NexPoint Residential Trust Lowers 2026 Guidance as NOI Declines
The real estate investment trust reported a net loss attributable to common stockholders of $8.6 million for the second quarter.
NexPoint Residential Trust (NXRT), a residential real estate investment trust, reported a second-quarter net loss attributable to common stockholders of $8.6 million. The loss widened from $7.0 million in the same period last year, due to a $2.1 million increase in property operating expenses and a $0.7 million rise in interest expense.
Total revenues for the quarter rose to $64.6 million from $63.1 million in the prior-year period. However, Same Store net operating income decreased 2.9% to $36.9 million, compared to $38.0 million in the second quarter of 2024.
Funds from operations (FFO), Core FFO, and adjusted FFO (AFFO) attributable to common stockholders all declined year-over-year. FFO fell to $15.2 million from $16.9 million, Core FFO decreased to $16.9 million from $18.0 million, and AFFO dropped to $19.7 million from $20.3 million.
Operational metrics showed a mix of stability and pricing pressure. Same Store occupancy increased 30 basis points to 93.6%, while average effective rent decreased 0.9% to $1,487. Same Store blended lease trade-outs improved to -1.16% from -1.92% in the first quarter of 2025, though they remained 2.07% lower than the second quarter of 2024.
The company's value-add program saw improved returns, with an average monthly rent premium of $90.60 and a 23.0% return on investment, up from a $69 premium and 19.0% return in the first quarter. On June 5, 2025, the company deployed its first $22.1 million fixed-rate term loan for its DST bridge-lending initiative, which carries an interest rate of 10.00% per annum.
NexPoint Residential Trust revised its full-year 2025 guidance downward. The company lowered the mid-point for Core FFO per diluted share to $2.45 from $2.57, the Same Store NOI growth mid-point to -1.0% from -0.5%, and the Same Store rental income mid-point to -0.3% from 0.9%.
Total debt outstanding increased to $1.62 billion as of June 30, 2025, up from $1.50 billion in the second quarter of 2024. This increase pushed the leverage ratio, measured as total debt to market capitalization plus total debt, to 69% from 64%.