DALLAS, Aug. 17,
2023 /PRNewswire/ -- NexPoint Residential Trust,
Inc. ("NXRT" or the "Company") (NYSE: NXRT) is pleased to announce
the execution of agreements to sell Old Farm in Houston, TX, and Silverbrook in Dallas, TX to separate buyers, with an
expected closing in early Q4 2023. Old Farm and Silverbrook's
trailing nominal cap rates are 5.12% and 4.55%, and their tax and
insurance-adjusted cap rates are 4.96% and 4.61%, respectively.
The Company expects the dispositions of these assets to generate
approximately $67 to 69 million of
net sales proceeds at a combined approximate trailing nominal cap
rate of 4.96% and tax and insurance-adjusted cap rate of 4.82%.
The executed agreements have $3.0
million (or approximately 2% of the combined purchase price)
of non-refundable earnest money held in escrow. The properties are
being sold to separate institutional investors at cap rates below
their respective market cap rates calculated within our Net Asset
Value Summary (Page 8 of NXRT's Second Quarter Earnings
Supplement).
The dispositions are expected to close in early October. After
completing these sales, the Company expects to pay off the entire
$57 million outstanding balance on
the corporate credit facility. The retirement of the corporate
credit facility and the property-level debt will reduce
portfolio-level debt by approximately $156
million. NXRT's hedged debt will increase to 97% from
88%. The portfolio will be hedged, 77% by swaps, 18% property-level
rate caps, and 2% first mortgage fixed debt. The combination of
these asset sales provides greater strategic flexibility and
de-risks the Company's balance sheet heading into 2024.
In addition, NXRT is currently in the process of selecting
buyers for Timber Creek and Radbourne Lake in Charlotte, NC and Stone Creek at Old Farm in Houston, TX. We expect these sales to be
completed in late Q4 2023 or early Q1 2024. These sales will allow
NXRT to acquire new assets, continue to deleverage the portfolio
and/or buy back shares.
"NXRT is excited to execute our strategic objectives to sell out
of our Houston market positions
and pay off our most expensive debt capital. Old Farm and
Silverbrook sales showcase the liquidity in our markets, and low
cap rates further prove the quality and desirability of our assets
in a turbulent marketplace. We have seen a good buyer turnout for
our other three assets in the market and expect strong returns from
these additional sales. We will continue to unlock liquidity the
Company can use to repurchase shares, should our stock continue to
trade at a material discount to our internal NAV estimate, and to
pursue attractive internal and external growth strategies should
those opportunities present themselves throughout the remaining
part of 2023 and 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," "estimate," "will," "should," and similar
expressions, and variations or negatives of these words. These
forward-looking statements include, but are not limited to,
statements regarding the expected closing of the sale of the Old
Farm and Silverbrook properties, the expected net sales proceeds
and nominal cap rate and adjusted cap rate of the properties, the
expected payoff of the corporate credit facility and related
timing, the expected reduction of property-level debt and hedged
debt, the asset sales provide greater strategic flexibility and
derisk the Company's balance sheet heading into 2024, the timing
and expected strong returns from the sale of Timber Creek,
Radbourne Lake and Stone Creek at
Old Farm and that these maneuvers will unlock liquidity which the
Company can use to repurchase common stock, deleverage the
portfolio and pursue internal and external growth strategies. 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 that the property sales do not close or are
delayed and those 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, Inc.