Earnings call transcript Q1 2023

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Operator

Thank you for standing by. At this time, I would like to welcome everyone to the NexPoint Residential Trust Q1, 2023 Earnings Conference Call. [Operator Instructions] Thank you.

Kristen Thomas, you may begin your conference.

Kristen Thomas

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

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

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

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

the that company's For a release see more complete earnings measures these discussion filed financial earlier of was non-GAAP today.

turn go Brian. ahead, would the over Please Mitts. now call I like to to Brian

Brian Mitts

Brian joining time. Mitts. us Kirsten. this everyone morning. I'm Thank you, your Welcome to Appreciate

McGraner Matt here As Kirsten I'm joined and Bonner mentioned, McDermett. with

after of driving results, guidance. the to call updated discuss on metrics and our update and leasing year. and over turn the our specifics Let me it remainder I'll performance our Bonner NAV, and Matt give to guidance the environment our that then cover QX for the kickoff and

was Net first same to net $X.XX $X.X XXXX diluted revenue. per and XX% a in as represents of $XX.X revenue for share QX loss which million let's of revenue million loss the increase million, and compared are quarter $X.XX $X.X start results as which in total period or the share of follows. a So or in million total diluted per $XX.X

For $XX.X the first quarter, million on NOI on $XX.X properties, quarter properties representing compared the to in a of increase million XX first XX.X% was XX as for XXXX NOI.

year-over-year quarter, new the and growth on averaged the For leases X.X%. renewals rent rent X.X% on year-over-year across average growth portfolio,

equivalent believe our the Given where are there's and for product, Class the future rent remainder apartments outsides rates rental still we in room B as for year. for of markets for growth

in same of increase share, QX of of in quarter-over-quarter. same on $X.XXper the per or same For store the XXXX. this store store increase an diluted portfolio down million FFO This of store X% with XXXX. Core XX.X% an $XX.X to $X.XX expenses X.X% X.X% to Compared QX QX, occupancy led to up rent reported quarter QX XXXX, We to compared increase XX.X% compared as in and share for XX%. diluted were store same quarter, to was NOI coupled same rents

$XX $XX full XX.X% and the units, For of portfolio XX,XXX and premium an quarter. achieving the premium completed average which an kitchen installments X,XXX XX.X%, our XX.X% average respectively, achieving XX.X% and units monthly quarter, washer XXX package $XXX, dryer technology and upgrades monthly renovations of and current and ROI call and of leased $XXX upgrades, respectively. XX% represents rent and installations, of today in XXX and completed partial Inception we partial full and rent during renovated we've ROI X,XXX the

refinancing proceeds the to the facility During the corporate credit paid through available quarter, refinanced on $XX.X down million Venue first the we cash. and Camelback and

the use in in credit of quarter, corporate balance sales we'll March million. corporate the which remainder this those million Stone of Houston, and is of Creek expect with XX, $XX the some of facility. of Old we facility pay down the the expected Farm and As proceeds to $XX net

last estimates based at cap Moving the NOI, on a and midpoint. to on These the cap are the rates as share NAV, range forward low on of high to our high ranging XXXX. in markets flat on end, has the follows. end $XX.XX current end, nav reporting end, and our approximately from $XX.XX from remains low QX, XX the increased per X.X% basis based from rates on quarter we're average $XX.XX and which points X% on

we guidance, end, follows. $X.XX high with guidance year full and the $X.XX to to we're are as the updating $X.XX. of on midpoint the FFO, Moving guiding end, On Core low

rental For increase. XX.X% end, estimating increase we're end, on XX.X% XX.X% increase low the high of for on income, the midpoint

then in clarity low to transparency For the additional the add on some and same the we're store end and NOI, XX.X% information. X.X% end, XX% for growth estimating growth And high midpoint. on

We as and on are showing that's end, results at total expense $XX.X end, at high the the driving and guidance. estimate some for our midpoint. to of $XX.X the expense obviously interest year on million million components $XX.X We low interest million the our the

and and portfolio Bonner in So commentary completes environment. remarks, with it the my Matt for over I'll turn that lease then to some

Matt McGraner

Thanks, Brian.

the XX% Dallas, Rental going revenue notching operational XX% of results. growth over to range, outperform continues first Tampa and year-over-year north in our the with Atlanta Let markets Phoenix, Florida me XX%. across same our to growth by store with board start growth quarter in

First portfolio driven same pace growth revenues. growth XX.X% markets, NOI quarter total in continued the X.X% at strong a by store in our averaging with

least same positive out at X.X% The of or just XX.X%. QX see growth basis XX growth continued to total our Six markets year-over-year growth expenses a XX with quarter-over-quarter, experience NOI markets better. XX expense and store operating of of of achieving store or moderate achieved X.X% of registering of margin also quarter-over-quarter. in our with greater QX growth expense controllable points same X.X% with portfolio started have revenue healthy NOI nine our We

markets XX.X%. XX.X% were Our Tampa our XX.X%, renewal X.X%. top for Phoenix and markets with XX.X%, at the at growth at quarter Nashville of conversions South XX.X%; Florida at least Renewal XX were Orlando six executing rate out at XX.X% five of at

top South five Tampa at Florida Raleigh at Worth X.X%, were Orlando at at markets X.X% Dallas X.X%. X.X%; Fort X.X%, and at Our at

this reducing On leasing healthy the is occupancy peak report QX Brian turnover A costs and mentioned maximizing XX.X%. to shift centralization in the front, that XX.X% supply and rising occupancy XX% markets. Year-to-date as spur same continued QX, over entered our leased as XXXX, as exposure primarily we're conditions of with we in us to pleased portfolio trend XX focus remained to to market well the store have day retention, have our of towards continued of labor. deliver we within further Through the Class stock our and new morning our the albeit season seen operational resident positioning XXXX,

moderate a of in X that our with We on in year sub and We in to Deliveries estimated of our of most over this years this inventory peak next competition. fall markets. illustrate by the the units in just cliff ‘XX new relative to early off page and for to encouraged then ‘XX literally to with project this are XXXX our supplemental. start our And and supply most supply markets directly just placement then X,XXX next. by thereafter assets delivering picture hit RealPage sub X.X%, markets the rise three

particularly is Our in paradigm drop. and internal and upgraded deliveries the this relative our products supply enjoying expect power when and/or significantly acute are conclusion assets we be to versus still pricing between half currently new ‘XX second of housing SFR ‘XX

front, transaction we the disposition Stone Old the Creek Farm of during the to On and complete expect quarter.

the full mentioned, sales the use to As on balance revolver. retire previously we'll the proceeds remaining

capital close actively to the monitor and movements markets continue any opportunities cap stay markets. rates to in for We on our to

of wait investors continue and see the stress. several the clarity seeing expansion, environment the the on however, also a of expected vintage. On We've clear current rate cap the recently, XX low We market to versus interest is nominal class ranges in a couple price last and will X.XX% large location and portfolio months. many and NAV over average, rate to which between more banking around positive rate on for of we're regional X.X XX sidelines through similar NXRTs, flattened XXs. X% cap a We're large share assets REIT depending to cap institutional turn for monitoring acquisitions seen to we

housing, In to further middle in demonstrate earnings XXXX are produce closing, ability we're in through our that and market strength in strong markets. growth. will in start particularly late off XXXX a NOI, maintain outsized growth And dividend optimism we to rental see where to April, continued we our expecting

to over here, teams continuing prepared it Thanks for full back you, Turn remarks. our have to I Brian. So NexPoint execute. BH to

Brian Mitts

Yes, let's go questions. to

Operator

[Operator Instructions]

is of Your Credit Okusanya first Suisse. question from Omotayo

Omotayo Okusanya

morning, team. Oh, yes. Good

a for Just wanted guidance to second. focus on

bit million, your just essentially little was about is kind the where lowered only expense up of which $X.XX. Could you from NOI was unchanged talk you of something about go your But store pickup by interest the that XX%? kind where your midpoint guidance So midpoint of $X.XX, given that that a guidance, comes $X.XX. of growth remaining three same at about point

Matt McGraner

interest of some the that speak this through Tayo, calls individually analysts. of some and We've on talked There's past noise can side. I kind of kind runs to this. about the with

there value slide; guidance rate that of see fair That's caps. $X we about through the mark-to-market obviously and million. creates on You a have a moving the shows

changes increase interest in. try of sort to the continue a just of that let challenging. changes bit given piece rate best So expense sort talk to to differential of about where remainder But estimate quarter. mark-to-market little movements makes we I’ll of curve for Bonner turns of our see of the the forward in volatility to and we which in this, the the interest ability, the

we're but you anything? little add to up that transparency trying so tighten want here, and Bonner, have to And do

Bonner McDermett

to here. happy step Tayo, in Yes,

almost XX% reaffirm front. at, of same numbers look NOI through the As the have visibility look we May renewable June as we we So, at store of on here we through the at the April, essentially and end midpoint

feel offline, dig best and there. interest deeper G&A think a share And picking financing smaller that think few, that corporate in in has from rates ago com, our a couple have we line a were expense, good then several forecast NOI. the I view seeing going, wild, costs an to we've curve hitting months ahead year, for a our you're that impact. two the and little a our But sight track got loans So a curve of on of little you as look ultimately, ultimately, swings, some view, a little we're bit about, start offset talking can We had for XX% the an think rate then that color of dot at this forward really pretty about we $X.XX gone to where has cents the the original amortization, on corporate give a own continue accumulation stronger there. up year, that there. forecast currently bit And bit But forecast updates that obviously, we're we in ahead NOI deferred we well. midpoint year, we're I as

you're think from I bit up that. benefit picking So a little of

Omotayo Okusanya

the of reiterate to based improvement mainly is as well then, a pool, of just kind So gap on $X.XX that the G&A some in the as pickup improvements. non-things some to like to and close

Bonner McDermett

too in June currently towards, as we timing used close now that that should there. There's here a another looking the mention think, we're I dispositions, component

assets to those So months for get full up to picture. NOI well, couple we're picking as a the additional year of

of bunch in improvements value interest the caps, the that expense, which it's full is interest, most which of at on incremental the those mark-to-market that interest any picture includes fair a that of move expense. rate the offset of dramatic So little

Operator

Your [inaudible] next is question from

Unidentified Analyst

store morning, And for is the currently expense guys. guidance Good midpoint Same was quarter. first XX.X% of XX.X%. the

to you your assumes growth impact average or or the time comps? quarters Are significant tax expense relief just expecting items of each remaining that property the going remainder positively ease in to are any one X%. So XXXX around of

Brian Mitts

to this. Yes, add I'll Bonner and can start

the turned a expecting estate tax real of costs part moderation of as turn rent quarter. then first large are roll we've and in the We relief a some

insurance moderate that of we half our So the on to in than that a renewal we bit too, is year. we expect the Adding back thought. did to little better

do it Just think add? we recently anything Bonner, month the to have I so. or locked last you in

Bonner McDermett

that Yes, point. just on

XX%, to out we So market that an savings, tough in increase conservative saw there, And on a I significant is in April premium we pretty where think the came modeling think I have we're single assumptions there. were a some renewal, XX%. digits year we X on in we the our

of months year So back the and the some savings interest for nine there's expense.

R&M in decline we costs going really in rates, a We better real settlement Additionally, active taxes. as case is a the tax tax year. QX started point, there rising in-turn of seen same store that up the And in store, same XXXX’s single an really one at QX impacted XXXX in items significant didn't you and more that the quarter look post of that values for most in R&M line relief we second estate given XXXX run We expense. a taxes the moratorium, with, our litigation last get year. about on we that yet, turn still in XXXX positioning particular settlement several for we've this feeling we your flowing here back to And evictions saw then in and cases have same some have through elevation so are better values. in

we we better inflation you of the normalize expense for balance I think as the that QX into quarter-over-quarter, more year. the about so So comp will get feel

Unidentified Analyst

that. Okay, market? also for you Charlotte drove point And XXX point thank a then XXX quick this on And basis had you drop in I drop occupancy. what then Atlanta, quarter-over-quarter saw around basis question in

Bonner McDermett

fire had portion at so we Atlanta, in that's a asset a So Rockledge there.

difficult in we've The Mill little that a we've Preserve more having think just at Terrell Atlanta, pricing. discussions, been at I bit moderated Additionally, renewal

demand. management dealt bit in are with and backfill quarter Charlotte, our Those teams dealt waning it little as X/XX, of casualty revenue asset, also Timber assets ending Creek to of a those a kind So our demand has of event, with numbers working there.

management, up. So revenue back that we've making toggling build the dialed to that in sure pricing occupancy is been

Operator

Your is Omotayo next of Suisse. question Okusanya Credit

Omotayo Okusanya

Yes.

rent back going to quarter. a Just again the for

in turned negative. for It look seen of at Vegas. a Taken new some rents markets your actually I’ve and

it Just what kind made of kind on And a Is curious is kind growth slowing like the that in side? new in going of supply, it job was market? lot markets? of rent of negative demand on those what the

Matt McGraner

That's a Tayo, we're bit supply a The Matt. now. a on of is component. Phoenix -- a Phoenix it’s in Hey, quite Yes. story. deliveries going there's right That

component The year of first year, half is really to where we're increases. last seeing those XX% other really rents the last XX% tough but last comp,

giving than Phoenix. story market. we are concessions heavy that's think Solara There I to and in Vegas Torreyana in heavily, So seasonality expected. the are several is the around particularly Bella demand assets, and weaker that

to So those we some on buy had occupancy assets. two

Operator

at call for closing now questions the team over further to this no will are the There time. remarks. I turn

Kristen Thomas

appreciate us, questions. you out Yes, time free you. everyone's to questions. feel additional we'll Thank then And next until and Happy them. reach to to if you see quarter. And have answer

Operator

This for concludes Thank you your today's conference participation. call.

You disconnect. now may

NexPoint Residential Trust (NXRT) 25 Apr 232023 Q1 Earnings call transcript