LITTLE ROCK, Ark. and
TORONTO, Dec. 10, 2020 /CNW/ - BSR Real Estate
Investment Trust ("BSR" or the "REIT") (TSX: HOM.U) (HOM.UN)
announced today it has sold West End Lodge located in Beaumont, Texas, built in 2010 and comprising
360 apartment units, for gross proceeds of $44.0 million (the "Transaction"). The REIT has
now exited the Beaumont, Texas
market as part of its portfolio enhancement growth strategy and
capital recycling program. All dollar amounts in this news release
are denominated in US currency.
As part of the Transaction, the buyer assumed the REIT's
in-place mortgage financing of $21.9
million and the REIT took back a $5.2
million note receivable maturing in five years. The note
bears interest at 4.1% in years one and two, 5.1% in years three
and four and 10.0% in year five. The REIT intends to use the
remaining cash proceeds of $21.5
million to fund acquisitions.
This Transaction marks the twelfth disposition for the REIT in
the fourth quarter of 2020. The cumulative gross proceed of
the 12 dispositions was $260.8
million, representing a 10.5% increase over the IPO
appraised values. The $5.2 million
note receivable related to this Transaction was from a buyer of
multiple properties and was the only such asset taken back by the
REIT in connection with the divestiture program.
Following the progress of the capital recycling program
completed to date, the REIT's portfolio has 6,948 apartment units
in 28 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.
"BSR has now exited the Longview and Beaumont, Texas markets, the Baton Rouge and Shreveport, Louisiana markets and the
Tulsa, Oklahoma market, in
addition to other non-core asset dispositions in the Little Rock, Arkansas and Houston, Texas markets," stated John Bailey, BSR's Chief Executive Officer. "We
now turn to completing this current phase of the capital recycling
program by making acquisitions in our target markets, fully funded
by our current liquidity position. We have a robust pipeline of
acquisition opportunities and expect to deploy our available
capital over the short-run."
Since BSR completed its IPO on May 18,
2018, the portfolio's weighted average age has decreased
from 29 years to 18 years old, 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 32 dispositions totaling 6,399
apartment units with a weighted average year built of 1988 (32
years old). Following the Transaction announced today, the REIT's
debt to gross book value ratio ("Debt to GBV") is 39.0% and its
acquisition capacity is approximately $300
million.
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.
Forward-Looking Statements
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 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 nine
month periods ended September 30,
2020 for a reconciliations of NOI and Debt-to-GBV to
standardized IFRS measures.
SOURCE BSR Real Estate Investment Trust