NexPoint Residential Trust, Inc. Completes Refinancings of 17 Properties

Rhea-AI Summary

NexPoint Residential Trust (NXRT) has completed refinancing 17 properties through JP Morgan Chase Bank. Combined with previous refinancings, the company has refinanced 34 loans totaling $1.469 billion, representing 97.8% of total outstanding debt. The refinancing improves interest rates and extends weighted average debt maturity to 6.82 years from 5.54 years. The company's weighted average interest rate on total debt reduces by 48 bps to 5.65%, and adjusted for swap contracts, decreases from 3.44% to 2.95%. NXRT now has no significant debt maturities until 2028.

Positive

• Refinanced 97.8% of total outstanding debt ($1.469 billion)
• Extended weighted average debt maturity to 6.82 years from 5.54 years
• Reduced weighted average interest rate by 48 basis points to 5.65%
• Adjusted weighted average interest rate decreased to 2.95% from 3.44%
• No meaningful debt maturities until 2028

Negative

• Total indebtedness remains high at $1.503 billion
• 72.6% of $1.469 billion floating rate debt exposed to interest rate risk

Insights

Financial Analyst

The comprehensive refinancing of 97.8% of NXRT's debt portfolio, totaling $1.469 billion, marks a significant financial milestone. The improved terms include a 48 bps reduction in weighted average interest rate to 5.65% and with swap contracts, the adjusted rate drops to 2.95%. The extension of weighted average debt maturity to 6.82 years from 5.54 years substantially reduces near-term refinancing risk, with only 2.2% of total debt maturing through 2028.

The floating-rate structure combined with extensive interest rate swap coverage (72.6% of floating rate debt) provides effective interest rate risk management. The partnership with JP Morgan demonstrates strong banking relationships and access to institutional capital markets, which is important for future growth opportunities.

Real Estate Investment Analyst

This refinancing strengthens NXRT's position in the multifamily REIT sector by improving its debt profile across 34 properties. The reduced interest expense and extended maturity schedule enhance operational flexibility and cash flow stability. The weighted average fixed rate of 0.9807% on swap agreements provides significant protection against interest rate volatility while maintaining exposure to potential rate decreases. The improved debt structure could support future acquisition opportunities and property improvements, potentially driving NOI growth.

DALLAS, Nov. 27, 2024 /PRNewswire/ -- NexPoint Residential Trust, Inc. ("NXRT" or the "Company") (NYSE: NXRT) announced today the closing of 17-property agency mortgage refinancings through J.P. Morgan Chase Bank ("JP Morgan").

With the closing of these 17 loan agreements, and together with the 17 loan agreements previously entered on October 1, 2024, the Company has refinanced 34 loans for total gross proceeds of $1.469 billion, which, in the aggregate, represents approximately 97.8% of the Company's total outstanding debt. Notably, NXRT agreed to refinance at interest rate pricing improved from prior terms. This refinancing activity extends the Company's weighted average debt maturity schedule to approximately 6.82 years (from approximately 5.54 years) – after this refinancing activity, debt maturing through 2028 equates to approximately 2.2% of total debt (down from approximately 33% previously).

Holistically, these refinancings are expected to reduce NXRT's weighted average interest rate on total debt by 48 bps to 5.65% before the impact of interest rate swap contracts. Accounting for the hedging impact of the swaps, NXRT's adjusted weighted average interest rate is expected to be reduced from 3.44% to 2.95%. With the completion of these refinancings, the Company has no meaningful debt maturities until 2028.

"NXRT is pleased to announce the completion of the second half of this significant refinancing initiative, continuing to fortify our balance sheet and strengthen our relationship with JP Morgan. We identified this refinancing opportunity early in the year and we are thrilled to deliver what we believe to be a building block for growth and an excellent result for shareholders." said Matt McGraner, Chief Investment Officer.

Outstanding Debt Details
Mortgage Debt
The following table contains summary information concerning the mortgage debt of the Company as of November 26, 2024 ($ in 000s):
Operating Properties		Type		Term  (months)		Outstanding Principal (1)		Interest Rate (2)		Maturity Date
Arbors on Forest Ridge		Floating		84		$              17,307		5.68 %		12/1/2031	(3)
Cutter's Point		Floating		84		18,994		5.68 %		12/1/2031	(3)
The Summit at Sabal Park		Floating		84		26,735		5.68 %		12/1/2031	(3)
Courtney Cove		Floating		84		31,596		5.68 %		12/1/2031	(3)
The Preserve at Terrell Mill		Floating		84		74,341		5.68 %		12/1/2031	(3)
Versailles		Floating		84		26,108		5.68 %		12/1/2031	(3)
Seasons 704 Apartments		Floating		84		33,960		5.68 %		12/1/2031	(3)
Madera Point		Floating		84		29,676		5.68 %		12/1/2031	(3)
Venue at 8651		Floating		84		24,620		5.68 %		12/1/2031	(3)
Parc500		Floating		84		30,012		5.68 %		12/1/2031	(3)
Rockledge Apartments		Floating		84		78,444		5.68 %		12/1/2031	(3)
Atera Apartments		Floating		84		38,555		5.68 %		12/1/2031	(3)
Torreyana Apartments		Floating		84		43,153		5.68 %		12/1/2031	(3)
Bloom		Floating		84		60,848		5.68 %		12/1/2031	(3)
Bella Solara		Floating		84		37,772		5.68 %		12/1/2031	(3)
Fairways at San Marcos		Floating		84		55,056		5.68 %		12/1/2031	(3)
Creekside at Matthews		Floating		84		28,703		5.68 %		12/1/2031	(3)
The Venue on Camelback		Floating		84		36,465		5.68 %		9/30/2031
Sabal Palm at Lake Buena Vista		Floating		84		56,220		5.68 %		9/30/2031
Cornerstone		Floating		84		45,815		5.68 %		9/30/2031
Versailles II		Floating		84		15,706		5.68 %		9/30/2031
Brandywine I & II		Floating		84		59,526		5.68 %		9/30/2031
Bella Vista		Floating		84		37,400		5.68 %		9/30/2031
The Enclave		Floating		84		33,440		5.68 %		9/30/2031
The Heritage		Floating		84		29,810		5.68 %		9/30/2031
Summers Landing		Floating		84		14,135		5.68 %		9/30/2031
Residences at Glenview Reserve		Floating		84		33,271		5.68 %		9/30/2031
Avant at Pembroke Pines		Floating		84		248,185		5.68 %		9/30/2031
Arbors of Brentwood		Floating		84		39,977		5.68 %		9/30/2031
The Verandas at Lake Norman		Floating		84		30,113		5.68 %		9/30/2031
Six Forks Station		Floating		84		30,430		5.68 %		9/30/2031
High House at Cary		Floating		84		32,478		5.68 %		9/30/2031
The Adair		Floating		84		33,229		5.68 %		9/30/2031
Estates on Maryland		Floating		84		37,345		5.68 %		9/30/2031
Residences at West Place		Fixed		120		33,817		4.24 %		10/1/2028
						$         1,503,242		5.65 %

(1)	Mortgage debt that is non-recourse to the Company and encumbers the multifamily properties.
(2)	Interest rate is based on a reference rate plus an applicable margin, except for fixed-rate mortgage debt. 30-Day Average SOFR was 4.69% as of November 25, 2024.
(3)	The Company finalized a 7-year term refinance on 17 properties at SOFR plus a 1.09% margin. The refinance closed on November 26, 2024.

Interest Rate Swap Agreements
As of November 26, 2024, the Company had the following outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk (dollars in thousands):

Effective Date		Termination Date		Counterparty		Notional Amount				Fixed Rate (1)
September 1, 2019		September 1, 2026		KeyBank			100,000				1.4620	%
September 1, 2019		September 1, 2026		KeyBank			125,000				1.3020	%
January 3, 2020		September 1, 2026		KeyBank			92,500				1.6090	%
March 4, 2020		June 1, 2026		Truist			100,000				0.8200	%
June 1, 2021		September 1, 2026		KeyBank			200,000				0.8450	%
June 1, 2021		September 1, 2026		KeyBank			200,000				0.9530	%
March 1, 2022		March 1, 2025		Truist			145,000				0.5730	%
March 1, 2022		March 1, 2025		Truist			105,000				0.6140	%
							1,067,500				0.9807	%	(2)

(1)	The floating rate option for the interest rate swaps is the daily compounded average of SOFR plus a 0.11448% adjustment ("Adjusted SOFR"). As of November 25, 2024, Adjusted SOFR was 4.69%.
(2)	Represents the weighted average fixed rate of the interest rate swaps.

As of November 26, 2024 we had total indebtedness of $1.503 billion at an adjusted weighted average interest rate of 5.65%, of which $1.469 billion was debt with a floating interest rate. Interest rate swap agreements effectively covered 72.6% of our $1.469 billion of floating rate mortgage debt outstanding. For purposes of calculating the adjusted weighted average interest rate of the total indebtedness, we have included the weighted average fixed rate of 0.9807% for Adjusted SOFR on the $1.1 billion notional amount of interest rate swap agreements that we have entered into as of November 26, 2024.

About NXRT

NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of NexPoint Advisors, L.P., an SEC-registered investment advisor, which has extensive real estate experience.

Cautionary Statement Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's current expectations, assumptions and beliefs. Forward-looking statements can often be identified by words such as "believe," "continue," "expect," "will," "plan" and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding the expected reduction in NXRT's weighted average interest rate before and after the effect of interest rate swaps, the belief that the refinancings will continue to fortify our balance sheet and strengthen our relationship with JP Morgan and the belief that the refinancings is a building block for growth. They are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement, including those described in our filings with the Securities and Exchange Commission (the "SEC"), particularly those described in our Annual Report on Form 10-K. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the Company's most recent Annual Report on Form 10-K and other filings with the SEC for a more complete discussion of the risks and other factors that could affect any forward-looking statements. The statements made herein speak only as of the date of this release and except as required by law, NXRT does not undertake any obligation to publicly update or revise any forward-looking statements.

Contact:
Kristen Griffith
Investor Relations
IR@nexpoint.com

View original content to download multimedia:https://www.prnewswire.com/news-releases/nexpoint-residential-trust-inc-completes-refinancings-of-17-properties-302317074.html

SOURCE NexPoint Residential Trust, Inc.

FAQ

What is the total value of NXRT's refinancing completed in November 2024?

NXRT completed refinancing of 34 loans for total gross proceeds of $1.469 billion, representing 97.8% of the company's total outstanding debt.

How did NXRT's debt maturity schedule change after the November 2024 refinancing?

The refinancing extended NXRT's weighted average debt maturity to 6.82 years from 5.54 years, with only 2.2% of total debt maturing through 2028.

What is NXRT's new weighted average interest rate after the November 2024 refinancing?

NXRT's weighted average interest rate reduced to 5.65% before swap contracts, and the adjusted rate decreased to 2.95% from 3.44% after accounting for interest rate swaps.