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NexPoint (NREF) Announces Public Offering of Common Stock

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·3-min read
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Tapping the equity market to raise funds, NexPoint Real Estate Finance, Inc. NREF has announced an underwritten public offering of 2,000,000 shares. Further, as part of the offering, the company will give underwriters an option to purchase up to an additional 300,000 shares.

It plans to contribute net proceeds from the offering to its operating partnership — NexPoint Real Estate Finance Operating Partnership, L.P. ­ — in exchange for the OP’s common limited partnership units.

The OP then plans to channelize these funds to pay down outstanding borrowings under the company's master repurchase agreements. It also intends to make investments in line with the company's investment strategy. Markedly, for the remainder of 2021, NexPoint will focus on the acquisition of life science and self-storage preferred investments as well as a multifamily commercial mortgage-backed security.

Amid the heightening need for effective diagnostics, therapies and vaccines to fight the health crisis, life-science properties have become indispensable. Also, higher investments in pharmaceutical research and development are driving the demand for lab spaces.

Aside from this, low human interaction and reduced costs of the self-storage sector should aid real estate fundamentals in uncertain times. Hence, given the strength in the life science and self-storage asset classes, such investment focus is a strategic fit. This will likely drive the company’s external growth on the back of accretive acquisition opportunities.

The common stock offering boosts NexPoint's financial flexibility and helps efficiently meet its financial obligations. Moreover, it provides ample scope for deploying capital for long-term growth opportunities and rewarding higher returns to stockholders at the same time.

However, the offering is expected to result in earnings per share dilution in the near term.

Currently, NexPoint carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

The stock has gained 16.5% over the past three months compared with the industry’s growth of 0.7%.

Zacks Investment Research
Zacks Investment Research


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Great Ajax Corp. AJX carries a Zacks Rank of 2 at present. The Zacks Consensus Estimate for its 2021 earnings has been revised 6% upward over the past week.

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Ladder Capital Corp (LADR) : Free Stock Analysis Report

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Great Ajax Corp. (AJX) : Free Stock Analysis Report

NexPoint Real Estate Finance, Inc. (NREF) : Free Stock Analysis Report

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