NXRT.NEXPOINT.COM

•

NXRT¹ reported Net Loss, FFO², Core FFO² and AFFO² of $(5.4)M, $16.1M, $16.4M and $18.6M, respectively, attributable to common stockholders for the quarter ended September 30, 2021, compared to Net Income, FFO, Core FFO, and AFFO of $29.6M, $17.2M, $13.3M and $15.1M, respectively, attributable to common stockholders for the quarter ended September 30, 2020.

•

NXRT reported Net Loss, FFO, Core FFO and AFFO of $(15.7)M, $46.5M, $44.7M and $51.0M, respectively, attributable to common stockholders for the nine months ended September 30, 2021, compared to Net Income, FFO, Core FFO, and AFFO of $48.2M, $41.6M, $41.3M and $46.5M, respectively, attributable to common stockholders for the nine months ended September 30, 2020.

•

For the three months ended September 30, 2021, Q3 Same Store properties³ average effective rent, total revenue and NOI² increased 6.8%, 5.3% and 6.6%, respectively, and occupancy increased 40 bps over the prior year period.

•

For the nine months ended September 30, 2021, YTD Same Store properties³ average effective rent, total revenue and NOI² increased 6.8%, 3.6% and 2.4%, respectively, and occupancy increased 40 bps over the prior year period.

•

The weighted average effective monthly rent per unit across all 40 properties held as of September 30, 2021 (the “Portfolio”), consisting of 15,032⁴ units, was $1,204, while physical occupancy was 95.3%.

•

On September 10, 2021, NXRT acquired Six Forks Station located in Raleigh, North Carolina for a gross purchase price of $74.76 million.

•

NXRT paid a third quarter dividend of $0.34125 per share of common stock on September 30, 2021.

•

On October 29, 2021, the Company’s board approved a quarterly dividend of $0.38 per share, an 11.4% increase from the previous dividend per share. Since inception, NXRT has increased the dividend per share by 84.5%.

•

During the three months ended September 30, 2021, through its at-the-market offering (“ATM program”), NXRT issued 101,587 shares for approximately $6.7 million in gross proceeds.

•

During the third quarter, for the properties in our Portfolio, we completed 290 full and partial upgrades and leased 349 upgraded units, achieving an average monthly rent premium of $172 and a 21.2% ROI⁵.

•

Since inception, for the properties currently in our Portfolio, we have completed 5,979 full and partial upgrades, 4,554 kitchen and laundry appliances, and 10,134 technology packages, resulting in a $134, $47, and $43 average monthly rental increase per unit and a 21.5%, 72.7%, and 35.0% ROI, respectively.

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”, “FFO, Core FFO and AFFO” and “NOI and Same Store NOI” sections of this release.

NXRT.NEXPOINT.COM

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3)

We define “Same Store” properties as properties that were in our Portfolio for the entirety of the periods being compared. There are 35 properties encompassing 13,576 units of apartment space in our Same Store pool for the three months ended September 30, 2021 (our “Q3 Same Store” properties) and 35 properties encompassing 13,576 units of apartment space in our Same Store pool for the nine months ended September 30, 2021 (our “YTD Same Store” properties). The same store unit count excludes 81 units that are currently down due to fires and winter storm Uri in February 2021 (Hollister Place: 34 units, Atera: 18 units, Timber Creek: 16 units, Venue at 8651: 8 units and Preserve at Terrell Mill: 5 units).

4)

Total units owned in our Portfolio is 15,032, however 89 units are currently down due to fires, a tornado, and winter storm Uri (Hollister Place: 34 units, Atera: 18 units, Timber Creek: 16 units, Cutter’s Point: 8 units, Venue at 8651: 8 units and Preserve at Terrell Mill: 5 units).

5)

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 $56.4 million for the third quarter of 2021, compared to $51.0 million for the third quarter of 2020.

•

Net loss for the third quarter of 2021 totaled $(5.4) million, or loss of $(0.21) per diluted share, which included $21.6 million of depreciation and amortization expense. This compared to a net income of $29.6 million, or earnings of $1.19 per diluted share, for the third quarter of 2020, which included $17.7 million of depreciation and amortization expense.

•

The change in our net loss of $(5.4) million for the three months ended September 30, 2021 as compared to our net income of $29.6 million for the three months ended September 30, 2020 primarily relates to decreases in gain on sales of real estate and casualty gains, partially offset by an increase in total revenues.

•

For the third quarter of 2021, NOI was $33.6 million on 40 properties, compared to $29.3 million for the third quarter of 2020 on 36 properties.

•

For the third quarter of 2021, Q3 Same Store NOI increased 6.6% to $30.3 million, compared to $28.4 million for the third quarter of 2020.

•

For the third quarter of 2021, FFO totaled $16.1 million, or $0.64 per diluted share, compared to $17.2 million, or $0.69 per diluted share, for the third quarter of 2020.

•

For the third quarter of 2021, Core FFO totaled $16.4 million, or $0.65 per diluted share, compared to $13.3 million, or $0.53 per diluted share, for the third quarter of 2020.

•

For the third quarter of 2021, AFFO totaled $18.6 million, or $0.74 per diluted share, compared to $15.1 million, or $0.60 per diluted share, for the third quarter of 2020.

•

Total revenues were $160.7 million for the nine months ended September 30, 2021, compared to $154.3 million for the nine months ended September 30, 2020.

•

Net loss for the nine months ended September 30, 2021 totaled $(15.7) million, or loss of $(0.62) per diluted share, which included $62.3 million of depreciation and amortization expense. This compared to net income of $48.2 million, or earnings of $1.91 per diluted share, for the nine months ended September 30, 2020, which included a gain on sales of real estate of $69.2 million and $62.5 million of depreciation and amortization expense.

•

The change in our net loss of $(15.7) million for the nine months ended September 30, 2021 as compared to our net income of $48.4 million for the nine months ended September 30, 2020 primarily relates to decreases in gains on sales of real estate and casualty gains, partially offset by an increase in total revenues.

•

For the nine months ended September 30, 2021, NOI was $93.6 million on 40 properties, compared to $89.9 million for the nine months ended September 30, 2020 on 36 properties.

•

For the nine months ended September 30, 2021, Same Store NOI increased 2.4% to $87.5 million, compared to $85.5 million for the nine months ended September 30, 2020.

•

For the nine months ended September 30, 2021, FFO totaled $46.5 million, or $1.85 per diluted share, compared to $41.6 million, or $1.65 per diluted share, for the nine months ended September 30, 2020.

•

For the nine months ended September 30, 2021, Core FFO totaled $44.7 million, or $1.78 per diluted share, compared to $41.3 million, or $1.64 per diluted share, for the nine months ended September 30, 2020.

•

For the nine months ended September 30, 2021, AFFO totaled $51.0 million, or $2.03 per diluted share, compared to $46.5 million, or $1.85 per diluted share, for the nine months ended September 30, 2020.

NXRT.NEXPOINT.COM

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NXRT.NEXPOINT.COM

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(share counts in thousands)

Exchange/Ticker

NYSE: NXRT

Share Price (1)

$70.62

Insider Ownership

12.30%

2021 Q4 Dividend Per Share

$0.38

Dividend Yield (1)

2.15%

Shares Outstanding - basic (2)

25,175

Shares Outstanding - diluted (2)

25,175

(1)

As of the close of market trading on November 1, 2021.

(2)

Weighted average for the three months ended September 30, 2021. If the Company sustains a net loss for the period presented, unvested restricted stock units are not included in the calculation of diluted shares outstanding.

(2)

Estimated value ranges are presented for the existing portfolio (40 properties at September 30, 2021).

(3)

The Company anticipates net income will be in the range between approximately $20.2 million and $21.6 million for the full year 2021 and between $36.3 million and $37.7 million for the fourth quarter of 2021. FY 2021 NOI Guidance considers the completed acquisitions of Creekside at Matthews, The Verandas at Lake Norman, Six Forks Station, and the completed dispositions of Beechwood Terrace and Cedar Pointe and assumes no further acquisition or disposition activity for the remainder of the year.

(4)

2021 Pro Forma NOI Guidance takes into effect the acquisitions of Creekside at Matthews, The Verandas at Lake Norman and Six Forks Station as if they were purchased on January 1, 2021, which we estimate would have contributed approximately an additional $1,100, $1,000 and $2,300, respectively, to NOI. Additionally, 2021 Pro Forma NOI Guidance takes into effect the dispositions of Beechwood Terrace and Cedar Pointe as if they were disposed of on December 31, 2021 which we estimate would have contributed approximately an additional $600 to NOI.

(5)

Includes approximately $14.5 million that is held for value-add upgrades; reduced by $14.5 million for estimated 2021 rehab expenditures.

(6)

Includes approximately $1.4 million in forward 12-month principal payments.

(7)

Includes outstanding balance of September 30, 2021.

NXRT.NEXPOINT.COM

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September 30, 2021

December 31, 2020

(Unaudited)

ASSETS

Operating Real Estate Investments

Land

$

352,048

$

323,429

Buildings and improvements

1,676,850

1,544,115

Intangible lease assets

3,172

1,675

Construction in progress

6,374

10,796

Furniture, fixtures, and equipment

108,430

96,228

Total Gross Operating Real Estate Investments

2,146,874

1,976,243

Accumulated depreciation and amortization

(264,543

)

(215,494

)

Total Net Operating Real Estate Investments

1,882,331

1,760,749

Real estate held for sale, net of accumulated depreciation of $11,028 and $0, respectively

43,998

—

Total Net Real Estate Investments

1,926,329

1,760,749

Cash and cash equivalents

18,413

24,457

Restricted cash

48,871

32,558

Accounts receivable, net

5,783

9,045

Prepaid and other assets

5,848

2,405

TOTAL ASSETS

$

2,005,244

$

1,829,214

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Mortgages payable, net

$

1,229,972

$

1,162,855

Mortgages payable held for sale, net

40,486

—

Credit facility, net

273,339

182,323

Accounts payable and other accrued liabilities

11,452

10,058

Accrued real estate taxes payable

20,624

12,822

Accrued interest payable

2,364

2,274

Security deposit liability

2,941

2,688

Prepaid rents

1,643

1,639

Fair market value of interest rate swaps

12,466

43,530

Total Liabilities

1,595,287

1,418,189

Redeemable noncontrolling interests in the Operating Partnership

4,532

3,098

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; 25,251,641 and 25,016,957 shares issued and outstanding, respectively

252

250

Additional paid-in capital

386,734

376,710

Accumulated earnings less dividends

31,804

75,321

Accumulated other comprehensive loss

(13,365

)

(44,354

)

Total Stockholders' Equity

405,425

407,927

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

2,005,244

$

1,829,214

NXRT.NEXPOINT.COM

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For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2021

2020

2021

2020

Revenues

Rental income

$

54,918

$

49,578

$

156,305

$

149,945

Other income

1,466

1,412

4,438

4,307

Total revenues

56,384

50,990

160,743

154,252

Expenses

Property operating expenses

12,783

11,906

35,116

35,591

Real estate taxes and insurance

7,646

7,686

24,876

23,485

Property management fees (1)

1,639

1,489

4,640

4,504

Advisory and administrative fees (2)

1,938

1,976

5,706

5,777

Corporate general and administrative expenses

3,152

2,807

9,070

8,440

Property general and administrative expenses

2,076

1,559

5,451

4,924

Depreciation and amortization

21,591

17,723

62,335

62,479

Total expenses

50,825

45,146

147,194

145,200

Operating income before gain on sales of real estate

5,559

5,844

13,549

9,052

Gain on sales of real estate

—

30,160

—

69,151

Operating income

5,559

36,004

13,549

78,203

Interest expense

(11,531

)

(11,049

)

(32,830

)

(33,704

)

Loss on extinguishment of debt and modification costs

—

(596

)

(328

)

(1,470

)

Casualty gains

—

4,960

2,379

3,932

Miscellaneous income

565

322

1,505

1,401

Net income (loss)

(5,407

)

29,641

(15,725

)

48,362

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

(16

)

89

(47

)

145

Net income (loss) attributable to common stockholders

$

(5,391

)

$

29,552

$

(15,678

)

$

48,217

Other comprehensive income (loss)

Unrealized gains (losses) on interest rate derivatives

4,545

4,068

31,082

(54,518

)

Total comprehensive income (loss)

(862

)

33,709

15,357

(6,156

)

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

(3

)

101

46

(19

)

Comprehensive income (loss) attributable to common stockholders

$

(859

)

$

33,608

$

15,311

$

(6,137

)

Weighted average common shares outstanding - basic

25,175

24,372

25,128

24,688

Weighted average common shares outstanding - diluted

25,175

24,926

25,128

25,194

Earnings (loss) per share - basic

$

(0.21

)

$

1.21

$

(0.62

)

$

1.95

Earnings (loss) per share - diluted

$

(0.21

)

$

1.19

$

(0.62

)

$

1.91

(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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For the Three Months Ended September 30,

For the Nine Months Ended September 30,

2021

2020

2021

2020

Net income (loss)

$

(5,407

)

$

29,641

$

(15,725

)

$

48,362

Adjustments to reconcile net income (loss) to NOI:

Advisory and administrative fees

1,938

1,976

5,706

5,777

Corporate general and administrative expenses

3,152

2,807

9,070

8,440

Casualty-related expenses/(recoveries)

(1)

120

(47