NXRT.NEXPOINT.COM

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Property Name

Location

Date of

Acquisition

Purchase Price

Mortgage Debt

# Units

Effective

Ownership

The Verandas at Lake Norman

Charlotte, North Carolina

June 30, 2021

$

63,500

$

34,925

264

100

%

Creekside at Matthews

Charlotte, North Carolina

June 30, 2021

58,000

31,900

240

100

%

$

121,500

$

66,825

504

Market

New Leases

% Increase

Rent Increase

Renewals

% Increase

Rent Increase

DFW

289

12.6%

$119.69

349

6.3%

$59.42

HOU

159

4.6%

$53.61

154

3.5%

$42.24

CHA

88

8.2%

$85.89

72

7.0%

$74.17

NASH

273

10.2%

$109.51

271

4.5%

$45.43

ATL

134

22.3%

$253.81

242

7.4%

$82.63

ORL

148

9.4%

$113.45

164

4.4%

$52.32

TPA

81

24.3%

$243.47

94

8.1%

$78.49

South FL

232

17.9%

$263.97

314

5.4%

$77.06

PHX

242

16.9%

$196.91

274

7.0%

$83.81

LSV

157

20.2%

$233.75

144

8.5%

$94.77

TOTAL

1,803

14.2%

$164.55

2,078

6.1%

$68.17

Q2 2021

Q2 2020

YTD 2021

YTD 2020

(in thousands, except for per share and unit data)

Company Profile

Market Capitalization (as of the last day of the period)

$

1,383,000

$

859,000

Share Price (as of the last day of the period)

$

54.98

$

35.35

Weighted average common shares outstanding - basic

25,140

24,307

25,104

24,847

Weighted average common shares outstanding - diluted

25,140

24,307

25,104

25,330

Earnings Profile

Total revenues

$

52,563

$

50,681

$

104,359

$

103,262

Net income (loss) attributable to common stockholders

(3,408

)

(9,290

)

(10,287

)

18,665

NOI (1)

30,029

30,296

59,610

60,281

Same Store NOI (2)

28,664

28,485

56,929

56,843

Same Store NOI Growth (%) (2)

0.6

%

0.2

%

Earnings Metrics Per Common Share (diluted basis)

Earnings

$

(0.14

)

$

(0.38

)

$

(0.41

)

$

0.74

FFO (1)

$

0.66

$

0.50

$

1.21

$

0.96

Core FFO (1)

$

0.56

$

0.59

$

1.13

$

1.11

AFFO (1)

$

0.65

$

0.66

$

1.29

$

1.24

Dividends declared per common share

$

0.34125

$

0.3125

$

0.6825

$

0.625

     FFO Coverage (3)

1.93x

1.59x

1.77x

1.54x

     Core FFO Coverage (3)

1.65x

1.90x

1.65x

1.77x

     AFFO Coverage (3)

1.90x

2.13x

1.89x

1.98x

Portfolio

Total Properties

39

37

Total Units (4)

14,709

14,104

     Occupancy

96.1

%

95.3

%

     Average Effective Monthly Rent per Unit

$

1,159

$

1,109

Same Store Portfolio Metrics (2)

Total Same Store Properties

35

35

35

35

Total Same Store Units

13,544

13,657

13,544

13,657

     Occupancy

96.0

%

95.3

%

96.0

%

95.3

%

     Average Effective Monthly Rent per Unit

$

1,153

$

1,113

$

1,153

$

1,113

Value-Add Program

Completed Rehab Units

336

399

621

966

Cumulative Completed Rehab Units (5)

5,784

     Average Increase to Effective Monthly Rent

     per Unit (Post-Rehab)

$

132

     ROI on Post-Rehab Units

21.4

%

Outstanding Debt Summary

Total Mortgage Debt

$

1,234,515

$

1,151,500

Credit Facilities

250,000

225,000

Total Debt Outstanding

$

1,484,515

$

1,376,500

     Leverage Ratio (Net Debt to Enterprise Value) (6)

51

%

60

%

(1)

For more information and reconciliations of NOI, FFO, Core FFO and AFFO, see the “FFO, Core FFO and AFFO”, “NOI and Same Store NOI” and “Definitions and Reconciliations of Non-GAAP Measures” sections of this release.

(2)

We define “Same Store” properties as properties that were in our Portfolio for the entirety of the periods being compared. For additional information regarding our Q2 and YTD Same Store properties, see the “Q2 Same Store Results” and “YTD Same Store Results” section of this release.

(3)

Indicates coverage ratio of FFO/Core FFO/AFFO per common share (diluted) over dividends declared per common share during the period.

(4)

Total units owned is 14,709, however 249 units are currently down due to fires, a tornado, and winter storm Uri in February 2021.

(5)

Inclusive of all full and partial interior upgrades completed through. Cumulative results exclude rehabs completed for properties sold through June 30, 2021.

(6)

For more information and a reconciliation of debt to net debt, see the “Definitions and Reconciliations of Non-GAAP Measures” section of this release.

NXRT.NEXPOINT.COM

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Guidance Range (1)

Low-End

Mid-Point

High-End

Prior Mid-Point

Earnings (loss) per diluted share (2)

$

0.07

$

0.12

$

0.17

$

(0.99

)

Core FFO per diluted share (2) (3)

$

2.30

$

2.35

$

2.41

$

2.29

Same Store Growth: (4)

Rental Income

4.2

%

4.6

%

5.0

%

4.9

%

Total Revenue

4.3

%

4.7

%

5.0

%

4.8

%

Total Expenses (5)

6.4

%

5.6

%

4.8

%

6.6

%

Same Store NOI (3)

2.7

%

4.0

%

5.2

%

3.6

%

Other Considerations: (6)

Acquisitions

$

100.0

$

150.0

$

200.0

$

150.0

Dispositions (7)

$

75.0

$

112.5

$

150.0

$

112.5

(1)

Full Year 2021 guidance forecast includes Same Store growth projections presented above, which takes into effect the tornado damage at Cutter’s Point, fires at Timber Creek and Venue 8651, units damaged by winter storm Uri, the completed acquisitions of Creekside at Matthews and The Verandas at Lake Norman, the forecasted acquisition of a to-be-identified multifamily community in Raleigh, NC and the forecasted dispositions of Beechwood Terrace and Cedar Pointe and assumes no further acquisition or disposition activity for the remainder of the year.

(2)

Weighted average diluted share count estimate for full year 2021 is approximately 25.8 million.

(3)

Same Store NOI and Core FFO are non-GAAP measures. For reconciliations of Full Year 2021 Same Store NOI and Core FFO guidance to net loss guidance, and a discussion of why we consider these non-GAAP measures useful, see the “Definitions and Reconciliations of Non-GAAP Measures” section of this release.

(4)

Year-over-year growth for the Full Year 2021 pro forma Same Store pool (33 properties).

(5)

The largest component to our same store operating expense forecast, real estate tax expense, is largely outside of our ability to control though we have and expect to continue taking all available action to manage real estate tax expense inflation in 2021 through our national tax consulting vendor and their legal experts. We have received initial indications of value for 27 of 39 assets and we are actively appealing or otherwise contesting 17 of those values. The outstanding valuations coming from our Charlotte, North Carolina and Florida assets are expected to be released by September 1st. We are optimistic that we will broadly meet or exceed our preliminary budget expectations for real estate tax expense in 2021.

(6)

Transaction volumes presented are representative of expected full year targets which include the completed acquisitions of Creekside at Matthews and The Verandas at Lake Norman, the forecasted acquisition of a to-be-identified multifamily community in Raleigh, NC and the forecasted dispositions of Beechwood Terrace and Cedar Pointe. We continue to evaluate our Portfolio for capital recycling opportunities and actual acquisitions and dispositions and the corresponding impact to EPS and Core FFO guidance could vary significantly from our projections. We undertake no duty to update these assumptions, except as required by law.

(7)

Includes the forecasted dispositions of Beechwood Terrace and Cedar Pointe.

(1)

Management estimates based on independent third-party review of our properties.

(2)

Estimated value ranges are presented for the existing portfolio (39 properties at June 30, 2021).

(3)

The Company anticipates net income will be in the range between approximately $1.7 million and $4.5 million for the full year 2021 and between $(10.3) million and $(8.9) million for the third quarter of 2021.  FY 2021 NOI Guidance considers the completed acquisitions of Creekside at Matthews and The Verandas at Lake Norman, the forecasted acquisition of a to-be-identified multifamily community in Raleigh, NC, and the forecasted dispositions of Beechwood Terrace and Cedar Pointe and assumes no further acquisition or disposition activity for the remainder of the year.

(4)

2021 Pro Forma NOI Guidance takes into effect the acquisitions of Creekside at Matthews and The Verandas at Lake Norman as if they were purchased on January 1, 2021, which would have contributed $2,500 and $2,400, respectively, to NOI.

(5)

Includes approximately $9.3 million that is held for value-add upgrades; reduced by $9.3 million for estimated 2021 rehab expenditures.

(6)

Includes approximately $1.3 million in forward 12-month principal payments.

(7)

Includes outstanding balance of June 30, 2021.

NXRT.NEXPOINT.COM

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June 30, 2021

December 31, 2020

(Unaudited)

ASSETS

Operating Real Estate Investments

Land

$

340,691

$

323,429

Buildings and improvements

1,605,723

1,544,115

Intangible lease assets

1,972

1,675

Construction in progress

9,487

10,796

Furniture, fixtures, and equipment

102,469

96,228

Total Gross Operating Real Estate Investments

2,060,342

1,976,243

Accumulated depreciation and amortization

(242,952

)

(215,494

)

Total Net Operating Real Estate Investments

1,817,390

1,760,749

Real estate held for sale, net of accumulated depreciation of $11,028 and $0, respectively

43,850

—

Total Net Real Estate Investments

1,861,240

1,760,749

Cash and cash equivalents

26,489

24,457

Restricted cash

33,738

32,558

Accounts receivable, net

8,798

9,045

Prepaid and other assets

6,675

2,405

TOTAL ASSETS

$

1,936,940

$

1,829,214

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities:

Mortgages payable, net

$

1,188,947

$

1,162,855

Mortgages payable held for sale, net

40,474

—

Credit facility, net

248,494

182,323

Accounts payable and other accrued liabilities

9,709

10,058

Accrued real estate taxes payable

14,874

12,822

Accrued interest payable

1,723

2,274

Security deposit liability

2,774

2,688

Prepaid rents

1,639

1,639

Fair market value of interest rate swaps

17,010

43,530

Total Liabilities

1,525,644

1,418,189

Redeemable noncontrolling interests in the Operating Partnership

4,026

3,098

Stockholders' Equity:

Preferred stock, $0.01 par value: 100,000,000 shares authorized; 0 shares issued

—

—

Common stock, $0.01 par value: 500,000,000 shares authorized; 25,149,927 and 25,016,957 shares issued and outstanding, respectively

251

250

Additional paid-in capital

378,365

376,710

Accumulated earnings less dividends

46,551

75,321

Accumulated other comprehensive loss

(17,897

)

(44,354

)

Total Stockholders' Equity

407,270

407,927

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$

1,936,940

$

1,829,214

NXRT.NEXPOINT.COM

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For the Three Months Ended June 30,

For the Six Months Ended June 30,

2021

2020

2021

2020

Revenues

Rental income

$

51,047

$

49,253

$

101,387

$

100,367

Other income

1,516

1,428

2,972

2,895

Total revenues

52,563

50,681

104,359

103,262

Expenses

Property operating expenses

11,173

11,964

22,389

23,685

Real estate taxes and insurance

8,508

7,777

17,230

15,799

Property management fees (1)

1,516

1,465

3,001

3,015

Advisory and administrative fees (2)

1,900

1,936

3,768

3,801

Corporate general and administrative expenses

2,978

2,932

5,918

5,633

Property general and administrative expenses

1,760

1,533

3,319

3,365

Depreciation and amortization

19,986

21,418

40,744

44,756

Total expenses

47,821

49,025

96,369

100,054

Operating income before gain on sales of real estate

4,742

1,656

7,990

3,208

Gain on sales of real estate

—

19

—

38,991

Operating income

4,742

1,675

7,990

42,199

Interest expense

(10,683

)

(10,993

)

(21,299

)

(22,655

)

Loss on extinguishment of debt and modification costs

(328

)

—

(328

)

(874

)

Casualty gains (loss)

2,379

(1,079

)

2,379

(1,028

)

Miscellaneous income

472

1,079

940

1,079

Net income (loss)

(3,418

)

(9,318

)

(10,318

)

18,721

Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership

(10

)

(28

)

(31

)

56

Net income (loss) attributable to common stockholders

$

(3,408

)

$

(9,290

)

$

(10,287

)

$

18,665

Other comprehensive income (loss)

Unrealized gains (losses) on interest rate derivatives

(4,805

)

(8,046

)

26,537

(58,586

)

Total comprehensive income (loss)

(8,223

)

(17,364

)

16,219

(39,865

)

Comprehensive income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership

(24

)

(52

)

49

(120

)

Comprehensive income (loss) attributable to common stockholders

$

(8,199

)

$

(17,312

)

$

16,170

$

(39,745

)

Weighted average common shares outstanding - basic

25,140

24,307

25,104

24,847

Weighted average common shares outstanding - diluted

25,140

24,307

25,104

25,330

Earnings (loss) per share - basic

$

(0.14

)

$

(0.38

)

$

(0.41

)

$

0.75

Earnings (loss) per share - diluted

$

(0.14

)

$

(0.38

)

$

(0.41

)

$

0.74

(1)

Fees incurred to an unaffiliated third party that is an affiliate of the noncontrolling limited partner of the Operating Partnership (the “OP”).

(2)

Fees incurred to the Company’s adviser.

NXRT.NEXPOINT.COM

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For the Three Months Ended June 30,

For the Six Months Ended June 30,

2021

2020

2021

2020

Net income/(loss)

$

(3,418

)

$

(9,318

)

$

(10,318

)

$

18,721

Adjustments to reconcile net income (loss) to NOI:

Advisory and administrative fees

1,900

1,936

3,768

3,801

Corporate general and administrative expenses

2,978

2,932

5,918

5,633

Casualty-related expenses/(recoveries)

(1)

(435

)

723

(392

)

773

Casualty loss (gain)

(2,379

)

1,079

(2,379

)

1,028

Pandemic expense