BSR REIT Announces Fourth Quarter and Full Year 2024 Financial Results

Canada NewsWire

LITTLE ROCK, Ark. and TORONTO, March 5, 2025

LITTLE ROCK, Ark. and TORONTO, March 5, 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 and year ended December 31, 2024 ("Q4 2024" and "FY 2024", 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 Q4 2024 and FY 2024 and the three months and year ended December 31, 2023 ("Q4 2023" and "FY 2023", respectively), thus removing the impact of 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, 2024 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 of the REIT granted to trustees ("Deferred Units").

"BSR delivered another year of solid operating and financial results in 2024," said Dan Oberste, the REIT's President and Chief Executive Officer. "We achieved our highest ever AFFO per Unit and increased our occupancy despite record new deliveries in our core markets. These results underline the resilience of BSR's management platform and the REIT's ability to generate cash flow growth despite the cost of capital challenge facing the industry. The recently announced transformative sale of nine stabilized properties underlines this capability. We intend to redeploy the proceeds of this sale to acquire properties that are anticipated to offer higher returns for unitholders, a strategy that we have consistently executed successfully in the past. The future has never been brighter for BSR."

2024 Highlights

   -- Same Community1 revenue for FY 2024 increased 0.4% over FY 2023; 
 
   -- Same Community1 NOI for FY 2024 increased 1.3% compared to FY 2023; 
 
   -- Weighted average occupancy was 95.6% as of December 31, 2024, compared to 
      95.3% of December 31, 2023; 
 
   -- FFO per Unit1 for FY 2024 of $0.96 increased 3.2% over FY 2023; 
 
   -- AFFO per Unit1 for FY 2024 of $0.88 increased 3.5% over FY 2023; 
 
   -- During FY 2024, the REIT's AFFO payout ratio was 60.3% compared to 60.7% 
      during FY 2023; 
 
   -- Debt to Gross Book Value as of December 31, 2024 was 46.5%; 
 
   -- During FY 2024 and Q4 2024, the REIT retired $8.8 million and $4.5 
      million, respectively, of its debt with cash flows generated from 
      operations; 
 
   -- In December 2024, the REIT extended $160.0 million of mortgage notes to 
      December 11, 2026, with no other contractual changes as a result of the 
      extension; 
 
   -- On November 1, 2024, the REIT entered into a new forward receive-variable 
      based USD-SOFR/pay fixed interest rate swap of $42.0 million at a fixed 
      rate of 3.13% effective February 2, 2025 and maturing February 1, 2030, 
      subject to the counterparty's optional early termination date of February 
      2, 2026; 
 
   -- In December 2024, construction was completed on Aura 35Fifty, a 
      238-apartment unit community in the Austin, TX MSA; and 
 
   -- For the third year in a row, BSR was named one of the Best Places to Work 
      in Multifamily, and Best Places to Work in Multifamily for Women at the 
      Multifamily Innovations Awards held in December 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. 
 

Subsequent Highlight

   -- On January 3, 2025, the REIT redeemed all issued and outstanding of the 
      5.0% Convertible 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 a total contractual 
      purchase price of $61.0 million; and 
 
   -- On February 27, 2025, the REIT announced the pending sale of nine 
      stabilized properties for a contractual purchase price of $618.5 million. 

Q4 2024 Financial Summary

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

 
                           Q4 2024     Q4 2023     Change       Change % 
Revenue, Total Portfolio     $ 42,165    $ 42,096         $ 69     0.2 % 
Revenue, Same 
 Community(1) Properties     $ 42,040    $ 42,096       $ (56)    -0.1 % 
Revenue, Non-Same 
 Community(1) Properties        $ 125        $ --        $ 125       nm* 
Net income (loss) and 
 comprehensive income 
 (loss)                      $ 39,785  $ (69,530)    $ 109,315       nm* 
NOI(1) , Total Portfolio     $ 21,736    $ 22,490      $ (754)    -3.4 % 
NOI(1) , Same 
 Community(1) Properties     $ 21,895    $ 22,490      $ $(595.SI)$    -2.6 % 
NOI(1) , Non-Same 
 Community(1) Properties      $ (159)        $ --      $ (159)       nm* 
FFO(1)                       $ 11,861    $ 13,262    $ (1,401)   -10.6 % 
FFO per Unit(1)                $ 0.22      $ 0.24     $ (0.02)    -8.3 % 
Maintenance capital 
 expenditures                 $ (933)     $ (818)      $ (115)    14.1 % 
Straight line rental 
 revenue differences           $ (51)        $ --       $ (51)       nm* 
AFFO(1)                      $ 10,877    $ 12,444    $ (1,567)   -12.6 % 
AFFO per Unit(1)               $ 0.20      $ 0.22     $ (0.02)    -9.1 % 
Weighted Average Unit 
 Count                     53,805,811  55,799,773  (1,993,962)    -3.6 % 
Unitholders' equity         $ 657,596   $ 712,401   $ (54,805)    -7.7 % 
NAV(1)                      $ 901,308   $ 953,112   $ (51,804)    -5.4 % 
NAV per Unit(1)               $ 16.75     $ 17.71     $ (0.96)    -5.4 % 
 
 
*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-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 $42.2 million for Q4 2024 increased 0.2% compared to $42.1 million for Q4 2023. Aura 35Fifty, the REIT's only non-stabilized, property contributed $0.1 million to the increase, mostly offset by a decrease of $0.1 million in Same Community properties, described below.

Same Community revenue of $42.0 million for Q4 2024 decreased $0.1 million, or 0.1%, compared to $42.1 million for Q4 2023, primarily due to a decrease in average rent per unit, from $1,503 as of December 31, 2023 to $1,488 as of December 31, 2024, , resulting in a decrease of $0.3 million, partially offset by a $0.2 million increase in other property income related to resident credit building services and utility reimbursements.

The net income (loss) and comprehensive income (loss) change between Q4 2024 and Q4 2023 is primarily due to non-cash adjustments to fair value of investment properties and derivatives and other financial liabilities from September 30, 2024 to December 31, 2024 and September 30, 2023 to December 31, 2023, respectively, and is not considered comparable period over period.

The 3.4% decrease in total portfolio NOI for Q4 2024 of $21.7 million compared to $22.5 million in Q4 2023 was the result of the decrease of $0.6 million in Same Community NOI described below as well as operating expenses, net of revenue, for Aura 35Fifty, which was in lease-up.

The 2.6% decrease in Same Community NOI for Q4 2024 of $21.9 million compared to $22.5 million in Q4 2023 was attributable to the decrease in revenue described above, as well as an increase in property tax expenses of $0.5 million due to higher tax refunds received in the comparative period.

FFO was $11.9 million, or $0.22 per Unit, for Q4 2024 compared to $13.3 million, or $0.24 per Unit, for Q4 2023. The decrease in FFO was the result of the decrease in total portfolio NOI described above, an increase of $0.5 million in general and administrative expenses related to the timing of the recognition of health insurance expense in Q4 2024 over Q4 2023 and $0.1 million in higher finance costs. FFO per Unit decreased compared to the prior period due to the items mentioned above, partially offset by the impact of the REIT's repurchase and cancellation of 3.5 million Units under its normal course issuer bids in 2023.

AFFO was $10.9 million, or $0.20 per Unit for Q4 2024 compared to $12.4 million, or $0.22 per Unit for Q4 2023. The decrease in AFFO was primarily the result of the decrease in FFO discussed above, as well as a $0.1 million increase in maintenance capital expenditures. AFFO per Unit decreased compared to the prior period due to the items mentioned above, partially offset by the impact of the REIT's repurchase and cancellation of 3.5 million Units under its normal course issuer bids in 2023.

Excluding short term leases, during Q4 rental rates for new leases and renewals decreased 8.3% and increased 0.9%, respectively, for a blended decrease of 3.6%. For January and February 2025 rental rates for new leases and renewals decreased 8.0% and 0.3%, respectively, for a blended decrease of 3.6%. This blended decrease is expected to reverse in the second half of 2025 as new supply in our major markets continues to be effectively absorbed and minimal additional supply is anticipated over the next two years.

NAV was $901.3 million, or $16.75 per unit, as of December 31, 2024, compared to $953.1 million, or $17.71 per unit, as of December 31, 2023. The decrease is primarily due to the reduction in the fair value of investment property values, driven by slight capitalization rate expansion and lower cash flow trends, subsequent to December 31, 2023.

FY 2024 Financial Summary

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

 
                          FY 2024     FY 2023      Change       Change % 
Revenue, Total Portfolio   $ 168,670    $ 167,803        $ 867     0.5 % 
Revenue, Same 
 Community(1) Properties   $ 168,528    $ 167,803        $ 725     0.4 % 
Revenue, Non-Same 
 Community(1) Properties       $ 142         $ --        $ 142       nm* 
Net loss and 
 comprehensive loss       $ (40,242)  $ (210,870)    $ 170,628       nm* 
NOI(1) , Total Portfolio    $ 91,936     $ 91,066        $ 870     1.0 % 
NOI(1) , Same 
 Community(1) Properties    $ 92,251     $ 91,066      $ 1,185     1.3 % 
NOI(1) , Non-Same 
 Community(1) Properties     $ (315)         $ --      $ (315)       nm* 
FFO(1)                      $ 51,743     $ 52,639      $ (896)    -1.7 % 
FFO per Unit(1)               $ 0.96       $ 0.93       $ 0.03     3.2 % 
Maintenance capital 
 expenditures              $ (4,114)    $ (4,292)        $ 178    -4.1 % 
Straight line rental 
 revenue differences          $ (46)         $ 68      $ (114)       nm* 
AFFO(1)                     $ 47,583     $ 48,415      $ (832)    -1.7 % 
AFFO per Unit(1)              $ 0.88       $ 0.85       $ 0.03     3.5 % 
Weighted Average Unit 
 Count                    53,822,578   56,781,907  (2,959,329)    -5.2 % 
 
 
*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-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 $168.7 million for FY 2024 increased 0.5% compared to $167.8 million for FY 2023. Same Community properties contributed $0.7 million, as described below, and the non-stabilized property contributed $0.1 million to the overall increase.

Same Community revenue of $168.5 million for FY 2024 increased $0.7 million, or 0.4%, compared to $167.8 million for FY 2023, primarily due to an increase of $0.6 million in other property income related to resident credit building services and utility reimbursements.

The net loss and comprehensive loss change between FY 2024 and FY 2023 is primarily due to non-cash adjustments to fair value of investment properties and derivatives and other financial liabilities from December 31, 2023 to December 31, 2024 and December 31, 2022 to December 31, 2023, respectively, and is not considered comparable period over period.

The 1.0% increase in total portfolio NOI for FY 2024 of $91.9 million compared to $91.1 million in FY 2023 was the result of the increase in Same Community NOI of $1.2 million, described below, partially offset by operating expenses, net of revenue, for the non-stabilized property which is in lease-up.

The 1.3% increase in Same Community NOI for FY 2024 of $92.3 million compared to $91.1 million in FY 2023 was the result of the increase in revenue described above as well as a decrease in real estate tax expense of $0.7 million due to higher tax refunds and $0.1 million in lower property insurance expenses. These increases were partially offset by higher renting expenses of $0.4 million associated with the cost of new services to generate additional other income such as smart home technology and the resident credit building program.

FFO was $51.7 million, or $0.96 per Unit, for FY 2024 compared to $52.6 million, or $0.93 per Unit, for FY 2023. The decrease in FFO was primarily the result of $2.0 million in higher finance costs due to higher average interest rates and an increase in total loans and borrowings outstanding due to draws in 2023 to fund the REIT's normal course issuer bid repurchases in 2023, partially offset by the increase in Same Community NOI described above. FFO per Unit increased as a result of the REIT's repurchase and cancellation of 3.5 million Units under its normal course issuer bids in 2023.

AFFO was $47.6 million, or $0.88 per Unit, for FY 2024 compared to $48.4 million, or $0.85 per Unit, for FY 2023. The decrease in AFFO was primarily the result of the decrease in FFO discussed above, partially offset by a $0.2 million decrease in maintenance capital expenditures. AFFO per Unit increased as a result of the REIT's repurchase and cancellation of 3.5 million Units under its normal course issuer bids in 2023.

Highlights from Recent Four Quarters

In thousands of U.S. dollars (except per unit amounts)

 
                   December 31,  September    June 30,      March 31, 
                   2024          30, 2024     2024          2024 
Operational 
Information 
Number of real 
 estate 
 investment 
 properties                  32           31            31            31 
Total apartment 
 units                    8,904        8,666         8,666         8,666 
Average monthly 
 rent on in-place 
 leases                 $ 1,489      $ 1,507       $ 1,507       $ 1,502 
Average monthly 
rent on in-place 
leases, 
    Same 
     Community(1) 
     Properties         $ 1,488      $ 1,507       $ 1,507       $ 1,502 
Weighted average 
 occupancy rate          95.6 %       94.7 %        95.3 %        95.3 % 
Retention rate           56.0 %       55.4 %        54.4 %        52.3 % 
Debt to Gross 
 Book Value(1)           46.5 %       46.4 %        46.7 %        46.5 % 
 
 
                          Q4 2024     Q3 2024     Q2 2024     Q1 2024 
Operating Results 
Revenue, Total Portfolio    $ 42,165    $ 42,290    $ 42,232    $ 41,983 
Revenue, Same 
 Community(1) Properties    $ 42,040    $ 42,273    $ 42,232    $ 41,983 
Revenue, Non-Same 
 Community(1) Properties       $ 125        $ 17        $ --        $ -- 
NOI(1) , Total Portfolio    $ 21,736    $ 22,256    $ 24,106    $ 23,839 
NOI(1) , Same 
 Community(1) Properties    $ 21,895    $ 22,411    $ 24,106    $ 23,839 
NOI(1) , Non-Same 
 Community(1) Properties     $ (159)     $ (155)        $ --        $ -- 
NOI Margin(1) , Total 
 Portfolio                    51.5 %      52.6 %      57.1 %      56.8 % 
NOI Margin(1) , Same 
 Community(1) Properties      52.1 %      53.0 %      57.1 %      56.8 % 
NOI Margin(1) , Non-Same         n/a         n/a         n/a         n/a 
Community(1) Properties 
Net income (loss) and 
 comprehensive income 
 (loss)                     $ 39,785  $ (39,251)  $ (39,205)   $ (1,571) 
Distributions on Class B 
 Units                       $ 2,815     $ 2,750     $ 2,617     $ 2,626 
Fair value adjustment to 
 investment properties      $ 16,069  $ (15,161)    $ 30,683    $ 38,718 
Fair value adjustment to 
investment 
 properties (IFRIC 21)       $ 6,552     $ 7,332     $ 8,327  $ (22,211) 
Property tax liability 
 adjustment, net (IFRIC 
 21)                       $ (6,552)   $ (7,332)   $ (8,327)    $ 22,211 
Fair value adjustment to 
derivatives and other 
 financial liabilities    $ (45,958)    $ 63,049    $ 19,729  $ (26,153) 
Fair value adjustment to 
 unit-based compensation     $ (848)       $ 775       $ 283       $ (2) 
Principal payments on 
 lease liability              $ (36)      $ (36)      $ (35)      $ (34) 
Depreciation of 
 right-to-use asset             $ 34        $ 33        $ 34        $ 33 
FFO(1)                      $ 11,861    $ 12,159    $ 14,106    $ 13,617 
FFO per Unit                  $ 0.22      $ 0.23      $ 0.26      $ 0.25 
Maintenance capital 
 expenditures                $ (933)   $ (1,067)   $ (1,401)     $ (713) 
Straight line rental 
 revenue differences          $ (51)        $ 13         $ 8      $ (16) 
AFFO(1)                     $ 10,877    $ 11,105    $ 12,713    $ 12,888 
AFFO per Unit(1)              $ 0.20      $ 0.21      $ 0.24      $ 0.24 
AFFO Payout Ratio             68.9 %      65.9 %      54.5 %      53.9 % 
Weighted Average Unit 
 Count                    53,805,811  53,789,870  53,838,699  53,856,476 
 
 
(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. 
 

Liquidity and Capital Structure

As of December 31, 2024, the REIT had liquidity of $136.0 million, consisting of cash and cash equivalents of $8.7 million and $127.2 million available under its senior secured revolving credit facility ("Credit Facility"). The REIT also has the flexibility to obtain additional liquidity through adding properties to the borrowing base of the Credit Facility.

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