LITTLE ROCK and TORONTO, Oct. 25, 2018 /PRNewswire/ - BSR Real Estate Investment Trust ("BSR" or the "REIT") (TSX: HOM.U) announced today that it has closed on the acquisition of Towne Park at Har-Ber Apartments ("Towne Park"), in Springdale, Arkansas, for US$28.9 million. The transaction was funded utilizing BSR's revolving credit facility. The addition of Towne Park is expected to be accretive to the REIT's adjusted funds from operations1 ("AFFO") on a per unit basis.
Towne Park, which was constructed in two phases in 2016 and 2017, is a 237-unit multifamily property comprising one, two, and three bedroom apartments and townhomes in the high-growth Northwest Arkansas metropolitan statistical area ("MSA"). The property is the REIT's second purchase in this region in just under two years, following the acquisition of Mountain Ranch Apartments, a 360 unit garden-style complex less than 10 miles away.
Northwest Arkansas is the fastest growing region of the state and 14th fastest growing MSA in the United States. Towne Park is located less than a 15 mile drive from the headquarters of three Fortune 500 companies including, Walmart. Median household income in Northwest Arkansas rose 8.1% in the past 12 months. In the multifamily space, average lease prices in Northwest Arkansas have increased 18% over the past four years. Multifamily vacancy rates in this MSA currently sit at 3.9%, representing a decrease of 260 basis points over the past four years.
"We are thrilled to add Towne Park to our portfolio," said John Bailey, Chief Executive Officer of the REIT. "This acquisition increases our exposure to the fastest growing market in our home state of Arkansas and is consistent with our strategy of clustering properties to maximize operating efficiencies."
In the past two and a half years, BSR has grown its portfolio by 16% through the acquisition of five properties with a combined 1,394 units. The total unit count for BSR, which completed an IPO just five months ago on the Toronto Stock Exchange, now stands at 10,116 units.
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 49 multifamily garden-style residential properties consisting of 10,116 apartment units located across five bordering states 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, including statements regarding the extent to which the acquisition of Towne Park is expected to be accretive to AFFO per Unit. 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 are based on certain assumptions, including assumptions regarding the expected financial performance of Towne Park. 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 prospectus dated May 11, 2018 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 Measure
AFFO is key measures of performance commonly used by real estate operating companies and real estate investment trusts. It is not a measure recognized under International Financial Reporting Standards ("IFRS") and does not have standardized meanings prescribed by IFRS. AFFO 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 period ended June 30, 2018 for a reconciliation of the REIT's AFFO to a standardized IFRS measure.
1 AFFO is a non-IFRS financial measure. See "Non-IFRS Financial Measure" in this news release.
SOURCE BSR Real Estate Investment Trust