NexPoint Real Estate Finance(US:NREF)2024-05-14 01:17Real Estate Investments - The company has completed approximately $18.4 billion of gross real estate transactions since 2012, with its Sponsor managing about $19.8 billion in loans and credit-related investments as of March 31, 2024[183]. - The company acquired or originated investments totaling $122.54 million during the three months ended March 31, 2024, with a significant mezzanine investment in life sciences amounting to $43.28 million[187]. - The company focuses on investments in real estate sectors where its management has expertise, including multifamily, SFR, self-storage, life science, and hospitality sectors[181]. - The company targets lending or investing in stabilized properties or those with light-transitional business plans[181]. - The company has diversified its investments across various property types, primarily focusing on multifamily properties[224]. - The company has expanded its real estate portfolio with new investments in multifamily properties in various locations[226]. Financial Performance - The company reported a net loss of $16.32 million from redemptions and sales during the three months ended March 31, 2024, with total dispositions amounting to $550.06 million[188]. - Net interest loss for the three months ended March 31, 2024, was $12.8 million, a decrease of approximately $16.8 million compared to net interest income of $3.9 million for the same period in 2023, primarily due to accelerated amortization of a senior loan premium[205]. - Other income decreased to $9.2 million for the three months ended March 31, 2024, down from $10.9 million in 2023, reflecting an increase in unrealized losses related to consolidated CMBS VIEs[207]. - Operating expenses increased significantly to $11.0 million for the three months ended March 31, 2024, compared to $5.5 million in 2023, marking a 99.7% increase[205]. - Net income attributable to common stockholders for the three months ended March 31, 2024, was a loss of $14.3 million, compared to a profit of $6.6 million in 2023, representing a decrease of 317.5%[205]. - G&A expenses rose to $4.2 million for the three months ended March 31, 2024, from $2.2 million in 2023, an increase of approximately $2.0 million[208]. - Dividends declared per share decreased to $0.5000 in 2024 from $0.6850 in 2023, a reduction of 27.0%[212]. Investment Returns - The company has a preferred equity investment in multifamily properties with a coupon rate of 11.00% and a maturity date of May 1, 2030[187]. - The company has a current yield of 14.32% on a mezzanine loan in the life sciences sector, maturing on February 9, 2027[187]. - Preferred equity investments totaled $214.31 million, yielding an average return of 12.11%[226]. - The total investment in SFR Loans amounts to $135.232 million with a current yield of 5.31% and a remaining term of 3.55 years[224]. - The total investment in CMBS B-Pieces is $506.538 million, yielding an average current yield of 4.36% and a remaining term of 5.31 years[224]. - Total mezzanine loans amounted to $177.78 million with an average interest rate of 10.79%[225]. Shareholder Information - The weighted-average number of shares of common stock outstanding increased slightly to 17,264 in 2024 from 17,118 in 2023, a 0.9% increase[212]. - Weighted-average common shares outstanding - diluted increased by 2.5% to 18,082 thousand in Q1 2024 from 17,640 thousand in Q1 2023[218]. - The company has a total of 60,658 in common stock issued as of April 14, 2022[226]. - As of March 31, 2024, the company sold 1,657,700 shares of Series B Preferred Stock for total gross proceeds of $40.9 million[240]. Cash Flow and Liquidity - For the three months ended March 31, 2024, net cash provided by operating activities was $17.7 million, an increase from $15.0 million for the same period in 2023[243]. - Net cash provided by investing activities for the three months ended March 31, 2024, was $545.4 million, significantly up from $66.7 million in 2023[244]. - Net cash used in financing activities for the three months ended March 31, 2024, was $560.5 million, compared to $61.7 million in 2023[245]. - The company expects to meet its long-term liquidity requirements through various sources, including future debt or equity issuances and net cash from operations[231]. Market Conditions - The macroeconomic environment remains challenging due to high interest rates and limited credit availability, impacting commercial real estate investments[268]. Legal and Regulatory - The company has been involved in lawsuits that are not expected to materially affect its business or financial condition[185]. - The company intends to maintain its REIT status for U.S. federal income tax purposes, which commenced with the taxable year ended December 31, 2020[184].