NexPoint Residential Trust, Inc. Completes the Sale of Old Farm and Will Repay the Full Outstanding Balance on the Corporate Credit Facility
DALLAS, March 5, 2024 /PRNewswire/ -- NexPoint Residential Trust, Inc. ("NXRT" or the "Company") (NYSE:NXRT) announced today the closing of the sale of Old Farm in Houston, TX, a 734-unit property built in 1996. The property was acquired for $84.7 million on December 29, 2016 and has provided consistent operational and cash flow performance for the portfolio for the last 7+ years. As of March 1, 2024, the property was 91.41% leased with a weighted average effective monthly rent of approximately $1,307. Net proceeds from the sale were approximately $49.4M, delivering a trailing nominal tax and insurance adjusted cap rate of 5.36%, a 22.14% levered internal rate of return and a 2.98x multiple on invested capital, each of which well exceeded expectations. The Company will use a portion of the net proceeds from the sale to make a $24 million paydown on the Company's corporate credit facility on March 5, 2024, continuing the Company's strategic de-leveraging and balance sheet improvement initiatives. This repayment will take the drawn balance on the facility to $0, leaving $350 million of undrawn and available capacity.
"NXRT is pleased to announce the closing of Old Farm, which allows us to deliver a strong return on a 7-year investment, creates almost $50 million of liquidity for the Company and pays off our most expensive debt capital, a long-stated goal. 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 throughout 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 "should," "continue," "will," "seek" 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, the use of proceeds from the sale of Old Farm to pay down the Company's corporate credit facility, 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
[email protected]
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SOURCE NexPoint Residential Trust, Inc.