Current Report Filing (8-k)

Date : 09/03/2019 @ 8:17PM
Source : Edgar (US Regulatory)
Stock : NexPoint Residential Trust Inc (NXRT)
Quote : 47.66  -0.25 (-0.52%) @ 11:00PM
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Current Report Filing (8-k)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

Date of report (Date of earliest event reported): August 28, 2019

 

 

NEXPOINT RESIDENTIAL TRUST, INC.

(Exact Name Of Registrant As Specified In Its Charter)

 

 

 

Maryland   001-36663   47-1881359

(State or Other Jurisdiction

of Incorporation)

  (Commission
File Number)
  (IRS Employer
Identification No.)

300 Crescent Court, Suite 700

Dallas, Texas 75201

(Address of Principal Executive Offices) (Zip Code)

Registrant’s telephone number, including area code: (972) 628-4100

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

 

Trading

Symbol(s)

 

Name of each exchange

on which registered

Common Stock, par value $0.01 per share   NXRT   New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.01.

Completion of Acquisition or Disposition of Assets.

NexPoint Residential Trust, Inc. (the “Company”) completed the previously disclosed sale of The Pointe at the Foothills, Belmont at Duck Creek, The Ashlar, Heatherstone and Edgewater at Sandy Springs on August 28, 2019 and the previously disclosed sale of Abbington Heights on August 30, 2019 (together the “Portfolio”) to an unaffiliated third party for approximately $289.9 million. For property level information regarding the Portfolio, see the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which was filed with the Securities and Exchange Commission (the “SEC”) on July 30, 2019, which information is incorporated by reference herein. The Company used the proceeds from the sale to fund a portion of the purchase price of the previously disclosed acquisition of the Pembroke Apartments, which, as further discussed below, closed on August 30, 2019. The Company will also use the proceeds from the sale to fund a portion of the purchase price of the previously disclosed acquisition of the Arbors of Brentwood.

The Company also completed the previously disclosed acquisition of the Pembroke Apartments on August 30, 2019 from an unaffiliated third party for approximately $322.0 million. For property level information regarding the Pembroke Apartments, see the Company’s Current Report on Form 8-K, which was filed with the SEC on August 13, 2019, which information is incorporated by reference herein.

 

Item 9.01.

Financial Statements and Exhibits.

(a)  Financial Statements. The financial information relating to the Pembroke Apartments required under Rule 3-14 of Regulation S-X will be filed by an amendment to this report no later than November 18, 2019, which is the first business day that is 71 calendar days from the date that the report relating to the Pembroke Apartments is required to be filed.

(b)  Pro Forma Financial Information. The pro forma financial information relating to the Pembroke Apartments required under Article 11 of Regulation S-X will be filed by an amendment to this report no later than November 18, 2019, which is the first business day that is 71 calendar days from the date that the report relating to the Pembroke Apartments is required be filed.

The pro forma financial information relating to the Portfolio required under Article 11 of Regulation S-X has been included in this Current Report on Form 8-K as set forth below.

 

Unaudited Pro Forma Consolidated Financial Information

     3  

Unaudited Pro Forma Consolidated Balance Sheet as of June 30, 2019

     4  

Unaudited Pro Forma Consolidated Statement of Operations for the six months ended June 30, 2019 and the year ended December 31, 2018

     5  

Notes to Unaudited Pro Forma Consolidated Financial Statements

     7  

(d)  Exhibits. None.

Cautionary Notice Regarding Forward-Looking Statements

This report 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 “will”, “expect,” “intend” and similar expressions, and variations or negatives of these words. These forward-looking statements include, but are not limited to, statements regarding the expected use of proceeds from the property disposition and the acquisition of the Arbors of Brentwood. They are not guarantees of future results and are subject to risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed in any forward-looking statement. 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 for the year ended December 31, 2018 and the Company’s other filings with the SEC for a more complete discussion of the risks and other factors that could affect any forward-looking statements. Except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changing circumstances or any other reason after the date of this report.

 

2


NEXPOINT RESIDENTIAL TRUST, INC.

UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

The following unaudited pro forma information should be read in conjunction with the Company’s historical consolidated financial statements and the notes thereto as filed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018, which was filed with the SEC on February 19, 2019. In addition, this unaudited pro forma information should be read in conjunction with the Company’s unaudited historical consolidated financial statements and the notes thereto as filed in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019, which was filed with the SEC on July 30, 2019.

The following unaudited pro forma consolidated balance sheet as of June 30, 2019 has been prepared to give effect to the disposition of the Portfolio as if the disposition occurred on June 30, 2019.

The following unaudited pro forma consolidated statement of operations for the year ended December 31, 2018 has been prepared to give effect to the disposition of the Portfolio as if the disposition occurred on January 1, 2018.

The following unaudited pro forma consolidated statement of operations for the six months ended June 30, 2019 has been prepared to give effect to the disposition of the Portfolio as if the disposition occurred on January 1, 2018.

These unaudited pro forma consolidated financial statements are prepared for informational purposes only and are not necessarily indicative of future results or of actual results that would have been achieved had the disposition of the Portfolio been consummated on January 1, 2018 or June 30, 2019.

In the opinion of the Company’s management, all adjustments necessary to reflect the effect of the transaction described above have been included in the pro forma consolidated financial statements.

 

3


NEXPOINT RESIDENTIAL TRUST, INC.

UNAUDITED PRO FORMA CONSOLIDATED BALANCE SHEET

AS OF JUNE 30, 2019

(in thousands, except share and per share amounts)

 

     NXRT, Inc.
(Historical)
(a)
    Disposition of
Portfolio
(b)
    Pro Forma
Total
 
ASSETS                   

Operating Real Estate Investments

      

Land

   $ 203,748     $     $ 203,748  

Buildings and improvements

     914,771             914,771  

Intangible lease assets

     2,971             2,971  

Construction in progress

     612             612  

Furniture, fixtures, and equipment

     57,545             57,545  
  

 

 

   

 

 

   

 

 

 

Total Gross Operating Real Estate Investments

     1,179,647             1,179,647  

Accumulated depreciation and amortization

     (127,118           (127,118
  

 

 

   

 

 

   

 

 

 

Total Net Operating Real Estate Investments

     1,052,529             1,052,529  

Real estate held for sale, net of accumulated depreciation of $897 and $897, respectively

     175,968       (158,499     17,469  
  

 

 

   

 

 

   

 

 

 

Total Net Real Estate Investments

     1,228,497       (158,499     1,069,998  

Cash and cash equivalents

     16,892       139,048 (c)      155,940  

Restricted cash

     22,676       (1,724     20,952  

Accounts receivable

     2,667       (246     2,421  

Prepaid and other assets

     3,826       (328     3,498  

Fair market value of interest rate swaps

     2,363             2,363  
  

 

 

   

 

 

   

 

 

 

TOTAL ASSETS

   $ 1,276,921     $ (21,749   $ 1,255,172  
  

 

 

   

 

 

   

 

 

 
LIABILITIES AND STOCKHOLDERS’ EQUITY                   

Liabilities:

      

Mortgages payable, net

   $ 769,973     $     $ 769,973  

Mortgages payable held for sale, net

     156,636       (143,414     13,222  

Credit facility, net

     51,536             51,536  

Accounts payable and other accrued liabilities

     6,679       (411     6,268  

Accrued real estate taxes payable

     10,192       (1,358     8,834  

Accrued interest payable

     3,086       (483     2,603  

Security deposit liability

     2,032       (299     1,733  

Prepaid rents

     1,554       (291     1,263  

Fair market value of interest rate swaps

     853             853  
  

 

 

   

 

 

   

 

 

 

Total Liabilities

     1,002,541       (146,256     856,285  

Redeemable noncontrolling interests in the Operating Partnership

     3,032             3,032  

Stockholders’ Equity:

      

Preferred stock, $0.01 par value: 100,000,000 shares authorized; 0 shares issued

                  

Common stock, $0.01 par value: 500,000,000 shares authorized; 23,895,442 and 23,499,635 shares issued and outstanding, respectively

     238             238  

Additional paid-in capital

     297,448             297,448  

Accumulated earnings less dividends

     (26,824     124,507 (d)      97,683  

Accumulated other comprehensive income

     486             486  
  

 

 

   

 

 

   

 

 

 

Total Stockholders’ Equity

     271,348       124,507       395,855  
  

 

 

   

 

 

   

 

 

 

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY

   $ 1,276,921     $ (21,749   $ 1,255,172  
  

 

 

   

 

 

   

 

 

 

See accompanying notes to the unaudited pro forma consolidated financial statements

 

4


NEXPOINT RESIDENTIAL TRUST, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE SIX MONTHS ENDED JUNE 30, 2019

(in thousands, except share and per share amounts)

 

     NXRT, Inc.
(Historical)
(a)
    Disposition of
Portfolio

(b)
    Pro Forma
Total
 

Revenues

      

Rental income

   $ 74,033     $ (11,548   $ 62,485  

Other income

     10,524       (2,041     8,483  
  

 

 

   

 

 

   

 

 

 

Total revenues

     84,557       (13,589     70,968  
  

 

 

   

 

 

   

 

 

 

Expenses

      

Property operating expenses

     19,800       (3,466     16,334  

Real estate taxes and insurance

     11,322       (1,466     9,856  

Property management fees

     2,531       (408     2,123  

Advisory and administrative fees

     3,722       (321 )(c)      3,401  

Corporate general and administrative expenses

     4,974             4,974  

Property general and administrative expenses

     3,426       (595     2,831  

Depreciation and amortization

     28,464       (2,073     26,391  
  

 

 

   

 

 

   

 

 

 

Total expenses

     74,239       (8,329     65,910  
  

 

 

   

 

 

   

 

 

 

Operating income before gain on sales of real estate

     10,318       (5,260     5,058  

Gain on sales of real estate

                  
  

 

 

   

 

 

   

 

 

 

Operating income

     10,318       (5,260     5,058  

Interest expense

     (16,678     3,096       (13,582

Loss on extinguishment of debt and modification costs

                  
  

 

 

   

 

 

   

 

 

 

Net loss

     (6,360     (2,164     (8,524

Net loss attributable to redeemable noncontrolling interests in the Operating Partnership

     (19     (8     (27
  

 

 

   

 

 

   

 

 

 

Net loss attributable to common stockholders

   $ (6,341   $ (2,156   $ (8,497
  

 

 

   

 

 

   

 

 

 

Other comprehensive loss

      

Unrealized losses on interest rate derivatives

     (16,611           (16,611
  

 

 

   

 

 

   

 

 

 

Total comprehensive loss

     (22,971     (2,164     (25,135

Comprehensive loss attributable to redeemable noncontrolling interests in the Operating Partnership

     (69     (8     (77
  

 

 

   

 

 

   

 

 

 

Comprehensive loss attributable to common stockholders

   $ (22,902   $ (2,156   $ (25,058
  

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding – basic

     23,643             23,643  
  

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding – diluted

     24,139             24,139  
  

 

 

   

 

 

   

 

 

 

Loss per share – basic

   $ (0.27   $ (0.09   $ (0.36
  

 

 

   

 

 

   

 

 

 

Loss per share – diluted

   $ (0.27   $ (0.09   $ (0.36
  

 

 

   

 

 

   

 

 

 

See accompanying notes to the unaudited pro forma consolidated financial statements

 

5


NEXPOINT RESIDENTIAL TRUST, INC.

UNAUDITED PRO FORMA CONSOLIDATED STATEMENT OF OPERATIONS

FOR THE YEAR ENDED DECEMBER 31, 2018

(in thousands, except share and per share amounts)

 

     NXRT, Inc.
(Historical)
(d)
    Disposition of
Portfolio
(e)
    Pro Forma
Total
 

Revenues

      

Rental income

   $ 127,964     $ (22,363   $ 105,601  

Other income

     18,633       (3,798     14,835  
  

 

 

   

 

 

   

 

 

 

Total revenues

     146,597       (26,161     120,436  
  

 

 

   

 

 

   

 

 

 

Expenses

      

Property operating expenses

     35,824       (7,226     28,598  

Acquisition costs

                  

Real estate taxes and insurance

     20,713       (2,897     17,816  

Property management fees

     4,382       (790     3,592  

Advisory and administrative fees

     7,474       (649 )(f)      6,825  

Corporate general and administrative expenses

     7,808             7,808  

Property general and administrative expenses

     6,134       (1,139     4,995  

Depreciation and amortization

     47,470       (8,535     38,935  
  

 

 

   

 

 

   

 

 

 

Total expenses

     129,805       (21,236     108,569  
  

 

 

   

 

 

   

 

 

 

Operating income

     16,792       (4,925     11,867  

Interest expense

     (28,572     5,358       (23,214

Loss on extinguishment of debt and modification costs

     (3,576     620       (2,956

Gain on sales of real estate

     13,742             13,742  
  

 

 

   

 

 

   

 

 

 

Net income (loss)

     (1,614     1,053       (561

Net income attributable to noncontrolling interests

                  

Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership

     (5           (4
  

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to common stockholders

   $ (1,609   $ 1,053     $ (557
  

 

 

   

 

 

   

 

 

 

Other comprehensive income

      

Unrealized gains on interest rate derivatives

     1,931             1,931  
  

 

 

   

 

 

   

 

 

 

Total comprehensive income

     317       1,053       1,370  

Comprehensive income attributable to noncontrolling interests

                  

Comprehensive income attributable to redeemable noncontrolling interests in the Operating Partnership

     1       1       2  
  

 

 

   

 

 

   

 

 

 

Comprehensive income attributable to common stockholders

   $ 316     $ 1,052     $ 1,368  
  

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding – basic

     21,189             21,189  
  

 

 

   

 

 

   

 

 

 

Weighted average common shares outstanding – diluted

     21,667             21,667  
  

 

 

   

 

 

   

 

 

 

Earnings (loss) per share – basic

   $ (0.08   $ 0.05     $ (0.03
  

 

 

   

 

 

   

 

 

 

Earnings (loss) per share – diluted

   $ (0.08   $ 0.05     $ (0.03
  

 

 

   

 

 

   

 

 

 

See accompanying notes to the unaudited pro forma consolidated financial statements

 

6


NEXPOINT RESIDENTIAL TRUST, INC.

NOTES TO UNAUDITED PRO FORMA CONSOLIDATED FINANCIAL STATEMENTS

Balance sheet adjustments

 

  (a)

Represents the unaudited historical consolidated balance sheet of NexPoint Residential Trust, Inc. and subsidiaries (the “Company”) as of June 30, 2019. See the historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2019.

 

  (b)

Reflects the disposition of the Portfolio as if it occurred on June 30, 2019.

 

  (c)

Represents the proceeds from the sale of the Portfolio after adjustments for closing costs, repayment of outstanding debt and other liabilities related to the Portfolio as of June 30, 2019.

 

  (d)

Reflects the change in accumulated earnings arising from the disposition of the Portfolio, net of any estimated gain on disposition. This change has not been reflected in the pro forma consolidated statement of operations because it is considered to be non-recurring in nature.

Income statement adjustments

 

  (a)

Represents the unaudited historical consolidated operations of the Company for the six months ended June 30, 2019. See the historical consolidated financial statements and notes thereto included in the Company’s Quarterly Report on Form 10-Q for the six months ended June 30, 2019.

 

  (b)

Represents the pro forma change in operations that would result if the Portfolio had been disposed of by the Company on January 1, 2018.

 

  (c)

Represents the impact to advisory and administrative fees assuming the sale of the Portfolio occurred on January 1, 2018.

 

  (d)

Represents the audited historical consolidated operations of the Company for the year ended December 31, 2018. See the historical consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018.

 

  (e)

Represents the pro forma change in operations that would result if the Portfolio had been disposed of by the Company on January 1, 2018.

 

  (f)

Represents the impact to advisory and administrative fees assuming the sale of the Portfolio occurred on January 1, 2018.

 

 

7


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

NEXPOINT RESIDENTIAL TRUST, INC.
By:  

/s/ Brian Mitts

 

Name: Brian Mitts

Title: Chief Financial Officer, Executive

VP-Finance, Secretary and Treasurer

Date: September 3, 2019

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