LITTLE
ROCK, Ark. and TORONTO, Nov. 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 and nine months ended September 30, 2023 ("Q3 2023" and "YTD 2023",
respectively). All comparisons 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 Q3 2023 and YTD 2023
and the three months and nine months ended September 30, 2022 ("Q3 2022" and "YTD 2022",
respectively), thus removing the impact of acquisitions,
dispositions and non-stabilized properties. Condensed Consolidated
Interim Financial Statements and Management's Discussion and
Analysis as of and for the three and nine months ended September 30, 2023 are available on the REIT's
website at www.bsrreit.com and at www.sedarplus.ca.
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 trust
units of the REIT ("Units"), Class B Units of BSR Trust, LLC
("Class B Units") and issued Deferred Units.
"Q3 2023 proved to be strong as anticipated with AFFO per Unit
increasing 10.5% and Same Community NOI increasing 7.0% over Q3
2022," said Dan Oberste, the REIT's
President and Chief Executive Officer. "These results reflect the
outstanding market fundamentals in our core Texas markets, which continue to attract
residents and businesses from other jurisdictions. And with the
recent reduction of real estate taxes in the state, it is now more
attractive than ever for them to relocate to our markets."
Q3 2023 Highlights
- FFO per Unit1 for Q3 2023 of $0.23 increased 8.3% over Q3 2022;
- AFFO per Unit1 for Q3 2023 of $0.21 increased 10.5% over Q3 2022;
- Weighted average rent increased 3.0% to $1,504 per apartment unit as of September 30, 2023 compared to $1,460 as of September 30,
2022;
- Excluding short term leases, rental rates for new leases and
renewals changed -0.2% and 5.6%, respectively, over the prior
leases, resulting in a blended increase of 2.7%;
- Same Community1 revenues for Q3 2023 increased 3.9%
over Q3 2022;
- Same Community1 Net Operating Income
("NOI")1 for Q3 2023 increased 7.0% over Q3 2022;
- During Q3 2023, the REIT's AFFO Payout Ratio1 was
61.6% compared to 67.2% during Q3 2022;
- Weighted average occupancy was 95.2% as of September 30, 2023 compared to 94.7% as of
September 30, 2022;
- Debt to Gross Book Value1 excluding Convertible
Debentures (as defined below) as of September 30, 2023 was 39.2%;
- During Q3 2023, the REIT used excess cash from operations to
pay down $9.0 million on its
revolving credit facility;
- In September 2023, the REIT
extended $160 million of mortgage
notes by one year to September 13,
2025, with no other contractual changes as a result of the
extension; and
- During Q3 2023, the REIT purchased and canceled 11,700 Units
under its normal course issuer bid ("NCIB") and automatic
securities purchase plan ("ASPP") at an average price of
$12.46 per Unit.
Subsequent Highlights
- On October 4, 2023, the REIT
renewed its NCIB for the 12-month period through October 5, 2024, permitting the REIT to purchase
for cancellation up to a maximum of 3,186,336 Units, or
approximately 10% of the public float as of September 27, 2023, over the 12-month period
commencing October 6, 2023. The REIT
concurrently renewed the ASPP.
- In October 2023, since the
commencement of the renewed NCIB, the REIT purchased and cancelled
44,800 Units under the renewed NCIB and ASPP at an average price of
$10.73 per Unit.
- On November 1, 2023, the REIT
entered into a new $65 million
interest rate swap at a fixed rate of 3.27% effective July 1, 2024 and maturing January 31, 2031, subject to the counterparty's
optional early termination date of January
2, 2025.
- On November 3, 2023, the REIT
entered into a new $60 million
interest rate swap at a fixed rate of 3.537% effective January 2, 2024 and maturing January 2, 2031, subject to the counterparty's
optional early termination date of January
1, 2025.
____________________________
|
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.
|
Q3 2023 Financial Summary
In thousands of U.S. dollars, except per unit amounts
|
Q3
2023
|
|
Q3
2022
|
|
Change
|
|
Change
%
|
Revenue, Total
Portfolio
|
$
42,079
|
|
$
40,549
|
|
$
1,530
|
|
3.8 %
|
Revenue, Same
Community1 Properties
|
$
40,016
|
|
$
38,518
|
|
$
1,498
|
|
3.9 %
|
Revenue, Non-Same
Community1 Properties
|
$
2,063
|
|
$
2,031
|
|
$
32
|
|
1.6 %
|
Net (loss) income and
comprehensive (loss) income
|
$
(79,286)
|
|
$
23,787
|
|
$
(103,073)
|
|
nm*
|
NOI1, Total
Portfolio
|
$
22,694
|
|
$
21,719
|
|
$
975
|
|
4.5 %
|
NOI1, Same Community1
Properties
|
$
21,658
|
|
$
20,247
|
|
$
1,411
|
|
7.0 %
|
NOI1, Non-Same
Community1 Properties
|
$
1,036
|
|
$
1,472
|
|
$
(436)
|
|
-29.6 %
|
Funds from Operations
("FFO")1
|
$
13,081
|
|
$
12,082
|
|
$
999
|
|
8.3 %
|
FFO per
Unit1
|
$
0.23
|
|
$
0.21
|
|
$
0.02
|
|
9.5 %
|
Maintenance capital
expenditures
|
$
(1,141)
|
|
$
(920)
|
|
$
(221)
|
|
24.0 %
|
Straight line rental
revenue differences
|
$
(2)
|
|
$
47
|
|
$
(49)
|
|
nm*
|
AFFO1
|
$
11,938
|
|
$
11,209
|
|
$
729
|
|
6.5 %
|
AFFO per
Unit1
|
$
0.21
|
|
$
0.19
|
|
$
0.02
|
|
10.5 %
|
Weighted Average Unit
Count
|
56,930,050
|
|
58,205,337
|
|
(1,275,287)
|
|
-2.2 %
|
Unitholders'
equity
|
$
817,661
|
|
$
1,011,580
|
|
$
(193,919)
|
|
-19.2 %
|
NAV1
|
$
1,062,395
|
|
$
1,299,344
|
|
$
(236,949)
|
|
-18.2 %
|
NAV per
Unit1
|
$
18.66
|
|
$
22.32
|
|
$
(3.66)
|
|
-16.4 %
|
*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 $42.1
million for Q3 2023 increased 3.8% compared to $40.5 million in Q3 2022. Same Community
properties contributed $1.5 million
to the overall increase, as described below.
Revenue from Same Community properties of $40.0 million for Q3 2023 increased 3.9% from
$38.5 million in Q3 2022, primarily
due to a 3.1% increase in average rental rates from $1,452 per apartment unit as of September 30, 2022 to $1,497 per apartment unit as of September 30, 2023.
The net (loss) income and comprehensive (loss) income change
between Q3 2023 and Q3 2022 is primarily due to non-cash
adjustments to fair values of investment properties and derivatives
and other financial liabilities from June
30, 2023 to September 30, 2023
and June 30, 2022 to September 30, 2022, respectively, and is not
considered comparable period over period.
The 4.5% increase in total portfolio NOI for Q3 2023 to
$22.7 million compared to
$21.7 million in Q3 2022 was the
result of increases of $1.4 million
from Same Community properties, described below, partially offset
by the reduction from Non-Same Community properties of $0.4 million due to real estate tax refunds
received during Q3 2022 related to properties sold in 2021.
The 7.0% increase in Same Community NOI to $21.7 million for Q3 2023 compared to
$20.2 million in Q3 2022 was the
result of the increase in revenue described above, as well as a
$0.7 million decrease in real estate
taxes, primarily due to revised 2023 tax assessments, partially
offset by an increase in property operating expenses of
$0.8 million due to higher repair and
maintenance expenses, payroll costs and property insurance.
FFO was $13.1 million, or
$0.23 per Unit, for Q3 2023 compared
to $12.1 million, or $0.21 per Unit, for Q3 2022. The improvement was
primarily the result of the higher NOI discussed above as well as a
decrease of $0.3 million in finance
costs (net of finance income primarily from interest rate swaps,
excluding the loss on extinguishment of debt in the comparative
period), partially offset by $0.3
million additional general and administrative expenses.
AFFO was $12.0 million, or
$0.21 per Unit, for Q3 2023, compared
to $11.2 million, or $0.19 per Unit, for Q3 2022. The improvement was
primarily the result of the increase in FFO discussed above,
partially offset by an increase in maintenance capital
expenditures.
Net Asset Value was $1.1 billion,
or $18.66 per unit, as of
September 30, 2023 compared to
$1.3 billion, or $22.32 per unit, as of September 30, 2022. The decrease is primarily due
to a decrease in fair value driven primarily by capitalization rate
expansion subsequent to September 30,
2022 (net of the impact of increases in NOI).
YTD 2023 Financial Summary
In thousands of U.S. dollars, except per unit amounts
|
YTD
2023
|
|
YTD
2022
|
|
Change
|
|
Change
%
|
Revenue, Total
Portfolio
|
$
125,707
|
|
$
116,881
|
|
$
8,826
|
|
7.6 %
|
Revenue, Same
Community1 Properties
|
$
119,572
|
|
$
111,007
|
|
$
8,565
|
|
7.7 %
|
Revenue, Non-Same
Community1 Properties
|
$
6,135
|
|
$
5,874
|
|
$
261
|
|
4.4 %
|
Net (loss) income and
comprehensive (loss) income
|
$
(141,340)
|
|
$
243,650
|
|
$
(384,990)
|
|
nm*
|
NOI1, Total
Portfolio
|
$
68,576
|
|
$
62,362
|
|
$
6,214
|
|
10.0 %
|
NOI1, Same Community1
Properties
|
$
65,565
|
|
$
58,556
|
|
$
7,009
|
|
12.0 %
|
NOI1, Non-Same
Community1 Properties
|
$
3,011
|
|
$
3,806
|
|
$
(795)
|
|
-20.9 %
|
FFO1
|
$
39,377
|
|
$
34,784
|
|
$
4,593
|
|
13.2 %
|
FFO per
Unit1
|
$
0.69
|
|
$
0.63
|
|
$
0.06
|
|
9.5 %
|
Maintenance capital
expenditures
|
$
(3,474)
|
|
$
(2,840)
|
|
$
(634)
|
|
22.3 %
|
Escrowed rent guaranty
realized
|
$
—
|
|
$
87
|
|
$
(87)
|
|
nm*
|
Straight line rental
revenue differences
|
$
68
|
|
$
183
|
|
$
(115)
|
|
nm*
|
AFFO1
|
$
35,971
|
|
$
32,214
|
|
$
3,757
|
|
11.7 %
|
AFFO per
Unit1
|
$
0.63
|
|
$
0.58
|
|
$
0.05
|
|
8.6 %
|
Weighted Average Unit
Count
|
57,112,882
|
|
55,580,637
|
|
1,532,245
|
|
2.8 %
|
*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 $125.7
million for YTD 2023 increased 7.6% compared to $116.9 million in YTD 2022. Same Community
properties contributed $8.6 million,
as described below, and the non-stabilized property contributed
$0.3 million to the overall
increase.
Revenue from Same Community properties of $119.6 million for YTD 2023 increased 7.7% from
$111.0 million in YTD 2022, primarily
due to a 3.1% increase in average rental rates from $1,452 per apartment unit as of September 30, 2022 to $1,497 per apartment unit as of September 30, 2023.
The net (loss) income and comprehensive (loss) income change
between YTD 2023 and YTD 2022 is primarily due to non-cash
adjustments to fair values of investment properties and derivatives
and other financial liabilities from December 31, 2022 to September 30, 2023 and December 31, 2021 to September 30, 2022, respectively, and is not
considered comparable period over period.
The 10.0% increase in total portfolio NOI for YTD 2023 to
$68.6 million compared to
$62.4 million in YTD 2022 was the
result of an increase of $7.0 million
from Same Community properties, described below, partially offset
by a reduction from Non-Same Community properties of $0.8 million due to real estate tax refunds
received during Q3 2022 related to properties sold in
2021.
The 12.0% increase in Same Community NOI to $65.6 million for YTD 2023 compared to
$58.6 million for YTD 2022 was the
result of the increase in revenue described above, as well as a
$1.0 million decrease in real estate
taxes, primarily due to revised 2023 tax assessments, partially
offset by higher property operating expenses of $2.5 million due to an increase in payroll costs,
repair and maintenance expenses and the cost of insurance over the
comparative period.
FFO was $39.4 million, or
$0.69 per Unit, for YTD 2023 compared
to $34.8 million, or $0.63 per Unit, for YTD 2022. The increase was
primarily the result of the higher NOI discussed above, partially
offset by an increase of $0.8 million
in finance costs (net of finance income primarily from interest
rate swaps) associated with an increase in interest rates versus
the comparative period as well as an increase of $0.8 million in general and administrative
expenses due to higher payroll expenses, travel costs and
consulting fees.
AFFO was $36.0 million, or
$0.63 per Unit, for the nine months
ended September 30, 2023 compared to
$32.2 million, or $0.58 per Unit, for the nine months ended
September 30, 2022. The improvement
was primarily the result of the increase in FFO discussed above,
partially offset by higher maintenance capital expenditures of
$0.6 million. The increase in
maintenance capital expenditures is primarily due to roof
replacements and balcony restoration at Wimbledon Green and
Westwood Park in the second quarter
of 2023.
Highlights from Recent Four Quarters
In thousands of U.S. dollars (except per unit
amounts)
|
September 30,
2023
|
|
June 30,
2023
|
|
March 31,
2023
|
|
December 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
|
$
1,504
|
|
$
1,501
|
|
$
1,489
|
|
$
1,482
|
Average monthly rent on
in-place leases,
|
|
|
|
|
|
|
|
Same Community1
Properties
|
$
1,497
|
|
$
1,495
|
|
$
1,482
|
|
$
1,475
|
Weighted average
occupancy rate
|
95.2 %
|
|
95.3 %
|
|
95.9 %
|
|
96.0 %
|
Retention
rate
|
56.0 %
|
|
56.0 %
|
|
52.5 %
|
|
56.3 %
|
Debt to Gross Book
Value1
|
41.3 %
|
|
39.4 %
|
|
38.4 %
|
|
37.3 %
|
|
Q3
2023
|
|
Q2
2023
|
|
Q1
2023
|
|
Q4
2022
|
Operating
Results
|
|
|
|
|
|
|
|
Revenue, Total
Portfolio
|
$
42,079
|
|
$
42,043
|
|
$
41,585
|
|
$
41,637
|
Revenue, Same
Community1 Properties
|
$
40,016
|
|
$
39,992
|
|
$
39,564
|
|
$
39,604
|
Revenue, Non-Same
Community1 Properties
|
$
2,063
|
|
$
2,051
|
|
$
2,021
|
|
$
2,033
|
NOI1, Total
Portfolio
|
$
22,694
|
|
$
23,044
|
|
$
22,838
|
|
$
23,154
|
NOI1, Same
Community1 Properties
|
$
21,658
|
|
$
22,037
|
|
$
21,870
|
|
$
21,970
|
NOI1, Non-Same
Community1 Properties
|
$
1,036
|
|
$
1,007
|
|
$
968
|
|
$
1,184
|
NOI Margin1, Total
Portfolio
|
53.9 %
|
|
54.8 %
|
|
54.9 %
|
|
55.6 %
|
NOI Margin1, Same
Community1 Properties
|
54.1 %
|
|
55.1 %
|
|
55.3 %
|
|
55.5 %
|
NOI Margin1, Non-Same
Community1 Properties
|
50.2 %
|
|
49.1 %
|
|
47.9 %
|
|
58.2 %
|
Net (loss) income and
comprehensive (loss) income
|
$
(79,286)
|
|
$
(45,916)
|
|
$
(16,138)
|
|
$
(16,420)
|
Distributions on Class
B Units
|
$
2,663
|
|
$
2,665
|
|
$
2,668
|
|
$
2,670
|
Fair value adjustment
to investment properties
|
$
111,080
|
|
$
71,805
|
|
$
16,526
|
|
$
43,071
|
Fair value adjustment
to investment
|
|
|
|
|
|
|
|
properties
(IFRIC 21)
|
$
7,814
|
|
$
7,746
|
|
$
(22,163)
|
|
$
8,961
|
Property tax liability
adjustment, net (IFRIC 21)
|
$
(7,814)
|
|
$
(7,746)
|
|
$
22,163
|
|
$
(8,961)
|
Fair value adjustment
to derivatives and other
|
|
|
|
|
|
|
|
financial
liabilities
|
$
(20,913)
|
|
$
(15,107)
|
|
$
8,964
|
|
$
(17,274)
|
Fair value adjustment
to unit-based compensation
|
$
(464)
|
|
$
(170)
|
|
$
997
|
|
$
(396)
|
Restructuring
costs
|
$
-
|
|
$
-
|
|
$
-
|
|
$
1,630
|
Principal payments on
lease liability
|
$
(33)
|
|
$
(33)
|
|
$
(31)
|
|
$
(31)
|
Depreciation of
right-to-use asset
|
$
34
|
|
$
33
|
|
$
33
|
|
$
34
|
FFO1
|
$
13,081
|
|
$
13,277
|
|
$
13,019
|
|
$
13,284
|
FFO per Unit
|
$
0.23
|
|
$
0.23
|
|
$
0.23
|
|
$
0.23
|
Maintenance capital
expenditures
|
$
(1,141)
|
|
$
(1,776)
|
|
$
(557)
|
|
$
(793)
|
Straight line rental
revenue differences
|
$
(2)
|
|
$
25
|
|
$
45
|
|
$
8
|
AFFO1
|
$
11,938
|
|
$
11,526
|
|
$
12,507
|
|
$
12,499
|
AFFO per
Unit1
|
$
0.21
|
|
$
0.20
|
|
$
0.22
|
|
$
0.22
|
AFFO Payout
Ratio
|
61.6 %
|
|
63.9 %
|
|
59.1 %
|
|
59.6 %
|
Weighted Average Unit
Count
|
56,930,050
|
|
57,199,497
|
|
57,212,200
|
|
58,006,651
|
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 September 30, 2023, the REIT
had liquidity of $200.1 million,
consisting of cash and cash equivalents of $3.9 million and $196.2
million available under its revolving credit facility. The
REIT also has the flexibility to obtain additional liquidity by
adding properties to the borrowing base of the revolving credit
facility.
As of September 30, 2023, the REIT
had total mortgage notes payable of $497.7
million, excluding the revolving credit facility and
construction loan for the investment property under development,
with a weighted average contractual interest rate of 3.3% and a
weighted average term to maturity of 4.7 years. In aggregate,
mortgage notes payable and the revolving credit facility total
$745.8 million as of September 30, 2023 with a weighted average
contractual interest rate of 3.2%, which excludes the convertible
unsecured subordinated debentures (the "Convertible Debentures")
and the construction loan for the investment property under
development. Debt to Gross Book Value excluding the convertible
debentures as of September 30, 2023
was 39.2%. As of September 30, 2023,
98% of the REIT's debt was fixed or economically hedged to fixed
rates.
In September 2023, the REIT
extended $160 million of mortgage
notes by one year to September 13,
2025, with no other contractual changes as a result of the
extension.
As of September 30, 2023, the REIT
had outstanding Convertible Debentures valued at $40.5 million at a contractual interest rate of
5%, maturing on September 30, 2025
with a conversion price of $14.40 per
Unit.
On October 4, 2023, the Toronto
Stock Exchange accepted the REIT's notice of intention to make a
NCIB commencing on October 6, 2023
for up to a maximum of 3,186,336 of its issued and outstanding
Units. The REIT concurrently renewed its ASPP in connection with
the renewed NCIB. The REIT may purchase Units for a 12-month period
ending on October 5, 2023.
The REIT purchased and canceled 1,079,507 Units under its
existing NCIB and ASPP at an average price of $13.55 per Unit through December 31, 2022. During the nine months ended
September 30, 2023, the REIT
purchased and cancelled 402,177 Units under its existing NCIB and
ASPP at an average price of $12.43.
In October 2023, since the
commencement of the renewed NCIB, the REIT purchased and cancelled
44,800 Units under the renewed NCIB and ASPP at an average price of
$10.73 per Unit.
Distributions and Units Outstanding
Cash distributions declared to holders of Units and holders of
Class B Units totalled $7.3 million
for Q3 2023, representing an AFFO Payout
Ratio1 of 61.6%. 100% of the REIT's cash
distributions were classified as return of capital. As of
September 30, 2023, the total number
of Units outstanding was 36,084,795. There were also 20,479,837
Class B Units outstanding, which are redeemable for Units on a
one-for-one basis.
Senior Management Structure
The REIT announced today that Brandon Barger, the REIT's Chief Financial
Officer, is taking a leave of absence for health-related reasons.
Susan Rosenbaum, the REIT's Chief
Operating Officer and former Chief Financial Officer, was appointed
today as Interim Chief Financial Officer by the board of trustees
of the REIT. Ms. Rosenbaum has a wealth of experience in this role,
acting as the REIT's Chief Financial Officer for seven years up
until recently, on January 1, 2023,
when she was appointed Chief Operating Officer. She has facilitated
an orderly and seamless transition with respect to the REIT's Q3
financial results and will act as both Interim Chief Financial
Officer and Chief Operating Officer until Brandon's
return.
"Our thoughts and best wishes go out to Brandon during his leave
of absence," said Dan Oberste, the
REIT's President and Chief Executive Officer. "Until Brandon's
return, the REIT remains soundly managed with our experienced team.
The REIT's succession plan takes into account unanticipated
executive officer leave. I am confident in Susie and our team's
abilities to manage both the REIT's excellent operating performance
and financial reporting in Brandon's absence."
2023 Earnings and Same Community Portfolio Guidance
The REIT's 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 expenses and NOI in
2023. The guidance does not include potential acquisitions,
dispositions or future growth from the impact of properties
currently under development.
The REIT has revised it's 2023 guidance. In November 2023, a constitutional election ratified
lowering real estate taxes for Texans, including multi-family
residential rental properties. This decrease in real estate taxes
for the REIT of approximately $1.4
million, applies to the 2023 tax year, and is included in
the guidance. These tax savings are offset by an increase in the
cost of insurance and additional interest expense which has also
been included in the revised guidance for 2023. These changes
resulted in the range narrowing for FFO per Unit and AFFO per Unit,
property operating expenses increasing and total revenue and NOI
remaining unchanged.
|
Revised guidance for
2023
|
Per
Unit
|
Range
|
Midpoint
|
Total
Portfolio
|
|
|
FFO per Unit
|
$0.92 to
$0.94
|
$0.93
|
AFFO per
Unit
|
$0.85 to
$0.87
|
$0.86
|
|
|
|
Same Community
Growth
|
|
|
Total
Revenue
|
5.0% to 7.0%
|
6.0 %
|
Property Operating
Expenses
|
5.0% to 7.0%
|
6.0 %
|
NOI
|
6.0% to 8.0%
|
7.0 %
|
|
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 Susan
Rosenbaum, Interim Chief Financial Officer and Chief
Operating Officer, will host a conference call for analysts and
investors on Thursday November
9th, 2023 at 12:00 pm
(ET). Participants can register and enter their phone
number at: https://emportal.ink/3Q24JRX 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/lKGdYrzYEjo.
A replay of the call will be available until Thursday, November 16th, 2023. To
access the replay, dial 416-764-8677 or 888-390-0541 (Passcode:
273311#). 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 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
and nine months ended September 30,
2023, which section is incorporated herein by reference.
|
|
|
|
|
|
|
Three
months
ended
September 30,
2023
|
|
Three
months
ended
September 30,
2022
|
|
Nine
months
ended
September 30,
2023
|
|
Nine
months
ended
September 30,
2022
|
|
Net (loss) income
and comprehensive (loss) income
|
|
$
(79,286)
|
|
$
23,787
|
|
$ (141,340)
|
|
$
243,650
|
|
Adjustments to
arrive at FFO
|
|
|
|
|
|
|
|
|
|
|
Distributions on Class
B Units
|
|
2,663
|
|
2,671
|
|
7,996
|
|
7,997
|
|
|
Fair value adjustment
to investment properties
|
|
111,080
|
|
23,449
|
|
199,411
|
|
(115,598)
|
|
|
Fair value adjustment
to investment properties (IFRIC 21)
|
|
7,814
|
|
5,635
|
|
(6,603)
|
|
(8,961)
|
|
|
Property tax liability
adjustment, net (IFRIC 21)
|
|
(7,814)
|
|
(5,635)
|
|
6,603
|
|
8,961
|
|
|
Fair value adjustment
to derivatives and other financial
|
|
|
|
|
|
|
|
|
|
|
|
liabilities
|
|
(20,913)
|
|
(38,330)
|
|
(27,056)
|
|
(102,565)
|
|
|
Fair value adjustment
to unit-based compensation
|
|
(464)
|
|
(354)
|
|
363
|
|
444
|
|
|
Loss on extinguishment
of debt
|
|
—
|
|
853
|
|
—
|
|
853
|
|
|
Principal payments on
lease liability
|
|
(33)
|
|
(27)
|
|
(97)
|
|
(96)
|
|
|
Depreciation of
right-to-use asset
|
|
34
|
|
33
|
|
100
|
|
99
|
|
Funds from
Operations ("FFO")
|
|
$
13,081
|
|
$
12,082
|
|
$
39,377
|
|
$
34,784
|
|
FFO per
Unit
|
|
$
0.23
|
|
$
0.21
|
|
$
0.69
|
|
$
0.63
|
|
Adjustments to
arrive at AFFO
|
|
|
|
|
|
|
|
|
|
|
Maintenance capital
expenditures
|
|
(1,141)
|
|
(920)
|
|
(3,474)
|
|
(2,840)
|
|
|
Escrowed rent guaranty
realized
|
|
—
|
|
—
|
|
—
|
|
87
|
|
|
Straight line rental
revenue differences
|
|
(2)
|
|
47
|
|
68
|
|
183
|
|
Adjusted Funds from
Operations ("AFFO")
|
|
$
11,938
|
|
$
11,209
|
|
$
35,971
|
|
$
32,214
|
|
AFFO per
Unit
|
|
$
0.21
|
|
$
0.19
|
|
$
0.63
|
|
$
0.58
|
|
Distributions
declared
|
|
$
7,349
|
|
$
7,528
|
|
$
22,112
|
|
$
21,719
|
|
AFFO Payout
Ratio
|
|
61.6 %
|
|
67.2 %
|
|
61.5 %
|
|
67.4 %
|
|
Weighted average
unit count
|
|
56,930,050
|
|
58,205,337
|
|
57,112,882
|
|
55,580,637
|
|
|
|
|
|
|
Three months
ended
September 30, 2023
|
|
Three months
ended
September 30, 2022
|
|
Nine months
ended
September 30, 2023
|
|
Nine months
ended
September 30, 2022
|
Total
revenue
|
|
$
42,079
|
|
$
40,549
|
|
$
125,707
|
|
$
116,881
|
Property operating
expenses
|
|
(12,898)
|
|
(12,150)
|
|
(36,620)
|
|
(33,900)
|
Real estate
taxes
|
|
1,327
|
|
(1,045)
|
|
(27,114)
|
|
(29,580)
|
|
|
|
|
|
|
30,508
|
|
27,354
|
|
61,973
|
|
53,401
|
Property tax liability
adjustment (IFRIC 21)
|
|
(7,814)
|
|
(5,635)
|
|
6,603
|
|
8,961
|
Net Operating Income
("NOI")
|
|
$
22,694
|
|
$
21,719
|
|
$
68,576
|
|
$
62,362
|
NOI
margin
|
|
53.9 %
|
|
53.6 %
|
|
54.6 %
|
|
53.4 %
|
|
|
|
|
|
|
|
|
September 30,
2023
|
|
December 31,
2022
|
|
|
|
|
|
|
|
|
|
|
|
Loans and borrowings
(current portion)
|
|
|
|
$
1,825
|
|
$
1,779
|
Loans and borrowings
(non-current portion)
|
|
|
|
738,373
|
|
724,581
|
Convertible
debentures
|
|
|
|
40,511
|
|
42,599
|
Total loans and
borrowings and convertible debentures ("Debt")
|
|
|
|
780,709
|
|
768,959
|
Gross Book
Value
|
|
|
|
$
1,889,829
|
|
$
2,063,275
|
Debt to Gross Book
Value
|
|
|
|
41.3 %
|
|
37.3 %
|
|
|
|
|
|
|
|
|
September 30,
2023
|
|
December 31,
2022
|
Unitholders'
equity
|
|
|
|
$
817,661
|
|
$
975,749
|
Class B
Units
|
|
|
|
244,734
|
|
267,826
|
NAV
|
|
|
|
|
|
$
1,062,395
|
|
$
1,243,575
|
Unit count, as of the
end of period
|
|
|
|
56,945,300
|
|
57,169,893
|
NAV per
Unit
|
|
|
|
$
18.66
|
|
$
21.75
|
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 and nine months
ended September 30, 2023 and in the
REIT's Annual Information Form dated March
8, 2023, both of which are available on SEDAR+
(www.sedarplus.ca). 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