NexPoint Residential Trust, Inc.

Ladies and gentlemen, thank you for standing by and welcome to the Next Point Residential Trust Q2 2023 conference call. I would now like to turn the call over to Kristen Thomas. Please go ahead.

Thank you. Good day, everyone, and welcome to Next Point Residential Trust conference call to review the company results for the second quarter ended June 30th, 2023. On the call today are Brian Mintz, Executive Vice President and Chief Financial Officer, Matt McGrainer, Executive Vice President and Chief Investment Officer, and Bonner McDermott, Vice President, Asset Investment Management. As a reminder, this call is being webcast through the company's website at nxrt.nextpoint.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 risk and other factors that could affect any forward-looking statements. The statements made during this conference call speak only on 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 Brian Metz. Please go ahead, Brian.

Thanks, Preston. Welcome to everyone joining us. Appreciate you participating. Excuse me. I'm going to kick off the call and cover our Q2 and year-to-date results. I'll talk about our updated NAV and then revised guidance before I turn it over to Matt to discuss some of our results and forward guidance in detail. Results for second quarter are as follows. Net loss for the second quarter was $4 million, or $0.15 per loss, or per share loss, and that's per diluted share, on total revenue of $69.6 million, as compared to a net loss of $7.8 million, or a $0.30 loss per diluted share in the same period of 2022. And that's on total, that was on total revenue of $65.8 million, which is a 6% increase in revenue. The second quarter NOI was $42 million on 40 properties compared to $39 million for the second quarter of 2022 on 41 properties, which is an 8% increase in NOI. For the quarter, same-store rent increased 7.9%, and same-store occupancy was down 60 basis points to 93.8%. This, coupled with an increase in same-store expenses of 7.7%, led to an increase in same-store NOI of 7.6% as compared to Q2 2022. As compared to Q1 2023, rents for the second quarter on the same-store portfolio were up 0.7% quarter-over-quarter. We reported second-quarter core FFO of $20.4 million, or $0.77 per diluted share, compared to $0.78 per diluted share in second quarter 2022. For the quarter, we completed 505 full and partial renovations, which is an increase of 2.2% from the prior quarter, and leased 517 renovated units, achieving an average monthly rent premium of $224 and a 20.9% return on investment during the year, which is in line with our long-term average ROI in renovations. Inception to date, the current portfolio, we've completed 8,736 full and partial upgrades for about 58% of the total units, 5,091 kitchen upgrades, washer-dryer installments, and 10,753 technology package installations, achieving an average monthly rent premium of $161, $49, and $45, respectively. and an ROI of 21%, 66.8%, and 35.3% respectively. NXRT paid a second quarter dividend of 42 cents per common share on June 30th of this year. Results year-to-date for the 2023 were as follows. Net loss year-to-date was 7.8 million, or a 31-cent loss per diluted share on total revenue of $138.8 million as compared to a net loss of $12.5 million, or a $0.49 loss per diluted share in the same period in 2022. A total revenue of $126.6 million, which is an increase of 10% in revenue over the prior year. Year-to-date, NOI was $83.1 million on 40 properties, as compared to $75.6 million on 40 properties for the same period in 2022, or an increase of 10%. Year-to-date same-store rent increased 7.9% and same-store occupancy was down 70 basis points to 93.7%. This coupled with an increase in same-store expenses of 11.2% led to an increase in same-store NOI of 8.5% as compared to the same period in 2022. We reported year-to-date core FFO of $39 million or $1.49 per diluted share compared to $1.54 per deleted share in the six months into June 30, 2022. For our NAV per share, based on the current estimate of cap rates in our markets and forward NOI, we are reporting an NAV per range as follows, $64.09 on the low end, $72.51 on the high end, and $68.30 at the midpoint. These are based on average cap rates ranging from 5% on the low end to 5.3% on the high end, which remains unchanged from last quarter. To wrap up my comments, we'll go through a full year of 2023 guidance, which we're revising as follows. Core FFO per diluted share, $2.90 on the low end, $3.05 on the high end, with a midpoint of $2.98. Same store revenue, 8.3% on the low end, 9.4% on the high end, and 8.8% at the midpoint. Same store expenses, 7.3% on the low end, 6.8% on the high end, for a midpoint of 7%. And same store NOI is 9% on the low end, 11% on the high end, with a midpoint of 10%. Our core FFO decrease from prior quarter guidance is based primarily on the Houston asset, which did not sell in the second quarter as we thought it would. But Matt's got more details on that and the other guidance. So with that, I'll turn it over to him.