Little Rock REIT continues Texas apartment acquisition binge

by Wesley Brown (wesbrocomm@gmail.com) 350 views 

Little Rock-based BSR Real Estate Investment Trust has continued its Texas-sized shopping spree with the recent acquisition of two large apartment complexes in two fast-growing suburban communities in the Houston and Dallas markets.

Late last week, BSR announced that it had acquired the Satori at Long Meadow Apartments in Richmond, Texas, and the Auberry at Twin Creeks in Allen, Texas for a total of $92.8 million. Richmond is located just about 35 miles southwest of Houston, while Allen is 25 miles north of Dallas.

“The purchase of Satori and Auberry is an opportunity for BSR to continue to modernize our portfolio in MSAs we have targeted for growth,” said BSR Chief Executive John Bailey. “Satori, nestled in one of the wealthiest suburbs of Houston, is a cutting-edge community which builds on our existing Houston footprint. Auberry adds to our growing scale in Dallas and is positioned to generate incremental value for unitholders through BSR’s capital redevelopment program.”

Satori is a newly built, Class A garden-style community that consists of 300 one, two and three-bedroom apartment units on 20.7 acres. The property, adjacent to Plano, Texas, includes multiple amenities, including a resort-style swimming pool, drive-through mail kiosk, dog park, car care center and direct garage/ground floor entry for every apartment unit.

Satori is currently in the lease up phase with 32% of the apartment units already rented out. To mitigate any potential lease up risk, BSR said it had entered a rent escrow agreement with the seller that allows the Arkansas apartment operator to collect monthly stabilized rental revenue from the seller through June 2020.

Auberry is a Class B garden-style community consisting of 216 one, two, and three-bedroom apartment units on 12.6 acres constructed in 2005. The apartment community’s key features include detached garages, a resort-style swimming pool, a dog park, granite countertops, and a private access gate.

BSR now owns eight properties and 1,962 total apartment units in the Houston market representing 18.2% of the REIT’s portfolio. In the Dallas-Ft. Worth market, it now owns five properties with 1,708 total apartment units, which is 15.9% of the Arkansas property trust’s portfolio.

Last summer, BSR successfully completed its public offering (IPO) on the lesser known TSX, now trading under the stock symbol “HOM.U.” When the company first began trading on June 18, 2018, on the Canadian stock exchange, the state’s second publicly-held REIT successfully priced 13,500,000 shares at $10.

The additions of Satori and Auberry mark eight acquisitions since the IPO, adding 2,213 units to the company’s growing apartment communities across Arkansas, Mississippi, Oklahoma, Louisiana and Texas. In late August, BSR also announced that it had purchased the Cielo and Madrone apartment complexes in Austin, Texas for a combined price tag of $104.4 million. Other purchases include Brandon Place in Oklahoma City; Towne Park in Springdale; Riverhill in Grand Prairie, Texas; and Wimberly Apartments in Dallas.

Altogether, the Little Rock REIT owns a portfolio of 49 residential apartment communities with 10,784 apartment units across Arkansas, Mississippi, Oklahoma, Louisiana and Texas.

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