NREF

Image source: The Motley Fool. Thursday, Aug. 6, 2026 at 11:00 a.m. ET Investor Relations - Kristen Griffith Executive Vice President and Chief Financial Officer - Paul Richards Executive Vice President and Chief Investment Officer - Matthew Ryan McGraner Operator: Hello everyone. Thank you for joining us, and welcome to the NexPoint Residential Trust quarter 26 earnings call. After today's prepared remarks, we will host a question-and-answer session If you would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. I will now hand the conference over to Kristen Griffith, Investor Relations. Kristen? Please go ahead. Kristen Griffith: Thank you. Good day, everyone, and welcome to NexPoint Real Estate Finance, Conference call to review the company results for the second quarter ended 06/30/2026. On the call today are Paul Richards, executive vice president and chief financial officer and Matthew Ryan McGraner, executive vice president and chief investment officer. As a reminder, this call is being webcast to the company's website at nrep.nexpoint.com. Before we begin, I would like to remind everyone that this conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 2 thousand that are based on the management current expectations, assumptions, and beliefs. Listeners should not place undue reliance on any forward looking statements and are encouraged to review the company's annual report on Form 10-Ks and the company's other filings with the SEC for a more complete discussion of risk and other factors that could affect the forward looking statements. The statements made during this conference call speak only as of today's date, and except as required by law, NREF does not undertake any obligation to publicly update or revise any forward looking statements. This conference call also includes an analysis of non-GAAP financial measures. For a more complete discussion, of these non-GAAP financial measures, see the company's presentation that was filed earlier today. I would now like to turn the call over to Paul Richards. Operator: Please go ahead, Paul. Paul Richards: Thanks, Kristen, and good morning, everyone. I will walk through our quarterly results, cover the balance sheet and provide guidance for Q3 before turning it over to Matthew for a deeper dive on the portfolio and macro lending environment. For the second quarter, we reported a net income of $0.29 per diluted share compared to $0.54 for Q2 of 2025. The earnings available for distribution was $0.46 per diluted share in the second quarter compared to $0.43 per diluted share in the same period of 2025. Cash available for distribution was $0.58 per diluted share in the second quarter compared to $0.46 per diluted share in the same period of 2025. We paid a regular dividend of $0.50 per share in the second quarter. Which was 1.16x covered by cash available for distribution, On 07/27/2026, the board declared a dividend of $0.50 per share payable for the third quarter of 2026. Book value per diluted share decreased by 1.9% from Q1 of 2026 to $18.60 per diluted share primarily driven by a small unrealized loss on our stock warrant portfolio. Turning to new investments during the quarter. We have continued to originate new investments across our target asset classes, funded through a combination of retained operating cash flow proceeds from our series c preferred offering, and additional capacity under our secured financing facilities reflecting our continued ability to identify and execute attractive opportunities that drive returns for our shareholders. We funded a $20.2 million preferred equity investment in a multifamily property that pays a monthly coupon of 14%. A $42.6 million mezzanine loan secured by a life science property at a 14% coupon and funded an additional 31.9 million on other existing commitments in the quarter. I want to highlight what remains, in our view, the most important development year to date. We closed a $375 million drawable term loan facility with Mizuho Capital Markets, which we used to repay our $180 million 5.75% senior unsecured notes at their May 1 maturity. As of today, there are $362.2 million outstanding on the facility. Concurrently, we entered into a TRS, or total return swap, with Mizuho, which reduces the effect of our net interest cost to SOFR plus 245. This transaction removed the largest near term liability overhang on our balance sheet and replaced fixed rate unsecured debt with a floating rate asset based financing structure that better aligns with our preference to have additional balance sheet flexibility in terms of prepayment ability. And provides a back leverage solution to enhance returns on new investments. Combined with the $22.6 million we raised in our series c preferred, we head into the back half of 2026 with what we believe to be 1 of the cleanest, most flexible capital structures in the commercial mortgage REIT sector. Moving to the portfolio and balance sheet. Our portfolio is comprised of 85 investments with a total outstanding balance of $1.1 billion. Our investments are allocated across sectors are as follows. 39.4% life sciences, 37.6% multifamily, 15.1% single family rental, 4.2% storage, 2.1% industrial, and 1.6% marina. Our fixed income portfolio is allocated across investments as follows. 27.8% preferred equity investments, 24.9% mezzanine loans, 17.5% CMBS B pieces, 17.3% revolving credit facilities, 6.2% senior loans, 4% IO strips, and 2.2% promissory notes. The asset collateralizing our investments are allocated geographically as follows. 31.2% Massachusetts, 16% Texas, 6% Florida, 4.6% Georgia, 5.2% California, 4.7% Maryland, with the remainder across states of 4% exposure, reflecting our heavy preference to Sunbelt markets, with Massachusetts and California exposure heavily weighted towards life science. The collateral in our portfolio is 80.3% stabilized, with a 63.4% loan to value and a weighted average DSCR of 1.39x. We have $836.6 million of debt outstanding with a weighted average cost of 6.3%. That has a weighted average maturity of 2.6 years. Our secured debt is collateralized by $1.4 billion of collateral with a weighted average maturity of 2.7 years and a debt to equity ratio of 0.88x. Moving to guidance for the third quarter. Earnings available for distribution $0.43 per diluted share at the midpoint with a range of $0.38 on the low end and $0.48 on the high end. Cash available for distribution, $0.55 per diluted share at the midpoint with a range of $0.50 on the low end and $0.60 on the high end. And with that, I would like to turn it over to Matthew Ryan McGraner. For a detailed discussion of the portfolio and the current market environment. Operator: Matthew Ryan McGraner? Matthew Ryan McGraner: Thanks, Paul. Another great quarter of consistent solid execution, so appreciate it. The underlying recurring earnings power of the portfolio is continuing to tick up, while we operate at the top of the commercial mortgage REIT peer group on credit. Now onto our verticals. Paul Richards: As Paul noted, residential remains our largest exposure between SFR and multifamily. We believe residential fundamentals are turning and remain constructive. Blended lease trade outs across our owned residential assets progressed from negative 1.7% in April to negative 1.2% in May to negative 50 basis points in June and turned positive 30 basis points in July. that is the first positive blended print since early 25. And new lease trade outs remain the drag, but renewals have been holding up well. The 2021 and 2022 vintage loans is where the compression risk still sits. And as you know, we did very little originations during this period. Net deliveries peaked at approximately 695 thousand units in the trailing 12 months in the ending Q2 of 2024 against roughly 282 thousand units of average annual deliveries since 2001. CoStar forecasts 2026 deliveries down approximately 49% from 2025 with another 20% decline in 2027. And starts are running approximately 70% below the 2022 peak. Supply is what broke pricing power in 2024 and 2025, and supply is what is going to return it. The structural backdrop has not changed. The cost to own in our markets remains roughly 3x the cost to rent and there is no reasonable mortgage rate path that closes that gap quickly. Matthew Ryan McGraner: Now on to life science. Life is now tracking to be 85% leased, up from 71% leased, anchored by Lila Sciences, on a long term lease for 245 thousand square feet. With expansion options. Indeed keeps expanding its plan and programming at the asset, obviously, great sign and accretive to our collateral value. The demand funnel for our life science collateral has widened materially because of AI, not in spite of it. AI companies need the same purpose built infrastructure traditional lab tenants need, that is power density, cooling capacity, structural floor loads, ventilation, vibration, and vibration tolerances. They cannot retrofit older converted assets at any rent. Alewife has the bones. it is in the right submarket. Adjacent to MIT and the broader Cambridge cluster. Our exposure here is not a generic bet on the sector. it is a concentrated bet on first to fill infrastructure grade assets in elite educational districts that are now also AI corridors. The credit profile is improving as the tenant unit universe widens. On the self storage, our self-storage portfolio continues to outperform with occupancy in the low 90s, rent growth, and with rent growth and NOI materially ahead of the sector. The upcoming pipeline, in April, we walked through a $190 million-plus of NREF investment and $200 and 25 million plus of structured product credit opportunities. And as Paul mentioned, we successfully closed in excess of 70 million of this pipeline during the quarter. The pipeline's blended return profile remains well in excess of our cost of capital on the TRS facility, And even with the move higher in the forward curve, pricing power remains with disciplined solution capital providers. To close and summarize, earnings are ahead of the guidance we gave in April. Credit continues to hold well. The April pipeline converted into funded assets at double digit coupons, a residential supply trough that is now visible in operating data rather than forecast, life science collateral that keeps derisking, storage is bottoming, and a balance sheet purpose built for exactly the rate environment we are in. As always, I want to thank the team for their hard work, and now we would like to turn the call over to take your questions. Operator: We will now begin the question-and-answer session. You would like to ask a question, please press *1 to raise your hand. To withdraw your question, press *1 again. We ask that you pick up your handset. When asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Crispin Love. With Piper Sandler. Your line is now open. Please go ahead. Analyst: Thank you. Good morning. I appreciate you taking my question. First, on the portfolio makeup side, life sciences, I think it is now nearly 40%, exceeds multifamily, I think, the first time for you guys. So when you take a longer-term horizon look out, how do you think about portfolio sizing with regards to multifamily and life sciences where those could trend directionally, especially with the AI theme, but also kind of positive themes across multi as well, as you look at the next several, quarters and years. Matthew Ryan McGraner: Yes, that is a great question, Crispin, and 1 that we talk about often. I think, the in a normalized environment, we would probably like to keep life sciences to be about 1/3, or I would say life science and advanced manufacturing kind of biomanufacturing, those type of assets. At around a third of the pie chart. Obviously, in the, you know, recent kind of 12 to 18 months, Alewife is a 1-off pretty special opportunity that we were able to take advantage of. But going forward, I think we would like to have it be 1-third and have the residential, you know, kind of be 50%. Above about the exposure on life science. We are expecting probably to get some of that capital back. The sponsor on Alewife is out you know, running a refi process to, recap the Alewife the whole campus. And we would get, you know, substantial amount of capital back. To then go redeploy. And, you know, our goal would be to probably redeploy most of those proceeds into residential assets. Analyst: Perfect. That makes sense. I know there is definitely a unique situation there. And then just on the dividend and the outlook, CAD had been ahead of the dividend for some time, but earnings available for distribution had been below for several quarters. So curious if you have a line of sight where you think when you think both EAD and CAD could be above the dividend on a sustainable basis? And are you comfortable with the current level given the CAD coverage? Paul Richards: Yes, another great question, Crispin. We are we are definitely comfortable with the CAD coverage. Which, you know, is our, you know, gold standard when it comes to, distributions and when we discuss with the board those opportunities for quarterly distributions. And you know, over time, you know, we do think both EAD and CAD will converge you know, and what you have seen too is the increase in CAD over the past few quarters as we discussed in prior calls due to the redeployment you know, accretively into investments via you know, using proceeds from our series b and now series c preferred raising. So hope that answers your question. Analyst: Perfect. Thank you, and appreciate you taking my question. Operator: Your next question comes from the line of Jade Rahmani with KBW. Your line is now open. Please go ahead. Jade Rahmani: You very much. What are you seeing in terms of underlying credit performance in the multifamily book? Maybe you could touch on both the preferred equity exposure and also the B-piece exposure. Matthew Ryan McGraner: Yeah. Thanks, Jade. Good morning. I think as it relates to our multifamily exposure, you know, I think we benefited from largely investing and focusing on assets that were agency quality. So Fannie and Freddie underwritten assets that were first screened you know, by a JLL, a walker, etcetera. And then, you know, underwritten by our team. So we did very little of sort of the nonbank, you know, floating rate bridge loans that you know, I think you know, some of our peers have done and gotten in trouble with. Most of our collateral, you know, on the pref book, does sit behind agency loans, yet to the extent that we have had to take over, you know, projects, like in Alexandria or The Alexander at the District, for example, think now about a year ago, the that deal is now leased up and healthy. But the underlying, you know, kind of, I guess, credit profile of our assets both on the B-pieces and preferred qualitatively, I think, are of a higher standard you than our peer group. Number 2, most of that exposure You know, some COVID-era lean-ins on the b pieces where we got some outstanding collateral in terms and got paid for it. Did not do much in 2022, 2023. And now we are, you know, kinda back in the market. The higher for longer rate environment I think, helps us a little bit on the multifamily because you are--you know, you can still you can see some cracks forming you know, for folks that you know, need to find, you know, cash-in collateral in order to refi on the extension test. But so far, so good. On the B-piece collateral, you know, I do not think we took any you know, provisions or saw any credit you know, credit leaks, on that side, nor on the pref book, you know, to the extent that, you know, anything happens there that you know, we certainly have the team to take over the asset and nurture it back to health. And then, you pretty constructive on the transaction market going forward. I think in Q4, as new leasing you know, we believe new leasing, as I have said in my prepared comments, will inflect higher in Q4. You know, that should attract, capital providers both on the debt and the equity side, and we are starting to see that in the transaction market. So long-winded answer, but, you know, I think that we like our credit exposure and certainly like the setup for supply and demand, you know, in the next, you know, 2, 3, 4 quarters. Jade Rahmani: Thanks very much. Alewife seems like a you know, great asset so it will definitely produce very high returns. But outside of that, exposure, life science still remains quite challenged. What are you seeing in the rest of the life science exposure? Matthew Ryan McGraner: Yes. Alewife is doing, you know, extremely well and, you know, unfortunately, I think we will we will probably get that capital back sometime in the fourth quarter, and it will be a great result. The broader exposure, you know, in on our life science book, continues to, to sequentially get better. Tours and our TIMs, you know, tenants in the market list, sequentially over Q1. And into Q2, we are up 30%. And more, and we are already seeing in July even with the holiday, you know, soaking up the first 2 weeks that the third quarter is tracking to be ahead in terms of, you know, tour activity. So we like, you know, we like our kind of broader exposure beyond you know, alewife and, some of our investors and analysts toward those assets and then think would agree they are first to fill, you know, great, well located I would say that beyond, beyond our exposure, the other important point to make is, again, when we originated it. You know, most of it was done, you know, kind of in distressed hairy era of 2024, 2025, 2026 at a reset basis. And so we are not you know, we are not originating the loans back in the go-go days of 2021 and 2022 that, you know, that you are seeing some credit creep and some trouble with our peers. So thanks. Thanks, Jade. Operator: There are no further questions at this time. I will now turn the call back to the management team for closing remarks. Matthew Ryan McGraner: Alright. Well, thanks very much for everyone's participation and interest today. Thanks to the teams here at NexPoint. And I look forward to speaking after the Q3 call. Have a good day. Thank you. Bye. Operator: This concludes today's call. Thank you for attending. You may now disconnect. Before you buy stock in NexPoint Real Estate Finance, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and NexPoint Real Estate Finance wasn’t one of them. The 10 stocks that made the cut are built for long-term growth and could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $400,209!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,375,393!* That performance is why people listen. With a track record of beating the S&P 500 by 4x, Stock Advisor offers a distinct advantage. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built for the long haul. See the 10 stocks » *Stock Advisor returns as of August 13, 2026. This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. NexPoint Real Estate Finance (NREF) Q2 2026 Earnings Call Transcript was originally published by The Motley Fool

Interested in NexPoint Real Estate Finance, Inc.? Here are five stocks we like better. Q2 earnings and dividend coverage improved: Earnings available for distribution rose to $0.46 per diluted share, while cash available for distribution reached $0.58, covering the $0.50 dividend by 1.16 times. The board declared another $0.50-per-share dividend for Q3. Debt refinancing expanded financial flexibility: NexPoint closed a $375 million drawable term loan facility, using it to repay $180 million of maturing senior unsecured notes. The refinancing replaced fixed-rate unsecured debt with floating-rate, asset-based financing and reduced near-term liability pressure. Investment growth and operating trends remain mixed but constructive: The company added multifamily, life-science and other investments while managing a $1.1 billion portfolio. Residential leasing trends improved into positive territory, LYFE’s occupancy is tracking toward 85%, and self-storage continued to outperform, though Q3 earnings guidance midpoint of $0.43 per share is below Q2 results. NexPoint Real Estate Finance (NYSE:NREF) reported second-quarter earnings available for distribution of $0.46 per diluted share and cash available for distribution of $0.58 per diluted share, as the commercial mortgage REIT expanded its investment portfolio and refinanced a maturing unsecured debt obligation. Net income was $0.29 per diluted share for the quarter ended June 30, compared with $0.54 per diluted share in the year-earlier period. Earnings available for distribution increased from $0.43 per diluted share a year earlier, while cash available for distribution rose from $0.46 per diluted share. → Sandisk Just Delivered a Blowout Quarter—Here's Why the Stock Is Falling The company paid a regular quarterly dividend of $0.50 per share, which Chief Financial Officer Paul Richards said was covered 1.16 times by cash available for distribution. The board also declared a $0.50-per-share dividend for the third quarter, payable following its July 27 declaration. Richards highlighted the closing of a $375 million drawable term loan facility with Mizuho Capital Markets as the quarter’s most significant development. NexPoint used the facility to repay $180 million of 5.75% senior unsecured notes that matured May 1. → 4 Oil and Gas ETF Plays as Prices Stay Sky-High As of the earnings call, $362.2 million was outstanding under the facility. The company also entered a total return swap with Mizuho that Richards said reduced the impact of its net interest cost to SOFR plus 245 basis points. Richards said the transaction removed the company’s largest near-term liability overhang and replaced fixed-rate unsecured debt with floating-rate, asset-based financing. He said the structure provides greater prepayment flexibility and a leverage solution for new investments. → No Hangover: Revisiting Microsoft One Week After Earnings The company also raised $22.6 million through its Series C preferred offering. Richards said retained operating cash flow, preferred-offering proceeds and additional secured financing capacity supported new investments during the quarter. $20.2 million preferred equity investment in a multifamily property paying a 14% monthly coupon. $42.6 million mezzanine loan secured by a life science property with a 14% coupon. $31.9 million of additional funding on existing commitments. Book value per diluted share declined 1.9% from the first quarter to $18.60, primarily because of a small unrealized loss in the company’s stock loan portfolio. NexPoint reported 85 investments with a total outstanding balance of $1.1 billion. Life sciences represented 39.4% of the portfolio, followed by multifamily at 37.6%, single-family rental at 15.1%, storage at 4.2%, industrial at 2.1% and marina assets at 1.6%. The portfolio was 80.3% stabilized, with a 63.4% loan-to-value ratio and weighted average debt-service coverage ratio of 1.39 times. The company had $836.6 million of debt outstanding at a weighted average cost of 6.3% and a weighted average maturity of 2.6 years. Its debt-to-equity ratio was 0.88 times. For the third quarter, the company guided to earnings available for distribution of $0.38 to $0.48 per diluted share, with a midpoint of $0.43. Cash available for distribution guidance was $0.50 to $0.60 per diluted share, with a midpoint of $0.55. Chief Investment Officer Matt McGraner said the company sees improving residential operating trends. Blended lease trade-outs across its owned residential assets improved from negative 1.7% in April to negative 1.2% in May and negative 50 basis points in June, before turning positive by 30 basis points in July. McGraner said new leases remained a drag, while renewals held up well. He said multifamily supply had pressured pricing in 2024 and 2025, but cited CoStar forecasts for 2026 deliveries to decline about 49% from 2025 and for 2027 deliveries to fall another 20%. In life sciences, McGraner said the LYFE property was tracking to reach 85% leased, up from 71%, anchored by a long-term lease with Lila Sciences for 245,000 square feet and expansion options. He said the asset’s demand funnel had expanded as artificial intelligence companies seek infrastructure with the power, cooling, structural, ventilation and vibration specifications needed by lab users. During the question-and-answer session, McGraner said NexPoint would generally target life sciences and advanced manufacturing at roughly one-third of the portfolio, with residential representing about 50%. He said the company could receive a substantial amount of capital back if the Alewife campus refinancing process is completed, with the goal of redeploying most of the proceeds into residential assets. McGraner also said the company’s self-storage portfolio continued to outperform, with occupancy in the low 90% range and rent growth and net operating income ahead of the broader sector. NexPoint Real Estate Finance, Inc is a publicly traded real estate investment trust (REIT) focused on originating, acquiring and managing a diversified portfolio of commercial real estate debt investments. The company seeks to generate current income and capital appreciation by providing financing solutions across the capital structure for stabilized and transitional properties. Its investments include whole loans, mezzanine loans, preferred equity and other structured credit products secured by multifamily, office, industrial, retail and hospitality assets. Since its initial public offering in March 2021, NexPoint Real Estate Finance has closed numerous transactions with borrowers nationwide, including both institutional sponsors and privately held owners. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "NexPoint Real Estate Finance Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

NexPoint (NREF) came out with quarterly earnings of $0.46 per share, beating the Zacks Consensus Estimate of $0.43 per share. This compares to earnings of $0.43 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of +6.98%. A quarter ago, it was expected that this company would post earnings of $0.41 per share when it actually produced earnings of $0.43, delivering a surprise of +4.88%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. NexPoint, which belongs to the Zacks REIT and Equity Trust industry, posted revenues of $16.54 million for the quarter ended June 2026, surpassing the Zacks Consensus Estimate by 15.58%. This compares to year-ago revenues of $12.07 million. The company has topped consensus revenue estimates three times over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. NexPoint shares have added about 20.2% since the beginning of the year versus the S&P 500's gain of 12.8%. While NexPoint has outperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for NexPoint was favorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #2 (Buy) for the stock. So, the shares are expected to outperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.45 on $14.47 million in revenues for the coming quarter and $1.80 on $58.8 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, REIT and Equity Trust is currently in the bottom 29% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. TPG Mortgage Investment Trust (MITT), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 10. This real estate investment trust is expected to post quarterly earnings of $0.26 per share in its upcoming report, which represents a year-over-year change of +44.4%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. TPG Mortgage Investment Trust's revenues are expected to be $22 million, up 23.9% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report NexPoint Real Estate Finance, Inc. (NREF) : Free Stock Analysis Report TPG Mortgage Investment Trust Inc. (MITT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

This article first appeared on GuruFocus. Core FFO: $16.9 million, or $0.66 per diluted share, a penny ahead of consensus. FFO: $15.2 million, or $0.60 per share. AFFO: $19.7 million, or $0.77 per share. Net Loss: $8.6 million, or $0.34 per diluted share, including $23.9 million of depreciation and amortization. Total Revenue: $64.6 million, up from $63.1 million a year ago. Same-Store Revenue: $62.4 million, down 0.6% year-over-year. Same-Store NOI: $36.9 million, down 2.9% year-over-year. Total NOI: $37.9 million across 36 properties, essentially flat with last year. Same-Store Occupancy: 93.6% at quarter-end, up 30 basis points year-over-year. Average Effective Rent: $1,487, down 80 basis points. Interest Expense: $15.8 million, versus $15.2 million a year ago. Same-Store Operating Expenses: Up 2.4% year-over-year. Real Estate Taxes: Down 3.5%. Insurance: Down 11.7% on the April renewal. Payroll: Down 1%. Repair and Maintenance: Up 13.9%. Marketing: Up 38.2%. Utilities: Up 6.1%. Other Income: Up 29.2%. Dividend: Declared $0.53 per share, payable September 30th. Total Indebtedness: Approximately $1.6 billion with an adjusted weighted average interest rate of approximately 3.58%. Available Liquidity: Approximately $133.5 million, including $14.6 million of unrestricted cash and $118.9 million of undrawn credit facility capacity. Net Leverage: Approximately 57% of internal lab estimate. Estimated Net Asset Value: $46.76 per diluted share at the midpoint, using a cap rate range of 5.25% to 5.75%. 2026 Core FFO Guidance: Lowered to a range of $2.35 to $2.54 per diluted share, midpoint of $2.45. 2026 Same-Store NOI Guidance: Lowered to a range of negative 2.5% to 0.5%, midpoint of negative 1%. 2026 Same-Store Expense Growth Guidance: Lowered to approximately 2.1% at the midpoint. 2026 Same-Store Revenue Growth Guidance: Lowered to roughly 0.2% at the midpoint. Blended Lease Trade-Out: Negative 1.16% for the quarter, improving from negative 1.7% in April to positive 30 basis points in July. New Lease Trade-Out: Negative 5% for the quarter, improving from negative 5.4% in April to negative 2.3% in July. Renewal Lease Trade-Out: Positive 1.9% for the quarter. Retention: 55.9%. Turnover: Improved to 44.1% from 46.5%. Bad Debt: 60 basis points of gross potential rent, a roughly 40% improvement year-over-year. Concession Utilization: Cut roughly in half from 55.6% in the first quarter to 27.7% in the second quarter. Average Weeks Free: Fell from 2.2 weeks to 1.1 week. Upgrades Completed: 459 full and partial upgrades, with at least 258 upgraded units at an average monthly rent premium of $89 and a 23% return. Warning! GuruFocus has detected 8 Warning Signs with NREF. Is NREF fairly valued? Test your thesis with our free DCF calculator. Release Date: August 06, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Second quarter core FFO of $0.66 per diluted share beat consensus by a penny, with first-half results ahead of plan. Blended lease trade-outs improved from negative 1.7% in April to positive 30 basis points in July, marking the first positive print since early 2025. Same-store revenue year-over-year comp improved by 160 basis points between Q1 and Q2, from negative 2% to negative 0.6%. Expense discipline is broad-based, with full-year same-store expense growth guidance lowered by 140 basis points to 2.1%, driven by lower real estate taxes, insurance, and payroll. Value-add upgrades continue to generate strong returns, with 459 upgrades completed in Q2 at a 23% return and average monthly rent premium of $89. Supply outlook is favorable, with national deliveries at decade lows and two-thirds of submarkets having less than 2% active supply growth, supporting a late-2026/2027 inflection. Concession utilization was cut in half from 55.6% in Q1 to 27.7% in Q2, with South Florida dropping from 87.6% to 4.8%. The stock trades at a more than 40% discount to estimated NAV midpoint of $46.76 per share, providing a compelling buyback opportunity. No scheduled debt maturities until 2028, with total available liquidity of $133.5 million and net leverage at 57% of internal estimates. Sedona Mountain, a recent acquisition, is performing well with occupancy up 430 basis points sequentially and NOI beating budget by almost 5%. Full-year 2026 core FFO guidance was lowered to a midpoint of $2.45 per share, down $0.12 from the prior $2.57, primarily due to higher interest expense from an upward shift in the forward curve. Interest expense is projected to increase to approximately $71.2 million for 2026, up from $69 million previously, with $14.6 million fewer swap inflows expected in the second half. Same-store NOI guidance was reduced to a midpoint of negative 1%, from negative 0.5%, with Nashville accounting for about 85% of the reduction. Same-store revenue growth guidance was cut by 90 basis points to 0.2% at the midpoint, reflecting softer revenue production in certain markets. New lease trade-outs remained negative at negative 5% in Q2, with laggards in Orlando, Charlotte, Dallas, and Nashville due to remaining supply pressure. Repair and maintenance costs increased 13.9% year-over-year, driven by a fiber buildout in four markets, though partially offset by amenity fee income. Marketing expenses rose 38.2% as the company leaned into lead generation at properties below target occupancy. Occupancy gave back 30-40 basis points in June as the company prioritized pricing over occupancy, ending the quarter at 93.6%. The Federal Reserve held rates steady with some members dissenting in favor of a hike, indicating potential further rate pressure. The transaction market remains illiquid with wide bid-ask spreads, and most participants expect a clearer recovery only in 2027. Q: What is driving the reduction in full-year 2026 core FFO guidance, and what are the key components of the bridge from the previous midpoint?A: Paul Richards, CFO, explained that the full-year 2026 core FFO guidance midpoint was lowered to $2.45 per share from $2.57, a $0.12 reduction. The largest driver is a $0.16 per share increase in interest expense due to an upward shift in the forward curve, which reduced projected swap inflows by approximately $14.6 million. This was partially offset by a $0.09 reduction from lower same-store revenue, a $0.06 improvement from lower same-store expenses, a $0.05 increase from realized interest income on a bridge lending investment, and a $0.02 favorable impact from G&A management. Q: Can you elaborate on the "clean inflection" you expect in the operating environment, and how does it shape your outlook for 2027?A: Matthew McGraner, CIO, clarified that the "clean inflection" refers to achieving positive new lease trade-outs. The guidance revision is concentrated in four or five assets, primarily in Nashville, which account for about $2.2 million of gross potential rent revisions. The new guidance implies slightly negative new lease rates in Q3 and slightly positive in Q4, which is the quarter they feel best about. This inflection is supported by the supply cliff, with deliveries tracking to the lowest level in over a decade, and improving demand fundamentals. Q: What were the key drivers of the same-store revenue and expense performance in the second quarter, and how did the leasing trajectory improve?A: Matt McGraner highlighted that same-store total revenue was down 60 basis points year-over-year, a 160 basis point improvement from the Q1 comp. Blended lease trade-outs improved from negative 1.7% in April to positive 30 basis points in July, the first positive print since early 2025. On the expense side, same-store operating expenses were up 2.4%, with favorable trends in real estate taxes (down 3.5%), insurance (down 11.7%), and payroll (down 1%). The company lowered its full-year same-store expense growth outlook by 140 basis points to approximately 2.1%. Q: How is the company's technology platform contributing to operational performance, and what are the latest metrics?A: Matt McGraner detailed that the two-layer model, using VH Management's funnel leasing platform and NexPoint Intelligence at the advisory level, is driving efficiency. In Q2, the platform converted 24,703 leads into 1,226 move-ins, with a 5.3% lead-to-application rate. Self-guided touring scaled to 26.2% of tours, up from 18.7% in Q1, capturing after-hours demand. This technology is a key driver of the expense discipline seen across the portfolio. Q: What is the current state of the transaction market, and how are you prioritizing capital allocation to close the NAV gap?A: Matt McGraner noted that institutional transaction volume remains well below last year with sticky cap rates and a wide bid-ask spread. However, well-located Sunbelt assets are trading materially tighter than the company's implied cap rate, reinforcing the NAV gap. The capital allocation priorities are to close the value gap through operating execution into 2027, recycling capital, and buying back stock. The stock trades at a more than 40% discount to the estimated NAV midpoint of $46.76 per share. Q: Can you provide more detail on the occupancy trend during the quarter and the strategy behind it?A: Bonner McDermott, VP of Asset and Investment Management, explained that the 93.6% physical occupancy is a point-in-time figure as of June 30. The average financial occupancy for the quarter was about 93.8%. The company was deliberately aggressive on pricing in early June, which led to a slight give-back of about 40 basis points of occupancy. The focus is now on pushing pricing to achieve the positive inflection in new lease rates, even if it means running occupancy in the mid-93s. Q: What is the outlook for interest expense and hedging, given the recent rate environment?A: Paul Richards stated that full-year 2026 interest expense is now projected at approximately $71.2 million, up from roughly $69 million discussed last quarter. Interest rate swaps currently fix the rate on $817.5 million, or about 51.5% of floating-rate mortgage debt. The bulk of that protection, approximately $717.5 million at a weighted average fixed rate near 1.14%, rolls off in September. The company has the ability to layer in more protection when the risk-adjusted economics make sense. Q: How is the Sedona Mountain acquisition performing, and what are the expectations for its NOI growth?A: Matt McGraner reported that the 321-unit community in North Las Vegas closed the quarter at 92.2% occupancy, up 430 basis points from Q1. NOI is beating budget by almost 5%, with expenses 12.2% under forecast. The company is on track to generate a 7.2% NOI CAGR through 2029, taking a high-5 cap rate purchase to a 7.5% to 8% stabilized yield. Q: What are the trends in concessions, and how are they impacting pricing power?A: Matt McGraner noted that concession utilization was cut roughly in half from 55.6% in Q1 to 27.7% in Q2, with average weeks free falling from 2.2 to 1.1. South Florida drove most of the improvement, going from 87.6% utilization to just 4.8%. Concession dollars as a percentage of gross potential rent ran at about 1% for the quarter. The company projects utilization will fall another 50 basis points by year-end. Q: Can you provide more color on the markets that are underperforming and the markets that are exceeding expectations?A: Paul Richards explained that the same-store NOI reduction is concentrated, with Nashville accounting for about 85% of the reduction. Four markets are guiding to better same-store NOI than originally assumed: South Florida, Atlanta, Phoenix, and Raleigh-Durham. Dallas is a good example of expense discipline, where a $590,000 revenue reduction was almost entirely offset by For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Management attributes the current performance to a deliberate avoidance of 2021-2022 vintage floating-rate bridge loans, focusing instead on agency-quality collateral that has insulated the portfolio from peer-level credit distress. Residential fundamentals are reaching a turning point, with blended lease trade-outs turning positive in July for the first time since early 2025 as the supply of new units peaks and begins to decline. The life science portfolio is being repositioned as 'infrastructure-grade' assets, with demand widening due to AI companies requiring specific power and cooling capacities that legacy assets cannot provide. Strategic capital allocation has shifted toward Sunbelt markets and elite educational districts like the Cambridge cluster, where management believes assets are 'first to fill' during market recoveries. The company successfully replaced $180 million of fixed-rate unsecured debt with a $375 million floating-rate facility and TRS, intentionally increasing balance sheet flexibility and prepayment ability. Operational outperformance in the self-storage vertical is driven by occupancy in the low 90s and rent growth that management claims is materially ahead of the broader sector. Guidance for Q3 2026 assumes a midpoint of $0.43 for Earnings Available for Distribution (EAD) and $0.55 for Cash Available for Distribution (CAD). Management expects a significant supply-side tailwind as 2026 deliveries are forecasted to drop 49% from 2025 levels, which is expected to return pricing power to landlords. The company anticipates a 'capital recycling' event in Q4 2026, expecting to receive a substantial payout from a sponsor refinancing of the Alewife life science campus. Strategic redeployment of returned capital is planned to favor residential assets, with a long-term goal of maintaining a 50% residential and 33% life science portfolio mix. New leasing activity is projected to inflect higher in Q4 2026., which management believes will attract increased debt and equity capital back into the transaction market. Book value per share decreased 1.9% sequentially to $18.60, primarily due to unrealized losses within the stock warrant portfolio. The company raised $22.6 million through a Series C preferred offering to fund new investments at double-digit coupons. Management flagged that while renewals are holding up, new lease trade-outs remain a drag on residential performance due to historical supply peaks. The portfolio remains heavily concentrated in Massachusetts (31.2%) and Texas (16%), reflecting a strategic bet on specific life science and Sunbelt corridors. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management intends to normalize the portfolio at approximately 50% residential and 33% life science/advanced manufacturing. Proceeds from an expected Q4 refinancing of the Alewife asset will be primarily redeployed into residential opportunities. Management expressed confidence in the dividend, citing Cash Available for Distribution (CAD) as their 'gold standard' for coverage. They expect EAD and CAD to converge over time as capital from recent preferred raises is fully deployed into accretive investments. Credit remains healthy because the company avoided non-bank floating-rate bridge loans, sticking to agency-quality underwriting. Management noted that higher interest rates are creating 'cracks' for competitors needing cash-in refinancings, but NexPoint's portfolio has not seen credit leaks or new provisions.

DALLAS, Aug. 6, 2026 /PRNewswire/ -- NexPoint Real Estate Finance, Inc. ("NREF" or the "Company") (NYSE: NREF) today reported its financial results for the quarter ended June 30, 2026. NREF reported net income attributable to common stockholders of $5.4 million, or $0.29 per diluted share1, for the three months ended June 30, 2026. NREF reported cash available for distribution2 of $13.9 million, or $0.58 per diluted common share2, for the three months ended June 30, 2026. "NREF's earnings this quarter reaffirm the consistency our investors have come to rely on, even as broader credit conditions remain unsettled. That stability stems from a portfolio built around life sciences, self-storage, multifamily, and industrial — sectors we selected for their structural, cycle-resistant demand rather than short-term momentum. As rate uncertainty causes many traditional lenders to pull back, we are able to underwrite new opportunities from a position of strength, reinforcing the durability of our earnings and the steady growth of book value. Our focus remains on translating that discipline into long-term, transparent value creation for our shareholders," said Matthew McGraner, Chief Investment Officer. Second Quarter 2026 Highlights Outstanding total portfolio of $1.1 billion, composed of 85 investments3 Single-family rental ("SFR"), multifamily, life sciences, self-storage, marinas, and industrial represent 15.1%, 37.6%, 39.4%, 4.2%, 1.6% and 2.1% of the Company's investment portfolio, respectively as of June 30, 2026 Weighted-average loan to value ("LTV")4 and debt service coverage ratio ("DSCR") on our senior loans, CMBS, CMBS I/O strips, preferred equity, and mezzanine investments are 63.4% and 1.39x3, respectively During the quarter, the Company funded $7.3MM on a loan that pays a monthly coupon of SOFR + 900 bps. The Company funded $20.2MM on a loan that pays a monthly coupon of 14.0%. The Company funded $42.6MM on a loan that pays a monthly coupon of 14.0%. During the quarter, the Company raised $22.6MM in gross proceeds from the Series C preferred stock offering. On July 27, 2026 NREF announced a third quarter dividend of $0.50 per common share 1 Weighted-average shares outstanding - diluted assumes vesting of all outstanding unvested restricted stock units and the conversion of all redeemable non-controlling interests.2 Earnings available for distribution ("EAD"), cash available for distribution ("CAD") and adjusted weighted average common shares outstanding - diluted are non-GAAP measures. For a discussion of why we consider these non-GAAP measures useful and reconciliations of these non-GAAP measures, see the "Reconciliations of Non-GAAP Financial Measures" and "Non-GAAP Financial Measures" sections of this release.3 As of June 30, 2026; and excluding the common stock, revolving credit facility investments and the Alexander at the District, Ridgeview Place and Mag & May multifamily properties. CMBS B-Pieces reflected on an unconsolidated basis. 4 Loan to value is generally based on the initial loan amount divided by the as-is appraised value as of the date the loan was originated or by the current principal amount as of the date of the most recent as-is appraised value. For our CMBS B-Pieces, LTV is based on the weighted-average LTV of the underlying loan pool.5 Net income attributable to common stockholders in 3Q 2026 is estimated to be between $7.4 million and $9.8 million. See reconciliations below. Looking Ahead: Third Quarter 2026 Guidance Earnings Available for Distribution2 3Q 2026 EAD per diluted common share guidance is $0.435 at the midpoint Cash Available for Distribution2 3Q 2026 CAD per diluted common share guidance is $0.555 at the midpoint Conference Call Details The Company is scheduled to host a conference call on, August 6, 2026, at 11:00 a.m. ET (10:00 a.m. CT), to discuss second quarter 2026 financial results. The conference call can be accessed live over the phone by dialing 833-461-5787 or, for international callers, +1 365-657-4084 and using passcode Conference ID: 492 613 888. A live audio webcast of the call will be available online at the Company's website, nref.nexpoint.com (under "Resources"). An online replay will be available shortly after the call on the Company's website and continue to be available for 60 days. For additional commentary and portfolio information, please view NREF's earning supplement, which was posted on the Company's website, nref.nexpoint.com. Reconciliations of Non-GAAP Financial Measures The following table provides a reconciliation of Earnings Available for Distribution and Cash Available for Distribution to GAAP net income attributable to common stockholders and Adjusted Weighted Average Common Shares Outstanding – diluted to Weighted Average Common Shares Outstanding - diluted (in thousands, except per share amounts): About NexPoint Real Estate Finance, Inc. NexPoint Real Estate Finance, Inc., is a publicly traded REIT, with its common stock and 8.50% Series A Cumulative Redeemable Preferred Stock listed on the New York Stock Exchange under the symbols "NREF" and "NREF-PRA", respectively, primarily focused on originating, structuring and investing in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties and common equity investments, as well as multifamily and single-family rental commercial mortgage-backed securities securitizations, promissory notes, revolving credit facilities and stock warrants. More information about the Company is available at nref.nexpoint.com. 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 "anticipate," "believe," "estimate," "expect," "intend," "may," "should" 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 business, strategy and industry in general, third quarter 2026 guidance, including net income, net income attributable to common stockholders, EAD, CAD, EAD and CAD per diluted common share and related coverage ratios and related assumptions and estimates, the Company's intent to not settle Series B or Series C Preferred redemptions in shares of common stock when the Company's common stock price is below book value and the Company's focus on sectors with structural, cycle-resistant demand reinforcing the Company's earnings and steady growth of book value and the Company's focus on long-term, transparent value creation for its shareholders. They are not guarantees of future results and forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement, including those described in greater detail in our filings with the Securities and Exchange Commission (the "SEC"), particularly those described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the Company's Annual Report on Form 10-K and the Company's other filings with the SEC for a more complete discussion of risks and other factors that could affect any forward-looking statement. The statements made herein speak only as of the date of this press release and except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements. Non-GAAP Financial Measures This press release contains non-GAAP financial measures. A "non-GAAP financial measure" is defined as a numerical measure of a company's financial performance that excludes or includes amounts so as to be different than the most directly comparable measure calculated and presented in accordance with GAAP in the statements of income, balance sheets or statements of cash flows of the Company. The non-GAAP financial measures used within this press release are EAD, CAD, EAD and CAD per diluted common share and adjusted weighted average common shares outstanding - diluted. EAD is defined as net income (loss) attributable to our common stockholders computed in accordance with GAAP, including realized gains and losses not otherwise included in net income (loss), excluding any unrealized gains or losses or other similar non-cash items that are included in net income (loss) for the applicable reporting period, regardless of whether such items are included in other comprehensive income (loss), or in net income (loss) and adding back amortization of stock-based compensation. The Company also adjusts EAD to remove the income/(losses) from equity method investments as they represent changes in the equity value of our investment rather than distributable earnings. The Company will include income from equity method investments to the extent that we receive cash distributions and upon realizing gains and/or losses. Net income (loss) attributable to common stockholders may also be adjusted for the effects of certain GAAP adjustments and transactions that may not be indicative of our current operations. In addition, EAD in this press release includes the dilutive effect of non-controlling interests. We use EAD to evaluate our performance and to assess our long-term ability to pay distributions. We believe providing EAD as a supplement to GAAP net income (loss) to our investors is helpful to their assessment of our performance and our long-term ability to pay distributions. We also use EAD as a component of the management fee paid to our external manager. EAD does not represent net income or cash flows from operating activities and should not be considered as an alternative to GAAP net income, an indication of our GAAP cash flows from operating activities, a measure of our liquidity or an indication of funds available for our cash needs. Our computation of EAD may not be comparable to EAD reported by other REITs. We calculate CAD by adjusting EAD by adding back amortization of premiums, depreciation and amortization of real estate investment and amortization of deferred financing costs and by removing accretion of discounts. We use CAD to evaluate our performance and our current ability to pay distributions. We also believe that providing CAD as a supplement to GAAP net income (loss) to our investors is helpful to their assessment of our performance and our current ability to pay distributions. CAD does not represent net income or cash flows from operating activities and should not be considered as an alternative to GAAP net income, an indication of our GAAP cash flows from operating activities, a measure of our liquidity or an indication of funds available for our cash needs. Our computation of CAD may not be comparable to CAD reported by other REITs. EAD per diluted common share and CAD per diluted common share are based on adjusted weighted average common shares outstanding – diluted. Adjusted weighted average common shares outstanding - diluted is calculating by subtracting the dilutive effect of potential redemptions of Series B and Series C Preferred shares for shares of our common stock from weighted average common shares outstanding - diluted. We believe providing adjusted weighted average common shares outstanding - diluted to our investors is helpful in their assessment of our performance without the potential dilutive effective of the Series B or Series C Preferred shares. We have the right to redeem the Series B and Series C Preferred shares for cash or shares of our common stock. Additionally, Series B and Series C Preferred redemptions are capped at 2% of the outstanding Series B or Series C Preferred shares per month, 5% per quarter and 20% per year, respectively. The Company maintains sufficient liquidity to pay cash to cover any redemptions up to the quarterly redemption cap. Further, it is the Company's intent to not settle Series B or Series C Preferred redemptions in shares of common stock when the Company's common stock price is below book value. Adjusted weighted average common shares outstanding – diluted should not be considered as an alternative to the GAAP measure. Our computation of adjusted weighted average common shares outstanding – diluted may not be comparable to adjusted weighted average common shares outstanding - diluted reported by other companies. Contact:Kristen GriffithInvestor [email protected]: [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/nref-announces-second-quarter-2026-results-provides-third-quarter-2026-guidance-302844778.html

This article first appeared on GuruFocus. Core FFO: $16.9 million, or $0.66 per diluted share, a penny ahead of consensus. FFO: $15.2 million, or $0.60 per share. AFFO: $19.7 million, or $0.77 per share. Net Loss: $8.6 million, or $0.34 per diluted share, including $23.9 million of depreciation and amortization. Total Revenue: $64.6 million, up from $63.1 million a year ago. Same-Store Revenue: $62.4 million, down 0.6% year-over-year. Same-Store NOI: $36.9 million, down 2.9% year-over-year. Total NOI: $37.9 million across 36 properties, essentially flat with last year. Same-Store Occupancy: 93.6%, up 30 basis points from a year ago. Average Effective Rent: $1,487, down 80 basis points. Interest Expense: $15.8 million in Q2, versus $15.2 million a year ago. Same-Store Operating Expenses: Up 2.4% year-over-year. Real Estate Taxes: Down 3.5%. Insurance: Down 11.7% on the April renewal. Payroll: Down 1%. Repair and Maintenance: Up 13.9%. Marketing: Up 38.2%. Utilities: Up 6.1%. Other Income: Up 29.2%. Dividend: $0.53 per share payable September 30th. Total Indebtedness: Approximately $1.6 billion with an adjusted weighted average interest rate of approximately 3.58%. Available Liquidity: Approximately $133.5 million, including $14.6 million of unrestricted cash and $118.9 million of undrawn credit facility capacity. Net Leverage: Approximately 57% of internal lab estimate. Estimated Net Asset Value: $46.76 per diluted share at the midpoint, with a range of $40.35 to $53.16. 2026 Core FFO Guidance: Revised to $2.35 to $2.54 per diluted share, midpoint of $2.45. 2026 Same-Store NOI Guidance: Revised to negative 2.5% to 0.5%, midpoint of negative 1%. 2026 Same-Store Revenue Growth Guidance: Approximately 0.2% at the midpoint. 2026 Same-Store Expense Growth Guidance: Approximately 2.1% at the midpoint. 2026 Interest Expense Projection: Approximately $71.2 million. Blended Lease Trade-Out: Negative 1.16% for the quarter, improving from negative 1.7% in April to positive 30 basis points in July. New Lease Trade-Out: Negative 5% for the quarter, improving from negative 5.4% in April to negative 2.3% in July. Renewal Lease Trade-Out: Positive 1.9% for the quarter. Retention: 55.9%. Turnover: 44.1%, improved from 46.5%. Bad Debt: 60 basis points of gross potential rent. Concession Utilization: Cut roughly in half from 55.6% in Q1 to 27.7% in Q2. Average Weeks Free: Fell from 2.2 weeks to 1.1 week. Upgrades Completed: 459 full and partial upgrades, with at least 258 upgraded units at an average monthly rent premium of $89 and a 23% return. Warning! GuruFocus has detected 9 Warning Signs with NREF. Is NREF fairly valued? Test your thesis with our free DCF calculator. Release Date: August 04, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Second quarter core FFO of $0.66 per diluted share beat consensus by a penny, with first-half results ahead of plan. Blended lease trade-outs improved from negative 1.7% in April to positive 30 basis points in July, marking the first positive print since early 2025. Same-store occupancy closed at 93.6%, up 30 basis points year-over-year, with retention improving to 55.9% and turnover down to 44.1%. Expense discipline is strong, with full-year same-store expense growth guidance lowered by 140 basis points to 2.1%, driven by declines in real estate taxes, insurance, and payroll. Value-add upgrades continue to generate high returns, with 459 upgrades completed in Q2 at a 23% return and average monthly rent premiums of $89. The supply-demand backdrop is improving, with national deliveries at decade lows and two-thirds of submarkets having less than 2% active inventory growth. Concession utilization was cut roughly in half from 55.6% in Q1 to 27.7% in Q2, with average weeks free down to 1.1 weeks. The stock trades at a more than 40% discount to estimated NAV midpoint of $46.76 per share, presenting a significant value opportunity. No scheduled debt maturities until 2028, with total available liquidity of approximately $133.5 million. Sedona Mountain, a recent acquisition, is performing well with occupancy up 430 basis points and NOI beating budget by almost 5%. Full-year 2026 core FFO guidance was lowered to a midpoint of $2.45 per share, down $0.12 from the prior midpoint of $2.57. Higher interest expense, driven by an upward shift in the forward curve, is expected to reduce swap inflows by $14.6 million, or $0.16 per share, in the second half. Same-store revenue growth guidance was cut by 90 basis points to 0.2% at the midpoint, with Nashville accounting for about 85% of the same-store NOI reduction. Same-store NOI declined 2.9% year-over-year in Q2, with total revenue down 0.6% and average effective rent down 80 basis points. New lease trade-outs remained negative at 5% in Q2, with laggards in Orlando, Charlotte, Dallas, and Nashville due to remaining supply pressure. Repair and maintenance costs increased 13.9% year-over-year, driven by fiber buildouts in four markets, and marketing expenses rose 38.2%. The Federal Reserve held rates at 3.5%-3.75% with some members dissenting in favor of a hike, indicating potential further rate pressure. Occupancy gave back 30-40 basis points in June as the company prioritized pricing over occupancy, with July occupancy still in the mid-93% range. The transaction market remains illiquid with wide bid-ask spreads, and most participants expect a clearer recovery only in 2027. Net leverage is at 57% of internal NAV, and deleveraging remains a priority, funded mainly through disposition proceeds. Q: What is driving the reduction in full-year 2026 core FFO guidance, and what is the new midpoint? A: Paul Richards, CFO, explained that the company is lowering its full-year 2026 core FFO guidance to a midpoint of $2.45 per share, down from $2.57. The reduction is primarily driven by higher interest rate expense due to an upward shift in the forward curve, which reduced projected swap inflows by roughly $14.6 million (or $0.16 per share). A smaller portion reflects a slower same-store revenue rebound. The company is resetting to a level it is confident it can deliver rather than relying on offsets. Q: Can you elaborate on the "clean inflection" you expect in the operating environment and how it shapes your outlook for next year? A: Matthew McGraner, CIO, clarified that the "clean inflection" refers to positive new lease rates. The guidance revision is concentrated in four or five assets, primarily in markets like Nashville, which were not as strong as originally expected. The new guidance implies slightly negative new lease trade-outs in Q3 and slightly positive in Q4, which is the quarter they feel best about. This positive new lease pricing is the clean inflection point they are targeting. Q: What were the key drivers of the same-store revenue and expense performance in the second quarter? A: Paul Richards, CFO, noted that same-store total revenue was down 0.6% year-over-year, while same-store NOI was down 2.9%. On the expense side, the company is lowering its full-year same-store expense growth outlook by 140 basis points to about 2.1%, driven by broad-based improvements in real estate taxes (down 3.5%), insurance (down 11.7% on the April renewal), and payroll (down 1%). Pressure points included repair and maintenance (up 13.9%) and marketing (up 38.2%), though the R&M increase is concentrated in a fiber buildout that has a corresponding offset in other income. Q: How is the leasing trajectory improving, and what are the latest trade-out numbers? A: Matthew McGraner, CIO, reported that blended trade-outs improved from negative 1.7% in April to negative 1.2% in May, negative 50 basis points in June, and turned positive at about 30 basis points in July. New lease trade-outs improved from negative 5.4% in April to negative 2.3% in July, while renewals held above 2%. This is the first positive blended print since early 2025, driven by improving supply/demand dynamics in their Sunbelt submarkets. Q: What is the status of the company's interest rate hedging and debt maturity profile? A: Paul Richards, CFO, stated that interest rate swaps currently fix the rate on $817.5 million, or approximately 51.5% of floating-rate mortgage debt. The bulk of that protection, approximately $717.5 million at a weighted average fixed rate near 1.1392%, rolls off in September. The company has the ability to layer in more protection when risk-adjusted economics make sense. There are no scheduled debt maturities until 2028, which consists of only a small $33 million fixed-rate loan. Q: Can you provide details on the value-add program and its returns? A: Paul Richards, CFO, highlighted that during Q2, the company completed 459 full and partial upgrades at an average monthly rent premium of $89 and a 23% return. Since inception, they have completed 10,474 full and partial interior upgrades, over 5,100 kitchen and laundry packages, and roughly 11,200 tech packages, generating average monthly rent increases of $152, $50, and $43 per unit at returns of 20.7%, 63.4%, and 37.2%, respectively. This remains one of the most reliable capital-efficient sources of growth. Q: What is the company's view on the supply and demand backdrop in its markets? A: Matthew McGraner, CIO, noted that national deliveries peaked near 700,000 units in 2024, but starts are off roughly 70% from the peak, and deliveries this year are tracking to the lowest level in more than a decade. In their Sunbelt submarkets, two-thirds have less than 2% active annual inventory growth. On the demand side, the premium to own versus rent is 44% against a 17% long-run average, and move-outs to buy a home were 8.7% this quarter, down from 10.9% a year ago. This supports a clean inflection approaching in late 2026 and into 2027. Q: How is the company's technology platform contributing to performance? A: Matthew McGraner, CIO, explained that the two-layer model, using VH Management's funnel leasing platform and NexPoint Intelligence at the advisory level, is driving efficiency. In Q2, the platform converted 24,703 leads into 1,321 applications and 1,226 move-ins, with a 5.3% lead-to-application rate and a 34.6% tour-to-application rate, both improved from Q1. Self-guided touring scaled to 26.2% of tours, up from 18.7% in Q1, capturing after-hours demand. Q: What is the status of the Sedona Mountain acquisition and its performance? A: Matthew McGraner, CIO, reported that the 321-unit community in North Las Vegas, purchased in December 2025 for $73.25 million, closed the quarter at 92.2% occupancy, up 430 basis points from Q1. NOI is beating budget by almost 5%, with expenses 12.2% under forecast. The company remains on track to generate a 7.2% NOI CAGR through 2029, taking a high-5 cap rate purchase to a 7.5% to 8% stabilized yield. Q: How is the company thinking about capital allocation and the NAV discount? A: Paul Richards, CFO, noted that the estimated net asset value at quarter-end is $46.76 per diluted share at the midpoint, using a cap rate range of 5.25% to 5.75%. At a recent price of $25.91, the stock trades at more than a 40% discount to that midpoint. The company For the complete transcript of the earnings call, please refer to the full earnings call transcript.

PennyMac Mortgage (PMT) came out with quarterly earnings of $0.23 per share, missing the Zacks Consensus Estimate of $0.3 per share. This compares to a loss of $0.04 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -23.33%. A quarter ago, it was expected that this specialty finance company would post earnings of $0.36 per share when it actually produced earnings of $0.16, delivering a surprise of -55.56%. Over the last four quarters, the company has surpassed consensus EPS estimates two times. PennyMac Mortgage, which belongs to the Zacks REIT and Equity Trust industry, posted revenues of $73 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 19.63%. This compares to year-ago revenues of $70.2 million. The company has topped consensus revenue estimates just once over the last four quarters. The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call. PennyMac Mortgage shares have lost about 22% since the beginning of the year versus the S&P 500's gain of 8.5%. While PennyMac Mortgage has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock? There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately. Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions. Ahead of this earnings release, the estimate revisions trend for PennyMac Mortgage was unfavorable. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #4 (Sell) for the stock. So, the shares are expected to underperform the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.32 on $93.95 million in revenues for the coming quarter and $1.16 on $366.29 million in revenues for the current fiscal year. Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, REIT and Equity Trust is currently in the bottom 33% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1. NexPoint (NREF), another stock in the same industry, has yet to report results for the quarter ended June 2026. The results are expected to be released on August 6. This company is expected to post quarterly earnings of $0.43 per share in its upcoming report, which represents no change from the year-ago quarter. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days. NexPoint's revenues are expected to be $14.31 million, up 18.6% from the year-ago quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report PennyMac Mortgage Investment Trust (PMT) : Free Stock Analysis Report NexPoint Real Estate Finance, Inc. (NREF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research