10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2024

OR

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 001-36663

NexPoint Residential Trust, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Maryland	47-1881359
(State or other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification No.)

300 Crescent Court, Suite 700, Dallas, Texas (Address of Principal Executive Offices)	75201
	(Zip Code)

(214) 276-6300

(Telephone Number, Including Area Code)

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.01 per share	NXRT	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer	☒	Accelerated Filer	☐
Non-Accelerated Filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 02, 2024, the registrant had 25,674,313 shares of its common stock, par value $0.01 per share, outstanding.

NEXPOINT RESIDENTIAL TRUST, INC.

Form 10-Q

Quarter Ended March 31, 2024

INDEX

			Page
Cautionary Statement Regarding Forward-Looking Statements			ii
	PART I—FINANCIAL INFORMATION
Item 1.		Financial Statements
		Consolidated Balance Sheets as of March 31, 2024 (Unaudited) and December 31, 2023	1
		Consolidated Unaudited Statements of Operations and Comprehensive Income (Loss) for the Three Months Ended March 31, 2024 and 2023	2
		Consolidated Unaudited Statements of Stockholders’ Equity for the Three Months Ended March 31, 2024 and 2023	3
		Consolidated Unaudited Statements of Cash Flows for the Three Months Ended March 31, 2024 and 2023	4
		Notes to Consolidated Unaudited Financial Statements	6
Item 2.		Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.		Quantitative and Qualitative Disclosures About Market Risk	39
Item 4.		Controls and Procedures	40
	PART II—OTHER INFORMATION
Item 1.		Legal Proceedings	41
Item 1A.		Risk Factors	41
Item 2.		Unregistered Sales of Equity Securities and Use of Proceeds, and Issuer Purchases of Securities	41
Item 3.		Defaults Upon Senior Securities	41
Item 4.		Mine Safety Disclosures	42
Item 5.		Other Information	42
Item 6.		Exhibits	43
Signatures			44

i

Cautionary Statement Regarding Forward-Looking Statements

This quarterly report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. In particular, statements relating to our liquidity and capital resources, the performance of our properties and results of operations contain forward-looking statements. Furthermore, all of the statements regarding future financial performance (including market conditions and demographics) are forward-looking statements. We caution investors that any forward-looking statements presented in this quarterly report are based on management’s current beliefs and assumptions made by, and information currently available to, management. When used, the words “anticipate,” “believe,” “expect,” “intend,” “may,” “might,” “plan,” “estimate,” “project,” “should,” “will,” “would,” “result” and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

Forward-looking statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements.

Some of the risks and uncertainties that may cause our actual results, performance, liquidity or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

•unfavorable changes in market and economic conditions in the United States and globally and in the specific markets where our properties are located;

•macroeconomic trends including inflation and high interest rates may adversely affect our financial condition and results of operations;

•risks associated with the ownership of real estate;

•limited ability to dispose of assets because of the relative illiquidity of real estate investments;

•our multifamily properties are concentrated in certain geographic markets in the Southeastern and Southwestern United States, which makes us more susceptible to adverse developments in those markets;

•increased risks associated with our strategy of acquiring value-enhancement multifamily properties rather than more conservative investment strategies;

•failure to succeed in new markets may have adverse consequences on our performance;

•potential reforms to the Federal Home Loan Mortgage Corporation (“Freddie Mac”) and the Federal National Mortgage Association (“Fannie Mae”);

•competition could limit our ability to acquire attractive investment opportunities, which could adversely affect our profitability and impede our growth;

•competition and any increased affordability of residential homes could limit our ability to lease our apartments or increase or maintain rents;

•the relatively low residential mortgage rates may result in potential renters purchasing residences rather than leasing them, and as a result, cause a decline in our occupancy rates;

•the risk that we may fail to consummate future property acquisitions;

•failure of acquisitions to yield anticipated results;

•risks associated with increases in interest rates and our ability to issue additional debt or equity securities in the future;

•risks associated with selling apartment communities, which could limit our operational and financial flexibility;

•contingent or unknown liabilities related to properties or businesses that we have acquired or may acquire;

•lack of or insufficient amounts of insurance;

•the risk that our environmental assessments may not identify all potential environmental liabilities and our remediation actions may be insufficient;

•high costs associated with the investigation or remediation of environmental contamination, including asbestos, lead-based paint, chemical vapor, subsurface contamination and mold growth;

•high costs associated with the compliance with various accessibility, environmental, building and health and safety laws and regulations, such as the Americans with Disabilities Act of 1990 and the Fair Housing Act;

•risks associated with limited warranties we may obtain when purchasing properties;

ii

•exposure to decreases in market rents due to our short-term leases;

•risks associated with operating through joint ventures and funds;

•our dependence on information systems;

•risks associated with breaches of our data security;

•costs associated with being a public company, including compliance with securities laws;

•the risk that our business could be adversely impacted if there are deficiencies in our disclosure controls and procedures or internal control over financial reporting;

•risks associated with our substantial current indebtedness and indebtedness we may incur in the future;

•risks associated with derivatives or hedging activity;

•risks associated with representations and warranties made by us in connection with sales of our properties may subject us to liability that could result in losses and could harm our operating results and, therefore, distributions we make to our stockholders;

•loss of key personnel of NexPoint Advisors, L.P. (our “Sponsor”), NexPoint Real Estate Advisors, L.P. (our “Adviser”) and our property manager;

•the risk that we may not replicate the historical results achieved by other entities managed or sponsored by affiliates of our Adviser, members of our Adviser’s management team or by our Sponsor or its affiliates;

•risks associated with our Adviser’s ability to terminate the Advisory Agreement (as defined below);

•our ability to change our major policies, operations and targeted investments without stockholder consent;

•the substantial fees and expenses we pay to our Adviser and its affiliates;

•risks associated with any potential internalization of our management functions;

•conflicts of interest and competing demands for time faced by our Adviser, our Sponsor and their officers and employees;

•the risk that we may compete with other entities affiliated with our Sponsor or property manager for properties and residents;

•failure to maintain our status as a REIT;

•failure of our operating partnership to be taxable as a partnership for U.S. federal income tax purposes, possibly causing us to fail to qualify for or to maintain REIT status;

•compliance with REIT requirements, which may limit our ability to hedge our liabilities effectively and cause us to forgo otherwise attractive opportunities, liquidate certain of our investments or incur tax liabilities;

•risks associated with our ownership of interests in taxable REIT subsidiaries ("TRSs");

•the recognition of taxable gains from the sale of properties as a result of the inability to complete certain like-kind exchanges in accordance with Section 1031 of the Internal Revenue Code of 1986, as amended (the “Code”);

•the risk that the Internal Revenue Service (the "IRS") may consider certain sales of properties to be prohibited transactions, resulting in a 100% penalty tax on any taxable gain;

•the risk that we may be subject to other tax liabilities that may reduce our cash flows and distributions on our shares;

•the ineligibility of dividends payable by REITs for the reduced tax rates available for some dividends;

•risks associated with the stock ownership restrictions of the Code for REITs and the stock ownership limit imposed by our charter;

•the ability of our board of directors to revoke our REIT qualification without stockholder approval;

•recent and potential legislative or regulatory tax changes or other actions affecting REITs;

•foreign investors may be subject to U.S. federal income tax or withholding tax distributions received from us or on proceeds and the disposition of our current common stock;

•risks associated with the market for our common stock and the general volatility of the capital and credit markets;

•failure to generate sufficient cash flows to service our outstanding indebtedness or pay distributions at expected levels;

•risks associated with limitations of liability for and our indemnification of our directors and officers;

•the risk that legal proceedings we become involved in from time to time could adversely affect our business;

iii

•the risk that acts of violence could decrease the value of our assets and have an adverse effect on our business and results of operations;

•risks associated with the Highland Capital Management, L.P. bankruptcy, including related litigation and potential conflicts of interest; and

•any other risks included under Part I, Item 1A, “Risk Factors” of our Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission on February 27, 2024 or under Part II, Item 1A, “Risk Factors” of this Quarterly Report on Form 10-Q.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. They are based on estimates and assumptions only as of the date of this quarterly report. We undertake no obligation to update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by law.

iv

NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

	March 31, 2024			December 31, 2023
	(Unaudited)
ASSETS
Operating Real Estate Investments
Land	$	359,819		$	359,819
Buildings and improvements		1,723,657			1,719,864
Construction in progress		6,861			8,322
Furniture, fixtures and equipment		185,257			180,435
Total Gross Operating Real Estate Investments		2,275,594			2,268,440
Accumulated depreciation and amortization		(435,410	)		(411,087	)
Total Net Operating Real Estate Investments		1,840,184			1,857,353
Real estate held for sale, net of accumulated depreciation of $14,478 and $31,871, respectively		40,090			110,747
Total Net Real Estate Investments		1,880,274			1,968,100
Cash and cash equivalents		37,234			12,367
Restricted cash		31,515			32,912
Accounts receivable, net		13,082			14,598
Prepaid and other assets		6,870			8,640
Fair value of interest rate swaps		73,711			71,028
TOTAL ASSETS	$	2,042,686		$	2,107,645
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgages payable, net	$	1,454,101		$	1,453,787
Mortgages payable held for sale, net		35,204			88,044
Credit facility, net		—			23,243
Accounts payable and other accrued liabilities		14,121			17,140
Accrued real estate taxes payable		7,619			11,230
Accrued interest payable		9,077			9,399
Security deposit liability		3,060			3,159
Prepaid rents		1,643			1,773
Total Liabilities		1,524,825			1,607,775
Redeemable noncontrolling interests in the Operating Partnership		5,082			5,246
Stockholders' Equity:
Preferred stock, $0.01 par value: 100,000,000 shares authorized; 0 shares issued		—			—
Common stock, $0.01 par value: 500,000,000 shares authorized; 25,774,730 and 25,674,313 shares issued and outstanding, respectively		257			256
Additional paid-in capital		414,243			413,010
Accumulated earnings less dividends		25,742			11,493
Accumulated other comprehensive income		72,537			69,865
Total Stockholders' Equity		512,779			494,624
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	2,042,686		$	2,107,645

See Notes to Consolidated Financial Statements

1

NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share amounts)

(Unaudited)

	For the Three Months Ended March 31,
	2024			2023
Revenues
Rental income	$	65,598		$	67,537
Other income		1,979			1,690
Total revenues		67,577			69,227
Expenses
Property operating expenses		13,768			13,266
Real estate taxes and insurance		9,312			10,020
Property management fees (1)		1,958			2,027
Advisory and administrative fees (2)		1,743			1,889
Corporate general and administrative expenses		4,910			3,367
Property general and administrative expenses		2,281			2,270
Depreciation and amortization		24,323			23,266
Total expenses		58,295			56,105
Operating income before gain on sales of real estate		9,282			13,122
Gain on sales of real estate with related party		31,709			—
Operating income		40,991			13,122
Interest expense		(14,391	)		(16,739	)
Gain (loss) on extinguishment of debt and modification cost		(546	)		122
Casualty gain (loss)		199			(814	)
Equity in earnings of affiliate		38			—
Miscellaneous income		111			411
Net income (loss)		26,402			(3,898	)
Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership		104			(15	)
Net income (loss) attributable to common stockholders	$	26,298		$	(3,883	)
Other comprehensive income (loss)
Unrealized gains (losses) on interest rate derivatives		2,683			(17,206	)
Total comprehensive income (loss)		29,085			(21,104	)
Comprehensive income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership		115			(80	)
Comprehensive income (loss) attributable to common stockholders	$	28,970		$	(21,024	)
Weighted average common shares outstanding - basic		25,721			25,599
Weighted average common shares outstanding - diluted		26,354			25,599
Earnings (loss) per share - basic	$	1.02		$	(0.15	)
Earnings (loss) per share - diluted	$	1.00		$	(0.15	)

(1)Fees incurred to an affiliate of the noncontrolling limited partner of the Company’s Operating Partnership (see Note 8).

(2)Fees incurred to the Adviser (see Note 9).

See Notes to Consolidated Financial Statements

2

NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(dollars in thousands)

(Unaudited)

	Preferred Stock				Common Stock				Additional		Accumulated Earnings			Accumulated Other
	Number of Shares		Par Value		Number of Shares		Par Value		Paid-in Capital		Less Dividends			Comprehensive Income (Loss)		Total
Balances, December 31, 2023		—	$	—		25,674,313	$	256	$	413,010	$	11,493		$	69,865	$	494,624
Net income attributable to common stockholders		—		—		—		—		—		26,298			—		26,298
Vesting of stock-based compensation		—		—		100,417		1		1,233		—			—		1,234
Common stock dividends declared ($0.46242 per share)		—		—		—		—		—		(12,280	)		—		(12,280	)
Other comprehensive income		—		—		—		—		—		—			2,672		2,672
Adjustment to reflect redemption value of redeemable noncontrolling interests in the Operating Partnership		—		—		—		—		—		231			—		231
Balances, March 31, 2024		—	$	—		25,774,730	$	257	$	414,243	$	25,742		$	72,537	$	512,779

	Preferred Stock				Common Stock				Additional		Accumulated Earnings (Loss)			Accumulated Other
	Number of Shares		Par Value		Number of Shares		Par Value		Paid-in Capital		Less Dividends			Comprehensive Income (Loss)			Total
Balances, December 31, 2022		—	$	—		25,549,319	$	255	$	405,376	$	11,880		$	102,155		$	519,666
Net loss attributable to common stockholders		—		—		—		—		—		(3,883	)		—			(3,883	)
Vesting of stock-based compensation		—		—		108,404		1		471		—			—			472
Common stock dividends declared ($0.42 per share)		—		—		—		—		—		(10,940	)		—			(10,940	)
Other comprehensive income		—		—		—		—		—		—			(17,141	)		(17,141	)
Adjustment to reflect redemption value of redeemable noncontrolling interests in the Operating Partnership		—		—		—		—		—		(141	)		—			(141	)
Balances, March 31, 2023		—	$	—		25,657,723	$	256	$	405,847	$	(3,084	)	$	85,014		$	488,033

See Notes to Consolidated Financial Statements

3

NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

	For the Three Months Ended March 31,
	2024			2023
Cash flows from operating activities
Net income (loss)	$	26,402		$	(3,898	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Gain on sales of real estate with related party		(31,709	)		—
Depreciation and amortization		24,323			23,266
Amortization/write-off of deferred financing costs		1,263			645
Change in fair value on derivative instruments included in interest expense		(13,533	)		(9,175	)
Net cash received on derivative settlements		14,007			9,871
Amortization/write-off of fair value adjustment of assumed debt		(26	)		(27	)
Provision for bad debts, net		1,172			2,325
Vesting of stock-based compensation		2,547			1,966
Insurance proceeds received for business interruption		538			—
Equity in earnings of affiliate		(38	)		—
Casualty gain (loss)		(107	)		202
Changes in operating assets and liabilities, net of effects of sales and acquisitions:
Accounts receivable		(1,363	)		(3,748	)
Prepaid and other assets		1,938			2,323
Operating liabilities		(2,116	)		2,750
Real estate taxes payable		(3,611	)		1,423
Net cash provided by operating activities		19,687			27,923
Cash flows from investing activities
Net proceeds from sales of real estate		102,704			—
Insurance proceeds received from casualty losses		1,032			1,494
Additions to real estate investments		(9,567	)		(17,999	)
Net cash provided by (used in) investing activities		94,169			(16,505	)
Cash flows from financing activities
Mortgage proceeds received		—			42,788
Mortgage payments		(52,958	)		(28,181	)
Credit facilities payments		(24,000	)		(17,500	)
Deferred financing costs received (paid)		—			61
Interest rate cap fees paid		(118	)		(215	)
Prepayment penalties on extinguished debt		(529	)		(285	)
Payments for taxes related to net share settlement of stock-based compensation		—			(1,494	)
Dividends paid to common stockholders		(12,733	)		(11,267	)
Distributions to redeemable noncontrolling interests in the Operating Partnership		(48	)		(49	)
Net cash used in financing activities		(90,386	)		(16,142	)
Net increase (decrease) in cash, cash equivalents and restricted cash		23,470			(4,724	)
Cash, cash equivalents and restricted cash, beginning of period		45,279			51,799
Cash, cash equivalents and restricted cash, end of period	$	68,749		$	47,075

See Notes to Consolidated Financial Statements

4

NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

Supplemental Disclosure of Cash Flow Information
Interest paid	$	27,555		$	24,071
Supplemental Disclosure of Noncash Activities
Issuance of operating partnership units for purchase of noncontrolling interests		—			415
Adjustment to reflect redemption value of redeemable noncontrolling interests in the OP		231			(141	)
Capitalized construction costs included in accounts payable and other accrued liabilities		3,792			5,091
Change in fair value on derivative instruments designated as hedges		2,683			(17,206	)
Decrease in dividends payable upon vesting of restricted stock units		(453	)		(327	)
Write-off of assets due to casualty losses		—			1,751
Write-off of deferred financing costs		16			38

See Notes to Consolidated Financial Statements

5

NEXPOINT RESIDENTIAL TRUST, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Organization and Description of Business

NexPoint Residential Trust, Inc. (the “Company,” “we,” “our”) was incorporated in Maryland on September 19, 2014, and has elected to be taxed as a real estate investment trust (“REIT”) and the Company believes the current organization and method of operation will enable it to maintain its status as a REIT. The Company is focused on “value-add” multifamily investments primarily located in the Southeastern and Southwestern United States. Substantially all of the Company’s business is conducted through NexPoint Residential Trust Operating Partnership, L.P. (the “OP”), the Company’s operating partnership. The Company also consolidates certain variable interest entities ("VIEs") in accordance with Financial Accounting Standards Board’s ("FASB") Accounting Standards Codification ("ASC") 810 Consolidation. The Company controls and consolidates the OP as a VIE. The Company owns its properties (the “Portfolio”) through the OP and its wholly owned taxable REIT subsidiary (“TRS”). The OP owns approximately 99.9% of the Portfolio; the TRS owns approximately 0.1% of the Portfolio. The Company’s wholly owned subsidiary, NexPoint Residential Trust Operating Partnership GP, LLC (the “OP GP”), is the sole general partner of the OP. As of March 31, 2024, there were 26,053,988 common units in the OP (“OP Units”) outstanding, of which 25,951,154, or 99.6%, were owned by the Company and 102,834, or 0.4%, were owned by noncontrolling limited partners (see Note 8).

The Company is externally managed by NexPoint Real Estate Advisors, L.P. (the “Adviser”), through an agreement dated March 16, 2015, as amended, and renewed on February 26, 2024 for a one-year term (the “Advisory Agreement”), by and among the Company, the OP and the Adviser. The Adviser conducts substantially all of the Company’s operations and provides asset management services for its real estate investments. The Company expects it will only have accounting employees while the Advisory Agreement is in effect. All of the Company’s investment decisions are made by the Adviser, subject to general oversight by the Adviser’s investment committee and the Company’s board of directors (the “Board”). The Adviser is wholly owned by NexPoint Advisors, L.P. (the “Sponsor”).

The Company’s investment objectives are to maximize the cash flow and value of properties owned, acquire properties with cash flow growth potential, provide quarterly cash distributions and achieve long-term capital appreciation for its stockholders through targeted management and a value-add program. Consistent with the Company’s policy to acquire assets for both income and capital gain, the Company intends to hold at least majority interests in its properties for long-term appreciation and to engage in the business of 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 consistent with its investment objectives. Economic and market conditions may influence the Company to hold properties for different periods of time. From time to time, the Company may sell a property if, among other deciding factors, the sale would be in the best interest of its stockholders.

The Company may allocate up to 30% of the Portfolio to investments in real estate-related debt and securities with the potential for high current income or total returns. These allocations may include first and second mortgages and subordinated, bridge, mezzanine, construction and other loans, as well as debt securities related to or secured by multifamily real estate and common and preferred equity securities, which may include securities of other REITs or real estate companies.

2. Summary of Significant Accounting Policies

Readers of this Quarterly Report on Form 10-Q ("Quarterly Report") should refer to the audited financial statements and notes to consolidated financial statements of the Company for the year ended December 31, 2023, which are included in our Annual Report on Form 10-K ("2023 Annual Report"), filed with the United States Securities and Exchange Commission ("SEC") on February 27, 2024 and also available on our website (nxrt.nexpoint.com), since we have omitted from this Quarterly Report certain footnote disclosures which would substantially duplicate those contained in such audited financial statements. You should also refer to Note 2, Summary of Significant Accounting Policies, in the notes to consolidated financial statements in our 2023 Annual Report for further discussion of our significant accounting policies and estimates. Information contained on, or accessible through, our website is not incorporated by reference into and does not constitute a part of this Quarterly Report or any other report or documents we file or furnish with the SEC.

Reclassification of Prior Year Activity on the Consolidated Statement of Cash Flows

Certain reclassifications have been made within the consolidated statements of cash flows to the changes in operating assets and liabilities, net of effects of sales and acquisitions for the three months ended March 31, 2023 to be comparative to the consolidated statement of cash flows for the three months ended March 31, 2024.

6

Impairment

Real estate assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The key inputs into our impairment analysis include, but are not limited to, the holding period, net operating income, and capitalization rates. In such cases, the Company will evaluate the recoverability of such real estate assets based on estimated future cash flows and the estimated liquidation value of such real estate assets, and record an impairment loss if such undiscounted cash flows are insufficient to recover the carrying amount of the real estate asset. If impaired, the real estate asset will be written down to its estimated fair value. The Company’s impairment analysis identifies and evaluates events or changes in circumstances that indicate the carrying amount of a real estate investment may not be recoverable, including determining the period the Company will hold the rental property, net operating income, and the estimated capitalization rate for each respective real estate investment. As of March 31, 2024, the Company has not recorded any impairment on its real estate assets.

Held for Sale

The Company periodically classifies real estate assets as held for sale when certain criteria are met in accordance with U.S. generally accepted accounting principles ("GAAP"). At that time, the Company presents the net real estate assets and the net debt associated with the real estate held for sale separately in its consolidated balance sheet, and the Company ceases recording depreciation and amortization expense related to that property. Real estate held for sale is reported at the lower of its carrying amount or its estimated fair value less estimated costs to sell. As of March 31, 2024 and December 31, 2023, there were two and three properties classified as held for sale, respectively. In addition to the net real estate and mortgages payable held for sale, the consolidated balance sheets also includes approximately $0.3 million and $0.8 million of accounts receivable and prepaid and other assets, and approximately $1.0 million and $4.9 million of accounts payable, real estate taxes payable, security deposits, prepaid rents, and other accrued liabilities related to assets held for sale as of March 31, 2024 and December 31, 2023, respectively.

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company has taken the ASC 848 elections needed to allow for the hedged forecasted transactions to transition while not discontinuing the associated hedge accounting designations. Application of these hedged accounting expedients preserves the presentation of derivatives consistent with past presentation. The Company will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting – Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires a public entity to disclose significant segment expenses and other segment items in interim and annual periods and expands the ASC 280 disclosure requirements for interim periods. The ASU also explicitly requires public entities with a single reportable segment to provide all segment disclosures under ASC 280, including the new disclosures under ASU 2023-07. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Management is currently evaluating this ASU to determine its impact on the Company's disclosures.

3. Real Estate Investments

Acquisitions

There were no acquisitions of real estate during the three months ended March 31, 2024 and 2023.

Dispositions

The Company sold one property and zero properties during the three months ended March 31, 2024 and 2023, respectively, as detailed in the table below (in thousands).

Property Name		Location	Date of Sale	Sales Price		Net Cash Proceeds (1)		Gain on Sale of Real Estate
Old Farm	(2)	Houston, Texas	March 1, 2024	$	103,000	$	102,704	$	31,709
				$	103,000	$	102,704	$	31,709

(1)Represents sales price, net of closing costs.

(2)Old Farm was sold to NexBank Capital, Inc. (“NexBank Capital”). A director and officer of the Company, who controls the Adviser, which externally manages the Company, also (i) is the beneficiary of a trust that indirectly owns 100% of the limited partnership interests in the parent of the Adviser and directly owns 100% of the general partnership interests in the parent of the Adviser and (ii) is a director of NexBank Capital. See Note 9.

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NXRT Captive

On July 6, 2023, NexPoint Captive Insurance Company, Inc. (“NexPoint Captive”) was authorized to transact business in the State of Montana as a captive insurance company. NexPoint Captive began providing rental insurance coverage to NXRT properties and properties managed by affiliates of the Adviser on August 1, 2023. The OP purchased 100% ownership interest and has the power to direct the activities of NexPoint Captive. NexPoint Captive is required to maintain a cash reserve of $250,000 to fund potential claims, which is classified as restricted cash on the consolidated balance sheet. As of March 31, 2024 and December 31, 2023, the Company had approximately $0.3 million and $0.1 million accrued for case reserves, respectively. The Company consolidates NexPoint Captive in its consolidated financial statements.

Casualty Losses

The Company experienced certain casualty events during the three months ended March 31, 2024 and 2023. Certain casualty proceeds from insurance are recorded in casualty gains (loss) on the consolidated statements of operations and comprehensive income (loss) in relation to these events. Events that are considered to be small, standard and not extraordinary are recorded through property operating expense. Insurance proceeds received from casualty losses are recognized on the Company’s consolidated statements of cash flows as investing activities. The Company differentiates proceeds received from business interruption and casualty gains (losses) in accounting for the transactions. Business interruption proceeds are specifically insurance proceeds to recoup lost rents due to a qualifying event(s) (i.e., fires, floods, storms, water damage, etc.) as determined by the insurance policy and are reflected as operating cash flows in the accompanying consolidated statements of cash flows. Business interruption that has been accrued by the Company is presented in miscellaneous income in the accompanying consolidated statements of operations and comprehensive income (loss). Casualty gains (losses) are distinctly attributable to damage and subsequent write down of the property (loss), and the recoupment of funds from the insurance policy, as it relates to the damage. Such proceeds received from the damage to the property are accounted for as a gain to the Company, and potentially offset losses attributable to net write off of damaged assets. As of March 31, 2024 and December 31, 2023, there were 23 and 107 down units, respectively.

During three months ended March 31, 2024 and 2023, the Company recognized $0.2 million in casualty gain and $0.8 million in casualty loss, respectively, and $0.1 million and $0.4 million in business interruption proceeds on the consolidated statement of operations and comprehensive income (loss) due to casualty events, respectively.

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4. Debt

Mortgage Debt

The following table contains summary information concerning the mortgage debt of the Company as of March 31, 2024 (dollars in thousands):

Operating Properties	Type	Term (months)		Outstanding Principal				Interest Rate (1)	Maturity Date
Arbors on Forest Ridge	Floating		120	$	19,184			6.87%	12/1/2032
Cutter's Point	Floating		120		21,524			6.87%	12/1/2032
The Summit at Sabal Park	Floating		120		30,826			6.87%	12/1/2032
Courtney Cove	Floating		120		36,146			6.87%	12/1/2032
The Preserve at Terrell Mill	Floating		120		71,098			6.87%	12/1/2032
Versailles	Floating		120		40,247			6.87%	12/1/2032
Seasons 704 Apartments	Floating		120		33,132			6.87%	12/1/2032
Madera Point	Floating		120		34,457			6.87%	12/1/2032
Venue at 8651	Floating		120		18,690			6.87%	12/1/2032
The Venue on Camelback	Floating		120		42,788			7.50%	2/1/2033
Sabal Palm at Lake Buena Vista	Floating		84		42,100			6.74%	9/1/2025
Cornerstone	Floating		120		46,804			7.41%	12/1/2032
Parc500	Floating		120		29,416			6.87%	12/1/2032
Rockledge Apartments	Floating		120		93,129			6.87%	12/1/2032
Atera Apartments	Floating		120		46,198			6.87%	12/1/2032
Versailles II	Floating		84		12,061			6.62%	10/1/2025
Brandywine I & II	Floating		84		43,835			6.62%	10/1/2025
Bella Vista	Floating		84		29,040			6.76%	2/1/2026
The Enclave	Floating		84		25,322			6.76%	2/1/2026
The Heritage	Floating		84		24,625			6.76%	2/1/2026
Summers Landing	Floating		84		10,109			6.62%	10/1/2025
Residences at Glenview Reserve	Floating		84		25,502			6.88%	10/1/2025
Residences at West Place	Fixed		120		33,817			4.24%	10/1/2028
Avant at Pembroke Pines	Floating		84		177,100			6.87%	9/1/2026
Arbors of Brentwood	Floating		84		34,237			6.87%	10/1/2026
Torreyana Apartments	Floating		120		50,580			6.87%	12/1/2032
Bloom	Floating		120		59,830			6.87%	12/1/2032
Bella Solara	Floating		120		40,328			6.87%	12/1/2032
Fairways at San Marcos	Floating		120		60,228			6.87%	12/1/2032
The Verandas at Lake Norman	Floating		84		34,925			7.17%	7/1/2028
Creekside at Matthews	Floating		120		29,648			6.87%	12/1/2032
Six Forks Station	Floating		120		41,180			7.04%	10/1/2031
High House at Cary	Floating		84		46,625			7.33%	1/1/2029
The Adair	Floating		84		35,115			7.29%	4/1/2029
Estates on Maryland	Floating		84		43,157			7.29%	4/1/2029
				$	1,463,003
Fair market value adjustment					477		(2)
Deferred financing costs, net of accumulated amortization of $4,175					(9,379	)
				$	1,454,101
Held For Sale Properties
Stone Creek at Old Farm	Floating		84	$	15,274			7.12%	7/1/2024
Radbourne Lake	Floating		84		20,000			6.73%	10/1/2025
				$	35,274
Deferred financing costs, net of accumulated amortization of $530					(70	)
				$	35,204

(1)Interest rate is based on a reference rate plus an applicable margin, except for fixed rate mortgage debt. The reference rate used in our Portfolio is 30-Day Average Secured Overnight Financing Rate (“SOFR”). As of March 31, 2024, SOFR was 5.322%.

(2)The Company reflected a valuation adjustment on its fixed rate debt for Residences at West Place to adjust it to fair market value on its respective date of acquisition for the difference between the fair value and the assumed principal amount of debt. The difference is amortized into interest expense over the remaining terms of the mortgages.

The weighted average interest rate of the Company’s mortgage indebtedness was 6.874% as of March 31, 2024 and 6.900% as of December 31, 2023. As of March 31, 2024, the adjusted weighted average interest rate of the Company’s mortgage indebtedness was 3.470% which excludes the effect of interest rate caps. For purposes of calculating the adjusted weighted average interest rate of the outstanding mortgage indebtedness, the Company has included the weighted average fixed rate of 1.0682% for its combined $1.2 billion notional amount of interest rate swap agreements, which effectively fix the interest rate on $1.2 billion of the Company’s floating rate mortgage debt (see Note 5).

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Each of the Company’s mortgages is a non-recourse obligation subject to customary provisions. The loan agreements contain customary events of default, including defaults in the payment of principal or interest, defaults in compliance with the covenants contained in the documents evidencing the loan, defaults in payments under any other security instrument covering any part of the property, whether junior or senior to the loan, and bankruptcy or other insolvency events. As of March 31, 2024 and December 31, 2023, the Company believes it is in compliance with all provisions.

Credit Facility

On October 24, 2022, the Company exercised its option to extend the Corporate Credit Facility with respect to the revolving commitments for a single one-year term resulting in a maturity date of June 30, 2025. During the three months ended March 31, 2024, the Company paid down $24.0 million on the Corporate Credit Facility. As of March 31, 2024, there was $350.0 million available for borrowing under the Corporate Credit Facility. Subject to conditions provided in the Corporate Credit Facility, the commitments under Corporate Credit Facility may be increased up to an additional $150.0 million if the lenders agree to increase their commitments or if the lenders agree for the increase to be funded by any additional lender proposed by the Company, through the OP. The Corporate Credit Facility will mature on June 30, 2025 with respect to the revolving commitments. The Company can voluntarily and permanently reduce all of the revolving commitments before the maturity date. As of March 31, 2024 and December 31, 2023, the Company had $0.0 million and $24.0 million outstanding on the Corporate Credit Facility, respectively.

Advances under the Corporate Credit Facility accrue interest at a per annum rate equal to, at the Company’s election, either Term SOFR plus a margin of 1.90% to 2.40%, depending on the Company’s total leverage ratio and a benchmark replacement adjustment of 0.1%, or a base rate determined according to the highest of (a) the prime rate, (b) the federal funds rate plus 0.50%, (c) Term SOFR plus 1.0% or (d) 0.0% plus a margin of 0.90% to 1.40%, depending on the Company’s total leverage ratio. An unused commitment fee at a rate of 0.15% or 0.25%, depending on the outstanding aggregate revolving commitments, applies to unutilized borrowing capacity under the Corporate Credit Facility. Amounts owed under the Corporate Credit Facility may be prepaid at any time without premium or penalty. The Corporate Credit Facility is guaranteed by the Company and the obligations under the Corporate Credit Facility are, subject to some exceptions, secured by a continuing security interest in substantially all of the assets of the Company. The Company is in compliance with all of the covenants required in its Corporate Credit Facility.

Deferred Financing Costs

The Company defers costs incurred in obtaining financing and amortizes the costs over the terms of the related loans using the straight-line method, which approximates the effective interest method. Deferred financing costs, net of amortization, are recorded as a reduction from the related debt on the Company’s consolidated balance sheets. As of March 31, 2024, the Company had $3.0 million of deferred financing costs and $2.5 million of accumulated amortization related to the Corporate Credit Facility classified in prepaid and other assets on the consolidated balance sheet. Upon repayment of or in conjunction with a material change in the terms of the underlying debt agreement, any unamortized costs are charged to loss on extinguishment of debt and modification costs (see “Loss on Extinguishment of Debt and Modification Costs” below). For the three months ended March 31, 2024 and 2023, amortization of deferred financing costs of approximately $0.7 million and $0.8 million, respectively, is included in interest expense on the consolidated statements of operations and comprehensive income (loss).

Gain (Loss) on Extinguishment of Debt and Modification Costs

Loss on extinguishment of debt and modification costs includes prepayment penalties and defeasance costs incurred on the early repayment of debt, costs incurred in a debt modification that are not capitalized as deferred financing costs and other costs incurred in a debt extinguishment. During the three months ended March 31, 2024 and 2023, the Company recognized a loss on extinguishment of debt of approximately $0.5 million and a gain of $0.1 million, respectively.

Schedule of Debt Maturities

The aggregate scheduled maturities, including amortizing principal payments, of total debt for the next five calendar years subsequent to March 31, 2024 are as follows (in thousands):

	Operating Properties		Held For Sale Properties		Credit Facility		Total
2024	$	222	$	15,274	$	—	$	15,496
2025		133,386		20,000		—		153,386
2026		290,324		—		—		290,324
2027		—		—		—		-
2028		81,041		—		—		81,041
Thereafter		958,030		—		—		958,030
Total	$	1,463,003	$	35,274	$	—	$	1,498,277

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5. Fair Value of Derivatives and Financial Instruments

Derivative Financial Instruments and Hedging Activities

In the normal course of business, our operations are exposed to market risks, including the effect of changes in interest rates. We may enter into derivative financial instruments to offset this underlying market risk. There have been no significant changes in our policy and strategy from what was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

LIBOR ceased publication on June 30, 2023. On July 1, 2023, LIBOR rates were replaced with SOFR as the reference rate for most LIBOR debt and derivative instruments. For the Company's interest rate swaps, the reference transitioned from one-month LIBOR to the daily compounded average of SOFR plus a 0.11448% adjustment (“Adjusted SOFR”).

As of March 31, 2024, the Company had the following outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk (dollars in thousands):

Effective Date	Termination Date	Counterparty	Notional Amount		Fixed Rate (1)
June 1, 2019	June 1, 2024	KeyBank	$	50,000		2.0020	%
June 1, 2019	June 1, 2024	Truist		50,000		2.0020	%
September 1, 2019	September 1, 2026	KeyBank		100,000		1.4620	%
September 1, 2019	September 1, 2026	KeyBank		125,000		1.3020	%
January 3, 2020	September 1, 2026	KeyBank		92,500		1.6090	%
March 4, 2020	June 1, 2026	Truist		100,000		0.8200	%
June 1, 2021	September 1, 2026	KeyBank		200,000		0.8450	%
June 1, 2021	September 1, 2026	KeyBank		200,000		0.9530	%
March 1, 2022	March 1, 2025	Truist		145,000		0.5730	%
March 1, 2022	March 1, 2025	Truist		105,000		0.6140	%
			$	1,167,500		1.0682	%	(2)

(1)The floating rate option for the interest rate swaps is Adjusted SOFR. As of March 31, 2024, Adjusted SOFR was 5.436%.

(2)Represents the weighted average fixed rate of the interest rate swaps.

As of March 31, 2024, the Company had the following interest rate swap that was designated as a cash flow hedge of interest rate risk with future effective date (dollars in thousands):

Future Swaps

Effective Date	Termination Date	Counterparty	Notional Amount		Fixed Rate (1)
September 1, 2026	January 1, 2027	KeyBank	$	92,500		1.7980	%

(1)The floating rate option for the interest rate swap is Adjusted SOFR. As of March 31, 2024, Adjusted SOFR was 5.436%.

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Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements but either do not meet the strict requirements to apply hedge accounting in accordance with FASB ASC 815, Derivatives and Hedging, or the Company has elected not to designate such derivatives as hedges. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in net income (loss) as interest expense.

As of March 31, 2024, the Company had the following interest rate caps outstanding that were not designated as cash flow hedges of interest rate risk (dollars in thousands):

Properties	Type	Maturity Date	Notional		Strike Rate
The Verandas at Lake Norman	Floating	7/1/2024		34,925		3.40	%
Creekside at Matthews	Floating	7/1/2024		31,900		4.40	%
Sabal Palm at Lake Buena Vista	Floating	9/1/2024		42,100		6.20	%
Residences at Glenview Reserve	Floating	10/1/2024		25,645		4.81	%
Timber Creek	Floating	10/1/2024		24,100		4.99	%
Brandywine I & II	Floating	10/1/2024		43,835		6.82	%
Radbourne Lake	Floating	10/1/2024		20,000		6.46	%
Summers Landing	Floating	10/1/2024		10,109		6.07	%
Versailles II	Floating	10/1/2024		12,061		6.82	%
Six Forks Station	Floating	10/1/2024		41,180		4.00	%
High House at Cary	Floating	1/1/2025		46,625		2.74	%
The Heritage	Floating	2/1/2025		24,625		5.18	%
The Enclave	Floating	2/1/2025		25,322		5.18	%
Bella Vista	Floating	2/1/2025		29,040		5.18	%
Estates on Maryland	Floating	4/1/2025		43,157		3.91	%
The Adair	Floating	4/1/2025		35,115		3.91	%
Rockledge Apartments	Floating	12/1/2025		93,129		6.45	%
The Preserve at Terrell Mill	Floating	12/1/2025		71,098		6.45	%
Fairways at San Marcos	Floating	12/1/2025		60,228		6.70	%
Bloom	Floating	12/1/2025		59,830		6.70	%
Atera Apartments	Floating	12/1/2025		46,198		6.45	%
Silverbrook	Floating	12/1/2025		46,088		6.45	%
Torreyana Apartments	Floating	12/1/2025		50,580		6.70	%
Cornerstone	Floating	12/1/2025		46,804		6.66	%
Versailles	Floating	12/1/2025		40,247		6.45	%
Bella Solara	Floating	12/1/2025		40,328		6.70	%
Courtney Cove	Floating	12/1/2025		36,146		6.70	%
Madera Point	Floating	12/1/2025		34,457		6.70	%
Creekside at Matthews	Floating	12/1/2025		29,648		6.45	%
Parc500	Floating	12/1/2025		29,416		6.45	%
Seasons 704 Apartments	Floating	12/1/2025		33,132		6.70	%
The Summit at Sabal Park	Floating	12/1/2025		30,826		6.70	%
Cutter's Point	Floating	12/1/2025		21,524		6.45	%
Venue at 8651	Floating	12/1/2025		18,690		6.45	%
Arbors on Forest Ridge	Floating	12/1/2025		19,184		6.70	%
Venue on Camelback	Floating	2/1/2026		42,788		6.07	%
			$	1,340,080		5.90	%	(1)

The table below presents the fair value of the Company’s derivative financial instruments, which use level 2 inputs, as well as their classification on the consolidated balance sheets as of March 31, 2024 and December 31, 2023 (in thousands):

		Asset Derivatives				Liability Derivatives
	Balance Sheet Location	March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Derivatives designated as hedging instruments:
Interest rate swaps	Fair value of interest rate swaps	$	73,711	$	71,028	$	—	$	—
Derivatives not designated as hedging instruments:
Interest rate caps	Prepaid and other assets		2,639		2,988		—		—
Total		$	76,350	$	74,016	$	—	$	—

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The tables below present the effect of the Company’s derivative financial instruments on the consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2024 and 2023 (in thousands):

	Amount of gain (loss) recognized in OCI					Location of gain (loss) reclassified from accumulated	Amount of gain (loss) reclassified from OCI into income
	2024		2023			OCI into income	2024		2023
Derivatives designated as hedging instruments:
For the three months ended March 31,
Interest rate products	$	15,590	$	(7,061	)	Interest expense	$	12,907	$	10,145

	Location of gain (loss)	Amount of gain (loss) recognized in income
	recognized in income	2024			2023
Derivatives not designated as hedging instruments:
For the three months ended March 31,
Interest rate products	Interest expense	$	(626	)	$	(970	)

Other Financial Instruments Carried at Fair Value

Redeemable noncontrolling interests in the OP have a redemption feature and are marked to their redemption value if such value exceeds the carrying value of the redeemable noncontrolling interests in the OP (see Note 8). The redemption value is based on the fair value of the Company’s common stock at the redemption date, and therefore, is calculated based on the fair value of the Company’s common stock at the balance sheet date. Since the valuation is based on observable inputs such as quoted prices for similar instruments in active markets, redeemable noncontrolling interests in the OP are classified as Level 2 if they are adjusted to their redemption value.

Financial Instruments Not Carried at Fair Value

As of March 31, 2024 and December 31, 2023, the fair values of cash and cash equivalents, restricted cash, accounts receivable, prepaid and other assets, excluding interest rate caps, accounts payable and other accrued liabilities, accrued real estate taxes payable, accrued interest payable, security deposits and prepaid rent approximated their carrying values because of the short-term nature of these instruments. The estimated fair values of other financial instruments were determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair values. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company would realize on the disposition of the financial instruments. The use of different market assumptions or estimation methodologies may have a material effect on the estimated fair value amounts.

In calculating the fair value of its long-term indebtedness, the Company used interest rate and spread assumptions that reflect current credit worthiness and market conditions available for the issuance of long-term debt with similar terms and remaining maturities. These financial instruments utilize Level 2 inputs. The table below presents the carrying value (outstanding principal balance) and estimated fair value of our debt at March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024				December 31, 2023
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Fixed rate debt	$	33,817	$	32,154	$	33,817	$	31,950
Floating rate debt (1)	$	1,464,460	$	1,271,125	$	1,541,419	$	1,335,635

(1)Includes balances outstanding under our Corporate Credit Facility.

6. Stockholders’ Equity

Common Stock

During the three months ended March 31, 2024 and 2023, the Company issued 100,417 and 108,404 shares, respectively, of common stock pursuant to its long-term incentive plan (see “Long Term Incentive Plan” below).

As of March 31, 2024, the Company had 25,774,730 shares of common stock, par value $0.01 per share, issued and outstanding.

Share Repurchase Program

On June 15, 2016, the Board authorized the Company to repurchase up to $30.0 million of its common stock, par value $0.01 per share, during a two-year period that was set to expire on June 15, 2018 (the “Share Repurchase Program”). On April 30, 2018, the Board

13

increased the Share Repurchase Program from $30.0 million to up to $40.0 million and extended it by an additional two years to June 15, 2020. On March 13, 2020, the Board further increased the Share Repurchase Program from $40.0 million to up to $100.0 million and extended it to March 12, 2023. On October 24, 2022, the Board authorized the Company to repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $100.0 million during a two-year period that will expire on October 24, 2024. This authorization replaced the Board's prior authorization. The Company may utilize various methods to affect the repurchases, and the timing and extent of the repurchases will depend upon several factors, including market and business conditions, regulatory requirements and other corporate considerations, including whether the Company’s common stock is trading at a significant discount to net asset value per share. Repurchases under this program may be discontinued at any time.

During the three months ended March 31, 2024 and 2023, the Company did not make any share repurchases. Since the inception of the Share Repurchase Program through March 31, 2024, the Company has repurchased 2,550,628 shares of its common stock, par value $0.01 per share, at a total cost of approximately $72.4 million, or $28.36 per share on average.

Restricted Stock Units

Under the Company’s 2016 Long Term Incentive Plan (the "2016 LTIP"), restricted stock units may be granted to the Company’s directors, officers and other key employees (and those of the Adviser and the Company’s subsidiaries) and typically vest over a three to five-year period for officers, employees and certain key employees of the Adviser and annually for directors. Beginning on the date of grant, restricted stock units earn dividends that are payable in cash on the vesting date. The following table includes the number of restricted stock units granted to its directors, officers, employees and certain key employees of the Adviser under the 2016 LTIP:

	Summary of Grants
	February		March		May		Total
2019		186,662		—		—		186,662
2020		168,183		—		116,852		285,035
2021		204,663		—		—		204,663
2022		142,519		—		—		142,519
2023		—		260,709		—		260,709
2024		—		355,475		—		355,475
Total		702,027		616,184		116,852		1,435,063

As of March 31, 2024 and December 31, 2023, the Company had 780,599 and 620,137 unvested units under the 2016 LTIP, respectively.

The following table includes the number of restricted stock units granted, vested, forfeited and outstanding as of March 31, 2024:

	2024
	Number of Units				Weighted Average Grant Date Fair Value
Outstanding January 1,		620,137			$	47.50
Granted		355,475				30.89
Vested		(195,013	)	(1)		47.00
Forfeited		—				—
Outstanding March 31,		780,599			$	40.19

(1)Certain key employees of the Adviser elected to net the taxes owed upon vesting against the shares issued resulting in 100,417 shares being issued as shown on the Consolidated Statement of Stockholders’ Equity. During the three months ended March 31, 2024, 50,201 shares vested under the 2016 LTIP that had not settled as of March 31, 2024.

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The following table contains information regarding the vesting of restricted stock units under the 2016 LTIP for the next five calendar years subsequent to March 31, 2024:

	Shares Vesting
	February		March		May		June		Total
2024		—		—		21,877		841		22,718
2025		97,154		136,671		21,769		—		255,594
2026		64,147		114,965		—		—		179,112
2027		26,281		114,965		—		—		141,246
2028		—		114,958		—		—		114,958
2029		—		66,971		—		—		66,971
Total		187,582		548,530		43,646		841		780,599

As of March 31, 2024 and December 31, 2023, the Company had issued 1,132,822 and 982,204 shares of common stock under the 2016 LTIP, respectively. For the three months ended March 31, 2024 and 2023, the Company recognized approximately $2.5 million and $2.0 million, respectively, of equity-based compensation expense related to grants of restricted stock units. For the three months ended March 31, 2024 and 2023, the Company recognized approximately $2.5 million and $2.0 million, respectively, of equity-based compensation expense related to grants of restricted stock units. As of March 31, 2024 and December 31, 2023, the Company had recognized a liability of approximately $1.6 million and $2.1 million, respectively, related to dividends earned on restricted stock units that are payable in cash upon vesting which is included in accounts payable and other accrued liabilities on the consolidated balance sheets. Forfeitures are recognized as they occur.

As of March 31, 2024 and December 31, 2023. the Company had total unrecognized compensation expense on restricted awards of approximately $30.0 million and $21.5 million over a weighted average vesting period of 2.3 and 1.5 years, respectively.

At-the-Market Offering

On March 4, 2020, the Company, the OP and the Adviser entered into separate equity distribution agreements with each of Jefferies LLC (“Jefferies”), Raymond James & Associates, Inc. (“Raymond James”), KeyBanc Capital Markets Inc. (“KeyBanc”) and Truist Securities (f/k/a SunTrust Robinson Humphrey, Inc., “SunTrust,” and together with Jefferies, Raymond James and KeyBanc, the “ATM Sales Agents”), pursuant to which the Company could issue and sell from time to time when an effective registration statement was available shares of the Company’s common stock, par value $0.01 per share, having an aggregate sales price of up to $225,000,000 (the “2020 ATM Program”). Sales of shares of common stock, if any, could be made in transactions that were deemed to be “at the market” offerings, as defined in Rule 415 under the Securities Act, including, without limitation, sales made by means of ordinary brokers’ transactions on the New York Stock Exchange, to or through a market maker at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices based on prevailing market prices. In addition to the issuance and sale of shares of common stock, the Company could enter into forward sale agreements with each of Jefferies, KeyBanc and Raymond James, or their respective affiliates, through the 2020 ATM Program. During the three months ended March 31, 2024 and 2023, no shares were issued under the 2020 ATM Program. The following table contains summary information of the 2020 ATM Program since its inception:

Gross proceeds	$	62,310,967
Common shares issued		1,120,910
Gross average sale price per share	$	55.59
Sales commissions	$	934,665
Offering costs		1,353,015
Net proceeds		60,023,287
Average price per share, net	$	53.55

7. Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of the Company’s common stock outstanding, which excludes any unvested restricted stock units issued pursuant to the 2016 LTIP. Diluted earnings (loss) per share is computed by adjusting basic loss per share for the dilutive effect of the assumed vesting of restricted stock units. During periods of net loss, the assumed vesting of restricted stock units is anti-dilutive and is not included in the calculation of earnings (loss) per share.

The effect of the conversion of OP Units held by noncontrolling limited partners is not reflected in the computation of basic and diluted earnings (loss) per share as the assumed conversion of these units would have no net impact on the determination of diluted earnings (loss) per share. See Note 8 for additional information.

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The following table sets forth the computation of basic and diluted loss per share for the periods presented (in thousands, except per share amounts):

		For the Three Months Ended March 31,
		2024		2023
Numerator for earnings (loss) per share:
Net income (loss)		$	26,402	$	(3,898	)
Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership			104		(15	)
Net income (loss) attributable to common stockholders		$	26,298	$	(3,883	)
Denominator for earnings (loss) per share:
Weighted average common shares outstanding			25,721		25,599
Denominator for basic earnings (loss) per share			25,721		25,599
Weighted average unvested restricted stock units			633		476
Denominator for diluted earnings per share	(1)		26,354		25,599
Earnings (loss) per weighted average common share:
Basic		$	1.02	$	(0.15	)
Diluted		$	1.00	$	(0.15	)

(1)If the Company sustains a net loss for the period presented, unvested restricted stock units are not included in the diluted earnings per share calculation.

8. Noncontrolling Interests

Redeemable Noncontrolling Interests in the OP

The following table sets forth the redeemable noncontrolling interests in the OP for the three months ended March 31, 2024 (in thousands):

Redeemable noncontrolling interests in the OP, December 31, 2023	$	5,246
Net income attributable to redeemable noncontrolling interests in the OP		104
Other comprehensive income attributable to redeemable noncontrolling interests in the OP		11
Distributions to redeemable noncontrolling interests in the OP		(48	)
Adjustment to reflect redemption value of redeemable noncontrolling interests in the OP		(231	)
Redeemable noncontrolling interests in the OP, March 31, 2024	$	5,082

Fees and Reimbursements to BH and its Affiliates

The Company has entered into management agreements with BH Management Services, LLC (“BH”), the Company’s property manager and an independently owned third party, who manages the Company’s properties and supervises the implementation of the Company’s value-add program. BH is an affiliate of BH Equities, LLC and its affiliates (collectively, (“BH Equity"), who was a noncontrolling interest member of the Company’s joint ventures prior to the BH purchase by the Company of 100% of the joint venture interests in the Portfolio owned by BH Equity, representing approximately 8.4% ownership in the portfolio (the “BH Buyout") on June 30, 2017. Through BH Equity’s noncontrolling interests in such joint ventures, BH Equity was deemed to be a related party. With the completion of the BH Buyout, BH Equity is no longer deemed to be a related party. BH Equity became a noncontrolling limited partner of the OP upon execution of the Amendment. BH and its affiliates do not have common ownership in any joint venture with the Adviser; there is also no common ownership between BH and its affiliates and the Adviser.

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The property management fee paid to BH is approximately 3% of the monthly gross income from each property managed. Currently, BH manages all of the Company’s properties. Additionally, the Company may pay BH certain other fees, including: (1) a fee of $15-25 per unit for the one-time setup and inspection of properties, (2) a construction supervision fee of 5-6% of total project costs, which is capitalized, (3) acquisition fees and due diligence costs reimbursements, and (4) other owner approved fees at $55 per hour. BH also acts as a paymaster for the properties and is reimbursed at cost for various operating expenses it pays on behalf of the properties. The following is a summary of fees that the properties incurred to BH and its affiliates, as well as reimbursements paid to BH from the properties for various operating expenses, for the three months ended March 31, 2024 and 2023 (in thousands):

		For the Three Months Ended March 31,
		2024			2023
Fees incurred
Property management fees	(1)	$	1,943		$	2,019
Construction supervision fees	(2)		159			651
Design fees	(2)		—			11
Acquisition fees	(3)		(1	)		—
Reimbursements
Payroll and benefits	(4)		4,833			5,451
Other reimbursements	(5)		1,136			1,353

(1)Included in property management fees on the consolidated statements of operations and comprehensive income (loss).

(2)Capitalized on the consolidated balance sheets and reflected in buildings and improvements.

(3)Includes due diligence costs. Acquisition fees are capitalized to real estate assets on the consolidated balance sheets.

(4)Included in property operating expenses on the consolidated statements of operations and comprehensive income (loss).

(5)Includes property operating expenses such as repairs and maintenance costs and certain property general and administrative expenses, which are included on the consolidated statements of operations and comprehensive income (loss).

9. Related Party Transactions

Advisory and Administrative Fee

In accordance with the Advisory Agreement, the Company pays the Adviser an advisory fee equal to 1.00% of the Average Real Estate Assets (as defined below). The duties performed by the Company’s Adviser under the terms of the Advisory Agreement include, but are not limited to: providing daily management for the Company, selecting and working with third party service providers, managing the Company’s properties or overseeing the third party property manager, formulating an investment strategy for the Company and selecting suitable properties and investments, managing the Company’s outstanding debt and its interest rate exposure through derivative instruments, determining when to sell assets, and managing the value-add program or overseeing a third party vendor that implements the value-add program. “Average Real Estate Assets” means the average of the aggregate book value of Real Estate Assets before reserves for depreciation or other non-cash reserves, computed by taking the average of the book value of real estate assets at the end of each month (1) for which any fee under the Advisory Agreement is calculated or (2) during the year for which any expense reimbursement under the Advisory Agreement is calculated. “Real Estate Assets” is defined broadly in the Advisory Agreement to include, among other things, investments in real estate-related securities and mortgages and reserves for capital expenditures (the value-add program). The advisory fee is payable monthly in arrears in cash, unless the Adviser elects, in its sole discretion, to receive all or a portion of the advisory fee in shares of common stock, subject to certain limitations.

In accordance with the Advisory Agreement, the Company also pays the Adviser an administrative fee equal to 0.20% of the Average Real Estate Assets. The administrative fee is payable monthly in arrears in cash, unless the Adviser elects, in its sole discretion, to receive all or a portion of the administrative fee in shares of common stock, subject to certain limitations.

The advisory and administrative fees paid to the Adviser on the Contributed Assets (as defined in the Advisory Agreement) are subject to an annual cap of approximately $5.4 million (the “Contributed Assets Cap”) (see “Expense Cap” below).

Pursuant to the terms of the Advisory Agreement, the Company will reimburse the Adviser for all documented Operating Expenses and Offering Expenses it incurs on behalf of the Company. “Operating Expenses” include legal, accounting, financial and due diligence services performed by the Adviser that outside professionals or outside consultants would otherwise perform, the Company’s pro rata share of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of the Adviser required for the Company’s operations, and compensation expenses under the 2016 LTIP. Operating Expenses do not include expenses for the advisory and administrative services described in the Advisory Agreement. Certain Operating Expenses, such as the Company’s ratable share of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses incurred by the Adviser or its affiliates that relate to the operations of the Company, may be billed monthly to the Company under a shared services agreement. “Offering Expenses” include all expenses (other than underwriters’ discounts) in connection with an offering, including, without limitation, legal, accounting, printing, mailing and filing fees and other documented offering expenses. For the three months ended March 31, 2024 and 2023, the Adviser did not bill any Operating Expenses or Offering Expenses to the Company and any such expenses the Adviser incurred during the periods are considered to be permanently waived.

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Expense Cap

Pursuant to the terms of the Advisory Agreement, expenses paid or incurred by the Company for operating expenses and advisory and administrative fees payable to the Adviser and Operating Expenses will not exceed 1.5% of Average Real Estate Assets per calendar year (or part thereof that the Advisory Agreement is in effect (the “Expense Cap”)). The Expense Cap does not limit the reimbursement of expenses related to Offering Expenses. 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 the Company’s ordinary course of business or any out-of-pocket acquisitions or due diligence expenses incurred in connection with the acquisition or disposition of real estate assets. Also, advisory and administrative fees are further limited on Contributed Assets to approximately $5.4 million in any calendar year. Contributed Assets refers to all Real Estate Assets contributed to the Company as part of its spin-off. The Contributed Assets Cap is not reduced for dispositions of such assets subsequent to its spin-off. Advisory and administrative fees on New Assets (as defined in the Advisory Agreement) are not subject to the above limitation and are based on an annual rate of 1.2% on Average Real Estate Assets, but are subject to the Expense Cap. New Assets are all Real Estate Assets that are not Contributed Assets.

For the three months ended March 31, 2024 and 2023, the Company incurred advisory and administrative fees of $1.7 million and $1.9 million, respectively. For the three months ended March 31, 2024 and 2023, the Adviser elected to voluntarily waive advisory and administrative fees of approximately $5.5 million and $5.3 million, respectively. The advisory and administrative fees waived by the Adviser are considered to be permanently waived for the periods. The 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.

Other Related Party Transactions

The Company has in the past, and may in the future, utilize the services of affiliated parties. The Company holds multiple operating accounts at NexBank.

On July 30, 2021, three of our property-owning subsidiaries entered into agreements with NLMF Holdco, LLC, an entity under common control with our Adviser and in which we own a 10% equity interest, to provide faster, more reliable and lower cost internet to our residents. The lease of the fiber facilities and easement is between NLMF Holdco, LLC and NLMF Leaseco, LLC, which is wholly and separately owned by NLMF Leaseco Owner, LLC, which is controlled by Matt McGraner, one of our officers. The fiber management and internet services agreement is managed by NLMF Leaseco, LLC. The Company accounts for its interest in NLMF Holdco, LLC using the equity method of accounting. As of March 31, 2024, the Company has funded approximately $0.6 million to NLMF Holdco, LLC which is included in prepaid and other assets on the consolidated balance sheet of the Company. For the three months ended March 31, 2024, the Company included $0.0 million of NLMF Holdco, LLC net income in equity in earnings of affiliate on the consolidated statement of operations and comprehensive income (loss). For the three months ended March 31, 2024 and 2023, the Company incurred expenses of $0.7 million and $0.6 million, respectively, for fiber internet service to NLMF Leaseco, LLC which is included in property operating expenses on the consolidated statement of operations and comprehensive income (loss).

NXRTBH Old Farm, LLC

On August 16, 2023, the Company entered into a Membership Interest Purchase Agreement (“MIPA”) between NXRTBH McMillan, LLC (a wholly owned subsidiary of the Company, the “Seller”) and NexBank Capital to sell all the membership interests of NXRTBH Old Farm, LLC (“Old Farm subsidiary”). Then on March 1, 2024 (the “closing date”), in accordance with the Fourth Amendment to Membership Interest Purchase Agreement, the Seller sold the membership interests of the Old Farm subsidiary to NexBank Capital for $103 million. Substantially all of the fair value of the disposed membership interests is concentrated in the property that is wholly owned by the Old Farm subsidiary at the closing date. As such, the Company determined the Old Farm subsidiary is not a business, and the membership interests represent an in-substance nonfinancial asset consistent with ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets.

The membership interests sold represented 100% of the outstanding equity interests. Following the sale, the Company determined it no longer holds a controlling financial interest in the Old Farm subsidiary and is no longer the primary beneficiary. The Company deconsolidated the Old Farm subsidiary (including the property) as of March 1, 2024. Simultaneously with the sale, the Seller, NexBank Capital and the Old Farm subsidiary entered into an Agreement Regarding Ownership of Bank Accounts, which retained the bank account and its retained balance, along with all its respective rights, titles and interest in, to, and under, at the Seller. Therefore, the $1 million retained cash balance as of the closing date was not deconsolidated along with the sale. The Company recognized a gain on deconsolidation of $31.7 million.

A director and officer of the Company, who controls the Adviser, which externally manages the Company, also (i) is the beneficiary of a trust that indirectly owns 100% of the limited partnership interests in the parent of the Adviser and directly owns 100% of the general partnership interests in the parent of the Adviser and (ii) is a director of NexBank Capital, the holding company of NexBank, directly owns a minority of the common stock of NexBank, and is the beneficiary of a trust that directly owns a substantial portion of the common stock of NexBank.

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10. Commitments and Contingencies

Commitments

In the normal course of business, the Company enters into various rehabilitation construction related purchase commitments with parties that provide these goods and services. In the event the Company were to terminate rehabilitation construction services prior to the completion of projects, the Company could potentially be committed to satisfy outstanding or uncompleted purchase orders with such parties. As of March 31, 2024 and December 31, 2023, management does not anticipate any material deviations from schedule or budget related to rehabilitation projects currently in process.

The Company’s agreement with NLMF Holdco, LLC may result in additional funding requirements to cover future project costs. The maximum exposure of potential commitments is expected to be no more than $4.0 million.

Contingencies

In the normal course of business, the Company is subject to claims, lawsuits, and legal proceedings. While it is not possible to ascertain the ultimate outcome of all such matters, management believes that the aggregate amount of such liabilities, if any, in excess of amounts provided or covered by insurance, will not have a material adverse effect on the consolidated balance sheets or consolidated statements of operations and comprehensive income (loss) of the Company. The Company is not involved in any material litigation nor, to management’s knowledge, is any material litigation currently threatened against the Company or its properties or subsidiaries.

Environmental liabilities could have a material adverse effect on the Company’s business, assets, cash flows or results of operations. As of March 31, 2024 and December 31, 2023, the Company was not aware of any environmental liabilities. There can be no assurance that material environmental liabilities do not exist.

Self-Insurance Program

On March 1, 2022, the Adviser entered into a new self-insurance policy resulting in a new aggregate amount of $2,497,500 (the “2022 Aggregate Amount”) which is allocated across properties managed by the Adviser with approximately $1.8 million being allocated to the Company.

On April 1, 2023, the Adviser entered into a new self-insurance policy resulting in a new aggregate amount of $2,950,000 (the “2023 Aggregate Amount”) which is allocated across properties managed by the Adviser with approximately $2.1 million being allocated to the Company. As of March 31, 2024, $1.8 million of the $2.1 million of 2023 Aggregate Amount allocated to the Company has been prepaid by the Company.

11. Subsequent Events

Dividends Declared

On April 29, 2024, the Company’s Board approved a quarterly dividend of $0.46242 per share, payable on June 28, 2024 to stockholders of record on June 14, 2024.

Sale of Radbourne Lake

On April 30, 2024, the Company sold Radbourne Lake for a sales price of approximately $39.3 million.

Share Repurchases

Since March 31, 2024, the Company has purchased 269,408 shares of its common stock, totaling approximately $8.6 million at an average price of $31.76 per share.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

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 annual report on Form 10-K for the year ended December 31, 2023 (our “Annual Report”), filed with the Securities and Exchange Commission (the “SEC”) on February 26, 2024. 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 Annual Report.

Overview

As of March 31, 2024, our Portfolio consisted of 37 multifamily properties primarily located in the Southeastern and Southwestern United States encompassing 13,399 units of apartment space that was approximately 94.6% leased with a weighted average monthly effective rent per occupied apartment unit of $1,511. 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 March 31, 2024, 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 an unaffiliated limited partner (see Note 8 to our consolidated financial statements).

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 26, 2024 for a one-year term. The Adviser is wholly owned by NexPoint Advisors, L.P.

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 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 three months ended March 31, 2024 and 2023.

The macroeconomic environment remains challenging as central banks have continued to rapidly raise interest rates. The rising rate environment, coupled with large bank failures in early 2023 and ongoing economic uncertainty, has limited credit availability to commercial real estate. Less available and more expensive debt capital has had pronounced effects on the capital markets, making property acquisitions and other investments harder to finance. Similar factors also impact the timing of and proceeds generated from asset sales and our ability to obtain debt capital.

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”). 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, filed a lawsuit (the “Bankruptcy Trust Lawsuit”) against various persons and entities, including our Sponsor and James Dondero. 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”). 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 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.

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Components of Our Revenues and Expenses

Revenues

Rental income. Our earnings are primarily attributable to the rental revenue from our multifamily properties. We anticipate that the leases we enter into for our multifamily properties will typically be for one year or less on average. Also included are utility reimbursements, late fees, pet fees, and other rental fees charged to tenants.

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.

Expenses

Property operating expenses. Property operating expenses include property maintenance costs, salary and employee benefit costs, utilities, casualty-related expenses and recoveries and other property operating costs.

Real estate taxes and insurance. Real estate taxes include the property taxes assessed by local and state authorities depending on the location of each property. Insurance includes the cost of commercial, general liability, and other needed insurance for each property.

Property management fees. Property management fees include fees paid to BH, our property manager, or other third party management companies for managing each property (see Note 8 to our consolidated financial statements).

Advisory and administrative fees. Advisory and administrative fees include the fees paid to our Adviser pursuant to the Advisory Agreement (see Note 9 to our consolidated financial statements).

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. Corporate general and administrative expenses and the advisory and administrative 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 advisory and administrative fees otherwise due. If advisory and administrative 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.

Property general and administrative expenses. Property general and administrative expenses include the costs of marketing, professional fees, general office supplies, and other administrative related costs of each property.

Depreciation and amortization. Depreciation and amortization costs primarily include depreciation of our multifamily properties and amortization of acquired in-place leases.

Other Income and Expense

Interest expense. Interest expense primarily includes the cost of interest expense on debt, the amortization of deferred financing costs and the related impact of interest rate derivatives used to manage our interest rate risk.

Gain (loss) on extinguishment of debt and modification costs. Gain (loss) on extinguishment of debt and modification costs includes prepayment penalties and defeasance costs, the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt related to the early repayment of debt, costs incurred in a debt modification that are not capitalized as deferred financing costs and other costs incurred in a debt extinguishment.

Casualty gain (loss). Casualty gain (loss) include 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.

Miscellaneous income. Miscellaneous income includes proceeds received from insurance for business interruption involving the loss of rental income at a property that has temporarily suspended operations due to an unexpected and unusual event.

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Gain on sales of real estate. Gain on sales of real estate includes the gain recognized upon sales of properties. Gain on sales of real estate is calculated by deducting the carrying value of the real estate and costs incurred to sell the properties from the sales prices of the properties.

Results of Operations for the Three Months Ended March 31, 2024 and 2023

The following table sets forth a summary of our operating results for the three months ended March 31, 2024 and 2023 (in thousands):

	For the Three Months Ended March 31,
	2024			2023			$ Change
Total revenues	$	67,577		$	69,227		$	(1,650	)
Total expenses		(58,295	)		(56,105	)		(2,190	)
Operating income before gain on sales of real estate		9,282			13,122			(3,840	)
Gain on sales of real estate		31,709			—			31,709
Operating income		40,991			13,122			27,869
Interest expense		(14,391	)		(16,739	)		2,348
Gain (loss) on extinguishment of debt and modification costs		(546	)		122			(668	)
Casualty gain (loss)		199			(814	)		1,013
Equity in earnings of affiliate		38			—			38
Miscellaneous income		111			411			(300	)
Net income (loss)		26,402			(3,898	)		30,300
Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership		104			(15	)		119
Net income (loss) attributable to common stockholders	$	26,298		$	(3,883	)	$	30,181

The change in our net income for the three months ended March 31, 2024 as compared to the net loss for the three months ended March 31, 2023 primarily relates to an increase on gain on sales of real estate.

Revenues

Rental income. Rental income was $65.6 million for the three months ended March 31, 2024 compared to $67.5 million for the three months ended March 31, 2023, which was a decrease of approximately $1.9 million. The decrease between the periods was primarily due to our disposition activity in 2023 and 2024.

Other income. Other income was $2.0 million for the three months ended March 31, 2024 compared to $1.7 million for the three months ended March 31, 2023, which was an increase of approximately $0.3 million. The increase between the periods was primarily due to a $0.3 million increase from NXRT Captive.

Expenses

Property operating expenses. Property operating expenses were $13.8 million for the three months ended March 31, 2024 compared to $13.3 million for the three months ended March 31, 2023, which was an increase of approximately $0.5 million. The increase between the periods was primarily due to a decrease in casualty gains on $1.7 million, offset by a decrease in all other operating expenses of $2.2 million due to our disposition activity in 2023 and 2024.

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Real estate taxes and insurance. Real estate taxes and insurance costs were $9.3 million for the three months ended March 31, 2024 compared to $10.0 million for the three months ended March 31, 2023, which was a decrease of approximately $0.7 million. The decrease between the periods was primarily due to a decrease in property taxes of $0.7 million, which was driven by our disposition activity in 2023 and 2024.

Property management fees. Property management fees were $2.0 million for the three months ended March 31, 2024 and $2.0 million for the three months ended March 31, 2023. Property management fees are primarily based on total revenues.

Advisory and administrative fees. Advisory and administrative fees were $1.7 million for the three months ended March 31, 2024 and $1.9 million for the three months ended March 31, 2023 which was a decrease of approximately $0.2 million. For the three months ended March 31, 2024 and 2023, our Adviser elected to voluntarily waive the 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.

Corporate general and administrative expenses. Corporate general and administrative expenses were $4.9 million for the three months ended March 31, 2024 compared to $3.4 million for the three months ended March 31, 2023, which was an increase of approximately $1.5 million. The increase was primarily due to an increase in stock compensation expense of $0.6 million.

Property general and administrative expenses. Property general and administrative expenses were $2.3 million for the three months ended March 31, 2024 compared to $2.3 million for the three months ended March 31, 2023, which was flat.

Depreciation and amortization. Depreciation and amortization costs were $24.3 million for the three months ended March 31, 2024 compared to $23.3 million for the three months ended March 31, 2023, which was an increase of approximately $1.0 million. The increase between the periods was primarily due to an increase of $1.1 million in depreciation expense.

Other Income and Expense

Interest expense. Interest expense was $14.4 million for the three months ended March 31, 2024 compared to $16.7 million for the three months ended March 31, 2023, which was a decrease of approximately $2.3 million. The decrease between the periods was primarily due an increase in interest on debt of $2.1 million as a result of increased interest rates offset by interest rate swaps and caps gain of $2.7 million and $1.6 million, respectively. The following table details the various costs included in interest expense for the three months ended March 31, 2024 and 2023 (in thousands):

	For the Three Months Ended March 31,
	2024			2023			$ Change
Interest on debt	$	27,207		$	25,147		$	2,060
Amortization of deferred financing costs		717			767			(50	)
Interest rate swaps		(12,907	)		(10,145	)		(2,762	)
Interest rate caps mark-to-market loss (gain)		(626	)		970			(1,596	)
Total	$	14,391		$	16,739		$	(2,348	)

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Casualty gain (loss). Casualty loss was $0.2 million gain compared to a $0.8 million loss for the three months ended March 31, 2024 and 2023, respectively. The increase in casualty gain (loss) between periods of $1.0 million is attributable to the Company's casualty events and the timing.

Miscellaneous income. Miscellaneous income was $0.1 million compared to $0.4 million for the three months ended March 31, 2023. The decrease in miscellaneous income is attributable to a decrease in business interruption proceeds.

Gain on sales of real estate. Gain on sales of real estate was $31.7 million compared to $0.0 million for the three months ended March 31, 2023. The increase between periods is attributable to our sale of one property during the three months ended March 31, 2024 compared to no dispositions during the three months ended March 31, 2023.

Non-GAAP Measurements

Net Operating Income and Same Store Net Operating Income

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) the impact of: (a) depreciation and amortization expenses and (b) gains or losses from the sale of operating real estate assets that are included in net income (loss) computed in accordance with GAAP, (4) corporate general and administrative expenses, (5) other gains and losses that are specific to us including loss on extinguishment of debt and modification costs, (6) casualty-related expenses/(recoveries) and casualty gains (losses), (7) gain (loss) on extinguishment of debt and modification costs that are not reflective of continuing operations of the properties, (8) 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 (9) equity in earnings of affiliates.

The cost of funds is eliminated from net income (loss) because it is specific to our particular financing capabilities and constraints. The cost of funds is also eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by us regarding the appropriate mix of capital, which may have changed or may change in the future. Corporate general and administrative expenses, and non-operating fees to affiliates and equity in earnings of affiliates are eliminated because they do not reflect continuing operating costs of the property owner. Depreciation and amortization expenses as well as gains or losses from the sale of operating real estate assets are eliminated because they may not accurately represent the actual change in value in our multifamily properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole have historically increased or decreased as a result of changes in overall economic conditions instead of from actual use of the property or the passage of time. Gains and losses from the sale of real property vary from property to property and are affected by market conditions at the time of sale, which will usually change from period to period. Casualty-related expenses and recoveries are excluded because they do not reflect continuing operating costs of the property owner. Entity level general and administrative expenses incurred at the properties are eliminated as they are specific to the way in which we have chosen to hold our properties and are the result of our ownership structuring. Also, expenses that are incurred upon acquisition of a property do not reflect continuing operating costs of the property owner. These gains and losses can create distortions when comparing one period to another or when comparing our operating results to the operating results of other real estate companies that have not made similarly timed purchases or sales. We believe that eliminating these items from net income (loss) is useful because the resulting measure captures the actual ongoing revenue generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs.

However, the usefulness of NOI is limited because it excludes corporate general and administrative expenses, interest expense, loss on extinguishment of debt and modification costs, certain fees to affiliates such as advisory and administrative fees, depreciation and amortization expense and gains or losses from the sale of properties, and other gains and losses as determined under GAAP, the level of capital expenditures and leasing costs necessary to maintain the operating performance of our properties, all of which are significant economic costs. NOI may fail to capture significant trends in these components of net income, which further limits its usefulness.

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NOI is a measure of the operating performance of our properties but does not measure our performance as a whole. NOI is therefore not a substitute for net income (loss) as computed in accordance with GAAP. This measure should be analyzed in conjunction with net income (loss) computed in accordance with GAAP and discussions elsewhere in “—Results of Operations” regarding the components of net income (loss) that are eliminated in the calculation of NOI. Other companies may use different methods for calculating NOI or similarly entitled measures and, accordingly, our NOI may not be comparable to similarly entitled measures reported by other companies that do not define the measure exactly as we do.

We define “Same Store NOI” as NOI for our properties that are comparable between periods. We view Same Store NOI as an important measure of the operating performance of our properties because it allows us to compare operating results of properties owned for the entirety of the current and comparable periods and therefore eliminates variations caused by acquisitions or dispositions during the periods.

NOI and Same Store NOI for the Three Months Ended March 31, 2024 and 2023

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 months ended March 31, 2024 and 2023 to net income (loss), the most directly comparable GAAP financial measure (in thousands):

		For the Three Months Ended March 31,
		2024			2023
Net income (loss)		$	26,402		$	(3,898	)
Adjustments to reconcile net income (loss) to NOI:
Advisory and administrative fees			1,743			1,889
Corporate general and administrative expenses			4,614			3,367
Casualty-related expenses/(recoveries)	(1)		33			(1,706	)
Casualty loss (gain)			(199	)		814
Property general and administrative expenses	(2)		983			781
Depreciation and amortization			24,323			23,266
Interest expense			14,391			16,739
Equity in earnings of affiliate			(38	)		—
Gain (loss) on extinguishment of debt and modification costs			546			(122	)
Gain on sales of real estate			(31,709	)		—
NOI		$	41,089		$	41,130
Less Non-Same Store
Revenues			(3,885	)		(8,041	)
Operating expenses			2,015			4,660
Operating income			(3	)		(58	)
Same Store NOI		$	39,216		$	37,691

(1)Adjustment to net income (loss) to exclude certain property operating expenses that are casualty-related expenses/(recoveries).

(2)Adjustment to net income (loss) to exclude certain property general and administrative 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, centralized leasing service and franchise tax fees.

Net Operating Income for Our Q1 Same Store and Non-Same Store Properties for the Three Months Ended March 31, 2024 and 2023

There are 35 properties encompassing 12,961 units of apartment space in our same store pool for the three months ended March 31, 2024 and 2023 (our “Q1 Same Store” properties). Our Q1 Same Store properties exclude the following four properties in our Portfolio as of March 31, 2024: Stone Creek at Old Farm and Radbourne Lake, as well as the 23 units that are currently down (see Note 3).

The following table reflects the revenues, property operating expenses and NOI for the three months ended March 31, 2024 and 2023 for our Q1 Same Store and Non-Same Store properties (dollars in thousands):

For the three months ended March 31, 2024 and 2023, excludes approximately $32,000 and $(1,856,000), respectively, of casualty-related expenses/(recoveries).

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	For the Three Months Ended March 31,
	2024		2023		$ Change			% Change
Revenues
Same Store
Rental income	$	61,910	$	59,761	$	2,149			3.6	%
Other income		1,486		1,425		61			4.3	%
Same Store revenues		63,396		61,186		2,210			3.6	%
Non-Same Store
Rental income		3,688		7,776		(4,088	)		-52.6	%
Other income		197		265		(68	)		-25.7	%
Non-Same Store revenues		3,885		8,041		(4,156	)		-51.7	%
Total revenues		67,281		69,227		(1,946	)		-2.8	%
Operating expenses
Same Store
Property operating expenses (1)		12,706		12,595		111			0.9	%
Real estate taxes and insurance		8,555		8,238		317			3.8	%
Property management fees (2)		1,821		1,778		43			2.4	%
Property general and administrative expenses (3)		1,206		1,237		(31	)		-2.5	%
Same Store operating expenses		24,288		23,848		440			1.8	%
Non-Same Store
Property operating expenses (4)		1,029		2,377		(1,348	)		-56.7	%
Real estate taxes and insurance		757		1,782		(1,025	)		-57.5	%
Property management fees (2)		137		249		(112	)		-45.0	%
Property general and administrative expenses (5)		92		252		(160	)		-63.5	%
Non-Same Store operating expenses		2,015		4,660		(2,645	)		-56.8	%
Total operating expenses		26,303		28,508		(2,205	)		-7.7	%
Operating income
Same Store
Miscellaneous income		108		353		(245	)		-69.4	%
Non-Same Store
Miscellaneous income		3		58		(55	)	N/M
Total operating income		111		411		(300	)	N/M
NOI
Same Store		39,216		37,691		1,525			4.0	%
Non-Same Store		1,873		3,439		(1,566	)		-45.5	%
Total NOI	$	41,089	$	41,130	$	(41	)		-0.1	%

(1)For the three months ended March 31, 2024 and 2023, excludes approximately $32,000 and $(1,856,000), respectively, of casualty-related expenses/(recoveries).

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

(3)For the three months ended March 31, 2024 and 2023, excludes approximately $913,000 and $638,000, 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, centralized leasing service and franchise tax fees.

(4)For the three months ended March 31, 2024 and 2023, excludes approximately $1,000 and $150,000, respectively, of casualty-related expenses.

(5)For the three months ended March 31, 2024 and 2023, excludes approximately $70,000 and $143,000, 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, centralized leasing service and franchise tax fees.

See reconciliation of net income (loss) to NOI above under “NOI and Same Store NOI for the Three Months Ended March 31, 2024 and 2023.”

Same Store Results of Operations for the Three Months Ended March 31, 2024 and 2023

As of March 31, 2024, our Q1 Same Store properties were approximately 94.7% leased with a weighted average monthly effective rent per occupied apartment unit of $1,514. As of March 31, 2023, our Q1 Same Store properties were approximately 94.4% leased with

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a weighted average monthly effective rent per occupied apartment unit of $1,520. For our Q1 Same Store properties, we recorded the following operating results for the three months ended March 31, 2024 as compared to the three months ended March 31, 2023:

Revenues

Rental income. Rental income was $61.9 million for the three months ended March 31, 2024 compared to $59.8 million for the three months ended March 31, 2023, which was an increase of approximately $2.1 million, or 3.6%. The majority of the increase is related to a 0.4% decrease in the weighted average monthly effective rent per occupied apartment unit to $1,514 as of March 31, 2024 from $1,520 as of March 31, 2023, partially offset by a 0.3% increase in occupancy.

Other income. Other income was $1.5 million for the three months ended March 31, 2024 compared to $1.4 million for the three months ended March 31, 2023, which was an increase of approximately $0.1 million. The majority of the increase is related to a $0.1 million increase in internet income.

Expenses

Property operating expenses. Property operating expenses were $12.7 million for the three months ended March 31, 2024 compared to $12.6 million for the three months ended March 31, 2023, which was an increase of approximately $0.1 million, or 0.9%. The majority of the increase is related to a $0.1 million increase in maintenance and administrative salaries.

Real estate taxes and insurance. Real estate taxes and insurance costs were $8.6 million for the three months ended March 31, 2024 compared to $8.2 million for the three months ended March 31, 2023, which was an increase of approximately $0.4 million. The majority of the increase is related to increases of $0.2 million and $0.2 million in insurance and property taxes, respectively.

Property management fees. Property management fees were $1.8 million for the three months ended March 31, 2024 compared to $1.8 million for the three months ended March 31, 2023, which was flat.

Property general and administrative expenses. Property general and administrative expenses were $1.2 million for the three months ended March 31, 2024 compared to $1.2 million for the three months ended March 31, 2023, which was flat.

FFO, Core FFO and AFFO

We believe that net income (loss), as defined by GAAP, is the most appropriate earnings measure. We also believe that funds from operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“NAREIT”), core funds from operations (“Core FFO”) and adjusted funds from operations (“AFFO”) are important non-GAAP supplemental measures of operating performance for a REIT.

Since the historical cost accounting convention used for real estate assets requires depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income (loss), as defined by GAAP. FFO is defined by NAREIT as net income (loss) computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization. We compute FFO attributable to common stockholders in accordance with NAREIT’s definition. Our presentation differs slightly in that we begin with net income (loss) before adjusting for amounts attributable to redeemable noncontrolling interests in the OP and we show the combined amounts attributable to such noncontrolling interests as an adjustment to arrive at FFO attributable to common stockholders.

Core FFO makes certain adjustments to FFO, which are either not likely to occur on a regular basis or are otherwise not representative of the ongoing operating performance of our Portfolio. Core FFO adjusts FFO to remove items such casualty-related expenses and recoveries and gains or losses, gain (loss) on extinguishment of debt and modification costs that are not reflective of continuing operations of the properties, the amortization of deferred financing costs incurred in connection with obtaining short-term debt financing, and the noncontrolling interests (as described above) related to these items. We believe Core FFO is useful to investors as a supplemental gauge of our operating performance and is useful in comparing our operating performance with other REITs that are not as involved in the aforementioned activities.

AFFO makes certain adjustments to Core FFO in order to arrive at a more refined measure of the operating performance of our Portfolio. There is no industry standard definition of AFFO and practice is divergent across the industry. AFFO adjusts Core FFO to remove items such as equity-based compensation expense and the amortization of deferred financing costs incurred in connection with obtaining long-term debt financing, and the noncontrolling interests (as described above) related to these items. We believe AFFO is useful to investors as a supplemental gauge of our operating performance and is useful in comparing our operating performance with other REITs that are not as involved in the aforementioned activities.

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The effect of the conversion of OP Units held by noncontrolling limited partners is not reflected in the computation of basic and diluted FFO, Core FFO and AFFO per share, as they are exchangeable for common stock on a one-for-one basis. The FFO, Core FFO and AFFO allocable to such units is allocated on this same basis and reflected in the adjustments for noncontrolling interests in the table below. As such, the assumed conversion of these units would have no net impact on the determination of diluted FFO, Core FFO and AFFO per share. See Note 8 to our consolidated financial statements for additional information.

We believe that the use of FFO, Core FFO and AFFO, combined with the required GAAP presentations, improves the understanding of operating results of REITs among investors and makes comparisons of operating results among such companies more meaningful. While FFO, Core FFO and AFFO are relevant and widely used measures of operating performance of REITs, they do not represent cash flows from operations or net income (loss) as defined by GAAP and should not be considered as an alternative or substitute to those measures in evaluating our liquidity or operating performance. FFO, Core FFO and AFFO do not purport to be indicative of cash available to fund our future cash requirements. Further, our computation of FFO, Core FFO and AFFO may not be comparable to FFO, Core FFO and AFFO reported by other REITs that do not define FFO in accordance with the current NAREIT definition or that interpret the current NAREIT definition or define Core FFO or AFFO differently than we do.

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The following table reconciles our calculations of FFO, Core FFO and AFFO to net loss, the most directly comparable GAAP financial measure, for the (in thousands, except per share amounts):

		For the Three Months Ended March 31,
		2024			2023			% Change
Net income (loss)		$	26,402		$	(3,898	)	N/M
Depreciation and amortization			24,323			23,266			4.5	%
Gain on sales of real estate			(31,709	)		—			0.0	%
Adjustment for noncontrolling interests			(75	)		(73	)		2.7	%
FFO attributable to common stockholders			18,941			19,295			-1.8	%
FFO per share - basic		$	0.74		$	0.75			-2.3	%
FFO per share - diluted		$	0.72		$	0.74			-2.9	%
(Gain) loss on extinguishment of debt and modification costs			546			(122	)	N/M
Casualty-related expenses/(recoveries)			33			(1,706	)	N/M
Casualty losses (gains)			(199	)		814		N/M
Amortization of deferred financing costs - acquisition term notes			330			330			0.0	%
Adjustment for noncontrolling interests			(2	)		2		N/M
Core FFO attributable to common stockholders			19,649			18,613			5.6	%
Core FFO per share - basic		$	0.76		$	0.73			5.1	%
Core FFO per share - diluted		$	0.75		$	0.71			4.4	%
Amortization of deferred financing costs - long term debt			387			437			-11.4	%
Equity-based compensation expense			2,547			1,966			29.6	%
Adjustment for noncontrolling interests			(12	)		(9	)		33.3	%
AFFO attributable to common stockholders			22,571			21,007			7.4	%
AFFO per share - basic		$	0.88		$	0.82			6.9	%
AFFO per share - diluted		$	0.86		$	0.81			6.3	%
Weighted average common shares outstanding - basic			25,721			25,599			0.5	%
Weighted average common shares outstanding - diluted	(1)		26,354			26,075			1.1	%
Dividends declared per common share		$	0.46242		$	0.42			10.1	%
Net income (loss) Coverage - diluted	(2)	2.16x			-0.36x			N/M
FFO Coverage - diluted	(2)	1.55x			1.76x				-11.8	%
Core FFO Coverage - diluted	(2)	1.61x			1.70x				-5.1	%
AFFO Coverage - diluted	(2)	1.85x			1.92x				-3.4	%

(1)The Company uses actual diluted weighted average common shares outstanding when in a dilutive position for FFO, Core FFO and AFFO.

(2)Indicates coverage ratio of Net loss/FFO/Core FFO/AFFO per common share (diluted) over dividends declared per common share during the period.

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The three months ended March 31, 2024 as compared to the three months ended March 31, 2023

FFO was $18.9 million for the three months ended March 31, 2024 compared to $19.3 million for the three months ended March 31, 2023, which was a decrease of approximately $0.4 million. The change in our FFO between the periods primarily relates to a decrease in total revenues of $1.6 million, partially offset by a decrease in casualty loss of $1.0 million.

Core FFO was $19.6 million for the three months ended March 31, 2024 compared to $18.6 million for the three months ended March 31, 2023, which was an increase of approximately $1.0 million. The change in our Core FFO between the periods primarily relates to a decrease in casualty loss of $1.0 million, partially offset by a decrease in FFO.

AFFO was $22.6 million for the three months ended March 31, 2024 compared to $21.0 million for the three months ended March 31, 2023, which was an increase of approximately $1.6 million. The change in our AFFO between the periods primarily relates to an increase in Core FFO and equity-based compensation expense of $0.6 million.

Liquidity and Capital Resources

Our short-term liquidity requirements consist primarily of funds necessary to pay for debt maturities, operating expenses and other expenditures directly associated with our multifamily properties, including:

•capital expenditures to continue our value-add program and to improve the quality and performance of our multifamily properties;

•interest expense and scheduled principal payments on outstanding indebtedness (see “—Obligations and Commitments” below);

•recurring maintenance necessary to maintain our multifamily properties;

•distributions necessary to qualify for taxation as a REIT;

•acquisition of additional properties;

•advisory and administrative fees payable to our Adviser;

•general and administrative expenses;

•reimbursements to our Adviser; and

•property management fees payable to BH.

We expect to meet our short-term liquidity requirements generally through net cash provided by operations and existing cash balances and any unused capacity on the Corporate Credit Facility. As of March 31, 2024, we had approximately $2.9 million of renovation value-add reserves for our planned capital expenditures to implement our value-add program. Renovation value-add reserves are not required to be held in escrow by a third party. We may reallocate these funds, at our discretion, to pursue other investment opportunities or meet our short-term liquidity requirements.

Our long-term liquidity requirements consist primarily of funds necessary to pay for the costs of acquiring additional multifamily properties, renovations and other capital expenditures to improve our multifamily properties and scheduled debt payments and distributions. We expect to meet our long-term liquidity requirements through various sources of capital, which may include a revolving credit facility and future debt or equity issuances, existing working capital, net cash provided by operations, long-term mortgage indebtedness and other secured and unsecured borrowings, and property dispositions. However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, including the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including as a result of any failure to comply with financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity, market perceptions about us and restrictions on sales of properties under the Code. The success of our business strategy will depend, in part, on our ability to access these various capital sources.

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In addition to our value-add program, our multifamily properties will require periodic capital expenditures and renovation to remain competitive. Also, acquisitions, redevelopments, or expansions of our multifamily properties will require significant capital outlays. Long-term, we may not be able to fund such capital improvements solely from net cash provided by operations because we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deductions for dividends paid and excluding net capital gains, to qualify and maintain our qualification as a REIT, and we are subject to tax on any retained income and gains. As a result, our ability to fund capital expenditures, acquisitions, or redevelopment through retained earnings long-term is limited. Consequently, we expect to rely heavily upon the availability of debt or equity capital for these purposes. If we are unable to obtain the necessary capital on favorable terms, or at all, our financial condition, liquidity, results of operations, and prospects could be materially and adversely affected.

On March 4, 2020, the Company, the OP and the Adviser entered into separate equity distribution agreements with each of the ATM Sales Agents, pursuant to which the Company could issue and sell from time to time when an effective registration statement was available shares of the Company’s common stock, par value $0.01 per share, having an aggregate sales price of up to $225,000,000 (the “2020 ATM Program”). The 2020 ATM Program may be terminated by the Company at any time and expires automatically once aggregate sales under the 2020 ATM Program reach $225,000,000 (see Note 6 to our consolidated financial statements).

We believe that our available cash, expected operating cash flows, and potential debt or equity financings will provide sufficient funds for our operations, anticipated scheduled debt service payments and dividend requirements for the twelve-month period following March 31, 2024.

Cash Flows

The following table presents selected data from our consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 (in thousands):

	For the Three Months Ended March 31,
	2024			2023
Net cash provided by operating activities	$	19,687		$	27,923
Net cash provided by (used in) investing activities		94,169			(16,505	)
Net cash used in financing activities		(90,386	)		(16,142	)
Net increase (decrease) in cash, cash equivalents and restricted cash		23,470			(4,724	)
Cash, cash equivalents and restricted cash, beginning of period		45,279			51,799
Cash, cash equivalents and restricted cash, end of period	$	68,749		$	47,075

Cash flows from operating activities. During the three months ended March 31, 2024, net cash provided by operating activities was $19.7 million compared to net cash provided by operating activities of $27.9 million for the three months ended March 31, 2023. The change in cash flows from operating activities was mainly due to a $4.4 million decrease in change in fair value on derivative instruments included in interest expense and a $4.9 million decrease in operating liabilities, net of effects of sales and acquisitions.

Cash flows from investing activities. During the three months ended March 31, 2024, net cash provided by investing activities was $94.2 million compared to net cash used in investing activities of $16.5 million for the three months ended March 31, 2023. The change in cash flows from investing activities was mainly due to an increase in net proceeds from sales of real estate of $102.7 million.

Cash flows from financing activities. During the three months ended March 31, 2024, net cash used in financing activities was $90.4 million compared to net cash used in financing activities of $16.1 million for the three months ended March 31, 2023. The change in cash flows from financing activities was mainly due to a net decrease in debt of approximately $74.1 million.

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Real Estate Investments Statistics

As of March 31, 2024, the Company was invested in a total of 37 multifamily properties, as listed below:

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							Average Effective Monthly Rent Per Unit (1) as of				% Occupied (2) as of
Property Name		Rentable Square Footage (in thousands)		Number of Units (3)		Date Acquired	March 31, 2024		December 31, 2023		March 31, 2024			December 31, 2023
Arbors on Forest Ridge			155		210	1/31/2014	$	1,185	$	1,180		94.3	%		92.4	%
Cutter's Point			198		196	1/31/2014		1,417		1,497		93.9	%		93.9	%
The Summit at Sabal Park			205		252	8/20/2014		1,485		1,503		92.1	%		94.0	%
Courtney Cove			225		324	8/20/2014		1,316		1,490		96.0	%		94.4	%
Radbourne Lake	(4)		247		225	9/30/2014		1,464		1,385		88.0	%		93.3	%
Sabal Palm at Lake Buena Vista			371		400	11/5/2014		1,716		1,786		95.0	%		95.5	%
Cornerstone			318		430	1/15/2015		1,449		1,453		94.4	%		90.0	%
The Preserve at Terrell Mill			692		752	2/6/2015		1,284		1,321		96.0	%		91.9	%
Versailles			301		388	2/26/2015		1,197		1,261		92.5	%		93.0	%
Seasons 704 Apartments			217		222	4/15/2015		1,861		1,837		94.1	%		94.1	%
Madera Point			193		256	8/5/2015		1,304		1,345		95.7	%		95.7	%
Venue at 8651			289		333	10/30/2015		1,172		1,182		93.7	%		91.6	%
Parc500			266		217	7/27/2016		1,897		1,927		96.3	%		95.9	%
The Venue on Camelback			256		415	10/11/2016		1,065		1,080		91.8	%		91.8	%
Stone Creek at Old Farm	(4)		186		190	12/29/2016		1,365		1,343		93.2	%		93.2	%
Rockledge Apartments			802		708	6/30/2017		1,543		1,550		95.8	%		92.7	%
Atera Apartments			334		380	10/25/2017		1,500		1,524		91.6	%		96.1	%
Versailles II			199		242	9/26/2018		1,148		1,252		93.8	%		95.0	%
Brandywine I & II			414		632	9/26/2018		1,198		1,252		95.3	%		94.5	%
Bella Vista			243		248	1/28/2019		1,769		1,791		94.8	%		98.0	%
The Enclave			194		204	1/28/2019		1,808		1,851		95.6	%		96.6	%
The Heritage			199		204	1/28/2019		1,670		1,653		96.6	%		95.1	%
Summers Landing			139		196	6/7/2019		1,267		1,203		90.8	%		93.9	%
Residences at Glenview Reserve			344		360	7/17/2019		1,263		1,233		96.1	%		95.8	%
Residences at West Place			345		342	7/17/2019		1,591		1,586		94.7	%		93.0	%
Avant at Pembroke Pines			1,442		1,520	8/30/2019		2,176		2,106		95.1	%		95.1	%
Arbors of Brentwood			325		346	9/10/2019		1,486		1,423		94.5	%		89.0	%
Torreyana Apartments			309		316	11/22/2019		1,456		1,557		96.2	%		93.7	%
Bloom			498		528	11/22/2019		1,290		1,315		93.0	%		89.8	%
Bella Solara			271		320	11/22/2019		1,336		1,371		95.9	%		88.8	%
Fairways at San Marcos			340		352	11/2/2020		1,596		1,576		97.2	%		93.5	%
The Verandas at Lake Norman			241		264	6/30/2021		1,355		1,316		95.8	%		94.3	%
Creekside at Matthews			263		240	6/30/2021		1,431		1,397		96.3	%		94.6	%
Six Forks Station			360		323	9/10/2021		1,402		1,416		89.5	%		92.6	%
High House at Cary			293		302	12/7/2021		1,499		1,636		96.4	%		95.4	%
The Adair			328		232	4/1/2022		1,918		1,807		97.4	%		94.4	%
Estates on Maryland			324		330	4/1/2022		1,450		1,459		96.1	%		92.7	%
			12,326		13,399

(1)Average effective monthly rent per unit is equal to the average of the contractual rent for commenced leases as of March 31, 2024 and December 31, 2022, respectively, minus any tenant concessions over the term of the lease, divided by the number of units under commenced leases as of March 31, 2024 and December 31, 2022, respectively.

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(2)Percent occupied is calculated as the number of units occupied as of March 31, 2024 and December 31, 2022, divided by the total number of units, expressed as a percentage.

(3)Includes 23 down units due to casualty events as of March 31, 2024 (see Note 3).

(4)Properties classified as held for sale as of March 31, 2024.

Debt, Derivatives and Hedging Activity

Mortgage Debt

As of March 31, 2024, our subsidiaries had aggregate mortgage debt outstanding to third parties of approximately $1.5 billion at a weighted average interest rate of 6.874% and an adjusted weighted average interest rate of 3.470%. For purposes of calculating the adjusted weighted average interest rate of our mortgage debt outstanding, we have included the weighted average fixed rate of 1.0682% for our combined $1.2 billion notional amount of interest rate swap agreements, which effectively fixes the interest rate on $1.2 billion of our floating rate debt. See Notes 4 and 5 to our consolidated financial statements for additional information.

We have entered into and expect to continue to enter into interest rate swap and cap agreements with various third parties to fix or cap the floating interest rates on a majority of our floating rate mortgage debt outstanding. The interest rate swap agreements generally have a term of four to five years and effectively establish a fixed interest rate on debt on the underlying notional amounts. The interest rate swap agreements involve the receipt of variable-rate amounts from a counterparty in exchange for us making fixed-rate payments over the life of the agreements without exchange of the underlying notional amount. As of March 31, 2024, interest rate swap agreements effectively covered 79.7% of our $1.5 billion of floating rate debt outstanding.

The interest rate cap agreements generally have a term of three to four years, cover the outstanding principal amount of the underlying debt and are generally required by our lenders. Under the interest rate cap agreements, we pay a fixed fee in exchange for the counterparty to pay any interest above a maximum rate. As of March 31, 2024, interest rate cap agreements covered $1.3 billion of our $1.5 billion of floating rate mortgage debt outstanding. These interest rate cap agreements effectively cap one-month LIBOR on $1.3 billion of our floating rate mortgage debt at a weighted average rate of 5.905%.

LIBOR ceased publication on June 30, 2023. On July 1, 2023, LIBOR rates were replaced with SOFR as the reference rate for most LIBOR debt and derivative instruments. For the Company's interest rate swaps, the reference transitioned from one-month LIBOR to Adjusted SOFR.

We intend to invest in additional multifamily properties as suitable opportunities arise and adequate sources of equity and debt financing are available. We expect that future investments in properties, including any improvements or renovations of current or newly acquired properties, will depend on and will be financed by, in whole or in part, our existing cash, future borrowings and the proceeds from additional issuances of common stock or other securities or property dispositions.

Although we expect to be subject to restrictions on our ability to incur indebtedness, we expect that we will be able to refinance existing indebtedness or incur additional indebtedness for acquisitions or other purposes, if needed. However, there can be no assurance that we will be able to refinance our indebtedness, incur additional indebtedness or access additional sources of capital, such as by issuing common stock or other debt or equity securities, on terms that are acceptable to us or at all.

Furthermore, following the completion of our value-add and capital expenditures programs and depending on the interest rate environment at the applicable time, we may seek to refinance our floating rate debt into longer-term fixed rate debt at lower leverage levels.

Corporate Credit Facility

On March 25, 2022, the Company entered into a loan modification agreement by and among the Company, the OP, Truist Bank and the Lenders party thereto, which modified the Company’s existing credit agreement, dated as of June 30, 2021 (as amended and supplemented, the “Corporate Credit Facility”). As of March 31, 2024, there was $309.0 million available for borrowing under the Corporate Credit Facility. Subject to conditions provided in the Corporate Credit Facility, the commitments under Corporate Credit Facility may be increased up to an additional $150.0 million if the lenders agree to increase their commitments or if the lenders agree for the increase to be funded by any additional lender proposed by the Company, through the OP. The Corporate Credit Facility will mature on June 30, 2025 with respect to the revolving commitments, unless the Company exercises its option to voluntarily and permanently reduce all of the revolving commitments before the maturity date or elects to exercise its right and option to extend the facility with respect to the revolving commitments for a single one-year term. As of March 31, 2024, there was $0.0 million in aggregate principal outstanding under the Corporate Credit Facility.

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The Corporate Credit Facility is a non-recourse obligation and contains customary events of default, including defaults in the payment of principal or interest, defaults in compliance with the covenants contained in the document evidencing the loan, defaults in payments under any other security instrument, and bankruptcy or other insolvency events. As of March 31, 2024, the Company believes it is compliant with all provisions. For additional information regarding our Corporate Credit Facility, see Note 4.

Interest Rate Swap Agreements

In order to fix a portion of, and mitigate the risk associated with, our floating rate indebtedness (without incurring substantial prepayment penalties or defeasance costs typically associated with fixed rate indebtedness when repaid early or refinanced), we, through the OP, have entered into six interest rate swap transactions with KeyBank and four with SunTrust Bank (collectively the “Counterparties”) with a combined notional amount of $1.2 billion. As of March 31, 2024, the interest rate swaps we have entered into effectively replace the floating interest rate (SOFR) with respect to $1.2 billion of our floating rate debt outstanding with a weighted average fixed rate of 1.0682%. During the term of these interest rate swap agreements, we are required to make monthly fixed rate payments of 1.0682%, on a weighted average basis, on the notional amounts, while the Counterparties are obligated to make monthly floating rate payments based on Adjusted SOFR to us referencing the same notional amounts. For purposes of hedge accounting under FASB ASC 815, Derivatives and Hedging, we have designated these interest rate swaps as cash flow hedges of interest rate risk. See Notes 4 and 5 to our consolidated financial statements for additional information.

The following table contains summary information regarding our outstanding interest rate swaps (dollars in thousands):

Effective Date	Termination Date	Counterparty	Notional Amount		Fixed Rate (1)
June 1, 2019	June 1, 2024	KeyBank	$	50,000		2.0020	%
June 1, 2019	June 1, 2024	Truist		50,000		2.0020	%
September 1, 2019	September 1, 2026	KeyBank		100,000		1.4620	%
September 1, 2019	September 1, 2026	KeyBank		125,000		1.3020	%
January 3, 2020	September 1, 2026	KeyBank		92,500		1.6090	%
March 4, 2020	June 1, 2026	Truist		100,000		0.8200	%
June 1, 2021	September 1, 2026	KeyBank		200,000		0.8450	%
June 1, 2021	September 1, 2026	KeyBank		200,000		0.9530	%
March 1, 2022	March 1, 2025	Truist		145,000		0.5730	%
March 1, 2022	March 1, 2025	Truist		105,000		0.6140	%
			$	1,167,500		1.0682	%	(2)

(1)The floating rate option for the interest rate swaps is Adjusted SOFR. As of March 31, 2024, Adjusted SOFR was 5.436%.

(2)Represents the weighted average fixed rate of the interest rate swaps.

Obligations and Commitments

The following table summarizes our contractual obligations and commitments as of March 31, 2024 for the next five calendar years subsequent to March 31, 2024. We used Adjusted SOFR as of March 31, 2024 to calculate interest expense due by period on our floating rate debt and net interest expense due by period on our interest rate swaps.

		Payments Due by Period (in thousands)
		Total		2024		2025		2026		2027		2028		Thereafter
Operating Properties Mortgage Debt
Principal payments		$	1,463,003	$	222	$	133,386	$	290,324	$	—	$	81,041	$	958,030
Interest expense	(1)		383,090		24,907		46,288		40,090		54,145		52,453		165,207
Total		$	1,846,093	$	25,129	$	179,674	$	330,414	$	54,145	$	133,494	$	1,123,237
Held For Sale Property Mortgage Debt
Principal payments		$	35,274	$	15,274	$	20,000	$	—	$	—	$	—	$	—
Interest expense			2,142		1,271		871		—		—		—		—
Total		$	37,416	$	16,545	$	20,871	$	—	$	—	$	—	$	—
Credit Facility
Principal payments		$	—	$	—	$	—	$	—	$	—	$	—	$	—
Interest expense			1,115		668		447		—		—		—		—
Total		$	1,115	$	668	$	447	$	—	$	—	$	—	$	—
Total contractual obligations and commitments		$	1,884,624	$	42,342	$	200,992	$	330,414	$	54,145	$	133,494	$	1,123,237

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(1)Interest expense obligations includes the impact of expected settlements on interest rate swaps which have been entered into in order to fix the interest rate on the hedged portion of our floating rate debt obligations. As of March 31, 2024, we had entered into eleven interest rate swap transactions with a combined notional amount of $1.2 billion. We have allocated the total impact of expected settlements on the $1.2 billion notional amount of interest rate swaps to ‘Operating Properties Mortgage Debt.’ We used Adjusted SOFR as of March 31, 2024 to determine our expected settlements through the terms of the interest rate swaps.

Corporate Credit Facility

The Corporate Credit Facility will mature on June 30, 2025 with respect to the revolving commitments, unless the Company exercises its option to voluntarily and permanently reduce all of the revolving commitments before the maturity date.

Advisory Agreement

Our Advisory Agreement requires that we pay our Adviser an annual advisory and administrative fee of 1.2%. The advisory and administrative fees paid to the Adviser on the Contributed Assets (as defined in the Advisory Agreement) are subject to an annual cap of approximately $5.4 million. For the three months ended March 31, 2024 and 2023, the Company incurred advisory and administrative fees of $1.7 million and $1.9 million, respectively.

NLMF Holdco, LLC

The Company’s agreement with NLMF Holdco, LLC may result in additional funding requirements to cover future project costs. The maximum exposure of potential commitments is expected to be no more than $4.0 million. We expect that these actions will provide faster, more reliable and lower cost internet to our residents. We expect to roll out this service to our other properties in the future.

Capital Expenditures and Value-Add Program

We anticipate incurring average annual repairs and maintenance expense of $575 to $725 per apartment unit in connection with the ongoing operations of our business. These expenditures are expensed as incurred. In addition, we reserve, on average, approximately $250 to $350 per apartment unit for non-recurring capital expenditures and/or lender required replacement reserves. When incurred, these expenditures are either capitalized or expensed, in accordance with GAAP, depending on the type of the expenditure. Although we will continuously monitor the adequacy of this average, we believe these figures to be sufficient to maintain the properties at a high level in the markets in which we operate. A majority of the properties in our Portfolio were underwritten and acquired with the premise that we would invest $4,000 to $10,000 per unit in the first 36 months of ownership, in an effort to add value to the asset’s exterior and interiors. In many cases, we reserve cash at the closing of each acquisition to fund these planned capital expenditures and value-add improvements. As of March 31, 2024, we had approximately $2.9 million of renovation value-add reserves for our planned capital expenditures and other expenses to implement our value-add program, which will provide further funding for our interior and exterior rehab initiatives at several properties. The following table sets forth a summary of our capital expenditures related to our value-add program for the (in thousands):

		For the Three Months Ended March 31,
Rehab Expenditures		2024		2023
Interior	(1)	$	1,730	$	7,309
Exterior and common area			474		4,007
Total rehab expenditures		$	2,204	$	11,316

(1)Includes total capital expenditures during the period on completed and in-progress interior rehabs. For the three months ended March 31, 2024 and 2023, we completed full and partial interior rehabs on 127 and 690 units, respectively.

Income Taxes

We anticipate that we will continue to qualify to be taxed as a REIT for U.S. federal income tax purposes, and we intend to continue to be organized and to operate in a manner that will permit us to qualify as a REIT. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our annual REIT taxable income to stockholders. As a REIT, we will be subject to 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. 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 three months ended March 31, 2024 and 2023.

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If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate income tax rates, and dividends paid to our stockholders would not be deductible by us in computing taxable income. Any resulting corporate liability could be substantial and could materially and adversely affect our net income and net cash available for distribution to stockholders. Unless we were entitled to relief under certain Code provisions, we also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify to be taxed as a REIT.

We evaluate the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are “more-likely-than-not” (greater than 50 percent probability) of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Our management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which include federal and certain states. We have no examinations in progress and none are expected at this time.

We recognize our tax positions and evaluate them using a two-step process. First, we determine whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Second, we will determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement.

We had no material unrecognized tax benefit or expense, accrued interest or penalties as of March 31, 2024. We and our subsidiaries are subject to federal income tax as well as income tax of various state and local jurisdictions. The 2023, 2022 and 2021 tax years remain open to examination by tax jurisdictions to which our subsidiaries and we are subject. When applicable, we recognize interest and/or penalties related to uncertain tax positions on our consolidated statements of operations and comprehensive income (loss).

Dividends

We intend to make regular quarterly dividend payments to holders of our common stock. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains. As a REIT, we will be subject to 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 intend to make regular quarterly dividend payments of all or substantially all of our taxable income to holders of our common stock out of assets legally available for this purpose, if and to the extent authorized by our Board. Before we make any dividend payments, whether for U.S. federal income tax purposes or otherwise, we must first meet both our operating requirements and debt service on our debt payable. If our cash available for distribution is less than our taxable income, we could be required to sell assets, borrow funds or raise additional capital to make cash dividends or we may make a portion of the required dividend in the form of a taxable distribution of stock or debt securities.

We will make dividend payments 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 general and administrative expenses. Our quarterly dividends per share may be substantially different than our quarterly taxable earnings and GAAP earnings per share. Our Board declared our first quarterly dividend of 2024 of $0.46242 per share on February 15, 2024 which was paid on March 28, 2024 and funded out of cash flows from operations.

Off-Balance Sheet Arrangements

As of March 31, 2024 and December 31, 2023, we had no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Critical Accounting Policies and Estimates

Management’s discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires our management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate these judgments, assumptions and estimates for changes that would affect the reported amounts. These estimates are based on management’s historical industry experience and on various other judgments and assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these judgments, assumptions and estimates. Below is a discussion of the accounting policies that we consider critical to understanding our financial condition or results of operations where there is uncertainty or where significant judgment is required. A discussion of recent accounting pronouncements and our significant accounting policies, including further discussion of the accounting policies described below, can be found in Note 2 “Summary of Significant Accounting Policies” to our consolidated financial statements included in this quarterly report.

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Purchase Price Allocation

Upon acquisition of a property considered to be an asset acquisition, the purchase price and related acquisition costs (“total consideration”) are allocated to land, buildings, improvements, furniture, fixtures, and equipment, and intangible lease assets based on relative fair value in accordance with FASB ASC 805, Business Combinations. Acquisition costs are capitalized in accordance with FASB ASC 805.

The allocation of total consideration, which is determined using inputs that are classified within Level 3 of the fair value hierarchy established by FASB ASC 820, Fair Value Measurement and Disclosures (see Note 5 to our consolidated financial statements), is based on management’s estimate of the property’s “as-if” vacant fair value and is calculated by using all available information such as the replacement cost of such asset, appraisals, property condition reports, market data and other related information. If any debt is assumed in an acquisition, the difference between the fair value, which is estimated using inputs that are classified within Level 2 of the fair value hierarchy, and the face value of debt is recorded as a premium or discount and amortized as interest expense over the life of the debt assumed.

Impairment

Real estate assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The key inputs into our impairment analysis include, but are not limited to, the holding period, net operating income, and capitalization rates. In such cases, we will evaluate the recoverability of such real estate assets based on estimated future cash flows and the estimated liquidation value of such real estate assets, and provide for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the real estate asset. If impaired, the real estate asset will be written down to its estimated fair value. The Company’s impairment analysis identifies and evaluates events or changes in circumstances that indicate the carrying amount of a real estate investment may not be recoverable, including determining the period the Company will hold the rental property, net operating income, and the estimated capitalization rate for each respective real estate investment.

Inflation

The real estate market has not been directly affected by inflation in the past several years due to increases in rents nationwide. The majority of our lease terms are for a period of one year or less and reset to market if renewed. The majority of our leases also contain protection provisions applicable to reimbursement billings for utilities. Due to the short-term nature of our leases, we do not believe our results will be materially affected.

Inflation may also affect the overall cost of debt, as the implied cost of capital increases. The Federal Reserve has raised interest rates in response to or in anticipation of continued inflation concerns. We intend to mitigate these risks through long-term fixed interest rate loans and interest rate hedges, which to date have included interest rate cap and interest rate swap agreements.

REIT Tax Election

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,” as defined by the Code, to our stockholders. 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 three months ended March 31, 2024 and 2023. 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.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk is the adverse effect on the value of assets and liabilities that results from a change in market conditions. Our primary market risk exposure is interest rate risk with respect to our indebtedness and counterparty credit risk with respect to our interest rate derivatives. In order to minimize counterparty credit risk, we enter into and expect to enter into hedging arrangements only with major financial institutions that have high credit ratings. As of March 31, 2024, we had total indebtedness of $1.5 billion at a weighted average interest rate of 6.87%, of which $1.5 billion was debt with a floating interest rate. As of March 31, 2024, interest rate swap agreements effectively covered 79.7% of our $1.5 billion of floating rate debt outstanding. For purposes of calculating the adjusted weighted average interest rate of our total indebtedness, we have included the weighted average fixed rate of 1.0682% for the $1.2 billion notional amount of interest rate swap agreements that we have entered into as of March 31, 2024. which effectively fix the interest rate on $1.2 billion of our floating rate mortgage debt outstanding.

An increase in interest rates could make the financing of any acquisition by us more costly. Rising or high interest rates could also limit our ability to refinance our debt when it matures or cause us to pay higher interest rates upon refinancing and increase interest expense on refinanced indebtedness. We may manage, or hedge, interest rate risks related to our borrowings by means of interest rate cap and interest rate swap agreements. As of March 31, 2024, the interest rate cap agreements we have entered into effectively cap SOFR on $1.3 billion of our floating rate mortgage debt at a weighted average rate of 5.90% for the term of the agreements, which is generally three to four years. We also expect to manage our exposure to interest rate risk by maintaining a mix of fixed and floating rates for our indebtedness.

In order to fix a portion of, and mitigate the risk associated with, our floating rate indebtedness (without incurring substantial prepayment penalties or defeasance costs typically associated with fixed rate indebtedness when repaid early or refinanced), we, through the OP, have entered into ten interest rate swap transactions with the Counterparties with a combined notional amount of $1.2 billion. The interest rate swaps we have entered into effectively replace the floating interest rate (SOFR) with respect to that amount with a weighted average fixed rate of 1.0682%. During the term of these interest rate swap agreements, we are required to make monthly fixed rate payments of 1.0682%, on a weighted average basis, on the notional amounts, while the Counterparties are obligated to make monthly floating rate payments based on Adjusted SOFR to us referencing the same notional amounts. We have designated these interest rate swaps as cash flow hedges of interest rate risk.

Until our interest rates reach the caps provided by our interest rate cap agreements, each quarter point change in SOFR would result in an approximate increase to annual interest expense costs on our floating rate indebtedness, reduced by any payments due from the Counterparties under the terms of the interest rate swap agreements we had entered into as of March 31, 2024, of the amounts illustrated in the table below for our indebtedness as of March 31, 2024 (dollars in thousands):

Change in Interest Rates	Annual Increase to Interest Expense
0.25%	$	692
0.50%		1,385
0.75%		2,077
1.00%		2,770

There is no assurance that we would realize such expense as such changes in interest rates could alter our liability positions or strategies in response to such changes.

We may also be exposed to credit risk in the derivative financial instruments we use. Credit risk is the failure of the Counterparties to perform under the terms of the derivative financial instruments. If the fair value of a derivative financial instrument is positive, the Counterparties will owe us, which creates credit risk for us. If the fair value of a derivative financial instrument is negative, we will owe the Counterparties and, therefore, do not have credit risk. We seek to minimize the credit risk in derivative financial instruments by entering into transactions with major financial institutions that have high credit ratings.

LIBOR ceased publication on June 30, 2023. The Company held debt and derivatives that used LIBOR as the reference rate as of June 30, 2023. On July 1, 2023, LIBOR rates were replaced with Adjusted SOFR as the reference rate for the remaining LIBOR debt and derivative instruments.

39

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) and Rule 15d-15(b) under the Exchange Act, our management, including our President and Chief Financial Officer, evaluated, as of March 31, 2024, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) and Rule 15d-15(e). Based on that evaluation, our President and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2024, to provide reasonable assurance that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to management, including the President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

We believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.

Changes in Internal Control over Financial Reporting

There has been no change in internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended March 31, 2024 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

40

PART II—OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we are party to legal proceedings that arise in the ordinary course of our business. Management is not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by government agencies.

Item 1A. Risk Factors

There have been no material changes to the risk factors previously disclosed under Part I, Item 1A, “Risk Factors” in our Annual Report, filed with the SEC on February 27, 2024.

Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.

Repurchase of Shares

On October 25, 2022, we announced that our Board authorized us to repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $100.0 million during a two-year period that will expire on October 24, 2024. This authorization replaced the Board’s prior authorization of the share repurchase program. During the three months ended March 31, 2024, the Company did not make any repurchases. Since inception of the Share Repurchase Program through March 31, 2024, the Company had repurchased 2,550,628 shares of its common stock, par value $0.01 per share, at a total cost of approximately $72.4 million, or $28.36 per share as shown in the table below:

Period	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that may yet be Purchased under the Plans or Programs (in millions)
Beginning Total		2,550,628	$	28.36		2,550,628	$	100.0
January 1 – January 31		—		—		—		100.0
February 1 – February 28		—		—		—		100.0
March 1 – March 31		—		—		—		100.0
Total as of March 31, 2024		2,550,628	$	28.36		2,550,628	$	100.0

Item 3. Defaults Upon Senior Securities

None.

41

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

42

Item 6. Exhibits

EXHIBIT INDEX

Exhibit Number	Description
10.1*	Form of Restricted Stock Units Agreements (Officers) for award agreements entered into on or after November 6, 2023.
10.2*	Form of Restricted Stock Units Agreements (Directors) for award agreements entered into on or after November 6, 2023.
31.1*	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1+	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes- Oxley Act of 2002
101.INS*	Inline XBRL Instance Document (The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document)
101.SCH*	Inline XBRL Taxonomy Extension Schema
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase
104*	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

+ Furnished herewith.

43

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

NEXPOINT RESIDENTIAL TRUST, INC.

Signature	Title	Date
/s/ Jim Dondero	President and Director	May 02, 2024
Jim Dondero	(Principal Executive Officer)
/s/ Brian Mitts	Chief Financial Officer and Director	May 02, 2024
Brian Mitts	(Principal Financial Officer and Principal Accounting Officer)

44

EX-10.1

NEXPOINT RESIDENTIAL TRUST, INC.

Form of Restricted Stock Units Agreement (Key Employee)

This RESTRICTED STOCK UNITS AGREEMENT (this “Agreement”) is made as of ______ __, 20__, by and between NexPoint Residential Trust, Inc., a Maryland corporation (the “Company”), and ______ (the “Grantee”).

1.Certain Definitions. Capitalized terms used, but not otherwise defined, in this Agreement will have the meanings given to such terms in the Company’s 2016 Long Term Incentive Plan (the “Plan”).

2.Grant of RSUs. Subject to and upon the terms, conditions and restrictions set forth in this Agreement and in the Plan, the Company has granted to the Grantee as of _____ ___, 20__ (the “Date of Grant”) _____Restricted Stock Units (“RSUs”). Each RSU shall represent the right of the Grantee to receive one Share.

3.Restrictions on Transfer of RSUs. Subject to Section 15 of the Plan, neither the RSUs evidenced hereby nor any interest therein or in the Shares underlying such RSUs shall be transferable prior to payment to the Grantee pursuant to Section 5 hereof other than by will or pursuant to the laws of descent and distribution.

4.Vesting of RSUs.

(a)The RSUs covered by this Agreement shall become nonforfeitable and payable to the Grantee pursuant to Section 5 hereof (“Vest” or similar terms) as provided in this Section 4(a). The RSUs covered by this Agreement shall Vest _____________________________________, in each case, conditioned upon the Grantee’s continuous employment with the Company, the Advisor or its Affiliates through each such date (the period from the Date of Grant until the _____ anniversary of the Date of Grant, the “Vesting Period”). Any RSUs that do not so Vest will be forfeited, including, except as provided in Section 4(b), Section 4(c) or Section 4(d) below, if the Grantee ceases to be continuously employed by the Company, the Advisor or its Affiliates prior to the end of the Vesting Period. For purposes of this Agreement, “continuously employed” (or substantially similar terms) means the absence of any interruption or termination of the Grantee’s employment with the Company, the Advisor or its Affiliates.

(b)Notwithstanding Section 4(a) above, the RSUs shall Vest (to the extent the RSUs have not previously become Vested or been forfeited) prior to the end of the Vesting Period upon the Grantee’s termination of employment by the Company, the Advisor or its Affiliates, as applicable, due to the Grantee’s death, Disability or Retirement.

(c) (i) Notwithstanding Section 4(a) above, in the event of a Change in Control that occurs prior to the end of the Vesting Period, the RSUs shall

1

become Vested and payable in accordance with this Section 4(c). If at any time before the end of the Vesting Period or forfeiture of the RSUs, and while the Grantee is continuously employed by the Company, the Advisor or its Affiliates, a Change in Control occurs, then all of the RSUs will become Vested and payable to the Grantee in accordance with Section 5 hereof, except to the extent that a Replacement Award is provided to the Grantee in accordance with Section 4(c)(ii) to continue, replace or assume the RSUs covered by this Agreement (the “Replaced Award”).

(i)For purposes of this Agreement, a “Replacement Award” means an award (A) of the same type (e.g., time-based restricted stock units) as the Replaced Award, (B) that has a value at least equal to the value of the Replaced Award, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control, (D) the tax consequences of which to such Grantee under the Code are not less favorable to such Grantee than the tax consequences of the Replaced Award, and (E) the other terms and conditions of which are not less favorable to the Grantee than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether the conditions of this Section 4(c)(ii) are satisfied will be made by the Committee, as constituted immediately before the Change in Control, in its sole discretion.

(ii)If, after receiving a Replacement Award, the Grantee experiences a termination of employment with the Company, the Advisor or its Affiliates (or any of their successors) (as applicable, the “Successor”) by reason of a termination by the Successor without Cause or by the Grantee for Good Reason, in each case within a period of two years after the Change in Control and during the remaining vesting period for the Replacement Award, the Replacement Award shall fully Vest upon such termination of employment to the extent not previously Vested.

(d)Notwithstanding Section 4(a) above, the RSUs shall Vest (to the extent the RSUs have not previously become Vested or been forfeited) prior to the end of the Vesting Period in accordance with Section 5 hereof upon the Grantee’s Qualifying Termination by the Company or Successor.

(e)For purposes of this Agreement, the following definitions apply:

(i)“Affiliates” has the meaning set forth in the Plan, including the clarification that the term includes the Advisor and Operating Partnership, except that for avoidance of doubt under this Agreement the term also includes any corporation, partnership, joint venture or other entity, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the Advisor.

(ii)“Cause” shall mean any of the following: (A) a material breach by the Grantee of any agreement then in effect between the Grantee and the Company or Successor, (B) the Grantee’s conviction of or plea of “guilty” or “no contest” to a felony under the laws of the United States or any state thereof; (C) gross negligence or gross misconduct by Grantee with respect to the Company or Successor or any of its affiliates, (D) Grantee’s abandonment of Grantee’s employment with the Company or Successor or any of its affiliates, as applicable, or (E) the Grantee’s willful and continued failure to substantially perform the duties associated with the Grantee’s position (other than any such failure resulting from the Grantee’s incapacity due to physical or mental illness), which failure has not been cured within thirty (30) days after a written demand for substantial performance is delivered to the Grantee by the board of directors of the Company or Successor, which demand specifically identifies the manner in which the board of directors of the Company or Successor believes that the Grantee has not substantially performed his duties.

(iii)“Disability” shall mean a medically determinable physical or mental impairment expected to result in death or to continue for a period of not less than 12 months that causes the Grantee to be unable to engage in any substantial gainful activity.

(iv)“Good Reason” shall mean (A) a material diminution in the Grantee’s duties or responsibilities; (B) a material reduction in the aggregate value of base salary and bonus opportunity provided to the Grantee by the Successor; or (C) a reassignment of the Grantee to another primary office more than 50 miles from the Grantee’s current office location. The Grantee must notify the Successor of the Grantee’s intention to invoke termination for Good Reason within 90 days after the Grantee has knowledge of such event and provide, the Successor 30 days’ opportunity for cure, or such event shall not constitute Good Reason. The Grantee may not invoke termination for Good Reason if Cause exists at the time of such termination.

(v)“Retirement” shall mean the Grantee’s termination of employment with the Company, the Advisor or its Affiliates, as applicable, after the attainment of age 65.

(vi)“Qualifying Termination” means a termination of service by reason of (i) the Participant’s death, (ii) a termination by the Company or an Affiliate

due to the Grantee’s Disability, (iii) the Grantee’s Retirement or (iv) a termination by the Company or an Affiliate other than for Cause.

5.Form and Time of Payment of RSUs.

(a)General. Subject to Section 4 and Section 5(b), payment for Vested RSUs will be made in Shares within 10 days following the Vesting dates specified in Section 4(a).

(b)Other Payment Events. Notwithstanding Section 5(a), to the extent that the RSUs are Vested on the dates set forth below, payment with respect to the RSUs will be made as follows:

(i)Change in Control. Upon a Change in Control, and if no Replacement Award is granted, the Grantee is entitled to receive payment for Vested RSUs in Shares on the date of the Change in Control; provided, however, that if such Change in Control would not qualify as a permissible date of distribution under Section 409A(a)(2)(A) of the Code, and the regulations thereunder, and where Section 409A of the Code applies to such distribution, the Grantee is entitled to receive the corresponding payment on the date that would have otherwise applied pursuant to Sections5(a) or 5(b)(ii) as though such Change in Control had not occurred.

(ii)Qualifying Termination due to Death, Disability or Retirement. Within 10 days following the date of the Grantee’s Qualifying Termination of employment with the Company, the Advisor or its Affiliates, as applicable, due to the Grantee’s death, Disability, or Retirement, the Grantee is entitled to receive payment for Vested RSUs in Shares.

(iii)Termination Following Change in Control. With respect to Replacement Awards, within 10 days following the Grantee’s termination of employment with the Company, the Advisor or its Affiliates, as applicable, within two years following a Change in Control by the Company, the Advisor or its Affiliates, as applicable, without Cause or by the Grantee for Good Reason.

(iv)Qualifying Termination without Cause. In the event that the Grantee incurs a Qualifying Termination due to a termination by the Company or an Affiliate other than for Cause, subject to and conditioned upon the Grantee’s execution of a general release of claims in a form prescribed by the Company (the “Release”) within 21 days (or 45 days or such other number of days if necessary to comply with applicable law) after the date of such Qualifying Termination and, if the Grantee is entitled to a seven day post-signing revocation period under applicable law, the Grantee’s non-revocation of such Release during such seven day period, the Award will Vest and become nonforfeitable on the 55th day following the date of such Qualifying Termination with respect to that number of RSUs subject

to the Award which would have become vested and nonforfeitable during the 12-month period immediately following the date of such Qualifying Termination had the Grantee remained continuously employed by the Company or an Affiliate during such period (and will, following the Grantee’s Qualifying Termination, remain outstanding and eligible to Vest on such date if the Release has become effective and irrevocable).

(c)Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.

(d)The Committee may also determine to pay for Vested RSUs in cash based on the market value of the Shares on the date of settlement. The Company’s obligations to the Grantee with respect to the RSUs will be satisfied in full upon the issuance of Shares corresponding to such RSUs or upon a cash payment corresponding to such RSUs.

6.Dividend Equivalents; Other Rights.

(a)The Grantee shall have no rights of ownership in the Shares underlying the RSUs and no right to vote the Shares underlying the RSUs until the date on which the Shares underlying the RSUs are issued or transferred to the Grantee pursuant to Section 5 above.

(b)From and after the Date of Grant and until the earlier of (i) the time when the RSUs become Vested and are paid in accordance with Section 5 hereof or (ii) the time when the Grantee’s right to receive Shares in payment of the RSUs is forfeited in accordance with Section 4 hereof, on the date that the Company pays a cash dividend (if any) to holders of Shares generally, the Grantee shall be credited with cash per RSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including Vesting, payment and forfeitability) as apply to the RSUs in respect of which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the RSUs to which they relate are paid in Shares.

(c)The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

7.Adjustments. The number of Shares issuable for each RSU and the other terms and conditions of the grant evidenced by this Agreement are subject to adjustment as provided in Section 11 of the Plan.

8.Withholding Taxes. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with the delivery to the Grantee of Shares or any other payment to the Grantee or any other payment or Vesting event under this Agreement, and

the amounts available to the Company for such withholding are insufficient, it shall be a condition to the obligation of the Company to make any such delivery or payment that the Grantee make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld. The Grantee may elect that all or any part of such withholding requirement be satisfied by retention by the Company of a portion of the Shares to be delivered to the Grantee or by delivering to the Company other Shares held by the Grantee. If such election is made, the Shares so retained shall be credited against such withholding requirement at the market value of such Shares on the date of such delivery. In no event will the market value of the Shares to be withheld and/or delivered pursuant to this Section 8 to satisfy applicable withholding taxes exceed the minimum amount of taxes required to be withheld.

9.Compliance With Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue any Shares pursuant to this Agreement if the issuance thereof would result in a violation of any such law. Notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue Shares or make any payments pursuant to this Agreement if the issuance or payment thereof could impair the Company’s status as a REIT.

10.Compliance With Section 409A of the Code. To the extent applicable, it is intended that this Agreement and the Plan comply with the provisions of Section 409A of the Code. This Agreement and the Plan shall be administered in a manner consistent with this intent, and any provision that would cause this Agreement or the Plan to fail to satisfy Section 409A of the Code shall have no force or effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

11.No Right to Future Awards or Employment. The grant of the RSUs under this Agreement to the Grantee is a voluntary, discretionary award being made on a one-time basis, and it does not constitute a commitment to make any future awards. The grant of the RSUs and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law. Nothing contained in this Agreement shall confer upon the Grantee any right to be employed or remain employed by the Company, the Advisor or its Affiliates, nor limit or affect in any manner the right of the Company, the Advisor or its Affiliates to terminate the employment or adjust the compensation of the Grantee.

12.Relation to Other Benefits. Any economic or other benefit to the Grantee under this Agreement or the Plan shall not be taken into account in determining any benefits to which the Grantee may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company, the Advisor or its Affiliates and shall not affect the amount of any life insurance coverage in respect of the Grantee under any life insurance plan covering employees of the Company, the Advisor or its Affiliates.

13.Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that (a) no amendment shall adversely affect the rights of the Grantee under this Agreement without the Grantee’s written consent, and (b) the Grantee’s consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code or Section 10D of the Exchange Act or to prevent impairment of the Company’s status as a REIT.

14.Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

15.Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determine any questions which arise in connection with this Agreement.

16.Clawback. Any award granted under this Agreement shall be subject to any clawback or recoupment policy currently in effect or as may be adopted by the Company, in each case, as may be amended from time to time.

17.Electronic Delivery. The Company may, in its sole discretion, deliver any documents related to the RSUs and the Grantee’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Grantee’s consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

18.Governing Law. This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Maryland, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.

19.Successors and Assigns. Without limiting Section 3 hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.

20.Acknowledgement. The Grantee acknowledges that the Grantee (a) has received a copy of the Plan, (b) has had an opportunity to review the terms of this Agreement and the Plan, (c) understands the terms and conditions of this Agreement and the Plan and (d) agrees to such terms and conditions.

21.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

[SIGNATURES ON FOLLOWING PAGE]

NEXPOINT RESIDENTIAL TRUST, INC.

By:

Name:
Title:

Grantee Acknowledgment and Acceptance

By:

Name:

EX-10.2

NEXPOINT RESIDENTIAL TRUST, INC.

Form of Restricted Stock Units Agreement

This RESTRICTED STOCK UNITS AGREEMENT (this “Agreement”) is made as of _________, 20__, by and between NexPoint Residential Trust, Inc., a Maryland corporation (the “Company”), and [•] (the “Grantee”).

1.Certain Definitions. Capitalized terms used, but not otherwise defined, in this Agreement will have the meanings given to such terms in the Company’s 2016 Long Term Incentive Plan (the “Plan”).

2.Grant of RSUs. Subject to and upon the terms, conditions and restrictions set forth in this Agreement and in the Plan, the Company has granted to the Grantee as of ______, 20__ (the “Date of Grant”) [•] Restricted Stock Units (“RSUs”). Each RSU shall represent the right of the Grantee to receive one Share subject to and upon the terms and conditions of this Agreement.

3.Restrictions on Transfer of RSUs. Subject to Section 15 of the Plan, neither the RSUs evidenced hereby nor any interest therein or in the Shares underlying such RSUs shall be transferable prior to payment to the Grantee pursuant to Section 5 hereof other than by will or pursuant to the laws of descent and distribution.

4.Vesting of RSUs.

(a)The RSUs covered by this Agreement shall become nonforfeitable and payable to the Grantee pursuant to Section 5 hereof (“Vest,” or similar terms) on the first anniversary of the Date of Grant, conditioned upon the Grantee’s continuous service on the Board through such date (the period from the Date of Grant until the first anniversary of the Date of Grant, the “Vesting Period”). Any RSUs that do not so Vest will be forfeited, including, except as provided in Section 4(b) or Section 4(c) below, if the Grantee ceases to continuously serve on the Board prior to the end of the Vesting Period.

(b)Notwithstanding Section 4(a) above, the RSUs shall Vest upon the Grantee’s cessation of service on the Board if such service should cease prior to the end of the Vesting Period due to the Grantee’s death or Disability (to the extent the RSUs have not previously become Vested or been forfeited) in accordance with Section 5 hereof.

(c)Notwithstanding Section 4(a) above, if at any time before the end of the Vesting Period or forfeiture of the RSUs, and while the Grantee is continuously serving on the Board, a Change in Control occurs, then all of the RSUs will become Vested and payable to the Grantee in accordance with Section 5 hereof.

(d)For purposes of this Agreement, “Disability” shall mean a medically determinable physical or mental impairment expected to result in death or to continue for a period

of not less than 12 months that causes the Grantee to be unable to engage in any substantial gainful activity.

5.Form and Time of Payment of RSUs.

(a)Payment for the RSUs, after and to the extent they have become Vested, shall be made in the form of Shares. Payment shall be made as soon as administratively practicable following (but no later than thirty (30) days following) the date that the RSUs become Vested pursuant to Section 4 hereof.

(b)Except to the extent provided by Section 409A of the Code and permitted by the Committee, no Shares may be issued to the Grantee at a time earlier than otherwise expressly provided in this Agreement.

(c)The Committee may also determine to pay for Vested RSUs in cash based on the market value of the Shares on the date of settlement. The Company’s obligations to the Grantee with respect to the RSUs will be satisfied in full upon the issuance of Shares corresponding to such RSUs or upon a cash payment corresponding to such RSUs.

6.Dividend Equivalents; Other Rights.

(a)The Grantee shall have no rights of ownership in the Shares underlying the RSUs and no right to vote the Shares underlying the RSUs until the date on which the Shares underlying the RSUs are issued or transferred to the Grantee pursuant to Section 5 above.

(b)From and after the Date of Grant and until the earlier of (i) the time when the RSUs become Vested and are paid in accordance with Section 5 hereof or (ii) the time when the Grantee’s right to receive Shares in payment of the RSUs is forfeited in accordance with Section 4 hereof, on the date that the Company pays a cash dividend (if any) to holders of Shares generally, the Grantee shall be credited with cash per RSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including Vesting, payment and forfeitability) as apply to the RSUs in respect of which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the RSUs to which they relate are paid in Shares.

(c)The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Grantee will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

7.Adjustments. The number of Shares issuable for each RSU and the other terms and conditions of the grant evidenced by this Agreement are subject to adjustment as provided in Section 11 of the Plan.

8.Taxes. The Grantee will be solely responsible for the payment of all taxes that arise with respect to the granting and payment of the RSUs, including the payment of any Shares.

9.Compliance With Law. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; provided, however, notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue any Shares pursuant to this Agreement if the issuance thereof would result in a violation of any such law. Notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue Shares or make any payments pursuant to this Agreement if the issuance or payment thereof could impair the Company’s status as a REIT.

10.Compliance With Section 409A of the Code. To the extent applicable, it is intended that this Agreement and the Plan comply with or be exempt from the provisions of Section 409A of the Code. This Agreement and the Plan shall be administered in a manner consistent with this intent, and any provision that would cause this Agreement or the Plan to fail to satisfy Section 409A of the Code shall have no force or effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Grantee). Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

11.No Right to Future Awards or Board Membership. The grant of the RSUs under this Agreement to the Grantee is a voluntary, discretionary award being made on a one-time basis, and it does not constitute a commitment to make any future awards. Nothing contained in this Agreement shall confer upon the Grantee any right to continued service as a member of the Board.

12.Amendments. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; provided, however, that (a) no amendment shall adversely affect the rights of the Grantee under this Agreement without the Grantee’s written consent, and (b) the Grantee’s consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code or Section 10D of the Exchange Act or to prevent impairment of the Company’s status as a REIT.

13.Severability. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

14.Relation to Plan. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to

time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determine any questions which arise in connection with this Agreement.

15.Clawback. Any award granted under this Agreement shall be subject to any clawback or recoupment policy currently in effect or as may be adopted by the Company, in each case, as may be amended from time to time.

16.Electronic Delivery. The Company may, in its sole discretion, deliver any documents related to the RSUs and the Grantee’s participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Grantee’s consent to participate in the Plan by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

17.Governing Law. This Agreement shall be governed by and construed in accordance with the internal substantive laws of the State of Maryland, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.

18.Successors and Assigns. Without limiting Section 3 hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Grantee, and the successors and assigns of the Company.

19.Acknowledgement. The Grantee acknowledges that the Grantee (a) has received a copy of the Plan, (b) has had an opportunity to review the terms of this Agreement and the Plan, (c) understands the terms and conditions of this Agreement and the Plan and (d) agrees to such terms and conditions.

20.Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

[SIGNATURES ON FOLLOWING PAGE]

NEXPOINT RESIDENTIAL TRUST, INC.

By:

Name:
Title:

Grantee Acknowledgment and Acceptance

By:

Name:

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Jim Dondero, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NexPoint Residential Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 2, 2024

/s/ Jim Dondero

Jim Dondero

President

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Brian Mitts, certify that:

1. I have reviewed this quarterly report on Form 10-Q of NexPoint Residential Trust, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 2, 2024

/s/ Brian Mitts

Brian Mitts

Chief Financial Officer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of NexPoint Residential Trust, Inc. (the “Company”) for the period ending March 31, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Jim Dondero, President of the Company, and Brian Mitts, Chief Financial Officer of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: May 2, 2024	/s/ Jim Dondero
	Jim Dondero President (Principal Executive Officer)
Dated: May 2, 2024	/s/ Brian Mitts
	Brian Mitts Chief Financial Officer (Principal Financial Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2024	May 02, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q1
Trading Symbol	NXRT
Entity Registrant Name	NexPoint Residential Trust, Inc.
Entity Central Index Key	0001620393
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Common Stock, Shares Outstanding		25,674,313
Entity Current Reporting Status	Yes
Entity Shell Company	false
Entity File Number	001-36663
Entity Tax Identification Number	47-1881359
Entity Address, Address Line One	300 Crescent Court
Entity Address, Address Line Two	Suite 700
Entity Address, City or Town	Dallas
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	75201
City Area Code	(214)
Local Phone Number	276-6300
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	MD
Title of 12(b) Security	Common Stock, par value $0.01 per share
Security Exchange Name	NYSE

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Operating Real Estate Investments
Land	$ 359,819	$ 359,819
Buildings and improvements	1,723,657	1,719,864
Construction in progress	6,861	8,322
Furniture, fixtures and equipment	185,257	180,435
Total Gross Operating Real Estate Investments	2,275,594	2,268,440
Accumulated depreciation and amortization	(435,410)	(411,087)
Total Net Operating Real Estate Investments	1,840,184	1,857,353
Real estate held for sale	40,090	110,747
Total Net Real Estate Investments	1,880,274	1,968,100
Cash and cash equivalents	37,234	12,367
Restricted cash	31,515	32,912
Accounts receivable, net	13,082	14,598
Prepaid and other assets	6,870	8,640
Fair value of interest rate swaps	73,711	71,028
TOTAL ASSETS	2,042,686	2,107,645
Liabilities:
Mortgages payable, net	1,454,101	1,453,787
Mortgages payable held for sale, net	35,204	88,044
Credit facility, net	0	23,243
Accounts payable and other accrued liabilities	14,121	17,140
Accrued real estate taxes payable	7,619	11,230
Accrued interest payable	9,077	9,399
Security deposit liability	3,060	3,159
Prepaid rents	1,643	1,773
Total Liabilities	1,524,825	1,607,775
Redeemable noncontrolling interests in the Operating Partnership	5,082	5,246
Stockholders' Equity:
Preferred stock, $0.01 par value: 100,000,000 shares authorized; 0 shares issued
Common stock, $0.01 par value: 500,000,000 shares authorized; 25,774,730 and 25,674,313 shares issued and outstanding, respectively	257	256
Additional paid-in capital	414,243	413,010
Accumulated earnings less dividends	25,742	11,493
Accumulated other comprehensive income	72,537	69,865
Total Stockholders' Equity	512,779	494,624
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,042,686	$ 2,107,645

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Net of accumulated depreciation	$ 14,478	$ 31,871
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	500,000,000	500,000,000
Common stock, shares, issued	25,774,730	25,674,313
Common stock, shares, outstanding	25,774,730	25,674,313
Common stock, par value	$ 0.01	$ 0.01

XML

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) shares in Thousands, $ in Thousands		3 Months Ended
		Mar. 31, 2024	Mar. 31, 2023
Revenues
Rental income		$ 65,598	$ 67,537
Other income		1,979	1,690
Total revenues		67,577	69,227
Expenses
Property operating expenses		13,768	13,266
Real estate taxes and insurance		9,312	10,020
Property management fees	[1]	1,958	2,027
Advisory and administrative fees	[2]	1,743	1,889
Corporate general and administrative expenses		4,910	3,367
Property general and administrative expenses		2,281	2,270
Depreciation and amortization		24,323	23,266
Total expenses		58,295	56,105
Operating income before gain on sales of real estate		9,282	13,122
Gain on sales of real estate with related party		31,709
Operating income		40,991	13,122
Interest expense		(14,391)	(16,739)
Gain (loss) on extinguishment of debt and modification cost		(546)	122
Casualty gain (loss)		199	(814)
Equity in earnings of affiliate		38
Miscellaneous income		111	411
Net income (loss)		26,402	(3,898)
Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership		104	(15)
Net income (loss) attributable to common stockholders		26,298	(3,883)
Other comprehensive income (loss)
Unrealized gains (losses) on interest rate derivatives		2,683	(17,206)
Total comprehensive income (loss)		29,085	(21,104)
Comprehensive income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership		115	(80)
Comprehensive income (loss) attributable to common stockholders		$ 28,970	$ (21,024)
Weighted average common shares outstanding - basic		25,721	25,599
Weighted average common shares outstanding - diluted	[3]	26,354	25,599
Earnings (loss) per share - basic		$ 1.02	$ (0.15)
Earnings (loss) per share - diluted		$ 1	$ (0.15)

[1] Fees incurred to an affiliate of the noncontrolling limited partner of the Company’s Operating Partnership (see Note 8).

[2] Fees incurred to the Adviser (see Note 9).

[3] If the Company sustains a net loss for the period presented, unvested restricted stock units are not included in the diluted earnings per share calculation.

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands	Total	Common Stock	Additional Paid-in Capital	Accumulated Earnings (Loss) Less Dividends	Accumulated Other Comprehensive Income (Loss)
Beginning Balance, Values at Dec. 31, 2022	$ 519,666	$ 255	$ 405,376	$ 11,880	$ 102,155
Beginning Balance, Shares at Dec. 31, 2022		25,549,319
Net income (loss) attributable to common stockholders	(3,883)			(3,883)
Vesting of stock-based compensation	472	$ 1	471
Vesting of stock-based compensation, Shares		108,404
Common stock dividends declared	(10,940)			(10,940)
Other comprehensive income	(17,141)				(17,141)
Adjustment to reflect redemption value of redeemable noncontrolling interests in the Operating Partnership	(141)			(141)
Ending Balance, Values at Mar. 31, 2023	488,033	$ 256	405,847	(3,084)	85,014
Ending Balance, Shares at Mar. 31, 2023		25,657,723
Beginning Balance, Values at Dec. 31, 2023	$ 494,624	$ 256	413,010	11,493	69,865
Beginning Balance, Shares at Dec. 31, 2023	25,674,313	25,674,313
Net income (loss) attributable to common stockholders	$ 26,298			26,298
Vesting of stock-based compensation	1,234	$ 1	1,233
Vesting of stock-based compensation, Shares		100,417
Common stock dividends declared	(12,280)			(12,280)
Other comprehensive income	2,672				2,672
Adjustment to reflect redemption value of redeemable noncontrolling interests in the Operating Partnership	231			231
Ending Balance, Values at Mar. 31, 2024	$ 512,779	$ 257	$ 414,243	$ 25,742	$ 72,537
Ending Balance, Shares at Mar. 31, 2024	25,774,730	25,774,730

XML

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) (Parenthetical) - $ / shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Statement of Stockholders' Equity [Abstract]
Common stock, dividend per share declared	$ 0.46242	$ 0.42

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities
Net income (loss)		$ 26,402	$ (3,898)
Adjustments to reconcile net loss to net cash provided by operating activities:
Gain on sales of real estate with related party		(31,709)
Depreciation and amortization		24,323	23,266
Amortization/write-off of deferred financing costs		1,263	645
Change in fair value on derivative instruments included in interest expense		(13,533)	(9,175)
Net cash received on derivative settlements		14,007	9,871
Amortization/write-off of fair value adjustment of assumed debt		(26)	(27)
Provision for bad debts, net		1,172	2,325
Vesting of stock-based compensation		2,547	1,966
Insurance proceeds received for business interruption		538
Equity in earnings of affiliate		(38)
Casualty gain (loss)		(107)	202
Changes in operating assets and liabilities, net of effects of sale and acquisitions:
Accounts receivable		(1,363)	(3,748)
Prepaid and other assets		1,938	2,323
Operating liabilities		(2,116)	2,750
Real estate taxes payable		(3,611)	1,423
Net cash provided by operating activities		19,687	27,923
Cash flows from investing activities
Net proceeds from sales of real estate	[1]	102,704
Insurance proceeds received from casualty losses		1,032	1,494
Additions to real estate investments		(9,567)	(17,999)
Net cash provided by (used in) investing activities		94,169	(16,505)
Cash flows from financing activities
Mortgage proceeds received			42,788
Mortgage payments		(52,958)	(28,181)
Credit facilities payments		(24,000)	(17,500)
Deferred financing costs received (paid)			61
Interest rate cap fees paid		(118)	(215)
Prepayment penalties on extinguished debt		(529)	(285)
Payments for taxes related to net share settlement of stock-based compensation			(1,494)
Dividends paid to common stockholders		(12,733)	(11,267)
Distributions to redeemable noncontrolling interests in the Operating Partnership		(48)	(49)
Net cash (used in) financing activities		(90,386)	(16,142)
Net increase (decrease) in cash, cash equivalents and restricted cash		23,470	(4,724)
Cash, cash equivalents and restricted cash, beginning of period		45,279	51,799
Cash, cash equivalents and restricted cash, end of period		68,749	47,075
Supplemental Disclosure of Cash Flow Information
Interest paid		27,555	24,071
Supplemental Disclosure of Noncash Activities
Issuance of operating partnership units for purchase of noncontrolling interests			415
Adjustment to reflect redemption value of redeemable noncontrolling interests in the OP		(231)	141
Capitalized construction costs included in accounts payable and other accrued liabilities		3,792	5,091
Change in fair value on derivative instruments designated as hedges		2,683	(17,206)
Increase (decrease) in dividends payable upon vesting of restricted stock units		(453)	(327)
Write-off of assets due to casualty losses			1,751
Write-off of deferred financing costs		$ 16	$ 38

[1] Represents sales price, net of closing costs

XML

Organization and Description of Business

3 Months Ended

Mar. 31, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Description of Business

1. Organization and Description of Business

NexPoint Residential Trust, Inc. (the “Company,” “we,” “our”) was incorporated in Maryland on September 19, 2014, and has elected to be taxed as a real estate investment trust (“REIT”) and the Company believes the current organization and method of operation will enable it to maintain its status as a REIT. The Company is focused on “value-add” multifamily investments primarily located in the Southeastern and Southwestern United States. Substantially all of the Company’s business is conducted through NexPoint Residential Trust Operating Partnership, L.P. (the “OP”), the Company’s operating partnership. The Company also consolidates certain variable interest entities ("VIEs") in accordance with Financial Accounting Standards Board’s ("FASB") Accounting Standards Codification ("ASC") 810 Consolidation. The Company controls and consolidates the OP as a VIE. The Company owns its properties (the “Portfolio”) through the OP and its wholly owned taxable REIT subsidiary (“TRS”). The OP owns approximately 99.9% of the Portfolio; the TRS owns approximately 0.1% of the Portfolio. The Company’s wholly owned subsidiary, NexPoint Residential Trust Operating Partnership GP, LLC (the “OP GP”), is the sole general partner of the OP. As of March 31, 2024, there were 26,053,988 common units in the OP (“OP Units”) outstanding, of which 25,951,154, or 99.6%, were owned by the Company and 102,834, or 0.4%, were owned by noncontrolling limited partners (see Note 8).

The Company is externally managed by NexPoint Real Estate Advisors, L.P. (the “Adviser”), through an agreement dated March 16, 2015, as amended, and renewed on February 26, 2024 for a one-year term (the “Advisory Agreement”), by and among the Company, the OP and the Adviser. The Adviser conducts substantially all of the Company’s operations and provides asset management services for its real estate investments. The Company expects it will only have accounting employees while the Advisory Agreement is in effect. All of the Company’s investment decisions are made by the Adviser, subject to general oversight by the Adviser’s investment committee and the Company’s board of directors (the “Board”). The Adviser is wholly owned by NexPoint Advisors, L.P. (the “Sponsor”).

The Company’s investment objectives are to maximize the cash flow and value of properties owned, acquire properties with cash flow growth potential, provide quarterly cash distributions and achieve long-term capital appreciation for its stockholders through targeted management and a value-add program. Consistent with the Company’s policy to acquire assets for both income and capital gain, the Company intends to hold at least majority interests in its properties for long-term appreciation and to engage in the business of 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 consistent with its investment objectives. Economic and market conditions may influence the Company to hold properties for different periods of time. From time to time, the Company may sell a property if, among other deciding factors, the sale would be in the best interest of its stockholders.

The Company may allocate up to 30% of the Portfolio to investments in real estate-related debt and securities with the potential for high current income or total returns. These allocations may include first and second mortgages and subordinated, bridge, mezzanine, construction and other loans, as well as debt securities related to or secured by multifamily real estate and common and preferred equity securities, which may include securities of other REITs or real estate companies.

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Summary of Significant Accounting Policies

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Readers of this Quarterly Report on Form 10-Q ("Quarterly Report") should refer to the audited financial statements and notes to consolidated financial statements of the Company for the year ended December 31, 2023, which are included in our Annual Report on Form 10-K ("2023 Annual Report"), filed with the United States Securities and Exchange Commission ("SEC") on February 27, 2024 and also available on our website (nxrt.nexpoint.com), since we have omitted from this Quarterly Report certain footnote disclosures which would substantially duplicate those contained in such audited financial statements. You should also refer to Note 2, Summary of Significant Accounting Policies, in the notes to consolidated financial statements in our 2023 Annual Report for further discussion of our significant accounting policies and estimates. Information contained on, or accessible through, our website is not incorporated by reference into and does not constitute a part of this Quarterly Report or any other report or documents we file or furnish with the SEC.

Reclassification of Prior Year Activity on the Consolidated Statement of Cash Flows

Certain reclassifications have been made within the consolidated statements of cash flows to the changes in operating assets and liabilities, net of effects of sales and acquisitions for the three months ended March 31, 2023 to be comparative to the consolidated statement of cash flows for the three months ended March 31, 2024.

Impairment

Real estate assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The key inputs into our impairment analysis include, but are not limited to, the holding period, net operating income, and capitalization rates. In such cases, the Company will evaluate the recoverability of such real estate assets based on estimated future cash flows and the estimated liquidation value of such real estate assets, and record an impairment loss if such undiscounted cash flows are insufficient to recover the carrying amount of the real estate asset. If impaired, the real estate asset will be written down to its estimated fair value. The Company’s impairment analysis identifies and evaluates events or changes in circumstances that indicate the carrying amount of a real estate investment may not be recoverable, including determining the period the Company will hold the rental property, net operating income, and the estimated capitalization rate for each respective real estate investment. As of March 31, 2024, the Company has not recorded any impairment on its real estate assets.

Held for Sale

The Company periodically classifies real estate assets as held for sale when certain criteria are met in accordance with U.S. generally accepted accounting principles ("GAAP"). At that time, the Company presents the net real estate assets and the net debt associated with the real estate held for sale separately in its consolidated balance sheet, and the Company ceases recording depreciation and amortization expense related to that property. Real estate held for sale is reported at the lower of its carrying amount or its estimated fair value less estimated costs to sell. As of March 31, 2024 and December 31, 2023, there were two and three properties classified as held for sale, respectively. In addition to the net real estate and mortgages payable held for sale, the consolidated balance sheets also includes approximately $0.3 million and $0.8 million of accounts receivable and prepaid and other assets, and approximately $1.0 million and $4.9 million of accounts payable, real estate taxes payable, security deposits, prepaid rents, and other accrued liabilities related to assets held for sale as of March 31, 2024 and December 31, 2023, respectively.

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company has taken the ASC 848 elections needed to allow for the hedged forecasted transactions to transition while not discontinuing the associated hedge accounting designations. Application of these hedged accounting expedients preserves the presentation of derivatives consistent with past presentation. The Company will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting – Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires a public entity to disclose significant segment expenses and other segment items in interim and annual periods and expands the ASC 280 disclosure requirements for interim periods. The ASU also explicitly requires public entities with a single reportable segment to provide all segment disclosures under ASC 280, including the new disclosures under ASU 2023-07. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Management is currently evaluating this ASU to determine its impact on the Company's disclosures.

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Real Estate Investments

3 Months Ended

Mar. 31, 2024

Real Estate [Abstract]

Real Estate Investments

3. Real Estate Investments

Acquisitions

There were no acquisitions of real estate during the three months ended March 31, 2024 and 2023.

Dispositions

The Company sold one property and zero properties during the three months ended March 31, 2024 and 2023, respectively, as detailed in the table below (in thousands).

Property Name		Location	Date of Sale	Sales Price		Net Cash Proceeds (1)		Gain on Sale of Real Estate
Old Farm	(2)	Houston, Texas	March 1, 2024	$	103,000	$	102,704	$	31,709
				$	103,000	$	102,704	$	31,709

(1)Represents sales price, net of closing costs.

(2)Old Farm was sold to NexBank Capital, Inc. (“NexBank Capital”). A director and officer of the Company, who controls the Adviser, which externally manages the Company, also (i) is the beneficiary of a trust that indirectly owns 100% of the limited partnership interests in the parent of the Adviser and directly owns 100% of the general partnership interests in the parent of the Adviser and (ii) is a director of NexBank Capital. See Note 9.

NXRT Captive

On July 6, 2023, NexPoint Captive Insurance Company, Inc. (“NexPoint Captive”) was authorized to transact business in the State of Montana as a captive insurance company. NexPoint Captive began providing rental insurance coverage to NXRT properties and properties managed by affiliates of the Adviser on August 1, 2023. The OP purchased 100% ownership interest and has the power to direct the activities of NexPoint Captive. NexPoint Captive is required to maintain a cash reserve of $250,000 to fund potential claims, which is classified as restricted cash on the consolidated balance sheet. As of March 31, 2024 and December 31, 2023, the Company had approximately $0.3 million and $0.1 million accrued for case reserves, respectively. The Company consolidates NexPoint Captive in its consolidated financial statements.

Casualty Losses

The Company experienced certain casualty events during the three months ended March 31, 2024 and 2023. Certain casualty proceeds from insurance are recorded in casualty gains (loss) on the consolidated statements of operations and comprehensive income (loss) in relation to these events. Events that are considered to be small, standard and not extraordinary are recorded through property operating expense. Insurance proceeds received from casualty losses are recognized on the Company’s consolidated statements of cash flows as investing activities. The Company differentiates proceeds received from business interruption and casualty gains (losses) in accounting for the transactions. Business interruption proceeds are specifically insurance proceeds to recoup lost rents due to a qualifying event(s) (i.e., fires, floods, storms, water damage, etc.) as determined by the insurance policy and are reflected as operating cash flows in the accompanying consolidated statements of cash flows. Business interruption that has been accrued by the Company is presented in miscellaneous income in the accompanying consolidated statements of operations and comprehensive income (loss). Casualty gains (losses) are distinctly attributable to damage and subsequent write down of the property (loss), and the recoupment of funds from the insurance policy, as it relates to the damage. Such proceeds received from the damage to the property are accounted for as a gain to the Company, and potentially offset losses attributable to net write off of damaged assets. As of March 31, 2024 and December 31, 2023, there were 23 and 107 down units, respectively.

During three months ended March 31, 2024 and 2023, the Company recognized $0.2 million in casualty gain and $0.8 million in casualty loss, respectively, and $0.1 million and $0.4 million in business interruption proceeds on the consolidated statement of operations and comprehensive income (loss) due to casualty events, respectively.

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Debt

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Debt

4. Debt

Mortgage Debt

The following table contains summary information concerning the mortgage debt of the Company as of March 31, 2024 (dollars in thousands):

Operating Properties	Type	Term (months)		Outstanding Principal				Interest Rate (1)	Maturity Date
Arbors on Forest Ridge	Floating		120	$	19,184			6.87%	12/1/2032
Cutter's Point	Floating		120		21,524			6.87%	12/1/2032
The Summit at Sabal Park	Floating		120		30,826			6.87%	12/1/2032
Courtney Cove	Floating		120		36,146			6.87%	12/1/2032
The Preserve at Terrell Mill	Floating		120		71,098			6.87%	12/1/2032
Versailles	Floating		120		40,247			6.87%	12/1/2032
Seasons 704 Apartments	Floating		120		33,132			6.87%	12/1/2032
Madera Point	Floating		120		34,457			6.87%	12/1/2032
Venue at 8651	Floating		120		18,690			6.87%	12/1/2032
The Venue on Camelback	Floating		120		42,788			7.50%	2/1/2033
Sabal Palm at Lake Buena Vista	Floating		84		42,100			6.74%	9/1/2025
Cornerstone	Floating		120		46,804			7.41%	12/1/2032
Parc500	Floating		120		29,416			6.87%	12/1/2032
Rockledge Apartments	Floating		120		93,129			6.87%	12/1/2032
Atera Apartments	Floating		120		46,198			6.87%	12/1/2032
Versailles II	Floating		84		12,061			6.62%	10/1/2025
Brandywine I & II	Floating		84		43,835			6.62%	10/1/2025
Bella Vista	Floating		84		29,040			6.76%	2/1/2026
The Enclave	Floating		84		25,322			6.76%	2/1/2026
The Heritage	Floating		84		24,625			6.76%	2/1/2026
Summers Landing	Floating		84		10,109			6.62%	10/1/2025
Residences at Glenview Reserve	Floating		84		25,502			6.88%	10/1/2025
Residences at West Place	Fixed		120		33,817			4.24%	10/1/2028
Avant at Pembroke Pines	Floating		84		177,100			6.87%	9/1/2026
Arbors of Brentwood	Floating		84		34,237			6.87%	10/1/2026
Torreyana Apartments	Floating		120		50,580			6.87%	12/1/2032
Bloom	Floating		120		59,830			6.87%	12/1/2032
Bella Solara	Floating		120		40,328			6.87%	12/1/2032
Fairways at San Marcos	Floating		120		60,228			6.87%	12/1/2032
The Verandas at Lake Norman	Floating		84		34,925			7.17%	7/1/2028
Creekside at Matthews	Floating		120		29,648			6.87%	12/1/2032
Six Forks Station	Floating		120		41,180			7.04%	10/1/2031
High House at Cary	Floating		84		46,625			7.33%	1/1/2029
The Adair	Floating		84		35,115			7.29%	4/1/2029
Estates on Maryland	Floating		84		43,157			7.29%	4/1/2029
				$	1,463,003
Fair market value adjustment					477		(2)
Deferred financing costs, net of accumulated amortization of $4,175					(9,379	)
				$	1,454,101
Held For Sale Properties
Stone Creek at Old Farm	Floating		84	$	15,274			7.12%	7/1/2024
Radbourne Lake	Floating		84		20,000			6.73%	10/1/2025
				$	35,274
Deferred financing costs, net of accumulated amortization of $530					(70	)
				$	35,204

(1)Interest rate is based on a reference rate plus an applicable margin, except for fixed rate mortgage debt. The reference rate used in our Portfolio is 30-Day Average Secured Overnight Financing Rate (“SOFR”). As of March 31, 2024, SOFR was 5.322%.

(2)The Company reflected a valuation adjustment on its fixed rate debt for Residences at West Place to adjust it to fair market value on its respective date of acquisition for the difference between the fair value and the assumed principal amount of debt. The difference is amortized into interest expense over the remaining terms of the mortgages.

The weighted average interest rate of the Company’s mortgage indebtedness was 6.874% as of March 31, 2024 and 6.900% as of December 31, 2023. As of March 31, 2024, the adjusted weighted average interest rate of the Company’s mortgage indebtedness was 3.470% which excludes the effect of interest rate caps. For purposes of calculating the adjusted weighted average interest rate of the outstanding mortgage indebtedness, the Company has included the weighted average fixed rate of 1.0682% for its combined $1.2 billion notional amount of interest rate swap agreements, which effectively fix the interest rate on $1.2 billion of the Company’s floating rate mortgage debt (see Note 5).

Each of the Company’s mortgages is a non-recourse obligation subject to customary provisions. The loan agreements contain customary events of default, including defaults in the payment of principal or interest, defaults in compliance with the covenants contained in the documents evidencing the loan, defaults in payments under any other security instrument covering any part of the property, whether junior or senior to the loan, and bankruptcy or other insolvency events. As of March 31, 2024 and December 31, 2023, the Company believes it is in compliance with all provisions.

Credit Facility

On October 24, 2022, the Company exercised its option to extend the Corporate Credit Facility with respect to the revolving commitments for a single one-year term resulting in a maturity date of June 30, 2025. During the three months ended March 31, 2024, the Company paid down $24.0 million on the Corporate Credit Facility. As of March 31, 2024, there was $350.0 million available for borrowing under the Corporate Credit Facility. Subject to conditions provided in the Corporate Credit Facility, the commitments under Corporate Credit Facility may be increased up to an additional $150.0 million if the lenders agree to increase their commitments or if the lenders agree for the increase to be funded by any additional lender proposed by the Company, through the OP. The Corporate Credit Facility will mature on June 30, 2025 with respect to the revolving commitments. The Company can voluntarily and permanently reduce all of the revolving commitments before the maturity date. As of March 31, 2024 and December 31, 2023, the Company had $0.0 million and $24.0 million outstanding on the Corporate Credit Facility, respectively.

Advances under the Corporate Credit Facility accrue interest at a per annum rate equal to, at the Company’s election, either Term SOFR plus a margin of 1.90% to 2.40%, depending on the Company’s total leverage ratio and a benchmark replacement adjustment of 0.1%, or a base rate determined according to the highest of (a) the prime rate, (b) the federal funds rate plus 0.50%, (c) Term SOFR plus 1.0% or (d) 0.0% plus a margin of 0.90% to 1.40%, depending on the Company’s total leverage ratio. An unused commitment fee at a rate of 0.15% or 0.25%, depending on the outstanding aggregate revolving commitments, applies to unutilized borrowing capacity under the Corporate Credit Facility. Amounts owed under the Corporate Credit Facility may be prepaid at any time without premium or penalty. The Corporate Credit Facility is guaranteed by the Company and the obligations under the Corporate Credit Facility are, subject to some exceptions, secured by a continuing security interest in substantially all of the assets of the Company. The Company is in compliance with all of the covenants required in its Corporate Credit Facility.

Deferred Financing Costs

The Company defers costs incurred in obtaining financing and amortizes the costs over the terms of the related loans using the straight-line method, which approximates the effective interest method. Deferred financing costs, net of amortization, are recorded as a reduction from the related debt on the Company’s consolidated balance sheets. As of March 31, 2024, the Company had $3.0 million of deferred financing costs and $2.5 million of accumulated amortization related to the Corporate Credit Facility classified in prepaid and other assets on the consolidated balance sheet. Upon repayment of or in conjunction with a material change in the terms of the underlying debt agreement, any unamortized costs are charged to loss on extinguishment of debt and modification costs (see “Loss on Extinguishment of Debt and Modification Costs” below). For the three months ended March 31, 2024 and 2023, amortization of deferred financing costs of approximately $0.7 million and $0.8 million, respectively, is included in interest expense on the consolidated statements of operations and comprehensive income (loss).

Gain (Loss) on Extinguishment of Debt and Modification Costs

Loss on extinguishment of debt and modification costs includes prepayment penalties and defeasance costs incurred on the early repayment of debt, costs incurred in a debt modification that are not capitalized as deferred financing costs and other costs incurred in a debt extinguishment. During the three months ended March 31, 2024 and 2023, the Company recognized a loss on extinguishment of debt of approximately $0.5 million and a gain of $0.1 million, respectively.

Schedule of Debt Maturities

The aggregate scheduled maturities, including amortizing principal payments, of total debt for the next five calendar years subsequent to March 31, 2024 are as follows (in thousands):

	Operating Properties		Held For Sale Properties		Credit Facility		Total
2024	$	222	$	15,274	$	—	$	15,496
2025		133,386		20,000		—		153,386
2026		290,324		—		—		290,324
2027		—		—		—		-
2028		81,041		—		—		81,041
Thereafter		958,030		—		—		958,030
Total	$	1,463,003	$	35,274	$	—	$	1,498,277

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Fair Value of Derivative and Financial Instruments

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Fair Value of Derivatives and Financial Instruments

5. Fair Value of Derivatives and Financial Instruments

Derivative Financial Instruments and Hedging Activities

In the normal course of business, our operations are exposed to market risks, including the effect of changes in interest rates. We may enter into derivative financial instruments to offset this underlying market risk. There have been no significant changes in our policy and strategy from what was disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

LIBOR ceased publication on June 30, 2023. On July 1, 2023, LIBOR rates were replaced with SOFR as the reference rate for most LIBOR debt and derivative instruments. For the Company's interest rate swaps, the reference transitioned from one-month LIBOR to the daily compounded average of SOFR plus a 0.11448% adjustment (“Adjusted SOFR”).

As of March 31, 2024, the Company had the following outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk (dollars in thousands):

Effective Date	Termination Date	Counterparty	Notional Amount		Fixed Rate (1)
June 1, 2019	June 1, 2024	KeyBank	$	50,000		2.0020	%
June 1, 2019	June 1, 2024	Truist		50,000		2.0020	%
September 1, 2019	September 1, 2026	KeyBank		100,000		1.4620	%
September 1, 2019	September 1, 2026	KeyBank		125,000		1.3020	%
January 3, 2020	September 1, 2026	KeyBank		92,500		1.6090	%
March 4, 2020	June 1, 2026	Truist		100,000		0.8200	%
June 1, 2021	September 1, 2026	KeyBank		200,000		0.8450	%
June 1, 2021	September 1, 2026	KeyBank		200,000		0.9530	%
March 1, 2022	March 1, 2025	Truist		145,000		0.5730	%
March 1, 2022	March 1, 2025	Truist		105,000		0.6140	%
			$	1,167,500		1.0682	%	(2)

(1)The floating rate option for the interest rate swaps is Adjusted SOFR. As of March 31, 2024, Adjusted SOFR was 5.436%.

(2)Represents the weighted average fixed rate of the interest rate swaps.

As of March 31, 2024, the Company had the following interest rate swap that was designated as a cash flow hedge of interest rate risk with future effective date (dollars in thousands):

Future Swaps

Effective Date	Termination Date	Counterparty	Notional Amount		Fixed Rate (1)
September 1, 2026	January 1, 2027	KeyBank	$	92,500		1.7980	%

(1)The floating rate option for the interest rate swap is Adjusted SOFR. As of March 31, 2024, Adjusted SOFR was 5.436%.

Derivatives not designated as hedges are not speculative and are used to manage the Company’s exposure to interest rate movements but either do not meet the strict requirements to apply hedge accounting in accordance with FASB ASC 815, Derivatives and Hedging, or the Company has elected not to designate such derivatives as hedges. Changes in the fair value of derivatives not designated in hedging relationships are recorded directly in net income (loss) as interest expense.

As of March 31, 2024, the Company had the following interest rate caps outstanding that were not designated as cash flow hedges of interest rate risk (dollars in thousands):

Properties	Type	Maturity Date	Notional		Strike Rate
The Verandas at Lake Norman	Floating	7/1/2024		34,925		3.40	%
Creekside at Matthews	Floating	7/1/2024		31,900		4.40	%
Sabal Palm at Lake Buena Vista	Floating	9/1/2024		42,100		6.20	%
Residences at Glenview Reserve	Floating	10/1/2024		25,645		4.81	%
Timber Creek	Floating	10/1/2024		24,100		4.99	%
Brandywine I & II	Floating	10/1/2024		43,835		6.82	%
Radbourne Lake	Floating	10/1/2024		20,000		6.46	%
Summers Landing	Floating	10/1/2024		10,109		6.07	%
Versailles II	Floating	10/1/2024		12,061		6.82	%
Six Forks Station	Floating	10/1/2024		41,180		4.00	%
High House at Cary	Floating	1/1/2025		46,625		2.74	%
The Heritage	Floating	2/1/2025		24,625		5.18	%
The Enclave	Floating	2/1/2025		25,322		5.18	%
Bella Vista	Floating	2/1/2025		29,040		5.18	%
Estates on Maryland	Floating	4/1/2025		43,157		3.91	%
The Adair	Floating	4/1/2025		35,115		3.91	%
Rockledge Apartments	Floating	12/1/2025		93,129		6.45	%
The Preserve at Terrell Mill	Floating	12/1/2025		71,098		6.45	%
Fairways at San Marcos	Floating	12/1/2025		60,228		6.70	%
Bloom	Floating	12/1/2025		59,830		6.70	%
Atera Apartments	Floating	12/1/2025		46,198		6.45	%
Silverbrook	Floating	12/1/2025		46,088		6.45	%
Torreyana Apartments	Floating	12/1/2025		50,580		6.70	%
Cornerstone	Floating	12/1/2025		46,804		6.66	%
Versailles	Floating	12/1/2025		40,247		6.45	%
Bella Solara	Floating	12/1/2025		40,328		6.70	%
Courtney Cove	Floating	12/1/2025		36,146		6.70	%
Madera Point	Floating	12/1/2025		34,457		6.70	%
Creekside at Matthews	Floating	12/1/2025		29,648		6.45	%
Parc500	Floating	12/1/2025		29,416		6.45	%
Seasons 704 Apartments	Floating	12/1/2025		33,132		6.70	%
The Summit at Sabal Park	Floating	12/1/2025		30,826		6.70	%
Cutter's Point	Floating	12/1/2025		21,524		6.45	%
Venue at 8651	Floating	12/1/2025		18,690		6.45	%
Arbors on Forest Ridge	Floating	12/1/2025		19,184		6.70	%
Venue on Camelback	Floating	2/1/2026		42,788		6.07	%
			$	1,340,080		5.90	%	(1)

The table below presents the fair value of the Company’s derivative financial instruments, which use level 2 inputs, as well as their classification on the consolidated balance sheets as of March 31, 2024 and December 31, 2023 (in thousands):

		Asset Derivatives				Liability Derivatives
	Balance Sheet Location	March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Derivatives designated as hedging instruments:
Interest rate swaps	Fair value of interest rate swaps	$	73,711	$	71,028	$	—	$	—
Derivatives not designated as hedging instruments:
Interest rate caps	Prepaid and other assets		2,639		2,988		—		—
Total		$	76,350	$	74,016	$	—	$	—

The tables below present the effect of the Company’s derivative financial instruments on the consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2024 and 2023 (in thousands):

	Amount of gain (loss) recognized in OCI					Location of gain (loss) reclassified from accumulated	Amount of gain (loss) reclassified from OCI into income
	2024		2023			OCI into income	2024		2023
Derivatives designated as hedging instruments:
For the three months ended March 31,
Interest rate products	$	15,590	$	(7,061	)	Interest expense	$	12,907	$	10,145

	Location of gain (loss)	Amount of gain (loss) recognized in income
	recognized in income	2024			2023
Derivatives not designated as hedging instruments:
For the three months ended March 31,
Interest rate products	Interest expense	$	(626	)	$	(970	)

Other Financial Instruments Carried at Fair Value

Redeemable noncontrolling interests in the OP have a redemption feature and are marked to their redemption value if such value exceeds the carrying value of the redeemable noncontrolling interests in the OP (see Note 8). The redemption value is based on the fair value of the Company’s common stock at the redemption date, and therefore, is calculated based on the fair value of the Company’s common stock at the balance sheet date. Since the valuation is based on observable inputs such as quoted prices for similar instruments in active markets, redeemable noncontrolling interests in the OP are classified as Level 2 if they are adjusted to their redemption value.

Financial Instruments Not Carried at Fair Value

As of March 31, 2024 and December 31, 2023, the fair values of cash and cash equivalents, restricted cash, accounts receivable, prepaid and other assets, excluding interest rate caps, accounts payable and other accrued liabilities, accrued real estate taxes payable, accrued interest payable, security deposits and prepaid rent approximated their carrying values because of the short-term nature of these instruments. The estimated fair values of other financial instruments were determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair values. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company would realize on the disposition of the financial instruments. The use of different market assumptions or estimation methodologies may have a material effect on the estimated fair value amounts.

In calculating the fair value of its long-term indebtedness, the Company used interest rate and spread assumptions that reflect current credit worthiness and market conditions available for the issuance of long-term debt with similar terms and remaining maturities. These financial instruments utilize Level 2 inputs. The table below presents the carrying value (outstanding principal balance) and estimated fair value of our debt at March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024				December 31, 2023
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Fixed rate debt	$	33,817	$	32,154	$	33,817	$	31,950
Floating rate debt (1)	$	1,464,460	$	1,271,125	$	1,541,419	$	1,335,635

(1)Includes balances outstanding under our Corporate Credit Facility.

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Stockholders' Equity

3 Months Ended

Mar. 31, 2024

Equity [Abstract]

Stockholders' Equity

6. Stockholders’ Equity

Common Stock

During the three months ended March 31, 2024 and 2023, the Company issued 100,417 and 108,404 shares, respectively, of common stock pursuant to its long-term incentive plan (see “Long Term Incentive Plan” below).

As of March 31, 2024, the Company had 25,774,730 shares of common stock, par value $0.01 per share, issued and outstanding.

Share Repurchase Program

On June 15, 2016, the Board authorized the Company to repurchase up to $30.0 million of its common stock, par value $0.01 per share, during a two-year period that was set to expire on June 15, 2018 (the “Share Repurchase Program”). On April 30, 2018, the Board

increased the Share Repurchase Program from $30.0 million to up to $40.0 million and extended it by an additional two years to June 15, 2020. On March 13, 2020, the Board further increased the Share Repurchase Program from $40.0 million to up to $100.0 million and extended it to March 12, 2023. On October 24, 2022, the Board authorized the Company to repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $100.0 million during a two-year period that will expire on October 24, 2024. This authorization replaced the Board's prior authorization. The Company may utilize various methods to affect the repurchases, and the timing and extent of the repurchases will depend upon several factors, including market and business conditions, regulatory requirements and other corporate considerations, including whether the Company’s common stock is trading at a significant discount to net asset value per share. Repurchases under this program may be discontinued at any time.

During the three months ended March 31, 2024 and 2023, the Company did not make any share repurchases. Since the inception of the Share Repurchase Program through March 31, 2024, the Company has repurchased 2,550,628 shares of its common stock, par value $0.01 per share, at a total cost of approximately $72.4 million, or $28.36 per share on average.

Restricted Stock Units

Under the Company’s 2016 Long Term Incentive Plan (the "2016 LTIP"), restricted stock units may be granted to the Company’s directors, officers and other key employees (and those of the Adviser and the Company’s subsidiaries) and typically vest over a three to five-year period for officers, employees and certain key employees of the Adviser and annually for directors. Beginning on the date of grant, restricted stock units earn dividends that are payable in cash on the vesting date. The following table includes the number of restricted stock units granted to its directors, officers, employees and certain key employees of the Adviser under the 2016 LTIP:

	Summary of Grants
	February		March		May		Total
2019		186,662		—		—		186,662
2020		168,183		—		116,852		285,035
2021		204,663		—		—		204,663
2022		142,519		—		—		142,519
2023		—		260,709		—		260,709
2024		—		355,475		—		355,475
Total		702,027		616,184		116,852		1,435,063

As of March 31, 2024 and December 31, 2023, the Company had 780,599 and 620,137 unvested units under the 2016 LTIP, respectively.

The following table includes the number of restricted stock units granted, vested, forfeited and outstanding as of March 31, 2024:

	2024
	Number of Units				Weighted Average Grant Date Fair Value
Outstanding January 1,		620,137			$	47.50
Granted		355,475				30.89
Vested		(195,013	)	(1)		47.00
Forfeited		—				—
Outstanding March 31,		780,599			$	40.19

(1)Certain key employees of the Adviser elected to net the taxes owed upon vesting against the shares issued resulting in 100,417 shares being issued as shown on the Consolidated Statement of Stockholders’ Equity. During the three months ended March 31, 2024, 50,201 shares vested under the 2016 LTIP that had not settled as of March 31, 2024.

The following table contains information regarding the vesting of restricted stock units under the 2016 LTIP for the next five calendar years subsequent to March 31, 2024:

	Shares Vesting
	February		March		May		June		Total
2024		—		—		21,877		841		22,718
2025		97,154		136,671		21,769		—		255,594
2026		64,147		114,965		—		—		179,112
2027		26,281		114,965		—		—		141,246
2028		—		114,958		—		—		114,958
2029		—		66,971		—		—		66,971
Total		187,582		548,530		43,646		841		780,599

As of March 31, 2024 and December 31, 2023, the Company had issued 1,132,822 and 982,204 shares of common stock under the 2016 LTIP, respectively. For the three months ended March 31, 2024 and 2023, the Company recognized approximately $2.5 million and $2.0 million, respectively, of equity-based compensation expense related to grants of restricted stock units. For the three months ended March 31, 2024 and 2023, the Company recognized approximately $2.5 million and $2.0 million, respectively, of equity-based compensation expense related to grants of restricted stock units. As of March 31, 2024 and December 31, 2023, the Company had recognized a liability of approximately $1.6 million and $2.1 million, respectively, related to dividends earned on restricted stock units that are payable in cash upon vesting which is included in accounts payable and other accrued liabilities on the consolidated balance sheets. Forfeitures are recognized as they occur.

As of March 31, 2024 and December 31, 2023. the Company had total unrecognized compensation expense on restricted awards of approximately $30.0 million and $21.5 million over a weighted average vesting period of 2.3 and 1.5 years, respectively.

At-the-Market Offering

On March 4, 2020, the Company, the OP and the Adviser entered into separate equity distribution agreements with each of Jefferies LLC (“Jefferies”), Raymond James & Associates, Inc. (“Raymond James”), KeyBanc Capital Markets Inc. (“KeyBanc”) and Truist Securities (f/k/a SunTrust Robinson Humphrey, Inc., “SunTrust,” and together with Jefferies, Raymond James and KeyBanc, the “ATM Sales Agents”), pursuant to which the Company could issue and sell from time to time when an effective registration statement was available shares of the Company’s common stock, par value $0.01 per share, having an aggregate sales price of up to $225,000,000 (the “2020 ATM Program”). Sales of shares of common stock, if any, could be made in transactions that were deemed to be “at the market” offerings, as defined in Rule 415 under the Securities Act, including, without limitation, sales made by means of ordinary brokers’ transactions on the New York Stock Exchange, to or through a market maker at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices based on prevailing market prices. In addition to the issuance and sale of shares of common stock, the Company could enter into forward sale agreements with each of Jefferies, KeyBanc and Raymond James, or their respective affiliates, through the 2020 ATM Program. During the three months ended March 31, 2024 and 2023, no shares were issued under the 2020 ATM Program. The following table contains summary information of the 2020 ATM Program since its inception:

Gross proceeds	$	62,310,967
Common shares issued		1,120,910
Gross average sale price per share	$	55.59
Sales commissions	$	934,665
Offering costs		1,353,015
Net proceeds		60,023,287
Average price per share, net	$	53.55

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Earnings (Loss) Per Share

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

. Earnings (Loss) Per Share

Basic earnings (loss) per share is computed by dividing net loss attributable to common stockholders by the weighted average number of shares of the Company’s common stock outstanding, which excludes any unvested restricted stock units issued pursuant to the 2016 LTIP. Diluted earnings (loss) per share is computed by adjusting basic loss per share for the dilutive effect of the assumed vesting of restricted stock units. During periods of net loss, the assumed vesting of restricted stock units is anti-dilutive and is not included in the calculation of earnings (loss) per share.

The effect of the conversion of OP Units held by noncontrolling limited partners is not reflected in the computation of basic and diluted earnings (loss) per share as the assumed conversion of these units would have no net impact on the determination of diluted earnings (loss) per share. See Note 8 for additional information.

The following table sets forth the computation of basic and diluted loss per share for the periods presented (in thousands, except per share amounts):

		For the Three Months Ended March 31,
		2024		2023
Numerator for earnings (loss) per share:
Net income (loss)		$	26,402	$	(3,898	)
Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership			104		(15	)
Net income (loss) attributable to common stockholders		$	26,298	$	(3,883	)
Denominator for earnings (loss) per share:
Weighted average common shares outstanding			25,721		25,599
Denominator for basic earnings (loss) per share			25,721		25,599
Weighted average unvested restricted stock units			633		476
Denominator for diluted earnings per share	(1)		26,354		25,599
Earnings (loss) per weighted average common share:
Basic		$	1.02	$	(0.15	)
Diluted		$	1.00	$	(0.15	)

(1)If the Company sustains a net loss for the period presented, unvested restricted stock units are not included in the diluted earnings per share calculation.

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Noncontrolling Interests

3 Months Ended

Mar. 31, 2024

Noncontrolling Interest [Abstract]

Noncontrolling Interests

8. Noncontrolling Interests

Redeemable Noncontrolling Interests in the OP

The following table sets forth the redeemable noncontrolling interests in the OP for the three months ended March 31, 2024 (in thousands):

Redeemable noncontrolling interests in the OP, December 31, 2023	$	5,246
Net income attributable to redeemable noncontrolling interests in the OP		104
Other comprehensive income attributable to redeemable noncontrolling interests in the OP		11
Distributions to redeemable noncontrolling interests in the OP		(48	)
Adjustment to reflect redemption value of redeemable noncontrolling interests in the OP		(231	)
Redeemable noncontrolling interests in the OP, March 31, 2024	$	5,082

Fees and Reimbursements to BH and its Affiliates

The Company has entered into management agreements with BH Management Services, LLC (“BH”), the Company’s property manager and an independently owned third party, who manages the Company’s properties and supervises the implementation of the Company’s value-add program. BH is an affiliate of BH Equities, LLC and its affiliates (collectively, (“BH Equity"), who was a noncontrolling interest member of the Company’s joint ventures prior to the BH purchase by the Company of 100% of the joint venture interests in the Portfolio owned by BH Equity, representing approximately 8.4% ownership in the portfolio (the “BH Buyout") on June 30, 2017. Through BH Equity’s noncontrolling interests in such joint ventures, BH Equity was deemed to be a related party. With the completion of the BH Buyout, BH Equity is no longer deemed to be a related party. BH Equity became a noncontrolling limited partner of the OP upon execution of the Amendment. BH and its affiliates do not have common ownership in any joint venture with the Adviser; there is also no common ownership between BH and its affiliates and the Adviser.

The property management fee paid to BH is approximately 3% of the monthly gross income from each property managed. Currently, BH manages all of the Company’s properties. Additionally, the Company may pay BH certain other fees, including: (1) a fee of $15-25 per unit for the one-time setup and inspection of properties, (2) a construction supervision fee of 5-6% of total project costs, which is capitalized, (3) acquisition fees and due diligence costs reimbursements, and (4) other owner approved fees at $55 per hour. BH also acts as a paymaster for the properties and is reimbursed at cost for various operating expenses it pays on behalf of the properties. The following is a summary of fees that the properties incurred to BH and its affiliates, as well as reimbursements paid to BH from the properties for various operating expenses, for the three months ended March 31, 2024 and 2023 (in thousands):

		For the Three Months Ended March 31,
		2024			2023
Fees incurred
Property management fees	(1)	$	1,943		$	2,019
Construction supervision fees	(2)		159			651
Design fees	(2)		—			11
Acquisition fees	(3)		(1	)		—
Reimbursements
Payroll and benefits	(4)		4,833			5,451
Other reimbursements	(5)		1,136			1,353

(1)Included in property management fees on the consolidated statements of operations and comprehensive income (loss).

(2)Capitalized on the consolidated balance sheets and reflected in buildings and improvements.

(3)Includes due diligence costs. Acquisition fees are capitalized to real estate assets on the consolidated balance sheets.

(4)Included in property operating expenses on the consolidated statements of operations and comprehensive income (loss).

(5)Includes property operating expenses such as repairs and maintenance costs and certain property general and administrative expenses, which are included on the consolidated statements of operations and comprehensive income (loss).

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Related Party Transactions

3 Months Ended

Mar. 31, 2024

Related Party Transactions [Abstract]

Related Party Transactions

9. Related Party Transactions

Advisory and Administrative Fee

In accordance with the Advisory Agreement, the Company pays the Adviser an advisory fee equal to 1.00% of the Average Real Estate Assets (as defined below). The duties performed by the Company’s Adviser under the terms of the Advisory Agreement include, but are not limited to: providing daily management for the Company, selecting and working with third party service providers, managing the Company’s properties or overseeing the third party property manager, formulating an investment strategy for the Company and selecting suitable properties and investments, managing the Company’s outstanding debt and its interest rate exposure through derivative instruments, determining when to sell assets, and managing the value-add program or overseeing a third party vendor that implements the value-add program. “Average Real Estate Assets” means the average of the aggregate book value of Real Estate Assets before reserves for depreciation or other non-cash reserves, computed by taking the average of the book value of real estate assets at the end of each month (1) for which any fee under the Advisory Agreement is calculated or (2) during the year for which any expense reimbursement under the Advisory Agreement is calculated. “Real Estate Assets” is defined broadly in the Advisory Agreement to include, among other things, investments in real estate-related securities and mortgages and reserves for capital expenditures (the value-add program). The advisory fee is payable monthly in arrears in cash, unless the Adviser elects, in its sole discretion, to receive all or a portion of the advisory fee in shares of common stock, subject to certain limitations.

In accordance with the Advisory Agreement, the Company also pays the Adviser an administrative fee equal to 0.20% of the Average Real Estate Assets. The administrative fee is payable monthly in arrears in cash, unless the Adviser elects, in its sole discretion, to receive all or a portion of the administrative fee in shares of common stock, subject to certain limitations.

The advisory and administrative fees paid to the Adviser on the Contributed Assets (as defined in the Advisory Agreement) are subject to an annual cap of approximately $5.4 million (the “Contributed Assets Cap”) (see “Expense Cap” below).

Pursuant to the terms of the Advisory Agreement, the Company will reimburse the Adviser for all documented Operating Expenses and Offering Expenses it incurs on behalf of the Company. “Operating Expenses” include legal, accounting, financial and due diligence services performed by the Adviser that outside professionals or outside consultants would otherwise perform, the Company’s pro rata share of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of the Adviser required for the Company’s operations, and compensation expenses under the 2016 LTIP. Operating Expenses do not include expenses for the advisory and administrative services described in the Advisory Agreement. Certain Operating Expenses, such as the Company’s ratable share of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses incurred by the Adviser or its affiliates that relate to the operations of the Company, may be billed monthly to the Company under a shared services agreement. “Offering Expenses” include all expenses (other than underwriters’ discounts) in connection with an offering, including, without limitation, legal, accounting, printing, mailing and filing fees and other documented offering expenses. For the three months ended March 31, 2024 and 2023, the Adviser did not bill any Operating Expenses or Offering Expenses to the Company and any such expenses the Adviser incurred during the periods are considered to be permanently waived.

Expense Cap

Pursuant to the terms of the Advisory Agreement, expenses paid or incurred by the Company for operating expenses and advisory and administrative fees payable to the Adviser and Operating Expenses will not exceed 1.5% of Average Real Estate Assets per calendar year (or part thereof that the Advisory Agreement is in effect (the “Expense Cap”)). The Expense Cap does not limit the reimbursement of expenses related to Offering Expenses. 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 the Company’s ordinary course of business or any out-of-pocket acquisitions or due diligence expenses incurred in connection with the acquisition or disposition of real estate assets. Also, advisory and administrative fees are further limited on Contributed Assets to approximately $5.4 million in any calendar year. Contributed Assets refers to all Real Estate Assets contributed to the Company as part of its spin-off. The Contributed Assets Cap is not reduced for dispositions of such assets subsequent to its spin-off. Advisory and administrative fees on New Assets (as defined in the Advisory Agreement) are not subject to the above limitation and are based on an annual rate of 1.2% on Average Real Estate Assets, but are subject to the Expense Cap. New Assets are all Real Estate Assets that are not Contributed Assets.

For the three months ended March 31, 2024 and 2023, the Company incurred advisory and administrative fees of $1.7 million and $1.9 million, respectively. For the three months ended March 31, 2024 and 2023, the Adviser elected to voluntarily waive advisory and administrative fees of approximately $5.5 million and $5.3 million, respectively. The advisory and administrative fees waived by the Adviser are considered to be permanently waived for the periods. The 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.

Other Related Party Transactions

The Company has in the past, and may in the future, utilize the services of affiliated parties. The Company holds multiple operating accounts at NexBank.

On July 30, 2021, three of our property-owning subsidiaries entered into agreements with NLMF Holdco, LLC, an entity under common control with our Adviser and in which we own a 10% equity interest, to provide faster, more reliable and lower cost internet to our residents. The lease of the fiber facilities and easement is between NLMF Holdco, LLC and NLMF Leaseco, LLC, which is wholly and separately owned by NLMF Leaseco Owner, LLC, which is controlled by Matt McGraner, one of our officers. The fiber management and internet services agreement is managed by NLMF Leaseco, LLC. The Company accounts for its interest in NLMF Holdco, LLC using the equity method of accounting. As of March 31, 2024, the Company has funded approximately $0.6 million to NLMF Holdco, LLC which is included in prepaid and other assets on the consolidated balance sheet of the Company. For the three months ended March 31, 2024, the Company included $0.0 million of NLMF Holdco, LLC net income in equity in earnings of affiliate on the consolidated statement of operations and comprehensive income (loss). For the three months ended March 31, 2024 and 2023, the Company incurred expenses of $0.7 million and $0.6 million, respectively, for fiber internet service to NLMF Leaseco, LLC which is included in property operating expenses on the consolidated statement of operations and comprehensive income (loss).

NXRTBH Old Farm, LLC

On August 16, 2023, the Company entered into a Membership Interest Purchase Agreement (“MIPA”) between NXRTBH McMillan, LLC (a wholly owned subsidiary of the Company, the “Seller”) and NexBank Capital to sell all the membership interests of NXRTBH Old Farm, LLC (“Old Farm subsidiary”). Then on March 1, 2024 (the “closing date”), in accordance with the Fourth Amendment to Membership Interest Purchase Agreement, the Seller sold the membership interests of the Old Farm subsidiary to NexBank Capital for $103 million. Substantially all of the fair value of the disposed membership interests is concentrated in the property that is wholly owned by the Old Farm subsidiary at the closing date. As such, the Company determined the Old Farm subsidiary is not a business, and the membership interests represent an in-substance nonfinancial asset consistent with ASC 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets.

The membership interests sold represented 100% of the outstanding equity interests. Following the sale, the Company determined it no longer holds a controlling financial interest in the Old Farm subsidiary and is no longer the primary beneficiary. The Company deconsolidated the Old Farm subsidiary (including the property) as of March 1, 2024. Simultaneously with the sale, the Seller, NexBank Capital and the Old Farm subsidiary entered into an Agreement Regarding Ownership of Bank Accounts, which retained the bank account and its retained balance, along with all its respective rights, titles and interest in, to, and under, at the Seller. Therefore, the $1 million retained cash balance as of the closing date was not deconsolidated along with the sale. The Company recognized a gain on deconsolidation of $31.7 million.

A director and officer of the Company, who controls the Adviser, which externally manages the Company, also (i) is the beneficiary of a trust that indirectly owns 100% of the limited partnership interests in the parent of the Adviser and directly owns 100% of the general partnership interests in the parent of the Adviser and (ii) is a director of NexBank Capital, the holding company of NexBank, directly owns a minority of the common stock of NexBank, and is the beneficiary of a trust that directly owns a substantial portion of the common stock of NexBank.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

10. Commitments and Contingencies

Commitments

In the normal course of business, the Company enters into various rehabilitation construction related purchase commitments with parties that provide these goods and services. In the event the Company were to terminate rehabilitation construction services prior to the completion of projects, the Company could potentially be committed to satisfy outstanding or uncompleted purchase orders with such parties. As of March 31, 2024 and December 31, 2023, management does not anticipate any material deviations from schedule or budget related to rehabilitation projects currently in process.

The Company’s agreement with NLMF Holdco, LLC may result in additional funding requirements to cover future project costs. The maximum exposure of potential commitments is expected to be no more than $4.0 million.

Contingencies

In the normal course of business, the Company is subject to claims, lawsuits, and legal proceedings. While it is not possible to ascertain the ultimate outcome of all such matters, management believes that the aggregate amount of such liabilities, if any, in excess of amounts provided or covered by insurance, will not have a material adverse effect on the consolidated balance sheets or consolidated statements of operations and comprehensive income (loss) of the Company. The Company is not involved in any material litigation nor, to management’s knowledge, is any material litigation currently threatened against the Company or its properties or subsidiaries.

Environmental liabilities could have a material adverse effect on the Company’s business, assets, cash flows or results of operations. As of March 31, 2024 and December 31, 2023, the Company was not aware of any environmental liabilities. There can be no assurance that material environmental liabilities do not exist.

Self-Insurance Program

On March 1, 2022, the Adviser entered into a new self-insurance policy resulting in a new aggregate amount of $2,497,500 (the “2022 Aggregate Amount”) which is allocated across properties managed by the Adviser with approximately $1.8 million being allocated to the Company.

On April 1, 2023, the Adviser entered into a new self-insurance policy resulting in a new aggregate amount of $2,950,000 (the “2023 Aggregate Amount”) which is allocated across properties managed by the Adviser with approximately $2.1 million being allocated to the Company. As of March 31, 2024, $1.8 million of the $2.1 million of 2023 Aggregate Amount allocated to the Company has been prepaid by the Company.

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Subsequent Events

3 Months Ended

Mar. 31, 2024

Subsequent Events [Abstract]

Subsequent Events

11. Subsequent Events

Dividends Declared

On April 29, 2024, the Company’s Board approved a quarterly dividend of $0.46242 per share, payable on June 28, 2024 to stockholders of record on June 14, 2024.

Sale of Radbourne Lake

On April 30, 2024, the Company sold Radbourne Lake for a sales price of approximately $39.3 million.

Share Repurchases

Since March 31, 2024, the Company has purchased 269,408 shares of its common stock, totaling approximately $8.6 million at an average price of $31.76 per share.

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Summary of Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2024

Accounting Policies [Abstract]

Reclassification of Prior Year Activity on the Consolidated Statement of Cash Flows

Reclassification of Prior Year Activity on the Consolidated Statement of Cash Flows

Certain reclassifications have been made within the consolidated statements of cash flows to the changes in operating assets and liabilities, net of effects of sales and acquisitions for the three months ended March 31, 2023 to be comparative to the consolidated statement of cash flows for the three months ended March 31, 2024.

Impairment

Impairment

Real estate assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The key inputs into our impairment analysis include, but are not limited to, the holding period, net operating income, and capitalization rates. In such cases, the Company will evaluate the recoverability of such real estate assets based on estimated future cash flows and the estimated liquidation value of such real estate assets, and record an impairment loss if such undiscounted cash flows are insufficient to recover the carrying amount of the real estate asset. If impaired, the real estate asset will be written down to its estimated fair value. The Company’s impairment analysis identifies and evaluates events or changes in circumstances that indicate the carrying amount of a real estate investment may not be recoverable, including determining the period the Company will hold the rental property, net operating income, and the estimated capitalization rate for each respective real estate investment. As of March 31, 2024, the Company has not recorded any impairment on its real estate assets.

Held-for-Sale

Held for Sale

The Company periodically classifies real estate assets as held for sale when certain criteria are met in accordance with U.S. generally accepted accounting principles ("GAAP"). At that time, the Company presents the net real estate assets and the net debt associated with the real estate held for sale separately in its consolidated balance sheet, and the Company ceases recording depreciation and amortization expense related to that property. Real estate held for sale is reported at the lower of its carrying amount or its estimated fair value less estimated costs to sell. As of March 31, 2024 and December 31, 2023, there were two and three properties classified as held for sale, respectively. In addition to the net real estate and mortgages payable held for sale, the consolidated balance sheets also includes approximately $0.3 million and $0.8 million of accounts receivable and prepaid and other assets, and approximately $1.0 million and $4.9 million of accounts payable, real estate taxes payable, security deposits, prepaid rents, and other accrued liabilities related to assets held for sale as of March 31, 2024 and December 31, 2023, respectively.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848) (“ASU 2020-04”). ASU 2020-04 contains practical expedients for reference rate reform related activities that impact debt, leases, derivatives and other contracts. The guidance in ASU 2020-04 is optional and may be elected over time as reference rate reform activities occur. The Company has taken the ASC 848 elections needed to allow for the hedged forecasted transactions to transition while not discontinuing the associated hedge accounting designations. Application of these hedged accounting expedients preserves the presentation of derivatives consistent with past presentation. The Company will continue to evaluate the impact of the guidance and may apply other elections as applicable as additional changes in the market occur.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting – Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which requires a public entity to disclose significant segment expenses and other segment items in interim and annual periods and expands the ASC 280 disclosure requirements for interim periods. The ASU also explicitly requires public entities with a single reportable segment to provide all segment disclosures under ASC 280, including the new disclosures under ASU 2023-07. The amendments are effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Management is currently evaluating this ASU to determine its impact on the Company's disclosures.

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Real Estate Investments (Tables)

3 Months Ended

Mar. 31, 2024

Real Estate [Abstract]

Schedule of Sale of Properties

The Company sold one property and zero properties during the three months ended March 31, 2024 and 2023, respectively, as detailed in the table below (in thousands).

Property Name		Location	Date of Sale	Sales Price		Net Cash Proceeds (1)		Gain on Sale of Real Estate
Old Farm	(2)	Houston, Texas	March 1, 2024	$	103,000	$	102,704	$	31,709
				$	103,000	$	102,704	$	31,709

(1)Represents sales price, net of closing costs.

(2)Old Farm was sold to NexBank Capital, Inc. (“NexBank Capital”). A director and officer of the Company, who controls the Adviser, which externally manages the Company, also (i) is the beneficiary of a trust that indirectly owns 100% of the limited partnership interests in the parent of the Adviser and directly owns 100% of the general partnership interests in the parent of the Adviser and (ii) is a director of NexBank Capital. See Note 9.

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Debt (Tables)

3 Months Ended

Mar. 31, 2024

Debt Disclosure [Abstract]

Summary of Mortgage Debt of Company and Encumbers Multifamily Properties

The following table contains summary information concerning the mortgage debt of the Company as of March 31, 2024 (dollars in thousands):

Operating Properties	Type	Term (months)		Outstanding Principal				Interest Rate (1)	Maturity Date
Arbors on Forest Ridge	Floating		120	$	19,184			6.87%	12/1/2032
Cutter's Point	Floating		120		21,524			6.87%	12/1/2032
The Summit at Sabal Park	Floating		120		30,826			6.87%	12/1/2032
Courtney Cove	Floating		120		36,146			6.87%	12/1/2032
The Preserve at Terrell Mill	Floating		120		71,098			6.87%	12/1/2032
Versailles	Floating		120		40,247			6.87%	12/1/2032
Seasons 704 Apartments	Floating		120		33,132			6.87%	12/1/2032
Madera Point	Floating		120		34,457			6.87%	12/1/2032
Venue at 8651	Floating		120		18,690			6.87%	12/1/2032
The Venue on Camelback	Floating		120		42,788			7.50%	2/1/2033
Sabal Palm at Lake Buena Vista	Floating		84		42,100			6.74%	9/1/2025
Cornerstone	Floating		120		46,804			7.41%	12/1/2032
Parc500	Floating		120		29,416			6.87%	12/1/2032
Rockledge Apartments	Floating		120		93,129			6.87%	12/1/2032
Atera Apartments	Floating		120		46,198			6.87%	12/1/2032
Versailles II	Floating		84		12,061			6.62%	10/1/2025
Brandywine I & II	Floating		84		43,835			6.62%	10/1/2025
Bella Vista	Floating		84		29,040			6.76%	2/1/2026
The Enclave	Floating		84		25,322			6.76%	2/1/2026
The Heritage	Floating		84		24,625			6.76%	2/1/2026
Summers Landing	Floating		84		10,109			6.62%	10/1/2025
Residences at Glenview Reserve	Floating		84		25,502			6.88%	10/1/2025
Residences at West Place	Fixed		120		33,817			4.24%	10/1/2028
Avant at Pembroke Pines	Floating		84		177,100			6.87%	9/1/2026
Arbors of Brentwood	Floating		84		34,237			6.87%	10/1/2026
Torreyana Apartments	Floating		120		50,580			6.87%	12/1/2032
Bloom	Floating		120		59,830			6.87%	12/1/2032
Bella Solara	Floating		120		40,328			6.87%	12/1/2032
Fairways at San Marcos	Floating		120		60,228			6.87%	12/1/2032
The Verandas at Lake Norman	Floating		84		34,925			7.17%	7/1/2028
Creekside at Matthews	Floating		120		29,648			6.87%	12/1/2032
Six Forks Station	Floating		120		41,180			7.04%	10/1/2031
High House at Cary	Floating		84		46,625			7.33%	1/1/2029
The Adair	Floating		84		35,115			7.29%	4/1/2029
Estates on Maryland	Floating		84		43,157			7.29%	4/1/2029
				$	1,463,003
Fair market value adjustment					477		(2)
Deferred financing costs, net of accumulated amortization of $4,175					(9,379	)
				$	1,454,101
Held For Sale Properties
Stone Creek at Old Farm	Floating		84	$	15,274			7.12%	7/1/2024
Radbourne Lake	Floating		84		20,000			6.73%	10/1/2025
				$	35,274
Deferred financing costs, net of accumulated amortization of $530					(70	)
				$	35,204

(1)Interest rate is based on a reference rate plus an applicable margin, except for fixed rate mortgage debt. The reference rate used in our Portfolio is 30-Day Average Secured Overnight Financing Rate (“SOFR”). As of March 31, 2024, SOFR was 5.322%.

(2)The Company reflected a valuation adjustment on its fixed rate debt for Residences at West Place to adjust it to fair market value on its respective date of acquisition for the difference between the fair value and the assumed principal amount of debt. The difference is amortized into interest expense over the remaining terms of the mortgages.

Schedule of Debt Maturities

Schedule of Debt Maturities

The aggregate scheduled maturities, including amortizing principal payments, of total debt for the next five calendar years subsequent to March 31, 2024 are as follows (in thousands):

	Operating Properties		Held For Sale Properties		Credit Facility		Total
2024	$	222	$	15,274	$	—	$	15,496
2025		133,386		20,000		—		153,386
2026		290,324		—		—		290,324
2027		—		—		—		-
2028		81,041		—		—		81,041
Thereafter		958,030		—		—		958,030
Total	$	1,463,003	$	35,274	$	—	$	1,498,277

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Fair Value of Derivative and Financial Instruments (Tables)

3 Months Ended

Mar. 31, 2024

Fair Value Disclosures [Abstract]

Summary of Company's Outstanding Interest Rate Swaps

As of March 31, 2024, the Company had the following outstanding interest rate swaps that were designated as cash flow hedges of interest rate risk (dollars in thousands):

Effective Date	Termination Date	Counterparty	Notional Amount		Fixed Rate (1)
June 1, 2019	June 1, 2024	KeyBank	$	50,000		2.0020	%
June 1, 2019	June 1, 2024	Truist		50,000		2.0020	%
September 1, 2019	September 1, 2026	KeyBank		100,000		1.4620	%
September 1, 2019	September 1, 2026	KeyBank		125,000		1.3020	%
January 3, 2020	September 1, 2026	KeyBank		92,500		1.6090	%
March 4, 2020	June 1, 2026	Truist		100,000		0.8200	%
June 1, 2021	September 1, 2026	KeyBank		200,000		0.8450	%
June 1, 2021	September 1, 2026	KeyBank		200,000		0.9530	%
March 1, 2022	March 1, 2025	Truist		145,000		0.5730	%
March 1, 2022	March 1, 2025	Truist		105,000		0.6140	%
			$	1,167,500		1.0682	%	(2)

(1)The floating rate option for the interest rate swaps is Adjusted SOFR. As of March 31, 2024, Adjusted SOFR was 5.436%.

(2)Represents the weighted average fixed rate of the interest rate swaps.

As of March 31, 2024, the Company had the following interest rate swap that was designated as a cash flow hedge of interest rate risk with future effective date (dollars in thousands):

Future Swaps

Effective Date	Termination Date	Counterparty	Notional Amount		Fixed Rate (1)
September 1, 2026	January 1, 2027	KeyBank	$	92,500		1.7980	%

(1)The floating rate option for the interest rate swap is Adjusted SOFR. As of March 31, 2024, Adjusted SOFR was 5.436%.

Summary of Company's Outstanding Interest Rate Caps

As of March 31, 2024, the Company had the following interest rate caps outstanding that were not designated as cash flow hedges of interest rate risk (dollars in thousands):

Properties	Type	Maturity Date	Notional		Strike Rate
The Verandas at Lake Norman	Floating	7/1/2024		34,925		3.40	%
Creekside at Matthews	Floating	7/1/2024		31,900		4.40	%
Sabal Palm at Lake Buena Vista	Floating	9/1/2024		42,100		6.20	%
Residences at Glenview Reserve	Floating	10/1/2024		25,645		4.81	%
Timber Creek	Floating	10/1/2024		24,100		4.99	%
Brandywine I & II	Floating	10/1/2024		43,835		6.82	%
Radbourne Lake	Floating	10/1/2024		20,000		6.46	%
Summers Landing	Floating	10/1/2024		10,109		6.07	%
Versailles II	Floating	10/1/2024		12,061		6.82	%
Six Forks Station	Floating	10/1/2024		41,180		4.00	%
High House at Cary	Floating	1/1/2025		46,625		2.74	%
The Heritage	Floating	2/1/2025		24,625		5.18	%
The Enclave	Floating	2/1/2025		25,322		5.18	%
Bella Vista	Floating	2/1/2025		29,040		5.18	%
Estates on Maryland	Floating	4/1/2025		43,157		3.91	%
The Adair	Floating	4/1/2025		35,115		3.91	%
Rockledge Apartments	Floating	12/1/2025		93,129		6.45	%
The Preserve at Terrell Mill	Floating	12/1/2025		71,098		6.45	%
Fairways at San Marcos	Floating	12/1/2025		60,228		6.70	%
Bloom	Floating	12/1/2025		59,830		6.70	%
Atera Apartments	Floating	12/1/2025		46,198		6.45	%
Silverbrook	Floating	12/1/2025		46,088		6.45	%
Torreyana Apartments	Floating	12/1/2025		50,580		6.70	%
Cornerstone	Floating	12/1/2025		46,804		6.66	%
Versailles	Floating	12/1/2025		40,247		6.45	%
Bella Solara	Floating	12/1/2025		40,328		6.70	%
Courtney Cove	Floating	12/1/2025		36,146		6.70	%
Madera Point	Floating	12/1/2025		34,457		6.70	%
Creekside at Matthews	Floating	12/1/2025		29,648		6.45	%
Parc500	Floating	12/1/2025		29,416		6.45	%
Seasons 704 Apartments	Floating	12/1/2025		33,132		6.70	%
The Summit at Sabal Park	Floating	12/1/2025		30,826		6.70	%
Cutter's Point	Floating	12/1/2025		21,524		6.45	%
Venue at 8651	Floating	12/1/2025		18,690		6.45	%
Arbors on Forest Ridge	Floating	12/1/2025		19,184		6.70	%
Venue on Camelback	Floating	2/1/2026		42,788		6.07	%
			$	1,340,080		5.90	%	(1)

Summary of Derivative Financial Instruments and Classification on the Consolidated Balance Sheet

The table below presents the fair value of the Company’s derivative financial instruments, which use level 2 inputs, as well as their classification on the consolidated balance sheets as of March 31, 2024 and December 31, 2023 (in thousands):

		Asset Derivatives				Liability Derivatives
	Balance Sheet Location	March 31, 2024		December 31, 2023		March 31, 2024		December 31, 2023
Derivatives designated as hedging instruments:
Interest rate swaps	Fair value of interest rate swaps	$	73,711	$	71,028	$	—	$	—
Derivatives not designated as hedging instruments:
Interest rate caps	Prepaid and other assets		2,639		2,988		—		—
Total		$	76,350	$	74,016	$	—	$	—

Summary of Derivative Financial Instruments on Consolidated Statements of Operations and Comprehensive Income (Loss)

The tables below present the effect of the Company’s derivative financial instruments on the consolidated statements of operations and comprehensive income (loss) for the three months ended March 31, 2024 and 2023 (in thousands):

	Amount of gain (loss) recognized in OCI					Location of gain (loss) reclassified from accumulated	Amount of gain (loss) reclassified from OCI into income
	2024		2023			OCI into income	2024		2023
Derivatives designated as hedging instruments:
For the three months ended March 31,
Interest rate products	$	15,590	$	(7,061	)	Interest expense	$	12,907	$	10,145

	Location of gain (loss)	Amount of gain (loss) recognized in income
	recognized in income	2024			2023
Derivatives not designated as hedging instruments:
For the three months ended March 31,
Interest rate products	Interest expense	$	(626	)	$	(970	)

Schedule of Carrying Value Outstanding Principal Balance and Estimated Fair Value of Debt Instruments

The table below presents the carrying value (outstanding principal balance) and estimated fair value of our debt at March 31, 2024 and December 31, 2023 (in thousands):

	March 31, 2024				December 31, 2023
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Fixed rate debt	$	33,817	$	32,154	$	33,817	$	31,950
Floating rate debt (1)	$	1,464,460	$	1,271,125	$	1,541,419	$	1,335,635

(1)Includes balances outstanding under our Corporate Credit Facility.

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Stockholders' Equity (Tables)

3 Months Ended

Mar. 31, 2024

Class Of Stock [Line Items]

Summary of Restricted Stock Units

The following table includes the number of restricted stock units granted, vested, forfeited and outstanding as of March 31, 2024:

	2024
	Number of Units				Weighted Average Grant Date Fair Value
Outstanding January 1,		620,137			$	47.50
Granted		355,475				30.89
Vested		(195,013	)	(1)		47.00
Forfeited		—				—
Outstanding March 31,		780,599			$	40.19

(1)Certain key employees of the Adviser elected to net the taxes owed upon vesting against the shares issued resulting in 100,417 shares being issued as shown on the Consolidated Statement of Stockholders’ Equity. During the three months ended March 31, 2024, 50,201 shares vested under the 2016 LTIP that had not settled as of March 31, 2024.

Summary Information of 2020 ATM Program

The following table contains summary information of the 2020 ATM Program since its inception:

Gross proceeds	$	62,310,967
Common shares issued		1,120,910
Gross average sale price per share	$	55.59
Sales commissions	$	934,665
Offering costs		1,353,015
Net proceeds		60,023,287
Average price per share, net	$	53.55

2016 LTIP

Class Of Stock [Line Items]

Summary of Granted and Vesting of Restricted Stock Units

The following table contains information regarding the vesting of restricted stock units under the 2016 LTIP for the next five calendar years subsequent to March 31, 2024:

	Shares Vesting
	February		March		May		June		Total
2024		—		—		21,877		841		22,718
2025		97,154		136,671		21,769		—		255,594
2026		64,147		114,965		—		—		179,112
2027		26,281		114,965		—		—		141,246
2028		—		114,958		—		—		114,958
2029		—		66,971		—		—		66,971
Total		187,582		548,530		43,646		841		780,599

2016 LTIP | Directors, Officers, Employees and Certain Key Employees of Adviser

Class Of Stock [Line Items]

Summary of Granted and Vesting of Restricted Stock Units

The following table includes the number of restricted stock units granted to its directors, officers, employees and certain key employees of the Adviser under the 2016 LTIP:

	Summary of Grants
	February		March		May		Total
2019		186,662		—		—		186,662
2020		168,183		—		116,852		285,035
2021		204,663		—		—		204,663
2022		142,519		—		—		142,519
2023		—		260,709		—		260,709
2024		—		355,475		—		355,475
Total		702,027		616,184		116,852		1,435,063

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Earnings (Loss) Per Share (Tables)

3 Months Ended

Mar. 31, 2024

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Earnings (Loss) Per Share

The following table sets forth the computation of basic and diluted loss per share for the periods presented (in thousands, except per share amounts):

		For the Three Months Ended March 31,
		2024		2023
Numerator for earnings (loss) per share:
Net income (loss)		$	26,402	$	(3,898	)
Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership			104		(15	)
Net income (loss) attributable to common stockholders		$	26,298	$	(3,883	)
Denominator for earnings (loss) per share:
Weighted average common shares outstanding			25,721		25,599
Denominator for basic earnings (loss) per share			25,721		25,599
Weighted average unvested restricted stock units			633		476
Denominator for diluted earnings per share	(1)		26,354		25,599
Earnings (loss) per weighted average common share:
Basic		$	1.02	$	(0.15	)
Diluted		$	1.00	$	(0.15	)

(1)If the Company sustains a net loss for the period presented, unvested restricted stock units are not included in the diluted earnings per share calculation.

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Noncontrolling Interests (Tables)

3 Months Ended

Mar. 31, 2024

Noncontrolling Interest [Abstract]

Schedule of Redeemable Noncontrolling Interests

The following table sets forth the redeemable noncontrolling interests in the OP for the three months ended March 31, 2024 (in thousands):

Redeemable noncontrolling interests in the OP, December 31, 2023	$	5,246
Net income attributable to redeemable noncontrolling interests in the OP		104
Other comprehensive income attributable to redeemable noncontrolling interests in the OP		11
Distributions to redeemable noncontrolling interests in the OP		(48	)
Adjustment to reflect redemption value of redeemable noncontrolling interests in the OP		(231	)
Redeemable noncontrolling interests in the OP, March 31, 2024	$	5,082

Summary of Fees Incurred to BH And Its Affiliates As Well As Reimbursements Paid to BH

The following is a summary of fees that the properties incurred to BH and its affiliates, as well as reimbursements paid to BH from the properties for various operating expenses, for the three months ended March 31, 2024 and 2023 (in thousands):

		For the Three Months Ended March 31,
		2024			2023
Fees incurred
Property management fees	(1)	$	1,943		$	2,019
Construction supervision fees	(2)		159			651
Design fees	(2)		—			11
Acquisition fees	(3)		(1	)		—
Reimbursements
Payroll and benefits	(4)		4,833			5,451
Other reimbursements	(5)		1,136			1,353

(1)Included in property management fees on the consolidated statements of operations and comprehensive income (loss).

(2)Capitalized on the consolidated balance sheets and reflected in buildings and improvements.

(3)Includes due diligence costs. Acquisition fees are capitalized to real estate assets on the consolidated balance sheets.

(4)Included in property operating expenses on the consolidated statements of operations and comprehensive income (loss).

(5)Includes property operating expenses such as repairs and maintenance costs and certain property general and administrative expenses, which are included on the consolidated statements of operations and comprehensive income (loss).

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Organization and Description of Business - Additional Information (Details)	3 Months Ended
	Mar. 31, 2024 shares
Real Estate Properties [Line Items]
Date of incorporation	Sep. 19, 2014
OP Units, outstanding	26,053,988
OP Units owned	25,951,154
Maximum
Real Estate Properties [Line Items]
Investments in real estate-related debt and securities	30.00%
NexPoint Residential Trust Operating Partnership LP
Real Estate Properties [Line Items]
Percentage of OP Units, outstanding owned by company	99.60%
B H Equity
Real Estate Properties [Line Items]
Percentage of OP Units, outstanding owned by noncontrolling limited partner	0.40%
OP
Real Estate Properties [Line Items]
Percentage of ownership in portfolio	99.90%
TRS
Real Estate Properties [Line Items]
Percentage of ownership in portfolio	0.10%
Noncontrolling Limited Partner | B H Equity
Real Estate Properties [Line Items]
OP Units owned	102,834

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Summary of Significant Accounting Policies - Additional Information (Details)	3 Months Ended	12 Months Ended
	Mar. 31, 2024 USD ($) Property	Dec. 31, 2023 USD ($) Property
Summary Of Significant Accounting Policies [Line Items]
Impairment of real estate assets	$ 0
Number of properties held for sale | Property	2	3
Real estate held for sale assets	$ 1,840,184,000	$ 1,857,353,000
Accounts Receivable and Prepaid and Oher Assets Member
Summary Of Significant Accounting Policies [Line Items]
Real estate held for sale assets	300,000	800,000
Accounts Payable Real Estate Taxes Payable Security Deposits Prepaid Rents and Other Accrued Liabilities Member
Summary Of Significant Accounting Policies [Line Items]
Real estate held for sale associated with liabilities	$ 1,000,000	$ 4,900,000

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Real Estate Investments - Summary of Sale of Properties (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2024 USD ($)
Real Estate Properties [Line Items]
Sales Price	$ 103,000
Net Cash Proceeds	102,704	[1]
Gain on Sale of Real Estate	$ 31,709
Old Farm | Houston, Texas
Real Estate Properties [Line Items]
Date of Sale	Mar. 01, 2024
Sales Price	$ 103,000	[2]
Net Cash Proceeds	102,704	[1],[2]
Gain on Sale of Real Estate	$ 31,709	[2]

[1] Represents sales price, net of closing costs

[2] Old Farm was sold to NexBank Capital, Inc. (“NexBank Capital”). A director and officer of the Company, who controls the Adviser, which externally manages the Company, also (i) is the beneficiary of a trust that indirectly owns 100% of the limited partnership interests in the parent of the Adviser and directly owns 100% of the general partnership interests in the parent of the Adviser and (ii) is a director of NexBank Capital.

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Real Estate Investments - Summary of Sale of Properties (Parenthetical) (Details) - NexBank Capital	3 Months Ended
	Mar. 31, 2024
Real Estate Properties [Line Items]
Indirect ownership limited partnership interests in parent of adviser	100.00%
General partnership interests in parent of adviser	100.00%

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Real Estate Investments - Additional Information (Details)		3 Months Ended		12 Months Ended
	Jul. 06, 2023 USD ($)	Mar. 31, 2024 USD ($) Units Property	Mar. 31, 2023 USD ($) Property	Dec. 31, 2023 USD ($) Units
Real Estate Properties [Line Items]
Number of real estate properties sold | Property		1	0
Casualty (gain) loss		$ (199,000)	$ 814,000
Business interruption insurance claim proceeds			400,000
Casualty Losses
Real Estate Properties [Line Items]
Number of Units | Units		23		107
Casualty (gain) loss		$ (200,000)	$ 800,000
Business interruption insurance claim proceeds		100,000
NexPoint Captive
Real Estate Properties [Line Items]
Cash reserve	$ 250,000
Purchased ownership interest percentage	100.00%
Accrued for case reserves		$ 300,000		$ 100,000
Acquired Property
Real Estate Properties [Line Items]
Number of properties acquired | Property		0	0

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Debt - Summary of Mortgage Debt Nonrecourse to Company and Encumbers Multifamily Properties (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Dec. 31, 2023
Debt Instrument [Line Items]
Mortgages payable, net	$ 1,454,101	$ 1,453,787
Mortgages Payable
Debt Instrument [Line Items]
Deferred financing costs, net of accumulated amortization	(70)
Mortgages payable, net	35,204
Mortgages Payable | Operating Properties
Debt Instrument [Line Items]
Outstanding Principal	1,463,003
Fair market value adjustment	477
Deferred financing costs, net of accumulated amortization	(9,379)
Mortgages payable, net	1,454,101
Mortgages Payable | Discontinued Operations, Held-for-sale | Nonrecourse
Debt Instrument [Line Items]
Outstanding Principal	$ 35,274
Mortgages Payable | Arbors on Forest Ridge | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 19,184
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Cutter's Point | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 21,524
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | The Summit at Sabal Park | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 30,826
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Courtney Cove | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 36,146
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | The Preserve at Terrell Mill | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 71,098
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Versailles | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 40,247
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Seasons 704 Apartments | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 33,132
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Madera Point | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 34,457
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Venue at 8651 | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 18,690
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | The Venue on Camelback | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 42,788
Interest Rate	7.50%
Maturity Date	Feb. 01, 2033
Mortgages Payable | Stone Creek at Old Farm | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 15,274
Interest Rate	7.12%
Maturity Date	Jul. 01, 2024
Mortgages Payable | Radbourne Lake | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 20,000
Interest Rate	6.73%
Maturity Date	Oct. 01, 2025
Mortgages Payable | Sabal Palm at Lake Buena Vista | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 42,100
Interest Rate	6.74%
Maturity Date	Sep. 01, 2025
Mortgages Payable | Cornerstone | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Outstanding Principal	$ 46,804
Mortgages Payable | Cornerstone | Debt With Fixed Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Interest Rate	7.41%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Parc500 | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Outstanding Principal	$ 29,416
Mortgages Payable | Parc500 | Debt With Fixed Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Rockledge Apartments | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 93,129
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Atera Apartments | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 46,198
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Versailles II | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 12,061
Interest Rate	6.62%
Maturity Date	Oct. 01, 2025
Mortgages Payable | Brandywine I & II | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 43,835
Interest Rate	6.62%
Maturity Date	Oct. 01, 2025
Mortgages Payable | Bella Vista | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 29,040
Interest Rate	6.76%
Maturity Date	Feb. 01, 2026
Mortgages Payable | The Enclave | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 25,322
Interest Rate	6.76%
Maturity Date	Feb. 01, 2026
Mortgages Payable | The Heritage | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 24,625
Interest Rate	6.76%
Maturity Date	Feb. 01, 2026
Mortgages Payable | Summers Landing | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 10,109
Interest Rate	6.62%
Maturity Date	Oct. 01, 2025
Mortgages Payable | Residences at Glenview Reserve | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 25,502
Interest Rate	6.88%
Maturity Date	Oct. 01, 2025
Mortgages Payable | Residences at West Place | Debt With Fixed Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 33,817
Interest Rate	4.24%
Maturity Date	Oct. 01, 2028
Mortgages Payable | Avant at Pembroke Pines | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 177,100
Interest Rate	6.87%
Maturity Date	Sep. 01, 2026
Mortgages Payable | Arbors of Brentwood | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 34,237
Interest Rate	6.87%
Maturity Date	Oct. 01, 2026
Mortgages Payable | Torreyana Apartments | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 50,580
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Bloom | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 59,830
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Bella Solara | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 40,328
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Fairways at San Marcos | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 60,228
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | The Verandas at Lake Norman | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 34,925
Interest Rate	7.17%
Maturity Date	Jul. 01, 2028
Mortgages Payable | Creekside At Matthews | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 29,648
Interest Rate	6.87%
Maturity Date	Dec. 01, 2032
Mortgages Payable | Six Forks Station | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	120 months
Outstanding Principal	$ 41,180
Interest Rate	7.04%
Maturity Date	Oct. 01, 2031
Mortgages Payable | High House at Cary | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 46,625
Interest Rate	7.33%
Maturity Date	Jan. 01, 2029
Mortgages Payable | The Adair | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 35,115
Interest Rate	7.29%
Maturity Date	Apr. 01, 2029
Mortgages Payable | Estates On Maryland | Debt With Floating Interest Rate
Debt Instrument [Line Items]
Term (months)	84 months
Outstanding Principal	$ 43,157
Interest Rate	7.29%
Maturity Date	Apr. 01, 2029

XML

Debt - Summary of Mortgage Debt Nonrecourse to Company and Encumbers Multifamily Properties (Parenthetical) (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Debt Instrument [Line Items]
Deferred financing costs, accumulated amortization	$ 4,175
SOFR
Debt Instrument [Line Items]
Interest Rate	5.322%
Discontinued Operations, Held-for-sale
Debt Instrument [Line Items]
Deferred financing costs, accumulated amortization	$ 530

XML

Debt - Additional Information (Details) - USD ($)		3 Months Ended		9 Months Ended
	Oct. 24, 2022	Mar. 31, 2024	Mar. 31, 2023	Sep. 30, 2023	Dec. 31, 2023
Debt Instrument [Line Items]
Accumulated amortization		$ 4,175,000
Credit facility paid		24,000,000	$ 17,500,000
Credit facility outstanding		$ 0			$ 23,243,000
Line of credit facility, description		(a) the prime rate, (b) the federal funds rate plus 0.50%, (c) Term SOFR plus 1.0% or (d) 0.0% plus a margin of 0.90% to 1.40%, depending on the Company’s total leverage ratio. An unused commitment fee at a rate of 0.15% or 0.25%,
Gain (loss) on extinguishment of debt		$ 500,000	100,000
Interest expense
Debt Instrument [Line Items]
Amortization of deferred financing fees		700,000	$ 800,000
Corporate Credit Facility
Debt Instrument [Line Items]
Credit facility outstanding		0			$ 24,000,000
Corporate Credit Facility | Prepaid and Other Assets
Debt Instrument [Line Items]
Deferred financing costs		3,000,000
Accumulated amortization		2,500,000
Corporate Credit Facility | Nex Point Residential Trust Inc
Debt Instrument [Line Items]
Line of credit facility, available borrowing capacity		350,000,000
Term (months)	1 year
Term loan maturity date	Jun. 30, 2025
Credit facility paid		$ 24,000,000
Percentage of benchmark replacement adjustment		0.1
Corporate Credit Facility | Nex Point Residential Trust Inc | Accordion Feature | Maximum
Debt Instrument [Line Items]
Line of credit facility, increase in facility amount				$ 150,000,000
SOFR | Corporate Credit Facility | Nex Point Residential Trust Inc | Maximum
Debt Instrument [Line Items]
Interest rate		2.40%
SOFR | Corporate Credit Facility | Nex Point Residential Trust Inc | Minimum
Debt Instrument [Line Items]
Interest rate		1.90%
Mortgages Payable
Debt Instrument [Line Items]
Weighted average interest rate of mortgage indebtedness		6.874%			6.90%
Adjusted weighted average interest rate		3.47%
Weighted average fixed rate		1.0682%
Deferred financing costs		$ 70,000
Mortgages Payable | Floating Interest Rate Swap
Debt Instrument [Line Items]
Combined notional amount		1,200,000,000
Mortgages Payable | Interest Rate Swap
Debt Instrument [Line Items]
Indebtedness		$ 1,200,000,000

XML

Debt - Schedule of Debt Maturities (Details) $ in Thousands	Mar. 31, 2024 USD ($)
Debt Instrument [Line Items]
2024	$ 15,496
2025	153,386
2027	290,324
2028	81,041
Thereafter	958,030
Total	1,498,277
Operating Properties
Debt Instrument [Line Items]
2024	222
2025	133,386
2026	290,324
2028	81,041
Thereafter	958,030
Total	1,463,003
Held For Sale Properties
Debt Instrument [Line Items]
2024	15,274
2025	20,000
Total	$ 35,274

XML

Fair Value of Derivatives and Financial Instruments - Additional Information (Details)	Mar. 31, 2024
SOFR | Interest Rate Swap
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Adjusted weighted average interest rate	0.11448%

XML

Fair Value of Derivatives and Financial Instruments - Summary of Company's Outstanding Interest Rate Swaps (Details)	3 Months Ended
	Mar. 31, 2024 USD ($)
Interest Rate Swap Transaction One | KeyBank
Debt Instrument [Line Items]
Effective Date	Jun. 01, 2019
Termination Date	Jun. 01, 2024
Notional Amount	$ 50,000,000
Fixed Rate	2.002%
Interest Rate Swap Transaction Two | Truist
Debt Instrument [Line Items]
Effective Date	Jun. 01, 2019
Termination Date	Jun. 01, 2024
Notional Amount	$ 50,000,000
Fixed Rate	2.002%
Interest Rate Swap Transaction Three | KeyBank
Debt Instrument [Line Items]
Effective Date	Sep. 01, 2019
Termination Date	Sep. 01, 2026
Notional Amount	$ 100,000,000
Fixed Rate	1.462%
Interest Rate Swap Transaction Four | KeyBank
Debt Instrument [Line Items]
Effective Date	Sep. 01, 2019
Termination Date	Sep. 01, 2026
Notional Amount	$ 125,000,000
Fixed Rate	1.302%
Interest Rate Swap Transaction Five | KeyBank
Debt Instrument [Line Items]
Effective Date	Jan. 03, 2020
Termination Date	Sep. 01, 2026
Notional Amount	$ 92,500,000
Fixed Rate	1.609%
Interest Rate Swap Transaction Six | Truist
Debt Instrument [Line Items]
Effective Date	Mar. 04, 2020
Termination Date	Jun. 01, 2026
Notional Amount	$ 100,000,000
Fixed Rate	0.82%
Interest Rate Swap Transaction Seven | KeyBank
Debt Instrument [Line Items]
Effective Date	Jun. 01, 2021
Termination Date	Sep. 01, 2026
Notional Amount	$ 200,000,000
Fixed Rate	0.845%
Interest Rate Swap Transaction Eight | KeyBank
Debt Instrument [Line Items]
Effective Date	Jun. 01, 2021
Termination Date	Sep. 01, 2026
Notional Amount	$ 200,000,000
Fixed Rate	0.953%
Interest Rate Swap Transaction Nine | Truist
Debt Instrument [Line Items]
Effective Date	Mar. 01, 2022
Termination Date	Mar. 01, 2025
Notional Amount	$ 145,000,000
Fixed Rate	0.573%
Interest Rate Swap Transaction Ten | Truist
Debt Instrument [Line Items]
Effective Date	Mar. 01, 2022
Termination Date	Mar. 01, 2025
Notional Amount	$ 105,000,000
Fixed Rate	0.614%
Interest Rate Swap Transaction Eleven
Debt Instrument [Line Items]
Notional Amount	$ 1,167,500,000
Fixed Rate	1.0682%
Interest Rate Swap Transaction Fourteen | KeyBank | Future Effective Dates
Debt Instrument [Line Items]
Effective Date	Sep. 01, 2026
Termination Date	Jan. 01, 2027
Notional Amount	$ 92,500,000
Fixed Rate	1.798%

XML

Fair Value of Derivatives and Financial Instruments - Summary of Company's Outstanding Interest Rate Swaps (Parenthetical) (Details) - Adjusted SOFR	Mar. 31, 2024
Key Bank And Truist Bank
Debt Instrument [Line Items]
LIBOR, interest rate	5.436%
KeyBank | Future Effective Dates
Debt Instrument [Line Items]
LIBOR, interest rate	5.436%

XML

Fair Value of Derivatives and Financial Instruments - Summary of Company's Outstanding Interest Rate Caps (Details) - Not Designated as Hedging Instrument - Cash Flow Hedges	3 Months Ended
	Mar. 31, 2024 USD ($)
Debt Instrument [Line Items]
Notional	$ 1,340,080,000
Strike Rate	5.90%
The Verandas at Lake Norman
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Jul. 01, 2024
Notional	$ 34,925,000
Strike Rate	3.40%
Creekside At Matthews
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Jul. 01, 2024
Notional	$ 31,900,000
Strike Rate	4.40%
Sabal Palm at Lake Buena Vista
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Sep. 01, 2024
Notional	$ 42,100,000
Strike Rate	6.20%
Residences at Glenview Reserve
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Oct. 01, 2024
Notional	$ 25,645,000
Strike Rate	4.81%
Timber Creek
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Oct. 01, 2024
Notional	$ 24,100,000
Strike Rate	4.99%
Brandywine I & II
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Oct. 01, 2024
Notional	$ 43,835,000
Strike Rate	6.82%
Radbourne Lake
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Oct. 01, 2024
Notional	$ 20,000,000
Strike Rate	6.46%
Summers Landing
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Oct. 01, 2024
Notional	$ 10,109,000
Strike Rate	6.07%
Versailles II
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Oct. 01, 2024
Notional	$ 12,061,000
Strike Rate	6.82%
Six Forks Station
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Oct. 01, 2024
Notional	$ 41,180,000
Strike Rate	4.00%
High House at Cary
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Jan. 01, 2025
Notional	$ 46,625,000
Strike Rate	2.74%
The Heritage
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Feb. 01, 2025
Notional	$ 24,625,000
Strike Rate	5.18%
The Enclave
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Feb. 01, 2025
Notional	$ 25,322,000
Strike Rate	5.18%
Bella Vista
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Feb. 01, 2025
Notional	$ 29,040,000
Strike Rate	5.18%
Estates On Maryland
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Apr. 01, 2025
Notional	$ 43,157,000
Strike Rate	3.91%
The Adair
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Apr. 01, 2025
Notional	$ 35,115,000
Strike Rate	3.91%
Rockledge Apartments
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 93,129,000
Strike Rate	6.45%
The Preserve at Terrell Mill
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 71,098,000
Strike Rate	6.45%
Fairways at San Marcos
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 60,228,000
Strike Rate	6.70%
Bloom
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 59,830,000
Strike Rate	6.70%
Atera Apartments
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 46,198,000
Strike Rate	6.45%
Silverbrook
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 46,088,000
Strike Rate	6.45%
Torreyana Apartments
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 50,580,000
Strike Rate	6.70%
Cornerstone
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 46,804,000
Strike Rate	6.66%
Versailles
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 40,247,000
Strike Rate	6.45%
Bella Solara
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 40,328,000
Strike Rate	6.70%
Courtney Cove
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 36,146,000
Strike Rate	6.70%
Madera Point
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 34,457,000
Strike Rate	6.70%
Creekside at Matthews
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 29,648,000
Strike Rate	6.45%
Parc500
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 29,416,000
Strike Rate	6.45%
Seasons 704 Apartments
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 33,132,000
Strike Rate	6.70%
The Summit at Sabal Park
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 30,826,000
Strike Rate	6.70%
Cutter's Point
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 21,524,000
Strike Rate	6.45%
Venue at 8651
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 18,690,000
Strike Rate	6.45%
Arbors on Forest Ridge
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Dec. 01, 2025
Notional	$ 19,184,000
Strike Rate	6.70%
The Venue on Camelback
Debt Instrument [Line Items]
Type	Floating
Maturity Date	Feb. 01, 2026
Notional	$ 42,788,000
Strike Rate	6.07%

XML

Fair Value of Derivatives and Financial Instruments - Summary of Derivative Financial Instruments and Classification on the Consolidated Balance Sheet (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Derivative Instruments And Hedging Activities Disclosures [Line Items]
Asset Derivatives	$ 76,350	$ 74,016
Fair Value Of Interest Rate Swaps | Interest Rate Swap | Designated as hedging instrument
Derivative Instruments And Hedging Activities Disclosures [Line Items]
Asset Derivatives	73,711	71,028
Prepaid and Other Assets | Interest rate caps | Not Designated as Hedging Instrument
Derivative Instruments And Hedging Activities Disclosures [Line Items]
Asset Derivatives	$ 2,639	$ 2,988

XML

Fair Value of Derivatives and Financial Instruments - Summary of Derivative Financial Instruments on Consolidated Statements of Operations and Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Derivative Instruments Gain Loss [Line Items]
Amount of gain (loss) recognized in OCI	$ 2,683	$ (17,206)
Derivative Instrument, Gain (Loss) Reclassified from AOCI into Income, Effective Portion, Statement of Income or Comprehensive Income [Extensible Enumeration]	Interest Expense	Interest Expense
Interest rate products
Derivative Instruments Gain Loss [Line Items]
Amount of gain (loss) reclassified from OCI into income	$ 12,907	$ 10,145
Interest expense | Interest rate products
Derivative Instruments Gain Loss [Line Items]
Amount of gain (loss) recognized in OCI	15,590	(7,061)
Amount of gain (loss) recognized in income	$ (626)	$ (970)

XML

Fair Value of Derivatives and Financial Instruments - Schedule of Carrying Value and Estimated Fair Value of Debt Instruments (Details) - USD ($) $ in Thousands	Mar. 31, 2024	Dec. 31, 2023
Fixed rate debt
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Outstanding Principal	$ 33,817	$ 33,817
Estimated Fair Value	32,154	31,950
Floating rate debt
Fair Value Assets And Liabilities Measured On Recurring And Nonrecurring Basis [Line Items]
Outstanding Principal	1,464,460	1,541,419
Estimated Fair Value	$ 1,271,125	$ 1,335,635

XML

Stockholders' Equity - Additional Information (Details) - USD ($)						3 Months Ended		12 Months Ended	115 Months Ended
	Oct. 24, 2022	Mar. 13, 2020	Mar. 04, 2020	Apr. 30, 2018	Jun. 15, 2016	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023	Mar. 31, 2024	Dec. 31, 2022
Class Of Stock [Line Items]
Common stock, shares, issued						25,774,730		25,674,313	25,774,730
Common stock, shares, outstanding						25,774,730		25,674,313	25,774,730
Common stock, par value					$ 0.01	$ 0.01		$ 0.01	$ 0.01
Share repurchase program, authorized amount	$ 100,000,000	$ 100,000,000.0		$ 40,000,000.0	$ 30,000,000.0
Stock repurchase program, expiration date	Oct. 24, 2024	Mar. 12, 2023		Jun. 15, 2020	Jun. 15, 2018
Stock repurchase program period in force	2 years			2 years	2 years
Share repurchase program, treasury stock shares						0	0		2,550,628
Share repurchase program, treasury stock, value									$ 72,400,000
Share repurchase program, treasury stock, per share									$ 28.36
Common Stock
Class Of Stock [Line Items]
Common stock, shares, issued						25,774,730	25,657,723	25,674,313	25,774,730	25,549,319
Restricted Stock Units
Class Of Stock [Line Items]
Unvested units						780,599		620,137	780,599
Unrecognized compensation expense						$ 30,000,000		$ 21,500,000	$ 30,000,000
Weighted average vesting period						2 years 3 months 18 days		1 year 6 months
2020 At-the-Market Offering
Class Of Stock [Line Items]
Shares, issued						0	0
2020 At-the-Market Offering | Common Stock
Class Of Stock [Line Items]
Common stock, par value			$ 0.01
2020 At-the-Market Offering | Maximum | Common Stock
Class Of Stock [Line Items]
Aggregate sale price of common stock			$ 225,000,000
2016 LTIP
Class Of Stock [Line Items]
Common stock, shares, issued						100,417	108,404
Common stock, shares, issued						1,132,822		982,204	1,132,822
2016 LTIP | Restricted Stock Units
Class Of Stock [Line Items]
Unvested units						780,599		620,137	780,599
Equity-based compensation expense						$ 2,500,000	$ 2,000,000
Dividends earned on restricted stock units						$ 1,600,000		$ 2,100,000	$ 1,600,000
2016 LTIP | Restricted Stock Units | Director
Class Of Stock [Line Items]
Vesting period description						annually
2016 LTIP | Minimum | Restricted Stock Units | Officers, Employees and Certain Key Employees of Adviser
Class Of Stock [Line Items]
Restricted stock units, vesting period						3 years
2016 LTIP | Maximum | Restricted Stock Units | Officers, Employees and Certain Key Employees of Adviser
Class Of Stock [Line Items]
Restricted stock units, vesting period						5 years

XML

Stockholders' Equity - Summary of Granted and Vesting of Restricted Stock Units (Details)	3 Months Ended
	Mar. 31, 2024 shares
Vest in 2024
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	22,718
Vest in 2024 | May
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	21,877
Vest in 2024 | June
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	841
Vest in 2025
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	255,594
Vest in 2025 | February
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	97,154
Vest in 2025 | March
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	136,671
Vest in 2025 | May
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	21,769
Vest in 2026
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	179,112
Vest in 2026 | February
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	64,147
Vest in 2026 | March
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	114,965
Vest in 2027
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	141,246
Vest in 2027 | February
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	26,281
Vest in 2027 | March
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	114,965
Vest in 2028
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	114,958
Vest in 2028 | March
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	114,958
Vest in 2029
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	66,971
Vest in 2029 | March
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	66,971
Vest in Total Year
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	780,599
Vest in Total Year | February
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	187,582
Vest in Total Year | March
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	548,530
Vest in Total Year | May
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	43,646
Vest in Total Year | June
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, Vested	841
Grant in 2019 | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	186,662
Grant in 2019 | February | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	186,662
Grant in 2020 | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	285,035
Grant in 2020 | February | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	168,183
Grant in 2020 | May | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	116,852
Grant in 2021 | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	204,663
Grant in 2021 | February | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	204,663
Grant in 2022 | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	142,519
Grant in 2022 | February | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	142,519
Grant in 2023 | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	260,709
Grant in 2023 | March | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	260,709
Grant in 2024 | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	355,475
Grant in 2024 | March | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	355,475
Grant in Total Year | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	1,435,063
Grant in Total Year | February | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	702,027
Grant in Total Year | March | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	616,184
Grant in Total Year | May | Directors, Officers, Employees and Certain Key Employees of Adviser
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Restricted stock units, granted	116,852

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Stockholders' Equity - Summary of Restricted Stock Units (Details) - Restricted Stock Units	3 Months Ended
	Mar. 31, 2024 $ / shares shares
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Number of Units, Outstanding at beginning of the period | shares	620,137
Number of Units, Granted | shares	355,475
Number of Units, Vested | shares	(195,013)
Number of Units, Outstanding at ending of the period | shares	780,599
Weighted Average Grant Date Fair Value, Outstanding at beginning of the period | $ / shares	$ 47.50
Weighted Average Grant Date Fair Value, Granted | $ / shares	30.89
Weighted Average Grant Date Fair Value, Vested | $ / shares	47.00
Weighted Average Grant Date Fair Value, Outstanding at ending of the period | $ / shares	$ 40.19

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Stockholders' Equity - Summary of Restricted Stock Units (Parenthetical) (Details) - shares	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
2016 LTIP
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock issued upon vesting awards	50,201
Common Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock issued upon vesting awards	100,417	108,404

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Stockholders' Equity - Summary Information of 2020 ATM Program (Details) $ / shares in Units, $ in Thousands	Mar. 04, 2020 USD ($) $ / shares shares
Stockholders' Equity Note [Abstract]
Gross proceeds	$ 62,310,967
Common shares issued | shares	1,120,910
Gross average sale price per share | $ / shares	$ 55.59
Sales commissions	$ 934,665
Offering costs	1,353,015
Net proceeds	$ 60,023,287
Average price per share, net | $ / shares	$ 53.55

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Earnings (Loss) Per Share - Schedule of Computation of Basic and Diluted Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands		3 Months Ended
		Mar. 31, 2024	Mar. 31, 2023
Numerator for earnings (loss) per share:
Net income (loss)		$ 26,402	$ (3,898)
Net income (loss) attributable to redeemable noncontrolling interests in the Operating Partnership		104	(15)
Net income (loss) attributable to common stockholders		$ 26,298	$ (3,883)
Denominator for earnings (loss) per share:
Weighted average common shares outstanding - basic		25,721	25,599
Weighted average unvested restricted stock units		633	476
Weighted average common shares outstanding - diluted	[1]	26,354	25,599
Earnings (loss) per weighted average common share:
Basic		$ 1.02	$ (0.15)
Diluted		$ 1	$ (0.15)

[1] If the Company sustains a net loss for the period presented, unvested restricted stock units are not included in the diluted earnings per share calculation.

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Noncontrolling Interests - Schedule of Redeemable Noncontrolling Interests (Details) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Noncontrolling Interest [Abstract]
Redeemable noncontrolling interests in the OP, December 31, 2023	$ 5,246
Net income attributable to redeemable noncontrolling interests in the OP	104
Other comprehensive income attributable to redeemable noncontrolling interests in the OP	11
Distributions to redeemable noncontrolling interests in the OP	(48)
Issuance of operating partnership units for purchase of noncontrolling interests		$ 415
Adjustment to reflect redemption value of redeemable noncontrolling interests in the OP	(231)	$ 141
Redeemable noncontrolling interests in the OP, March 31, 2024	$ 5,082

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Noncontrolling Interests - Additional Information (Details)	3 Months Ended
	Mar. 31, 2024 $ / Property $ / h	Jun. 30, 2017
BH Management Services, LLC
Minority Interest [Line Items]
Property management fee percent	3.00%
Other owner approved fees, per hour | $ / h	55
BH Management Services, LLC | Minimum
Minority Interest [Line Items]
Inspection of properties fee, per unit	15
Construction supervision fee, percent fee	5.00%
BH Management Services, LLC | Maximum
Minority Interest [Line Items]
Inspection of properties fee, per unit	25
Construction supervision fee, percent fee	6.00%
BH Equity Portfolio
Minority Interest [Line Items]
Percentage of noncontrolling interests in joint ventures acquired		100.00%
BH Equity Portfolio | B H Equity
Minority Interest [Line Items]
Percentage of ownership interests in portfolio		8.40%

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Noncontrolling Interests - Summary of Fees Incurred to BH And Its Affiliates As Well As Reimbursements Paid to BH (Details) - USD ($) $ in Thousands		3 Months Ended
		Mar. 31, 2024	Mar. 31, 2023
Fees incurred
Property management fees	[1]	$ 1,958	$ 2,027
BH Management Services, LLC
Fees incurred
Property management fees	[2]	1,943	2,019
Construction supervision fees	[3]	159	651
Design fees	[3]		11
Acquisition fees	[4]	(1)
Reimbursements
Payroll and benefits	[5]	4,833	5,451
Other reimbursements	[6]	$ 1,136	$ 1,353

[1] Fees incurred to an affiliate of the noncontrolling limited partner of the Company’s Operating Partnership (see Note 8).

[2] Included in property management fees on the consolidated statements of operations and comprehensive income (loss).

[3] Capitalized on the consolidated balance sheets and reflected in buildings and improvements.

[4] Includes due diligence costs. Acquisition fees are capitalized to real estate assets on the consolidated balance sheets

[5] Included in property operating expenses on the consolidated statements of operations and comprehensive income (loss).

[6] Includes property operating expenses such as repairs and maintenance costs and certain property general and administrative expenses, which are included on the consolidated statements of operations and comprehensive income (loss).

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Related Party Transactions - Additional Information (Details)	3 Months Ended
	Mar. 31, 2024 USD ($) Subsidiary	Mar. 31, 2023 USD ($)	Dec. 31, 2023 USD ($)	Aug. 16, 2023 USD ($)
Related Party Transaction [Line Items]
Prepaid and other assets	$ 6,870,000		$ 8,640,000
NexPoint Real Estate Advisors, L.P
Related Party Transaction [Line Items]
Percentage of annual advisory, paid monthly	1.00%
Percentage of annual administrative fee, paid monthly	0.20%
Advisory and administrative fees on contributed assets	$ 5,400,000
Advisory and administrative fees percentage	1.20%
Advisory and administrative fees	$ 1,700,000	$ 1,900,000
Advisory and administrative fees waived	5,500,000	5,300,000
NexPoint Real Estate Advisors, L.P | Maximum
Related Party Transaction [Line Items]
Advisory and administrative fees on contributed assets	$ 5,400,000
Corporate general and administrative expenses and advisory and administrative fees percentage	1.50%
NLMF Holdco LLC
Related Party Transaction [Line Items]
Property owning subsidiaries | Subsidiary	3
Equity interest owned	10.00%
Prepaid and other assets	$ 600,000
Net income equity in earnings of affiliate	0
NLMF Leaseco, LLC
Related Party Transaction [Line Items]
Expenses incurred for fiber internet service included in property operating expenses	700,000	$ 600,000
NXRTBH Old Farm, LLC
Related Party Transaction [Line Items]
Outstanding equity interests				100.00%
Retained cash balance				$ 1,000,000
Recognized gain of deconsolidation	$ 31,700,000
NexBank Capital
Related Party Transaction [Line Items]
Indirect ownership limited partnership interests in parent of adviser	100.00%
General partnership interests in parent of adviser	100.00%

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Commitments and Contingencies - Additional Information (Details) - USD ($)			3 Months Ended			12 Months Ended
	Apr. 01, 2023	Mar. 01, 2022	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2023
Loss Contingencies [Line Items]
Maximum exposure of potential commitments			$ 4,000,000.0
Environmental liability incurred			0			$ 0
Self-Insurance Program
Loss Contingencies [Line Items]
Insurance claim amount	$ 2,950,000	$ 2,497,500	2,100,000		$ 1,800,000
Insurance claim funded			$ 1,800,000	$ 2,100,000

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Subsequent Events - Additional Information (Details) - USD ($) $ / shares in Units, $ in Millions			1 Months Ended	3 Months Ended		115 Months Ended
	Apr. 30, 2024	Apr. 29, 2024	May 01, 2024	Mar. 31, 2024	Mar. 31, 2023	Mar. 31, 2024
Subsequent Event [Line Items]
Share repurchase program, treasury stock shares				0	0	2,550,628
Share repurchase program, treasury stock, value						$ 72.4
Share repurchase program, treasury stock, per share						$ 28.36
Subsequent Event
Subsequent Event [Line Items]
Dividends payable date approved		Apr. 29, 2024
Dividends payable amount per share		$ 0.46242
Dividend payable date to be paid day month and year		Jun. 28, 2024
Dividends payable date of record day month and year		Jun. 14, 2024
Share repurchase program, treasury stock shares			269,408
Share repurchase program, treasury stock, value			$ 8.6
Share repurchase program, treasury stock, per share			$ 31.76
Subsequent Event | Radbourne Lake
Subsequent Event [Line Items]
Proceeds from sale of property	$ 39.3