BSR Real Estate Investment Trust of Little Rock on Thursday reported a 1.9% third-quarter decrease in net operating income from its portfolio of multifamily residential properties.
Net operating income, a key measure of performance used by real estate operating companies and REITs, fell to $22.3 million in the period, compared to $22.7 million in the same quarter a year ago.
The company attributed the decrease in part to initial operating expenses for a property under development. In total, third-quarter operating expenses were $13.02 million, up from $12.9 million a year ago.
A $400,000 increase in property tax expenses and a $100,000 decrease in tax refunds due to timing were also fact0rs, BSR said in a news release.
Another key performance metric, adjusted funds from operations, fell by nearly 7% to $11.1 million, compared to $11.9 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.
BSR, led by President & CEO Dan Oberste, is publicly traded on the Toronto Stock Exchange (TSX HOM.U). It owns 31 multifamily residential properties consisting of 8,666 apartment units, with 85% located in Texas, 11% in Oklahoma and 4% in Arkansas.
“The REIT continues to produce expected returns as our core Texas markets effectively absorb the remnants of an unprecedented increase in new multifamily housing supply,” Oberste said in a statement. “As we exit this phase of new supply in 2025, the REIT is well positioned to generate above-average rental growth and financial returns in future periods.”
The company’s occupancy rate dipped to 94.7% in the third quarter, compared to 95.3% a year ago.
BSR posted a net loss of $39.3 million in the 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 fell slightly Friday morning to $12.81. Year to date, shares were up more than 7%
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