BSR REIT ANNOUNCES FOURTH QUARTER AND FULL YEAR 2022 FINANCIAL RESULTS

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.

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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 Community^1 Properties	$                     24,901		$                     21,981		$                       2,920		13.3 %
Revenue, Non-Same Community^1 Properties	$                     16,736		$                     12,080		$                       4,656		38.5 %
Net (loss) income and comprehensive (loss) income	$                    (16,420)		$                     70,868		$                    (87,288)		nm*
NOI^1, Total Portfolio	$                     23,154		$                     18,684		$                       4,470		23.9 %
NOI^1, Same Community^1 Properties	$                     13,818		$                     12,369		$                       1,449		11.7 %
NOI^1, Non-Same Community^1 Properties	$                       9,336		$                       6,315		$                       3,021		47.8 %
Funds from Operations ("FFO")^1	$                     13,284		$                       9,653		$                       3,631		37.6 %
FFO per Unit^1	$                         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*
AFFO^1	$                     12,499		$                       9,093		$                       3,406		37.5 %
AFFO per Unit^1	$                         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 %
NAV^1	$                1,243,575		$                1,032,934		$                   210,641		20.4 %
NAV per Unit^1	$                       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 Community^1 Properties	$                     94,314		$                     84,439		$                       9,875		11.7 %
Revenue, Non-Same Community^1 Properties	$                     64,204		$                     35,143		$                     29,061		82.7 %
Net income and comprehensive income	$                   227,230		$                   283,214		$                    (55,984)		nm*
NOI^1, Total Portfolio	$                     85,516		$                     62,911		$                     22,605		35.9 %
NOI^1, Same Community^1 Properties	$                     51,126		$                     45,058		$                       6,068		13.5 %
NOI^1, Non-Same Community^1 Properties	$                     34,390		$                     17,853		$                     16,537		92.6 %
FFO^1	$                     48,068		$                     30,619		$                     17,449		57.0 %
FFO per Unit^1	$                         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*
AFFO^1	$                     44,713		$                     30,107		$                     14,606		48.5 %
AFFO per Unit^1	$                         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 Community^1 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 Value^1	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 Community^1 Properties	$                     24,901		$                     24,033		$                     23,179		$                     22,201
Revenue, Non-Same Community^1 Properties	$                     16,736		$                     16,516		$                     15,608		$                     15,344
NOI^1, Total Portfolio	$                     23,154		$                     21,719		$                     20,998		$                     19,645
NOI^1, Same Community^1 Properties	$                     13,818		$                     12,471		$                     12,718		$                     12,119
NOI^1, Non-Same Community^1 Properties	$                       9,336		$                       9,248		$                       8,280		$                       7,526
NOI Margin^1, Total Portfolio	55.6 %		53.6 %		54.1 %		52.3 %
NOI Margin^1, Same Community^1 Properties	55.5 %		51.9 %		54.9 %		54.6 %
NOI Margin^1, Non-Same Community^1 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
FFO^1	$                     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
AFFO^1	$                     12,499		$                     11,209		$                     10,478		$                     10,527
AFFO per Unit^1	$                         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 9^th, 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 16^th, 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

Brandon Barger, Chief Financial Officer, BSR Real Estate Investment Trust, Tel: [phone], Fax: [phone]