BSR Real Estate Investment Trust (HOM.UN) Q3 2024 earnings summary

Executive summary

• Q3 2024 performance met expectations, with stable occupancy at 94.7% and Same Community revenue up 0.5% year-over-year.

• FFO per Unit and AFFO per Unit for Q3 2024 were unchanged from Q3 2023 at $0.23 and $0.21, respectively, supported by unit repurchases.

• Board increased monthly distributions by 7.7%, reflecting cash flow growth and commitment to returns, effective August 2024.

• The REIT is positioned for above-average rental growth as new supply in Texas is absorbed, with expectations for improved returns in 2025.

Financial highlights

• Q3 2024 total portfolio revenue was $42.3 million, up 0.5% year-over-year; Same Community NOI declined 1.2% to $22.4 million due to higher property taxes and lower tax refunds.

• Q3 2024 net loss was $39.3 million, primarily due to non-cash fair value adjustments.

• YTD 2024 Same Community revenue rose 0.6% to $126.5 million; Same Community NOI increased 2.6% to $70.4 million.

• YTD 2024 FFO was $39.9 million ($0.74 per Unit), up 7.2% per Unit year-over-year; AFFO was $36.7 million ($0.68 per Unit), up 7.9% per Unit.

• NAV per Unit as of September 30, 2024 was $16.87, down from $18.66 a year earlier, reflecting lower property values.

Outlook and guidance

• 2024 guidance for FFO per Unit and AFFO per Unit remains at $0.96 and $0.88, respectively.

• Guidance for Same Community revenue growth midpoint revised down to 0.5% (from 1.0%) and NOI growth to 1.5% (from 2.0%) due to delayed property completion.

• 2024 guidance: same community revenue growth 0%-1%, NOI growth 0.5%-2.5%, FFO/unit $0.93-$0.99, AFFO/unit $0.85-$0.91.

• Expect supply constraints and improved fundamentals in late 2025 and beyond as new deliveries slow.