BSR REIT Acquires Two Strategic Assets in Largest Texas Markets for $92.8 Million
LITTLE ROCK, AR and TORONTO, Oct. 31, 2019 /CNW/ - BSR Real Estate Investment Trust ("BSR" or the "REIT") (TSX:HOM.U and HOM.UN) announced today that it has acquired Satori at Long Meadow Apartments ("Satori") in Richmond, Texas and Auberry at Twin Creeks ("Auberry") in Allen, Texas for a total of $92.8 million. Richmond is located in the Houston Metropolitan Statistical Area ("MSA") and Allen is located in the Dallas-Fort Worth ("DFW") MSA. To satisfy the purchase price for the two properties, the REIT used $56.9 million in mortgage debt, of which $20.3 million was assumed, and used its credit facilities for the balance. The addition of the properties is expected to be immediately accretive to the REIT's adjusted funds from operations ("AFFO") on a per unit basis.
"The purchase of Satori and Auberry is an opportunity for BSR to continue to modernize our portfolio in MSAs we have targeted for growth," stated John Bailey, BSR's Chief Executive Officer. "Satori, nestled in one of the wealthiest suburbs of Houston, is a cutting-edge community which builds on our existing Houston footprint. Auberry adds to our growing scale in Dallas and is positioned to generate incremental value for unitholders through BSR's capital redevelopment program."
Satori is a Class A garden-style community consisting of 300 one, two and three bedroom apartment units on 20.7 acres constructed in 2019. The property includes multiple amenities including a resort-style swimming pool, drive-through mail kiosk, dog park, car care center and direct garage/ground floor entry for every apartment unit. Satori is currently in the lease up phase with 32% of the apartment units already leased. To mitigate any potential lease up risk, BSR and the seller have entered into a Rent Guaranty Escrow Agreement, allowing the REIT to collect monthly stabilized rental revenue from the seller through June 2020.
BSR now owns eight properties and 1,962 total apartment units in the Houston market representing 18.2% of the REIT's portfolio. Houston is the fifth most populous metro market in the US and is home to 21 Fortune 500 companies. Satori is located in the Richmond/Katy submarket of Houston. Population growth in this community has outpaced overall population growth in Houston by 11.1% since April 2010, and the submarket ranks 10th as the most populous county in Texas.
Auberry is a Class B garden-style community consisting of 216 one, two, and three bedroom apartment units on 12.6 acres constructed in 2005. Dallas-Fort Worth is the fourth largest metro area in the US and has outpaced US and Texas GDP growth since 2010. Auberry includes features including detached garages, a resort-style swimming pool, a dog park, granite countertops, and a private access gate. BSR now owns five properties and 1,708 total apartment units in the DFW market, representing 15.9% of the REIT's portfolio.
The additions of Satori and Auberry mark eight property acquisitions for BSR since completing its initial public offering ("IPO") on the Toronto Stock Exchange on May 18, 2018. Other acquisitions since the IPO include Brandon Place in Oklahoma City, OK; Towne Park in Springdale, AR; Riverhill in Grand Prairie, TX; Wimberly Apartments in Dallas, TX; as well as Cielo and Madrone Apartments in Austin, TX. The acquisitions have added 2,213 apartment units to the REIT's portfolio. The average age of these properties is 11 years.
About BSR Real Estate Investment Trust
BSR Real Estate Investment Trust is an internally managed, unincorporated, and 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 49 multifamily garden-style residential properties aggregating 10,784 apartment units located across five bordering states in the Sunbelt region of the United States.
This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the business of the REIT. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate" and other similar expressions. The forward-looking statements in this news release are based on certain assumptions. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under the heading "Risk Factors" in the REIT's Management's Discussion & Analysis for the period ended June 30, 2019, dated August 6, 2019, which is available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law. The REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
Non-IFRS Financial Measure
AFFO is a key measure of performance 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. AFFO 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 three and six months ended June 30, 2019 for a reconciliation of AFFO to standardized IFRS measures.
SOURCE BSR Real Estate Investment Trust