NexPoint Real Estate Finance reported a $12.2 million loss attributable to common stockholders in the third quarter, while a separate cash-distribution measure was positive. The commercial real estate lender also outlined its portfolio mix and new investments, raised capital through preferred shares, and provided fourth-quarter earnings guidance.
The company expects fourth-quarter earnings available for distribution of about $0.42 per diluted common share at the midpoint. It previously announced a fourth-quarter common dividend of $0.50 per share.
Key details
-
Third-quarter results: NREF reported a net loss attributable to common stockholders of $12.2 million, or $0.65 per diluted share. It reported $14.0 million of cash available for distribution, a non-GAAP measure, or $0.60 per diluted common share. These are different measures of performance; the positive cash-distribution figure does not change the reported GAAP loss.
-
Fourth-quarter guidance: NREF expects net income attributable to common stockholders of $6.8 million to $9.2 million. Its guidance for earnings available for distribution is $8.6 million to $11.0 million, with a midpoint of $9.8 million, or about $0.42 per diluted common share.
-
Portfolio size and mix: At September 30, the company had a $1.0 billion portfolio comprising 83 investments. Life sciences made up 40.7% of the portfolio, multifamily 38.3%, and single-family rentals 14.0%. The remainder was in self-storage (4.6%), industrial (2.2%) and marinas (0.2%).
-
Reported credit measures: Across its senior loans, commercial mortgage-backed securities and several other debt and preferred investments, NREF reported a weighted-average loan-to-value ratio of 64.7% and a debt-service coverage ratio of 1.39 times. These measures cover specified investment categories, not the entire portfolio.
-
New investments funded during the quarter: NREF funded $8.4 million on a loan paying a monthly rate of SOFR plus 9 percentage points. It also funded two preferred-equity investments: $4.0 million with a 14% monthly preferred return and $2.2 million with a 13% monthly preferred return.
-
Preferred-stock proceeds: The company raised $27.9 million in gross proceeds through its Series C preferred-stock offering during the quarter.
-
Dividend: NREF announced a fourth-quarter dividend of $0.50 per common share on October 26.
The results present two distinct signals: a GAAP loss for common stockholders and positive cash available for distribution. The new preferred-stock proceeds add capital to the company but are raised through preferred shares, rather than common stock.