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 remained unchanged at $0.23 and $0.21, respectively, compared to Q3 2023.

• 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 markets is absorbed.

Financial highlights

• Same community revenue rose 0.5% year-over-year to $42.3 million, driven by higher rental fees and utility reimbursements.

• Same community NOI declined 1.2% to $22.4 million due to higher property taxes and lower tax refunds.

• FFO was $12.2 million ($0.23/unit), down 7.0% year-over-year, but FFO per unit was unchanged due to unit repurchases.

• AFFO was $11.1 million ($0.21/unit), down 7.0% year-over-year, with per unit figures flat year-over-year.

• NAV per Unit as of September 30, 2024 was $16.87, down 9.6% from the prior year.

Outlook and guidance

• 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.

• Guidance for Same Community revenue growth midpoint was lowered to 0.5% from 1.0%, and NOI growth midpoint to 1.5% from 2.0%.

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

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

• Management expects above-average rental growth as new supply is absorbed in core markets.