BSR REIT Acquires Riverhill Apartments Property in Dallas-Fort Worth MSA

BSR REIT Acquires Riverhill Apartments Property in Dallas-Fort Worth MSA

LITTLE ROCK, AR AND TORONTO, Dec. 20, 2018 /CNW/ – BSR Real Estate Investment Trust ("BSR" or the "REIT") (TSX: HOM.U) announced today that it has completed the acquisition of Riverhill Apartments ("Riverhill" or the "Property"), in Grand Prairie, Texas for US$45.2 million. The Riverhill Apartments are centrally located in the Dallas-Fort Worth Metropolitan Statistical Area ("MSA") between the cities of Dallas and Fort Worth, just south of DFW International Airport, and the headquarters of American Airlines. The addition of Riverhill is expected to be immediately accretive to the REIT’s adjusted funds from operations1 ("AFFO") on a per unit basis.

Riverhill, built in 1995, is a 334-unit multifamily complex located on approximately 16 acres that comprises four four-storey apartment buildings and 11 three-storey apartment buildings, as well as a leasing office/clubhouse, laundry facility and fitness center. The average monthly rent is approximately US$1,067 per unit.

Riverhill is the REIT’s third property in the Dallas-Fort Worth MSA, an area the REIT has targeted for acquisitions. The DFW MSA spans 13 counties and 9,700 square miles and includes one of the fastest-growing populations in the United States. The region has an above average household income, below average unemployment and is home to 22 Fortune 500 companies, one of the highest concentrations in the country. According to CoStar Group’s 2018 third quarter report, apartment rental rates increased 2.4% during the 12 months ended September 30, 2018, while the occupancy rate remained stable at 92.2%. The central location of the Property within the MSA provides ideal access to economic hubs.

"The Riverhill property is an outstanding addition to BSR’s portfolio," said John Bailey, Chief Executive Officer of the REIT. "It increases our exposure to a highly attractive market, and we see significant opportunities to generate both organic rent growth and additional rent growth through our value add strategies including unit upgrades and property enhancements."

The transaction was funded utilizing the REIT’s revolving credit facility. As a result of this acquisition, the REIT’s debt to Gross Book Value ratio is 49%.

Riverhill is the REIT’s third property acquisition since completing an initial public offering on the Toronto Stock Exchange in May, 2018. The acquisitions have added a combined 771 units to the REIT’s portfolio, which now includes 50 multifamily properties comprising 10,450 units.

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 50 multifamily garden-style residential properties aggregating 10,450 apartment units located across five bordering states in the Sunbelt region of the United States.

Forward-Looking Statements

This news release may contain forward-looking statements (within the meaning of applicable securities laws) relating to the business of the REIT, including statements regarding the extent to which the acquisition of Riverhill is expected to be accretive to AFFO per Unit. Forward-looking statements are identified by words such as "believe", "anticipate", "project", "expect", "intend", "plan", "will", "may", "estimate" and other similar expressions. The forward-looking statements in this news release are based on certain assumptions, including assumptions regarding the expected financial performance of Riverhill. They are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under the heading "Risk Factors" in the REIT’s prospectus dated May 11, 2018 which is available at . There can be no assurance that forward-looking statements will prove to be accurate as actual outcomes and results may differ materially from those expressed in these forward-looking statements. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, the REIT assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.

Non-IFRS Financial Measure

AFFO is a key measure of performance commonly used by real estate operating companies and real estate investment trusts. It is not a measure recognized under International Financial Reporting Standards ("IFRS") and does not have standardized meanings prescribed by IFRS. AFFO as calculated by the REIT may not be comparable to similar measures presented by other issuers. Please refer to the REIT’s Management’s Discussion and Analysis for the period ended September 30, 2018 for a reconciliation of the REIT’s AFFO to a standardized IFRS measure.

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1 AFFO is a non-IFRS financial measure. See "Non-IFRS Financial Measure" in this news release.

SOURCE BSR Real Estate Investment Trust

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Glenn Fleming