NexPoint Residential Trust, Inc. Q3 FY2025 earnings call

• Q3 2025 results: Net loss $7.8 million, total revenues $62.8 million. NOI $38.8 million. Same-store NOI up 3.5% despite rent and occupancy decreases.
• Completed 365 upgrades, leased 297 upgraded units with $72 average monthly rent premium and 20.1% ROI. Since inception, 9,478 upgrades, 4,925 appliances, 11,389 tech packages installed, driving rental increases and ROI.
• Expense control: Q3 same-store operating expenses down 6.3%, payroll and R&M down 7.5% and 6.1% respectively. Insurance down 19%, real estate taxes down 8.7% due to protests.
• Supply outlook: National new multifamily supply cycle peaking, with net deliveries expected to fall significantly in 2026 and 2027. CoStar forecasts net deliveries to drop 49% in 2026 and 20% in 2027.
• Acquisition: Awarded opportunity to acquire a 321-unit multifamily community in Northern Las Vegas, with potential to generate 7% same-store NOI CAGR over 5 years, plan to acquire in late Q4 2025 and sell in H1 2026 using 1031 reverse exchange.

For the third quarter ended September 30, 2025, NexPoint Residential Trust reported a net loss of $7.8 million or $0.31 per diluted share on total revenues of $62.8 million. NOI was $38.8 million on 35 properties, compared to $38.1 million on 36 properties in Q3 2024. Same-store rent and occupancy decreased 0.3% and 1.3% respectively, but same-store NOI increased 3.5%. The company paid a third quarter dividend of $0.51 per share, with a new dividend of $0.53 per share approved, a 3.9% increase. Since inception, dividend per share has increased by 157.3%. NAV range per share is $43.40 to $56.24, midpoint $49.82, based on average cap rates 5.25% to 5.75%.

Reaffirming midpoints for loss per diluted share (midpoint -$1.31), core FFO per diluted share (midpoint $2.75). Tightening guidance ranges for acquisitions and dispositions. Q3 dividend $0.51 per share, new dividend $0.53 per share approved, 3.9% increase.

Sustainability of expense control: Noncontrollable expenses like insurance and real estate taxes have one-time benefits, and payroll/R&M moderation needs to be sustained. Supply cycle risks: While supply is expected to decrease, continued market competition and one-time nature of some CapEx spend could impact future performance.

Q: On the operating expense side, asked about sustainability.

A: Matthew McGraner noted continued improvement in insurance and real estate taxes, with Bonner McDermett adding real estate tax savings were partly one-time.

Q: Quantify one-time real estate tax benefit in 3Q?

A: Bonner McDermett said about $820,000.

Q: Quantify new lease rates, renewals blend?

A: Matthew McGraner said new leases down 4.06% or $58, renewals up 1.94% or $29, blended negative 44 basis points; October trends similar.

Q: CapEx spend, tapering off?

A: Matthew McGraner said CapEx a bit elevated due to slower portfolio recycling, Bonner McDermett added interior spend focused on competitive upgrades with 20% ROI, larger nonrecurring CapEx from refinancings will moderate.

Q: Rationale for buying Vegas asset?

A: Matthew McGraner said asset offers 7% same-store NOI CAGR over 5 years, opportunities don't exist on large scale, not mutually exclusive with stock buybacks.