BSR REIT ANNOUNCES FOURTH QUARTER AND FULL YEAR 2022 FINANCIAL RESULTS

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BSR REIT ANNOUNCES FOURTH QUARTER AND FULL YEAR 2022 FINANCIAL RESULTS

Canada NewsWire

LITTLE ROCK, AR and TORONTO, ON, March 8, 2023 /CNW/ - BSR Real Estate Investment Trust ("BSR", or the "REIT") (TSX: HOM.U) (TSX: HOM.UN) today announced its financial results for the three months and year ended December 31, 2022 ("Q4 2022" and "FY 2022", respectively). All comparisons in the following summary are to the corresponding periods in the prior year. Results are presented in U.S. dollars. References to "Same Community" correspond to stabilized properties the REIT has owned for equivalent periods throughout Q4 2022 and FY 2022 and the three months and year ended December 31, 2021 ("Q4 2021" and "FY 2021", respectively), thus removing the impact of acquisitions, dispositions and non-stabilized properties. Audited Annual Consolidated Financial Statements and Management's Discussion and Analysis as of and for the three months and year ended December 31, 2022 are available on the REIT's website at www.bsrreit.com and at www.sedar.com.

A reconciliation of Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO") to net income and comprehensive income, as well as an expanded discussion of the components of FFO and AFFO, and a reconciliation of Net Asset Value ("NAV") to unitholders equity can be found under "Non-IFRS Measures" in this release. FFO per Unit, AFFO per Unit and NAV per Unit include diluted trust units of the REIT ("Units"), Class B Units of BSR Trust, LLC ("Class B Units") and issued Deferred Units.

"Our fourth quarter results reflect the strong fundamentals underlying our portfolio as increases in both occupancy and weighted average rents combined to drive robust FFO growth of 37.6% year-over-year and 9.9% sequentially from the previous quarter," said Dan Oberste, the REIT's President and Chief Executive Officer. "BSR is uniquely positioned to generate outstanding operating and financial results as we continue to see job growth, positive migration and occupancy trends in our core Texas markets". 

Q4 2022 Highlights

  • NAV per Unit1 increased 9.8% to $21.75 as of December 31, 2022, compared to $19.81 as of December 31, 2021;
  • FFO per Unit1 for Q4 2022 of $0.23 increased 21.1% over Q4 2021;
  • AFFO per Unit1 for Q4 2022 of $0.22 increased 29.4% over Q4 2021;
  • Weighted average rent increased 11.7% to $1,482 per apartment unit as of December 31, 2022 compared to $1,327 as of December 31, 2021 and 1.5% sequentially from $1,460 as of September 30, 2022;
  • During Q4 2022, rental rates for new leases, increased 2.1% and renewals increased 11.9% over the prior leases, resulting in a blended increase of 6.0%;
  • Same Community1 revenues for Q4 2022 increased 13.3% over Q4 2021;
  • Same Community1 Net Operating Income ("NOI")1 for Q4 2022 increased 11.7% over Q4 2021;
  • During Q4 2022, the REIT's AFFO Payout Ratio1 was 59.6% compared to 71.4% during Q4 2021;
  • Weighted average occupancy was 96.0% as of December 31, 2022 and December 31, 2021;
  • Debt to Gross Book Value1 excluding Convertible Debentures (as defined below) as of December 31, 2022 was 35.2%;
  • On October 3, 2022, the Toronto Stock Exchange accepted the REIT's notice of intention to make a normal course issuer bid ("NCIB") for a maximum of approximately 3.3 million of its issued and outstanding Units for a twelve-month period beginning on October 6, 2022. The REIT purchased and canceled 1,079,507 Units under its NCIB and automatic securities purchase plan at an average price of $13.55 per Unit through December 31, 2022;
  • BSR was named one of the Best Places to Work in Multifamily, and Best Places to Work in Multifamily for Women at the Multifamily Innovation Awards December 2022;
  • BSR was named as one of the Best Places to Work in Arkansas for the sixth straight year by Arkansas Business;
  • J Turner Research's Online Reputation Assessment ("ORA") score for BSR was 81.11 for 2022, compared to the national average of 62.88. The REIT expects its score to be in the top two publicly traded US REITs when the 2023 scores are published; and
  • On December 30, 2022, the REIT amended its existing $80 million interest rate swap, reducing the fixed rate from 1.704% to 0.440% and the maturity date from June 10, 2025 to June 10, 2024.

__________

1 Same Community, NOI, NOI Margin, FFO, FFO per Unit, AFFO, AFFO per Unit, AFFO Payout Ratio, Debt to Gross Book Value and NAV per Unit are non-IFRS measures. For a description of the basis of presentation and reconciliations of the REIT's non-IFRS measures, see "Non-IFRS Measures" in this news release.

 

FY 2022 Highlights

  • Same Community revenue for FY 2022 increased 11.7% over FY 2021;
  • Same Community NOI for FY 2022 increased 13.5% over FY 2021;
  • FFO per Unit for FY 2022 of $0.86 increased 43.3% over FY 2021;
  • AFFO per Unit for FY 2022 of $0.80 increased 35.6% over FY 2021; and
  • The REIT met or exceeded the midpoints for our 2022 guidance for the year ended December 31, 2022, including Same Community revenues, Same Community NOI, FFO per Unit and AFFO per Unit.

Subsequent Highlights

  • In January 2023, the REIT entered into a new forward receive-variable based 1 Month USD-SOFR CME/pay fixed interest rate swap of $80 million at a fixed interest rate of 1.828%. The swap is effective beginning on June 10, 2024 and matures on April 26, 2030, subject to the counterparty's optional early termination date of June 10, 2025.

Q4 2022 Financial Summary

In thousands of U.S. dollars, except per unit amounts


Q4 2022


Q4 2021


Change


Change %

Revenue, Total Portfolio

$                     41,637


$                     34,061


$                       7,576


22.2 %

Revenue, Same Community1 Properties

$                     24,901


$                     21,981


$                       2,920


13.3 %

Revenue, Non-Same Community1 Properties

$                     16,736


$                     12,080


$                       4,656


38.5 %

Net (loss) income and comprehensive (loss) income

$                    (16,420)


$                     70,868


$                    (87,288)


nm*

NOI1, Total Portfolio

$                     23,154


$                     18,684


$                       4,470


23.9 %

NOI1, Same Community1 Properties

$                     13,818


$                     12,369


$                       1,449


11.7 %

NOI1, Non-Same Community1 Properties

$                       9,336


$                       6,315


$                       3,021


47.8 %

Funds from Operations ("FFO")1

$                     13,284


$                       9,653


$                       3,631


37.6 %

FFO per Unit1

$                         0.23


$                         0.19


$                         0.04


21.1 %

Maintenance capital expenditures

$                         (793)


$                         (974)


$                          181


-18.6 %

Escrowed rent guaranty realized

$                               -


$                          265


$                         (265)


nm*

Straight line rental revenue differences

$                              8


$                            43


$                           (35)


nm*

AFFO1

$                     12,499


$                       9,093


$                       3,406


37.5 %

AFFO per Unit1

$                         0.22


$                         0.17


$                         0.05


29.4 %

Weighted Average Unit Count

58,006,651


52,130,772


5,875,879


11.3 %

Unitholders' equity

$                   975,749


$                   666,569


$                   309,180


46.4 %

NAV1

$                1,243,575


$                1,032,934


$                   210,641


20.4 %

NAV per Unit1

$                       21.75


$                       19.81


$                         1.94


9.8 %

*Percentages have been excluded for changes which are not considered to be meaningful for comparative purposes.

1Same Community, NOI, NOI Margin, FFO, FFO per Unit, AFFO, AFFO per Unit, AFFO Payout Ratio, Debt to Gross Book Value and NAV per Unit are non-IFRS measures. For a description of the basis of presentation and reconciliations of the REIT's non-IFRS measures, see "Non-IFRS Measures" in this news release.

 

Total portfolio revenue of $41.6 million for Q4 2022 increased 22.2% compared to $34.1 million in Q4 2021. The increase was the result of increases of $2.9 million from Same Community properties, as described below, and $6.1 million from property acquisitions, partially offset by property dispositions that reduced revenue by $1.6 million.

Revenue from Same Community properties of $24.9 million for Q4 2022 increased 13.3% from $22.0 million in Q4 2021, primarily due to a 12.3% increase in average rental rates from $1,225 per apartment unit as of December 31, 2021 to $1,376 per apartment unit as of December 31, 2022.

The decrease in net (loss) income and comprehensive (loss) income for Q4 2022 compared to Q4 2021 was primarily due to a change in the fair value adjustment to reduce the estimated fair value of investment properties by $157.4 million, partially offset by the change in the fair value adjustment (gain) to derivatives and other financial liabilities of $59.8 million, and an increase in NOI over the prior period, discussed below.

The 23.9% increase in total portfolio NOI for Q4 2022 to $23.2 million compared to $18.7 million in Q4 2021 was the result of increases of $1.4 million from Same Community properties, described below, and $3.8 million from property acquisitions and non-stabilized properties, partially offset by the reduction in NOI due to property dispositions of $0.7 million.

The 11.7% increase in Same Community NOI to $13.8 million for Q4 2022 compared to $12.4 million in Q4 2021 was the result of the increase in revenue described above, partially offset by an increase in property operating expenses of $1.5 million due to an increase in payroll, administrative and repair and maintenance expenses as well as an increase in the cost of real estate taxes and insurance over the prior period.

FFO was $13.3 million, or $0.23 per Unit, for Q4 2022 compared to $9.7 million, or $0.19 per Unit, for Q4 2021. The increase was primarily the result of the higher NOI discussed above, partially offset by an increase of $0.6 million in finance costs associated with debt incurred for the acquisition of additional investment properties over the prior period and an increase in interest rates. Losses on extinguishment of debt and restructuring costs are excluded from the calculation of FFO.

AFFO was $12.5 million, or $0.22 per Unit, for Q4 2022, compared to $9.1 million, or $0.17 per Unit, for Q4 2021. The improvement was primarily the result of the increase in FFO discussed above, partially offset by an escrowed rent guaranty realized in the prior year of $0.3 million. Losses on extinguishment of debt, restructuring costs and severance/retention costs on dispositions are excluded from the calculation of AFFO.

FY 2022 Financial Summary

In thousands of U.S. dollars, except per unit amounts






FY 2022


FY 2021


Change


Change %

Revenue, Total Portfolio

$                   158,518


$                   119,582


$                     38,936


32.6 %

Revenue, Same Community1 Properties

$                     94,314


$                     84,439


$                       9,875


11.7 %

Revenue, Non-Same Community1 Properties

$                     64,204


$                     35,143


$                     29,061


82.7 %

Net income and comprehensive income

$                   227,230


$                   283,214


$                    (55,984)


nm*

NOI1, Total Portfolio

$                     85,516


$                     62,911


$                     22,605


35.9 %

NOI1, Same Community1 Properties

$                     51,126


$                     45,058


$                       6,068


13.5 %

NOI1, Non-Same Community1 Properties

$                     34,390


$                     17,853


$                     16,537


92.6 %

FFO1

$                     48,068


$                     30,619


$                     17,449


57.0 %

FFO per Unit1

$                         0.86


$                         0.60


$                         0.26


43.3 %

Maintenance capital expenditures

$                      (3,633)


$                      (3,108)


$                         (525)


16.9 %

Escrowed rent guaranty realized

$                            87


$                       2,417


$                      (2,330)


nm*

Severance/retention costs on dispositions

$                               -


$                          211


$                         (211)


nm*

Straight line rental revenue differences

$                          191


$                           (32)


$                          223


nm*

AFFO1

$                     44,713


$                     30,107


$                     14,606


48.5 %

AFFO per Unit1

$                         0.80


$                         0.59


$                         0.21


35.6 %

Weighted Average Unit Count

56,192,126


51,407,230


4,784,896


9.3 %

*Percentages have been excluded for changes which are not considered to be meaningful for comparative purposes.

1Same Community, NOI, NOI Margin, FFO, FFO per Unit, AFFO, AFFO per Unit, AFFO Payout Ratio, Debt to Gross Book Value and NAV per Unit are non-IFRS measures. For a description of the basis of presentation and reconciliations of the REIT's non-IFRS measures, see "Non-IFRS Measures" in this news release.

 

The 32.6% increase in total portfolio revenue for the year ended December 31, 2022 to $158.5 million compared to $119.6 million for the year ended December 31, 2021 was the result of increases of $9.9 million from Same Community properties, $40.3 million from property acquisitions and $1.1 million from non-stabilized properties, partially offset by property dispositions that reduced revenue by $12.3 million.

Revenue from Same Community properties for the year ended December 31, 2022 increased 11.7% to $94.3 million compared to $84.4 million for the year ended December 31, 2021, primarily due to a 12.3% increase in average rental rates from $1,225 per apartment unit as of December 31, 2021 to $1,376 per apartment unit as of December 31, 2022.

The decrease in net income and comprehensive income for the year ended December 31, 2022 compared to the year ended December 31, 2021 was primarily due to a decrease in the fair value adjustment to investment properties of $350.2 million, partially offset by an increase in NOI, discussed below, and an increase in the fair value adjustment to derivatives and other financial liabilities of $263.3 million over the prior period.

The 35.9% increase in total portfolio NOI for the year ended December 31, 2022 to $85.5 million compared to $62.9 million for the year ended December 31, 2021 was the result of increases of $6.1 million from Same Community properties, discussed below, and $22.4 million from property acquisitions and non-stabilized properties, partially offset by property dispositions which reduced NOI by $5.8 million. Severance/retention costs on dispositions are excluded from NOI.

The 13.5% increase in Same Community NOI for the year ended December 31, 2022 to $51.1 million compared to $45.1 million for the year ended December 31, 2021 was the result of the increase in revenue described above, partially offset by an increase in property operating expenses of $3.8 million due to higher payroll expenses, administrative expenses, utilities, real estate taxes and property insurance expense compared to the prior period.

FFO was $48.1 million, or $0.86 per Unit, for the year ended December 31, 2022 compared to $30.6 million, or $0.60 per Unit, for the year ended December 31, 2021. The FFO per Unit increase of 43.3% was primarily the result of higher NOI discussed above, partially offset by increases of $1.0 million in general and administrative expenses primarily related to higher share based compensation and payroll expenses and $4.3 million in finance costs related to additional debt associated with investment properties acquired over the prior period and an increase in interest rates. Losses on extinguishment of debt and restructuring costs are excluded from the calculation of FFO.

AFFO was $44.7 million, or $0.80 per Unit, for the year ended December 31, 2022, compared to $30.1 million, or $0.59 per Unit, for the year ended December 31, 2021. The AFFO per Unit improvement of 35.6% was primarily the result of the increase in FFO, discussed above, partially offset by a lower escrow rent guaranty realized of $2.3 million and an increase in maintenance capital expenditures of $0.5 million largely related to the painting of metal railings and replacing of gutters in Q2 2022. Losses on extinguishment of debt, restructuring costs and severance/retention costs on dispositions are excluded from the calculation of AFFO.

Highlights from Recent Four Quarters

In thousands of U.S. dollars (except per unit amounts)






December 31,
2022


September 30,
2022


June 30,
2022


March 31,
2022

Operational Information








Number of real estate investment properties

31


31


31


31

Total apartment units

8,666


8,666


8,666


8,666

Average monthly rent on in-place leases

$                       1,482


$                       1,460


$                       1,412


$                       1,350

Average monthly rent on in-place leases,








     Same Community1 Properties

$                       1,376


$                       1,354


$                       1,307


$                       1,238

Weighted average occupancy rate

96.0 %


94.7 %


95.0 %


94.5 %

Retention rate

56.3 %


54.0 %


57.1 %


57.3 %

Debt to Gross Book Value1

37.3 %


36.2 %


36.2 %


43.2 %










Q4 2022


Q3 2022


Q2 2022


Q1 2022

Operating Results








Revenue, Total Portfolio

$                     41,637


$                     40,549


$                     38,787


$                     37,545

Revenue, Same Community1 Properties

$                     24,901


$                     24,033


$                     23,179


$                     22,201

Revenue, Non-Same Community1 Properties

$                     16,736


$                     16,516


$                     15,608


$                     15,344

NOI1, Total Portfolio

$                     23,154


$                     21,719


$                     20,998


$                     19,645

NOI1, Same Community1 Properties

$                     13,818


$                     12,471


$                     12,718


$                     12,119

NOI1, Non-Same Community1 Properties

$                       9,336


$                       9,248


$                       8,280


$                       7,526

NOI Margin1, Total Portfolio

55.6 %


53.6 %


54.1 %


52.3 %

NOI Margin1, Same Community1 Properties

55.5 %


51.9 %


54.9 %


54.6 %

NOI Margin1, Non-Same Community1 Properties

55.8 %


56.0 %


53.0 %


49.0 %

Net (loss) income and comprehensive








  (loss) income

$                    (16,420)


$                     23,787


$                   160,832


$                     59,031

Distributions on Class B Units

$                       2,670


$                       2,671


$                       2,678


$                       2,648

Fair value adjustment to investment properties

$                     43,071


$                     23,449


$                    (20,258)


$                  (118,789)

Fair value adjustment to investment








  properties (IFRIC 21)

$                       8,961


$                       5,635


$                       7,732


$                    (22,328)

Property tax liability adjustment, net (IFRIC 21)

$                      (8,961)


$                      (5,635)


$                      (7,732)


$                     22,328

Fair value adjustment to derivatives and other








  financial liabilities

$                    (17,274)


$                    (38,330)


$                  (129,842)


$                     65,607

Fair value adjustment to unit-based








  compensation

$                         (396)


$                         (354)


$                      (1,771)


$                       2,569

Restructuring costs

$                       1,630


$                               -


$                               -


$                               -

Loss on extinguishment of debt

$                               -


$                          853


$                               -


$                               -

Principal payments on lease liability

$                           (31)


$                           (27)


$                           (35)


$                           (34)

Depreciation of right-to-use asset

$                            34


$                            33


$                            33


$                            33

FFO1

$                     13,284


$                     12,082


$                     11,637


$                     11,065

FFO per Unit

$                         0.23


$                         0.21


$                         0.21


$                         0.21

Maintenance capital expenditures

$                         (793)


$                         (920)


$                      (1,218)


$                         (702)

Escrowed rent guaranty realized

$                               -


$                               -


$                              5


$                            82

Straight line rental revenue differences

$                              8


$                            47


$                            54


$                            82

AFFO1

$                     12,499


$                     11,209


$                     10,478


$                     10,527

AFFO per Unit1

$                         0.22


$                         0.19


$                         0.19


$                         0.20

AFFO Payout Ratio

59.6 %


67.2 %


71.8 %


63.3 %

Weighted Average Unit Count

58,006,651


58,205,337


56,290,702


52,179,657

1Same Community, NOI, NOI Margin, FFO, FFO per Unit, AFFO, AFFO per Unit, AFFO Payout Ratio, Debt to Gross Book Value and NAV per Unit are non-IFRS measures. For a description of the basis of presentation and reconciliations of the REIT's non-IFRS measures, see "Non-IFRS Measures" in this news release.

 

Liquidity and Capital Structure

As of December 31, 2022, the REIT had liquidity of $166.7 million, consisting of cash and cash equivalents of $7.2 million and $159.5 million available under its revolving credit facility. The REIT also can obtain additional liquidity by adding properties to the borrowing base of the revolving credit facility.

As of December 31, 2022, the REIT had total mortgage notes payable of $499.1 million, excluding the credit facility, with a weighted average contractual interest rate of 3.3% and a weighted average term to maturity of 5.1 years. Total loans and borrowings of the REIT as of December 31, 2022 were $726.4 million with a weighted average contractual interest rate of 3.4%, excluding the convertible unsecured subordinated debentures (the "Convertible Debentures"). Debt to Gross Book Value excluding the convertible debentures as of December 31, 2022 was 35.2%. As of December 31, 2022, 90% of the REIT's debt was fixed or economically hedged to fixed rates. Following the commencement of our $65 million swap beginning on January 3, 2023, 99% of the REIT's debt will be fixed or economically hedged to fixed rates at a weighted average contractual interest rate of 3.2%.

As of December 31, 2022, the REIT had outstanding Convertible Debentures valued at $42.6 million at a contractual interest rate of 5%, maturing on September 30, 2025 with a conversion price of $14.40 per Unit.

On December 8, 2021, the REIT announced an at-the-market equity program (the "ATM Program") that allows the REIT to issue up to $150 million of Units from treasury to the public from time to time, at the REIT's discretion. The ATM Program is effective until the earlier of (i) the issuance and sale of all of the Units through the agents on the terms and conditions set forth in the equity distribution agreement, (ii) the Shelf Prospectus ceasing to be effective on January 1, 2024, and (iii) the termination of the equity distribution agreement. As of December 31, 2022, no Units have been issued under the ATM Program.

On April 29, 2022, the REIT completed the April 2022 equity offering for gross proceeds of $115.1 million, after the full exercise of the underwriters' overallotment option. 

On October 3, 2022, the Toronto Stock Exchange accepted the REIT's notice of intention to make a NCIB for up to a maximum of approximately 3.3 million of its issued and outstanding Units. The REIT may purchase Units for a twelve-month period beginning on October 6, 2022 and the NCIB will terminate on October 5, 2023. The REIT purchased and canceled 1,079,507 Units under its NCIB and related automatic securities purchase plan at an average price of $13.55 per Unit, through December 31, 2022.

Distributions and Units Outstanding

Cash distributions declared to holders of Units and holders of Class B Units totalled $7.5 million for Q4 2022, representing an AFFO Payout Ratio1 of 59.6%. 100% of the REIT's cash distributions were classified as return of capital. As of December 31, 2022, the total number of Units outstanding was 36,309,281. There were also 20,554,586 Class B Units outstanding, which are redeemable for Units on a one-for-one basis.

2023 Earnings and Same Community Portfolio Guidance

The REIT's initial 2023 guidance is outlined below for FFO per Unit and AFFO per Unit, along with its expectations for Same Community Properties for revenue, property operating expense and NOI in 2023. The guidance does not include acquisitions, dispositions or future growth from the impact of properties currently under development. The REIT will update this guidance on a quarterly basis as necessary. 


Initial guidance for 2023

Per Unit

Range

Midpoint

Total Portfolio



FFO per Unit

$0.90 to $0.96

$0.93

AFFO per Unit

$0.83 to $0.89

$0.86




Same Community Growth



Total Revenue

5.0% to 7.0%

6.0 %

Property Operating Expenses

4.0% to 6.0%

5.0 %

NOI

6.0% to 8.0%

7.0 %

 

Non-IFRS measures are presented to illustrate alternative relevant measures to assess the REIT's performance. See "Non-IFRS Measures" in this news release. See also "Forward-Looking Information", as the figures presented above are considered "financial outlook" for purposes of applicable Canadian securities laws and may not be appropriate for purposes other than to understand management's current expectations relating to the future growth of the REIT. Although the REIT believes that its anticipated future results, performance or achievements expressed or implied by the forward-looking statements and information are based upon reasonable assumptions and expectations, the reader should not place undue reliance on forward-looking statements and information. The REIT reviews its key assumptions regularly and may change its outlook on a going-forward basis if necessary.

Conference Call

Dan Oberste, President and Chief Executive Officer, and Brandon Barger, Chief Financial Officer, will host a conference call for analysts and investors on Thursday March 9th, 2023 at 12:00 pm (ET). Participants can register and enter their phone number at https://bit.ly/3Rh5Wnw to receive an instant automated call back. Alternatively, they can dial 416-764-8688 or 1-888-390-0546 to reach a live operator who will join them into the call. In addition, the call will be webcast live at: https://app.webinar.net/qXG4350jDr9.

A replay of the call will be available until Thursday, March 16th, 2023. To access the replay, dial 416-764-8677 or 888-390-0541 (Passcode: 157993#). A transcript of the call will be archived on the REIT's website.

About BSR Real Estate Investment Trust

BSR Real Estate Investment Trust is an internally managed, unincorporated, open-ended real estate investment trust established pursuant to a declaration of trust under the laws of the Province of Ontario. The REIT owns a portfolio of multifamily garden-style residential properties located in attractive primary and secondary markets in the Sunbelt region of the United States.

Non-IFRS Measures

Same Community, NOI, NOI Margin, FFO, FFO per Unit, AFFO, AFFO per Unit, AFFO Payout Ratio, Debt to Gross Book Value, NAV and NAV per Unit are key measures of performance commonly used by real estate operating companies and real estate investment trusts. They are not measures recognized under International Financial Reporting Standards ("IFRS") and do not have standardized meanings prescribed by IFRS. Same Community, NOI, NOI Margin, FFO, FFO per Unit, AFFO, AFFO per Unit, AFFO Payout Ratio, Debt to Gross Book Value, NAV and NAV per Unit as calculated by the REIT may not be comparable to similar measures presented by other issuers. For complete definitions of these measures, as well as an explanation of their composition and how the measures provide useful information to investors, please refer to the section titled "Non-IFRS Measures" in the REIT's Management's Discussion and Analysis for the three months and year ended December 31, 2022, which section is hereby incorporated herein by reference.







Three months ended
December 31, 2022


Three months ended
December 31, 2021


Year ended
December 31, 2022


Year ended
December 31, 2021

Net income and comprehensive income


$       (16,420)


$         70,868


$       227,230


$       283,214

Adjustments to arrive at FFO










Distributions on Class B Units


2,670


2,595


10,667


10,638


Fair value adjustment to investment properties


43,071


(114,282)


(72,527)


(422,748)


Fair value adjustment to investment properties (IFRIC 21)


8,961


5,057



2,993


Property tax liability adjustment, net (IFRIC 21)


(8,961)


(5,057)



(2,993)


Fair value adjustment to derivatives and other financial










     liabilities


(17,274)


42,512


(119,839)


143,477


Fair value adjustment to unit-based compensation


(396)


905


48


2,972


Restructuring costs


1,630



1,630



Costs of disposition of investment properties



1,518



3,207


Loss on extinguishment of debt



5,538


853


9,861


Principal payments on lease liability


(31)


(33)


(127)


(132)


Depreciation of right-to-use asset


34


32


133


130

Funds from Operations ("FFO")


$         13,284


$           9,653


$         48,068


$         30,619

FFO per Unit


$             0.23


$             0.19


$             0.86


$             0.60

Adjustments to arrive at AFFO










Maintenance capital expenditures


(793)


(974)


(3,633)


(3,108)


Escrowed rent guaranty realized



265


87


2,417


Severance/retention costs on dispositions



106



211


Straight line rental revenue differences


8


43


191


(32)

Adjusted Funds from Operations ("AFFO")


$         12,499


$           9,093


$         44,713


$         30,107

AFFO per Unit


$             0.22


$             0.17


$             0.80


$             0.59

Distributions declared


$           7,451


$           6,495


$         29,170


$         25,708

AFFO Payout Ratio


59.6 %


71.4 %


65.2 %


85.4 %

Weighted average unit count


58,006,651


52,130,772


56,192,126


51,407,230

































Three months ended
December 31, 2022


Three months ended
December 31, 2021


Year ended
December 31, 2022


Year ended
December 31, 2021

Total revenue


$            41,637


$            34,061


$          158,518


$          119,582

Property operating expenses


(11,904)


(9,745)


(45,804)


(36,387)

Real estate taxes


2,382


(687)


(27,198)


(17,501)







32,115


23,629


85,516


65,694

Property tax liability adjustment (IFRIC 21)


(8,961)


(5,057)



(2,993)

Severance/retention costs on dispositions



106



211

Net Operating Income ("NOI")


$            23,154


$            18,678


$            85,516


$            62,912

NOI margin


55.6 %


54.8 %


53.9 %


52.6 %

   









December 31, 2022


December 31, 2021

Loans and borrowings (current portion)




$              1,779


$              1,714

Loans and borrowings (non-current portion)




724,581


824,767

Convertible debentures




42,599


51,745

Total loans and borrowings and convertible debentures ("Debt")




768,959


878,226

Gross Book Value




$       2,063,275


$       1,948,095

Debt to Gross Book Value




37.3 %


45.1 %































December 31, 2022


December 31, 2021

Unitholders' equity




$          975,749


$          666,569

Class B Units




267,826


366,365

NAV






$       1,243,575


$       1,032,934

Unit count, as of the end of period




57,169,893


52,142,519

NAV per Unit




$              21.75


$              19.81

 

Forward-Looking Statements

This news release contains forward-looking information within the meaning of applicable Canadian securities legislation (collectively, "forward-looking statements"). Forward-looking statements in this news release include, but are not limited to, statements which reflect management's expectations regarding objectives, plans, goals, strategies, future growth (including 2023 guidance for FFO, AFFO, and Same Community metrics Revenue, Property Expenses and NOI growth), results of operations, performance, business prospects, and opportunities for the REIT. The words "expects", "expectation", "anticipates", "anticipated", "believes", "will" or variations of such words and phrases identify forward-looking statements herein. Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events or circumstances. Forward-looking information is based on a number of assumptions and is subject to a number of risks and uncertainties, many of which are beyond the REIT's control that could cause actual results and events to differ materially from those that are disclosed in or implied by such forward-looking information. The REIT's estimates, beliefs and assumptions, which may prove to be incorrect, include assumptions relating to the REIT's future growth potential, results of operations, demographic and industry trends, no changes in legislative or regulatory matters, the tax laws as currently in effect, a gradual recovery and growth of the general economy over 2023, the impact of COVID-19, lease renewals and rental increases, the ability to re-lease or find new tenants, the timing and ability of the REIT to sell certain properties, project costs and timing, a continuing trend toward land use intensification at reasonable costs and development yields, including residential development in urban markets, access to equity and debt capital markets to fund, at acceptable costs, future capital requirements and to enable refinancing of debts as they mature, the availability of investment opportunities for growth in the REIT's target markets, the valuations to be realized on property sales relative to current IFRS values, and the market price of the Units . When relying on forward-looking statements to make decisions, the REIT cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties. The risks and uncertainties that may impact such forward-looking information include, but are not limited to, the REIT's ability to execute its growth strategies, the impact of changing conditions in the U.S. multifamily housing market, increasing competition in the U.S. multifamily housing market, the effect of fluctuations and cycles in the U.S. real estate market, the marketability and value of the REIT's portfolio, changes in the attitudes, financial condition and demand of the REIT's demographic market, fluctuation in interest rates and volatility in financial markets, developments and changes in applicable laws and regulations, the impact of climate change, the impact of COVID-19 on the operations, business and financial results of the REIT and the factors discussed under "Risks and Uncertainties" in the REIT's Management's Discussion and Analysis for the three months and year ended December 31, 2022 and in the REIT's Annual Information Form dated March 8, 2022, both of which are available on SEDAR (www.sedar.com). If any risks or uncertainties with respect to the above materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information. The REIT does not undertake any obligation to update such forward-looking information, whether as a result of new information, future events or otherwise, except as expressly required by applicable law. This forward-looking information speaks only as of the date of this news release.

Certain statements included in this news release, including with respect to 2023 FFO, AFFO and Same Community portfolio guidance, are considered financial outlook for purposes of applicable Canadian securities laws, and as such, the financial outlook may not be appropriate for purposes other than to understand management's current expectations relating to the future growth of the REIT, as disclosed in this news release. These forward-looking statements have been approved by management to be made as at the date of this news release. Certain material factors, estimates or assumptions were applied in drawing a conclusion or making a forecast or projection as reflected in this news release and actual results could differ materially from such conclusions, forecasts or projections. There can be no assurance that actual results, performance or achievements will be consistent with these forward-looking statements. The forward-looking statements contained in this document are expressly qualified in their entirety by this cautionary statement.

SOURCE BSR Real Estate Investment Trust

Cision View original content: http://www.newswire.ca/en/releases/archive/March2023/08/c3972.html

Copyright CNW Group 2023

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