NexPoint Residential Trust, Inc. Completes the Sale of Timber Creek and Further Paydown of the Corporate Credit Facility

Rhea-AI Summary

NexPoint Residential Trust, Inc. (NXRT) announced the successful sale of Timber Creek in Charlotte, NC, a 352-unit property, delivering impressive financial results. The property was sold for $22.8 million, generating net proceeds of approximately $24.5M. The Company used the proceeds to pay down $17 million on its corporate credit facility, reducing the drawn balance to $24 million, a 92.8% reduction from September 30, 2022. NXRT's strategic de-leveraging and balance sheet improvement initiatives are well underway, positioning the company for future growth and shareholder value enhancement.

Positive

• Successful sale of Timber Creek property in Charlotte, NC
• Net proceeds of approximately $24.5M
• Reduction of drawn balance on corporate credit facility to $24 million, a 92.8% reduction from September 30, 2022
• Strategic de-leveraging and balance sheet improvement initiatives

Negative

• None.

DALLAS, Dec. 18, 2023 /PRNewswire/ -- NexPoint Residential Trust, Inc. ("NXRT" or the "Company") (NYSE: NXRT) announced today the closing of the sale of Timber Creek in Charlotte, NC, a 352-unit property built in 1984. The property was acquired for $22.8 million on September 30, 2014, and the Company completed an extensive repositioning and value-add initiative, improving the common area amenities and a significant portion of the unit interiors. As of December 13, 2023, the property was 95.17% leased with a weighted average effective monthly rent of approximately $1,202. Net proceeds from the sale were approximately $24.5M, delivering a trailing nominal tax and insurance adjusted cap rate of 5.01%, a 25.80% levered internal rate of return and a 4.45x multiple on invested capital, each of which well exceeded expectations. The Company used the net proceeds from the sale to make a $17 million paydown on the Company's corporate credit facility on December 15, 2023, continuing the Company's strategic de-leveraging and balance sheet improvement initiatives. This paydown reduces the drawn balance on the facility to $24 million, a 92.8% reduction from September 30, 2022.

"NXRT is pleased to announce another successful 2023 disposition, furthering our strategic objective to exit lower growth legacy assets in Charlotte, Dallas and Houston, and pay off our most expensive debt capital. NXRT remains committed to unlocking liquidity the Company can use to improve the balance sheet, repurchase shares and/or pay off higher property-level debt that will be accretive to future growth. We will seek to continue this approach heading into 2024," said Matt McGraner, Chief Investment Officer.

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 "expect," "should," "continue" 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 strategic objectives, the execution of the strategic objectives, that NXRT is committed to unlocking liquidity which the Company can use to improve the balance sheet, repurchase shares and/or pay off higher property-level debt that will be accretive to future growth and the Company will seek to continue this approach in 2024. 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 statements described in our filings with the Securities and Exchange Commission, 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 Thomas
Investor Relations
IR@nexpoint.com

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SOURCE NexPoint Residential Trust

FAQ

What property did NexPoint Residential Trust, Inc. (NXRT) sell recently?

NXRT recently sold Timber Creek, a 352-unit property in Charlotte, NC.

How much did the property sale generate in net proceeds?

The property sale generated approximately $24.5M in net proceeds for NXRT.

What did NXRT use the net proceeds from the property sale for?

NXRT used the net proceeds to make a $17 million paydown on the company's corporate credit facility, reducing the drawn balance to $24 million.

What initiatives is NXRT currently focused on?

NXRT is focused on strategic de-leveraging and balance sheet improvement initiatives to enhance future growth and shareholder value.