Update on Sale of DoubleTree Portfolio, and Beginning the Sale Process of the HIX Nashville Portfolio
NexPoint Hospitality Trust, (TSX-V: NHT.U) announced the release of NHT's financial results for the three months ended March 31, 2023. All amounts are expressed in U.S. dollars.
The table below presents net income from continuing operations, Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO").
| For the Three Months Ended | ||||
| March 31, 2023 | March 31, 2022 | |||
| Net income | $ (3.8) | $ 0.8 | ||
| FFO2 | (1.8) | 5.8 | ||
| AFFO2 | (6.8) | 2.4 | ||
The table below presents Occupancy, ADR and RevPAR.
| For the Three Months Ended | ||||
| March 31, 2023 | March 31, 2022 | |||
| Occupancy | 73.3 % | 66.9 % | ||
| ADR | $ 169.94 | $ 149.83 | ||
| RevPAR | $ 126.29 | $ 100.84 | ||
DoubleTree Portfolio
On March 8, 2022, the Company began the marketing process to sell its DoubleTree Portfolio. As of March 31, 2023, the Company has sold the Beaverton, Vancouver and Bend properties for a combined purchase price of US$67.5 million. The Company had executed purchase and sale agreements on the Tigard property for a purchase price of US$24.5 million. However, the buyer defaulted on the agreement and relinquished the escrow to the Company. The Company is still actively marketing the Tigard property and hopes to complete the sale of the property before year end. Additionally, the Company has executed a purchase and sale agreement on the Olympia property for a purchase price of US$12.75 million and expects the transaction to close in the third quarter of 2023. The Company used the proceeds from the Beaverton, Bend, and Vancouver sales to pay off the DT Portfolio debt. The proceeds from the remaining sales will be used to pay down other outstanding debt the Company holds.
HIX Nashville Portfolio
On February 6, 2023, the Company entered into an agreement with a broker to actively start marketing the Holiday Inn Express Nashville for sale. The Company is targeting a sales price of US$125 million. As of the date of this report, the Company has received bids between US$115 million and US$120 million. Management is confident that the Company will receive an offer at the target price in the near future. The Company plans to retire the entirety of the HIX Nashville debt with the proceeds of the sale.
| For the Three Months Ended | ||||
| March 31, 2023 | March 31, 2022 | |||
| $ | $ | |||
| Net income (loss) from continuing operations | (3,756) | 832 | ||
| Depreciation of property and equipment | 1,847 | 2,794 | ||
| Depreciation of right-of-use asset | 47 | 83 | ||
| Amortization of advanced bookings from acquisitions | — | 96 | ||
| Fair value adjustment to interest rate caps | 135 | 326 | ||
| Acquisition costs | — | 278 | ||
| Deferred income tax recovery | (20) | (121) | ||
| Fair value adjustment of Class B Units | (101) | (289) | ||
| Impairment (recovery)/loss | — | 1,787 | ||
| Funds from Operations | (1,848) | 5,783 | ||
| FFO per unit - basic | (0.06) | 0.20 | ||
| Income taxes | 242 | 57 | ||
| Core Funds from Operations | (1,606) | 5,840 | ||
| CFFO per unit - basic | (0.05) | 0.20 | ||
| FF&E reserve | (5,158) | (4,556) | ||
| Amortization of deferred financing costs | 213 | 1,079 | ||
| Fees related to Nashville forbearance | (3) | — | ||
| Stock compensation | (264) | — | ||
| Adjusted Funds from Operations | (6,818) | 2,363 | ||
| AFFO per unit - basic | (0.23) | 0.08 | ||
| Weighted average units outstanding - basic | 29,901,742 | 29,352,055 | ||
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. 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 10 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.