BSR Reit Advances its Capital Recycling and Growth Strategy with the Sale of Towne Park in Northwest Arkansas Market for $31.7 Million
LITTLE ROCK, AR and TORONTO, Feb. 16, 2021 /CNW/ - BSR Real Estate Investment Trust ("BSR" or the "REIT") (TSX: HOM.U) (TSX: HOM.UN) announced today it has sold Towne Park at Har-Ber Apartments in Springdale, Arkansas for gross proceeds of $31.7 million. The gross sale price represents a 9.7% increase above the purchase price paid in October of 2018. In lieu of the REIT incurring penalties for the early repayment of debt, the purchaser assumed $18.8 million of mortgage debt with a 4.5% fixed interest rate, maturing in 10 years, leaving net cash proceeds to the REIT of $12.3 million.
"Towne Park is a community that has benefited from the BSR management platform, recently making the J Turner Research's Elite 1% list in online reputation," stated John Bailey, BSR's Chief Executive Officer. "While we only owned the property for a little over two years, reversion values in the Northwest Arkansas market are very attractive at this time. Given the REIT does not have scale in this market, it makes sense to capitalize on the current market conditions. Once again, we have crystalized value created by our platform, and we will continue this process going forward as we reinvest the proceeds in high growth markets to exploit the scalability of the platform."
Following the progress of the capital recycling program completed to date, the REIT's portfolio has 7,391 apartment units in 29 real estate investment properties, with 96% of Net Operating Income ("NOI") coming from strategic high growth core markets. This compares with just 52% at the time of the REIT's IPO in May 2018.
The REIT's 14 acquisitions following the IPO in May of 2018 added 4,191 apartment units with a weighted average year built of 2013 (seven years old) compared to 33 dispositions totaling 6,636 apartment units with a weighted average year built of 1989 (31 years old). Following the sale announced today, the REIT's debt to gross book value ratio ("Debt to GBV") is 40.0%, providing approximately $170 million in liquidity.
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 third quarter of 2020, dated November 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 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 and nine month periods ended September 30, 2020 for a reconciliation of Debt-to-GBV to standardized IFRS measures.
SOURCE BSR Real Estate Investment Trust