BSR Real Estate Investment Trust of Little Rock on Wednesday reported a 0.8% first-quarter increase in net operating income from its portfolio of multifamily residential properties.
Net operating income (NOI), a key measure of performance used by real estate operating companies and REITs, rose by 0.8% to $24.03 million in the period, compared to $23.84 million in the same quarter a year ago.
Another key performance metric, adjusted funds from operations (AFFO), fell by 8.5% to $11.8 million, compared to $12.9 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.
The company attributed the AFFO decrease primarily to higher finance costs associated with interest costs on the $61 million acquisition of an apartment complex in Austin, Texas, in January. AFFO was also weighed down by a new multifamily development in Austin. Construction on the 258-unit project was completed in December and the company is working to lease vacant units.
During the quarter, BSR sold a 316-unit apartment community in Oklahoma City, Oklahoma, for $28.3 million.
The deals are part of a broader portfolio makeover. BSR recently completed the $618.5 million sale of nine Texas multifamily properties to AvalonBay Communities Inc. of Arlington, Virginia, with plans to redeploy the proceeds toward acquisitions with higher potential returns.
As a result, the company has pulled its 2025 guidance with plans to provide a revised outlook at a later date.
CEO Dan Oberste said the company was focused on lease renewals and improving retention rates in the first quarter. The retention rate rose 4.6% to 56.9% on annual basis. It was up nine-tenths of percentage point on a quarterly basis.
Occupancy at BSR properties ticked up to 95.9% in the first quarter, compared to 95.3% a year ago and 95.6% in the fourth quarter of 2024.
“As we turn towards the second quarter, it is our intention to leverage the capital and market intelligence achieved through asset rotations, as well as the improving supply backdrop in our core markets, to continue to deliver outsized growth for unitholders,” CEO Dan Oberste said in a statement.
BSR is publicly traded on the Toronto Stock Exchange (TSX HOM.U).
The company posted a net loss of $40.8 million in the first quarter. The company attributed the loss primarily to adjustments in the fair value of investment properties and said the figure is not comparable period over period.
Shares of the company dipped about 1% Friday morning to $13.08. Over the past 12 months, shares were up more than 15%.
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