Little Rock-based BSR Real Estate Investment Trust (REIT), which is expected to report first quarter earnings on May 13, announced Tuesday (April 30) that it sold four non-core apartment properties for $31.7 million as part of the company’s “portfolio enhancement and capital recycling strategy.”
BSR officials said the sale price surpassed the appraised value of the assets following the company’s initial public offering last summer by $1.3 million or 4.3%. The Arkansas REIT completed its successful IPO on the Toronto Stock Exchange in late July 2019, raising cash proceeds of $135 million to fund the growth strategy to be one of the leading owner-operators of garden-style, multi-family apartment communities in the U.S.
The sale includes the Spring Valley and Briarwood apartments in Little Rock, which are 245- and 280-unit communities built in the early 1970s, respectively. Also included in the transaction were the smaller South Pointe and Fox Trail communities in Shreveport, also built in the early 1970s with 104- and 144-units each.
“We have consistently said our plan is to recycle capital into core markets, by selling properties that no longer meet our long-term growth strategy,” said John Bailey, BSR’s chief executive. “Through these property sales, we have crystallized the benefits of the upgrades previously performed, allowing us to redeploy the capital to other properties where we can maximize our platform’s capabilities and capital redevelopment program, thereby, increasing unitholder value.”
Since the company’s IPO, the Little Rock REIT headquartered in the city’s historic Union Station office complex has completed four other acquisitions across the U.S. Southwest, including two large apartment complexes in the Dallas/Fort Worth metro area, one in Springdale and another in Oklahoma City.
“These purchases are aligned with our acquisition strategy, as the properties were built after 1990, clustered in target markets and were purchased with a clear potential for higher rent utilizing the BSR platform,” said Bailey.
Company officials said $19.4 million of the net cash proceeds of $30.6 million from the deal will be used to retire related mortgage financing and $11.2 million to reduce the balance outstanding under the REIT’s credit facility. BSR’s portfolio now consists of 47 multi-family properties comprising 10,050 units in Arkansas, Texas, Oklahoma, Mississippi and Louisiana.