NXRT Q3 2026 Earnings: Same-Store NOI Falls 8.2%

NexPoint Residential Trust (NYSE: NXRT) reported Q3 2026 revenue of $64.5 million, up from $62.8 million a year earlier, while its GAAP diluted loss per share widened to $0.45 from $0.31. For the quarter ended September 30, same-store NOI fell 8.2%, and Core FFO per diluted share declined to $0.52 as higher property operating and interest expenses outweighed revenue growth. The company released the results on November 3, 2026.

Core Earnings Data

NXRT’s total revenue increased approximately 2.7%, but the net loss attributable to common stockholders widened to $11.5 million. The company attributed the change primarily to increases of $2.0 million in property operating expenses and $2.6 million in interest expense, partly offset by a $1.6 million increase in revenue.

The REIT’s non-GAAP earnings measures also declined. Total NOI fell despite the portfolio expanding to 36 properties from 35, while the same-store comparison showed a steeper deterioration in property-level profitability.

NOI, FFO, Core FFO, and AFFO are non-GAAP measures and do not represent operating cash flow. The reported net loss included $23.2 million of depreciation and amortization, compared with $23.8 million a year earlier.

Portfolio and Same-Store Performance

NXRT’s Q3 same-store pool contained 35 properties and 12,980 apartment units. Same-store revenue and average effective rent both decreased 0.7%, while occupancy declined 70 basis points. Same-store NOI fell much faster, dropping 8.2% to $35.6 million.

Across the full portfolio of 36 properties and 13,305 units, weighted average effective monthly rent was $1,489 and physical occupancy was 92.8%. Four units were unavailable at the end of the quarter.

The value-add program continued during the quarter. NXRT completed 708 full and partial upgrades and leased 425 upgraded units, producing an average monthly rent premium of $42.54 and a company-calculated return on investment of 21.1%.

Operating and Interest Costs Outpaced Revenue Growth

The central issue in Q3 was the divergence between consolidated revenue and profitability. Revenue rose year over year, partly reflecting the larger portfolio, but same-store revenue declined and property-level costs increased. The 8.2% decline in same-store NOI, compared with a 0.7% decrease in same-store revenue, shows that expenses created substantially more pressure than rents alone.

Financing costs added another constraint. Interest expense increased to $18.1 million from $15.5 million, an increase of approximately 16.9%. Combined with the $2.0 million rise in property operating expenses, this more than absorbed the reported increase in revenue and contributed to lower FFO, Core FFO, and AFFO.

Leverage, Dividend Coverage, and Capital Allocation

Total debt reached $1.62 billion at September 30, 2026, up from $1.50 billion a year earlier. Net debt increased to $1.60 billion from $1.49 billion, while total debt as a percentage of market capitalization plus debt rose to 77% from 65%. Net debt to enterprise value increased to 76% from 65%.

NXRT declared a Q3 dividend of $0.53 per common share, compared with $0.51 a year earlier. AFFO coverage remained above 1.0 times at 1.19 times, but declined from 1.56 times. Core FFO coverage fell to 0.99 times from 1.37 times, indicating that Core FFO per share was slightly below the quarterly dividend.

After the quarter, NXRT drew $33.0 million from its revolving credit facility. As of October 1, the facility had $112.1 million of principal and a $2.0 million letter of credit outstanding. On October 2, the company acquired the 228-unit Midtown Crossing property in Raleigh for $32.0 million.

The board subsequently authorized up to $150.0 million of common-stock repurchases through October 26, 2028. The authorization does not indicate that any shares have been repurchased. The board also approved another $0.53 quarterly dividend, payable on December 31, 2026.

2026 Guidance

NXRT described its outlook as a reset of full-year same-store NOI guidance. The supplied release provides the latest midpoint figures but not the previous guidance, so the size or direction of the revision cannot be quantified from the available information.

The full-year per-share guidance assumes approximately 25.6 million weighted average diluted shares.

Risks Investors Need to Watch

• Continued same-store weakness: Lower occupancy, average effective rent, and revenue could keep NOI under pressure if property costs do not moderate.
• Higher financing costs: Q3 interest expense rose approximately 16.9%, directly reducing GAAP earnings and REIT cash-flow measures.
• Elevated leverage: Net debt increased to $1.60 billion, and the reported leverage ratios rose materially from the prior year.
• Narrower dividend coverage: AFFO covered the quarterly dividend, but the coverage ratio declined to 1.19 times, while Core FFO coverage slipped below 1.0 times.
• Capital allocation demands: The post-quarter acquisition, credit-facility draw, dividend, and authorized repurchase program create competing uses for capital while leverage remains elevated.

Summary

NXRT produced modest consolidated revenue growth in Q3 2026, but weaker same-store operations and higher property and financing costs drove declines in NOI, FFO, Core FFO, and AFFO. The main issues to monitor are whether occupancy and rent trends stabilize, whether expense growth moderates, and how the company balances acquisitions, dividends, potential repurchases, and debt under its reset 2026 outlook.