BSR REIT Announces the Sale of Six Noncore Properties for $130 Million
LITTLE ROCK, Ark. and TORONTO, Nov. 10, 2020 /CNW/ - BSR Real Estate Investment Trust ("BSR" or the "REIT") (TSX: HOM.U) (TMX: HOM.UN) announced today that it has sold six noncore properties, comprising 1,483 apartment units, as part of the REIT's portfolio enhancement growth strategy and capital recycling program. The REIT received total gross proceeds of $130 million. All dollar amounts in this news release are denominated in US currency.
Four of the six assets sold are in the Little Rock, Arkansas metropolitan statistical area ("MSA"), including: Indian Hills built in 1974, Overbrook I and V built in 1975 and 1985 respectively, and Woodland Oaks built in 2001. The other two assets sold were Baystone built in 1968 and Vanderbilt built in 1983, both in the Houston, Texas MSA. The net proceeds of $127 million generated from these dispositions were used to repay $68 million in mortgage debt with the balance used to reduce the outstanding balance on the REIT's credit facility. These sales follow the recent acquisitions of Broadstone Park West in the Houston, Texas MSA and Aura Castle Hills in the Dallas, Texas MSA.
"Throughout 2020, BSR has successfully executed our portfolio enhancement growth strategy and capital recycling program amid the challenges presented by COVID-19," stated John Bailey, BSR's Chief Executive Officer. "We are pleased to continue to sell properties above the IPO appraised values and recycle the capital into high quality properties in our target markets. These sales further advance the transformation of BSR's portfolio over the past 18 months."
Since BSR completed its IPO on May 18, 2018, the portfolio's weighted average age has decreased by 11 years to 18 years old, from 29 years, directly attributable to the capital recycling program. The REIT's 12 acquisitions following the IPO added 3,511 apartment units with a weighted average year built of 2011 (nine years old) compared to 26 dispositions totaling 5,149 apartment units with a weighted average year built of 1985 (35 years old). Net Operating Income ("NOI") from properties located in the REIT's primary markets now comprises 88% of total NOI compared to 52% at the time of the REIT's IPO. The REIT's debt to gross book value ("Debt to GBV") is 48.1%.
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 Management's Discussion and Analysis for the second quarter of 2020, dated August 12, 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 Measures
NOI and Debt to GBV are key measures of operating performance and financial position commonly used by real estate operating companies and real estate investment trusts. They are not measures recognized under International Financial Reporting Standards ("IFRS") and do not have standardized meanings prescribed by IFRS. NOI or 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 and six month periods ended June 30, 2020 for a reconciliations of NOI and Debt-to-GBV to standardized IFRS measures.
SOURCE BSR Real Estate Investment Trust