NexPoint Residential Trust Inc. (NXRT)

[Enterprising Investor]

NXRT announces acquisitions and dispositions (4/03/17)

On April 3, 2017, NexPoint Residential Trust, Inc. (the “Company”) sold The Miramar Apartments, The Grove at Alban and Toscana for a cumulative gross sales price of $57.3 million. The properties, which were classified as held for sale as of December 31, 2016, were sold to three separate unaffiliated third parties.

The Company will use the net proceeds from these dispositions, approximately $26.7 million after the repayment of first mortgage debt obligations, member distributions and other closing costs, to pay down debt incurred on December 29, 2016 and used to acquire the Houston Portfolio, which includes Stone Creek at Old Farm Apartments and Old Farm Apartment Homes. The closing of these sales also completed the reverse 1031 exchange for Stone Creek at Old Farm Apartments and partially completed the reverse 1031 exchange for Old Farm Apartment Homes.

The Company is also under contract to sell Twelve 6 Ten at the Park in Dallas, Texas. The Company expects to use the net proceeds from this disposition to pay down debt and to complete the remaining piece of the reverse 1031 exchange for Old Farm Apartment Homes. Following the completion of these reverse 1031 exchanges, management expects to stabilize the Houston Portfolio’s loan-to-value ratio at approximately 55%.

Additionally, on April 3, 2017, the Company, through its operating partnership, NexPoint Residential Trust Operating Partnership, L.P., entered into an interest rate swap transaction with KeyBank National Association (the “Swap”). The Company entered into the Swap to fix a portion of, and mitigate the risk associated with, the Company’s floating rate indebtedness (without incurring substantial prepayment penalties or defeasance costs typically associated with fixed rate indebtedness). The Swap has an effective date of May 1, 2017 and a termination date of April 1, 2022. Beginning on May 1, 2017, the Company will be required to make monthly fixed rate payments of 1.961% calculated on a notional amount of $50 million, while the counterparty will be obligated to make monthly floating rate payments based on LIBOR to the Company referencing the same notional amount.

https://www.sec.gov/Archives/edgar/data/1620393/000119312517113677/d364856d8k.htm