EX-99.2 3 ex_327660.htm EXHIBIT 99.2 HTML Editor

Exhibit 99.2

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Cautionary Statements

 

FORWARD LOOKING STATEMENTS 

 

This presentation contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995 that are based on management's current expectations, assumptions and beliefs. Forward-looking statements can often be identified by words such as "anticipate", "estimate", "expect," "intend," "may", "should" and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding the Company’s business and industry in general, estimated yields on investment, guidance for financial results for the first quarter of 2022 and full year 2022, including the Company's estimated net income, earnings available for distribution (“EAD”), cash available for distribution (“CAD”) and dividend coverage ratios and related assumptions. They are not guarantees of future results and forward-looking statements are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement, including the ultimate duration and severity of the COVID-19 pandemic, and the effectiveness of actions taken, or actions that may be taken, by governmental authorities to contain the outbreak or treat its impact, as well as those described in greater detail in our filings with the Securities and Exchange Commission, particularly those described in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q. Readers should not place undue reliance on any forward-looking statements and are encouraged to review the Company’s Annual Report on Form 10-K and the Company's other filings with the SEC for a more complete discussion of risks and other factors that could affect any forward-looking statement. The statements made herein speak only as of the date of this presentation and except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements.

 

NON-GAAP FINANCIAL MEASURES 

 

This 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, balance sheets or statements of cash flows of the Company. The non-GAAP financial measures used within this presentation are EAD and CAD. EAD has replaced our prior presentation of Core Earnings. In addition, Core Earnings results from prior reporting periods have been relabeled EAD. In line with evolving industry practices, we believe EAD more accurately reflects the principal purpose of the measure than the term Core Earnings and will serve as a useful indicator for investors in evaluating our performance and our long-term ability to pay distributions.

 

EAD is defined as the net income (loss) attributable to our common stockholders computed in accordance with GAAP inlcuding net income (loss) attributable to non-controlling interests, including realized gains and losses not otherwise included in net income (loss), excluding any unrealized gains or losses or other similar non-cash items that are included in net income (loss) for the applicable reporting period, regardless of whether such items are included in other comprehensive income (loss), or in net income (loss) and adding back amortization of stock-based compensation. We use EAD to evaluate our performance which excludes the effects of certain GAAP adjustments and transactions that we believe are not indicative of our current operations and to assess our long-term ability to pay distributions. We believe providing EAD as a supplement to GAAP net income (loss) to our investors is helpful to their assessment of our performance and our long-term ability to pay distributions. We also use EAD as a component of the management fee paid to NREA (as defined below), our manager. EAD does not represent net income or cash flows from operating activities and should not be considered as an alternative to GAAP net income, an indication of our GAAP cash flows from operating activities, a measure of our liquidity or an indication of funds available for our cash needs. Our computation of EAD may not be comparable to EAD reported by other REITs.

 

We calculate CAD by adjusting EAD by adding back amortization of premiums and by removing accretion of discounts and non-cash items, such as stock dividends. We use CAD to evaluate our performance and our current ability to pay distributions. We also believe that providing CAD as a supplement to GAAP net income (loss) to our investors is helpful to their assessment of our performance and our current ability to pay distributions. CAD does not represent net income or cash flows from operating activities and should not be considered as an alternative to GAAP net income, an indication of our GAAP cash flows from operating activities, a measure of our liquidity or an indication of funds available for our cash needs. Our computation of CAD may not be comparable to CAD reported by other REITs.

 

ADDITIONAL INFORMATION

 

For additional information, see our filings with the SEC. Our filings with the SEC are available on our website, nref.nexpoint.com, under the “Financials" tab.

 

 

 

 

 

 

 

 

 

 

NEXPOINT REAL ESTATE FINANCE Page | 2
 
 

 

Company Overview

 

NexPoint Real Estate Finance, Inc. (“NREF” or the “Company”) is a publicly traded mortgage REIT (“mREIT”), with its shares listed on the New York Stock Exchange. The company concentrates on investments in real estate sectors where senior management has operating expertise, including multifamily, single-family rental (”SFR”), and self-storage, in the top 50 metropolitan statistical areas. The Company targets lending or investing in stabilized properties or properties with “light-transitional” business plans.

 

NREF is externally managed by NexPoint Real Estate Advisors VII, L.P. (“NREA”), an affiliate of NexPoint Advisors, L.P., an SEC-registered investment advisor with extensive real estate and fixed income experience.

 

 

2.8%

DISCOUNT TO BOOK1

9.6%

IMPLIED DIVIDEND YIELD2

8.2%

INSIDER OWNERSHIP3

 

 

NREF Total Return Vs Peers

 
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(1)

BASED ON December 31, 2021, BOOK VALUE INCLUDING REDEEMABLE NCI IN THE OPERATING PARTNERSHIP AS REPORTED BY THE COMPANY IN THIS PRESENTATION AND THE SHARE PRICE AS OF CLOSE OF TRADING February 16, 2022
(2)

IMPLIED DIVIDEND YIELD IS CALCULATED USING THE ANNOUNCED 1Q DIVIDEND OF $0.500 PER COMMON SHARE, ANNUALIZED, DIVIDED BY THE SHARE PRICE AS OF CLOSE OF TRADING ON February 16, 2022
(3)

AS OF THE CLOSE OF TRADING ON December 31, 2021
(4)

BLOOMBERG. TOTAL RETURN, INCLUDING DIVIDENDS, AS OF CLOSE OF TRADING ON February 16, 2022

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEXPOINT REAL ESTATE FINANCE Page | 3
 
 

 

Q4 2021 Highlights

 

FINANCIAL

●

4Q 2021 net income of $21.0MM, with net income attributable to redeemable noncontrolling interests of $7.6MM, net income attributable to common stockholders of $12.4MM, or $0.92 per diluted common share; compared to net income of $25.2MM, with net income attributable to redeemable noncontrolling interests of $11.1MM, net income attributable to common stockholders of $13.2MM, or $1.17 per diluted common share in 3Q 20211  
  ● 4Q 2021 earnings available for distribution of $11.8MM, or $0.54 per diluted share compared to $10.5MM, or $0.51 per diluted share in 3Q 20212
  ● Book value of $461.93MM, or $21.51 per common share, including redeemable non-controlling interests in the Operating Partnership and excluding Series A Preferred Stock; a 2.2% increase over 3Q 2021 book value on a per share basis
  ● Paid a 4Q 2021 dividend of  $0.475 per common share on December 30, 2021
  ● Announced 1Q 2022 dividend of $0.500 per common share to be paid on March 31, 2022
     
     
PORTFOLIO ● Outstanding total portfolio of $1.7B, comprised of 69 investments 3
  ● SFR, multifamily and life sciences represent 44.9%, 53.2% and 1.9% of our debt portfolio, respectively
  ● Weighted average loan to value (“LTV”) 4 and debt service coverage ratio (“DSCR”) on our SFR, CMBS, CMBS IO strips, preferred, mezz and convertible note investments are 67.9% and 1.99x3, respectively
  ● As of February 16, 2022, there are no loans currently in forbearance in our portfolio
  ● During 4Q 2021 we originated mezzanine and convertible notes with an aggregate principal amount of $40.8MM
  ● On October 25, 2021, a $12.1MM single-family rental first mortgage loan was repaid in full
  ● On November 8, 2021, we purchased $30.0MM of a preferred equity investment with a current yield of 10.0%
  ● On December 9, 2021, we purchased a $61.3MM floating rate Freddie Mac K-Series B-Piece, with an estimated yield of SOFR +525 bps
  ● On December 27, 2021, a $8.1 MM single-family rental first mortgage loan was repaid in full
  ● On December 31, 2021, we purchased a 204-unit multifamily property in Charlotte, North Carolina for $62.0MM
     

CAPITALIZATION

 ●

As of February 16, 2022, the Company’s debt to book value ratio was 2.53x  
  ● Secured credit facility, matched in structure and term of the underlying SFR loans, with a weighted average remaining term of 6.5 years as of December 31, 2021 
  ● As of February 16, 2022, outstanding repo financing was $302.7MM, which equates to a 57.5% advance rate on our CMBS B-Piece and IO Strip portfolio5
  ● On December 20, 2021, NREF issued $60.0MM of 5.75% Senior Unsecured Notes due 2026

 

 

(1)

DILUTED EPS ASSUMES VESTING OF ALL OUTSTANDING UNVESTED RESTRICTED STOCK UNITS AND CONVERSION OF ALL REDEEMABLE NON-CONTROLLING INTERESTS

(2)

EAD PER DILUTED SHARE ASSUMES VESTING OF ALL OUTSTANDING UNVESTED RESTRICTED STOCK UNITS AND CONVERSION OF ALL REDEEMABLE NON-CONTROLLING INTERESTS. SEE “RECONCILIATIONS” SLIDE

(3)

AS OF February 16, 2022 AND CMBS B-PIECES REFLECTED ON AN UNCONSOLIDATED BASIS

(4)

LOAN TO VALUE IS GENERALLY BASED ON THE INITIAL LOAN AMOUNT DIVIDED BY THE AS–IS APPRAISED VALUE AS OF THE DATE THE LOAN WAS ORIGINATED OR BY THE CURRENT PRINCIPAL AMOUNT AS OF THE DATE OF THE MOST RECENT AS-IS APPRAISED VALUE. FOR OUR CMBS B-PIECES, LTV IS BASED ON THE WEIGHTED AVERAGE LTV OF THE UNDERLYING LOAN POOL

(5)

BASED ON ACTUAL COLLATERAL POSTED

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEXPOINT REAL ESTATE FINANCE Page | 4
 
 

 

4Q 2021 Earnings and Book Value

 

 

●

Net interest income of $8.0MM, an increase of 22.0% over 3Q 2021
 

●

Net income of $21.0MM, with net income attributable to redeemable noncontrolling interests of $7.6MM, net income attributable to common stockholders of $12.4MM, or $0.92 per diluted common share; compared to net income of  $25.2MM, with net income attributable to redeemable noncontrolling interests of $11.1MM, net income attributable to common stockholders of $13.2MM, or $1.17 per diluted common share in 3Q 2021
 

●

Earnings available for distribution of $11.8MM, or $0.54 per diluted common share; compared to $10.5MM, or $0.51 per diluted common share in 3Q 2021
 

●

BV per common share including redeemable NCI in the Operating Partnership increased 2.2% to $21.51/share, compared to $21.04/share at the end of 3Q 2021

 

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NEXPOINT REAL ESTATE FINANCE Page | 5
 
 

Net Income, EAD, CAD and Guidance

 

NET INCOME/EAD/CAD:

 

 

●

Net income per diluted common share for the 4Q 2021 is $0.92, compared to $1.17 per diluted common share reported in 3Q 2021
 

●

4Q 2021 EAD per diluted share is $0.54, an increase of 5.9% compared to 3Q 2021 reported EAD per diluted share
 

●

4Q 2021 CAD per diluted share is $0.63, an increase of 1.6% over 3Q 2021 reported CAD per diluted share

 

Q1 GUIDANCE:

 

 

●

1Q 2022 EAD per diluted share guidance is $1.221 at the mid-point
 

●

1Q 2022 CAD per diluted share guidance is $1.571 at the mid-point

 

FULL YEAR GUIDANCE:

 

●

2022 EAD per diluted share guidance is $2.722 at the mid-point
 

●

2022 CAD per diluted share guidance is $3.212 at the mid-point

 

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(1)

NET INCOME IN 1Q 2022 IS ESTIMATED TO BE BETWEEN $25.1MM AND $27.3MM. SEE “RECONCILIATIONS” SLIDES

(2)

NET INCOME IN 2022 IS ESTIMATED TO BE BETWEEN $56.1MM AND $58.3MM. SEE “RECONCILIATIONS” SLIDES

 

NEXPOINT REAL ESTATE FINANCE Page | 6
 
 

 

Dividend and EAD/CAD Coverage

 

4Q 2021 DIVIDEND:

 

 

●

4Q dividend of $0.475/common share was paid December 30, 2021
 

●

4Q 2021 EAD dividend coverage is 1.14x
 

●

4Q 2021 CAD dividend coverage is 1.33x

 

1Q 2022 DIVIDEND:

 

 

●

1Q 2022 dividend of $0.500 per common share declared by the Board of Directors to be paid on March 31, 2022, a 5.3% increase from 4Q 2021 dividend per common share
 

●

1Q 2022 estimated EAD dividend coverage of 2.44x1 at the mid-point
 

●

1Q 2022 estimated CAD dividend coverage of 3.14x1 at the mid-point

 

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(1)

NET INCOME IN 1Q 2022 IS ESTIMATED TO BE BETWEEN $25.1MM AND $27.3MM. SEE “RECONCILIATIONS” SLIDES

 

NEXPOINT REAL ESTATE FINANCE Page | 7
 
 

 

Portfolio Commentary

 

Defensive Portfolio Characteristics

 

The current portfolio consists of senior loans, mezzanine debt, preferred equity and common stock investments in short-duration lease-term assets (multifamily, SFR, self-storage, life sciences) that are geographically diverse in the United States. The portfolio has minimal exposure to construction loans, no heavy transitional loans, no land loans and no for-sale loans. As of February 16, 2022, there are no loans currently in forbearance in our portfolio.

 

 

6.5

YEARS AVERAGE

REMAINING TERM5

90.8%

OF PORTFOLIO

STABILIZED5

67.9%

WEIGHTED AVG

LOAN TO VALUE5

1.99x

WEIGHTED AVG DSCR5

 

 

MULTIFAMILY  

●    Historically low losses for Freddie Mac debt issuances secured by multifamily assets, including periods of market stress

●    Aggregate losses in Freddie Mac’s origination history have averaged 5 bps per year dating back to 19941

●    Since 2009 and through December 2021, there have been $40.4MM in losses on $478B of combined issuance2

●    As of December 27, 2021, $2.1B of outstanding UPB, representing 0.6% of total securitized UPB, are currently in forbearance3

 

SINGLE-FAMILY

RENTAL

  

●    Although this is a relatively new asset class that was institutionalized in the wake of the global financial crisis, we believe SFR will exhibit resiliency akin to multifamily

●   Current portfolio of SFR loans is capitalized by a secured credit facility with Freddie Mac, is matched in both duration and structure of the underlying loans, has 6.5 years of average weighted term to maturity and a 250 bps interest rate spread4

●    Subject to Freddie Mac forbearance program to help mitigate cash flow interruptions to the bondholders

 

SELF-STORAGE  

●    Sticky COVID-related demand continues to be a tailwind moving into 2022

●    Occupancies across the sector remain at all-time highs with other fundamentals remaining strong

●    Historically, self-storage has outperformed other real estate asset types during economic downturns

 

LIFE SCIENCES  

●    Secular demand growth can be reliably estimated by looking into past performance over the last 10-15 years.

●    Increases in technology, spending and medical talent have created strong demand for real estate that meets unique and specific requirements

 

 

(1)

FREDDIE MAC; 4Q 2020

(2)

FREDDIE MAC; DECEMBER 2021

(3)

DECEMBER (2021) SECURITIZATION FORBEARANCE REPORT – FREDDIE MAC
(4) AS OF DECEMBER 31, 2021

(5)

AS OF February 16, 2022, AND EXCLUDING THE NEXPOINT STORAGE PARTNERS, INC COMMON STOCK (FORMERLY, JCAP SERIES A PREFERRED), AND THE HUDSON MONTFORD MULTIFAMILY PROPERTY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEXPOINT REAL ESTATE FINANCE Page | 8
 
 

 

Geographic and Asset Type Exposure1

 

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(1)

AS OF February 16, 2022 AND EXCLUDING THE NEXPOINT STORAGE PARTNERS, INC COMMON STOCK (FORMERLY, JCAP SERIES A PREFERRED), AND THE HUDSON MONTFORD MULTIFAMILY PROPERTY

 

 

 

 

 

 

 

 

 

 

 

 

NEXPOINT REAL ESTATE FINANCE Page | 9
 
 

 

Portfolio

 

#

  

Investment1

Location

Property Type

Investment Date

  

Current Principal

      

Net Equity2

    

Coupon3

      

Remaining Term4

    

Loan to Value

  

DSCR
1  

Senior Loan

Various

SFR

2/11/2020

   $ 508,700       $ 77,873       4.65 %       6.7       68.11 %

1.30x
2  

Senior Loan

Various

SFR

2/11/2020

     62,023         9,597       4.95 %       7.2       65.00 %

1.56x
3  

Senior Loan

Various

SFR

2/11/2020

     51,304         7,517       4.74 %       3.8       54.10 %

1.89x
4  

Senior Loan

Various

SFR

2/11/2020

     37,639         6,014       5.55 %       6.8       71.86 %

1.35x
5  

Senior Loan

Various

SFR

2/11/2020

     10,350         1,599       4.72 %       6.7       68.45 %

1.13x
6  

Senior Loan

Various

SFR

2/11/2020

     10,401         1,627       5.35 %       6.1       70.52 %

1.20x
7  

Senior Loan

Various

SFR

2/11/2020

     10,523         1,586       5.30 %       4.2       63.16 %

1.91x
8  

Senior Loan

Various

SFR

2/11/2020

     9,583         1,473       6.10 %       6.8       72.08 %

2.27x
9  

Senior Loan

Various

SFR

2/11/2020

     8,910         1,395       5.88 %       7.0       54.48 %

1.05x
10  

Senior Loan

Various

SFR

2/11/2020

     7,601         1,187       5.34 %       7.1       72.07 %

1.63x
11  

Senior Loan

Various

SFR

2/11/2020

     6,685         1,043       5.46 %       7.2       70.22 %

1.42x
12  

Senior Loan

Various

SFR

2/11/2020

     6,086         938       4.83 %       6.8       70.09 %

1.70x
13  

Senior Loan

Various

SFR

2/11/2020

     6,541         972       5.47 %       2.1       66.97 %

1.01x
14  

Senior Loan

Various

SFR

2/11/2020

     5,760         885       5.99 %       6.9       70.00 %

1.72x
15  

Senior Loan

Various

SFR

2/11/2020

     5,550         858       5.24 %       6.8       56.12 %

1.42x
16  

Senior Loan

Various

SFR

2/11/2020

     5,487         766       5.33 %       1.6       65.46 %

1.43x
17  

Senior Loan

Various

SFR

2/11/2020

     5,260         818       5.46 %       7.0       72.05 %

1.35x
18  

Senior Loan

Various

SFR

2/11/2020

     4,684         730       5.35 %       7.1       73.18 %

0.81x
   

Total SFR

     763,087         116,878       4.83 %       6.4       66.99 %

1.38x
1  

CMBS B-Piece

Various

Multifamily

2/11/2020

   $ 35,644   5   $ 15,476       6.14 % 6      4.2       64.01 %

6.36x
2  

CMBS B-Piece

Various

Multifamily

2/11/2020

     34,900   5     16,302       6.09 % 6      4.9       62.69 %

5.35x
3  

CMBS B-Piece

Various

Multifamily

4/23/2020

     81,999   5     25,163       3.50 %       8.2       63.74 %

2.29x
4  

CMBS B-Piece

Various

Multifamily

7/30/2020

     51,428   5     22,320       9.09 % 7      5.5       66.72 %

3.57x
5  

CMBS B-Piece

Various

Multifamily

8/6/2020

     108,643   5     26,388       11.43 % 8      8.5       68.96 %

3.46x
6  

CMBS B-Piece

Various

Multifamily

4/20/2021

     76,047   5     30,134       6.30 % 9      9.2       70.29 %

2.56x
7  

CMBS B-Piece

Various

Multifamily

6/30/2021

     108,035   5     31,026       6.88 % 8      5.0       66.70 %

1.86x
8  

CMBS B-Piece

Various

Multifamily

12/9/2021

     61,277   5     25,325       5.30 %       2.8       74.92 %

2.16x
   

Total CMBS B-Pieces

     557,973  

 

     192,134       7.12 %       6.5       67.68 %

3.03x
1  

CMBS IO Strip

Various

Multifamily

5/18/2020

   $ 2,451   10    $ 871       2.02 %       24.7       65.42 %

2.02x
2  

CMBS IO Strip

Various

Multifamily

8/6/2020

     8,046   10      3,292       0.10 %       8.5       68.96 %

3.46x
3  

CMBS IO Strip

Various

Multifamily

8/6/2020

     22,388   10      8,323       2.98 %       8.5       68.96 %

3.46x
4  

CMBS IO Strip

Various

Multifamily

4/28/2021

     7,439   10      1,986       1.59 %       8.1       63.74 %

2.29x
5  

CMBS IO Strip

Various

Multifamily

5/27/2021

     4,781   10      1,537       3.38 %       8.4       67.20 %

2.10x
6  

CMBS IO Strip

Various

Multifamily

6/7/2021

     596   10      218       2.31 %       6.9       63.87 %

2.44x
7  

CMBS IO Strip

Various

Multifamily

6/11/2021

     7,464   10      3,079       1.25 %       6.9       63.67 %

1.50x
8  

CMBS IO Strip

Various

Multifamily

6/24/2021

     2,020   10      736       1.20 %       6.9       64.06 %

1.65x
9  

CMBS IO Strip

Various

Multifamily

8/10/2021

     3,306   10      1,201       1.89 %       7.8       68.50 %

1.88x
10  

CMBS IO Strip

Various

Multifamily

8/11/2021

     1,713   10      628       3.10 %       9.6       67.12 %

2.24x
11  

CMBS IO Strip

Various

Multifamily

8/24/2021

     323   10      317       2.61 %       9.1       61.32 %

4.18x
12  

CMBS IO Strip

Various

Multifamily

9/1/2021

     4,912   10      4,827       1.92 %       8.5       67.59 %

2.07x
13  

CMBS IO Strip

Various

Multifamily

9/11/2021

     4,908   10      4,884       2.95 %       9.6       62.71 %

2.32x
   

Total CMBS IO Strip

     70,347         31,899       2.13 %       8.8       66.79 %

2.65x

 

$s IN 0,000s EXCEPT PER SHARE DATA

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEXPOINT REAL ESTATE FINANCE Page | 10
 
 

 

#

  

Investment1

Location

Property Type

Investment Date

  

Current Principal

      

Net Equity2

    

Coupon3

      

Remaining Term4

    

Loan to Value

  

DSCR
1   Mezzanine

Houston, TX

Multifamily

6/12/2020

   $ 7,500       $ 7,500       11.00 % 11      1.5       79.27 %

1.08x
2   Mezzanine

Philadelphia, PA

Multifamily

10/20/2020

     14,253         5,975       7.59 %       7.4       89.39 %

1.33x
3   Mezzanine

Laurel, MD

Multifamily

10/20/2020

     12,000         5,021       7.71 %       9.3       84.91 %

1.43x
4   Mezzanine

White Marsh, MD

Multifamily

10/20/2020

     10,380         4,344       7.42 %       9.5       84.78 %

1.44x
5   Mezzanine

Cockeysville, MD

Multifamily

10/20/2020

     9,610         4,022       7.42 %       9.5       84.26 %

1.47x
6   Mezzanine

Laurel, MD

Multifamily

10/20/2020

     7,390         3,093       7.42 %       9.5       80.29 %

1.61x
7   Mezzanine

North Aurora, IL

Multifamily

10/20/2020

     6,829         2,850       7.53 %       7.0       70.99 %

1.37x
8   Mezzanine

Lakewood, NJ

Multifamily

10/20/2020

     5,540         2,313       7.33 %       7.3       81.06 %

1.37x
9   Mezzanine

Wilmington, DE

Multifamily

10/20/2020

     5,470         2,284       7.50 %       7.3       89.27 %

1.25x
10  

Mezzanine

Urbandale, IA

Multifamily

10/20/2020

     4,010         1,674       7.89 %       6.9       83.80 %

1.55x
11  

Mezzanine

Daytona Beach, FL

Multifamily

10/20/2020

     3,700         1,544       7.83 %       6.8       81.48 %

1.47x
12  

Mezzanine

Rosedale, MD

Multifamily

10/20/2020

     3,620         1,515       7.42 %       9.5       83.26 %

1.40x
13  

Mezzanine

Atlanta, GA

Multifamily

10/20/2020

     3,310         1,382       6.91 %       7.5       80.31 %

1.28x
14  

Mezzanine

Temple Hills, MD

Multifamily

10/20/2020

     3,000         1,256       7.32 %       9.6       83.09 %

1.59x
15  

Mezzanine

Des Moines, IA

Multifamily

10/20/2020

     2,880         1,202       7.89 %       6.9       81.64 %

1.32x
16  

Mezzanine

Tyler, TX

Multifamily

10/20/2020

     2,135         891       7.74 %       6.8       83.12 %

1.72x
17  

Mezzanine

Temple Hills, MD

Multifamily

10/20/2020

     1,500         628       7.22 %       9.6       78.63 %

1.70x
18  

Mezzanine

Las Vegas, NV

Multifamily

10/20/2020

     1,190         497       7.71 %       7.2       75.49 %

1.47x
19  

Mezzanine

Vancouver, WA

Multifamily

10/20/2020

     1,082         453       8.70 %       8.8       84.32 %

1.77x
20  

Mezzanine

Los Angeles, CA

Multifamily

1/21/2021

     24,844         24,483       13.25 % 12      2.1       N/A   N/A
21  

Mezzanine

Irving , TX

Multifamily

11/18/2021

     12,600         12,476       11.00 %       6.9       91.90 %

1.57x
22  

Mezzanine

Rogers, AR

Multifamily

12/29/2021

     7,760         7,682       11.00 %       3.0       86.56 %

0.58x
   

Total Mezzanine

           150,603         93,084       9.12 %       6.5       70.30 %

1.37x
1  

Preferred Equity

Houston, TX

Multifamily

5/29/2020

   $ 10,000       $ 10,000       11.00 %       8.3       73.44 %

1.45x
2  

Preferred Equity

Holly Springs, NC

Life Sciences

9/29/2021

     6,891         6,858       10.00 %       1.8       N/A   N/A
3  

Preferred Equity

Atlanta , GA

Multifamily

10/26/2021

     9,750         9,656       11.00 %       2.8       92.30 %

1.14x
4  

Preferred Equity

Danbury, CT

Life Sciences

11/18/2021

     6,878         6,809       10.00 %       1.7       46.03 %

2.23x
5  

Preferred Equity

Las Vegas, NV

Multifamily

12/28/2021

     46,847         46,847       10.50 %       10.2       98.65 %

1.09x
6  

Preferred Equity

Vacaville, CA

Life Sciences

1/14/2022

     19,594         19,496       10.00 %       1.7       21.82 %

0.67x
   

Total Preferred Equity

           99,960         99,666       10.43 %       6.5       87.40 %

1.05x
1  

Convertible Note

Jersey City, NJ

Multifamily

12/28/2021

     20,478         20,377       9.00 %       2.0       N/A   N/A
2  

Convertible Note

Bronx, NY

Multifamily

1/12/2022

     38,656         38,463       9.00 %       2.0       N/A   N/A
   

Total Convertible Notes

           59,134         58,840       9.00 %       2.0       N/A   N/A
1  

Common Stock

 N/A

Self-Storage

11/6/2020

     N/A       $ 58,460       N/A         N/A       N/A   N/A
1  

Multifamily Property

Las Vegas , NV

Multifamily

12/31/2021

     N/A       $ 30,094       N/A         N/A       N/A   N/A
   

Portfolio Total

          $ 1,701,104       $ 681,055       6.32 %       6.5       67.90 %

1.99x

 

$s IN 0,000s EXCEPT PER SHARE DATA

 

(1)

AS OF February 16, 2022, OUR TOTAL PORTFOLIO REPRESENTS THE CURRENT PRINCIPAL AMOUNT OF THE CONSOLIDATED SFR LOANS, MEZZANINE LOANS, PREFERRED EQUITY, CONVERTIBLE NOTES, COMMON STOCK, AND MULTIFAMILY PROPERTY AS WELL AS THE NET EQUITY OF OUR CMBS B-PIECE INVESTMENTS
(2)

NET EQUITY REPREESENTS THE CARRYING VALUE LESS BORROWINGS
(3)

THE WEIGHTED AVERAGE COUPON IS WEIGHTED ON THE CURRENT PRINCIPAL BALANCE
(4)

THE WEIGHTED AVERAGE LIFE IS WEIGHTED ON THE CURRENT PRINCIPAL BALANCE AND ASSUMES NO PREPAYMENTS. THE MATURITY DATE USED FOR PREFERRED EQUITY INVESTMENTS REPRESENTS THE MATURITY DATE OF THE SENIOR MORTGAGE, AS THE PREFERRED EQUITY INVESTMENTS HAVE NO STATED MATURITY DATE AND REQUIRE REPAYMENT UPON THE SALE OR REFINANCING OF THE ASSET
(5)

THE CMBS B-PIECES ARE SHOWN ON AN UNCONSOLIDATED BASIS REFLECTING THE VALUE OF OUR INVESTMENTS
(6)

FLOATING RATE CMBS B-PIECE YIELDS 1M LIBOR PLUS 600 BPS. AS OF February 16, 2022, 1M LIBOR WAS 0.12%
(7)

FLOATING RATE CMBS B-PIECE YIELDS 1M LIBOR PLUS 900 BPS. AS OF February 16, 2022, 1M LIBOR WAS 0.12%
(8)

REPRESENTS THE BOND EQUIVALENT YIELD FOR THE FIXED RATE CMBS B-PIECE
(9)

FLOATING RATE CMBS B-PIECE YIELDS 30-DAY AVERAGE SOFR PLUS 625BPS. AS OF February 16, 2022, SOFR WAS 0.05%

(10) 

CURRENT PRINCIPAL FOR CMBS IO STRIPS ARE SHOWN AS CURRENT COST

(11)

MEZZANINE INVESTMENT IS FIXED AND PAYS 6.5% CURRENT INTEREST, PAID MONTHLY, WITH THE REMAINING 4.50% ACCRUING AND DUE AT MATURITY

(12)

MEZZANINE INVESTMENT YIELDS WSJ PRIME PLUS 1000 BPS. AS OF February 16, 2022, WSJ PRIME WAS 3.25%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEXPOINT REAL ESTATE FINANCE Page | 11
 
 

 

Financials  

 

$s IN 0,000s EXCEPT PER SHARE DATA OR AS OTHERWISE INDICATED

 

Income Statement

 

For the three months ended

  

December 31, 2021

    

September 30, 2021

  

Interest income

   $ 15,927     $ 14,372  

Interest expense

     (7,896 )     (7,790 )

Net interest income

     8,031       6,582  

Other income (loss)

     16,433       21,963  

Total operating expenses

     (3,507 )     (3,354 )

Net income

     20,957       25,191  

Preferred stock dividends

     (882 )     (874 )

Net (income) attributable to redeemable NCI

     (7,640 )     (11,084 )

Net income attributable to common stockholders

   $ 12,435     $ 13,233  

Weighted average common shares outstanding, diluted¹

     21,911       20,721  

Net income per share, diluted

   $ 0.92     $ 1.17  

 

 

Balance Sheet

 

   

December 31, 2021

    

December 31, 2020

  

Cash and cash equivalents

   $ 26,459     $ 30,241  

Restricted cash

     6,773       3,230  

Real estate investment, net

     62,269       -  

Loans, held-for-investment, net

     241,517       127,777  

Common stock investment, at fair value

     58,460       44,626  

Mortgage loans, held-for-investment, net

     847,364       918,114  

Accrued interest and dividends

     8,319       5,078  

Mortgage loans held in variable interest entities, at fair value

     7,192,547       5,007,515  

CMBS structured pass through certificates, at fair value

     69,816       38,984  

Accounts receivable and other assets

     393       745  

Total Assets

   $ 8,513,917     $ 6,176,310  

Secured financing agreements, net

   $ 786,226     $ 840,453  

Master repurchase agreements

     286,324       161,465  

Unsecured notes, net

     168,325       34,960  

Mortgages payable, net

     32,176       -  

Accounts payable and other accrued liabilities

     3,903       1,779  

Accrued interest payable

     3,985       2,311  

Bonds payable held in variable interest entities, at fair value

     6,726,272       4,731,429  

Total Liabilities

     8,007,211       5,772,397  

Redeemable NCI in the Operating Partnership

     261,423       275,670  

Total Stockholders Equity

     245,283       128,243  

Total Liabilities and Stockholders’ Equity

   $ 8,513,917     $ 6,176,310  

 

(1)

WEIGHTED AVERAGE DILUTED SHARES ASSUMES VESTING OF ALL OUTSTANDING UNVESTED RESTRICTED STOCK UNITS AND CONVERSION OF ALL REDEEMABLE NON-CONTROLLING INTERESTS

 

 

Book Value

 

 

   

December 31, 2021

    

December 31, 2020

  

Common stockholders' equity

   $ 200,503     $ 90,733  

Redeemable noncontrolling interests in the OP

     261,423       275,670  

Total equity

   $ 461,926     $ 366,403  

 

                

Redeemable OP and Sub OP units

     12,308       13,787  

Common shares outstanding

     9,164       5,023  

Combined book value per share

   $ 21.51     $ 19.48  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEXPOINT REAL ESTATE FINANCE Page | 12
 
 

 

Reconciliations

 

$s IN 0,000s EXCEPT PER SHARE DATA OR AS OTHERWISE INDICATED

 

Reconciliation of 1Q 2022 Net Income to EAD

 

   

Low

    

Mid

    

High

  

For the three months ended

  

Mar. 31, 2022

    

Mar. 31, 2022

    

Mar. 31, 2022

  

Net income attributable to common stockholders

   $ 18,952     $ 19,790     $ 20,628  

Net income attributable to redeemable noncontrolling interests

     6,163       6,426       6,689  

Adjustments:

                        

Amortization of stock-based compensation

     652       652       652  

EAD

   $ 25,767     $ 26,868     $ 27,969  
                         

Weighted average common shares outstanding, basic

     14,214       14,214       14,214  

Weighted average common shares outstanding, diluted¹

     22,023       22,023       22,023  
                         

EAD per diluted weighted average share

   $ 1.17     $ 1.22     $ 1.27  

Announced 1Q dividend

   $ 0.500     $ 0.500     $ 0.500  

Estimated 1Q dividend coverage ratio

  

2.34x

    

2.44x

    

2.54x

  

 

(1)

WEIGHTED AVERAGE DILUTED SHARES ASSUMES VESTING OF ALL OUTSTANDING UNVESTED RESTRICTED STOCK UNITS AND CONVERSION OF ALL REDEEMABLE NON-CONTROLLING INTERESTS

 

 

Reconciliation of 1Q 2022 EAD to CAD

 

 

   

Low

    

Mid

    

High

  

For the three months ended

  

Mar. 31, 2022

    

Mar. 31, 2022

    

Mar. 31, 2022

  

EAD

   $ 25,767     $ 26,868     $ 27,969  

Adjustments:

                        

Amortization of premiums

     10,579       10,579       10,579  

Accretion of discounts

     (2,871 )     (2,871 )     (2,871 )

Cash Available for Distribution

   $ 33,475     $ 34,576     $ 35,677  
                         

Weighted average common shares outstanding, basic

     14,214       14,214       14,214  

Weighted average common shares outstanding, diluted¹

     22,023       22,023       22,023  
                         

CAD per diluted weighted average share

   $ 1.52     $ 1.57     $ 1.62  

Announced 1Q dividend

   $ 0.500     $ 0.500     $ 0.500  

Estimated 1Q dividend coverage ratio

  

3.04x

    

3.14x

    

3.24x

  

 

 

(1)

WEIGHTED AVERAGE DILUTED SHARES ASSUMES VESTING OF ALL OUTSTANDING UNVESTED RESTRICTED STOCK UNITS AND CONVERSION OF ALL REDEEMABLE NON-CONTROLLING INTERESTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEXPOINT REAL ESTATE FINANCE Page | 13
 
 

 

Reconciliations

 

$s IN 0,000s EXCEPT PER SHARE DATA OR AS OTHERWISE INDICATED

 

Reconciliation of  full year Net Income to EAD

 

   

Low

    

Mid

    

High

  

For the year ended

  

Dec. 31, 2022

    

Dec. 31, 2022

    

Dec. 31, 2022

  

Net income attributable to common stockholders

   $ 41,960     $ 42,804     $ 43,648  

Net income attributable to redeemable noncontrolling interests

     14,166       14,431       14,696  

Adjustments:

                        

Amortization of stock-based compensation

     3,103       3,103       3,103  

EAD

   $ 59,229     $ 60,338     $ 61,447  
                         

Weighted average common shares outstanding, basic

     15,045       15,045       15,045  

Weighted average common shares outstanding, diluted¹

     22,183       22,183       22,183  
                         

EAD per diluted weighted average share

   $ 2.67     $ 2.72     $ 2.77  

Estimated 2022 dividend

   $ 2.000     $ 2.000     $ 2.000  

Estimated 2022 dividend coverage ratio

  

1.34x

    

1.36x

    

1.39x

  

 

(1)

WEIGHTED AVERAGE DILUTED SHARES ASSUMES VESTING OF ALL OUTSTANDING UNVESTED RESTRICTED STOCK UNITS AND CONVERSION OF ALL REDEEMABLE NON-CONTROLLING INTERESTS

 

 

Reconciliation of full year 2022 EAD to CAD

 

   

Low

    

Mid

    

High

  

For the year ended

  

Dec. 31, 2022

    

Dec. 31, 2022

    

Dec. 31, 2022

  

EAD

   $ 59,229     $ 60,338     $ 61,447  

Adjustments:

                        

Amortization of premiums

     23,158       23,158       23,158  

Accretion of discounts

     (12,288 )     (12,288 )     (12,288 )

Cash Available for Distribution

   $ 70,099     $ 71,208     $ 72,317  
                         

Weighted average common shares outstanding, basic

     15,045       15,045       15,045  

Weighted average common shares outstanding, diluted¹

     22,183       22,183       22,183  
                         

CAD per diluted weighted average share

   $ 3.16     $ 3.21     $ 3.26  

Estimated 2022 dividend

   $ 2.000     $ 2.000     $ 2.000  

Estimated 2022 dividend coverage ratio

  

1.58x

    

1.61x

    

1.63x

  

 

(1)

WEIGHTED AVERAGE DILUTED SHARES ASSUMES VESTING OF ALL OUTSTANDING UNVESTED RESTRICTED STOCK UNITS AND CONVERSION OF ALL REDEEMABLE NON-CONTROLLING INTERESTS

 

 

 

 

 

 

NEXPOINT REAL ESTATE FINANCE Page | 14
 
 

 

Reconciliation of Net Income (Loss) to Earnings Available for Distribution

 

$s IN 0,000s EXCEPT PER SHARE DATA OR AS OTHERWISE INDICATED

 

   

4Q 2021

    

3Q 2021

    

2Q 2021

    

1Q 2021

  

Net income attributable to common stockholders

   $ 12,435     $ 13,233     $ 5,542     $ 8,367  

Net income attributable to redeemable noncontrolling interests

     7,640       11,084       5,834       15,829  

Adjustments:

                                

Amortization of stock-based compensation

     538       538       557       391  

Loan loss provision, net

     -       -       -       124  

Unrealized (gains) or losses

     (8,832 )     (14,336 )     (3,859 )     (16,476 )

EAD

   $ 11,781     $ 10,519     $ 8,074     $ 8,235  
                                 

Weighted average common shares outstanding, basic

     9,163       6,863       5,306       5,023  

Weighted average common shares outstanding, diluted1

     21,911       20,721       19,603       19,199  
                                 

EAD per diluted weighted average share

   $ 0.54     $ 0.51     $ 0.41     $ 0.43  

Dividend per common share

   $ 0.48     $ 0.48     $ 0.48     $ 0.48  

EAD dividend coverage ratio

  

1.14x

    

1.07x

    

0.87x

    

0.91x

  

 

(1)

WEIGHTED AVERAGE DILUTED SHARES ASSUMES VESTING OF ALL OUTSTANDING UNVESTED RESTRICTED STOCK UNITS AND CONVERSION OF ALL REDEEMABLE NON-CONTROLLING INTERESTS

 

 

Reconciliation of Earnings Available for Distribution to CAD

 

 

   

4Q 2021

    

3Q 2021

    

2Q 2021

    

1Q 2021

  

Earnings Available for Distribution

   $ 11,781     $ 10,519     $ 8,074     $ 8,235  

Adjustments:

                                

Amortization of premiums

     5,337       5,390       2,808       2,516  

Accretion of discounts

     (3,271 )     (2,976 )     (1,680 )     (1,668 )

Cash Available for Distribution

   $ 13,847     $ 12,933     $ 9,202     $ 9,083  
                                 

Weighted average common shares outstanding, basic

     9,163       6,863       5,306       5,023  

Weighted average common shares outstanding, diluted1

     21,911       20,721       19,603       19,199  
                                 

CAD per diluted weighted average share

   $ 0.63     $ 0.62     $ 0.47     $ 0.47  

Dividend per common share

   $ 0.48     $ 0.48     $ 0.48     $ 0.48  

CAD dividend coverage ratio

  

1.33x

    

1.31x

    

0.99x

    

0.99x

  

 

(1)

WEIGHTED AVERAGE DILUTED SHARES ASSUMES VESTING OF ALL OUTSTANDING UNVESTED RESTRICTED STOCK UNITS AND CONVERSION OF ALL REDEEMABLE NON-CONTROLLING INTERESTS

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NEXPOINT REAL ESTATE FINANCE Page | 15