DALLAS, Nov. 27, 2024 /PRNewswire/ -- NexPoint Residential Trust, Inc. ("NXRT" or the "Company") (NYSE: NXRT) announced today the closing of 17-property agency mortgage refinancings through J.P. Morgan Chase Bank ("JP Morgan").
With the closing of these 17 loan agreements, and together with the 17 loan agreements previously entered on October 1, 2024, the Company has refinanced 34 loans for total gross proceeds of $1.469 billion, which, in the aggregate, represents approximately 97.8% of the Company's total outstanding debt. Notably, NXRT agreed to refinance at interest rate pricing improved from prior terms. This refinancing activity extends the Company's weighted average debt maturity schedule to approximately 6.82 years (from approximately 5.54 years) – after this refinancing activity, debt maturing through 2028 equates to approximately 2.2% of total debt (down from approximately 33% previously).
Holistically, these refinancings are expected to reduce NXRT's weighted average interest rate on total debt by 48 bps to 5.65% before the impact of interest rate swap contracts. Accounting for the hedging impact of the swaps, NXRT's adjusted weighted average interest rate is expected to be reduced from 3.44% to 2.95%. With the completion of these refinancings, the Company has no meaningful debt maturities until 2028.
"NXRT is pleased to announce the completion of the second half of this significant refinancing initiative, continuing to fortify our balance sheet and strengthen our relationship with JP Morgan. We identified this refinancing opportunity early in the year and we are thrilled to deliver what we believe to be a building block for growth and an excellent result for shareholders." said Matt McGraner, Chief Investment Officer.
Outstanding Debt Details | |||||||||||
Mortgage Debt | |||||||||||
The following table contains summary information concerning the mortgage debt of the Company as of November 26, 2024 ($ in 000s): | |||||||||||
Operating Properties | Type | Term | Outstanding | Interest Rate (2) | Maturity Date | ||||||
Arbors on Forest Ridge | Floating | 84 | $ 17,307 | 5.68 % | 12/1/2031 | (3) | |||||
Cutter's Point | Floating | 84 | 18,994 | 5.68 % | 12/1/2031 | (3) | |||||
The Summit at Sabal Park | Floating | 84 | 26,735 | 5.68 % | 12/1/2031 | (3) | |||||
Courtney Cove | Floating | 84 | 31,596 | 5.68 % | 12/1/2031 | (3) | |||||
The Preserve at Terrell Mill | Floating | 84 | 74,341 | 5.68 % | 12/1/2031 | (3) | |||||
Versailles | Floating | 84 | 26,108 | 5.68 % | 12/1/2031 | (3) | |||||
Seasons 704 Apartments | Floating | 84 | 33,960 | 5.68 % | 12/1/2031 | (3) | |||||
Madera Point | Floating | 84 | 29,676 | 5.68 % | 12/1/2031 | (3) | |||||
Venue at 8651 | Floating | 84 | 24,620 | 5.68 % | 12/1/2031 | (3) | |||||
Parc500 | Floating | 84 | 30,012 | 5.68 % | 12/1/2031 | (3) | |||||
Rockledge Apartments | Floating | 84 | 78,444 | 5.68 % | 12/1/2031 | (3) | |||||
Atera Apartments | Floating | 84 | 38,555 | 5.68 % | 12/1/2031 | (3) | |||||
Torreyana Apartments | Floating | 84 | 43,153 | 5.68 % | 12/1/2031 | (3) | |||||
Bloom | Floating | 84 | 60,848 | 5.68 % | 12/1/2031 | (3) | |||||
Bella Solara | Floating | 84 | 37,772 | 5.68 % | 12/1/2031 | (3) | |||||
Fairways at San Marcos | Floating | 84 | 55,056 | 5.68 % | 12/1/2031 | (3) | |||||
Creekside at Matthews | Floating | 84 | 28,703 | 5.68 % | 12/1/2031 | (3) | |||||
The Venue on Camelback | Floating | 84 | 36,465 | 5.68 % | 9/30/2031 | ||||||
Sabal Palm at Lake Buena Vista | Floating | 84 | 56,220 | 5.68 % | 9/30/2031 | ||||||
Cornerstone | Floating | 84 | 45,815 | 5.68 % | 9/30/2031 | ||||||
Versailles II | Floating | 84 | 15,706 | 5.68 % | 9/30/2031 | ||||||
Brandywine I & II | Floating | 84 | 59,526 | 5.68 % | 9/30/2031 | ||||||
Bella Vista | Floating | 84 | 37,400 | 5.68 % | 9/30/2031 | ||||||
The Enclave | Floating | 84 | 33,440 | 5.68 % | 9/30/2031 | ||||||
The Heritage | Floating | 84 | 29,810 | 5.68 % | 9/30/2031 | ||||||
Summers Landing | Floating | 84 | 14,135 | 5.68 % | 9/30/2031 | ||||||
Residences at Glenview Reserve | Floating | 84 | 33,271 | 5.68 % | 9/30/2031 | ||||||
Avant at Pembroke Pines | Floating | 84 | 248,185 | 5.68 % | 9/30/2031 | ||||||
Arbors of Brentwood | Floating | 84 | 39,977 | 5.68 % | 9/30/2031 | ||||||
The Verandas at Lake Norman | Floating | 84 | 30,113 | 5.68 % | 9/30/2031 | ||||||
Six Forks Station | Floating | 84 | 30,430 | 5.68 % | 9/30/2031 | ||||||
High House at Cary | Floating | 84 | 32,478 | 5.68 % | 9/30/2031 | ||||||
The Adair | Floating | 84 | 33,229 | 5.68 % | 9/30/2031 | ||||||
Estates on Maryland | Floating | 84 | 37,345 | 5.68 % | 9/30/2031 | ||||||
Residences at West Place | Fixed | 120 | 33,817 | 4.24 % | 10/1/2028 | ||||||
$ 1,503,242 | 5.65 % | ||||||||||
(1) | Mortgage debt that is non-recourse to the Company and encumbers the multifamily properties. |
(2) | Interest rate is based on a reference rate plus an applicable margin, except for fixed-rate mortgage debt. 30-Day Average SOFR was 4.69% as of November 25, 2024. |
(3) | The Company finalized a 7-year term refinance on 17 properties at SOFR plus a 1.09% margin. The refinance closed on November 26, 2024. |
Interest Rate Swap Agreements
As of November 26, 2024, the Company had the following outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk (dollars in thousands):
Effective Date | Termination Date | Counterparty | Notional Amount | Fixed Rate (1) | |||||||||
September 1, 2019 | September 1, 2026 | KeyBank | 100,000 | 1.4620 | % | ||||||||
September 1, 2019 | September 1, 2026 | KeyBank | 125,000 | 1.3020 | % | ||||||||
January 3, 2020 | September 1, 2026 | KeyBank | 92,500 | 1.6090 | % | ||||||||
March 4, 2020 | June 1, 2026 | Truist | 100,000 | 0.8200 | % | ||||||||
June 1, 2021 | September 1, 2026 | KeyBank | 200,000 | 0.8450 | % | ||||||||
June 1, 2021 | September 1, 2026 | KeyBank | 200,000 | 0.9530 | % | ||||||||
March 1, 2022 | March 1, 2025 | Truist | 145,000 | 0.5730 | % | ||||||||
March 1, 2022 | March 1, 2025 | Truist | 105,000 | 0.6140 | % | ||||||||
1,067,500 | 0.9807 | % | (2) | ||||||||||
(1) | The floating rate option for the interest rate swaps is the daily compounded average of SOFR plus a 0.11448% adjustment ("Adjusted SOFR"). As of November 25, 2024, Adjusted SOFR was 4.69%. |
(2) | Represents the weighted average fixed rate of the interest rate swaps. |
As of November 26, 2024 we had total indebtedness of $1.503 billion at an adjusted weighted average interest rate of 5.65%, of which $1.469 billion was debt with a floating interest rate. Interest rate swap agreements effectively covered 72.6% of our $1.469 billion of floating rate mortgage debt outstanding. For purposes of calculating the adjusted weighted average interest rate of the total indebtedness, we have included the weighted average fixed rate of 0.9807% for Adjusted SOFR on the $1.1 billion notional amount of interest rate swap agreements that we have entered into as of November 26, 2024.
About NXRT
NexPoint Residential Trust is a publicly traded REIT, with its shares listed on the New York Stock Exchange under the symbol "NXRT," primarily focused on acquiring, owning and operating well-located middle-income multifamily properties with "value-add" potential in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. NXRT is externally advised by NexPoint Real Estate Advisors, L.P., an affiliate of NexPoint Advisors, L.P., an SEC-registered investment advisor, which has extensive real estate experience.
Cautionary Statement Regarding Forward-Looking Statements
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's current expectations, assumptions and beliefs. Forward-looking statements can often be identified by words such as "believe," "continue," "expect," "will," "plan" and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding the expected reduction in NXRT's weighted average interest rate before and after the effect of interest rate swaps, the belief that the refinancings will continue to fortify our balance sheet and strengthen our relationship with JP Morgan and the belief that the refinancings is a building block for growth. 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 our filings with the Securities and Exchange Commission (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.
Contact:
Kristen Griffith
Investor Relations
IR@nexpoint.com
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