NXRT

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. 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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 - Matt McGraner Vice President, Asset and Investment Management - Bonner McDermett Operator: Hello, everyone. Thank you for joining us and welcome to the NexPoint Residential Trust Q2 2026 Earnings Call. [Operator Instructions] I will now hand the conference over to Kristen Griffith, Investor Relations. Kristen, please go ahead. Kristen Thomas: Thank you. Good day, everyone, and welcome to NexPoint Residential Trust's conference call to review the company's results for the second quarter ended June 30, 2026. On the call today are Paul Richards, Executive Vice President and Chief Financial Officer; Matt McGraner, Executive Vice President and Chief Investment Officer; and Bonner McDermett, Vice President, Asset and Investment Management. As a reminder, this call is being webcast through the company's website at nxrt.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 1995 that are based on management's current expectations, assumptions and beliefs. Listeners 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 the company's other filings with the SEC for a more complete discussion of risks and other factors that could affect any forward-looking statements. The statements made during this conference call speak only as of today's date, and except as required by law, NXRT 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 earnings release that was filed earlier today. I would now like to turn the call over to Paul Richards. Please go ahead, Paul. Paul Richards: Thank you, Kristen, and welcome, everyone. We appreciate you joining us this morning. I'll take you through our second quarter results and the changes we're making for our full year outlook, and then Matt will cover the operating environment, our leasing trajectory, the technology platform and how the portfolio is positioned. In April, we affirmed our full year guidance. This morning, we are lowering it to a core FFO midpoint of $2.45 per share, down $0.12 from $2.57. I'll explain what drove the change and what has and has not changed. In short, most of the reduction is from higher interest rate expense, reflecting an upward shift in the forward curve since our last update. A smaller portion reflects the slower same-store revenue rebound, which affects the full year. Importantly, our operating trajectory continues to improve month by month. Given recent macro shifts and clear visibility into Q3 operating performance, we believe this is the right time to update our forecast. Q2 2026 results. Second quarter core FFO was $16.9 million or $0.66 per diluted share, $0.01 ahead of consensus. That compared to $18 million or $0.71 a year ago. FFO was $15.2 million or $0.60 per share and AFFO was $19.7 million or $0.77 per share. Total NOI was $37.9 million across our 36 properties, essentially flat with the last year. Net loss for the quarter was $8.6 million or $0.34 per diluted share, which includes $23.9 million of depreciation and amortization. That compares to a net loss of $7 million or $0.28 per share in the second quarter of 2025. Total revenue was $64.6 million, up from $63.1 million a year ago as Sedona came online and into the numbers. On a same-store basis, 35 properties, which is about 98% of our units, total revenue was $62.4 million, down 0.6% and same-store NOI was $36.9 million, down 2.9%. Same-store occupancy closed the quarter at 93.6%, up 30 basis points from a year ago, and average effective rent was $1,487, down 80 basis points. One point on the first half of the year before I get into guidance. It came in about where we expected on that. The company earned $0.68 in the first quarter and $0.66 in the second, which equates to $1.34 through June, each quarter a little ahead of the Street. The revision today is almost entirely about the back half, and it's driven mostly by interest expense as our swap protection steps down, which I'll run through now. Interest expense and hedging. We've mentioned since our initial guidance that 2026 carries a real interest rate -- interest expense headwind as certain swap positions roll off and the step down lands in the second half. Q2 interest expense was $15.8 million versus $15.2 million a year ago. What changed since April is the rate curve. The forward SOFR has moved higher, roughly 30 basis points in the third quarter and 72 basis points in the fourth relative to our assumptions. In practical terms, that's about $14.6 million fewer projected swap inflows over the rest of the year, or roughly $0.16 per share of additional interest expense. It's the single largest piece of today's revision. Full year 2026 interest expense is now projected at approximately $71.2 million, up from roughly $69 million discussed last quarter and $67 million in the original model. One timing note. The Federal Reserve met last week and held its benchmark rate at 3.5% to 3.75%, with a few members dissenting in favor of a hike. Interest rate swaps currently fix the rate on $817.5 million, or approximately 51.5% of our floating rate mortgage debt, and we have full visibility into the maturity schedule. The bulk of that protection, approximately $717.5 million at a weighted average fixed rate near 1.1392% rolls off in September. We have the ability to layer in more protection, and we'll do it when the risk-adjusted economics make sense. Second, on the affirmation. In April, we mentioned the offsets we identified neutralized this headwind and we affirmed. The curve then moved against us more than we assumed and a handful of markets' revenue production came in softer than we modeled. Rather than lean on offsets to hold that number, we're resetting to a level we're confident we can deliver. I'll walk through the bridge in a minute. Moving on to expense detail. The expense side is where we're picking up real ground. We're lowering our full year same-store expense growth outlook by 140 basis points to about 2.1% at the midpoint from 3.5% originally. It's broad-based. Every market in the portfolio is now guiding to lower expense growth than we assumed at the start of the year, led by real estate taxes, insurance and continued payroll discipline from the centralized operating model Matt will describe. Our April insurance renewal, which came in more than 30% year-over-year is now fully in the run rate. Let me put some numbers on the quarter itself. Same-store operating expenses were up 2.4% year-over-year, and the mix is favorable where it counts most. Real estate taxes were down 3.5%, insurance was down 11.7% on the April renewal and payroll was down 1%, with property management fees and office operations each down about 1%. The pressure sat in 2 lines. Repairs and maintenance up 13.9% and marketing up 38.2% off a small base, where we've leaned into lead generation at properties below target occupancy. Utilities were up 6.1%. The repair and maintenance increase is concentrated rather than broad, and we treat that as episodic rather than a change in our underlying cost base. Net controllables held roughly in line, while our 2 largest noncontrollables, real estate taxes and insurance came down, which is what underpins the improved full year expense outlook. One important note regarding the elevated R&M cost. We aggregate resident amenity services, including bulk fiber, into the total here. The resident amenity services subcategory drives 83% of total R&M growth and is concentrated in the 4 markets undergoing a fiber build-out: Atlanta, Nashville, Phoenix, and South Florida. We see a corresponding offset to these expense increases within the resident amenity fee subcategory of other income, which is a significant driver of the 29.2% other income growth for the quarter. A value-add update. During the second quarter, we completed 459 full and partial upgrades and leased 258 upgraded units at an average monthly rent premium of $89 and a 23% return. Since inception, for the properties currently in the portfolio, we've 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 is still one of the most reliable, capital-efficient sources of growth we have. Moving on to the dividend. For the second quarter, we declared a dividend of $0.53 per share, payable September 30. Since inception, we've raised the dividend 157.3%. As of June 30, total indebtedness was approximately $1.6 billion at an adjusted weighted average interest rate of approximately 3.58%. We held approximately $14.6 million of unrestricted cash on $118.9 million of undrawn capacity on the credit facility for a total available liquidity of approximately $133.5 million. We have no scheduled debt maturities until 2028, which consists of only a small $33 million fixed-rate loan. Net leverage is about 57% of our internal NAV estimate and deleveraging over the medium term, funded mainly through disposition proceeds, remains a priority. Our estimated net asset value at the quarter ended is $46.76 per diluted share at the midpoint, using a cap rate range of 5.25% to 5.75% across the portfolio. The range runs $40.35 at the high end and $53.16 at the low end. At a recent price of $25.91, the stock trades at more of a 40% discount to that midpoint. Even at the most conservative end of our range, it's a meaningful discount to estimated liquidation value. We think the gap between where the stock trades and what the real estate is worth is significant, and our capital recycling and buyback tools give us a way to close that. 2026 guidance revised. I'll now walk through the revised guidance by component. We're lowering full year 2026 core FFO guidance to a range of $2.35 to $2.54 per diluted share at a midpoint of $2.45, down from a prior midpoint of $2.57. We're lowering same-store NOI guidance to a range of negative 2.5% to 0.5% at a midpoint of negative 1% from a prior midpoint of negative 0.5%. The components of the bridge from $2.57 to $2.45 in 5 pieces are as follows: interest expense down $0.16. Again, the forward curve move described before, about $14.6 million of fewer projected swap inflows, the largest single driver. Same-store revenue down $0.09. We're taking full year same-store revenue growth down about 90 basis points to roughly 0.2% at the midpoint. It's concentrated. Matt has the market detail, with Nashville accounting for most of the same-store NOI reduction. Same-store expense up $0.06. The 140 basis point improvement I recently walked through for about 2.1%. Fourth component is interest income up $0.05, realized income from bridge lending investments tied to Waterford DST transaction, which Matt will put in context. And lastly, corporate G&A and other up $0.02, favorable G&A management. That nets a $0.12 reduction to $2.45. A brief word on where the same-store cut sits because it's concentrated rather than broad. Nashville is about 85% of the same-store NOI reduction. Softer revenue combined with the steepest same-store expense growth in the portfolio, near 15%. So there's little expense cushion there. Four markets are guiding to better same-store NOI than we assumed at the start of the year: South Florida, Atlanta, Phoenix, and Raleigh-Durham. And Dallas is a good example of the expense discipline at work. Roughly $590,000 revenue reduction was almost entirely offset by about $505,000 of expense savings, so very little drop to NOI. This is a concentrated revision, not a portfolio-wide one. On where this puts us versus Street, consensus is about $2.51 with a few more recent estimates closer to $2.40 a share. Our new midpoint is in general agreement with external estimates. The first half is in the books ahead of plan. The revision is forward-looking, largely rate-drive reset to the back half. Our acquisition with disposition assumptions are unchanged at $0 to $200 million each, $100 million at the midpoint, reflecting continued capital recycling within guidance. And with that, let me turn it over to Matt. Matthew McGraner: All right. Thank you, Paul. I'll start with the backdrop because the fundamental setup for our portfolio keeps improving. Starting with supply. National deliveries peaked near 700,000 units in 2024, starts are off roughly 70% from the peak, and deliveries this year are tracking to the lowest level in more than a decade. And in our Sunbelt submarkets, the drop-off is steeper still. Two-thirds of our submarkets have less than 2% active annual inventory growth, and more than half have fewer than 500 units under development today. The first half bore that out. Our submarkets absorbed almost 6,000 units in the second quarter against 3,146 units of new supply, net absorption of a positive 2,852 units. And that follows a positive 1,307 in the first quarter. The remaining 2026 supply is real and concentrated. The most meaningful pressure for us is in North Charlotte, South Las Vegas, and the southern portion of Orange County and Orlando. Still, the supply cliff remains intact and the backdrop continues to improve, we think leading to a clean inflection approaching in late 2026 and into 2027. On demand, the structural case hasn't changed and the affordability channel has only gotten more extreme. John Burns has the premium to own versus rent at 44% against a 17% long-run average. Zelman has the entry-level payment gap at its widest since 1984, and move-outs to buy a home were 8.7% this quarter, down from 10.9% a year ago. Here's the part I'd underline. On 135 million households, every 50 basis point decline in homeownership rate creates 675,000 renter households, 2 years of normal absorption from a channel that requires no population growth at all. And on the geography, Zelman's own work has national household growth running at near 70 basis points annually through the end of the decade. Our markets run at roughly twice that. And per Witten Advisors, job growth, population and domestic migration continue to favor the Sunbelt for the balance of the decade. Slower national household formation is a real headwind to the national number. It is not the same input as the one that drives our markets. On to leasing. The leasing cadence is the real story this quarter. Across 1,360 new leases, our new lease trade-out was negative 5%, and across 1,684 renewals, we were positive 1.9%. For a blended trade-out of negative 1.16%, roughly 75 basis points better than the first quarter. The month-to-month tells a more encouraging story. Blended trade-outs went from negative 1.7% in April to negative 1.2% in May to negative 50 basis points in June. And it turned positive at about 30 basis points in July. New lease trade-outs, the hardest line, improved from negative 5.4% in April to negative 2.3% in July, roughly 310 basis points, while renewals held above 2%. That is the first positive blended print since early 2025 for us. It is just 1 month, but encouraging nonetheless. Raleigh was our only market with positive new lease trade-outs in the quarter, and the laggards on the new lease line, Orlando, Charlotte, Dallas and Nashville, are the same markets carrying the most remaining supply. On the occupancy and revenue front, the same-store portfolio closed at 93.6% physical occupancy, up 30 basis points year-over-year and flat sequentially with leased at roughly 95%. Retention was 55.9% and turnover improved to 44.1% from 46.5%. Same-store total revenue was $62.4 million, down 60 basis points year-over-year. The number I'd point you to is the trajectory in that comparison. We went from a negative 2.2% year-over-year in the first quarter to just negative 60 basis points in the second, a 160 basis point improvement in the year-over-year comp in a single quarter. Effective rent was down 80 basis points, a much shallower decline than the new lease line alone would suggest, and that is occupancy and retention discipline doing its job. On bad debt, 60 basis points of gross potential rent against 1.02% in the first quarter of last year, a roughly 40% improvement and a fraction of where we ran before centralization rebuilt our screening process. Rent-to-income ratios remain 20% across the portfolio, a very healthy margin. On to concessions. Two different measures to discuss here. Utilization, the share of new leases taking a month free, we cut that roughly in half from 55.6% in the first quarter to 27.7% in the second quarter. And average weeks free fell from 2.2 weeks to 1.1 week. South Florida drove most of that going from 87.6% utilization to just 4.8% utilization in the second quarter. On cost, concession dollars as a percentage of gross potential rent, we ran at about 1% for the quarter, still slightly above our forecast, and use was heaviest in Tampa, Orlando, Nashville, and Dallas. About 1/3 of the portfolio has no active concession offering today, and roughly half are offering selective pricing only on aged vacant and specific floor plans. We project utilization falls another $0.50 by year-end. On to our technology platform. A lot of what you're seeing in the quarter, especially on the expense side, comes out of the technology work we've laid out during REITweek in June. We run a 2-layer model. Property operations go through BH Management and their Funnel Leasing platform. At the adviser level, we're building NexPoint Intelligence. That's deliberate. Self-managed peers have to spend across every layer at once, while our model captures a disproportionate share of that benefit at a fraction of the capital. In the quarter, the platform converted 24,703 leads into 1,321 applications and 1,226 move-ins, a 5.3% lead-to-application rate and a 34.6% tour-to-application rate, both improved from the first quarter. Self-guided touring keeps scaling. 26.2% of tours in the quarter were self-guided, and that's up from 18.7% in the first quarter, and that's after-hours demand we otherwise would lose. Quick word on Sedona Mountain, the 321-unit community in North Las Vegas that we bought in December of last year for $73.25 million. The occupancy at the property closed at 92.2% for the quarter, up 430 basis points from the first quarter, and NOI is beating budget by almost 5% with expenses 12.2% under forecast. Roof, exterior paint, smart rent and amenity work are complete, and we're still targeting and on track to generate a 7.2% NOI CAGR through 2029, taking a high-5 cap rate purchase to a 7.5% to an 8% stabilized yield. On the transaction market and capital allocation, institutional volume remains well below last year and cap rates have remained sticky and the bid-ask remains wide with most participants pointing to 2027 for a clear recovery and more transaction volume. That said, we watch well-located Sunbelt assets trade materially tighter than our own implied cap rate, which reinforces the NAV gap Paul described. Our capital allocation priorities are straightforward. Our job is to close the value gap through operating execution into 2027, recycling capital and buying back stock. One item on earnings composition. Our revised guidance includes about $0.05 of realized interest income from our bridge lending investment tied to a Waterford DST transaction sourced through our adviser's platform. It's a discrete realized deployment of balance sheet capacity earning an accretive market return. We're carrying it as realized income rather than embedding a forward estimate, and we'll report it as it happens. In closing, the first half beat our plan. Same-store revenue improved 160 basis points in its year-over-year comp between the first and second quarters. Blended lease trade-outs went from a negative 1.7% in April to a positive 30 basis points in July. Occupancy is stable, retention is up and expenses are coming in better across every market and supply is rolling over fastest in the markets where we've been most pressured. That's what makes the setup compelling. 2026, we absorb the rate repricing and the last of the supply. 2027, we get to the supply cliff and the leasing earn-in. The earn-in is not a forecast. It's math on leases we've already signed. We're moving into the best supply-demand backdrop in 5 years, and the renter by necessity cohort is only expanding as affordability stays extreme. The fundamental recovery is more certain today than it has been in recent memory. I want to thank everyone here at NexPoint and BH for their hard work. And with that, the operator, let's open it up for questions. Peter Abramowitz: I just want to go back to Matt. I think you had some comments about the improvements in the operating environment. And I think you used the term, sort of, expecting a clean inflection in the second half of the year and into 2027. I guess just wondering how to interpret that. What do you consider sort of a clean inflection as you described it? Is it positive new lease rates or otherwise? Just help us frame how you're thinking about that and how it kind of shapes how you're thinking about the operating environment into next year? Matthew McGraner: Yes, I was referring to positive new lease rates. Our revisions to the guidance are concentrated really in 4 assets, 4 or 5 assets, that make up about $2.2 million of gross potential rent revisions. And really, those markets were just not as strong as we originally thought. And so as we look forward in the new guidance and what it implies for new leases, we're slightly negative in the third quarter and then modeling slightly positive in the fourth quarter. And that's the quarter that I think we feel the best about of the year and that kind of clean inflection is the positive new lease pricing that's implied in that guidance. Peter Abramowitz: Okay. That makes sense. And then I think your average occupancy was 93.6% for the entire quarter. I know in your May REIT update, I think you were running around 94% at the end of April and the end of May. So just wondering, I know there can be differences between average occupancy and month end and quarter end, but did you have a little bit of occupancy kind of give back as pricing was starting to ramp or continuing to ramp throughout June. And I guess what was the update on occupancy in July as well? Matthew McGraner: Yes, Bonner, can you get July occupancy for me. But the -- in terms of the strategy we had, we were deliberate in trying to hold rates on the new lease front. And so we lost a little bit of, call it 30, 40 basis points, good memory back to NAREIT. But we -- the strategy was to try to hold pricing as much as we could, which bore out sequentially month by month, the new lease pricing did improve as we just reported. And then Bonner, do you July... Bonner McDermett: Yes. And just a little bit of clarification. So Peter, the occupancy numbers we report in the supplement are as of point in time. So that 93.6% is a 6/30 physical end date. So the average financial occupancy for the quarter was about 93.8%. You're right. When we were at NAREIT early June, we were 94% flat physical. I think looking at where we thought we had some better pricing, we were a little bit more aggressive, both on new lease pricing and renewals. I think that a certain number of these assets that Matt's talking to, we thought we had a little bit more pricing power than was borne out and that ultimately eroded, call it, 40 bps of occupancy between the first week in June toward the end of the month. Rolling into July, I think in the operational update we provided in the supplement, you'll see the leasing funnel is working. We're generating pretty high lead volume. We think it's a very healthy seasonal time. And the inflection to a positive blend on rates, we're prioritizing pricing a bit. We're trying to push pricing, and we're okay. I mean, certainly, we would love to be a little bit healthier on occupancy, but running kind of mid-93s and getting to that inflection point in new lease rates is more of a focus today. Matthew McGraner: Yes. Thank you for everyone's participation today and look forward to speaking after Q3. Have a good day. Operator: This concludes today's call. Thank you for attending. You may now disconnect. 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Interested in NexPoint Residential Trust, Inc.? Here are five stocks we like better. NexPoint lowered its 2026 core FFO guidance to $2.35–$2.54 per share, primarily because higher interest rates are expected to increase full-year interest expense to about $71.2 million. Second-quarter core FFO fell to $16.9 million, or $0.66 per share, while same-store revenue declined 0.6% and same-store NOI dropped 2.9%. Nashville was responsible for roughly 85% of the reduction in the same-store NOI outlook. Leasing trends improved during the quarter, with blended trade-outs turning positive by July, occupancy holding at 93.6%, and Sedona Mountain reaching 92.2% occupancy. Expense-growth expectations also improved, and the company reported approximately $133.5 million in available liquidity. NexPoint Residential Trust (NYSE:NXRT) lowered its full-year 2026 core funds from operations guidance after higher projected interest expense and softer-than-expected revenue in several markets, despite management pointing to improving leasing trends and lower operating-cost growth. The multifamily real estate investment trust reported second-quarter core FFO of $16.9 million, or $0.66 per diluted share, compared with $18.0 million, or $0.71 per share, a year earlier. FFO was $15.2 million, or $0.60 per share, while adjusted FFO totaled $19.7 million, or $0.77 per share. The company recorded a net loss of $8.6 million, or $0.34 per diluted share, including $23.9 million of depreciation and amortization. → SpaceX’s First Earnings Report Could Decide Whether Shorts or Bulls Have Control Total revenue increased to $64.6 million from $63.1 million in the prior-year quarter, aided by the contribution from Sedona Mountain, a North Las Vegas property acquired in December 2025. Across the same-store portfolio, however, revenue declined 0.6% to $62.4 million and net operating income fell 2.9% to $36.9 million. Executive Vice President and Chief Financial Officer Paul Richards said NexPoint reduced its 2026 core FFO outlook to a range of $2.35 to $2.54 per diluted share, with a midpoint of $2.45. That compares with the company’s prior midpoint of $2.57. → 3 Drone Stocks That Should Soar After the Summer Slump Richards said the largest element of the revision was a higher forward interest-rate curve. NexPoint now expects approximately $14.6 million less in projected swap inflows during the remainder of 2026, representing roughly $0.16 per share of additional interest expense. The company projects full-year interest expense of about $71.2 million, compared with roughly $69 million discussed in April and $67 million in its original outlook. The company said interest-rate swaps fix rates on $817.5 million, or approximately 51.5%, of its floating-rate mortgage debt. About $717.5 million of that protection, carrying a weighted average fixed rate near 1.14%, is scheduled to roll off in September. → Why Rare Earth Processing Could Be the Real 2027 Opportunity NexPoint also reduced its same-store NOI outlook to a range of negative 2.5% to positive 0.5%, with a midpoint of negative 1%, from a prior midpoint of negative 0.5%. Same-store revenue growth is now expected to be about 0.2% at the midpoint, down about 90 basis points from prior assumptions. Richards said Nashville accounts for about 85% of the same-store NOI reduction, citing softer revenue and same-store expense growth near 15% in that market. He added that South Florida, Atlanta, Phoenix and Raleigh-Durham are expected to post better same-store NOI than initially forecast. While revenue expectations were reduced, NexPoint lowered its full-year same-store expense-growth outlook by 140 basis points to approximately 2.1% at the midpoint, from 3.5% originally. Same-store operating expenses rose 2.4% year over year in the second quarter. Real estate taxes declined 3.5%, insurance costs fell 11.7%, and payroll expense decreased 1%. Repair and maintenance expense increased 13.9%, while marketing expense rose 38.2% from a small base as the company increased lead-generation efforts at properties below target occupancy. Richards said resident amenity services, including bulk fiber installations, accounted for 83% of repair-and-maintenance growth. The fiber work is concentrated in Atlanta, Nashville, Phoenix and South Florida, and management said related expenses are offset by resident amenity fees recorded in other income. During the quarter, NexPoint completed 459 full and partial apartment upgrades and leased 258 upgraded units at an average monthly rent premium of $89, generating a reported 23% return. Executive Vice President and Chief Investment Officer Matt McGraner said leasing trends improved through the quarter. New lease trade-outs were negative 5% across 1,360 new leases, while renewals increased 1.9% across 1,684 renewals, producing a blended trade-out of negative 1.16%. Monthly blended trade-outs improved from negative 1.7% in April to negative 1.2% in May and negative 0.5% in June, turning positive by roughly 0.3% in July, according to McGraner. New-lease trade-outs improved from negative 5.4% in April to negative 2.3% in July, while renewal increases remained above 2%. Same-store physical occupancy ended the quarter at 93.6%, up 30 basis points from a year earlier and flat sequentially. Retention rose to 55.9%, while turnover improved to 44.1% from 46.5%. During the question-and-answer session, Vice President of Asset and Investment Management Bonner McDermett said occupancy declined by roughly 40 basis points during June as the company emphasized pricing, adding that management was prioritizing progress toward positive new-lease pricing while operating in the mid-93% occupancy range. McGraner said management’s updated forecast assumes slightly negative new-lease pricing in the third quarter and slightly positive pricing in the fourth quarter. He described positive new-lease rates as the “clean inflection” the company expects as supply conditions improve. As of June 30, NexPoint had approximately $1.6 billion of total debt at an adjusted weighted average interest rate of about 3.58%. The company reported $14.6 million of unrestricted cash and $118.9 million of undrawn credit-facility capacity, for total available liquidity of approximately $133.5 million. NexPoint said it has no scheduled debt maturities until 2028, when a $33 million fixed-rate loan comes due. The company declared a second-quarter dividend of $0.53 per share, payable Sept. 30. Management said its acquisition and disposition assumptions remain unchanged at $0 million to $200 million each, with a midpoint of $100 million, as it continues capital recycling efforts. McGraner said Sedona Mountain reached 92.2% occupancy during the quarter, up 430 basis points from the first quarter. He said the property’s NOI was nearly 5% above budget and expenses were 12.2% below forecast, while management continues to target a 7.2% NOI compound annual growth rate through 2029. NexPoint Residential Trust is a real estate investment trust focused on the acquisition, leasing and management of single‐family rental homes across the United States. The company targets suburban and Sun Belt markets with favorable demographic trends, seeking to build a diversified portfolio of standalone residences that serve the growing demand for quality rental housing. By concentrating on professionally managed homes rather than multi‐family apartments, NexPoint Residential Trust aims to offer tenants the benefits of privacy and space, while generating predictable rental income for investors. The firm’s investment strategy combines direct acquisitions of built single‐family homes with selective joint ventures and partnerships to optimize scale and geographic diversification. 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 Residential Trust Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for August 2026.

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 lowered full-year core FFO guidance primarily due to an upward shift in the forward SOFR curve, which reduced projected swap inflows by approximately $14.6 million. Performance attribution is highly concentrated, with the Nashville market accounting for roughly 85% of the total same-store NOI reduction due to soft revenue and steep expense growth. Operational efficiency improved through a centralized model and technology platform, leading to a 140 basis point reduction in the full-year same-store expense growth outlook. The portfolio is benefiting from a significant affordability gap in the housing market, with the premium to own versus rent at 44% compared to a 17% long-run average. Management highlighted a month-over-month improvement in leasing trajectory, noting that blended trade-outs turned positive in July for the first time since early 2025. Strategic capital allocation remains focused on closing the 40% discount to estimated net asset value through operational execution, capital recycling, and potential stock buybacks. Guidance anticipates a 'clean inflection' in late 2026 and into 2027 as the supply cliff remains intact following a 2024 peak in national deliveries and a significant drop-off in new starts. Interest expense projections for the back half of 2026 reflect the roll-off of approximately $717.5 million in swap protection at a weighted average rate of 1.1392% in September. Management expects new lease trade-outs to turn slightly positive in the fourth quarter of 2026, marking a shift from the negative trends seen in the first half of the year. The company maintains a target of $0 to $200 million for both acquisitions and dispositions, emphasizing a strategy of capital recycling within the current macro environment. Future NOI growth is expected to be supported by a 'supply cliff' in 2027, with more than half of current submarkets having fewer than 500 units under development. Elevated repairs and maintenance costs were driven by resident amenity services, specifically a fiber build-out in four key markets, which is offset by higher 'other income'. The portfolio faces concentrated supply pressure in North Charlotte, South Las Vegas, and parts of Orlando, which continues to weigh on new lease pricing in those specific areas. A $0.05 contribution to guidance comes from realized interest income on bridge lending investments, treated as discrete deployments rather than recurring operational revenue. Net leverage stands at 57% of internal NAV, with management identifying deleveraging through disposition proceeds as a medium-term priority. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Management clarified that a 'clean inflection' refers specifically to achieving positive new lease rates, which they model to occur in the fourth quarter of 2026. The revision to guidance was driven by 4 or 5 specific assets where market strength was weaker than originally modeled, rather than a portfolio-wide decline. Physical occupancy declined roughly 40 basis points from early June to the end of the month as management deliberately prioritized holding rates over maximizing occupancy. Management expressed comfort running occupancy in the mid-93% range if it facilitates the transition to positive new lease pricing during the healthy seasonal leasing period.

NXRT Reports Continued Improvement in Monthly Lease Trade-Outs and Deploys Initial $22.1 Million Fixed-Rate Term Loan for DST Bridge-Lending Initiative DALLAS, Aug. 4, 2026 /PRNewswire/ -- NexPoint Residential Trust, Inc. (NYSE:NXRT) reported financial results for the second quarter ended June 30, 2026. Highlights NXRT1 reported net loss, FFO2, Core FFO2 and AFFO2 of $8.6M, $15.2M, $16.9M and $19.7M, respectively, attributable to common stockholders for the quarter ended June 30, 2026, compared to net loss, FFO, Core FFO, and AFFO of $7.0M, $16.9M, $18.0M and $20.3M, respectively, attributable to common stockholders for the quarter ended June 30, 2025. NXRT reported net loss, FFO, Core FFO and AFFO of $15.4M, $32.6M, $34.2M and $39.3M, respectively, attributable to common stockholders for the six months ended June 30, 2026, compared to net loss, FFO, Core FFO, and AFFO of $13.9M, $34.3M, $37.0M and $41.8M, respectively, attributable to common stockholders for the six months ended June 30, 2025. For the three months ended June 30, 2026, Q2 Same Store properties3, occupancy increased 30 bps, total revenue decreased 0.6%, and average effective rent and NOI2 decreased 0.9% and 2.9% over the prior year period. For the six months ended June 30, 2026, YTD Same Store properties3, occupancy increased 30 bps, total revenue and NOI2 decreased 1.4% and 2.8%, respectively, and average effective rent decreased 0.9% over the prior year period. NXRT paid a second quarter dividend of $0.53 per share of common stock on June 30, 2026. The weighted average effective monthly rent per unit across all 36 properties held as of June 30, 2026 (the "Portfolio"), consisting of 13,3054 units, was $1,490, while physical occupancy was 93.5%. On June 5, 2026, the Company deployed $22.1 million into a fixed-rate term loan (the "Waterford Loan"), bearing interest at 10.00% per annum, that financed the acquisition of a 240-unit stabilized multifamily property in the Greensboro–High Point, North Carolina market. The investment represents the Company's first deployment under its DST bridge-lending program and was funded through the Company's revolving credit facility, capturing a positive spread between the Waterford Loan's 10.00% fixed rate and the Company's cost of borrowings. During the second quarter 2026, for the properties in the Portfolio, we completed 459 full and partial upgrades and leased 255 upgraded units, achieving an average monthly rent premium of $90.60 and a 23.0% ROI5. Since inception, for the properties currently in the Portfolio, we have completed 10,474 full and partial upgrades, 5,130 kitchen and laundry appliances, and 11,199 technology packages, resulting in a $152, $51, and $43 average monthly rental increase per unit and a 20.7%, 63.4%, and 37.2% ROI, respectively. Second Quarter 2026 Financial Results Total revenues were $64.6 million for the second quarter of 2026, compared to $63.1 million for the second quarter of 2025. Net loss for the second quarter of 2026 totaled $8.6 million, or loss of $0.34 per diluted share, which included $23.9 million of depreciation and amortization expense. This compared to net loss of $7.0 million, or loss of $0.28 per diluted share, for the second quarter of 2025, which included $24.1 million of depreciation and amortization expense. The change in our net loss of $8.6 million for the three months ended June 30, 2026 as compared to our net loss of 7.0 million for the three months ended June 30, 2025 primarily relates to an increase in property operating expenses and interest expense of $2.1 million and $0.7 million, respectively, offset by an increase in total revenues of $1.5 million. For the second quarter of 2026, NOI was $37.9 million on 36 properties, compared to $38.0 million for the second quarter of 2025 on 35 properties. For the second quarter of 2026, Q2 Same Store NOI decreased 2.9% to $36.9 million, compared to $38.0 million for the second quarter of 2025. For the second quarter of 2026, FFO totaled $15.2 million, or $0.60 per diluted share, compared to $16.9 million, or $0.67 per diluted share, for the second quarter of 2025. For the second quarter of 2026, Core FFO totaled $16.9 million, or $0.66 per diluted share, compared to $18.0 million, or $0.71 per diluted share, for the second quarter of 2025. For the second quarter of 2026, AFFO totaled $19.7 million, or $0.77 per diluted share, compared to $20.3 million, or $0.80 per diluted share, for the second quarter of 2025. 2026 Year to Date Financial Results Total revenues were $128.2 million for the six months ended June 30, 2026, compared to $126.4 million for the six months ended June 30, 2025. Net loss for the six months ended June 30, 2026 totaled $15.4 million, or loss of $0.60 per diluted share, which included $48.2 million of depreciation and amortization expense. This compared to net loss of $13.9 million, or loss of $0.55 per diluted share, for the six months ended June 30, 2025, which included $48.4 million of depreciation and amortization expense. The change in our net loss of $15.4 million for the six months ended June 30, 2026 as compared to our net loss of $13.9 million for the six months ended June 30, 2025 primarily relates to an increase in interest expense of $1.7 million. For the six months ended June 30, 2026, NOI was $75.5 million on 36 properties, compared to $75.8 million for the six months ended June 30, 2025 on 35 properties. For the six months ended June 30, 2026, Same Store NOI decreased 2.8% to $73.6 million, compared to $75.8 million for the six months ended June 30, 2025. For the six months ended June 30, 2026, FFO totaled $32.6 million, or $1.28 per diluted share, compared to $34.3 million, or $1.34 per diluted share, for the six months ended June 30, 2025. For the six months ended June 30, 2026, Core FFO totaled $34.2 million, or $1.34 per diluted share, compared to $37.0 million, or $1.45 per diluted share, for the six months ended June 30, 2025. For the six months ended June 30, 2026, AFFO totaled $39.3 million, or $1.54 per diluted share, compared to $41.8 million, or $1.64 per diluted share, for the six months ended June 30, 2025. Subsequent Events On July 27, 2026, the Company's Board approved a quarterly dividend of $0.53 per share, payable on September 30, 2026 to stockholders of record on September 15, 2026. Second Quarter Earnings Conference Call NXRT will host a call on Tuesday, August 4, 2026, at 11:00 a.m. ET (10:00 a.m. CT), to discuss its 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: 814362322. A live audio webcast of the call will be available online at the Company's website, nxrt.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. About NXRT NexPoint Residential Trust, Inc. is a publicly traded real estate investment trust ("REIT"), with its common stock listed on the New York Stock Exchange and NYSE Texas, Inc. 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. Our filings with the Securities and Exchange Commission (the "SEC") are available on our website, nxrt.nexpoint.com, under the "Financials" tab. Cautionary Statement Regarding Forward-Looking Statements This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's current expectations, assumptions and beliefs. Forward-looking statements can often be identified by words such as "expect," "anticipate," "estimate," "may," "plan," "believe" and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding NXRT's business and industry in general, forecasted submarket deliveries, 2026 full year guidance for earnings (loss) per diluted share and Core FFO per diluted share and the related components and assumptions, including acquisitions and dispositions, shares outstanding, and same store growth projections, NXRT's net asset value and the related components and assumptions, including estimated value-add expenditures, debt payments, outstanding debt, and shares outstanding, net income and NOI guidance for the full year and third quarter of 2026 and the related assumptions, planned value-add programs, including projected average rehab costs, rent change and return on investment, and expected settlement of interest rate swaps and the effect on the debt maturity schedule and rehab budgets. They are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement, including those described in greater detail in our filings with the SEC, 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. FFO, Core FFO and AFFO The following table reconciles our calculations of FFO, Core FFO and AFFO to net loss, the most directly comparable GAAP financial measure, for the three and six months ended June 30, 2026 and 2025 (in thousands, except per share amounts): Definitions and Reconciliations of Non-GAAP Measures Definitions This presentation 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 (loss), balance sheets or statements of cash flows of the Company. The non-GAAP financial measures used within this presentation are net operating income ("NOI"), funds from operations attributable to common stockholders ("FFO"), FFO per diluted share, Core FFO, Core FFO per diluted share, adjusted FFO ("AFFO"), AFFO per diluted share and net debt. NOI is a non-GAAP financial measure of performance. NOI is used by investors and our management to evaluate and compare the performance of our properties to other comparable properties, to determine trends in earnings and to compute the fair value of our properties as NOI is calculated by adjusting net income (loss) to add back (1) interest expense, (2) advisory and administrative fees, (3) depreciation and amortization expenses, (4) corporate income and corporate general and administrative expenses that are not reflective of operations of the properties, (5) casualty-related expenses/(recoveries) and casualty loss, (6) property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on behalf of the Company at the property for expenses such as legal, professional, centralized leasing service and franchise tax fees and (7) equity in earnings of affiliate. We define "Same Store NOI" as NOI for our properties that are comparable between periods. We view Same Store NOI as an important measure of the operating performance of our properties because it allows us to compare operating results of properties owned for the entirety of the current and comparable periods and therefore eliminates variations caused by acquisitions or dispositions during the periods. FFO is defined by the National Association of Real Estate Investment Trusts ("NAREIT"), as net income (loss) computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization. We compute FFO in accordance with NAREIT's definition. Our presentation differs slightly in that we begin with net income (loss) before adjusting for amounts attributable to redeemable noncontrolling interests in the OP and we show the combined amounts attributable to such noncontrolling interests as an adjustment to arrive at FFO attributable to common stockholders. Core FFO makes certain adjustments to FFO, which are not representative of the ongoing operating performance of our Portfolio. Core FFO adjusts FFO to remove items such as loss on extinguishment of debt and modification costs, casualty-related expenses/(recoveries) and loss (gain), the amortization of deferred financing costs, mark-to-market gains or losses related to interest rate cap agreements not designated as hedges for accounting purposes, and the noncontrolling interests (as described above) related to these items. AFFO makes certain adjustments to Core FFO in order to arrive at a more refined measure of the operating performance of our portfolio. There is no industry standard definition of AFFO and practice is divergent across the industry. AFFO adjusts Core FFO to remove items such as equity-based compensation expense and the related noncontrolling interests (as described above) related to this item. Net debt is calculated by subtracting cash and cash equivalents and restricted cash held for value-add upgrades and green improvements from total debt outstanding. We believe that the use of NOI, FFO, Core FFO, AFFO and net debt, combined with the required GAAP presentations, improves the understanding of operating results and debt levels of REITs among investors and makes comparisons of operating results and debt levels among such companies more meaningful. While NOI, FFO, Core FFO, AFFO and net debt are relevant and widely used measures of operating performance and debt levels of REITs, they do not represent cash flows from operations, net income (loss) or total debt as defined by GAAP and should not be considered an alternative or substitute to those measures in evaluating our liquidity, operating performance and debt levels. NOI, FFO, Core FFO and AFFO do not purport to be indicative of cash available to fund our future cash requirements. We present net debt because we believe it provides our investors a better understanding of our leverage ratio. Net debt should not be considered an alternative or substitute to total debt, as we may not always be able to use our available cash to repay debt. Our computation of NOI, FFO, Core FFO, AFFO and net debt may not be comparable to NOI, FFO, Core FFO, AFFO and net debt reported by other REITs. For a more complete discussion of NOI, FFO, Core FFO and AFFO, see our most recent Annual Report on Form 10-K and our other filings with the SEC. Reconciliations NOI and Same Store NOI The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles NOI and our Same Store NOI for the three and six months ended June 30, 2026 and 2025 to net loss, the most directly comparable GAAP financial measure (in thousands): Reconciliation of Debt to Net Debt Guidance Reconciliations of NOI, Same Store NOI, FFO, Core FFO and AFFO The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles our 2026 NOI guidance to net loss (the most directly comparable GAAP financial measure) guidance for the periods presented below (in thousands): The following table reconciles our FFO, Core FFO and AFFO guidance to our net loss (the most directly comparable GAAP financial measure) guidance for the year ended December 31, 2026 (in thousands, except per share data): NOI The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles NOI for the three months ended March 31, 2026 and the year ended December 31, 2025 to net loss, the most directly comparable GAAP financial measure (in thousands): The following table, reconciles FFO, Core FFO and AFFO for the three months ended March 31, 2026 and the year ended December 31, 2025 to net loss, the most directly comparable GAAP financial measure (in thousands): Contact:Investor RelationsKristen [email protected](214) 276-6300Media inquiries: [email protected] View original content to download multimedia:https://www.prnewswire.com/news-releases/nexpoint-residential-trust-inc-reports-second-quarter-2026-results-302842242.html

This article first appeared on GuruFocus. Core FFO: $16.9 million, or $0.66 per diluted share, a penny ahead of consensus, compared to $18 million, or $0.71, a year ago. FFO: $15.2 million, or $0.60 per share. AFFO: $19.7 million, or $0.77 per share. 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. Net Income: $6 million, or $0.34 per diluted share, compared to a net loss of $0.28 per share in Q2 2025. 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; full-year 2026 projected at approximately $71.2 million. Same-Store Operating Expenses: Up 2.4% year over year; full-year growth outlook lowered to approximately 2.1% at the midpoint. Real Estate Taxes: Down 3.5% year over year. Insurance: Down 11.7% on the April renewal. Payroll: Down 1% year over year. Repair and Maintenance: Up 13.9% year over year. Marketing: Up 38.2% year over year. Utilities: Up 6.1% year over year. Other Income: Up 29.2% for the quarter. Full-Year 2026 Core FFO Guidance: Lowered to a range of $2.35 to $2.54 per diluted share, at a midpoint of $2.45, down from a prior midpoint of $2.57. Full-Year 2026 Same-Store NOI Guidance: Lowered to a range of -2.5% to 0.5%, at a midpoint of -1%, from a prior midpoint of 0.5%. Dividend: Declared a dividend of $0.53 per share, payable September 30th. Total Indebtedness: Approximately $1.6 billion at an adjusted weighted average interest rate of approximately 3.58%. Liquidity: Approximately $133.5 million total available, including $14.6 million of unrestricted cash and $118.9 million of undrawn credit facility capacity. Value-Add Upgrades: Completed 459 full and partial upgrades, with 258 upgraded units at an average monthly rent premium of $89 and a 23% return. Warning! GuruFocus has detected 5 Warning Signs with NXRT. Is NXRT 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. NexPoint Residential Trust Inc (NYSE:NXRT) reported Q2 2026 core FFO of $0.66 per share, beating consensus estimates by a penny. Blended lease trade-outs turned positive in July at +30 basis points, marking the first positive print since early 2025 and showing a clear month-over-month improvement. Same-store operating expenses are trending lower, with full-year expense growth guidance improved by 140 basis points to 2.1%, driven by declines in real estate taxes, insurance, and payroll. The company's value-add renovation program continues to deliver strong returns, with completed upgrades generating an average monthly rent premium of $89 and a 23% return. The supply-demand backdrop is improving significantly, with national deliveries at decade lows and 2/3 of the company's submarkets having less than 2% active annual inventory growth. Concession utilization was cut roughly in half from 55.6% in Q1 to 27.7% in Q2, with Florida dropping from 87.6% to just 4.8% utilization. NexPoint Residential Trust Inc (NYSE:NXRT) lowered its full-year 2026 core FFO guidance 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 and the roll-off of swap protection in September, is the largest driver of the guidance reduction, costing approximately $0.16 per share. Same-store revenue growth guidance was reduced by 90 basis points to roughly 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. Occupancy gave back approximately 40 basis points in June as the company prioritized pricing over occupancy, with physical occupancy closing the quarter at 93.6%. Repair and maintenance costs increased 13.9% year-over-year, driven by a fiber build-out in four markets, and marketing expenses rose 38.2% due to increased lead generation at underperforming properties. Q: What constitutes a "clean inflection" in the operating environment, and how does it shape the outlook for 2027?A: Matt McGraner, Chief Investment Officer, clarified that the "clean inflection" refers to achieving positive new lease rates. The guidance revision is concentrated in only 4-5 assets, which account for about $2.2 million of gross potential rent revisions. The new guidance implies slightly negative new lease pricing in Q3, turning mildly positive in Q4, which would mark the clean inflection point. Q: Can you explain the discrepancy between the reported 93.6% occupancy and the average occupancy, and what drove the slight giveback in occupancy?A: Bonner McDermott, VP of Asset and Investment Management, clarified that the 93.6% is a point-in-time physical occupancy as of June 30th, while the average financial occupancy for the quarter was about 90.8%. The company deliberately held rates on new leases, which cost roughly 40 basis points of occupancy between early June and the end of the month. The strategy prioritized pricing over occupancy, and with the positive blended rate inflection in July, pushing pricing remains the focus. Q: What are the primary drivers behind the revised full-year 2026 core FFO guidance?A: Paul Richards, CFO, explained the $0.12 reduction in core FFO guidance to a $2.45 midpoint is driven by five components: interest expense (down $0.06) due to higher forward curve assumptions and fewer swap inflows; same-store revenue (down $0.09) concentrated in Nashville; same-store expense (up $0.06) from a 140 basis point improvement in expense growth outlook; interest income (up $0.05) from a bridge lending investment; and favorable corporate G&A (up $0.02). Q: How is the company's leasing trajectory improving, and what are the latest trends in lease trade-outs?A: Matt McGraner highlighted that blended trade-outs improved from -1.7% in April to -1.2% in May, -0.5% in June, and turned positive at +0.3% in July. New lease trade-outs improved from -5.4% in April to -2.3% in July, a 310 basis point improvement, while renewals held above 2%. This marks the first positive blended print since early 2025. Q: What is driving the significant improvement in same-store expense growth, and where is the pressure coming from?A: Paul Richards noted that full-year same-store expense growth guidance was lowered by 140 basis points to 2.1% at the midpoint. The improvement is broad-based, led by real estate taxes (down 3.5%), insurance (down 11.7% on the April renewal), and payroll (down 1%). Pressure remains in repair and maintenance (up 13.9%) and marketing (up 38.2%), with the R&M increase concentrated in fiber build-out markets, offset by resident amenity fee income growth of 29.2%. Q: How is the supply and demand backdrop evolving in the company's Sun Belt markets?A: Matt McGraner stated that national deliveries peaked near 700,000 units in 2024, with starts down roughly 70% from the peak. Two-thirds of the company's submarkets have less than 2% active annual inventory growth, and more than half have fewer than 500 units under development. Net absorption was positive 22,852 units in Q2, and the supply cliff remains intact, leading to a clean inflection approaching in late 2026 and into 2027. Q: What is the status of the Mountain community acquisition in North Las Vegas?A: Matt McGraner reported that the 321-unit community, purchased in December 2025 for $73.25 million, closed Q2 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's technology platform contributing to operational performance?A: Matt McGraner explained that the two-layer model, using VH Management's funnel leasing platform and NexPoint Intelligence at the advisory level, converted 24,703 leads into 1,321 applications and 1,226 move-ins in Q2. The lead-to-application rate improved to 5.3%, and self-guided touring scaled to 26.2% of tours, up from 18.7% in Q1, capturing after-hours demand. Q: What is the company's capital allocation strategy given the significant discount to NAV?A: Paul Richards noted that the stock trades at more than a 40% discount to the estimated NAV midpoint of $46.76 per share. Matt McGraner emphasized that capital allocation priorities are to close the value gap through operating execution into 2027, recycling capital, and buying back stock. The company has no scheduled debt maturities until 2028, with net leverage at about 57% of internal NAV estimates. Q: How are concessions trending, and what is the outlook for the remainder of the year?A: Matt McGraner reported that concession utilization was cut roughly in half from 55.6% in Q1 to 27.7% in Q2, with average weeks free falling from 2.22 to 1.1 weeks. 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, and the company projects utilization will fall another 50 basis points by year-end. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Banc of California (BANC) came out with quarterly earnings of $0.13 per share, missing the Zacks Consensus Estimate of $0.4 per share. This compares to earnings of $0.31 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of -67.50%. A quarter ago, it was expected that this banking service and lending company would post earnings of $0.38 per share when it actually produced earnings of $0.39, delivering a surprise of +2.63%. Over the last four quarters, the company has surpassed consensus EPS estimates three times. Banc of California, which belongs to the Zacks Banks - Southwest industry, posted revenues of $273.15 million for the quarter ended June 2026, missing the Zacks Consensus Estimate by 8.03%. This compares to year-ago revenues of $272.85 million. The company has topped consensus revenue estimates two 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. Banc of California shares have added about 9.8% since the beginning of the year versus the S&P 500's gain of 8.5%. While Banc of California 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 Banc of California was mixed. 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 #3 (Hold) for the stock. So, the shares are expected to perform in line with 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 $307.09 million in revenues for the coming quarter and $1.71 on $1.21 billion 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, Banks - Southwest is currently in the top 18% 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. Another stock from the broader Zacks Finance sector, NexPoint Residential Trust Inc. (NXRT), has yet to report results for the quarter ended June 2026. The results are expected to be released on August 4. This real estate investment trust is expected to post quarterly earnings of $0.61 per share in its upcoming report, which represents a year-over-year change of -23.8%. The consensus EPS estimate for the quarter has been revised 9.8% higher over the last 30 days to the current level. NexPoint Residential Trust Inc.'s revenues are expected to be $63.91 million, up 1.2% 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 Banc of California, Inc. (BANC) : Free Stock Analysis Report NexPoint Residential Trust, Inc. (NXRT) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Q1 results and outlook: NexPoint reported a net loss of $6.8 million and Core FFO of $17.3 million ($0.68 per share), slightly above consensus, and reaffirmed full‑year Core FFO guidance of $2.42–$2.71 while keeping the dividend at $0.53 per share with roughly 1.21x coverage at the midpoint; liquidity stands at about $161.5 million and there are no debt maturities until 2028. Interest expense headwind: Core FFO was pressured by higher interest costs as swap benefits fell (from $8.4M to $5.5M) and a higher forward SOFR curve added roughly $2.2M of incremental interest, raising full‑year interest expense guidance to $69.3 million; the company has swaps covering 62% of floating debt and is evaluating additional hedges. Operating trends improving but mixed: Same‑store NOI fell ~2.7% with occupancy rising to 93.6% (April ~93.9%), bad debt improved materially to 55 bps of GPR from 102 bps, and concessions (1.9% of GPR) are expected to decline meaningfully through 2026 toward roughly 0.4–1.0% by year‑end. Interested in NexPoint Residential Trust, Inc.? Here are five stocks we like better. NexPoint Residential Trust (NYSE:NXRT) reported a first-quarter 2026 net loss of $6.8 million, or $0.27 per diluted share, on total revenue of $63.5 million, Executive Vice President and Chief Financial Officer Paul Richards said on the company’s earnings call. The result compared with a net loss of $6.9 million, or $0.27 per diluted share, on $63.2 million of revenue in the first quarter of 2025. Richards said total NOI was $37.6 million across 36 properties, including Sedona at Lone Mountain, which was acquired in December. On a same-store basis across 35 legacy properties and 12,984 units, total income was $61.4 million, down 2.2% year-over-year, while operating expenses declined 1.6% to $24.8 million. Same-store NOI was $36.7 million, down 2.7%, with an NOI margin of 59.8%. Same-store occupancy ended the quarter at 93.6%. → Homebuilder Earnings: D.R. Horton Sticks Out as Pulte & NVR Sales Tank The company posted first-quarter Core FFO of $17.3 million, or $0.68 per diluted share, which Richards said was $0.03 above consensus. Core FFO per share was $0.75 in the prior-year quarter. Richards attributed the year-over-year decline in Core FFO primarily to higher interest expense, noting that 2026 includes “a meaningful interest expense headwind as certain swap positions fall off.” Total interest expense was $15.4 million versus $14.4 million a year earlier, with the benefit from swaps declining to $5.5 million from $8.4 million. → Meta Platforms Earnings Preview: What to Watch in Q1 2026 Report Since initial guidance was issued in February, Richards said the forward SOFR swap curve moved 7 to 47 basis points higher across the remaining quarters of 2026, adding about $2.2 million, or roughly $0.08 per diluted share, of incremental interest expense versus original assumptions. Full-year 2026 interest expense is now projected at $69.3 million compared to $67.1 million in the company’s original model. Richards said interest rate swaps fix the rate on $917.5 million, or 62%, of floating-rate mortgage debt, and the company is evaluating opportunities to add hedges “when risk-adjusted economics are compelling.” He pointed to a prior $100 million JPMorgan forward swap executed last April at 3.49% as an example of acting opportunistically. → Palantir Is Down 30%: Noise? Or a Signal to Accumulate? Executive Vice President and Chief Investment Officer Matthew Ryan McGraner said the company’s leasing metrics improved through the quarter and into April. Across 1,388 new leases signed in the first quarter, new lease trade-outs were negative 6.6%, or a $97 per unit decrease, while renewals (1,528 transactions) produced a 2.3% increase, or $33 per unit. The blended change across 2,916 transactions was negative 1.9%. McGraner emphasized the monthly cadence, saying new lease trade-outs improved from negative 7% in January to negative 5.6% in March and to approximately negative 4% in April month-to-date. Blended trade-outs narrowed from negative 1.9% in January to negative 1.7% in March and to roughly negative 1.2% in April month-to-date. On occupancy, McGraner said the same-store portfolio ended the first quarter at 93.6% physical occupancy, up from 92.6% at the start of the quarter. April month-to-date physical occupancy improved to 93.9%, while lease percentage reached 95.9%, which he said was the highest since the third quarter of 2025. Citing ApartmentIQ data, McGraner said the portfolio outperformed market comparables by 136 basis points in occupancy. McGraner also pointed to improved collections, stating that bad debt was 55 basis points of gross potential rent in the quarter, down from 1.02% of GPR a year earlier. He described the improvement as structural and tied to AI-enhanced screening and centralized credit evaluation. Concessions were another focus. McGraner said portfolio-level concessions were 1.9% of GPR, compared to 5.7% for the competitive set in the company’s submarkets, according to ApartmentIQ. Total concessions were approximately $1.15 million in the quarter, up from $271,000 in the first quarter of 2025. He said 39% of the year-over-year increase was attributable to one asset, Avana at Pembroke Pines, where competitive supply entered the submarket in late 2025. McGraner said the company expects concession utilization to decline meaningfully through 2026, projecting concessions at roughly 1% of GPR in the second quarter, 50 basis points in the third quarter, and 40 basis points in the fourth quarter, while financial occupancy is forecast to improve from 92.8% in the first quarter to 94% in the second quarter and 94.1% in the third quarter. On expenses, Richards said same-store payroll declined 4.3%, which he attributed to the company’s centralized operating model and an enhanced leasing platform. He also reported year-over-year declines in real estate taxes (down 11.2%) and insurance (down 23.5%), partially offset by a 15.2% increase in repairs and maintenance and a 50.5% increase in marketing spending. Richards said the repairs and maintenance increase reflected accelerated deferred maintenance as part of a “portfolio quality initiative” and elevated one-time costs related to lender-required capex at certain Florida properties. He characterized those items as episodic and said the overall expense outlook remained steady relative to the original model. On insurance, Richards said the company’s April 1 policy renewal produced a 13.3% year-over-year reduction, better than the strongest end of its previously guided range of 0% to negative 10%. During the quarter, the company completed 252 full and partial unit upgrades and leased 225 upgraded units, achieving an average monthly rent premium of $69 and a 19% ROI, Richards said. Since inception, he said the company has completed more than 10,100 full and partial interior upgrades with average monthly premiums of 13.3% and an inception-to-date ROI of 20.7%. Richards said the company declared a $0.53 per share dividend paid March 31, 2026, and reiterated commitment to the current distribution level. At the midpoint of Core FFO guidance, he said dividend coverage is approximately 1.21 times, with expectations for coverage to improve as revenue trends strengthen through peak season and into 2027. On the balance sheet, Richards noted that on Jan. 30, 2026, the company entered into a $40.3 million mortgage loan secured by Sedona at Lone Mountain at 55% loan-to-value. The loan matures Feb. 1, 2033, with interest based on 30-day average SOFR plus a 1.23% margin. Total indebtedness at March 31, 2026 was approximately $1.6 billion at an adjusted weighted average interest rate of 3.3%. The company ended the quarter with $18.5 million of unrestricted cash and $143 million of undrawn capacity on its credit facility, providing about $161.5 million of liquidity, Richards said. He added that the company has no scheduled debt maturities until 2028. Richards reaffirmed full-year 2026 Core FFO guidance of $2.42 to $2.71 per diluted share and reaffirmed the company’s same-store NOI outlook, with midpoint guidance implying negative 0.5% growth. He said higher projected interest expense and a slightly lower-than-modeled first-quarter leasing environment were offset by better-than-expected insurance renewal results, expense discipline, and strategic fee income from the advisor private capital platform discussed by management. During the Q&A, McGraner said the company sees opportunity to increase renewals and retention, particularly in the summer months, and management discussed efforts to narrow the spread between leased and occupied percentages as peak leasing season begins. McGraner also provided additional detail on potential fee and interest income opportunities related to the NexPoint Delaware Statutory Trust platform, describing potential lending spreads and sponsor fee economics, while noting that the company is not embedding additional transactions in its 2026 guidance. NexPoint Residential Trust is a real estate investment trust focused on the acquisition, leasing and management of single‐family rental homes across the United States. The company targets suburban and Sun Belt markets with favorable demographic trends, seeking to build a diversified portfolio of standalone residences that serve the growing demand for quality rental housing. By concentrating on professionally managed homes rather than multi‐family apartments, NexPoint Residential Trust aims to offer tenants the benefits of privacy and space, while generating predictable rental income for investors. The firm’s investment strategy combines direct acquisitions of built single‐family homes with selective joint ventures and partnerships to optimize scale and geographic diversification. The article "NexPoint Residential Trust Q1 Earnings Call Highlights" was originally published by MarketBeat.