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Price Target Lowered on Real Estate Trust
Research Report

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Katherine DeGilio wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures for Echelon Capital Markets, BSR Real Estate Investment Trust, May 12, 2023

Echelon Wealth Partners Inc. is a member of IIROC and CIPF. The documents on this website have been prepared for the viewer only as an example of strategy consistent with our recommendations; it is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular investing strategy. Any opinions or recommendations expressed herein do not necessarily reflect those of Echelon Wealth Partners Inc. Echelon Wealth Partners Inc. cannot accept any trading instructions via e-mail as the timely receipt of e-mail messages, or their integrity over the Internet, cannot be guaranteed. Dividend yields change as stock prices change, and companies may change or cancel dividend payments in the future. All securities involve varying amounts of risk, and their values will fluctuate, and the fluctuation of foreign currency exchange rates will also impact your investment returns if measured in Canadian Dollars. Past performance does not guarantee future returns, investments may increase or decrease in value and you may lose money. Data from various sources were used in the preparation of these documents; the information is believed but in no way warranted to be reliable, accurate and appropriate. Echelon Wealth Partners Inc. employees may buy and sell shares of the companies that are recommended for their own accounts and for the accounts of other clients. Echelon Wealth Partners compensates its Research Analysts from a variety of sources. The Research Department is a cost centre and is funded by the business activities of Echelon Wealth Partners including, Institutional Equity Sales and Trading, Retail Sales and Corporate and Investment Banking.

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ANALYST CERTIFICATION
Company: BSR REIT | HOM.U:TSX

I, David Chrystal, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers.

IMPORTANT DISCLOSURES

The Analyst or any member of the Analyst’s household have a financial interest in the securities of the subject issuer: Long Position, Trust Units.

Echelon Wealth Partners Inc. and/or one or more entities affiliated with Echelon Wealth Partners Inc. beneficially own common shares (or any other class of common equity securities) of this issuer which constitutes more than 1% of the presently issued and outstanding shares of the issuer.

Special Situations

Source: David Chrystal (5/12/23)

Recently released Q1/23 results from BSR Real Estate Investment Trust were in line with the previous forecast. However, based on a 10% discount to Echelon's NAV estimate, the target price was lowered on the stock, noted Echelon Capital Markets analyst David Chrystal.

BSR Real Estate Investment Trust (BSRTF:OTCMKTS) recently released financial results from the first quarter of 2023, which were in line with previous forecast and consensus, noted Echelon Capital Markets analyst David Chrystal in a May 12, 2023 research note.

Chrystal noted that while in line with Echelon's forecast, these results included "exceptional same property NOI growth (+17.8%) partially offset by higher interest expense." As seasonal rebound takes hold in the market, rental lifts will likely remain modest as they were in this quarter.

Chrystal suggested that a "lack of attractive external growth opportunities will likely see management focus on highly accretive buybacks and re-investment in existing assets in the near term."

Highlights

The report contained multiple upcoming highlights for BSR, including:

A market rent rebound is building momentum as the spring leasing season begins, showcasing three months of positive m/m market rent growth.
The development of Phase II f Aura 36Hundred in Austin is progressing within budget and the perceived timeframes. This is scheduled to be finished in 2023, with a total cost projection of US$59.5.
Investment focus is inward.

Chrystal noted, "Though Q1 did not include any activity on the REIT's NCIB, management earmarked US$5M for purchases under an automatic share purchase plan. Given the significant discount of the REIT's units relative to the price of apartment assets in its core markets, management believes that unit buybacks are currently the best use of excess capital."

Structure and Predictions

In this report, Echelon Capital Markets maintained its Buy rating on BSR, but lowered its target price from US$21 to US$19, "based on a 10% discount to our NAV estimate."

Chrystal's research also shared current market data on the company:

Rating: Buy
Price: US$12.72, with a 52-week range between US$12.32 and US$20.03
Price Target: US$19
Market Cap: US$729

Chrystal expects a projected return to target of 53.5% for shareholders. BSR has an enterprise value of US$1,531 million and 57.3 million outstanding shares.

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Important Disclosures:

Katherine DeGilio wrote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional and any action a reader takes as a result of information presented here is his or her own responsibility. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.

Disclosures for Echelon Capital Markets, BSR Real Estate Investment Trust, May 12, 2023

ANALYST CERTIFICATION
Company: BSR REIT | HOM.U:TSX

I, David Chrystal, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers.

IMPORTANT DISCLOSURES

The Analyst or any member of the Analyst’s household have a financial interest in the securities of the subject issuer: Long Position, Trust Units.

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