BSR Real Estate Investment Trust of Little Rock on Wednesday reported a 16% increase in first-quarter net operating income from its portfolio of multifamily residential properties in three states.
Net operating income, a key measure of performance used by real estate operating companies and REITs, increased to $22.8 million in the period, compared with $19.6 million in the same quarter a year ago.
Another key performance metric, adjusted funds from operations, rose nearly 19% to $12.5 million, up from $10.5 million a year ago. Adjusted funds from operations measures the cash generated from an REIT's properties and deducts capital expenditures required to maintain the properties.
Weighted average rent in the first quarter was $1,489 per unit, up 10.3% from $1,350 in the same quarter a year ago. Total revenue was $41.6 million, up nearly 11% from $37.5 million a year ago.
Dan Oberste, CEO of BSR, said the growth in operating income reflects the "strong fundamentals of multifamily in general and our core Texas markets in particular."
"BSR is well positioned to generate another year of healthy performance from our existing portfolio and capitalize on new growth opportunities as they arise," he said in a statement.
BSR is publicly traded on the Toronto Stock Exchange (TSX HOM.U). It owns 31 multifamily properties consisting of about 8,600 apartment units, with 85% located in Texas, 11% in Oklahoma and 4% in Arkansas.
Excluding short term leases, rental rates for new leases remained the same and renewals increased 7.7% over the prior leases.
The company posted a first-quarter net loss of $16.1 million, compared to a profit of $59 million a year ago. It attributed the loss primarily to adjustments to the fair value of investment properties and derivatives, along with other financial liabilities, and noted that the figure is not considered comparable period over period.
International Financial Reporting Standards require that the company report the fair value of its properties each quarter. Those values can vary widely quarter to quarter, and the company did not record gains or losses on them.
Shares of the company were flat Thursday morning. For the year to date, shares were down about 2%.
