BSR REIT Exits Northwest Arkansas at Attractive Premium
LITTLE ROCK, Ark. and TORONTO, April 26, 2021 /CNW/ - BSR Real Estate Investment Trust ("BSR" or the "REIT") (TSX: HOM.U) (TSX: HOM.UN) announced today it has sold Mountain Ranch Apartments in Fayetteville, Arkansas for gross proceeds of $49.5 million (the "Transaction"). The sale price reflects a 27.2% increase in this property's asset value since BSR's IPO in May 2018. All dollar amounts in this news release are denominated in US currency.
Mountain Ranch was the REIT's last remaining property in the Northwest Arkansas market. The sale reflects the REIT's opportunity to realize the attractive price available through divestment at this time. The proceeds of the Transaction will be deployed in targeted primary markets where BSR has established scale. Including the pending purchase of Alleia Long Meadow Farms in the Houston metropolitan statistical area announced in March, the REIT's debt to gross book value ratio ("Debt to GBV") following the Transaction is 46.7%, providing approximately $279 million of acquisition capacity.
"The Northwest Arkansas market is strong," stated John Bailey, BSR's Chief Executive Officer. "Reversion values continue to be attractive and, given our lack of scale there, it made sense to continue to capitalize on the current market conditions, with a view to maximizing unitholder return. We will rotate this capital into BSR's primary core markets as we have consistently done since our IPO."
Following the progress of BSR's capital recycling program to date, the REIT's portfolio now comprises 7,844 apartment units in 29 investment properties, with 95% of Net Operating Income ("NOI") coming from strategic, high growth primary markets. This compares with just 52% at the time of the REIT's IPO. The REIT's 17 acquisitions following the IPO added 5,200 apartment units with a weighted average year built of 2014 (seven years old) compared to 36 dispositions totaling 7,192 apartment units with a weighted average year built of 32 years old. The portfolio's overall weighted average age has decreased from 29 years to 15 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 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. These statements are based on the REIT's expectations, estimates, forecasts and projections and include, without limitation, statements regarding the intended monthly distributions of the REIT. The forward-looking statements in this news release are based on certain assumptions including, without limitation, that the REIT will have sufficient cash to pay its distributions. 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 2020 Management's Discussion & Analysis dated March 9, 2021 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 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 GBV as calculated by the REIT may not be comparable to similar measures presented by other issuers. Please refer to the REIT's 2020 Management's Discussion and Analysis dated March 9, 2021 for a reconciliation of Debt to GBV to standardized IFRS measures.
SOURCE BSR Real Estate Investment Trust