BSR REIT Sells Four Noncore Assets for $31.7 Million
LITTLE ROCK, AR and TORONTO, April 30, 2019 /CNW/ - BSR Real Estate Investment Trust ("BSR" or the "REIT") (TSX: HOM.U) announced today that it has sold four noncore assets as part of the REIT's portfolio enhancement and capital recycling strategy. The total consideration of $31.7 million exceeded the initial public offering appraised values by $1.3 million or 4.3%. All dollar amounts in this news release are denominated in US currency.
The transactions include Briarwood Apartments, built in 1972 with 280 apartment units, and Spring Valley Apartments, built 1975 with 245 apartment units. Both are located in Little Rock, Arkansas. Also included were Fox Trail Apartments, built in 1971 with 144 apartment units, and South Pointe Apartments, built in 1972 with 104 apartment units, both located in Shreveport, Louisiana.
"We have consistently said our plan is to recycle capital into core markets, by selling properties that no longer meet our long term growth strategy," said John Bailey, Chief Executive Officer of BSR REIT. "Through these property sales, we have crystallized the benefits of the upgrades previously performed, allowing us to redeploy the capital to other properties where we can maximize our platform's capabilities and capital redevelopment program, thereby, increasing unitholder value. We have acquired four properties since going public in May 2018. These purchases are aligned with our acquisition strategy, as the properties were built after 1990, clustered in target markets and were purchased with a clear potential for higher rent utilizing the BSR platform."
Of the net cash proceeds of $30.6 million from the above mentioned sales, $19.4 million was used to retire related mortgage financing and $11.2 million to reduce the balance outstanding under the REIT's credit facility, resulting in a Debt to Gross Book Value ratio of approximately 49.7%. BSR's portfolio now consists of 47 multifamily properties comprising 10,050 units.
About BSR Real Estate Investment Trust
BSR Real Estate Investment Trust is an internally managed, unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT owns a portfolio of 47 multifamily garden-style residential properties aggregating 10,050 apartment units located across five bordering states in the Sunbelt region of the United States.
Non-IFRS Financial Measure
Debt to Gross Book Value is a key measure of balance sheet strength commonly used by real estate operating companies and real estate investment trusts. It is not a measure recognized under International Financial Reporting Standards ("IFRS") and does not have a standardized meaning prescribed by IFRS. Debt to Gross Book Value as calculated by the REIT may not be comparable to similar measures presented by other issuers. Please refer to the REIT's Management's Discussion and Analysis for the period ended December 31, 2018 for a reconciliation of the REIT's Debt to Gross Book Value to standardized IFRS measures.
SOURCE BSR Real Estate Investment Trust