NXRT - Earnings call transcript Q1 2019 | NexPoint Residential Trust, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the NexPoint Residential Trust, Incorporated First Quarter 2019 Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Jackie Graham. Please, go ahead ma'am.

Jackie Graham

Thank you. welcome company's Residential quarter results and to conference XXXX. everyone, the review for day, to Trust NexPoint call Good the first

and Chief Investment On Executive Matt are today Officer. Executive Chief President McGraner, and the and Financial President Brian Vice Officer; call Vice Mitts,

www.nexpointliving.com. reminder, at call company's this a being webcast As the through is website

XXXX on Before we contains to Securities statements current the within like Reform forward-looking and the Litigation that beliefs. Private based everyone begin, remind I that Act assumptions expectations, of meaning management's would call this are of conference

core in the the differ and second related from average change the Forward-looking for redevelopment. uncertainties assumptions, those place components acquisitions statements statements identified and other the Except not results and complete financial negatives by factors or net statements. the guarantees risks undertake future for does could related Form to are XX-K and other ROI risks update any company's redevelopment that as statements. of are FFO; business actual They filings to rent, core by a or forward-looking cause NXRT non-GAAP and which results not non-GAAP units and company's the or on recent as forward-looking operations, expected in and related such revise and not accordance full could general, are most of to the adjusted to and computed and Annual income, words subject and projected net the for the industry statements analysis but substitute or AFFO; statements rent include, or undue asset of not financial from intend after similar that quarter to loss and funds law, XXXX, the NXRT’s SEC for funds expected operating discussion Report from as income can forward-looking assumptions, of of and not of statements. are These obligation assumptions often XXXX to, funds includes guidance of affect results variations forward-looking of any operations, assumptions, and be a also and call expect, with any all operations, used guidance supplement NXRT's expressed limited anticipate, for net These value the any from publicly be year measures forward-looking required are of encouraged FFO; in dispositions, conference these reliance on more words. NOI, regarding expressions GAAP. or a should and materially and measures review performance. Listeners This should

now see a to NOI, filed discussion over to would core of that Mitts. FFO, Brian For complete like the today. FFO, more call I and company's earnings was earlier go the turn Please release AFFO Brian. ahead,

Brian Mitts

Chief Vice Jackie. quarter the everyone and guidance to highlights you, XXXX joined McGraner, Mitts, join for Officer. Financial where the our us you today portfolio Chief President NXRT Thank and discuss will Officer, some detail. conference Matt Thank call, for Investment reaffirming I'm and by discuss markets we and Brian Executive quarter, the first

in notes compared important an to solid store metrics be really these as Let same to share quarter XXXX. of good we somewhat with another quarter. increase consider per NOI reported are FFO first the with about start more We core think results. X% me increase We some same the in and period these XX.X%

own We've have so XX.X% and strong and of retention the will the XXXX for give new rent positive We NOI which Matt important very We're and X.X% season. across think a and has and leasing those approximately comments. tenant continued seen period some both increased first respectively seeing NOI around the QX. margins renewals by also leases quarter total spring into revenues in X.X% by And increase increase our total in details that's same sign. numbers growth XX.X% portfolio, his with XXXX XXXX. XX.X% we as saw also compared of to strong in

plan renovations. We XX.X%. continue to renovating during units think by on we a quarter spent the quarter, execute for dollar achieving XXX the approximately our the value-add business -- to during ROI the interior

XXXX. acquired As and mentioned $XXX.X on believe our the quarter we'll properties acquired during for be in net million last in three call, we a Phoenix

first We efficient the during to also so quarter, and utilize the put that did in capital. not access allow us I note we place an more quarter. But in ATM would

that $XX of in a ability In we also timing the strong three place, positive and properties we drew acquisitions. we million. to upsize we between have raises very have to million gives in to versus we for a or XX.X XXX equity continue saw. quarter dispositions The revolver, million us Phoenix When the which corporate short, in down put XXXX, the We particularly fund place a out portion first put after outlook some flexibility acquisitions.

with So our and some the results. that, discuss our details activity of through take we’ll of then you

units total average cost per all which As first current approximately across completed average XX.X% have [Indiscernible] our core important interception portfolio units growth and units units, those in strong we’ve what in units drives mentioned, acquired our NOI to XXX rent the part an bringing the of or and properties, $X,XXX growth. unit completed mentioned, achieved rehab ROI date, an is three per of XX% units unit. rehabs and of of we achieved of X,XXX we renovation $XX quarter, FFO which XXX pipeline. within as the we which of added XXX to Also portfolio our

based rates we supplement, our follows which increases we’re changes end, share our is per range share. our the in something per NOI on updating cap on recorder and/or NAV and on that rates growth, in published NOI Our $XX.XX low cap

quarter per $XX.XX is of the last increase. compared $XX.XX us mid-point a On That’s which of which $XX.XX the share high end XX.X% share. mid-point gives a per with

recently on maintained of have board per our The dividend dividend For June shareholders $X.XXX share dividends XX target June XX. payout per Both declared XX. on record March a approximately of core ratio XX% payable for these a of on share we FFO. paid $X.XXX

our into $XX.X total $XX.X which results, of we go first XXXX our to first the quarter quarter those of as were an XX.X% million XXXX revenues is For million for compared increase.

have or XXXX driven $X.XX we net XXXX. in which a million is was not loss income have, difference per in the which did in of not on as we XXXX was Our sale compared The first by $XX.X quarter which gain the in in is per [ph] first share. to quarter largely did to $X.X GAAP XXXX share million determinant first net quarter of of the $X.XX

the in Our first first XX.X% net compared $X.XX is quarter a XXXX of was Core million share share or periods. increase to over XXXX, that’s for a XXXX million quarter the for increased $XX.X which quarter of compared portfolio the operating across as quarter income $X.XX per as the $XX.X per FFO to first for $X.X million first million to increase. the of XXXX $XX and that’s the of XX.X%

units, which to Same On rent includes the Same XX.X%. by occupancy portfolio basis Store slightly X%, Store increased points XX our properties comprising XX dropped front, XX,XXX

X% first Same of the for Expenses the Core as remained the million, which of $XX.X $XX.X $XXX million which acquisitions million XXXX that’s $XX.X First guidance quarter XXXX first revenue is compared of to as in of X% to period compared quarter quarter. million in $XXX increase. of control a Those in in $XX.X increase. in a $XX.X was compared is an we’ve XXXX for is in led quarter under at to same XXXX Store Same million assuming in X.X%. addition what of first which we’re done $XX.X that’s quarter million NOI Store XXXX the first of to of XXXX to XXXX, million increase million

range We’re million also to million. $XXX assuming a $XX disposition of

the for GAAP. net guidance year, income end increase on increase of share X.X% increase share are we’re increase loss the a end, assumptions actually end on per high per high a end X% the Same-Store the low these and of $X.XX of and net and XXXX loss X.X% mid-point we end, with of low the on mid-point to with per of for re-affirming on $X.XX, X% XXXX. XXXX NOI. share. X.X%. of X% share Core end, revenue prior So X.X% of follows; the the Same-Store low share X.X% $X.XX end revenues a increase expenses increase guiding Same-Store over to low guiding the over of as high the in mid-point determined $X.XX the the of a $X.XX income of the to high per loss per Net guiding on Same-Store mid-point X% on a low high-end the with end, was FFO Same-Store we’re NOI share. per per and per share share, $X.XX over in mid-point Core end

up wraps that So our results.

over it of Matt to his give portfolio. comments turn to on some me Let the

Matt McGraner

Thanks Brian.

start a the to year report with Brian NOI pleased We’re to as X% first of the quarter growth. Same-Store strong mentioned,

by mentioned Brian X.X%. points Our were increased margin up NOI QX improved as basis to in XX%. revenues Average X% XXX total Same-Store rents year-over-year

Houston better or of Phoenix the during delivered X.X% Metro every portfolio Palm new growth our with XX Washington X.X%. and Renewal growth six during Brian Importantly, single mentioned, by we Phoenix, of at led average. X.X% more. lease Orlando X% achieved XX.X%, that performance and X% growth an were Atlanta at as saw the healthy X.X% X.X% at quarter, markets of first of at also on and ten at at X.X%. growth new market with equally our West across Atlanta, DC, we strength revenue strong by Leasing out growing our of Eight achieving the Beach, includes remained entirety that quarter, or of out Charlotte average the was Orlando. X.X%, activity D.C. markets lease NOI healthy of and

for Enclave Heritage XX.X%. impressive The D.C. and a budget X.X%. Our retention on for XX.X%. has versus you quarter X.X%, acquired and our earlier beating the have X example of initial Vista, X.X%, is renewal totaling our were Heritage by moving mentioned, Enclave, The And XX.X%. XX, underwriting assets at transaction Bella been Charlotte beating on by the NOI’s for markets XXX Phoenix Brian Vista’s results as is MSA, X.X%, The NOI we the for at in at again units underwriting. and million. healthy as the XX.X% NOI know these budget January was Bella budget $XXX X.X% also Orlando Metro Tampa to front, most Phoenix top by at at Renewal exceeded

aggressively health year. in to we'll market operational Phoenix recycling potentially the the capital this area and [Indiscernible] in Given increase continue pursue acquisitions later in our when especially

and -- $XX the I We've resulting activity, Axiom Street price to we the great real Green NOI remain Metrics achieve as share quarter the we NAB approximately a result the Moving and at Place. achieved as of table benefit XX we've properties, acquisitions, as tax of on on in units brief XX recent ROI. outside Silver XXXX on Heather in receipts midpoint. the and in CDRE survey or out the our NAV far. venue unit so XXXX installs already at Recall growth, to and four want comment refund achieve Florida. We to average NAB of a cap Atera, $XX,XXX. results. increases table mentioned, The Stone hit numbers, on drivers and washer litigation we in updated to only from to quarterly to party a do to completed rate next law dryer XX and provide a litigation settled we share Brian ASH expect particular but Phoenix quarter, didn’t to capped -- I XX% similar a XX XXXX taxes. months first now. transaction Texas. extremely were we've our and over per and third $XX for and point estate during I Hollister right washer remain net per modest did dryer the the tax being approximately also plan Florida Brook still We installation compression wanted NOI Brian in success and premium but rehab on competitive started program and rehabs want that the briefly and in [ph], growth update

locking are in selling these We potential benefit be XXXX. taxable projecting proceeds anywhere still between values to the for $XXX,XXX $XXX,XXX while net favorable from to

Let a me end April. we've leasing with in experienced activity strong

occupied leased. at sits physically today XX% portfolio and Our XX.X%

X%. at Our at leases was April, of We’ve signed average XX.XX%. secured average an of renewal XXX X%. ratio also new retention In renewals XXX we an

And Given at the quarter, and the all always remarks. strong our have I to execute. teams as That's great NexPoint prepared BH results. for thanks to and continuing here for

Brian Mitts

Matt. Thanks,

for We’ll you turn time to the use questions. questions. for poll of it let’s So over remainder to the

Operator

you Raymond with [Operator question from We’ll Thank Instructions] take our Buck first Horne James.

Buck Horne

$XXX setting far you of to of you with highlighted to so clear absorbing that rates Good of accrual the property the based these And of that and or and the sort start taxes of on just go guesses bills and calculative I you any just that you XXXX $XXX for rates back best you’re the just using you these are that morning, setting I statement, if setting to terms or for income include is kind XXXX, your are there. in on – any – the are want yet. how rates on exclusive going the be guys. through are does accrual have the to highlighted maybe to benefits want got that net gotten tax you

Brian Mitts

built accruals, solidify that to XXX not include into We On Yes. those. our them. don’t is anticipate we that so we XXX

the As property-by-property third-party to with way has getting we that far years get it. help we that Then beginning, experience move come use reassess continuously we how that a us, up basis. think on our in tax valuation far the information. we be it at as we lot conservative new on based we and the use end as up That’s information. throughout us perhaps to accruals we expense and do we of the up ultimately our think can what we data set then And trying as our internally

Buck Horne

pricing so turning the of quickly great. your strategy far. That’s strengthen season And Okay. then leasing given the just just to

April. run maybe you your would characterize But occupancy little do the it bit usual? -- tighten enough price a strategy let run net as little the around hot your maybe the traffic You or price to how versus versus and quarter the occupancy balance than did look occupancy? like in a a how bit in to you harder little exposure Just strong looser equation first seems

Matt McGraner

growth particularly characterization, of We for that QX. the very occupancy experienced we quarter rent during the I saw. than place numbers healthy emphasis most Buck. because across think strength in normally issues more of that's markets that seasonality we face good first did a We on the the

It's quarter, and strengths occupancy in to expecting May even in I as It’s -- only the extremely both we are not given morning. the make. April We mentioned growth this have in it's equally are positive. second The rent numbers numbers the pull promising trends.

continually in us So, to improve. while area occupancy is for an

XX%. that to continue try add, drive I to think to value will think us that I for continue rate likely stay around

Buck Horne

Okay. Thank guys. you

Matt McGraner

Thanks Buck.

Operator

our Okusanya next Jefferies. take We’ll question Tayo with from

Tayo Okusanya

on Congrats morning. strong really Good quarter. Yes. the

couple The Just ex you what know could just us growth for the leases, number a stuff. let redev? was new of rent quarter that for

Matt McGraner

Yes.

X.X%. it was think X.X%, around I

Tayo Okusanya

leases Without new And the growth okay. XQ trending redev, XXXX? like for what in rent

Brian Mitts

the In quarter second X%.

Tayo Okusanya

that is X% in actually rate what Okay. or Is achieved you’ve is that April? asking actually

Matt McGraner

north that the ask the five. is of What That’s and what lease we renewals – six is north of April. also in tell achieved is renewal I new you can ask

Tayo Okusanya

Got you.

Matt McGraner

We expect to be these numbers.

Tayo Okusanya

then the you ability what you’re acquisition little seeing about acquisition you overall just talk And or confident – helpful. just confident That’s more outlook about environment, bit whether do just deals? you. a again feeling and to Thank you’re more less the could

Matt McGraner

Yes.

that third off deal, hit very, would focus second what portfolios through generally new we’re to the there’s likely been more five market. is but it’s focused acquisition one-off much normally [ph]. equity I BH's and on said, opportunities. coming on of terms to of excited There’s plentiful, either the quarter, portfolio the capital BH’s on participate repeat sellers terms in trying new than for not we’re which three hopeful few few would entrants is We’ve particular in That competing are very rather XXth but still those, mining there million competitive, that aggregating units or months And under north for a over that being portfolio There’s last, there’s the of competitive. on activity. of the we brief in XX,XXX the characterize characterize lot a in of the I and/or check XX to we’re where are brokered So, that lot folks some opportunities market a of on if million up or space. in about of size characterize continual into not check XX extremely bigger is

I up So, while third sum it’s we’re some still in competitive to pretty opportunities market and second guess there. helpful on quarter. the

Tayo Okusanya

was been Okay. real REIT. That’s REIT and new helpful. has there one advisors, in started a Canada from Last NexPoint me. Again, estate hotel up

Just kind much NXRT? you’re of how curious spending on to relative time that

Matt McGraner

five to team led that includes you dedicated Yes. hired [Indiscernible] know newly effort a hired that head effort. as I by focus individuals guess, up on to we’ve go a

we the terms nothing dedication management, the expect of or to So change focus. management in current

Tayo Okusanya

you you. much. very congrats Got Thank the quarter. Again, on

Matt McGraner

Thanks Tayo.

Brian Mitts

you. Thank

Operator

Thalmann. next We’ll Ladenburg with Massocca take John question our from

John Massocca

Good morning.

Matt McGraner

Hi, John.

John Massocca

increased packages? versus in the So, ROIs smaller to maybe that kind numbers may be some upgrade what [ph] amenity results of on drove partial dollars program. plus quarter this of these the your historical the terms Is rehap of

Matt McGraner

Yes.

think also right. seen in rent on did slight up average. that’s exactly have tick rather a terms we increase right. – then see dollar the in I first That’s And we’ve whole of quarter

met historical we on newer we spin [ph] into of There’s the XX, with the I products rehaps. so are your think little getting bit demand recorded I for versus guess. $XXX on rate the a great has average activity been

John Massocca

returns are be same-store of rehab. this outside of maintenance kind in weighing can maybe had there. bit know maybe a growth. the to that pressure you I kind outsized And some outsized seeing you Is cost terms the rehab going there in the for doing mean, against and program? portfolio is of repairs appliance of future this, of potential I in little

Matt McGraner

last increase actually our we've like of quarters. -- we've average ROI over mean added to in feel the been couple I I

what underwriting I you we're can we're tell to. So underwriting.

rehab seemingly able commensurate but underwriting a still Our increase. to more achieve the on a rate expensive we're benefit process,

There's So that's in I anytime the soon. the going future I nothing see to steady. can pretty think ROI that that story are derail

John Massocca

Understood. with side. you positive any expense an from Is green here? obviously which And is operating would the then Or the ongoing store potentially the on there initiatives that point at of process same a kind benefits those? lap

Matt McGraner

diminishing like same of return In there a is terms of store terms in results.

John Massocca

the point a Right? you the put I and just of these some initiatives at installing just will have benefit which is I have the So year? kind we're there imagine mean of growth you're kind units. stay Well, relatively in year them are once stuff place costs not store the over therefore to of and same utility that your lap same expense in

Matt McGraner

Yes.

I expense each to low the the that'll think and there portfolio flow expense once you or gone initiatives keep in of creating I units. either continue saving That each and green income growth other we, where low packages on time an thereby of to complete us the or rents installed will or utility initiatives current other organically. once said the through the elsewhere be mean, just the being we've help know water a we water in opportunity drive toilets tech

John Massocca

much far the kind the along runway of initiatives you. are more how And How in is green there portfolio? for

Matt McGraner

or I say lefts, the portfolio right of or think ongoing ten eleven deals at now. XX% so there's

runway quite I bit think. there's So still a of

John Massocca

on the question quarter? those made in sub, Okay. last Phoenix five And then of growth detail the include do that the numbers, are acquisitions those new rent one page

Matt McGraner

Yes.

John Massocca

very me. Thank you Okay. it much. for that's Well,

Matt McGraner

Thanks John.

Operator

next take Janney. Rob our Stevenson from question [Operator Instructions] We'll with

Rob Stevenson

morning guys. Good

guys as are part upgrades? dryer doing those installers, as separate those washer you you of doing sort terms are of redevelopments of or standalone larger In the

Matt McGraner

of dryer of kind at surveyed time and we But so off to do the we now. mean, units see of our folks late throughout and we portfolio the an that washer year right if rehab, year the the could asked year, The universe and to what’s we're are those that ladder. contracts the installed a bespoke the sort opportunity ones will. one I last hitting looked of at laundry do it there’s last

Rob Stevenson

per that you is causing install? much how And

Matt McGraner

per on machines. Depends between market. anywhere to the But $XXX it's $XXX

Rob Stevenson

a getting dollar boost you're And rents? in $XX

Matt McGraner

Yep.

Rob Stevenson

when your this. of I you and here? that imagine you I can’t I How that better have big set forward use opportunity anything so, for sort at is there's mean higher capital. looked And is mean, guys guys of how that moving big

Matt McGraner

be which units the We currently think it's we units. easily could get XXXX if doubled XXXX to

Rob Stevenson

Okay. And Arizona how then extensive. portfolio, the

redevelopment there? it assets? guys you have extensive You close $X baths I kitchens you rehab and unit exterior? needed dryers Is is and there? more think doing basis of on sort washer sort and earmarked the like for three talk to those million of scope a are things just Are of about the How that?

Matt McGraner

three doing allow that. possibly everything because doing the demographics the those will We're units for of you We're rental can increases. Yes.

doing plank blinds, – we’re appliances, slightly the we're units in the the newer so So and slashes, the we're enclosure yards for some we're getting dryers, Nicole, the enclosed we're kitchens, baths, the tenant some the larger in [Indiscernible] the floors, the back brush yard the assets base. the the in doing washer a two-inch creating providing

a upgrade. it's really higher end So

see that XX,XXX the You unit. of or can with span X larger

Rob Stevenson

than earnings just know Okay. results. off essentially of Phoenix to lastly for And a guidance in the probably of the on mean the being at What dispositions quarter you for the me. other kept first than drag point year? then that's the north midpoint that of wind going you you're from guys rest Is there anything ad up acquisition. increasing conservatism other this or I just annualized

Matt McGraner

good To If the the pretty point. don't no, latter half, we at there. year we I demand think about through crystal so look feel this think still I ball our

a sure. the year possibility it's So later in for

Rob Stevenson

then I the Brian, that did included of say XXX that guidance the is to? or acquisition acquisitions in And Okay. was one. addition Phoenix last in guess you one

Brian Mitts

what inclusive it the of we've acquired. included I in addition said guidance. That’s already in XXXX If

Rob Stevenson

Thank guys. Perfect. you Okay.

Operator

Horne next Raymond Buck James. We’ll from our question with take

Buck Horne

thanks. Hey,

follow-up. a quick Just

up there disposition? do year the is that’s on rest maybe to do out think kind in potential you capital So, and or timing of how your any pricing disposition the what given the idea play market achievable you of expect the

Matt McGraner

Yes.

disposition at that that's the I quote of in some and that to so and after I XX tax I market our XX cap think think adjusted we'll likely most on a something create X% when will deals try rate rates. to And looking CapEx, off off cap achieve. points an in that basis buyer XX% to then we’re likely these

able think to achieve both I of So we'll those. be

Brian Mitts

And quarter the then late modeled into dispositions third third in of kind as or quarter. far we goes, filing as

Buck Horne

Okay, great.

And so seeing would of and how that the underwrite. you characterize there there pipeline kind what deals out you are potential of are to acquisitions

You areas more mentioned Florida expectations pretty there high. prices? deals other reasonable Are where be still any where seller may are at more achievable

Matt McGraner

say Yes. Nashville locally again we gets BH’s one kind I year. would universe one that confident those. opportunities XXX through about one And we Florida, full to then on the some through pretty feel the portfolio -- have in and of us in that is

I second to those or so on the think in quarter. that execute And we'll third try

Buck Horne

one for And Okay. last me. one

continue the that repairs and R&M XX% Or store doing -- first up side? on year? expect trend you costs, the quarter same were is something was those the maintenance the in On about a to were year-on-year. through that there Is you'd

Matt McGraner

Yes.

largely we've So a there that residual historically offset the an in was current isn’t installing deals really increase that amenity security to lines. us certain in other R&M in systems increase rolled at out income expense, past. but an or It's as attributable

markets at there income Orlando of example kind where if or percent Atlanta and residual income for there -- So of the an those a kind it's or even jump so, for you've West standpoint, But R&M. us other in benefit on are you but XX R&M right. seen to is looks increase XX staying look Palm plus from it corresponding high is a have you

Buck Horne

helpful. Awesome. Thank you. Great. very That's

Matt McGraner

Buck. Thanks

Operator

Speakers, more there queue this the right. no in questions time at

Matt McGraner

everybody Thank thank and for joining call second to quarter. you. the our forward Well, look you

Operator

participation. concludes Thank This today's your call.

disconnect. now may You

NexPoint Residential Trust (NXRT) 30 Apr 192019 Q1 Earnings call transcript