NexPoint Residential Trust has successfully completed the sale of Old Farm, a 734-unit property in Houston. The property, which was built in 1996 and acquired for $84.7 million in 2016, boasted an impressive occupancy rate of 91.41% as of March 1st, with an average monthly rent of $1,307.
The sale generated net proceeds of approximately $49.4 million and resulted in a trailing nominal tax and insurance adjusted cap rate of 5.36%, along with a levered internal rate return (IRR)of22.14%andamultipleoninvestedcapitalof2 .98x.Theseprofitable returns demonstrate NexPoint’s expertise and success as real estate investors.
A significant portion ($24 million) from the net proceeds will be used to pay down the company’s corporate credit facility – part of their ongoing efforts to reduce debt levels and improve their balance sheet.
According to Matt McGraner from NexPoint Residential Trust: “We are pleased to announce the successful closing on Old Farm which not only delivers strong returns on our investment over seven years but also provides nearly $50 million liquidity for our company while achieving one key goal – paying off our most expensive debt capital.” This achievement showcases NexPoint’s commitment towards strategic growth initiatives.
