NXRT - Earnings call transcript Q4 2024 | NexPoint Residential Trust, Inc.

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Operator

Good morning, ladies and gentlemen, and thank you for standing by. My name is Kelvin and I will be your conference operator today. At this time, I would like to welcome everyone to the NexPoint Residential Trust Q4 2024 Earnings Call. [Operator Instructions] I would now like to turn the call over to Kristen Thomas Investor Relations. Please go ahead.

Kristen Thomas

you. Thank and company's Residential quarter results XX, everyone, to conference ended to XXXX. the review for welcome day, Truck NexPoint call December Good the fourth

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

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

of company's statements any recent current could the based the SEC other the everyone Before reliance Securities statements discussion encouraged are we for that remind within company's begin, the a forward-looking should more annual to contains call on and to Act risks meaning I Reform that Form most on factors Listeners this complete and forward-looking Private other review statements. the are Litigation filings place of expectations, would conference on report of that affect undue not beliefs. with like XXXX and assumptions and forward-looking any XX-K management's

statements NXRT an This financial speak and forward law or statements. during any by as also any call required [indiscernible] of non-GAAP today's and date revise The conference not to only publicly this looking obligation analysis update under of conference includes does call measures. made

more ahead, release turn a the go over see that discussion call I Please [indiscernible] complete now earnings For Matt. to like of Matt was company's today. the non-GAAP these would filed earlier to McGraner.

Matthew McGraner

long role XXXX. the put on played grateful a took well-earned dive he his officially we We're and to retirement, what NXRT before And it prepared XX, he is into in instrumental the of I today. dedication, for on to Kristen. is in our his December incredibly effect shaping countless years moment Thanks, days remarks, want congratulate Brian into take which

a And I'm for stepped At our having to insight deeply worked pleased leader member results While time, provide he move closely our understands the back as with we ability execution. forward. a over continuing long-term and new fortunate that Board, as shareholders. in CFO. Paul and welcome approach a we're and day-to-day I Richards confidence of remains same has our operations, Brian strategy to to officially me sector-leading drive Brian valued is our to strong He decade, Paul for have full his and our guidance

And with quarter walk through call and to results. to year financial I'll that, XXXX turn the our Paul fourth full over

Paul Richards

NAV off results joining forward Thanks, calculation our Matt, and Bonner and we everyone details thanks, and metrics and turn our our on portfolio. guidance. update call and on full QX and the to year look driving and kick cover to XXXX and Kristen, this initial I [indiscernible] appreciate conversation to welcome and I'll time. morning. highlights, Matt guidance your it the then lease discuss then the over performance to and environment I'll our provide and

million period with loss million million Let from $XX.X start to follows: diluted the million. $XX.X revenue total of or income net which $X.XX fourth fourth the total [indiscernible] or quarter, as per share $X.XX $XX.X results of compared in was $XX.X for revenue on per on share as me diluted the of same quarter are Net

properties in NOI. on net quarter decrease compared X.X% fourth million $XX.X fourth income a was for XXXX, XX on million $XX.X of properties operating to the quarter XX For the

Core in We XX FFO per compared XX.X%. per $X.XX points QX basis XX XXXX share compared portfolio For or diluted XXXX reported to basis and points million same-store and the a basis quarter with $XX.X income share points X.X% same-store rental stable on for diluted the XXXX occupancy of coupled fourth expenses of rental $X.XX an to up the quarter-over-quarter. of increase fourth same-store XX decrease This, NOI QX as in at to same-store quarter, remains led in of same-store QX was income increased 'XX.

execute value-add and units, investment. achieving during XX by innovations premium partial an renovated to average return and [indiscernible] our XX continue of full completing on $XXX business XX.X% We monthly rent

[indiscernible] of XX.X% appliance full $XX completed current package portfolio, as we $XXX, partial and $XX kitchen resulting investment, XX,XXX upgrades, and year-end, and X,XXX X,XXX on respectively. XX.X% unit XX.X%, the installations have increase rental installations in in In laundry monthly average technology and and and per return

$X.X Net million and income Moving for to results as diluted December XX per $XX.X million are of depreciation full Full million a ended million or of and which estate sales year of year. included year on real per gain $XX.X estate on This net income amortization gain year million compared diluted $XX.X depreciation included $X.XX income of share, $XX.X or to follows: amortization the full income sale which share real the for the $X.XX $XX.X and of of of and million expense. of expense. of was XXXX,

to For on XX XX period or the in same decrease $XXX.X year, million was million properties on a of compared X.X%. the NOI for properties as XXXX $XXX

with This, For X.X% the in at same-store in year increase NOI XX of compared same-store increased income of year, points XX.X%. stable the to increase full same-store same-store as coupled an basis an remained XXXX. occupancy expenses to rental in and X.X%, led

share XXXX, FFO. of business compound per annual XX.X% has XXXX inception Since in $X.XX We $X.XX in share reported NXRT or Core XXXX. to a generated million diluted diluted FFO compared $XX.X for growth the of in per Core

to cap end; our the cap on forward our Turning NAV NOI, flat in average which remained at quarter follows: a reflecting estimates low of the X.XX% $XX.XX X.XX% high last on end, $XX.XX NAV reporting in and the on on rates remained cap and capital end share rates markets from our year range These as low current same $XX.XX to midpoint. and our per the last ranging markets. and as the Based rates the in are over on markets we on high based stability are the estimate. end;

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

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

events. Finally, Radbourne before our on XXXX, discussing disposed guidance, and April October on Lake, old [indiscernible] touch Stone on activity XXXX, NXRT subsequent of transaction to X, farm I'd and X, XX, like capital $XX.X on March sales Creek levered balance drawn of the facility. XX.X These we invested million net credit million generated on and down proceeds, sales which on pay and XXXX. multiple IRR X.XX $XX to used on XXXX

XX, retired average XX% million the closings half total gross the range. which loan of for midpoint NAV proceeds weighted in common October the November of of XXXX stock a on of a In $X.XX aggregate billion, at we discount first Into $XX.X QX which and of XX XXXX, price total X, $XX.XX, entered of represented company's XXXX our is XX.X% XXXX, company debt. of representative outstanding into agreements the to

to by X.XX% was weighted to X.XX% XX average impact Notably, the the of the at schedule debt extended reduced maturity rate the Accounting X.XX% interest December these company's basis average swaps, rate NXRT's the for to NXRT's contracts. debt activity from years. agreed NXRT on interest refinancings rate an XX, pricing as total refinance refinancing interest XXXX. swap of reduced adjusted weighted interest hedging weighted to before points impact of from Holistically, This improved terms. X prior average

of company's XXXX, debt the payable company a stockholders On XX, these Board March quarterly the Directors dividend per on XXXX. of completion on until $X.XX declared meaningful has XXXX, of of February March record XX, no With share refinancings, the XXXX. to maturities XX,

low at our initial the the $X.XX share, guidance high XXXX, midpoint issuing $X.XX. For to $.XXX at follows: for are FFO end; Going we of a end Core as guidance per diluted with

the which low on a basis decrease X.X% point And for a XX in-store end, high end commentary on turn for of For same-store revenue, the midpoint, at to end, on on increase. X.X% the it basis points the an that, a X.X end negative midpoint. a of XX high X.X% low portfolio. end increase on the XX and on increase X.X% decrease with Same-store X.X% over on results and the with I'll low Matt decrease the NOI increase end; the expenses, increase the point high midpoint basis

Matthew McGraner

you, Thank Paul.

fourth finishing over [indiscernible], year ended and the finishing of average at quarter growth strong, XX%, operational an going Florida at occupancy South by and results. Orlando same-store respectively. start me stable XX.X%, quarter occupancy the saw Let sizable remained XX.X% in Charlotte, our and year-over-year. We XX.X%. XXXX Occupancy DFW

the over is with and several QX same-store conversions basis the XX the quarter February basis same XX.X% quarter. In by projected in seen points, last a and were XX January XX driven growth off strong growth NOI retention total of has for March at over XX.X% clip. started and Renewal XXXX, quarters. finish both to we've revenue finished growth X.X%, growth at points revenues Operating maintaining the points in growth moderate rental was negative basis the expense

year, continuing Bad have a down for and the real reflect in X.X% Operationally overall finishing taxes points. declined X.X% quarter, also points in XX for we which year-over-year. averaged for reduction Real debt XX ending X.X%. was to from booked year moderated elevated payroll negative quarter, post-COVID was growth. X.X%, our of at XXXX, basis growth at down full moderate basis of XXXX. to estate comp off in continues And XXXX's expense the estate the QX trend R&M an true-ups to QX average tax the

with as morning, pleased for the to is the occupancy this QX front, was XX.X% same-store occupied of positioning portfolio well a XX-day report XX.X%. trend us we're still On that occupancy And XX.X%, XXXX. of

markets same-store Indeed, Our by Atlanta record XXXX revenues at X%. XX%. X.X%; NOI points Las the the same-store X.X%. Vegas X.X%; was markets of markets. healthy Orlando year were impact X.X%; grew XX X despite for Raleigh improved margin same-store notable X.X%; by basis least increased the X% at year for Orlando at in while our XX year of full NOI deliveries growth our and by a at at Same-store at Those NOI

Turning to guidance. XXXX

a slightly line of reduction to gain and a negative and growth for between with basis point includes we for rent XX.X we're lease basis a occupancy activities [indiscernible] focus in our XXXX. midpoint from projecting year. Paul ROI It NOI year-over-year. As as trade-outs top the in growth we X% the moderating spending. income to half Also QX a the in value-add and assumes back a decline on and includes same-store occupancy rental increase guiding XX peak a growth assumes attributable in earn-out that X.X% rent XX growth portfolio, point the point model XXXX. Also with X.X% market are CapEx negative growth a to XXXX X.X% X.X% a physical said, basis forecasting also Across XX XX

We're XX.X% to reduction in from XX.X% a negative forecasting also from -- basis occupancy from XX.X% midpoint. -- at financial XX point the

be will bulk point Vegas, assuming perspective, markets market other in a and roughly basis South charges. each we're Raleigh, Las rent expecting Wi-Fi increase markets. to Florida, top-performing XX Atlanta, expecting these in Nashville Finally, X% our a from and And X% we're revenue growth

the a in in growth we're negative X.X% expense. Within XX decline. a expense X.X% [indiscernible] number advertising controllable X% X% a growth R&M growth year, basis and a On negative a for forecasting that labor turn point is costs, negative and the increased G&A

X.X% an to X% Paul On X% X growth -- on The X.X% This growth; expense NOI X.X% as of the hoping negative results. are expect achieve which noncontrollable a growth, which expense total growth, X.X% tax estate a to X% our to expense utility April mentioned, components and all growth. a to real a growth. X.X% we're same-store renewal; insurance equates forecasting this we assuming better

core. an be our XX% supply. to programs, internal declining assumptions our with that amid our historical value-add which as targets And regarding progresses to year continue accelerate to in still includes growth following guidance our to we business at anticipate the the aligned We end, XX%

full upgrades monthly an a unit, complete We $XX,XXX average premium. interior XXX to of cost expect $XXX per average at generating

properties. a to enclosures countertops, monthly rehab We properties stainless These average cost partial we surface initiatives see growth of hard are These include tub varying upgrades steel premium. and appliances, at generating per private by roughly unit, yards drive bespoke strategically additions tailored and competing aspects. partial rent such among partial bespoke an opportunities updated to upgrades among other where expect interior [indiscernible] average new $X,XXX as $XX complete

or Finally, we XX% XXX washer unit, cost also plan and generating per dryers to monthly premium at ROI. $XX average of $X,XXX install an average

the and second there opportunities the On we buyers the prospective of rent guidance, volume continue potentially of we increase in opportunities to of and expect the But to acquisition in year finally growth. the QX half. into can limited underwrite later pipeline will the disposition out do value-add first underwrite as half

corporate million to credit of markets and we $XXX company credit facility, excess of to has 'XX. finalize finalize platform. our an facility, On $XXX balance head provide and liquidity of June, well recasting and the the welcoming appreciate a syndicate balance In down capital of capacity NXRT our into partnership on and we sheet new strong the giving of banks on front, we're the forward expect million unsecured agreement liquidity a to to corporate look $XX.X path today and unrestricted flexibility cash that sheet. to million as We with available the liquidity continue relationships to and

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

for see We strategy begins to half in are specifically transition in QX the our the wane. at NexPoint It's continuing have units excited to quarterly to year, since this initiatives, saw for execute. expect the and execute and in remarks. another leading to BH XXXX, Thanks second here of a outsized year quarter. lowest sharp That's on QX Indeed, XXXX. pullback XX,XXX to the our supply I just and as XXXX level prepared all to teams year to of growth we [indiscernible] and in

turn that, call With we'll over questions. operator for to the

Operator

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

Kyle Katorincek

Atlanta for average basis up in points negative points effective negative income rents XXX XXX basis was occupancy was but basis XX rental quarter-over-quarter, Total points.

positive result drives what the So there?

Bonner McDermett

Yes.

I had there, higher exactly at. what [indiscernible] looking think a little in Atlanta, bit you're we've occupancy

benefit rolled we've and to that Wi-Fi. in assets QX think that Atlanta X over across We've the the recently, QX. other total out I revenue added both

think, retrofit growth That's benefit. getting and there. offsetting see of I has units. you We're fiber some some downward So [indiscernible] and total loss pressure gig a X the been revenue That,

Matthew McGraner

XXXX. to this X.X% a versus year just improvement Bonner's underwriting million. to we're debt to XXXX almost what In the debt That's and positive in XXXX, of add and in seen have the point, bad improving bad $X.X X.X% expecting market conversion in

So that's a too. little impact another

Kyle Katorincek

what decrease please drove can basis then XXX in some And the you on provide occupancy Okay. color in point [indiscernible] market? the

Bonner McDermett

Yes.

-- asset was supply market [indiscernible]. and pressures a we're some Raleigh, submarket, in today one We've it's for bit pressure. larger better of the [indiscernible] House think more We're the seen in I us. High and expansion particularly under our little

a also there. bit little of change We had personnel

So Raleigh it's particularly forward something the year. that that half the and on. still we've the moving are I of with gets And think towards better, supply picture dealt We back market. I think love the

Kyle Katorincek

up early know your I interior X,XXX full prepared And the and into bit about mentioned mentioned X,XXX dissipate. then start left Okay. to of that in that sort Any there guys you the you that market XXXX, any 'XX material a remarks, ramp markets there more. current units -- your based upgrades to and was on supply conditions little XQ changes one you to about like upgrades, but focusing and in mentioned plan to 'XX, you'd changes on?

Matthew McGraner

Yes. in We're push largely we where still prioritizing the renovations can places rates.

of done the say year, of the still So or that that I'd it's mentioned. that South Atlanta and quarter year excuse is just in this to output upgrades second we're Raleigh double half pace me, the then that's XXXX. the that year largely a Florida, last in Vegas, the XXX Bonner since and our -- output the not pleased it at were we XXX historically rehab revenue

that Our hopefully, goal an the second as of we have rehab quarter. some hope to the the additional in output the guidance. in and year to expecting and add inversion And is half this industry -- our output upside reevaluate from in this rate is pipeline every can

So the that's goal.

Operator

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

Omotayo Okusanya

think [Technical level us of through Difficulty] I how some interest of given, XXXX about walk in maturities the should you expense Could higher guess, we

Matthew McGraner

Yes.

I'm it's Tayo, hearing you. Matt. difficult time having a Sorry,

question plays Is through part the the in of was guidance. fair? expiration the how or swap I think that one question

Omotayo Okusanya

Yes, that's you hear fair. Can me.

Matthew McGraner

you I better Yes, can hear now. Yes.

then have roughly we million had swaps decline And our So we $X.XX a -- expiring our we basis XX were we of have point in -- June. in spread.

basis benefit XXXX, for a as that total actually expense. points guidance is basis a interest XXX component $X.XX points to reduces XXX So of the our

half more year if the core take -- in appropriately higher on of see the in, cuts but for upside do juncture. assumptions any have we think numbers, or think, I the the to we we in longer. being, second Now at there's Fed baked some conservative that's this do we're And

Operator

further no that, turn questions With remarks. time. over will at the back the this to are NexPoint for now ahead. management There final closing I go call team Please

Matthew McGraner

Thanks, speaking everyone, great right. day. we All you calling and for a to in, next quarter. look Have forward to

Operator

you for and conference Ladies call. ask the please your you thank and We gentlemen, disconnect concludes lines. participating that that

NexPoint Residential Trust (NXRT) 25 Feb 252024 Q4 Earnings call transcript