LITTLE
ROCK, AR and TORONTO,
ON, March 8, 2023 /CNW/ - BSR Real Estate
Investment Trust ("BSR", or the "REIT") (TSX: HOM.U) (TSX: HOM.UN)
today announced its financial results for the three months and year
ended December 31, 2022 ("Q4 2022"
and "FY 2022", respectively). All comparisons in the following
summary are to the corresponding periods in the prior year. Results
are presented in U.S. dollars. References to "Same Community"
correspond to stabilized properties the REIT has owned for
equivalent periods throughout Q4 2022 and FY 2022 and the three
months and year ended December 31,
2021 ("Q4 2021" and "FY 2021", respectively), thus removing
the impact of acquisitions, dispositions and non-stabilized
properties. Audited Annual Consolidated Financial Statements and
Management's Discussion and Analysis as of and for the three months
and year ended December 31, 2022 are
available on the REIT's website at www.bsrreit.com and at
www.sedar.com.
A reconciliation of Funds from Operations ("FFO") and Adjusted
Funds from Operations ("AFFO") to net income and comprehensive
income, as well as an expanded discussion of the components of FFO
and AFFO, and a reconciliation of Net Asset Value ("NAV") to
unitholders equity can be found under "Non-IFRS Measures" in this
release. FFO per Unit, AFFO per Unit and NAV per Unit include
diluted trust units of the REIT ("Units"), Class B Units of BSR
Trust, LLC ("Class B Units") and issued Deferred Units.
"Our fourth quarter results reflect the strong fundamentals
underlying our portfolio as increases in both occupancy and
weighted average rents combined to drive robust FFO growth of 37.6%
year-over-year and 9.9% sequentially from the previous quarter,"
said Dan Oberste, the REIT's
President and Chief Executive Officer. "BSR is uniquely positioned
to generate outstanding operating and financial results as we
continue to see job growth, positive migration and occupancy trends
in our core Texas
markets".
Q4 2022 Highlights
- NAV per Unit1 increased 9.8% to $21.75 as of December 31,
2022, compared to $19.81 as of
December 31, 2021;
- FFO per Unit1 for Q4 2022 of $0.23 increased 21.1% over Q4 2021;
- AFFO per Unit1 for Q4 2022 of $0.22 increased 29.4% over Q4 2021;
- Weighted average rent increased 11.7% to $1,482 per apartment unit as of December 31, 2022 compared to $1,327 as of December 31,
2021 and 1.5% sequentially from $1,460 as of September 30,
2022;
- During Q4 2022, rental rates for new leases, increased 2.1% and
renewals increased 11.9% over the prior leases, resulting in a
blended increase of 6.0%;
- Same Community1 revenues for Q4 2022 increased 13.3%
over Q4 2021;
- Same Community1 Net Operating Income
("NOI")1 for Q4 2022 increased 11.7% over Q4 2021;
- During Q4 2022, the REIT's AFFO Payout Ratio1 was
59.6% compared to 71.4% during Q4 2021;
- Weighted average occupancy was 96.0% as of December 31, 2022 and December 31, 2021;
- Debt to Gross Book Value1 excluding Convertible
Debentures (as defined below) as of December
31, 2022 was 35.2%;
- On October 3, 2022, the Toronto
Stock Exchange accepted the REIT's notice of intention to make a
normal course issuer bid ("NCIB") for a maximum of approximately
3.3 million of its issued and outstanding Units for a twelve-month
period beginning on October 6, 2022.
The REIT purchased and canceled 1,079,507 Units under its NCIB and
automatic securities purchase plan at an average price of
$13.55 per Unit through December 31, 2022;
- BSR was named one of the Best Places to Work in Multifamily,
and Best Places to Work in Multifamily for Women at the Multifamily
Innovation Awards December 2022;
- BSR was named as one of the Best Places to Work in Arkansas for the sixth straight year by
Arkansas Business;
- J Turner Research's Online Reputation Assessment ("ORA") score
for BSR was 81.11 for 2022, compared to the national average of
62.88. The REIT expects its score to be in the top two publicly
traded US REITs when the 2023 scores are published; and
- On December 30, 2022, the REIT
amended its existing $80 million
interest rate swap, reducing the fixed rate from 1.704% to 0.440%
and the maturity date from June 10,
2025 to June 10, 2024.
__________
|
1 Same
Community, NOI, NOI Margin, FFO, FFO per Unit, AFFO, AFFO per Unit,
AFFO Payout Ratio, Debt to Gross Book Value and NAV per Unit are
non-IFRS measures. For a description of the basis of
presentation and reconciliations of the REIT's non-IFRS measures,
see "Non-IFRS Measures" in this news release.
|
FY 2022 Highlights
- Same Community revenue for FY 2022 increased 11.7% over FY
2021;
- Same Community NOI for FY 2022 increased 13.5% over FY
2021;
- FFO per Unit for FY 2022 of $0.86
increased 43.3% over FY 2021;
- AFFO per Unit for FY 2022 of $0.80 increased 35.6% over FY 2021; and
- The REIT met or exceeded the midpoints for our 2022 guidance
for the year ended December 31, 2022,
including Same Community revenues, Same Community NOI, FFO per Unit
and AFFO per Unit.
Subsequent Highlights
- In January 2023, the REIT entered
into a new forward receive-variable based 1 Month USD-SOFR CME/pay
fixed interest rate swap of $80
million at a fixed interest rate of 1.828%. The swap is
effective beginning on June 10, 2024
and matures on April 26, 2030,
subject to the counterparty's optional early termination date of
June 10, 2025.
Q4 2022 Financial Summary
In thousands of U.S. dollars, except per unit amounts
|
Q4
2022
|
|
Q4
2021
|
|
Change
|
|
Change
%
|
Revenue, Total
Portfolio
|
$
41,637
|
|
$
34,061
|
|
$
7,576
|
|
22.2 %
|
Revenue, Same
Community1 Properties
|
$
24,901
|
|
$
21,981
|
|
$
2,920
|
|
13.3 %
|
Revenue, Non-Same
Community1 Properties
|
$
16,736
|
|
$
12,080
|
|
$
4,656
|
|
38.5 %
|
Net (loss) income and
comprehensive (loss) income
|
$
(16,420)
|
|
$
70,868
|
|
$
(87,288)
|
|
nm*
|
NOI1, Total
Portfolio
|
$
23,154
|
|
$
18,684
|
|
$
4,470
|
|
23.9 %
|
NOI1, Same
Community1 Properties
|
$
13,818
|
|
$
12,369
|
|
$
1,449
|
|
11.7 %
|
NOI1,
Non-Same Community1 Properties
|
$
9,336
|
|
$
6,315
|
|
$
3,021
|
|
47.8 %
|
Funds from Operations
("FFO")1
|
$
13,284
|
|
$
9,653
|
|
$
3,631
|
|
37.6 %
|
FFO per
Unit1
|
$
0.23
|
|
$
0.19
|
|
$
0.04
|
|
21.1 %
|
Maintenance capital
expenditures
|
$
(793)
|
|
$
(974)
|
|
$
181
|
|
-18.6 %
|
Escrowed rent guaranty
realized
|
$
-
|
|
$
265
|
|
$
(265)
|
|
nm*
|
Straight line rental
revenue differences
|
$
8
|
|
$
43
|
|
$
(35)
|
|
nm*
|
AFFO1
|
$
12,499
|
|
$
9,093
|
|
$
3,406
|
|
37.5 %
|
AFFO per
Unit1
|
$
0.22
|
|
$
0.17
|
|
$
0.05
|
|
29.4 %
|
Weighted Average Unit
Count
|
58,006,651
|
|
52,130,772
|
|
5,875,879
|
|
11.3 %
|
Unitholders'
equity
|
$
975,749
|
|
$
666,569
|
|
$
309,180
|
|
46.4 %
|
NAV1
|
$
1,243,575
|
|
$
1,032,934
|
|
$
210,641
|
|
20.4 %
|
NAV per
Unit1
|
$
21.75
|
|
$
19.81
|
|
$
1.94
|
|
9.8 %
|
*Percentages have
been excluded for changes which are not considered to be meaningful
for comparative purposes.
|
1Same Community, NOI, NOI
Margin, FFO, FFO per Unit, AFFO, AFFO per Unit, AFFO Payout Ratio,
Debt to Gross Book Value and NAV per Unit are non-IFRS measures.
For a description of the basis of presentation and reconciliations
of the REIT's non-IFRS measures, see "Non-IFRS Measures" in this
news release.
|
Total portfolio revenue of $41.6
million for Q4 2022 increased 22.2% compared to $34.1 million in Q4 2021. The increase was the
result of increases of $2.9 million
from Same Community properties, as described below, and
$6.1 million from property
acquisitions, partially offset by property dispositions that
reduced revenue by $1.6 million.
Revenue from Same Community properties of $24.9 million for Q4 2022 increased 13.3% from
$22.0 million in Q4 2021, primarily
due to a 12.3% increase in average rental rates from $1,225 per apartment unit as of December 31, 2021 to $1,376 per apartment unit as of December 31, 2022.
The decrease in net (loss) income and comprehensive (loss)
income for Q4 2022 compared to Q4 2021 was primarily due to a
change in the fair value adjustment to reduce the estimated fair
value of investment properties by $157.4
million, partially offset by the change in the fair value
adjustment (gain) to derivatives and other financial liabilities of
$59.8 million, and an increase in NOI
over the prior period, discussed below.
The 23.9% increase in total portfolio NOI for Q4 2022 to
$23.2 million compared to
$18.7 million in Q4 2021 was the
result of increases of $1.4 million
from Same Community properties, described below, and $3.8 million from property acquisitions and
non-stabilized properties, partially offset by the reduction in NOI
due to property dispositions of $0.7
million.
The 11.7% increase in Same Community NOI to $13.8 million for Q4 2022 compared to
$12.4 million in Q4 2021 was the
result of the increase in revenue described above, partially offset
by an increase in property operating expenses of $1.5 million due to an increase in payroll,
administrative and repair and maintenance expenses as well as an
increase in the cost of real estate taxes and insurance over the
prior period.
FFO was $13.3 million, or
$0.23 per Unit, for Q4 2022 compared
to $9.7 million, or $0.19 per Unit, for Q4 2021. The increase was
primarily the result of the higher NOI discussed above, partially
offset by an increase of $0.6 million
in finance costs associated with debt incurred for the acquisition
of additional investment properties over the prior period and an
increase in interest rates. Losses on extinguishment of debt and
restructuring costs are excluded from the calculation of FFO.
AFFO was $12.5 million, or
$0.22 per Unit, for Q4 2022, compared
to $9.1 million, or $0.17 per Unit, for Q4 2021. The improvement was
primarily the result of the increase in FFO discussed above,
partially offset by an escrowed rent guaranty realized in the prior
year of $0.3 million. Losses on
extinguishment of debt, restructuring costs and severance/retention
costs on dispositions are excluded from the calculation of
AFFO.
FY 2022 Financial Summary
In thousands of U.S.
dollars, except per unit amounts
|
|
|
|
|
|
FY
2022
|
|
FY
2021
|
|
Change
|
|
Change
%
|
Revenue, Total
Portfolio
|
$
158,518
|
|
$
119,582
|
|
$
38,936
|
|
32.6 %
|
Revenue, Same
Community1 Properties
|
$
94,314
|
|
$
84,439
|
|
$
9,875
|
|
11.7 %
|
Revenue, Non-Same
Community1 Properties
|
$
64,204
|
|
$
35,143
|
|
$
29,061
|
|
82.7 %
|
Net income and
comprehensive income
|
$
227,230
|
|
$
283,214
|
|
$
(55,984)
|
|
nm*
|
NOI1, Total
Portfolio
|
$
85,516
|
|
$
62,911
|
|
$
22,605
|
|
35.9 %
|
NOI1, Same
Community1 Properties
|
$
51,126
|
|
$
45,058
|
|
$
6,068
|
|
13.5 %
|
NOI1,
Non-Same Community1 Properties
|
$
34,390
|
|
$
17,853
|
|
$
16,537
|
|
92.6 %
|
FFO1
|
$
48,068
|
|
$
30,619
|
|
$
17,449
|
|
57.0 %
|
FFO per
Unit1
|
$
0.86
|
|
$
0.60
|
|
$
0.26
|
|
43.3 %
|
Maintenance capital
expenditures
|
$
(3,633)
|
|
$
(3,108)
|
|
$
(525)
|
|
16.9 %
|
Escrowed rent guaranty
realized
|
$
87
|
|
$
2,417
|
|
$
(2,330)
|
|
nm*
|
Severance/retention
costs on dispositions
|
$
-
|
|
$
211
|
|
$
(211)
|
|
nm*
|
Straight line rental
revenue differences
|
$
191
|
|
$
(32)
|
|
$
223
|
|
nm*
|
AFFO1
|
$
44,713
|
|
$
30,107
|
|
$
14,606
|
|
48.5 %
|
AFFO per
Unit1
|
$
0.80
|
|
$
0.59
|
|
$
0.21
|
|
35.6 %
|
Weighted Average Unit
Count
|
56,192,126
|
|
51,407,230
|
|
4,784,896
|
|
9.3 %
|
*Percentages have
been excluded for changes which are not considered to be meaningful
for comparative purposes.
|
1Same Community, NOI, NOI
Margin, FFO, FFO per Unit, AFFO, AFFO per Unit, AFFO Payout Ratio,
Debt to Gross Book Value and NAV per Unit are non-IFRS measures.
For a description of the basis of presentation and reconciliations
of the REIT's non-IFRS measures, see "Non-IFRS Measures" in this
news release.
|
The 32.6% increase in total portfolio revenue for the year ended
December 31, 2022 to $158.5 million compared to $119.6 million for the year ended December 31, 2021 was the result of increases of
$9.9 million from Same Community
properties, $40.3 million from
property acquisitions and $1.1
million from non-stabilized properties, partially offset by
property dispositions that reduced revenue by $12.3 million.
Revenue from Same Community properties for the year ended
December 31, 2022 increased 11.7% to
$94.3 million compared to
$84.4 million for the year ended
December 31, 2021, primarily due to a
12.3% increase in average rental rates from $1,225 per apartment unit as of December 31, 2021 to $1,376 per apartment unit as of December 31, 2022.
The decrease in net income and comprehensive income for the year
ended December 31, 2022 compared to
the year ended December 31, 2021 was
primarily due to a decrease in the fair value adjustment to
investment properties of $350.2
million, partially offset by an increase in NOI, discussed
below, and an increase in the fair value adjustment to derivatives
and other financial liabilities of $263.3
million over the prior period.
The 35.9% increase in total portfolio NOI for the year ended
December 31, 2022 to $85.5 million compared to $62.9 million for the year ended December 31, 2021 was the result of increases of
$6.1 million from Same Community
properties, discussed below, and $22.4
million from property acquisitions and non-stabilized
properties, partially offset by property dispositions which reduced
NOI by $5.8 million.
Severance/retention costs on dispositions are excluded from
NOI.
The 13.5% increase in Same Community NOI for the year ended
December 31, 2022 to $51.1 million compared to $45.1 million for the year ended December 31, 2021 was the result of the increase
in revenue described above, partially offset by an increase in
property operating expenses of $3.8
million due to higher payroll expenses, administrative
expenses, utilities, real estate taxes and property insurance
expense compared to the prior period.
FFO was $48.1 million, or
$0.86 per Unit, for the year ended
December 31, 2022 compared to
$30.6 million, or $0.60 per Unit, for the year ended December 31, 2021. The FFO per Unit increase of
43.3% was primarily the result of higher NOI discussed above,
partially offset by increases of $1.0
million in general and administrative expenses primarily
related to higher share based compensation and payroll expenses and
$4.3 million in finance costs related
to additional debt associated with investment properties acquired
over the prior period and an increase in interest rates. Losses on
extinguishment of debt and restructuring costs are excluded from
the calculation of FFO.
AFFO was $44.7 million, or
$0.80 per Unit, for the year ended
December 31, 2022, compared to
$30.1 million, or $0.59 per Unit, for the year ended December 31, 2021. The AFFO per Unit improvement
of 35.6% was primarily the result of the increase in FFO, discussed
above, partially offset by a lower escrow rent guaranty realized of
$2.3 million and an increase in
maintenance capital expenditures of $0.5
million largely related to the painting of metal railings
and replacing of gutters in Q2 2022. Losses on extinguishment of
debt, restructuring costs and severance/retention costs on
dispositions are excluded from the calculation of AFFO.
Highlights from Recent Four Quarters
In thousands of U.S.
dollars (except per unit amounts)
|
|
|
|
|
|
December 31,
2022
|
|
September 30,
2022
|
|
June 30,
2022
|
|
March 31,
2022
|
Operational
Information
|
|
|
|
|
|
|
|
Number of real estate
investment properties
|
31
|
|
31
|
|
31
|
|
31
|
Total apartment
units
|
8,666
|
|
8,666
|
|
8,666
|
|
8,666
|
Average monthly rent on
in-place leases
|
$
1,482
|
|
$
1,460
|
|
$
1,412
|
|
$
1,350
|
Average monthly rent on
in-place leases,
|
|
|
|
|
|
|
|
Same Community1
Properties
|
$
1,376
|
|
$
1,354
|
|
$
1,307
|
|
$
1,238
|
Weighted average
occupancy rate
|
96.0 %
|
|
94.7 %
|
|
95.0 %
|
|
94.5 %
|
Retention
rate
|
56.3 %
|
|
54.0 %
|
|
57.1 %
|
|
57.3 %
|
Debt to Gross Book
Value1
|
37.3 %
|
|
36.2 %
|
|
36.2 %
|
|
43.2 %
|
|
|
|
|
|
|
|
|
|
Q4
2022
|
|
Q3
2022
|
|
Q2
2022
|
|
Q1
2022
|
Operating
Results
|
|
|
|
|
|
|
|
Revenue, Total
Portfolio
|
$
41,637
|
|
$
40,549
|
|
$
38,787
|
|
$
37,545
|
Revenue, Same
Community1 Properties
|
$
24,901
|
|
$
24,033
|
|
$
23,179
|
|
$
22,201
|
Revenue, Non-Same
Community1 Properties
|
$
16,736
|
|
$
16,516
|
|
$
15,608
|
|
$
15,344
|
NOI1, Total
Portfolio
|
$
23,154
|
|
$
21,719
|
|
$
20,998
|
|
$
19,645
|
NOI1, Same
Community1 Properties
|
$
13,818
|
|
$
12,471
|
|
$
12,718
|
|
$
12,119
|
NOI1,
Non-Same Community1 Properties
|
$
9,336
|
|
$
9,248
|
|
$
8,280
|
|
$
7,526
|
NOI Margin1,
Total Portfolio
|
55.6 %
|
|
53.6 %
|
|
54.1 %
|
|
52.3 %
|
NOI Margin1,
Same Community1 Properties
|
55.5 %
|
|
51.9 %
|
|
54.9 %
|
|
54.6 %
|
NOI Margin1,
Non-Same Community1 Properties
|
55.8 %
|
|
56.0 %
|
|
53.0 %
|
|
49.0 %
|
Net (loss) income and
comprehensive
|
|
|
|
|
|
|
|
(loss)
income
|
$
(16,420)
|
|
$
23,787
|
|
$
160,832
|
|
$
59,031
|
Distributions on Class
B Units
|
$
2,670
|
|
$
2,671
|
|
$
2,678
|
|
$
2,648
|
Fair value adjustment
to investment properties
|
$
43,071
|
|
$
23,449
|
|
$
(20,258)
|
|
$
(118,789)
|
Fair value adjustment
to investment
|
|
|
|
|
|
|
|
properties
(IFRIC 21)
|
$
8,961
|
|
$
5,635
|
|
$
7,732
|
|
$
(22,328)
|
Property tax liability
adjustment, net (IFRIC 21)
|
$
(8,961)
|
|
$
(5,635)
|
|
$
(7,732)
|
|
$
22,328
|
Fair value adjustment
to derivatives and other
|
|
|
|
|
|
|
|
financial
liabilities
|
$
(17,274)
|
|
$
(38,330)
|
|
$
(129,842)
|
|
$
65,607
|
Fair value adjustment
to unit-based
|
|
|
|
|
|
|
|
compensation
|
$
(396)
|
|
$
(354)
|
|
$
(1,771)
|
|
$
2,569
|
Restructuring
costs
|
$
1,630
|
|
$
-
|
|
$
-
|
|
$
-
|
Loss on extinguishment
of debt
|
$
-
|
|
$
853
|
|
$
-
|
|
$
-
|
Principal payments on
lease liability
|
$
(31)
|
|
$
(27)
|
|
$
(35)
|
|
$
(34)
|
Depreciation of
right-to-use asset
|
$
34
|
|
$
33
|
|
$
33
|
|
$
33
|
FFO1
|
$
13,284
|
|
$
12,082
|
|
$
11,637
|
|
$
11,065
|
FFO per Unit
|
$
0.23
|
|
$
0.21
|
|
$
0.21
|
|
$
0.21
|
Maintenance capital
expenditures
|
$
(793)
|
|
$
(920)
|
|
$
(1,218)
|
|
$
(702)
|
Escrowed rent guaranty
realized
|
$
-
|
|
$
-
|
|
$
5
|
|
$
82
|
Straight line rental
revenue differences
|
$
8
|
|
$
47
|
|
$
54
|
|
$
82
|
AFFO1
|
$
12,499
|
|
$
11,209
|
|
$
10,478
|
|
$
10,527
|
AFFO per
Unit1
|
$
0.22
|
|
$
0.19
|
|
$
0.19
|
|
$
0.20
|
AFFO Payout
Ratio
|
59.6 %
|
|
67.2 %
|
|
71.8 %
|
|
63.3 %
|
Weighted Average Unit
Count
|
58,006,651
|
|
58,205,337
|
|
56,290,702
|
|
52,179,657
|
1Same Community, NOI, NOI
Margin, FFO, FFO per Unit, AFFO, AFFO per Unit, AFFO Payout Ratio,
Debt to Gross Book Value and NAV per Unit are non-IFRS measures.
For a description of the basis of presentation and reconciliations
of the REIT's non-IFRS measures, see "Non-IFRS Measures" in this
news release.
|
Liquidity and Capital Structure
As of December 31, 2022, the REIT
had liquidity of $166.7 million,
consisting of cash and cash equivalents of $7.2 million and $159.5
million available under its revolving credit facility. The
REIT also can obtain additional liquidity by adding properties to
the borrowing base of the revolving credit facility.
As of December 31, 2022, the REIT
had total mortgage notes payable of $499.1
million, excluding the credit facility, with a weighted
average contractual interest rate of 3.3% and a weighted average
term to maturity of 5.1 years. Total loans and borrowings of the
REIT as of December 31, 2022 were
$726.4 million with a weighted
average contractual interest rate of 3.4%, excluding the
convertible unsecured subordinated debentures (the "Convertible
Debentures"). Debt to Gross Book Value excluding the convertible
debentures as of December 31, 2022
was 35.2%. As of December 31, 2022,
90% of the REIT's debt was fixed or economically hedged to fixed
rates. Following the commencement of our $65
million swap beginning on January 3,
2023, 99% of the REIT's debt will be fixed or economically
hedged to fixed rates at a weighted average contractual interest
rate of 3.2%.
As of December 31, 2022, the REIT
had outstanding Convertible Debentures valued at $42.6 million at a contractual interest rate of
5%, maturing on September 30, 2025
with a conversion price of $14.40 per
Unit.
On December 8, 2021, the REIT
announced an at-the-market equity program (the "ATM Program") that
allows the REIT to issue up to $150
million of Units from treasury to the public from time to
time, at the REIT's discretion. The ATM Program is effective until
the earlier of (i) the issuance and sale of all of the Units
through the agents on the terms and conditions set forth in the
equity distribution agreement, (ii) the Shelf Prospectus ceasing to
be effective on January 1, 2024, and
(iii) the termination of the equity distribution agreement. As of
December 31, 2022, no Units have been
issued under the ATM Program.
On April 29, 2022, the REIT
completed the April 2022 equity
offering for gross proceeds of $115.1
million, after the full exercise of the underwriters'
overallotment option.
On October 3, 2022, the Toronto
Stock Exchange accepted the REIT's notice of intention to make a
NCIB for up to a maximum of approximately 3.3 million of its issued
and outstanding Units. The REIT may purchase Units for a
twelve-month period beginning on October 6,
2022 and the NCIB will terminate on October 5, 2023. The REIT purchased and canceled
1,079,507 Units under its NCIB and related automatic securities
purchase plan at an average price of $13.55 per Unit, through December 31, 2022.
Distributions and Units Outstanding
Cash distributions declared to holders of Units and holders of
Class B Units totalled $7.5 million
for Q4 2022, representing an AFFO Payout
Ratio1 of 59.6%. 100% of the REIT's cash
distributions were classified as return of capital. As of
December 31, 2022, the total number
of Units outstanding was 36,309,281. There were also 20,554,586
Class B Units outstanding, which are redeemable for Units on a
one-for-one basis.
2023 Earnings and Same Community Portfolio Guidance
The REIT's initial 2023 guidance is outlined below for FFO per
Unit and AFFO per Unit, along with its expectations for Same
Community Properties for revenue, property operating expense and
NOI in 2023. The guidance does not include acquisitions,
dispositions or future growth from the impact of properties
currently under development. The REIT will update this guidance on
a quarterly basis as necessary.
|
Initial guidance for
2023
|
Per
Unit
|
Range
|
Midpoint
|
Total
Portfolio
|
|
|
FFO per Unit
|
$0.90 to
$0.96
|
$0.93
|
AFFO per
Unit
|
$0.83 to
$0.89
|
$0.86
|
|
|
|
Same Community
Growth
|
|
|
Total
Revenue
|
5.0% to 7.0%
|
6.0 %
|
Property Operating
Expenses
|
4.0% to 6.0%
|
5.0 %
|
NOI
|
6.0% to 8.0%
|
7.0 %
|
Non-IFRS measures are presented to illustrate alternative
relevant measures to assess the REIT's performance. See
"Non-IFRS Measures" in this news release. See also
"Forward-Looking Information", as the figures presented above are
considered "financial outlook" for purposes of applicable Canadian
securities laws and may not be appropriate for purposes other than
to understand management's current expectations relating to the
future growth of the REIT. Although the REIT believes
that its anticipated future results, performance or achievements
expressed or implied by the forward-looking statements and
information are based upon reasonable assumptions and expectations,
the reader should not place undue reliance on forward-looking
statements and information. The REIT reviews its key assumptions
regularly and may change its outlook on a going-forward basis if
necessary.
Conference Call
Dan Oberste, President and Chief
Executive Officer, and Brandon
Barger, Chief Financial Officer, will host a conference call
for analysts and investors on Thursday March
9th, 2023 at 12:00 pm
(ET). Participants can register and enter their phone
number at https://bit.ly/3Rh5Wnw to receive an instant
automated call back. Alternatively, they can dial 416-764-8688 or
1-888-390-0546 to reach a live operator who will join them into the
call. In addition, the call will be webcast live
at: https://app.webinar.net/qXG4350jDr9.
A replay of the call will be available until Thursday, March 16th, 2023. To access
the replay, dial 416-764-8677 or 888-390-0541 (Passcode: 157993#).
A transcript of the call will be archived on the REIT's
website.
About BSR Real Estate Investment
Trust
BSR Real Estate Investment Trust is an internally managed,
unincorporated, 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.
Non-IFRS Measures
Same Community, NOI, NOI Margin, FFO, FFO per Unit, AFFO, AFFO
per Unit, AFFO Payout Ratio, Debt to Gross Book Value, NAV and NAV
per Unit are key measures of performance 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. Same Community, NOI, NOI Margin, FFO, FFO per Unit, AFFO,
AFFO per Unit, AFFO Payout Ratio, Debt to Gross Book Value, NAV and
NAV per Unit as calculated by the REIT may not be comparable to
similar measures presented by other issuers. For complete
definitions of these measures, as well as an explanation of their
composition and how the measures provide useful information to
investors, please refer to the section titled "Non-IFRS Measures"
in the REIT's Management's Discussion and Analysis for the three
months and year ended December 31,
2022, which section is hereby incorporated herein by
reference.
|
|
|
|
|
|
Three months
ended
December 31, 2022
|
|
Three months
ended
December 31, 2021
|
|
Year ended
December 31, 2022
|
|
Year ended
December 31, 2021
|
Net income and
comprehensive income
|
|
$
(16,420)
|
|
$
70,868
|
|
$
227,230
|
|
$
283,214
|
Adjustments to
arrive at FFO
|
|
|
|
|
|
|
|
|
|
Distributions on Class
B Units
|
|
2,670
|
|
2,595
|
|
10,667
|
|
10,638
|
|
Fair value adjustment
to investment properties
|
|
43,071
|
|
(114,282)
|
|
(72,527)
|
|
(422,748)
|
|
Fair value adjustment
to investment properties (IFRIC 21)
|
|
8,961
|
|
5,057
|
|
—
|
|
2,993
|
|
Property tax liability
adjustment, net (IFRIC 21)
|
|
(8,961)
|
|
(5,057)
|
|
—
|
|
(2,993)
|
|
Fair value adjustment
to derivatives and other financial
|
|
|
|
|
|
|
|
|
|
liabilities
|
|
(17,274)
|
|
42,512
|
|
(119,839)
|
|
143,477
|
|
Fair value adjustment
to unit-based compensation
|
|
(396)
|
|
905
|
|
48
|
|
2,972
|
|
Restructuring
costs
|
|
1,630
|
|
—
|
|
1,630
|
|
—
|
|
Costs of disposition of
investment properties
|
|
—
|
|
1,518
|
|
—
|
|
3,207
|
|
Loss on extinguishment
of debt
|
|
—
|
|
5,538
|
|
853
|
|
9,861
|
|
Principal payments on
lease liability
|
|
(31)
|
|
(33)
|
|
(127)
|
|
(132)
|
|
Depreciation of
right-to-use asset
|
|
34
|
|
32
|
|
133
|
|
130
|
Funds from
Operations ("FFO")
|
|
$
13,284
|
|
$
9,653
|
|
$
48,068
|
|
$
30,619
|
FFO per
Unit
|
|
$
0.23
|
|
$
0.19
|
|
$
0.86
|
|
$
0.60
|
Adjustments to
arrive at AFFO
|
|
|
|
|
|
|
|
|
|
Maintenance capital
expenditures
|
|
(793)
|
|
(974)
|
|
(3,633)
|
|
(3,108)
|
|
Escrowed rent guaranty
realized
|
|
—
|
|
265
|
|
87
|
|
2,417
|
|
Severance/retention
costs on dispositions
|
|
—
|
|
106
|
|
—
|
|
211
|
|
Straight line rental
revenue differences
|
|
8
|
|
43
|
|
191
|
|
(32)
|
Adjusted Funds from
Operations ("AFFO")
|
|
$
12,499
|
|
$
9,093
|
|
$
44,713
|
|
$
30,107
|
AFFO per
Unit
|
|
$
0.22
|
|
$
0.17
|
|
$
0.80
|
|
$
0.59
|
Distributions
declared
|
|
$
7,451
|
|
$
6,495
|
|
$
29,170
|
|
$
25,708
|
AFFO Payout
Ratio
|
|
59.6 %
|
|
71.4 %
|
|
65.2 %
|
|
85.4 %
|
Weighted average
unit count
|
|
58,006,651
|
|
52,130,772
|
|
56,192,126
|
|
51,407,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
December 31, 2022
|
|
Three months
ended
December 31, 2021
|
|
Year ended
December 31, 2022
|
|
Year ended
December 31, 2021
|
Total
revenue
|
|
$
41,637
|
|
$
34,061
|
|
$
158,518
|
|
$
119,582
|
Property operating
expenses
|
|
(11,904)
|
|
(9,745)
|
|
(45,804)
|
|
(36,387)
|
Real estate
taxes
|
|
2,382
|
|
(687)
|
|
(27,198)
|
|
(17,501)
|
|
|
|
|
|
|
32,115
|
|
23,629
|
|
85,516
|
|
65,694
|
Property tax liability
adjustment (IFRIC 21)
|
|
(8,961)
|
|
(5,057)
|
|
—
|
|
(2,993)
|
Severance/retention
costs on dispositions
|
|
—
|
|
106
|
|
—
|
|
211
|
Net Operating Income
("NOI")
|
|
$
23,154
|
|
$
18,678
|
|
$
85,516
|
|
$
62,912
|
NOI
margin
|
|
55.6 %
|
|
54.8 %
|
|
53.9 %
|
|
52.6 %
|
|
|
|
|
|
|
|
|
December 31,
2022
|
|
December 31,
2021
|
Loans and borrowings
(current portion)
|
|
|
|
$
1,779
|
|
$
1,714
|
Loans and borrowings
(non-current portion)
|
|
|
|
724,581
|
|
824,767
|
Convertible
debentures
|
|
|
|
42,599
|
|
51,745
|
Total loans and
borrowings and convertible debentures ("Debt")
|
|
|
|
768,959
|
|
878,226
|
Gross Book
Value
|
|
|
|
$
2,063,275
|
|
$
1,948,095
|
Debt to Gross Book
Value
|
|
|
|
37.3 %
|
|
45.1 %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31,
2022
|
|
December 31,
2021
|
Unitholders'
equity
|
|
|
|
$
975,749
|
|
$
666,569
|
Class B
Units
|
|
|
|
267,826
|
|
366,365
|
NAV
|
|
|
|
|
|
$
1,243,575
|
|
$
1,032,934
|
Unit count, as of the
end of period
|
|
|
|
57,169,893
|
|
52,142,519
|
NAV per
Unit
|
|
|
|
$
21.75
|
|
$
19.81
|
Forward-Looking Statements
This news release contains forward-looking information within
the meaning of applicable Canadian securities legislation
(collectively, "forward-looking statements"). Forward-looking
statements in this news release include, but are not limited to,
statements which reflect management's expectations regarding
objectives, plans, goals, strategies, future growth (including 2023
guidance for FFO, AFFO, and Same Community metrics Revenue,
Property Expenses and NOI growth), results of operations,
performance, business prospects, and opportunities for the REIT.
The words "expects", "expectation", "anticipates", "anticipated",
"believes", "will" or variations of such words and phrases identify
forward-looking statements herein. Statements
containing forward-looking information are not historical facts but
instead represent management's expectations, estimates and
projections regarding future events or circumstances.
Forward-looking information is based on a number of assumptions and
is subject to a number of risks and uncertainties, many of which
are beyond the REIT's control that could cause actual results and
events to differ materially from those that are disclosed in or
implied by such forward-looking information. The REIT's estimates,
beliefs and assumptions, which may prove to be incorrect, include
assumptions relating to the REIT's future growth potential, results
of operations, demographic and industry trends, no changes in
legislative or regulatory matters, the tax laws as currently in
effect, a gradual recovery and growth of the general economy over
2023, the impact of COVID-19, lease renewals and rental increases,
the ability to re-lease or find new tenants, the timing and ability
of the REIT to sell certain properties, project costs and timing, a
continuing trend toward land use intensification at reasonable
costs and development yields, including residential development in
urban markets, access to equity and debt capital markets to fund,
at acceptable costs, future capital requirements and to enable
refinancing of debts as they mature, the availability of investment
opportunities for growth in the REIT's target markets, the
valuations to be realized on property sales relative to current
IFRS values, and the market price of the Units . When
relying on forward-looking statements to make decisions, the REIT
cautions readers not to place undue reliance on these statements,
as forward-looking statements involve significant risks and
uncertainties. The risks and uncertainties that may impact such
forward-looking information include, but are not limited to, the
REIT's ability to execute its growth strategies, the impact of
changing conditions in the U.S. multifamily housing market,
increasing competition in the U.S. multifamily housing market, the
effect of fluctuations and cycles in the U.S. real estate market,
the marketability and value of the REIT's portfolio, changes in the
attitudes, financial condition and demand of the REIT's demographic
market, fluctuation in interest rates and volatility in financial
markets, developments and changes in applicable laws and
regulations, the impact of climate change, the impact of COVID-19
on the operations, business and financial results of the REIT and
the factors discussed under "Risks and Uncertainties" in the REIT's
Management's Discussion and Analysis for the three months and year
ended December 31, 2022 and in the
REIT's Annual Information Form dated March
8, 2022, both of which are available on SEDAR
(www.sedar.com). If any risks or uncertainties with respect to the
above materialize, or if the opinions, estimates or assumptions
underlying the forward-looking information prove incorrect, actual
results or future events might vary materially from those
anticipated in the forward-looking information. The REIT does not
undertake any obligation to update such forward-looking
information, whether as a result of new information, future events
or otherwise, except as expressly required by applicable law. This
forward-looking information speaks only as of the date of this news
release.
Certain statements included in this news release, including
with respect to 2023 FFO, AFFO and Same Community portfolio
guidance, are considered financial outlook for purposes of
applicable Canadian securities laws, and as such, the financial
outlook may not be appropriate for purposes other than to
understand management's current expectations relating to the future
growth of the REIT, as disclosed in this news release. These
forward-looking statements have been approved by management to be
made as at the date of this news release. Certain material factors,
estimates or assumptions were applied in drawing a conclusion or
making a forecast or projection as reflected in this news release
and actual results could differ materially from such conclusions,
forecasts or projections. There can be no assurance that actual
results, performance or achievements will be consistent with these
forward-looking statements. The forward-looking statements
contained in this document are expressly qualified in their
entirety by this cautionary statement.
SOURCE BSR Real Estate Investment Trust