BSR Real Estate Investment 5 00 convertible unsecured subordinated debentures T.HOM.DB.U

Alternate Symbol(s): BSRTF | T.HOM.UN

BSR Real Estate Investment Trust is an internally managed, unincorporated, open-ended real estate investment trust (REIT). The principal business of the Company is to acquire and operate multi-family residential rental properties across the United States. The Company owns approximately 31 multifamily garden-style residential properties located across three bordering states in the Sunbelt region of the United States, which stretches across the South Atlantic and Southwest portions of the United States. The Company also owns one property under development in Austin, Texas. Its properties include Adley at Gleannloch Apartments, Alleia Long Meadow Farms Apartments, Ariza Plum Creek, Auberry at Twin Creeks, Aura Benbrook, Aura 36Hundred, Bluff Creek Apartments, Brandon Place Apartment Homes, Bridgeport Apartments, Cielo Apartment Living, Hangar 19, Lakeway Castle Hills, Markham Oaks Apartments, M at Lakeline, Overlook by the Park and others. It operates in Arkansas, Texas and Oklahoma.

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BSR Real Estate Investment 5 00 convertible unsecured subordinated debentures

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Post by retiredcfon Nov 09, 2022 9:08am

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Post# 35084788

RBC

November 9, 2022

BSR REIT
Q3 in line; Growth decelerating as expected

TSX: HOM/U | USD 13.81 | Outperform | Price Target USD 23.50

Sentiment: Neutral

Our view: BSR REIT (“BSR”) reported FFO/unit of $0.21, +31% y/y, vs. RBC/consensus of $0.21/$0.22. As expected, operating metrics showed deceleration with SP NOI growth at +9.7%, and blended lease spreads at 11%. 2022 FFO guidance was slightly reduced from higher interest expense but this was in line with our estimate. BSR is active on its NCIB for the first time in a long time.

Key points:

SP NOI growth: +9.7% (SP-Rev +11%; SP-Exp +12%). This compares with larger US Sun Belt peers at 16-17% and smaller US Sun Belt peers at 12-13%. SP NOI margin was 51.9%, -50 bps y/y. Austin y/y growth has materially decelerated to 4%, which appears to be more cost driven.
Occupancy: 94.7%, -180 bps y/y; Average monthly rent $1,354, +13% y/y.
Midpoint 2022 FFO guidance decreased by 2% but this is in line with our estimate: FFO/unit $0.85-$0.87 (vs. $0.86-$0.90); SP

NOI growth guidance is unchanged at 12-14%. The FFO guidance reduction is due to higher interest expense.
Lease spreads decelerating somewhat: Blended +11.2 % (vs. 12.6% Q2/22); New lease +12.3%; renewal +10.3%.
Reported NAV/unit: $22.32, largely unchanged from Q2/22. Average cap rate utilized was 4.0% (+10bps).
Active on NCIB: Post quarter, acquired 200K units at an average price of US$13.99 for a total of $2.8M.
D/GBV: 36.2%, flat q/q
Management changes: Blake Brazeal, Co-President and COO will retire. Susan Koehn, current CFO will assume his role as COO.

Brandon Barger, current Chief Accounting Officer will assume CFO and Corporate Secretary.