BSR Real Estate Investment Trust of Little Rock announced Wednesday that it's acquiring three garden-style apartment communities in Texas markets for $195 million. It also announced the sale of a complex in Blytheville.
The REIT said it will pay for the properties through its existing credit facility. The deal is expected to be immediately accretive to adjusted funds from operations on a per unit basis.
The properties being acquired are:
- The newly constructed, 349-unit Vale Frisco Apartments in Frisco, near Dallas.
- The 260-unit Adley at Gleannloch Apartments in Spring, near Houston. It was built in 2019.
- The newly constructed 400-unit Alleia Long Meadow Farms in Richmond, near Houston.
"With the purchase of Adley, Vale Frisco and Alleia, we are enhancing our portfolio positioning in Dallas and Houston," CEO John Bailey said in a news release. "BSR has gained impressive scale in these markets, and we are continuing to build greater scale by acquiring two additional phases of prior acquisitions, allowing us to use our experience to manage these modern communities to their fullest potential."
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 the first year of ownership.
But BSR expects to reach stabilization by the second quarter of 2022, generating an internal rate of return range of 11%-15%. The REIT said the third-party appraised value of the portfolio at stabilization is $205 million.
The Vale Frisco and Adley sales have closed, and the Alleia closing will follow BSR’s receipt of its certificate of occupancy.
In addition, the REIT announced the recent $3.1 million sale of Capri Apartments in Blytheville. The net proceeds of $2.7 million were used to reduce the amount outstanding under BSR's credit facility.