NexPoint Residential Trust, Inc.

Previous wording

The following is a discussion and analysis of our financial condition and our historical results of operations. The following should be read in conjunction with our financial statements and accompanying notes included herein and with our 2025 Annual Report, filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2026. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those projected, forecasted, or expected in these forward-looking statements as a result of various factors, including, but not limited to, those discussed below and elsewhere in this quarterly report. See “Cautionary Statement Regarding Forward-Looking Statements” in this report, and “Risk Factors” in Part I, Item 1A, “Risk Factors” of our 2025 Annual Report. Our management believes the assumptions underlying the Company’s financial statements and accompanying notes are reasonable. However, the Company’s financial statements and accompanying notes may not be an indication of our financial condition and results of operations in the future.

Current wording

The following is a discussion and analysis of our financial condition and our historical results of operations. The following should be read in conjunction with our financial statements and accompanying notes included herein and with our 2025 Annual Report, filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2026. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those projected, forecasted, or expected in these forward-looking statements as a result of various factors, including, but not limited to, those discussed below and elsewhere in this quarterly report and in our 2025 Annual Report. See “Cautionary Statement Regarding Forward-Looking Statements” in this report, and Part I, Item 1A, “Risk Factors” in our 2025 Annual Report. Our management believes the assumptions underlying the Company’s financial statements and accompanying notes are reasonable. However, the Company’s financial statements and accompanying notes may not be an indication of our financial condition and results of operations in the future.

Previous wording

As of June 30, 2026, our Portfolio consisted of 36 multifamily properties primarily located in the Southeastern and Southwestern United States encompassing 13,305 units of apartment space that was approximately 93.5% leased with a weighted average monthly effective rent per occupied apartment unit of $1,490. 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, 2026, 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, 2026, our Portfolio consisted of 36 multifamily properties primarily located in the Southeastern and Southwestern United States encompassing 13,305 units of apartment space that was approximately 92.8% occupied with a weighted average monthly effective rent per occupied apartment unit of $1,489. 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, 2026, 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 23, 2026 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 23, 2026 for a one-year term. The Adviser is wholly owned by our 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, 2026 and 2025.

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, 2026 and 2025.

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”), which was subsequently transferred to the United States Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Court”). 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 and was subsequently amended, filed a lawsuit (the “Bankruptcy Trust Lawsuit”) against various persons and entities, including our Sponsor and James Dondero. The Bankruptcy Trust Lawsuit does not include claims related to our business or assets or operations. On March 24, 2023, the litigation trustee filed a motion seeking to voluntarily 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 July 15, 2026. In addition, on February 8, 2023, UBS Securities LLC and its affiliate (collectively, “UBS”) filed a lawsuit in the Supreme Court of the State of New York, County of New York against Mr. Dondero and a number of other 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 February 26, 2024, the respondents, including Mr. Dondero, filed motions to dismiss the UBS Lawsuit. 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 August 24, 2024, UBS filed a notice of appeal for that dismissal order, but withdrew its appeal on December 31, 2025. 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 and the other remaining respondents are appealing the denial of the motion to dismiss to the Appellate Division of the Supreme Court of the State of New York. The appeal was argued on April 8, 2026. The Supreme Court rescheduled a status conference in the UBS Lawsuit previously set for July 14, 2026 to September 15, 2026. 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 has no merit, and Mr. Dondero has informed us he believes the UBS Lawsuit has no merit; we have been advised that the defendants named in each of the lawsuits …

Excerpt shortened here; the source contains the full paragraph.

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”), which was subsequently transferred to the United States Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Court”). 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 and was subsequently amended, filed a lawsuit (the “Bankruptcy Trust Lawsuit”) against various persons and entities, including our Sponsor and James Dondero. The Bankruptcy Trust Lawsuit does not include claims related to our business or assets or operations. On March 24, 2023, the litigation trustee filed a motion seeking to voluntarily 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 July 15, 2026. The defendants have filed motions to dismiss the Bankruptcy Trust Lawsuit, which are pending before the trial court. In addition, on February 8, 2023, UBS Securities LLC and its affiliate (collectively, “UBS”) filed a lawsuit in the Supreme Court of the State of New York, County of New York against Mr. Dondero and a number of other 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 September 23, 2026, the trial court entered judgment in favor of Mr. Dondero, disposing of all of the claims UBS asserted against him. 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 has no merit and we have been advised that the defendants named in the Bankruptcy Trust Lawsuit intend to vigorously defend against the claims. We do not expect the Bankruptcy Trust Lawsuit will have a material effect on our business, results of operations or financial condition.

Previous wording

Other income. Other income includes ancillary income earned from tenants such as non-refundable fees, application fees, laundry fees, cable TV income, and other miscellaneous fees charged to tenants, as well as interest income from the Waterford Loan.

Current wording

Other income. Other income includes ancillary income earned from tenants such as non-refundable fees, application fees, laundry fees, internet income, cable TV income, and other miscellaneous fees charged to tenants, as well as interest income from the Waterford Loan.

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 Adviser Operating Expenses. Under the Advisory Agreement, reimbursement of Adviser Operating Expenses and the 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 Fees otherwise due. If 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.

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. Under the Advisory Agreement, reimbursement of Operating Expenses and the Fees paid to our Adviser 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 Fees otherwise due. If 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 includes 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 includes 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, 2026 as compared to our net loss for the three months ended June 30, 2025 primarily relates to an increase in total operating expenses and interest expense of $2.1 million and $0.7 million, respectively, offset by an increase in total revenues of $1.5 million.

Current wording

The change in our net loss for the three months ended September 30, 2026 as compared to our net loss for the three months ended September 30, 2025 primarily relates to an increase in total expenses and interest expense of approximately $2.7 million and $2.6 million, respectively, offset by an increase in total revenues of $1.6 million.

Previous wording

Other income. Other income was $2.8 million for the three months ended June 30, 2026 compared to $1.9 million for the three months ended June 30, 2025, which was an increase of approximately $0.9 million. The increase between the periods was primarily due to an increase in internet income and deposit insurance of $0.5 million and $0.1 million, respectively.

Current wording

Other income. Other income was $3.1 million for the three months ended September 30, 2026 compared to $1.9 million for the three months ended September 30, 2025, which was an increase of approximately $1.2 million. The increase between the periods was primarily due to an increase in internet income of $0.4 million and interest income of $0.5 million.

Previous wording

Advisory and administrative fees. Advisory and administrative fees were $1.8 million for the three months ended June 30, 2026 and $1.7 million for the three months ended June 30, 2025, which was an increase of approximately $0.1 million. For the three months ended June 30, 2026 and 2025, our Adviser elected to voluntarily waive advisory and administrative fees of approximately $5.5 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.

Current wording

Advisory and administrative fees. Advisory and administrative fees were $1.8 million for the three months ended September 30, 2026 compared to $1.8 million for the three months ended September 30, 2025. For the three months ended September 30, 2026 and 2025, our Adviser elected to voluntarily waive advisory and administrative fees of approximately $5.5 million and $5.4 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

Interest expense. Interest expense was $15.8 million for the three months ended June 30, 2026 compared to $15.2 million for the three months ended June 30, 2025, which was an increase of approximately $0.6 million. The increase in interest expense between the periods is primarily attributable to a decreased benefit from interest rate swaps of $1.9 million, offset by a decrease of $1.1 million in interest on debt. The following table details the various costs included in interest expense for the three months ended June 30, 2026 and 2025 (in thousands):

Current wording

Interest expense. Interest expense was $18.1 million for the three months ended September 30, 2026 compared to $15.5 million for the three months ended September 30, 2025, which was an increase of approximately $2.6 million. The increase in interest expense between the periods is primarily attributable to a decreased benefit from interest rate swaps of $3.8 million, partially offset by a decrease in interest on debt of $1.0 million. The following table details the various costs included in interest expense for the three months ended September 30, 2026 and 2025 (in thousands):

Previous wording

Miscellaneous income. Miscellaneous income was $0.0 million compared to $0.1 million for the three months ended June 30, 2026 and 2025, respectively, which was a decrease of $0.1 million. The decrease between periods is attributable to a decrease of business interruption proceeds of $0.1 million.

Current wording

Miscellaneous income. Miscellaneous income was $0.1 million compared to $0.1 million for the three months ended September 30, 2026 and 2025, respectively, which was flat.

Previous wording

The change in our net loss for the six months ended June 30, 2026 as compared to the net loss for the six months ended June 30, 2025 primarily relates to an increase in interest expense of $1.7 million.

Current wording

The change in our net loss for the nine months ended September 30, 2026 as compared to the net loss for the nine months ended September 30, 2025 primarily relates to an increase in total expenses and interest expense of $4.2 million and of $4.3 million, respectively, offset by an increase in total revenues of $3.4 million.

Previous wording

Rental income. Rental income was $122.9 million for the six months ended June 30, 2026 compared to $122.7 million for the six months ended June 30, 2025, which was an increase of approximately $0.2 million. The increase between the periods was primarily due to our acquisition activity in the fourth quarter of 2025, offset by increases in vacancy loss and rent concessions of $1.4 million and $1.3 million, respectively.

Current wording

Rental income. Rental income was $184.3 million for the nine months ended September 30, 2026 compared to $183.6 million for the nine months ended September 30, 2025, which was an increase of approximately $0.7 million. The increase between the periods was primarily due to an increase in market rent of $4.7 million, partially offset by increases in vacancy loss and one-time rent concessions of $2.1 million and $1.7 million, respectively.

Previous wording

Real estate taxes and insurance. Real estate taxes and insurance costs were $8.2 million for the three months ended June 30, 2026 compared to $8.5 million for the three months ended June 30, 2025, which was a decrease of approximately $0.3 million. The decrease between the periods was primarily due to a decreases of property taxes and property liability insurance of $0.1 million and $0.2 million, respectively.

Current wording

Real estate taxes and insurance. Real estate taxes and insurance costs were $24.5 million for the nine months ended September 30, 2026 compared to $24.8 million for the nine months ended September 30, 2025, which was a decrease of approximately $0.3 million. The decrease between the periods was primarily due to a decrease in property/liability insurance costs of $0.5 million, partially offset by an increase in real estate taxes of $0.3 million.

Previous wording

Advisory and administrative fees. Advisory and administrative fees were $3.6 million for the six months ended June 30, 2026 and $3.4 million for the six months ended June 30, 2025 which was an increase of approximately $0.2 million. For the six months ended June 30, 2026 and 2025, our Adviser elected to voluntarily waive advisory and administrative fees of approximately $10.9 million and $10.6 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 $5.4 million for the nine months ended September 30, 2026 and $5.2 million for the nine months ended September 30, 2025 which was an increase of approximately $0.2 million. For the nine months ended September 30, 2026 and 2025, our Adviser elected to voluntarily waive advisory and administrative fees of approximately $16.5 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

Property general and administrative expenses. Property general and administrative expenses were $4.8 million for the six months ended June 30, 2026 compared to $4.1 million for the six months ended June 30, 2025, which was an increase of approximately $0.7 million. The increase was primarily due to our acquisition activity in 2025.

Current wording

Property general and administrative expenses. Property general and administrative expenses were $7.4 million for the nine months ended September 30, 2026 compared to $6.7 million for the nine months ended September 30, 2025, which was an increase of approximately $0.7 million. The increase was primarily due to an increase in centralized services costs and locator fees of $0.4 million and $0.2 million, respectively.

Previous wording

Depreciation and amortization. Depreciation and amortization costs were $48.2 million for the six months ended June 30, 2026 compared to $48.4 million for the six months ended June 30, 2025, which was a decrease of approximately $0.2 million. The decrease between the periods was primarily due to a decrease of $1.2 million in depreciation expense, offset by an increase in amortization expense of $0.9 million.

Current wording

Depreciation and amortization. Depreciation and amortization expense was $71.4 million for the nine months ended September 30, 2026 compared to $72.2 million for the nine months ended September 30, 2025, which was a decrease of approximately $0.8 million. The decrease between the periods was primarily due to a decrease of $1.7 million in depreciation expense, partially offset by an increase in amortization of lease-in-place of $0.9 million.

Previous wording

Interest expense. Interest expense was $31.3 million for the six months ended June 30, 2026 compared to $29.5 million for the six months ended June 30, 2025, which was an increase of approximately $1.7 million. The increase between the periods was primarily due to a decrease benefit from interest rate swaps of $4.8 million, offset by a decrease in interest on debt and interest rate caps mark-to-market of $2.4 million and $0.9 million, respectively. The following table details the various costs included in interest expense for the six months ended June 30, 2026 and 2025 (in thousands):

Current wording

Interest expense. Interest expense was $49.3 million for the nine months ended September 30, 2026 compared to $45.0 million for the nine months ended September 30, 2025, which was an increase of approximately $4.3 million. The increase between the periods was primarily due to a decreased benefit of interest rate swaps of $8.6 million, partially offset by a decrease in interest on debt and interest rate caps mark-to-market of $3.4 million and $1.1 million, respectively. The following table details the various costs included in interest expense for the nine months ended September 30, 2026 and 2025 (in thousands):

Previous wording

Casualty loss. Casualty loss was $0.0 million and $0.2 million for the six months ended June 30, 2026 and 2025, respectively. The decrease in casualty loss between periods of $0.2 million is attributable to the Company's casualty events and the timing thereof.

Current wording

Casualty gain (loss). Casualty gain was less than $0.1 million for the nine months ended September 30, 2026 and casualty loss was $0.2 million for the nine months ended September 30, 2025. The decrease in casualty loss between periods of approximately $0.2 million is attributable to the timing of the Company's casualty events.

Previous wording

Miscellaneous income. Miscellaneous income was $0.1 million compared to $0.3 million for the six months ended June 30, 2026 and 2025, respectively, which was a decrease of $0.2 million. The decrease between periods is attributable to a decrease in business interruption proceeds.

Current wording

Miscellaneous income. Miscellaneous income was $0.2 million compared to $0.4 million for the nine months ended September 30, 2026 and 2025, respectively. The decrease between periods is attributable to a decrease in business interruption proceeds of $0.2 million.

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) corporate income and corporate general and administrative expenses that are not reflective of operations of the properties, (5) casualty-related expenses/(recoveries) and casualty loss, (6) 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 (7) equity in earnings of affiliate.

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) corporate income and corporate general and administrative expenses that are not reflective of operations of the properties, (5) casualty-related expenses/(recoveries) and casualty (gain) loss, (6) 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 (7) equity in earnings of affiliate.

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, 2026 and 2025 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, 2026 and 2025 to net loss, the most directly comparable GAAP financial measure (in thousands):

Previous wording

There are 35 properties encompassing 12,984 units of apartment space in our same store pool for the three months ended June 30, 2026 and 2025 (our “Q2 Same Store” properties). Our Q2 Same Store properties exclude the following property in our Portfolio as of June 30, 2026: Sedona at Lone Mountain. We consider a property to be a same store property if we held the property during the entirety of both periods.

Current wording

There are 35 properties encompassing 12,980 units of apartment space in our same store pool for the three months ended September 30, 2026 and 2025 (our “Q3 Same Store” properties). Our Q3 Same Store properties exclude 4 units that are currently down and the following property in our Portfolio as of September 30, 2026: Sedona at Lone Mountain. We consider a property to be a same store property if we held the property during the entirety of both periods.

Previous wording

Fees incurred to an affiliate of the noncontrolling limited partners of the OP.

Current wording

Fees incurred to an affiliate of the noncontrolling limited partner of the OP.

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, 2026 and 2025.”

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, 2026 and 2025.”

Previous wording

As of June 30, 2026, our Q2 Same Store properties were approximately 93.6% leased with a weighted average monthly effective rent per occupied apartment unit of $1,487. 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. For our Q2 Same Store properties, we recorded the following operating results for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025.

Current wording

As of September 30, 2026, our Q3 Same Store properties were approximately 92.9% occupied with a weighted average monthly effective rent per occupied apartment unit of $1,487. As of September 30, 2025, our Q3 Same Store properties were approximately 93.6% occupied with a weighted average monthly effective rent per occupied apartment unit of $1,497. For our Q3 Same Store properties, we recorded the following operating results for the three months ended September 30, 2026 as compared to the three months ended September 30, 2025:

Previous wording

Rental income. Rental income was $60.4 million for the three months ended June 30, 2026 compared to $61.2 million for the three months ended June 30, 2025, which was a decrease of approximately $0.8 million, or 1.4%. The decrease is attributable to a decrease in weighted average monthly effective rent during the three months ended June 30, 2026 compared to the three months ended June 30, 2025.

Current wording

Rental income. Rental income was $60.0 million for the three months ended September 30, 2026 compared to $60.9 million for the three months ended September 30, 2025, which was a decrease of approximately $0.9 million, or 1.4%. The decrease is attributable to an increase in vacancy loss and one-time rent concessions of $0.5 million and $0.3 million, respectively.

Previous wording

Other income. Other income was $2.0 million for the three months ended June 30, 2026, compared to $1.5 million for the three months ended June 30, 2025, which was an increase of $0.5 million, or 29.2%. The majority of the increase is related to a $0.5 million increase in internet income.

Current wording

Other income. Other income was $2.0 million for the three months ended September 30, 2026, compared to $1.5 million for the three months ended September 30, 2025, which was an increase of $0.5 million or 29.4%. The majority of the increase is related to a $0.4 million increase in internet income.

Previous wording

Real estate taxes and insurance. Real estate taxes and insurance costs were $8.1 million for the three months ended June 30, 2026 compared to $8.5 million for the three months ended June 30, 2025, which is a decrease of $0.4 million, or 4.8%. The decrease between periods was primarily due to a decrease in real property taxes and property liability expense of $0.2 million and $0.2 million, respectively.

Current wording

Real estate taxes and insurance. Real estate taxes and insurance costs were $8.1 million for the three months ended September 30, 2026 compared to $7.3 million for the three months ended September 30, 2025, which is an increase of $0.8 million or 10.6%. The increase between periods was primarily due to an increase in property tax of $0.8 million.

Previous wording

Property general and administrative expenses. Property general and administrative expenses were $2.8 million for the six months ended June 30, 2026 compared to $2.5 million for the six months ended June 30, 2025, which was an increase of approximately $0.3 million, or 11.3%. The majority of the increase is related to an increase in marketing portals expense and locator fees of $0.1 million and $0.1 million, respectively.

Current wording

Property general and administrative expenses. Property general and administrative expenses were $1.6 million for the three months ended September 30, 2026 compared to $1.3 million for the three months ended September 30, 2025, which was an increase of $0.3 million or 20.1%. The increase between periods was primarily due to increases in locator fees and eviction costs of $0.1 million and $0.1 million, respectively.

Previous wording

Net Operating Income for Our Same Store and Non-Same Store Properties for the Six Months Ended June 30, 2026 and 2025

Current wording

Net Operating Income for Our Same Store and Non-Same Store Properties for the Nine Months Ended September 30, 2026 and 2025

Previous wording

There are 35 properties encompassing 12,984 units of apartment space in our same store pool for the six months ended June 30, 2026 and 2025 (our “Same Store” properties). Our Q2 Same Store properties exclude the following property in our Portfolio as of June 30, 2026: Sedona at Lone Mountain. We consider a property to be a same store property if we held the property during the entirety of both periods.

Current wording

There are 35 properties encompassing 12,980 units of apartment space in our same store pool for the nine months ended September 30, 2026 and 2025 (our “Same Store” properties). Our Same Store properties exclude 4 units that are currently down and the following property in our Portfolio as of September 30, 2026: Sedona at Lone Mountain. We consider a property to be a same store property if we held the property during the entirety of both periods.

Previous wording

The following table reflects the revenues, property operating expenses and NOI for the six months ended June 30, 2026 and 2025 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, 2026 and 2025 for our Same Store and Non-Same Store properties (dollars in thousands):

Previous wording

Fees incurred to an unaffiliated third party that is an affiliate of the noncontrolling limited partner of the OP.

Current wording

Fees incurred to an unaffiliated third party that is an affiliate of a noncontrolling limited partner of the OP.

Previous wording

For the six months ended June 30, 2026 and 2025, excludes approximately $1,869,000 and $1,626,000, 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, 2026 and 2025, excludes approximately $2,912,000 and $2,696,000, 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

For the six months ended June 30, 2026 and 2025, excludes approximately $2,000 and $1,000, respectively, of casualty-related expenses.

Current wording

For the nine months ended September 30, 2026 and 2025, excludes approximately $2,000 and $0, respectively, of casualty-related expenses.

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, 2026 and 2025.”

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, 2026 and 2025.”

Previous wording

Same Store Results of Operations for the Six Months Ended June 30, 2026 and 2025

Current wording

Same Store Results of Operations for the Nine Months Ended September 30, 2026 and 2025