Self-Storage Lender NexPoint Real Estate Files for $115M IPO

NexPoint Real Estate Finance Inc. (NREF), a real estate investment trust (REIT) specializing in middle-market loans for hospitality, multi-family, office and self-storage properties, announced its intent for an initial public offering (IPO) of up to $115 million in a Dec. 23 filing with the Securities and Exchange Commission. The REIT will be managed by NexPoint Real Estate Advisors VII, a subsidiary of its sponsor, NexPoint Advisors LP.

Founded last year, the Dallas-based company plans to list its shares on the New York Stock Exchange under the NREF symbol. No pricing terms for the IPO were disclosed in the filing. Its primary emphasis will be on properties within the top 50 U.S. Metropolitan Statistical Areas.

NREF’s connection to self-storage stems primarily from NexPoint Advisors affiliates, which have invested or loaned approximately $211 million in the sector, including a $125 million preferred-equity investment in Jernigan Capital Inc. (JCAP), a publicly traded REIT that provides capital to private self-storage developers, owners and operators. Affiliates have also placed approximately $77.4 million of equity investment directly into self-storage developments, according to the filing.

Prior to closing the IPO, NREF intends to build an initial portfolio of commercial real estate loans, bonds and investments, including “structured real estate investments” within the multi-family, single-family rental and self-storage sectors, the filing states.

At the close of the IPO, the company will operate under a five-member board of directors comprised of Edward Constantino, James Dondero, Scott Kavanaugh, Arthur Laffer and Brian Mitts. Dondero will serve as president, while Mitts will be chief financial officer. Dondero is president and co-founder of investment adviser Highland Capital Management LP, an affiliate of NexPoint Advisors. He’s been a member of the JCAP board since 2016, when the merchant bank signed a stock-purchase agreement with accounts managed by NexPoint Advisors. Under the agreement, Highland committed to purchase $100 million of series A preferred stock from JCAP at $1,000 per share over a two-year period.

Laffer, an economist, is a notable board member. The 79-year-old is a former member of President Ronald Reagan’s Economic Policy Advisory Board. He received the Presidential Medal of Freedom in June 2019, according to a source.

Sources:
Securities and Exchange Commission, Form S-11
SpareFoot Storage Beat, Self-Storage Lender NexPoint Real Estate Files for IPO