NexPoint Residential Trust (NXRT) Q2 2024 earnings summary

Executive summary

• Q2 2024 net income was $10.6 million ($0.40 per diluted share), reversing a $4 million net loss in Q2 2023, driven by an $18.7 million gain from property sales.

• Portfolio comprised 36 multifamily properties with 13,174 units, 94.1% leased, and average monthly rent of $1,517 as of June 30, 2024.

• Focus remains on value-add multifamily investments in the Southeastern and Southwestern U.S., externally managed by NexPoint Real Estate Advisors.

• Dividend of $0.46 per share paid, 1.48x covered by Core FFO, with a 68% payout ratio.

• Macroeconomic headwinds include high interest rates and limited credit availability impacting acquisitions and asset sales.

Financial highlights

• Q2 2024 total revenues were $64.2 million, down from $69.6 million year-over-year, reflecting property dispositions.

• Q2 2024 FFO was $16.3 million ($0.64/share basic), Core FFO was $17.9 million ($0.70/share basic), and AFFO was $20.9 million ($0.82/share basic), all down year-over-year.

• Q2 2024 NOI was $38.9 million on 36 properties, down from $42 million on 40 properties in Q2 2023.

• Same-store NOI for Q2 was $38.4 million, up 2.4% year-over-year; same-store revenues increased 2.3%.

• Portfolio occupancy held at 94.1% at quarter-end, with effective financial occupancy at 94.9%.

Outlook and guidance

• 2024 core FFO per diluted share guidance: $2.66–$2.79 (midpoint $2.72), raised from prior guidance.

• Same-store NOI growth expected between 0.5% and 1.6% for 2024.

• Board declared a quarterly dividend of $0.46242 per share, payable September 30, 2024.

• Application submitted to refinance $750 million of mortgage debt on 17 properties through Freddie Mac, with refinancing expected to lower SOFR spread and provide $0.15–$0.20/share annual benefit through 2027.

• Management expects to meet short-term liquidity needs through operations, cash, and available credit.