BSR REIT unloads older apartments, files prospectus for $500 million in new funding

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by Roby Brock ([email protected]) November 10, 2019 3:04 pm 712 views 

BSR Real Estate Investment Trust sold nine noncore assets, comprising 1,423 apartment units, as part of what it calls its “portfolio enhancement and capital recycling strategy.” The sale of the complexes is worth $119.2 million.

The following properties were sold:

  • Dove Creek Apartments built in 1978 in Baton Rouge, Louisiana;
  • Longridge Apartments built in 2000 also in Baton Rouge, Louisiana; and
  • Summer Pointe Apartments built in 1985 in Shreveport, Louisiana.

Subsequent to Q3 BSR sold the following properties in Tulsa, Oklahoma:

  • 93 Twenty Apartments built in 1985;
  • Ridge Park Apartments built in 1982;
  • Inverness Apartments built in 1987; and
  • Charleston Crossing Apartments built in 1984.

Additionally, BSR sold Countryside Village Apartments built in 1986 in Moore, Oklahoma and Ridgewood Apartments built in 1987 in Hot Springs, Arkansas.

“The transformation of our portfolio continues as we rotate out of secondary markets and into our target markets on a tax deferred basis,” said John Bailey, Chief Executive Officer of BSR REIT. “These dispositions enable us to both crystallize the benefits of upgrades previously performed at these properties and to acquire more modern properties, clustered in targeted primary markets, with above average population growth and a clear potential for higher rent using the BSR platform.”

Since BSR completed its initial public offering (IPO) on May 18, 2018, the portfolio’s weighted average age has decreased by six years to 23 years old, from 29 years, directly attributable to acquisitions and dispositions.

The REIT’s eight acquisitions following its IPO added 2,213 apartment units with a weighted average year built of 2008 (11 years old) compared to the 15 dispositions totaling 2,534 apartment units with a weighted average year built of 1981 (38 years old).

BSR also announced it has filed a prospectus to secure up to $500 million in new funding.

The prospectus is valid for a 25-month period, during which time the REIT may issue trust units, debt securities, subscription receipts and warrants in amounts, at prices and on terms based on market conditions at the time of sale.

Unless otherwise specified, the net proceeds from the sale of securities for cash may be used for potential future acquisitions, capital expenditures, to repay indebtedness and general working capital purposes.