WWW.NEXPOINTLIVING.COM

•

NXRT¹ reported Net Income, FFO², Core FFO² and AFFO² of $118.7M, $8.6M, $11.5M and $13.3M, respectively, attributable to common stockholders for the quarter ended September 30, 2019, compared to Net Loss, FFO, Core FFO, and AFFO of $(5.3)M, $5.9M, $8.9M and $10.3M, respectively, attributable to common stockholders for the quarter ended September 30, 2018.

•

NXRT reported Net Income, FFO, Core FFO and AFFO of $112.4M, $30.6M, $33.5M and $38.9M, respectively, attributable to common stockholders for the nine months ended September 30, 2019, compared to Net Income, FFO, Core FFO, and AFFO of $3.2M, $23.0M, $25.9M and $30.0M, respectively, attributable to common stockholders for the nine months ended September 30, 2018.

•

For the three months ended September 30, 2019, Q3 Same Store properties³ average effective rent, total revenue and NOI² increased 3.7%, 3.7% and 4.4%, respectively, and occupancy decreased 80 bps over the prior year period.

•

For the nine months ended September 30, 2019, YTD Same Store properties³ average effective rent, total revenue and NOI² increased 3.7%, 4.1% and 5.1%, respectively, and occupancy decreased 80 bps over the prior year period.

•

During the three months ended September 30, 2019, NXRT acquired two properties in Nashville, TN (Residences at Glenview Reserve and Arbors of Brentwood), one in Orlando, FL (Residences at West Place) and one in Pembroke Pines, FL (Avant at Pembroke Pines) for a combined purchase price of approximately $484.3M.

•

The weighted average effective monthly rent per unit across all 37 properties held as of September 30, 2019 (the “Portfolio”), consisting of 13,757 units, was $1,095, while physical occupancy was 93.6%.

•

NXRT paid a third quarter dividend of $0.275 per share of common stock on September 30, 2019.

•

During the third quarter, for the properties in our Portfolio, we completed 588 full and partial upgrades and leased 418 upgraded units, achieving an average monthly rent premium of $99 and a 25.2% ROI⁴. Since inception, for the properties in our Portfolio, we have completed 5,842 full and partial upgrades and achieved an average monthly rental increase per unit of $98, equating to a 24.2% ROI on all units leased as of September 30, 2019.

•

During the third quarter of 2019, we completed Smart Home Technology installs on 2,271 units, covering 8 properties.

•

On August 28, 2019 and August 30, 2019, NXRT completed the previously disclosed sale of six properties (the “Sunbelt Portfolio”) for a total sale price of approximately $289.9 million which netted proceeds of approximately $140.2 million after repayment of debt and closing costs. These proceeds were used to acquire Avant at Pembroke Pines on August 30, 2019 and Arbors of Brentwood on September 10, 2019.

•

On October 28, 2019, the Company’s board declared a quarterly dividend of $0.3125 per share, a 13.6% increase from the previous dividend per share. Since inception, NXRT has increased the dividend per share by 51.7%.

•

From May 2019 through October 2019, through its at-the-market offering (“ATM program”), NXRT issued approximately 1.4 million shares for approximately $60.8 million in net proceeds, which NXRT used to pay down the corporate revolver. During Q3 2019, NXRT issued approximately 0.9 million shares for approximately $39.9 million in net proceeds through the ATM program.

(1)

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

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Page 1

(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.

(3)

We define “Same Store” properties as properties that were in our Portfolio for the entirety of the periods being compared. There are 26 properties encompassing 9,253 units of apartment space in our Same Store pool for the three and nine months ended September 30, 2019 (our “Q3 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 $46.8 million for the third quarter of 2019, compared to $36.5 million for the third quarter of 2018.

•

Net income for the third quarter of 2019 totaled $119.1 million, or income of $4.84 per diluted share, which included $17.2 million of depreciation and amortization expense. This compared to net loss of $(5.3) million, or a loss of $(0.25) per diluted share, for the third quarter of 2018, which included $11.2 million of depreciation and amortization expense.

•

The change in our net income of $119.1 million for the three months ended September 30, 2019 as compared to our net loss of $(5.3) million for the three months ended September 30, 2018 primarily relates to increases in gains on sales of real estate and total revenues, partially offset by increases in depreciation and property operating expenses.

•

For the third quarter of 2019, NOI was $26.1 million on 37 properties, compared to $20.0 million for the third quarter of 2018 on 32 properties.

•

For the third quarter of 2019, Q3 Same Store NOI increased 4.4% to $16.9 million, compared to $16.2 million for the third quarter of 2018.

•

For the third quarter of 2019, FFO totaled $8.6 million, or $0.35 per diluted share, compared to $5.9 million, or $0.28 per diluted share, for the third quarter of 2018.

•

For the third quarter of 2019, Core FFO totaled $11.5 million, or $0.47 per diluted share, compared to $8.9 million, or $0.42 per diluted share, for the third quarter of 2018.

•

For the third quarter of 2019, AFFO totaled $13.3 million, or $0.54 per diluted share, compared to $10.3 million, or $0.48 per diluted share, for the third quarter of 2018.

•

Total revenues were $131.4 million for the nine months ended September 30, 2019, compared to $107.2 million for the nine months ended September 30, 2018.

•

Net income for the nine months ended September 30, 2019 totaled $112.7 million, or income of $4.63 per diluted share, which included $45.7 million of depreciation and amortization expense. This compared to net income of $3.2 million, or income of $0.15 per diluted share, for nine months ended September 30, 2018, which included $33.6 million of depreciation and amortization expense.

•

The change in our net income of $112.7 million for the nine months ended September 30, 2019 as compared to our net income of $3.2 million for the nine months ended September 30, 2018 primarily relates to increases in gains on sales of real estate and total revenues, partially offset by increases in depreciation and property operating expenses.

•

For the nine months ended September 30, 2019, NOI was $74.3 million on 37 properties, compared to $58.9 million for the nine months ended September 30, 2018 on 35 properties.

•

For the nine months ended September 30, 2019, Q3 Same Store NOI increased 5.1% to $50.4 million, compared to $47.9 million for the nine months ended September 30, 2018.

•

For the nine months ended September 30, 2019, FFO totaled $30.6 million, or $1.26 per diluted share, compared to $23.0 million, or $1.08 per diluted share, for the nine months ended September 30, 2018.

•

For the nine months ended September 30, 2019, Core FFO totaled $33.5 million, or $1.38 per diluted share, compared to $25.9 million, or $1.21 per diluted share, for the nine months ended September 30, 2018.

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•

For the nine months ended September 30, 2019, AFFO totaled $38.9 million, or $1.60 per diluted share, compared to $30.0 million, or $1.41 per diluted share, for the nine months ended September 30, 2018.

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(share counts in thousands)

Exchange/Ticker

NYSE: NXRT

Share Price (1)

$47.48

Insider Ownership

21.01%

2019 Q4 Dividend Per Share

$0.3125

Dividend Yield (1)

2.63%

Shares Outstanding - basic (Wtd Avg. 3 mo. ended 09/30/2019)

24,088

Shares Outstanding - diluted (Wtd Avg. 3 mo. ended 09/30/2019)

24,557

(1)

As of the close of market trading on October 28, 2019.

Revenue & Average Rent Per Unit

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

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Avant at

Pembroke Pines

Arbors of Brentwood

Total/ Average

New Unit Interior Upgrade Inventory

938

147

1,085

Average Interior Upgrade Cost

$

13,562

$

10,193

$

13,106

Underwritten Average Rent Premium (monthly)

$

234

$

149

$

222

Forecast Return on Investment (annual)

20.7

%

17.5

%

20.4

%

New Smart Home Technology Packages

1,520

346

1,866

Rental Revenue Growth, Next Three Years Avg.

7.0

%

7.0

%

7.0

%

Total Revenue Growth, Next Three Years Avg.

6.5

%

6.5

%

6.5

%

NOI Growth, Next Three Years Avg.

8.4

%

7.0

%

8.2

%

Cap Rate Expansion, Next Three Years Total (basis points)

100

67

96

Cap Rate Expansion, Seven Year Hold (basis points)

185

140

179

4.0% RENT GROWTH

3.5% RENT GROWTH

ON Q3’19 NEW LEASES

ON Q3’19 RENEWALS

Top 5 Markets

New Leases

% Increase

Rent Increase

Top 5 Markets

Renewals

% Increase

Rent Increase

DC Metro

19

10.8%

$122

Charlotte

94

5.3%

$49

Charlotte

87

7.7%

$74

Atlanta

289

4.8%

$50

Phoenix

179

6.9%

$71

Phoenix

186

3.8%

$40

Tampa

67

6.5%

$60

Tampa

99

3.8%

$34

South FL

347

5.0%

$48

DFW Metro

414

3.7%

$34

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Page 5

Q3 2019

Q3 2018

YTD 2019

YTD 2018

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

Company Profile

Market Capitalization

$

1,160,000

$

690,000

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

$

46.76

$

33.20

Weighted average common shares outstanding - basic

24,088

20,775

23,793

20,847

Weighted average common shares outstanding - diluted

24,557

21,262

24,280

21,328

Earnings Profile

Total revenues

$

46,833

$

36,495

$

131,390

$

107,207

Net income (loss) attributable to common stockholders

118,747

(5,245

)

112,406

3,158

NOI (1)

26,100

19,959

74,264

58,924

Same Store NOI (2)

16,898

16,185

50,370

47,936

Same Store NOI Growth (%) (2)

4.4

%

5.1

%

Earnings Metrics Per Common Share (diluted basis)

Earnings (loss)

$

4.84

$

(0.25

)

$

4.63

$

0.15

FFO (1)

$

0.35

$

0.28

$

1.26

$

1.08

Core FFO (1)

$

0.47

$

0.42

$

1.38

$

1.21

AFFO (1)

$

0.54

$

0.48

$

1.60

$

1.41

Dividends declared per common share

$

0.275

$

0.250

$

0.825

$

0.750

     FFO Coverage (3)

1.27x

1.12x

1.53x

1.44x

     Core FFO Coverage (3)

1.70x

1.67x

1.67x

1.62x

     AFFO Coverage (3)

1.97x

1.93x

1.94x

1.88x

Portfolio

Total Properties

37

35

Total Units

13,757

12,555

     Occupancy

93.6

%

93.8

%

     Average Effective Monthly Rent per Unit

$

1,095

$

979

Same Store Portfolio Metrics (2)

Total Same Store Properties

26

26

26

26

Total Same Store Units

9,253

9,253

9,253

9,253

     Occupancy

93.3

%

94.1

%

93.3

%

94.1

%

     Average Effective Monthly Rent per Unit

$

1,034

$

997

$

1,034

$

997

Value-Add Program

Completed Rehab Units

588

439

1,308

1,116

Cumulative Completed Rehab Units (4)

5,842

     Average Increase to Effective Monthly Rent

     per Unit (Post-Rehab)

$

98

     ROI on Post-Rehab Units

24.2

%

Outstanding Debt Summary

Total Mortgage Debt

$

1,060,948

$

845,945

Credit Facilities

107,000

80,000

Total Debt Outstanding

$

1,167,948

$

925,945

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

49

%

57

%

(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 Q3 and YTD Same Store properties, see the “Q3 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 September 30, 2019) over dividends declared per common share during the period.

(4)

Inclusive of all full and partial interior upgrades completed through. Cumulative results exclude rehabs completed for properties sold through September 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.

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Page 6

Guidance Range (1)

Low-End

Mid-Point

High-End

Prior Mid-Point

Earnings (loss) per diluted share (2)

$

4.38

$

4.42

$

4.47

$

4.59

Core FFO per diluted share (2) (3)

$

1.88

$

1.92

$

1.95

$

1.90

Same Store Growth: (4)

Rental Income

4.0

%

4.5

%

5.0

%

Total Revenue

4.5

%

5.0

%

5.5

%

Total Expenses

2.5

%

3.0

%

3.5

%

3.3

%

Same Store NOI (3)

6.0

%

6.6

%

7.3

%

6.3

%

Other Considerations:

Acquisitions (5)

$

636.0

$

756.5

$

877.0

$

301.5

Dispositions

$

289.9

$

314.9

$

339.9

$

314.9

(1)

Full Year 2019 guidance forecast includes Same Store growth projections presented above, which takes into effect the acquisition of the Residences at Glenview, Residences at West Place, Avant at Pembroke Pines and Arbors of Brentwood.

(2)

Weighted average diluted share count estimate for full year 2019 is approximately 24.6 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 the Full Year 2019 Same Store pool (25 properties).

(5)

Includes $636.0 million in acquisitions of Bella Vista, Enclave, Heritage, Summers Landing, the Residences at Glenview, Residences at West Place, Avant at Pembroke Pines and Arbors of Brentwood.

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(1)

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

(2)

Fourth Quarter and Full Year 2019 NOI Guidance is presented for the existing portfolio (37 properties at October 29, 2019).

(3)

The Company anticipates net income (loss) will be in the range between approximately $107.9 million and $109.9 million for the full year of 2019 and between $(3.0) million and $(5.0) million for the fourth quarter of 2019.

(4)

2019 Pro Forma NOI Guidance takes into effect the acquisitions of Summers Landing, Residences at Glenview Reserve, Residences at West Place, Avant at Pembroke Pines and Arbors of Brentwood as if as if they were purchased on January 1, 2019, which would have contributed $1,050, $2,800, $2,500, $15,800 and $3,400 respectively, to NOI. 2019 Pro Forma NOI Guidance also takes into effect the disposition of the SunBelt portfolio as if it was disposed on January 1, 2019, which would have reduced NOI by $14,900.

(5)

Includes approximately $16.0 million that is held for value-add upgrades and approximately $0.5 million that is escrowed to finance green property improvements; reduced by $16.5 million for estimated 2019 rehab and green capital expenditures.

(6)

Includes approximately $0.7 million in forward 12-month principal payments.

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September 30, 2019

December 31, 2018

(Unaudited)

ASSETS

Operating Real Estate Investments

Land

$

261,592

$

202,347

Buildings and improvements

1,316,087

935,604

Intangible lease assets

10,897

3,049

Construction in progress

1,598

1,881

Furniture, fixtures, and equipment

69,417

61,456

Total Gross Operating Real Estate Investments

1,659,591

1,204,337

Accumulated depreciation and amortization

(138,210

)

(134,124

)

Total Net Operating Real Estate Investments

1,521,381

1,070,213

Real estate held for sale, net of accumulated depreciation of $4,594 and $897, respectively

32,635

17,329

Total Net Real Estate Investments

1,554,016

1,087,542

Cash and cash equivalents

20,373

19,864

Restricted cash

41,108

23,265

Accounts receivable

3,567

3,340

Prepaid and other assets

5,218

9,058

Fair market value of interest rate swaps

—

18,141

TOTAL ASSETS

$

1,624,282

$

1,161,210

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Mortgages payable, net

$

1,027,947

$

824,702

Mortgages payable held for sale, net

26,616

13,318

Credit facility, net

106,034

—

Accounts payable and other accrued liabilities

13,314

5,765

Accrued real estate taxes payable

17,742

12,607

Accrued interest payable

3,111

2,852

Security deposit liability

2,732

1,889

Prepaid rents

1,500

1,482

Fair market value of interest rate swaps

2,051

—

Total Liabilities

1,201,047

862,615

Redeemable noncontrolling interests in the Operating Partnership

3,424

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; 24,799,905 and 23,499,635 shares issued and outstanding, respectively

247

234

Additional paid-in capital

337,694

285,511

Accumulated earnings (loss) less dividends

84,924

(6,764

)

Accumulated other comprehensive income (loss)

(3,054

)

17,047

Total Stockholders' Equity

419,811

296,028

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,624,282

$

1,161,210

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Page 9

For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2019

2018

2019

2018

Revenues

Rental income

$

40,828

$

31,724

$

114,861

$

93,366

Other income

6,005

4,771

16,529

13,841

Total revenues

46,833

36,495

131,390

107,207

Expenses

Property operating expenses

11,456

9,231

31,256

26,339

Real estate taxes and insurance

6,731

5,048

18,053

14,492

Property management fees (1)

1,408

1,085

3,939

3,205

Advisory and administrative fees (2)

1,891

1,885

5,613

5,586

Corporate general and administrative expenses

2,339

1,932

7,313

5,731

Property general and administrative expenses

1,547

1,280

4,973

4,475

Depreciation and amortization

17,228

11,228

45,692

33,638

Total expenses

42,600

31,689

116,839

93,466

Operating income before gain on sales of real estate

4,233

4,806

14,551

13,741

Gain on sales of real estate

127,700

—

127,700

13,742

Operating income

131,933

4,806

142,251

27,483

Interest expense

(9,960

)

(7,119

)

(26,638

)

(20,739

)

Loss on extinguishment of debt and modification costs

(2,869

)

(2,947

)

(2,869

)

(3,576

)

Net income (loss)

119,104

(5,260

)

112,744

3,168

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

357

(15

)

338

10

Net income (loss) attributable to common stockholders

$

118,747

$

(5,245

)

$

112,406

$

3,158

Other comprehensive income (loss)

Unrealized gains (losses) on interest rate derivatives

(3,550

)

1,222

(20,161

)

11,732

Total comprehensive income (loss)

115,554

(4,038

)

92,583

14,900

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

347

(12

)

278

45

Comprehensive income (loss) attributable to common stockholders

$

115,207

$

(4,026

)

$

92,305

$

14,855

Weighted average common shares outstanding - basic

24,088

20,775

23,793

20,847

Weighted average common shares outstanding - diluted

24,557

21,262

24,280

21,328

Earnings (loss) per share - basic

$

4.93

$

(0.25

)

$

4.72

$

0.15

Earnings (loss) per share - diluted

$

4.84

$

(0.25

)

$

4.63

$

0.15

(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.

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Page 10

For the Three Months Ended September 30,

2019

2018

$ Change

% Change

Revenues

Same Store

Rental income

$

26,707

$

25,878

$

829

3.2

%

Other income

$

4,014

$

3,754

260

6.9

%

Same Store revenues

30,721

29,632

1,089

3.7

%

Non-Same Store

Rental income

14,121

5,846

8,275

N/M

Other income

1,991

1,017

974

N/M

Non-Same Store revenues

16,112

6,863

9,249

N/M

Total revenues

46,833

36,495

10,338

28.3

%

Operating expenses

Same Store