Washington, DC  20549

For the quarterly period ended June 30, 2015

OR

Commission File Number 001-07172

(Exact name of Registrant as specified in its charter)

516-466-3100

(Registrant's telephone number, including area code)

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 Date File required to be submitted and posted pursuant to Rule 405 of Regulations 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See definition of "large accelerated filer," "accelerated filer" and "small reporting company" in Rule 12b-2 of the Exchange Act.  (Check one):

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

Indicate the number of shares outstanding of each of the issuer's classes of stock, as of the latest practicable date.

14,101,056 Shares of Beneficial Interest,

$3 par value, outstanding on August 5, 2015

Part I ‑ FINANCIAL INFORMATION

Item 1. Financial Statements

BRT REALTY TRUST AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share data)

See accompanying notes to consolidated financial statements.

BRT REALTY TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

See accompanying notes to consolidated financial statements.

BRT REALTY TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

(Dollars in thousands)

See accompanying notes to consolidated financial statements.

BRT REALTY TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EQUITY

Nine Months Ended June 30, 2015

(Unaudited)

(Dollars in thousands, except share data)

See accompanying notes to consolidated financial statements.

BRT REALTY TRUST AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(Dollars in Thousands)

See accompanying notes to consolidated financial statements.

BRT REALTY TRUST AND SUBSIDIARIES

Notes to Consolidated Financial Statements

June 30, 2015

Note 1 – Organization and Background

BRT Realty Trust ("BRT" or the "Trust") is a business trust organized in Massachusetts. BRT owns, operates and develops (i) multi‑family properties and (ii) commercial and mixed-use real estate assets.

The multi‑family properties are generally acquired with venture partners in transactions in which the Trust contributes 80% of the equity.

BRT conducts its operations to qualify as a real estate investment trust, or REIT, for federal income tax purposes.

Note 2 – Basis of Preparation

The accompanying interim unaudited consolidated financial statements as of June 30, 2015 , and for the three and nine months ended June 30, 2015 and 2014 , reflect all normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the results for such interim periods. The results of operations for the three and nine months ended June 30, 2015 and 2014 , are not necessarily indicative of the results for the full year. The consolidated balance sheet as of September 30, 2014 , has been derived from the audited financial statements at that date but does not include all the information and footnotes required by accounting principles generally accepted in the United States ("GAAP") for complete financial statements.

The consolidated financial statements include the accounts and operations of BRT Realty Trust, its wholly owned subsidiaries, and its majority owned or controlled real estate entities and its interests in variable interest entities in which the Trust is determined to be the primary beneficiary. Material intercompany balances and transactions have been eliminated.

RBH‑TRB Newark Holdings LLC, referred to herein as the Newark Joint Venture, was determined to be a variable interest entity ("VIE") because the total equity investment at risk is not sufficient to permit it to finance its activities without additional subordinated financial support by its equity holders. The Trust was determined to be the primary beneficiary of this joint venture because it has a controlling interest in that it has the power to direct the activities of the VIE that most significantly impact the entity's economic performance and it has the obligation to absorb losses of the entity and the right to receive benefits from the entity that could potentially be significant to the entity.

The Trust's consolidated joint ventures that own multi‑family properties, other than the joint venture which owns a multi-family property in Kennesaw, GA, were determined to be VIE's because the voting rights of some equity investors are not proportional to their obligations to absorb the expected losses of the entity and their right to receive the expected residual returns. In addition, substantially all of the entity's activities either involved or are conducted on behalf of an investor that has disproportionately fewer voting rights. It was determined that the Trust is the primary beneficiary of these joint ventures because it has a controlling interest in that it has the power to direct the activities that most significantly impact the economic performance and it has the obligation to absorb losses and the right to receive benefits that could potentially be significant to the entity.

The joint venture that owns the Kennesaw, GA property was determined not to be a VIE but is consolidated because the Trust has a controlling financial interest in the entity due to its substantive participating rights.

The distributions to each joint venture partner are determined pursuant to the applicable operating agreement and may not be pro-rata to the equity interest each partner has in the applicable venture.

With respect to its unconsolidated joint ventures, as (i) the Trust is primarily the managing member but does not exercise substantial operating control over these entities or the Trust is not the managing member and (ii) such entities are not VIE's, the Trust has determined that such joint ventures should be accounted for under the equity method of accounting for financial statement purposes.

Note 2 – Basis of Preparation - continued

The preparation of the financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results could differ from those estimates.

Note 3 ‑ Equity

Common Share Dividend Distribution

During the quarter ended June 30, 2015 , the Trust did not declare a dividend on its shares.

Restricted Shares

The Trust's 2012 Incentive Plan, approved by its shareholders in March 2012, permits the Trust to grant stock options, restricted stock, restricted stock units, performance shares awards and any one or more of the foregoing, up to a maximum of 600,000 shares. In January 2015, the Trust granted 142,950 shares of restricted stock pursuant to this plan. As of June 30, 2015 , 414,625 shares of unvested restricted stock are outstanding pursuant to this plan and 258,250 shares of unvested restricted stock are outstanding pursuant to the Trust's 2009 equity incentive plan (the "Prior Plan"). No additional awards may be granted under the Prior Plan. The restricted shares granted under the 2012 Incentive Plan and the Prior Plan vest five years from the date of grant and under specified circumstances, including a change in control, may vest earlier. For accounting purposes, the restricted shares are not included in the outstanding shares shown on the consolidated balance sheets until they vest, but are included in the earnings per share computation. For the three months ended June 30, 2015 and 2014 , the Trust recorded $ 232,000 and $214,000 , respectively, of compensation expense. For the nine months ended June 30, 2015 and 2014 , the Trust recorded $676,000 , and $600,000 , respectively, of compensation expense related to the amortization of unearned compensation. At June 30, 2015 , $ 2,415,000 has been deferred as unearned compensation and will be charged to expense over the remaining vesting periods. The weighted average vesting period is 2.6 years.

Share Repurchase

In the nine months ended June 30, 2015 , the Trust purchased 345,081 of its shares of beneficial interest at a price of $7.02 for a total of $2,422,000 .

Per Share Data

Basic loss per share was determined by dividing net loss applicable to common shareholders for the applicable period by the weighted average number of shares of beneficial interest (including unvested restricted stock), outstanding during such period. Diluted earnings per share reflects the potential dilution that could occur if securities or other contracts to issue shares of beneficial interest were exercised or converted into shares of beneficial interest or resulted in the issuance of shares of beneficial interest that share in the earnings of the Trust. Diluted earnings per share was determined by dividing net income applicable to common shareholders for the applicable period by the total of the weighted average number of shares of beneficial interest outstanding. The Trust does not have any dilutive securities outstanding.

Basic and diluted shares outstanding for the three months ended June 30, 2015 and 2014 , were 14,101,056 and 14,303,237 , respectively and for nine months ended June 30, 2015 and 2014 were 14,144,236 and 14,252,902 , respectively.

Note 4 ‑ Real Estate Properties

A summary of real estate properties owned is as follows (dollars in thousands):

_________________

Acquisitions and Dispositions

During the three months ended December 31, 2014, the Trust increased its ownership interest in a (i) joint venture that owns two multi-family properties in Houston, TX from 80% to 91% by purchasing a partner's interest in the venture for $ 2,036,000 ; and (ii) joint venture that owns a multi-family property in Decatur, GA from 80% to 100% by purchasing its partner's interest in the venture for $ 1,850,000 . The Trust incurred $153,000 in professional fees related to these transactions.

On February 5, 2015, the Trust sold its Lawrenceville, GA multi-family property for a gross sales price of $9,700,000 . The Trust recognized a gain on the sale of $2,654,000 , of which approximately $1,140,000 was allocated to the non-controlling partner.

On April 1, 2015, the Trust increased its ownership interest in a joint venture that owns a multi-family property in North Charleston, SC from 90% to 100% by purchasing its partner's interest for $790,000 .

On July 27, 2015, the Trust, through a consolidated joint venture, purchased a 618 unit multi-family property located in Valley, AL. The contract price was $44,000,000 (exclding $1,900,000 of closing costs, property escrows and working capital). The purchase was financed with $29,000,000 of mortgage debt which has at an annual interest rate of 4.49% and matures in 2025. The Trust contributed $10,400,000 of equity for its 61.25% share of the venture and its partner contributed $6,500,000 for the balance of the interests in the venture.

Note 4 ‑ Real Estate Properties - continued

Purchase Price Allocation

Note 5 - Real Estate Properties Held For Sale

On July 7, 2015, the Trust sold the property in Marietta, GA, for $17,600,000 . The Trust estimates it will recognize a gain on the sale of approximately $8,000,000 , of which $3,100,000 will be allocated to the non-controlling partner.

On July 21, 2015, the Trust sold the property in Houston, TX, for $39,900,000 , including the purchaser's assumption of the $24,100,000 mortgage debt. The Trust estimates it will recognize a gain on the sale of approximately $4,000,000 , of which $800,000 will be allocated to the non-controlling partner.

Note 6 – Debt Obligations

Debt obligations consist of the following (dollars in thousands):

Note 6 – Debt Obligations - continued

Mortgages Payable

The Trust assumed mortgage debt of $17,173,000 in connection with its purchase, in December 2014, of a multi-family property located in Pensacola, FL. The mortgage has an annual interest rate of 4.85% , requires interest only payments for 12 months and matures in October 2018.

Contemporaneously with the Trust's increased ownership interest in a joint venture that owns multi-family properties in Houston, TX, the Trust refinanced a $6,494,000 adjustable rate mortgage and obtained a $ 7,500,000 fixed

rate mortgage with an annual interest rate of 4.19% . The new mortgage requires interest payments only until November 2015 and matures in November 2024 .

During the nine months ended June 30, 2015 , the Trust obtained additional mortgage financing as set forth in the table below (dollars in thousands):

Junior Subordinated Notes

At June 30, 2015 and September 30, 2014 , the Trust's junior subordinated notes had an outstanding principal balance of $37,400,000 . The interest rates on the outstanding notes are set forth in the table below: 

Interest expense relating to the junior subordinated notes was $458,000 for each of the three months ended June 30, 2015 and 2014 , and $ $1,375,000 for each of the nine months ended June 30, 2015 and 2014 . Amortization of the deferred costs, a component of interest expense, was $5,000 for each of the three months ended June 30, 2015 and 2014 , and $15,000 for each of the nine months ended June 30, 2015 and 2014 .

Note 7 – Deferred Income (New Markets Tax Credit Transaction)

In connection with the Newark Joint Venture's Teachers Village project, on September 30, 2014, affiliates of JP Morgan Chase ("Chase") contributed $5,100,000 , and on September 12, 2012, and February 3, 2012, affiliates of Goldman Sachs (" Goldman") contributed $16,400,000 and $11,200,000 , respectively, to special purpose subsidiaries of the Newark Joint Venture and these subsidiaries received the proceeds from the sale of New Markets Tax Credits ("NMTC") for which the project qualified. Chase and Goldman are entitled to receive tax credits against their qualified investments in the project over seven years commencing as of the dates of their respective contributions. At the end of the seven years , the Newark Joint Venture subsidiaries have the option to acquire the special purpose entities for a nominal fee.

The NMTC program was enacted by Congress to serve low-income and distressed communities by providing investors with tax credit incentives to make capital investments in those communities. The program permits taxpayers to claim credits against their Federal income tax for up to 39% of qualified investments.

Note 7 – Deferred Income (New Markets Tax Credit Transaction) - continued

The deferred income on the Trust's consolidated balance sheets at June 30, 2015 and September 30, 2014 in the amount of $30,990,000 represents the Chase and Goldman contributions, which are net of fees of the NMTC transactions and Newark Joint Venture financing transactions. These amounts will be recognized into income when

the obligations to comply with the requirements of the NMTC program as set forth in the applicable provisions of the Internal Revenue Code of 1986, as amended (the "Code"), are satisfied. The failure of the Newark Joint Venture to comply with the requirements of the NMTC program may result in the reversal of the tax credit benefits and the related obligation of the Newark Joint Venture to indemnify the beneficiaries of such credits. The tax credits are subject to recapture for a seven year period as provided in the Code.

Costs incurred in structuring these transactions are deferred and will be recognized as an expense based on the maturities of the various mortgage financings, including the debt financing obtained by the Newark Joint Venture contemporaneously with the NMTC transactions. At June 30, 2015 and September 30, 2014 , these costs totaled $9.9 million and $8.7 million , respectively, and are included in deferred costs on the consolidated balance sheets.

The Trust determined that the special purpose subsidiaries are VIEs. The VIEs ongoing activities, which include collecting and remitting interest and fees and NMTC compliance, were all considered in the design of the special purpose entities and are not anticipated to affect the economic performance during the life of the VIEs.

Management considered the obligation to deliver tax benefits, provide guarantees to Chase and Goldman and the Trust's obligation to absorb the losses of the VIE. Management also considered Chase's and Goldman's lack of a material interest in the underlying economics of the project. Management concluded that the Newark Joint Venture (a consolidated subsidiary of the Trust) is the primary beneficiary and has therefore consolidated the VIEs.

Note 8 - Segment Reporting

Management determined that it operates in two reportable segments: a multi-family property segment which includes the ownership, operation and developing of its multi-family properties; and an other real estate segment which includes the ownership, operation and developing of the its other real estate assets and, in particular, the Newark Joint Venture. In the period ended June 30, 2014, the Trust also operated a third segment - the origination and servicing of a loan portfolio. The Trust no longer operates the third segment and the operations of the segment are reported as discontinued operations.

Note 8 - Segment Reporting - continued

_______________________________

(a) Excludes $ $3,028 of assets related to discontinued operations.

Note 8 – Segment Reporting - continued

Note 8 – Segment Reporting - continued

_______________________________

(a) Excludes $ $3,028 of assets related to discontinued operations.

Note 9 – Fair Value of Financial Instruments

Financial Instruments Not Measured at Fair Value

The following methods and assumptions were used to estimate the fair value of each class of financial instruments that are not recorded at fair value on the consolidated balance sheets:

Cash and cash equivalents, restricted cash, accounts receivable (included in other assets), accounts payable and accrued liabilities: The carrying amounts reported in the consolidated balance sheets for these instruments approximate their fair value due to the short term nature of these accounts.

Junior subordinated notes: At June 30, 2015 and 2014 , the estimated fair value of the Trust's junior subordinated notes is lower than their carrying value by approximately $ 17,500,000 and $21,800,000 based on a market interest rate of 6.53% and 6.84% , respectively.

Mortgages payable: At June 30, 2015 , the estimated fair value of the Trust's mortgages payable is lower than their carrying value by approximately $ 4,800,000 assuming market interest rates between 2.13% and 9.26% and at June 30, 2014 , the estimated fair value of the Trust's mortgages payable was lower than their carrying value by approximately $8,700,000 assuming market interest rates between 2.13% and 9.38% . Market interest rates were determined using rates which the Trust believes reflects institutional lender yield requirements.

Considerable judgment is necessary to interpret market data and develop estimated fair value. The use of different market assumptions and/or estimation methodologies may have a material effect on the estimated fair value assumptions.

Financial Instruments Measured at Fair Value

The Trust's fair value measurements are based on the assumptions that market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, there is a fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity and the reporting entity's own assumptions about market participant assumptions. Level 1 assets/liabilities are valued based on quoted prices for identical instruments in active markets, Level 2 assets/liabilities are valued based on quoted prices in active markets for similar instruments, on quoted prices in less active or inactive markets, or on other "observable" market inputs, and Level 3 assets/liabilities are valued based significantly on "unobservable" market inputs. The Trust does not currently own any financial instruments that are classified as Level 3.

Set forth below is information regarding the Trust's financial liabilities measured at fair value as of June 30, 2015 (dollars in thousands):

Derivative financial instrument: Fair values are approximated using widely accepted valuation techniques including discounted cash flow analysis on the expected cash flows of the derivatives. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves, foreign exchange rates, and implied volatilities. At June 30, 2015 , this derivative is included in other accounts payable and accrued liabilities on the consolidated balance sheet.

Note 9 – Fair Value of Financial Instruments - continued

Although the Trust has determined that the majority of the inputs used to value its derivative fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with it utilize Level 3 inputs, such as estimates of current credit spreads to evaluate the likelihood of default by itself and its counterparty. As of June 30, 2015 , the Trust assessed the significance of the impact of the credit valuation adjustments on the overall valuation of its derivative position and determined that the credit valuation adjustments are not significant to the overall valuation of its derivative. As a result, the Trust determined that its derivative valuation is classified in Level 2 of the fair value hierarchy.

Note 10 – Derivative Financial Instruments

Cash Flow Hedges of Interest Rate Risk

The Trust's objective in using interest rate derivatives is to add stability to variable rate interest payments and expense by managing its exposure to interest rate movements. To accomplish this objective, the Trust primarily uses interest rate swaps as part of its interest rate risk management strategy. Interest rate swaps designated as cash flow hedges involve the receipt of variable amounts from a counterparty in exchange for the Trust making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount.

The effective portion of changes in the fair value of derivatives designated and that qualify as cash flow hedges is recorded in accumulated other comprehensive loss on our consolidated balance sheets and is subsequently reclassified into earnings in the period that the hedged forecasted transaction affects earnings.

As of June 30, 2015 , the Trust had the following outstanding interest rate derivative that was designated as a cash flow hedge of interest rate risk (dollars in thousands):

The table below presents the fair value of the Trust's derivative financial instrument as well as its classification on the consolidated balance sheets as of the dates indicated (amounts in thousands):

As of June 30, 2015 , the Trust did not have any derivative instruments that were considered to be ineffective and does not use derivative instruments for trading or speculative purposes.

Note 10 – Derivative Financial Instruments - continued

The following table presents the effect of the Trust's interest rate swap on the consolidated statements of comprehensive loss for the dates indicated (dollars in thousands):

No gain or loss was recognized related to hedge ineffectiveness or to amounts excluded from effectiveness testing on the Trust's cash flow hedges during the three and nine months ended June 30, 2015 and June 30, 2014 . The Trust estimates an additional $28,000 will be reclassified from other comprehensive income (loss) as an increase to interest expense over the next twelve months.

Credit-risk-related Contingent Features

The agreement between the Trust and its derivatives counterparty provides that if the Trust defaults on any of its indebtedness, including default where repayment of the indebtedness has not been accelerated by the lender, the Trust could be declared in default on its derivative obligation.

As of June 30, 2015 , the fair value of the derivative in a net liability position, which includes accrued interest, but excludes any adjustment for nonperformance risk related to this agreement, was $31,000 . As of June 30, 2015 , the Trust has not posted any collateral related to this agreement. If the Trust had been in breach of this agreement at June 30, 2015 , it could have been required to settle its obligations thereunder at its termination value of $31,000 .

Note 11 – New Accounting Pronouncements

In April 2015, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2015-03 Interest - Imputation of Interest, which amends the balance sheet presentation for debt issuance costs. Under the amended guidance, a company will present unamortized debt issuance costs as a direct deduction from the carrying amount of that debt liability. The guidance is to be applied on a retrospective basis, and is effective for annual reporting periods beginning after December 15, 2015, with early adoption being permitted. The Trust is currently in the process of evaluating the impact the adoption of the guidance will have on its consolidated financial statements.

In January 2015, the FASB issued ASU No. 2015-01, Simplifying Income Statement Presentation by Eliminating the Concept of Extraordinary Items, which simplifies income statement presentation by eliminating extraordinary items from US GAAP. The ASU retains current presentation and disclosure requirements for an event or transaction that is of an unusual nature or of a type that indicates infrequency of occurrence. Transactions that meet both criteria would now also follow such presentation and disclosure requirements. The ASU is effective in annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted; however, adoption must occur at the beginning of an annual period. An entity can elect to apply the guidance prospectively or retrospectively. The Trust elected early adoption for the fiscal year beginning October 1, 2014, and its adoption did not have a material effect on its consolidated financial statements.

Note 12 – Subsequent Events

Subsequent events have been evaluated and any significant events, relative to our consolidated financial statements as of June 30, 2015 that warrant additional disclosure, have been included in the notes to the consolidated financial statements.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

With the exception of historical information, this report on Form 10-Q contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended. We intend such forward-looking statements to be covered by the safe harbor provision 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, which are based on certain assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words "may", "will", "believe", "expect", "intend", "anticipate", "estimate", "project", or similar expressions or variations thereof. Forward-looking statements involve known and unknown risks, uncertainties and other factors which are, in some cases, beyond our control and which could materially affect actual results, performance or achievements. Investors are cautioned not to place undue reliance on any forward-looking statements and are urged to read "Item 1A. Risk Factors" in our Annual Report on Form 10-K for the year ended September 30, 2014 .

Overview

We are a real estate investment trust, also known as a REIT, engaged in two principal business activities - the ownership, operation and development of (i) multi‑family properties and (ii) commercial and mixed use and other real estate assets.

Our multi‑family operations derive revenue primarily from tenant rental payments. Generally, these operations 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. As of June 30, 2015 , we own 27 multi‑family properties located in ten states with an aggregate of 7,715 units (including 360 units at a development property). Occupancy at June 30, 2015, excluding the units at the development property, is 94.8%.

Our commercial, mixed use and other real estate asset operations are comprised principally of the activities of the Newark Joint Venture. The Newark Joint Venture is currently developing a project known as "Teachers Village"- the project currently involves six buildings: four completed buildings, one building expected to be completed by Fall 2015 and a sixth building at which construction has commenced and the building is expected to be completed by Summer 2016. The venture is currently unprofitable and it is anticipated that the activities will continue to be unprofitable at least until the Teachers Village project is constructed fully and reasonable occupancy levels achieved. The project, as currently contemplated, requires additional funding. No assurance can be given that the Teachers Village project or the Newark Joint Venture will obtain the additional financing required or ever be profitable. See "- Liquidity and Capital Resources - Newark Joint Venture".

Net loss attributable to common shareholders increased in the nine months ended June 30, 2015 by $100,000 to a loss of $5.8 million from a loss of $5.7 million in the nine months ended June 30, 2014 . The increased loss is primarily due to the add back in the nine month period ended June 30, 2014 of the minority partner's share of interest expense due to a non-recurring deferred interest payment to us by the Newark Joint Venture on a $19.5 million of debt.

Recent Developments

On July 7, 2015, we sold the Ivy Ridge property in Atlanta, GA, for $17.6 million. We estimate we will recognize a gain on the sale of approximately $8.0 million, of which $3.1 million will be allocated to the non-controlling partner.

On July 21, 2015, we sold the Palms property in Houston, TX, for $39.9 million, including the purchaser's assumption of the $24.1 million mortgage debt. We estimate we will recognize a gain on the sale of approximately $4 million of which $800,000 will be allocated to the non-controlling partner.

On July 27, 2015, we purchased, through a consolidated joint venture, a 618 unit multi-family property located in Valley, AL. The contract price was $44.0 million (excluding $1.9 million of closing costs, property

escrows and working capital). The purchase was financed with $29.0 million of mortgage debt with an annual interest rate of 4.49% and maturing in 2025. We contributed $10.4 million of equity for our 61.25% share of the venture and our partner contributed $6.5 million for the balance of the interests in the venture.

We estimate that the sale of the two properties and the purchase of one additional property in July 2015, will on a quarterly basis, reduce revenue by approximately $650,000, operating expenses, by approximately $370,000, depreciation by approximately $120,000 and interest expense by approximately $110,000. Excluding the estimated $12 million gain on sales of real estate (of which approximately $3.9 million will be allocated to the non-controlling interests) which will be recognized in the fourth fiscal quarter of 2015, these transactions will not have a material effect on net income (loss) attributable to common shareholders.

Results of Operations – Three months ended June 30, 2015 compared to the three months ended June 30, 2014 .

Revenues

The following table compares our revenues for the periods indicated:

Rental and other revenues from real estate. The increase is due primarily to $1.5 million from two multi-family properties acquired since July 2014, $934,000 from the inclusion, for the full quarter, from four multi-family properties acquired in the three months ended June 30, 2014 , $1.2 million from multi-family properties acquired prior to April 2014, due primarily to a net increase in rental rates at many of our multi-family properties, and $273,000 from the Newark Joint Venture, due to increased occupancy at the residential units that were completed from October through December 2014. Offsetting the increase was a reduction of $382,000 as a result of the February 2015 sale of our Lawrenceville, GA property.

Expenses

The following table compares our expenses for the periods indicated:

Real estate operating expenses. The increase is due primarily to $730,000 from the two multi-family properties acquired since July 2014, $507,000 from the inclusion, for the full quarter, from four multi-family properties acquired

in the three months ended June 30, 2014 , and $285,000 resulting from the commencement of operations at Teachers Village buildings that were completed from October through December 2014. Offsetting the increase is a decline of $232,000 as a result of our sale of the Lawrenceville, GA property.

Interest expense . Approximately $320,000 of the increase is due to the mortgages on the two multi-family properties acquired since July 2014, $202,000 from the inclusion, for the full quarter, from four multi-family properties acquired in the three months ended June 30, 2014, and $106,000 from the Newark Joint Venture due to increased borrowings incurred in the September 2014 Teachers Village financing, offset by an increase in the amount of interest capitalized at the project. Capitalized interest for the three months ended June 30, 2015 and 2014 , was $663,000 and $350,000, respectively.

Advisor's fees, related party . The fee is calculated based on invested assets which increased primarily due to the purchase, since July 2014, of two multi-family properties, and improvements made at existing properties.

Property acquisition costs . These costs decreased due to reduced acquisition activity.

General and administrative. The increase is due to (i) the classification in discontinued operations, in the corresponding period of the prior year, of amounts relating to our lending operations and (ii) increased compensation levels.

Depreciation and amortization. The increase is due to $315,000 from the two multi-family properties acquired since July 2014, $274,000 from the inclusion, for the full quarter, from four properties acquired in the three months ended June 30, 2014, $380,000 due to the finalization of purchase price allocations with respect to three properties and $172,000 due to the completion of a building at Teachers Village. (See Note 4 to our consolidated financial statements).

Discontinued operations

The three months ended June 30, 2014 includes $185,000 of income from the operations of our loan origination and servicing operations which were discontinued as of September 30, 2014.

Results of Operations – Nine months ended June 30, 2015 compared to the nine months ended June 30, 2014 .

Revenues

The following table compares our revenues for the periods indicated:

Rental and other revenues from real estate. The increase is due primarily to $3.8 million from two multi-family properties acquired since July 2014, $9.1 million from the inclusion, for the entire current period, of 12 multi-family properties acquired in the nine months ended June 30, 2014 , $1.6 million from multi-family properties acquired prior to October 2013, (due primarily to increased rental rates at many of these properties) and $635,000 from the Newark Joint Venture due to increased occupancy at the residential units completed from October through December 2014 . Offsetting the increase was a $649,000 reduction as a result of the sale of our Lawrenceville, GA property.

Expenses

The following table compares our expenses for the periods indicated:

Real estate operating expenses. The increase is comprised primarily of $1.7 million from two multi-family properties acquired since July 2014, $4.4 million from the inclusion, for the entire current period, of 12 properties acquired in the nine months ended June 30, 2014 and $595,000 from the commencement of operations at Teachers Village buildings completed from October through December 2014. Offsetting the increase are declines of $310,000 as a result of the sale of our Lawrenceville, GA property and $283,000 primarily related to the inclusion, in the corresponding period of the prior year, of real estate tax adjustments to reflect increased assessments.

Interest expense . The increase is due to $782,000 from the mortgages on the two multi-family properties acquired since July 2014, $1.7 million from the inclusion, for the entire current period, from the mortgages on 12 multi-family properties acquired in the nine months ended June 30, 2014 , $192,000 due to supplemental financings at several properties and $398,000 from the Newark Joint Venture. The net increase in interest expense at the Newark Joint Venture is due to the debt incurred in the September 2014 financing of the Teachers Village project offset by an increase in the amount of interest capitalized due to the completion of construction of two buildings at Teachers Village. Capitalized interest was $1.87 million and $863,000 for the nine months ended June 30, 2015 and 2014 , respectively.

Advisor's fees, related party . The fee is calculated based on invested assets which increased primarily due to the purchase, since October 1, 2103, of 14 multi-family properties.

Property acquisition costs . These costs decreased due to reduced acquisition activity.

General and administrative. A significant portion of the increase is due primarily to the classification in discontinued operations, in the corresponding period of the prior year, of amounts relating to our lending operations and to a lesser extent, increased professional fees related to our purchase of our partners' interests in two multi-family properties.

Depreciation and amortization. The increase is due to $684,000 from the two multi- family properties acquired since July 2014, $671,000 from the inclusion, for the entire current period, of twelve properties acquired in the nine months ended June 30, 2014 , $1.0 million from the finalization of purchase price allocations with respect to seven properties and $437,000 from the Newark Joint Venture due primarily to the completion of two buildings at Teachers Village. (See Note 4 to our consolidated financial statements).