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What factors drove the changes in Nexpoint Real Estate's revenue and profit?

- **Life Sciences Success**: Alewife project 2/3 leased with Lila Sciences, driving AI cluster and capital options.
- **Multifamily Recovery**: 2026 supply drop to 234K units, supporting revenue growth in constrained markets.
- **Balance Sheet Strength**: 0.93x D/E, $45M new notes at 7.875%, Series C preferred at 8% coupon.
- **Pipeline Growth**: $350M pipeline across multifamily, BTR, storage, and life sciences with low leverage enabling opportunistic buys.

**【CFO Financial Commentary】**
- Q3 2025 net income of $1.12 per diluted share, up from $0.74 in Q3 2024, driven by unrealized gains on preferred stock and warrants.
- Cash available for distribution: $0.53 per share (down 17% YoY) with dividend coverage of 1.06x.
- Book value per share increased 8% to $18.79, reflecting unrealized gains.
- Portfolio: $1.1B across 88 investments (47.3% multifamily, 33.9% life sciences) with 87.4% stabilized assets and 1.41x DSCR.
- Debt: $720.9M at 5.3% cost, with $45M new senior notes at 7.875% maturing in 2027.
- Series B preferred stock raise nearing $400M; planning $200M Series C at 8% coupon.

**【CIO Portfolio Discussion】**
- Multifamily supply peak in 2024 (695K units), expected to drop 49% YoY in 2026, supporting 2026 revenue growth.
- Life sciences focus on gateway markets: Alewife project leased 2/3 with Lila Sciences (245K sqft), creating AI cluster.
- Pipeline: $350M+ in investments ($120M multifamily, $75M BTR, $45M storage, $80M life sciences).
- Low leverage (0.93x D/E) and healthy dividend coverage enable opportunistic growth and stock buybacks.

**【Q&A Highlights】**
- **Life Sciences Sector**: NREF's 30% LTV life sciences loans in gateway markets (e.g., Boston's Alewife project) show resilience. Lila Sciences lease signals cluster formation and capital market optionality.
- **Multifamily Supply**: 2025 deliveries peak at 508K units, falling 49% YoY in 2026. New lease growth expected in 2026, especially in constrained markets like SF, NY, and Chicago. Sunbelt recovery lagging but inevitable.
- **Capital Deployment**: Preference for senior loans in stabilized assets; bridge loans under pressure due to 2021-2022 vintages, but 2026 outlook optimistic.

NexPoint Real Estate Finance, Inc. (NREF) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

NREF

NREF fundamentals

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