WWW.NEXPOINTLIVING.COM

AN AFFILIATE OF

•

NXRT¹ reported Net Loss, FFO², Core FFO² and AFFO² of $(2.0)M, $11.0M, $11.0M and $12.9M, respectively, attributable to common stockholders for the quarter ended June 30, 2019, compared to Net Loss, FFO, Core FFO, and AFFO of $(1.7)M, $9.3M, $8.7M and $10.2M, respectively, attributable to common stockholders for the quarter ended June 30, 2018.

•

NXRT reported Net Loss, FFO, Core FFO and AFFO of $(6.3)M, $22.0M, $22.0M and $25.6M, respectively, attributable to common stockholders for the six months ended June 30, 2019, compared to Net Income, FFO, Core FFO, and AFFO of $8.4M, $17.0M, $17.0M and $19.8M, respectively, attributable to common stockholders for the six months ended June 30, 2018.

•

For the three months ended June 30, 2019, Q2 Same Store properties³ average effective rent, total revenue and NOI² increased 4.3%, 4.0% and 5.4%, respectively, and occupancy increased 40 bps over the prior year period.

•

For the six months ended June 30, 2019, YTD Same Store properties³ average effective rent, total revenue and NOI² increased 4.3%, 4.3% and 6.2%, respectively, and occupancy increased 40 bps over the prior year period.

•

For the three months ended June 30, 2019, Q2 Same Store properties expenses increased 2.2% over the prior year period, primarily due to increases in property taxes of 11.5%.

•

During the three months ended June 30, 2019, NXRT acquired Summer’s Landing in Fort Worth, TX for a purchase price of approximately $19.4M.

•

The weighted average effective monthly rent per unit across all 39 properties held as of June 30, 2019 (the “Portfolio”), consisting of 13,407 units, was $1,016, while physical occupancy was 94.4%.

•

NXRT paid a second quarter dividend of $0.275 per share of common stock on June 28, 2019.

•

During the second quarter, for the properties in our Portfolio, we completed 475 full and partial upgrades and leased 381 upgraded units, achieving an average monthly rent premium of $109 and a 27.1% ROI⁴. Since inception, for the properties in our Portfolio, we have completed 6,594 full and partial upgrades and achieved an average monthly rental increase per unit of $97, equating to a 23.2% ROI on all units leased as of June 30, 2019.

•

During the second quarter of 2019, we completed Smart Home Technology installs on 4,891 units, covering 15 properties.

•

On June 25, 2019, NXRT entered into a sale agreement on six properties (the “Sunbelt Portfolio”) for a total sale price of approximately $289.9 million which will net proceeds of approximately $145.0 million after repayment of debt and before closing costs.  The sales of the properties are expected to close on or before August 30, 2019.

(1)

In this release, “we,” “us,” “our,” the “Company,” “NexPoint Residential Trust,” and “NXRT” each refer to NexPoint Residential Trust, Inc., a Maryland corporation.

(2)

FFO, Core FFO, AFFO and NOI are non-GAAP measures. For a discussion of why we consider these non-GAAP measures useful and reconciliations of FFO, Core FFO, AFFO and NOI to net income (loss), see the “Definitions and Reconciliations of Non-GAAP Measures” and “FFO, Core FFO and AFFO” sections of this release.

www.NexPointLiving.com

Page 1

AN AFFILIATE OF

(3)

We define “Same Store” properties as properties that were in our Portfolio for the entirety of the periods being compared. There are 32 properties encompassing 11,471 units of apartment space in our Same Store pool for the three and six months ended June 30, 2019 (our “Q2 Same Store” and “YTD Same Store” properties).

(4)

We define Return on Investment (“ROI”) as the sum of the actual rent premium divided by the sum of the total cost.

•

Total revenues were $43.1 million for the second quarter of 2019, compared to $35.7 million for the second quarter of 2018.

•

Net loss for the second quarter of 2019 totaled $(2.0) million, or a loss of $(0.08) per diluted share, which included $13.1 million of depreciation and amortization expense. This compared to net loss of $(1.7) million, or a loss of $(0.08) per diluted share, for the second quarter of 2018, which included $11.0 million of depreciation and amortization expense and $0.1 million of loss on extinguishment and debt modification costs.

•

The change in our net loss of $2.0 million for the three months ended June 30, 2019 as compared to our net loss of $1.7 million for the three months ended June 30, 2018 primarily relates to increases in operating expenses, depreciation and amortization and interest expense, and was partially offset by an increase in total revenues.

•

For the second quarter of 2019, NOI was $24.6 million on 39 properties, compared to $19.8 million for the second quarter of 2018 on 32 properties.

•

For the second quarter of 2019, Q2 Same Store NOI increased 5.4% to $20.8 million, compared to $19.8 million for the second quarter of 2018.

•

For the second quarter of 2019, FFO totaled $11.0 million, or $0.46 per diluted share, compared to $9.3 million, or $0.44 per diluted share, for the second quarter of 2018.

•

For the second quarter of 2019, Core FFO totaled $11.0 million, or $0.45 per diluted share, compared to $8.7 million, or $0.41 per diluted share, for the second quarter of 2018.

•

For the second quarter of 2019, AFFO totaled $12.9 million, or $0.53 per diluted share, compared to $10.2 million, or $0.48 per diluted share, for the second quarter of 2018.

www.NexPointLiving.com

Page 2

AN AFFILIATE OF

www.NexPointLiving.com

Page 3

AN AFFILIATE OF

(share counts in thousands)

Exchange/Ticker

NYSE: NXRT

Share Price (1)

$42.74

Insider Ownership

20.83%

2019 Q3 Dividend Per Share

$0.275

Dividend Yield (1)

2.57%

Shares Outstanding - basic (Wtd Avg. 3 mo. ended 6/30/2019)

23,736

Shares Outstanding - diluted (Wtd Avg. 3 mo. ended 6/30/2019)

24,233

(1)

As of the close of market trading on July 29, 2019.

Revenue & Average Rent Per Unit

Stock Price Performance (Since Inception; 4/1/2015)

SIGNIFICANT APPRECIATION

+233.2%

www.NexPointLiving.com

Page 4

AN AFFILIATE OF

Property Name

Location

Date of Acquisition

Purchase Price

Mortgage Debt

# Units

Bella Vista

Phoenix, Arizona

January 28, 2019

$

48,400

$

29,040

248

The Enclave

Tempe, Arizona

January 28, 2019

41,800

25,322

204

The Heritage

Phoenix, Arizona

January 28, 2019

41,900

24,625

204

Summer's Landing

Fort Worth, Texas

June 7, 2019

19,396

10,109

196

$

151,496

$

89,096

852

4.1% RENT GROWTH

5.3% RENT GROWTH

ON Q2’19 NEW LEASES

ON Q2’19 RENEWALS

Top 5 Markets

New Leases

% Increase

Rent Increase

Top 5 Markets

Renewals

% Increase

Rent Increase

Charlotte

74

9.7%

$92

Atlanta

277

7.6%

$77

Phoenix

291

7.6%

$77

Charlotte

88

7.4%

$71

Atlanta

306

7.0%

$73

Phoenix

255

6.7%

$68

DC Metro

24

5.7%

$64

DC Metro

20

5.9%

$66

Orlando

127

4.8%

$55

DFW Metro

533

5.8%

$54

www.NexPointLiving.com

Page 5

AN AFFILIATE OF

Q2 2019

Q2 2018

YTD 2019

YTD 2018

(in thousands, except for per share and unit data)

Company Profile

Market Capitalization

$

989,000

$

590,000

Share Price (as of the last day of the period)

$

41.40

$

28.45

Weighted average common shares outstanding - basic

23,736

20,780

23,643

20,883

Weighted average common shares outstanding - diluted

24,233

21,295

24,139

21,362

Earnings Profile

Total revenues

$

43,066

$

35,655

$

84,557

$

70,712

Net income (loss) attributable to common stockholders

(1,981

)

(1,661

)

(6,341

)

8,403

NOI (1)

24,578

19,838

48,167

38,965

Same Store NOI (2)

20,837

19,774

41,253

38,858

Same Store NOI Growth (%) (2)

5.4

%

6.2

%

Earnings Metrics Per Common Share (diluted basis)

Earnings (loss)

$

(0.08

)

$

(0.08

)

$

(0.27

)

$

0.39

FFO (1)

$

0.46

$

0.44

$

0.91

$

0.80

Core FFO (1)

$

0.45

$

0.41

$

0.91

$

0.80

AFFO (1)

$

0.53

$

0.48

$

1.06

$

0.92

Dividends declared per common share

$

0.275

$

0.250

$

0.550

$

0.500

     FFO Coverage (3)

1.66x

1.76x

1.66x

1.60x

     Core FFO Coverage (3)

1.65x

1.64x

1.66x

1.59x

     AFFO Coverage (3)

1.93x

1.91x

1.93x

1.85x

Portfolio

Total Properties

39

32

Total Units

13,407

11,471

     Occupancy

94.4

%

94.2

%

     Average Effective Monthly Rent per Unit

$

1,016

$

967

Same Store Portfolio Metrics (2)

Total Same Store Properties

32

32

32

32

Total Same Store Units

11,471

11,471

11,471

11,471

     Occupancy

94.6

%

94.2

%

94.6

%

94.2

%

     Average Effective Monthly Rent per Unit

$

1,009

$

967

$

1,009

$

967

Value-Add Program

Completed Rehab Units

475

379

720

677

Cumulative Completed Rehab Units (4)

6,594

     Average Increase to Effective Monthly Rent

     per Unit (Post-Rehab)

$

97

     ROI on Post-Rehab Units

23.2

%

Outstanding Debt Summary

Total Mortgage Debt

$

934,345

$

750,693

Credit Facilities

52,500

35,000

Total Debt Outstanding

$

986,845

$

785,693

     Leverage Ratio (Net Debt to Enterprise Value) (5)

49

%

56

%

(1)

For more information and reconciliations of NOI, FFO, Core FFO and AFFO, see the “FFO, Core FFO and AFFO” and “Definitions and Reconciliations of Non-GAAP Measures” sections of this release.

(2)

We define “Same Store” properties as properties that were in our Portfolio for the entirety of the periods being compared. For additional information regarding our Q2 and YTD Same Store properties, see the “Q2 Same Store Results” and “YTD Same Store Results” section of this release.

(3)

Indicates coverage ratio of FFO/Core FFO/AFFO per common share (diluted) over dividends declared per common share during the period.

(4)

Inclusive of all full and partial interior upgrades completed through June 30, 2019. Cumulative results exclude rehabs completed for properties sold through June 30, 2019.

(5)

For more information and a reconciliation of debt to net debt, see the “Definitions and Reconciliations of Non-GAAP Measures” section of this release.

www.NexPointLiving.com

Page 6

AN AFFILIATE OF

Guidance Range (1)

Low-End

Mid-Point

High-End

Prior Mid-Point

Earnings (loss) per diluted share (2)

$

4.55

$

4.59

$

4.64

$

(0.71

)

Core FFO per diluted share (2) (3)

$

1.86

$

1.90

$

1.93

$

1.87

Same Store Growth: (4)

Rental Income

4.0

%

4.5

%

5.0

%

Total Revenue

4.5

%

5.0

%

5.5

%

Total Expenses

2.8

%

3.3

%

3.8

%

3.8

%

Same Store NOI (3)

5.3

%

6.3

%

7.3

%

6.0

%

Other Considerations:

Acquisitions (5)

$

251.5

$

301.5

$

351.5

$

200.0

Dispositions

$

289.9

$

314.9

$

339.9

$

162.5

(1)

Full Year 2019 guidance forecast includes Same Store growth projections presented above, which takes into effect the acquisition of the Phoenix Portfolio, Summer’s Landing, Residences at Glenview and Residences at West Place.

(2)

Weighted average diluted share count estimate for full year 2019 is approximately 24.3 million.

(3)

Same Store NOI and Core FFO are non-GAAP measures. For reconciliations of Full Year 2019 Same Store NOI and Core FFO guidance to net loss guidance, and a discussion of why we consider these non-GAAP measures useful, see the “Definitions and Reconciliations of Non-GAAP Measures” section of this release.

(4)

Year-over-year growth for 2019 pro forma Same Store pool (26 properties).

(5)

Includes $251.5 million in acquisitions of the Phoenix Portfolio, Summer’s Landing, Residences at Glenview and Residences at West Place.

www.NexPointLiving.com

Page 7

AN AFFILIATE OF

(1)

Management estimates based on independent third party review of our properties.

(2)

Third quarter and full year 2019 NOI guidance is presented for the existing Portfolio (41 properties at July 30, 2019).

(3)

We anticipate net income will be between $111.6 million and $113.6 million for the full year 2019 and between $121.8 million and $122.8 million for the third quarter of 2019.

(5)

Includes approximately $6.2 million that is held for value-add upgrades and approximately $2.0 million that is escrowed to finance green property improvements; reduced by $8.2 million for estimated forward 12-month rehab and green capital expenditures.

(6)

Includes approximately $1.0 million in forward 12-month principal payments.

www.NexPointLiving.com

Page 8

AN AFFILIATE OF

June 30, 2019

December 31, 2018

(Unaudited)

ASSETS

Operating Real Estate Investments

Land

$

203,748

$

202,347

Buildings and improvements

914,771

935,604

Intangible lease assets

2,971

3,049

Construction in progress

612

1,881

Furniture, fixtures, and equipment

57,545

61,456

Total Gross Operating Real Estate Investments

1,179,647

1,204,337

Accumulated depreciation and amortization

(127,118

)

(134,124

)

Total Net Operating Real Estate Investments

1,052,529

1,070,213

Real estate held for sale, net of accumulated depreciation of $33,305 and $897, respectively

175,968

17,329

Total Net Real Estate Investments

1,228,497

1,087,542

Cash and cash equivalents

16,892

19,864

Restricted cash

22,676

23,265

Accounts receivable

2,667

3,340

Prepaid and other assets

3,826

9,058

Fair market value of interest rate swaps

2,363

18,141

TOTAL ASSETS

$

1,276,921

$

1,161,210

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Mortgages payable, net

$

769,973

$

824,702

Mortgages payable held for sale, net

156,636

13,318

Credit facility, net

51,536

—

Accounts payable and other accrued liabilities

6,679

5,765

Accrued real estate taxes payable

10,192

12,607

Accrued interest payable

3,086

2,852

Security deposit liability

2,032

1,889

Prepaid rents

1,554

1,482

Fair market value of interest rate swaps

853

-

Total Liabilities

1,002,541

862,615

Redeemable noncontrolling interests in the Operating Partnership

3,032

2,567

Stockholders' Equity:

Preferred stock, $0.01 par value: 100,000,000 shares authorized; 0 shares issued

—

—

Common stock, $0.01 par value: 500,000,000 shares authorized; 23,895,442 and 23,499,635 shares issued and outstanding, respectively

238

234

Additional paid-in capital

297,448

285,511

Accumulated earnings less dividends

(26,824

)

(6,764

)

Accumulated other comprehensive income

486

17,047

Total Stockholders' Equity

271,348

296,028

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,276,921

$

1,161,210

www.NexPointLiving.com

Page 9

AN AFFILIATE OF

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2019

2018

2019

2018

Revenues

Rental income

$

37,711

$

31,069

$

74,033

$

61,642

Other income

5,355

4,586

10,524

9,070

Total revenues

43,066

35,655

84,557

70,712

Expenses

Property operating expenses

10,161

8,231

19,800

17,108

Real estate taxes and insurance

5,564

4,588

11,322

9,444

Property management fees (1)

1,291

1,066

2,531

2,120

Advisory and administrative fees (2)

1,872

1,863

3,722

3,701

Corporate general and administrative expenses

2,741

1,986

4,974

3,799

Property general and administrative expenses

1,768

1,648

3,426

3,195

Depreciation and amortization

13,066

11,038

28,464

22,410

Total expenses

36,463

30,420

74,239

61,777

Operating income before gain on sales of real estate

6,603

5,235

10,318

8,935

Gain on sales of real estate

—

—

—

13,742

Operating income

6,603

5,235

10,318

22,677

Interest expense

(8,590

)

(6,823

)

(16,678

)

(13,620

)

Loss on extinguishment of debt and modification costs

—

(78

)

—

(629

)

Net income (loss)

(1,987

)

(1,666

)

(6,360

)

8,428

Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership

(6

)

(5

)

(19

)

25

Net income (loss) attributable to common stockholders

$

(1,981

)

$

(1,661

)

$

(6,341

)

$

8,403

Other comprehensive income (loss)

Unrealized gains (losses) on interest rate derivatives

(10,946

)

2,749

(16,611

)

10,510

Total comprehensive income (loss)

(12,933

)

1,083

(22,971

)

18,938

Comprehensive income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership

(39

)

4

(69

)

57

Comprehensive income (loss) attributable to common stockholders

$

(12,894

)

$

1,079

$

(22,902

)

$

18,881

Weighted average common shares outstanding - basic

23,736

20,780

23,643

20,883

Weighted average common shares outstanding - diluted

24,233

21,295

24,139

21,362

Earnings (loss) per share - basic

$

(0.08

)

$

(0.08

)

$

(0.27

)

$

0.40

Earnings (loss) per share - diluted

$

(0.08

)

$

(0.08

)

$

(0.27

)

$

0.39

(1)

Fees incurred to an unaffiliated third party that is an affiliate of the noncontrolling limited partner of the Operating Partnership (the “OP”).

(2)

Fees incurred to the Company’s adviser.

www.NexPointLiving.com

Page 10

AN AFFILIATE OF

For the Three Months Ended June 30,

2019

2018

$ Change

% Change

Revenues

Same Store

Rental income

$

32,341

$

31,072

$

1,269

4.1

%

Other income

4,721

4,570

151

3.3

%

Same Store revenues

37,062

35,642

1,420

4.0

%

Non-Same Store

Rental income

5,370

(3

)

5,373

N/M

Other income

634

16

618

N/M

Non-Same Store revenues

6,004

13

5,991

N/M

Total revenues

43,066

35,655

7,411

20.8

%

Operating expenses

Same Store

Property operating expenses (1)

8,927

8,930

(3

)

0.0

%

Real estate taxes and insurance

4,959

4,630

329

7.1

%

Property management fees (2)

1,112

1,066

46

4.3

%

Property general and administrative expenses (3)

1,227

1,242

(15

)

-1.2

%

Same Store operating expenses

16,225