BSR REIT ANNOUNCES SECOND QUARTER 2025 FINANCIAL RESULTS

Executive Summary

• BSR Real Estate Investment Trust reported its financial results for the second quarter and first half of 2025, highlighting a strategic pivot involving significant property dispositions and acquisitions.
• The REIT suspended its 2025 guidance due to the inherent dissimilarity of current results compared to prior periods, driven by the sale of stabilized assets and the lease-up phase of new acquisitions.
• Key operational metrics show Same Community occupancy at 95.6% and a return to positive blended rental rate spreads in July 2025, signaling improving momentum.

Key Details

• Q2 2025 Financial Performance:
  • Total Revenue: $33.7 million (down 20.2% YoY).
  • Same Community Revenue: $26.6 million (down 0.2% YoY).
  • Net Loss: $(22.5) million.
  • Funds from Operations (FFO): $9.2 million ($0.21 per Unit).
  • Adjusted Funds from Operations (AFFO): $8.4 million ($0.19 per Unit).
  • Net Asset Value (NAV): $653.3 million ($16.74 per Unit).
• YTD 2025 Financial Performance:
  • Total Revenue: $77.2 million (down 8.4% YoY).
  • FFO: $21.6 million ($0.44 per Unit).
  • AFFO: $20.2 million ($0.41 per Unit).
• Property Dispositions (Contribution Transaction):
  • On April 30, 2025, the REIT sold six properties (Auberry at Twin Creeks, Aura Benbrook, Lakeway Castle Hills, Satori Frisco, Vale Frisco, and Wimberly) comprising 1,844 units in Dallas, TX.
  • Total Consideration: $431.5 million.
  • Structure: $193.0 million in cash received; balance settled via cancellation of 15,000,000 Class B Units.
• Property Acquisitions:
  • On May 14, 2025, the REIT acquired Forayna Vintage Park (350 units) and Botanic Luxury Living (288 units) in Houston, TX.
  • Total Purchase Price: $141.0 million.
  • Funding: Credit Facility, mortgage note, and available cash.
• Operational Metrics:
  • Same Community Weighted Average Occupancy: 95.6% (June 30, 2025).
  • Non-Stabilized Property Occupancy: 59.7% (up from 35.3% in March 2025).
  • Rental Rate Changes (Q2 2025): New leases -3.7%, Renewals +1.7%, Blended -0.7%.
  • Rental Rate Changes (July 2025): New leases -1.5%, Renewals +2.8%, Blended +1.1% (first positive blended spread since Q3 2024).
• Liquidity and Capital Structure:
  • Total Liquidity: $82.5 million ($21.5 million cash + $61.0 million available under Credit Facility).
  • Total Debt: $659.9 million (Mortgage notes payable of $408.1 million + Credit Facility).
  • Debt to Gross Book Value: 48.9%.
  • Weighted Average Interest Rate: 3.8% (including swaps).
  • Interest Rate Hedge: Entered into a receive-variable USD-SOFR/pay fixed swap ($150.0 million notional, 2.88% fixed rate) effective July 1, 2025.
  • 100% of debt is fixed or economically hedged to fixed rates.
• Distributions:
  • Cash distributions declared for Q2 2025: $6.1 million.
  • AFFO Payout Ratio: 73.0%.
  • 100% of distributions classified as return of capital.
• Unit Count Changes:
  • Cancellation of 15,000,000 Class B Units on April 30, 2025.
  • Total non-weighted unit count as of June 30, 2025: 39,021,863.

Notable Quotes

• "Our second quarter results reflect the growing positive momentum supporting our business and reinforce our expected pivot to sustained growth in the quarters to come," said Dan Oberste, the REIT's President and Chief Executive Officer. "Just as we said we would, following the closing of our transformative dispositions earlier this year, our team was able to expeditiously and accretively redeploy a significant portion of the proceeds into two highly attractive assets in the north Houston market. Combined with our recent Dallas acquisition and lease up of our Austin development, we are excited about the opportunity this new crop of acquisitions brings to our residents and Unitholders."