BSR REIT cuts 2026 FFO and AFFO guidance after Q2 results

BSR REIT (TSX: HOM ) held its second-quarter earnings conference call on Thursday.

Below is the complete transcript from the call.

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Access the full call at Summary BSR REIT reported a 1.5% increase in total portfolio revenue to $34.2 million for Q2, driven by 2025 property acquisitions, despite a decline in same community revenue.

Same community NOI decreased by 2.8% year-over-year due to lower revenue and timing of real estate tax refunds, while total portfolio NOI saw a slight increase of 0.5%.

The company revised its FFO and AFFO per unit 2026 guidance downward due to slower than expected stabilization of a major acquisition and a competitive concessionary environment.

BSR REIT is experiencing positive trends in platform efficiency and centralization efforts, yielding operational cost savings, notably in payroll and insurance expenses.

Management remains optimistic about medium- to long-term growth, driven by lease-up activities, economic stabilization of non-same community assets, and improving supply-demand fundamentals.

Full Transcript Tom, CFO Further, in July, rates on new leases declined by 90 basis points while renewals increased by 2.2%, resulting in a 1.0% increase in blended rates.

We are encouraged by the continued momentum in trade-outs over the summer as April, May, June, and July each got sequentially better on a blended basis.

Same community revenue in Q2 was $26.4 million, a decrease of 1% compared to last year.

This was primarily due to a reduction of $0.3 million from lower average occupancy, which was 94.6% versus 95.6%, and $0.2 million from lower average monthly in-place rent.

The decrease was partially offset by an increase in other property income of $0.2 million, which was driven by an increase in utility reimbursements and resident amenity programs.

Sequentially, same community revenue of $26.4 million for Q2 2026 increased 35 basis points compared to Q1 primarily due to higher average occupancy, which was 94.6% versus 94.3%, as well as higher average monthly in-place rent.

Total portfolio revenue of $34.2 million in Q2 increased 1.5% compared to last year.

The increase was primarily the result of $4 million of revenue generated from our 2025 property acquisitions, partially offset by the loss of $3.2 million from our 2025 property dispositions and a $0.3 million reduction from same community properties.

Sequentially, total portfolio revenue of $34.2 million increased 1.1% from Q1 primarily due to the performance of the 2025 acquisitions.

Same community NOI for Q2 2026 of $13.9 million decreased 2.8% from last year.

This was primarily attributable to: (1) the decrease in revenue I just described, (2) timing related to the real estate tax refunds received in Q2 of last year, as Q2 last year received an outsized amount of refunds, and (3) an improvement in property insurance expense of $0.1 million after another fantastic year for our annual property insurance renewal, which went effective in April.

Sequentially, same community NOI decreased 1.4% from Q1 2026, primarily attributable to the lower property tax refunds of $0.2 million.

Total portfolio NOI for Q2 2026 of $17.9 million increased 0.5% from last year.

The increase was the result of a $2 million contribution from our property acquisitions, offset by the $1.5 million lost due to our 2025 dispositions and a $0.4 million reduction from the same community properties.

Sequentially, total portfolio NOI for Q2 2026 of $17.9 million increased from Q1 2026.

The increase was primarily the result of the increase in total portfolio revenue in addition to a $0.2 million increase in prior-year property tax refunds received from the property dispositions, partially offset by the decrease in same community NOI.

As Dan alluded to in his remarks, total portfolio NOI will continue to improve as we graduate from a focus on physical occupancy to a focus on full economic stabilization of our non-same community properties, as demonstrated by the non-same community NOI margin opportunity.

Below NOI, G&A expenses were essentially flat year over year and down 6.6% sequentially from Q1.

As we communicated last quarter, legal and professional costs were elevated in Q1 and normalized in Q2.

Finally, Q2 net finance costs were up 35% year over year and 3.7% sequentially.

The year-over-year comparison is extremely noisy because, recall, the second quarter last year was our primary transition quarter and thus the portfolio was not carrying full leverage for the quarter.

Sequentially, net finance costs are up due entirely to interest rate resets which occurred in our derivative portfolio.

All in all, FFO in Q2 ’26 was $7.1 million, or $0.18 per unit, compared to $9.2 million, or $0.21 per unit, last year.

The decrease was primarily driven by three items: first, the change in same store NOI; second, increased finance costs; which all was partially offset by, third, the ramping momentum in our non-same community portfolio.

Sequentially, FFO in Q2 ’26 was $7.1 million, or $0.18 per unit, compared to $6.9 million, or $0.18 per unit, in Q1 of 2026.

Once again, the slight increase in FFO was driven primarily by momentum in our non-same community portfolio, offset by finance costs.

On AFFO, the same drivers apply that I just mentioned on FFO.