LITTLE ROCK, Ark. and TORONTO, July 30, 2020 /PRNewswire/ - BSR Real Estate Investment Trust ("BSR" or the "REIT") (TSX:HOM.U and HOM.UN) announced today that it has acquired Broadstone Park West ("Broadstone" or the "Property"), a 370 suite, garden style residential community in Houston, Texas for US$51 million from Starlight Investments. The transaction was financed through a combination of a draw on the REIT's credit facility of approximately US$40.0 million and the issuance of approximately US$10.4 million of trust units of the REIT at US$12.25 per unit, net of prorations. Debt to gross book value is 49.8% and the REIT has US$54.5 million in liquidity after the purchase. The addition of the Property is expected to be immediately accretive to the REIT's adjusted funds from operations ("AFFO") on a per unit basis.
Broadstone was constructed in 2014 in the Houston metropolitan statistical area ("MSA"), the fifth largest MSA in the United States and home to 21 Fortune 500 companies. The Property has numerous amenities including a clubhouse, fitness center, resort-style swimming pool with sun deck, garages, and a dog park. The REIT now owns 2,332 apartment units in the Houston MSA, where BSR has been operating for 20 years.
"The acquisition of Broadstone is another example of BSR growing according to our defined clustering strategy," stated John Bailey, BSR's Chief Executive Officer. "Broadstone is an attractive asset with the newer amenities that our residents want. We will add value to the Property by applying it to our internal management platform, as we have done with other properties acquired since our IPO."
The purchase of Broadstone marks the eleventh property acquisition for BSR since completing its initial public offering (the "IPO") on the Toronto Stock Exchange in May 2018. Other post-IPO acquisitions included Satori at Long Meadow Apartments constructed in 2019 and also in the Houston MSA. In the Austin MSA, acquisitions included Ariza at Plum Creek, Retreat at Wolf Ranch, Cielo, and Madrone Apartments. In the Dallas-Fort Worth MSA, acquisitions included Wimberly, Auberry at Twin Creeks, and Riverhill Apartments. Additional acquisitions were Brandon Place Apartments in Oklahoma City, OK and Towne Park at Har-ber Apartments in the Northwest Arkansas MSA. These acquisitions have added 3,235 apartment units to the REIT's portfolio with an average age of ten years compared to the 20 dispositions to-date which total 3,666 apartment units and an average of age of 38 years.
About BSR Real Estate Investment Trust
BSR Real Estate Investment Trust is an internally managed, unincorporated, and open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT owns a portfolio of multifamily garden-style residential properties located in attractive primary and secondary markets in the Sunbelt region of the United States.
This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the business of the REIT. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate" and other similar expressions. The forward-looking statements in this news release, including with respect to expected accretion to AFFO, are based on certain assumptions, including that the Property will perform as expected. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under the heading "Risk Factors" in the REIT's Annual Information Form for the dated March 10, 2020, which is available at www.sedar.com. There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law. The REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise
Non-IFRS Financial Measures
AFFO and debt to gross book value 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 a standardized meaning prescribed by IFRS. AFFO and debt to gross book value as calculated by the REIT may not be comparable to similar measures presented by other issuers. Please refer to the REIT's Management's Discussion and Analysis for the three months and year ended December 31, 2019 for a reconciliation of AFFO to standardized IFRS measures.
SOURCE BSR Real Estate Investment Trust