NXRT.NEXPOINT.COM

•

NXRT¹ reported Net Loss, FFO², Core FFO² and AFFO² of $(7.8)M, $17.6M, $20.3M and $22.7M, respectively, attributable to common stockholders for the quarter ended June 30, 2022, compared to Net Loss, FFO, Core FFO, and AFFO of $(3.4)M, $16.5M, $14.2M and $16.3M, respectively, attributable to common stockholders for the quarter ended June 30, 2021.

•

NXRT reported Net Loss, FFO, Core FFO and AFFO of $(12.5)M, $36.6M, $40.4M and $45.1M, respectively, attributable to common stockholders for the six months ended June 30, 2022, compared to Net Loss, FFO, Core FFO, and AFFO of $(10.3)M, $30.3M, $28.3M and $32.4M, respectively, attributable to common stockholders for the six months ended June 30, 2021.

•

For the three months ended June 30, 2022, Q2 Same Store properties³ average effective rent, total revenue and NOI² increased 19.2%, 14.2% and 16.4%, respectively, and occupancy decreased 150 bps over the prior year period.

•

For the six months ended June 30, 2022, YTD Same Store properties³ average effective rent, total revenue and NOI² increased 19.2%, 12.7% and 16.4%, respectively, and occupancy decreased 150 bps over the prior year period.

•

The weighted average effective monthly rent per unit across all 41 properties held as of June 30, 2022 (the “Portfolio”), consisting of 15,387⁴ units, was $1,387, while physical occupancy was 94.5%.

•

On April 1, 2022, NXRT acquired The Adair located in Sandy Springs, Georgia, and Estates on Maryland located in Phoenix, Arizona for a combined purchase price of $143.4 million.

•

NXRT paid a second quarter dividend of $0.38 per share of common stock on June 30, 2022.

•

During the six months ended June 30, 2022, through its at-the-market offering (“ATM program”), NXRT issued 52,091 shares for approximately $4.3 million in gross proceeds.

•

During the three months ended June 30, 2022, NXRT repurchased and retired 69,567 shares at a weighted average price of $73.82 per share. Since inception, NXRT has repurchased 2,451,722 shares at a weighted average price of $27.07 per share.

•

During the second quarter, for the properties in our Portfolio, we completed 650 full and partial upgrades and leased 609 upgraded units, achieving an average monthly rent premium of $138 and a 24.9% ROI⁵.

•

Since inception, for the properties currently in our Portfolio, we have completed 6,834 full and partial upgrades, 4,724 kitchen and laundry appliances, and 9,624 technology packages, resulting in a $142, $48, and $43 average monthly rental increase per unit and a 21.8%, 69.7%, and 33.5% 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 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.

3)

We define “Same Store” properties as properties that were in our Portfolio for the entirety of the periods being compared. There are 34 properties encompassing 13,433 units of apartment space in our Same Store pool for the three months ended June 30, 2022 (our “Q2 Same Store” properties) and 34 properties encompassing 13,433 units of apartment space in our Same Store pool for the six months ended June 30, 2022 (our “YTD Same Store” properties). The same store unit count excludes 67 units that are currently down due to casualty events (Silverbrook: 16 units, Arbors of

NXRT.NEXPOINT.COM

Page 1

Brentwood: 16 units, Timber Creek: 15 units, Venue at 8651: 8 units, Hollister Place: 6 units, The Preserve at Terrell Mill: 3 units, Parc500: 2 units, and Bloom: 1 unit).

4)

Total units owned in our Portfolio is 15,387, however 73 units are currently down due to casualty events (Silverbrook: 16 units, Arbors of Brentwood: 16 units, Timber Creek: 15 units, Venue at 8651: 8 units, Hollister Place: 6 units, Six Forks: 6 units, The Preserve at Terrell Mill: 3 units, Parc500: 2 units, and Bloom: 1 unit).

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 $65.8 million for the second quarter of 2022, compared to $52.6 million for the second quarter of 2021.

•

Net loss for the second quarter of 2022 totaled $(7.8) million, or loss of $(0.30) per diluted share, which included $25.5 million of depreciation and amortization expense. This compared to a net loss of $(3.4) million, or earnings of $(0.14) per diluted share, for the second quarter of 2021, which included $20.0 million of depreciation and amortization expense.

•

The change in our net loss of $(7.8) million for the three months ended June 30, 2022 as compared to our net loss of $(3.4) million for the three months ended June 30, 2021 primarily relates to a decrease in casualty gains and an increase in depreciation expense, partially offset by an increase in total revenues.

•

For the second quarter of 2022, NOI was $38.8 million on 41 properties, compared to $30.2 million for the second quarter of 2021 on 39 properties.

•

For the second quarter of 2022, Q2 Same Store NOI increased 16.4% to $33.7 million, compared to $28.9 million for the second quarter of 2021.

•

For the second quarter of 2022, FFO totaled $17.6 million, or $0.69 per diluted share, compared to $16.5 million, or $0.66 per diluted share, for the second quarter of 2021.

•

For the second quarter of 2022, Core FFO totaled $20.3 million, or $0.79 per diluted share, compared to $14.2 million, or $0.56 per diluted share, for the second quarter of 2021.

•

For the second quarter of 2022, AFFO totaled $22.7 million, or $0.89 per diluted share, compared to $16.3 million, or $0.65 per diluted share, for the second quarter of 2021.

•

Total revenues were $126.6 million for the six months ended June 30, 2022, compared to $104.4 million for the six months ended June 30, 2021.

•

Net loss for the six months ended June 30, 2022 totaled $(12.5) million, or loss of $(0.49) per diluted share, which included $49.3 million of depreciation and amortization expense. This compared to net loss of $(10.3) million, or earnings of $(0.41) per diluted share, for the six months ended June 30, 2021, which included $40.7 million of depreciation and amortization expense.

•

The change in our net loss of $(12.5) million for the six months ended June 30, 2022 as compared to our net loss of $(10.3) million for the six months ended June 30, 2021 primarily relates to a decrease in casualty gains and an increase in depreciation expense, partially offset by an increase in total revenues.

•

For the six months ended June 30, 2022, NOI was $75.4 million on 41 properties, compared to $60.0 million for the six months ended June 30, 2021 on 39 properties.

•

For the six months ended June 30, 2022, Same Store NOI increased 16.4% to $66.9 million, compared to $57.4 million for the six months ended June 30, 2021.

•

For the six months ended June 30, 2022, FFO totaled $36.6 million, or $1.43 per diluted share, compared to $30.3 million, or $1.21 per diluted share, for the six months ended June 30, 2021.

•

For the six months ended June 30, 2022, Core FFO totaled $40.4 million, or $1.58 per diluted share, compared to $28.3 million, or $1.13 per diluted share, for the six months ended June 30, 2021.

•

For the six months ended June 30, 2022, AFFO totaled $45.1 million, or $1.76 per diluted share, compared to $32.4 million, or $1.29 per diluted share, for the six months ended June 30, 2021.

NXRT.NEXPOINT.COM

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NXRT.NEXPOINT.COM

Page 3

(share counts in thousands)

Exchange/Ticker

NYSE: NXRT

Share Price (1)

$62.98

Insider Ownership

12.58%

2022 Q3 Dividend Per Share

$0.38

Dividend Yield (1)

2.41%

Shares Outstanding - basic (2)

25,672

Shares Outstanding - diluted (2)

25,672

(1)

As of the close of market trading on July 25, 2022.

(2)

Weighted average for the three months ended June 30, 2022. 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.

Portfolio Composition by Market

Revenue & Average Rent Per Unit

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

NXRT.NEXPOINT.COM

Page 4

Property Name

Location

Date of

Acquisition

Purchase Price

Mortgage Debt

# Units

Effective

Ownership

The Adair

Sandy Springs, Georgia

April 1, 2022

$

65,500

$

35,115

232

100

%

Estates on Maryland

Phoenix, Arizona

April 1, 2022

77,900

43,157

330

100

%

$

143,400

$

78,272

562

Market

New Leases

% Increase

Rent Increase

Renewals

% Increase

Rent Increase

DFW

412

19.6%

$

212.07

335

15.9%

$

167.29

HOU

193

11.7%

$

143.22

170

13.2%

$

155.53

CHA

174

16.7%

$

199.53

129

14.2%

$

159.98

NASH

210

23.8%

$

279.96

208

15.9%

$

184.91

ATL

224

20.1%

$

266.17

223

14.0%

$

180.16

ORL

189

30.6%

$

388.19

131

24.1%

$

305.51

TPA

84

29.5%

$

343.29

74

26.2%

$

301.28

SFL

216

31.6%

$

519.06

292

22.5%

$

354.25

PHX

295

21.4%

$

278.48

268

16.9%

$

212.61

LSV

208

16.8%

$

215.00

144

13.7%

$

173.54

RDU

117

10.8%

$

137.90

138

11.7%

$

151.26

TOTAL/AVERAGE

2,322

21.1%

$

269.37

2,112

16.9%

$

213.24

(In thousands)

Q2 2022

Q2 2021

% Change

Rental Revenue

$

56,206

$

49,086

14.5

%

Other Income

1,507

1,469

2.6

%

Total Income

57,713

50,555

14.2

%

Total Expense

24,147

21,779

10.9

%

Miscellaneous income

136

167

-18.6

%

NOI

$

33,702

$

28,943

16.4

%

NXRT.NEXPOINT.COM

Page 5

(1)

Source: RealPage as of April 30, 2022. NXRT average rent as of May 31, 2022.

(2)

Source: Average of Invitation Homes and American Homes 4 Rent. Average effective rent per market based on recent public filings.

NXRT.NEXPOINT.COM

Page 6

Q2 2022

Q2 2021

YTD 2022

YTD 2021

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

Company Profile

Market Capitalization (as of the last day of the period)

$

1,603,000

$

1,383,000

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

$

62.51

$

54.98

Weighted average common shares outstanding - basic

25,672

25,140

25,646

25,104

Weighted average common shares outstanding - diluted

25,672

25,140

25,646

25,104

Earnings Profile

Total revenues

$

65,766

$

52,563

$

126,552

$

104,359

Net loss attributable to common stockholders

(7,797

)

(3,408

)

(12,450

)

(10,287

)

NOI (1)

38,846

30,227

75,411

59,951

Same Store NOI (2)

33,702

28,943

66,857

57,440

Same Store NOI Growth (%) (2)

16.4

%

16.4

%

Earnings Metrics Per Common Share (diluted basis)

Earnings

$

(0.30

)

$

(0.14

)

$

(0.49

)

$

(0.41

)

FFO (1)

$

0.69

$

0.66

$

1.43

$

1.21

Core FFO (1)

$

0.79

$

0.56

$

1.58

$

1.13

AFFO (1)

$

0.89

$

0.65

$

1.76

$

1.29

Dividends declared per common share

$

0.38

$

0.34

$

0.76

$

0.68

     FFO Coverage (3)

1.81x

1.93x

1.88x

1.77x

     Core FFO Coverage (3)

2.08x

1.65x

2.08x

1.66x

     AFFO Coverage (3)

2.33x

1.90x

2.32x

1.89x

Portfolio

Total Properties

41

39

Total Units (4)

15,387

14,709

     Occupancy

94.5

%

96.1

%

     Average Effective Monthly Rent per Unit

$

1,387

$

1,159

Same Store Portfolio Metrics (2)

Total Same Store Properties

34

34

34

34

Total Same Store Units

13,433

13,386

13,433

13,386

     Occupancy

94.5

%

96.0

%

94.5

%

96.0

%

     Average Effective Monthly Rent per Unit

$

1,385

$

1,162

$

1,385

$

1,162

Value-Add Program

Completed Rehab Units

650

336

1,181

621

Cumulative Completed Rehab Units (5)

6,834

     Average Increase to Effective Monthly Rent

     per Unit (Post-Rehab)

$

142

     ROI on Post-Rehab Units

21.8

%

Outstanding Debt Summary

Total Mortgage Debt

$

1,358,675

$

1,234,515

Credit Facilities

335,000

250,000

Total Debt Outstanding

$

1,693,675

$

1,484,515

     Leverage Ratio (Net Debt to Enterprise Value) (6)

51

%

50

%

(1)

For more information and reconciliations of NOI, FFO, Core FFO and AFFO, see the “FFO, Core FFO and AFFO”, “NOI and Same Store NOI” 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)

Total units owned is 15,387, however 73 units are currently down due to casualty events.

(5)

Inclusive of all full and partial interior upgrades completed through. Cumulative results exclude rehabs completed for properties sold through June 30, 2022.

(6)

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

NXRT.NEXPOINT.COM

Page 7

Guidance Range (1)

Low-End

Mid-Point

High-End

Prior Mid-Point

Earnings per diluted share (2)

$

3.04

$

3.10

$

3.15

$

4.19

Core FFO per diluted share (2) (3)

$

2.96

$

3.01

$

3.07

$

3.01

Same Store Growth: (4)

Rental Income

12.0

%

12.5

%

13.0

%

11.4

%

Total Revenue

11.5

%

12.0

%

12.4

%

10.8

%

Total Expenses

7.0

%

6.5

%

6.1

%

5.9

%

Same Store NOI (3)

14.7

%

15.8

%

17.0

%

14.3

%

Other Considerations: (5)

Acquisitions

$

150.0

$

225.0

$

300.0

$

225.0

Dispositions

$

150.0

$

225.0

$

300.0

$

225.0

(1)

Full Year 2022 guidance forecast includes Same Store growth projections presented above, which takes into effect the forecast dispositions of Old Farm, Stone Creek at Old Farm and Hollister Place, thereby removing those assets from the Full Year 2022 pro forma Same Store pool.

(2)

Weighted average diluted share count estimate for full year 2022 is approximately 26.2 million.

(3)

Same Store NOI and Core FFO are non-GAAP measures. For reconciliations of Full Year 2022 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 2022 pro forma Same Store pool (31 properties).

(5)

We continue to evaluate our Portfolio for capital recycling opportunities. Transaction volumes presented are incorporated into the EPS and CFFO guidance above. Actual acquisitions and dispositions could vary significantly from our projections. We undertake no duty to update these assumptions, except as required by law.

NXRT.NEXPOINT.COM

Page 8

REAL ESTATE BY MARKET VALUE

NAV SUMMARY

Property

NOI

Cap Rate Range (1)

Value Range (2)

Component

Min

Max

Market

Contribution

Min

Max

Min

Max

Tangible Assets

Texas

Real Estate (2)

$

3,700,460

$

4,107,944

Dallas/Fort Worth

13.3%

3.9%

4.2%

$

492,522

$

547,745

Cash

20,463

Houston

5.5%

4.0%

4.3%

201,847

221,472

Restricted Cash - Renovation Reserves (5)

19,333

Renovation Expenditures (5)

(19,333)

North Carolina

Cash Adjustments (6)

(1,002)

Raleigh

3.3%

3.9%

4.2%

124,092

138,006

Fair Market Value of Interest Rate Swaps

75,461

Charlotte

6.8%

3.9%

4.2%

251,060

279,209

Other Assets

50,428

Value of Assets

$

3,845,810

$

4,253,294

Georgia

Atlanta

8.5%

3.9%

4.2%

314,818

350,116

Tangible Liabilities

Credit Facility (7)

$335,000

Tennessee

Mortgage Debt

1,358,675

Nashville

11.1%

3.9%

4.2%

412,535

458,790

Total Outstanding Debt

1,693,675

Forward 12-month Principal Payments (6)

(1,002)

Florida

Total Outstanding Debt (FY 2022 Est.)

1,692,673

Orlando

7.7%

3.9%

4.2%

284,211

316,078

Other Tangible Liabilities (at Book)

40,689

Tampa

4.2%

3.9%

4.2%

154,230

171,523

Value of Liabilities

$1,733,362

South Florida

15.9%

3.9%

4.2%

589,869

656,006

Net Leverage (mid-point)

43%

Net Asset Value

$

2,112,448

$

2,519,932

Nevada

Shares outstanding - diluted (FY 2022 Est.)

26,177

Las Vegas

8.1%

4.0%

4.3%

296,430

325,251

Est. NAV / Share

$

80.70

$

96.27

NAV / Share (mid-point)

$88.48

Arizona

Phoenix

15.6%

3.9%

4.2%

578,846

643,748

Total / Ave

100.0%

3.9%

4.2%

$

3,700,460

$

4,107,944

NOI ESTIMATE

IMPLIED VAUE VALUATION METRICS

Q1 2022 NOI Actual

36,565

Min

Max

Q2 2022 NOI Actual

38,846

Implied Real Estate Value

$

3,700,460

$

4,107,944

Low

High

No. of Units (June 30, 2022) (2)

15,387

Estimated Q3 2022 NOI Guidance (3)

$

39,084

$

40,792

Implied Value/Apartment Unit

$

240.5

$

267.0

2022 Pro Forma NOI Guidance (3)(4)

$

155,668

$

160,756

Implied Value/Apartment Unit (mid-point)

$253.7

(1)

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

(2)

Full Year 2022 NOI Guidance is presented for the existing portfolio (41 properties as of June 30, 2022).

(3)

The Company anticipates net income (loss) will be in the range between approximately $80.0 million and $82.8 million for the full year 2022 and between ($4.5) million and ($6.3) million for the third quarter of 2022. FY 2022 NOI Guidance considers the completed acquisitions of The Adair and Estates on Maryland and the forecasted dispositions of Hollister Place, Old Farm and Stone Creek at Old Farm and assumes no further acquisition or disposition activity for the remainder of the year.

(4)

2022 Pro Forma NOI assumes The Adair, Estates on Maryland, Old Farm, Stone Creek and Hollister Place were owned for the full year 2022, which we estimate would have contributed approximately an additional $800, $1,000, $1,900, $500 and $700, respectively, to NOI.

(5)

Includes approximately $19.3 million that is held for value-add upgrades; reduced by $19.3 million for estimated 2022 rehab expenditures.

(6)

Includes approximately $1.0 million in forward 12-month principal payments (which excludes the repayment of The Cornerstone loan which we expect to refinance in 2023).

(7)

Includes outstanding balance of June 30, 2022.

NXRT.NEXPOINT.COM

Page 9

June 30, 2022

December 31, 2021

(Unaudited)

ASSETS

Operating Real Estate Investments

Land

$

395,813

$

375,857

Buildings and improvements

1,867,841

1,743,866

Intangible lease assets

2,603

2,576

Construction in progress

5,504

6,078

Furniture, fixtures, and equipment

137,603

120,419

Total Gross Operating Real Estate Investments

2,409,364

2,248,796

Accumulated depreciation and amortization

(332,701

)

(287,096

)

Total Net Real Estate Investments

2,076,663

1,961,700

Cash and cash equivalents

20,463

49,450

Restricted cash

45,755

39,246

Accounts receivable, net

11,919

4,844

Prepaid and other assets

12,087

4,701

Fair market value of interest rate swaps

75,461

3,526

TOTAL ASSETS

$

2,242,348

$

2,063,467

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Mortgages payable, net

$

1,351,172

$

1,276,285

Credit facility, net

333,203

278,215

Accounts payable and other accrued liabilities

16,673

12,590

Accrued real estate taxes payable

15,124

13,182

Accrued interest payable

4,001

2,491

Security deposit liability

3,119

2,945

Prepaid rents

1,772

1,775

Total Liabilities

1,725,064

1,587,483

Redeemable noncontrolling interests in the Operating Partnership

6,238

6,139

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; 25,647,942 and 25,500,567 shares issued and outstanding, respectively

256

255

Additional paid-in capital

407,436

407,803

Accumulated earnings less dividends

29,071

59,209

Accumulated other comprehensive income

74,283

2,578

Total Stockholders' Equity

511,046

469,845

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

2,242,348

$

2,063,467

NXRT.NEXPOINT.COM

Page 10

For the Three Months Ended June 30,

For the Six Months Ended June 30,

2022

2021

2022

2021

Revenues

Rental income

$

64,152

$

51,047

$

123,449

$

101,387

Other income

1,614

1,516

3,103

2,972

Total revenues

65,766

52,563

126,552

104,359

Expenses

Property operating expenses

16,703

11,173

30,299

22,389

Real estate taxes and insurance

9,531

8,508

18,251

17,230

Property management fees (1)

1,912

1,516

3,669

3,001

Advisory and administrative fees (2)

1,868

1,900

3,711

3,768

Corporate general and administrative expenses

3,812

2,978

7,298

5,918

Property general and administrative expenses

2,193

1,760

4,199

3,319

Depreciation and amortization

25,548

19,986

49,266

40,744

Total expenses

61,567

47,821

116,693

96,369

Operating income

4,199

4,742

9,859

7,990

Interest expense

(12,402

)

(10,683

)

(23,038

)

(21,299

)

Loss on extinguishment of debt and modification costs

—

(328

)

—

(328

)

Casualty gains

229

2,379

357

2,379

Miscellaneous income

147

472

328

940

Net loss

(7,827

)

(3,418

)

(12,494

)

(10,318

)

Net loss attributable to redeemable noncontrolling interests in the Operating Partnership

(30

)

(10

)

(44

)

(31

)

Net loss attributable to common stockholders

$

(7,797

)

$

(3,408

)

$

(12,450

)

$

(10,287

)

Other comprehensive income (loss)

Unrealized gains (losses) on interest rate derivatives

17,357

(4,805

)

71,936

26,537

Total comprehensive income (loss)

9,530

(8,223

)

59,442

16,219

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

37

(24

)

187

49

Comprehensive income (loss) attributable to common stockholders

$

9,493

$

(8,199

)

$

59,255

$

16,170