BSR REIT ANNOUNCES FIRST QUARTER 2025 FINANCIAL RESULTS

Canada NewsWire

LITTLE ROCK, AR and TORONTO, May 7, 2025

LITTLE ROCK, AR and TORONTO, May 7, 2025 /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 ended March 31, 2025 ("Q1 2025"). 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 Q1 2025 and the three months ended March 31, 2024 ("Q1 2024"), thus removing the impact of acquisitions, dispositions and non-stabilized properties. The Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis as of and for the three months ended March 31, 2025 are prepared in accordance with the accounting standards issued by the International Accounting Standards Board ("IFRS Accounting Standards" or "GAAP"), and 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-GAAP 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 of the REIT granted to trustees ("Deferred Units").

"We are very pleased by our solid start to 2025," said Dan Oberste, the REIT's President and Chief Executive Officer. "As the new supply in our markets continues to be absorbed, we have focused on renewals and improved our retention rate 460 basis points to 56.9% for Q1 2025 over Q1 2024, maximizing cashflow for our unitholders. Our results in Q1 reflect both the quality of our assets and the capabilities of our management platform. Of course, Q1 was highlighted by the agreement for the strategic disposition of $618.5 million of assets in Texas, underlining BSR's continued ability to create value for unitholders regardless of the external market environment. We also executed on the acquisition of Venue Craig Ranch Apartments in Dallas and the disposition of Bluff Creek Apartments in Oklahoma City, as we continue to accretively recycle capital and upgrade our portfolio. As we turn towards the second quarter, it is our intention to leverage the capital and market intelligence achieved through asset rotations, as well as the improving supply backdrop in our core markets, to continue to deliver outsized growth for unitholders."

Q1 2025 Highlights

   -- Same Community revenue for Q1 2025 increased 0.6% over Q1 2024; 
 
   -- Same Community NOI for Q1 2025 increased 2.3% compared to Q1 2024; 
 
   -- Weighted average occupancy was 95.9% as of March 31, 2025, compared to 
      95.3% as of March 31, 2024; 
 
   -- During Q1 2025, the REIT's AFFO payout ratio was 63.8%; 
 
   -- Debt to Gross Book Value was 45.3% as of March 31, 2025 which decreased 
      120 basis points from 46.5% as of December 31, 2024; 
 
   -- On January 3, 2025, the REIT redeemed all issued and outstanding 
      convertible subordinated debentures for $41.5 million, plus accrued and 
      unpaid interest; 
 
   -- On January 9, 2025, the REIT acquired Venue Craig Ranch, a 277-apartment 
      unit community in McKinney, TX (Dallas MSA) for $61.0 million; 
 
   -- On February 27, 2025, the REIT announced the strategic disposition of 
      $618.5 million of assets to AvalonBay Communities, Inc. ("Avalon Bay" or 
      "AVB") $(AVB)$, unlocking value embedded in stabilized assets and 
      further positioning BSR for future growth (the "Transaction"). The 
      Transaction was completed in two phases: the Direct Asset Sale 
      Transaction (which closed on March 31, 2025, see below) and the 
      Contribution Transaction (which closed subsequent to quarter end, see 
      below). Based on the potential impact of the Transaction, the REIT is 
      temporarily suspending guidance but intends to revisit the release of 
      2025 guidance in a future period; 
 
   -- On March 24, 2025, the REIT sold Bluff Creek Apartments, a 316 unit 
      apartment community located in Oklahoma City, OK for $28.3 million; and 
 
   -- On March 31, 2025, the REIT completed the first phase of the AVB 
      Transaction by selling Cielo I, Cielo II, and Retreat at Wolf Ranch 
      comprising 857 apartment units located in Austin, TX, for $187.0 million 
      (the "Direct Asset Sale Transaction"). 

Subsequent Highlights

   -- On April 3, 2025, the REIT entered into a new receive-variable based 
      USD-SOFR CME/pay fixed interest rate swap on a notional value of $150.0 
      million at a fixed rate of 2.88% effective July 1, 2025, and maturing 
      July 1, 2030, subject to the counterparty's optional early termination 
      date of July 1, 2027. 
 
   -- On April 30, 2025, the REIT closed the second phase of the Transaction, 
      pursuant to which BSR Trust sold six properties (Auberry at Twin Creeks, 
      Aura Benbrook, Lakeway Castle Hills, Satori Frisco, Vale Frisc and 
      Wimberly) comprising of 1,844 apartment units located in Dallas, TX to 
      AVB for $431.5 million (the "Contribution Transaction"). Under the 
      Contribution Transaction, BSR Trust received $193.0 million in cash and 
      the balance through the cancellation of 15,000,000, or 75%, of the 
      outstanding Class B Units of the REIT. BSR used a portion of the cash to 
      extinguish all existing mortgage debt on the contributed properties, with 
      the remainder to be used for repayment of other indebtedness, transaction 
      expenses and general corporate purposes, including future acquisitions. 

Q1 2025 Financial Summary

In thousands of U.S. dollars, except per unit amounts

 
                        Q1 2025       Q1 2024       Change      Change % 
Revenue, Total 
 Portfolio                  $ 43,476      $ 41,983     $ 1,493     3.6 % 
Revenue, Same 
 Community(1) 
 Properties                 $ 36,709      $ 36,506       $ 203     0.6 % 
Revenue, Non-Same 
 Community(1) 
 Properties                  $ 6,767       $ 5,477     $ 1,290       nm* 
Net loss and 
 comprehensive loss       $ (40,848)     $ (1,571)  $ (39,277)       nm* 
NOI1, Total Portfolio       $ 24,030      $ 23,839       $ 191     0.8 % 
NOI1, Same 
 Community(1) 
 Properties                 $ 20,918      $ 20,444       $ 474     2.3 % 
NOI1, Non-Same 
 Community(1) 
 Properties                  $ 3,112       $ 3,395     $ (283)       nm* 
Funds from Operations 
 ("FFO")(1)                 $ 12,433      $ 13,617   $ (1,184)   (8.7 %) 
FFO per Unit(1)               $ 0.23        $ 0.25       $ (0)   (8.0 %) 
Maintenance capital 
 expenditures                $ (549)       $ (713)       $ 164  (23.0 %) 
Straight line rental 
 revenue differences          $ (97)        $ (16)      $ (81)       nm* 
AFFO(1)                     $ 11,787      $ 12,888   $ (1,101)   (8.5 %) 
AFFO per Unit(1)              $ 0.22        $ 0.24       $ (0)   (8.3 %) 
Weighted Average Unit 
 Count                  $ 53,905,295  $ 53,856,476    $ 48,819     0.1 % 
 
 
                      Q1 2025    Q4 2024    Change      Change % 
Unitholders' equity   $ 612,880  $ 708,300  $ (95,420)  (13.5 %) 
NAV(1)                $ 899,486  $ 927,504  $ (28,018)   (3.0 %) 
NAV per Unit(1)         $ 16.66    $ 17.20    $ (0.54)   (3.2 %) 
 
 
*Percentages have been excluded for changes which 
 are not considered to be meaningful for comparative 
 purposes. 
(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-GAAP 
 measures. For a description of the basis of presentation 
 and reconciliations of the REIT's non-GAAP measures, 
 see "Non-GAAP Measures" in this news release 
 

Total portfolio revenue of $43.5 million for Q1 2025 increased 3.6% compared to $42.0 million for Q1 2024. This increase was the result of contributions of $1.3 million from the acquisition of Venue Craig Ranch Apartments in January 2025 (the "Property Acquisition"), $0.2 million from Same Community properties (discussed further below) and $0.2 million from Aura 35Fifty, which was completed in December 2024 and remains non-stabilized during the current and comparative periods due to lease-up (the "Non-Stabilized Property"), partially offset by the dispositions and results of Bluff Creek Apartments, which was sold on March 24, 2025, Cielo I, Cielo II and Retreat at Wolf Ranch, which were sold on March 31, 2025 in connection with the Direct Asset Sale Transaction, (collectively, the "Property Dispositions") that reduced revenue by $0.3 million. Total revenue resulting from the Non-Stabilized Property will continue to improve in future periods as the lease-up progresses through to completion.

Same Community revenue of $36.7 million for Q1 2025 increased $0.2 million, or 0.6%, compared to $36.5 million for Q1 2024, primarily due to a $0.2 million increase in other property income driven by enhanced resident participation in credit building services and an increase in utility reimbursements. The increase in utility reimbursements was primarily due to increased preventative maintenance on water meters allowing an increase in the pass through of water charges as well as an increase in properties receiving valet trash service over the prior year.

The net loss and comprehensive loss change between Q1 2025 and Q1 2024 is primarily due to non-cash adjustments to fair value of investment properties, derivatives and other financial liabilities from December 31, 2024 to March 31, 2025 and December 31, 2023 to March 31, 2024, respectively, as well as the costs of dispositions of $5.2 million, is not considered comparable period over period.

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