Fast-growing BSR Real Estate Investment Trust posted first quarter profits of $15.1 million Monday (May 13) nearly one year after the Little Rock-based apartment owner and operator completed its initial public offering (IPO) on the REIT-friendly Toronto Stock Exchange.
For the three-month period ended March 31, the Little Rock REIT reported net operating income of $15.1 million on revenues of $27.7 million. On an adjusted funds from operations (AFFO) basis, BSR results of $7.5 million, or 18.8 cents per share for the three-month period was nearly 14% higher than the company’s internal forecast.
Adjusted FFO is a closely-watched measure in the REIT industry. It takes net income and adds back items such as depreciation and amortization. The company also reported that weighted average rent per apartment rose 3.6% to $835 in the third quarter, up from $821 per apartment at the close of fiscal year 2018.
“BSR delivered outstanding first quarter results while increasing our financial flexibility and positioning the REIT for sustained future growth,” said CEO John Bailey. “This consistent earnings performance over the forecast period combined with our portfolio enhancement capital recycling and redevelopment program strategies demonstrate our platform’s capabilities to create long-term value for our unitholders.”
In the past year, the Little Rock REIT headquartered in the city’s historic Union Station office complex has been on a multi-state acquisition spree across the U.S. Southwest, including the purchase of two large apartment communities in the Dallas/Fort Worth metro area, one in Springdale and another in Oklahoma City. The price tag for those acquisitions was more than $150 million.
At the same, BSR sold four non-core apartment properties in the first quarter for $31.7 million as part of the company’s “portfolio enhancement and capital recycling strategy.” The deal involved the Spring Valley and Briarwood apartments in Little Rock, which are 245- and 280-unit communities built in the early 1970s, respectively. It also included the sale of the smaller South Pointe and Fox Trail communities in Shreveport, also built in the early 1970s with 104- and 144-units each.
Locally, BSR announced Monday that it had started the $15.6 million second phase expansion of its Wimbledon Green property in Little Rock, which consists of 96 garden style apartment homes constructed in 2005. The new development will more than double Wimbledon Green’s current size to 252 apartment units. The company now owns a portfolio of 47 multifamily garden-style residential properties with nearly 11,0000 located across five bordering Sunbelt states, including Arkansas, Oklahoma, Texas, Louisiana and Mississippi.
Prior to the first quarter apartment sales, BSR said it had cash-on-hand of $8.4 million, along with a $110 million revolving credit facility, a $35 million line of credit and total payable mortgage debt of $423 million. Nearly $110 million has been drawn from the credit facility and line of credit, company officials said, while cash payouts to the Arkansas REIT’s stockholders totaled $5 million.
BSR’s stock closed Monday down one penny at $9.70 per share in Canada. The company’s shares have traded in the range of $7.12 as a low and $9.90 as a high since last summer’s IPO. The Little Rock REIT will hold its annual meeting Tuesday (May 14) in Toronto.