Here are 1-3 brief analogies for NexPoint Residential Trust (NXRT):

• Public Storage for apartment buildings
• Marriott for apartment complexes

• Rental Housing: Providing residential apartment units for lease to individuals and families, primarily in the Southeastern and Southwestern United States.

NexPoint Residential Trust (NXRT) Major Customers

NexPoint Residential Trust (NXRT) is a real estate investment trust (REIT) that owns and operates multifamily apartment communities. As such, the company sells primarily to individuals who lease apartments in their properties.

Based on its focus on B and B+ quality properties in rapidly expanding Sunbelt markets, NXRT serves the following categories of customers:

• Young Professionals and Early Career Individuals: This demographic seeks modern, amenity-rich apartment living that offers flexibility and convenience in economically vibrant areas. They are often attracted to properties that provide a good value proposition for a comfortable lifestyle without the commitment of homeownership.
• Families and Mid-Career Professionals: This category includes individuals and small to medium-sized families looking for well-maintained and spacious rental housing. They often prioritize good school districts, convenient access to employment centers, and desirable community amenities, choosing to rent for flexibility, financial considerations, or lifestyle preferences.
• Empty Nesters and Lifestyle Renters: These customers include individuals or couples who may be downsizing from single-family homes, seeking a low-maintenance lifestyle, or relocating to warmer climates. They value properties that offer a strong sense of community, desirable amenities, and convenient access to retail, dining, and leisure activities, aligning with the "affordable luxury" offerings in NXRT's portfolio.

null

James Dondero, Chairman, President and Chief Executive Officer

Mr. Dondero serves as President and Chairman of the Board of NexPoint Residential Trust (NXRT). He is also the President of NexPoint Real Estate Advisors, L.P., the external manager of NXRT, and holds leadership positions as President and Chairman of the Board of NexPoint Real Estate Finance (NREF), CEO of NexPoint Hospitality Trust (NHT.U), and CEO of NexPoint Diversified Real Estate Trust (NXDT). With over 30 years of experience, Mr. Dondero has invested in credit and equity markets and is credited with pioneering credit asset classes. He founded NXRT in 2013 as a REIT under a closed-end fund, NexPoint Credit Strategies Fund (NHF), seeking uncorrelated yield. He conceptualized forming a private REIT to directly own real estate when it wasn't feasible within the closed-end fund structure.

Paul Richards, Chief Financial Officer, Executive VP-Finance, Treasurer and Assistant Secretary

Mr. Richards was appointed Chief Financial Officer, Executive VP-Finance, Treasurer, and Assistant Secretary of NXRT, effective January 1, 2025. He also holds the CFO, Assistant Secretary, and Treasurer roles for VineBrook since August 2024, and the CFO, Executive VP-Finance, Treasurer, and Assistant Secretary positions for NXDT and NREF since January 2025, in addition to being CFO and Corporate Secretary of NHT since January 2025. Mr. Richards joined NexPoint in 2017 and has served as a director for their Sponsor since 2019. His prior roles include Vice President of Asset Management and Financing of VineBrook from 2018 to August 2024, VP of Originations and Investments of NREF from February 2020 to January 2025, and Vice President of Asset Management of NHT from March 2019 to December 2024.

Matthew McGraner, Chief Investment Officer & Executive Vice President

Mr. McGraner has served as Executive Vice President and Chief Investment Officer of NXRT since March 2015. He holds similar chief investment officer and executive vice president roles across various NexPoint entities, including NexPoint Real Estate Finance, Inc. (NREF), NexPoint Diversified Real Estate Trust (NXDT), NexPoint Hospitality Trust (NHT U), and VineBrook Homes Trust, Inc. As a Managing Director at NexPoint or its affiliates since May 2013, his responsibilities involve leading the real estate platform's operations, sourcing investments, managing risk, and developing business opportunities, including fundraising and private investments. A licensed attorney, Mr. McGraner previously worked at Jones Day from 2011 to 2013, where he focused on private equity, real estate, and mergers and acquisitions. During his time at Jones Day, he oversaw the acquisition and financing of over $200 million in real estate investments and provided advice on $16.3 billion in M&A and private equity transactions. Since joining NexPoint in 2013, he has led the acquisition and financing of over $11.8 billion of real estate investments. Mr. McGraner also co-founded NexPoint Real Estate Advisors, L.P. (NREA) and NXRT.

Dennis "D.C." Sauter, Jr., General Counsel and Secretary

Mr. Sauter has served as General Counsel of NXRT since February 2020 and as General Counsel of NexPoint Advisors, L.P., since April 2021. Before joining NexPoint, he was a partner in the real estate section of Wick Phillips Gould & Martin, LLP in Dallas, Texas, from January 2014 to February 2020. In this role, he specialized in acquisitions, construction, financing, joint ventures, and complex leasing for REITs, private developers, and institutional investors. Mr. Sauter's primary responsibilities at NXRT include managing all legal matters, such as corporate governance, real estate transactions, and capital markets transactions. He has been a licensed attorney and member of the State Bar of Texas since 2001.

Brian Mitts, Director

Mr. Mitts served as the Chief Financial Officer, Executive Vice President-Finance, Treasurer, and Secretary of NXRT until his resignation from the CFO role, effective January 1, 2025, but remains a Director. He co-founded NexPoint Real Estate Advisors, L.P. (NREA), NXRT, and other real estate businesses with Mr. McGraner and Mr. Dondero. He also co-founded NexPoint Advisors, L.P., the parent of NREA. Mr. Mitts joined NREA or its affiliates in 2007 and currently leads NexPoint's financial reporting and accounting teams, playing a key role in financing and capital allocation decisions. Before co-founding NREA and NXRT, he was the Chief Operations Officer of Highland Funds Asset Management, L.P., where he managed fund operations and helped develop new products. Mr. Mitts is also a member of the board of directors for NXRT and NREF, and serves on the investment committee of NREA.

The key risks to NexPoint Residential Trust's (NXRT) business are primarily associated with its financial structure, market exposure, and the execution of its core strategy.

1. Interest Rate and Indebtedness Risk: NexPoint Residential Trust carries a substantial amount of indebtedness, which can restrict its financial and operational flexibility and heighten its susceptibility to economic downturns. A significant portion of its debt is subject to variable interest rates, exposing the company to increased interest expenses if rates rise. While the company has utilized fixed-rate debt portfolios (post-swap) to mitigate some exposure, refinancing risks remain for maturing loans. This risk is further emphasized by the observation that the company's interest payments are not well covered by its earnings.
2. Adverse Market Conditions and Geographic Concentration: NXRT's concentration of properties primarily in the Sun Belt region makes it particularly vulnerable to adverse developments in these specific markets. Unfavorable changes in market and economic conditions, including regional oversupply cycles, rising construction costs, inflation, and potential recessions, could negatively impact occupancy levels, rental rates, and the overall value of its assets. For instance, the company experienced a 3.8% same-store Net Operating Income (NOI) decline in Q1 2025 compared to Q1 2024, highlighting the impact of supply-demand imbalances in the Sun Belt.
3. Execution Risk of Value-Add Strategy and Market Competition: The company's strategy relies on acquiring and repositioning multifamily properties with a "value-add" component to improve rental rates and net operating income. However, this strategy involves inherent risks, including potential delays and higher costs in renovating and repositioning properties, which may not always yield the anticipated results. Furthermore, intense competition in its target markets could limit NXRT's ability to acquire attractive investment opportunities and impede its growth and profitability. The company has also faced ongoing unprofitability, with losses rising over the past five years and forecasts for continued unprofitability, suggesting challenges in the execution of its strategy and the competitive landscape.

Share Repurchases

• In March 2020, NexPoint Residential Trust's Board of Directors authorized an increase in its share repurchase program from $40.0 million to $100.0 million, with approximately $75.0 million remaining available for repurchases at that time. This authorization expired on March 12, 2023.
• Following the updated program announcement in March 2020, the company repurchased approximately 1.5 million shares at an average price of $27.48 per share.
• In April 2025, NXRT purchased 223,109 shares of its common stock for approximately $7.6 million at an average price of $34.29 per share.

Share Issuance

• During the full year 2020, NXRT issued approximately 1.3 million shares of common stock through its At-The-Market (ATM) program at an average price of $46.58 per share, generating roughly $59.5 million in gross proceeds.
• Prior to March 31, 2020, the company issued 918,614 shares under its ATM program at an average price of $49.12 per share, resulting in gross proceeds of $45.12 million.

Outbound Investments

• In 2020, NXRT acquired one property, The Fairways at San Marcos in Phoenix, Arizona, for $85 million. The company also sold three properties in 2020 for net proceeds of $43 million.
• During 2022, NexPoint Residential Trust acquired two properties, totaling 562 units, for a combined purchase price of $143.4 million.
• In the third quarter of 2025, NXRT was awarded the opportunity to acquire a 321-unit multifamily community in Northern Las Vegas as part of its capital recycling strategy.

Capital Expenditures

• NexPoint Residential Trust's core strategy involves a "value-add program" that includes significant capital investments in its multifamily properties, focusing on both interior unit upgrades and community amenities.
• Typical interior improvements include new kitchen cabinets, appliances, lighting, and faux-wood flooring, while community amenity upgrades encompass renovating leasing offices, clubhouses, fitness centers, and pool areas, and adding dog parks.
• In the first quarter of 2025, NXRT completed 210 full and partial unit upgrades, leading to an average monthly rent premium of $62 and a 16.1% return on investment (ROI) for the 201 upgraded units leased.