Little Rock-based BSR Real Estate Investment Trust (REIT) posted 2019 revenue of $111.669 million, up 10.7% compared to 2018 revenue. But the company posted a net income loss of $53.207 million compared to a gain of $144 million in 2018.
However, net income in the two years was impacted by “fair value adjustments to investment properties and Class B Units” in 2019 and a large “bargain purchase gain” in 2018. The publicly held company trades on the Toronto Stock Exchange under the symbol HOM.U.
The Little Rock REIT owns a portfolio of 40 residential apartment communities with 9,359 apartment units across Arkansas, Mississippi, Oklahoma, and Texas. Of the REIT’s 39 multifamily garden-style residential properties, 66% of the apartment units are located in the state of Texas, 21% are located in the state of Arkansas, 11% are located in the state of Oklahoma and the remaining 2% are located in Mississippi.
“Vacancy rates continue to decrease while household formations are increasing, driving stronger demand. The passing of the U.S. tax reform bill on December 22, 2017 made homeownership less appealing to residents throughout the United States. Moreover, the millennial age cohort continues to show a greater propensity to rent driven by large student loans and a desire for a more flexible lifestyle,” the company noted in its financial report posted March 10.
Following are highlights from the recent financial report.
• During 2019, the REIT acquired five apartment communities, in its primary markets, for $250.3 million.
• During 2019, BSR sold 15 noncore properties for $173 million as part of its capital recycling program, under which the REIT recycles the proceeds from asset sales, on a tax-deferred basis, into markets with high growth potential that meet its acquisition criteria.
• Subsequent to Dec. 31, 2019, the REIT sold Westwood Village in Shreveport, Louisiana, for gross proceeds of $1 million. BSR has now exited the state of Louisiana.
• Weighted average rent was $942 per apartment unit as of Dec. 31, 2019 compared to $821 per apartment unit as of Dec. 31, 2018, an increase of 14.7%.