BSR REIT Announces the Sale of Three Noncore Properties for $52.5 Million
LITTLE ROCK and TORONTO, April 13, 2020 /CNW/ - BSR Real Estate Investment Trust ("BSR" or the "REIT") (TSX:HOM.U and HOM.UN) announced today that it has sold three noncore properties, comprising 632 apartment units, as part of the REIT's portfolio enhancement and capital recycling strategy. All dollar amounts in this news release are denominated in US currency.
The following properties were sold in Longview, Texas for gross proceeds of $52.5 million: Summer Brook Apartments built in 1997; Summer Green I Apartments; and the second phase, Summer Green II, both built in 1984.
"The sale of the Longview properties is consistent with our stated strategy to capitalize on the historically low cap rate spread between primary and secondary markets in U.S. sunbelt states," said John Bailey, Chief Executive Officer of BSR. "These sales follow the March acquisition of Ariza in our target market of Austin, Texas, and enable us to enhance the quality of our portfolio in primary markets, while also crystalizing the benefits of upgrades previously performed on the Longview properties on a tax-deferred basis. I am very proud of the BSR team for continuing to execute efficiently during these uncertain economic times related to COVID-19, which is a testament to our management platform."
Since BSR completed its IPO on May 18, 2018, the portfolio's weighted average age has decreased by seven years to 22 years old, from 29 years, directly attributable to acquisitions and dispositions. The REIT's nine acquisitions following the IPO added 2,562 apartment units with a weighted average year built of 2009 (11 years old) compared to the 19 dispositions totaling 3,414 apartment units with a weighted average year built of 1982 (38 years old). NOI from properties located in the REIT's primary markets now comprises 79% of total NOI compared to 52% as of the fourth quarter of 2018 on a pro-forma basis.
The net cash proceeds of $51.2 million generated from these dispositions further enhance the REIT's strong liquidity position, essential in the current uncertain economy. Total liquidity today is $77.0 million, including cash and equivalents of $9.6 million, $32.4 million of borrowing capacity under the REIT's credit facility, and $35.0 million available under the REIT's revolving line of credit. The REIT's pro forma debt to gross book value ratio is 46.6%.
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 multifamily garden-style residential properties located in attractive primary and secondary markets 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 Annual Information Form for the dated March 10, 2020, 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
Debt to gross book value ("Debt to GBV") is a key measure of financial position 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 GBV 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 months and year ended December 31, 2019 for a further discussion of non-IFRS financial measures.
SOURCE BSR Real Estate Investment Trust