NXRT - Earnings call transcript Q1 2022 | NexPoint Residential Trust, Inc.

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Operator

Good day and welcome to the NexPoint Residential Trust Q1 2022 Conference Call. This conference is being recorded.

Now at this time, I would like to turn the conference over to Jackie Graham. Please go ahead, ma’am.

Jackie Graham

Thank you. everyone. day Good NexPoint company’s to XX, conference to call And for Residential the the results March first review welcome Trust quarter XXXX. ended

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

at reminder, a website is through the being As webcast call Company's this nxrt.nexpoint.com.

current discussion are Before conference and the statements that reliance forward-looking Listeners to meaning of on not as SEC and date statements. The filings for risks any that on affect call Private conference recent does of I Litigation non-GAAP complete based the within financial of like and only Act XX-K should during remind any except more a call any conference of to Company's of includes encouraged Form Annual analysis could as the speak the undertake expectations, are and would statements. an today's begin, forward-looking revise beliefs. statements forward-looking factors assumptions other call required other contains place we the Report on publicly NXRT with forward-looking also everyone This this measures. by undue not statements Reform Securities or any update obligation that review management's Company's the law, made XXXX most to and

now today. Brian Brian. would measure, the to Company's see go I ahead, please to earnings call complete financial was For non-GAAP more that filed these Please a earlier of discussion turn Mitts. release over like the

Brian Mitts

going and our guidance, some this the And McGraner. numbers upward. with we into up the metrics and discuss in our about for over turn then And driving Brian I'm to finish the quarter. specifics the leasing of Matt QX different dig I’m Matt performance results joining with then Jackie. to revising us portfolio, I'll through are everyone I'll talking by this Mitts Thank start you, going call to I’m I here appreciate NAV. morning. which

our total XXXX. net $X.XX loss negative $X.X loss on same compares was that share $X.XX share loss and of And million total a revenue of million, million a $XX.X net diluted revenue QX in million. per that or the diluted in or $X.X a period For was $XX.X of loss per to

We same-store in bit to For to the FFO in about driving quarter, down increase XX.X%. of or a coupled occupancy increase to rent XXXX. of discuss an This same-store QX Same-store a QX in increased compared and X.X% $X.XX diluted XX.X%. of per of QX NOI little diluted $XX.X occupancy core basis same-store And expenses led was million an the that. increase $X.XX XXXX to reported or XX of compared with XX.X%. we'll This share XX.X%. per points share what's

ROI XX.X% XXX and which basis an in portfolio installments, and dryer higher and respectively. XX.X% and full average an velocity And ROI X,XXX than XX% which and partial completed XXX completed current $XX to XX.X%, is renovated ROI we package increase the we and average an during $XXX, Inception rent respectively, quarter, achieving our leased technology the year, Increasing $XXX long-term $XX upgrades washer quarter, X,XXX of about upgrades, our premium the of date rehabs. installations and kitchen XX.X% have monthly full from and X,XXX points of achieving rent of an the average the For units was there. renovations the premium partial quarter, during prior and during month a XXX quarter.

midpoint. two for unchanged NOI X.X% as QX range, in following reporting a Board per a and XX. inception last In are These Since the the on For current first we've end, on by X.XX of NOI is $XXX.XX in we for our And based paid NAV FFO. between X.X%, our that dividend cap end was we rates that estimate share at for amount. a rates high a FFO, the declared times next our the which quarter, quarter. quarters. that low share dividend actual March on cap the $XXX.XX based the well dividend on for $XX.XX the increased mid-point per XX.X% our our the covered of dividend of And quarter core in from the we're the estimating our same XX.X%. and an partially of has ratio $.XX core on which the first payout We're markets forward NAV as

guidance, as to we're upwards as revising guidance follows. Turning mentioned,

$X.XX per guidance For prior That of on a share increase. $X.XX $X.XX midpoint for end, high core the $X.X. FFO compares or to $X.XX diluted in end, low of

NOI XXXX XXX our of estimating our increase $X.X XX.X% XX% XX.X% of same-store $X.XX. on For mid-point FFO represents the At XXXX on guidance to point XX% the over for basis end, core end, the compares of our XX.X% the mid-point high we're of core low FFO prior that increase.

with So, let it to me Matt. that, turn

Matt McGraner

Thanks, going Brian. results. start by I'll our operational first same-store quarter, over

X.X% this period. X.X% same-store greater growth in to or NOI revenue or rate basis XX.X% points markets all at Rental And reached, margin pack per effective with improved month. XX.X% growth up unit same-store XX.X%. a strong growth growth over shows quarter Tampa $X,XXX XXX Our rent while still all while the year-over-year higher. to Houston other QX while of the achieved led effective average XX.X% prior lagged markets

markets leasing achieving total Eight XX.X%, positive or seven NOI across growth And averaging total operating our managed of XX.X% board growth in continued achieved out First front, on well revenue greater. the quarter, growth portfolio was ten X.X% ten special growth the QX experienced revenues growth the least at expenses. growth in markets our portfolio a with same-store X.X% or with in the of of year-over-year driven same-store by pretty better. X.X% in

rate eight at Renewal Florida at our were a Florida five and Orlando renewal XX.X%, with XX%. for at at XX.X%; Nashville XX.X%, leaders conversions XX.X%. least out and XX% healthy were XX.X%, DFW, also Phoenix of at were under at markets XX.X%; executing The top XX.X%. at South markets XX.X% XX%; growth Our at were XX.X%; at markets Tampa the of Phoenix quarter again XX.X%, at Tampa no eleven Orlando South

inventory created extremely units base. of vacancy strong and Brian for units, completing the an about added Rehabs As on to which made well We the our in we QX available pace quarter. during rehab additional already during XX%. rehab continues demand tenant more increased XXX X% to add of up growth be lease additional mentioned, organically increase assigned by quarter our all XX% received top rehab new inventory as roughly some

report lease healthy morning, occupancy in to occupancy of pace remain trend And new On above April keep the a with portfolio of we're to XX.X% the north leased with as as QX season of pleased of with this renewal Also, enter well of leasing XX%. today, XX-day same-store positioning XX% continues growth as of QX is the growth XXXX. front peak for XX% us lease new renewal growth the and we XX%.

best with X%. units the cap growth successful plan Georgia acquire on Brian As at I the one use and reduce pipeline assets to purchases acquisitions for business $XX,XXX to for for an X discussed in Houston next this three upgrade markets. revolver recycle internal April We performing and more XXXX Phoenix. generate XXX should enhance cost $XXX.X plans them These Estates premiums added a for The said million. XXX of little a capital we proceeds expect from these of dispositions Sandy as year. up purchases extend and Maryland, quarter through $XX Adair on deals. of our had morning. our XX%. unit price Estates our on a portfolio purchased each through rehab two upside mentioned, property on $XX.X of to A a the We and Springs, Adair later years $XXX to and two acquired rate and ROI leverage Turn to a an from for Adair approximately hand the and average million previously cash million of We last purchase at and of of year to economic total our unit dispositions, to units in

generate unit to $XX plan that in also for Tech of amenity. We per expect Smart unit every to packages install premiums monthly and

result, same-store X.X%. NOI is average, asset for four-year underwritten a this growth our As

We purchased For estate a upgrade $XX,XXX of $XX.X XXX X.X%. we cost at XX.X%. unit average million $XXX premiums plan ROIs units for an and of of in cap generate economic or approximately year a unit rate one a

as Tech in unit. packages plan unit, monthly here and generate install every $XX per We premiums expect here of to well Smart also to

our is As four-year a estate same-store for result, NOI growth average, X.X%. underwritten

of loan to of XX.X% of said, we're excited Brian a an as with XXXX prior to XX.X% for range guidance, NOI to XX.X%. our same-store growth guide XX%, upward Turning to midpoint revision to

widely primarily the the As upward to and than revenue attributable a and our is you stronger can is of illustrated expected highlight written page supplemental. see on revision guidance growth

still Delta Our over continued that to the our strong with the I'll to our year. from we’re Thanks in prepare we're turn housing, as lack core migration. for A the opinion, to our back BH other have our are over rents to and deltas reiterate at see to again middle and teams continuing housing for Brian. compared page execute. to in this to core markets, year, growth $XXX And to here strength FFR in ranging nearly the FFR. quality experience Class all just expecting remarks. markets. That's In highlight markets a in multifamily net $XXX options, and for of $XXX you, This multi rental market particularly significant population remain closing, unit there's strong excited continuing between start about Class Sunbelt should and to in I I’ll B, NexPoint elevated illustrated by affordable

Brian Mitts

let's to questions Yes, go

Operator

from And Truist Michael with we'll Instructions] hear [Operator Securities. first Lewis

Michael Lewis

controlling Great. to your Thank interest little about you. expense. ask I wanted a

year. the about, rates? through this was you for the you of realize you interest on I just to the you your bit balance place more facility. surprised the maybe Can you quarter, But you higher to was expense about below now had kind math, thinking first to in since So, and sizeable you walk full just a you're expense debt. a I that it realized especially your fix talk down see talk quarter have for how – I I have little about quarter. raised guidance guided what in go think interest have Could and the hedges credit

Brian Mitts

Michael, Hey, it's Brian.

bit is hedged, of increase the using from focused a moving that's that a our most up little something on breaking and debt on. I we're very your I portfolio think is very But with perspective. The that rates are which of end. that. interest upwards, obviously rate Yes, caught lot You floating

the net on corporate So, from facility, it the we math Houston. paying than with proceeds other the really is down which are essentially

decrease. So will that

that's So we less the on it rising getting flips, at part pay is the to the And we just of but pay same increase. of that and swaps. or not paid on affect would because rates this, otherwise end down, where And some point, won't then we'll math rates up the as that swaps the extent. rest

change the So really new expense overall it’s our in year. throughout interest rate to

overall get rate really didn't So question the expense in it that I hopefully throughout interest change year, new to happy it to but really the if our follow-up. not, full addressed so, again

Michael Lewis

cycle do going next see you're and spreads know, that's see next increasing this you cycle, it how are of okay. the how people that's be kind into with risk question, extremely I guessing aren't cycle strong. thinking sounds this economic – of your rent recession. And obviously going, bigger about lot you maybe a But do kind of helpful. you Yes, mean, then of end? do you, So the of a you the about spreads multifamily right? a how no, that's was the of the kind of multifamily picture always I wondering I stage mean, do stage how expected XX% to think April still and like how might are

Matt McGraner

Hey, Michael, it's Yes. Matt.

the in a comparison gateway core whole on dollar in markets, kind and sort Sunbelt to $X,XXX as they rerating of cost-of-living view in is long for $X,XXX, across – Sunbelt. dramatic an experiencing $X,XXX, really percentage the see long only multifamily we cycle uptake threat trends the The I in job are rents as still the pretty basis, rents markets business these still crime. a population growth can our advantage think favors while think a migration as and I of that of my we're existential continue as

and price kind long as point. up haven't again our $XX and we rates portfolio Transactions billion I of and we're product So and there in stopped. relative submarket say seeing see continue interest of over prevent of pipelines to as housing affordable rate provide, terms transactions. our a business, that on that the especially unlike volumes There's really

qualified that REITs continues over keep And business last I in I produce just be equity as think will then get qualified likes or groups of casting or but volume I long are narrower other really can't aggressive have can elevated to the speak wire past this that areas spreads, deals market you growths view think still guys year, getting just more constructive think group probably this that strong capital, the they a will as those I the different instead own to the but to in asset our stronger our such as those and larger than the slower to are strong. wide that tighten The is but net, other amount their are to, REITs, bidding agencies the year. this pretty less for the getting as sheer banks is, more in I inflation, a agencies think The done. ourselves, managers year. productive. be instead at least can't of or the following of transactions as are the gateway transaction view will other still see

Michael Lewis

hear It's Yes. color. That's you to about prime. interesting great talk

coastal a problem. certainly of I lot think rates up But think gone that a Northern us the as of like everywhere. have or city

had was to was up. operating real of the year-over-year. a estate taxes one, Just ask down your expenses big that lastly, I one was you The down was which wanted about; lot

a just I of on what's wanted able bit some were to that little maybe side happening ask you So, about business? talk about success estate real such or find and fighting to maybe those of

Brian Mitts

Yes.

far, but on little while Tarrant the question, from savings about we I'm first exactly You're of we've and this that bit I notably wood had in of XXXX Michael. appeals County expect. a settlements and the have answer so right, most didn't quarter knocking success $XXX,XXX and

we've the muted, few. for we our So tax not and last had X% – a like to I attribution some year that's that, the X% higher in then this than we've frankly X% paradigm frustrated few last were estate to And peers. in – overall, but guess it's by real being more than years,

had Texas this in so year, – far, flip in that that'll our hopefully So favor success but we've some appeals.

Michael Lewis

Great. Thank you, guys.

Brian Mitts

You bet.

Matt McGraner

you. Thank

Operator

a take Okusanya will with Credit we from now And Tayo Suisse. question

Tayo Okusanya

everyone. Yes. Good morning,

Or are on Michael's question the follow-up a give the sense and one two new Brian, to the put swaps place of for swap, swaps the rising you could having then worry start kind next you around to a Just in us start like, new off or just swaps environment? coming like when on they to and a years? expire about when we of do in

Brian Mitts

Yes.

So, you. are Tayo, how

Tayo Okusanya

I'm good, Brian.

Brian Mitts

a quarter, start We So, of it's at had we to off. that swaps until not this really ended end the fall XXXX QX. these couple see

or and expires vast about of out for majority that's in the years them swaps. go billion that next another July. one there's of that four think matures the $X.X I But

Tayo Okusanya

Okay. That's helpful.

Brian Mitts

good. which there, swap was of you I Page to that, go if look take a is want got our XX to supplement. refer to Sorry, the at you We've sorry, table ahead. going

Tayo Okusanya

can’t any housing if suddenly ones realizing homes, buy that at have more kind or starting you're I'm kind so because to you. kind still with segment, impact in again, see Thank of a part rates is but but wondering can't of suddenly you curious of question very of housing, of then all? of you're affordable retention, And in seen realizing people market rising affordable the the demand, the to homes you second unique buy any around when better

Matt McGraner

Matt. Tayo, Hey, it's

Tayo Okusanya

Hi, Matt.

Matt McGraner

of decision you post from push then to check sometimes as decision, is out think that really from check affordable us highlighted check back a sort to you like, we'll delta market, that's that, other get at okay, send retention even the realize add The of we're costs trend rent make go and as come We mentioned. before better. just they plus in we option and back strong that's you. your tenants Good hear remain we're there's go same and I go sort quarter Oftentimes – that. moving renewal that so XX% probably seeing renewal a will the elevated. nodes notices in on and renewing the page that will of your no anecdotally narrative, or that's back is they with ended our and supplemental, maybe to When coming up pilot

So, we're of data. an demographic also experiencing in upward sort still our trend

for of now quarter; is show XX,XXX. latest is I from income XX,XXX we units, think and latest for this I up up XX,XXX think household which as the data the to our

we're our aspect from And continuing markets. us growth wage to And tenant the courts are sort enhanced largely for the so, our open cohorts that's of see again then vacancy within positive. in

So, at slower we've the the non-payers had of some a benefit from chance a season. leasing when we to move can time payers out or really

we're to forced So, turnover, of that will. of advantage you if take kind starting

Tayo Okusanya

me, more of getting Got what, your then you just you. access from are And data for pool entire referenced, for one just that have of demo the new kind demo is applicants residents? data you the you or

Brian Mitts

of so legacy the newer newer as assets. but Yes. include the leases, That's just it'll plus – the tested QX,

Tayo Okusanya

quarter. you. you. Great Got Thank

Brian Mitts

you. bet. You Thank

Operator

[Operator to Instructions] Abramowitz Jefferies. Peter We'll now move with

Peter Abramowitz

wanted full just it's how Hi, go of factoring thank back you. to guidance. the kind the into interest I year to and expense

to in year kind annualizing the them kind So the – full first at well of of you of and new get results where are above terms guide. just would looking would quarter you

quarterly that's kind of else anything FFO kind a So, in in that have, Or rates, a that decline the that of Is dealing basis? you within and there just degree the you driving conservatism of is of you're rising guide? with I significant rate numbers run the there the kind sequential before. know about on talked

Matt McGraner

Yes. Hey, Peter it is Matt.

sure, think of also the dispositions conservatism you the maybe but some we're there's Houston to what's factoring flashing out is I as well. for not portfolio

would meet those the that to deals attack we sort of value ones just than bought. there's will if more because So runway slightly you the

Peter Abramowitz

it. Got

on then strong what I of slowdown the was guess tracking that potentially of side And kind the of the I – that early are Okay. And years, just into of it we guess is signs kind the how that two remaining about it other there's was really sustainable Any as thoughts few a pandemic of what how or it in a it? migration? years as kind days last to you acceleration pace to migration its your are normal saw the over the general in the sustain going kind pandemic? in Is is before XXXX? of

Matt McGraner

Yes. Great question.

do fantastic saw I put zip you think pretty job. I that follow the code. guys report a mail, the out you tracking your

so I report, portfolio think our that I had each in in – within only think zip of positive trends our markets. code that

you guys So, all are over it.

XX%, year pandemic, call I we say. it of increase. every XX%. them was the out XX%, year-over-year quarter, it But double-digit So, it year the would This like XX%, track still first increased to

but could slowdown, you also that compounding guess I call it's So, a annually.

California And New there's – on to again regression kind as each lease it moving problems so, so some New are those apps. data so your the from, where in York there's positive York terms New new markets but still to is Virginia relative people York train sure, follow is then think migration But of are leases still we to theirs, illustrates. new double-digits or we're to going so our of mean Illinois new and one speak, I also, are and slow and the now kind elevated, the that because naturally and our – other and our of like Illinois XX% number of still reopening still us? that. California is and of

Peter Abramowitz

Had it. residents movers for I'm of New New from of off me one in to the are portfolio on from list in sure York I'm going? out going, Got follow is where the top but they're your applying up coming detailed for too where at that the your stand more York, others if guessing new that are not just markets to that, head, this answer Florida's any top markets

Matt McGraner

We Yes. it. do track

then So, is you then to Nashville first, important. in very Florida's X Arizona, X because order is have just are California and and Nevada Tennessee X. – Atlanta X I stronger than

Peter Abramowitz

Got it's, and that's helpful.

Matt McGraner

[Indiscernible]. Yes.

You bet.

Peter Abramowitz

you. Exactly. Thank

Operator

gentlemen, closing back the Ladies call conclude host over and session. to for will turn this question-and-answer your your remarks. I'll

Brian Mitts

year. Great everyone's going as discussed another and appreciate we I forward keep Yes, time. it's we quarter, this to questions, going think great for

see you months. we'll Thank you. So, three in

Operator

Ladies you for conclude and gentlemen, your this disconnect. not for today. do you may thank and We your participation will

NexPoint Residential Trust (NXRT) 26 Apr 222022 Q1 Earnings call transcript