BSR Profile and Strategy

BSR REIT is an internally-managed real estate investment trust that owns and operates a portfolio of 47 multi-family real estate properties across the Sunbelt region of the United States. The properties are strategically located in five bordering states and have received significant capital investment in the last three years.

The REIT’s objective is to provide sustainable and growing distributions to investors by expanding cash flow through both organic rental growth and acquisitions. The REIT’s units trade on the Toronto Stock Exchange under the symbol HOM.U.

Investment Highlights

1. Fully aligned management platform with significant retained interest

- The REIT has a scalable platform with nearly 300 employees spread across 14 markets. The business is internally managed, led by a team of five professionals with more than 100 years of combined experience and supported by a highly experienced Board with a majority of independent Trustees. Management and the Board own greater than 50% of the REIT.

2. Attractive asset class with favourable fundamentals

- The multi-family sector has outperformed other real estate sectors over the past 20 years, generating strong returns throughout various economic cycles. Multi-family rental rates increase frequently due to relatively short lease durations compared to other forms of real estate. The REIT benefits from strong demographic fundamentals in the Sunbelt, and an increased propensity to rent across the United States.

3. Sizeable, quality portfolio with embedded growth opportunity

- The REIT invested significant capital in its properties from 2015 to 2017, which is resulting in higher occupancy and continuing higher rental rates. More upside in rental rates is expected given strong population and employment growth in the Sunbelt, and the REIT’s relatively low rental rates compared to its tenants’ annual income.

4. Attractive external growth strategy

- The REIT is well positioned to complete accretive acquisitions in the Sunbelt region. Management is focused on acquisitions in suburban areas of primary and secondary markets outside larger cities, where there is less competition. The team has completed transactions totalling more than $1 billion since 2008.

5. Stable cash distribution with a conservative AFFO payout ratio and debt profile. Debt to gross book value of 44.5% as at September 30, 2018.

- The REIT intends to pay stable and growing cash distributions to Unitholders, with an estimated AFFO payout ratio of 77% for the 12 months ended March 31, 2019. Initial Debt to Gross Book value is approximately 45.6%. The REIT believes it can maintain a conservative AFFO payout ratio while investing capital to enhance the value of the business.

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