BSR REIT Announces Fourth Quarter and Full Year 2024 Financial Results

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Mar 05, 2025, 17:12 ET

LITTLE ROCK, Ark. and TORONTO, March 5, 2025 /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, 2024 ("Q4 2024" and "FY 2024", respectively). All comparisons 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 2024 and FY 2024 and the three months and year ended December 31, 2023 ("Q4 2023" and "FY 2023", respectively), thus removing the impact of 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, 2024 are available on the REIT's website at www.bsrreit.com and at www.sedarplus.ca.

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 trust units of the REIT ("Units"), Class B Units of BSR Trust, LLC ("Class B Units") and issued deferred units of the REIT granted to trustees ("Deferred Units").

"BSR delivered another year of solid operating and financial results in 2024," said Dan Oberste, the REIT's President and Chief Executive Officer. "We achieved our highest ever AFFO per Unit and increased our occupancy despite record new deliveries in our core markets. These results underline the resilience of BSR's management platform and the REIT's ability to generate cash flow growth despite the cost of capital challenge facing the industry. The recently announced transformative sale of nine stabilized properties underlines this capability. We intend to redeploy the proceeds of this sale to acquire properties that are anticipated to offer higher returns for unitholders, a strategy that we have consistently executed successfully in the past. The future has never been brighter for BSR."

2024 Highlights

Same Community¹ revenue for FY 2024 increased 0.4% over FY 2023;
Same Community¹ NOI for FY 2024 increased 1.3% compared to FY 2023;
Weighted average occupancy was 95.6% as of December 31, 2024, compared to 95.3% of December 31, 2023;
FFO per Unit¹ for FY 2024 of $0.96 increased 3.2% over FY 2023;
AFFO per Unit¹ for FY 2024 of $0.88 increased 3.5% over FY 2023;
During FY 2024, the REIT's AFFO payout ratio was 60.3% compared to 60.7% during FY 2023;
Debt to Gross Book Value as of December 31, 2024 was 46.5%;
During FY 2024 and Q4 2024, the REIT retired $8.8 million and $4.5 million, respectively, of its debt with cash flows generated from operations;
In December 2024, the REIT extended $160.0 million of mortgage notes to December 11, 2026, with no other contractual changes as a result of the extension;
On November 1, 2024, the REIT entered into a new forward receive-variable based USD-SOFR/pay fixed interest rate swap of $42.0 million at a fixed rate of 3.13% effective February 2, 2025 and maturing February 1, 2030, subject to the counterparty's optional early termination date of February 2, 2026;
In December 2024, construction was completed on Aura 35Fifty, a 238-apartment unit community in the Austin, TX MSA; and
For the third year in a row, BSR was named one of the Best Places to Work in Multifamily, and Best Places to Work in Multifamily for Women at the Multifamily Innovations Awards held in December 2024.

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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.

Subsequent Highlight

On January 3, 2025, the REIT redeemed all issued and outstanding of the 5.0% Convertible Debentures, for $41.5 million, plus accrued and unpaid interest;
On January 9, 2025, the REIT acquired Venue Craig Ranch, a 277-apartment unit community in McKinney, TX (Dallas MSA) for a total contractual purchase price of $61.0 million; and
On February 27, 2025, the REIT announced the pending sale of nine stabilized properties for a contractual purchase price of $618.5 million.

Q4 2024 Financial Summary

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

	Q4 2024	Q4 2023	Change	Change %
Revenue, Total Portfolio	$ 42,165	$ 42,096	$ 69	0.2 %
Revenue, Same Community¹ Properties	$ 42,040	$ 42,096	$ (56)	-0.1 %
Revenue, Non-Same Community¹ Properties	$ 125	$ —	$ 125	nm*
Net income (loss) and comprehensive income (loss)	$ 39,785	$ (69,530)	$ 109,315	nm*
NOI¹, Total Portfolio	$ 21,736	$ 22,490	$ (754)	-3.4 %
NOI¹, Same Community¹ Properties	$ 21,895	$ 22,490	$ (595)	-2.6 %
NOI¹, Non-Same Community¹ Properties	$ (159)	$ —	$ (159)	nm*
FFO¹	$ 11,861	$ 13,262	$ (1,401)	-10.6 %
FFO per Unit¹	$ 0.22	$ 0.24	$ (0.02)	-8.3 %
Maintenance capital expenditures	$ (933)	$ (818)	$ (115)	14.1 %
Straight line rental revenue differences	$ (51)	$ —	$ (51)	nm*
AFFO¹	$ 10,877	$ 12,444	$ (1,567)	-12.6 %
AFFO per Unit¹	$ 0.20	$ 0.22	$ (0.02)	-9.1 %
Weighted Average Unit Count	53,805,811	55,799,773	(1,993,962)	-3.6 %
Unitholders' equity	$ 657,596	$ 712,401	$ (54,805)	-7.7 %
NAV¹	$ 901,308	$ 953,112	$ (51,804)	-5.4 %
NAV per Unit¹	$ 16.75	$ 17.71	$ (0.96)	-5.4 %

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

Total portfolio revenue of $42.2 million for Q4 2024 increased 0.2% compared to $42.1 million for Q4 2023. Aura 35Fifty, the REIT's only non-stabilized, property contributed $0.1 million to the increase, mostly offset by a decrease of $0.1 million in Same Community properties, described below.

Same Community revenue of $42.0 million for Q4 2024 decreased $0.1 million, or 0.1%, compared to $42.1 million for Q4 2023, primarily due to a decrease in average rent per unit, from $1,503 as of December 31, 2023 to $1,488 as of December 31, 2024, , resulting in a decrease of $0.3 million, partially offset by a $0.2 million increase in other property income related to resident credit building services and utility reimbursements.

The net income (loss) and comprehensive income (loss) change between Q4 2024 and Q4 2023 is primarily due to non-cash adjustments to fair value of investment properties and derivatives and other financial liabilities from September 30, 2024 to December 31, 2024 and September 30, 2023 to December 31, 2023, respectively, and is not considered comparable period over period.

The 3.4% decrease in total portfolio NOI for Q4 2024 of $21.7 million compared to $22.5 million in Q4 2023 was the result of the decrease of $0.6 million in Same Community NOI described below as well as operating expenses, net of revenue, for Aura 35Fifty, which was in lease-up.

The 2.6% decrease in Same Community NOI for Q4 2024 of $21.9 million compared to $22.5 million in Q4 2023 was attributable to the decrease in revenue described above, as well as an increase in property tax expenses of $0.5 million due to higher tax refunds received in the comparative period.

FFO was $11.9 million, or $0.22 per Unit, for Q4 2024 compared to $13.3 million, or $0.24 per Unit, for Q4 2023. The decrease in FFO was the result of the decrease in total portfolio NOI described above, an increase of $0.5 million in general and administrative expenses related to the timing of the recognition of health insurance expense in Q4 2024 over Q4 2023 and $0.1 million in higher finance costs. FFO per Unit decreased compared to the prior period due to the items mentioned above, partially offset by the impact of the REIT's repurchase and cancellation of 3.5 million Units under its normal course issuer bids in 2023.

AFFO was $10.9 million, or $0.20 per Unit for Q4 2024 compared to $12.4 million, or $0.22 per Unit for Q4 2023. The decrease in AFFO was primarily the result of the decrease in FFO discussed above, as well as a $0.1 million increase in maintenance capital expenditures. AFFO per Unit decreased compared to the prior period due to the items mentioned above, partially offset by the impact of the REIT's repurchase and cancellation of 3.5 million Units under its normal course issuer bids in 2023.

Excluding short term leases, during Q4 rental rates for new leases and renewals decreased 8.3% and increased 0.9%, respectively, for a blended decrease of 3.6%. For January and February 2025 rental rates for new leases and renewals decreased 8.0% and 0.3%, respectively, for a blended decrease of 3.6%. This blended decrease is expected to reverse in the second half of 2025 as new supply in our major markets continues to be effectively absorbed and minimal additional supply is anticipated over the next two years.

NAV was $901.3 million, or $16.75 per unit, as of December 31, 2024, compared to $953.1 million, or $17.71 per unit, as of December 31, 2023. The decrease is primarily due to the reduction in the fair value of investment property values, driven by slight capitalization rate expansion and lower cash flow trends, subsequent to December 31, 2023.

FY 2024 Financial Summary

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

	FY 2024	FY 2023	Change	Change %
Revenue, Total Portfolio	$ 168,670	$ 167,803	$ 867	0.5 %
Revenue, Same Community¹ Properties	$ 168,528	$ 167,803	$ 725	0.4 %
Revenue, Non-Same Community¹ Properties	$ 142	$ —	$ 142	nm*
Net loss and comprehensive loss	$ (40,242)	$ (210,870)	$ 170,628	nm*
NOI¹, Total Portfolio	$ 91,936	$ 91,066	$ 870	1.0 %
NOI¹, Same Community¹ Properties	$ 92,251	$ 91,066	$ 1,185	1.3 %
NOI¹, Non-Same Community¹ Properties	$ (315)	$ —	$ (315)	nm*
FFO¹	$ 51,743	$ 52,639	$ (896)	-1.7 %
FFO per Unit¹	$ 0.96	$ 0.93	$ 0.03	3.2 %
Maintenance capital expenditures	$ (4,114)	$ (4,292)	$ 178	-4.1 %
Straight line rental revenue differences	$ (46)	$ 68	$ (114)	nm*
AFFO¹	$ 47,583	$ 48,415	$ (832)	-1.7 %
AFFO per Unit¹	$ 0.88	$ 0.85	$ 0.03	3.5 %
Weighted Average Unit Count	53,822,578	56,781,907	(2,959,329)	-5.2 %

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

Total portfolio revenue of $168.7 million for FY 2024 increased 0.5% compared to $167.8 million for FY 2023. Same Community properties contributed $0.7 million, as described below, and the non-stabilized property contributed $0.1 million to the overall increase.

Same Community revenue of $168.5 million for FY 2024 increased $0.7 million, or 0.4%, compared to $167.8 million for FY 2023, primarily due to an increase of $0.6 million in other property income related to resident credit building services and utility reimbursements.

The net loss and comprehensive loss change between FY 2024 and FY 2023 is primarily due to non-cash adjustments to fair value of investment properties and derivatives and other financial liabilities from December 31, 2023 to December 31, 2024 and December 31, 2022 to December 31, 2023, respectively, and is not considered comparable period over period.

The 1.0% increase in total portfolio NOI for FY 2024 of $91.9 million compared to $91.1 million in FY 2023 was the result of the increase in Same Community NOI of $1.2 million, described below, partially offset by operating expenses, net of revenue, for the non-stabilized property which is in lease-up.

The 1.3% increase in Same Community NOI for FY 2024 of $92.3 million compared to $91.1 million in FY 2023 was the result of the increase in revenue described above as well as a decrease in real estate tax expense of $0.7 million due to higher tax refunds and $0.1 million in lower property insurance expenses. These increases were partially offset by higher renting expenses of $0.4 million associated with the cost of new services to generate additional other income such as smart home technology and the resident credit building program.

FFO was $51.7 million, or $0.96 per Unit, for FY 2024 compared to $52.6 million, or $0.93 per Unit, for FY 2023. The decrease in FFO was primarily the result of $2.0 million in higher finance costs due to higher average interest rates and an increase in total loans and borrowings outstanding due to draws in 2023 to fund the REIT's normal course issuer bid repurchases in 2023, partially offset by the increase in Same Community NOI described above. FFO per Unit increased as a result of the REIT's repurchase and cancellation of 3.5 million Units under its normal course issuer bids in 2023.

AFFO was $47.6 million, or $0.88 per Unit, for FY 2024 compared to $48.4 million, or $0.85 per Unit, for FY 2023. The decrease in AFFO was primarily the result of the decrease in FFO discussed above, partially offset by a $0.2 million decrease in maintenance capital expenditures. AFFO per Unit increased as a result of the REIT's repurchase and cancellation of 3.5 million Units under its normal course issuer bids in 2023.

Highlights from Recent Four Quarters

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

	December 31, 2024	September 30, 2024	June 30, 2024	March 31, 2024
Operational Information
Number of real estate investment properties	32	31	31	31
Total apartment units	8,904	8,666	8,666	8,666
Average monthly rent on in-place leases	$ 1,489	$ 1,507	$ 1,507	$ 1,502
Average monthly rent on in-place leases,
Same Community¹ Properties	$ 1,488	$ 1,507	$ 1,507	$ 1,502
Weighted average occupancy rate	95.6 %	94.7 %	95.3 %	95.3 %
Retention rate	56.0 %	55.4 %	54.4 %	52.3 %
Debt to Gross Book Value¹	46.5 %	46.4 %	46.7 %	46.5 %

	Q4 2024	Q3 2024	Q2 2024	Q1 2024
Operating Results
Revenue, Total Portfolio	$ 42,165	$ 42,290	$ 42,232	$ 41,983
Revenue, Same Community¹ Properties	$ 42,040	$ 42,273	$ 42,232	$ 41,983
Revenue, Non-Same Community¹ Properties	$ 125	$ 17	$ —	$ —
NOI¹, Total Portfolio	$ 21,736	$ 22,256	$ 24,106	$ 23,839
NOI¹, Same Community¹ Properties	$ 21,895	$ 22,411	$ 24,106	$ 23,839
NOI¹, Non-Same Community¹ Properties	$ (159)	$ (155)	$ —	$ —
NOI Margin¹, Total Portfolio	51.5 %	52.6 %	57.1 %	56.8 %
NOI Margin¹, Same Community¹ Properties	52.1 %	53.0 %	57.1 %	56.8 %
NOI Margin¹, Non-Same Community¹ Properties	n/a	n/a	n/a	n/a
Net income (loss) and comprehensive income (loss)	$ 39,785	$ (39,251)	$ (39,205)	$ (1,571)
Distributions on Class B Units	$ 2,815	$ 2,750	$ 2,617	$ 2,626
Fair value adjustment to investment properties	$ 16,069	$ (15,161)	$ 30,683	$ 38,718
Fair value adjustment to investment
properties (IFRIC 21)	$ 6,552	$ 7,332	$ 8,327	$ (22,211)
Property tax liability adjustment, net (IFRIC 21)	$ (6,552)	$ (7,332)	$ (8,327)	$ 22,211
Fair value adjustment to derivatives and other
financial liabilities	$ (45,958)	$ 63,049	$ 19,729	$ (26,153)
Fair value adjustment to unit-based compensation	$ (848)	$ 775	$ 283	$ (2)
Principal payments on lease liability	$ (36)	$ (36)	$ (35)	$ (34)
Depreciation of right-to-use asset	$ 34	$ 33	$ 34	$ 33
FFO¹	$ 11,861	$ 12,159	$ 14,106	$ 13,617
FFO per Unit	$ 0.22	$ 0.23	$ 0.26	$ 0.25
Maintenance capital expenditures	$ (933)	$ (1,067)	$ (1,401)	$ (713)
Straight line rental revenue differences	$ (51)	$ 13	$ 8	$ (16)
AFFO¹	$ 10,877	$ 11,105	$ 12,713	$ 12,888
AFFO per Unit¹	$ 0.20	$ 0.21	$ 0.24	$ 0.24
AFFO Payout Ratio	68.9 %	65.9 %	54.5 %	53.9 %
Weighted Average Unit Count	53,805,811	53,789,870	53,838,699	53,856,476

Liquidity and Capital Structure

As of December 31, 2024, the REIT had liquidity of $136.0 million, consisting of cash and cash equivalents of $8.7 million and $127.2 million available under its senior secured revolving credit facility ("Credit Facility"). The REIT also has the flexibility to obtain additional liquidity through adding properties to the borrowing base of the Credit Facility.

As of December 31, 2024, the REIT had total mortgage notes payable of $496.0 million, excluding the revolving credit facility, with a weighted average contractual interest rate of 3.5% (including interest rate swaps) and a weighted average term to maturity of 3.7 years. In aggregate, mortgage notes payable and the revolving credit facility totaled $787.5 million as of December 31, 2024, with a weighted average contractual interest rate of 3.8% (including interest rate swaps), excluding the REIT's convertible unsecured subordinated debentures then outstanding (the "Convertible Debentures"). Debt to Gross Book Value as of December 31, 2024 was 46.5%. As of December 31, 2024, 100% of the REIT's debt was fixed or economically hedged to fixed rates.

In September 2023, the REIT extended $160.0 million of mortgage notes by one year to September 13, 2025, with no other contractual changes as a result of the extension. In December 2024, the REIT further extended the $160.0 million of mortgage notes to December 11, 2026, with no other related contractual changes.

As of December 31, 2024, the REIT's availability under the Credit Facility is sufficient to refinance the $48.0 million of mortgage debt maturing in the next twelve months, while also considering other refinancing options including new mortgages.

On January 9, 2025, the REIT placed Venue Craig Ranch onto the Credit Facility as a borrowing base property and funded the $61.0 million transaction using the Credit Facility availability, as discussed above.

On February 28, 2025, the REIT placed Aura 35Fifty onto the Credit Facility as a borrowing base property and refinanced the $38.7 million outstanding mortgage note using the Credit Facility availability.

Normal Course Issuer Bid

On October 4, 2023, the REIT renewed its normal course issuer bid (the "2023 NCIB") for the 12-month period through October 5, 2024, permitting the REIT to purchase for cancellation up to a maximum of 3,186,336 Units, or approximately 10% of the public float as of September 27, 2023, over the 12-month period commencing October 6, 2023. The REIT concurrently renewed the automatic securities purchase plan (the "2023 ASPP"). On October 5, 2024, the REIT's 2023 NCIB expired. As of December 31, 2024, the REIT purchased and cancelled 3,137,895 Units under the 2023 NCIB and 2023 ASPP at an average price of $10.65 per Unit. The REIT suspended its 2023 ASPP in December 2023.

On November 7, 2024, the Toronto Stock Exchange (the "TSX") accepted the REIT's notice of intention to make a normal course issuer bid (the "2024 NCIB") commencing on November 12, 2024 for up to a maximum of 2,856,430 of its issued and outstanding Units, or approximately 10% of the public float as of October 29, 2024, for cancellation over the 12-month period commencing November 12, 2024 through to November 11, 2025. As of December 31, 2024 the REIT has not purchased and cancelled any Units under the 2024 NCIB.

All Units purchased under the NCIB will be cancelled upon their purchase. The REIT intends to fund the purchases out of its available resources.

Early Redemption of the Convertible Debentures

On January 3, 2025, the REIT redeemed all the issued and outstanding Convertible Debentures in the aggregate principal amount of $41.5 million plus accrued and unpaid interest of $0.5 million. The redemption of the Convertible Debentures was funded with the Credit Facility.

Distributions and Units Outstanding

Cash distributions declared to holders of Units and holders of Class B Units totalled $7.5 million for Q4 2024, representing an AFFO Payout Ratio of 68.9%. 100% of the REIT's cash distributions were classified as return of capital. As of December 31, 2024, the total number of Units outstanding was 33,422,714. There were also 20,091,704 Class B Units, which are redeemable for Units on a one-for-one basis, and 307,622 Deferred Units outstanding as of December 31, 2024, for a total non-weighted unit count of 53,822,040. These are weighted for the purpose of calculating FFO per Unit, AFFO per Unit and NAV per Unit as defined above.

Pending Asset Sale for Contractual Purchase Price of $618.5 million

On February 27, 2025, the REIT announced that it had entered into agreements to sell an aggregate of nine properties, consisting of 2,701 apartment units, to AvalonBay Communities, Inc. ("AVB") (NYSE: AVB) for a stated aggregate contractual purchase price of $618.5 million (collectively, the "Transaction").

Under the Transaction, the REIT will sell three properties (Cielo I, Cielo II and Retreat at Wolf Ranch) comprising 857 apartment units located in Austin, TX to AVB for a contractual purchase price of $187.0 million in the aggregate, directly for cash consideration (the "Direct Asset Sale Transaction"). The Direct Asset Sale Transaction is expected to close on or around March 31, 2025.

Under a separate contribution transaction (the "Contribution Transaction"), the REIT will sell six properties (Auberry at Twin Creeks, Aura Benbrook, Lakeway Castle Hills, Satori Frisco, Vale Frisco and Wimberly) comprising 1,844 apartment units located in Dallas, TX to AVB for a stated aggregate contractual purchase price of $431.5 million in exchange for a mix of up to $220.0 million (expected $193.0 million) in cash consideration, a portion of which is to be used to extinguish all existing mortgage debt on the contributed properties and the remainder to be used for repayment of other indebtedness and general corporate purposes, and (ii) the exchange and cancellation of up to 15,000,000 (approximately 75%) of the Class B Units into equity of a newly formed "DownREIT" partnership entity of AVB. In connection with the Contribution Transaction, the contractual rights held by a subset of legacy holders of Class B Units, including consent rights over certain fundamental sale transactions, will be eliminated. Subject to the satisfaction of all conditions precedent, the Contribution Transaction is expected to close in the second quarter of 2025.

A termination fee of $7.5 million will be payable by the REIT to AVB in respect of a termination by the REIT for certain breaches or a failure to close by a specified date due to certain matters relating to the structure of the Contribution Transaction. A termination fee of $15.0 million will be payable by AVB to the REIT for certain breaches or if AVB terminates the agreement for any reason in its discretion.

The REIT also intends to retain approximately $109.0 million of secured mortgage debt with an interest rate of approximately 2.7% that currently encumbers properties under the Direct Asset Sale Transaction by substituting these with existing properties or potential future acquisitions.

For further information, please reference the REIT's announcement of the Transaction on February 27, 2025. A copy of the agreement governing the Contribution Transaction will be available under the REIT's profile on SEDAR+ at www.sedarplus.ca.

Based on the potential impact of the Transaction, the REIT is suspending the release of guidance for 2025. The REIT will revisit the release of 2025 guidance in a future period following the closing of the Transaction.

Appointment of Chief Financial Officer and Change in Management

The REIT also announced today the appointment of Tom Cirbus as the REIT's Chief Financial Officer and Corporate Secretary effective March 17, 2025. Mr. Cirbus previously spent 11 years in the investment banking division of Wells Fargo across the real estate, gaming, lodging and leisure coverage and equity capital markets teams. Prior to his time at Wells Fargo, he worked at KPMG as an analyst. In connection with the appointment of Mr. Cirbus, Susan Rosenbaum will step down as the Interim Chief Financial Officer effective March 17 and continue in her role as the Chief Operating Officer.

"Tom will make a great addition to our team", said Mr. Oberste. "His real estate investment banking and capital markets experience are the perfect complement to our existing management team and will be key as we navigate this next chapter in BSR."

Conference Call

Dan Oberste, President and Chief Executive Officer, and Susan Rosenbaum, Interim Chief Financial Officer and Chief Operating Officer, will host a conference call for analysts and investors on Thursday, March 6^th, 2025, at 12:00 pm (ET). Participants can register and enter their phone number at: https://emportal.ink/4hjzOLN to receive an instant automated call back. Alternatively, they can dial 416-945-7677 or 1-888-699-1199 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/Aevp0zQrqRY

A replay of the call will be available until Thursday, March 13th, 2025. To access the replay, dial 289-819-1450 or 888-660-6345 (Passcode: 38620#). 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 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, 2024, which section is incorporated herein by reference.

			Three months ended December 31, 2024	Three months ended December 31, 2023	Year ended December 31, 2024	Year ended December 31, 2023
Net income (loss) and comprehensive income (loss)			$ 39,785	$ (69,530)	$ (40,242)	$ (210,870)
Adjustments to arrive at FFO
	Distributions on Class B Units		2,815	2,650	10,808	10,646
	Fair value adjustment to investment properties		16,069	70,987	70,309	270,398
	Fair value adjustment to investment properties (IFRIC 21)		6,552	6,603	—	—
	Property tax liability adjustment, net (IFRIC 21)		(6,552)	(6,603)	—	—
	Fair value adjustment to derivatives and other financial
		liabilities	(45,958)	8,790	10,667	(18,266)
	Fair value adjustment to unit-based compensation		(848)	(74)	208	289
	Restructuring costs		—	263	—	263
	Loss on extinguishment of debt		—	176	—	176
	Principal payments on lease liability		(36)	(33)	(141)	(130)
	Depreciation of right-to-use asset		34	33	134	133
Funds from Operations ("FFO")			$ 11,861	$ 13,262	$ 51,743	$ 52,639
FFO per Unit			$ 0.22	$ 0.24	$ 0.96	$ 0.93
Adjustments to arrive at AFFO
	Maintenance capital expenditures		(933)	(818)	(4,114)	(4,292)
	Straight line rental revenue differences		(51)	—	(46)	68
Adjusted Funds from Operations ("AFFO")			$ 10,877	$ 12,444	$ 47,583	$ 48,415
AFFO per Unit			$ 0.20	$ 0.22	$ 0.88	$ 0.85
Distributions declared			$ 7,498	$ 7,256	$ 28,689	$ 29,368
AFFO Payout Ratio			68.9 %	58.3 %	60.3 %	60.7 %
Weighted average unit count			53,805,811	55,799,773	53,822,578	56,781,907

	Three months ended December 31, 2024	Three months ended December 31, 2023	Year ended December 31, 2024	Year ended December 31, 2023
Total revenue	$ 42,165	$ 42,096	$ 168,670	$ 167,803
Property operating expenses	(12,862)	(12,667)	(49,905)	(49,287)
Real estate taxes	(1,015)	(336)	(26,829)	(27,450)
	28,288	29,093	91,936	91,066
Property tax liability adjustment (IFRIC 21)	(6,552)	(6,603)	—	—
Net Operating Income ("NOI")	$ 21,736	$ 22,490	$ 91,936	$ 91,066
NOI margin	51.5 %	53.4 %	54.5 %	54.3 %

	December 31, 2024	December 31, 2023
Loans and borrowings (current portion)	$ 49,951	$ 1,842
Loans and borrowings (non-current portion)	737,572	771,409
Convertible debentures	41,764	39,676
Total loans and borrowings and convertible debentures ("Debt")	829,287	812,927
Gross Book Value	$ 1,782,583	$ 1,825,914
Debt to Gross Book Value	46.5 %	44.5 %

	December 31, 2024	December 31, 2023
Unitholders' equity	$ 657,596	$ 712,401
Class B Units	243,712	240,711
NAV	$ 901,308	$ 953,112
Unit count, as of the end of period	53,822,040	53,828,591
NAV per Unit	$ 16.75	$ 17.71

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 metrics Revenue, Property Expenses and NOI growth), results of operations, performance, business prospects, and opportunities for the REIT, the anticipated closing of the Transaction, the economic and strategic impact of the Transaction, the satisfaction of the conditions to closing the Transaction and the timing thereof, the use of proceeds in respect of the Transaction, and future acquisitions. 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 satisfaction of all closing conditions for the Transaction, the receipt of all approvals for the Transaction, the closing of the Transaction and anticipated timing thereof, the anticipated benefits of the Transaction and ability of the REIT to execute value-enhancing growth initiatives, 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, stability of the general economy over 2025, 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 and acquire 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 ability to refinance 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 carrying 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, failure to obtain necessary approvals or satisfy (or obtain a waiver of) the conditions to closing the Transaction, the occurrence of any event, change or other circumstance that could give rise to the termination of the agreements in respect of the Transaction, material losses in respect of the properties to be sold pursuant to the Transaction, the REIT's ability to obtain any approvals for the Transaction, either party's failure to consummate the Transaction when required or on the terms as originally negotiated, risks related to the disruption of management time from ongoing business operations due to the Transaction, potential litigation relating to the Transaction, including the effects of any outcomes related thereto, the possibility of unexpected costs and liabilities related to the Transaction, the REIT's ability to execute its growth strategies, the REIT's ability to execute future acquisitions, 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, the impact of U.S. and global tariffs, 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, 2024 and in the REIT's Annual Information Form dated March 5, 2025, both of which are available on SEDAR+ (www.sedarplus.ca). 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 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

For further information, please contact: Susan Rosenbaum, Interim Chief Financial Officer and Chief Operating Officer, BSR Real Estate Investment Trust, Tel: 501.371.6335, Fax: 501.374.3383

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