BSR REIT Announces Third Quarter 2023 Financial Results

LITTLE ROCK, Ark. and TORONTO, Nov. 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 and nine months ended September 30, 2023 ("Q3 2023" and "YTD 2023", 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 Q3 2023 and YTD 2023 and the three months and nine months ended September 30, 2022 ("Q3 2022" and "YTD 2022", respectively), thus removing the impact of acquisitions, dispositions and non-stabilized properties. Condensed Consolidated Interim Financial Statements and Management's Discussion and Analysis as of and for the three and nine months ended September 30, 2023 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.

"Q3 2023 proved to be strong as anticipated with AFFO per Unit increasing 10.5% and Same Community NOI increasing 7.0% over Q3 2022," said Dan Oberste, the REIT's President and Chief Executive Officer. "These results reflect the outstanding market fundamentals in our core Texas markets, which continue to attract residents and businesses from other jurisdictions. And with the recent reduction of real estate taxes in the state, it is now more attractive than ever for them to relocate to our markets."

Q3 2023 Highlights

• FFO per Unit¹ for Q3 2023 of $0.23 increased 8.3% over Q3 2022;
• AFFO per Unit¹ for Q3 2023 of $0.21 increased 10.5% over Q3 2022;
• Weighted average rent increased 3.0% to $1,504 per apartment unit as of September 30, 2023 compared to $1,460 as of September 30, 2022;
• Excluding short term leases, rental rates for new leases and renewals changed -0.2% and 5.6%, respectively, over the prior leases, resulting in a blended increase of 2.7%;
• Same Community¹ revenues for Q3 2023 increased 3.9% over Q3 2022;
• Same Community¹ Net Operating Income ("NOI")¹ for Q3 2023 increased 7.0% over Q3 2022;
• During Q3 2023, the REIT's AFFO Payout Ratio¹ was 61.6% compared to 67.2% during Q3 2022;
• Weighted average occupancy was 95.2% as of September 30, 2023 compared to 94.7% as of September 30, 2022;
• Debt to Gross Book Value¹ excluding Convertible Debentures (as defined below) as of September 30, 2023 was 39.2%;
• During Q3 2023, the REIT used excess cash from operations to pay down $9.0 million on its revolving credit facility;
• In September 2023, the REIT extended $160 million of mortgage notes by one year to September 13, 2025, with no other contractual changes as a result of the extension; and
• During Q3 2023, the REIT purchased and canceled 11,700 Units under its normal course issuer bid ("NCIB") and automatic securities purchase plan ("ASPP") at an average price of $12.46 per Unit.

Subsequent Highlights

• On October 4, 2023, the REIT renewed its 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 ASPP.
• In October 2023, since the commencement of the renewed NCIB, the REIT purchased and cancelled 44,800 Units under the renewed NCIB and ASPP at an average price of $10.73 per Unit.
• On November 1, 2023, the REIT entered into a new $65 million interest rate swap at a fixed rate of 3.27% effective July 1, 2024 and maturing January 31, 2031, subject to the counterparty's optional early termination date of January 2, 2025.
• On November 3, 2023, the REIT entered into a new $60 million interest rate swap at a fixed rate of 3.537% effective January 2, 2024 and maturing January 2, 2031, subject to the counterparty's optional early termination date of January 1, 2025.

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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. 

Q3 2023 Financial Summary

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

	Q3 2023		Q3 2022		Change		Change %
Revenue, Total Portfolio	$                42,079		$                40,549		$                  1,530		3.8 %
Revenue, Same Community1 Properties	$                40,016		$                38,518		$                  1,498		3.9 %
Revenue, Non-Same Community1 Properties	$                  2,063		$                  2,031		$                       32		1.6 %
Net (loss) income and comprehensive (loss) income	$               (79,286)		$                23,787		$             (103,073)		nm*
NOI1, Total Portfolio	$                22,694		$                21,719		$                     975		4.5 %
NOI1, Same Community1 Properties	$                21,658		$                20,247		$                  1,411		7.0 %
NOI1, Non-Same Community1 Properties	$                  1,036		$                  1,472		$                    (436)		-29.6 %
Funds from Operations ("FFO")1	$                13,081		$                12,082		$                     999		8.3 %
FFO per Unit1	$                    0.23		$                    0.21		$                    0.02		9.5 %
Maintenance capital expenditures	$                 (1,141)		$                    (920)		$                    (221)		24.0 %
Straight line rental revenue differences	$                        (2)		$                       47		$                      (49)		nm*
AFFO1	$                11,938		$                11,209		$                     729		6.5 %
AFFO per Unit1	$                    0.21		$                    0.19		$                    0.02		10.5 %
Weighted Average Unit Count	56,930,050		58,205,337		(1,275,287)		-2.2 %
Unitholders' equity	$              817,661		$           1,011,580		$             (193,919)		-19.2 %
NAV1	$           1,062,395		$           1,299,344		$             (236,949)		-18.2 %
NAV per Unit1	$                  18.66		$                  22.32		$                   (3.66)		-16.4 %

*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 $42.1 million for Q3 2023 increased 3.8% compared to $40.5 million in Q3 2022. Same Community properties contributed $1.5 million to the overall increase, as described below.

Revenue from Same Community properties of $40.0 million for Q3 2023 increased 3.9% from $38.5 million in Q3 2022, primarily due to a 3.1% increase in average rental rates from $1,452 per apartment unit as of September 30, 2022 to $1,497 per apartment unit as of September 30, 2023.

The net (loss) income and comprehensive (loss) income change between Q3 2023 and Q3 2022 is primarily due to non-cash adjustments to fair values of investment properties and derivatives and other financial liabilities from June 30, 2023 to September 30, 2023 and June 30, 2022 to September 30, 2022, respectively, and is not considered comparable period over period.

The 4.5% increase in total portfolio NOI for Q3 2023 to $22.7 million compared to $21.7 million in Q3 2022 was the result of increases of $1.4 million from Same Community properties, described below, partially offset by the reduction from Non-Same Community properties of $0.4 million due to real estate tax refunds received during Q3 2022 related to properties sold in 2021.

The 7.0% increase in Same Community NOI to $21.7 million for Q3 2023 compared to $20.2 million in Q3 2022 was the result of the increase in revenue described above, as well as a $0.7 million decrease in real estate taxes, primarily due to revised 2023 tax assessments, partially offset by an increase in property operating expenses of $0.8 million due to higher repair and maintenance expenses, payroll costs and property insurance.

FFO was $13.1 million, or $0.23 per Unit, for Q3 2023 compared to $12.1 million, or $0.21 per Unit, for Q3 2022. The improvement was primarily the result of the higher NOI discussed above as well as a decrease of $0.3 million in finance costs (net of finance income primarily from interest rate swaps, excluding the loss on extinguishment of debt in the comparative period), partially offset by $0.3 million additional general and administrative expenses.

AFFO was $12.0 million, or $0.21 per Unit, for Q3 2023, compared to $11.2 million, or $0.19 per Unit, for Q3 2022. The improvement was primarily the result of the increase in FFO discussed above, partially offset by an increase in maintenance capital expenditures.

Net Asset Value was $1.1 billion, or $18.66 per unit, as of September 30, 2023 compared to $1.3 billion, or $22.32 per unit, as of September 30, 2022. The decrease is primarily due to a decrease in fair value driven primarily by capitalization rate expansion subsequent to September 30, 2022 (net of the impact of increases in NOI).

YTD 2023 Financial Summary

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

	YTD 2023		YTD 2022		Change		Change %
Revenue, Total Portfolio	$              125,707		$              116,881		$                  8,826		7.6 %
Revenue, Same Community1 Properties	$              119,572		$              111,007		$                  8,565		7.7 %
Revenue, Non-Same Community1 Properties	$                  6,135		$                  5,874		$                     261		4.4 %
Net (loss) income and comprehensive (loss) income	$             (141,340)		$              243,650		$             (384,990)		nm*
NOI1, Total Portfolio	$                68,576		$                62,362		$                  6,214		10.0 %
NOI1, Same Community1 Properties	$                65,565		$                58,556		$                  7,009		12.0 %
NOI1, Non-Same Community1 Properties	$                  3,011		$                  3,806		$                    (795)		-20.9 %
FFO1	$                39,377		$                34,784		$                  4,593		13.2 %
FFO per Unit1	$                    0.69		$                    0.63		$                    0.06		9.5 %
Maintenance capital expenditures	$                 (3,474)		$                 (2,840)		$                    (634)		22.3 %
Escrowed rent guaranty realized	$                      —		$                       87		$                      (87)		nm*
Straight line rental revenue differences	$                       68		$                     183		$                    (115)		nm*
AFFO1	$                35,971		$                32,214		$                  3,757		11.7 %
AFFO per Unit1	$                    0.63		$                    0.58		$                    0.05		8.6 %
Weighted Average Unit Count	57,112,882		55,580,637		1,532,245		2.8 %

*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 $125.7 million for YTD 2023 increased 7.6% compared to $116.9 million in YTD 2022. Same Community properties contributed $8.6 million, as described below, and the non-stabilized property contributed $0.3 million to the overall increase.

Revenue from Same Community properties of $119.6 million for YTD 2023 increased 7.7% from $111.0 million in YTD 2022, primarily due to a 3.1% increase in average rental rates from $1,452 per apartment unit as of September 30, 2022 to $1,497 per apartment unit as of September 30, 2023.

The net (loss) income and comprehensive (loss) income change between YTD 2023 and YTD 2022 is primarily due to non-cash adjustments to fair values of investment properties and derivatives and other financial liabilities from December 31, 2022 to September 30, 2023 and December 31, 2021 to September 30, 2022, respectively, and is not considered comparable period over period.

The 10.0% increase in total portfolio NOI for YTD 2023 to $68.6 million compared to $62.4 million in YTD 2022 was the result of an increase of $7.0 million from Same Community properties, described below, partially offset by a reduction from Non-Same Community properties of $0.8 million due to real estate tax refunds received during Q3 2022 related to properties sold in 2021.

The 12.0% increase in Same Community NOI to $65.6 million for YTD 2023 compared to $58.6 million for YTD 2022 was the result of the increase in revenue described above, as well as a $1.0 million decrease in real estate taxes, primarily due to revised 2023 tax assessments, partially offset by higher property operating expenses of $2.5 million due to an increase in payroll costs, repair and maintenance expenses and the cost of insurance over the comparative period.

FFO was $39.4 million, or $0.69 per Unit, for YTD 2023 compared to $34.8 million, or $0.63 per Unit, for YTD 2022. The increase was primarily the result of the higher NOI discussed above, partially offset by an increase of $0.8 million in finance costs (net of finance income primarily from interest rate swaps) associated with an increase in interest rates versus the comparative period as well as an increase of $0.8 million in general and administrative expenses due to higher payroll expenses, travel costs and consulting fees.

AFFO was $36.0 million, or $0.63 per Unit, for the nine months ended September 30, 2023 compared to $32.2 million, or $0.58 per Unit, for the nine months ended September 30, 2022. The improvement was primarily the result of the increase in FFO discussed above, partially offset by higher maintenance capital expenditures of $0.6 million. The increase in maintenance capital expenditures is primarily due to roof replacements and balcony restoration at Wimbledon Green and Westwood Park in the second quarter of 2023.

Highlights from Recent Four Quarters

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

	September 30, 2023		June 30, 2023		March 31, 2023		December 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	$         1,504		$        1,501		$       1,489		$        1,482
Average monthly rent on in-place leases,
Same Community^1 Properties	$         1,497		$        1,495		$       1,482		$        1,475
Weighted average occupancy rate	95.2 %		95.3 %		95.9 %		96.0 %
Retention rate	56.0 %		56.0 %		52.5 %		56.3 %
Debt to Gross Book Value^1	41.3 %		39.4 %		38.4 %		37.3 %

	Q3 2023		Q2 2023		Q1 2023		Q4 2022
Operating Results
Revenue, Total Portfolio	$                42,079		$                42,043		$                41,585		$                41,637
Revenue, Same Community^1Properties	$                40,016		$                39,992		$                39,564		$                39,604
Revenue, Non-Same Community^1 Properties	$                  2,063		$                  2,051		$                  2,021		$                  2,033
NOI1, Total Portfolio	$                22,694		$                23,044		$                22,838		$                23,154
NOI1, Same Community^1 Properties	$                21,658		$                22,037		$                21,870		$                21,970
NOI1, Non-Same Community^1 Properties	$                  1,036		$                  1,007		$                     968		$                  1,184
NOI Margin1, Total Portfolio	53.9 %		54.8 %		54.9 %		55.6 %
NOI Margin1, Same Community^1 Properties	54.1 %		55.1 %		55.3 %		55.5 %
NOI Margin1, Non-Same Community^1 Properties	50.2 %		49.1 %		47.9 %		58.2 %
Net (loss) income and comprehensive (loss) income	$               (79,286)		$               (45,916)		$               (16,138)		$               (16,420)
Distributions on Class B Units	$                  2,663		$                  2,665		$                  2,668		$                  2,670
Fair value adjustment to investment properties	$              111,080		$                71,805		$                16,526		$                43,071
Fair value adjustment to investment
properties (IFRIC 21)	$                  7,814		$                  7,746		$               (22,163)		$                  8,961
Property tax liability adjustment, net (IFRIC 21)	$                 (7,814)		$                 (7,746)		$                22,163		$                 (8,961)
Fair value adjustment to derivatives and other
financial liabilities	$               (20,913)		$               (15,107)		$                  8,964		$               (17,274)
Fair value adjustment to unit-based compensation	$                    (464)		$                    (170)		$                     997		$                    (396)
Restructuring costs	$                          -		$                          -		$                          -		$                  1,630
Principal payments on lease liability	$                      (33)		$                      (33)		$                      (31)		$                      (31)
Depreciation of right-to-use asset	$                       34		$                       33		$                       33		$                       34
FFO^1	$                13,081		$                13,277		$                13,019		$                13,284
FFO per Unit	$                    0.23		$                    0.23		$                    0.23		$                    0.23
Maintenance capital expenditures	$                 (1,141)		$                 (1,776)		$                    (557)		$                    (793)
Straight line rental revenue differences	$                        (2)		$                       25		$                       45		$                         8
AFFO^1	$                11,938		$                11,526		$                12,507		$                12,499
AFFO per Unit^1	$                    0.21		$                    0.20		$                    0.22		$                    0.22
AFFO Payout Ratio	61.6 %		63.9 %		59.1 %		59.6 %
Weighted Average Unit Count	56,930,050		57,199,497		57,212,200		58,006,651

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 September 30, 2023, the REIT had liquidity of $200.1 million, consisting of cash and cash equivalents of $3.9 million and $196.2 million available under its revolving credit facility. The REIT also has the flexibility to obtain additional liquidity by adding properties to the borrowing base of the revolving credit facility.

As of September 30, 2023, the REIT had total mortgage notes payable of $497.7 million, excluding the revolving credit facility and construction loan for the investment property under development, with a weighted average contractual interest rate of 3.3% and a weighted average term to maturity of 4.7 years. In aggregate, mortgage notes payable and the revolving credit facility total $745.8 million as of September 30, 2023 with a weighted average contractual interest rate of 3.2%, which excludes the convertible unsecured subordinated debentures (the "Convertible Debentures") and the construction loan for the investment property under development. Debt to Gross Book Value excluding the convertible debentures as of September 30, 2023 was 39.2%. As of September 30, 2023, 98% of the REIT's debt was fixed or economically hedged to fixed rates.

In September 2023, the REIT extended $160 million of mortgage notes by one year to September 13, 2025, with no other contractual changes as a result of the extension.

As of September 30, 2023, the REIT had outstanding Convertible Debentures valued at $40.5 million at a contractual interest rate of 5%, maturing on September 30, 2025 with a conversion price of $14.40 per Unit.

On October 4, 2023, the Toronto Stock Exchange accepted the REIT's notice of intention to make a NCIB commencing on October 6, 2023 for up to a maximum of 3,186,336 of its issued and outstanding Units. The REIT concurrently renewed its ASPP in connection with the renewed NCIB. The REIT may purchase Units for a 12-month period ending on October 5, 2023.

The REIT purchased and canceled 1,079,507 Units under its existing NCIB and ASPP at an average price of $13.55 per Unit through December 31, 2022. During the nine months ended September 30, 2023, the REIT purchased and cancelled 402,177 Units under its existing NCIB and ASPP at an average price of $12.43.

In October 2023, since the commencement of the renewed NCIB, the REIT purchased and cancelled 44,800 Units under the renewed NCIB and ASPP at an average price of $10.73 per Unit.

Distributions and Units Outstanding

Cash distributions declared to holders of Units and holders of Class B Units totalled $7.3 million for Q3 2023, representing an AFFO Payout Ratio¹ of 61.6%. 100% of the REIT's cash distributions were classified as return of capital. As of September 30, 2023, the total number of Units outstanding was 36,084,795. There were also 20,479,837 Class B Units outstanding, which are redeemable for Units on a one-for-one basis.

Senior Management Structure

The REIT announced today that Brandon Barger, the REIT's Chief Financial Officer, is taking a leave of absence for health-related reasons. Susan Rosenbaum, the REIT's Chief Operating Officer and former Chief Financial Officer, was appointed today as Interim Chief Financial Officer by the board of trustees of the REIT. Ms. Rosenbaum has a wealth of experience in this role, acting as the REIT's Chief Financial Officer for seven years up until recently, on January 1, 2023, when she was appointed Chief Operating Officer. She has facilitated an orderly and seamless transition with respect to the REIT's Q3 financial results and will act as both Interim Chief Financial Officer and Chief Operating Officer until Brandon's return. 

"Our thoughts and best wishes go out to Brandon during his leave of absence," said Dan Oberste, the REIT's President and Chief Executive Officer. "Until Brandon's return, the REIT remains soundly managed with our experienced team. The REIT's succession plan takes into account unanticipated executive officer leave. I am confident in Susie and our team's abilities to manage both the REIT's excellent operating performance and financial reporting in Brandon's absence."

2023 Earnings and Same Community Portfolio Guidance

The REIT's 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 expenses and NOI in 2023. The guidance does not include potential acquisitions, dispositions or future growth from the impact of properties currently under development.

The REIT has revised it's 2023 guidance. In November 2023, a constitutional election ratified lowering real estate taxes for Texans, including multi-family residential rental properties. This decrease in real estate taxes for the REIT of approximately $1.4 million, applies to the 2023 tax year, and is included in the guidance. These tax savings are offset by an increase in the cost of insurance and additional interest expense which has also been included in the revised guidance for 2023. These changes resulted in the range narrowing for FFO per Unit and AFFO per Unit, property operating expenses increasing and total revenue and NOI remaining unchanged.

	Revised guidance for 2023
Per Unit	Range	Midpoint
Total Portfolio
FFO per Unit	$0.92 to $0.94	$0.93
AFFO per Unit	$0.85 to $0.87	$0.86
Same Community Growth
Total Revenue	5.0% to 7.0%	6.0 %
Property Operating Expenses	5.0% to 7.0%	6.0 %
NOI	6.0% to 8.0%	7.0 %

	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 Susan Rosenbaum, Interim Chief Financial Officer and Chief Operating Officer, will host a conference call for analysts and investors on Thursday November 9^th, 2023 at 12:00 pm (ET). Participants can register and enter their phone number at:  https://emportal.ink/3Q24JRX 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/lKGdYrzYEjo. 

A replay of the call will be available until Thursday, November 16^th, 2023. To access the replay, dial 416-764-8677 or 888-390-0541 (Passcode: 273311#). 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 and nine months ended September 30, 2023, which section is incorporated herein by reference.

							Three months ended September 30, 2023		Three months ended September 30, 2022		Nine months ended September 30, 2023		Nine months ended September 30, 2022
	Net (loss) income and comprehensive (loss) income						$        (79,286)		$          23,787		$      (141,340)		$        243,650
	Adjustments to arrive at FFO
		Distributions on Class B Units					2,663		2,671		7,996		7,997
		Fair value adjustment to investment properties					111,080		23,449		199,411		(115,598)
		Fair value adjustment to investment properties (IFRIC 21)					7,814		5,635		(6,603)		(8,961)
		Property tax liability adjustment, net (IFRIC 21)					(7,814)		(5,635)		6,603		8,961
		Fair value adjustment to derivatives and other financial
			liabilities				(20,913)		(38,330)		(27,056)		(102,565)
		Fair value adjustment to unit-based compensation					(464)		(354)		363		444
		Loss on extinguishment of debt					—		853		—		853
		Principal payments on lease liability					(33)		(27)		(97)		(96)
		Depreciation of right-to-use asset					34		33		100		99
	Funds from Operations ("FFO")						$          13,081		$          12,082		$          39,377		$          34,784
	FFO per Unit						$               0.23		$               0.21		$               0.69		$               0.63
	Adjustments to arrive at AFFO
		Maintenance capital expenditures					(1,141)		(920)		(3,474)		(2,840)
		Escrowed rent guaranty realized					—		—		—		87
		Straight line rental revenue differences					(2)		47		68		183
	Adjusted Funds from Operations ("AFFO")						$          11,938		$          11,209		$          35,971		$          32,214
	AFFO per Unit						$               0.21		$               0.19		$               0.63		$               0.58
	Distributions declared						$            7,349		$            7,528		$          22,112		$          21,719
	AFFO Payout Ratio						61.6 %		67.2 %		61.5 %		67.4 %
	Weighted average unit count						56,930,050		58,205,337		57,112,882		55,580,637

						Three months ended September 30, 2023		Three months ended September 30, 2022		Nine months ended September 30, 2023		Nine months ended September 30, 2022
Total revenue						$              42,079		$              40,549		$            125,707		$            116,881
Property operating expenses						(12,898)		(12,150)		(36,620)		(33,900)
Real estate taxes						1,327		(1,045)		(27,114)		(29,580)
						30,508		27,354		61,973		53,401
Property tax liability adjustment (IFRIC 21)						(7,814)		(5,635)		6,603		8,961
Net Operating Income ("NOI")						$              22,694		$              21,719		$              68,576		$              62,362
NOI margin						53.9 %		53.6 %		54.6 %		53.4 %

								September 30, 2023		December 31, 2022
Loans and borrowings (current portion)								$                1,825		$                1,779
Loans and borrowings (non-current portion)								738,373		724,581
Convertible debentures								40,511		42,599
Total loans and borrowings and convertible debentures ("Debt")								780,709		768,959
Gross Book Value								$         1,889,829		$         2,063,275
Debt to Gross Book Value								41.3 %		37.3 %

								September 30, 2023		December 31, 2022
Unitholders' equity								$            817,661		$            975,749
Class B Units								244,734		267,826
NAV								$        1,062,395		$        1,243,575
Unit count, as of the end of period								56,945,300		57,169,893
NAV per Unit								$                18.66		$                21.75

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 and nine months ended September 30, 2023 and in the REIT's Annual Information Form dated March 8, 2023, 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, 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

Susan Rosenbaum, Interim Chief Financial Officer and Chief Operating Officer, BSR Real Estate Investment Trust, Tel: [phone], Fax: [phone]