Enterprising Investor
6 years ago
NexPoint Residential Trust, Inc. Reports Second Quarter 2018 Results (7/31/18)
Strong Demand and Lower Expenses Drive Increases to Same Store NOI and Core FFO Guidance, 5.5% Growth on New Leases;
$9.7 Million Share Repurchases YTD through June 30, 2018
DALLAS, July 31, 2018 /PRNewswire/ -- NexPoint Residential Trust, Inc. (NYSE:NXRT) reported financial results for the second quarter ended June 30, 2018.
Highlights
• NXRT reported Net Loss, FFO1, Core FFO1 and AFFO1 of $(1.7)M, $9.3M, $8.7M and $10.2M, respectively, attributable to common stockholders for the quarter ended June 30, 2018.
• For the three months ended June 30, 2018, Q2 Same Store properties2 average effective rent, occupancy, total revenue and NOI1 increased 3.6%, 1.6%, 4.7% and 11.0%, respectively, over the prior year period.
• Q2 Same Store expenses decreased 2.2% in the second quarter due to implementation of the Freddie Mac Green-Up Program and lower property taxes through aggressive challenges of assessed values.
• The weighted average effective monthly rent per unit across all 32 properties held as of June 30, 2018 (the "Portfolio"), consisting of 11,471 units, was $967, while physical occupancy was 94.2%.
• NXRT paid a second quarter dividend of $0.25 per share of common stock on June 29, 2018.
• During the second quarter, for the properties in our Portfolio, NXRT completed 379 full and partial upgrades and leased 215 upgraded units, achieving $94 average monthly rent premiums and a 24.6% ROI3. Since inception, for the properties in our Portfolio, we have completed 4,906 full and partial upgrades and achieved a $92 average monthly rental increase per unit, equating to a 21.4% ROI on all units leased as of June 30, 2018.
• During the second quarter of 2018, NXRT repurchased 178,988 shares of its common stock at a total cost of approximately $4,615,000, or $25.78 per share. As of June 30, 2018, NXRT had repurchased a total of 737,458 shares of its common stock at a total cost of approximately $16,694,000, or $22.64 per share.
"Fundamental strength and further execution of our business plans led to another strong quarter of results for NXRT. We are pleased with the results of our efforts to deliver value for our residents and our shareholders, and we believe the future outlook for quality Class B/workforce housing in our high-growth markets remains bright." – James D. Dondero, Chairman and President
Second Quarter 2018 Financial Results
• Total revenues were $35.7 million for the second quarter of 2018, compared to $35.2 million for the second quarter of 2017.
• Net loss for the second quarter of 2018 totaled $(1.7) million, or a loss of $(0.08) per diluted share, which included $11.0 million of depreciation and amortization expense. This compared to net income of $7.4 million, or $0.34 per diluted share, for the second quarter of 2017, which included $19.9 million of gain on sales of real estate and $12.2 million of depreciation and amortization expense.
• The change in our net income (loss) between the periods primarily relates to a decrease in gain on sales of real estate, and was partially offset by decreases in property operating expenses, depreciation and amortization, and loss on extinguishment of debt and modification costs.
• For the second quarter of 2018, NOI was $19.8 million on 32 properties, compared to $18.1 million for the second quarter of 2017 on 37 properties.
• For the second quarter of 2018, Q2 Same Store NOI increased 11.0% to $17.5 million, compared to $15.7 million for the second quarter of 2017.
• For the second quarter of 2018, FFO totaled $9.3 million, or $0.44 per diluted share, compared to $1.7 million, or $0.08 per diluted share, for the second quarter of 2017.
• For the second quarter of 2018, Core FFO totaled $8.7 million, or $0.41 per diluted share, compared to $6.1 million, or $0.28 per diluted share, for the second quarter of 2017.
• For the second quarter of 2018, AFFO totaled $10.2 million, or $0.48 per diluted share, compared to $7.4 million, or $0.35 per diluted share, for the second quarter of 2017.
Q2 Same Store Results of Operations for the Three Months Ended June 30, 2018 and 2017
As of June 30, 2018, our 30 properties encompassing 10,383 units of apartment space in our Q2 Same Store pool were approximately 94.2% leased with a weighted average monthly effective rent per occupied apartment unit of $944, a year over year increase of 160 bps and $32, respectively.
[tables deleted]
YTD Same Store Results of Operations for the Six Months Ended June 30, 2018 and 2017
There are 29 properties encompassing 10,123 units of apartment space in our Same Store pool for the six months ended June 30, 2018 (our "YTD Same Store" properties). As of June 30, 2018, our YTD Same Store properties were approximately 94.2% leased with a weighted average monthly effective rent per occupied apartment unit of $944, a year over year increase of 157 bps and $34, respectively.
Value-Add Programs
For the properties in our Portfolio as of June 30, 2018, we completed full and partial renovations on 379 units in the second quarter of 2018 at an average cost of $4,547 per renovated unit. Since inception, for the properties in our Portfolio, we have completed full and partial renovations on 4,906 units at an average cost of $5,015 per renovated unit that has been leased as of June 30, 2018. We have achieved average rent growth of 10.8%, or a $92 average monthly rental increase per unit, on all units renovated and leased as of June 30, 2018, resulting in a 21.4% ROI.
Third Quarter 2018 Dividend
On July 30, 2018, NXRT's board of directors declared a quarterly dividend of $0.25 per share of common stock. The dividend will be paid on September 28, 2018 to stockholders of record on September 14, 2018.
Share Repurchase Program
As noted above, during the second quarter, NXRT repurchased 178,988 shares of its common stock at a total cost of approximately $4,615,000, or $25.78 per share. As of June 30, 2018, NXRT had repurchased a total of 737,458 shares of its common stock at a total cost of approximately $16,694,000, or $22.64 per share. As of June 30, 2018, NXRT had 20,747,367 shares of its common stock issued and outstanding.
Additional information on second quarter 2018 results and 2018 financial and earnings guidance is included in supplemental data that can be found in the Investor Relations section of the Company's website at www.nexpointliving.com.
Supplemental Information
Supplemental information to this press release can be found in the Investor Relations section of the Company's website at www.nexpointliving.com.
Second Quarter Earnings Conference Call
NXRT will host a call on Tuesday, July 31, 2018 at 11:00 a.m. ET to discuss its second quarter financial results. The conference call can be accessed live over the phone by dialing (334) 323-0522 or, for international callers, (877) 260-1479, and using passcode Conference ID: 7830851. A live audio webcast of the call will be available online at the Company's website, http://www.nexpointliving.com (under "Investor Relations"). An online replay will be available shortly after the call on the Company's website and continue to be available for 60 days.
A replay of the conference call will also be available through Tuesday, August 7, 2018, by dialing (888) 203-1112 or, for international callers, (719) 457-0820 and entering passcode 7830851.
About NXRT
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment adviser. More information about NXRT is available at http://www.nexpointliving.com.
https://www.prnewswire.com/news-releases/nexpoint-residential-trust-inc-reports-second-quarter-2018-results-300689104.html
Enterprising Investor
7 years ago
NexPoint Residential Trust, Inc. Reports First Quarter 2018 Results (5/01/18)
$10.1 million net income, 5.9% same-store NOI growth;
$5.1 million of shares repurchased in the first quarter, $9.4 million year-to-date through April 30, 2018;
NXRT Board authorized $10 million increase and two-year extension of the Share Repurchase Program
DALLAS, May 1, 2018 /PRNewswire/ -- NexPoint Residential Trust, Inc. (NYSE: NXRT) reported financial results for the first quarter ended March 31, 2018.
Highlights
•NXRT reported Net Income, FFO1, Core FFO1 and AFFO1 of $10.1M, $7.7M, $8.3M and $9.5M, respectively, attributable to common stockholders for the quarter ended March 31, 2018.
•For the three months ended March 31, 2018, Same Store properties average effective rent, total revenue and NOI1 increased 3.9%, 3.6% and 5.9%, respectively, over the prior year period.
•The weighted average effective monthly rent per unit across all 32 properties held as of March 31, 2018 (the "Portfolio"), consisting of 11,471 units, was $958, while physical occupancy was 94.0%.
•NXRT paid a first quarter dividend of $0.25 per share of common stock on March 29, 2018.
•During the first quarter, NXRT completed the disposition of Timberglen for gross sales proceeds of $30.0 million.
•In February 2018, NXRT used $8.6 million of proceeds from the Timberglen sale to pay the remaining outstanding balance on the bridge facility with KeyBank National Association (the "2017 Bridge Facility"), which retired the bridge facility.
•During the first quarter, for the properties in our Portfolio, NXRT completed 298 full and partial upgrades and leased 167 upgraded units, achieving $95 average monthly rent premiums and a 21.2% ROI2. Since inception, for the properties in our Portfolio, we have completed 4,527 full and partial upgrades and achieved a $90 average monthly rental increase per unit, equating to a 21.2% ROI on all units leased as of March 31, 2018.
•During the first quarter of 2018, NXRT repurchased 203,953 shares of its common stock at a total cost of approximately $5,058,000, or $24.80 per share. As of March 31, 2018, NXRT had repurchased a total of 558,470 shares of its common stock at a total cost of approximately $12,079,000, or $21.63 per share.
•On February 12, 2018, NXRT's board of directors, including its independent directors, unanimously approved a renewal of the Advisory Agreement with NexPoint Real Estate Advisors, L.P. (the "Adviser") for a one-year term that expires on March 16, 2019.
"We achieved a strong start for the year in the first quarter, maintaining a steady pace of revenue growth while limiting controllable operating expense inflation. The Company strategically disposed of Timberglen for gross sale proceeds of $30.0 million, retired the 2017 Bridge Facility, and bought back over 200,000 shares at appreciable discounts to our internal Net Asset Value projection," according to NXRT's Chairman and President, Jim Dondero. "Management remains bullish on the fundamentals for well-located workforce housing in the Southeast and Southwest and we will keep working methodically to produce strong financial performance."
First Quarter 2018 Financial Results
•Total revenues were $35.1 million for the first quarter of 2018, compared to $37.0 million for the first quarter of 2017.
•Net income for the first quarter of 2018 totaled $10.1 million, or earnings of $0.47 per diluted share, which included $13.7 million of gain on sale of real estate and $11.4 million of depreciation and amortization expense. This compared to a net loss of $(3.6) million, or $(0.17) per diluted share, for the first quarter of 2017, which included $12.4 million of depreciation and amortization expense.
•The change in our net income (loss) between the periods primarily relates to increases in gain on sale of real estate and same store operating results, and was partially offset by increases in corporate general and administrative expenses and loss on extinguishment of debt and modification costs.
•For the first quarter of 2018, NOI¹ was $19.1 million on 32 properties, compared to $19.7 million for the first quarter of 2017 on 40 properties.
•For the first quarter of 2018, Same Store NOI¹ increased 5.9% to $16.5 million, compared to $15.6 million for the first quarter of 2017.
•For the first quarter of 2018, FFO¹ totaled $7.7 million, or $0.36 per diluted share, compared to $8.0 million, or $0.38 per diluted share, for the first quarter of 2017.
•For the first quarter of 2018, Core FFO¹ totaled $8.3 million, or $0.39 per diluted share, compared to $8.1 million, or $0.38 per diluted share, for the first quarter of 2017.
•For the first quarter of 2018, AFFO¹ totaled $9.5 million, or $0.45 per diluted share, compared to $9.1 million, or $0.43 per diluted share, for the first quarter of 2017.
1. FFO, Core FFO, AFFO and NOI are non-GAAP measures. For reconciliations of FFO, Core FFO, AFFO and NOI to net income, and a discussion of why we consider these non-GAAP measures useful, see the "Definitions and Reconciliations" section of this release.
2. We define Return on Investment ("ROI") as the sum of the actual rent premium divided by the sum of the total cost.
[tables deleted]
Same Store Results of Operations
There are 29 properties encompassing 10,123 units of apartment space in our same store pool for the three months ended March 31, 2018 (our "Same Store" properties). As of March 31, 2018, our Same Store properties were approximately 94.1% leased with a weighted average monthly effective rent per occupied apartment unit of $933. As of March 31, 2017, our Same Store properties were approximately 94.6% leased with a weighted average monthly effective rent per occupied apartment unit of $899.
Disposition of Property
As previously reported, we sold Timberglen on January 31, 2018 for a gross sales price of $30.0 million, achieving a 44.77% IRR and 3.78x multiple on invested capital1. We used $8.6 million of the proceeds from the sale to pay the remaining $8.6 million outstanding on our 2017 Bridge Facility, which retired the bridge facility.
Value-Add Programs
For the properties in our Portfolio as of March 31, 2018, we completed full and partial renovations on 298 units in the first quarter of 2018 at an average cost of $5,409 per renovated unit. Since inception, for the properties in our Portfolio, we have completed full and partial renovations on 4,527 units at an average cost of $5,002 per renovated unit that has been leased as of March 31, 2018. We have achieved average rent growth of 10.8%, or a $90 average monthly rental increase per unit, on all units renovated and leased as of March 31, 2018, resulting in a 21.2% ROI.
Second Quarter 2018 Dividend
On April 30, 2018, NXRT's board of directors declared a quarterly dividend of $0.25 per share of common stock. The dividend will be paid on June 29, 2018 to stockholders of record on June 15, 2018.
Share Repurchase Program
As noted above, during the first quarter, NXRT repurchased 203,953 shares of its common stock at a total cost of approximately $5,058,000, or $24.80 per share. As of March 31, 2018, NXRT had repurchased a total of 558,470 shares of its common stock at a total cost of approximately $12,079,000, or $21.63 per share. As of March 31, 2018, NXRT had 20,926,355 shares of its common stock issued and outstanding.
Subsequent Events
Share Repurchase Program
Subsequent to March 31, 2018 and through April 30, 2018, NXRT repurchased 167,267 shares of its common stock at a total cost of approximately $4,307,000 or $25.75 per share. As of April 30, 2018, NXRT had repurchased a total of 725,737 shares of its common stock at a total cost of approximately $16,386,000, or $22.58 per share. On April 30, 2018, the Board authorized increasing the Share Repurchase Program to up to $40.0 million, and extending it by an additional two years to June 15, 2020.
Additional information on first quarter 2018 results and 2018 financial and earnings guidance is included in supplemental data that can be found in the Investor Relations section of the Company's website at www.nexpointliving.com.
Supplemental Information
Supplemental information to this press release can be found in the Investor Relations section of the Company's website at www.nexpointliving.com.
First Quarter Earnings Conference Call
NXRT will host a call on Tuesday, May 1, 2018 at 11:00 a.m. ET to discuss its first quarter financial results. The conference call can be accessed live over the phone by dialing (334) 323-0522 or, for international callers, (877) 260-1479, and using passcode Conference ID: 6756596. A live audio webcast of the call will be available online at the Company's website, http://www.nexpointliving.com (under "Investor Relations"). An online replay will be available shortly after the call on the Company's website and continue to be available for 60 days.
A replay of the conference call will also be available through Tuesday, May 8, 2018, by dialing (888) 203-1112 or, for international callers, (719) 457-0820 and entering passcode 6756596.
About NXRT
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment adviser. More information about NXRT is available at http://www.nexpointliving.com.
https://www.prnewswire.com/news-releases/nexpoint-residential-trust-inc-reports-first-quarter-2018-results-300639947.html
Enterprising Investor
8 years ago
NexPoint Residential Trust, Inc. Reports Third Quarter Results (11/10/16)
DALLAS, Nov. 10, 2016 /PRNewswire/ -- NexPoint Residential Trust, Inc. (NYSE: NXRT) reported financial results for the quarter ended September 30, 2016.
Third Quarter 2016 Highlights
•NXRT paid a third quarter dividend of $0.206 per share of NXRT common stock on September 30, 2016.
•On November 7, 2016, NXRT's board of directors approved a quarterly dividend of $0.220 per share of NXRT common stock, a $0.014 per share, or 6.8% increase, over the prior quarter's dividend. The dividend is payable on December 30, 2016 to stockholders of record on December 15, 2016.
•Net income totaled $8.8 million, or earnings of $0.33 per common share, which included $9.6 million of gain on sales of four properties, Colonial Forest, Park at Blanding, Willowdale Crossings and Jade Park, and depreciation and amortization of $8.7 million, compared to net income of $16.6 million, or earnings of $0.69 per common share, for the second quarter of 2016, which included $16.4 million of gain on sales of three properties, Meridian, Park at Regency, and Mandarin Reserve, and depreciation and amortization of $8.1 million.
•FFO¹, net of four dispositions made during the quarter, totaled $6.9 million, or $0.32 per common share, compared to $7.2 million, or $0.34 per common share, for the second quarter of 2016.
•AFFO¹ totaled $16.2 million, or $0.76 per common share, which included $8.0 million, the Company's share of gain on sales of four properties. This compared to $22.5 million, or $1.06 per common share, for the second quarter of 2016, which included $14.8 million, the Company's share of gain on sales of three properties.
•NOI¹ was $17.1 million for the third quarter of 2016, compared to $17.4 million for the second quarter of 2016.
•Total revenues were $33.1 million for the quarter, compared to $33.7 million for the second quarter of 2016.
•Same Store total revenues, NOI and occupancy increased 10.2%, 12.8%, and 48 basis points to 93.9%, respectively, as compared to the third quarter of 2015.
•The weighted average effective monthly rent per unit across all 36 properties held as of September 30, 2016, consisting of 11,626 units, was $848, while physical occupancy was 93.6%.
•NXRT completed upgrades on 538 units and leased 569 upgraded units during the third quarter of 2016, achieving a 21.2% ROI on those units. Since inception, we have completed 4,118 upgrades and achieved a $85 average monthly rental increase per unit, equating to a 21.2% ROI on all units leased through September 30, 2016.
•On June 15, 2016, the Company's Board of Directors authorized the repurchase of up to $30.0 million of the Company's common stock. During the third quarter, NXRT purchased 76,214 shares of its common stock at a total cost of approximately $1,435,000, or $18.83 per share. As of November 9, 2016, the Company had purchased a total of 233,346 shares of its common stock under the share repurchase program at a total cost of approximately $4,279,000, or $18.34 per share.
•As mentioned above, the Company completed the disposition of four properties during the quarter: Colonial Forest and Park at Blanding in Jacksonville, Florida, Willowdale Crossings in Frederick, Maryland, and Jade Park in Daytona Beach, Florida for a combined $69.7 million of gross sale proceeds. The Company recognized a $9.6 million gain on the sales while the investments returned an approximate cumulative levered IRR of 17.27% and an approximate equity multiple of 1.39x. The exit from the entire Jacksonville portfolio yielded a 31.5% IRR and 1.62x equity multiple over a 24 month hold period.
1AFFO, FFO and NOI are non-GAAP measures. For reconciliations of AFFO, FFO and NOI to net income and a discussion of why we consider these non-GAAP measures useful, see the "Definitions and Reconciliations" section of this release.
"Having fixed $400 million, or 73.2% of our floating rate debt (swapping LIBOR for 0.9956% for five years), successfully disposing of seven properties, buying back approximately $4.3 million of the Company's stock and redeploying capital into more attractive opportunities in West Palm Beach and Phoenix, we feel it is an appropriate time to increase our quarterly dividend and target a payout ratio of 60 to 65% of our annual funds from operations (FFO). We remain bullish on the internal growth prospects within our existing portfolio and investment opportunities in workforce housing across our core markets and look forward to continuing to deliver value and results for our residents and our stockholders," stated, NXRT Chairman and President, Jim Dondero.
Third Quarter Financial Results
The Company recorded net income in the third quarter of 2016 of $8.8 million, which included gain on sales of real estate of $9.6 million and depreciation and amortization of $8.7 million. This compared to a net loss of $(0.9) million for the third quarter of 2015, which included depreciation and amortization of $9.1 million. For the nine months ended September 30, 2016, NXRT had net income of $25.7 million, which included $25.9 million of gain on sales of real estate and $26.4 million of depreciation and amortization. This compared to net loss of $(9.0) million for the nine months ended September 30, 2015, which included depreciation and amortization of $30.8 million.
For the three months ended September 30, 2016, FFO was $6.9 million, or $0.32 per common share, and AFFO was $16.2 million, or $0.76 per common share. For the nine months ended September 30, 2016, FFO was $22.7 million, or $1.07 per common share, and AFFO was $48.0 million, or $2.25 per common share.
The change in the Company's net income (loss) for the quarter ended September 30, 2016 as compared to the quarter ended September 30, 2015, primarily relate to strong year-over-year performance of our same store portfolio and the disposition of four properties during the third quarter of 2016, as compared to no dispositions during the third quarter of 2015.
Same Store Properties Operating Results
The Company's Same Store property pool at September 30, 2016 included 32 properties totaling 10,292 units, or approximately 88.5% of the Company's 11,626 units. These Same Store properties represented approximately 85.7% of NXRT's NOI for the quarter ended September 30, 2016.
Same Store total revenues, NOI, and occupancy increased 10.2%, 12.8%, and 48 basis points to 93.9%, respectively, in the third quarter of 2016, compared to the third quarter of 2015.
Disposition of Assets
During the third quarter, the Company completed the disposition of Colonial Forest and Park at Blanding in Jacksonville, Florida, Willowdale Crossings in Frederick, Maryland, and Jade Park in Daytona Beach, Florida for a combined $69.7 million of gross sale proceeds, generating an approximate cumulative levered IRR of 17.27% and an approximate equity multiple of 1.39x. Net proceeds from the dispositions were used to retire existing debt, buy back stock and to partially fund the Company's acquisition of The Colonnade (through a 1031 like-kind exchange of Willowdale Crossings) subsequent to quarter end. The exit from the Jacksonville portfolio yielded a 31.5% IRR and 1.62x equity multiple over a 24 month hold period.
Value-Add Programs
For the three months ended September 30, 2016 and 2015, we completed full and partial interior rehabs on 538 and 696 units, respectively. For the nine months ended September 30, 2016 and 2015, we completed full and partial interior rehabs on 1,475 and 1,543 units, respectively.
[tables deleted]
Bridge Facility
During the nine months ended September 30, 2016, the Company paid down the entire $29.0 million of principal on its bridge facility, which was funded with $18.0 million of the Company's share of proceeds, net of distributions to noncontrolling interests, from the sales of Park at Regency and Mandarin Reserve, $9.0 million of proceeds drawn under the Company's Credit Facility and $2.0 million of cash on hand. The Bridge Facility was retired on August 2, 2016.
Interest Rate Swap Agreements
In order to fix a portion of, and mitigate the risk associated with, the Company's floating rate indebtedness (without incurring substantial prepayment penalties or defeasance costs typically associated with fixed rate indebtedness when repaid early or refinanced), the Company, through the OP, has entered into four interest rate swap transactions with KeyBank (the "Counterparty") with a combined notional amount of $400.0 million. The interest rate swaps effectively replace the floating interest rate (one-month LIBOR) with a weighted average fixed rate of 0.9956%. During the term of these interest rate swap agreements, the Company is required to make monthly fixed rate payments of 0.9956%, on a weighted average basis, on the notional amounts, while the Counterparty is obligated to make monthly floating rate payments based on one-month LIBOR to the Company referencing the same notional amounts. The Company has designated these interest rate swaps as cash flow hedges of interest rate risk.
Third Quarter 2016 Dividend
On August 9, 2016, the Company declared its sixth consecutive quarterly dividend of $0.206 per share of NXRT common stock, which was paid on September 30, 2016 to stockholders of record on September 15, 2016.
Share Repurchase Program
During the nine months ended September 30, 2016, the Company purchased 81,214 shares of its common stock at a total cost of approximately $1,524,000, or $18.76 per share. The cost of these shares is included in common stock held in treasury at cost on the consolidated balance sheet as of September 30, 2016. As of September 30, 2016, the Company had 21,293,825 million shares of its common stock issued and 21,212,611 shares outstanding. Subsequent to September 30, 2016 and through November 9, 2016, the Company purchased 152,132 shares of its common stock under its share repurchase program, at a total cost of approximately $2,756,000, or $18.11 per share. As of November 9, 2016, the Company had purchased a total of 233,346 shares of its common stock under its share repurchase program at a total cost of approximately $4,279,000, or $18.34 per share, which will be included in common stock held in treasury at cost on the Company's consolidated balance sheet. As of November 9, 2016, the Company had 21,293,825 million shares of its common stock issued and 21,060,479 shares outstanding.
Subsequent Events
On October 11, 2016, NXRT acquired The Colonnade, a 415-unit property in Phoenix, Arizona, for $44.6 million. The Company expanded its Credit Facility and used $29.5 million of proceeds drawn to fund a portion of the purchase price, as well as proceeds, net of distributions to noncontrolling interests, from the sales of Willowdale Crossings and Jade Park and cash on hand. This is the Company's third acquisition in Phoenix in the last 14 months, expanding NXRT's footprint in the market to 1,199 units and bringing NXRT's total portfolio to 37 properties consisting of 12,041 units in 10 markets as of November 10, 2016.
The Company acquired the following property subsequent to September 30, 2016 (dollars in thousands) (unaudited):
The Colonnade
Phoenix, Arizona
October 11, 2016
Purchase price: $44,600
Debt: $29,500
Units: 415
Minority interest: 3%
Dividend Increase
On November 7, 2016, NXRT's board of directors approved a quarterly dividend of $0.220 per share of NXRT common stock, a $0.014 per share, or 6.8% increase, over the prior quarter's dividend. The dividend is payable on December 30, 2016 to stockholders of record on December 15, 2016.
2016 Full Year Guidance
At this time, the Company reaffirms updated full year 2016 guidance for NOI, FFO and AFFO as disclosed in the Company's June 2016 Investor Presentation. AFFO guidance excludes gain on sales.
•NOI: $68.0 million - $70.0 million
•FFO: $1.38 - $1.47 per share
•AFFO: $1.46 – $1.55 per share
See the "Definitions and Reconciliations" section of this press release for a reconciliation of 2016 Full Year Non-GAAP Guidance to 2016 Full Year net income guidance.
Additional information on third quarter results and 2016 financial and earnings guidance is included in supplemental data that can be found in the Investor Relations section of the Company's website at www.nexpointliving.com.
Supplemental Information
Supplemental information to this press release can be found in the Investor Relations section of the Company's website at www.nexpointliving.com. Our filings with the Securities and Exchange Commission are filed under the registrant name of NexPoint Residential Trust, Inc.
Third Quarter Earnings Conference Call
NXRT will host a call to discuss its third quarter results on Thursday, November 10, 2016 at 11:00 a.m. ET. The number to call for this interactive teleconference is (800) 344-6698, or for international callers, (785) 830-7979 in each case using passcode 7206789. A live audio webcast of the call will be available online at the Company's website, http://www.nexpointliving.com (under "Investor Relations").
A replay of the call will be available approximately two hours after the call through Thursday, November 17, 2016, by dialing (888) 203-1112, or for international callers, (719) 457-0820 and entering the confirmation number, 7206789.
Fourth Quarter Conference Schedule
The Company is scheduled to participate in the NAREIT's REITWorld Conference in Phoenix, Arizona, from November 15-17, 2016. During this conference, management may discuss the Company's current operating environment; operating trends; development, redevelopment, disposition and acquisition activity; portfolio strategy and other business and financial matters affecting the Company. Details on how to access related materials will be available on the Company's website at http://www.nexpointliving.com/presentations one business day in advance of the conference.
About NXRT
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment adviser. More information about NXRT is available at http://www.nexpointliving.com.
http://www.prnewswire.com/news-releases/nexpoint-residential-trust-inc-reports-third-quarter-results-300360554.html
Enterprising Investor
8 years ago
NexPoint Residential Trust, Inc. Reports Second Quarter Results (8/09/16)
DALLAS, Aug. 9, 2016 /PRNewswire/ -- NexPoint Residential Trust, Inc. (NYSE: NXRT) reported financial results for the quarter ended June 30, 2016.
Second Quarter 2016 Highlights
•NXRT paid a second quarter dividend of $0.206 per share of NXRT common stock on June 30, 2016. On August 8, 2016, NXRT's board of directors approved a quarterly dividend of $0.206 per share of NXRT common stock, payable on September 30, 2016 to stockholders of record on September 15, 2016
•Net income totaled $16.6 million, or earnings of $0.69 per common share; includes gain on sales of three properties, Meridian, Mandarin Reserve and Park at Regency, or $16.4 million, and depreciation and amortization of $8.1 million, compared to net income of $0.3 million, or loss of less than $(0.01) per common share, for the first quarter of 2016
•AFFO¹ totaled $22.5 million, or $1.06 per common share; includes the Company's share of gain on sales of three properties. This compared to $8.9 million, or $0.42 per common share, for the first quarter of 2016
•FFO,¹ which excludes the gain on sales, totaled $7.2 million, or $0.34 per common share, compared to $8.6 million, or $0.41 per common share, for the first quarter of 2016
•NOI¹ was $17.4 million for the second quarter of 2016, compared to $17.7 million for the first quarter of 2016
•Total revenues were $33.7 million for the quarter, compared to $33.5 million for the first quarter
•The weighted average effective monthly rent per unit across all 39 properties held as of June 30, 2016, consisting of 12,276 units, was $830, while physical occupancy was 93.7%
•NXRT completed upgrades on 550 units during the second quarter of 2016. Since inception, we have completed 3,580 upgrades and achieved a $96 average monthly rental increase per unit, equating to 21.0% ROI on all units leased through June 30, 2016
•Same Store total revenues, NOI and occupancy increased 10.2%, 11.0%, and 87 basis points to 93.9%, respectively, as compared to the second quarter of 2015
•In the second quarter, NXRT's Board of Directors authorized the repurchase of up to $30.0 million of its common stock. This authorization expires on June 15, 2018
•As mentioned above, the Company completed the disposition of three properties during the quarter: Mandarin Reserve and Park at Regency in Jacksonville, Florida for approximately $47.0 million and Meridian in Austin, Texas for approximately $17.25 million.
1AFFO, FFO and NOI are non-GAAP measures. For reconciliations of AFFO, FFO and NOI to net income and a discussion of why we consider these non-GAAP measures useful, see the "Definitions and Reconciliations" section of this release.
"NXRT delivered sector-leading operating performance in the second quarter 2016, further substantiating the merits of our growth model and broader business strategy," according to NXRT Chairman and President, Jim Dondero. "We accelerated the execution of value-add programs in the second quarter of 2016, completing 550 unit upgrades during the period while decreasing average cost per unit by 80 bps. This performance, coupled with the completion of exterior, common area and amenity improvements, drove an 11.6% increase to effective rent premiums on upgraded units, up $10 to $96 per month on average over the prior tenant.
We were also pleased with our capital allocation execution during the quarter, in which we retired more than $70 million of mortgage and bridge debt, swapped $300 million of notional floating rate debt (effective July 1, 2016) at an average fixed rate of 1.0088%, and completed the acquisition of a lower risk, higher growth opportunity (City View) through a like-kind exchange."
Second Quarter Financial Results
The Company recorded net income in the second quarter of 2016 of $16.6 million, which included depreciation and amortization of $8.1 million. This compared to a net loss of $(2.3) million for the second quarter of 2015, which included depreciation and amortization of $10.1 million. For the first six months of 2016, NexPoint had a net income of $16.9 million, which included $17.7 million of depreciation and amortization. This compared to a net loss of $(8.2) million for the first six months of 2015, which included depreciation and amortization of $21.7 million.
For the quarter ended June 30, 2016, AFFO attributable to common shareholders was $22.5 million, or $1.06 per common share, and FFO was $7.2 million, or $0.34 per common share. For the six months ended June 30, 2016, AFFO attributable to shareholders was $31.5 million, or $1.48 per common share, and FFO was $15.8 million, or $0.74 per common share.
The changes in the Company's net income, AFFO and FFO for the quarter ended June 30, 2016 as compared to the quarter ended June 30, 2015, primarily relate to strong year-over-year performance of our same store portfolio and the disposition of 3 properties during the second quarter of 2016, as compared to no dispositions during the second quarter of 2015.
Same Store Properties Operating Results
The Company's Same Store property pool at June 30, 2016 included 35 properties totaling 10,937 units, or approximately 89% of the Company's 12,276 units. These Same Store properties represented approximately 87% of NXRT's NOI for the quarter ended June 30, 2016.
Same Store total revenues, NOI, and occupancy increased 10.2%, 11.0%, and 87 basis points to 93.9%, respectively, in the second quarter of 2016, compared to the second quarter of 2015.
Disposition of Assets
During the second quarter, the Company completed the sales of the Mandarin Reserve and Park at Regency in Jacksonville, Florida as well as the sale of the Meridian in Austin Texas for $64.25 million gross sale proceeds. Net proceeds from dispositions were used to retire existing debt and to partially fund (through a like-kind exchange) the Company's acquisition of CityView apartments subsequent to quarter end.
Value-Add Programs
In the second quarter, rehab capital expenditures, which includes interior, exterior and common area improvements, totaled $4.6 million.
Subsequent Events
On July 27, 2016, NXRT used the net proceeds from the sale of Meridian through a like-kind exchange, to acquire CityView, a 217-unit property in West Palm Beach, FL, for $22.4M. This was the Company's second acquisition in West Palm Beach in the last 18 months, bringing NXRT's total portfolio to 40 properties consisting of 12,493 units in 11 markets.
Second Quarter 2016 Dividend
On May 9, 2016, the Company declared their fifth consecutive quarterly dividend of $0.206 per share of NXRT common stock, which was paid on June 30, 2016 to stockholders of record on June 15, 2016.
Share Buy Back Program
During the second quarter, NXRT announced that the Company's Board of Directors authorized the repurchase of up to $30.0 million of its common stock. This authorization expires on June 15, 2018.
2016 Full Year Guidance
At this time, the Company reaffirms updated full year 2016 guidance for NOI, FFO and AFFO as disclosed in the Company's June 2016 Investor Presentation. AFFO guidance excludes gain on sales.
•NOI: $68.0 million - $70.0 million
•FFO: $1.38 - $1.47 per share
•AFFO: $1.46 – $1.55 per share
Additional information on second quarter results and 2016 financial and earnings guidance is included in supplemental data that can be found in the Investor Relations section of the Company's website at www.nexpointliving.com.
Supplemental Information
Supplemental information to this press release can be found in the Investor Relations section of the Company's website at www.nexpointliving.com. Our filings with the Securities and Exchange Commission are filed under the registrant name of NexPoint Residential Trust, Inc.
Second Quarter Earnings Conference Call
NXRT will host a call to discuss its second quarter results on Tuesday, August 9, 2016 at 11:00 a.m. ET. The number to call for this interactive teleconference is (800) 524-8950, or for international callers, (416) 260-0113 in each case using passcode 9512554. A live audio webcast of the call will be available online at the Company's website, http://www.nexpointliving.com (under "Investor Relations").
A replay of the call will be available approximately two hours after the call through Tuesday, August 16, 2016, by dialing (888) 203-1112, or for international callers, (719) 457-0820 and entering the confirmation number, 9512554.
About NXRT
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment adviser. More information about NXRT is available at http://www.nexpointliving.com.
http://www.prnewswire.com/news-releases/nexpoint-residential-trust-inc-reports-second-quarter-results-300310997.html
Enterprising Investor
9 years ago
NexPoint Residential Trust, Inc. Reports First Quarter Results (5/10/16)
DALLAS, May 10, 2016 /PRNewswire/ -- NexPoint Residential Trust, Inc. (NYSE: NXRT) reported financial results for the quarter ended March 31, 2016.
First Quarter 2016 Highlights
• NXRT paid a first quarter dividend of $0.206 per share of NXRT common stock on March 31, 2016. On May 9, 2016, NXRT's board of directors approved a quarterly dividend of $0.206 per share of NXRT common stock, payable on June 30, 2016 to stockholders of record on June 15, 2016
• Net income totaled $0.3 million, or $0.01 per common share; includes depreciation and amortization of $9.6 million, compared to a net loss of $(1.9) million, or $(0.10) per common share, for the fourth quarter of 2015
• AFFO¹ totaled $8.9 million, or $0.42 per common share, compared to $7.4 million, or $0.35 per common share, for the fourth quarter of 2015
• FFO¹ totaled $8.6 million, or $0.41 per common share, compared to $6.9 million, or $0.33 per common share, for the fourth quarter of 2015
• NOI¹ was $17.7 million for the first quarter of 2016, compared to $16.6 million for the fourth quarter of 2015
• Rental revenue increased to $29.4 million for the quarter, compared to $28.6 million for the fourth quarter of 2015
• As of March 31, 2016, weighted average effective monthly rent per unit across all 42 properties, consisting of 13,155 units, was $811, while physical occupancy was 94.5%
• NXRT completed upgrades on 387 units during the first quarter of 2016. Since inception, we have completed 3,030 upgrades and achieved a $87 average monthly rental increase per unit, equating to 21.1% ROI on all units leased through March 31, 2016
• Same Store rental revenue, NOI and occupancy increased 8.4%, 13.9%, and 95 basis points to 94.6%, respectively, as compared to the first quarter of 2015
• During the quarter, NXRT contracted to sell three assets, two in Jacksonville, FL – Mandarin Reserve and The Park at Regency and its sole asset in Austin, TX – The Meridian. These sales are anticipated to close in the second quarter and generate gross proceeds of approximately $64.25 million.
1 AFFO, FFO and NOI are non-GAAP measures. For reconciliations of AFFO, FFO and NOI to net income and a discussion of why we consider these non-GAAP measures useful, see the "Definitions and Reconciliations" section of this release.
Jim Dondero, Chairman and President of NXRT, said, "NXRT got off to a great start for the year with first quarter earnings exceeding guidance across the board, while delivering double digit Same Store Other Income and NOI growth, at 18.2% and 13.9%, respectively. Management continues to substantiate the value creation strategy identified at the outset of our public listing, and we remain confident that our strategic portfolio of well-located Class B properties in thriving Southeastern and Southwestern markets will continue to outperform the multifamily and broader real estate markets."
First Quarter Financial Results
The Company recorded net income in the first quarter of 2016 of $0.3 million, which included depreciation and amortization of $9.6 million. This is compared to a net (loss) of $(5.9) million for the first quarter of 2015, which included depreciation and amortization of $11.6 million.
For the quarter ended March 31, 2016, AFFO attributable to common shareholders was $8.9 million, or $0.42 per common share, and FFO was $8.6 million, or $0.41 per common share.
The changes in the Company's net income/(loss), AFFO and FFO for the quarter ended March 31, 2016 as compared to the quarter ended March 31, 2015, primarily relate to the Company acquiring, owning and operating an additional 4 properties for a total of 42 properties as of March 31, 2016, as compared to acquiring, owning and operating 38 properties as of March 31, 2015.
Same Store Properties Operating Results
The Company's Same Store property pool at March 31, 2016 included 32 properties totaling 9,428 units, or approximately 72% of the Company's 13,155 units. These Same Store properties represented approximately 71% of NXRT's NOI for the quarter ended March 31, 2016.
Same Store rental revenue, NOI, and occupancy increased 8.4%, 13.9%, and 95 basis points to 94.6%, respectively, in the first quarter of 2016, compared to the first quarter of 2015.
Disposition of Assets
During the first quarter, NXRT contracted to sell three assets, two in Jacksonville, FL – Mandarin Reserve and The Park at Regency and its sole asset in Austin, TX – The Meridian. These sales are anticipated to close in the second quarter with total gross proceeds estimated to be $64.25 million.
Value-Add Programs
In the first quarter, rehab capital expenditures, which includes interior, exterior and common area improvements, totaled $7.6 million.
First Quarter 2016 Dividend
On March 7, 2016, the Company declared their fourth consecutive quarterly dividend of $0.206 per share of NXRT common stock, which was paid on March 31, 2016 to stockholders of record on March 18, 2016.
Reaffirmation of 2016 Full Year Guidance
At this time, the Company reaffirms full year 2016 guidance for NOI, FFO, and AFFO as follows:
•NOI: $69.1 million - $71.1 million
•FFO: $1.49 - $1.57 per share
•AFFO: $1.54 – $1.62 per share
Additional information on first quarter results and 2016 financial and earnings guidance is included in supplemental data that can be found in the Investor Relations section of the Company's website at www.nexpointliving.com.
Supplemental Information
Supplemental information to this press release can be found in the Investor Relations section of the Company's website at www.nexpointliving.com. Our filings with the Securities and Exchange Commission are filed under the registrant name of NexPoint Residential Trust, Inc.
First Quarter Earnings Conference Call
NXRT will host a call to discuss its first quarter results on Tuesday, May 10, 2016 at 11:00 a.m. ET. The number to call for this interactive teleconference is (800) 344-6491, or for international callers, (785) 830-7988, in each case using passcode 1737479. A live audio webcast of the call will be available online at the Company's website, http://www.nexpointliving.com (under "Investor Relations").
A replay of the call will be available approximately two hours after the call through Tuesday, May 17, 2016, by dialing (888) 203-1112, or for international callers, (719) 457-0820 and entering the confirmation number, 1737479.
About NXRT
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment adviser. More information about NXRT is available at http://www.nexpointliving.com.
http://www.prnewswire.com/news-releases/nexpoint-residential-trust-inc-reports-first-quarter-results-300265692.html
Enterprising Investor
9 years ago
NexPoint Residential Trust, Inc. Reports Fourth Quarter And Full Year Financial Results (3/08/16)
DALLAS, March 8, 2016 /PRNewswire/ -- NexPoint Residential Trust, Inc. (NYSE: NXRT) reported financial results for the quarter ended December 31, 2015.
Fourth Quarter 2015 Highlights
• NXRT paid its third quarterly dividend of $0.206 per share of NXRT common stock on December 31, 2015. On March 7, 2016, NXRT's board of directors approved a quarterly dividend of $0.206 per share of NXRT common stock, payable on March 31, 2016 to stockholders of record on March 18, 2016
• AFFO1 totaled $7.4 million, or $0.35 per common share, compared to $7.9 million for the third quarter of 2015
• FFO1 totaled $6.9 million, or $0.33 per common share, compared to $7.0 million for the third quarter of 2015
• NOI1 of $16.6 million, including two months for one property acquired during the quarter, compared to $15.7 million for the third quarter of 2015, and $60.4 million for the year ended December 31, 2015
• Rental income increased to $28.6 million for the quarter, compared to $27.0 million for the third quarter of 2015
• Net loss of $1.9 million, $(0.10) per common share; includes depreciation and amortization of $10.0 million
• As of December 31, 2015, weighted average effective monthly rent per unit across all 42 properties, consisting of 13,155 units, was $803, while physical occupancy was 93.9%
• NXRT completed upgrades on 552 units during the quarter and 2,313 for the year ended December 31, 2015, inclusive of all full and partial renovations. Since inception, we have completed 2,643 upgrades and achieved a $93 average monthly rental increase per unit, which equates to a 21.5% ROI on all units leased through December 31, 2015
• Same Store rental income, NOI and occupancy increased 7.6%, 7.3%, and 140 basis points to 94.2%, respectively, as compared to the fourth quarter of 2014
• Same Store property operating expenses increased 11.5%, driven primarily by real estate tax increases
• During the quarter, NXRT acquired one multifamily community, The Place at Vanderbilt, totaling 333 units, for a purchase price of $19.25 million. During the year ended December 31, 2015, NXRT acquired 10 multifamily communities for a combined purchase price of approximately $277.4 million
1 AFFO, FFO and NOI are non-GAAP measures. For reconciliations of AFFO, FFO and NOI to net income and a discussion of why we consider these non-GAAP measures useful, see the "Definitions and Reconciliations" section of this release.
Jim Dondero, Chairman and President of NXRT, said, "NXRT closed out 2015 with another strong quarter, particularly within our same store pool, and we sourced another opportunistic acquisition in one of our core markets. As we look ahead to 2016, I see continued strength of Class B apartment fundamentals across our markets and our properties should continue to see enhanced demand and operating performance. NXRT continues to be a dogged advocate for our shareholders, and we intend to make thoughtful and accretive business decisions as opportunities arise in 2016."
Fourth Quarter and Full Year Financial Results
For the quarter ended December 31, 2015, AFFO attributable to common stockholders was $7.4 million, or $0.35 per common share, and FFO was $6.9 million, or $0.33 per common share. For the year ended December 31, 2015, AFFO attributable to common stockholders was $29.5 million, or $1.38 per common share, and FFO was $25.6 million, or $1.20 per common share.
The Company recorded a net loss in the fourth quarter of 2015 of $1.9 million, which included depreciation and amortization of $10.0 million. This is compared to a net loss of $6.1 million for the fourth quarter of 2014, which included depreciation and amortization of $10.2 million. For the year ended December 31, 2015, the Company had a net loss of $10.9 million, which included $40.8 million of depreciation and amortization. This is compared to a net loss of $17.5 million for the year ended December 31, 2014, which included depreciation and amortization of $21.6 million.
The change in the Company's FFO and AFFO for the year ended December 31, 2015 as compared to FFO and AFFO for the year ended December 31, 2014 primarily relates to the Company acquiring, owning and operating an additional 10 properties for a total of 42 properties as of December 31, 2015, as compared to acquiring, owning and operating 32 properties as of December 31, 2014.
Fourth Quarter Same Store Operating Results
The Company's Same Store properties at December 31, 2015 included 25 properties totaling 7,532 units, or approximately 57% of the Company's 13,155 units. These Same Store properties represented approximately 55% of NXRT's NOI for the quarter ended December 31, 2015.
Same Store rental income, NOI, and occupancy increased 7.6%, 7.3%, and 140 basis points to 94.2%, respectively, in the fourth quarter of 2015, as compared to the fourth quarter of 2014.
Fourth Quarter and Full Year Multifamily Acquisitions
As previously announced, during the fourth quarter of 2015, NXRT acquired one property: The Place at Vanderbilt, a 333-unit Class B multifamily community built in 1984 and located in Fort Worth, TX, for a purchase price of $19.25 million.
The Place at Vanderbilt was financed in part through the assumption of a $13.875 million floating rate mortgage with an interest rate of 2.23% over 30-day LIBOR, that matures on January 1, 2022. The balance of the purchase price was funded using NXRT's available unrestricted cash.
During the year ended December 31, 2015, NXRT acquired 10 multifamily properties for a total purchase price of approximately $277.4 million.
Fourth Quarter and Full Year Value-Add Programs
In the fourth quarter, rehab capital expenditures, which includes interior, exterior and common area improvements, totaled $9.0 million.
Total rehab capital expenditures for the year ended December 31, 2015 were $35.1 million.
Fourth Quarter 2015 Dividend
On November 10, 2015, the Company declared a quarterly dividend of $0.206 per share of NXRT common stock, payable on December 31, 2015 to stockholders of record on December 15, 2015.
2016 Full Year Guidance
The Company is expecting full year 2016 guidance for NOI, FFO, and AFFO as follows:
• NOI: $69.1 million - $71.1 million
• FFO: $1.49 - $1.57 per share
• AFFO: $1.54 - $1.62 per share
Additional information on the fourth quarter results and 2016 financial and earnings guidance is included in supplemental data that can be found in the Investor Relations section of the Company's website at www.nexpointliving.com.
Multifamily Dispositions
In general, NXRT intends to hold its multifamily properties for production of rental income. During the year ended December 31, 2015, we did not sell any of our multifamily properties. Economic and market conditions may influence us to hold our investments for different periods of time. From time to time, we may sell an asset before the end of the expected holding period, particularly if we receive a bona fide unsolicited offer with attractive terms, if we have an upcoming liquidity need, such as a debt maturing, or if the sale of the asset would otherwise be in the best interests of our stockholders. When reviewing whether a sale is in the best interests of our stockholders, we take into consideration whether market conditions and asset positioning have maximized the value of the property to us and any potential adverse tax consequences of a sale. In some cases, we may determine that a particular market no longer fits within our business strategy and sell assets to exit that market.
Supplemental Information
Supplemental information to this press release can be found in the Investor Relations section of the Company's website at www.nexpointliving.com. Our filings with the Securities and Exchange Commission are filed under the registrant name of NexPoint Residential Trust, Inc.
Fourth Quarter Earnings Conference Call
NXRT will host a call to discuss its fourth quarter results on Tuesday, March 8, 2016 at 11:00 a.m. ET. The number to call for this interactive teleconference is (888) 417-8533, or for international callers, (719) 457-1512, in each case using passcode 6469595. A live audio webcast of the call will be available online at the Company's website, http://www.nexpointliving.com (under "Investor Relations").
A replay of the call will be available approximately two hours after the call through Tuesday, March 15, 2016, by dialing (888) 203-1112, or for international callers, (719) 457-0820 and entering the confirmation number, 6469595.
About NXRT
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment adviser. More information about NXRT is available at http://www.nexpointliving.com.
Cautionary Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based on management's current expectations, assumptions and beliefs. Forward-looking statements can often be identified by words such as "expect" and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding NXRT's guidance for financial results for the full year 2016. They are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement. Readers should not place undue reliance on any forward-looking statements and are encouraged to review NXRT's Forms 10-Q for the first, second, and third quarters of 2015, as well as the Form 10-K for the year ended December 31, 2015 that will be filed with the SEC on or before March 30, 2016 for a more complete discussion of the risks and other factors that could affect any forward-looking statements. Except as required by the federal securities laws, NXRT does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this press release.
Definitions and Reconciliations
This press release includes analysis of adjusted funds from operations, or AFFO, funds from operations, or FFO, and net operating income, or NOI, all of which are non-GAAP financial measures of performance. These non-GAAP measures should be used as a supplement to, and not a substitute for, net income (loss) computed in accordance with GAAP. For a more complete discussion of AFFO, FFO, and NOI, see our Forms 10-Q for the first, second, and third quarters of 2015, as well as our Form 10-K for the year ended December 31, 2015, that will be filed with the SEC on or before March 30, 2016. This press release also includes an analysis of our Same Store properties, which are defined as those that are stabilized and comparable for both the current and the prior reporting year. Same Store analysis for the fourth quarter of 2015 includes 25 properties totaling 7,532 units, or approximately 57% of the Company's 13,155 units.
FFO and AFFO
We believe that net income, as defined by GAAP, is the most appropriate earnings measure. We also believe that funds from operations, or FFO, as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), and adjusted funds from operations, or AFFO, are important non-GAAP supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined by NAREIT as net income computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization and impairment charges. We compute FFO attributable to common shareholders in accordance with NAREIT's definition. Our presentation differs slightly in that we begin with Net Loss before adjusting for noncontrolling interests and show the noncontrolling interests as an adjustment to arrive at FFO attributable to common shareholders. AFFO is calculated by adjusting our FFO by adding back items that do not reflect ongoing property operations, such as acquisition expenses, equity-based compensation expenses and the amortization of deferred loan costs. AFFO will also be adjusted to include any gains (losses) from sales of property to the extent excluded from FFO and exclude relevant noncontrolling interests. We will not have any equity-based compensation expenses unless and until our stockholders approve an amendment to the Company's charter to remove the 1940 Act compliance requirements.
We believe that the use of FFO and AFFO, combined with the required GAAP presentations, improves the understanding of operating results of REITs among investors and makes comparisons of operating results among such companies more meaningful.
[tables deleted]
Net Operating Income
NOI is a non-GAAP financial measure of performance. NOI is used by investors and our management to evaluate and compare the performance of our properties, to determine trends in earnings and to compute the fair value of our properties as it is not affected by (1) cost of funds, (2) acquisition costs, (3) non-operating fees paid to affiliates, (4) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP, (5) corporate general and administrative expenses and other gains and losses that are specific to us and (6) entity level general and administrative expenses that are either non-recurring in nature or incurred on behalf of us at the property for expenses such as legal, professional and franchise tax fees.
Same Store Properties
We review our stabilized multifamily communities on a comparable basis between periods. Our Same Store properties are defined as those that are stabilized and comparable for both the current period and the same period for the prior reporting year. There are twenty-five properties meeting this definition for the fourth quarter of 2015: Miramar, Arbors on Forest Ridge, Cutter's Point, Eagle Crest, Meridian, Silverbrook, Timberglen, Toscana, The Grove at Alban, Willowdale Crossing, Edgewater at Sandy Springs, Beechwood Terrace, Willow Grove, Woodbridge, Abbington Heights, Colonial Forest, Courtney Cove, Park at Blanding, Park at Regency, The Summit at Sabal Park, Jade Park, Mandarin Reserve, Timber Creek, Belmont at Duck Creek, and Radbourne Lake.
Reconciliation of Guidance for 2016 NOI, FFO and AFFO
The Company anticipates that net loss will be in the range between $2.0 million to $4.0 million for the full year 2016. The difference between net loss and FFO is depreciation and amortization, which is anticipated to be $35.0 million to $36.0 million for the full year 2016. The difference between FFO and AFFO is deferred loan costs to the extent excluded from FFO, which are anticipated to total approximately $1.1 million for the full year 2016. The difference between net loss and NOI is depreciation and amortization, interest expense, the advisory and administrative fees and the reimbursement of adviser expenses, which are anticipated to total approximately $72.0 million to $74.0 million for the full year 2016. Our guidance assumes we owned all properties for the full year 2016. The Company expects approximately 21,293,825 shares to be outstanding during 2016.
In this release, "we," "us," "our," the "Company," "NexPoint Residential Trust," and "NXRT" each refer to NexPoint Residential Trust, Inc., a Maryland corporation.
http://www.prnewswire.com/news-releases/nexpoint-residential-trust-inc-reports-fourth-quarter-and-full-year-financial-results-300232418.html
Enterprising Investor
9 years ago
NexPoint Residential Trust, Inc. Reports Third Quarter Financial Results (11/10/15)
DALLAS, Nov. 10, 2015 /PRNewswire/ -- NexPoint Residential Trust, Inc. (NYSE: NXRT) reported financial results for the third quarter ended September 30, 2015.
Third Quarter 2015 Highlights
•NXRT paid its second quarterly dividend of $0.206 per share of NXRT common stock on September 30, 2015. Subsequent to the third quarter 2015, NXRT's Board approved a quarterly dividend of $0.206 for each share of NXRT common stock (or $4.4 million in the aggregate), payable on December 31, 2015 for holders of record on December 15, 2015
•AFFO1 totaled $7.9 million, or $0.37 per common share, compared to $7.1 million in second quarter of 2015
•FFO1 of $7.0 million, $0.33 per common share, compared to $6.7 million for the second quarter of 2015
•NOI1 of $15.7 million, including partial months for two properties acquired during the quarter, and $43.7 million for the first nine months of 2015
•Rental income increased to $27.0 million for the quarter, compared to $25.5 million for the second quarter of 2015
•Net loss of $890,000, $(0.04) per common share; includes depreciation and amortization of $9.1 million
•Average effective rent per unit across all 41 properties, consisting of 12,822 units was $796 while physical occupancy was 93.1%
•NXRT completed upgrades on 696 units for the quarter, for an average per unit rental increase of $88 correlating to a 24.4% ROI
•Same Store rental income, NOI and occupancy increased 6.4%, 11.0%, and 183 basis points to 93.3%, respectively, as compared to the same period last year
•During the quarter, NXRT acquired two multifamily communities, totaling 784 units, for a combined purchase price of $74.8 million; in the first nine months of 2015, NXRT acquired 9 multifamily communities for a combined purchase price of $258.2 million
•Subsequent to the third quarter of 2015, NXRT acquired a 333-unit suburban apartment community in Fort Worth, Texas for $19.25 million
1AFFO, FFO and NOI are Non-GAAP measures. For reconciliations of AFFO, FFO and NOI to net income and a discussion of why we consider these Non-GAAP measures useful, see the "Definitions and Reconciliations" section of this release.
Jim Dondero, Chairman and President of NXRT, said, "This quarter's results helped solidify our value-add thesis and what we believe is the key to our Company's near-term future growth. Our Same Store NOI, which added one property in the third quarter, delivered a strong 11.0% growth. We are also pleased to announce that on October 30, 2015, we purchased The Place at Vanderbilt, a 333-unit apartment community in Fort Worth, Texas."
Third Quarter Financial Results
For the quarter ended September 30, 2015, AFFO attributable to common shareholders was $7.9 million, or $0.37 per common share, and FFO was $7.0 million, or $0.33 per common share. For the nine months ended September 30, 2015, AFFO attributable to common shareholders was $22.1 million, or $1.04 per common share, and FFO was $18.7 million or $0.88 per common share.
The Company recorded a net loss in the third quarter of 2015 of $890,000, which included depreciation and amortization of $9.1 million. This compared to a net loss of $6.4 million for the third quarter of 2014, which included depreciation and amortization of $5.8 million. For the first nine months of 2015, the Company had a net loss of $9.0 million, which included $30.8 million of depreciation and amortization. This compared to a net loss of $11.4 million for the first nine months of 2014, which included depreciation and amortization of $11.4 million.
The changes in the Company's net loss, AFFO and FFO for the three and nine month periods ended September 30, 2014 primarily relate to NXRT acquiring, owning and operating an additional 16 properties for a total of 41 properties as of September 30, 2015, compared to 25 properties at September 30, 2014, as well as Same Store NOI growth of 11.0%.
Same Store Properties Operating Results
The Company's Same Store properties at September 30, 2015 included 10 properties totaling 3,227 units, or approximately 25% of the Company's 12,822 units. These Same Store properties represented approximately 26% of NexPoint's NOI for the quarter ended September 30, 2015.
Same Store rental revenue, Same Store NOI and Same Store occupancy increased 6.4%, 11.0%, and 183 basis points to 93.3%, respectively, in the third quarter, compared to the same period last year.
Multifamily Acquisitions
As previously announced, during the third quarter of 2015, NexPoint acquired two properties: Madera Point, a 256-unit Class B multifamily community built in 1985 and located in Mesa, Arizona for a purchase price of $22.5 million, and Pointe at the Foothills, a 528-unit Class B multifamily community built in 1986 and located in Phoenix, Arizona for a purchase price of $52.3 million.
During the first nine months of this year, NXRT acquired nine multifamily properties for a total purchase price of $258.2 million.
Value-Add Programs
In the third quarter rehab capital expenditures, which includes interior, exterior and common area improvements, totaled $10.5 million.
Total rehab capital expenditures for the first nine months of 2015 were $26.1 million.
Subsequent Events
On October 30, 2015, NexPoint acquired a new property: The Place at Vanderbilt, a 333-unit Class B multifamily community built in 1984, located in Fort Worth, Texas.
The Place at Vanderbilt was purchased for $19.25 million and financed in part through the assumption of a $13.875 million floating rate mortgage with an interest rate of 2.23% over 30-day LIBOR, that matures on January 1, 2022. The balance of the purchase price was funded using NXRT's available unrestricted cash.
2015 Full Year Guidance
The Company is expecting full year 2015 guidance for NOI, FFO, and AFFO as follows:
•NOI: $59 million - $61 million
•FFO: $1.22 - $1.29 per share
•AFFO: $1.38 – $1.45 per share
Additional information on the third quarter results and 2015 financial and earnings guidance is included in supplemental data that can be found in the Investor Relations section of the Company's website at www.nexpointliving.com.
Fourth Quarter 2015 Dividend
On November 10, 2015 the Company declared a quarterly dividend of $0.206 per share of NXRT common stock, payable on December 31, 2015 to stockholders of record on December 15, 2015.
Supplemental Information
Supplemental information to this press release can be found in the Investor Relations section of the Company's website at www.nexpointliving.com. Our filings with the Securities and Exchange Commission are filed under the registrant name of NexPoint Residential Trust, Inc.
Third Quarter Earnings Conference Call
NexPoint will host a call to discuss its third quarter results on Tuesday, November 10, 2015 at 11:00 a.m. ET. The number to call for this interactive teleconference is (877) 876-9173 or for international callers, (785) 424-1670, in each case using passcode 4105748. A live audio webcast of the call will be available online at the Company's website, http://www.nexpointliving.com (under "Investor Relations").
A replay of the call will be available approximately two hours after the call through Monday, November 16, 2015, by dialing (888) 203-1112 or, for international callers, (719) 457-0820 and entering the confirmation number, 4105748.
About NXRT
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment adviser. More information about NXRT is available at http://www.NexPointLiving.com.
Cautionary Notice Regarding Forward-Looking Statements
This press release contains forward-looking statements that are based on management's current expectations, assumptions and beliefs. Forward-looking statements can often be identified by words such as "expect" and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding NXRT's guidance for financial results for the 2015 full year. They are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement. Readers should not place undue reliance on any forward-looking statements and are encouraged to review NXRT's Forms 10-Q for the first and second quarters, as well as the quarter ended September 30, 2015 that will be filed with the SEC on November 13, 2015, final information statement and NXRT's Form 10 registration statement filed with the SEC, for a more complete discussion of the risks and other factors that could affect any forward-looking statements. Except as required by the federal securities laws, NXRT does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this press release.
Definitions and Reconciliations
This press release includes analysis of adjusted funds from operations, or AFFO, funds from operations, or FFO, and net operating income, or NOI, all of which are non-GAAP financial measures of performance. These non-GAAP measures should be used as a supplement to, and not a substitute for, net income (loss) computed in accordance with GAAP. For a more complete discussion of AFFO, FFO, and NOI, see our Form 10-Q for the quarter ended September 30, 2015, that will be filed with the SEC on November 13, 2015, and our Form 10-Qs for the first and second quarter previously filed with the SEC. This press release includes an analysis of Same Store properties, those multifamily communities that are stabilized and comparable for both the current and the prior reporting year. Same Store property analysis for third quarter includes 10 properties totaling 3,227 units, or approximately 25% of the Company's 12,822 units for the quarter ended September 30, 2015.
FFO and AFFO
We believe that net income, as defined by GAAP, is the most appropriate earnings measure. We also believe that funds from operations, or FFO, as defined by the National Association of Real Estate Investment Trusts ("NAREIT"), and adjusted funds from operations, or AFFO, are important non-GAAP supplemental measures of operating performance for a REIT. Because the historical cost accounting convention used for real estate assets requires depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined by NAREIT as net income computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization and impairment charges. We compute FFO attributable to common shareholders in accordance with NAREIT's definition. Our presentation differs slightly in that we begin with Net Loss before adjusting for noncontrolling interests and show the noncontrolling interests as an adjustment to arrive at FFO attributable to common shareholders. AFFO is calculated by adjusting our FFO by adding back items that do not reflect ongoing property operations, such as acquisition expenses, equity-based compensation expenses and the amortization of deferred loan costs. AFFO will also be adjusted to include any gains (losses) from sales of property to the extent excluded from FFO and exclude relevant noncontrolling interests. We will not have any equity-based compensation expenses unless and until our stockholders approve an amendment to the Company's charter to remove the 1940 Act compliance requirements.
We believe that the use of FFO and AFFO, combined with the required GAAP presentations, improves the understanding of operating results of REITs among investors and makes comparisons of operating results among such companies more meaningful.
[tables deleted]
Gain on eminent domain: On August 4, 2015, The Department of Transportation of the State of Georgia ("DOT"), through exercise of eminent domain, appropriated 0.966 acres of land and certain access rights from The Crossings in Marietta, GA and paid the sum of $326,111 as just and adequate compensation. The Company recognized a gain on eminent domain of $157,882. Due to immateriality, the gain on eminent domain was included in Other Income for the three and nine months ended September 30, 2015.
Net Operating Income
NOI is a non-GAAP financial measure of performance. NOI is used by investors and our management to evaluate and compare the performance of our properties, to determine trends in earnings and to compute the fair value of our properties as it is not affected by (1) the cost of funds, (2) acquisition costs, (3) non-operating fees to affiliates, (4) the impact of depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP or (5) corporate general and administrative expenses and other gains and losses that are specific to us and (6) entity level general and administrative expenses that are either non-recurring in nature or incurred on behalf of us at the property for expenses such as legal, professional and franchise tax fees.
The following is a table that details our net operating income for the three months ended September 30, 2015 and 2014 and the nine months ended September 30, 2015 and 2014. The net operating income in the following table has not been adjusted for the effects of any noncontrolling interests.
Reconciliation of Guidance for 2015 NOI, FFO and 2015 AFFO
The Company anticipates that net loss will be in the range between $10.0 million to $11.0 million for the full year of 2015 and between $1 million to $2 million for the fourth quarter of 2015. The difference between net loss and FFO is depreciation and amortization and gains from property dispositions, which is anticipated to be $40.0 million to $41.0 million for the full year of 2015. The difference between FFO and AFFO is deferred loan costs, acquisition costs, and gains to the extent excluded from FFO which are anticipated to total approximately $4 million for the full year of 2015. The difference between net loss and NOI is depreciation and amortization, interest expense, acquisition costs, the advisory and administrative fees and the reimbursement of adviser expenses, which are anticipated to total approximately $70 million to $71 million for the full year of 2015 and $16 million to $17 million for the fourth quarter of 2015. Our guidance also assumes no additional property acquisitions in 2015 other than the previously reported acquisition on October 30, 2015 of The Place at Vanderbilt.
In this release, "we," "us," "our," the "Company," "NexPoint," "NexPoint Residential Trust" and "NXRT" each refer to NexPoint Residential Trust, Inc., a Maryland corporation.
Contact:
Marilynn Meek
Financial Relations Board
212-827-3773
http://www.prnewswire.com/news-releases/nexpoint-residential-trust-inc-reports-third-quarter-financial-results-300175739.html
Enterprising Investor
9 years ago
Rents Rise Faster for Midtier Apartments Than Luxury Ones (8/16/15)
Developers’ focus on high end contributes to shortage of affordable units; construction costs too high to build middle-income housing
By Laura Kusisto
The Verona apartment complex in suburban Denver doesn’t have the flashy amenities some tenants covet. No infinity pool. No rooftop lounge. No concierge service. Still, demand at the 1980s-era complex is so strong that the landlord has raised the rent 72% on some apartments in just two years, after renovations.
Modest apartment buildings like the Verona that cater to middle-class and working-class families are becoming scarcer as fewer are built nationwide and older ones are demolished. That has resulted in a severe shortage of midtier apartments, causing rents for these units to rise at a faster pace than for luxury ones.
Even though construction of multifamily rental properties is running at the highest level in decades, the overwhelming majority of new units—more than 80% in the nation’s largest metropolitan areas—are luxury, according to CoStar Group Inc.
Construction costs are generally too high to justify building new complexes for low- and middle-income tenants, experts say, contributing to the scarcity. For instance, AvalonBay Communities Inc., one of the country’s largest apartment developers, spends $340,000 on average for each unit it builds, according to Dave Bragg, an analyst for Green Street Advisors. The average monthly rent, to make up for construction costs, is projected at $2,900—putting those units near the top end of even pricey apartment markets.
The difference in costs between installing granite countertops and stainless-steel appliances is so slight compared to buying land and installing elevators that economists say developing a luxury apartment and a midtier one comes out roughly the same. Historically, developers could save some money by building low-rise buildings in suburban locations, but even those are becoming increasingly difficult to build as even suburban officials push developers to develop midrise buildings in central locations and reduce sprawl.
New households are also much more likely to be renters than buyers, raising rents. Though rents are rising rapidly for all classes of apartments, the influx of luxury units is starting to slow rent hikes in that category, while the dearth of lower-priced apartments is having the opposite effect.
According to Axiometrics Inc., an apartment research firm based in Dallas, rents during the second quarter of 2015 jumped 5.8% for Class B apartments, which are aimed at middle-class families. These tend to be low-rise suburban buildings from the 1980s, with amenities that often include an outdoor pool, a business center and ample green space. Rents rose 4.9% for Class C apartments, aimed at the working class. Meanwhile, rents grew 4.2% for Class A luxury apartments, which are more likely to be downtown high-rises with city views, infinity pools and doormen.
“Everybody and their mother is out building these Class A apartments,” said Ryan Severino, senior economist at Reis Inc. “Nobody is building B and C apartments.” Research by Reis, which tracks commercial real estate, found that the supply of less expensive apartments, excluding rent-regulated units, has decreased 1.6% since 2002. Over that time, high-end apartment inventory has increased 31%.
In many U.S. cities, fewer units are available to middle-income households, according to a report by New York University’s Furman Center and Capital One Financial Corp. In Miami, middle-income renters could afford 33% of recently available apartments in 2013, down from 40% in 2006. In Philadelphia, 35% were affordable to such renters, compared with 45% in 2006.
Even though rents are rising faster on middle-class apartments, they are still considerably less expensive than luxury apartments. Rents for Class A apartments, which make up the top 20% of the market, averaged $1,702 in the second quarter, according to Axiometrics. Class B rents, which make up the middle 60%, averaged $1,192 and Class C rents averaged $845.
In the Denver area, for example, rents average $1,686 a month for luxury apartments, $1,290 for midtier and $965 for lower-end, according to Axiometrics. In Boston, it is $3,345 for luxury, nearly $2,050 for midtier and $1,486 for the most affordable units. In the San Francisco area, Class A apartments are more than $4,000, Class B are $3,125 and Class C are more than $2,200.
At the Verona in Littleton, Colo., applications from prospective tenants are piling up, prompting the management to work “faster, faster, faster,” to turn over vacant units, said Kevin Finkel, executive vice president at Philadelphia-based Resource Real Estate, which owns the complex and other midtier apartment buildings around the country. About half of the monthly rents turn into profit for the company, Mr. Finkel said.
Resource Real Estate purchased the Verona in 2013, paying about $30 million for the 300-unit complex that includes 12 low-rise buildings. The apartments featured beige carpeting, dark brown cupboards and fake brick fireplaces. Resource poured between $3 million and $4 million into upgrades, including laminate countertops and faux wood floors. Rents are now pushing $1,500 a month for some two-bedroom units that had brought in $871 a month before Resource took over.
Traffic from potential renters calling and touring the complex has risen 25% since Resource began renovations. To keep up, the company has renovation teams working double shifts to get units ready for new renters and it has also cut down on marketing.
Mr. Finkel said the Verona appeals to millennials who can’t afford to buy a suburban house or rent a luxury apartment in Denver. Tenants are often single parents looking for an affordable place to live in a community with good schools.
Ian Cochrane, a 39-year-old artist with two children, recently moved into the building after rent on the single-family home where he lived, in the suburb of Aurora, was set to rise to nearly $1,900 from $1,595. Mr. Cochrane, who was divorced in January, said the new apartment is more affordable at around $1,350 a month and has a saltwater pool and good schools for his daughter, 5, and son, 10.
Denver, a historically affordable city for the middle class, has become less so as both rents and house prices have risen sharply. Overall, rents in the city were up 6% over the past year, according to Reis. Mr. Cochrane, who spent six years as a stay-at-home dad and relies on alimony payments to cover the rent, said the new apartment is affordable but he has little room to save. “It can be a struggle for sure,” he said.
Nationwide, rent increases are inflating the pool of families classified as rent burdened, meaning they spend more than 30% of their income on housing. A report released last month by Harvard University’s Joint Center for Housing Studies found that one in five renter households with income of $45,000 to $75,000 a year was rent-burdened in 2013, up from about 18% in 2008 and 15% in 2003.
Experts said that while some of the luxury apartments under construction today could eventually become more affordable due to oversupply, that isn’t likely to help middle-class renters soon.
“The gap between what is the top of the market and what’s truly affordable has gotten so large that the odds of the new stuff ultimately becoming affordable is much smaller now than it has been in the past,” said Andrew Jakabovics, senior director of policy development and research for Enterprise Community Partners, an affordable-housing group.
http://www.wsj.com/articles/rents-rise-faster-for-midtier-apartments-than-luxury-ones-1439769468
Enterprising Investor
9 years ago
NexPoint Residential Trust, Inc. Reports Second Quarter Financial Results (8/11/15)
DALLAS--(BUSINESS WIRE)--NexPoint Residential Trust, Inc. (NYSE:NXRT) reported financial results for the second quarter ended June 30, 2015.
Second Quarter 2015 Highlights
• NXRT paid a first quarter dividend of $0.206 per share of NXRT common stock on June 30, 2015. Subsequent to the second quarter 2015, NXRT’s Board approved a quarterly dividend of $0.206 for each share of NXRT common stock (or $4.4 million in the aggregate), payable on September 30, 2015 for holders of record on September 15, 2015
• AFFO¹ totaled $7.1 million, or $0.34 per common share, compared to $7.0 million in first quarter of 2015
• FFO¹ of $6.7 million, $0.32 per common share, compared to $5.0 million for the first quarter of 2015
• NOI¹ of $14.85 million, including partial months for one property acquired during the quarter, and $28.0 million for the first six months of 2015
• Rental income increased to $25.5 million for the quarter, compared to $22.7 million for the first quarter of 2015
• Net loss of $2.3 million, $(0.11) per common share; includes depreciation and amortization of $10.1 million
• Average effective rent per unit across all 39 properties, consisting of 12,038 units was $784 while physical occupancy was 93.4%
• NXRT completed upgrades on 411 units for the quarter, for an average per unit rental increase of $90 correlating to a 24.76% ROI
• Same store rental income, NOI and occupancy increased 4.6%, 7.3%, and 104 basis points to 93.6%, respectively, as compared to the same period last year
• During the quarter, NXRT acquired one multifamily community, totaling 222 units, for a purchase price of $21 million; in the first six months of 2015, NXRT acquired 7 multifamily communities for a combined purchase price of $183.4 million
• Subsequent to the second quarter of 2015, NXRT acquired two suburban apartment communities in Phoenix, Arizona for $74.8 million
¹AFFO, FFO and NOI are Non-GAAP measures. For reconciliations of AFFO, FFO and NOI to net income and a discussion of why we consider these Non-GAAP measures useful, see the “Definitions and Reconciliations” section of this release.
Jim Dondero, Chairman and President of NXRT, said, "Healthy organic rent growth and execution of our value-add program led to a strong financial performance for the quarter. Additionally, we continue to be opportunistic acquirers of accretive deals. For the quarter, we are pleased to have delivered 7.3% same store NOI growth while adding a great asset in the West Palm Beach submarket."
Second Quarter Financial Results
For the quarter ended June 30, 2015, AFFO attributable to common shareholders was $7.1 million, or $0.34 per common share, and FFO was $6.7 million, or $0.32 per common share. For the six months ended June 30, 2015, AFFO attributable to common shareholders was $14.1 million, or $0.66 per common share, and FFO was $11.7 million or $0.55 per common share.
The Company recorded a net loss in the second quarter of 2015 of $(2.3) million, which included depreciation and amortization of $10.1 million. This compared to a net loss of $(2.3) million for the second quarter of 2014, which included depreciation and amortization of $3.6 million. For the first six months of 2015, the Company had a net loss of $(8.2) million, which included $21.7 million of depreciation and amortization. This compared to a net loss of $(5.0) million for the first six months of 2014, which included depreciation and amortization of $5.6 million.
The changes in the Company’s net loss, AFFO and FFO for the three and six months periods ended June 30, 2014 primarily relate to NXRT acquiring, owning and operating an additional 29 properties for a total of 39 properties as of June 30, 2015, compared to 10 properties at June 30, 2014, as well as same-store NOI growth of 7.3%.
Same Store Properties Operating Results
The Company's same-store properties at June 30, 2015 included 9 properties totaling approximately 2,795 units, or approximately 23% of the Company's 12,038 units. These same-store properties represented approximately 23% of NexPoint’s NOI for the quarter ended June 30, 2015.
Same store rental revenue, same-store NOI and same-store occupancy increased 4.6%, 7.3%, and 104 basis points to 93.6%, respectively, in the second quarter, compared to the same period last year.
Multifamily Acquisitions
As previously announced, during the second quarter of 2015, NexPoint acquired Bayberry Apartments, a 222 unit Class B multifamily community built in 1986/87 and located in West Palm Beach, Florida for a purchase price of $21 million.
During the first six months of this year, NXRT acquired seven multifamily properties for a total purchase price of $183.4 million. The Company has budgeted and reserved approximately $22.0 million in capex to implement its value-add programs at these properties.
Value-Add Programs
In the second quarter rehab capital expenditures, which includes interior, exterior and common area improvements, totaled $8.1 million.
Total rehab capital expenditures for the first six months of 2015 were $15.5 million.
Subsequent Events
On August 5, 2015, NexPoint acquired two properties: Madera Point, a 256 unit Class B multifamily community built in 1985, located in Mesa, Arizona and The Pointe at the Foothills, a 528 unit Class B multifamily community built in 1986, located in Phoenix, Arizona.
Madera Point was purchased for $22.5 million and financed in part through a $13.5 million floating rate interest only mortgage with an interest rate of 1.90% over 30-day LIBOR, that matures on September 1, 2020. The balance of the purchase price was funded using NXRT’s available unrestricted cash and its credit facility.
The Pointe at the Foothills was purchased for $52.3 million in part through a $31.4 million floating rate interest only mortgage with an interest rate of 1.90% over 30-day LIBOR, that matures on September 1, 2020. The balance of the purchase price was funded using NXRT’s available unrestricted cash and its credit facility.
The Company has budgeted and reserved approximately $3.2 million in capex to implement its value-add programs at these two properties.
2015 Per Share FFO & AFFO Guidance
The Company is reaffirming its prior FFO guidance and expects full year 2015 FFO to be in a range of $1.22 to $1.29 per common share. See “Definitions and Reconciliations” for a reconciliation of our 2015 FFO guidance.
The Company is expecting full year 2015 AFFO to be in the range of $1.38 to $1.45 per common share. See “Definitions and Reconciliations” for a reconciliation of our 2015 AFFO guidance.
Additional information on the second quarter results and 2015 financial and earnings guidance is included in supplemental data that can be found in the Investor Relations section of the Company’s website at www.nexpointliving.com.
Third Quarter 2015 Dividend
On August 11, 2015 the Company declared a quarterly dividend of $0.206 per share of NXRT common stock, payable on September 30, 2015 to stockholders of record on September 15, 2015.
Supplemental Information
Supplemental information to this press release can be found in the Investor Relations section of the Company’s website at www.nexpointliving.com. Our filings with the Securities and Exchange Commission are filed under the registrant name of NexPoint Residential Trust, Inc.
Second Quarter Earnings Conference Call
NexPoint will host a call to discuss its second quarter results on Tuesday, August 11, 2015 at 11:00 a.m. ET. The number to call for this interactive teleconference is (877) 876-9177 or for international callers, (785) 424-1666, in each case using passcode 5609909. A live audio webcast of the call will be available online at the Company's website, http://www.nexpointliving.com (under “Investor Relations”).
A replay of the call will be available approximately two hours after the call through Monday, August 17, 2015, by dialing (888) 203-1112 or, for international callers, (719) 457-0820 and entering the confirmation number, 5609909.
About NXRT
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol “NXRT,” primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with “value-add” potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment adviser. More information about NXRT is available at http://www.NexPointLiving.com.
http://www.businesswire.com/news/home/20150811005735/en/NexPoint-Residential-Trust-Reports-Quarter-Financial-Results#.VcoPiyHbKUk
Enterprising Investor
9 years ago
Where Are All the Middle-Class Rentals? (6/24/15)
The rent affordability crunch moves up the economic ladder as most new apartments are built to luxury specs
by Patrick Clark
Ryan Dravitz and a roommate shared a spacious apartment in Denver, paying $1,200 a month for 1,200 square feet in a high-rise building a mile from the center of downtown. Then, in 2012, the rental market exploded. The roommate moved out, and Dravitz, 26, moved into a house with four others. His old apartment is now renting for $2,000.
“Luckily, I got engaged recently, so we have a dual income,” said Dravitz, a bank teller and freelance writer and editor. Even so, it’s unlikely the couple will be able to afford to stay downtown, where rents are rising rapidly, and new rental buildings with such amenities as golf simulators and dog spas are becoming increasingly common.
Skyrocketing rents and multiple roommates—these are the kinds of war stories you expect to hear in space-constrained cities such as New York and San Francisco. But the rental crunch has been steadily creeping inland from coastal cities and up the economic ladder.
“For lower-income households, affordability has been a problem for decades,” says Stockton Williams, executive director at the Urban Land Institute’s Terwilliger Center for Housing. “Now you have people in middle-income, two-earner households who are paying unsustainable rents.”
For builders, the logic is clear. Profit margins are often better at the high end, and costly such amenities as floor-to-ceiling windows and high-end appliances help entice new tenants—as long as there's a market of renters who can afford the pricier digs.
“When you build something new, you want to push the quality up to give people a reason to move up,” says Cary Bruteig, a partner at Apartment Insights who tracks the Denver market.
Here's the vicious circle that's sending rents spiraling higher:
1.People paying high rents have a harder time saving for a down payment, preventing tenants from exiting the rental market.
2.Low vacancy rates let landlords raise rents still higher.
3.Developers who know they can command high rents (and sales prices) are spurred to spend more to acquire developable land.
4.Higher land costs can force builders to target the higher end of the market.
Real estate developers in the U.S. started work on 360,000 new apartments last year, the most in more than 25 years, though not necessarily on homes most Americans can afford. In 2013, the median rent for a new apartment was $1,290, about 50 percent of the median renter’s monthly income, according to data published today by Harvard’s Joint Center on Housing Studies. Eighty-two percent of the new units completed from 2012 to 2014 were luxury apartments, according to CoStar Group research cited by the Wall Street Journal.
In Denver, the story of the rental affordability crunch starts at the tail end of the housing boom, after the easier path to home ownership had curtailed demand for new rental apartments. The local economy roared to life after the recession, workers flocked to the city, and rental prices shot up. Rents rose 10.2 percent last year, according to a February report from Zillow, the third-highest rate among U.S. cities, after San Francisco and San Jose.
Developers moved to soak up the new demand. Based on projects currently under construction, developers will have added close to 11,000 apartments within 1.5 miles of the city center from 2010 to 2016, according to an estimate by Ken Schroeppel, founder of the DenverInfill blog, which tracks new construction. About 96 percent of those units are rentals.
In addition to higher absolute rents, apartment dwellers are paying more for less. Two-thirds of new apartments built in Denver from 2010 to 2015 were one-bedrooms or studios, compared to just under half from 2000 to 2009, according to Pat Stucker, managing director at Jones Lang LaSalle's Denver Capital Markets group. Downsized apartments include new pie-slice units at Turntable Studios, a circular building that was once a downtown hotel. The smallest are 330 square feet and rent for up to $1,000 a month.
In a perfect world, affluent renters would trickle up into new, luxury units, while rates on plainer units would come down or stay the same. But the vacancy rate on Denver apartments is just 4.3 percent, according to Bruteig. Until that number rises, demand is likely to keep rents high.
The same dynamic holds true nationally, as the share of Americans who rent their housing is at a 20-year high and likely to keep rising. A report earlier this month from the Urban Institute predicts that 59 percent of new households formed from 2010 to 2020 will rent.
“The real question," says Stucker of Jones Lang LaSalle, "is how long can that last before you reach a level that is not affordable to the majority of the demographic that you’re trying to service."
http://www.bloomberg.com/news/articles/2015-06-24/where-are-all-the-middle-class-rentals-
Enterprising Investor
10 years ago
NXRT Reports First Quarter Results (5/15/15)
DALLAS--(BUSINESS WIRE)--NexPoint Residential Trust, Inc., or NXRT, (NYSE: NXRT) today announced operating results for the quarter ended March 31, 2015 (“Q1 2015”).
NexPoint Residential Trust is pleased to announce quarterly results for the first time as a public company. Strong operating performance was driven by acquisition of six properties (2,388 units), as well as continued implementation of significant value-add strategies across the portfolio.
“After acquiring 9,428 units in 2014, we were pleased to grow an additional 20% in the first quarter of 2015,” said Jim Dondero, President of NXRT. “The results of our value-add programs provide our residents with dramatically improved living spaces. We expect these programs and strong market fundamentals to continue to drive our top-line growth, improve resident retention and create value for our shareholders.”
Quarterly Common Dividend Declared
Our Board of Directors declared its first quarterly common dividend at a quarterly rate of $0.206 per common share, which will be paid on June 30, 2015 to holders of record on June 15, 2015.
Net Income (Loss)
For the quarter ended March 31, 2015, net loss attributable to common shareholders was $5,398,853, which included depreciation and amortization of $11,610,290.
Net Operating Income (NOI)
For the quarter ended March 31, 2015, NOI was $12,934,878, which included partial months for the six properties acquired during the quarter.
Funds from Operations (FFO); Guidance
For the quarter ended March 31, 2015, FFO, was $4,979,741, or $0.23 per common share. NXRT is reaffirming prior guidance for full year FFO projected to be in a range of $1.22 to $1.29 per common share. NXRT will reevaluate its full-year 2015 FFO and same store growth assumptions with its second quarter 2015 earnings report. Additional information on our 2015 financial and earnings guidance is included in the supplemental data that can be found on the “Investor Relations” tab of our website at www.nexpointliving.com.
Financial & Business Highlights
• Rental income was $22,690,537 for the three months ended March 31, 2015 compared to $3,560,203 for the three months ended March 31, 2014, which was an increase of $19,130,334. This change primarily relates to the Company acquiring, owning and operating an additional 29 properties for a total of 38 properties as of March 31, 2015 as compared to nine properties as of March 31, 2014.
• Quarter-end average effective monthly rent per unit was $771 across all properties, while physical occupancy ended at 93.7%
• Through March 31, 2015, NXRT completed upgrades on 610 units and achieved average rent increase of 11.9% on leased units, which correlated to an average ROI 24.6%
• Although only attributable to our longest-held property, Miramar, Q1 2015 same store rental income, NOI and occupancy increased 17%, 41.5% and 382 basis points to 96%, respectively, over Q1 2014
• NXRT acquired six multifamily apartment communities totaling 2,388 units, for a combined purchase price of $162 million and expanded its presence in Dallas, Orlando and Atlanta. NXRT has budgeted and reserved approximately $20 million in capex to implement its value-add programs at these properties.
Value-Add Programs
Total rehab capital expenditures for the portfolio during the first quarter were $7,407,793.
Subsequent Events
On April 15, 2015, NXRT acquired Bayberry Apartments, a 222-unit Class B multifamily community built in 1986/1987 and located in West Palm Beach, Florida.
The property was purchased for $21 million and financed through a $12.66 million Freddie Mac Standard Delivery CME Adjustable Rate Mortgage Loan, at 60% loan to purchase price. The purchase price was approximately 55% below replacement cost for the market. NXRT plans to implement its value-add programs to achieve outsized resident satisfaction and same-store NOI growth.
Supplemental Material and Conference Call
Supplemental data to this press release can be found on the "Investor Relations" tab of our website at www.nexpointliving.com. NXRT will commence conference calls to further discuss quarterly results beginning with its second quarterly earnings release. Our filings with the Securities and Exchange Commission are filed under the registrant name of NexPoint Residential Trust, Inc.
About NXRT
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol “NXRT,” primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with “value-add” potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment adviser. More information about NXRT is available at http://www.NexPointLiving.com.
http://www.businesswire.com/news/home/20150515006057/en/NXRT-Reports-Quarter-Results#.VVZ9-YnbKUk
Enterprising Investor
10 years ago
NexPoint Credit Strategies Fund Announces Record and Distribution Dates for REIT Spin-Off (3/11/15)
DALLAS--(BUSINESS WIRE)--NexPoint Credit Strategies Fund (NYSE: NHF) announced today that its Board of Trustees has approved the separation of its business into two separate and independent publicly traded companies:
• NexPoint Credit Strategies Fund (“NHF”), which will continue to operate as a non-diversified, closed-end investment company; and
• NexPoint Residential Trust, Inc. (“NXRT”), which will acquire, own, operate and selectively develop multifamily properties.
The Board of Trustees has approved, and NHF plans to effect the separation through, a spin-off in which NHF will distribute all of the outstanding shares of NXRT common stock to NHF’s shareholders on a pro rata basis. The distribution will be made to NHF shareholders of record as of the close of business on March 23, 2015, the record date for the distribution. The shares are expected to be distributed on March 31, 2015.
In the distribution, shareholders of NHF will receive one share of NXRT common stock for every three NHF common shares held as of the close of business on the record date. No fractional shares will be distributed in connection with the spin-off. A cash payment will be made in lieu of any fractional shares.
Following the spin-off, NXRT will be a separate publicly traded company distinct from NHF, and NHF will not retain any NXRT common stock. NHF will continue to be listed on the New York Stock Exchange (“NYSE”) under the symbol "NHF," while NXRT expects to list its common stock on NYSE under the symbol "NXRT."
NXRT will be externally managed by NexPoint Real Estate Advisors, L.P., an affiliate of NexPoint Advisors, L.P., the advisor for NHF, and an affiliate of Highland Capital Management, L.P., a leading global alternative asset manager and an SEC-registered investment advisor that, together with its affiliates, has approximately $20.2 billion in assets under management as of December 31, 2014. NexPoint Real Estate Advisors, L.P. will conduct substantially all of NXRT’s operations and manage NXRT’s real estate investments. The members of the management team of NexPoint Real Estate Advisors, L.P. are expected to be James Dondero, Brian Mitts, Matt McGraner, Matthew Goetz, and Scott Ellington. The management team has significant experience across real estate investing, private lending, and private equity.
It is expected that, beginning on or shortly before March 23, 2015 through March 31, 2015, there will be two markets in NHF shares:
• a "regular-way" market in which NHF shares will trade with an entitlement to receive shares of NXRT common stock on the distribution date; and
• an "ex-distribution" market in which NHF shares will trade without an entitlement to receive shares of NXRT common stock on the distribution date.
During this time period, it is also expected that shares of NXRT common stock will begin trading on a "when-issued" basis. On the first trading day following the distribution date, all NHF shares and shares of NXRT common stock will be traded only on a "regular-way" market.
No action is required by NHF shareholders in order to receive shares of NXRT common stock in the distribution. An information statement containing details of the spin-off and information about NXRT will be mailed to NHF shareholders prior to the distribution date.
The spin-off is conditioned on NXRT's registration statement being declared effective by the SEC and NYSE’s authorization to list NXRT’s shares on NYSE and other conditions described in the registration statement. NHF also reserves the right to withdraw and cancel the distribution if, at any time prior to the distribution date, the Board of Trustees of NHF determines that the spin-off is not in the best interests of NHF and its shareholders, or that market conditions or other circumstances are such that the spin-off is no longer advisable. If NHF’s Board of Trustees abandons the spin-off, NHF will be responsible for all the expenses and other costs associated with the spin-off.
The distribution will not qualify for tax-free treatment. NHF shareholders are urged to consult their financial advisers and tax advisers regarding the particular consequences of the distribution in their situation, including, without limitation, the specific implications of selling NHF shares on or prior to the distribution date and the applicability and effect of any U.S. federal, state, local and foreign tax laws.
About NexPoint Credit Strategies Fund
NexPoint Credit Strategies Fund is a closed-end fund managed by NexPoint Advisors, L.P. NHF’s investment objectives are to provide both current income and capital appreciation. NHF is invested primarily in below investment grade debt and equity securities and has the ability to hedge risk. The manager attempts to exceed the return of the Dow Jones Credit Suisse Hedge Fund Index and the HFR Global Hedge Fund Indexes in a transparent, registered fund format with monthly dividends. An investment in NHF is not appropriate for all investors. No assurance can be given that NHF will achieve its investment objectives.
Shares of closed-end investment companies frequently trade at a discount to net asset value. The price of NHF’s shares is determined by a number of factors, several of which are beyond the control of NHF. Therefore, NHF cannot predict whether its shares will trade at, below or above net asset value. Past performance does not guarantee future results. More information about NexPoint Credit Strategies Fund is available at www.nexpointadvisors.com.
http://www.businesswire.com/news/home/20150311005905/en/NexPoint-Credit-Strategies-Fund-Announces-Record-Distribution#.VQ7IaYktGUk
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