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BSR adds to portfolio of newer apartments

by Andrew Moreau | December 17, 2020 at 2:44 a.m.

After spending $129 million to acquire two Texas apartment properties, BSR Real Estate Investment Trust said Wednesday that it remains in growth mode with an additional $175 million it plans to use for more acquisitions.

The Little Rock company announced late Tuesday that it has purchased apartment complexes in the Houston and Dallas metropolitan areas and intends to continue the momentum going forward.

BSR purchased the 350-unit Vale Luxury Apartments in the Houston area and the 330-unit Satori Frisco Apartments in the Dallas metro region. Vale is a newly constructed garden-style community and Satori Frisco was built in late 2019.

Those additions are part of BSR’s strategy to acquire newer apartment complexes in growing metro areas in the Sun Belt region while selling off old properties in declining markets.

The company has targeted the Austin, Dallas, Houston and Oklahoma City regions as well as Northwest Arkansas for growth potential. “The purchase of Vale and Satori Frisco is a clear example of our portfolio enhancement growth strategy and capital recycling program at work,” said John Bailey, BSR’s chief executive officer.

“We are now using our strong liquidity position to invest in Vale and Satori Frisco, modern communities in core growth markets with the amenities our residents desire,” he added. “Our ability to execute on BSR’s plan to increase shareholder value has been on full display during the fourth quarter.”

Since mid-November, the company has sold a dozen older properties and now is turning attention to adding newer apartment complexes in the five target markets.

“Our acquisition capacity for investments is $175 million after yesterday’s purchases,” Chief Financial Officer Susie Koehn said Wednesday. “The company is in growth mode and will continue to pursue accretive acquisitions to our unitholders going forward.”

Since going public in May 2018, BSR has reduced the average age of its portfolio. The company’s 14 acquisitions after the initial public offering have added 4,191 apartment units with a weighted average year built of 2013 compared with 32 sales totaling 6,399 apartment units with a weighted average year built of 1988.

Earlier this month, the company announced the sale of six apartment properties, including the last complex it owned in Beaumont, Texas. Those sales totaled about $130 million.

South Oaks Apartments at 3401 Fair Park Blvd., across from the University of Arkansas at Little Rock campus, was among the properties sold. Other complexes that were sold are in the Houston metro area and in Beaumont and Longview, Texas.

In November, the company sold six properties for $130 million, with a net gain of $127 million. That sale included Indian Hills and two Overbrook complexes in North Little Rock and Woodland Oaks in Conway.

The company now has only two holdings — apartment buildings in Blytheville and Pascagoula, Miss. — that do not fit its growth strategy.

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