Company: BHM
Filing Date: 2025-10-08
Form Type: S-11
Source: 0001104659-25-097905
Chunk: 33

Company: Bluerock Homes Trust, Inc.
Filing Date: 2025-10-08
Form: S-11
Chunk 33
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 to our variable-rate borrowings. As of June 30, 2025, we had interest rate caps and swaps which effectively
limit our exposure to interest rate risk by providing a ceiling on the underlying floating interest rate for $101.0 million of our floating
rate debt. However, the effect of inflation on interest rates could increase our financing costs over time, either through borrowings
on floating-rate lines of credit or refinancing of our existing borrowings that may incur higher interest expenses related to the issuance
of new debt.

Additionally, inflationary
pricing may have a negative effect on the construction costs necessary to complete our development projects, including, but not limited
to, costs of construction materials, labor and services from third-party contractors and suppliers. Certain increases in the costs of
construction materials can often be managed in our development projects through either general budget contingencies built into our overall
construction costs estimates for each project or guaranteed maximum price construction contracts, which stipulate a maximum price for
certain construction costs and shift inflation risk to construction general contractors. However, no assurance can be given that our
budget contingencies would accurately account for potential construction cost increases given the current severity of inflation and variety
of contributing factors or that general contractors would be able to absorb such increases in costs and complete our construction projects
timely, within budget, or at all. Higher construction costs could adversely impact our investments in real estate assets and expected
yields on our development projects, which may make otherwise lucrative investment opportunities less profitable to us. As a result, our
business, financial condition, results of operations, cash flows, liquidity and ability to satisfy our debt service obligations and to
pay dividends and distributions to security holders could be adversely affected over time.

Our current portfolio primarily consists of interests in residential properties, located primarily in markets in the Sunbelt and Western United States. Any adverse developments in local economic conditions or the demand for residential properties in these markets may negatively impact our results of operations.

Our current portfolio of
properties consists primarily of residential properties geographically concentrated in the Sunbelt and Western United States, and our
portfolio going forward may consist primarily of the same. As such, we are currently susceptible to local economic conditions and the
supply of and demand for residential properties in these markets. If there is a downturn in the economy or an oversupply of or decrease
in demand for residential properties in these markets, our business could be materially adversely affected to a greater extent than if
we owned a real estate portfolio that was more