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| Statement |
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| On the occupancy front, we're pleased to report the Q4 same-store occupancy remained over 94.7% positioning us well for 2024 |
| 2024 retention has also started off strong, with both January and February over 50%, February month-to-date is 59% and March is expected to finish at 60%-plus |
| So in closing, so far in 2024, we're off to a good start prioritizing occupancy and increased resident satisfaction and retention |
| Our full year same-store NOI margin improved by 65 basis points to 61.6% |
| Same-store revenues increased, excuse me, 7.1%, while same-store NOI registered a strong 8.2% growth year-over-year |
| Our Q4 same-store NOI margin improved to 62.5%, up 20 basis points over the prior year period |
| So the new leases were down 6.25%, renewals are 40 basis points for a blended negative 2.69% and so we are seeing a little bit better as we filled up the assets and have a strong occupancy base, which was the goal |
| Our balance sheet is much healthier after materially delevering through last year's hiking cycle |
| We think our pricing power will be higher |
| So while we, again, will continue to have a defensive posture going - starting the year, we are optimistic about the portfolios, intermediate to long-term growth prospects for the foreseeable future |
| Once we get through the old farm sales, as I mentioned, we're fully paid off on our credit facility and feel pretty good about where the capital stack sits in terms of being hedged with over - mid-90s percent of our debt still being hedged |
| For the quarter, same-store rental income increased 3.8% and same-store occupancy was up 60 basis points to 94.7% |
| For the year, same-store rental income increased 7.1% and same-store occupancy was up 60 basis points to 94.7% |
| And the trend in January is encouraging because given the holiday season |
| Expenses continue to moderate and our efforts to reduce turnover costs help maximize growth |
| We think are going to get better to the second half of the year |
| January has looked better |
| We saw sizable occupancy growth in some of our supply heavy markets as we implemented a more defensive strategy late in the year |
| So again, everything that could go wrong went wrong last year, and we're - our balance sheet is about as healthy as it's ever been, especially after we close Old Farm last week, and have fresh capital on the balance sheet to go buy back stock or pay down debt |
| Implementing AI and centralization of labor has started to pay dividends, most notably in Q4 2023, which we will continue to improve in 2024 |
| Fourth quarter same-store NOI growth was 4.5%, driven by 3.8% growth in rental revenue and 4.1% growth in total revenue |
| This coupled with an increase in same-store expenses of 5.5% led to an increase in same-store NOI of 8.2% as compared to the full year 2022 |
| Since inception of the business in 2015, NXRT has generated 10.92% compound annual growth in Core FFO |
| Rental income for the fourth quarter of '23 on the same-store portfolio was up 1.3% quarter-over-quarter from the third quarter of '23 |
| This coupled with an increase in same-store expenses of 2%, led to an increase in same-store NOI of 4.5% as compared to Q4 2022 |
| And one thing that was a little bit encouraging this year is that they do expect to see absorption kind of be maintained across our submarkets, not enough to outstrip the four decade high of supply that's peaking this year, but it's still - but yes, the job growth forecasts are factored into - are factored into those numbers, and we'd be happy to share those with you |
| And in underwriting basically, call it, a 2% expectation for the year in Atlanta, and that we expect to be one of the higher bad debt markets obviously, but it has incrementally improved over the past couple of months |
| But overall, year-over-year, we were forecasted to do about 1,300 units in 2023, 235 fold this year, shipping that focus, and we're pretty proud to report that we're 96.9% leased today |
| Thanks for our teams here at NexPoint BH for continuing to execute |
| So not out of the woods yet, but do feel better about it |
| Statement |
|---|
| Though positive for the year, new lease rental rates turned negative in the second half of the year, putting stress on top line revenue growth |
| Bad debt also continued to trend down and finished Q4 at 1.9%, down from 2.7% earlier in the year |
| Payroll declined 180 basis points in Q4, continuing the downward trend in Q2 and Q3 |
| We're getting a little bit of a difficult - more difficult time getting that demand |
| I think it's a little tougher to forecast the demand side |
| And then as that going to '25 and '26, if things play out the way they are in supply wanes, and there's no new starts, starts down 40% year-over-year |
| New leases were down blended for the quarter, 7.8% |
| The average of blended is negative 4-point - or excuse me, negative 4.14% |
| And the worst - in our view, one of the worst things we can do is to go out and fix debt or fixed debt today at potentially peak rates because a new buyer or a buyer of our portfolio at some point, we'll likely have a better cost of capital or a different cost of capital so that our - that's the way we think about it |
| We're feeling more supply pressure, Charlotte comes to mind, Las Vegas |
| We are expecting modest growth this year, specifically in the second half of the year as supply growth begins to wane |
| This compared to a net loss of $9.3 million or negative $0.36 per diluted share for the full year 2022, which includes a gain on sale of real estate of $14.7 million |
| We're seeing it down at the end of January at 1.7%, 1.8% |
| I think as we look at whatever we did in the fourth quarter, we had to give some concessions in a couple of markets |
| Matt McGraner Expecting this on the - just to add expecting the 17.5% ROI, I think compares just modestly down from last year, I believe it's 19% or 20% |
| Overall, this year, I think our concession usage is probably going to come down based on - we're 97.5% leased today |
| And then I think as we sit here today, we still think that we're - we need to be defensive through the first and second quarter as supply delivers as they're giving new assets are giving sometimes two or three months, but we again expect that to wane during the third quarter |
| I mean, look, before we were - before we got it with the 500 basis point increases of interest rates in 12, 14 months, we were - we took the portfolio down from 14x, 15x when we went public in 2015 down to kind of where it is today and that was intentional, and it is intentional |
| So I think as it relates to the markets that are going to be tougher are Atlanta, Las Vegas, Tampa in the first half of the year |
| I think the assets that we'll prioritize for disposition will be those that are requiring a heavier CapEx lift and/or in the more of a supply concentrated submarket because I think we're - given where we are at peak rates or at least we believe we're peak rates, then we think that the greater risk to the portfolio health is again heavier CapEx or submarkets that have oversized supply |
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