BSR Real Estate Investment Trust

Good day, everyone, and welcome. My name is Jim, and I will be your conference operator today. At this time, I'd like to welcome everyone to the BSR REIT Q4 2025 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise, and after management's prepared remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star and 1 on your telephone keypad. Removing yourself from the queue is just as simple. Just repeat the steps of star and one. I would now like to turn our conference over to Mr. Spencer Andrews, Vice President of Investor Relations and Marketing. Please go ahead, sir.

Thank you, Jim. And good morning, everyone. Welcome to BSR Reads Conference Call to discuss our financial results for the fourth quarter and year-ending December 31st, 2025. I'm joined on the call today by our CEO, Dan Oberstein, our Chief Financial Officer, Tom Service, and our Chief Operating Officer, Susie Rosenbaum, who are all available to answer your questions after our prepared remarks. Before we begin, I want to remind listeners that certain statements made on this conference call about future events are forward-looking in nature. Any such information is subject to risks, uncertainties, and assumptions that could cause actual results to differ materially. In addition, we will reference certain non-GAAP financial measures that we believe are useful supplemental information about our financial performance. For more information, please refer to the cautionary statements on forward-looking information and a description of our non-GAAP financial measures in our news release and MD&A dated March 11, 2026. Dan, over to you.

Thanks, Spencer. Our 25 financial performance reflects a REIT in transition. one that deliberately rotated nearly a billion dollars of property during that year, the transition is now largely complete. We completed a strategic disposition of stabilized assets, redeployed capital into newer lease-up assets with greater growth potential, and streamlined our capital structure with the cancellation of roughly 75% of our Class B units, or 27% of our total units as converted. All of these things make the REIT a far more attractive investment today than it was at this time a year ago. Amid all this change, our team continued to perform at a high level, despite a persistently challenging leasing environment across our core Texas markets. We are generating incremental improvements in performance, supported by lease up of our new properties and other gross initiatives. During the year, same community revenue declined a modest 40 basis points, despite all the challenges I just mentioned. Same community NOI declined by 1.6%, due in part to a strategic decision to retain overhead, positioning the REIT for future growth. Same community weighted average occupancy closed the year at 94.3%. Our retention rate was 59.5% at quarter end, 130 basis point expansion from the end of Q3, and up from 56% a year ago. And we made significant progress at our two primary lease-up assets. Aura 3550 ended 25 at 92% occupied. That compares to 86.6% at the end of Q3 and the low 20s in early 2025. A full year of a physically stabilized Aura 3550 will provide year-over-year upside in 26. And the owns will be closed the year at 70.4% occupied, representing additional upside to the non-same community portfolio in 26. Despite all the good we achieved in 25, our fourth quarter and full year 25 results, as well as our preliminary 26 guidance, reflect a few unavoidable realities. First, new lease rate recovery has somewhat lagged our expectations, but with 24 plus months of minimal new supply ahead, we see a clear path to rate improvement. Second, we are operating in a materially different interest rate environment than existed several years ago. While our interest hedging program certainly helped to shield our investors from interest volatility, which allowed the REIT to distance itself from ZERP reliance, ultimately, we expect little future benefit from zero interest rate policies. And finally, rotating capital into newer, lease-up-focused assets has an immediate positive impact to our portfolio quality, but it takes time to fully flow through our financials. To state the obvious, we earn $0 from vacant apartments. However, the earnings drag from lease-up assets is finite. 435.50 is already at 92%, and the Owensby's ramp-up is underway. Thus, our team is going to keep doing what it does best, focus on what we can control and adeptly manage risk versus return. We will continue to drive occupancy at new assets capitalize on organic growth opportunities embedded in our properties, minimize our cost of capital, and pursue external growth opportunities that provide accretion on a per unit basis. With market fundamentals steadily improving in our core Texas markets, albeit at a slower pace than we would like, and with the best in class portfolio in tow, we like our relative position in the market moving into 2026. I'll now invite Tom to review our financial results in 2026 guidance in more detail. Tom?