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BSR acquires Houston, Dallas housing properties for $92.8M

BSR Real Estate Investment Trust (HOM.U-T, HOM.UN-T) has acquired two garden-style communities in...

IMAGE: The newly constructed Satori at Long Meadow Apartments in Richmond, near Houston, have been acquired by BSR REIT. (Courtesy

The newly constructed Satori at Long Meadow Apartments in Richmond, near Houston, have been acquired by BSR REIT. (Courtesy

BSR Real Estate Investment Trust (HOM.U-THOM.UN-T) has acquired two garden-style communities in the Houston and Dallas-Fort Worth markets of Texas for $92.8 million.

The REIT, registered in Ontario but based in Little Rock, Ark., has now purchased eight properties in the 17 months since its IPO on the TSX in May 2018. It now owns a portfolio of 49 multifamily garden-style residential properties comprising 10,784 apartment units located across five bordering states in the U.S. Sunbelt region.

The most recent acquisitions are the Satori at Long Meadows Apartments in Richmond, near Houston, and Auberry at Twin Creeks in the Dallas area.

“The purchase of Satori and Auberry is an opportunity for BSR to continue to modernize our portfolio in MSAs we have targeted for growth,” said John Bailey, BSR’s chief executive officer, in a release. “Satori, nestled in one of the wealthiest suburbs of Houston, is a cutting-edge community which builds on our existing Houston footprint.

“Auberry adds to our growing scale in Dallas and is positioned to generate incremental value for unitholders through BSR’s capital redevelopment program.”

Satori at Long Meadow

Satori is a class-A garden-style community consisting of 300 one-, two- and three-bedroom apartment units on 20.7 acres constructed in 2019.

The property includes multiple amenities including a resort-style swimming pool, drive-through mail kiosk, dog park, car care centre and direct garage/ground floor entry for every apartment unit.

Satori is currently in the lease-up phase with 32 per cent of the units already leased. To mitigate any potential lease-up risk, BSR and the seller have entered into a Rent Guaranty Escrow Agreement, allowing the REIT to collect monthly stabilized rental revenue from the seller through June 2020.

BSR now owns eight properties and 1,962 total apartment units in the Houston market representing 18.2 per cent of its portfolio. Houston is the fifth-most populous metro market in the U.S. and home to 21 Fortune 500 companies.

Satori is located in the Richmond/Katy submarket of Houston. Population growth in this community has outpaced overall population growth in Houston by 11.1 per cent since April 2010, and the submarket is the 10th-most populous county in Texas.

Auberry at Twin Creeks

Auberry is a class-B garden-style community consisting of 216 one-, two-, and three-bedroom apartment units on 12.6 acres constructed in 2005. 

Dallas-Fort Worth is the fourth-largest metro area in the U.S. and has outpaced U.S. and Texas GDP growth since 2010. Auberry features detached garages, a resort-style swimming pool, a dog park, granite countertops and a private access gate.

BSR owns five properties and 1,708 apartments in the D-FW market, representing 15.9 per cent of its portfolio.

To fund the purchases, BSR used $56.9 million in mortgage debt, of which $20.3 million was assumed. THE REIT used its credit facilities for the balance.

Other acquisitions since the IPO include Brandon Place in Oklahoma City, Okla.; Towne Park in Springdale, Ark.; Riverhill in Grand Prairie, Texas; Wimberly Apartments in Dallas;  and Cielo and Madrone Apartments in Austin.

The acquisitions have added 2,213 apartment units to the REIT’s portfolio. The average age of the properties is 11 years.

The announcement of the sale comes as BSR prepares to release its Q3 2019 earnings after the closing of markets on Tuesday, Nov. 12.

The REIT also recently closed a $55.25-million share issue, consisting of $40.25 million on a bought-deal basis and a $15-million private placement with Toronto-based Vision Capital Corp. funds.

A portion of those proceeds went toward BSR’s September purchase of 554 garden-style rental units in two adjacent properties in Austin.

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