Interview With BSR REIT (Strong Buy Reaffirmed)
I recently had the opportunity to meet with the CEO and CFO of BSR REIT (HOM.U:CA; BSRTF) at REIT Week in NYC.
Daniel M. Oberste, President and Chief Executive Officer
Thomas Cirbus, Chief Financial Officer
BSR is one of our largest positions in the Core Portfolio, and we recently named it as one of our Top Picks for 2026.
The reason is simple.
BSR owns a portfolio of young, affordable apartment communities in the Texas Triangle, mainly Dallas, Austin, and Houston, which are some of the fastest-growing markets in the country.
Despite that, the stock trades at a steep discount to NAV.
Its NAV is in the mid $16s per unit, but the stock recently traded closer to $11.50, or roughly 70% of NAV.
The market is discounting BSR because its recent results have been weak.
Texas has faced significant apartment oversupply in recent years, hurting occupancy, rent growth, and same property NOI. BSR also went through a major portfolio transformation last year, selling a large portion of its portfolio to AvalonBay (AVB), repurchasing its Class B units, and recycling capital into higher growth value-add opportunities.
This created a temporary drag on AFFO per unit because there is a lag between selling stabilized assets and redeploying the proceeds into new properties that are still in lease-up.
But the key point of our thesis is that this weakness is temporary.
BSR’s NAV has now stabilized, and its same property NOI is expected to return to growth already in the near term. Its markets continue to enjoy strong population and job growth. New supply is expected to fall sharply in the coming years. And management is actively working to close the gap to NAV through buybacks, capital recycling, and potentially other strategic actions.
This latest meeting strengthened that view.
The biggest takeaway is that management sounded very confident that a recovery in the apartment sector, especially in BSR’s markets, is increasingly inevitable as we move into 2027.
