intentional misconduct or gross negligence, failure to pay valid taxes and other claims which could create a lien on a property and the conversion of security deposits, insurance proceeds or condemnation awards.) At September 30, 2015, the principal amount of mortgage debt outstanding with respect to the properties at which we are the carve-out guarantor is approximately $66 million.

Our Other Real Estate Assets and Activities

Newark Joint Venture

Other Developments

See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Other Developments" for information regarding the possible sale by BRT of its equity interest in the Newark Joint Venture and the possible repayment of $19.5 million in principal amount of secured mortgage debt owed to BRT eliminated in consolidation.

Background

Two of our wholly-owned subsidiaries are members of a joint venture, which we refer to as the Newark Joint Venture, with two members that are not affiliated with us. The Newark Joint Venture owns several properties (including development sites) in downtown Newark, NJ. The properties are surrounded by a variety of governmental, educational, cultural and entertainment institutions and facilities. In close proximity to these properties are the Newark campus of Rutgers University, the New Jersey Institute of Technology, University of Medicine and Dentistry of New Jersey, Essex County College, Seton Hall Law School, the New Jersey Performing Arts Center, the Prudential Arena (home of the National Hockey League New Jersey Devils), the Essex County Court Complex, Newark's City Hall and a Federal Courthouse. These properties are within walking distance of Newark Penn Station, which provides access to Amtrak and New Jersey Transit trains and are accessible to local bus routes. The properties are served by various highways, including the Garden State Parkway, Interstate-95, Interstate-78 and Interstate-280.

In 2007, immediately prior to the formation of the Newark Joint Venture, we held loans aggregating approximately $38 million, secured by substantially all of the properties conveyed to the Newark Joint Venture by our borrowers. We entered into loan work-out negotiations with our borrowers and, as a result of such negotiations, entered into the Newark Joint Venture. In connection with the work-out of our loans and the formation of the Newark Joint Venture, our loans were converted into a consolidated mortgage loan of $27 million with the balance of our loans converted into a $6.9 million preferred capital account interest and a 50.1% membership interest in the Newark Joint Venture, providing us with a separate capital account of $3.9 million. The other members caused all the properties secured by our loans, and additional properties (unencumbered by our loans) and contract rights to acquire additional properties, all located in downtown Newark, NJ, to be contributed to the Newark Joint Venture for which the other members received a 49.9% membership interest in the Newark Joint Venture (with a separate capital account of $3.9 million).

The Newark Joint Venture is in the process of redeveloping the Teachers Village site and intends to redevelop all or a portion of the remaining sites, particularly the Market Street site, with personnel hired by the Newark Joint Venture, with other development partners (including adjacent property owners that may be interested in redeveloping several of such properties at the same time) or sell some of its sites to developers or end users. Although we own only a 50.1% membership interest in the Newark Joint Venture, in accordance with generally accepted accounting principles in the United States, the assets, liabilities and results of operations of the Newark Joint Venture are consolidated with our financial statements. Accordingly, our consolidated balance sheets at September 30, 2015, include, as real estate properties, $141.4 million net book value of real estate owned and being developed by the Newark Joint Venture and, as mortgages payable, mortgage debt of $110.4 million incurred by the Newark Joint Venture. BRT's $19.5 million mortgage loan to the Newark Joint Venture (which is secured by all of the real estate assets of the Newark Joint Venture other than the Teachers Village properties and the Broad Street properties), is eliminated in consolidation and is not recorded on our consolidated balance sheet.

The Newark Joint Venture believes that the properties owned by it have adequate insurance coverage for their current use.

Current Property Information

Except as otherwise noted below, the following table sets forth as of September 30, 2015, information regarding the properties owned by the Newark Joint Venture ( dollars in thousands ):

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The following table sets forth as of September 30, 2015, a schedule of the annual lease expirations of the Newark Joint Venture's commercial real estate assets and the anticipated contributions to 2016 contractual rental income, assuming that none of the tenants exercise renewal or cancellation options, if any ( dollars in thousands ):

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Information and Activities Relating to Development and Other Sites

Set forth below is information regarding the Newark Joint Venture's most significant properties.

Teachers Village

The Teachers Village site encompasses an area bounded by Branford Street to the north, Treat Place to the east, Hill Street to the south and Washington Street to the west, and is adjacent to Halsey Street. From 2012 through 2014, the Newark Joint Venture obtained, in three phases, financing of approximately $93.1 million, which together with $31.4 million of New Markets Tax Credit net proceeds is, after payment of transaction expenses and payment of approximately $19.1 million of principal and accrued interest on debt, has and is being used to construct six buildings.

The first financing phase, which we refer to as Phase I, was used to fund the construction of two buildings with an aggregate of 113,903 rentable square feet-these buildings were completed in August/September 2013. Approximately 88,833 square feet is leased to three charter schools and a day-care center.

The second financing phase, which we refer to as Phase II, will result in, upon completion of construction, three buildings containing approximately 123 residential rental units and approximately 29,140 square feet of retail space. One building containing 21 residential units and 3,980 square feet of retail space was completed in August 2014, and the second building, containing 40 residential units and 9,100 square feet of retail space, was completed in December 2014. (The retail space at these buildings require build-out. See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources-Newark Joint Venture"). We anticipate the third building, which contains 62 residential units of which 30 are occupied, will be completed by February 2016.

The third financing phase, which we refer to as Phase III, contemplates the construction of an 82,547 square feet mixed-use space which will consist of a (i) 48,772 square foot commercial condominium unit including 10,453 square feet of retail space and 42 residential units, which we refer to as the Commercial Condo, and (ii) 33,775 square feet residential condominium unit including 39 residential units, which we refer to as the Residential Condo. The Residential Condo is owned by the Newark Joint Venture and the Commercial Condo is owned by certain indirect members of the Newark Joint Venture other than BRT; however, the owners of the Commercial Condo have agreed to distribute to the Newark Joint Venture any net distributable proceeds ( i.e ., cash flow and residual capital event proceeds after any necessary funds are expended on debt service, reserves and operating expenses) they receive as owners of the Commercial Condo. It is anticipated that this building will be completed by July 2016.

Residential Leasing Activity at Teachers Village

At December 1, 2015, the 91 available residential units constructed to date are occupied and we anticipate the remaining 32 units will be completed and leased by February 2016. We estimate that in 2016, the rental income from these 123 units will be approximately $1.9 million.

Commercial Leasing Activity at Teachers Village

At December 1, 2015, of the approximately 126,983 square feet of commercial space at the four completed buildings, approximately 95,218 square feet is leased to three charter schools, a day care center and and three retail tenants. In addition, the Newark Joint Venture has entered into leases with 11 tenants with respect to 18,466 square feet of retail space at these buildings; however, the tenants' obligations to take possession and pay rent is subject to the achievement of certain conditions, including the completion of landlord and tenant work and third party financing to fund a portion of such work. We can give no assurance that these conditions will be satisfied. If these conditions are not achieved by the dates specified in the applicable leases, certain tenants may be entitled to terminate their leases. See "Management's Discussion and Analysis of Financial Condition and Results of Operations-Liquidity and Capital Resources-Newark Joint Venture".

Market Street

The Market Street site is an approximately 68,000 square foot site, currently representing approximately 303,000 rentable square feet. The site is bounded by Market Street, Campbell Street, Washington Street and University Avenue in downtown Newark, New Jersey. Potential redevelopment opportunities with respect to this site include an office complex with a retail component, a medical office complex containing offices, research laboratories and other medical related services, a retail center, a hotel, corporate headquarters, university offices, classrooms and/or dormitories, or a combination of one or more of these uses. The Newark Joint Venture may redevelop this site for its own account. Alternatively, the Newark Joint Venture may enter into a joint venture with a development partner or sell all or portions of the site. Although there have been discussions with various parties concerning the development of the Market Street area, the Newark Joint Venture has not entered into any material agreements concerning the redevelopment of all or any portion of the site and there is no assurance that it will be able to conclude any such arrangement or obtain the financing necessary to proceed with any arrangement which it may conclude.

Mortgage Debt

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At September 30, 2015, the $110.4 million of outstanding debt related to the Newark Joint Venture (of which approximately $104.0 million is related to Teachers Village), carries a weighted average effective interest rate (after giving effect to an annual subsidy of $1.0 million from the United States Department of Treasury), of approximately 4.53%, a weighted average remaining term of 10.5 years and is secured by the Teachers Village, Broad Street and Market Street properties. This debt is generally non-recourse to (i) BRT and (ii) except as otherwise indicated below, the Newark Joint Venture. In connection with Phases I through III, the Newark Joint Venture guaranteed, among other things, up to $27 million in principal amount of mortgage debt, which guarantees generally only expire after satisfaction of performance thresholds relating to the leasing and occupancy of these facilities within specified periods, losses incurred by the lenders by reason of the borrower's bad acts ( e.g ., fraud or misappropriation), the failure to complete construction of the six buildings to be constructed (four of which have been constructed) and the carrying costs with respect to certain properties. The Newark Joint Venture has also agreed to provide indemnity with respect to specified environmental matters, violations of the Americans with Disabilities Act and similar laws and to indemnify the beneficiaries of the New Markets Tax Credits for losses sustained if such credits are disallowed. We estimate that the New Markets Tax Credit indemnity obligation would not exceed $33 million (exclusive of interest and penalties) and is subject to reduction to the extent the credits are not disallowed.

Terms of the Newark Joint Venture Operating Agreement

The following is a summary of the material provisions of the amended and restated limited liability company operating agreement of the Newark Joint Venture:

Membership Interests.     We own 50.1% of the membership interests in the Newark Joint Venture, and the other members (collectively, the "Other Member") own 49.9% of the membership interests in the Newark Joint Venture.

Manager.     An affiliate of the Other Member is the manager of the Newark Joint Venture and is responsible for the day-to-day management activities of the Newark Joint Venture, but our consent is required for all major decisions affecting the Newark Joint Venture and its properties. Under specified circumstances, we may remove the manager immediately or upon six months advance written notice.

Mandatory Capital Calls.     Members are generally required to make pro rata capital contributions to the Newark Joint Venture for any projected budget shortfalls.

Buy-Sell.     During specified periods and circumstances, either member group may provide the other member group with written notice setting forth the amount they will pay to purchase all of the assets of the Newark Joint Venture. The member group which receives such notice has the option to (i) sell their membership interests in the Newark Joint Venture to the other members for their pro rata portion of the asset purchase price set forth in the written notice, or (ii) purchase the other members' membership interests in the Newark Joint Venture for their pro rata portion of the asset purchase price set forth in the written

notice. If the acquirer is the Other Member, then the Other Member is required to, among other things, pay in full our mortgage and our preferred equity interest at closing.

Right of First Refusal and Tag-along Rights.     At any time, either member group may provide the other member group with written notice setting forth the sale price at which it desires to sell all or a portion of its membership interests. The member group which received such notice may purchase the offered membership interests at the price set forth in the notice. If they do not elect to purchase the membership interest in accordance with the terms of the notice, the offering members may secure another person to purchase its offered membership interests within 180 days. The group of members which received the sale notice may tag-along in a sale to such other person and sell their pro rata portion of the membership interests.

Distributions.     The Newark Joint Venture may not distribute any cash flow to its members until the $19.5 million balance due on our loan (eliminated in consolidation on our financial statements) has been fully repaid, including accrued interest. Once it has been fully repaid, the cash flow of the Newark Joint Venture will generally be distributed as follows: (i) first, to each member pro rata in an amount equal to their unreturned additional capital contributions, (ii) second, to us, until we receive a 10% return on our preferred capital contributions, (iii) third, to us until we receive an amount equal to our preferred capital contributions, (iv) fourth, to each member pro rata until such member receives a 10% return on their additional capital contributions, (v) fifth, to the members pro rata an amount equal to their common capital contributions, and (vi) the remainder shall be distributed as follows: (a) 10% to the managing member, and (b) 90% pro rata to the Other Members.

Manager of the Newark Joint Venture

The manager of the Newark Joint Venture is RBH Group LLC; its managing member and President is Ron Beit-Halachmy. Mr. Beit-Halachmy, 43 years of age, has over 20 years of experience in the real estate industry and has been involved for more than ten years in acquiring sites in Newark, New Jersey. He was the managing member of the entities which acquired all of the real property currently owned by the Newark Joint Venture. Mr. Beit-Halachmy earned a BA in Economics from the University of Wisconsin and a law degree from New York Law School. The Newark Joint Venture carries key man life insurance on Mr. Beit-Halachmy in the amount of $40 million.

Other Real Estate Assets

We also own the following properties with an aggregate net book value of $10.5 million at September 30, 2015:

• an 8.7 acre vacant parcel of land in South Daytona Beach, Florida,

• 17 cooperative apartments, 15 of which are rent controlled or rent stabilized, in two buildings in upper

Manhattan, New York, and

• a subordinated leasehold interest in a portion (approximately 29% of a 99,000 square foot facility) of a

shopping center in Yonkers, NY.

In addition, we have a 50% equity interest in an unconsolidated joint venture that owns an aggregate of 19 cooperative apartment units located in Lawrence, New York.

Our Real Estate Lending Activities

Corporate Level Financing Arrangement

Junior Subordinated Notes

Competition

We compete to acquire real estate assets and in particular, multi-family properties, with other owners and operators of such properties including other multi-family REITs, pension and investment funds, real estate developers and private real estate investors. Competition to acquire such properties is based on price and ability to secure financing on a timely basis and complete an acquisition. To the extent that a potential joint venture partner introduces us to a multi-family acquisition opportunity, we compete with other sources of equity capital to participate in such joint venture based on the financial returns we are willing to offer such potential partner and the other terms and conditions of the joint venture arrangement. We also compete for tenants at our multi-family properties-such competition depends upon various factors, including alternative housing options available in the applicable sub-market, rent, amenities provided and proximity to employment and quality of life venues.

The Newark Joint Venture competes for funding, and in particular, tax credit allocations and financing provided by governmental and quasi-governmental sources, with other real estate developers. It competes for commercial, retail, residential and educational tenants with landlords owning properties in Newark, New Jersey and the surrounding area and developers interested in developing facilities in Newark or the surrounding area.

Many of our competitors possess greater financial and other resources than we possess.

Environmental Regulation

We are subject to regulation at the federal, state and municipal levels and are exposed to potential liability should our properties or actions result in damage to the environment or to other persons or properties. These conditions include the presence or growth of mold, potential leakage of underground storage tanks, breakage or leaks from sewer lines and risks pertaining to waste handling. The potential costs of compliance, property damage restoration and other costs for which we could be liable or which could occur without regard to our fault or knowledge of such conditions, are unknown and could potentially be material.

In the course of acquiring and owning multi family properties, we or our joint venture partner engage an independent environmental consulting firm to perform a level 1 environmental assessment (and if appropriate, a level 2 assessment) to identify and mitigate these risks as part of the due diligence process. We believe these assessment reports provide a reasonable basis for discovery of potential hazardous conditions prior to acquisition. Should any potential environmental risks or conditions be discovered during our due diligence process, the potential costs of remediation will be assessed carefully and factored into the cost of acquisition, assuming the identified risks and factors are deemed to be manageable and within reason. Some risks or conditions may be identified that are significant enough to cause us to abandon the possibility of acquiring a given property. As of the date of this report, we have no knowledge of any material claims made or pending against us with regard to environmental damage for which we may be found liable, nor are we aware of any potential hazards to the environment related to any of our properties which could reasonably be expected to result in a material loss.

Our Structure

We share facilities, personnel and other resources with several affiliated entities including, among others, Gould Investors L.P., a master limited partnership involved primarily in the ownership and operation of a diversified portfolio of real estate assets, and One Liberty Properties, Inc., an NYSE listed equity REIT. Eight individuals (including Jeffrey A. Gould,

Chief Executive Officer and President, Mitchell Gould, Executive Vice President and George Zweier, Chief Financial Officer), devote substantially all of their business time to our activities, while our other personnel (including several officers) share their services on a part-time basis with us and other affiliated entities that share our executive offices. (Including our full and part-time personnel , we estimate that we have the equivalent of 13 full time employees). The allocation of expenses for the shared facilities, personnel and other resources is computed in accordance with a Shared Services Agreement by and among us and the affiliated entities. The allocation is based on the estimated time devoted by executive, administrative and clerical personnel to the affairs of each entity that is a party to this agreement.

In addition, we are party to an Advisory Agreement, as amended, between us and REIT Management Corp., our advisor. REIT Management is wholly owned by Fredric H. Gould, a member of our Board of Trustees and the former chairman of such board, and he and certain of our executive officers, including our Chairman of the Board and Chief Executive Officer, receive compensation from REIT Management. Pursuant to this agreement, REIT Management furnishes advisory and administrative services with respect to our business, including, without limitation, developing and maintaining banking and financing relationships, participating in the analysis and approvals of multi-family property acquisitions, providing investment advice and providing assistance with building inspections.

The Advisory Agreement, as amended, provides that (i) it renews automatically on July 1 st  of each year, unless earlier terminated with or without cause, (ii) that the minimum and maximum fees payable in a fiscal year to REIT Management are $750,000 and $4 million, respectively, subject to adjustment for any fiscal year of less than twelve months, and (iii) we pay REIT Management the following annual fees, which are paid on a quarterly basis:

We paid fees pursuant to this agreement of $2.4 million and $2 million in 2015 and 2014, respectively. Approximately $214,000 of the 2014 fees is included in discontinued operations.

Effective as of December 31, 2015, the Advisory Agreement will terminate. In lieu thereof, we will retain personnel, including related parties, to provide the services previously provided pursuant to such agreement.The aggregate fees in calendar 2016 for the provision of such services may not exceed $1.15 million.

Item 1A.    Risk Factors.

 Set forth below is a discussion of certain risks affecting our business. The categorization of risks set forth below is meant to help you better understand the risks facing our business and is not intended to limit your consideration of the possible effects of these risks to the listed categories. Any adverse effects arising from the realization of any of the risks discussed, including our financial condition and results of operation, may, and likely will, adversely affect many aspects of our business.

Risks Related to our Business

Our acquisition, development and property improvement activities are limited by available funds.

Our ability to acquire additional multi-family properties, to improve our multi-family properties and to develop our Newark Joint Venture properties, is limited by the funds available to us. At September 30, 2015, we had approximately $15.6 million of cash and cash equivalents and approximately $6.5 million and $13.3 million designated as restricted cash for multi-family property improvements and Newark Joint Venture development activities, respectively. Our multi-family acquisition and improvement activities and the Newark Joint Venture development activities are constrained by funds available to us which will limit growth in our revenues and operating results. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources - Newark Joint Venture".

It is unlikely that we will be required to declare any dividends in the next several years to maintain our status as a REIT.

We have not declared or paid any dividends since 2010. In order to qualify as a REIT, we are required to distribute 90% of our taxable income. At December 31, 2014, we had a tax loss carry-forward of approximately $65 million. Under current tax laws, we can offset our future taxable income against our tax loss carry-forward until 2029 or until the tax loss carry-forward has been fully used, whichever occurs first. As a result, it is unlikely that we will be required to pay a dividend for the next several years in order to maintain our REIT status. The non-payment of cash dividends may negatively impact the price of our common shares.

We may not be able to compete with competitors, many of which have greater financial and other resources than we possess.

We compete with many third parties engaged in the ownership and operation of multi-family properties, including other REITs, specialty finance companies, public and private investors, investment and pension funds and other entities. The Newark Joint Venture competes (i) with real estate developers for tax credit allocations and financing provided by governmental and quasi-governmental authorities, and (ii) for tenants, with landlords and developers with, or interested in developing, properties in Newark, New Jersey and the surrounding area. Many of these competitors have substantially greater financial and other resources than we do. Larger and more established competitors enjoy significant competitive advantages that result from, among other things, enhanced operating efficiencies and more extensive networks providing greater and more favorable access to capital, financing and tax credit allocations and more favorable lending and acquisition opportunities. Larger multi-family property operators have the ability and capacity to acquire a greater number of higher quality properties at more favorable locations and on more favorable terms and conditions.

We may incur impairment charges in 2016.

We evaluate on a quarterly basis our real estate portfolios for indicators of impairment. Impairment charges reflect management's judgment of the probability and severity of the decline in the value of real estate assets we own. These charges and provisions may be required in the future as a result of factors beyond our control, including, among other things, changes in the economic environment and market conditions affecting the value of real property assets. If we are required to take impairment charges, our results of operations will be adversely impacted.

Our revenues and the value of our portfolio may be negatively affected by casualty events occurring on our properties.

The joint ventures in which we are an equity participant carry all risk property insurance covering the property and any improvements to the property owned by the joint venture for the cost of replacement in the event of a casualty. Further, we carry insurance for such purpose on properties owned by us. However, the amount of insurance coverage maintained for any property may be insufficient to pay the full replacement cost following a casualty event. In addition, the rent loss coverage under a policy may not extend for the full period of time that a tenant or tenants may be entitled to a rent abatement that is a result of, or that may be required to complete restoration following, a casualty event. In addition, there are certain types of losses, such as those arising from earthquakes, floods, hurricanes and terrorist attacks, that may be uninsurable or that may not be economically feasible to insure. Changes in zoning, building codes and ordinances, environmental considerations and other factors may make it impossible for a joint venture or us, as the case may be, to use insurance proceeds to replace damaged or destroyed improvements at a property. If any of these or similar events occur, the amount of coverage may not be sufficient to replace a damaged or destroyed property. As a result, our returns and the value of our investment may be reduced.

Compliance or failure to comply with the Americans with Disabilities Act of 1990 or other safety regulations and requirements could result in substantial costs.

The Americans with Disabilities Act generally requires that public buildings, including our properties, be made accessible to disabled persons. Non-compliance could result in the imposition of fines by the federal government or the award of damages to private litigants. From time-to-time claims may be asserted against us with respect to some of our properties under the Americans with Disabilities Act. If, under the Americans with Disabilities Act, we are required to make substantial alterations and capital expenditures in one or more of our properties, including the removal of access barriers, it could adversely affect our financial condition and results of operations.

Our properties are subject to various federal, state and local regulatory requirements, such as state and local fire and life safety requirements. If we fail to comply with these requirements, we could incur fines or private damage awards. We do not know whether existing requirements will change or whether compliance with future requirements will require significant unanticipated expenditures that will affect our cash flow and results of operations.

In order for real estate properties to generate positive cash flow or to make real estate properties suitable for sale, we may need to make significant capital improvements and incur deferred maintenance costs with respect to these properties.

Some of our properties, and in particular, our multi-family properties, face competition from newer, and updated properties. At September 30, 2015, the approximate weighted average age (based on the number of units) of our multi-family properties is approximately 25 years. To remain competitive and increase occupancy at these properties and/or make them attractive to potential tenants or purchasers, we may have to make significant capital improvements and/or incur deferred maintenance costs with respect to these properties. The cost of these improvements and deferred maintenance items may impair our financial condition and liquidity.

Our transactions with affiliated entities involve conflicts of interest.

Entities affiliated with us and with certain of our executive officers provide services to us and on our behalf. Although our policy is to obtain terms in transactions with affiliates that are at least as favorable as those that we would receive if the transactions were entered into with unaffiliated entities, these transactions raise the potential that we may not receive terms as favorable as those that we would receive if the transactions were entered into with unaffiliated entities.

Liability relating to environmental matters may impact the value of properties that we acquire.

We may be subject to environmental liabilities arising from the ownership of properties we acquire. Under various federal, state and local laws, an owner or operator of real property may become liable for the costs of removal of certain hazardous substances released on its property. These laws often impose liability without regard to whether the owner or operator knew of, or was responsible for, the release of such hazardous substances.

If we acquire properties, the presence of hazardous substances on a property may adversely affect our ability to finance or sell the property and we may incur substantial remediation costs. The discovery of material environmental liabilities attached to such properties could have a material adverse effect on our results of operations and financial condition.

The presence of hazardous substances may adversely affect our ability to sell real estate or borrow using the real estate as collateral.

Senior management and other key personnel are critical to our business and our future success may depend on our ability to retain them.

We depend on the services of Jeffrey A. Gould, our president and chief executive officer, and other members of senior management to carry out our business and investment strategies. Although Jeffrey A. Gould devotes substantially all of his business time to our affairs, he devotes a limited amount of his business time to entities affiliated with us. In addition to Jeffrey A. Gould, only two other executive officers, Mitchell Gould, our executive vice president, and George Zweier, a vice president and our chief financial officer, devote all or substantially all of their business time to us. The remainder of our executive management personnel share their services on a part-time basis with entities affiliated with us and located in the same executive offices pursuant to a shared services agreement. We rely on part-time executive officers to provide certain services to us, including legal and accounting services, since we do not employ full-time executive officers to handle these services. If the shared services agreement is terminated, we will have to obtain such services or hire employees to perform them. We may not be able to replace these services or hire such employees in a timely manner or on terms, including cost and level of expertise, that are as favorable as those we receive under the shared services agreement.

In addition, in the future we may need to attract and retain qualified senior management and other key personnel, both on a full-time and part-time basis. The loss of the services of any of our senior management or other key personnel or our inability to recruit and retain qualified personnel in the future, could impair our ability to carry out our business and our investment strategies.

We do not carry key man life insurance on members of our senior management.

Breaches of information technology systems could materially harm our business and reputation.

We, our joint venture partners and the property managers managing our properties collect and retain on information technology systems certain financial, personal and other sensitive information provided by third parties, including tenants, vendors and employees. Such persons also rely on information technology systems for the collection and distribution of funds. There can be no assurance that we, our joint venture partners or property managers will be able to prevent unauthorized access to sensitive information or the unauthorized distribution of funds. Any loss of this information or unauthorized distribution of funds as a result of a breach of information technology systems may result in loss of funds to which we are entitled, legal

liability and costs (including damages and penalties), as well as damage to our reputation, that could materially and adversely affect our business and financial performance.

We are subject to risks associated with real estate assets and the real estate industry, which could decrease revenues or increase costs and adversely affect the economic performance and value of our properties.

Our real estate assets are subject to general economic and market risks. As such, in a general economic decline or recessionary climate, our assets may not generate sufficient cash to pay expenses, service debt or cover maintenance, and, as a result, our financial condition, results of operations and cash flow may be adversely affected. Factors that may adversely affect the economic performance or value of our properties include, among others:

Risks Related to our Multi-Family Activities

Unfavorable changes in market and economic conditions could adversely affect occupancy, rental rates, operating expenses, and the overall market value of multi-family properties we acquire.

Conditions in markets in which we acquire multi-family properties may significantly affect occupancy, rental rates and the operating performance of such assets. The risks that may adversely affect conditions in those markets include the following:

We may be unable to refinance our multi-family mortgage debt as it matures.

We are subject to the risks associated with mortgage financing, including the risk that our cash flow will be insufficient to meet required payments of principal and interest and that we will be unable to refinance our mortgage debt as it matures. At September 30, 2015, the weighted average annual interest rate on our multi-family mortgage debt is 3.99% and the weighted average remaining term on this mortgage debt is 6.5 years. Approximately $142.3 million in principal amount of mortgage debt, bearing annual interest rates ranging from approximately 3.7% to 4%, matures in 2019. As we will not have sufficient liquidity to make all these principal payments when due, we will need to refinance a significant portion, if not all, of our outstanding multi-family debt as it matures. We may not be able to refinance existing debt or, in the event of increased interest rates, refinance on terms as favorable as currently in effect; either of these outcomes could have a material adverse effect on our financial condition and results of operations.

We could be negatively impacted by changes in our relationship with Fannie Mae or Freddie Mac, changes in the condition of Fannie Mae or Freddie Mac and by changes in government support for multi-family housing.

Fannie Mae and Freddie Mac have been a major source of financing for multi-family real estate in the United States and we have used loan programs sponsored by these agencies to finance many of our acquisitions of multi-family properties. There has been ongoing discussion by the government with regard to the long term structure and viability of Fannie Mae and Freddie Mac, which could result in adjustments to guidelines for their loan products. Should these agencies have their

mandates changed or reduced, lose key personnel, be disbanded or reorganized by the government or otherwise discontinue providing liquidity for the multi-family sector, our ability to obtain financing through loan programs sponsored by the agencies could be negatively impacted. In addition, changes in our relationships with Fannie Mae and Freddie Mac, and the lenders that participate in these loan programs, with respect to our existing mortgage financing could impact our ability to obtain comparable financing for new acquisitions or refinancing for our existing multi-family real estate investments. Should our access to financing provided through Fannie Mae and Freddie Mac loan programs be reduced or impaired, it would significantly reduce our access to debt capital and/or increase borrowing costs and could significantly limit our ability to acquire properties on acceptable terms and reduce the values to be realized upon property sales.

Most of our multi-family properties are located in a limited number of markets, which makes us susceptible to adverse economic developments in such markets.

In addition to general, regional and national economic conditions, the operating performance of our multi-family residential properties is impacted by the economic conditions of the specific markets in which our properties are concentrated. Approximately 21%, 17%, 15% and 14% of our estimated 2016 revenues from multi-family properties are attributable to properties located in Texas, Georgia, Tennessee and Florida, respectively. Accordingly, adverse economic developments in such markets could adversely impact the operations of these properties and therefore our operating results and cash flow. The concentration of properties in a limited number of markets exposes us to risks of adverse economic developments which are greater than the risks of owning properties with a more geographically diverse portfolio.

We are subject to certain risks associated with selling multi-family properties, which could limit our operational and financial flexibility.

We may desire to dispose of  multifamily properties that no longer meet our objectives, but our ability to complete such sales may be limited by adverse market conditions, including conditions over which we have limited or no control, such as the availability of mortgage debt. These conditions may impact the price or the other terms of a contemplated sale and the time needed to find a purchaser and complete the sale. We may be required to expend funds to correct defects or to make improvements before a property can be sold. Further, federal tax laws limit our ability to profit on the sale of properties that we have owned for less than two years, and this limitation may prevent us from selling properties when market conditions are favorable. The foregoing conditions may limit our ability to dispose of properties in order to meet our objectives, which may in turn have a material adverse effect on our financial condition and the market value of our securities.

The failure of third party property management companies to properly manage our properties may result in a decrease in occupancy rates, rental rates or both, which could adversely impact our results of operations

We and our joint venture partners rely on third party property management companies to manage our properties. These management companies are responsible for, among other things, leasing and marketing rental units, selecting tenants (including an evaluation of the creditworthiness of tenants), collecting rent, paying operating expenses, and maintaining the property. If these property management companies do not perform their duties properly or we or our joint venture partners do not effectively supervise the activities of these companies, occupancy rates, rental rates or both may decline at such properties. One property manager and its affiliates manage nine properties, a second property manager and its affiliates manage four properties and nine other property managers manage three or fewer properties - the loss of our managers, and in particular, the property manager that manages nine properties, could result in a decrease in occupancy rates, rental rates or both. Further, some of management companies are owned by our joint venture partners or their affiliates. The termination of a management company may require the approval of the mortgagee, our joint venture partner or both. If we are unable to terminate a property manager not performing its duties, on a timely basis, our occupancy rates, rental rates or both, could be adversely impacted.

Increased competition and increased affordability of residential homes could limit our ability to retain our tenants or increase or maintain rents.

Our multi-family properties compete with numerous housing alternatives, including other multi-family and single-family rental homes, as well as owner occupied single and multi-family homes. Our ability to retain tenants and increase or maintain rents or occupancy levels could be adversely affected by the alternative housing in a particular area and, due to declining housing prices, mortgage interest rates and government programs to promote home ownership, the increasing affordability of owner occupied single and multi-family homes.

Risks involved in conducting real estate activity through joint ventures.

We have in the past and in the future intend to acquire properties in joint ventures with other persons or entities when we believe that circumstances warrant the use of such structure. Joint venture investments involve risks, including the possibility that our partner might become insolvent or otherwise refuse to make capital contributions or property distributions when due; that we may be responsible to our partner for indemnifiable losses; that our partner may not perform its property oversight

responsibilities; that our partner may have business goals which are inconsistent with ours; our partner may be in a position to take action or withhold consent contrary to our instructions or requests; and our partner might engage in unlawful or fraudulent conduct with respect to our jointly owned properties or other properties in which they have an ownership interest. We and our partner may each have the right to trigger a buy-sell arrangement, which could cause us to sell our interest, or acquire our partner's interest, at a time when we otherwise would not have initiated such a transaction.

In some instances, joint venture partners may have competing interests in our markets that could create conflicts of interest. Further, our joint venture partners may experience financial distress, including bankruptcy, and to the extent they do not meet their obligations to us or our joint venture with them, we may be adversely affected.

Five of our multi-family property joint ventures are owned with one joint venture partner or its affiliates and four of our multi-family property joint ventures are owned with a second joint venture partner or its affiliates. We may be adversely effected if we are unable to maintain a satisfactory working relationship with either of these joint venture partners or if either partner becomes financially distressed.

Risks Related to the Newark Joint Venture and Other Real Estate Operations.

The Newark Joint Venture likely will have an operating loss for the foreseeable future.

We anticipate that the Newark Joint Venture will operate at a loss in 2016 and for several years thereafter. If the Newark Joint Venture operates at a loss, we and our partners in the venture may be required to fund the operating losses and capital requirements by making additional capital contributions. No assurance can be given that we or our venture partners will have the resources or be willing to make such contribution and the failure to make the required contribution may have an adverse impact on us.

If we are unable to pay debt service as it becomes due, we may be forced to sell properties at disadvantageous terms or relinquish our rights to such properties, which would result in the loss of revenues and in a decline in the value of our real property portfolio.

At September 30, 2015, approximately $9.4 million of debt service relating to the Newark Joint Venture is payable prior to the end of 2016 and $17.4 million of debt service is payable from 2017 through 2018. The cash flow from the properties securing the mortgage debt may be insufficient to meet required debt service payments. In particular, the rental revenues from the current tenants at Teachers Village are insufficient to cover all of the Newark Joint Ventures debt service obligations from 2016 through 2018. If efforts to generate additional rental revenues from the Teachers Village site are unsuccessful (due to, among other things, the failure to complete the buildings under construction or contemplated to be constructed or to fully lease at satisfactory rates the residential and commercial space at the six buildings contemplated to comprise Teachers Village), the Newark Joint Venture may be unable to meet its debt service obligation with respect to the Teachers Village properties and such properties would require additional capital from the members of the venture or may be foreclosed on by the lenders. See "Management's Discussion and Analysis of Financial Condition and Results of Operations - Disclosure of Contractual Oblidgations".

The Newark Joint Venture is limited in its ability the Teachers Village facilities for purposes other than as contemplated by the applicable financing and tax credit transactions.

The terms and conditions of the financings and tax credits provided to the Newark Joint Venture limit the venture's ability to use the Teachers Village facilities in a manner other than as permitted to be used by the governing transaction documents. Among other things, the New Markets Tax Credits and related contractual obligations provide that if prior to the seven year recapture period, the facilities are used in a manner prohibited by such tax credit program, the credits may be disallowed. The qualified school construction bonds in principal amount of approximately $22.7 million at September 30, 2015 requires that certain portions of the facilities be used for at least 19 years as public school facilities and the annual $1 million interest reimbursement provided by the US Treasury is subject to recapture if such facilities are not used for educational purposes for specified periods. The New Jersey Urban Transit Hub tax credits program requires that certain portions of the facilities must be used for residential purposes for at least ten years and that at least 20% of the residential units be allocated for lower/middle income housing. If as a result of market or other conditions, it is determined that the contemplated uses of the facilities are not financially viable, the Newark Joint Venture will be limited in its ability to use these facilities in an alternative manner which may adversely impact our financial condition and results of operations.

We have limited experience in developing and operating development sites.

The principal assets of our Newark Joint Venture are several development sites located in downtown Newark, NJ. Since we have limited experience in real estate development, we are subject to risks that differ from those to which we have been

subject to historically. Although the principal of the managing member of the Newark Joint Venture (who is formerly the principal of our borrowers) is knowledgeable with respect to the local real estate market, he has limited experience in development projects. There can be no assurance that the Newark Joint Venture will be successful in developing and/or managing the redevelopment of the sites.

The success of our Newark Joint Venture depends, to a large extent, on the principal of the Newark Joint Venture's manager.

The principal of the manager of the Newark Joint Venture was responsible for acquiring all the properties owned by the Newark Joint Venture and is responsible for, among other things, overseeing the construction and leasing activities at Teachers Village and development activities with respect to Market Street and the other properties owned by the venture. We believe that the principal's continued involvement is important to the success of the Newark Joint Venture. The diminution or loss of his services due to disability, death or for any other reasons could have a material adverse effect on the Newark Joint Venture's business, which would result in a material adverse effect on our business.

The Newark Joint Venture carries key man life insurance on such principal in the amount of $40 million. There can be no assurance that the proceeds from such life insurance would be sufficient to compensate the Newark Joint Venture for the loss of his services, and these policies do not provide any benefits if he becomes disabled or is otherwise unable to render services to the Newark Joint Venture.

The Newark Joint Venture is subject to risks particular to real estate development activities.

The Newark Joint Venture is subject to the risks associated with development activities. These risks include:

Failure of the Newark Joint Venture to comply with the requirements of the New Markets Tax Credit program may result in significant losses and impair our financial condition.

The Newark Joint Venture entered into various arrangements to obtain funding under the New Markets Tax Credit program for the Teachers Village project and in connection therewith received approximately $31 million of net tax credit proceeds. New Markets Tax Credits are subject to recapture for a period of seven years as provided in the Internal Revenue Code. The Newark Joint Venture is required to comply with various regulations and contractual provisions that apply to the these credits and has indemnified the beneficiaries thereof for any loss or recapture of the benefits of such credits until the obligation to deliver tax benefits is relieved. We estimate that such indemnity obligation would not exceed approximately $33 million (exclusive of interest and penalties) and is subject to reduction to the extent the credits are not disallowed. Non-compliance with applicable requirements could result in the tax benefits not being realized by the beneficiaries which would have an adverse effect on our financial position and results of operations.

Risks Related to our Industry

Compliance with REIT requirements may hinder our ability to maximize profits.

In order to qualify as a REIT for Federal income tax purposes, we must continually satisfy tests concerning, among other things, our sources of income, the amounts we distribute to our shareholders and the ownership of securities. We may also be required to make distributions to shareholders at disadvantageous times or when we do not have funds readily available for distribution. Accordingly, compliance with REIT requirements may hinder our ability to operate solely on the basis of maximizing profits.

In order to qualify as a REIT, we must also ensure that at the end of each calendar quarter at least 75% of the value of our assets consists of cash, cash items, government securities and qualified REIT real estate assets. The remainder of our investment in securities cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of such issuer. In addition, no more than 5% of the value of our assets can consist of the securities of any one issuer, other than a qualified REIT security. If we fail to comply with these requirements, we must dispose of the portion of our assets in excess of such amounts within 30 days after the end of the calendar quarter in order to avoid losing our REIT status and suffering adverse tax consequences. This requirement could cause us to dispose of assets for consideration of less than their true value and could lead to a material adverse impact on our results of operations and financial condition.

Because Real Estate Investments Are Illiquid, We May Not Be Able to Sell Properties As Needed.

Real estate investments generally cannot be sold quickly. We may not be able to reconfigure our portfolio promptly in response to economic or other conditions. This inability to reallocate our capital promptly could adversely affect our financial condition and results of operations.

Item 1B.    Unresolved Staff Comments.

None.

Item 2.    Properties.

Our executive office is located at 60 Cutter Mill Road, Suite 303, Great Neck, New York. This office is located in a building that through December 31, 2014 was owned by a subsidiary of Gould Investors L.P. We believe that such facilities are satisfactory for our current and projected needs.

The information set forth under "Item 1-Business" is incorporated herein by this reference to the extent responsive to the information called for by this item.

Item 3.    Legal Proceedings.

None.

Item 4.    Mine Safety Disclosures.

Not applicable.

PART II

Item 5.    Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common shares of beneficial interest, or Common Shares, are listed on the New York Stock Exchange, or the NYSE, under the symbol "BRT." The following table shows for the periods indicated, the high and low sales prices of the Common

On December 1, 2015, the high and low sales prices of our Common Shares was $7.00 and $6.74, respectively.

As of December 1, 2015, there were approximately 917 holders of record of our Common Shares.

We have not paid any cash dividends since 2010. Our tax loss carry forward at December 31, 2014, was approximately $65.3 million; therefore, we are not currently required by Federal tax code provisions relating to REITs to pay cash dividends to maintain our status as a REIT.

Stock Performance Graph

This graph compares the performance of our shares with the Standard & Poor's 500 Stock Index, an index consisting of publicly traded mortgage REITs ( i.e ., FTSE NAREIT Mortgage REITs) and an index consisting of apartment REITs ( i.e ., FTSE NAREIT Equity Apartments). The graph assumes $100 invested on September 30, 2010 and assumes the reinvestment of dividends.

COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURN*

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*    $100 invested on 9/30/10 in stock or index, including reinvestment of dividends. Fiscal year ending September 30.    

Issuer Purchases of Equity Securities

Our Board of Trustees has authorized us to repurchase up to $4 million of our common shares through September 30, 2017. At September 30, 2015, $1.6 million of such authorization remains available.

Item 6.    Selected Financial Data.

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Funds from Operations; Adjusted Funds from Operations.

In view of our multi- family property activities, we disclose below funds from operations ("FFO") and adjusted funds from operations ("AFFO") because we believe that such metrics are a widely recognized and appropriate measure of the performance of an equity REIT.

We compute FFO in accordance with the "White Paper on Funds From Operations" issued by the National Association of Real Estate Investment Trusts ("NAREIT") and NAREIT's related guidance. FFO is defined in the White Paper as net income (loss) (computed in accordance with generally accepted accounting principles), excluding gains (or losses) from sales of property, plus depreciation and amortization, plus impairment write-downs of depreciable real estate and after adjustments for unconsolidated partnerships and joint ventures. Adjustments for unconsolidated partnerships and joint ventures will be calculated to reflect funds from operations on the same basis. In computing FFO, we do not add back to net income the amortization of costs in connection with our financing activities or depreciation of non-real estate assets. Since the NAREIT White Paper only provides guidelines for computing FFO, the computation of FFO may vary from one REIT to another. We compute AFFO by adjusting FFO for our straight-line rent accruals, restricted stock expense and deferred mortgage costs (including our share of our unconsolidated joint ventures).

We believe that FFO and AFFO are useful and standard supplemental measures of the operating performance for equity REITs and are used frequently by securities analysts, investors and other interested parties in evaluating equity REITs, many of which present FFO and AFFO when reporting their operating results. FFO and AFFO are intended to exclude GAAP historical cost depreciation and amortization of real estate assets, which assures that the value of real estate assets diminish predictability over time. In fact, real estate values have historically risen and fallen with market conditions. As a result, we believe that FFO and AFFO provide a performance measure that, when compared year over year, should reflect the impact to operations from trends in occupancy rates, rental rates, operating costs, interest costs and other matters without the inclusion of depreciation and amortization, providing a perspective that may not be necessarily apparent from net income. We also consider FFO and AFFO to be useful to us in evaluating potential property acquisitions.

FFO and AFFO do not represent net income or cash flows from operations as defined by GAAP. FFO and AFFO should not be considered to be an alternative to net income as a reliable measure of our operating performance; nor should FFO and AFFO be considered an alternative to cash flows from operating, investing or financing activities (as defined by GAAP) as measures of liquidity.

FFO and AFFO do not measure whether cash flow is sufficient to fund all of our cash needs, including principal amortization and capital improvements. FFO and AFFO do not represent cash flows from operating, investing or financing activities as defined by GAAP.

Management recognizes that there are limitations in the use of FFO and AFFO. In evaluating our performance, management is careful to examine GAAP measures such as net income (loss) and cash flows from operating, investing and financing activities. Management also reviews the reconciliation of net income (loss) to FFO and AFFO.

The table below provides a reconciliation of net income (loss) determined in accordance with GAAP to FFO and AFFO for each of the indicated years (amounts in thousands):

The table below provides a reconciliation of net income (loss) per common share (on a diluted basis) determined in accordance with GAAP to FFO and AFFO.

Item 7.    Management's Discussion and Analysis of Financial Condition and Results of Operations.

Overview

We are a REIT that during the past three years engaged in three principal business activities: the ownership, operation and development of multi-family properties; the ownership, operation and development of commercial and mixed use real estate assets; and real estate lending. During this period, we commenced and accelerated our multi-family property activities and de-emphasized and ultimately exited our real estate lending activities. As of November 1, 2014, we were no longer engaged in real estate lending and the financial information (including our consolidated financial statements) included herein reclassifies, for all periods presented, our real estate lending activities as discontinued operations. See note 1 to our consolidated financial statements.

Our multi-family activities derive revenue primarily from tenant rental payments. Generally, these activities involve our investment of 80% of the equity in a joint venture that acquires a multi-family property, with the balance of the equity contributed by our joint venture partner. We commenced these activities in 2012 and as of September 30, 2015, 2014, 2013 and 2012, we owned 28, 27, 14 and five multi-family properties, respectively, with 8,300, 7,609, 3,786 and 1,452 units, respectively. Since October 1, 2015, we acquired two multi-family properties with an aggregate of 507 units (including a development project which contemplates the construction of 271 units). At December 1, 2015, we own 30 multi-family properties with an aggregate of 8,807 units-four of these properties are wholly owned.

Our ownership, operation and development of commercial, mixed use and other real estate assets is comprised principally of the activities of the Newark Joint Venture and to a lesser extent, the ownership and operations of various real estate assets located in New York and Florida. The Newark Joint Venture is engaged in the development of properties in downtown Newark, NJ. The properties are being developed for educational, commercial, retail and residential uses. Currently, the Newark Joint Venture is developing a project known as "Teachers Village"-the project currently involves six buildings:

The venture, which contemplates developing certain of its other properties located in Newark ( e.g ., Market Street and some of the other land parcels at Teachers Village), generates negative cash flow and anticipates that it will continue to generate negative cash flow at least until the fifth and sixth buildings currently contemplated by the Teacher's Village project are completed and significant occupancy levels achieved. The venture estimates that it requires approximately $7 million to $10 million to cover cost overruns and the build out of retail space at the Phase II buildings. We can provide no assurance that sufficient funding will be available for the foregoing purposes or for any additional development activities (including development activities relating to the Market Street and other properties) and even if sufficient funding is obtained, that such activities will be profitable to us. See " -Other Developments" for information, among other things, regarding the possible sale by BRT of its equity interests in the Newark Joint Venture.

Our real estate lending activities involved originating and holding for investment short-term senior mortgage loans secured by commercial and multi-family real estate properties. Revenue was generated from interest income ( i.e, the interest borrowers paid on our loans) and to a lesser extent, loan fee income generated on the origination and extension of loans, and investment income from securities transactions. These activities decreased during the two years ended September 30, 2014 due to, among other things, increased competition, and as of November 1, 2014, we were no longer engaged in real estate lending. Accordingly, these activities are presented as discontinued operations.

Highlights of 2015

The following summarizes certain of our activities in 2015 and our financial condition at year-end:

Other Developments

BRT is negotiating the sale of all or substantially all of its equity interest in the Newark Joint Venture, which we refer to as the Equity Sale, and anticipates that it will recognize a gain if this transaction is consummated. In addition, the Newark Joint Venture is discussing with an institutional lender a possible repayment, which we refer to as the Repayment Transaction, of the $19.5 million in principal amount of secured mortgage debt owed to BRT eliminated in consolidation. If the Equity Sale is consummated, BRT will no longer be engaged in funding the capital resource and liquidity requirements of the Newark Joint Venture. Further, in the first full quarter immediately following such sale, BRT's consolidated financial statements will de-consolidate the assets, liabilities and operations of the Newark Joint Venture and the $19.5 million secured mortgage debt currently eliminated in consolidation will be reflected, until the consummation of the Repayment Transaction, on our consolidated balance sheet as a mortgage receivable.We can provide no assurance that the Equity Sale or Repayment Transaction will be consummated or if consummated, that such transactions will be consummated on terms favorable to BRT.

Subsequent to September 30, 2015, we acquired two multi-family properties with an aggregate of 507 units (including a development project that contemplates constructing 271 units) for $26.4 million, including mortgage debt of $16.1 million. We estimate that in 2016, the rental revenue from the operating property will be approximately $2.1 million and the operating expenses, interest expense and depreciation will aggregate approximately $2.1 million.

Gould Investors, a related party, has indicated that to facilitate our multi-family acquisitions, it would, through March 31, 2016, lend BRT up to $10 million on an unsecured basis, such loan to (i) mature on the earlier, and to the extent, of (a) six months from the date of funding and (b) the receipt of proceeds from the Equity Sale and/or the Repayment Transaction and (ii) bear interest at a rate of three month LIBOR plus 475 basis points. We refer to this loan as the Gould Loan. On December 11, 2015, BRT borrowed $8 million from Gould Investors.

Years Ended September 30, 2015 and 2014

Revenues

The following table compares our revenues for the years indicated:

Rental and other revenue from real estate properties.     The components of the increase are: (i) $11.6 million due primarily to the inclusion, for a full year, of 12 properties that were acquired in 2014 and, to a lesser extent, improved rental rates at several of these properties; (ii) $3.6 million from four multi-family properties acquired in 2015; (iii) $822,000 primarily from residential tenants that took possession of rental units at Teachers Village following completion of construction of two Phase II buildings in September and December 2014; and (iv) $2.1 million primarily due to rental rate increases at multi-family properties acquired prior to 2014, and in particular, demand driven rental rate increases at The Fountains Apartments and Mountain Park Estates, which account for approximately $1.1 million of the increase. Included in 2015 and 2014 are revenues of $6.8 million and $8.9 million from the Properties Sold.

Expenses

The following table compares our expenses for the periods indicated:

Operating expenses related to real estate properties.     The components of the increase are: (i) $5.4 million, due to the inclusion, for a full year, of the operations at 12 multifamily properties acquired in 2014; (ii) $1.5 million from the operations at four multi-family properties acquired in 2015; and (iii) $526,000 from operating expenses at the Newark Joint Venture, which includes a $233,000 increase in management fees. The management fee increased because the fee paid in 2014 was only paid for a portion of such year. The other operating expenses at the venture increased primarily due to the commencement of operations at the two Phase II buildings completed in September and December 2014. Included in 2015 and 2014 are operating expenses of $4.4 million and $5.4 million from the Properties Sold.

Interest expense.     The components of the increase are: (i) $2.2 million, due to the inclusion, for a full year, of the mortgage debt incurred in connection with the 12 multifamily properties acquired in 2014; (ii) $910,000, due to the mortgage debt incurred in connection with the four multifamily properties acquired in 2015; (iii) $257,000 from supplemental financing obtained in 2015 at three properties; and (iv) $ 614,000 from the inclusion of a full year of interest expense associated with the Newark Joint Venture's September 2014 financing. Included in 2015 and 2014 is interest expense of $1.6 million and $2.1 million respectively, attributable to the mortgage debt of the Properties Sold. Capitalized interest was $2.6 million and $1.3 million in 2015 and 2014, respectively. The increase in capitalized interest is due to construction activities related to Phases II and III. Our junior subordinated notes in principal amount of $37.4 million bear interest at a fixed rate of 4.9% per annum and beginning April 2016, bear interest at a rate equal to three month LIBOR plus 200 basis points. Assuming that interest rates from April 2016 through the balance of the year are the same as in effect as of September 30, 2015, we estimate that the interest expense associated with such notes will decrease in 2016 by approximately $400,000 .

Advisor's fee, related party.     The fee, calculated based on invested assets, increased primarily due to the inclusion, for a full year, of the multi-family properties acquired in 2014. Approximately $214,000 of the fees paid to the advisor in 2014 is recorded in discontinued operations.The Advisory Agreement terminates December 31, 2015 and we anticipate realizing net savings of approximately $1 million in 2016 from such termination. See "Business-Our Structure."

Property acquisition costs.     The change is due to decreased acquisition activity in 2015. We acquired four properties in 2015 and 13 properties in 2014.

General and administrative expense. The increase is due primarily to the inclusion of $357,000 of expenses, which in 2014, had been included in discontinued operations. These continuing expenses, which had been borne by our loan and investment segment, were borne in 2015 by our multi-family and other real estate assets segments. There were also increases in professional fees of $138,000 primarily related to the buyout of our partners' interests in several joint ventures and a $100,000 increase in restricted stock expense due to the (i) higher stock price associated with the restricted stock awards granted in the past several years in comparison to the awards granted in 2010 that vested in 2015 and (ii) to a lesser extent, the increase in the number of such awards granted over the past several years. These increases were offset by a $138,000 reduction in state franchise tax expense resulting from a refund of prior years' taxes. General and administrative expense is allocated between our two segments in 2015 and 2014 in proportion to the estimated time spent by our full time personnel on such segments.

Depreciation.     The components of the increase are: (i) $1.9 million due to the inclusion, for the full year, of 12 multi-family properties acquired in 2014; (ii) $1.0 million from the four multi-family properties acquired in 2015; (iii) $1.4 million reflecting the net effect of purchase price allocation adjustments; and (iv) $611,000 due to the commencement of depreciation with respect to the two Phase II buildings completed in September and December 2014. Included in 2015 and 2014 is depreciation of $1.2 million and $1.1 million, respectively, related to the Properties Sold.

Other revenue and expense items

Gain on sale of property.     In 2015, we recognized an aggregate gain of $14.4 million from the Properties Sold. We also sold certain other residential properties, which are included in our other real estate asset segment, for an aggregate gain of $723,000. There were no corresponding gains in 2014.

Discontinued Operations

Discontinued operations reflects our real estate lending activities which ceased in October 2014. There is no income from discontinued operations in 2015, compared to $1.4 million of income from discontinued operations in 2014. The decrease is due to the termination of our real estate lending activities.

Net Income/Loss Attributable to Non-controlling Interests

The change with respect to our multi-family activities primarily reflects the allocation to our joint venture partners of approximately $5.2 million, representing their share of the gain on the sale of three multi-family properties in 2015. The change with respect to our other real estate segment reflects primarily the allocation in 2014 to our partner in the Newark Joint Venture of such partner's share of certain interest expense. This expense related to a one time payment of deferred interest to BRT on debt eliminated in consolidation.

Years Ended September 30, 2014 and 2013

Revenues

Rental and other revenue from real estate properties.     The components of the increase are: (i) approximately $20.6 million from 13 multi-family properties acquired in 2014; (ii) approximately $11.6 million due to the inclusion, for a full year, of nine properties that were owned for a portion of 2013; (iii) approximately $1.6 million primarily due to inclusion for a full year of rental income from commercial tenants at Teachers Village; and (iv) $925,000 primarily due to rental rate increases at multi-family properties acquired prior to 2013.

Expenses