NexPoint Real Estate Finance, Inc. (NYSE:NREF) Q4 2022 Earnings Call Transcript

Matt McGraner: Yes. We see supply peaking in either Q4 this year or Q1 of next year. Largely, the units are in the Sunbelt Smile where we operate, the NXRT’s assets, albeit at a lower price point. There will be some softness in terms of occupancy and rents in our view, in the Sunbelt Smile with €“ over the next, like I said, a year or so. But after that, deliveries fall off a cliff. They’re basically going from 387,000 units delivered in the fourth quarter of this year down to 126,000 in the fourth quarter of 2024. So that’s €“ and then they’re down to €“ in Q3 of 2025 to 12,000. So that’s the data that we’re seeing. There will be kind of a short-term blip, I think, in terms of softness in these areas, mostly on the higher end type of product. But I think you want to be an owner of assets and owner of multifamily in late 2024 and 2025.

Jade Rahmani: And on the single-family for rent side, how is performance tracking relative to your expectations. There’s clearly a moderation in rent growth that we’re seeing as well as an uptick in turnover, which is driving increased expense. And then there’s also still inflation pressures on the expense side. Nevertheless, rents are still high, and occupancy is high. Any performance issues on the single-family for rent side?

Brian Mitts: Not in our portfolio nor in the loan portfolio that we have. As you mentioned, rents are still going up at a pretty good clip, and I think mitigating some of the other cost increases ever seen. So NOI growth is still relatively strong. We don’t see any issues in our portfolio with that or in the future.

Jade Rahmani: Thanks very much.

Brian Mitts: Thanks Jade.

Operator: And ladies and gentlemen, we have no further questions at this time. I will now turn the call back over to our presenters for any additional or closing remarks.

Brian Mitts: No, we’re well good. Appreciate everyone’s time and thoughtful questions. I appreciate it. We’ll talk to you next quarter.

Operator: And this concludes today’s conference call. We thank you for your participation. You may now disconnect.