Bsr Real Estate Investment Trust · TSX:BSRT.UN
Bsr Real Estate Investment Trust — Q2 2024 Earnings Presentation
32 slides from Bsr Real Estate Investment Trust's earnings presentation, Aug 7, 2024
Slide 1: BSR Real Estate Investment Trust
BSR REAL ESTATE INVESTMENT TRUST August 2024 Lakeway Castle Hills Ariza Plum Creek Headquarters Palermo by the Park Satori at Long Meadow Dallas, TX Austin TX Little Rock, AR Dallas, TX Houston, TX
Slide 2: Disclaimers
Disclaimers Non-Reliance This presentation does not purport to be comprehensive or to contain all the information that a recipient may need in order to evaluate an investment in securities of BSR Real Estate Investment Trust (“BSR” or the “REIT”). No representation or warranty, express or implied, i
Slide 3: Presenters
Presenters Daniel Oberste President and Chief Executive Officer • CEO since January 2022 • Served as the REIT’s President and Chief Investment Officer prior to promotion • With BSR and predecessor company since 2009 Susan Rosenbaum Chief Operating Officer and Interim Chief Financial Officer • With B
Slide 4: REIT Overview
Ariza Plum Creek – Austin, TX REIT Overview 4
Slide 5: BSR REIT At A Glance
BSR REIT At A Glance • Internally managed portfolio of 31 garden-style, multi-family communities ARKANSAS totalling 8,666 units 3 Properties 304 Apartment Units OKLAHOMA • Located in five suburban primary and 4 Properties 965 Apartment Units secondary markets in three bordering U.S. sunbelt states •
Slide 6: BSR REIT's Garden-Style Assets
BSR REIT’s Garden-Style Assets • Low density rental communities, located primarily in suburban areas of primary and secondary markets • Primarily middle market, high-quality housing that typically experiences strong demand throughout all phases of the economic cycle Auberry at Twin Creeks - Allen, T
Slide 7: Investment Highlights
Investment Highlights 1. Fully aligned internal management platform 2. Attractive garden-style and big house apartments in high-growth U.S. sunbelt markets 3. BSR has successfully repositioned to focus on attractive modern properties in primary markets with embedded growth opportunity 4. Stable cash
Slide 8: Fully Aligned Internal Management Platform
Brandon Place - Oklahoma City, OK Fully Aligned Internal Management Platform 8
Slide 9: Fully Aligned Internal Management Platform with Significant Retained Interest
Fully Aligned Internal Management Platform with Significant Retained Interest • Scalable internal platform with more • Senior team of four seasoned real estate than 200 employees across five markets professionals who have worked seamlessly together since prior to the REIT’s formation • Bailey/Hughes
Slide 10: Attractive Garden-Style Apartments in High-Growth U.S. Sunbelt Markets
The M at Lakeline – Austin, TX Attractive Garden-Style Apartments in High-Growth U.S. Sunbelt Markets 10
Slide 11: Top Performing Sector
Attractive Asset Class with Favourable Fundamentals Top Performing Sector 20-Year Annualized Returns by Real Estate Sector (2003 – 2023) 20% Public REITs 16% 12% 10.9% 10.1% 8% 6.4% 6.0% 4% 0% Multifamily Industrial Retail Office Source: S&P Global Note: REIT performance indicates total return and a
Slide 12: Top Performing Sub-Sector
Attractive Asset Class with Favourable Fundamentals Top Performing Sub-Sector Compound annual total return for multifamily apartment REITS, 2015-2023 24% 20% 16% 13.7% 12% 8% 6.7% 5.1% 4% 0% Sunbelt National Coastal Source: Bloomberg Sunbelt includes: BRT Apartment Corp., Camden Property Trust, Inde
Slide 13: Attractive Asset Class with Favourable Fundamentals: Millennials and Propensity to Rent
Attractive Asset Class with Favourable Fundamentals United States Population (Ages 20 – 34)(1) Propensity to Rent(1) 2023 2013 70 70% 61% 63% 65 60% 60 50% 37% 39% 40% Millions 55 29% 29% 30% 24% 23% 21% 19% 50 20% 45 10% 40 -- 35 % of 2022 Under 35 35 - 44 45 - 54 55 - 64 65+ Population 30% 16% 15%
Slide 14: Repositioned to Focus on Attractive Modern Properties in Primary Markets
Alleia Long Meadow Farms – Houston, TX Repositioned to Focus on Attractive Modern Properties in Primary Markets with Embedded Growth Opportunity 14
Slide 15: Exposure to Highest-Growth U.S. Markets: Population Growth
Exposure to Highest-Growth U.S. Markets Population Growth 1.62% 1.65% 1.54% 1.30% 1.25% 1.22% 0.84% 0.51% 0.48% 0.53% 0.47% 0.30% 0.19% 0.01% 0.04% 0.02% 2018 2019 2020 2021 2022 2023 -0.33% -1.39% BSR Primary Markets Gateway Markets National Population growth in BSR’s primary markets consistently o
Slide 16: Population Growth Projections
Exposure to Highest-Growth U.S. Markets Population Growth Projections Total Projected Population Average Annual Five Year Forward Rank MSA Growth 2023-2028 Population Growth Population CAGR 1 Austin 227,264 45,453 1.78% 2 Charlotte 129,917 25,983 1.78% 3 Orlando 223,321 44,664 1.54% 4 Salt Lake City
Slide 17: Annual Employment Growth
Exposure to Highest-Growth U.S. Markets Annual Employment Growth 5.7% 4.0% 3.7% 3.1% 3.2% 2.6% 2.7% 2.5% 2.4% 2.5% 2.5% 2.1% 1.7% 1.7% 1.7% 1.6% 1.3% 1.1% 1.2% 1.0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 -4.4% -6.2% BSR Primary Texas Markets (Cumulative) United States Employment grow
Slide 18: Growth Drivers in the REIT's Primary Markets
Growth Drivers in the REIT’s Primary Markets Annual Rent as a Percentage of Median Household Income(1) 40% 35% 33.9% 30% 26.1% 25% 21.1% 20.5% 19.5% 20% 16.9% 15% 10% 5% 0% Gateway National Dallas Houston Austin Oklahoma City % of REIT’s Total Markets 37% 26% 22% 11% Apartment Units Rent as a percen
Slide 19: Indicative Asset Profiles
Indicative Asset Profiles Aura Benbrook Palermo by the Park The M at Lakeline Benbrook, Texas Frisco, Texas Cedar Park, Texas Number of units: 301 Number of units: 384 Number of units: 374 Average Rent / Unit(1): $1,583 Average Rent / Unit(1): $1,685 Average Rent / Unit(1): $1,753 Occupancy(2): 97%
Slide 20: Increased Exposure to Primary, High-Growth Markets
Increased Exposure to Primary, High-Growth Markets Portfolio NOI Breakdown by MSA Q3 2018 (Post-IPO) Q2 2024 NW Arkansas Austin Austin 4% Dallas 5% 22% Dallas 10% 43% Houston 20% Other Other 3% 48% Oklahoma City 7% Oklahoma City 13% Houston 25% 52% Primary Markets 97% Primary Markets Portfolio has b
Slide 21: Market Rent Per Square Foot in BSR's Primary Markets
Market Rent Per Square Foot in BSR’s Primary Markets Austin Dallas-Fort Worth $1.70 $1.70 $1.85 $1.89 $1.88 $1.61 $1.45 $1.50 $1.37 $1.30 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Houston Oklahoma City $1.44 $1.07 $1.08 $1.37 $1.43 $1.02 $1.16 $1.23 $0.89 $0.92 2019 2020 2021 2022 2023 2019
Slide 22: Historical Financial Metrics
Historical Financial Metrics NOI ($millions)1 FFO per Unit1 AFFO per Unit1 $91.1 $92.9 $0.93 $0.96 $0.88 $85.5 $0.86 $0.80 $0.85 $0.71 $0.64 $59.7 $59.2 $62.9 $0.61 $0.60 $0.56 $0.59 2019 2020 2021 2022 2023 2024E 2019 2020 2021 2022 2023 2024E 2019 2020 2021 2022 2023 2024E Maintenance Capex (as a
Slide 23: External Growth: Acquisition Strategy
External Growth Acquisition Strategy Acquisition Criteria • Prioritize off-market or limited • Garden-style and big house assets bidding situations targeting middle income residents • Focus on primary markets with • Suburban areas of our targeted strong forecasted rent growth primary markets, which
Slide 24: Transformation of Portfolio Since IPO
Transformation of Portfolio Since IPO • 22 properties • Total purchase price: ~$1.3 billion • Added 6,966 units to portfolio • Attractive primary markets • Accretive to AFFO per Unit Lakeway Castle Hills - Lewisville, TX • Weighted average age of six years • Compares to weighted average age of 31 ye
Slide 25: Stable Cash Distribution with a Strong Liquidity Position
Volterra at Westlake – Houston, TX Stable Cash Distribution with a Strong Liquidity Position and Demonstrated NAV and AFFO Growth 25
Slide 26: Financial Review
Financial Review (000s, except for percentages and per-unit Q2 2024 Q2 2023 Change H1 2024 H1 2023 Change amounts) Same Community $42,232 $42,043 0.4% $84,215 $83,628 0.7% Revenue Same Community $24,106 $23,044 4.6% $47,945 $45,882 4.5% NOI Same Community 57.1% 54.8% 230bps 56.9% 54.9% 200bps NOI Ma
Slide 27: Stable Cash Distribution with a Strong Liquidity Position
Stable Cash Distribution with a Strong Liquidity Position • Debt to Gross Book Value Ratio: 46.7% as at June 30, 2024 (44.4% excluding convertible debentures) • Conservative AFFO payout ratio of 54.5% in Q2 2024 • Weighted average mortgage term to maturity of 3.9 years with weighted average contract
Slide 28: Distribution Increase
Distribution Increase Unitholder Distributions Increased 7.7% • Board of Trustees approved increase in monthly distribution to $0.0467 per Unit ($0.56 on an annualized basis), beginning with the August 2024 distribution • Second distribution increase since IPO • Reflects positive business outlook, c
Slide 29: Debt Maturities
Debt Maturities Debt Repayment Schedule (as at June 30, 2024) Principal Payments on Maturity Principal Payments During Period 8% $400,000,000 46.2% $350,000,000 39% $300,000,000 92%61% $250,000,000 26.2% $200,000,000 $150,000,000 15.0% 12.3% $100,000,000 $50,000,000 0.1% 0.1% $0 2024 2025 2026 2027
Slide 30: Positive Outlook
Positive Outlook • Very positive long-term economic outlook for the REIT’s markets • New apartment deliveries expected to peak in 2024 as pace of new developments has slowed • Solid financial guidance for 2024, despite more challenging near-term environment of elevated interest rates and rising supp
Slide 31: ESG Commitment
ESG Commitment Environmental: Social: Governance: • Third-party biller provides vacant • Maintain voluntary turnover at • Code of business conduct and ethics apartment unit charge backs, energy approximately half of the industry • Third-party anonymous whistleblower consumption variance reporting, p
Slide 32: Investment Highlights
Investment Highlights 1. Fully aligned internal management platform 2. Attractive garden-style and big house apartments in high-growth U.S. sunbelt markets 3. BSR has successfully repositioned to focus on attractive modern properties in primary markets with embedded growth opportunity 4. Stable cash
BSR Real Estate Investment Trust — Q2 2024 Earnings Presentation on 6ix