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 > RBC

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Post by retiredcfon May 11, 2022 9:00am

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Post# 34673422

RBC

May 10, 2022

BSR REIT
Q1/22 slightly ahead; 2022 guidance maintained

Sentiment: Positive

Outperform

TSX: HOM/U; USD 17.25; TSX: HOM-U

Price Target USD 24.00

All values in USD unless otherwise noted.
Priced as of prior trading day's market close, EST (unless otherwise noted).

Our view: BSR REIT (“BSR”) reported FFO/unit of $0.21, +75% y/y, vs. RBC/ consensus of $0.20/$0.20. 2022 FFO guidance was maintained. Consistent with other US multi-family names, pricing power remains in its key Texas markets. Post-quarter de-leveraging will eat into FFO/unit somewhat, but the growth outlook remains strong for the balance of the year.

Key points

• SP NOI growth: +16% (SP-Rev +11%; SP-Exp +5.7%). This compares with larger Sun Belt peers in the 12–14% range. Same-asset pool represented 62% of BSR’s total NOI. While expenses are up, they are reasonably benign considering the current environment. SP NOI margin improved 240 bps y/y to 52.3%. Austin continues to be an outperformer with SP NOI +26%.

SP occupancy: 94.3%, -10 bps y/y; SP rent $1,238, +9% y/y
2022 guidance maintained: FFO/unit $0.86–0.90; midpoint of $0.88; SP NOI growth guidance is 11–13%, based on 8–10% revenue growth and

4.5–6.5% expense growth.
Lease spreads: blended +12.5% (+15.3% Q4/21); new lease +17.4%;

renewal +9.0%; turnover rate 43%.
Leverage: D/GBV (incl. converts) 40.2%, declining to 35% post April

$115m equity offering used to pay down credit facility.
IFRS BV/unit (pre-tax): $21.98, +66% y/y, +11% sequentially from

$19.81. Average cap rate utilized was 3.9%.