NexPoint Residential to sell Old Farm in Houston and Silverbrook in Dallas

NexPoint Residential announced the execution of agreements to sell Old Farm in Houston, TX, and Silverbrook in Dallas, TX to separate buyers, with an expected closing in early Q4. Old Farm and Silverbrook’s trailing nominal cap rates are 5.12% and 4.55%, and their tax and insurance-adjusted cap rates are 4.96% and 4.61%, respectively. The company expects the dispositions of these assets to generate approximately $67M-$69M of net sales proceeds at a combined approximate trailing nominal cap rate of 4.96% and tax and insurance-adjusted cap rate of 4.82%. The executed agreements have $3.0M of non-refundable earnest money held in escrow. The dispositions are expected to close in early October. After completing these sales, the company expects to pay off the entire $57M outstanding balance on the corporate credit facility. The retirement of the corporate credit facility and the property-level debt will reduce portfolio-level debt by approximately $156M. NXRT‘s hedged debt will increase to 97% from 88%. The combination of these asset sales aims to provide greater strategic flexibility and de-risk the company’s balance sheet heading into 2024. In addition, NXRT is currently in the process of selecting buyers for Timber Creek and Radbourne Lake in Charlotte, NC and Stone Creek at Old Farm in Houston, TX and expects these sales to be completed in late Q4 2023 or early Q1 2024.