Bullboard - Stock Discussion Forum BSR Real Estate Investment 5 00 convertible unsecured subordinated debentures T.HOM.DB.U

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

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... see more

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TSX:HOM.DB.U - Post Discussion

BSR Real Estate Investment 5 00 convertible unsecured subordinated debentures > RBC

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Post by retiredcf on Nov 09, 2022 9:08am

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.