NXRT - Earnings call 4 2023 | NexPoint Residential Trust, Inc.

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

Operator

[Audio Gap]

as a reminder, this call is being webcast through the company's website at [ nxrt.nextwan.com ].

Before we begin, I would like to remind everyone that this conference call 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 [indiscernible]. Listeners should not place undue reliance on any forward-looking statements and are encouraged to review the company's most recent annual Form 10-K and [Audio Gap]

forward-looking statements. on the except speak and as not any during today's as [indiscernible] made revise undertake and or date required obligation statements conference statements. only call of does any The forward-looking updated publicly by law, includes This non-GAAP financial analysis measures. conference an of call also

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

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

Brian Mitts

then morning. off I'm Welcome, joined fourth everyone. to over Appreciate Bob and driving results this NAV I'll our year well and I'm and details you [ Thank and specifics cover turn discuss full our Matt Mitts, as you, as ] also environment the and update XXXX. Brian joining [ on it performance provide calculation by to and [indiscernible] Kristen. and McDermott. ] then the our the initial McGraner Matt and highlights. I'll on portfolio. leasing quarter guidance guidance metrics and . I'll for kick call

million on net start diluted revenue let total or share or the as period which XXXX $X.XX of quarter, same $XX.X for in results diluted per quarter net the on income revenue income per of share So $X.X fourth million. follows: the $XX.X million to from of fourth with as $X.XX me compared was total million in the $XX.X

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

an of compared increase to led was increased XX.X%. same-store in expenses of an points X%, up to basis same-store same-store increase quarter, income same-store rental occupancy the and XXXX. as NOI in For This, QX X.X% coupled with to XX X.X%

the was per to per million We in of diluted the FFO portfolio the income fourth X.X% of share QX the from 'XX. compared quarter $X.XX quarter reported diluted quarter $XX.X or same-store up $X.XX 'XX. quarter-over-quarter third of 'XX on core Rental for fourth of share

XXX XX/XX, return X,XXX execute XXX upgrades, achieving full installations $XX and monthly current to laundry of ] and continue completing leased full completed increase date the And plan the an we during portfolio on XX.X%, by $XX $XXX rent of and kitchen $XXX, on package rental have units, as respectively. and partial return [indiscernible] [ resulting We average X,XXX to and monthly investment, and and per XX,XXX in XX.X% [indiscernible] in appliance premium quarter XX.X% our unit and value-add installations, technology average XX.X% a investment. business renovated

year share results per Moving was to $X.XX million ended full the XXXX, a $X.XX included estate of million. or diluted diluted gain on sales $XX.X XX to year or which loss of for for a income million. which of This year. compared negative Net [indiscernible] gain $X.X $XX.X Full share $XX.X a sale the are follows. on December per as full includes year million net of the real

period in to ] million same for increase in properties For XX XXXX was year, NOI. $XXX.X as on the $XXX.X for million X.X% [ properties an of on XX compared the NOI

per $X.XX to XXXX XXXX. or of $X.XX reported to ] diluted X.X% same-store compared share year, expenses For XX and This, per We an XXXX. increase with XX.X%. same-store rental the income X.X% points in $XX.X of basis year was million occupancy to core X.X% of up coupled in to compared share led in same-store diluted FFO increase the increased same-store full NOI in an as [

in in of and the inception Since compound business XRT has core FFO. generated growth XXXX XX.XX% annual

inception, on we XX. our dividend Since a $X.XX share December fourth of dividend the For paid increased quarter, have we per XXX.X%.

core covered dividend X.XXx FFO. of a of payout XX.X% FFO our with ratio by core XXXX, was For

cap the markets follows: X.X% the rates end, of $XX.XX Moving range on same the as markets. rates high rates and reporting year-to-date rates low current to from remained end, on NAV ranging NOI, These in $XX.XX our to and we're forward basis as X% increases based the to low a our which NAV. on rise end end, in average high last XX a absorbable share the Based at increased our from and $XX.XX estimates our in on in per reflect are interest midpoint. on cap points quarter cap the

XXXX $XX of [indiscernible] we proceeds and 'XX, guidance, September events our Dallas ] representing subsequent of for Brook Before XX/XX. -- rate used touch down partially on was in I'll gain sale million paid we [ the facility $XX.X the of on credit $XX cap million X.XX%. net a since Silver corporate XX. dispositions the to million, go to down pay and The gross of completed on were $XX.X sale million September proceeds

XX. pay estimated of we located cap We pay rate completed $XX the $XX.X in was the corporate gross million on net contract to rest half sale credit facility year. the The XX, sale million in down down close representing and in currently used to were proceeds facility. under million to the have the the million, of a $XX December be we December $XX.X X.XX%. of that X Lake net first located on Charlotte fully of in will On credit The used Creek Houston, $XX.X proceeds properties, [indiscernible] corporate of million Charlotte proceeds expect of the Old Farm, gain Timber of for

guidance to XXXX. Going for

of with follows: per $X.XX for $X.XX. at the We the initial $X.XX as at share, are diluted low high end, guidance core issuing midpoint FFO the end

on end decrease same-store X% of increase high low at results the the X.X% X.X% ] end, midpoint. [indiscernible] same-store a flat low increase increase for X% the a which midpoint midpoint X% increase expenses [ the the for high end, on a a For for same-store with increase in end of increase the X.X% a low X.X% end, end, high a on and X% or on NOI the revenue, the

and Bonner to let that, with So additional commentary. it me for turn over Matt

Matthew McGraner

Thanks, Brian.

over results. going by same-store quarter operational start me fourth our Let

Our quarter points month, the at effective QX improved year basis year-over-year. margin XX per up basis the same-store XX period. prior rents points $X,XXX to ended XX.X%, NOI over Same-store up

up defensive sizable XX.X% while Fourth growth by implemented ended X.X%, Occupancy at occupancy growth ], Phoenix Florida saw X.X% was in at of Tampa supply XX.X%. South occupied. over as X.X% and rental year we growth XX% finished strategy some more finished our a revenue That was late in the XX.X%, driven revenue. same-store respectively, growth in points and year NOI XX [ all quarter and total basis in and markets year. the year-over-year. XXXX heavy Charlotte We the Atlanta

continuing taxes X.X% in expense in the quarter, also from our the taxes moderate see true-ups [ QX and year. X to declined X.X% growth. elevated down reduction year-over-year. finished real basis moderated points year, the was ending with points growth Bad and expense in continuing QX. for the X.X%, debt also Payroll maintenance continue well and moderating QX estate QX, overall at X.X% reflect often percentage a Repairs growth earlier from continued at booked QX ] comp QX to to to down We trend and post-COVID And in XXX as estate XXXX. downward down trend in in real

In XXXX, we [indiscernible].

Though the of to of started further As rates to lease revenue dividends, on year, labor we improve positive half record almost and AI the which turned [indiscernible] line second our on see negative continue most of putting high continue top second moderate costs rental reduce centralization delivering new year, market and enter for effects will Expenses the decade the to pay efforts XXXX. our stress in indeed, a growth. maximize started has supply, the year, turnover to help to the in reduce high. -- XXXX, notably QX in growth. Implementing X we

occupied, pleased healthy March morning, remained front, XX.X% retention [indiscernible]. trend over month-to-date both we're February XX%, QX positioning is to the also January of with XX.X% off and the well portfolio [indiscernible] as for leased occupancy with a the over started strong, XXXX this and XXXX. [indiscernible]. XX% February report XX-day has On us And same-store [indiscernible]

XXXX to full performance. NOI year Turning same-store

X.X% XX points by XX.X%. same-store same-store margin year excuse a while Same-store our strong to X.X%, year-over-year. of full revenues basis me, NOI growth registered -- decreased Our by NOI markets same-store increased, NOI improved Nashville by Tampa were the X% markets for grew year each or more. South Orlando, same-store Notable at and growth NOI X%. least NOI grew as Six [indiscernible] Florida, XX

capital dispositions. additions disposed to XXXX. and Brian These X.XXx on silver million XXXX at September $XX of in to Timber blended NXRT used multiple pay to as and IRR on XXXX mentioned, December invested of which on $XX in [indiscernible] net proceeds, [ facility. Turning XX% a levered million XX, sales was it booked XX, Creek ] generated

proceeds. IRR levered the by XXXX, $XX Old capital net a million will February excited We're multiple invested XX% generate close report that which Farm with of to sales end and will of X.XX finally

We on our and $XX net amount sales pay credit the of drawn million facility. will use the proceeds remaining off

press will the We gap disposition. on the the to release close strategic closing

As will contract which IRR net XX% in X.Xx at multiple Radborne and -- we're a $XX Brian Lake, invested also sales to on levered generate under million sell mentioned, excuse me, XXx proceeds. capital

to -- mentioned our Brian As XXXX turning guidance.

relatively we are enter to growth. controllable total As Brian growth, XXXX said, growth X.X% X.X% same-store forecasting as expecting peak income flat We're X.X% and properties, same-store time, X.X% growth for total to to forecasting X.X% to growth. expense NOI Across we're we be at supply. this X.X% our rental revenue X.X% expense

business growth internal our and guidance [indiscernible] includes at programs. assumptions to an our regarding be core to continue value-add the our We that following

monthly full select assets. $XX,XXX per average $XXX average to XX.X% invested cost premiums upgrades unit, on We capital. complete XXX return generating or approximately expect of on an interior At

end assets if reach guidance, can backsplashes, that bespoke identify capital. additions strategies XXX of be our tax-efficient recycling monthly and the have such on our we implemented also assumptions. unit, $XXX an range the capital, the past. in XX% the given guidance is additional complete prioritized $XXX at And of as to acquisition average dispositions. to disposition our capital generating of steel interior at to could cost activity share includes $XXX sheet rate our expect new million invested $X,XXX on We or given stainless cap -- of and can return that buybacks, which This XXXX investment accretively $XX following million team of cleanup partial X% moment. Disposition acquisition upgrades appliances, per premiums of via includes north current the added cost average higher balance implied [indiscernible], we've million X and tub

and in off and good a So satisfaction to increased resident occupancy start in closing, prioritizing so far we're retention. XXXX,

Our delevering year's materially balance cycle. hiking sheet healthier is much after through last

defensive. Though start our the year posture is to

We wane ]. second half as supply this year, growth to year modest begins are growth in the of expecting specifically [ the

the in quarter of Our in right storm, view so the submarkets. through the internal to third supply is we speak, high our that are now

delivering units submarkets XX,XXX XXXX, in submarkets. XXX the In supply In delivering units. XX, then of that example, And our XXXX, X,XXX for than units across more is under entire our company. just in to XXXX, half we see number new in there's

continue will execute. are again, to foreseeable the we, long-term starting to for have our future. growth while optimistic NexPoint at intermediate Thanks all have posture a we for So and portfolios, about prepared the That's here year, I BH remarks. for going defensive to prospects to the teams -- continuing

to to call turn like Brian. I'd And over back the

Brian Mitts

we'll now. [indiscernible] to go Q&A .

Operator

And comes Janney. the line with of Kyle first Instructions] [Operator Katorincek the from question

Kyle Katorincek

your closing the stock appreciation? purchasing your versus the via you of between do and price NAV Given long-term gap provided NAV how with trade-off buybacks assets range, consider value

Matthew McGraner

a question. Kyle, it's It's Matt. good

that we is, I we implied currently of own market think thinking portfolio at the we're can't -- assets north like again, find better it at cap in way X% a our rate. the any than about

being south that pricing of are so south launched, still to cap which few are way rate. sale, of Assets far speak, and are a implied X% that between for are

So as to that cap rate compress. range continues

XXXXs us I of something think acquisition active selling finance our in as past sort then currency see our like where years, and cycle the or buying portfolio to -- a to it. being [ we and start deal use the XX done ] start you'll over on portfolio the we've utilizing in more continuing reverse past

Kyle Katorincek

for considering Radburn similar assuming Old guidance, $XXX Lake disposition 'XX price around And Old million being and sale in then midpoint the [indiscernible] then Okay. $XXX with Farm, of million. gets you Stonecreek Old Farm, guidance the terms of to Farm to

be incremental expiring of likely rates sales near-term Our to interest. with higher and caps assets

Matthew McGraner

necessarily. not No,

some peak CapEx are we oversized or because that great, rates we'll portfolio disposition for CapEx at requiring of will the we're in those -- least that more markets are or supply I risk a heavier think think again, heavier the where we to a and/or assets -- submarket greater lift concentrated believe health then think that be I is prioritize at have we're that supply. we the the given

Kyle Katorincek

one for of the in last What REIT me. rules then maximum for our you sales are do And can Okay. 'XX?

Matthew McGraner

of my top the head, not positive. Off I'm

a know the I we get to for extent can nonissue to for you that think back specific XXXXs, but sure, the it's on XXXX, that utilize we I number. do

Operator

with Your next of Linda question Jefferies. comes from TSai the line

Linda Yu Tsai

In you to terms would dispose, expect portfolio of how to of few over help the much your delever years? next recycle

Matthew McGraner

and our our of facility in about being being with into sort portfolio a of good would farm greater I hedged and XXXX, still the I where percent Once credit the likely sales r-- the we're think sales, be as look pretty probably in scenario as XXXX individually the we get through old where terms we debt sits of fully paid feel capital mentioned, delevering. more off hedged. mid-XXs ove of on stack

scenario, just again, outright disposition the the portfolio. likely is an think, of yes, more So I

terms equilibrium. But we're yes, think I in at delevering, of incremental

Linda Yu Tsai

And which modest say growth question? in see half, you first? markets second Yes, then it. good when might return the you Got

Matthew McGraner

Florida year. as do So stronger kind Las up of the are in South to are think of year. going first Vegas think relates second throughout and and Tampa or the see of we us, half We We the the to year, I markets better picking the tougher the those are to for get it half to then latter Atlanta, be Nashville. in markets the of going half think Orlando obviously that

Linda Yu Tsai

Last question.

of updates debt your And fraudulent there on what's bad year-end? Just Atlanta, for kind expectation any on activity?

Matthew McGraner

improved. it's Yes,

last encouraging end couple in debt the the and of was year the the year, was given basically, past season. where bit have of but the And incrementally markets. little we of of year. X.X%. call because obviously, lag terms trend a to it that expect it over X% in January of X%. has seeing months. the in at over down And of it We're at sometimes almost debt. It at X.X%, Atlanta, And expectation a of be the you higher it, -- is bad start for In bad one holiday improved January a the underwriting

out woods do it. . So better of but about feel not the yet,

Operator

the of line Peaks next from Your is question Bank. Conor with Deutsche

Unknown Analyst

ROI touched you any in opening redevelopment could mix? and program, redevelopment expecting value-add versus you're if there's the expected on compare And difference your in On you XXXX activity in remarks, or XXXX?

Matthew McGraner

full My Bonner so specifics recollection to the over X,XXX turn versus last I'll year over Yes. of upgrades XXXX couple you is roughly to it hundred compare a of units Bonner? Do year-over-year. of or this year. have

Unknown Executive

right. that's Yes, Yes.

we getting $XXX a the the more premiums we're time XXX little as at understanding getting a So market, the new market look of [indiscernible]. supply in $XXX a in in -- where softness, the difficult We're pushing XXX is to that difficult supply demand. to bit portfolio, when

-- down those now, for year of times. we holds. for full units, are for those the upgrade to shift So on achieving Matt really focused full on call, XXX occupancy number the as We've hundred to base the occupancy the and mentioned prioritized a case are

asset premium special. the The function by portfolio. individually $XXX there is across rest and it's asset. the that workflow of a demand just we're more the getting demand of We're over evenly, asset the in

of So a market full areas drive where value. in a we're right finding not we a We're out, where now. properties can we're doing not those trade getting

stainless have XXXX. year, we're may overall, we're a and that, we report market appliance like X,XXX proud value were do that shipping XXX in we leased of that units there. about this adding had to through, out today. pretty upgrade. can to fold So XX.X% where private But in year-over-year, We forecasted steel a a back pay go backlash add we're things first-generation package focus,

you're out fruition So come seeing that I think and in the work numbers. to

Matthew McGraner

last -- ROI, Expecting it's this think on to I I XX.X% XX%. the compares just add from just to the expecting believe XX% down modestly or year,

getting still the ROIS. higher So

Operator

next the Your Horne Buck from question is Raymond . James. of line with

Buck Horne

to maybe were it, spreads lease renewal lease the missed of blends the of and the if Just kind new it and as all together. January specifically kind you as during of and could if of fourth break spread average was maybe what I that down what down break just with wondered new quarter

Matthew McGraner

Buck. Yes. Thanks Sure, for the question.

X.X%. negative down When for quarter, X.X% negative plan average for blended then the renewals leases January or New points blended. you me, better. XX were basis X-point And excuse has looked were the just --

up a the So the points new leases filled -- little as negative we basis for and the so X.XX% occupancy were down assets base, X.XX%, which are renewals better was are seeing a have XX we a goal. strong blended and and bit

Buck Horne

what now concessions market the the Or what helpful. That's now? there. properties? conditions Or are are Class what's using right Are in you there right B competitive it. -- average Appreciate Got out market? color concessions the for guys the

Matthew McGraner

that. submarkets, That Yes, particular, I'll say to occupancy kick our in and that priority we ours. assets, a quarter. it in for bought was add to start Bonner to I'll the fourth of the I'd in really

in so I And it was I And giving mean, a call rate we then we star as wane first blended we're about we sit today, that roughly the yield assets concession again, think second months, supply that is a or delivers a as during but giving blended. here defensive X quarter month are seeing [indiscernible]. to as X were giving the think a market were we be through they're as expect quarter. new sometimes the -- third that still to . need we, and we

Unknown Executive

to to add that? If have anything you

Unknown Executive

X Yes.

for did offering the couple discount. of the supply of concessions prospect for us. free to concessions months free, When had lot looking is And feeling we little We're a is what Las couple Charlotte supply as pressure of those renter, quarter, -- a a month fourth we think a bit more comes a the mind, markets. a the we I of some in in are at look new give Vegas. to

QX, in help utilized QX So a where build light to we in some concessions that were those little occupancy markets in of . on we churn.

think the As We and folks to based the number, we at big of usage let's here points this probably the year, bulk leased we're XX.X% are a basis on pricing call the GTR. and down. XXXX, Overall, the concessions, typically not think that. today. -- more in look more dynamic it's model heavy -- concession I quarter. I going on it, is utilize But come first than concessions our

I think our on retention. folks

definitive You that, see prove not renewal the towards as would think trade-out we that And should out and in there. be I that concessions should many back need half. more the

Operator

is the line Lewis Your Truth next question Michael with from of Securities.

Michael Lewis

I think about talked there's some markets. of sometime kind in midyear, bit new supply that around you consensus a a and your of little about

when I forecast into I think it's your those had tougher side. a of was and you little if forecast job you guidance on think demand the demand side were wondering you growth putting the a built to just what ranges? together kind

Matthew McGraner

Yes. to as into they you. demand year, it's . to forecasts year factored utilize job share that's decade factored of happy yes, encouraging I We growth And be supply those are to high peaking X be our submarkets. but do RealPage those this in with growth of bit a kind maintained still one -- walk across was enough this our largely mean, and we'd are but the submarkets, and into outstrip thing numbers, not of the is all we expect little a that see do. consultant quarterly job that through absorption prospects to

Michael Lewis

little but me. lastly makes selling with you all forecasting fits renovation hedge what be variable of about this debt what is it of It So your delever the rate you When helpful the how right? together. kind to for part of And then talked should strategy, here, game wanted sense, to strategy. the of might for do and use end than have and that's a and assets EBITDA strategy and an It's leverage think just dispositions about and a it look dispositions I'm little property the debt? target how we know so still you strategy end XXx, bit I game that. is net leverage of north the you I trying you bit should the maybe much to right? -- elevated think our that's calculating your have leverage down or a a and leverage of with talk kind paying kind bit peers, your at little how around . maybe some -- because different and about don't expect we're

Matthew McGraner

Yes. one it question, about consider we It's that a talk often. great or

go So year went I this think my because year overall on is more notwithstanding view wrong could last last that everything wrong.

bad sink. cycle, hiking rapid it's kitchen supply, fraud, just everything, Just debt,

And markets think us XXXX environment. so capital as normalized hopefully, normalized we're look at XXXX, A rates. more that a into we at lot peak more of

But putting a swaps So we if this on consider, more that, it'd did we be great. year. for example, be

So out the capital likely a debt debt a or in point, that will at way the portfolios to think cost -- worst any sure recycle today some given of I to our liquidity so it that buyer the better buyer in is B think given market, trade we and time about any asset, Class can the different a the is peak at of capital capital. as our as competitive think these and the we of continue portfolio sell we rates worst have do the improve that. portfolio go making our fix that again, that's at the in -- And at our again GSE things possible potentially Get liquid we'll rates. or because better the cost do or of new cap fixed given it, trade in view, it. way about financings, will year, one is

starts 'XX, down going power supply into as then capital our of year-over-year. they past the a play is higher. in year, are think delever. will on this incrementally new starts, putting things be the in employed out to way We asset hope to to that later XX% pricing be if and that 'XX wanes, year find no and Our And a there's replacement to strategy that is the potentially leverage and we've less we'll able couple recycle assets in

that equity I units be for and to return could them. or into ourselves. will sell potentially we for think demand assets higher either raise able being when more our value translate to

And so I think we'll at look that delever point, to that

Michael Lewis

Is fair say mean, situation. to like sounds property-by-property kind of it fluid it Okay. a it's I --

Xx this You're the not target the maybe for is and it's it gross at moving right right or looking or fair? is look debt you at saying, kind strategy -- leverage strategy on asset this of the depending more sounds That's market. value to something, a

Matthew McGraner

mean, look, we and it I see investors X%, when our today. were that to was year, want . speak to were to incrementally. -- to rates us go raise from pay we got X% still who before We is the But equity kind -- before didn't point often at took Yes. we intentional, portfolio we XX down hit excluding of is XXx increases XX, months, and debt went delever time. to it want intentional. we with XX, last down where the of the basis XXXX interest XXX public down we in in

everything balance as sheet could we -- do not wrong right we're been, on we but capital after can go of off balance our go is do and farm is property to that down unencumbered But delever, as healthy next just again, the old want -- So wholesale that week, it or and especially There's decision. a what isn't have now fresh to properties last year, we think stock buy it's close take ever is debt. sheet an back we about pay went and that's that leverage have it couple make or -- best. wrong the to We'll X.

Operator

back remarks. the be turn appear I now at questions. further And to there this closing management no to for will call . time,

Brian Mitts

you, know Do Yes. anything Matt? further. don't I

Matthew McGraner

No, [indiscernible]. I the everyone's to first quarter. our look time talk today. we'll again, and team here call after to thanks end you to appreciate And that, With the

Robert Stevenson

for all you call. conference joining Thank today's

now may . disconnect. You

NexPoint Residential Trust (NXRT) 20 Feb 242023 Q4 Earnings call transcript