NXRT - Earnings call transcript Q2 2024 | NexPoint Residential Trust, Inc.

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

Operator

Thank you for standing by. My name is Christina, and I will be your conference operator today. At this time, I would like to welcome everyone to the NexPoint Residential Trust Second Quarter 2024 Earnings Call. [Operator Instructions]. After the speaker's remarks, there will be a question-and-answer session. Instructions]. [Operator now over will Investor Kristen the Relations. turn I to floor Thomas, And begin call. you the Kristen, may

Kristen Thomas

Thank day, results Conference Call quarter you. Residential mid to NexPoint Good in review everyone, and the XX, company's June from second to the XXXX. welcome Trust

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

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

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

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

Brian Mitts

for cover today Mitts. our performance to be us I your our Thanks, QX environment million appreciate income diluted Kristen. and $X.XX Radbourne NAV that and Net the updated the and $XX.X as revenue and share This an gain are outlook driving was million for was or follows. completed $XX.X start of of at on second the second time. $XX XX. diluted of on includes million. for quarter joined the and specifics discuss $XX.X Lake sale share I'm on McGraner, per million leasing morning. I in $XX.X in April over the million. Brian this The for total Matt Bonner call year. McDermett. I'll loss it the of $X.XX to quarter Bonner revenue total to results, the net per joining Welcome turn to metrics will XXXX the same compares Matt the by net million income guidance for a or $X loss on I'll some guidance. Results period of quarter everyone

$XX second NOI properties. XXXX, on of quarter $XX.X for properties the XX quarter million million For of compared XX on the was XXXX to second

million or up reported or $XX per XX.X%. while share $X.XX core on same-store XXXX coupled to $X.XX to increase a rents increase per decreased X%, NOI second diluted portfolio, quarter same-store with QX quarter, X.X% FFO QX the QX compared held to and for stable X.X% For led to same-store in $X of share an rent of same-store This, an at diluted as occupancy compared compared sequentially. We QX X.X% revenues in were as same-store 'XX. of 'XX of

stock of our unit monthly and monthly $X.XX a XX portfolio, respectively. NXRT on $XX and on and XXX.X%. return XX.X% XX,XXX quarter common $XXX XX.X% rental an and XX. completed second the investment, per dividend XX on X,XXX $XX Since for upgrades, quarter, paid kitchen our installs, and currently second resulting sorry, in average and increase partial inception, return of partial and we've full the -- and and $XXX achieving our inception rent for XX upgraded During properties the increased June of renovations, laundry units, we've premium X,XXX appliance package completed we XX.X%, dividend technology leased in full a properties portfolio, investment. Since average XX.X% per installs and share in a

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

was XX, stock quarter, million June on NXRT completed represented sale attractive second second for at sales purchased Old capital. In of sales to price X.Xx retired and per property. The million Lake $XX.X XX the in cash $XX.X This on average of $XX.XX stock. Radbourne a million. on Farm retired hand of mortgage NAV the our the levered weighted of IRR During XX% retire the QX subsequently company and the $XX.XX an share, quarter, of a multiple net midpoint NXRT and million resulted proceeds its to generated invested of XX.X% price purchased is which $XX.X Stone common discount range. On at the the Creek a

and June cash of we As of XX, million facility. corporate credit $XX.X XXXX, $XXX liquidity million on had available the of

down X.X% activity. NXRT for reporting average basis cap quarter range to we're intelligence diluted end, XXXX NOI, share. based market NAV midpoint. cap range midpoint estimated per is end low NOI, based $X.XX over FFO a X.X% to increase on increase are the on X.X% end X.X% increase on increase now per Same-store the recent at follows. XX-point expenses, markets, in follows, midpoint. Total and decreased, on low revenue, rates the NOI midpoint high midpoint. as end expenses NAV. follows. sorry, to X% $XX.XX low transaction the sorry, X.X% high share core end at in current X.X% updating as X.X% and the low the a turn and high rates X.X% the revenue, guidance increase ranging high which the or completes and end, Turning X.XX% negative remarks. on X.XX% it from These on end Core the our points -- end, and on a X.X%. FFO prepared high diluted end, of as same-store Matt. at low and from share, same-store on Based high and $XX.XX increase Total revised on upon I'll in $X.XX the increase an That the range on same-store the The per -- $XX.XX a end -- per a of our sorry, XX increase $X.XX. end, my forward the end and low this

Matthew McGraner

Thanks, Brian.

me averaging second Let revenue X quarter rental of X% our X.X% growth. reviewing at XX operational by start with results. Same-store same-store markets was least

also led quarter. markets Las continued way Vegas for growth, for Atlanta Total X.X% portfolio moderation year-over-year. We're at in our to report same-store the the While and respectively. some X.X% growth and X.X% pleased expense up were revenues the

were year-over-year. X.X% operating same-store expenses up quarter just Second

And finalized tax payroll basis R&M still in on respectively, several up appeals XX XX just year and and active property points X.X% resulting assets. in XQ year-over-year, we moderate continued marketing appeals, Specifically, to declined from basis and our points, expense XXXX. tax prior X.X% property growth reduction are XX year-over-year

quarter in year-over-year Second respectively. healthy the X.X% growth a Atlanta or same-store greater, X with maintained way of and growth, our NOI XX Vegas the markets Las with markets and achieved XX.X% growth X.X%. portfolio X.X% NOI of averaging at leading

portfolio year. basis with of which or registered our a the NOI least X.X% front, QX points in XX experienced out markets same-store the continued on the up XX growth better. was Operationally, revenue XX.X%, positive of margin X QX achieving from prior income growth healthy at Our

a at at and South X% growth Vegas Our Las markets were X at at X.X%, Raleigh Charlotte least tenants blended and top out X.XX%. of eligible conversions the Renewal of Atlanta at X.X%, X.X% Florida XX% executing quarter, X.X%, X of rate XX X.X%. The for markets with were for renewal average

the of of second On a healthy the of XX.X% as portfolio the healthy as the of the leased occupied, mentioned, half close the trend XX.X% XX-day year, quarter, trend, heading healthy into XX.X% and of occupancy higher. XX%. Operationally, Brian bumped we front, it registered have today, as a remaining a and

come the be really and and While outperformed focus though but challenge, debt revenue. upside exceptional year, play throughout year historic second supply we rest also. rents of occupancy seen on the to growing still in seasonality Demand continues resilient half we into we resistance the the on will deliveries first role as the to expect that stayed to see the to in XXXX. Also and optimistic of demand of second continue half going down, to year a even bad a half a grow the additions was basis, of has surprise a positive have the peak expectations we're

In continue and addition, imbalances XXXX will to supply demand favor as enter landlords beyond. we

of down XX% starts Some from XXXX notice XX,XXX on as at XXX,XXX an on RealPage XXX,XXX starts their peak major annual down down starts from just a average. XXXX across are starts which the starts from lowest XX at is XX-year in XXXX the drawdown year-over-year Sunbelt tracking XX%. XQ years, in of rate. consultants now starts anywhere our to are or deliveries approximately represent updates with month Trailing the level approximately The run way including XX metros, units trailing and Annual rate in versus XX%. peak Sunbelt follows: with markets units markets, XX% run from all came quarterly are would and XX% units,

Finally, X% to RealPage XXXX. forecast annual X% a return of rent normal growth in

sheet. perhaps bigger Turning of the of balance items to one the

points. JPMorgan credit in On have the we're debt take broadly. have we to we also advantage XX below would Today, and of retiring spread mortgage the Mac the basis our and NAREIT, refinance we XXX average this we the basis spread our estate announce spread entirety And terms the the working Freddie the real an entire refinance average to end thereby Freddie We're XXX deleveraging strategy, been basis with with same at application XXXX, tightening facility. at at of in of refinancing as to the signed heels rate points, of markets XXX. to weighted the alluded to plus XX portfolio pleased debt. By remaining executing interest by points to portfolio agreement bring of first

out to One period is of annually. the forecasted benefit X of the by expected to extending tranche full to benefit and close first significant X will next refinanced expires refinancings impact to the to assets added be this offset expect provide after X shortly the lockup earnings year, $X.XX November maturing years X. The interest We this earnings year remaining of $X.XX over beyond rate is the our of initiative core refinancing swaps maturities on October another years.

maintain we expirations project our at throughout growth core core minimum, can, expectation bolstering XXXX over success in achieving performance annual we out our FFO a up balance shoring X% swap history. We initiative compounded As we operating NOI, our at future by see the a our have the least the is future that and into for growth. in and sheet, positioning FFO estimates a company this doubled metric historically years

on with maintenance we'll inflation a latter and defeasance as no and us remain fees breakage yield look flexible Importantly, opportunistically these always, this refinancings to and/or hedge allow And minimal as sell moderate. basis to exposure expectations assets penalties.

Finally, NAV. on the

NAV rate downward XX a As to share knowledge based is mentioned, rate markets. per XXXX revised our basis Brian midpoint on made assumption in adjustment new current our NOI. our cap trades point $XX.XX assets our using a X.X% comparable X.XX% upon to successful on to X.XX% of We cap

or and both back buy I'll rate the purchase range. company, assets In in roughly At outlook exchange. In sell and liquidity, look we're to have the the the up X.XX%. were stock new flow our X% excited utilize near-term rate discount about our assets reiterate, I NAV stay cap done and Blackstone XXXX at Brian? which our here NexPoint closing, for and/or utilizing with the implied for cap free we guidepost and BH recently all addition, just to a as a transaction That's of levels, current the the X.XX% teams work we'll in today's generate these remarks. refinancings, struck year ARC to cash use at we for of deal past at our is to continuing to KKR, to execute. extent and Lennar low have Thanks prepared our free And as hard another outperformance. we'll to prices,

Brian Mitts

Matt. it, Appreciate

up it open for questions. Let's

Operator

[Operator Instructions].

first Your Montgomery of line question comes Scott. Janney Kyle Katorincek from from the

Kyle Katorincek

than come that has accounted the for of expenses noted materially to taxes year-to-date guys higher total that due estimated? initially you X-year real reassessment. Raleigh your in estate Did XX% You

Matthew McGraner

Yes.

estimates. Raleigh, that tale having a satisfied deals, consultants of Mooresville the came asset, now, fighting. kind pretty more in-house Six The do little The in to We're a actually it's X asset, in our asset, outcome. bit right? ahead Forks we one that right So of of

still accruing think that there. rate. We us a see you higher savings So there's at

more there's material for could If down. and about spread you of look the of that of our numbers, deals at the outcomes, get referenced year those, range XX full drivers asset can be one for that XXXX. actively House there that are million in if $X.X High one is that protest we

Apple it's opportunity for that. impact. But as it kind bought mentioned, So of we're X-year will still working then big at a the X. be the you a fixed is on certainly next It and

to to can have report QX. going we're we But everything outcome. come do to more So we control that hopefully,

Kyle Katorincek

And any other are that tax up markets Okay. larger 'XX? that half be then there multiyear coming into within the and are second going reassessments XX of to

Matthew McGraner

No, that's the one.

So year well. was as Charlotte, year, County Nashville Mecklenburg last last

are those of odd with tax but dealing So Raleigh's we're the situations, X kind now. with

pleasantly I get with and the think some down. we data, some income surprised result Forks we're can, we Six outcome, through High approach, think House sale

Kyle Katorincek

then expect to an process update on Should we in provide the Houston? with 'XX? Stone And could year-end still you sales Okay. guys Creek the it close

Matthew McGraner

And offers on. with that believe and can marketing think still it different transact offers can year-end. We're before negotiating we we do a buyers execute of we attractive couple Yes. have

Operator

your the Okusanya comes from line question Deutsche And of Omotayo next Bank. from

Omotayo Okusanya

Yes.

these of of deal terms pertains could may of now you assets paperwork. ongoing talk with any refinancing know the while. it refinancing GFC a can to second the in it -- you fees exists? And There's as debt, sometimes and lot that if fee with that refinance, one, have a process the Hud of Just of to all, payments then about take to I kind

be administrative. can very You

will a that get Just it kind be kind bit how of process done. through little easy us of talk about to

Matthew McGraner

Tayo, it's Matt.

accounting considered the be So our There's within years. complete fees can over It's all million going a because costs, but Mac think, sticking some a the the $XX $XX on that of refinancing to breakage modification for I has, purposes. be the the currently life portfolio. negligible they're million, versus we're really debt -- Freddie the X amortized

them, with Freddie Mac execution JPMorgan the then and current over JPMorgan. then sponsor is that. And refinanced have that's in financed Freddie Freddie $X a side, select company. we're obviously and think, the the the I So with lender. a on with of billion is history And

cadence good So we're a in very with them.

be tranche, We can we -- second XX believe while out through doing we're tranche. first like and applications. We'll signed and close the we're we're a have the by the the next later. quarter the over the parties concurrently would third tranche and this first And then of third working close days, end month on concurrently to on

it. us. And And routine again, expect so we this pretty pretty excited about to be for

Omotayo Okusanya

year-over-year. in it That's revenue for little revenue occupancy same-store I'm revenue was guidance numbers I down like kind helpful. were -- a And Rents, little then same-store you -- the the again, sorry, second the bit, flattish again, were of seems somewhat quarter, up same-store a bit. but quarter, think your

through is and doing ancillary little that for better? Is Could the a better? implications of the talk curious, Just rest again, debt bad you income year? bit that that doing potential

Matthew McGraner

of the we roughly specifics, lot the Brian, bad a half Yes. I second underwriting can you the is income $XXX,XXX think me give reduction and of revenue of vacancy loss $X And total [indiscernible]. of debt. I And the as but then it of million half upwards GPR the what year, forward, about a go we're think better $XXX,XXX. of first that's also drove lower of but for bad debt

Brian Mitts

Yes.

one that of might get in think things lost translation I here. the

throughout report quarter So occupancy average higher. occupancy XX.X%. at physical occupancy, a The the full same-store and was through end we occupancy pool. the strong quarter financial XX.X% of pretty occupancy the effect We XXX carried of

So occupancy. overall, we had a pickup in

X.X% -- year-over-year. also is our We bad down have debt about

pleasantly surprised we're So there.

from to I of think fiction kind we've work activity done well the through COVID. overhang

think, is the in occupancy bad of did in and that X.X% A pickup so And growth in, revenue. I we a debt. quarter, lot

Operator

floor the no team. management With I'll turn questions, to [Operator the over Instructions]. further

Brian Mitts

you. this on morning, again next everyone we'll talk quarter. Appreciate Thank and Yes.

Operator

today's does This call. conference you. conclude Thank

now may day. a Have great disconnect. You

NexPoint Residential Trust (NXRT) 30 Jul 242024 Q2 Earnings call transcript