NexPoint Residential Trust(US:NXRT)2025-05-01 22:37Portfolio Overview - As of March 31, 2025, the Portfolio consisted of 35 multifamily properties with 12,984 units, approximately 94.4% leased, and a weighted average monthly effective rent of $1,495 per occupied unit[107]. - Same Store properties were approximately 94.4% leased as of March 31, 2025, down from 94.7% as of March 31, 2024, with a weighted average monthly effective rent per occupied apartment unit of $1,495, a decrease of 1.3% from $1,514[150][150]. - The average effective monthly rent per unit as of March 31, 2025, was $1,350, with an overall occupancy rate of 94.5% across 35 multifamily properties[177][178]. Financial Performance - Total revenues for the three months ended March 31, 2025, were $63.2 million, a decrease of approximately 6.5% from $67.6 million in the same period of 2024[126]. - Total revenues decreased by $4.5 million, or 6.7%, to $62.774 million in Q1 2025 from $67.281 million in Q1 2024[147]. - Rental income decreased to $61.4 million for the three months ended March 31, 2025, down from $65.6 million in 2024, primarily due to disposition activity[127]. - For the three months ended March 31, 2025, rental income was $61.4 million, a decrease of approximately $0.5 million or 0.8% compared to $61.9 million for the same period in 2024[150]. - Same Store NOI decreased by $1.487 million, or 3.8%, to $37.734 million in Q1 2025 from $39.221 million in Q1 2024[147]. - Total NOI decreased by $3.334 million, or 8.1%, to $37.760 million in Q1 2025 from $41.094 million in Q1 2024[147]. - Operating income before gain on sales of real estate was $7.4 million for the three months ended March 31, 2025, compared to $9.3 million in 2024, reflecting a decrease of approximately 20.1%[126]. - The net loss for the three months ended March 31, 2025, was $6.9 million, a significant decline from a net income of $26.4 million in the same period of 2024, primarily due to a decrease in gain on sales of real estate of $31.7 million[126]. - FFO for the three months ended March 31, 2025, was $17.4 million, a decrease of approximately $1.5 million from $18.9 million in the same period in 2024[165]. - Core FFO was $19.1 million for the three months ended March 31, 2025, down approximately $0.3 million from $19.4 million in 2024[166]. - AFFO was $21.6 million for the three months ended March 31, 2025, a decrease of approximately $0.4 million from $22.0 million in 2024[167]. Expenses - Total expenses for the three months ended March 31, 2025, were $55.8 million, a decrease of approximately 4.3% from $58.3 million in 2024[126]. - Property operating expenses were $12.5 million for the three months ended March 31, 2025, down from $13.8 million in 2024, a decrease of approximately 9.4%[129]. - Property operating expenses increased to $13.1 million for the three months ended March 31, 2025, an increase of approximately $0.4 million or 3.3% compared to $12.7 million in 2024[152]. - Real estate taxes and insurance costs were $9.0 million for the three months ended March 31, 2025, compared to $9.3 million in 2024, a decrease of approximately 3.2%[130]. - Real estate taxes and insurance costs rose to $9.0 million for the three months ended March 31, 2025, an increase of approximately $0.4 million from $8.6 million in 2024[153]. - Property management fees were $1.8 million for the three months ended March 31, 2025, down from $2.0 million in 2024, a decrease of approximately 10%[131]. - Corporate general and administrative expenses decreased by approximately $0.4 million to $4.5 million in Q1 2025 from $4.9 million in Q1 2024[133]. - Property general and administrative expenses decreased by $0.3 million to $2.0 million in Q1 2025 from $2.3 million in Q1 2024[134]. - Depreciation and amortization costs increased slightly by $0.1 million to $24.4 million in Q1 2025 compared to $24.3 million in Q1 2024[135]. - Interest expense remained flat at $14.4 million for both Q1 2025 and Q1 2024[136]. - Casualty gain was $0.2 million in Q1 2025, an increase of $1.0 million compared to a loss of $0.8 million in Q1 2024[137]. - Gain on sales of real estate was $0.0 million in Q1 2025, a significant decrease from $31.7 million in Q1 2024 due to no property sales[138]. Cash Flow and Liquidity - For the three months ended March 31, 2025, net cash provided by operating activities was $28.3 million, an increase of 43.4% compared to $19.7 million for the same period in 2024[174]. - Net cash used in investing activities was $8.9 million for the three months ended March 31, 2025, a significant decrease from net cash provided of $94.2 million in the same period in 2024, primarily due to a decrease in net proceeds from sales of real estate by $102.7 million[175]. - The company expects to meet its long-term liquidity requirements through various sources, including a revolving credit facility and future debt or equity issuances[169]. - The company had $0.0 million outstanding on the Corporate Credit Facility as of March 31, 2025, with $100.0 million available for borrowing[186]. Debt and Financing - As of March 31, 2025, the company had aggregate mortgage debt outstanding of approximately $1.5 billion at a weighted average interest rate of 5.40%[179]. - Interest rate swap agreements effectively covered 55.6% of the company's $1.5 billion of floating rate mortgage debt outstanding as of March 31, 2025[180]. - The company expects to rely heavily on debt or equity capital for funding capital expenditures and acquisitions due to limitations on retained earnings for REIT qualification[171]. - The company plans to refinance existing indebtedness or incur additional indebtedness for acquisitions, although there is no assurance of favorable terms[184]. - The company expects to complete value-add and capital expenditures programs and may seek to refinance floating rate debt into longer-term fixed rate debt depending on the interest rate environment[185]. - The company has total indebtedness of $1.5 billion with a weighted average interest rate of 5.40%, all of which is floating rate debt[211]. - Interest rate swap agreements cover 55.6% of the $1.5 billion floating rate debt, effectively fixing the interest rate on $0.8 billion at 1.10%[211]. - An increase of 0.25% in interest rates would result in an approximate annual increase to interest expense of $1,630,000[214]. - The company has entered into interest rate cap agreements that cap SOFR on floating rate mortgage debt at a weighted average rate of 7.31%[212]. Market Conditions and Risks - The macroeconomic environment remains challenging, with less available and more expensive debt capital impacting property acquisitions and investments[110]. - The real estate market has not been directly affected by inflation due to increases in rents nationwide, with most lease terms being one year or less[209]. - Credit risk is present in derivative financial instruments, with the company minimizing this risk by dealing with major financial institutions with high credit ratings[215]. - The company evaluates real estate assets for impairment based on estimated future cash flows and liquidation value[208]. - The company manages interest rate risks through interest rate cap and swap agreements to mitigate financing costs[212]. Capital Expenditures and Renovations - As of March 31, 2025, the company had approximately $3.7 million of renovation value-add reserves for planned capital expenditures[168]. - The company anticipates average annual repairs and maintenance expenses of $575 to $725 per apartment unit, with additional capital expenditures of $250 to $350 per unit for non-recurring expenses[196]. - The company completed full and partial interior rehabs on 210 units in Q1 2025, compared to 127 units in Q1 2024, with total rehab expenditures of $709,000 in 2025 versus $2.2 million in 2024[196]. - The company has approximately $3.7 million in renovation value-add reserves for planned capital expenditures and other expenses related to its value-add program[196]. Dividends - Dividends declared per common share increased to $0.51 for the three months ended March 31, 2025, a rise of 10.3% from $0.46 in 2024[163]. - The company declared a quarterly dividend of $0.51 per share on February 24, 2025, which was paid on March 31, 2025[203]. Corporate Governance - The Corporate Credit Facility will mature on June 30, 2025, unless the company voluntarily reduces its revolving commitments before the maturity date[193]. - The maximum exposure of potential commitments related to the agreement with NLMF Holdco, LLC is expected to be no more than $4.0 million[195]. - As of March 31, 2025, the company had no off-balance sheet arrangements that could affect its financial condition[204].