DALLAS, Oct. 3, 2024
/PRNewswire/ -- NexPoint Residential Trust, Inc. ("NXRT" or the
"Company") (NYSE: NXRT) announced today the closing of 17-property
mortgage refinancings through J.P. Morgan Chase Bank ("JP Morgan")
and The Federal Home Loan Mortgage Corporation ("Freddie Mac"), the
sale of Stone Creek at Old Farm, and
the Company is scheduled to host a conference call on Tuesday, October 29, 2024, at 11:00 a.m. ET (10:00 a.m.
CT), to discuss third quarter 2024 financial
results.
The Company entered into 17 loan agreements and expects to enter
into 17 additional loan agreements on November 29, 2024, for total gross proceeds of
$1.466 billion, which, in the
aggregate, will represent ~ 97.7% of the Company's total
outstanding debt. Notably, NXRT agreed to refinance at interest
rate pricing improved (SOFR + 109 bps) from prior terms. This
refinancing activity extends the Company's weighted average debt
maturity schedule to ~7.0 years (from ~5.69 years) – after this
refinancing activity, debt maturing through 2028 equates to ~2.3%
of total debt (down from ~33% previously).
Holistically, these refinancings are expected to reduce NXRT's
weighted average interest rate on total debt by 48 bps to 6.21%
before the impact of interest rate swap contracts. Accounting for
the hedging impact of the swaps, NXRT's adjusted weighted average
interest rate is expected to be reduced from 3.64% to 3.16%. With
the completion of these refinancings, the Company has no meaningful
debt maturities until 2028.
The Company also closed on the sale of Stone Creek at Old Farm in Houston, TX, a 190-unit property built in
1998. The property was acquired for $23.3
million on December 29, 2016,
and has provided consistent operational and cash flow performance
for the portfolio for the last 7+ years. As of September 30, 2024, the property was 96.31%
leased with a weighted average effective monthly rent of
approximately $1,322. Net
proceeds from the sale were approximately $23.7M, delivering a trailing nominal tax and
insurance adjusted cap rate of 5.25% and a 2.19x multiple on
invested capital.
The Company is scheduled to host a conference call on
Tuesday, October 29, 2024, at
11:00 a.m. ET (10:00 a.m. CT), to discuss third quarter 2024
financial results. The conference call can be accessed live over
the phone by dialing 888-660-4430 or, for international callers, +1
646-960-0537 and using passcode Conference ID: 5001576. A
live audio webcast of the call will be available online at the
Company's website, https://nxrt.nexpoint.com (under
"Resources"). 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, November 12, 2024, by
dialing 800- 770- 2030 or, for international callers, +1 609- 800-
9909 and entering passcode 5001576.
The Company plans to issue a press release with third quarter
2024 financial results before market open on Tuesday, October 29, 2024.
"NXRT is delighted to announce the completion of this
significant refinancing initiative, fortifying our balance sheet
and growing our relationship with JP Morgan and Freddie Mac. We
identified an opportunity to capitalize on the slowdown in 'Mission
Driven' agency debt production heading into the second half of
2024, leveraging our deep relationships and Select Sponsor status
with Freddie Mac to drive the best execution and deliver an
excellent result for shareholders. The sale of Stone Creek completes our stated goal of exiting
the Houston market. We look
forward to talking about the impact of the refinance and sale of
Stone Creek on a 3Q earnings call on
October 29th." said
Matt McGraner, Chief Investment
Officer.
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Outstanding Debt
Details
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|
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Mortgage
Debt
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The following table
contains summary information concerning the mortgage debt of the
Company as of October 1, 2024 assuming the expected closing of the
17 additional property refinancings occurred on October 1, 2024 ($
in 000s):
|
|
|
Operating
Properties
|
|
Type
|
|
Term
(months)
|
|
Outstanding
Principal (1)
|
|
Interest Rate (2)
|
|
Maturity
Date
|
|
|
Arbors on Forest
Ridge
|
|
Floating
|
|
84
|
|
$
16,630
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
Cutter's
Point
|
|
Floating
|
|
84
|
|
18,228
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
The Summit at Sabal
Park
|
|
Floating
|
|
84
|
|
25,681
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
Courtney
Cove
|
|
Floating
|
|
84
|
|
31,401
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
The Preserve at Terrell
Mill
|
Floating
|
|
84
|
|
71,835
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
Versailles
|
|
Floating
|
|
84
|
|
26,611
|
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6.25 %
|
|
10/31/2031
|
(3)
|
|
Seasons 704
Apartments
|
|
Floating
|
|
84
|
|
33,745
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
Madera Point
|
|
Floating
|
|
84
|
|
30,669
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
Venue at
8651
|
|
Floating
|
|
84
|
|
24,622
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
Parc500
|
|
Floating
|
|
84
|
|
28,646
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
Rockledge
Apartments
|
|
Floating
|
|
84
|
|
77,271
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
Atera
Apartments
|
|
Floating
|
|
84
|
|
38,796
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
Torreyana
Apartments
|
|
Floating
|
|
84
|
|
43,442
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
Bloom
|
|
Floating
|
|
84
|
|
61,017
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
Bella Solara
|
|
Floating
|
|
84
|
|
39,546
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
Fairways at San
Marcos
|
|
Floating
|
|
84
|
|
54,590
|
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6.25 %
|
|
10/31/2031
|
(3)
|
|
Creekside at
Matthews
|
|
Floating
|
|
84
|
|
29,815
|
|
6.25 %
|
|
10/31/2031
|
(3)
|
|
The Venue on
Camelback
|
|
Floating
|
|
84
|
|
36,465
|
|
6.25 %
|
|
9/30/2031
|
(4)
|
|
Sabal Palm at Lake
Buena Vista
|
Floating
|
|
84
|
|
56,220
|
|
6.25 %
|
|
9/30/2031
|
(4)
|
|
Cornerstone
|
|
Floating
|
|
84
|
|
45,815
|
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6.25 %
|
|
9/30/2031
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(4)
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Versailles
II
|
|
Floating
|
|
84
|
|
15,706
|
|
6.25 %
|
|
9/30/2031
|
(4)
|
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Brandywine I &
II
|
|
Floating
|
|
84
|
|
59,526
|
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6.25 %
|
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9/30/2031
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(4)
|
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Bella Vista
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Floating
|
|
84
|
|
37,400
|
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6.25 %
|
|
9/30/2031
|
(4)
|
|
The Enclave
|
|
Floating
|
|
84
|
|
33,440
|
|
6.25 %
|
|
9/30/2031
|
(4)
|
|
The Heritage
|
|
Floating
|
|
84
|
|
29,810
|
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6.25 %
|
|
9/30/2031
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(4)
|
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Summers
Landing
|
|
Floating
|
|
84
|
|
14,135
|
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6.25 %
|
|
9/30/2031
|
(4)
|
|
Residences at Glenview
Reserve
|
Floating
|
|
84
|
|
33,271
|
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6.25 %
|
|
9/30/2031
|
(4)
|
|
Avant at Pembroke
Pines
|
|
Floating
|
|
84
|
|
248,185
|
|
6.25 %
|
|
9/30/2031
|
(4)
|
|
Arbors of
Brentwood
|
|
Floating
|
|
84
|
|
39,977
|
|
6.25 %
|
|
9/30/2031
|
(4)
|
|
The Verandas at Lake
Norman
|
Floating
|
|
84
|
|
30,113
|
|
6.25 %
|
|
9/30/2031
|
(4)
|
|
Six Forks
Station
|
|
Floating
|
|
84
|
|
30,430
|
|
6.25 %
|
|
9/30/2031
|
(4)
|
|
High House at
Cary
|
|
Floating
|
|
84
|
|
32,478
|
|
6.25 %
|
|
9/30/2031
|
(4)
|
|
The Adair
|
|
Floating
|
|
84
|
|
33,229
|
|
6.25 %
|
|
9/30/2031
|
(4)
|
|
Estates on
Maryland
|
|
Floating
|
|
84
|
|
37,345
|
|
6.25 %
|
|
9/30/2031
|
(4)
|
|
Residences at West
Place
|
|
Fixed
|
|
120
|
|
33,817
|
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4.24 %
|
|
10/1/2028
|
|
|
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$
1,499,907
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(1) Mortgage debt that
is non-recourse to the Company and encumbers the multifamily
properties.
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|
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(2) Interest rate is
based on a reference rate plus an applicable margin, except for
fixed-rate mortgage debt. 30-Day Average SOFR was 5.16% as of
October 1, 2024.
(3) The Company is
finalizing a 7-year term refinance on 17 properties at SOFR plus a
1.09% margin. The refinance is expected to close on November 29,
2024. Final loan amounts are subject to change based on final
commitment at closing.
|
|
|
(4) The Company
finalized a 7-year term refinance on 17 properties at SOFR plus a
1.09% margin. The refinance closed on October 1, 2024.
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|
|
|
|
|
|
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|
|
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Interest Rate Swap Agreements
As of October 1, 2024, the Company
had the following outstanding interest rate swaps that were
designated as cash flow hedges of interest rate risk (dollars in
thousands):
|
Effective
Date
|
|
Termination
Date
|
|
Counterparty
|
|
Notional
Amount
|
|
|
Fixed Rate
(1)
|
|
|
|
September 1,
2019
|
|
September 1,
2026
|
|
KeyBank
|
|
|
100,000
|
|
|
|
1.4620
|
%
|
|
|
September 1,
2019
|
|
September 1,
2026
|
|
KeyBank
|
|
|
125,000
|
|
|
|
1.3020
|
%
|
|
|
January 3,
2020
|
|
September 1,
2026
|
|
KeyBank
|
|
|
92,500
|
|
|
|
1.6090
|
%
|
|
|
March 4,
2020
|
|
June 1, 2026
|
|
Truist
|
|
|
100,000
|
|
|
|
0.8200
|
%
|
|
|
June 1, 2021
|
|
September 1,
2026
|
|
KeyBank
|
|
|
200,000
|
|
|
|
0.8450
|
%
|
|
|
June 1, 2021
|
|
September 1,
2026
|
|
KeyBank
|
|
|
200,000
|
|
|
|
0.9530
|
%
|
|
|
March 1,
2022
|
|
March 1,
2025
|
|
Truist
|
|
|
145,000
|
|
|
|
0.5730
|
%
|
|
|
March 1,
2022
|
|
March 1,
2025
|
|
Truist
|
|
|
105,000
|
|
|
|
0.6140
|
%
|
|
|
|
|
|
|
|
|
1,067,500
|
|
|
|
0.9807
|
%
|
(2)
|
(1) The floating rate option for the interest rate swaps
is daily compounded average of SOFR plus 0.11448% adjustment
("Adjusted SOFR"). As of October 1,
2024, Adjusted SOFR was 5.07%.
(2) Represents the weighted average fixed rate of the
interest rate swaps.
As of October 1, 2024 and after
giving effect to the closing of the additional 17-property mortgage
refinancing, we had total indebtedness of $1.50 billion at an adjusted weighted average
interest rate of 6.21%, of which $1.466
billion was debt with a floating interest rate. As of
October 1, 2024 and after giving
effect to the closing of the additional 17-property mortgage
refinancing, interest rate swap agreements effectively covered
72.8% of our $1.466 billion of
floating rate mortgage debt outstanding. For purposes of
calculating the adjusted weighted average interest rate of the
total indebtedness, we have included the weighted average fixed
rate of 0.9807% for Adjusted SOFR on the $1.1 billion notional amount of interest rate
swap agreements that we have entered into as of October 1, 2024.
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
NexPoint Advisors, L.P., an SEC-registered investment advisor,
which has extensive real estate experience.
Cautionary Statement Regarding Forward-Looking
Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are based on management's current expectations, assumptions
and beliefs. Forward-looking statements can often be identified by
words such as "expect," "will," "plan" and similar
expressions, and variations or negatives of these words. These
forward-looking statements include, but are not limited to,
statements regarding the Company's debt profile following the
refinancings, including total debt, adjusted average weighted
interest rate and interest swap coverage, the expected closing of
additional property refinancings on November
29, 2024, the refinanced debt as a percentage of the
Company's total outstanding debt after the expected closing of the
refinancings on November 29, 2024,
the expected total gross proceeds from the refinancings, expected
debt maturity schedule, the expected reduction in NXRT's weighted
average interest rate before and after the effect of interest rate
swaps, the expected term, principal, interest rate and maturity
date for additional refinancings and the issuance of a press
release with third quarter 2024 results before market open on
Tuesday, October 29, 2024. 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, including that the 17-property refinancing doesn't close
on November 29, 2024 or is delayed
and those described in our filings with the Securities and Exchange
Commission (the "SEC"), particularly those described in our Annual
Report on Form 10-K. Readers should not place undue reliance on any
forward-looking statements and are encouraged to review the
Company's most recent Annual Report on Form 10-K and other filings
with the SEC for a more complete discussion of the risks and other
factors that could affect any forward-looking statements. The
statements made herein speak only as of the date of this release
and except as required by law, NXRT does not undertake any
obligation to publicly update or revise any forward-looking
statements.
Contact:
Kristen Thomas
Investor Relations
IR@nexpoint.com
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SOURCE NexPoint Residential Trust, Inc.
