NREF Announces Second Quarter 2024 Results, Provides Third Quarter 2024 Guidance
NexPoint Real Estate Finance (NREF) reported strong Q2 2024 results, with net income of $7.5 million ($0.40 per diluted share) and cash available for distribution of $15.0 million ($0.64 per diluted share). The company's total portfolio stands at $1.2 billion across 85 investments, with a focus on multifamily (56.9%), life sciences and specialty manufacturing (22.2%), and single-family rental (18.8%). NREF's weighted-average loan-to-value ratio is 62.3% with a debt service coverage ratio of 1.52x.
Key Q2 highlights include purchasing a K-Series B-Piece with a 9.50% yield and originating a $67.5 million short-term bridge loan at 16.5% interest. For Q3 2024, NREF projects Earnings Available for Distribution of $0.505 per diluted share at the midpoint, with net income attributable to common stockholders estimated between $9.1 million and $11.5 million.
NexPoint Real Estate Finance (NREF) ha riportato risultati solidi per il secondo trimestre del 2024, con un reddito netto di 7,5 milioni di dollari (0,40 dollari per azione diluita) e un cash disponibile per la distribuzione di 15,0 milioni di dollari (0,64 dollari per azione diluita). Il portafoglio totale dell'azienda si attesta a 1,2 miliardi di dollari distribuiti su 85 investimenti, con un focus sugli immobili multifamiliari (56,9%), scienze della vita e produzione specializzata (22,2%), e affitti unifamiliari (18,8%). Il rapporto medio ponderato prestito/valore di NREF è del 62,3% con un rapporto di copertura del servizio del debito di 1,52x.
Tra i principali punti salienti del secondo trimestre ci sono l'acquisto di un K-Series B-Piece con un rendimento del 9,50% e l'originazione di un prestito ponte a breve termine di 67,5 milioni di dollari a un tasso di interesse del 16,5%. Per il terzo trimestre del 2024, NREF prevede utili disponibili per la distribuzione di 0,505 dollari per azione diluita a metà intervallo, con un reddito netto attribuibile agli azionisti comuni stimato tra 9,1 milioni e 11,5 milioni di dollari.
NexPoint Real Estate Finance (NREF) reportó resultados sólidos para el segundo trimestre de 2024, con una ganancia neta de 7.5 millones de dólares (0.40 dólares por acción diluida) y efectivo disponible para distribución de 15.0 millones de dólares (0.64 dólares por acción diluida). La cartera total de la empresa asciende a 1.2 mil millones de dólares en 85 inversiones, con un enfoque en multifamiliares (56.9%), ciencias de la vida y fabricación especializada (22.2%), y alquiler de viviendas unifamiliares (18.8%). El ratio medio ponderado de préstamo a valor de NREF es del 62.3% con un ratio de cobertura del servicio de la deuda de 1.52x.
Los aspectos destacados del segundo trimestre incluyen la compra de una pieza B de la serie K con un rendimiento del 9.50% y la originación de un préstamo puente a corto plazo de 67.5 millones de dólares a un 16.5% de interés. Para el tercer trimestre de 2024, NREF proyecta ganancias disponibles para distribución de 0.505 dólares por acción diluida en el punto medio, con una ganancia neta atribuible a los accionistas comunes estimada entre 9.1 millones y 11.5 millones de dólares.
NexPoint Real Estate Finance (NREF)는 2024년 2분기에 750만 달러(희석 주당 0.40 달러)의 순이익과 1,500만 달러(희석 주당 0.64 달러)의 분배 가능한 현금을 기록하며 강력한 실적을 보고했습니다. 회사의 총 포트폴리오는 85개 투자로 구성된 12억 달러이며, 다가구 주택(56.9%), 생명 과학 및 특수 제조(22.2%), 단독 주택 임대(18.8%)에 초점을 맞추고 있습니다. NREF의 가중 평균 대출 대비 가치 비율은 62.3%이며, 부채 서비스 보장 비율은 1.52x입니다.
2분기 주요 하이라이트에는 9.50%의 수익률로 K-시리즈 B-조각을 구매하고, 16.5%의 이자로 6,750만 달러의 단기 브리지 론을 발행한 것이 포함됩니다. 2024년 3분기 동안 NREF는 중간값 기준 희석 주당 0.505 달러의 분배 가능한 수익을 예상하며, 일반 주주에게 귀속되는 순이익은 910만 달러에서 1,150만 달러 사이로 추정됩니다.
NexPoint Real Estate Finance (NREF) a rapporté de solides résultats pour le deuxième trimestre 2024, avec un revenu net de 7,5 millions de dollars (0,40 dollar par action diluée) et des liquidités disponibles pour distribution de 15,0 millions de dollars (0,64 dollar par action diluée). Le portefeuille total de la société s'élève à 1,2 milliard de dollars répartis sur 85 investissements, avec un accent sur les logements multifamiliaux (56,9 %), les sciences de la vie et la fabrication spécialisée (22,2 %) et la location de maisons individuelles (18,8 %). Le ratio moyen pondéré prêt/valeur de NREF est de 62,3 % avec un ratio de couverture du service de la dette de 1,52x.
Les principaux points saillants du deuxième trimestre incluent l'achat d'une pièce B de la série K avec un rendement de 9,50 % et l'origine d'un prêt à court terme de 67,5 millions de dollars à un taux d'intérêt de 16,5 %. Pour le troisième trimestre 2024, NREF projette des bénéfices disponibles pour distribution de 0,505 dollar par action diluée à la moyenne, avec un revenu net attribuable aux actionnaires ordinaires estimé entre 9,1 millions et 11,5 millions de dollars.
NexPoint Real Estate Finance (NREF) meldete starke Ergebnisse für das 2. Quartal 2024 mit einem Nettogewinn von 7,5 Millionen US-Dollar (0,40 US-Dollar pro verwässerter Aktie) und verfügbaren Mitteln zur Ausschüttung von 15,0 Millionen US-Dollar (0,64 US-Dollar pro verwässerter Aktie). Das Gesamtportfolio des Unternehmens beträgt 1,2 Milliarden US-Dollar verteilt auf 85 Investments, mit einem Fokus auf Mehrfamilienhäuser (56,9%), Lebenswissenschaften und Spezialfertigung (22,2%) sowie Einfamilienvermietung (18,8%). Das gewichtete Durchschnittsverhältnis von Kredit zu Wert beträgt 62,3% bei einem Schuldendienstdeckungsgrad von 1,52x.
Wichtige Höhepunkte des 2. Quartals sind der Kauf eines K-Series B-Pieces mit einer Rendite von 9,50% sowie die Kreditvergabe eines kurzfristigen Brücken-Darlehens über 67,5 Millionen US-Dollar zu einem Zinssatz von 16,5%. Für das 3. Quartal 2024 prognostiziert NREF, dass die verfügbaren Erträge zur Ausschüttung durchschnittlich 0,505 US-Dollar pro verwässerter Aktie betragen, wobei der Nettogewinn, der den Stammaktionären zuzurechnen ist, voraussichtlich zwischen 9,1 Millionen und 11,5 Millionen US-Dollar liegt.
- Strong Q2 2024 results with $7.5 million net income
- Cash available for distribution of $15.0 million ($0.64 per diluted share)
- Diverse $1.2 billion portfolio across 85 investments
- Healthy weighted-average loan-to-value ratio of 62.3%
- Originated $67.5 million short-term bridge loan at 16.5% interest
- Positive Q3 2024 guidance with projected EAD of $0.505 per diluted share
- None.
Insights
NexPoint Real Estate Finance's Q2 2024 results demonstrate resilience in a challenging market environment. The company reported
Key points to consider:
- The company's
$1.2 billion portfolio is well-diversified across various real estate sectors, with a focus on multifamily (56.9% ) and life sciences/specialty manufacturing (22.2% ). - The weighted-average loan-to-value ratio of
62.3% and debt service coverage ratio of 1.52x suggest a relatively conservative lending approach, which is prudent in the current economic climate. - NREF's ability to deploy capital in a tight credit market, as evidenced by the
$67.5 million bridge loan with a16.5% interest rate, showcases its competitive advantage.
Looking ahead, NREF's Q3 2024 guidance projects earnings available for distribution of
Overall, NREF's performance and outlook appear positive, especially considering the challenging real estate financing landscape. However, investors should monitor the company's ability to maintain its loan quality and capitalize on market dislocations without taking on excessive risk.
NREF's Q2 2024 results offer valuable insights into the current state of the real estate financing market. The company's success in a challenging environment where "banks and traditional lenders remain sidelined or distracted with credit issues" highlights the opportunities available for alternative lenders.
Several aspects of NREF's portfolio are noteworthy:
- The focus on multifamily (
56.9% ) and life sciences/specialty manufacturing (22.2% ) properties indicates a strategic emphasis on sectors with strong fundamentals and potential for growth. - The relatively low exposure to retail and office properties, which are facing significant headwinds, is a positive factor.
- The
18.8% allocation to single-family rentals reflects the growing importance of this asset class in the housing market.
The origination of a
The absence of loans in forbearance is a positive sign, but it's important to monitor this metric closely as economic pressures continue. The weighted-average loan-to-value ratio of
Looking forward, NREF's ability to capitalize on market dislocations while maintaining prudent underwriting standards will be key to its continued success in this dynamic real estate financing landscape.
NREF reported net income attributable to common stockholders of
NREF reported cash available for distribution2 of
"NREF is pleased to deliver another strong quarter with consistent, resilient earnings in our core property types. While banks and traditional lenders remain sidelined or distracted with credit issues, we remain active, focused and ready to deploy capital into this challenging credit market, capitalizing on market dislocations and creating long-term value for our shareholders," commented Chief Investment Officer Matthew McGraner.
Second Quarter 2024 Highlights
- Outstanding total portfolio of
$1.2 billion - Single-family rental ("SFR"), multifamily, life sciences and specialty manufacturing, self-storage and marinas represent
18.8% ,56.9% ,22.2% ,1.5% and0.6% of the Company's investment portfolio, respectively - Weighted-average loan to value ("LTV")4 and debt service coverage ratio ("DSCR") on our SFR, CMBS, CMBS I/O strips, preferred, mezzanine, credit risk transfer and mortgage-backed security investments are
62.3% and 1.52x3, respectively - As of August 1, 2024, there are no loans currently in forbearance in our portfolio
- During 2Q 2024, NREF purchased a K – Series B-Piece with an outstanding principal balance of
$31 9.50% - During the quarter, the Company originated and funded
$67 $150.0 55% LTV and bears a fixed interest rate of16.5% per annum.
1 Weighted-average diluted shares outstanding assumes vesting of all outstanding unvested restricted stock units and the conversion of all redeemable non-controlling interests. |
2 Earnings available for distribution ("EAD"), cash available for distribution ("CAD") and earnings per adjusted diluted share ("EPS") are non-GAAP measures. Beginning in the second quarter of 2024, EAD per diluted share, CAD per diluted share and EPS per adjusted diluted share are based on adjusted diluted weighted average shares outstanding. Adjusted diluted weighted average shares outstanding is a non-GAAP measure. For a discussion of why we consider these non-GAAP measures useful and reconciliations of these non-GAAP measures, see the "Reconciliations of Non-GAAP Financial Measures" and "Non-GAAP Financial Measures" sections of this release. |
3 As of June 30, 2024; and excluding the common stock investments, preferred stock investment, the Hudson Montford and Alexander at the District multifamily properties, CMBS B-Pieces reflected on an unconsolidated basis. |
4 Loan to value is generally based on the initial loan amount divided by the as-is appraised value as of the date the loan was originated or by the current principal amount as of the date of the most recent as-is appraised value. For our CMBS B-Pieces, LTV is based on the weighted-average LTV of the underlying loan pool. |
5 Net income attributable to common stockholders in 3Q 2024 is estimated to be between |
Looking Ahead: Third Quarter 2024 Guidance
Earnings Available for Distribution2
- 3Q 2024 EAD per diluted share guidance is
$0.50
Low | Mid | High | ||||||||||
Sept. 30, 2024 | Sept. 30, 2024 | Sept. 30, 2024 | ||||||||||
Net income | $ | 12,318 | $ | 13,489 | $ | 14,660 | ||||||
Net (income) loss attributable to Series A Preferred stockholders | (874) | (874) | (874) | |||||||||
Net (income) loss attributable to Series B Preferred stockholders | (2,316) | (2,316) | (2,316) | |||||||||
Net income attributable to common stockholders | $ | 9,128 | $ | 10,299 | $ | 11,470 | ||||||
Adjustments | ||||||||||||
Amortization of stock-based compensation | 1,411 | 1,411 | 1,411 | |||||||||
EAD | $ | 10,539 | $ | 11,710 | $ | 12,881 | ||||||
Weighted average common shares outstanding - basic | 17,461 | 17,461 | 17,461 | |||||||||
Weighted average common shares outstanding - diluted | 30,246 | 30,246 | 30,246 | |||||||||
Shares attributable to potential redemption of Series B Preferred | (6,826) | (6,826) | (6,826) | |||||||||
Adjusted weighted average common shares outstanding - diluted | 23,420 | 23,420 | 23,420 | |||||||||
EPS per Weighted Average Share - diluted | $ | 0.38 | $ | 0.42 | $ | 0.46 | ||||||
EPS per Adjusted Weighted Average Share - diluted | $ | 0.39 | $ | 0.44 | $ | 0.49 | ||||||
EAD per Adjusted Weighted Average Share - diluted | $ | 0.45 | $ | 0.50 | $ | 0.55 | ||||||
EPS Dividend Coverage Ratio | 0.76 | x | 0.84 | x | 0.92 | x | ||||||
EPS Adjusted Dividend Coverage Raito | 0.78 | x | 0.88 | x | 0.98 | x | ||||||
EAD Adjusted Dividend Coverage Raito | 0.90 | x | 1.00 | x | 1.10 | x | ||||||
Cash Available for Distribution2
- 3Q 2024 CAD per diluted share guidance is
$0.45
Low | Mid | High | ||||||||||
Sept. 30, 2024 | Sept. 30, 2024 | Sept. 30, 2024 | ||||||||||
EAD | $ | 10,539 | 11,710 | $ | 12,881 | |||||||
Adjustments | ||||||||||||
Amortization of premiums | 2,422 | 2,422 | 2,422 | |||||||||
Accretion of discounts | (4,573) | (4,573) | (4,573) | |||||||||
Amortization and depreciation | 1,062 | 1,062 | 1,062 | |||||||||
CAD | $ | 9,450 | $ | 10,621 | $ | 11,792 | ||||||
Weighted average common shares outstanding - basic | 17,461 | 17,461 | 17,461 | |||||||||
Weighted average common shares outstanding - diluted | 30,246 | 30,246 | 30,246 | |||||||||
Shares attributable to potential redemption of Series B Preferred | (6,826) | (6,826) | (6,826) | |||||||||
Adjusted weighted average common shares outstanding - diluted | 23,420 | 23,420 | 23,420 | |||||||||
EPS per Weighted Average Share - diluted | $ | 0.38 | $ | 0.42 | $ | 0.46 | ||||||
EPS per Adjusted Weighted Average Share - diluted | $ | 0.39 | $ | 0.44 | $ | 0.49 | ||||||
CAD per Adjusted Weighted Average Share - diluted | $ | 0.40 | $ | 0.45 | $ | 0.50 | ||||||
EPS Dividend Coverage Ratio | 0.76 | x | 0.84 | x | 0.92 | x | ||||||
EPS Adjusted Dividend Coverage Raito | 0.78 | x | 0.88 | x | 0.98 | x | ||||||
CAD Adjusted Dividend Coverage Raito | 0.80 | x | 0.90 | x | 1.00 | x | ||||||
Conference Call Details
The Company is scheduled to host a conference call on Thursday, August 1, 2024, at 11:00 a.m. ET (10:00 a.m. CT), to discuss second quarter 2024 financial results.
The conference call can be accessed live over the phone by dialing 888-660-4430 or +1 646-960-0537 and entering Conference ID 6891136. A live audio webcast of the call will be available online at the Company's website, https://nref.nexpoint.com (under "Resources"). An online replay will be available shortly after the call on the Company's website and continue to be available for 60 days.
A replay of the conference call will also be available through Thursday, August 15, 2024, by dialing 1 800- 770- 2030 or, for international callers, +1 647- 362- 9199 and entering passcode 6891136.
For additional commentary and portfolio information, please view NREF's earning supplement, which was posted on the Company's website, http://nref.nexpoint.com.
Reconciliations of Non-GAAP Financial Measures
The following table provides a reconciliation of Earnings Available for Distribution2 and Cash Available for Distribution2 to GAAP net income attributable to common stockholders and Adjusted Diluted Weighted Average Shares Outstanding to Diluted Weighted Average Shares Outstanding (in thousands, except per share amounts):
For the Three Months Ended June 30, | ||||||||
2024 | 2023 | |||||||
Net income (loss) attributable to common stockholders | $ | 7,488 | 5,747 | |||||
Net income attributable to redeemable noncontrolling interests | 2,275 | 1,856 | ||||||
Adjustments | ||||||||
Amortization of stock-based compensation | 1,454 | 1,262 | ||||||
Provision for (reversal of) credit losses | (2) | (6) | ||||||
Equity in (income) losses of equity method investments (1) | 892 | 889 | ||||||
Unrealized (gains) or losses (2) | 3,852 | 1,708 | ||||||
EAD | $ | 15,959 | $ | 11,456 | ||||
EAD per Adjusted Diluted Weighted-Average Share | $ | 0.68 | $ | 0.50 | ||||
Adjustments | ||||||||
Amortization of premiums | $ | 1,682 | 3,806 | |||||
Accretion of discounts | (3,693) | (3,572) | ||||||
Depreciation and amortization of real estate investments | 1,082 | 478 | ||||||
Amortization of deferred financing costs | 12 | 11 | ||||||
CAD | $ | 15,042 | $ | 12,179 | ||||
CAD per Adjusted Diluted Weighted-Average Share | $ | 0.64 | $ | 0.53 | ||||
Weighted-average common shares outstanding - basic | 17,422 | 17,213 | ||||||
Weighted-average common shares outstanding - diluted | 27,788 | 23,080 | ||||||
Shares attributable to potential redemption of Series B Preferred | 4,357 | — | ||||||
Adjusted weighted-average common shares outstanding - diluted | 23,431 | 23,080 | ||||||
(1) | Starting in the third quarter of 2023, the Company has adjusted EAD to remove the (income) / loss from equity method investments as it does not represent distributable earnings. We will include income from equity method investments to the extent that we receive cash distributions and upon realizing gains and/or losses. |
(2) | Unrealized gains represent the net change in unrealized gains on investments held at fair value. |
About NexPoint Real Estate Finance, Inc.
NexPoint Real Estate Finance, Inc., is a publicly traded REIT, with its common stock and
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 "anticipate", "believe," "estimate", "expect," "intend," "may", "should" and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding the Company's business, strategy and industry in general, third quarter 2024 guidance, including net income attributable to common stockholders, EAD, CAD, EAD and CAD per diluted share, EPS per adjusted diluted share and related coverage ratios, assumptions and estimates and the Company's intent to not settle Series B Preferred redemptions in shares of common stock when the Company's common stock price is below book value. They are not guarantees of future results and forward-looking statements 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 greater detail in our filings with the Securities and Exchange Commission, particularly those described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the Company's Annual Report on Form 10-K and the Company's other filings with the SEC for a more complete discussion of risks and other factors that could affect any forward-looking statement. The statements made herein speak only as of the date of this press release and except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements.
Non-GAAP Financial Measures
This press release contains non-GAAP financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flows of the Company. The non-GAAP financial measures used within this press release are EAD, CAD, EAD and CAD per diluted share, EPS per adjusted diluted share and adjusted weighted average diluted shares outstanding.
EAD is defined as net income (loss) attributable to our common stockholders computed in accordance with GAAP, including realized gains and losses not otherwise included in net income (loss), excluding any unrealized gains or losses or other similar non-cash items that are included in net income (loss) for the applicable reporting period, regardless of whether such items are included in other comprehensive income (loss), or in net income (loss) and adding back amortization of stock-based compensation. Net income (loss) attributable to common stockholders may also be adjusted for the effects of certain GAAP adjustments and transactions that may not be indicative of our current operations. In addition, EAD in this press release includes the dilutive effect of non-controlling interests. We use EAD to evaluate our performance and to assess our long-term ability to pay distributions. We believe providing EAD as a supplement to GAAP net income (loss) to our investors is helpful to their assessment of our performance and our long-term ability to pay distributions. We also use EAD as a component of the management fee paid to our manager. EAD does not represent net income or cash flows from operating activities and should not be considered as an alternative to GAAP net income, an indication of our GAAP cash flows from operating activities, a measure of our liquidity or an indication of funds available for our cash needs. Our computation of EAD may not be comparable to EAD reported by other REITs. Starting in the third quarter of 2023, the Company has adjusted EAD to remove the income/(losses) from equity method investments as they represent changes in the equity value of our investment rather than distributable earnings. The Company will include income from equity method investments to the extent that we receive cash distributions and upon realizing gains and/or losses.
We calculate CAD by adjusting EAD by adding back amortization of premiums, depreciation and amortization of real estate investment and amortization of deferred financing costs and by removing accretion of discounts. We use CAD to evaluate our performance and our current ability to pay distributions. We also believe that providing CAD as a supplement to GAAP net income (loss) to our investors is helpful to their assessment of our performance and our current ability to pay distributions. CAD does not represent net income or cash flows from operating activities and should not be considered as an alternative to GAAP net income, an indication of our GAAP cash flows from operating activities, a measure of our liquidity or an indication of funds available for our cash needs. Our computation of CAD may not be comparable to CAD reported by other REITs.
Adjusted weighted average diluted shares outstanding is calculating by subtracting the dilutive effect of potential redemptions of Series B Preferred shares for shares of our common stock from weighted average diluted shares outstanding. We believe providing adjusted weighted average diluted shares outstanding to our investors is helpful in their assessment of our performance without the potential dilutive effective of the Series B Preferred shares. We have the right to redeem the Series B Preferred shares for cash or shares of our common stock. Additionally, Series B Preferred redemptions are capped at
EPS per adjusted diluted share is calculated by dividing net income by adjusted weighted average diluted shares outstanding. We believe providing EPS per adjusted diluted share to our investors is helpful in their assessment of our performance without the potential dilutive effect of the Series B Preferred shares.
Adjusted weighted average diluted shares outstanding and EPS per adjusted diluted share should not be considered as alternatives to the GAAP measures. Our computation of adjusted weighted average diluted shares outstanding and EPS per adjusted diluted share may not be comparable to adjusted weighted average diluted shares outstanding or EPS per adjusted diluted share reported by other companies.
Contact:
Kristen Thomas
Investor Relations
IR@nexpoint.com
Media: pro-nexpoint@prosek.com
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SOURCE NexPoint Real Estate Finance, Inc.
FAQ
What was NREF's net income for Q2 2024?
How much cash available for distribution did NREF report for Q2 2024?
What is the composition of NREF's investment portfolio as of Q2 2024?
What is NREF's guidance for Earnings Available for Distribution in Q3 2024?
