NexPoint Hospitality Trust Announces First Quarter 2022 Financial Results, Intent to Sell DoubleTree Portfolio, and Convertible Notes

NexPoint Hospitality Trust (TSX-V: NHT.U) announced the release of NHT's financial results for the three months ended March 31, 2022.  All amounts are expressed in U.S. dollars.

The table below presents Net Income, FFO and AFFO. 

The table below presents Occupancy, ADR and RevPAR.

Additional information on 2022 financial and operational results can be found at www.sedar.com in our 2022 interim consolidated financial statements and management discussion and analysis ("MD&A").

DoubleTree Portfolio

On March 8, 2022, the Company began the marketing process to sell its DoubleTree Portfolio. As of May 27, 2022, the Company has received multiple offers and expects the transaction to close in the third quarter of 2022. The Company will use the proceeds from the sale to pay down the outstanding debt on the DT Portfolio with the remaining proceeds used to make principal paydowns on existing third party debt.

NHT Capitalization Updates

NHT announced that a subsidiary of NHT has, between January 1, 2022, and March 31, 2022, issued convertible notes (the "Notes") in the aggregate principal amount of US$27.48 million (the "Liquidity Transactions") to affiliates of NHT's external advisor. NHT repaid $4.55 million of principal to affiliates in the first quarter of 2022.

The Notes bear interest at varying rates and are repayable in membership interests ("Membership Interests") of NHT's operating subsidiary, NHT Operating Partnership, LLC (the "OP"), which are redeemable for trust units of NHT ("Trust Units") at the option of NHT in its sole discretion. The approval of the TSX Venture Exchange will be required prior to any conversion of the Membership Interests into Trust Units. NHT used the proceeds of the Liquidity Transactions for general working capital purposes.  Management believes the Liquidity Transactions will further strengthen NHT's balance sheet and liquidity profile to better position itself as the hospitality industry continues to rebound from the impact of the COVID-19 pandemic. The fair market value of each Note does not exceed and did not exceed at the time of issuance of such Note 25% of NHT's market capitalization.

Each of the Liquidity Transactions constituted a related party transaction as defined in Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Liquidity Transactions were completed in reliance on (i) an available exemption from the formal valuation requirement of MI 61-101 provided in paragraph (a) of Section 5.5 of MI 61-101 and (ii) an available exemption from the minority shareholder requirement of MI 61-101 provided in paragraph (a) of Section 5.7(1) of MI 61-101.

About NHT

NexPoint Hospitality Trust is a publicly traded real estate investment trust, with its Units listed on the TSX Venture Exchange under the ticker NHT.U. and NHT is focused on acquiring, owning and operating well-located hospitality properties in the United States that offer a high current yield and in many cases are underperforming assets with the potential to increase in value through investments in capital improvements, a market-based recovery, brand repositioning, revenue enhancements, operational improvements, expense inefficiencies, and exploiting excess land or underutilized space. NHT owns 13 branded properties sponsored by Marriott, Hilton, Hyatt, and Intercontinental Hotels Group, located across the U.S. NHT is externally advised by NexPoint Real Estate Advisors VI, L.P.