NexPoint Residential Trust, Inc.

Previous wording

As of June 30, 2025, our Portfolio consisted of 35 multifamily properties primarily located in the Southeastern and Southwestern United States encompassing 12,984 units of apartment space that was approximately 93.3% leased with a weighted average monthly effective rent per occupied apartment unit of $1,500. Substantially all of our business is conducted through the OP. We own the Portfolio through the OP and our TRS. The OP owns approximately 99.9% of the Portfolio; our TRS owns approximately 0.1% of the Portfolio. The OP GP is the sole general partner of the OP. As of June 30, 2025, there were 26,053,988 OP Units outstanding, of which 25,951,154, or 99.6%, were owned by us, and 102,834, or 0.4%, were owned by unaffiliated limited partners (see Note 8 to our consolidated financial statements).

Current wording

As of September 30, 2025, our Portfolio consisted of 35 multifamily properties primarily located in the Southeastern and Southwestern United States encompassing 12,984 units of apartment space that was approximately 93.6% leased with a weighted average monthly effective rent per occupied apartment unit of $1,497. Substantially all of our business is conducted through the OP. We own the Portfolio through the OP and our TRS. The OP owns approximately 99.9% of the Portfolio; our TRS owns approximately 0.1% of the Portfolio. The OP GP is the sole general partner of the OP. As of September 30, 2025, there were 26,053,988 OP Units outstanding, of which 25,951,154, or 99.6%, were owned by us, and 102,834, or 0.4%, were owned by unaffiliated limited partners (see Note 8 to our consolidated financial statements).

Previous wording

We are primarily focused on directly or indirectly acquiring, owning, and operating well-located multifamily properties with a value-add component in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. We generate revenue primarily by leasing our multifamily properties. We intend to employ targeted management and a value-add program at a majority of our properties in an attempt to improve rental rates and the net operating income (“NOI”) at our properties and achieve long-term capital appreciation for our stockholders. We are externally managed by the Adviser through the Advisory Agreement, by and among the OP, the Adviser and us. The Advisory Agreement was renewed on February 24, 2025 for a one-year term. The Adviser is wholly owned by NexPoint Advisors, L.P.

Current wording

We are primarily focused on directly or indirectly acquiring, owning, and operating well-located multifamily properties with a value-add component in large cities and suburban submarkets of large cities, primarily in the Southeastern and Southwestern United States. We generate revenue primarily by leasing our multifamily properties. We intend to employ targeted management and a value-add program at a majority of our properties in an attempt to improve rental rates and the net operating income (“NOI”) at our properties and achieve long-term capital appreciation for our stockholders. We are externally managed by the Adviser through the Advisory Agreement, by and among the OP, the Adviser and us. The Advisory Agreement was renewed on February 24, 2025 for a one-year term. The Adviser is wholly owned by the Sponsor.

Previous wording

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code, and expect to continue to qualify as a REIT. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our REIT taxable income to our stockholders. As a REIT, we will be subject to U.S. federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. We believe we qualify for taxation as a REIT under the Code, and we intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify as a REIT. Taxable income from certain non-REIT activities is managed through a TRS and is subject to applicable federal, state, and local income and margin taxes. We had no significant taxes associated with our TRS for the six months ended June 30, 2025 and 2024.

Current wording

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code, and expect to continue to qualify as a REIT. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our REIT taxable income to our stockholders. As a REIT, we will be subject to U.S. federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. We believe we qualify for taxation as a REIT under the Code, and we intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify as a REIT. Taxable income from certain non-REIT activities is managed through a TRS and is subject to applicable federal, state, and local income and margin taxes. We had no significant taxes associated with our TRS for the nine months ended September 30, 2025 and 2024.

Previous wording

The macroeconomic environment remains challenging. Less available and more expensive debt capital has had pronounced effects on the capital markets, making property acquisitions and other investments harder to finance. Similar factors also impact the timing of and proceeds generated from asset sales and our ability to obtain debt capital. Additionally, the U.S. government recently announced a comprehensive set of tariffs. Since then, the U.S. government has paused implementation for some of these tariffs. In addition, the U.S. government has announced additional tariffs on major trading partners of the U.S., which are expected to become effective on August 1. Although certain tariffs have gone into effect, the timing and scope of other tariffs is still currently uncertain. Such tariffs could impact our results of operations by increasing the costs of various goods, including construction materials. The impact of such tariffs is subject to uncertainties regarding the timing of their implementation, the magnitude of such tariffs and possible exemption for certain goods, among other unknowns.

Current wording

The macroeconomic environment remains challenging. Less available and more expensive debt capital has had pronounced effects on the capital markets, making property acquisitions and other investments harder to finance. Similar factors also impact the timing of and proceeds generated from asset sales and our ability to obtain debt capital. The U.S. government announced a comprehensive set of tariffs in the second quarter. Following the pause of certain of these tariffs, the majority of the previously announced tariffs have been implemented. The U.S. government has indicated that it could impose additional tariffs on particular countries and impose global tariffs on certain goods. Such tariffs could impact our results of operations by increasing the costs of various goods, including construction materials. Management is actively engaged with vendors and business partners to reduce financial risks of tariffs; however, the impact of such tariffs is subject to uncertainties regarding the timing of their implementation, the magnitude of such tariffs and possible exemption for certain goods, among other unknowns.

Previous wording

On October 16, 2019, Highland, a former affiliate of our Sponsor, filed for Chapter 11 bankruptcy protection with the United States Bankruptcy Court for the District of Delaware (the “Highland Bankruptcy”). On October 15, 2021, Marc S. Kirschner, as litigation trustee of a litigation subtrust formed pursuant to Highland’s plan of reorganization and disclosure statement which became effective on August 11, 2021, filed a lawsuit (the “Bankruptcy Trust Lawsuit”) against various persons and entities, including our Sponsor and James Dondero. On March 24, 2023, the litigation trustee filed a motion for leave to stay the Bankruptcy Trust Lawsuit, which was granted by the bankruptcy court on April 4, 2023. Per the court’s order, the Bankruptcy Trust Lawsuit is stayed until any party provides 30 days’ notice of the intent to resume the adversary proceeding, with all pending deadlines extended for a period of time commensurate with the length of the stay. As of the date of this filing, the Bankruptcy Trust Lawsuit continues to be stayed. In addition, on February 8, 2023, UBS Securities LLC and UBS AG London (collectively, “UBS”) filed a lawsuit in the Supreme Court of the State of New York, County of New York related to a default that occurred in 2009 on a warehouse facility between UBS and funds affiliated with Highland. The lawsuit makes claims against several persons and entities seeking to collect on $1.3 billion in judgments UBS obtained against entities that were managed indirectly by Highland (the “UBS Lawsuit”). On March 7, 2023, the matter was removed to the United States District Court for the Southern District of New York. On April 6, 2023, UBS moved to have the case remanded to New York state court. The federal court remanded the state-law causes of action and retained and stayed the federal cause of action. On February 26, 2024, several of the respondents, including Mr.Dondero, filed motions in state court to dismiss the UBS Lawsuit on various grounds. A hearing was held on July 8, 2024. The court dismissed the claims against one respondent, CLO HoldCo, Ltd., for lack of personal jurisdiction in a

Current wording

On October 16, 2019, Highland, a former affiliate of our Sponsor, filed for Chapter 11 bankruptcy protection with the United States Bankruptcy Court for the District of Delaware (the “Highland Bankruptcy”). On October 15, 2021, Marc S. Kirschner, as litigation trustee of a litigation subtrust formed pursuant to Highland’s plan of reorganization and disclosure statement which became effective on August 11, 2021, filed a lawsuit (the “Bankruptcy Trust Lawsuit”) against various persons and entities, including our Sponsor and James Dondero. On March 24, 2023, the litigation trustee filed a motion for leave to stay the Bankruptcy Trust Lawsuit, which was granted by the bankruptcy court on April 4, 2023. On June 30, 2025, the bankruptcy court approved a settlement agreement between Highland and Hunter Mountain Investment Trust (“HMIT”) pursuant to which the claims asserted in the Bankruptcy Trust Lawsuit were assigned to HMIT. HMIT subsequently filed a motion to lift the stay of the Bankruptcy Trust Lawsuit, which was granted and became effective on October 3, 2025. As of the date of this filing, the bankruptcy court has requested briefing from the parties regarding whether the court continues to have jurisdiction over the Bankruptcy Trust Lawsuit given the assignment of claims from Highland to HMIT. Briefs on this matter are due on November 18, 2025.In addition, on February 8, 2023, UBS Securities LLC and UBS AG London (collectively, “UBS”) filed a lawsuit in the Supreme Court of the State of New York, County of New York related to a default that occurred in 2009 on a warehouse facility between UBS and funds affiliated with Highland. The lawsuit makes claims against several persons and entities seeking to collect on $1.3 billion in judgments UBS obtained against entities that were managed indirectly by Highland (the “UBS Lawsuit”). On March 7, 2023, the matter was removed to the United States District Court for the Southern District of New York. On April 6, 2023, UBS moved to have the case remanded to New York state court. The federal court remanded the state-law causes of action and retained and stayed the federal cause of action. On February 26, 2024, several of the respondents, including Mr. Dondero, filed motions in state court to dismiss the UBS Lawsuit on various grounds. A hearing was held on July 8, 2024. The court dismissed the claims against one respondent, CLO HoldCo, Ltd., for lack of personal jurisdiction in a July 12, 2024 order. On March 26, 2025, the court entered an order denying the remaining motions to dismiss and directed the respondents to file an answer to the UBS Lawsuit within 20 days, which they did. Mr. Dondero is appealing the denial of the motion to dismiss to the Appellate Division of the Supreme Court of the State of New York. Neither the Bankruptcy Trust Lawsuit nor the UBS Lawsuit include claims related to our business or our assets. Our Sponsor and Mr. Dondero have informed us they believe the Bankruptcy Trust Lawsuit …

Excerpt shortened here; the source contains the full paragraph.

Previous wording

Property management fees. Property management fees include fees paid to BH, our property manager, or other third party management companies for managing each property (see Note 8 to our consolidated financial statements).

Current wording

Property management fees. Property management fees include fees paid to BH, our property manager, or other third party management companies for managing each property (see Note 8 to our consolidated financial statements). Property management fees are primarily based on a component of total revenue.

Previous wording

Corporate general and administrative expenses. Corporate general and administrative expenses include, but are not limited to, audit fees, legal fees, listing fees, board of director fees, equity-based compensation expense, investor relations costs and payments of reimbursements to our Adviser for operating expenses. Corporate general and administrative expenses and the advisory and administrative fees paid to our Adviser (including advisory and administrative fees on properties defined in the Advisory Agreement as New Assets) will not exceed 1.5% of Average Real Estate Assets per calendar year (or part thereof that the Advisory Agreement is in effect), calculated in accordance with the Advisory Agreement, or the Expense Cap. The Expense Cap does not limit the reimbursement by us of expenses related to securities offerings paid by our Adviser. The Expense Cap also does not apply to legal, accounting, financial, due diligence, and other service fees incurred in connection with mergers and acquisitions, extraordinary litigation, or other events outside our ordinary course of business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of real estate assets. Additionally, in the sole discretion of the Adviser, the Adviser may elect to waive certain advisory and administrative fees otherwise due. If advisory and administrative fees are waived in a period, the waived fees for that period are considered to be waived permanently and the Adviser may not be reimbursed in the future. . On April 4, 2025, the compensation committee of the Board recommended that the Board approve the 2025 LTIP, and the Board unanimously approved and determined that the 2025 LTIP was advisable and in the best interests of the Company and the Company’s stockholders. The Board subsequently directed that approval of the 2025 LTIP be submitted for consideration by our stockholders at our annual meeting. On May 20, 2025, the Company’s stockholders approved the 2025 LTIP at our annual meeting of stockholders.

Current wording

Corporate general and administrative expenses. Corporate general and administrative expenses include, but are not limited to, audit fees, legal fees, listing fees, board of director fees, equity-based compensation expense, investor relations costs and payments of reimbursements to our Adviser for operating expenses. Corporate general and administrative expenses and the advisory and administrative fees paid to our Adviser (including advisory and administrative fees on properties defined in the Advisory Agreement as New Assets) will not exceed 1.5% of Average Real Estate Assets per calendar year (or part thereof that the Advisory Agreement is in effect), calculated in accordance with the Advisory Agreement, or the Expense Cap. The Expense Cap does not limit the reimbursement by us of expenses related to securities offerings paid by our Adviser. The Expense Cap also does not apply to legal, accounting, financial, due diligence, and other service fees incurred in connection with mergers and acquisitions, extraordinary litigation, or other events outside our ordinary course of business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of real estate assets. Additionally, in the sole discretion of the Adviser, the Adviser may elect to waive certain advisory and administrative fees otherwise due. If advisory and administrative fees are waived in a period, the waived fees for that period are considered to be waived permanently and the Adviser may not be reimbursed in the future.

Previous wording

Casualty loss. Casualty loss include expenses resulting from damages from an unexpected and unusual event such as a natural disaster. Expenses can include additional payments on insurance premiums, impairment recognized on a property, and other abnormal expenses arising from the related event.

Current wording

Casualty gain. Casualty gain include expenses resulting from damages from an unexpected and unusual event such as a natural disaster. Expenses can include additional payments on insurance premiums, impairment recognized on a property, and other abnormal expenses arising from the related event.

Previous wording

The change in our net loss for the three months ended June 30, 2025 as compared to our net income for the three months ended June 30, 2024 primarily relates to the change in gain on sales of real estate of $18.7 million.

Current wording

The change in our net loss for the three months ended September 30, 2025 as compared to our net loss for the three months ended September 30, 2024 primarily relates to a decrease in total expenses of approximately $3.0 million offset by a decease in total revenues of $1.2 million and an increase in interest expense of $0.9 million.

Previous wording

Other income. Other income was $1.9 million for the three months ended June 30, 2025 compared to $1.9 million for the three months ended June 30, 2024, which was flat.

Current wording

Other income. Other income was $1.9 million for the three months ended September 30, 2025 compared to $1.8 million for the three months ended September 30, 2024, which was an increase of approximately $0.1 million. The increase between the periods was primarily due to an increase in interest income of $0.1 million.

Previous wording

Advisory and administrative fees. Advisory and administrative fees were $1.7 million for the three months ended June 30, 2025 and $1.7 million for the three months ended June 30, 2024. For the three months ended June 30, 2025 and 2024, our Adviser elected to voluntarily waive advisory and administrative fees of approximately $5.3 million and $5.2 million, respectively, and are considered permanently waived. Our Adviser is not contractually obligated to waive fees on New Assets in the future and may cease waiving fees on New Assets at its discretion. Advisory and administrative fees may increase in future periods as we acquire additional properties, which will be classified as New Assets.

Current wording

Advisory and administrative fees. Advisory and administrative fees were $1.8 million for the three months ended September 30, 2025 compared to $1.7 million for the three months ended September 30, 2024. For the three months ended September 30, 2025 and 2024, our Adviser elected to voluntarily waive advisory and administrative fees of approximately $5.4 million and $5.3 million, respectively, and are considered permanently waived. Our Adviser is not contractually obligated to waive fees on New Assets in the future and may cease waiving fees on New Assets at its discretion. Advisory and administrative fees may increase in future periods as we acquire additional properties, which will be classified as New Assets.

Previous wording

Corporate general and administrative expenses. Corporate general and administrative expenses were $4.5 million for the three months ended June 30, 2025 compared to $4.8 million for the three months ended June 30, 2024, which was a decrease of approximately $0.3 million. The decrease was primarily due to decreases in professional fees and stock compensation expense for a total of $0.4 million.

Current wording

Corporate general and administrative expenses. Corporate general and administrative expenses were $4.8 million for the three months ended September 30, 2025 compared to $4.8 million for the three months ended September 30, 2024, which was flat.

Previous wording

Depreciation and amortization. Depreciation and amortization costs were $24.1 million for the three months ended June 30, 2025 compared to $24.4 million for the three months ended June 30, 2024, which was a decrease of approximately $0.3 million, which was attributable to a decrease in our value-add activities over the prior periods.

Current wording

Depreciation and amortization. Depreciation and amortization costs were $23.8 million for the three months ended September 30, 2025 compared to $24.6 million for the three months ended September 30, 2024, which was a decrease of approximately $0.8 million, which was attributable to a decrease in our value-add activities over the prior periods.

Previous wording

Interest expense. Interest expense was $15.2 million for the three months ended June 30, 2025 compared to $14.0 million for the three months ended June 30, 2024, which was an increase of approximately $1.2 million. The increase in interest expense between the periods is primarily attributable to a decrease in interest on debt of approximately $5.5 million, offset by increases in effective interest rate swap expense and amortization of deferred financing costs of $5.5 million and $0.9 million, respectively. The following table details the various costs included in interest expense for the three months ended June 30, 2025 and 2024 (in thousands):

Current wording

Interest expense. Interest expense was $15.5 million for the three months ended September 30, 2025 compared to $14.6 million for the three months ended September 30, 2024, which was an increase of approximately $0.9 million. The increase in interest expense between the periods is primarily attributable to increases in effective interest rate swap expense and amortization of deferred financing costs of $4.8 million and $1.0 million, respectively, offset by a decrease in interest on debt of approximately $5.1 million. The following table details the various costs included in interest expense for the three months ended September 30, 2025 and 2024 (in thousands):

Previous wording

The change in our net loss for the six months ended June 30, 2025 as compared to the net income for the six months ended June 30, 2024 primarily relates to the decrease in gain on sales of real estate of $50.4 million.

Current wording

The change in our net loss for the nine months ended September 30, 2025 as compared to the net income for the nine months ended September 30, 2024 primarily relates to the decrease in gain on sales of real estate of $50.4 million.

Previous wording

Property general and administrative expenses. Property general and administrative expenses were $4.1 million for the six months ended June 30, 2025 compared to $4.9 million for the six months ended June 30, 2024, which was a decrease of approximately $0.8 million. The decrease was primarily due to our disposition activity in 2024.

Current wording

Rental income. Rental income was $183.6 million for the nine months ended September 30, 2025 compared to $190.3 million for the nine months ended September 30, 2024, which was a decrease of approximately $6.7 million. The decrease between the periods was primarily due to our disposition activity in 2024.

Previous wording

Property operating expenses. Property operating expenses were $25.0 million for the six months ended June 30, 2025 compared to $27.5 million for the six months ended June 30, 2024, which was a decrease of approximately $2.5 million. The decrease between the periods was primarily due to our disposition activity in 2024.

Current wording

Property operating expenses. Property operating expenses were $38.4 million for the nine months ended September 30, 2025 compared to $43.2 million for the nine months ended September 30, 2024, which was a decrease of approximately $4.8 million. The decrease between the periods was primarily due to our disposition activity in 2024.

Previous wording

Advisory and administrative fees. Advisory and administrative fees were $3.4 million for the six months ended June 30, 2025 and $3.5 million for the six months ended June 30, 2024 which was a decrease of approximately $0.1 million. For the six months ended June 30, 2025 and 2024, our Adviser elected to voluntarily waive advisory and administrative fees of approximately $10.6 million and $10.7 million and are considered permanently waived. Our Adviser is not contractually obligated to waive fees on New Assets in the future and may cease waiving fees on New Assets at its discretion. Advisory and administrative fees may increase in future periods as we acquire additional properties, which will be classified as New Assets.

Current wording

Advisory and administrative fees. Advisory and administrative fees were $5.2 million for the nine months ended September 30, 2025 and $5.2 million for the nine months ended September 30, 2024 which was flat. For the nine months ended September 30, 2025 and 2024, our Adviser elected to voluntarily waive advisory and administrative fees of approximately $16.0 million and $16.0 million, respectively, and are considered permanently waived. Our Adviser is not contractually obligated to waive fees on New Assets in the future and may cease waiving fees on New Assets at its discretion. Advisory and administrative fees may increase in future periods as we acquire additional properties, which will be classified as New Assets.

Previous wording

Corporate general and administrative expenses. Corporate general and administrative expenses were $9.0 million for the six months ended June 30, 2025 compared to $9.7 million for the six months ended June 30, 2024, which was a decrease of approximately $0.7 million. The decrease was primarily due to a decrease in stock compensation expense of $0.4 million.

Current wording

Corporate general and administrative expenses. Corporate general and administrative expenses were $13.8 million for the nine months ended September 30, 2025 compared to $14.5 million for the nine months ended September 30, 2024, which was a decrease of approximately $0.7 million. The decrease was primarily due to a decrease in stock compensation expense of $0.5 million.

Previous wording

Depreciation and amortization. Depreciation and amortization costs were $48.4 million for the six months ended June 30, 2025 compared to $48.8 million for the six months ended June 30, 2024, which was a decrease of approximately $0.4 million. The decrease between the periods was primarily due to a decrease of $0.4 million in depreciation expense, which was primarily due to a decrease in our value-add activities over the prior periods.

Current wording

Depreciation and amortization. Depreciation and amortization expense was $72.2 million for the nine months ended September 30, 2025 compared to $73.4 million for the nine months ended September 30, 2024, which was a decrease of approximately $1.2 million. The decrease between the periods was primarily due to a decrease of $1.2 million in depreciation expense, which was primarily due to a decrease in our value-add activities over the prior periods.

Previous wording

Interest expense. Interest expense was $29.5 million for the six months ended June 30, 2025 compared to $28.4 million for the six months ended June 30, 2024, which was an increase of approximately $1.1 million. The increase between the periods was primarily due to a decrease in interest on debt of $12.0 million, offset by a decrease in benefit from interest rate swaps and increase in amortization of deferred financing costs of $10.0 million and $1.9 million, respectively. The following table details the various costs included in interest expense for the six months ended June 30, 2025 and 2024 (in thousands):

Current wording

Interest expense. Interest expense was $45.0 million for the nine months ended September 30, 2025 compared to $43.0 million for the nine months ended September 30, 2024, which was an increase of approximately $2.0 million. The increase between the periods was primarily due to an increase in amortization of deferred financing costs of $14.9 million and $2.9 million offset by a decrease in interest on debt of $17.1 million, respectively. The following table details the various costs included in interest expense for the nine months ended September 30, 2025 and 2024 (in thousands):

Previous wording

Casualty loss. Casualty loss was $0.2 million and a $0.5 million for the six months ended June 30, 2025 and 2024, respectively. The decrease in casualty loss between periods of $0.3 million is attributable to the Company's casualty events and the timing.

Current wording

Casualty loss. Casualty loss was $0.2 million and $0.5 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease in casualty loss between periods of $0.3 million is attributable to the Company's casualty events and the timing.

Previous wording

Miscellaneous income. Miscellaneous income was $0.3 million compared to $0.2 million for the six months ended June 30, 2025 and 2024, respectively. The increase between periods is attributable to an increase in business interruption proceeds.

Current wording

Miscellaneous income. Miscellaneous income was $0.4 million compared to $0.3 million for the nine months ended September 30, 2025 and 2024, respectively. The increase between periods is attributable to an increase in business interruption proceeds.

Previous wording

Gain on sale of real estate. Gain on sale of real estate was $0.0 million compared to $50.4 million for the six months ended June 30, 2025 and 2024, respectively. The decrease between periods is attributable to no dispositions during the six months ended June 30, 2025 compared to two during the six months ended June 30, 2024.

Current wording

Gain on sale of real estate. Gain on sale of real estate was $0.0 million compared to $50.4 million for the nine months ended September 30, 2025 and 2024, respectively. The decrease between periods is attributable to no dispositions during the nine months ended September 30, 2025 compared to two during the nine months ended September 30, 2024.

Previous wording

NOI is a non-GAAP financial measure of performance. NOI is used by investors and our management to evaluate and compare the performance of our properties to other comparable properties, to determine trends in earnings and to compute the fair value of our properties as NOI is calculated by adjusting net income (loss) to add back (1) interest expense, (2) advisory and administrative fees, (3) depreciation and amortization expenses, (4) gains or losses from the sale of operating real estate assets that are included in net income (loss) computed in accordance with GAAP, (5) corporate income and corporate general and administrative expenses that are not reflective of operations and properties, (6) other gains and losses that are specific to us including loss on extinguishment of debt and modification costs, (7) casualty-related expenses/(recoveries) and casualty gains (losses), (8) property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on behalf of the Company at the property for expenses such as legal, professional, centralized leasing service and franchise tax fees and (9) equity in earnings of affiliates.

Current wording

NOI is a non-GAAP financial measure of performance. NOI is used by investors and our management to evaluate and compare the performance of our properties to other comparable properties, to determine trends in earnings and to compute the fair value of our properties as NOI is calculated by adjusting net income (loss) to add back (1) interest expense, (2) advisory and administrative fees, (3) depreciation and amortization expenses, (4) gains or losses from the sale of operating real estate assets that are included in net income (loss) computed in accordance with GAAP, (5) corporate income and corporate general and administrative expenses that are not reflective of operations and properties, (6) other gains and losses that are specific to us including loss on extinguishment of debt and modification costs, (7) casualty-related expenses/(recoveries) and casualty losses (gains), (8) property general and administrative expenses that are not reflective of the continuing operations of the properties or are incurred on behalf of the Company at the property for expenses such as legal, professional, centralized leasing service and franchise tax fees and (9) equity in earnings of affiliates.

Previous wording

The cost of funds is eliminated from net income (loss) because it is specific to our particular financing capabilities and constraints. The cost of funds is also eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by us regarding the appropriate mix of capital, which may have changed or may change in the future. Advisory and administrative fees and corporate general and administrative expenses are eliminated because they do not reflect continuing operating costs of the property owner. Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are eliminated because they may not accurately represent the actual change in value in our multifamily properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole have historically increased or decreased as a result of changes in overall economic conditions instead of from actual use of the property or the passage of time. Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale, which will usually change from period to period. Casualty-related expenses and recoveries, casualty losses, and losses on the extinguishment of debt and modification costs are excluded because they do not reflect continuing operating costs of the property owner. Entity level general and administrative expenses incurred at the properties are eliminated as they are specific to the way in which we have chosen to hold our properties and are the result of our ownership structuring. Equity in earnings of affiliates is excluded as its not part of our core operations for the properties. These items can create distortions when comparing one period to another or when comparing our operating results to the operating results of other real estate companies that have not made similarly timed purchases or sales. We believe that eliminating these items from net income (loss) is useful because the resulting measure captures the actual ongoing revenue generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs.

Current wording

The cost of funds is eliminated from net income (loss) because it is specific to our particular financing capabilities and constraints. The cost of funds is also eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by us regarding the appropriate mix of capital, which may have changed or may change in the future. Advisory and administrative fees and corporate general and administrative expenses are eliminated because they do not reflect continuing operating costs of the property owner. Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are eliminated because they may not accurately represent the actual change in value in our multifamily properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole have historically increased or decreased as a result of changes in overall economic conditions instead of from actual use of the property or the passage of time. Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale, which will usually change from period to period. Casualty-related expenses and recoveries, casualty gains and losses, and losses on the extinguishment of debt and modification costs are excluded because they do not reflect continuing operating costs of the property owner. Entity level general and administrative expenses incurred at the properties are eliminated as they are specific to the way in which we have chosen to hold our properties and are the result of our ownership structuring. Equity in earnings of affiliates is excluded as its not part of our core operations for the properties. These items can create distortions when comparing one period to another or when comparing our operating results to the operating results of other real estate companies that have not made similarly timed purchases or sales. We believe that eliminating these items from net income (loss) is useful because the resulting measure captures the actual ongoing revenue generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs.

Previous wording

The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles our NOI and our Same Store NOI for the three and six months ended June 30, 2025 and 2024 to net income (loss), the most directly comparable GAAP financial measure (in thousands):

Current wording

The following table, which has not been adjusted for the effects of noncontrolling interests, reconciles our NOI and our Same Store NOI for the three and nine months ended September 30, 2025 and 2024 to net income (loss), the most directly comparable GAAP financial measure (in thousands):

Previous wording

$31.5 million with a related party for the six months ended June 30, 2024.

Current wording

$31.5 million with a related party for the nine months ended September 30, 2024.

Previous wording

See reconciliation of net loss to NOI above under “NOI and Same Store NOI for the Three and Six Months Ended June 30, 2025 and 2024.”

Current wording

See reconciliation of net loss to NOI above under “NOI and Same Store NOI for the Three and Nine Months Ended September 30, 2025 and 2024.”

Previous wording

As of June 30, 2025, our Q2 Same Store properties were approximately 93.3% leased with a weighted average monthly effective rent per occupied apartment unit of $1,500. As of June 30, 2024, our Q2 Same Store properties were approximately 94.1% leased with a weighted average monthly effective rent per occupied apartment unit of $1,520. For our Q2 Same Store properties, we recorded the following operating results for the three months ended June 30, 2025 as compared to the three months ended June 30, 2024:

Current wording

As of September 30, 2025, our Q3 Same Store properties were approximately 93.6% leased with a weighted average monthly effective rent per occupied apartment unit of $1,497. As of September 30, 2024, our Q3 Same Store properties were approximately 94.9% leased with a weighted average monthly effective rent per occupied apartment unit of $1,502. For our Q3 Same Store properties, we recorded the following operating results for the three months ended September 30, 2025 as compared to the three months ended September 30, 2024:

Previous wording

Rental income. Rental income was $61.2 million for the three months ended June 30, 2025 compared to $61.6 million for the three months ended June 30, 2024, which was a decrease of approximately $0.4 million, or 0.6%. The decrease is attributable to a decrease in weighted average occupancy during the three months ended June 30, 2025 compared to the three months ended June 30, 2024.

Current wording

Rental income. Rental income was $60.9 million for the three months ended September 30, 2025 compared to $61.5 million for the three months ended September 30, 2024, which was a decrease of approximately $0.6 million, or 1.0%. The decrease is attributable to a decrease in weighted average occupancy during the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Previous wording

Other income. Other income was $1.5 million for the three months ended June 30, 2025, compared to $1.3 million for the three months ended June 30, 2024, which was an increase of $0.2 million. The majority of the increase is related to a $0.1 million increase in interest income.

Current wording

Other income. Other income was $1.5 million for the three months ended September 30, 2025, compared to $1.3 million for the three months ended September 30, 2024, which was an increase of $0.2 million. The majority of the increase is related to a $0.3 million increase in internet income.

Previous wording

Real estate taxes and insurance. Real estate taxes and insurance costs were $8.5 million for the three months ended June 30, 2025 compared to $8.2 million for the three months ended June 30, 2024, which was an increase of approximately $0.3 million. The increase between the periods was primarily due to an increase in real estate taxes of $0.5 million, partially offset by a decrease in insurance of $0.3 million.

Current wording

Real estate taxes and insurance. Real estate taxes and insurance costs were $7.3 million for the three months ended September 30, 2025 compared to $8.2 million for the three months ended September 30, 2024, which is a decrease of $0.9 million. The decrease between periods was primarily due to a decrease in property taxes and insurance of $0.5 million and $0.3 million, respectively.

Previous wording

Net Operating Income for Our Same Store and Non-Same Store Properties for the Six Months Ended June 30, 2025 and 2024

Current wording

Net Operating Income for Our Same Store and Non-Same Store Properties for the Nine Months Ended September 30, 2025 and 2024

Previous wording

There are 35 properties encompassing 12,946 units of apartment space in our same store pool for the six months ended June 30, 2025 and 2024 (our “Same Store” properties). Our Same Store properties exclude 38 units that are currently down (see Note 3).

Current wording

There are 35 properties encompassing 12,946 units of apartment space in our same store pool for the nine months ended September 30, 2025 and 2024 (our “Same Store” properties). Our Same Store properties exclude 38 units that are currently down (see Note 3).

Previous wording

The following table reflects the revenues, property operating expenses and NOI for the six months ended June 30, 2025 and 2024 for our Same Store and Non-Same Store properties (dollars in thousands):

Current wording

The following table reflects the revenues, property operating expenses and NOI for the nine months ended September 30, 2025 and 2024 for our Same Store and Non-Same Store properties (dollars in thousands):

Previous wording

For the six months ended June 30, 2025 and 2024, excludes approximately $1,626,000 and $2,064,000, respectively, of expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees.

Current wording

For the nine months ended September 30, 2025 and 2024, excludes approximately $2,696,000 and $2,654,000, respectively, of expenses that are not reflective of the continuing operations of the properties or are incurred on our behalf at the property for expenses such as legal, professional and franchise tax fees.

Previous wording

See reconciliation of net income (loss) to NOI above under “NOI and Same Store NOI for the Three and Six Months Ended June 30, 2025 and 2024.”

Current wording

See reconciliation of net loss to NOI above under “NOI and Same Store NOI for the Three and Nine Months Ended September 30, 2025 and 2024.”

Previous wording

Same Store Results of Operations for the Six Months Ended June 30, 2025 and 2024

Current wording

Same Store Results of Operations for the Nine Months Ended September 30, 2025 and 2024

Previous wording

As of June 30, 2025, our Same Store properties were approximately 93.3% leased with a weighted average monthly effective rent per occupied apartment unit of $1,500. As of June 30, 2024, our Same Store properties were approximately 94.1% leased with a weighted average monthly effective rent per occupied apartment unit of $1,520. For our Same Store properties, we recorded the following operating results for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024:

Current wording

As of September 30, 2025, our Same Store properties were approximately 93.6% leased with a weighted average monthly effective rent per occupied apartment unit of $1,497. As of September 30, 2024, our Same Store properties were approximately 94.9% leased with a weighted average monthly effective rent per occupied apartment unit of $1,502. For our Same Store properties, we recorded the following operating results for the nine months ended September 30, 2025 as compared to the nine months ended September 30, 2024: