NexPoint Residential Trust Cuts 2026 Core FFO Outlook as Loss Widens

NexPoint Residential Trust (NXRT ) reported its third-quarter results on November 3, 2026, cutting its full-year Core FFO and Same Store NOI outlook after posting a wider quarterly net loss despite higher revenue. Total revenue rose to $64.5 million for the quarter ended September 30, 2026, from $62.8 million a year earlier, but net loss attributable to common stockholders widened to $11.5 million, or $0.45 per diluted share, from $7.8 million, or $0.31.

Core FFO, the company’s adjusted funds-from-operations measure, fell to $13.4 million, or $0.52 per diluted share, from $17.7 million, or $0.70. AFFO, which further adjusts Core FFO for equity-based compensation, declined to $16.2 million from $20.2 million. Management attributed the larger net loss primarily to $2.0 million of higher property operating expenses and $2.6 million of higher interest expense, partly offset by the $1.6 million revenue increase.

Same-Store Costs Outpace Revenue

The consolidated revenue increase did not come from the established portfolio. The third-quarter earnings supplement shows that the 35-property, 12,980-unit Same Store pool—properties owned throughout both comparison periods, representing approximately 98% of the portfolio and excluding Sedona at Lone Mountain—generated $62.0 million of revenue, down 0.7%. Rental income fell 1.4%, while a 29.4% increase in other income cushioned that decline. Non-Same Store properties contributed $1.4 million of revenue, helping the consolidated top line rise despite the Same Store contraction.

Same Store occupancy fell 70 basis points to 92.9%, and average effective monthly rent declined 0.7% to $1,487. Operating expenses rose much faster, climbing 11.2% to $26.4 million. Repairs and maintenance increased 20.0%, real estate taxes 15.4% and utilities 11.8%. Same Store net operating income consequently fell 8.2% to $35.6 million, demonstrating that the quarter’s property-level deterioration reflected cost pressure as well as weaker occupancy and rent.

Leasing metrics showed that pressure continuing into the fourth quarter. New-lease trade-outs were negative 4.5% in the third quarter, compared with positive 3.2% on renewals. In October, new-lease trade-outs remained negative at 3.6%, renewals were positive 2.1%, and ending occupancy was 92.3%.

2026 Outlook Moves Lower

NXRT’s revised forecast calls for full-year Core FFO of $2.17 to $2.27 per diluted share, with a $2.22 midpoint, down from the prior $2.45 midpoint. Its projected loss is now $1.72 to $1.63 per diluted share, a $1.68 midpoint loss compared with $1.54 previously.

The Same Store assumptions explain the earnings reset. Full-year total-revenue growth moved to a negative 0.9% midpoint from positive 0.2%, while total-expense growth rose to 4.4% from 2.1%. Same Store NOI is projected at negative 5.1% to negative 3.6%, with a negative 4.3% midpoint versus the prior negative 1.0% midpoint. Those forecasts apply to the 35-property full-year Same Store pool.

The company raised its acquisition midpoint to $116 million from $100 million and reaffirmed the $100 million disposition midpoint. The projected transaction volumes are incorporated into the loss-per-share and Core FFO guidance, though actual acquisitions and dispositions could vary significantly from those assumptions.

Debt and Capital Actions

Total debt outstanding was $1.62 billion at September 30, 2026, up from $1.50 billion a year earlier. On October 1, NXRT drew another $33.0 million under its revolving credit facility, leaving $112.1 million of principal and a $2.0 million letter of credit outstanding under the facility.

The next day, the REIT acquired Midtown Crossing, a 228-unit property in Raleigh, North Carolina, for $32.0 million with 100% effective ownership. On October 26, the board authorized up to $150.0 million of common-share repurchases over two years, an authorization rather than a completed repurchase, and approved a $0.53 quarterly dividend payable December 31, 2026, to stockholders of record on December 15, 2026.

The quarter leaves NXRT with a clear operating tension: acquisitions can increase consolidated revenue, but property-level income is falling as expenses and interest costs rise. With October new-lease trade-outs still negative and the Same Store NOI outlook lowered, the central question for the final quarter is whether the existing portfolio can stabilize while NXRT manages higher debt and interest costs alongside acquisitions and a possible buyback.