NexPoint Residential Trust Files 2023 Annual Report on Form 10-K

TL;DR

<b>NexPoint Residential Trust has filed its 2023 10-K, detailing its real estate operations and financial standing for the fiscal year ending December 31, 2023.</b>

AI Summary

NexPoint Residential Trust, Inc. (NXRT) filed a Annual Report (10-K) with the SEC on February 27, 2024. NexPoint Residential Trust, Inc. filed its 2023 Form 10-K on February 27, 2024. The filing covers the fiscal year ending December 31, 2023. The company is incorporated in Maryland (MD) and operates under the SIC code 6798 for Real Estate Investment Trusts. Key addresses include 300 Crescent Court, Suite 700, Dallas, TX 75201 for both business and mailing. The filing references various real estate properties, including 'StoneCreekAtOldFarm', 'ThePreserveAtTerrellMill', and 'MesaArizona'.

Why It Matters

For investors and stakeholders tracking NexPoint Residential Trust, Inc., this filing contains several important signals. This 10-K filing provides a comprehensive overview of NexPoint Residential Trust's financial performance, operational activities, and strategic positioning within the real estate investment trust sector for the fiscal year 2023. Investors and analysts can use this document to assess the company's asset portfolio, debt structure, and overall financial health, which are crucial for evaluating investment potential and risks.

Risk Assessment

Risk Level: medium — NexPoint Residential Trust, Inc. shows moderate risk based on this filing. The filing is a standard 10-K, which is a routine annual report. However, the specific details within the report regarding financial performance, debt, and property operations will determine the actual risk level for investors.

Analyst Insight

Review the financial statements and risk factors within the 10-K to understand NexPoint Residential Trust's performance and potential challenges in the real estate market.

Key Numbers

• 2023-12-31 — Fiscal Year End (Reporting period)
• 2024-02-27 — Filing Date (Date the 10-K was filed)
• 86 — Public Document Count (Number of documents in the filing)

Key Players & Entities

• NexPoint Residential Trust, Inc. (company) — Filer name
• 2023-12-31 (date) — Fiscal year end
• 2024-02-27 (date) — Filing date
• 300 Crescent Court, Suite 700, Dallas, TX 75201 (address) — Business and mailing address
• 0001620393 (company) — Central Index Key
• 6798 (industry_code) — Standard Industrial Classification for Real Estate Investment Trusts

FAQ

Industry Context

NexPoint Residential Trust operates as a Real Estate Investment Trust (REIT), focusing on acquiring, owning, and managing multifamily properties. The company's performance is tied to the broader multifamily real estate market trends, including occupancy rates, rental income, and property valuations.

Regulatory Implications

As a publicly traded company and a REIT, NexPoint Residential Trust is subject to regulations from the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934. This 10-K filing is a mandatory disclosure requirement.

What Investors Should Do

1. Analyze the financial statements within the 10-K for revenue, net income, and debt levels.
2. Examine the property portfolio details to understand geographic diversification and property types.
3. Review the risk factors section for potential challenges and mitigation strategies.

Key Dates

• 2023-12-31: Fiscal Year End — End of the reporting period for the 10-K.
• 2024-02-27: Filing Date — Date the 10-K was officially submitted to the SEC.

Year-Over-Year Comparison

This is the initial filing of the 2023 10-K, providing the latest annual financial and operational data for NexPoint Residential Trust.

Key Financial Figures

• $0.01 — ch registered Common Stock, par value $0.01 per share NXRT New York Stock Excha
• $12,303 — ns on 2,073 units at an average cost of $12,303 per renovated unit. Since inception, fo
• $9,715 — ns on 8,534 units at an average cost of $9,715 per renovated unit that has been leased
• $169 — eved average rent growth of 14.5%, or a $169 average monthly rental increase per uni
• $45.2 m — vidends: We declared dividends totaling $45.2 million, or $1.722 per share for the year
• $1.722 — ed dividends totaling $45.2 million, or $1.722 per share for the year ended December 3
• $0.46242 — ince the Spin-Off (as defined below) to $0.46242 per share, which was an increase of $0.
• $0.04242 — 242 per share, which was an increase of $0.04242 per share, or a 10.1% increase, over ou
• $0.26 — to $0.46242 per share is an increase of $0.26 per share, or a 124.5% increase, over o
• $34.43 — eld based on our closing share price of $34.43 on December 31, 2023. Results of Oper
• $53.2 million — ease in gain on sales of real estate of $53.2 million and increases in property operating exp
• $0.4 million — eases in property operating expenses of $0.4 million and depreciation and amortization expen
• $2.4 m — epreciation and amortization expense of $2.4 million, partially offset by an increase
• $13.5 million — set by an increase in total revenues of $13.5 million. (2) See Item 7, "Management's Discus
• $17.5 million — On February 2, 2023, the Company made a $17.5 million principal payment on the Corporate Cred

Filing Documents

• nxrt-20231231.htm (10-K) — 6796KB
• nxrt-ex19_1.htm (EX-19.1) — 82KB
• nxrt-ex21_1.htm (EX-21.1) — 103KB
• nxrt-ex23_1.htm (EX-23.1) — 2KB
• nxrt-ex31_1.htm (EX-31.1) — 17KB
• nxrt-ex31_2.htm (EX-31.2) — 17KB
• nxrt-ex32_1.htm (EX-32.1) — 12KB
• img68588767_0.jpg (GRAPHIC) — 63KB
• img68588767_1.jpg (GRAPHIC) — 529KB
• 0000950170-24-021143.txt (&nbsp;) — 24467KB
• nxrt-20231231.xsd (EX-101.SCH) — 2006KB
• nxrt-20231231_htm.xml (XML) — 5565KB

Business

Business 5 Item 1A.

Risk Factors

Risk Factors 17 Item 1B. Unresolved Staff Comments 42 Item 1C. Cybersecurity 42 Item 2.

Properties

Properties 44 Item 3.

Legal Proceedings

Legal Proceedings 45 Item 4. Mine Safety Disclosures 45 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 46 Item 6. [Reserved] 47 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 48 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 73 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 74 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 74 Item 9A.

Controls and Procedures

Controls and Procedures 74 Item 9B. Other Information 75 PART III Item 10. Directors, Executive Officers and Corporate Governance 76 Item 11.

Executive Compensation

Executive Compensation 76 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 76 Item 13. Certain Relationships and Related Transactions, and Director Independence 76 Item 14. Principal Accountant Fees and Services 76 PART IV Item 15. Exhibits and Financial Statement Schedules 77 Index to Consolidated Financial Statements F- 1 i Cautionary Statement Regardin g Forward-Looking Statements This annual report (the "Annual Report") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. In particular, statements relating to our liquidity and capital resources, the performance of our properties and results of operations contain forward-looking statements. Furthermore, all of the statements regarding future financial performance (including market conditions and demographics) are forward-looking statements. We caution investors that any forward-looking statements presented in this Annual Report are based on management's current beliefs and assumptions made by, and information currently available to, management. When used, the words "anticipate," "believe," "expect," "intend," "may," "might," "plan," "estimate," "project," "should," "will," "would," "result" and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions. Forward-looking statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-lookin

B USINESS

ITEM 1. B USINESS General NexPoint Residential Trust, Inc. (the "Company," "we," "our") was incorporated in Maryland on September 19, 2014, and has elected to be taxed as a REIT. The Company is focused on "value-add" multifamily investments primarily located in the Southeastern and Southwestern United States. Substantially all of the Company's business is conducted through NexPoint Residential Trust Operating Partnership, L.P. (the "OP"), the Company's operating partnership. The Company owns its properties (the "portfolio") through the OP and its wholly owned TRS. The OP owns approximately 99.9% of the portfolio; the TRS owns approximately 0.1% of the portfolio. The Company's wholly owned subsidiary, NexPoint Residential Trust Operating Partnership GP, LLC (the "OP GP"), is the sole general partner of the OP. As of December 31, 2023, there were 26,053,988 common units in the OP ("OP Units") outstanding, of which 25,951,154, or 99.6%, were owned by the Company and 102,834, or 0.4%, were owned by noncontrolling limited partners (see Note 9 to our consolidated financial statements). The Company is externally managed by the Adviser, through an agreement dated March 16, 2015, as amended, and renewed on February 26, 2024 for a one-year term (the "Advisory Agreement"), by and among the Company, the OP and the Adviser. The Adviser conducts substantially all of the Company's operations and provides asset management services for its real estate investments. The Company expects it will only have accounting employees while the Advisory Agreement is in effect. All of the Company's investment decisions are made by the Adviser, subject to general oversight by the Adviser's investment committee and the Company's board of directors (the "Board"). The Adviser is wholly owned by the Sponsor. The Company's investment objectives are to maximize the cash flow and value of properties owned, acquire properties with cash flow growth potential, provide quarterly cash distributions an