NexPoint Real Estate Finance (NYSE:NREF) reported fourth-quarter 2025 results that included higher net income year over year, while earnings available for distribution declined from the prior-year quarter. Management also reiterated its focus on portfolio positioning across residential, life sciences, self-storage, and single-family rental, and discussed balance sheet actions intended to improve capital efficiency heading into 2026.
Quarterly results and dividend
For the fourth quarter ended Dec. 31, 2025, NREF reported net income of $0.52 per diluted share, up from $0.43 in the fourth quarter of 2024. Chief Financial Officer Paul Richards said the increase was driven by unrealized gains on preferred stock and stock warrant investments.
The company paid a $0.50 per share regular dividend in the fourth quarter, which Richards said was 1.06 times covered by CAD. The board declared a $0.50 per share dividend for the first quarter of 2026.
On the call, management addressed the relationship between EAD and CAD in the context of dividend sustainability. Executives said the difference between the two measures primarily reflected items such as amortization of premiums, accretion of discounts, and depreciation on REO, and that they view CAD as the better indicator for dividend coverage.
Full-year 2025 performance
For the full year, NREF reported net income of $2.09 per diluted share, more than double the $1.02 reported in 2024. Richards attributed the increase primarily to higher net interest income.
Interest income rose $17.4 million to $89.9 million in 2025 from $72.5 million in the prior year, driven by higher rates on the portfolio. Over the same period, interest expense declined to $42.8 million from $44.4 million.
On a distributable basis, EAD was $1.84 per diluted share, up 3.4% from $1.78 in 2024. CAD was $1.97 per diluted share, down from $2.42 in the prior year, representing an 18.6% decrease.
Portfolio composition and credit metrics
NREF ended the quarter with 92 investments totaling $1.2 billion of outstanding balance. Richards outlined the portfolio’s sector allocation as:
- 47% multifamily
- 30% life sciences
- 17% single-family rental
- Balance across storage, marina, and industrial
By investment type, the portfolio included 28% CMBS B-Pieces, 23% preferred equity, 20% mezzanine loans, 14% revolving credit facilities, 10% senior loans, with the remainder in interest-only strips and promissory notes.
Geographically, collateral was concentrated in Massachusetts (24%), Texas (16%), and California (7%), with Massachusetts and California exposure described as heavily weighted toward life science. Florida, Georgia, and Maryland rounded out the top states, and management said this reflects a continued preference for Sun Belt markets.
Richards said collateral was 82.5% stabilized, with a 63.6% loan-to-value ratio and a 1.24x weighted average debt service coverage ratio.
Financing activity, re-REMIC transaction, and Q1 guidance
During the fourth quarter, NREF funded several new investments, including $5.7 million on a loan with a monthly coupon of SOFR plus 900 basis points and a 14% floor, $22.5 million on a loan paying an 11% monthly coupon, and a combined $17.4 million across two marina loans at a 13% monthly coupon.
On capital markets, the company raised $60.5 million in gross proceeds from its Series B preferred stock offering. Richards also noted the company launched its Series C 8% preferred stock at $25 per share, with approximately 80,000 shares sold through year-end for $2 million in gross proceeds and $14.1 million through the date of the call.
On the liability side, NREF had $771.2 million of debt outstanding at a 5.3% weighted average cost and roughly one-year weighted average maturity. Secured debt was collateralized by $689.2 million of assets with a 3.6-year weighted average maturity, and the company reported a 0.92x debt-to-equity ratio.
During the quarter, NREF refinanced $36.5 million of unsecured notes with a new $45 million unsecured offering at 7.875%, which Richards described as a modest step up from the company’s 7.5% notes issued in October 2020. The new notes have a two-year term with prepayment flexibility. Management said it expects to term out remaining unsecured notes in the first half of 2026, noting $180 million of unsecured notes mature in May and refinancing options are under review.
Subsequent to quarter end, the company entered into a re-REMIC transaction on its FREMF 2017-K62 B-Pieces with Mizuho. Under the structure, NREF will sell the B-Pieces and purchase a horizontal risk retention tranche representing roughly 5.8% of re-REMICs. Richards said the transaction reduces mark-to-market repo financing by $75.2 million and would reduce the debt-to-equity ratio to 0.83x. The HRR tranche carries an expected yield of 18.5%, and management said interest expense savings and reinvestment capacity are expected to be $0.30 to $0.34 per share accretive to annual CAD on a go-forward basis.
For the first quarter of 2026, NREF guided to:
- EAD of $0.35 to $0.45 per diluted share (midpoint $0.40)
- CAD of $0.45 to $0.55 per diluted share (midpoint $0.50)
Management commentary on verticals, pipeline, and credit
Chief Investment Officer Matt McGraner highlighted portfolio positioning and described a view that AI-related demand could broaden the tenant funnel for select life science assets. He said the company has intentionally focused on residential and self-storage exposures, which he characterized as “recession-resilient,” and said life science exposure is in “first to fill” assets in elite educational districts.
McGraner discussed the company’s largest life science exposure, ALIFE Park, stating it is 64% leased at a 9 debt cap rate, with RFPs, LOIs, and leases totaling 2.8 times the project’s square footage. He said the company expects the project to be fully leased in 2026, “yielding a debt cap rate with a 12 handle.” In Q&A, management cited characteristics including being purpose-built, slab-on-grade, and located in West Cambridge on mass transit lines as factors supporting leasing momentum, and said it has seen increased optimism and activity in the last 30 to 60 days.
On multifamily, McGraner said the company is working through what it views as the highest supply cycle since the 1980s and expects a new lease inflection in 2026, citing factors such as structural demand, reduced deliveries, lower construction starts, and concession burn-off. He also discussed demographic trends, including growth in the 65+ population and a Harvard study projecting the senior renter population to double by 2030.
In self-storage, McGraner said industry occupancy ended 2025 at 89%, down 210 basis points from the start of the year, with a sluggish housing market cited as a key driver. He added that move-in rates have been trending up since May 2025 and that supply remains constrained. For NexPoint’s storage portfolio, he said occupancy finished 2025 at 91.7%, exceeded its NOI budget by 3.2%, and grew NOI 13% over 2024, while 2026 NOI growth is expected to moderate to 4%.
McGraner also discussed single-family rental and build-to-rent (BTR), saying fundamentals have continued to outperform broader multifamily and that agency financing remains available for BTR assets. He said the company sees opportunity to provide capital to the sector and described the potential impact of proposed regulation as too early to determine, with more focus potentially falling on scattered-site single-family rentals.
On pipeline, McGraner said the company’s rolling 90-day pipeline includes senior and mezzanine investments across:
- $90 million of multifamily
- $55 million of BTR
- $45 million of small-bay industrial and self-storage
- $70 million of life sciences and advanced manufacturing
Richards also addressed a ~$12 million provision for credit loss recorded in the quarter, stating about one-third reflected a more conservative general reserve calculation including a “severe downside component” to align with peers, while the remainder related to deals where reserves had already been taken. He said he expects the provision to level off in 2026 and did not identify additional problem areas in the portfolio.
About NexPoint Real Estate Finance (NYSE:NREF)
NexPoint Real Estate Finance, Inc is a publicly traded real estate investment trust (REIT) focused on originating, acquiring and managing a diversified portfolio of commercial real estate debt investments. The company seeks to generate current income and capital appreciation by providing financing solutions across the capital structure for stabilized and transitional properties. Its investments include whole loans, mezzanine loans, preferred equity and other structured credit products secured by multifamily, office, industrial, retail and hospitality assets.
Since its initial public offering in March 2021, NexPoint Real Estate Finance has closed numerous transactions with borrowers nationwide, including both institutional sponsors and privately held owners.
