NexPoint Real Estate Finance reported a third-quarter net loss attributable to common shareholders, while a separate cash-distribution measure was above its common dividend. The real estate lender also provided fourth-quarter earnings guidance, reported new investment funding and said it raised $27.9 million through a Series C preferred-stock offering.
Key details
- Third-quarter results diverged depending on the measure: NREF posted a net loss attributable to common stockholders of $12.2 million, or $0.65 per diluted share. Cash available for distribution, a non-GAAP measure, was $14.0 million, or $0.60 per diluted common share.
- The upcoming common dividend is $0.50 per share. NREF announced the fourth-quarter dividend on Oct. 26. Third-quarter cash available for distribution was 10 cents per diluted share above that amount; the company described its third-quarter earnings as covering its dividend.
- Fourth-quarter guidance: NREF expects earnings available for distribution (EAD) of about $0.42 per diluted common share at the midpoint. It forecasts net income attributable to common stockholders of $6.8 million to $9.2 million and EAD of $8.6 million to $11.0 million. EAD is also a non-GAAP measure, distinct from net income and cash available for distribution.
- Portfolio size and mix: At Sept. 30, the portfolio totaled $1.0 billion across 83 investments. Life sciences accounted for 40.7% of investments, multifamily 38.3%, single-family rentals 14.0%, self-storage 4.6%, industrial 2.2% and marinas 0.2%.
- Credit metrics: NREF reported weighted-average loan-to-value of 64.7% and debt-service coverage of 1.39 times across specified loan and investment categories. The figures exclude certain holdings and properties.
- New investment funding: During the quarter, NREF funded $8.4 million on a loan paying SOFR plus 9 percentage points, along with $4.0 million and $2.2 million in preferred-equity investments carrying stated returns of 14% and 13%, respectively.
- Preferred-stock proceeds: The company raised $27.9 million in gross proceeds from its Series C preferred-stock offering during the quarter.
The results show why the company’s per-share figures need to be read alongside their definitions: the quarter produced a common-stock net loss, but positive cash available for distribution. The fourth-quarter EAD midpoint of $0.42 per share is below the announced $0.50 common dividend, though EAD and cash available for distribution are different measures. The Series C proceeds add capital through preferred stock, which ranks separately from common equity.