Exhibit 99.1
30 APRIL 2019 | NYSE: NXRT
EARNINGS SUPPLEMENT: FIRST QUARTER 2019
NEXPOINT RESIDENTIAL TRUST, INC.
300 CRESCENT COURT, SUITE 700
DALLAS, TX 75201
PHONE: 972-628-4100
INVESTOR RELATIONS:
JACKIE GRAHAM - 972-419-6213
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
TABLE OF CONTENTS
Earnings Release | 1 |
Cautionary Statement Regarding Forward-Looking Statements | 3 |
Overview | 4 |
Highlights of Recent Activity | 5 |
Financial Summary | 6 |
2019 Full Year Guidance Summary | 7 |
Components of Net Asset Value | 8 |
Consolidated Balance Sheets | 9 |
Consolidated Statements of Operations | 10 |
Q1 Same Store Results | 11 |
Q1 Same Store Properties Operating Metrics | 13 |
FFO, Core FFO and AFFO | 14 |
Historical Capital Expenditures | 16 |
Value-Add Program Details | 17 |
Outstanding Debt Details | 18 |
Debt Maturity Schedule | 20 |
Historical Acquisition Details | 21 |
Historical Disposition Details | 22 |
Definitions and Reconciliations of Non-GAAP Measures | 23 |
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THE COLONNADE: PHOENIX, AZ |
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IMPROVED DRIVE UP APPEAL – POST RENOVATION |
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ORIGINAL LEASING CENTER DRIVE UP – PRE RENOVATION
NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
FOR IMMEDIATE RELEASE
Contact:
Investor Relations
Jackie Graham
972-419-6213
NEXPOINT RESIDENTIAL TRUST, INC. REPORTS FIRST QUARTER 2019 RESULTS
NXRT Acquires $132 Million of Properties in Phoenix; Continues to Execute Value-Add Strategy
Dallas, TX, April 30, 2019 – NexPoint Residential Trust, Inc. (NYSE:NXRT) reported financial results for the first quarter ended March 31, 2019.
Highlights
• | NXRT1 reported Net Loss, FFO2, Core FFO2 and AFFO2 of $(4.4)M, $11.0M, $11.0M and $12.7M, respectively, attributable to common stockholders for the quarter ended March 31, 2019, compared to Net Income, FFO, Core FFO, and AFFO 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, 2019, Q1 Same Store properties3 average effective rent, total revenue and NOI2 increased 4.0%, 4.7% and 7.0%, respectively, and occupancy decreased 40 bps over the prior year period. |
• | For the three months ended March 31, 2019, Q1 Same Store properties expenses increased 2.0% over the prior year period, primarily due to increases in property taxes of 9.8%, partially offset by decreases in property operating expenses of 1.8% which was a result of lower utility costs from implementation of the Freddie Mac Green Advantage program. |
• | During the first quarter, NXRT acquired three properties in Phoenix (Bella Vista, The Heritage and The Enclave or the “Phoenix Portfolio”) for a combined purchase price of approximately $132.1M. |
• | On January 28, 2019, NXRT entered into a $75.0 million credit facility (the “$75 Million Credit Facility”) with SunTrust Bank and immediately drew $52.5 million to fund a portion of the purchase price of the Phoenix Portfolio. |
• | The weighted average effective monthly rent per unit across all 38 properties held as of March 31, 2019 (the “Portfolio”), consisting of 13,211 units, was $1,007, while physical occupancy was 93.6%. |
• | NXRT paid a first quarter dividend of $0.275 per share of common stock on March 29, 2019. |
• | During the first quarter, for the properties in our Portfolio, we completed 245 full and partial upgrades and leased 174 upgraded units, achieving an average monthly rent premium of $119 and a 27.4% ROI4. Since inception, for the properties in our Portfolio, we have completed 5,906 full and partial upgrades and achieved an average monthly rental increase per unit of $97, equating to a 23.3% ROI on all units leased as of March 31, 2019. |
| (1) | In this release, “we,” “us,” “our,” the “Company,” “NexPoint Residential Trust,” and “NXRT” each refer to NexPoint Residential Trust, Inc., a Maryland corporation. |
| (2) | FFO, Core FFO, AFFO and NOI are non-GAAP measures. For a discussion of why we consider these non-GAAP measures useful and reconciliations of FFO, Core FFO, AFFO and NOI to net income (loss), see the “Definitions and Reconciliations of Non-GAAP Measures” and “FFO, Core FFO and AFFO” sections of this release. |
| (3) | We define “Same Store” properties as properties that were in our Portfolio for the entirety of the periods being compared. There are 32 properties encompassing 11,471 units of apartment space in our Same Store pool for the three months ended March 31, 2019 (our “Q1 Same Store” properties). |
| (4) | We define Return on Investment (“ROI”) as the sum of the actual rent premium divided by the sum of the total cost. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
“We’re excited about the strong start to 2019, with the Company’s continued execution of its value-add strategy producing outsized revenue growth and 20%+ ROIs on upgraded units. In addition, we are already pleased with the $132 million Phoenix Portfolio acquired in January, where operations are exceeding our expectations” stated NXRT Chairman and President, Jim Dondero. “Looking ahead, we believe the future outlook for quality Class B/workforce housing in our high-growth markets remains bright.”
First Quarter 2019 Financial Results
• | Total revenues were $41.5 million for the first quarter of 2019, compared to $35.1 million for the first quarter of 2018. |
• | Net loss for the first quarter of 2019 totaled $(4.4) million, or a loss of $(0.19) per diluted share, which included $15.4 million of depreciation and amortization expense. This compared to net income of $10.1 million, or earnings of $0.47 per diluted share, for the first quarter of 2018, which included $13.7 million of gain on sales of real estate, $11.4 million of depreciation and amortization expense and $0.6 million of loss on extinguishment and debt modification costs. |
• | The change in our net income (loss) between the periods primarily relates to a decrease in gain on sales of real estate and an increase in total expenses and interest expense, and was partially offset by an increase in total revenues and decreases in loss on extinguishment of debt and modification costs. |
• | For the first quarter of 2019, NOI was $23.6 million on 38 properties, compared to $19.1 million for the first quarter of 2018 on 32 properties. |
• | For the first quarter of 2019, Q1 Same Store NOI increased 7.0% to $20.4 million, compared to $19.1 million for the first quarter of 2018. |
• | For the first quarter of 2019, FFO totaled $11.0 million, or $0.46 per diluted share, compared to $7.7 million, or $0.36 per diluted share, for the first quarter of 2018. |
• | For the first quarter of 2019, Core FFO totaled $11.0 million, or $0.46 per diluted share, compared to $8.3 million, or $0.39 per diluted share, for the first quarter of 2018. |
• | For the first quarter of 2019, AFFO totaled $12.7 million, or $0.53 per diluted share, compared to $9.5 million, or $0.45 per diluted share, for the first quarter of 2018. |
First Quarter Earnings Conference Call
NXRT will host a call on Tuesday, April 30, 2019 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 877-260-1479 or, for international callers, (334) 323-0522, and using passcode Conference ID: 1362865. 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 will continue to be available for 60 days.
A replay of the conference call will also be available through Sunday, May 5, 2019, by dialing (888) 203-1112 or, for international callers, (719) 457-0820 and entering passcode 1362865.
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
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. Our filings with the Securities and Exchange Commission (the “SEC”) are available on our website, www.nexpointliving.com, under the “Investor Relations” tab.
Cautionary Statement Regarding Forward-Looking Statements
This 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,” “anticipate,” “estimate,” “may,” “should,” “intend” and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding NXRT’s business and industry in general, NXRT’s guidance for financial results for the full year 2019 and the related assumptions, net asset value and the related components and assumptions, guidance for the second quarter 2019 and the related assumptions, expected acquisitions and dispositions, the expected redevelopment of units and the projected average rent, rent change and ROI after redevelopment. 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 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.
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
NEXPOINT RESIDENTIAL TRUST, INC: FIRST QUARTER 2019 OVERVIEW
Company Profile
(share counts in thousands) | |
Exchange/Ticker | NYSE: NXRT |
Share Price (1) | $36.77 |
Insider Ownership | 20.79% |
2019 Q2 Dividend Per Share | $0.275 |
Dividend Yield (1) | 2.99% |
Shares Outstanding - basic (Wtd Avg. 3 mo. ended 3/31/2019) | 23,550 |
Shares Outstanding - diluted (Wtd Avg. 3 mo. ended 3/31/2019) | 24,044 |
(1) | As of the close of market trading on April 29, 2019. |
Portfolio Composition by Market
Market | | % of Units |
Dallas/Fort Worth | | 26.4% |
Atlanta | | 16.8% |
Nashville | | 14.2% |
Phoenix | | 14.0% |
Houston | | 9.0% |
Orlando | | 6.3% |
Charlotte | | 4.4% |
Tampa | | 4.4% |
West Palm Beach | | 3.3% |
D.C. Metro | | 1.2% |
Total | | 100.0% |
| | |
Revenue & Average Rent Per Unit | | Stock Price Performance (Since Inception; 4/1/2015) |
| | |
| | SIGNIFICANT APPRECIATION +188.6%  |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Highlights of Recent Activity
ACQUISITIONS
(dollar amounts in thousands)
Property Name | | Location | | Date of Acquisition | | Purchase Price | | | Mortgage Debt | | | # Units | |
Bella Vista | | Phoenix, Arizona | | January 28, 2019 | | $ | 48,400 | | | $ | 29,040 | | | | 248 | |
The Enclave | | Tempe, Arizona | | January 28, 2019 | | | 41,800 | | | | 25,322 | | | | 204 | |
The Heritage | | Phoenix, Arizona | | January 28, 2019 | | | 41,900 | | | | 24,625 | | | | 204 | |
| | | | | | $ | 132,100 | | | $ | 78,987 | | | | 656 | |
LEASED REHABS
CONSISTENT DEMAND FOR NXRT UPGRADED UNITS
5.1% RENT GROWTH | | | 4.6% RENT GROWTH |
| | | | | | | | | |
ON Q1’19 NEW LEASES | | | ON Q1’19 RENEWALS |
| | | | | | | | | |
Top 5 Markets | New Leases | % Increase | Rent Increase | | | Top 5 Markets | Renewals | % Increase | Rent Increase |
Phoenix | 138 | 13.2% | $115 | | | Phoenix | 165 | 8.9% | $70 |
Charlotte | 71 | 8.3% | $76 | | | Charlotte | 68 | 5.9% | $55 |
DC Metro | 22 | 7.9% | $88 | | | Orlando | 106 | 5.3% | $58 |
Orlando | 109 | 7.7% | $84 | | | Tampa | 83 | 5.2% | $47 |
Atlanta | 202 | 6.7% | $70 | | | DC Metro | 18 | 4.9% | $54 |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Financial Summary
| | Q1 2019 | | | Q1 2018 | | | FY 2018 | | | FY 2017 | |
(in thousands, except for per share and unit data) | | | | | | | | | | | | | | | | |
Company Profile | | | | | | | | | | | | | | | | |
Market Capitalization | | $ | 906,000 | | | $ | 520,000 | | | $ | 824,000 | | | $ | 588,000 | |
Share Price (as of the last day of the period) | | $ | 38.34 | | | $ | 24.84 | | | $ | 35.05 | | | $ | 27.94 | |
Weighted average common shares outstanding - basic | | | 23,550 | | | | 20,987 | | | | 21,189 | | | | 21,057 | |
Weighted average common shares outstanding - diluted | | | 24,044 | | | | 21,430 | | | | 21,667 | | | | 21,399 | |
| | | | | | | | | | | | | | | | |
Earnings Profile | | | | | | | | | | | | | | | | |
Total revenues | | $ | 41,491 | | | $ | 35,057 | | | $ | 146,597 | | | $ | 144,235 | |
Net income (loss) attributable to common stockholders | | | (4,360 | ) | | | 10,064 | | | | (1,609 | ) | | | 53,374 | |
NOI (1) | | | 23,587 | | | | 19,127 | | | | 80,175 | | | | 76,578 | |
Same Store NOI (2) | | | 20,417 | | | | 19,085 | | | | 67,907 | | | | 63,246 | |
Same Store NOI Growth (%) (2) | | | 7.0 | % | | | | | | | 7.4 | % | | | | |
| | | | | | | | | | | | | | | | |
Earnings Metrics Per Common Share (diluted basis) | | | | | | | | | | | | | | | | |
Earnings (loss) | | $ | (0.19 | ) | | $ | 0.47 | | | $ | (0.08 | ) | | $ | 2.49 | |
FFO (1) | | $ | 0.46 | | | $ | 0.36 | | | $ | 1.48 | | | $ | 1.17 | |
Core FFO (1) | | $ | 0.46 | | | $ | 0.39 | | | $ | 1.62 | | | $ | 1.41 | |
AFFO (1) | | $ | 0.53 | | | $ | 0.45 | | | $ | 1.88 | | | $ | 1.62 | |
Dividends declared per common share | | $ | 0.275 | | | $ | 0.250 | | | $ | 1.025 | | | $ | 0.910 | |
FFO Coverage (3) | | 1.66x | | | 1.44x | | | 1.44x | | | 1.29x | |
Core FFO Coverage (3) | | 1.67x | | | 1.54x | | | 1.58x | | | 1.55x | |
AFFO Coverage (3) | | 1.92x | | | 1.78x | | | 1.84x | | | 1.79x | |
| | | | | | | | | | | | | | | | |
Portfolio | | | | | | | | | | | | | | | | |
Total Properties | | | 38 | | | | 32 | | | | 35 | | | | 33 | |
Total Units | | | 13,211 | | | | 11,471 | | | | 12,555 | | | | 11,775 | |
Occupancy | | | 93.6 | % | | | 94.0 | % | | | 94.6 | % | | | 93.8 | % |
Average Effective Monthly Rent per Unit | | $ | 1,007 | | | $ | 958 | | | $ | 985 | | | $ | 948 | |
| | | | | | | | | | | | | | | | |
Same Store Portfolio Metrics (2) | | | | | | | | | | | | | | | | |
Total Same Store Properties | | | 32 | | | | 32 | | | | 29 | | | | 29 | |
Total Same Store Units | | | 11,471 | | | | 11,471 | | | | 10,123 | | | | 10,123 | |
Occupancy | | | 93.6 | % | | | 94.0 | % | | | 94.5 | % | | | 93.9 | % |
Average Effective Monthly Rent per Unit | | $ | 996 | | | $ | 958 | | | $ | 963 | | | $ | 925 | |
| | | | | | | | | | | | | | | | |
Value-Add Program | | | | | | | | | | | | | | | | |
Completed Rehab Units | | | 245 | | | | 298 | | | | 1,432 | | | | 1,588 | |
Cumulative Completed Rehab Units (4) | | | 5,906 | | | | | | | | | | | | | |
Average Increase to Effective Monthly Rent per Unit (Post-Rehab) | | $ | 97 | | | | | | | | | | | | | |
ROI on Post-Rehab Units | | | 23.3 | % | | | | | | | | | | | | |
| | | | | | | | | | | | | | | | |
Outstanding Debt Summary | | | | | | | | | | | | | | | | |
Total Mortgage Debt | | $ | 924,463 | | | $ | 744,473 | | | | | | | | | |
Credit Facilities | | | 52,500 | | | | 30,000 | | | | | | | | | |
Bridge Facility | | | — | | | | — | | | | | | | | | |
Total Debt Outstanding | | $ | 976,963 | | | $ | 774,473 | | | | | | | | | |
Leverage Ratio (Net Debt to Enterprise Value) (5) | | | 51 | % | | | 59 | % | | | | | | | | |
(1) | For more information and reconciliations of NOI, FFO, Core FFO and AFFO, see the “FFO, Core FFO and AFFO” and “Definitions and Reconciliations of Non-GAAP Measures” sections of this release. |
(2) | We define “Same Store” properties as properties that were in our Portfolio for the periods being compared. For additional information regarding our Q1 Same Store properties, see the “Q1 Same Store Results” section of this release. |
(3) | Indicates coverage ratio of FFO/Core FFO/AFFO per common share (diluted) over dividends declared per common share during the period. |
(4) | Inclusive of all full and partial interior upgrades completed through March 31, 2019. Cumulative results exclude rehabs completed for properties sold through March 31, 2019. |
(5) | For more information and a reconciliation of debt to net debt, see the “Definitions and Reconciliations of Non-GAAP Measures” section of this release. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
2019 Full Year Guidance Summary
NXRT is reaffirming 2019 guidance ranges for Loss per diluted share, Core FFO per diluted share, Same Store Rental Income, Same Store Total Revenue, Same Store Total Expenses, and Same Store NOI as follows:
| | Guidance Range (1) | |
| | Low-End | | | Mid-Point | | | High-End | |
Loss per diluted share (2) | | $ | (0.76 | ) | | $ | (0.71 | ) | | $ | (0.66 | ) |
Core FFO per diluted share (2) (3) | | $ | 1.82 | | | $ | 1.87 | | | $ | 1.91 | |
| | | | | | | | | | | | |
Same Store Growth: (4) | | | | | | | | | | | | |
Rental Income | | | 4.0 | % | | | 4.5 | % | | | 5.0 | % |
Total Revenue | | | 4.5 | % | | | 5.0 | % | | | 5.5 | % |
Total Expenses | | | 3.3 | % | | | 3.8 | % | | | 4.3 | % |
Same Store NOI (3) | | | 5.0 | % | | | 6.0 | % | | | 7.0 | % |
| | | | | | | | | | | | |
Other Considerations: | | | | | | | | | | | | |
Acquisitions (5) | | $ | 150.0 | | | $ | 200.0 | | | $ | 250.0 | |
Dispositions | | $ | 75.0 | | | $ | 162.5 | | | $ | 250.0 | |
(1) | Full Year 2019 guidance forecast includes Same Store growth projections presented above, which takes into effect the acquisition of the Phoenix Portfolio, and the other acquisition and disposition assumptions presented above. |
(2) | Weighted average diluted share count estimate for full year 2019 is approximately 24.1 million. |
(3) | Same Store NOI and Core FFO are non-GAAP measures. For reconciliations of Full Year 2019 Same Store NOI and Core FFO guidance to net loss guidance, and a discussion of why we consider these non-GAAP measures useful, see the “Definitions and Reconciliations of Non-GAAP Measures” section of this release. |
(4) | Year-over-year growth for 2019 pro forma Same Store pool (32 properties). |
(5) | Includes the $132.1 million acquisition of the Phoenix Portfolio. |
Additional information on first quarter 2019 results and 2019 financial and earnings guidance is included in the following sections of this release.
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Components of Net Asset Value
(dollar and share amounts in thousands, except per share and per unit data)
REAL ESTATE VALUE BY MARKET
Property | NOI | | | Cap Rate Range (1) | | | Value Range (2) | |
Market | Contribution | | | Min | | Max | | | Min | | Max | |
Texas | | | | | | | | | | | | | | | | | |
Dallas/Fort Worth | 23.1% | | | 5.3% | | 5.8% | | | $ | 389,654 | | $ | 435,563 | |
Houston | 8.8% | | | 5.5% | | 5.9% | | | | 145,645 | | | 158,108 | |
| | | | | | | | | | | | | | | | | |
North Carolina | | | | | | | | | | | | | | | | | |
Charlotte | 4.3% | | | 5.2% | | 5.7% | | | | 73,933 | | | 83,516 | |
| | | | | | | | | | | | | | | | | |
Georgia | | | | | | | | | | | | | | | | | |
Atlanta | 16.8% | | | 5.2% | | 5.7% | | | | 285,510 | | | 322,517 | |
| | | | | | | | | | | | | | | | | |
Tennessee | | | | | | | | | | | | | | | | | |
Nashville | 14.5% | | | 5.4% | | 5.8% | | | | 244,389 | | | 268,077 | |
| | | | | | | | | | | | | | | | | |
Florida | | | | | | | | | | | | | | | | | |
Orlando | 7.4% | | | 5.0% | | 5.3% | | | | 137,584 | | | 147,442 | |
Tampa | 3.7% | | | 5.0% | | 5.3% | | | | 68,006 | | | 72,879 | |
West Palm Beach | 3.6% | | | 5.0% | | 5.3% | | | | 66,762 | | | 71,545 | |
| | | | | | | | | | | | | | | | | |
Washington D.C. | | | | | | | | | | | | | | | | | |
Other | 1.3% | | | 5.5% | | 5.8% | | | | 22,050 | | | 23,743 | |
| | | | | | | | | | | | | | | | | |
Arizona | | | | | | | | | | | | | | | | | |
Phoenix | 16.5% | | | 5.0% | | 5.3% | | | | 304,147 | | | 325,939 | |
Total / Ave | 100.0% | | | 5.2% | | 5.6% | | | $ | 1,737,680 | | $ | 1,909,329 | |
NAV SUMMARY
Component | | Min | | | Max | |
Tangible Assets | | | | | | | | |
Real Estate (2) | | $ | 1,737,680 | | | $ | 1,909,329 | |
Cash | | 20,536 | |
Restricted Cash - Renovation & Green Reserves (4) | | 8,863 | |
Renovation & Green Capital Expenditures (4) | | (8,863) | |
Cash Adjustments (5) | | (698) | |
Fair Market Value of Interest Rate Swaps | | 12,467 | |
Other Assets | | 16,109 | |
Value of Assets | | $ | 1,786,094 | | | $ | 1,957,743 | |
| | | | | | | | |
| | | | | | | | |
Tangible Liabilities | | | | | | | | |
Credit Facility (6) | | $52,500 | |
Mortgage Debt | | 924,463 | |
Total Outstanding Debt | | 976,963 | |
Forward 12-month Principal Payments (5) | | (698) | |
Total Outstanding Debt (FY 2019 Est.) | | 976,265 | |
Other Tangible Liabilities (at Book) | | 18,056 | |
Value of Liabilities | | $994,321 | |
Net Leverage (mid-point) | | 53% | |
Net Asset Value | | $ | 791,773 | | | $ | 963,422 | |
Shares outstanding - diluted (FY 2019 Est.) | | 24,100 | |
Est. NAV / Share | | $ | 32.85 | | | $ | 39.98 | |
NAV / Share (mid-point) | | $36.41 | |
NOI ESTIMATE
| | | | | | | | |
4Q 2018 NOI Actual | | 21,251 | |
1Q 2019 NOI Actual | | 23,587 | |
| | Low | | | High | |
Estimated 2Q 2019 NOI Guidance (3) | | | 23,750 | | | | 24,250 | |
FY 2019 NOI Guidance (3) | | $ | 97,000 | | | $ | 99,000 | |
IMPLIED VALUATION METRICS
| | Min | | | Max | |
Implied Real Estate Value | | $ | 1,737,680 | | | $ | 1,909,329 | |
No. of Units (March 31, 2019 E.) (2) | | 13,211 | |
Implied Value/Apartment Unit | | $ | 131.5 | | | $ | 144.5 | |
Implied Value/Apartment Unit (mid-point) | | $138.0 | |
(1) | Management estimates based on independent third party review of our properties. |
(2) | Estimated value ranges, based on Full Year 2019 NOI guidance, are presented for the existing Portfolio (38 properties at March 31, 2019). |
(3) | We anticipate net loss will be between $16.0 million and $18.0 million for the full year 2019 and between $5.0 million and $6.0 million for the second quarter of 2019. FY 2019 NOI Guidance takes into effect the acquisition of the Phoenix Portfolio and the other acquisition and disposition assumptions presented under “2019 Full Year Guidance Summary.” |
(4) | Includes approximately $6.2 million that is held for value-add upgrades and approximately $2.7 million that is escrowed to finance green property improvements; reduced by $8.9 million for estimated forward 12-month rehab and green capital expenditures. |
(5) | Includes approximately $0.7 million in forward 12-month principal payments. |
(6) On January 28, 2019, we, through NexPoint Residential Trust Operating Partnership, L.P. (the “OP”), entered into the $75 Million Credit Facility with SunTrust Bank and immediately drew $52.5 million to fund a portion of the purchase price of the Phoenix Portfolio.
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
| | March 31, 2019 | | | December 31, 2018 | |
| | (Unaudited) | | | | | |
ASSETS | | | | | | | | |
Operating Real Estate Investments | | | | | | | | |
Land | | $ | 231,170 | | | $ | 202,347 | |
Buildings and improvements | | | 1,038,797 | | | | 935,604 | |
Intangible lease assets | | | 2,438 | | | | 3,049 | |
Construction in progress | | | 1,594 | | | | 1,881 | |
Furniture, fixtures, and equipment | | | 66,661 | | | | 61,456 | |
Total Gross Operating Real Estate Investments | | | 1,340,660 | | | | 1,204,337 | |
Accumulated depreciation and amortization | | | (146,473 | ) | | | (134,124 | ) |
Total Net Operating Real Estate Investments | | | 1,194,187 | | | | 1,070,213 | |
Real estate held for sale, net of accumulated depreciation of $897 and $897, respectively | | | 17,347 | | | | 17,329 | |
Total Net Real Estate Investments | | | 1,211,534 | | | | 1,087,542 | |
Cash and cash equivalents | | | 20,536 | | | | 19,864 | |
Restricted cash | | | 17,747 | | | | 23,265 | |
Accounts receivable | | | 3,418 | | | | 3,340 | |
Prepaid and other assets | | | 3,807 | | | | 9,058 | |
Fair market value of interest rate swaps | | | 12,467 | | | | 18,141 | |
TOTAL ASSETS | | $ | 1,269,509 | | | $ | 1,161,210 | |
| | | | | | | | |
LIABILITIES AND STOCKHOLDERS' EQUITY | | | | | | | | |
Liabilities: | | | | | | | | |
Mortgages payable, net | | $ | 903,143 | | | $ | 824,702 | |
Mortgages payable held for sale, net | | | 13,269 | | | | 13,318 | |
Credit facility, net | | | 51,910 | | | | — | |
Accounts payable and other accrued liabilities | | | 5,795 | | | | 5,765 | |
Accrued real estate taxes payable | | | 5,480 | | | | 12,607 | |
Accrued interest payable | | | 3,210 | | | | 2,852 | |
Security deposit liability | | | 1,955 | | | | 1,889 | |
Prepaid rents | | | 1,616 | | | | 1,482 | |
Total Liabilities | | | 986,378 | | | | 862,615 | |
| | | | | | | | |
Redeemable noncontrolling interests in the Operating Partnership | | | 2,808 | | | | 2,567 | |
| | | | | | | | |
Stockholders' Equity: | | | | | | | | |
Preferred stock, $0.01 par value: 100,000,000 shares authorized; 0 shares issued | | | — | | | | — | |
Common stock, $0.01 par value: 500,000,000 shares authorized; 23,643,277 and 23,499,635 shares issued and outstanding, respectively | | | 235 | | | | 234 | |
Additional paid-in capital | | | 286,580 | | | | 285,511 | |
Accumulated earnings less dividends | | | (17,891 | ) | | | (6,764 | ) |
Accumulated other comprehensive income | | | 11,399 | | | | 17,047 | |
Total Stockholders' Equity | | | 280,323 | | | | 296,028 | |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | | $ | 1,269,509 | | | $ | 1,161,210 | |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share amounts)
(Unaudited)
| | For the Three Months Ended March 31, | |
| | 2019 | | | | | 2018 | |
Revenues | | | | | | | | | | |
Rental income | | $ | 36,322 | | | | | $ | 30,573 | |
Other income | | | 5,169 | | | | | | 4,484 | |
Total revenues | | | 41,491 | | | | | | 35,057 | |
Expenses | | | | | | | | | | |
Property operating expenses | | | 9,639 | | | | | | 8,877 | |
Real estate taxes and insurance | | | 5,758 | | | | | | 4,856 | |
Property management fees (1) | | | 1,240 | | | | | | 1,054 | |
Advisory and administrative fees (2) | | | 1,850 | | | | | | 1,838 | |
Corporate general and administrative expenses | | | 2,233 | | | | | | 1,813 | |
Property general and administrative expenses | | | 1,658 | | | | | | 1,547 | |
Depreciation and amortization | | | 15,398 | | | | | | 11,372 | |
Total expenses | | | 37,776 | | | | | | 31,357 | |
Operating income before gain on sales of real estate | | | 3,715 | | | | | | 3,700 | |
Gain on sales of real estate | | | — | | | | | | 13,742 | |
Operating income | | | 3,715 | | | | | | 17,442 | |
Interest expense | | | (8,088 | ) | | | | | (6,797 | ) |
Loss on extinguishment of debt and modification costs | | | — | | | | | | (551 | ) |
Net income (loss) | | | (4,373 | ) | | | | | 10,094 | |
Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership | | | (13 | ) | | | | | 30 | |
Net income (loss) attributable to common stockholders | | $ | (4,360 | ) | | | | $ | 10,064 | |
Other comprehensive income (loss) | | | | | | | | | | |
Unrealized gains (losses) on interest rate derivatives | | | (5,665 | ) | | | | | 7,761 | |
Total comprehensive income (loss) | | | (10,038 | ) | | | | | 17,855 | |
Comprehensive income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership | | | (30 | ) | | | | | 53 | |
Comprehensive income (loss) attributable to common stockholders | | $ | (10,008 | ) | | | | $ | 17,802 | |
| | | | | | | | | | |
Weighted average common shares outstanding - basic | | | 23,550 | | | | | | 20,987 | |
Weighted average common shares outstanding - diluted | | | 24,044 | | | | | | 21,430 | |
| | | | | | | | | | |
Earnings (loss) per share - basic | | $ | (0.19 | ) | | | | $ | 0.48 | |
Earnings (loss) per share - diluted | | $ | (0.19 | ) | | | | $ | 0.47 | |
| | | | | | | | | | |
Dividends declared per common share | | $ | 0.275 | | | | | $ | 0.250 | |
(1) | Fees incurred to an unaffiliated third party that is an affiliate of the noncontrolling limited partner of the OP. |
(2) | Fees incurred to the Company’s adviser. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Q1 Same Store Results of Operations for the Three Months Ended March 31, 2019 and 2018
There are 32 properties encompassing 11,471 units of apartment space, or approximately 87% of our Portfolio, in our same store pool for the three months ended March 31, 2019 and 2018 (our “Q1 Same Store” properties). Our Q1 Same Store properties exclude the following six properties in our Portfolio as of March 31, 2019: Cedar Pointe, Crestmont Reserve, Brandywine I & II, Bella Vista, The Enclave and The Heritage.
As of March 31, 2019, our Q1 Same Store properties were approximately 93.6% leased with a weighted average monthly effective rent per occupied apartment unit of $996, a year-over-year decrease of 40 bps and an increase of $38, respectively.
The following table reflects the revenues, property operating expenses and NOI for the three months ended March 31, 2019 and 2018 for our Q1 Same Store and Non-Same Store properties (dollars in thousands):
| | For the Three Months Ended March 31, | | | | | | | | | |
| | 2019 | | | 2018 | | | $ Change | | | % Change | |
Revenues | | | | | | | | | | | | | | | | |
Same Store | | | | | | | | | | | | | | | | |
Rental income | | $ | 31,784 | | | $ | 30,356 | | | $ | 1,428 | | | | 4.7 | % |
Other income | | | 4,695 | | | | 4,483 | | | | 212 | | | | 4.7 | % |
Same Store revenues | | | 36,479 | | | | 34,839 | | | | 1,640 | | | | 4.7 | % |
Non-Same Store | | | | | | | | | | | | | | | | |
Rental income | | | 4,538 | | | | 217 | | | | 4,321 | | | N/M | |
Other income | | | 474 | | | | 1 | | | | 473 | | | N/M | |
Non-Same Store revenues | | | 5,012 | | | | 218 | | | | 4,794 | | | N/M | |
Total revenues | | | 41,491 | | | | 35,057 | | | | 6,434 | | | | 18.4 | % |
| | | | | | | | | | | | | | | | |
Operating expenses | | | | | | | | | | | | | | | | |
Same Store | | | | | | | | | | | | | | | | |
Property operating expenses (1) | | | 8,580 | | | | 8,736 | | | | (156 | ) | | | -1.8 | % |
Real estate taxes and insurance | | | 5,225 | | | | 4,818 | | | | 407 | | | | 8.4 | % |
Property management fees (2) | | | 1,091 | | | | 1,045 | | | | 46 | | | | 4.4 | % |
Property general and administrative expenses (3) | | | 1,166 | | | | 1,155 | | | | 11 | | | | 1.0 | % |
Same Store operating expenses | | | 16,062 | | | | 15,754 | | | | 308 | | | | 2.0 | % |
Non-Same Store | | | | | | | | | | | | | | | | |
Property operating expenses (4) | | | 1,024 | | | | 117 | | | | 907 | | | N/M | |
Real estate taxes and insurance | | | 533 | | | | 38 | | | | 495 | | | N/M | |
Property management fees (2) | | | 149 | | | | 9 | | | | 140 | | | N/M | |
Property general and administrative expenses (5) | | | 136 | | | | 12 | | | | 124 | | | N/M | |
Non-Same Store operating expenses | | | 1,842 | | | | 176 | | | | 1,666 | | | N/M | |
Total operating expenses | | | 17,904 | | | | 15,930 | | | | 1,974 | | | | 12.4 | % |
| | | | | | | | | | | | | | | | |
NOI | | | | | | | | | | | | | | | | |
Same Store | | | 20,417 | | | | 19,085 | | | | 1,332 | | | | 7.0 | % |
Non-Same Store | | | 3,170 | | | | 42 | | | | 3,128 | | | N/M | |
Total NOI (6) | | $ | 23,587 | | | $ | 19,127 | | | $ | 4,460 | | | | 23.3 | % |
(1) | For the three months ended March 31, 2019 and 2018, excludes approximately $35,000 and $23,000, respectively, of casualty-related expenses. |
(2) | Fees incurred to an unaffiliated third party that is an affiliate of the noncontrolling limited partner of the OP. |
(3) | For the three months ended March 31, 2019 and 2018, excludes approximately $238,000 and $359,000, respectively, of expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees. |
(4) | For the three months ended March 31, 2018, excludes approximately $1,000 of casualty-related expenses. We did not have any casualty-related expenses for the three months ended March 31, 2019. |
(5) | For the three months ended March 31, 2019 and 2018, excludes approximately $118,000 and $21,000, respectively, of expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees. |
(6) | For additional information regarding NOI, see the “Definitions and Reconciliations of Non-GAAP Measures” section of this release. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
The following table contains additional information about our Q1 Same Store properties rent and occupancy metrics, revenues, operating expenses and NOI for the three months ended March 31, 2019 and 2018 (dollars in thousands, except for per unit data):
| | Q1 2019 | | | Q1 2018 | | | % Change | |
Same Store Total Units | | | 11,471 | | | | 11,471 | | | | | |
Same Store Occupied Units | | | 10,735 | | | | 10,785 | | | | | |
Same Store Ending Occupancy | | | 93.6 | % | | | 94.0 | % | | | -0.4 | % |
Same Store Average Rent per Unit | | $ | 996 | | | $ | 958 | | | | 4.0 | % |
| | | | | | | | | | | | |
Same Store Revenues | | | | | | | | | | | | |
Same Store Rental Income | | $ | 31,784 | | | $ | 30,356 | | | | 4.7 | % |
Same Store Other Income | | | 4,695 | | | | 4,483 | | | | 4.7 | % |
Total Same Store Revenues | | | 36,479 | | | | 34,839 | | | | 4.7 | % |
| | | | | | | | | | | | |
Same Store Operating Expenses | | | | | | | | | | | | |
Payroll | | | 3,660 | | | | 3,583 | | | | 2.1 | % |
Repairs & Maintenance | | | 2,985 | | | | 2,727 | | | | 9.5 | % |
Utilities | | | 1,935 | | | | 2,426 | | | | -20.2 | % |
Real Estate Taxes | | | 4,554 | | | | 4,147 | | | | 9.8 | % |
Insurance | | | 671 | | | | 671 | | | | 0.0 | % |
Property Management Fees | | | 1,091 | | | | 1,045 | | | | 4.4 | % |
Office Operations | | | 770 | | | | 753 | | | | 2.3 | % |
Marketing | | | 396 | | | | 402 | | | | -1.5 | % |
Total Same Store Operating Expenses | | | 16,062 | | | | 15,754 | | | | 2.0 | % |
| | | | | | | | | | | | |
Q1 Same Store NOI | | $ | 20,417 | | | $ | 19,085 | | | | 7.0 | % |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Q1 Same Store Properties Operating Metrics
(dollars in thousands, except for per unit data)
| | | | | | | | | | | | |
Properties by Market (1) | | Unit Count | | Average Effective Rent | Occupancy | Total Rental Income |
| | | | | | | | | | | | |
| | Total | | Q1 2019 | Q1 2018 | % Change | Q1 2019 | Q1 2018 | bps ∆ | Q1 2019 | Q1 2018 | % Change |
Texas | | | | | | | | | | | | |
Dallas | | 3,252 | | $947 | $919 | 3.0% | 93.3% | 93.5% | -20 | $8,596 | $8,274 | 3.9% |
Houston | | 1,184 | | 1,134 | 1,128 | 0.5% | 92.5% | 92.9% | -40 | 3,686 | 3,560 | 3.5% |
Average/Total | | 4,436 | | 997 | 975 | 2.3% | 93.1% | 93.3% | -20 | 12,282 | 11,834 | 3.8% |
| | | | | | | | | | | | |
North Carolina | | | | | | | | | | | | |
Charlotte | | 577 | | 950 | 910 | 4.4% | 95.1% | 96.2% | -110 | 1,517 | 1,469 | 3.3% |
Average/Total | | 577 | | 950 | 910 | 4.4% | 95.1% | 96.2% | -110 | 1,517 | 1,469 | 3.3% |
| | | | | | | | | | | | |
Georgia | | | | | | | | | | | | |
Atlanta | | 2,220 | | 1,033 | 986 | 4.8% | 93.3% | 94.2% | -90 | 6,325 | 5,999 | 5.4% |
Average/Total | | 2,220 | | 1,033 | 986 | 4.8% | 93.3% | 94.2% | -90 | 6,325 | 5,999 | 5.4% |
| | | | | | | | | | | | |
Tennessee | | | | | | | | | | | | |
Nashville | | 1,038 | | 953 | 933 | 2.1% | 92.4% | 94.6% | -220 | 2,719 | 2,705 | 0.5% |
Average/Total | | 1,038 | | 953 | 933 | 2.1% | 92.4% | 94.6% | -220 | 2,719 | 2,705 | 0.5% |
| | | | | | | | | | | | |
Florida | | | | | | | | | | | | |
Orlando | | 830 | | 1,143 | 1,061 | 7.7% | 94.5% | 96.4% | -190 | 2,682 | 2,490 | 7.7% |
Tampa | | 576 | | 930 | 881 | 5.6% | 93.6% | 93.2% | 40 | 1,486 | 1,408 | 5.5% |
West Palm Beach | | 439 | | 1,197 | 1,135 | 5.5% | 95.9% | 94.3% | 160 | 1,482 | 1,405 | 5.5% |
Average/Total | | 1,845 | | 1,089 | 1,022 | 6.6% | 94.5% | 94.9% | -40 | 5,650 | 5,303 | 6.5% |
| | | | | | | | | | | | |
Washington D.C. | | | | | | | | | | | | |
D.C. Metro | | 156 | | 1,107 | 1,066 | 3.8% | 95.5% | 94.9% | 60 | 497 | 462 | 7.6% |
Average/Total | | 156 | | 1,107 | 1,066 | 3.8% | 95.5% | 94.9% | 60 | 497 | 462 | 7.6% |
| | | | | | | | | | | | |
Arizona | | | | | | | | | | | | |
Phoenix | | 1,199 | | 830 | 773 | 7.4% | 94.5% | 93.2% | 130 | 2,794 | 2,584 | 8.1% |
Average/Total | | 1,199 | | 830 | 773 | 7.4% | 94.5% | 93.2% | 130 | 2,794 | 2,584 | 8.1% |
| | | | | | | | | | | | |
Average/Total | | 11,471 | | $996 | $958 | 4.0% | 93.6% | 94.0% | -40 | $31,784 | $30,356 | 4.7% |
(1) | This table only includes the 32 properties in our Q1 Same Store pool. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
FFO, Core FFO and AFFO
The following table reconciles our calculations of FFO, Core FFO and AFFO to net income (loss), the most directly comparable GAAP financial measure, for the periods shown below (in thousands, except per share amounts):
| | For the Three Months Ended March 31, | | | For the Twelve Months Ended December 31, | |
| | 2019 | | | 2018 | | | 2018 | | | 2017 | |
Net income (loss) | | $ | (4,373 | ) | | $ | 10,094 | | | $ | (1,614 | ) | | $ | 56,359 | |
Depreciation and amortization | | | 15,398 | | | | 11,372 | | | | 47,470 | | | | 48,752 | |
Gain on sales of real estate | | | — | | | | (13,742 | ) | | | (13,742 | ) | | | (78,365 | ) |
Adjustment for noncontrolling interests | | | (33 | ) | | | (23 | ) | | | (96 | ) | | | (1,695 | ) |
FFO attributable to common stockholders | | | 10,992 | | | | 7,701 | | | | 32,018 | | | | 25,051 | |
| | | | | | | | | | | | | | | | |
FFO per share - basic | | $ | 0.47 | | | $ | 0.37 | | | $ | 1.51 | | | $ | 1.19 | |
FFO per share - diluted | | $ | 0.46 | | | $ | 0.36 | | | $ | 1.48 | | | $ | 1.17 | |
| | | | | | | | | | | | | | | | |
Loss on extinguishment of debt and modification costs | | | — | | | | 551 | | | | 3,576 | | | | 5,719 | |
Casualty-related expenses/(recoveries) | | | 35 | | | | 24 | | | | (663 | ) | | | (287 | ) |
Change in fair value on derivative instruments - ineffective portion | | | — | | | | — | | | | — | | | | (309 | ) |
Amortization of deferred financing costs - acquisition term notes | | | — | | | | 21 | | | | 159 | | | | 403 | |
Adjustment for noncontrolling interests | | | — | | | | (26 | ) | | | (9 | ) | | | (430 | ) |
Core FFO attributable to common stockholders | | | 11,027 | | | | 8,271 | | | | 35,081 | | | | 30,147 | |
| | | | | | | | | | | | | | | | |
Core FFO per share - basic | | $ | 0.47 | | | $ | 0.39 | | | $ | 1.66 | | | $ | 1.43 | |
Core FFO per share - diluted | | $ | 0.46 | | | $ | 0.39 | | | $ | 1.62 | | | $ | 1.41 | |
| | | | | | | | | | | | | | | | |
Amortization of deferred financing costs - long term debt | | | 432 | | | | 368 | | | | 1,491 | | | | 1,592 | |
Equity-based compensation expense | | | 1,235 | | | | 914 | | | | 4,198 | | | | 3,109 | |
Adjustment for noncontrolling interests | | | (5 | ) | | | (4 | ) | | | (17 | ) | | | (76 | ) |
AFFO attributable to common stockholders | | | 12,689 | | | | 9,549 | | | | 40,753 | | | | 34,772 | |
| | | | | | | | | | | | | | | | |
AFFO per share - basic | | $ | 0.54 | | | $ | 0.45 | | | $ | 1.92 | | | $ | 1.65 | |
AFFO per share - diluted | | $ | 0.53 | | | $ | 0.45 | | | $ | 1.88 | | | $ | 1.62 | |
| | | | | | | | | | | | | | | | |
Weighted average common shares outstanding - basic | | | 23,550 | | | | 20,987 | | | | 21,189 | | | | 21,057 | |
Weighted average common shares outstanding - diluted | | | 24,044 | | | | 21,430 | | | | 21,667 | | | | 21,399 | |
| | | | | | | | | | | | | | | | |
Dividends declared per common share | | $ | 0.275 | | | $ | 0.250 | | | $ | 1.025 | | | $ | 0.910 | |
| | | | | | | | | | | | | | | | |
FFO Coverage - diluted | (1) | 1.66x | | | 1.44x | | | | 1.44 | x | | | 1.29 | x |
Core FFO Coverage - diluted | (1) | 1.67x | | | 1.54x | | | | 1.58 | x | | | 1.55 | x |
AFFO Coverage - diluted | (1) | 1.92x | | | 1.78x | | | | 1.84 | x | | | 1.79 | x |
(1) | Indicates coverage ratio of FFO/Core FFO/AFFO per common share (diluted) over dividends declared per common share during the period. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
The three months ended March 31, 2019 as compared to the three months ended March 31, 2018
The change in our net loss of $4.3 million for the three months ended March 31, 2019 as compared to our net income of $10.1 million for the three months ended March 31, 2018 primarily relates to a decrease in gain on sales of real estate and an increase in total expenses and interest expense, and was partially offset by an increase in total revenues and decreases in loss on extinguishment of debt and modification costs. The change in our net loss between the periods was also due to our acquisition and disposition activity in 2019 and 2018 and the timing of the transactions (we acquired three properties in the first quarter of 2019; we sold one property in the first quarter of 2018).
FFO was $11.0 million for the three months ended March 31, 2019 compared to $7.7 million for the three months ended March 31, 2018, which was an increase of approximately $3.3 million. The change in our FFO between the periods primarily relates to an increase in total revenues of $6.4 million and a decrease in loss on extinguishment of debt and modification costs of $0.6 million. These were partially offset by an increase in property operating expenses of $2.0 million, an increase in advisory and administrative fees of $0.1 million, an increase in interest expense of $1.3 million, an increase in corporate general and administrative expenses of $0.4 million and adjustments for amounts attributable to noncontrolling interests.
Core FFO was $11.0 million for the three months ended March 31, 2019 compared to $8.3 million for the three months ended March 31, 2018, which was an increase of approximately $2.7 million. The change in our Core FFO between the periods primarily relates to an increase in FFO, partially offset by a decrease in loss on extinguishment of debt and modification costs of $0.6 million and adjustments for amounts attributable to noncontrolling interests.
AFFO was $12.7 million for the three months ended March 31, 2019 compared to $9.5 million for the three months ended March 31, 2018, which was an increase of approximately $3.2 million. The change in our AFFO between the periods primarily relates to increases in Core FFO and an increase in equity-based compensation expense of $0.3 million.
The year ended December 31, 2018 as compared to the year ended December 31, 2017
The change in our net loss of $1.6 million for the year ended December 31, 2018 as compared to our net income of $56.4 million for the year ended December 31, 2017 primarily relates to a decrease in gain on sales of real estate of $64.7 million, and was partially offset by an increase in total revenues of $2.4 million and decreases in total property operating expenses of $1.4 million, depreciation and amortization expense of $1.3 million and loss on extinguishment of debt and modification costs of $2.1 million. The change in our net income (loss) between the periods was also due to our acquisition and disposition activity in 2017 and 2018 and the timing of the transactions (we acquired one property in the first quarter of 2017, one property in the second quarter of 2017, one property in the fourth quarter of 2017 and three properties in the third quarter of 2018; we sold four properties in the second quarter of 2017, five properties in the third quarter of 2017 and one property in the first quarter of 2018).
FFO was $32.0 million for the year ended December 31, 2018 compared to $25.1 million for the year ended December 31, 2017, which was an increase of approximately $6.9 million. The change in our FFO between the periods primarily relates to increases in total revenues of $2.4 million and decreases in total property operating expenses of $1.4 million, interest expense of $1.0 million and loss on extinguishment of debt and modification costs of $2.1 million, partially offset by an increase in corporate general and administrative expenses of $1.5 million and adjustments for amounts attributable to noncontrolling interests.
Core FFO was $35.1 million for the year ended December 31, 2018 compared to $30.1 million for the year ended December 31, 2017, which was an increase of approximately $5.0 million. The change in our Core FFO between the periods primarily relates to an increase in FFO, partially offset by a decrease in loss on extinguishment of debt and modification costs of $2.1 million and adjustments for amounts attributable to noncontrolling interests.
AFFO was $40.8 million for the year ended December 31, 2018 compared to $34.8 million for the year ended December 31, 2017, which was an increase of approximately $6.0 million. The change in our AFFO between the periods primarily relates to increases in Core FFO and equity-based compensation expense of $1.1 million.
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Historical Capital Expenditures
| | Q1 2019 | | | Q1 2018 | | | % Change | | | FY 2018 | | | FY 2017 | | | % Change | |
($ in thousands) | | | | | | | | | | | | | | | | | | | | | | | | |
Capital Expenditures | | | | | | | | | | | | | | | | | | | | | | | | |
Acquisition Capital Expenditures | | $ | 132,100 | | | $ | — | | | N/A | | | $ | 130,980 | | | $ | 197,200 | | | | -33.6 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capitalized Rehab Expenditures | | | | | | | | | | | | | | | | | | | | | | | | |
Interior | | | 2,488 | | | | 1,516 | | | | 64.1 | % | | | 8,559 | | | | 8,393 | | | | 2.0 | % |
Exterior and common area | | | 1,785 | | | | 2,449 | | | | -27.1 | % | | | 9,133 | | | | 7,621 | | | | 19.8 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Capitalized Maintenance Expenditures | | | | | | | | | | | | | | | | | | | | | | | | |
Recurring | | | 1,081 | | | | 729 | | | | 48.3 | % | | | 4,954 | | | | 4,723 | | | | 4.9 | % |
Non-Recurring | | | 864 | | | | 503 | | | | 71.8 | % | | | 5,805 | | | | 3,782 | | | | 53.5 | % |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total Capital Expenditures | | $ | 138,318 | | | $ | 5,197 | | | | N/M | | | $ | 159,431 | | | $ | 221,719 | | | | -28.1 | % |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Value-Add Program Details
Property Name (1) | | Units | | | Rehab Units Completed (2) | | | Average Rent Pre-Rehab | | | Average Rent Post-Rehab | | | Avg. Rehab Cost Per Unit (3) | | | Post-Rehab Rent Change % | | | ROI (3) | |
Completed Value-Add Programs | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Southpoint Reserve at Stoney Creek (4) | | | 156 | | | | 55 | | | $ | 990 | | | $ | 1,096 | | | $ | 7,428 | | | | 10.7 | % | | | 17.1 | % |
Total/Weighted Average | | | 156 | | | | 55 | | | $ | 990 | | | $ | 1,096 | | | $ | 7,428 | | | | 10.7 | % | | | 17.1 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Value-Add Programs In Progress | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Abbington Heights | | | 274 | | | | 183 | | | $ | 794 | | | $ | 894 | | | $ | 4,667 | | | | 12.6 | % | | | 25.7 | % |
Arbors on Forest Ridge | | | 210 | | | | 191 | | | | 803 | | | | 880 | | | | 3,137 | | | | 9.6 | % | | | 29.4 | % |
Atera Apartments | | | 380 | | | | 98 | | | | 1,209 | | | | 1,360 | | | | 3,312 | | | | 12.5 | % | | | 54.7 | % |
Beechwood Terrace | | | 300 | | | | 236 | | | | 881 | | | | 971 | | | | 4,904 | | | | 10.2 | % | | | 22.0 | % |
Belmont at Duck Creek | | | 240 | | | | 194 | | | | 932 | | | | 1,024 | | | | 3,666 | | | | 9.9 | % | | | 30.2 | % |
Cedar Pointe | | | 210 | | | | 15 | | | | 991 | | | | 1,176 | | | | 12,259 | | | | 18.6 | % | | | 18.1 | % |
Cornerstone | | | 430 | | | | 237 | | | | 934 | | | | 1,015 | | | | 5,445 | | | | 8.6 | % | | | 17.7 | % |
Courtney Cove | | | 324 | | | | 132 | | | | 811 | | | | 913 | | | | 4,783 | | | | 12.6 | % | | | 25.7 | % |
Crestmont Reserve | | | 242 | | | | 1 | | | | 938 | | | | 1,044 | | | | 8,153 | | | | 11.4 | % | | | 15.7 | % |
Cutter's Point | | | 196 | | | | 174 | | | | 1,005 | | | | 1,103 | | | | 4,535 | | | | 9.7 | % | | | 25.8 | % |
Eagle Crest | | | 447 | | | | 118 | | | | 787 | | | | 868 | | | | 2,653 | | | | 10.3 | % | | | 36.5 | % |
Edgewater at Sandy Springs | | | 760 | | | | 408 | | | | 882 | | | | 991 | | | | 7,504 | | | | 12.3 | % | | | 17.4 | % |
Heatherstone | | | 152 | | | | 158 | | | | 805 | | | | 882 | | | | 4,215 | | | | 9.6 | % | | | 22.0 | % |
Hollister Place | | | 260 | | | | 160 | | | | 920 | | | | 1,068 | | | | 3,112 | | | | 16.0 | % | | | 57.0 | % |
Madera Point | | | 256 | | | | 150 | | | | 817 | | | | 909 | | | | 3,997 | | | | 11.3 | % | | | 27.8 | % |
Parc500 | | | 217 | | | | 113 | | | | 1,170 | | | | 1,346 | | | | 13,752 | | | | 15.1 | % | | | 15.4 | % |
Radbourne Lake | | | 275 | | | | 275 | | | | 1,000 | | | | 1,050 | | | | 969 | | | | 5.0 | % | | | 61.9 | % |
Rockledge Apartments | | | 87 | | | | 87 | | | | 1,056 | | | | 1,257 | | | | 10,941 | | | | 19.0 | % | | | 22.0 | % |
Sabal Palm at Lake Buena Vista | | | 211 | | | | 211 | | | | 1,134 | | | | 1,214 | | | | 641 | | | | 7.1 | % | | | 150.5 | % |
Seasons 704 Apartments | | | 134 | | | | 134 | | | | 1,054 | | | | 1,126 | | | | 5,903 | | | | 6.9 | % | | | 14.7 | % |
Silverbrook | | | 460 | | | | 460 | | | | 797 | | | | 863 | | | | 3,033 | | | | 8.3 | % | | | 26.2 | % |
The Ashlar | | | 264 | | | | 302 | | | | 829 | | | | 898 | | | | 3,620 | | | | 8.3 | % | | | 22.9 | % |
The Colonnade | | | 415 | | | | 74 | | | | 668 | | | | 930 | | | | 10,966 | | | | 39.2 | % | | | 28.7 | % |
The Pointe at the Foothills | | | 528 | | | | 63 | | | | 913 | | | | 948 | | | | 1,940 | | | | 3.8 | % | | | 21.6 | % |
The Preserve at Terrell Mill | | | 752 | | | | 426 | | | | 772 | | | | 908 | | | | 8,698 | | | | 17.7 | % | | | 18.8 | % |
The Summit at Sabal Park | | | 252 | | | | 193 | | | | 889 | | | | 974 | | | | 4,579 | | | | 9.5 | % | | | 22.1 | % |
Timber Creek | | | 352 | | | | 82 | | | | 847 | | | | 972 | | | | 7,115 | | | | 14.8 | % | | | 21.1 | % |
Venue at 8651 | | | 333 | | | | 290 | | | | 839 | | | | 917 | | | | 4,241 | | | | 9.2 | % | | | 21.9 | % |
Versailles | | | 388 | | | | 450 | | | | 830 | | | | 902 | | | | 3,717 | | | | 8.7 | % | | | 23.4 | % |
Willow Grove | | | 244 | | | | 139 | | | | 839 | | | | 943 | | | | 5,449 | | | | 12.4 | % | | | 22.9 | % |
Woodbridge | | | 220 | | | | 97 | | | | 951 | | | | 1,040 | | | | 5,353 | | | | 9.4 | % | | | 20.1 | % |
Total/Weighted Average | | | 9,813 | | | | 5,851 | | | $ | 881 | | | $ | 978 | | | $ | 4,972 | | | | 11.0 | % | | | 23.4 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total/Weighted Average Completed | | | 9,969 | | | | 5,906 | | | $ | 882 | | | $ | 979 | | | $ | 4,995 | | | | 11.0 | % | | | 23.3 | % |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Planned Value-Add Programs | | | | | | | | | | Projected Avg. Rent | | | | | | | Rent Change & ROI (Projections) | |
Old Farm | | | 734 | | | | — | | | $ | 1,226 | | | $ | 1,316 | | | TBD | | | | 7.3 | % | | TBD | |
Stone Creek at Old Farm | | | 190 | | | | — | | | | 1,261 | | | | 1,305 | | | TBD | | | | 3.5 | % | | TBD | |
Brandywine I & II | | | 632 | | | | — | | | | 959 | | | | 1,079 | | | TBD | | | | 12.5 | % | | TBD | |
Bella Vista | | | 248 | | | | — | | | | 1,203 | | | | 1,351 | | | TBD | | | | 12.3 | % | | TBD | |
The Enclave | | | 204 | | | | — | | | | 1,239 | | | | 1,369 | | | TBD | | | | 10.5 | % | | TBD | |
The Heritage | | | 204 | | | | — | | | | 1,210 | | | | 1,356 | | | TBD | | | | 12.1 | % | | TBD | |
Total/Weighted Average Planned | | | 2,212 | | | | — | | | $ | 1,150 | | | $ | 1,260 | | | TBD | | | | 9.6 | % | | TBD | |
(1) | We do not plan to upgrade 100% of the units at each of our properties. |
(2) | Inclusive of all full and partial interior upgrades completed through March 31, 2019. |
(3) | Inclusive of all full and partial interior upgrades completed and leased through March 31, 2019. |
(4) | Property was classified as held for sale as of March 31, 2019.
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Outstanding Debt Details
Mortgage Debt
The following table contains summary information concerning the mortgage debt of the Company as of March 31, 2019 (dollars in thousands):
Operating Properties | | Type | | Term (months) | | | Outstanding Principal (1) | | | Interest Rate (2) | | | Maturity Date |
Arbors on Forest Ridge | | Floating | | | 84 | | | $ | 13,130 | | | 4.17% | | | 7/1/2024 |
Cutter's Point | | Floating | | | 84 | | | | 16,640 | | | 4.17% | | | 7/1/2024 |
Eagle Crest | | Floating | | | 84 | | | | 29,510 | | | 4.17% | | | 7/1/2024 |
Silverbrook | | Floating | | | 84 | | | | 30,590 | | | 4.17% | | | 7/1/2024 |
Edgewater at Sandy Springs | | Floating | | | 84 | | | | 52,000 | | | 4.17% | | | 7/1/2024 |
Beechwood Terrace | | Floating | | | 84 | | | | 23,365 | | | 3.93% | | | 9/1/2025 |
Willow Grove | | Floating | | | 84 | | | | 14,818 | | | 4.27% | | | 7/1/2024 |
Woodbridge | | Floating | | | 84 | | | | 13,677 | | | 4.27% | | | 7/1/2024 |
The Summit at Sabal Park | | Floating | | | 84 | | | | 13,560 | | | 4.11% | | | 7/1/2024 |
Courtney Cove | | Floating | | | 84 | | | | 13,680 | | | 4.11% | | | 7/1/2024 |
The Preserve at Terrell Mill | | Floating | | | 84 | | | | 42,480 | | | 4.11% | | | 7/1/2024 |
The Ashlar | | Floating | | | 84 | | | | 14,520 | | | 4.11% | | | 7/1/2024 |
Heatherstone | | Floating | | | 84 | | | | 8,880 | | | 4.11% | | | 7/1/2024 |
Versailles | | Floating | | | 84 | | | | 23,880 | | | 4.11% | | | 7/1/2024 |
Seasons 704 Apartments | | Floating | | | 84 | | | | 17,460 | | | 4.11% | | | 7/1/2024 |
Madera Point | | Floating | | | 84 | | | | 15,150 | | | 4.11% | | | 7/1/2024 |
The Pointe at the Foothills | | Floating | | | 84 | | | | 34,800 | | | 4.11% | | | 7/1/2024 |
Venue at 8651 | | Floating | | | 84 | | | | 13,734 | | | 4.27% | | | 7/1/2024 |
The Colonnade | | Floating | | | 84 | | | | 28,093 | | | 4.17% | | | 7/1/2024 |
Old Farm | | Floating | | | 84 | | | | 52,886 | | | 4.17% | | | 7/1/2024 |
Stone Creek at Old Farm | | Floating | | | 84 | | | | 15,274 | | | 4.17% | | | 7/1/2024 |
Timber Creek | | Floating | | | 84 | | | | 24,100 | | | 3.75% | | | 10/1/2025 |
Radbourne Lake | | Floating | | | 84 | | | | 20,000 | | | 3.78% | | | 10/1/2025 |
Sabal Palm at Lake Buena Vista | | Floating | | | 84 | | | | 42,100 | | | 3.79% | | | 9/1/2025 |
Abbington Heights | | Floating | | | 84 | | | | 16,920 | | | 3.74% | | | 9/1/2025 |
Belmont at Duck Creek | | Floating | | | 84 | | | | 17,760 | | | 3.88% | | | 6/1/2025 |
Cornerstone | | Fixed | | | 120 | | | | 22,112 | | | 4.24% | | | 3/1/2023 |
Parc500 | | Fixed | | | 120 | | | | 15,416 | | | 4.49% | | | 8/1/2025 |
Hollister Place | | Floating | | | 84 | | | | 14,811 | | | 3.83% | | | 10/1/2025 |
Rockledge Apartments | | Floating | | | 84 | | | | 68,100 | | | 4.06% | | | 7/1/2024 |
Atera Apartments | | Floating | | | 84 | | | | 29,500 | | | 3.97% | | | 11/1/2024 |
Cedar Pointe | | Floating | | | 84 | | | | 17,300 | | | 3.84% | | | 9/1/2025 |
Crestmont Reserve | | Floating | | | 84 | | | | 12,061 | | | 3.67% | | | 10/1/2025 |
Brandywine I & II | | Floating | | | 84 | | | | 43,835 | | | 3.67% | | | 10/1/2025 |
Bella Vista | | Floating | | | 84 | | | | 29,040 | | | 3.81% | | | 2/1/2026 |
The Enclave | | Floating | | | 84 | | | | 25,322 | | | 3.81% | | | 2/1/2026 |
The Heritage | | Floating | | | 84 | | | | 24,625 | | | 3.81% | | | 2/1/2026 |
| | | | | | | | $ | 911,129 | | | | | | | |
Fair market value adjustment | | | | | | | | | 608 | | | | | | | |
Deferred financing costs, net of accumulated amortization of $2,154 | | | | | | | | | (8,594 | ) | | | | | | |
| | | | | | | | $ | 903,143 | | | | | | | |
| | | | | | | | | | | | | | | | |
Held For Sale Property | | | | | | | | | | | | | | | | |
Southpoint Reserve at Stoney Creek | | Floating | | | 84 | | | | 13,334 | | | 4.60% | | | 1/1/2022 |
| | | | | | | | | | | | | | | | |
| | | | | | | | $ | 13,334 | | | | | | | |
Deferred financing costs, net of accumulated amortization of $100 | | | | | | | | | (65 | ) | | | | | | |
| | | | | | | | $ | 13,269 | | | | | | | |
(1) | Mortgage debt that is non-recourse to the Company and encumbers the multifamily properties. |
(2) | Interest rate is based on one-month LIBOR plus an applicable margin, except for fixed rate mortgage debt. One-month LIBOR as of March 31, 2019 was 2.4945%. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Credit Facility
The following table contains summary information concerning the Company’s credit facility as of March 31, 2019 (dollars in thousands):
| | Type | | Term (months) | | | Outstanding Principal | | | Interest Rate (1) | | | Maturity Date |
$75 Million Credit Facility | | Floating | | | 24 | | | $ | 52,500 | | | 4.74% | | | 1/28/2021 |
Deferred financing costs, net of accumulated amortization of $54 | | | | | | | | | (590 | ) | | | | | | |
| | | | | | | | $ | 51,910 | | | | | | | |
(1) | Interest rate is based on one-month LIBOR plus an applicable margin. One-month LIBOR as of March 31, 2019 was 2.4945%. |
Interest Rate Swap Agreements
As of March 31, 2019, 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 | | Notional | | | Fixed Rate (1) | | |
July 1, 2016 | | June 1, 2021 | | $ | 100,000 | | | | 1.1055 | % | |
July 1, 2016 | | June 1, 2021 | | | 100,000 | | | | 1.0210 | % | |
July 1, 2016 | | June 1, 2021 | | | 100,000 | | | | 0.9000 | % | |
September 1, 2016 | | June 1, 2021 | | | 100,000 | | | | 0.9560 | % | |
April 1, 2017 | | April 1, 2022 | | | 100,000 | | | | 1.9570 | % | |
May 1, 2017 | | April 1, 2022 | | | 50,000 | | | | 1.9610 | % | |
July 1, 2017 | | July 1, 2022 | | | 100,000 | | | | 1.7820 | % | |
| | | | $ | 650,000 | | | | 1.3388 | % | (2) |
(1) | The floating rate option for the interest rate swaps is one-month LIBOR. As of March 31, 2019, one-month LIBOR was 2.4945%. |
(2) | Represents the weighted average fixed rate of the interest rate swaps. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Debt Maturity Schedule
| | Payments Due by Period (in thousands) | |
| | Total | | | 2019 | | | 2020 | | | 2021 | | | 2022 | | | 2023 | | | Thereafter | |
Operating Properties Mortgage Debt | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Principal payments | | $ | 911,129 | | | $ | 535 | | | $ | 744 | | | $ | 782 | | | $ | 817 | | | $ | 20,598 | | | $ | 887,653 | |
Interest expense | (1) | | 192,521 | | | | 22,290 | | | | 29,659 | | | | 33,087 | | | | 36,546 | | | | 36,349 | | | | 34,590 | |
Total | | $ | 1,103,650 | | | $ | 22,825 | | | $ | 30,403 | | | $ | 33,869 | | | $ | 37,363 | | | $ | 56,947 | | | $ | 922,243 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Held For Sale Property Mortgage Debt | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Principal payments | | $ | 13,334 | | | $ | 163 | | | $ | 239 | | | $ | 258 | | | $ | 12,674 | | | $ | — | | | $ | — | |
Interest expense | | | 1,674 | | | | 466 | | | | 611 | | | | 597 | | | | — | | | | — | | | | — | |
Total | | $ | 15,008 | | | $ | 629 | | | $ | 850 | | | $ | 855 | | | $ | 12,674 | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Credit Facility | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Principal payments | | $ | 52,500 | | | $ | — | | | $ | — | | | $ | 52,500 | | | $ | — | | | $ | — | | | $ | — | |
Interest expense | | | 4,384 | | | | 1,805 | | | | 2,402 | | | | 177 | | | | — | | | | — | | | | — | |
Total | | $ | 56,884 | | | $ | 1,805 | | | $ | 2,402 | | | $ | 52,677 | | | $ | — | | | $ | — | | | $ | — | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Total contractual obligations and commitments | | $ | 1,175,542 | | | $ | 25,259 | | | $ | 33,655 | | | $ | 87,401 | | | $ | 50,037 | | | $ | 56,947 | | | $ | 922,243 | |
(1) | Interest expense obligations includes the impact of expected settlements on interest rate swaps which have been entered into in order to fix the interest rate on the hedged portion of our floating rate debt obligations. As of March 31, 2019, we had entered into seven interest rate swap transactions with a combined notional amount of $650.0 million. We have allocated the total impact of expected settlements on the $650.0 million notional amount of interest rate swaps to ‘Operating Properties Mortgage Debt.’ We used one-month LIBOR as of March 31, 2019 to determine our expected settlements through the terms of the interest rate swaps. |
(1) | As of March 31, 2019, we had total indebtedness of $977.0 million at a weighted average interest rate of 3.28%, of which $939.4 million was debt with a floating interest rate. The interest rate swap agreements we have entered into effectively fix the interest rate on $650.0 million, or 73%, of our $886.9 million 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 1.3388% for one-month LIBOR on the $650.0 million notional amount of interest rate swap agreements that we have entered into as of March 31, 2019, which effectively fix the interest rate on $650.0 million of our floating rate mortgage debt outstanding. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Historical Acquisition Details
(in thousands, except for unit and per unit amounts) |
Property Name (1) | | Location | | Units | | Transaction Date | | Purchase Price | | Rehab Budget (2) | | Total Investment | | Per Unit |
Arbors on Forest Ridge | | Bedford, TX | | 210 | | 1/31/2014 | | $12,805 | | $1,449 | | $14,254 | | $67,876 |
Cutter's Point | | Richardson, TX | | 196 | | 1/31/2014 | | 15,845 | | 1,357 | | 17,202 | | 87,765 |
Eagle Crest | | Irving, TX | | 447 | | 1/31/2014 | | 27,325 | | 1,120 | | 28,445 | | 63,635 |
Silverbrook | | Grand Prairie, TX | | 642 | | 1/31/2014 | | 30,400 | | 1,661 | | 32,061 | | 49,939 |
Edgewater at Sandy Springs | | Atlanta, GA | | 760 | | 7/18/2014 | | 58,000 | | 5,281 | | 63,281 | | 83,264 |
Beechwood Terrace | | Antioch, TN | | 300 | | 7/21/2014 | | 21,400 | | 1,815 | | 23,215 | | 77,383 |
Willow Grove | | Nashville, TN | | 244 | | 7/21/2014 | | 13,750 | | 2,116 | | 15,866 | | 65,025 |
Woodbridge | | Nashville, TN | | 220 | | 7/21/2014 | | 16,000 | | 1,641 | | 17,641 | | 80,186 |
Abbington Heights | | Antioch, TN | | 274 | | 8/1/2014 | | 17,900 | | 1,617 | | 19,517 | | 71,230 |
The Summit at Sabal Park | | Tampa, FL | | 252 | | 8/20/2014 | | 19,050 | | 1,656 | | 20,706 | | 82,167 |
Courtney Cove | | Tampa, FL | | 324 | | 8/20/2014 | | 18,950 | | 1,691 | | 20,641 | | 63,707 |
Radbourne Lake | | Charlotte, NC | | 225 | | 9/30/2014 | | 24,250 | | 1,438 | | 25,688 | | 114,169 |
Timber Creek | | Charlotte, NC | | 352 | | 9/30/2014 | | 22,750 | | 4,334 | | 27,084 | | 76,943 |
Belmont at Duck Creek | | Garland, TX | | 240 | | 9/30/2014 | | 18,525 | | 1,174 | | 19,699 | | 82,079 |
Sabal Palm at Lake Buena Vista | | Orlando, FL | | 400 | | 11/5/2014 | | 49,500 | | 1,346 | | 50,846 | | 127,115 |
Southpoint Reserve at Stoney Creek (3) | | Fredericksburg, VA | | 156 | | 12/18/2014 | | 17,000 | | 1,737 | | 18,737 | | 120,109 |
Cornerstone | | Orlando, FL | | 430 | | 1/15/2015 | | 31,550 | | 2,662 | | 34,212 | | 79,563 |
The Preserve at Terrell Mill | | Marietta, GA | | 752 | | 2/6/2015 | | 58,000 | | 6,688 | | 64,688 | | 86,021 |
The Ashlar | | Dallas, TX | | 264 | | 2/26/2015 | | 16,235 | | 2,165 | | 18,400 | | 69,697 |
Heatherstone | | Dallas, TX | | 152 | | 2/26/2015 | | 9,450 | | 1,648 | | 11,098 | | 73,013 |
Versailles | | Dallas, TX | | 388 | | 2/26/2015 | | 26,165 | | 3,917 | | 30,082 | | 77,531 |
Seasons 704 Apartments | | West Palm Beach, FL | | 222 | | 4/15/2015 | | 21,000 | | 1,900 | | 22,900 | | 103,153 |
Madera Point | | Mesa, AZ | | 256 | | 8/5/2015 | | 22,525 | | 1,808 | | 24,333 | | 95,051 |
The Pointe at the Foothills | | Mesa, AZ | | 528 | | 8/5/2015 | | 52,275 | | 1,372 | | 53,647 | | 101,604 |
Venue at 8651 | | Fort Worth, TX | | 333 | | 10/30/2015 | | 19,250 | | 4,592 | | 23,842 | | 71,598 |
Parc500 | | West Palm Beach, FL | | 217 | | 7/27/2016 | | 22,421 | | 5,082 | | 27,503 | | 126,742 |
The Colonnade | | Phoenix, AZ | | 415 | | 10/11/2016 | | 44,600 | | 6,018 | | 50,618 | | 121,971 |
Old Farm | | Houston, TX | | 734 | | 12/29/2016 | | 84,721 | | 1,135 | | 85,856 | | 116,970 |
Stone Creek at Old Farm | | Houston, TX | | 190 | | 12/29/2016 | | 23,332 | | 456 | | 23,788 | | 125,200 |
Hollister Place | | Houston, TX | | 260 | | 2/1/2017 | | 24,500 | | 2,952 | | 27,452 | | 105,585 |
Rockledge Apartments | | Marietta, GA | | 708 | | 6/30/2017 | | 113,500 | | 7,685 | | 121,185 | | 171,165 |
Atera Apartments | | Dallas, TX | | 380 | | 10/25/2017 | | 59,200 | | 3,721 | | 62,921 | | 165,582 |
Cedar Pointe | | Antioch, TN | | 210 | | 8/24/2018 | | 26,500 | | 2,252 | | 28,752 | | 136,914 |
Crestmont Reserve | | Dallas, TX | | 242 | | 9/26/2018 | | 24,680 | | 2,797 | | 27,477 | | 113,541 |
Brandywine I & II | | Nashville, TN | | 632 | | 9/26/2018 | | 79,800 | | 7,762 | | 87,562 | | 138,547 |
Bella Vista | | Phoenix, AZ | | 248 | | 1/28/2019 | | 48,400 | | 3,414 | | 51,814 | | 208,927 |
The Enclave | | Tempe, AZ | | 204 | | 1/28/2019 | | 41,800 | | 2,608 | | 44,408 | | 217,686 |
The Heritage | | Phoenix, AZ | | 204 | | 1/28/2019 | | 41,900 | | 2,660 | | 44,560 | | 218,431 |
Total/Weighted Average | | | | 13,211 | | | | $1,275,254 | | $106,727 | | $1,381,981 | | $104,608 |
(1) | Only includes properties owned as of March 31, 2019. |
(2) | Includes interior and exterior rehab. |
(3) | Property was classified as held for sale as of March 31, 2019. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Historical Disposition Details
(in thousands, except unit and per unit amounts) | | | | | | | | | | | | | | | | | | | | | |
Property Name | | Location | | Units | | | Purchase Price | | | Sale Price | | | Per Unit | | | Sale Date | | Net Cash Proceeds (1) | | | Gain on Sale | |
Meridian | | Austin, TX | | | 200 | | | $ | 12,300 | | | $ | 17,250 | | | $ | 86,250 | | | 5/10/2016 | | $ | 16,981 | | | $ | 4,786 | |
Park at Regency and Mandarin Reserve | | Jacksonville, FL | | | 679 | | | | 34,500 | | | | 47,000 | | | | 69,219 | | | 6/6/2016 | | | 46,239 | | | | 11,584 | |
Park at Blanding and Colonial Forest | | Jacksonville, FL | | | 291 | | | | 12,000 | | | | 14,500 | | | | 49,828 | | | 8/31/2016 | | | 14,259 | | | | 2,007 | |
Willowdale Crossings | | Frederick, MD | | | 432 | | | | 41,000 | | | | 45,200 | | | | 104,630 | | | 9/15/2016 | | | 44,439 | | | | 5,576 | |
Jade Park | | Dayton Beach, FL | | | 144 | | | | 7,800 | | | | 10,000 | | | | 69,444 | | | 9/30/2016 | | | 9,868 | | | | 1,979 | |
The Miramar Apartments | | Dallas, TX | | | 314 | | | | 8,875 | | | | 16,550 | | | | 52,707 | | | 4/3/2017 | | | 16,326 | | | | 6,368 | |
Toscana | | Dallas, TX | | | 192 | | | | 8,875 | | | | 13,250 | | | | 69,010 | | | 4/3/2017 | | | 13,040 | | | | 4,283 | |
The Grove at Alban | | Frederick, MD | | | 290 | | | | 23,050 | | | | 27,500 | | | | 94,828 | | | 4/3/2017 | | | 27,021 | | | | 4,514 | |
Twelve 6 Ten at the Park | | Dallas, TX | | | 402 | | | | 20,984 | | | | 26,600 | | | | 66,169 | | | 4/27/2017 | | | 26,349 | | | | 4,731 | |
Regatta Bay | | Seabrook, TX | | | 240 | | | | 18,200 | | | | 28,200 | | | | 117,500 | | | 7/14/2017 | | | 27,670 | | | | 10,423 | |
NAVA Portfolio (2) | | Atlanta, GA | | | 1,100 | | | | 66,200 | | | | 116,000 | | | | 105,455 | | | 9/27/2017 | | | 114,010 | | | | 48,046 | |
Timberglen | | Dallas, TX | | | 304 | | | | 16,950 | | | | 30,000 | | | | 98,684 | | | 1/31/2018 | | | 29,553 | | | | 13,742 | |
Total/Weighted Average | | | | | 4,588 | | | $ | 270,734 | | | $ | 392,050 | | | $ | 85,451 | | | | | $ | 385,755 | | | $ | 118,039 | |
(1) | Represents sales price, net of closing costs. |
(2) | The NAVA Portfolio consists of The Arbors, The Crossings, The Crossings at Holcomb Bridge and The Knolls. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Definitions and Reconciliations of Non-GAAP Measures
Definitions
This presentation contains non-GAAP financial measures. A “non-GAAP financial measure” is defined as a numerical measure of a company’s financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flows of the Company. The non-GAAP financial measures used within this presentation are net operating income (“NOI”), funds from operations attributable to common stockholders (“FFO”), FFO per diluted share, Core FFO, Core FFO per diluted share, adjusted FFO (“AFFO”), AFFO per diluted share and net debt.
NOI is used by investors and our management to evaluate and compare the performance of our properties to other comparable properties, to determine trends in earnings and to compute the fair value of our properties. NOI is calculated by adjusting net income (loss) to add back (1) the cost of funds, (2) acquisition costs, (3) advisory and administrative fees, (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, (6) other gains and losses that are specific to us, (7) casualty-related expenses/(recoveries), and (8) property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on behalf of the Company at the property for expenses such as legal, professional and franchise tax fees. We define “Same Store NOI” as NOI for our properties that are comparable between periods. We view Same Store NOI as an important measure of the operating performance of our properties because it allows us to compare operating results of properties owned for the entirety of the current and comparable periods and therefore eliminates variations caused by acquisitions or dispositions during the periods.
FFO is defined by the National Association of Real Estate Investment Trusts (“NAREIT”), as net income (loss) 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 in accordance with NAREIT’s definition. Our presentation differs slightly in that we begin with net income (loss) before adjusting for amounts attributable to (1) noncontrolling interests in consolidated joint ventures and (2) redeemable noncontrolling interests in the OP and we show the combined amounts attributable to such noncontrolling interests as an adjustment to arrive at FFO attributable to common stockholders.
Core FFO makes certain adjustments to FFO, which are either not likely to occur on a regular basis or are otherwise not representative of the ongoing operating performance of our Portfolio. Core FFO adjusts FFO to remove items such as losses on extinguishment of debt and modification costs (includes prepayment penalties and defeasance costs incurred and the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt related to the retirement of debt and costs incurred in connection with a debt modification that are expensed), casualty-related expenses and recoveries, the amortization of deferred financing costs incurred in connection with obtaining short-term debt financing, the ineffective portion of fair value adjustments on our interest rate derivatives designated as cash flow hedges, and the noncontrolling interests related to these items.
AFFO makes certain adjustments to Core FFO. There is no industry standard definition of AFFO and practice is divergent across the industry. AFFO adjusts Core FFO to remove items such as equity-based compensation expense and the amortization of deferred financing costs incurred in connection with obtaining long-term debt financing, and the noncontrolling interests related to these items.
Net debt is calculated by subtracting cash and cash equivalents and restricted cash held for value-add upgrades and green improvements from total debt outstanding.
We believe that the use of NOI, FFO, Core FFO, AFFO and net debt, combined with the required GAAP presentations, improves the understanding of operating results and debt levels of real estate investment trusts (“REITs”) among investors and makes comparisons of operating results and debt levels among such companies more meaningful. While NOI, FFO, Core FFO, AFFO and net debt are relevant and widely used measures of operating performance and debt levels of REITs, they do not represent cash flows from operations, net income (loss) or total debt as defined by GAAP and should not be considered an alternative to those measures in evaluating our liquidity, operating performance and debt levels. NOI, FFO, Core FFO and AFFO do not purport to be indicative of cash available to fund our future cash requirements. We present net debt because we believe it provides our investors a better understanding of our leverage ratio. Net debt should not be considered an alternative to total debt, as we may not always be able to use our available cash to repay debt. Our computation of NOI, FFO, Core FFO, AFFO and net debt may not be comparable to NOI, FFO, Core FFO, AFFO and net debt reported by other REITs. For a more complete discussion of NOI, FFO, Core FFO and AFFO, see our most recent Annual Report on Form 10-K and our other filings with the SEC.
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Reconciliations
NOI and Same Store NOI
The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles NOI and our Same Store NOI to net income (loss) (the most directly comparable GAAP financial measure) for the periods shown below (in thousands):
| | | | | | | | | | | | | | | | | | | | |
| | Q1 2019 | | | Q4 2018 | | | Q1 2018 | | | FY 2018 | | | FY 2017 | |
Net income (loss) | | $ | (4,373 | ) | | $ | (4,782 | ) | | $ | 10,094 | | | $ | (1,614 | ) | | $ | 56,359 | |
Adjustments to reconcile net income (loss) to NOI: | | | | | | | | | | | | | | | | | | | | |
Advisory and administrative fees | | | 1,850 | | | | 1,888 | | | | 1,838 | | | | 7,474 | | | | 7,419 | |
Corporate general and administrative expenses | | | 2,233 | | | | 2,077 | | | | 1,813 | | | | 7,808 | | | | 6,275 | |
Casualty-related expenses | (1) | | 35 | | | | 39 | | | | 24 | | | | (663 | ) | | | (287 | ) |
Property general and administrative expenses | (2) | | 356 | | | | 364 | | | | 380 | | | | 1,294 | | | | 1,130 | |
Depreciation and amortization | | | 15,398 | | | | 13,832 | | | | 11,372 | | | | 47,470 | | | | 48,752 | |
Interest expense | | | 8,088 | | | | 7,833 | | | | 6,797 | | | | 28,572 | | | | 29,576 | |
Loss on extinguishment of debt and modification costs | | | — | | | | — | | | | 551 | | | | 3,576 | | | | 5,719 | |
Gain on sales of real estate | | | — | | | | — | | | | (13,742 | ) | | | (13,742 | ) | | | (78,365 | ) |
NOI | | $ | 23,587 | | | $ | 21,251 | | | $ | 19,127 | | | $ | 80,175 | | | $ | 76,578 | |
Less Non-Same Store | | | | | | | | | | | | | | | | | | | | |
Revenues | | | (5,012 | ) | | | (4,816 | ) | | | (218 | ) | | | (23,012 | ) | | | (25,765 | ) |
Operating expenses | | | 1,842 | | | | 2,238 | | | | 176 | | | | 10,744 | | | | 12,433 | |
Same Store NOI | | $ | 20,417 | | | $ | 18,673 | | | $ | 19,085 | | | $ | 67,907 | | | $ | 63,246 | |
(1) | Adjustment to net income (loss) to exclude certain property operating expenses that are casualty-related recoveries. |
(2) | Adjustment to net income (loss) to exclude certain property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees. |
Reconciliation of Debt to Net Debt
(dollar amounts in thousands) | | Q1 2019 | | | Q1 2018 | |
Total mortgage debt | | $ | 924,463 | | | $ | 744,473 | |
Credit facilities | | | 52,500 | | | | 30,000 | |
Bridge facility | | | — | | | | — | |
Adjustments to arrive at net debt: | | | | | | | | |
Cash and cash equivalents | | | (20,536 | ) | | | (13,935 | ) |
Restricted cash held for value-add upgrades and green improvements | | | (8,863 | ) | | | (4,703 | ) |
Net Debt | | $ | 947,564 | | | $ | 755,835 | |
Enterprise Value (1) | | $ | 1,853,564 | | | $ | 1,275,835 | |
Leverage Ratio | | | 51 | % | | | 59 | % |
(1) | Enterprise Value is calculated as Market Capitalization plus Net Debt. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
Reconciliations of NOI, Same Store NOI, FFO, Core FFO and AFFO
The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles NOI to net income (loss) (the most directly comparable GAAP financial measure) for the periods presented below (in thousands):
| | For the Year Ended December 31, 2019 | | | For the Three Months Ended June 30, 2019 | |
| | Guidance (1) | | | Guidance (1) | |
Net loss | | $ | (17,040 | ) | | $ | (5,640 | ) |
Adjustments to reconcile net loss to NOI: | | | | | | | | |
Advisory and administrative fees | | | 7,500 | | | | 1,870 | |
Corporate general and administrative expenses | | | 9,000 | | | | 2,400 | |
Property general and administrative expenses | (2) | | 1,295 | | | | 350 | |
Depreciation and amortization | | | 62,225 | | | | 16,350 | |
Interest expense | | | 34,170 | | | | 8,670 | |
NOI | | $ | 97,150 | | | $ | 24,000 | |
Less Non-Same Store | | | | | | | | |
Revenues | (3) | | (23,350 | ) | | | | |
Operating expenses | (3) | | 8,650 | | | | | |
Same Store NOI | (3) | $ | 82,450 | | | | | |
(1) | Estimates shown for full year and second quarter 2019 guidance. Assumptions made for full year and second quarter 2019 NOI guidance include the Same Store operating growth projections included in the “2019 Full Year Guidance Summary” section of this release, the effect of the acquisition of the Phoenix Portfolio, and the other acquisition and disposition assumptions presented under “2019 Full Year Guidance Summary.” |
(2) | Adjustment to net loss to exclude certain property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees. |
(3) | Amounts are derived from the results of operations of our pro forma Full Year 2019 Same Store properties and Non-Same Store properties. There are 32 properties in our pro forma Full Year 2019 Same Store pool. |
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NEXPOINT RESIDENTIAL TRUST, INC. [NYSE:NXRT]
The following table reconciles our FFO, Core FFO and AFFO guidance to our net loss (the most directly comparable GAAP financial measure) guidance for the year ended December 31, 2019 (in thousands, except per share data):
| | For the Year Ended December 31, 2019 | |
| | Mid-Point | |
Net loss | | $ | (17,040 | ) |
Depreciation and amortization | | | 62,225 | |
Adjustment for noncontrolling interests | | | (136 | ) |
FFO attributable to common stockholders | | | 45,049 | |
FFO per share - diluted (1) | | $ | 1.87 | |
| | | | |
Core FFO attributable to common stockholders | | | 45,049 | |
Core FFO per share - diluted (1) | | $ | 1.87 | |
| | | | |
Amortization of deferred financing costs - long term debt | | | 1,815 | |
Equity-based compensation expense | | | 5,165 | |
Adjustment for noncontrolling interests | | | (21 | ) |
AFFO attributable to common stockholders | | | 52,008 | |
AFFO per share - diluted (1) | | $ | 2.16 | |
| | | | |
Weighted average common shares outstanding - diluted | | | 24,100 | |
(1) | For purposes of calculating per share data, we assume a weighted average diluted share count of approximately 24.1 million for the full year 2019. |
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