NexPoint Residential Trust plans to part ways with multifamily holdings in Houston and Dallas, in a move to reshape its portfolio and pay off debt.
The company is selling two apartment complexes: Old Farm Apartments, which has 734 units, at 2500 Old Farm Road; and the 642-unit Silverbrook at 2934 Alouette Drive in Grand Prairie, just southwest of Dallas.
The transactions are expected to net the Dallas-based company between $67 million and $69 million in net proceeds. That works out to about $50,000 per unit, and the sales could close as soon as this winter, according to a news release.
This maneuver comes as the company seeks to recalibrate its market presence, as noted in its second quarter earnings supplement.
The cap rates at which these assets are being divested are below their respective market cap rates, according to the news release.
Old Farm Apartments, built in 1998, and NexPoint bought it in 2016 along with its neighbor, the 190-unit Stone Creek at Old Farm Apartments, for $108 million, or a little over $128,000 per unit.
The firm also plans to sell the Stone Creek apartments by the end of the year, completely exiting its Houston portfolio.
NexPoint previously sold Houston property Hollister Place, a 260-unit complex off Hollister Street near Fairbanks, in late December, netting $20 million in proceeds, almost $77,000 per unit.
As the company offloads these properties, it anticipates a significant shift in its financial standing, with plans to extinguish the $57 million balance on its corporate credit facility.
The sales will further alleviate portfolio-level debt by an estimated $156 million. NexPoint currently holds 40 multifamily properties across the Sun Belt, totaling 15,127 units.