NexPoint Real Estate Finance Inc
For the period ended Sep 30, 2024. Filed Nov 7, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 7, 2024
NREF$13.40-1.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-08.
0001786248-24-000017
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-07.
0001786248-24-000022
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 163 previous paragraphs and 162 current paragraphs.
105 unchanged; 51 reworded; 6 added; 4 removed; 3 previous and 0 current paragraphs rearranged.
Tables are not compared: 18 previous and 18 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (6)
Current report
Management fees. Management fees were $2.8 million for the nine months ended September 30, 2024 compared to $2.5 million for the nine months ended September 30, 2023.
Current report
On May 23, 2024, NexPoint Bridge Investor I, LLC (“Bridge Investor I”), an entity owned by an affiliate of the Manager, entered into a Secured Convertible Promissory Note and Warrant Purchase Agreement (“Purchase Agreement”) whereby IQHQ, L.P. issued and sold to Bridge Investor I a Secured Convertible Promissory Note (“IQHQ Promissory Note”) with a purchase commitment of $150.0 million. The IQHQ Promissory Note bears interest at 16.5%, which is payable in kind, and matures on May 23, 2025, which may be extended up to two times for a period of six months after each extension at the option of IQHQ, L.P. upon payment of an extension fee. The IQHQ Promissory Note will automatically convert into Series E preferred stock of IQHQ, L.P. upon a Qualified Equity Financing (as defined in the IQHQ Promissory Note). In accordance with the Purchase Agreement, IQHQ Holdings, L.P. (“IQHQ Holdings”) also issued and sold a corresponding warrant to Bridge Investor I to purchase Class A-3 Units of IQHQ Holdings (the “IQHQ Warrant”). The IQHQ Warrant entitles the holder to purchase, at an exercise price of $0.01, Class A-3 Units of IQHQ Holdings representing up to 6.25% of the fully diluted and outstanding common equity of IQHQ Holdings if the IQHQ Promissory Note is fully funded. The IQHQ Warrant is exercisable, in whole or in part, at any time, and expires on May 23, 2034, unless there is an earlier change of control, initial public offering or liquidation.
Current report
In connection with the Purchase Agreement, the Company, through certain subsidiaries, along with certain entities advised by affiliates of our Manager (the “IQHQ Participating Purchasers”) entered into a participation rights agreement with Bridge Investor I pursuant to which the Company and the IQHQ Participating Purchasers have a right to fund up to specified amounts of the IQHQ Promissory Note and the IQHQ Warrant. Upon receipt of a draw request, each IQHQ Participating Purchaser will have the right to elect to fund an amount equal or greater than zero up to their respective preemptive right under the IQHQ Holdings or IQHQ, L.P. organizational documents less the total amount of advances previously made by such IQHQ Participating Purchaser. Upon receipt of a draw request, NXDT OP will also have the right to elect to fund an amount equal or greater than zero up to 50% of the total requested amount that is not funded by the IQHQ Participating Purchasers. The Company, through certain subsidiaries, would be required to fund any amounts not funded by the IQHQ Participating Purchasers and NXDT OP. At any time that the IQHQ Participating Purchasers have funded less than their respective participation amounts, the IQHQ Participating Purchasers have the option to pay the Company or NXDT OP (to the extent it has funded) any amount of such unfunded amount. Upon such payment, the IQHQ Participating Purchaser would become entitled to all interest accrued on the amounts paid to the Company or NXDT OP, if applicable, on and after the date of such payment. A portion of the IQHQ Warrant is allocated in accordance with the pro rata funding of the IQHQ Promissory Note.
Current report
IQHQ Holdings is the sole common stockholder of IQHQ, Inc., and the IQHQ Participating Purchasers own common equity in IQHQ Holdings and/or IQHQ, L.P. The Company has an ownership interest in the Series D-1 preferred stock in IQHQ, which is the limited partner in IQHQ, L.P; however, the Company has no controlling financial interest nor significant influence in IQHQ, L.P.
Current report
The loan participation is considered a transfer of the IQHQ Promissory Note and the IQHQ Warrant and qualified as a sale under ASC 860, Transfers and Servicing, as (1) the transfer legally isolated the transferred assets from the transferor, (2) the transferee has the right to pledge or exchange the transferred assets and no condition both constrains the transferee’s right to pledge or exchange the assets and provides more than a trivial benefit to the transferor, and (3) the transferor does not maintain effective control over the transferred assets. The IQHQ Promissory Note is classified as Loans, held-for-investment, net, and the IQHQ Warrant is classified as Stock warrant investments. The IQHQ Warrant is accounted for as investments in equity securities under ASC 321, Investments – Equity Securities, and the Company elected to use the measurement alternative to measure the investment at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for identical or similar investments of the same issuer, if any.
Current report
As of September 30, 2024, the Company has funded $101.1 million and the IQHQ Participating Purchasers have funded $1.4 million. The Company’s expected maximum commitment under the IQHQ Promissory Note and Warrant is $150.0 million, of which $47.5 million was unfunded as of September 30, 2024.
Removed paragraphs (4)
Previous report
(2)Includes investments made on January 26, 2024, and March 1, 2024.
Previous report
(3)Includes investments made on January 26, 2024, and February 9, 2024.
Previous report
(4)Includes investments made on January 8, 2024, and February 2, 2024.
Previous report
Management fees. Management fees were $1.7 million for the six months ended June 30, 2024 compared to $1.7 million for the six months ended June 30, 2023.
Reworded paragraphs (51)
Previous wording
We are a commercial mortgage REIT incorporated in Maryland on June 7, 2019. Our strategy is to originate, structure and invest in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties and common stock investments, as well as multifamily and SFR CMBS securitizations, promissory notes and mortgage backed securities, or our target assets. We primarily focus on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage, life science and hospitality sectors predominantly in the top 50 MSAs. In addition, we target lending or investing in properties that are stabilized or have a light-transitional business plan.
Current wording
We are a commercial mortgage REIT incorporated in Maryland on June 7, 2019. Our strategy is to originate, structure and invest in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties and common stock investments, as well as multifamily and SFR CMBS securitizations, promissory notes and mortgage backed securities, or our target assets. We primarily focus on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage and life science sectors predominantly in the top 50 MSAs. In addition, we target lending or investing in properties that are stabilized or have a light-transitional business plan.
Previous wording
We are externally managed by our Manager, a subsidiary of our Sponsor, an SEC-registered investment advisor, which has extensive real estate experience, having completed as of June 30, 2024 approximately $20.1 billion of gross real estate transactions since the beginning of 2012. In addition, our Sponsor, together with its affiliates and NexBank, is one of the most experienced global alternative credit managers managing approximately $21.8 billion of loans and debt or credit related investments as of June 30, 2024 and has managed credit investments for over 25 years. We believe our relationship with our Sponsor benefits us by providing access to resources including research capabilities, an extensive relationship network, other proprietary information, scalability, and a vast wealth of knowledge of information on real estate in our target assets and sectors.
Current wording
We are externally managed by our Manager, a subsidiary of our Sponsor, an SEC-registered investment advisor, which has extensive real estate experience, having completed as of September 30, 2024 approximately $20.1 billion of gross real estate transactions since the beginning of 2012. In addition, our Sponsor, together with its affiliates and NexBank, is one of the most experienced global alternative credit managers managing approximately $9.6 billion of loans and debt or credit related investments as of September 30, 2024 and has managed credit investments for over 25 years. We believe our relationship with our Sponsor benefits us by providing access to resources including research capabilities, an extensive relationship network, other proprietary information, scalability, and a vast wealth of knowledge of information on real estate in our target assets and sectors.
Previous wording
On October 15, 2021, a lawsuit (the “Bankruptcy Trust Lawsuit”) was filed by a litigation subtrust formed in connection with Highland’s bankruptcy against various persons and entities, including our Sponsor and James Dondero. In addition, on February 8, 2023, a lawsuit (the “UBS Lawsuit”) was filed by UBS Securities LLC and its affiliate against Mr. Dondero and a number of other persons and entities. Neither the Bankruptcy Trust Lawsuit nor the UBS Lawsuit include claims related to our business or our assets or operations. 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 intend to vigorously defend against the claims. We do not expect the Bankruptcy Trust Lawsuit or the UBS Lawsuit will have a material effect on our business, results of operations or financial condition.
Current wording
On October 15, 2021, a lawsuit (the “Bankruptcy Trust Lawsuit”) was filed by a litigation subtrust formed in connection with Highland’s bankruptcy 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, a lawsuit (the “UBS Lawsuit”) was filed by UBS Securities LLC and its affiliate against Mr. Dondero and a number of other persons and entities. Neither the Bankruptcy Trust Lawsuit nor the UBS Lawsuit include claims related to our business or our assets or operations. 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 intend to vigorously defend against the claims. We do not expect the Bankruptcy Trust Lawsuit or the UBS Lawsuit will have a material effect on our business, results of operations or financial condition.
Previous wording
Results of Operations for the Three and Six Months Ended June 30, 2024, and 2023
Current wording
Results of Operations for the Three and Nine Months Ended September 30, 2024, and 2023
Previous wording
The following tables set forth a summary of our operating results for the three and six months ended June 30, 2024 and 2023 (in thousands):
Current wording
The following tables set forth a summary of our operating results for the three and nine months ended September 30, 2024 and 2023 (in thousands):
Previous wording
The change in our net income (loss) for the three months June 30, 2024 as compared to the net income (loss) for the three months ended June 30, 2023 primarily relates to a decrease in interest expense related to the repayment of one of our senior loans. Our net income (loss) attributable to common stockholders for the three months ended June 30, 2024 was approximately $7.5 million. We had approximately $6.7 million in net interest income, generated income of $14.2 million in other income, incurred operating expenses of $8.8 million, allocated $0.9 million of income to Series A Preferred stockholders, allocated $1.5 million of income to Series B Preferred stockholders, and allocated $2.3 million of income to redeemable noncontrolling interests for the three months ended June 30, 2024.
Current wording
The change in our net income (loss) for the three months ended September 30, 2024 as compared to the net income (loss) for the three months ended September 30, 2023 primarily relates to an increase in interest income due to higher yielding assets and a decrease in interest expense related to the repayment of one of our senior loans. Our net income (loss) attributable to common stockholders for the three months ended September 30, 2024 was approximately $16.1 million. We had approximately $12.5 million in net interest income, generated income of $18.7 million in other income, incurred operating expenses of $7.8 million, allocated $0.9 million of income to Series A Preferred stockholders, allocated $2.4 million of income to Series B Preferred stockholders, and allocated $3.9 million of income to redeemable noncontrolling interests for the three months ended September 30, 2024.
Previous wording
Net interest income (expense). Net interest income was $6.7 million for the three months ended June 30, 2024 compared to net interest income of $4.2 million for the three months ended June 30, 2023 which was an increase of approximately $2.5 million. The increase between the periods is primarily due to a decrease in interest expense from the repayment of one of our senior loans in the first quarter of 2024. As of June 30, 2024 we own 85 discrete investments compared to 87 as of June 30, 2023.
Current wording
Net interest income. Net interest income was $12.5 million for the three months ended September 30, 2024 compared to net interest income of $4.8 million for the three months ended September 30, 2023 which was an increase of approximately $7.7 million. The increase between the periods is primarily due to an increase in interest income due to higher yielding assets and a decrease in interest expense from the repayment of one of our senior loans. As of September 30, 2024 we own 83 discrete investments compared to 89 as of September 30, 2023.
Previous wording
Other income. Other income was $14.2 million for the three months ended June 30, 2024 compared to $9.4 million for the three months ended June 30, 2023, which was an increase of approximately $4.8 million. This was primarily due to an increase in unrealized gain related to consolidated CMBS VIEs and an increase in fair value marks between the periods.
Current wording
Other income (expense). Other income was $18.7 million for the three months ended September 30, 2024 compared to $(15.5) million for the three months ended September 30, 2023, which was an increase of approximately $34.2 million. This was primarily due to an increase in unrealized gain related to consolidated CMBS VIEs and an increase in fair value marks between the periods.
Previous wording
G&A expenses. G&A expenses were $3.2 million for the three months ended June 30, 2024 compared to $2.4 million for the three months ended June 30, 2023, which was an increase of approximately $0.8 million. The increase between the periods was primarily due to a $1.0 million increase in stock compensation expense compared to the prior period.
Current wording
G&A expenses. G&A expenses were $2.2 million for the three months ended September 30, 2024 compared to $2.5 million for the three months ended September 30, 2023, which was a decrease of approximately $0.3 million. The decrease between the periods was primarily due to $0.2 million increase in payroll expense compared to the prior period.
Previous wording
Loan servicing fees. Loan servicing fees were $0.4 million for the three months ended June 30, 2024 compared to $1.1 million for the three months ended June 30, 2023, which was a decrease of approximately $0.7 million. The decrease between the periods was primarily due to a decrease in SFR Loans and mezzanine loans in the portfolio compared to the prior period.
Current wording
Loan servicing fees. Loan servicing fees were $0.3 million for the three months ended September 30, 2024 compared to $1.0 million for the three months ended September 30, 2023, which was a decrease of approximately $0.7 million. The decrease between the periods was primarily due to a decrease in SFR Loans in the portfolio compared to the prior period.
Previous wording
Management fees. Management fees were $0.9 million for the three months ended June 30, 2024 compared to $0.8 million for the three months ended June 30, 2023.
Current wording
Management fees. Management fees were $1.0 million for the three months ended September 30, 2024 compared to $0.8 million for the three months ended September 30, 2023.
Previous wording
Expenses from consolidated real estate owned. Expenses from consolidated real estate owned were $4.4 million for the three months ended June 30, 2024, compared to $0.8 million for the three months ended June 30, 2023, which was an increase of approximately $3.5 million. The increase is due to the consolidation of Alexander at the District.
Current wording
Expenses from consolidated real estate owned. Expenses from consolidated real estate owned were $4.3 million for the three months ended September 30, 2024, compared to $1.9 million for the three months ended September 30, 2023, which was an increase of approximately $2.4 million. The increase is due to the consolidation of Alexander at the District.
Previous wording
The change in our net income (loss) for the six months ended June 30, 2024 as compared to the net income (loss) for the six months ended June 30, 2023 primarily relates to an increase in other income. Our net income (loss) attributable to common stockholders for the six months ended June 30, 2024 was approximately $(6.8) million. We had approximately $6.1 million in net interest losses, generated income of $23.4 million in other income, incurred operating expenses of $19.8 million, allocated $1.7 million of income to Series A Preferred stockholders, allocated $2.1 million of income to Series B Preferred stockholders, and allocated $0.4 million of income to redeemable noncontrolling interests for the six months ended June 30, 2024.
Current wording
The change in our net income (loss) for the nine months ended September 30, 2024 as compared to the net income (loss) for the nine months ended September 30, 2023 primarily relates to an increase in other income. Our net income (loss) attributable to common stockholders for the nine months ended September 30, 2024 was approximately $9.3 million. We had approximately $6.4 million in net interest income, generated income of $42.0 million in other income, incurred operating expenses of $27.7 million, allocated $2.6 million of income to Series A Preferred stockholders, allocated $4.5 million of income to Series B Preferred stockholders, and allocated $4.3 million of income to redeemable noncontrolling interests for the nine months ended September 30, 2024.
Previous wording
Net interest income (expense). Net interest loss was $6.1 million for the six months ended June 30, 2024 compared to net interest income of $8.2 million for the six months ended June 30, 2023, which was a decrease of approximately $14.2 million. The decrease between the periods is primarily due to accelerated amortization of the premium associated with the prepayment on a senior loan during the six months ended June 30, 2024. As of June 30, 2024 we own 85 discrete investments compared to 88 as of June 30, 2023.
Current wording
Net interest income. Net interest loss was $6.4 million for the nine months ended September 30, 2024 compared to net interest income of $13.0 million for the nine months ended September 30, 2023, which was a decrease of approximately $6.5 million. The decrease between the periods is primarily due to accelerated amortization of the premium associated with the prepayment on a senior loan during the nine months ended September 30, 2024. As of September 30, 2024 we own 83 discrete investments compared to 89 as of September 30, 2023.
Previous wording
Other income. Other income was $23.4 million for the six months ended June 30, 2024 compared to $20.3 million for the six months ended June 30, 2023 which was a decrease of approximately $3.0 million. This was primarily due to an increase in unrealized losses related to consolidated CMBS VIEs and a decrease in fair value marks between the periods.
Current wording
Other income. Other income was $42.0 million for the nine months ended September 30, 2024 compared to $4.8 million for the nine months ended September 30, 2023 which was an increase of approximately $37.2 million. This was primarily due to an increase in unrealized gains related to consolidated CMBS VIEs, an increase in fair value marks between the periods and a reversal of credit losses.
Previous wording
G&A expenses. G&A expenses were $7.4 million for the six months ended June 30, 2024 compared to $4.5 million for the six months ended June 30, 2023, which was an increase of approximately $2.8 million. The increase between the periods was primarily due to a $1.0 million increase in stock compensation expense and a $0.7 million increase in legal fees compared to the prior period.
Current wording
G&A expenses. G&A expenses were $9.5 million for the nine months ended September 30, 2024 compared to $7.1 million for the nine months ended September 30, 2023, which was an increase of approximately $2.4 million. The increase between the periods was primarily due to a $1.2 million increase in stock compensation expense and a $1.0 million increase in legal fees compared to the prior period.
Previous wording
Loan servicing fees. Loan servicing fees were $0.9 million for the six months ended June 30, 2024 compared to $2.1 million for the six months ended June 30, 2023, which was a decrease of approximately $1.2 million. The decrease between the periods was primarily due to a decrease in SFR Loans and mezzanine loans in the portfolio compared to the prior period.
Current wording
Loan servicing fees. Loan servicing fees were $1.3 million for the nine months ended September 30, 2024 compared to $3.2 million for the nine months ended September 30, 2023, which was a decrease of approximately $1.9 million. The decrease between the periods was primarily due to a decrease in SFR Loans in the portfolio compared to the prior period.
Previous wording
Expenses from consolidated real estate owned. Expenses from consolidated real estate owned were $9.8 million for the six months ended June 30, 2024, compared to $2.3 million for the six months ended June 30, 2023, which was an increase of approximately $7.5 million. The increase is due to the consolidation of Alexander at the District.
Current wording
Expenses from consolidated real estate owned. Expenses from consolidated real estate owned were $14.1 million for the nine months ended September 30, 2024, compared to $4.3 million for the nine months ended September 30, 2023, which was an increase of approximately $9.8 million. The increase is due to the consolidation of Alexander at the District.
Previous wording
Earnings Available for Distribution, Cash Available for Distribution and Adjusted Diluted Weighted Average Shares
Current wording
Earnings Available for Distribution, Cash Available for Distribution and Adjusted Weighted Average Common Shares Outstanding - Diluted
Previous wording
Starting in the second quarter of 2024, EAD per diluted share and CAD per diluted share are based on adjusted diluted weighted average shares. Adjusted weighted average diluted shares outstanding is a non-GAAP measure calculated by subtracting the dilutive effect of potential redemptions of Series B Preferred shares for shares of our common stock from weighted average diluted shares outstanding. We believe providing adjusted weighted average diluted shares outstanding and EAD per diluted share and CAD per diluted share based on adjusted weighted average diluted shares outstanding is helpful to our investors in their assessment of our performance without the potential dilutive effective of the Series B Preferred shares. We have the right to redeem the Series B Preferred shares for cash or shares of our common stock. Additionally, Series B Preferred redemptions are capped at 2% of the outstanding Series B Preferred shares per month, 5% per quarter and 20% per year. Further, it is the Company's intent to not settle Series B Preferred redemptions in shares of common stock when the Company's common stock price is below book value.
Current wording
Starting in the second quarter of 2024, EAD per diluted common share and CAD per diluted common share are based on adjusted weighted average common shares outstanding - diluted. Adjusted weighted average common shares outstanding - diluted is a non-GAAP measure calculated by subtracting the dilutive effect of potential redemptions of Series B Preferred shares for shares of our common stock from weighted average common shares outstanding - diluted. We believe providing adjusted weighted average common shares outstanding - diluted and EAD per diluted common share and CAD per diluted common share based on adjusted weighted average common shares outstanding - diluted is helpful to our investors in their assessment of our performance without the potential dilutive effective of the Series B Preferred shares. We have the right to redeem the Series B Preferred shares for cash or shares of our common stock. Additionally, Series B Preferred redemptions are capped at 2% of the outstanding Series B Preferred shares per month, 5% per quarter and 20% per year. The Company maintains sufficient liquidity to pay cash to cover any redemptions up to the quarterly redemption cap. Further, it is the Company's intent to not settle Series B Preferred redemptions in shares of common stock when the Company's common stock price is below book value.
Previous wording
Adjusted weighted average diluted shares outstanding should not be considered as an alternative to the GAAP measures. Our computation of adjusted weighted average diluted shares outstanding may not be comparable to adjusted weighted average diluted shares outstanding reported by other companies.
Current wording
Adjusted weighted average common shares outstanding - diluted should not be considered as an alternative to the GAAP measures. Our computation of adjusted weighted average common shares outstanding - diluted may not be comparable to adjusted weighted average common shares outstanding - diluted reported by other companies.
Previous wording
Prior period EAD per diluted share and CAD per diluted share have not been updated to reflect this adjustment as the dilutive effect of the Series B Preferred redemptions were immaterial to prior periods.
Current wording
Prior period EAD per diluted common share and CAD per diluted common share have not been updated to reflect this adjustment as the dilutive effect of the Series B Preferred redemptions were immaterial to prior periods.
Previous wording
The following tables provide a reconciliation of EAD and CAD to GAAP net income including the dilutive effect of noncontrolling interests and adjusted diluted weighted average shares outstanding to diluted weighted average shares outstanding for the three and six months ended June 30, 2024 and 2023 (in thousands, except per share amounts):
Current wording
The following tables provide a reconciliation of EAD and CAD to GAAP net income including the dilutive effect of noncontrolling interests and adjusted weighted average common shares outstanding - diluted to weighted average common shares outstanding - diluted for the three and nine months ended September 30, 2024 and 2023 (in thousands, except per share amounts):
Previous wording
(1)Starting in the third quarter of 2023, the Company has adjusted EAD to remove the (income) / loss from equity method investments as it does not represent distributable earnings. We will include income from equity method investments to the extent that we receive cash distributions and upon realizing gains and/or losses.
Current wording
(1)Starting in the third quarter of 2023, the Company has adjusted EAD to remove the (income) / loss from equity method investments as it does not represent distributable earnings. Prior periods have been updated to reflect this adjustment. We will include income from equity method investments to the extent that we receive cash distributions and upon realizing gains and/or losses.
Previous wording
(3)Starting in the second quarter of 2024, EAD per diluted weighted-average share, CAD per diluted weighted-average share and adjusted diluted weighted average common shares outstanding do not include the dilutive effect of the potential redemption of Series B Preferred Stock for common shares. Prior periods have not been updated to reflect this adjustment.
Current wording
(3)Starting in the second quarter of 2024, EAD per diluted common share, CAD per diluted common share and adjusted weighted average common shares outstanding - diluted do not include the dilutive effect of the potential redemption of Series B Preferred Stock for common shares. Prior periods have not been updated to reflect this adjustment because the dilutive effect of potential Series B Preferred redemptions were immaterial to prior periods.
Previous wording
(1)Starting in the third quarter of 2023, the Company has adjusted EAD to remove the (income) / loss from equity method investments as it does not represent distributable earnings. We will include income from equity method investments to the extent that we receive cash distributions and upon realizing gains and/or losses.
Current wording
(1)Starting in the third quarter of 2023, the Company has adjusted EAD to remove the (income) / loss from equity method investments as it does not represent distributable earnings. Prior periods have been updated to reflect this adjustment. We will include income from equity method investments to the extent that we receive cash distributions and upon realizing gains and/or losses.
Previous wording
(3)Starting in the second quarter of 2024, EAD per diluted weighted-average share, CAD per diluted weighted-average share and adjusted diluted weighted average common shares outstanding do not include the dilutive effect of the potential redemption of Series B Preferred Stock for common shares. Prior periods have not been updated to reflect this adjustment. In the six months ended June 30, 2024, the adjusted diluted average common shares outstanding for the first quarter does not exclude the dilutive effect of the potential redemption of Series B Preferred Stock for common shares.
Current wording
(3)Starting in the second quarter of 2024, EAD per diluted common share, CAD per diluted common share and adjusted weighted average common shares outstanding - diluted do not include the dilutive effect of the potential redemption of Series B Preferred Stock for common shares. Prior periods have not been updated to reflect this adjustment because the dilutive effect of potential Series B Preferred redemptions were immaterial to prior periods. In the nine months ended September 30, 2024, the adjusted weighted average common shares outstanding - diluted for the first quarter does not exclude the dilutive effect of the potential redemption of Series B Preferred Stock for common shares.
Previous wording
(1)Our total portfolio represents the current principal amount of the consolidated SFR Loans, CMBS I/O Strips, mezzanine loans, preferred equity, multifamily properties, promissory notes, mortgage backed securities as well as the net equity of our CMBS B-Piece investments and stock warrants.
Current wording
(1)Our total portfolio represents the current principal amount of the consolidated SFR Loans, CMBS I/O Strips, mezzanine loans, preferred equity, multifamily properties, promissory notes, a mortgage backed security as well as the net equity of our CMBS B-Piece investments and stock warrants.
Previous wording
(5)The Company reclassified this investment from a mezzanine loan to senior loan effective April 1, 2024.
Current wording
(5)The Company reclassified this investment from a mezzanine loan to senior loan effective April 1, 2024 because there was and as of September 30, 2024 there is, no senior mortgage on the property collateralized by the loan.
Previous wording
(17)Real Estate is a 204-unit multifamily property. As of June 30, 2024, the property was 95.6% occupied, with effective rent per occupied unit of $1,631 per month.
Current wording
(17)Real Estate is a 204-unit multifamily property. As of September 30, 2024, the property was 97.1% occupied, with effective rent per occupied unit of $1,855 per month.
Previous wording
(18)Real Estate is a 280-unit multifamily property. As of June 30, 2024, the property was 80.4% occupied with effective rent per occupied unit of $1402 per month.
Current wording
(18)Real Estate is a 280-unit multifamily property. As of September 30, 2024, the property was 93.2% occupied with effective rent per occupied unit of $1,693 per month.
Previous wording
Prior to the Formation Transaction, two of our subsidiaries entered into a loan and security agreement, dated July 12, 2019, with Freddie Mac (the “Credit Facility”). Under the Credit Facility, these entities borrowed approximately $788.8 million in connection with their acquisition of senior pooled mortgage loans backed by SFR properties (the “Underlying Loans”). No additional borrowings can be made under the Credit Facility, and our obligations will be secured by the Underlying Loans. The Credit Facility was assumed by the Company as part of the Formation Transaction. As such, the remaining outstanding balance of $788.8 million was contributed to the Company on February 11, 2020. Our borrowings under the Credit Facility will mature on July 12, 2029; however, if an Underlying Loan matures prior to July 12, 2029, we will be required to repay the portion of the Credit Facility that is allocated to that loan. As of June 30, 2024, the outstanding balance on the Credit Facility was $122.5 million.
Current wording
Prior to the Formation Transaction, two of our subsidiaries entered into a loan and security agreement, dated July 12, 2019, with Freddie Mac (the “Credit Facility”). Under the Credit Facility, these entities borrowed approximately $788.8 million in connection with their acquisition of senior pooled mortgage loans backed by SFR properties (the “Underlying Loans”). No additional borrowings can be made under the Credit Facility, and our obligations will be secured by the Underlying Loans. The Credit Facility was assumed by the Company as part of the Formation Transaction. As such, the remaining outstanding balance of $788.8 million was contributed to the Company on February 11, 2020. Our borrowings under the Credit Facility will mature on July 12, 2029; however, if an Underlying Loan matures prior to July 12, 2029, we will be required to repay the portion of the Credit Facility that is allocated to that loan. As of September 30, 2024, the outstanding balance on the Credit Facility was $113.3 million.
Previous wording
As discussed in Note 9 to our consolidated financial statements, we, through the OP and the Subsidiary OPs, have borrowed approximately $280.7 million under our repurchase agreements and posted approximately $1.1 billion par value of our CMBS B-Piece, CMBS I/O Strip, MSCR Notes and mortgage backed security investments as collateral. The CMBS B-Pieces, CMBS I/O Strips, MSCR Notes and mortgage backed securities held as collateral are illiquid and irreplaceable in nature. These assets are restricted solely to satisfy the interest and principal balances owed to the lender as described in our Annual Report.
Current wording
As discussed in Note 9 to our consolidated financial statements, we, through the OP and the Subsidiary OPs, have borrowed approximately $239.0 million under our repurchase agreements and posted approximately $1.0 billion par value of our CMBS B-Piece, CMBS I/O Strip and mortgage backed security investments as collateral. The CMBS B-Pieces, CMBS I/O Strips and mortgage backed securities held as collateral are illiquid and irreplaceable in nature. These assets are restricted solely to satisfy the interest and principal balances owed to the lender as described in our Annual Report.
Previous wording
On November 2, 2023, the Company announced the launch of a continuous public offering of up to 16,000,000 shares of its Series B Preferred Stock at a price to the public of $25.00 per share, for gross proceeds of $400 million. Beginning on the first day of the calendar month following the date of original issuance, the Series B Preferred Stock are redeemable at the option of the holder at a redemption price per share equal to the liquidation preference of $25.00 per share, plus all accrued but unpaid cash dividends and less certain redemption fees. After the first day of the calendar month following the second anniversary of the original issue date, the Company also has the option to redeem, in whole or in part, subject to certain restrictions in the Company's charter and the articles supplementary setting forth the terms of the Series B Preferred Stock, at a redemption price per share equal to the liquidation preference of $25.00 per share, plus any accrued but unpaid cash dividends. In all optional redemptions, the Company has the right, in its sole discretion, to pay the redemption in cash or in equal value of shares of the Company’s common stock for so long as the common stock is listed or admitted to trading on the NYSE or another national securities exchange or automated quotation system. The Dealer Manager serves as the Company’s dealer manager in connection with the offering. The Dealer Manager uses its reasonable best efforts to sell the shares of Series B Preferred Stock offered in the offering, and the Company pays the Dealer Manager, subject to the discounts and other special circumstances described or referenced therein, (i) Selling Commissions of 7.0% of the aggregate gross proceeds from sales of Series B Preferred Stock in the offering and (ii) a Dealer Manager Fee of 3.0% of the gross proceeds from sales of Series B Preferred Stock in the offering. The Dealer Manager, subject to federal and state securities laws, will reallow all or any portion of the Selling Commissions and may reallow a portion of the Dealer Manager Fee to other securities dealers that the Dealer Manager may retain who sold the shares of Series B Preferred Stock as is described more fully in the agreements between such dealers and the Dealer Manager. The Company expects that the offering will terminate on the earlier of the date the Company sells all 16,000,000 shares of the Series B Preferred Stock in the offering or March 14, 2025 (which is the third anniversary of the effective date of the Company’s registration statement), which may be extended by the Board in its sole discretion. The Board may elect to terminate this offering at any time. As of June 30, 2024, the Company has sold 3,163,477 shares of Series B Preferred Stock for total gross proceeds of $77.8 million.
Current wording
On November 2, 2023, the Company announced the launch of a continuous public offering of up to 16,000,000 shares of its Series B Preferred Stock at a price to the public of $25.00 per share, for gross proceeds of $400 million. Beginning on the first day of the calendar month following the date of original issuance, the Series B Preferred Stock are redeemable at the option of the holder at a redemption price per share equal to the liquidation preference of $25.00 per share, plus all accrued but unpaid cash dividends and less certain redemption fees. After the first day of the calendar month following the second anniversary of the original issue date, the Company also has the option to redeem, in whole or in part, subject to certain restrictions in the Company's charter and the articles supplementary setting forth the terms of the Series B Preferred Stock, at a redemption price per share equal to the liquidation preference of $25.00 per share, plus any accrued but unpaid cash dividends. In all optional redemptions, the Company has the right, in its sole discretion, to pay the redemption in cash or in equal value of shares of the Company’s common stock for so long as the common stock is listed or admitted to trading on the NYSE or another national securities exchange or automated quotation system. The Dealer Manager serves as the Company’s dealer manager in connection with the offering. The Dealer Manager uses its reasonable best efforts to sell the shares of Series B Preferred Stock offered in the offering, and the Company pays the Dealer Manager, subject to the discounts and other special circumstances described or referenced therein, (i) Selling Commissions of 7.0% of the aggregate gross proceeds from sales of Series B Preferred Stock in the offering and (ii) a Dealer Manager Fee of 3.0% of the gross proceeds from sales of Series B Preferred Stock in the offering. The Dealer Manager, subject to federal and state securities laws, will reallow all or any portion of the Selling Commissions and may reallow a portion of the Dealer Manager Fee to other securities dealers that the Dealer Manager may retain who sold the shares of Series B Preferred Stock as is described more fully in the agreements between such dealers and the Dealer Manager. The Company expects that the offering will terminate on the earlier of the date the Company sells all 16,000,000 shares of the Series B Preferred Stock in the offering or March 14, 2025 (which is the third anniversary of the effective date of the Company’s registration statement), which may be extended by the Board in its sole discretion. The Board may elect to terminate this offering at any time. As of September 30, 2024, the Company has sold 4,970,885 shares of Series B Preferred Stock for total gross proceeds of $121.5 million.
Previous wording
We may seek additional sources of liquidity from further repurchase facilities, other borrowings and future offerings of common and preferred equity and debt securities and contributions from existing holders of the OP or Subsidiary OPs. In addition, we may apply our existing cash and cash equivalents and cash flows from operations to any liquidity needs. As of June 30, 2024, our cash and cash equivalents were $4.3 million.
Current wording
We may seek additional sources of liquidity from further repurchase facilities, other borrowings and future offerings of common and preferred equity and debt securities and contributions from existing holders of the OP or Subsidiary OPs. In addition, we may apply our existing cash and cash equivalents and cash flows from operations to any liquidity needs. As of September 30, 2024, our cash and cash equivalents were $34.7 million.
Previous wording
The following table presents selected data from our Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and June 30, 2023 (in thousands):
Current wording
The following table presents selected data from our Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and September 30, 2023 (in thousands):
Previous wording
Cash flows from operating activities. During the six months ended June 30, 2024, net cash provided by operating activities was $10.2 million compared to net cash provided by operating activities of $22.5 million for the six months ended June 30, 2023. This decrease primarily relates to the change in unrealized gains on investments held at fair value.
Current wording
Cash flows from operating activities. During the nine months ended September 30, 2024, net cash provided by operating activities was $24.9 million compared to net cash provided by operating activities of $28.4 million for the nine months ended September 30, 2023. This decrease primarily relates to the change in unrealized gains on investments held at fair value.
Previous wording
Cash flows from investing activities. During the six months ended June 30, 2024, net cash provided by investing activities was $597.0 million compared to net cash provided by investing activities of $431.4 million for the six months ended June 30, 2023. This increase was primarily due to the proceeds from payments received on mortgage loans held for investment.
Current wording
Cash flows from investing activities. During the nine months ended September 30, 2024, net cash provided by investing activities was $735.9 million compared to net cash provided by investing activities of $639.5 million for the nine months ended September 30, 2023. This increase was primarily due to the proceeds from payments received on mortgage loans held for investment.
Previous wording
Cash flows from financing activities. During the six months ended June 30, 2024, net cash used in financing activities was $616.5 million compared to net cash used in financing activities of $452.6 million for the six months ended June 30, 2023. The increase primarily relates to principal repayments on borrowings under secured financing agreements and offset with proceeds from the issuance of Series B Preferred Stock.
Current wording
Cash flows from financing activities. During the nine months ended September 30, 2024, net cash used in financing activities was $738.8 million compared to net cash used in financing activities of $675.3 million for the nine months ended September 30, 2023. The increase primarily relates to principal repayments on borrowings under secured financing agreements and offset with proceeds from the issuance of Series B Preferred Stock.
Previous wording
We will make dividend payments to holders of our common stock based on our estimate of taxable earnings per share of common stock, but not earnings calculated pursuant to GAAP. Our dividends and taxable income and GAAP earnings will typically differ due to items such as depreciation and amortization, fair-value adjustments, differences in premium amortization and discount accretion and non-deductible G&A expenses. Our quarterly dividends per share of our common stock may be substantially different than our quarterly taxable earnings and GAAP earnings per share. Our Board declared the second regular quarterly dividend to common stockholders of $0.50 per share on April 29, 2024, which was paid on June 28, 2024, to stockholders of record as of June 14, 2024. Our Board declared a Series A Preferred Stock dividend to Series A Preferred stockholders of $0.53125 per share on June 7, 2024, which was paid on July 25, 2024, to Series A Preferred stockholders of record as of July 15, 2024. On March 22, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on May 6, 2024, to stockholders of record as of April 25, 2024. On April 18, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on June 5, 2024, to stockholders of record as of May 24, 2024. On May 23, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on July 5, 2024, to stockholders of record as of June 25, 2024. On June 25, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on August 5, 2024, to stockholders of record as of July 25, 2024.
Current wording
We will make dividend payments to holders of our common stock based on our estimate of taxable earnings per share of common stock, but not earnings calculated pursuant to GAAP. Our dividends and taxable income and GAAP earnings will typically differ due to items such as depreciation and amortization, fair-value adjustments, differences in premium amortization and discount accretion and non-deductible G&A expenses. Our quarterly dividends per share of our common stock may be substantially different than our quarterly taxable earnings and GAAP earnings per share. Our Board declared the second regular quarterly dividend to common stockholders of $0.50 per share on April 29, 2024, which was paid on June 28, 2024, to stockholders of record as of June 14, 2024. Our Board declared a Series A Preferred Stock dividend to Series A Preferred stockholders of $0.53125 per share on June 7, 2024, which was paid on July 25, 2024, to Series A Preferred stockholders of record as of July 15, 2024. On March 22, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on May 6, 2024, to stockholders of record as of April 25, 2024. On April 18, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on June 5, 2024, to stockholders of record as of May 24, 2024. On May 23, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on July 5, 2024, to stockholders of record as of June 25, 2024. On June 25, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on August 5, 2024, to stockholders of record as of July 25, 2024. Our Board declared the third regular quarterly dividend to common stockholders of $0.50 per share on July 29, 2024, which was paid on September 30, 2024, to stockholders of record as of September 13, 2024. On July 16, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on September 5, 2024, to stockholders of record as of August 23, 2024. On August 19, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on October 7, 2024, to stockholders of record as of September 25. On September 9, 2024, our Board declared a Series A Preferred Stock dividend of $0.53125 per share, which was paid on October 25, 2024, to stockholders of record as of October 15, 2024. On September 18, 2024, our Board declared a Series B Preferred Stock dividend to Series B Preferred stockholders of $0.1875, which was paid on November 5, 2024, to stockholders of record as of October 25, 2024.
Showing the first 40 of 51 pairs. Open the source sections for the rest.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
On December 8, 2022 and in connection with a restructuring of NSP, the Company, through REIT Sub, together with NexPoint Diversified Real Estate Trust ("NXDT"), an entity that is advised by an affiliate of the Manager, Highland Income Fund and NexPoint Real Estate Strategies Fund (collectively, the "Co-Guarantors"), as guarantors, entered into a sponsor guaranty agreement (the "NSP Sponsor Guaranty Agreement") in favor of Extra Space Storage, LP ("Extra
Previous report — wording carried elsewhere
On February 10, 2023, the Company, through one of the Subsidiary OPs, through a unit purchase agreement, committed to purchase $30.3 million of the preferred units with respect to a multifamily property development located in
Previous report — wording carried elsewhere
2016-13 is a $1.6 million reduction in retained earnings. The beginning allowance for credit loss as of January 1, 2024 was $2.1 million. The reversal of credit losses for the six months ended June 30, 2024 is included in other income on the accompanying Consolidated Statements of Operations, resulting in a June 30, 2024 ending allowance for credit loss of $1.7 million.