BSR Real Estate Investment Trust of Little Rock has acquired two apartment complexes in Texas for $129 million and sold another in Texas for $44 million.
It bought the recently constructed 350-unit Vale Luxury Apartments in the Houston metropolitan area and the 330-unit Satori Frisco Apartments in the Dallas MSA that was built in late 2019.
Vale is already 55.1% leased and is expected to be accretive to the REIT's adjusted funds from operations on a per-unit basis as lease-up continues. Satori Frisco is 91.5% leased and is expected to be immediately accretive.
The REIT sold the 360-unit West End Lodge in Beaumont, exiting that market. The complex was built in 2010.
"The purchase of Vale and Satori Frisco is a clear example of our portfolio enhancement growth strategy and capital recycling program at work," CEO John Bailey said in a news release. "BSR recently exited the smaller Beaumont and Longview, Texas markets and also sold noncore properties in other markets. 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. Our ability to execute on BSR’s plan to increase shareholder value has been on full display during the fourth quarter."
As part of the sale, the buyer assumed BSR’s in-place mortgage financing of $21.9 million and BSR took back a $5.2 million note receivable maturing in five years. The REIT said it intends to use the remaining cash proceeds of $21.5 million to fund acquisitions.
"BSR has now exited the Longview and Beaumont, Texas markets, the Baton Rouge and Shreveport, Louisiana markets and the Tulsa, Oklahoma market, in addition to other non-core asset dispositions in the Little Rock, Arkansas and Houston, Texas markets," Bailey said in a separate news release. "We now turn to completing this current phase of the capital recycling program by making acquisitions in our target markets, fully funded by our current liquidity position. We have a robust pipeline of acquisition opportunities and expect to deploy our available capital over the short-run."