Vinebrook Homes Trust Inc
03/11/2026 | Press release | Distributed by Public on 03/11/2026 13:58
Annual Report for Fiscal Year Ending 12-31, 2025 (Form 10-K)
Management's Discussion and Analysis of Financial Condition and Results of Operations
The following is a discussion and analysis of our financial condition and our historical results of operations. The following should be read in conjunction with our financial statements and accompanying notes included herein. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those projected, forecasted, or expected in these forward-looking statements as a result of various factors, including, but not limited to, those discussed below and elsewhere in this Form 10-K. See "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" in this Form 10-K. Our management believes the assumptions underlying the Company's financial statements and accompanying notes are reasonable. However, the Company's financial statements and accompanying notes may not be an indication of our financial condition and results of operations in the future.
This section of this Form 10-K generally discusses the years ended December 31, 2025 and 2024. A discussion of the year ended December 31, 2023 is available at Part II, "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K for the year ended December 31, 2024.
Overview
The Company is an owner and operator of single-family rental homes, both scattered site and in BTR communities, that are rented to residents under leases with typical durations of one year. The Company's mission is to provide our residents with affordable, safe, clean and functional homes with a high level of service through institutional, quality management. Our investment objective is to acquire properties with cash flow growth potential, renovate (when appropriate) and maintain our homes to deliver a high-quality resident experience, while providing quarterly cash distributions and seeking long-term capital appreciation for our stockholders. Our investment focus has historically been on the affordable and workforce segments of the housing industry, but we are not precluded from investing in homes in the higher-cost segments of the housing industry.
The Company has two reportable segments, the VineBrook Portfolio and the NexPoint Homes Portfolio. The VineBrook Portfolio is the Company's primary reportable segment comprised of 20,355 homes as of December 31, 2025 which represents a significant majority of the Company's consolidated portfolio and operations. The VineBrook Portfolio generally purchases homes to implement a value-add strategy where we acquire, renovate (when appropriate), lease, maintain and otherwise manage single family rental homes primarily located in large to medium size cities and suburbs located in the midwestern, heartland and southeastern United States. Through this strategy, we seek to improve rental rates and net operating income ("NOI") at our homes. In addition to our value-add strategy, Company management has begun to underwrite acquisitions of, and the Company has begun to acquire, newer homes in BTR communities in higher growth submarkets within or complementary to our existing geographic footprint. The NexPoint Homes Portfolio is a reportable segment comprised of 2,035 homes as of December 31, 2025 and represents a minority of the Company's consolidated portfolio and operations. The NexPoint Homes Portfolio is a reportable segment that generally purchases newer homes that require less rehabilitation compared to the historical VineBrook Portfolio. As of December 31, 2025, we, through our OP and its consolidated subsidiaries, owned and operated 22,390 single family rental homes located in 21 states. We are externally advised by the Adviser through the Advisory Agreement, which will automatically renew on the anniversary of the renewal date for one-year terms thereafter, unless otherwise terminated.
On June 10, 2025, the OP entered into the Externalization Agreements with the Evergreen Manager. Pursuant to the Externalization Agreements, the Evergreen Manager will provide property management services to and generally operate the VineBrook Portfolio, including leasing the properties, managing resident situations, collecting rents, paying operating expenses, managing maintenance issues and other responsibilities customary for the management of SFR and BTR properties as well as provide certain asset management, acquisition, disposition and other services. On July 18, 2025, the initial group of properties within the VineBrook Portfolio was transitioned to the Evergreen Manager platform, a second group of properties was transitioned on September 17, 2025 and the final group was transitioned on October 23, 2025. On the Transition Effective Date, all of the Legacy VineBrook Management Agreements terminated. In connection with the Externalization, substantially all of our historical employees were terminated by the Company, with some being employed
by the Evergreen Manager, some being employed by our Adviser and the balance being discharged. As a result of the Management Agreements, as of the Transition Effective Date the VineBrook Portfolio is externally managed by the Evergreen Manager.
The NexPoint Homes Portfolio has entered into property management agreements with Mynd Management, Inc., as discussed in Note 4 of our consolidated financial statements.
For information regarding the Bankruptcy Trust Lawsuit and the UBS Lawsuit, see "Item 1A. Risk Factors-The Chapter 11 bankruptcy filing by Highland may have materially adverse consequences on our business, financial condition and results of operations" and "Item 1A. Risk Factors-Litigation against James Dondero and others may have materially adverse consequences on our business, financial condition and results of operations." Neither the Bankruptcy Trust Lawsuit nor the UBS Lawsuit include claims related to our business or our assets. Our Adviser and Mr. Dondero have informed us they believe the Bankruptcy Trust Lawsuit has no merit, and Mr. Dondero has informed us he believes the UBS Lawsuit has no merit; we have been advised that the defendants named in each of the lawsuits intend to vigorously defend against the claims. We do not expect the Bankruptcy Trust Lawsuit or the UBS Lawsuit will have a material effect on our business, results of operations or financial condition.
The United States government announced a comprehensive set of tariffs in the second quarter of 2025. Following the pause of certain of these tariffs, the majority of the previously announced tariffs were implemented, but such tariffs were determined unconstitutional by the Supreme Court of the United States in a February 2026 ruling. Following such ruling, the current administration immediately imposed a 10% global tariff under a separate statutory provision. The United States government has indicated that it could impose additional tariffs on particular countries and impose global tariffs on certain goods. Such tariffs could impact our results of operations by increasing the costs of various goods, including construction materials. Management is actively engaged with vendors and business partners to reduce financial risks of tariffs; however, the impact of such tariffs is subject to uncertainties regarding the timing of their implementation, the magnitude of such tariffs and possible exemptions for certain goods, among other uncertainties.
Our website is located at www.vinebrookhomes.com. From time to time, we may use our website as a distribution channel for material Company information.
Pathway to Homeownership Program
In 2024, we began our "Pathway to Homeownership" program, providing qualified residents with opportunities for home ownership. This initiative empowers individuals and families residing in a VineBrook Portfolio home to purchase their home outright by securing a conventional mortgage, enabling them to build equity in an affordable property. Residents of VineBrook Portfolio homes also have access to nationally recognized financial counseling and literacy resources at no additional cost to them through VineBrook's partnership with Operation Hope. These services include workshops that focus on topics such as money management, credit and homeownership, all geared to help residents attain financial freedom. VineBrook is one of the only large single-family rental companies dedicated to providing affordable and workforce housing. Through the Pathway to Homeownership, we have added yet another option for affordable, accessible single-family living that otherwise might not be available in a supply-challenged market.
Our VineBrook Portfolio
Since our formation, we have significantly grown our VineBrook Portfolio. When the Company began operations on November 1, 2018, the Initial Portfolio consisted of 4,129 homes located in Ohio, Kentucky and Indiana. As of December 31, 2025 and 2024, the VineBrook Portfolio consisted of 20,355 and 20,804 homes, respectively, in 19 and 18 states, respectively. As of December 31, 2025 and 2024, the VineBrook Portfolio had an occupancy of 94.5% and 96.3%, respectively, and a weighted average monthly effective rent of $1,307 and $1,296, respectively, per occupied home. As of December 31, 2025 and 2024, the occupancy of stabilized homes in our VineBrook Portfolio was 94.9% and 95.7%, respectively, and the weighted average monthly effective rent of occupied stabilized homes was $1,325 and $1,309, respectively. As of
December 31, 2025 and 2024, 23.5% and 25.1%, respectively, of homes in our VineBrook Portfolio were excluded from being stabilized either because the homes were in rehabilitation or were purchased with residents in place or were classified as held for sale. The table below provides summary information regarding our VineBrook Portfolio as of December 31, 2025.
|
Market |
State |
# of Homes |
Portfolio Occupancy |
Average Effective Rent |
# of Stabilized Homes |
Stabilized Occupancy |
Stabilized Average Monthly Rent |
|||||||||||||||||||
|
Cincinnati |
OH, KY |
2,704 |
95.6 |
% |
$ |
1,384 |
2,296 |
95.6 |
% |
$ |
1,405 |
|||||||||||||||
|
Dayton |
OH |
2,685 |
94.9 |
% |
1,274 |
2,553 |
94.7 |
% |
1,266 |
|||||||||||||||||
|
St. Louis |
MO |
1,669 |
95.8 |
% |
1,230 |
1,138 |
95.4 |
% |
1,250 |
|||||||||||||||||
|
Columbus |
OH |
1,584 |
95.9 |
% |
1,346 |
1,457 |
95.7 |
% |
1,346 |
|||||||||||||||||
|
Indianapolis |
IN |
1,416 |
93.2 |
% |
1,288 |
1,098 |
96.6 |
% |
1,347 |
|||||||||||||||||
|
Memphis |
TN, MS |
1,231 |
92.4 |
% |
1,075 |
889 |
90.8 |
% |
1,070 |
|||||||||||||||||
|
Kansas City |
MO, KS |
1,065 |
96.1 |
% |
1,364 |
835 |
95.9 |
% |
1,373 |
|||||||||||||||||
|
Birmingham |
AL |
1,006 |
95.6 |
% |
1,297 |
669 |
95.1 |
% |
1,302 |
|||||||||||||||||
|
Columbia |
SC |
921 |
96.7 |
% |
1,454 |
617 |
97.1 |
% |
1,487 |
|||||||||||||||||
|
Jackson |
MS |
753 |
95.6 |
% |
1,291 |
621 |
95.7 |
% |
1,304 |
|||||||||||||||||
|
Milwaukee |
WI |
740 |
96.6 |
% |
1,381 |
568 |
96.7 |
% |
1,425 |
|||||||||||||||||
|
Augusta |
GA, SC |
616 |
94.6 |
% |
1,240 |
446 |
94.2 |
% |
1,285 |
|||||||||||||||||
|
Pensacola |
FL |
377 |
88.3 |
% |
1,408 |
220 |
91.8 |
% |
1,402 |
|||||||||||||||||
|
Greenville |
SC |
350 |
96.6 |
% |
1,387 |
258 |
96.1 |
% |
1,439 |
|||||||||||||||||
|
Portales |
NM |
350 |
94.9 |
% |
1,162 |
146 |
95.2 |
% |
1,167 |
|||||||||||||||||
|
Pittsburgh |
PA |
317 |
91.8 |
% |
1,131 |
258 |
93.0 |
% |
1,173 |
|||||||||||||||||
|
Montgomery |
AL |
282 |
94.0 |
% |
1,259 |
241 |
92.9 |
% |
1,254 |
|||||||||||||||||
|
Huntsville |
AL |
270 |
92.6 |
% |
1,330 |
203 |
92.6 |
% |
1,349 |
|||||||||||||||||
|
Raeford |
NC |
250 |
92.8 |
% |
1,241 |
169 |
91.1 |
% |
1,245 |
|||||||||||||||||
|
Omaha |
NE, IA |
249 |
96.0 |
% |
1,355 |
233 |
96.1 |
% |
1,366 |
|||||||||||||||||
|
Little Rock |
AR |
248 |
92.3 |
% |
1,030 |
234 |
91.9 |
% |
1,030 |
|||||||||||||||||
|
Atlanta |
GA |
217 |
79.3 |
% |
1,338 |
85 |
85.9 |
% |
1,507 |
|||||||||||||||||
|
Triad |
NC |
214 |
91.6 |
% |
1,386 |
173 |
90.2 |
% |
1,384 |
|||||||||||||||||
|
Nashville |
TN |
105 |
95.2 |
% |
1,823 |
2 |
100.0 |
% |
1,899 |
|||||||||||||||||
|
Phoenix |
AZ |
102 |
71.6 |
% |
1,849 |
78 |
93.6 |
% |
2,418 |
|||||||||||||||||
|
Myrtle Beach |
SC |
97 |
83.5 |
% |
1,883 |
92 |
88.0 |
% |
1,985 |
|||||||||||||||||
|
Sub-Total/Average |
19,818 |
94.5 |
% |
$ |
1,307 |
15,579 |
94.9 |
% |
$ |
1,325 |
||||||||||||||||
|
Held for Sale |
537 |
n/a |
n/a |
n/a |
n/a |
n/a |
||||||||||||||||||||
|
Total/Average |
20,355 |
94.5 |
% |
$ |
1,307 |
15,579 |
94.9 |
% |
$ |
1,325 |
||||||||||||||||
The table below provides summary information regarding our VineBrook Portfolio as of December 31, 2024:
|
Market |
State |
# of Homes |
Portfolio Occupancy |
Average Effective Rent |
# of Stabilized Homes |
Stabilized Occupancy |
Stabilized Average Monthly Rent |
|||||||||||||||||||
|
Cincinnati |
OH, KY |
2,866 |
96.2 |
% |
$ |
1,360 |
2,367 |
95.8 |
% |
$ |
1,376 |
|||||||||||||||
|
Dayton |
OH |
2,717 |
97.1 |
% |
1,268 |
2,559 |
97.1 |
% |
1,264 |
|||||||||||||||||
|
St. Louis |
MO |
1,773 |
94.9 |
% |
1,195 |
1,134 |
93.5 |
% |
1,217 |
|||||||||||||||||
|
Columbus |
OH |
1,626 |
96.0 |
% |
1,317 |
1,488 |
95.6 |
% |
1,319 |
|||||||||||||||||
|
Indianapolis |
IN |
1,403 |
96.7 |
% |
1,302 |
1,087 |
96.2 |
% |
1,318 |
|||||||||||||||||
|
Memphis |
TN, MS |
1,331 |
94.4 |
% |
1,080 |
897 |
92.9 |
% |
1,093 |
|||||||||||||||||
|
Kansas City |
MO, KS |
1,086 |
96.9 |
% |
1,338 |
813 |
96.4 |
% |
1,350 |
|||||||||||||||||
|
Birmingham |
AL |
1,035 |
96.3 |
% |
1,290 |
635 |
95.3 |
% |
1,301 |
|||||||||||||||||
|
Columbia |
SC |
949 |
95.9 |
% |
1,418 |
581 |
94.7 |
% |
1,453 |
|||||||||||||||||
|
Jackson |
MS |
802 |
96.5 |
% |
1,255 |
646 |
96.1 |
% |
1,259 |
|||||||||||||||||
|
Milwaukee |
WI |
770 |
96.4 |
% |
1,332 |
557 |
95.5 |
% |
1,387 |
|||||||||||||||||
|
Atlanta |
GA |
655 |
96.5 |
% |
1,631 |
265 |
92.8 |
% |
1,681 |
|||||||||||||||||
|
Augusta |
GA, SC |
635 |
97.5 |
% |
1,237 |
433 |
97.0 |
% |
1,308 |
|||||||||||||||||
|
Greenville |
SC |
376 |
96.8 |
% |
1,356 |
266 |
95.9 |
% |
1,418 |
|||||||||||||||||
|
Portales |
NM |
350 |
96.0 |
% |
1,171 |
137 |
91.2 |
% |
1,185 |
|||||||||||||||||
|
Pittsburgh |
PA |
340 |
97.4 |
% |
1,159 |
267 |
97.4 |
% |
1,187 |
|||||||||||||||||
|
Pensacola |
FL |
300 |
95.0 |
% |
1,461 |
200 |
92.5 |
% |
1,479 |
|||||||||||||||||
|
Montgomery |
AL |
295 |
94.9 |
% |
1,272 |
242 |
94.6 |
% |
1,290 |
|||||||||||||||||
|
Huntsville |
AL |
274 |
98.5 |
% |
1,416 |
195 |
97.9 |
% |
1,430 |
|||||||||||||||||
|
Omaha |
NE, IA |
272 |
98.9 |
% |
1,322 |
252 |
99.2 |
% |
1,334 |
|||||||||||||||||
|
Little Rock |
AR |
260 |
96.9 |
% |
1,072 |
243 |
97.1 |
% |
1,076 |
|||||||||||||||||
|
Raeford |
NC |
250 |
98.0 |
% |
1,272 |
151 |
97.4 |
% |
1,318 |
|||||||||||||||||
|
Triad |
NC |
219 |
96.8 |
% |
1,432 |
174 |
96.0 |
% |
1,461 |
|||||||||||||||||
|
Sub-Total/Average |
20,584 |
96.3 |
% |
$ |
1,296 |
15,589 |
95.7 |
% |
$ |
1,309 |
||||||||||||||||
|
Held for Sale |
220 |
n/a |
n/a |
n/a |
n/a |
n/a |
||||||||||||||||||||
|
Total/Average |
20,804 |
96.3 |
% |
$ |
1,296 |
15,589 |
95.7 |
% |
$ |
1,309 |
||||||||||||||||
NexPoint Homes Portfolio
NexPoint Homes is an owner and operator of single-family rental homes. As of December 31, 2025 and 2024, the NexPoint Homes Portfolio consisted of 2,035 and 2,247 single-family rental homes, respectively, primarily located in the midwestern and southeastern United States. As of December 31, 2025 and 2024, the NexPoint Homes Portfolio had an occupancy of approximately 94.2% and 91.4%, respectively, and a weighted average monthly effective rent of $1,774 and $1,741, respectively, per occupied home. Lease durations are typically one year. NexPoint Homes' activities include acquiring, renovating, developing, leasing and operating single-family rental homes. For the NexPoint Homes Portfolio, a home is classified as stabilized once it has been rented or has been rehabilitated by the Company and available for rent for a period of greater than 30 days. Additionally, because stabilized homes are expected to be held for at least one year, stabilized homes also exclude any assets held for sale. As of December 31, 2025 and 2024, the number of stabilized homes in the NexPoint Homes Portfolio was 1,926 and 2,091, respectively, the occupancy of stabilized homes was 94.2% and 91.4%, respectively, and the weighted average monthly effective rent of stabilized occupied homes was $1,774 and $1,741, respectively. As of December 31, 2025 and 2024, 5.4% and 6.9% of homes in our NexPoint Homes Portfolio were excluded from being stabilized, respectively, because the homes were classified as held for sale.
The table below provides summary information regarding the NexPoint Homes Portfolio as of December 31, 2025:
|
Market |
State |
# of Homes |
Portfolio Occupancy |
Average Effective Rent |
# of Stabilized Homes |
Stabilized Occupancy |
Stabilized Average Monthly Rent |
|||||||||||||||||||
|
Oklahoma City |
OK |
318 |
95.0 |
% |
$ |
1,733 |
318 |
95.0 |
% |
$ |
1,733 |
|||||||||||||||
|
Fayetteville |
AR |
301 |
93.4 |
% |
1,730 |
301 |
93.4 |
% |
1,730 |
|||||||||||||||||
|
Little Rock |
AR |
210 |
97.6 |
% |
1,496 |
210 |
97.6 |
% |
1,496 |
|||||||||||||||||
|
Atlanta |
GA |
199 |
95.5 |
% |
2,035 |
199 |
95.5 |
% |
2,035 |
|||||||||||||||||
|
San Antonio |
TX |
184 |
95.1 |
% |
1,676 |
184 |
95.1 |
% |
1,676 |
|||||||||||||||||
|
Tulsa |
OK |
147 |
94.6 |
% |
1,705 |
147 |
94.6 |
% |
1,705 |
|||||||||||||||||
|
Birmingham |
AL |
115 |
96.5 |
% |
1,610 |
115 |
96.5 |
% |
1,610 |
|||||||||||||||||
|
Kansas City |
MO, KS |
102 |
89.2 |
% |
2,045 |
102 |
89.2 |
% |
2,045 |
|||||||||||||||||
|
Huntsville |
AL |
67 |
95.5 |
% |
1,892 |
67 |
95.5 |
% |
1,892 |
|||||||||||||||||
|
Charlotte |
NC |
52 |
98.1 |
% |
2,015 |
52 |
98.1 |
% |
2,015 |
|||||||||||||||||
|
Other (1) |
AL,FL,KS,TX |
231 |
74.5 |
% |
1,864 |
231 |
74.5 |
% |
1,864 |
|||||||||||||||||
|
Sub-Total/Average |
1,926 |
94.2 |
% |
$ |
1,774 |
1,926 |
94.2 |
% |
$ |
1,774 |
||||||||||||||||
|
Held for Sale |
109 |
n/a |
n/a |
n/a |
n/a |
n/a |
||||||||||||||||||||
|
Total/Average |
2,035 |
94.2 |
% |
$ |
1,774 |
1,926 |
94.2 |
% |
$ |
1,774 |
||||||||||||||||
(1)
Contains markets that have less than 50 homes which include Dallas/Fort Worth, Mobile, Jacksonville, Orlando, Tampa, Wichita, Austin and Houston.
The table below provides summary information regarding the NexPoint Homes Portfolio as of December 31, 2024:
|
Market |
State |
# of Homes |
Portfolio Occupancy |
Average Effective Rent |
# of Stabilized Homes |
Stabilized Occupancy |
Stabilized Average Monthly Rent |
|||||||||||||||||||
|
Oklahoma City |
OK |
341 |
90.9 |
% |
$ |
1,677 |
341 |
90.9 |
% |
$ |
1,677 |
|||||||||||||||
|
Fayetteville |
AR |
317 |
91.5 |
% |
1,688 |
317 |
91.5 |
% |
1,688 |
|||||||||||||||||
|
Little Rock |
AR |
210 |
91.4 |
% |
1,433 |
210 |
91.4 |
% |
1,433 |
|||||||||||||||||
|
San Antonio |
TX |
199 |
91.5 |
% |
1,709 |
199 |
91.5 |
% |
1,709 |
|||||||||||||||||
|
Atlanta |
GA |
198 |
88.9 |
% |
2,027 |
198 |
88.9 |
% |
2,027 |
|||||||||||||||||
|
Tulsa |
OK |
158 |
92.4 |
% |
1,652 |
158 |
92.4 |
% |
1,652 |
|||||||||||||||||
|
Kansas City |
MO, KS |
146 |
96.6 |
% |
1,928 |
146 |
96.6 |
% |
1,928 |
|||||||||||||||||
|
Birmingham |
AL |
120 |
89.2 |
% |
1,576 |
120 |
89.2 |
% |
1,576 |
|||||||||||||||||
|
Huntsville |
AL |
70 |
88.6 |
% |
1,828 |
70 |
88.6 |
% |
1,828 |
|||||||||||||||||
|
Charlotte |
NC |
56 |
98.2 |
% |
1,934 |
56 |
98.2 |
% |
1,934 |
|||||||||||||||||
|
Memphis |
TN, MS |
56 |
92.9 |
% |
1,792 |
56 |
92.9 |
% |
1,792 |
|||||||||||||||||
|
Dallas/Ft Worth |
TX |
51 |
90.2 |
% |
2,328 |
51 |
90.2 |
% |
2,328 |
|||||||||||||||||
|
Other (1) |
AL,FL,KS,TX |
169 |
89.9 |
% |
1,804 |
169 |
89.9 |
% |
1,804 |
|||||||||||||||||
|
Sub-Total/Average |
2,091 |
91.4 |
% |
$ |
1,741 |
2,091 |
91.4 |
% |
$ |
1,741 |
||||||||||||||||
|
Held for Sale |
156 |
n/a |
n/a |
n/a |
n/a |
n/a |
||||||||||||||||||||
|
Total/Average |
2,247 |
91.4 |
% |
$ |
1,741 |
2,091 |
91.4 |
% |
$ |
1,741 |
||||||||||||||||
(1)
Contains markets that have less than 50 homes which include Mobile, Jacksonville, Orlando, Tampa, Wichita, Austin, and Houston.
Components of Revenues and Expenses
The following is a description of the components of our revenues and expenses.
Revenues
Rental Income.Our revenues are derived primarily from rental revenue, net of any concessions and uncollectible amounts, collected from residents of our single-family rental homes under lease agreements which typically have a term of one year. Also included are utility reimbursements, late fees, pet fees, and other rental fees charged to residents.
Other income. Other income includes ancillary income earned from residents such as non-refundable fees, application fees, move-out fees, and other miscellaneous fees charged to residents.
Expenses
Property operating expenses.Property operating expenses include property maintenance costs, turn costs (costs incurred in making a home ready for the next resident after the prior resident vacates the home), leasing costs and the associated salary and employee benefit costs, utilities, vehicle leases and HOA fees. Certain property operating costs are capitalized in accordance with our capitalization policy. Certain turn costs are capitalized to buildings and improvements if they improve the condition of the home or return it to its original condition and exceed $1,500 in cost. Upon being occupied, expenditures up to $1,500 for ordinary repairs and maintenance thereafter are expensed as incurred, and we capitalize expenditures that improve the condition of the home in excess of $1,500.
Real estate taxes and insurance.Real estate taxes include the property taxes assessed by local and state authorities depending on the location of each home. Insurance includes the cost of property, general liability, and other needed insurance for each property. Certain real estate taxes and insurance costs are capitalized in accordance with our capitalization policy.
Property management fees.Property management fees include fees paid to Mynd for managing each property in the NexPoint Homes Portfolio, and beginning in the third quarter of 2025, fees paid to Evergreen Manager for managing each property in the VineBrook Portfolio.
Advisory fees.Advisory fees include the fees paid to our Adviser pursuant to the Advisory Agreement and the NexPoint Homes Adviser pursuant to the NexPoint Homes Advisory Agreement (see Note 11 to our consolidated financial statements).
General and administrative expenses.General and administrative expenses include, but are not limited to, equity-based compensation expense, legal fees, corporate payroll and personnel costs, tax preparation fees, corporate taxes, Board fees, costs of marketing, professional fees, audit fees, general office supplies, centralized technology support and other expenses associated with our corporate and administrative functions. After the Externalization, shared-services fees are also included in general and administrative expenses, and corporate payroll and personnel costs substantially reduced.
Depreciation and amortization.Depreciation and amortization costs primarily include depreciation of our homes and amortization of right of use assets, recognized over their respective useful lives.
Interest expense.Interest expense primarily includes the cost of interest expense on debt, payments and receipts related to our interest rate derivatives, the change (which may be positive or negative) in fair value of interest rate derivatives not designated as hedges, the amortization of deferred financing costs and the amortization of bond discounts. Certain interest costs are capitalized in accordance with our capitalization policy.
Loss on extinguishment of debt.Loss on extinguishment of debt includes prepayment penalties and defeasance costs, the write-off of unamortized deferred financing costs and fair market value adjustments of assumed debt related to the early repayment of debt and other costs incurred in a debt extinguishment.
Gain/(loss) on sales and impairment of real estate, net. Gain/(loss) on sales and impairment of real estate, net, includes the gain or loss recognized upon sales of homes and impairment charges recorded on real estate assets, including casualty gains or losses incurred on homes. Gain/(loss) on sales of real estate is calculated by deducting the carrying value of the real estate and costs incurred to sell the properties from the sales prices of the homes. Impairment of real estate assets is calculated by calculating the lower of the carrying amount or estimated fair value less estimated costs to sell for held for sale properties. Casualty gains and losses include gains or losses incurred on homes, net of insurance proceeds received, that experience an event such as a natural disaster or fire.
Investment income.Investment income includes interest income from the retained ABS I and ABS II certificates, interest income from money market accounts and interest income from preferred equity investments. See Notes 5, 6 and 11 to our consolidated financial statements.
Provision for loan losses. Provision for loan losses relate to the change in our allowance for loan losses and includes the reduction of the HomeSource Note and its associated interest receivable. See Note 11 to our consolidated financial statements for additional information.
Loss on forfeited deposits. Loss on forfeited deposits includes forfeitures of deposits related to the termination of acquisition agreements in the NexPoint Homes Portfolio.
Consolidated Results of Operations for the Years Ended December 31, 2025 and 2024
The year ended December 31, 2025 compared to the year ended December 31, 2024
The following table sets forth a summary of our consolidated operating results for the year ended December 31, 2025 and 2024 (in thousands):
|
For the Year Ended December 31, |
||||||||||||
|
2025 |
2024 |
$ Change |
||||||||||
|
Total revenues |
$ |
371,277 |
$ |
362,825 |
$ |
8,452 |
||||||
|
Total expenses |
568,840 |
520,535 |
48,305 |
|||||||||
|
Loss on extinguishment of debt |
(2,083 |
) |
(3,881 |
) |
1,798 |
|||||||
|
Gain (loss) on sales and impairment of real estate, net |
3,255 |
(32,455 |
) |
35,710 |
||||||||
|
Investment income |
4,080 |
4,242 |
(162 |
) |
||||||||
|
Reversal of (provision for) loan losses |
500 |
(4,605 |
) |
5,105 |
||||||||
|
Loss on forfeited deposits |
(1,468 |
) |
- |
(1,468 |
) |
|||||||
|
Net loss |
(193,279 |
) |
(194,409 |
) |
1,130 |
|||||||
|
Dividends on and accretion to redemption value of Redeemable Series A Preferred stock |
8,793 |
8,801 |
(8 |
) |
||||||||
|
Net income attributable to Series B Preferred stock |
6,052 |
6,052 |
- |
|||||||||
|
Net loss attributable to redeemable noncontrolling interests in the OP |
(32,131 |
) |
(29,162 |
) |
(2,969 |
) |
||||||
|
Net loss attributable to redeemable noncontrolling interests in consolidated VIEs |
(17,993 |
) |
(30,703 |
) |
12,710 |
|||||||
|
Net loss attributable to noncontrolling interests in consolidated VIEs |
(2,468 |
) |
(4,734 |
) |
2,266 |
|||||||
|
Net loss attributable to stockholders |
$ |
(155,532 |
) |
$ |
(144,663 |
) |
$ |
(10,869 |
) |
|||
The change in our net loss between the periods primarily relates to increases in property operating expenses, property management fees, depreciation and amortization, general and administrative expenses, interest expense and loss on forfeited deposits, as well as decreases in rental income and investment income, partially offset by increases in other income and gains on sales and impairment of real estate, as well as decreases in real estate taxes and insurance and advisory fees.
Revenues
Rental income. Rental income was $353.4 million for the year ended December 31, 2025 compared to $357.5 million for the year ended December 31, 2024, which was a decrease of $4.1 million. The decrease between the periods was primarily due to dispositions in the VineBrook Portfolio and NexPoint Homes Portfolio, partially offset by an increase in rental rates over the past year.
Other income. Other income was $17.9 million for the year ended December 31, 2025 compared to $5.3 million for the year ended December 31, 2024, which was an increase of $12.6 million. The increase between the periods was primarily
due to incremental tenant utility billings as part of the Company's adoption of Conservice, a third party utility billing and management company.
Expenses
Property operating expenses. Property operating expenses were $86.2 million for the year ended December 31, 2025 compared to $80.2 million for the year ended December 31, 2024, which was an increase of $6.0 million. The increase between the periods was primarily due to an increase in turnover, utilities and maintenance costs in the year ended December 31, 2025, associated with stabilized homes and transition to Conservice for utilities, partially offset by decrease in property operations payroll due to the Externalization. For the years ended December 31, 2025 and 2024, turn costs represented approximately 17% and 21%, respectively, of our property operating expenses.
Real estate taxes and insurance. Real estate taxes and insurance were $66.8 million for the year ended December 31, 2025 compared to $67.8 million for the year ended December 31, 2024, which was a decrease of $1.0 million. The decrease between the periods was primarily due to dispositions in the VineBrook Portfolio and NexPoint Homes Portfolio, partially offset by an increase in real estate tax assessments as a result of increases in property valuations.
Property management fees. Property management fees were $4.0 million for the year ended December 31, 2025 compared to $2.5 million for the year ended December 31, 2024, which was an increase of $1.5 million. The increase between the periods was primarily due to the Externalization, and the transition of property management of the NexPoint Homes Portfolio to Mynd on September 19, 2024.
Advisory fees. Advisory fees were $20.1 million for the year ended December 31, 2025 compared to $20.8 million for the year ended December 31, 2024, which was a decrease of $0.7 million. The decrease between the periods was primarily due to the decrease in fee earning assets under management for the VineBrook Portfolio and NexPoint Homes Portfolio.
General and administrative expenses. General and administrative expenses were $116.9 million for the year ended December 31, 2025 compared to $81.6 million for the year ended December 31, 2024, which was an increase of $35.3 million. The increase between the periods was primarily due to increases in equity-based compensation costs related to the acceleration of RSU and PIU vestings due to the termination of certain executive employment arrangements in connection with the Externalization, and an increase in legal fees following the Externalization. Of the $116.9 million of general and administrative expenses, $19.8 million is related to the Externalization and $16.2 million is related to accelerated RSU award vestings.
Depreciation and amortization. Depreciation and amortization costs were $124.7 million for the year ended December 31, 2025 compared to $123.9 million for the year ended December 31, 2024, which was an increase of $0.8 million. The increase between the periods was primarily due to the acquisition of homes within the VineBrook Portfolio, partially offset by disposition of homes and increase in movement of homes to be classified as held for sale over the past year.
Interest expense. Interest expense was $150.2 million for the year ended December 31, 2025 compared to $143.9 million for the year ended December 31, 2024, which was an increase of $6.3 million. The increase between the periods was primarily due to an increase in non-cash discount amortization and a decrease in interest rate derivative proceeds due to the expiration and termination of interest rate swaps and caps, partially offset by decreases in interest on debt as we made pay
downs on debt outstanding over the past year. The following table details the various costs included in interest expense for the year ended December 31, 2025 and 2024 (in thousands):
|
For the Year Ended December 31, |
||||||||||||
|
2025 |
2024 |
$ Change |
||||||||||
|
Interest on debt |
$ |
137,304 |
$ |
154,719 |
$ |
(17,415 |
) |
|||||
|
Amortization of deferred financing costs |
11,409 |
13,301 |
(1,892 |
) |
||||||||
|
Amortization of debt discounts |
19,055 |
13,370 |
5,685 |
|||||||||
|
Interest rate swaps and caps |
(16,925 |
) |
(36,591 |
) |
19,666 |
|||||||
|
Capitalized interest |
(645 |
) |
(948 |
) |
303 |
|||||||
|
Total |
$ |
150,198 |
$ |
143,851 |
$ |
6,347 |
||||||
Loss on extinguishment of debt.Loss on extinguishment of debt was $2.1 million for the year ended December 31, 2025 compared to $3.9 million for the year ended December 31, 2024, which was a decrease of $1.8 million. The decrease between the periods was primarily due to a decrease in debt extinguishment activity for the year ended December 31, 2025.
Gain/(loss) on sales and impairment of real estate, net.Gain on sales and impairment of real estate was $3.3 million for the year ended December 31, 2025 compared to loss on sales and impairment of real estate of $32.5 million for the year ended December 31, 2024, which was an increase of $35.7 million. The increase between the periods was primarily due to a decrease in the homes sold for a loss within the NexPoint Homes Portfolio, an increase in proceeds from homes sold within the VineBrook Portfolio, specifically within the Atlanta market, and a decrease in the number of homes classified as held for sale that had impairment charges booked. The Company strategically identifies homes for disposal and expects the disposal of these properties to be accretive to the Portfolio's results of operation and overall performance.
Investment income.Investment income was $4.1 million for the year ended December 31, 2025 compared to $4.2 million for the year ended December 31, 2024, which was a decrease of $0.1 million. The decrease between the periods was primarily due to a decrease in interest income from money market accounts, partially offset by the increase in interest income from preferred equity investments.
Reversal of (provision for) loan losses. Reversal of loan losses was $0.5 million for the year ended December 31, 2025 compared to provision for loan losses of $4.6 million for the year ended December 31, 2024, which was an increase of $5.1 million. The increase between the periods was due to the reversal of loan losses from extra cash received from NexPoint Homes Manager after notifying the SFR OP that the NexPoint Homes Manager would cease business operations, which resulted in the provision that effectively reduced the HomeSource Note and its associated interest receivable.
Loss on forfeited deposits. Loss on forfeited deposits was $1.5 million for the year ended December 31, 2025 compared to zero for the year ended December 31, 2024, which was an increase of $1.5 million. The increase between the periods was primarily due to legal fees and other transaction costs associated with the termination of an acquisition agreement within the VineBrook Portfolio and writing off earnest money deposits within the NexPoint Homes Portfolio during the year ended December 31, 2025.
Non-GAAP Measurements
Net Operating Income
NOI is a non-GAAP financial measure of performance. NOI is used by our management to evaluate and compare the performance of our properties to other comparable properties, to determine trends in earnings and to compute the fair value of our properties as NOI is not affected by (1) interest expense, (2) advisory fees, (3) the impact of depreciation and amortization expenses, (4) gains or losses from the sale of operating real estate assets that are included in net income computed in accordance with GAAP or impairment charges, including casualty gains or losses (5) general and administrative expenses, (6) investment income, (7) change in unrealized loss on investments, (8) reversal of (provision for) loan losses, (9)
loss on forfeited deposits and (10) other gains and losses that are specific to us, including loss on extinguishment of debt. We believe that eliminating these items from net income is useful because the resulting measure captures the actual ongoing revenue generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs.
However, the usefulness of NOI is limited because it excludes the items discussed above. NOI may fail to capture significant trends in these components of net income, which further limits its usefulness.
NOI is a measure of the operating performance of our properties but does not measure our performance as a whole. NOI is therefore not a substitute for net income (loss) as computed in accordance with GAAP. This measure should be analyzed in conjunction with net income (loss) computed in accordance with GAAP and discussions elsewhere regarding the components of net income (loss) that are eliminated in the calculation of NOI. Other companies may use different methods for calculating NOI or similarly entitled measures and, accordingly, our NOI may not be comparable to similarly entitled measures reported by other companies that do not define the measure exactly as we do.
The following table, which has not been adjusted for the effects of noncontrolling interests ("NCI"), reconciles our consolidated NOI for the years ended December 31, 2025 and 2024 to net loss, the most directly comparable GAAP financial measure on a consolidated basis (in thousands):
|
For the Year Ended December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
Net loss |
$ |
(193,279 |
) |
$ |
(194,409 |
) |
||
|
Adjustments to reconcile net loss to NOI: |
||||||||
|
Advisory fees |
20,068 |
20,764 |
||||||
|
General and administrative expenses |
116,863 |
81,553 |
||||||
|
Depreciation and amortization |
124,653 |
123,940 |
||||||
|
Interest expense |
150,198 |
143,851 |
||||||
|
Loss on extinguishment of debt |
2,083 |
3,881 |
||||||
|
Gain (loss) on sales and impairment of real estate, net |
(3,255 |
) |
32,455 |
|||||
|
Investment income |
(4,080 |
) |
(4,242 |
) |
||||
|
Reversal of (provision for) loan losses |
(500 |
) |
4,605 |
|||||
|
Loss on forfeited deposits |
1,468 |
- |
||||||
|
NOI |
$ |
214,219 |
$ |
212,398 |
||||
The following table, which has not been adjusted for the effects of NCI, reconciles our NOI for each of our segments for the years ended December 31, 2025 and 2024 to net loss, the most directly comparable GAAP financial measure by reportable segment (in thousands):
|
For the Year Ended December 31, 2025 |
For the Year Ended December 31, 2024 |
|||||||||||||||||||||||
|
VineBrook Portfolio |
NexPoint Homes Portfolio |
Total Company |
VineBrook Portfolio |
NexPoint Homes Portfolio |
Total Company |
|||||||||||||||||||
|
Net loss |
$ |
(149,496 |
) |
$ |
(43,783 |
) |
$ |
(193,279 |
) |
$ |
(122,638 |
) |
$ |
(71,771 |
) |
$ |
(194,409 |
) |
||||||
|
Adjustments to reconcile net loss to NOI: |
||||||||||||||||||||||||
|
Advisory fees |
16,914 |
3,154 |
20,068 |
17,271 |
3,493 |
20,764 |
||||||||||||||||||
|
General and administrative expenses |
108,390 |
8,473 |
116,863 |
76,253 |
5,300 |
81,553 |
||||||||||||||||||
|
Depreciation and amortization |
102,730 |
21,923 |
124,653 |
97,413 |
26,527 |
123,940 |
||||||||||||||||||
|
Interest expense |
122,380 |
27,818 |
150,198 |
111,822 |
32,029 |
143,851 |
||||||||||||||||||
|
Loss on extinguishment of debt |
1,832 |
251 |
2,083 |
3,881 |
- |
3,881 |
||||||||||||||||||
|
(Gain)/loss on sales and impairment of real estate, net |
(7,551 |
) |
4,296 |
(3,255 |
) |
7,134 |
25,321 |
32,455 |
||||||||||||||||
|
Investment income |
(3,835 |
) |
(245 |
) |
(4,080 |
) |
(3,891 |
) |
(351 |
) |
(4,242 |
) |
||||||||||||
|
(Reversal of)/provision for loan losses |
- |
(500 |
) |
(500 |
) |
- |
4,605 |
4,605 |
||||||||||||||||
|
Loss on forfeited deposits |
66 |
1,402 |
1,468 |
- |
- |
- |
||||||||||||||||||
|
NOI |
$ |
191,430 |
$ |
22,789 |
$ |
214,219 |
$ |
187,245 |
$ |
25,153 |
$ |
212,398 |
||||||||||||
Net Operating Income for Our 2024-2025 Same Home and Non-Same Home Properties for the Years Ended December 31, 2025 and 2024
There are 17,234 homes in our 2024-2025 same home pool (our "2024-2025 Same Home" properties). To be included as a "2024-2025 Same Home," homes must be in the VineBrook Portfolio and must have been stabilized for at least 90 days in advance of the first day of the previous fiscal year and be held through the current reporting period-end. 2024-2025 Same Home properties for the period ended December 31, 2025 and December 31, 2024 were stabilized by October 1, 2023 and held through December 31, 2025. 2024-2025 Same Home properties do not include homes held for sale. Homes that are stabilized are included as 2024-2025 Same Home properties, whether occupied or vacant. See Item 1 "Business-Our VineBrook Portfolio" for a discussion of the definition of stabilized. We view 2024-2025 Same Home NOI as an important measure of the operating performance of our homes because it allows us to compare operating results of homes owned for the entirety of the current and comparable periods and therefore eliminate variations caused by acquisitions or dispositions during the periods.
The following table reflects the revenues, property operating expenses and NOI for the years ended December 31, 2025 and 2024 for our 2024-2025 Same Home and Non-Same Home properties (dollars in thousands):
|
For the Year Ended December 31, |
||||||||||||||||
|
2025 |
2024 |
$ Change |
% Change |
|||||||||||||
|
Revenues |
||||||||||||||||
|
Same Home |
||||||||||||||||
|
Rental income (1) |
$ |
262,639 |
$ |
257,072 |
$ |
5,567 |
2.2 |
% |
||||||||
|
Other income (1) |
3,153 |
2,573 |
580 |
22.5 |
% |
|||||||||||
|
Same Home revenues |
265,792 |
259,645 |
6,147 |
2.4 |
% |
|||||||||||
|
Non-Same Home |
||||||||||||||||
|
Rental income (1) |
85,291 |
93,801 |
(8,510 |
) |
(9.1 |
)% |
||||||||||
|
Other income (1) |
13,954 |
1,850 |
12,104 |
N/M |
||||||||||||
|
Non-Same Home revenues |
99,245 |
95,651 |
3,594 |
3.8 |
% |
|||||||||||
|
Total revenues |
365,037 |
355,296 |
9,741 |
2.7 |
% |
|||||||||||
|
Operating expenses |
||||||||||||||||
|
Same Home |
||||||||||||||||
|
Property operating expenses (1) |
45,393 |
51,471 |
(6,078 |
) |
-11.8 |
% |
||||||||||
|
Real estate taxes and insurance |
47,672 |
47,543 |
129 |
0.3 |
% |
|||||||||||
|
Property management fees (2) |
1,283 |
- |
1,283 |
N/M |
||||||||||||
|
Same Home operating expenses |
94,348 |
99,014 |
(4,666 |
) |
(4.7 |
)% |
||||||||||
|
Non-Same Home |
||||||||||||||||
|
Property operating expenses (1) |
34,581 |
21,170 |
13,411 |
63.3 |
% |
|||||||||||
|
Real estate taxes and insurance |
19,171 |
20,257 |
(1,086 |
) |
(5.4 |
)% |
||||||||||
|
Property management fees (2) |
2,718 |
2,457 |
261 |
10.6 |
% |
|||||||||||
|
Non-Same Home operating expenses |
56,470 |
43,884 |
12,586 |
28.7 |
% |
|||||||||||
|
Total operating expenses |
150,818 |
142,898 |
7,920 |
5.5 |
% |
|||||||||||
|
NOI |
||||||||||||||||
|
Same Home |
171,444 |
160,631 |
10,813 |
6.7 |
% |
|||||||||||
|
Non-Same Home |
42,775 |
51,767 |
(8,992 |
) |
(17.4 |
)% |
||||||||||
|
Total NOI |
$ |
214,219 |
$ |
212,398 |
$ |
1,821 |
0.9 |
% |
||||||||
(1)
Presented net of resident chargebacks.
(2)
Property management fees were eliminated in consolidation for the VineBrook Portfolio until the Externalization.
See reconciliation of net income (loss) to NOI above under "-Net Operating Income."
2024-2025 Same Home Results of Operations for the Years Ended December 31, 2025 and 2024
As of December 31, 2025, our 2024-2025 Same Home properties were approximately 95.0% occupied with a weighted average monthly effective rent per occupied home of $1,316. As of December 31, 2024, our 2024-2025 Same Home properties were approximately 96.3% occupied with a weighted average monthly effective rent per occupied home of $1,310. For our 2024-2025 Same Home properties, we recorded the following operating results for the year ended December 31, 2025 as compared to the year ended December 31, 2024:
Revenues
Rental income. Rental income was $262.6 million for the year ended December 31, 2025 compared to $257.1 million for the year ended December 31, 2024, which was an increase of approximately $5.5 million, or 2.2%. The increase is related to a 0.5% increase in the weighted average monthly effective rent per occupied home, partially offset by a 1.3% decrease in occupancy.
Other income.Other income was approximately $3.2 million for the year ended December 31, 2025 compared to approximately $2.6 million for the year ended December 31, 2024, which was an increase of approximately $0.6 million, or 22.5%. This increase was primarily due to the increase in overall fees charged to single family properties of $0.6 million.
Expenses
Property operating expenses.Property operating expenses were $45.4 million for the year ended December 31, 2025 compared to $51.5 million for the year ended December 31, 2024, which was a decrease of approximately $6.1 million, or 11.8%. The decrease is primarily related to a decrease in repair and maintenance expense of $2.1 million and a decrease in turnover costs of $4.0 million.
Real estate taxes and insurance.Real estate taxes and insurance costs were $47.7 million for the year ended December 31, 2025 compared to $47.5 million for the year ended December 31, 2024, which was an increase of approximately $0.2 million, or 0.3%. The increase is primarily related to an increase in real estate taxes of $0.4 million, partially offset by a decrease in property insurance costs of $0.2 million.
Property management fees.Property management fees were $1.3 million for the year ended December 31, 2025 compared to zero for the year ended December 31, 2024, which was an increase of approximately $1.3 million, or 100.0%. The increase is primarily related to an increase in property management fees of $1.3 million related to the Externalization.
The following table reflects a reconciliation of Same Home and Non-Same Home revenues and operating expenses to total revenues and operating expenses, including resident chargebacks, for the years ended December 31, 2025 and 2024 (dollars in thousands):
|
For the Year Ended December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
Same Home revenues |
$ |
265,792 |
$ |
259,645 |
||||
|
Non-Same Home revenues |
99,245 |
95,651 |
||||||
|
Chargebacks |
6,240 |
7,529 |
||||||
|
Total revenues |
$ |
371,277 |
$ |
362,825 |
||||
|
Same Home operating expenses |
94,348 |
99,014 |
||||||
|
Non-Same Home operating expenses |
56,470 |
43,884 |
||||||
|
Chargebacks |
6,240 |
7,529 |
||||||
|
Total operating expenses |
$ |
157,058 |
$ |
150,427 |
||||
Net Operating Income for Our 2023-2025 Same Home and Non-Same Home Properties for the Years Ended December 31, 2025 and 2024
There are 11,323 homes in our 2023-2025 same home pool (our "2023-2025 Same Home" properties). To be included as a "2023-2025 Same Home," homes be in the VineBrook Portfolio and must have been stabilized for at least 90 days in advance of the first day of fiscal year 2023 and be held through the current reporting period-end. 2023-2025 Same Home properties for the period ended December 31, 2025, December 31, 2024 and December 31, 2023 were stabilized by October 1, 2022 and held through December 31, 2025. 2023-2025 Same Home properties do not include homes held for sale. Homes that are stabilized are included as 2023-2025 Same Home properties, whether occupied or vacant. See Item 1 "Business-Our VineBrook Portfolio" for a discussion of the definition of stabilized. We view 2023-2025 Same Home NOI as an important measure of the operating performance of our homes because it allows us to compare operating results of homes owned for the entirety of the current and comparable periods and therefore eliminate variations caused by acquisitions or dispositions during the periods.
The following table reflects the revenues, property operating expenses and NOI for the years ended December 31, 2025 and December 31, 2024 for our 2023-2025 Same Home and Non-Same Home properties (dollars in thousands):
|
For the Year Ended December 31, |
2025 to 2024 |
|||||||||||||||
|
2025 |
2024 |
$ Change |
% Change |
|||||||||||||
|
Revenues |
||||||||||||||||
|
Same Home |
||||||||||||||||
|
Rental income (1) |
$ |
171,035 |
$ |
167,810 |
$ |
3,225 |
1.9 |
% |
||||||||
|
Other income (1) |
2,137 |
1,717 |
420 |
24.5 |
% |
|||||||||||
|
Same Home revenues |
173,172 |
169,527 |
3,645 |
2.2 |
% |
|||||||||||
|
Non-Same Home |
||||||||||||||||
|
Rental income (1) |
176,895 |
183,063 |
(6,168 |
) |
(3.4 |
)% |
||||||||||
|
Other income (1) |
14,970 |
2,706 |
12,264 |
N/M |
||||||||||||
|
Non-Same Home revenues |
191,865 |
185,769 |
6,096 |
3.3 |
% |
|||||||||||
|
Total revenues |
365,037 |
355,296 |
9,741 |
2.7 |
% |
|||||||||||
|
Operating expenses |
||||||||||||||||
|
Same Home |
||||||||||||||||
|
Property operating expenses (1) |
30,715 |
35,994 |
(5,279 |
) |
(14.7 |
)% |
||||||||||
|
Real estate taxes and insurance |
30,641 |
30,578 |
63 |
0.2 |
% |
|||||||||||
|
Property management fees (2) |
806 |
- |
806 |
N/M |
||||||||||||
|
Same Home operating expenses |
62,162 |
66,572 |
(4,410 |
) |
(6.6 |
)% |
||||||||||
|
Non-Same Home |
||||||||||||||||
|
Property operating expenses (1) |
49,259 |
36,647 |
12,612 |
34.4 |
% |
|||||||||||
|
Real estate taxes and insurance |
36,202 |
37,222 |
(1,020 |
) |
(2.7 |
)% |
||||||||||
|
Property management fees (2) |
3,195 |
2,457 |
738 |
30.0 |
% |
|||||||||||
|
Non-Same Home operating expenses |
88,656 |
76,326 |
12,330 |
16.2 |
% |
|||||||||||
|
Total operating expenses |
150,818 |
142,898 |
7,920 |
5.5 |
% |
|||||||||||
|
NOI |
||||||||||||||||
|
Same Home |
111,010 |
102,955 |
8,055 |
7.8 |
% |
|||||||||||
|
Non-Same Home |
103,209 |
109,443 |
(6,234 |
) |
(5.7 |
)% |
||||||||||
|
Total NOI |
$ |
214,219 |
$ |
212,398 |
$ |
1,821 |
0.9 |
% |
||||||||
(1)
Presented net of resident chargebacks.
(2)
Property management fees were eliminated in consolidation for the VineBrook Portfolio until the Externalization.
See reconciliation of net income (loss) to NOI above under "-Net Operating Income."
2023-2025 Same Home Results of Operations for the Years Ended December 31, 2025 and 2024
As of December 31, 2025, our 2023-2025 Same Home properties were approximately 94.8% occupied with a weighted average monthly effective rent per occupied home of $1,300. As of December 31, 2024, our 2023-2025 Same Home properties were approximately 96.1% occupied with a weighted average monthly effective rent per occupied home of $1,299. For our 2023-2025 Same Home properties, we recorded the following operating results for the year ended December 31, 2025 as compared to the year ended December 31, 2024:
Revenues
Rental income. Rental income was $171.0 million for the year ended December 31, 2025 compared to $167.8 million for the year ended December 31, 2024, which was an increase of approximately $3.2 million, or 1.9%. The increase is related to a 0.5% increase in the weighted average monthly effective rent per occupied home, partially offset by a 1.3% decrease in occupancy.
Other income.Other income was approximately $2.1 million for the year ended December 31, 2025 compared to approximately $1.7 million for the year ended December 31, 2024, which was an increase of approximately $0.4 million, or 24.5%. This increase was primarily due to the increase in overall fees charged to single family properties of $0.4 million.
Expenses
Property operating expenses.Property operating expenses were $30.7 million for the year ended December 31, 2025 compared to $36.0 million for the year ended December 31, 2024, which was a decrease of approximately $5.3 million, or 14.7%. The decrease is primarily related to a decrease in repair and maintenance expense of $1.4 million and a decrease in turnover costs of $3.9 million.
Real estate taxes and insurance.Real estate taxes and insurance costs were $30.6 million for the year ended December 31, 2025 compared to $30.6 million for the year ended December 31, 2024, which had no change across the period. This is primarily related to an increase in real estate taxes of $0.3 million, offset by a decrease in property insurance costs of $0.3 million.
Property management fees. Property management fees were $0.8 million for the year ended December 31, 2025 compared to zero for the year ended December 31, 2024, which was an increase of approximately $0.8 million or 100.0%. The increase is primarily related to an increase in property management fee of $0.8 million related to the Externalization.
Consolidated FFO, Core FFO and AFFO
We believe that net income (loss), as defined by GAAP, is the most appropriate earnings measure. We also believe that funds from operations attributable to stockholders, NCI of the OP, redeemable NCI in consolidated VIEs, and NCI in consolidated VIEs ("FFO") as defined by the National Association of Real Estate Investments Trusts ("NAREIT"), core funds from operations attributable to stockholders, NCI of the OP, redeemable NCI in consolidated VIEs, and NCI in consolidated VIEs ("Core FFO") and adjusted funds from operations attributable to stockholders, NCI of the OP, redeemable NCI in consolidated VIEs, and NCI in consolidated VIEs ("AFFO") are important non-GAAP supplemental measures of operating performance for a REIT.
Since the historical cost accounting convention used for real estate assets requires depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income (loss), as defined by GAAP. FFO is defined by NAREIT as net income (loss) computed in accordance with GAAP, excluding gains or losses from real estate dispositions and impairment of real estate assets, plus real estate depreciation and amortization. We compute FFO in accordance with NAREIT's definition. Our presentation differs slightly from NAREIT's in that we begin with net income (loss) attributable to stockholders and add net income (loss) attributable to NCI in the OP, net income (loss) attributable to redeemable NCI in consolidated VIEs and net income (loss) attributable to NCI in consolidated VIEs and then make the adjustments to arrive at FFO.
Core FFO makes certain adjustments to FFO, which are not representative of the ongoing operating performance of our Portfolio. Core FFO adjusts FFO to remove items such as (1) losses on forfeited deposits, (2) gains or losses on extinguishment of debt, (3) non-cash interest expenses, (5) reversal of (provision for) loan losses, (6) transaction costs incurred in connection with the Externalization, acquisitions, dispositions and issuance of debt and other costs not related to core real estate operations and (7) equity-based compensation expense. We believe Core FFO is useful as a supplemental gauge of our operating performance and is useful in comparing our operating performance with other REITs.
AFFO makes certain adjustments to Core FFO in order to arrive at a more refined measure of the operating performance of our Portfolio. There is no industry standard definition of AFFO and the method of calculating AFFO is divergent across the industry. AFFO adjusts Core FFO to remove recurring capital expenditures, which are costs necessary to help preserve the value and maintain functionality of our homes. We believe AFFO is useful as a supplemental gauge of the operating performance of our Company and is useful in comparing our operating performance with other REITs.
Basic and diluted weighted average shares in our FFO/Core FFO/AFFO table includes both our Common Stock and OP Units.
We believe that the use of FFO, Core FFO and AFFO, combined with the required GAAP presentations, improves the understanding of operating results of REITs and makes comparisons of operating results among such companies more meaningful. While FFO, Core FFO and AFFO are relevant and widely used measures of operating performance of REITs, they do not represent cash flows from operations or net income (loss) as defined by GAAP and should not be considered as an alternative or substitute to those measures in evaluating our liquidity or operating performance. FFO, Core FFO and AFFO do not purport to be indicative of cash available to fund our future cash requirements.
The following table reconciles our calculations of FFO, Core FFO and AFFO to net loss attributable to stockholders for the years ended December 31, 2025 and 2024 (in thousands, except per share amounts):
|
For the Year Ended December 31, |
2025 to 2024 |
|||||||||||||||
|
2025 |
2024 |
$ Change |
% Change |
|||||||||||||
|
Net loss attributable to stockholders |
$ |
(155,532 |
) |
$ |
(144,663 |
) |
$ |
(10,869 |
) |
7.5 |
% |
|||||
|
Net loss attributable to NCI in the OP |
(32,131 |
) |
(29,162 |
) |
(2,969 |
) |
10.2 |
% |
||||||||
|
Net loss attributable to redeemable noncontrolling interest in consolidated VIEs |
(17,993 |
) |
(30,703 |
) |
12,710 |
-41.4 |
% |
|||||||||
|
Net loss attributable to noncontrolling interest in consolidated VIEs |
(2,468 |
) |
(4,734 |
) |
2,266 |
-47.9 |
% |
|||||||||
|
Depreciation and amortization |
124,653 |
123,940 |
713 |
0.6 |
% |
|||||||||||
|
Loss/(Gain) on sales and impairment of real estate, net |
(3,255 |
) |
32,455 |
(35,710 |
) |
N/M |
||||||||||
|
FFO attributable to stockholders, NCI in the OP, redeemable noncontrolling interests in consolidated VIEs, and noncontrolling interests in consolidated VIEs |
(86,726 |
) |
(52,867 |
) |
(33,859 |
) |
64.0 |
% |
||||||||
|
FFO per share - basic |
$ |
(2.79 |
) |
$ |
(1.77 |
) |
$ |
(1.02 |
) |
57.6 |
% |
|||||
|
FFO per share - diluted |
$ |
(2.79 |
) |
$ |
(1.77 |
) |
$ |
(1.02 |
) |
57.6 |
% |
|||||
|
Loss on forfeited deposits |
1,468 |
- |
1,468 |
100.0 |
% |
|||||||||||
|
Loss on extinguishment of debt |
2,083 |
3,881 |
(1,798 |
) |
-46.3 |
% |
||||||||||
|
Non-cash interest expense |
36,139 |
34,140 |
1,999 |
5.9 |
% |
|||||||||||
|
Reversal of (provision for) loan losses |
(500 |
) |
4,605 |
(5,105 |
) |
N/M |
||||||||||
|
Transaction and other costs |
15,435 |
8,868 |
6,567 |
74.1 |
% |
|||||||||||
|
Equity-based compensation expense |
53,000 |
20,690 |
32,310 |
N/M |
||||||||||||
|
Core FFO attributable to stockholders, NCI in the OP, redeemable noncontrolling interests in consolidated VIEs, and noncontrolling interests in consolidated VIEs |
20,899 |
19,317 |
1,582 |
8.2 |
% |
|||||||||||
|
Core FFO per share - basic |
$ |
0.67 |
$ |
0.65 |
$ |
0.02 |
3.1 |
% |
||||||||
|
Core FFO per share - diluted |
$ |
0.65 |
$ |
0.63 |
$ |
0.02 |
3.2 |
% |
||||||||
|
Recurring capital expenditures |
(20,025 |
) |
(23,844 |
) |
3,819 |
-16.0 |
% |
|||||||||
|
AFFO attributable to stockholders, NCI in the OP, redeemable noncontrolling interests in consolidated VIEs, and noncontrolling interests in consolidated VIEs |
874 |
(4,527 |
) |
5,401 |
N/M |
|||||||||||
|
AFFO per share - basic |
$ |
0.03 |
$ |
(0.15 |
) |
$ |
0.18 |
N/M |
||||||||
|
AFFO per share - diluted |
$ |
0.03 |
$ |
(0.15 |
) |
$ |
0.18 |
N/M |
||||||||
|
Weighted average shares outstanding - basic |
31,137 |
29,920 |
||||||||||||||
|
Weighted average shares outstanding - diluted (1) |
31,992 |
30,784 |
||||||||||||||
|
Dividends declared per share |
$ |
2.1204 |
$ |
2.1204 |
||||||||||||
|
Net loss attributable to stockholders per share/unit - diluted |
$ |
(6.04 |
) |
$ |
(5.73 |
) |
||||||||||
|
Net loss attributable to stockholders Coverage - diluted (2) |
-2.85x |
-2.70x |
||||||||||||||
|
FFO Coverage - diluted (3) |
-1.32x |
-0.83x |
||||||||||||||
|
Core FFO Coverage - diluted (3) |
0.31x |
0.30x |
||||||||||||||
|
AFFO Coverage - diluted (3) |
0.01x |
-0.07x |
||||||||||||||
(1)
For the years ended December 31, 2025 and 2024, includes approximately 641,410 shares and 838,000 shares, respectively, related to the assumed vesting of restricted stock units of the Company ("RSUs"), earned performance
shares of the Company ("Performance Shares") and profits interest units in the OP ("PI Units") not contingent upon an IPO, change in control or listing of the Company's Common Stock on a national securities exchange.
(2)
Indicates coverage ratio of net loss attributable to stockholders per share (diluted) over dividends declared per common share during the period.
(3)
Indicates coverage ratio of FFO/Core FFO/AFFO per common share (diluted) over dividends declared per common share during the period.
VineBrook FFO, Core FFO and AFFO
In addition to FFO, Core FFO and AFFO, we present FFO, Core FFO and AFFO for the VineBrook Portfolio ("VineBrook FFO," "VineBrook Core FFO," and "VineBrook AFFO," respectively) as we view the VineBrook Portfolio as the Company's primary reportable segment and believe it is useful to consider the VineBrook FFO, VineBrook Core FFO and VineBrook AFFO as supplemental gauges of our operating performance. We also use VineBrook Core FFO as a performance metric for certain key executives, including under grants of performance shares made in the Internalization.
FFO is defined by NAREIT as net income (loss) computed in accordance with GAAP, excluding gains or losses from real estate dispositions and impairment of real estate assets, plus real estate depreciation and amortization. We compute VineBrook FFO in accordance with NAREIT's definition. Our presentation differs slightly from NAREIT's in that we begin with VineBrook net income (loss) attributable to stockholders and add VineBrook net income (loss) attributable to NCI in the OP and then make the adjustments to arrive at VineBrook FFO.
VineBrook Core FFO makes certain adjustments to VineBrook FFO, which are not representative of the ongoing operating performance of our Portfolio. VineBrook Core FFO adjusts VineBrook FFO to remove or add items such as (1) losses on forfeited deposits, (2) reportable segment-specific investment income, (3) gains or losses on extinguishment of debt, (4) non-cash interest expenses, (5) transaction costs incurred in connection with acquisitions, dispositions and issuance of debt and other costs not related to core real estate operations, including the Externalization and (6) equity-based compensation expense. We believe VineBrook Core FFO is useful as a supplemental gauge of our operating performance and is useful in comparing our operating performance with other REITs.
VineBrook AFFO makes certain adjustments to VineBrook Core FFO in order to arrive at a more refined measure of the operating performance of our VineBrook Portfolio. There is no industry standard definition of AFFO and the method of calculating AFFO is divergent across the industry. VineBrook AFFO adjusts VineBrook Core FFO to remove recurring capital expenditures, which are costs necessary to help preserve the value and maintain functionality of our homes. We believe VineBrook AFFO is useful as a supplemental gauge of the operating performance of our VineBrook Portfolio and is useful in comparing our operating performance with other REITs.
Basic and diluted weighted average shares in our VineBrook FFO/VineBrook Core FFO/VineBrook AFFO table includes both our Common Stock and OP Units.
We believe that the use of VineBrook FFO, VineBrook Core FFO and VineBrook AFFO, combined with the required GAAP presentations, improves the understanding of operating results of REITs and makes comparisons of operating results among such companies more meaningful. While FFO, Core FFO and AFFO are relevant and widely used measures of operating performance of REITs, they do not represent cash flows from operations or net income (loss) as defined by GAAP and should not be considered as an alternative or substitute to those measures in evaluating our liquidity or operating performance. VineBrook FFO, VineBrook Core FFO and VineBrook AFFO do not purport to be indicative of cash available to fund our future cash requirements. Further, our computation of VineBrook FFO, VineBrook Core FFO and VineBrook AFFO may not be comparable to FFO, Core FFO and AFFO reported by other REITs.
The FFO, Core FFO and AFFO results discussed further below are for the VineBrook Portfolio, and reconcile to net loss for the VineBrook Portfolio for the years ended December 31, 2025 and 2024. See below for a reconciliation of VineBrook net loss to consolidated net loss for the years ended December 31, 2025 and 2024:
|
For the Year Ended December 31, 2025 |
For the Year Ended December 31, 2024 |
|||||||||||||||||||||||
|
VineBrook Portfolio |
NexPoint Homes Portfolio |
Total Company |
VineBrook Portfolio |
NexPoint Homes Portfolio |
Total Company |
|||||||||||||||||||
|
Net loss attributable to stockholders |
$ |
(134,006 |
) |
$ |
(21,526 |
) |
$ |
(155,532 |
) |
$ |
(111,345 |
) |
$ |
(33,318 |
) |
$ |
(144,663 |
) |
||||||
|
Net loss attributable to redeemable NCI in the OP |
(30,335 |
) |
(1,796 |
) |
(32,131 |
) |
(26,146 |
) |
(3,016 |
) |
(29,162 |
) |
||||||||||||
|
Net loss attributable to redeemable NCI in consolidated VIEs |
- |
(17,993 |
) |
(17,993 |
) |
- |
(30,703 |
) |
(30,703 |
) |
||||||||||||||
|
Net loss attributable to NCI in consolidated VIEs |
- |
(2,468 |
) |
(2,468 |
) |
- |
(4,734 |
) |
(4,734 |
) |
||||||||||||||
|
Dividends on and accretion to redemption value of Redeemable Series A preferred stock |
8,793 |
- |
8,793 |
8,801 |
- |
8,801 |
||||||||||||||||||
|
Net income attributable to Redeemable Series B Preferred stock |
6,052 |
- |
6,052 |
6,052 |
- |
6,052 |
||||||||||||||||||
|
Net Loss |
$ |
(149,496 |
) |
$ |
(43,783 |
) |
$ |
(193,279 |
) |
$ |
(122,638 |
) |
$ |
(71,771 |
) |
$ |
(194,409 |
) |
||||||
The following table reconciles our calculations of VineBrook FFO, VineBrook Core FFO and VineBrook AFFO to the VineBrook Portfolio's net loss attributable to stockholders for the years ended December 31, 2025 and 2024, which is reconciled to consolidated net loss above, the most directly comparable GAAP financial measure (in thousands, except per share amounts):
|
For the Year Ended December 31, |
2025 to 2024 |
|||||||||||||||
|
2025 |
2024 |
$ Change |
% Change |
|||||||||||||
|
Net loss attributable to stockholders |
$ |
(134,006 |
) |
$ |
(111,345 |
) |
$ |
(22,661 |
) |
20.4 |
% |
|||||
|
Net loss attributable to NCI in the OP |
(30,335 |
) |
(26,146 |
) |
(4,189 |
) |
16.0 |
% |
||||||||
|
Depreciation and amortization |
102,730 |
97,413 |
5,317 |
5.5 |
% |
|||||||||||
|
Loss/(Gain) on sales and impairment of real estate, net |
(7,551 |
) |
7,134 |
(14,685 |
) |
N/M |
||||||||||
|
VineBrook FFO attributable to stockholders and NCI in the OP |
(69,162 |
) |
(32,944 |
) |
(36,218 |
) |
N/M |
|||||||||
|
VineBrook FFO per share - basic |
$ |
(2.22 |
) |
$ |
(1.10 |
) |
$ |
(1.12 |
) |
N/M |
||||||
|
VineBrook FFO per share - diluted |
$ |
(2.22 |
) |
$ |
(1.10 |
) |
$ |
(1.12 |
) |
N/M |
||||||
|
Loss on forfeited deposits |
66 |
- |
66 |
100.0 |
% |
|||||||||||
|
Investment income (1) |
4,745 |
5,056 |
(311 |
) |
-6.2 |
% |
||||||||||
|
Loss on extinguishment of debt |
1,832 |
3,881 |
(2,049 |
) |
-52.8 |
% |
||||||||||
|
Non-cash interest expense |
35,626 |
33,105 |
2,521 |
7.6 |
% |
|||||||||||
|
Transaction and other costs |
10,853 |
8,421 |
2,432 |
28.9 |
% |
|||||||||||
|
Equity-based compensation expense |
52,524 |
20,172 |
32,352 |
N/M |
||||||||||||
|
VineBrook Core FFO attributable to stockholders and NCI in the OP |
36,484 |
37,691 |
(1,207 |
) |
-3.2 |
% |
||||||||||
|
VineBrook Core FFO per share - basic |
$ |
1.17 |
$ |
1.26 |
$ |
(0.09 |
) |
-7.1 |
% |
|||||||
|
VineBrook Core FFO per share - diluted |
$ |
1.14 |
$ |
1.22 |
$ |
(0.08 |
) |
-6.6 |
% |
|||||||
|
Recurring capital expenditures |
(20,025 |
) |
(23,844 |
) |
3,819 |
-16.0 |
% |
|||||||||
|
VineBrook AFFO attributable to stockholders and NCI in the OP |
16,459 |
13,847 |
2,612 |
18.9 |
% |
|||||||||||
|
VineBrook AFFO per share - basic |
$ |
0.53 |
$ |
0.46 |
$ |
0.07 |
15.2 |
% |
||||||||
|
VineBrook AFFO per share - diluted |
$ |
0.51 |
$ |
0.45 |
$ |
0.06 |
13.3 |
% |
||||||||
|
Weighted average shares outstanding - basic |
31,137 |
29,920 |
||||||||||||||
|
Weighted average shares outstanding - diluted (2) |
31,992 |
30,784 |
||||||||||||||
|
Dividends declared per share |
$ |
2.1204 |
$ |
2.1204 |
||||||||||||
|
Net loss attributable to stockholders per share/unit - diluted (3) |
$ |
(6.04 |
) |
$ |
(5.73 |
) |
||||||||||
|
Net loss attributable to stockholders Coverage - diluted (4) |
-2.85x |
-2.70x |
||||||||||||||
|
VineBrook FFO Coverage - diluted (5) |
-1.05x |
-0.52x |
||||||||||||||
|
VineBrook Core FFO Coverage - diluted (5) |
0.54x |
0.58x |
||||||||||||||
|
VineBrook AFFO Coverage - diluted (5) |
0.24x |
0.21x |
||||||||||||||
(1)
Investment income in the table above includes approximately $1.0 million and $1.6 million of interest income from the 7.50% convertible notes of the SFR OP (the "SFR OP Convertible Notes") and promissory notes with NexPoint Homes and the SFR OP and approximately $3.7 million and $3.5 million of dividend income from the investment in NexPoint Homes for the years ended December 31, 2025 and 2024, respectively. The VineBrook Portfolio interest and dividend income related to NexPoint Homes are eliminated on the consolidated statements of operations and comprehensive income (loss) but are added back to VineBrook Core FFO since these funds are attributable to the standalone VineBrook Portfolio.
(2)
For the years ended December 31, 2025 and 2024, includes approximately 641,410 shares and 838,000 shares respectively, related to the assumed vesting of RSUs, Performance Shares and profits interest units in the OP ("PI Units")
not contingent upon an IPO, change in control, or listing of the Company's Common Stock on a national securities exchange.
(3)
For the years ended December 31, 2025 and 2024, the net loss attributable to stockholders per share/unit (diluted) includes $(0.84) per common share and $(0.97) per common share, respectively, related to the allocated loss per common share attributable to the NexPoint Homes Portfolio.
(4)
Indicates coverage ratio of net loss attributable to stockholders for the VineBrook Portfolio per share (diluted) over dividends declared per common share during the period.
(5)
Indicates coverage ratio of VineBrook FFO/VineBrook Core FFO/VineBrook AFFO per common share (diluted) over dividends declared per common share during the period.
The year ended December 31, 2025 as compared to the year ended December 31, 2024
VineBrook FFO was negative $69.2 million for the year ended December 31, 2025 compared to negative $32.9 million for the year ended December 31, 2024, which was a decrease of approximately $36.2 million. The change in VineBrook FFO between the periods primarily relates to the decrease in rental income of $1.6 million and increases in the VineBrook Portfolio's general and administrative expenses of $31.8 million, the VineBrook Portfolio's depreciation and amortization expense of $5.3 million, VineBrook Portfolio's total property operating expenses of $3.5 million and VineBrook Portfolio's interest expense of $10.6 million, partially offset by an increase in the VineBrook Portfolio's other income of $9.5 million.
VineBrook Core FFO was $36.5 million for the year ended December 31, 2025 compared to $37.7 million for the year ended December 31, 2024, which was a decrease of approximately $1.2 million. The change in VineBrook Core FFO between the periods primarily relates to decreases in VineBrook FFO of $36.2 million and loss on extinguishment of debt of $2.0 million, partially offset by increases in VineBrook Portfolio's non-cash interest expense of $2.5 million, VineBrook Portfolio's transaction and other costs of $2.4 million and VineBrook Portfolio's equity based compensation expense of $32.4 million, which are all added back to arrive at VineBrook Core FFO.
VineBrook AFFO was $16.5 million for the year ended December 31, 2025 compared to $13.8 million for the year ended December 31, 2024, which was an increase of approximately $2.7 million. The change in VineBrook AFFO between the periods primarily relates to a decrease to VineBrook Core FFO, partially offset by a decrease in the VineBrook Portfolio's recurring capital expenditures of $3.8 million.
The changes in diluted VineBrook FFO per share, VineBrook Core FFO per share and VineBrook AFFO per share were primarily related to an increase of 9.4% in VineBrook interest expense (or 5.3% on a per share basis). The weighted average interest rate of debt decreased from 5.3132% as of December 31, 2024 to 5.0575% as of December 31, 2025 for the VineBrook Portfolio, which has partially offset the decrease in our VineBrook FFO and VineBrook Core FFO per share results. The Company has entered into one interest rate derivative agreement with a notional amount of approximately $82.9 million in order to partially offset the impact of interest rates.
Liquidity and Capital Resources
Our short-term liquidity requirements consist primarily of funds necessary to pay for debt maturities, operating expenses and other expenditures directly associated with our homes, including:
•
recurring maintenance necessary to maintain our homes;
•
interest expense and scheduled principal payments on outstanding indebtedness;
•
distributions necessary to qualify for taxation as a REIT;
•
advisory fees payable to our Adviser;
•
property management, asset management and real estate development services fees payable to the Evergreen Manager and its affiliates;
•
general and administrative expenses; and
•
capital expenditures related to upcoming acquisitions and rehabilitation of owned homes.
We expect to meet our short-term liquidity requirements generally through net cash provided by operations, existing cash balances, sales of homes and debt financing.
Subsequent to December 31, 2025, the Company paid off $18.6 million of the debt obligations coming due. Each reporting period, management evaluates the Company's ability to continue as a going concern in accordance with ASC 205-40, Going Concern, by evaluating conditions and events, including assessing the liquidity needs to meet obligations as they become due within one year after the date the financial statements are issued. The Company has significant debt obligations of approximately $276.5 million coming due within 12 months of the financial statement issuance date, primarily due to the NexPoint Homes MetLife Note 1, which matures on March 3, 2027. As of the date of issuance, the Company does not have sufficient liquidity to satisfy these obligations. In order to satisfy obligations as they mature, management intends to evaluate its options and may seek to: (i) make partial loan pay downs, (ii) refinance the NexPoint Homes MetLife Note 1 and (iii) sell homes from its Portfolio and pay down debt balances with the net sale proceeds. Subsequent to December 31, 2025, the Company sold 107 homes and 14 homes for net proceeds of approximately $16.5 million and $3.4 million in the VineBrook Portfolio and the NexPoint Homes Portfolio, respectively. The Company intends to sell approximately 4,000 homes over the next twelve months to generate net proceeds of approximately $590.0 million in the VineBrook Portfolio. Additionally, the Company intends to sell approximately 600 homes over the next twelve months to generate proceeds of approximately $143.0 million in the NexPoint Homes Portfolio. The sale of homes from the Portfolio could cause a decrease in net operating income but is expected to be offset by the interest savings from the pay downs. The Company's ability to meet its debt obligations as they come due is dependent upon its ability to meet debt covenants, which it currently projects to do, its ability to refinance debt and its ability to sell homes from its Portfolio to pay down the balances. The Company intends to refinance the NexPoint Homes MetLife Note 1 obligation primarily using debt or equity financing before it comes due. Given the Company's historical ability to refinance debt, as well as the robust debt market, the Company expects to be able to refinance debt as necessary to meets its debt obligations going forward. Management believes these plans by the Company will be sufficient to satisfy the obligations as they become due. These financial statements have been prepared by management in accordance with GAAP and this basis assumes that the Company will continue as a going concern, which contemplates the realization of assets and the satisfaction of liabilities and commitments in the normal course of business. These financial statements do not include any adjustments that may result from the outcome of this uncertainty.
We believe that our available cash, expected operating cash flows, net proceeds from the sale of homes and potential debt or equity financings will provide sufficient funds for our operations, anticipated scheduled debt service payments and dividend requirements for the twelve-month period following the issuance of these financials. We believe that the various sources of long-term capital, which may include public or private issuances of common equity, preferred equity or debt, draws on our revolving credit facilities, existing working capital, net cash provided by operations, long-term mortgage indebtedness and other secured and unsecured borrowings will provide sufficient funds for our operations, anticipated scheduled debt service payments and dividend requirements in the long-term.
There are a number of factors that may have a material adverse effect on our ability to access capital sources, including the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including as a result of any failure to comply with financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity, market perceptions about us and restrictions on sales of properties under the Code. The success of our business strategy will depend, in part, on our ability to access these various capital sources.
Our homes will require periodic capital expenditures and renovation to remain competitive. Also, acquisitions of new homes will require significant capital outlays. Long-term, we may not be able to fund such capital improvements solely from net cash provided by operations because we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deductions for dividends paid and excluding net capital gains, to qualify and maintain our qualification as a REIT, and we are subject to tax on any retained income and gains. As a result, our ability to fund capital expenditures and acquisitions through retained earnings long-term is limited. Consequently, we expect to rely heavily upon the availability of debt or equity capital for these purposes. If we are unable to obtain the necessary capital on favorable terms, or at all, our financial condition, liquidity, results of operations, and prospects could be materially and adversely affected.
Cash Flows
The years ended December 31, 2025 and 2024
The following table presents selected data from our consolidated statements of cash flows for the years ended December 31, 2025 and 2024 (in thousands):
|
For the Year Ended December 31, |
||||||||
|
2025 |
2024 |
|||||||
|
Net cash provided by (used in) operating activities |
$ |
12,853 |
$ |
22,160 |
||||
|
Net cash provided by (used in) investing activities |
(18,515 |
) |
90,054 |
|||||
|
Net cash provided by (used in) financing activities |
66,215 |
(113,202 |
) |
|||||
|
Change in cash and restricted cash |
60,553 |
(988 |
) |
|||||
|
Cash and restricted cash, beginning of year |
84,632 |
85,620 |
||||||
|
Cash and restricted cash, end of year |
145,185 |
84,632 |
||||||
The year ended December 31, 2025 as compared to the year ended December 31, 2024
Cash flows from operating activities.During the year ended December 31, 2025, net cash used in operating activities was $12.9 million compared to net cash provided by operating activities of $22.2 million for the year ended December 31, 2024. The change in cash flows from operating activities was primarily due to decreases in accrued interest payable of $4.3 million, prepaids and other assets of $13.5 million and accounts receivable of $7.8 million and increases in real estate taxes payable of $2.4 million and accounts payable and other accrued liabilities of $13.2 million.
Cash flows from investing activities.During the year ended December 31, 2025, net cash used in investing activities was $18.5 million compared to net cash provided by investing activities of $90.1 million for the year ended December 31, 2024. The change in cash flows from investing activities was mainly due to an increase in acquisitions of real estate investments, a decrease in disposition activity of the VineBrook Portfolio and a decrease in net proceeds from sales of real estate.
Cash flows from financing activities.During the year ended December 31, 2025, net cash provided by financing activities was $66.2 million compared to net cash used in financing activities of $113.2 million for the year ended December 31, 2024. The change in cash flows from financing activities was mainly due to an increase in credit facilities proceeds received, a decrease in credit facilities principal payments and a decrease in notes payable principal payments made, partially offset by a decrease in notes payable proceeds received.
Debt, Derivatives and Hedging Activity
Debt
As of December 31, 2025, the VineBrook Portfolio had aggregate debt outstanding to third parties of approximately $2.2 billion at a weighted average interest rate of 5.0575% and an adjusted weighted average interest rate of 5.0575%. For purposes of calculating the adjusted weighted average interest rate of our debt outstanding, we have included the weighted
average fixed rate of 4.2500%, representing a weighted average fixed rate for SOFR, for the applicable interest period ("one-month term SOFR"), daily SOFR and daily SOFR plus 0.1145%, on our $82.9 million notional amount of interest rate cap agreement, which effectively fixes the interest rate on $82.9 million of our floating rate debt. See Notes 5 and 6 to our consolidated financial statements for additional information.
The following table sets forth a summary of our mortgage loan indebtedness for the VineBrook Portfolio as of December 31, 2025 (dollars in thousands):
|
Type |
Outstanding Principal as of December 31, 2025 |
Interest Rate (1) |
Maturity |
||||||||
|
JPM Acquisition Facility |
Floating |
82,569 |
6.04% |
7/9/2027 |
|||||||
|
JPM Term Loan |
Floating |
474,918 |
5.59% |
9/10/2027 |
|||||||
|
Barings Term Loan |
Fixed |
323,039 |
5.44% |
10/17/2030 |
|||||||
|
ABS I Loan |
Fixed |
366,906 |
4.92% |
12/8/2028 |
|||||||
|
ABS II Loan |
Fixed |
397,117 |
4.65% |
3/9/2029 |
|||||||
|
MetLife Term Loan I |
Fixed |
308,910 |
4.50% |
8/22/2029 |
|||||||
|
MetLife Term Loan II |
Fixed |
245,008 |
4.75% |
11/4/2029 |
|||||||
|
TrueLane Mortgage |
Fixed |
7,422 |
5.35% |
2/1/2028 |
|||||||
|
Crestcore II Note |
Fixed |
2,395 |
5.12% |
7/9/2029 |
|||||||
|
Crestcore IV Note |
Fixed |
2,228 |
5.12% |
7/9/2029 |
|||||||
|
Total Outstanding Principal |
$ |
2,210,512 |
|||||||||
(1)
Represents the interest rate as of December 31, 2025. Except for fixed rate debt, the interest rate is 30-day average SOFR, daily SOFR or one-month term SOFR, plus an applicable margin. The 30-day average SOFR as of December 31, 2025 was 3.7866%, daily SOFR as of December 31, 2025 was 3.8700% and one-month term SOFR as of December 31, 2025 was 3.6875%.
In addition to the mortgage loan indebtedness for the VineBrook Portfolio presented above and described below, the NexPoint Homes Portfolio had $515.7 million of debt outstanding at December 31, 2025 (excluding amounts owed to the OP by NexPoint Homes, as these are eliminated in consolidation). See Notes 5 and 12 to the consolidated financial statements.
Warehouse Facility
On September 20, 2019, the OP (as guarantor) and VB One, LLC (as borrower) entered into a credit facility (the "Warehouse Facility") with KeyBank N.A. ("KeyBank"). On August 14, 2024, the OP entered into a Seventh Amendment to the Warehouse Facility (the "Warehouse Seventh Amendment") with KeyBank, as administrative agent, and the lenders party thereto. The Warehouse Seventh Amendment, among other things, provided for (1) a reduction in the maximum commitment of the Warehouse Facility; (2) reduced unused facility fees; (3) modifications and additions of certain covenants, including adjusting the minimum fixed charge coverage ratio to not less than 1.40 to 1.0, effective as of January 1, 2024; (4) in connection with sales of assets to unaffiliated third parties, the prepayment of the commitment amount with 100% of such proceeds until the commitment under the Warehouse Facility is reduced to $475.0 million and with 75% of such proceeds thereafter; provided that certain additional amounts may be required to be prepaid if the outstanding principal balance would exceed the value of the assets in the borrowing base following such sale; (5) the reduction of the outstanding principal balance to be no more than $475.0 million by October 31, 2024.
As of December 31, 2025 and 2024, the outstanding principal balance of the Warehouse Facility was zero and $457.2 million, respectively. As of December 31, 2025 and 2024, there was zero and $17.8 million, respectively, of remaining commitment to be drawn on the Warehouse Facility. On September 11, 2025, the Company fully paid off the outstanding principal balance and interest on the Warehouse Facility. The Warehouse Facility, net of unamortized deferred financing costs, was included in credit facilities on the consolidated balance sheets in 2024.
JPM Facility
On March 1, 2021, the Company entered into a non-recourse carveout guaranty and certain wholly owned subsidiaries of VB Three, LLC (as borrowers) entered into a $500.0 million credit agreement (the "JPM Facility") with JPMorgan Chase Bank, National Association ("JPM"). The total facility amount was updated to $350.0 million under Amendment No. 2. The JPM Facility was secured by equity pledges in VB Three, LLC ("VB Three") and its wholly owned subsidiaries. On April 24, 2025, the Company entered into Amendment No. 5 to the JPM Facility, wherein the maturity date was extended to July 31, 2025. On July 28, 2025, the Company entered into Amendment No. 6 to the JPM Facility, wherein the maturity date was extended to October 31, 2025, and the commitment was reduced to the amount equal to the advances outstanding as of the Amendment No. 6 effective date and all repayments permanently reduced the commitment.
As of December 31, 2025 and 2024, the outstanding principal balance of the JPM Facility was zero and $97.4 million, respectively. As of December 31, 2025 and 2024, there was zero and $252.6 million, respectively, of remaining commitment to be drawn on the JPM Facility. On October 17, 2025, the Company fully paid off the outstanding principal balance and interest on the JPM Facility. The JPM Facility, net of unamortized deferred financing costs, was included in credit facilities on the consolidated balance sheets in 2024.
JPM Acquisition Facility
On June 25, 2025, VB Twelve, LLC, an indirect subsidiary of the Company, entered into a loan and security agreement with JPM, as lender, providing for an uncommitted facility for up to $500.0 million (the "JPM Acquisition Facility"). The JPM Acquisition Facility bears interest at the greater of (i) one-month term SOFR or (ii) 3.00% plus 2.35% per annum. The JPM Acquisition Facility is interest-only and matures on July 9, 2027 with a one-year extension option subject to meeting certain criteria, payment of an extension fee and increases in the interest rate spread.
As of December 31, 2025, the outstanding principal balance of the JPM Acquisition Facility was $82.6 million. As of December 31, 2025, there was $417.4 million of remaining availability to be drawn on the JPM Acquisition Facility. The JPM Acquisition Facility, net of unamortized deferred financing costs, is included in credit facilities on the consolidated balance sheets.
JPM Term Loan
On September 11, 2025, the OP, as borrower, entered into a credit agreement (the "JPM Term Loan") with JPM, and the lenders party thereto from time to time, including The Ohio State Life Insurance Company ("OSL"). The JPM Term Loan provides for term loans of $485.0 million, all of which were drawn on September 11, 2025. Borrowings under the JPM Term Loan will generally bear interest at term SOFR for the interest period plus 1.90%, provided that the Company may elect for the JPM Term Loan to bear interest at (i) the greater of the prime rate, the federal funds effective rate plus 0.5%, and one-month term SOFR plus 1.0%, in each case, plus 0.90% or (ii) adjusted daily effective SOFR plus 1.90%. The JPM Term Loan is interest-only and matures on September 10, 2027. The Company used the proceeds from the JPM Term Loan to fully repay the outstanding balances of the Warehouse Facility and the OSL Loan II.
As of December 31, 2025, the outstanding principal balance of the JPM Term Loan was $474.9 million. As of December 31, 2025, there was zero remaining availability to be drawn on the JPM Term Loan. The JPM Term Loan, net of unamortized deferred financing costs, is included in notes payable on the consolidated balance sheets.
Barings Term Loan
On October 17, 2025, the OP, via its indirect subsidiaries, as borrowers, and the Company, as parent guarantor, entered into a loan agreement that provided for a $325.0 million loan (the "Barings Term Loan") with Massachusetts Mutual Life Insurance Company, MassMutual Ascend Life Insurance Company and Martello Re Limited, as lenders, which has been fully funded at an original issue discount of 3.0% of the Barings Term Loan. The Barings Term Loan is interest-only and
matures on October 17, 2030. The loan bears interest at 5.44% per annum, payable monthly. The Company used the proceeds from the Barings Term Loan to fully repay the outstanding balances of the MetLife Note and the JPM Facility.
As of December 31, 2025, the outstanding principal balance of the Barings Term Loan was $323.0 million. As of December 31, 2025, there was zero remaining availability to be drawn on the Barings Term Loan. The Barings Term Loan, net of unamortized deferred financing costs, is included in notes payable on the consolidated balance sheets.
Asset Backed Securitization I
On December 6, 2023, the OP completed an asset backed securitization ("ABS") transaction, in connection with which VineBrook Homes Borrower 1, LLC, an indirect special purpose subsidiary of the OP (the "ABS I Borrower") entered into a loan agreement (the "ABS I Loan Agreement") with Bank of America, National Association, as lender (the "ABS I Lender"), providing for a 5-year, fixed-rate, interest-only loan with a total principal balance of $392.2 million (the "ABS I Loan").
Concurrent with the execution of the ABS I Loan Agreement, the ABS I Lender sold the ABS I Loan to VineBrook Homes Depositor A, LLC (the "Depositor"), an indirect subsidiary of the OP, which, in turn, transferred the ABS I Loan to a trust in exchange for (i) $178.4 million principal amount of Class A pass-through certificates (the "Class A Certificates"), (ii) $38.6 million principal amount of Class B pass-through certificates (the "Class B Certificates"), (iii) $30.8 million principal amount of Class C pass-through certificates (the "Class C Certificates"), (iv) $43.0 million principal amount of Class D pass-through certificates (the "Class D Certificates"), (v) $50.1 million principal amount of Class E1 pass-through certificates (the "Class E1 Certificates"), (vi) $12.2 million principal amount of Class E2 pass-through certificates (the "Class E2 Certificates," and collectively with the Class A Certificates, Class B Certificates, Class C Certificates, Class D Certificates and Class E1 Certificates, the "Regular Certificates"), and (vii) $39.1 million Class R pass-through certificates (the "Class R Certificates," and together with the Regular Certificates, the "Certificates"). The Certificates represent beneficial ownership interests in the trust and its assets, including the ABS I Loan.
The Depositor sold the Certificates, acquired by the Depositor in the manner described above, to placement agents who resold the Certificates to investors in a private offering. The Regular Certificates are exempt from registration under the Securities Act and are "exempted securities" under the Securities Exchange Act of 1934 (the "Exchange Act"). To satisfy applicable risk retention rules, the OP completed a securitization transaction, VINE 2023-SFR1, providing for a 5-year, fixed-rate, interest-only loan of Class F certificates ("Class F Certificates") with a total principal amount of $39.1 million. The Company evaluated the purchased Class F Certificates as a variable interest in the trust and concluded that the Class F Certificates do not provide the Company with an ability to direct activities that could impact the trust's economic performance. The Company does not consolidate the trust and the $39.1 million of purchased Class F Certificates are reflected as asset-backed securitization certificates in the Company's consolidated balance sheets. The Depositor used the proceeds from the sale of the Certificates to purchase the ABS I Loan from the ABS I Lender, as described above. The Regular Certificates were sold to investors at a discount and the OP retained the Class F Certificate (as described above), with the result that the proceeds, before closing costs, from the ABS I Loan to the ABS I Borrower were approximately $314.0 million. The net proceeds of $300.6 million were used to partially pay down the Warehouse Facility.
The ABS I Loan is collateralized by 2,641 single-family rental homes, and as of December 31, 2025, approximately 12.97% of the Portfolio served as collateral for outstanding borrowings under the ABS I Loan. The ABS I Loan is segregated into six tranches, all of which accrue interest at 4.9235% and have a maturity date of December 8, 2028.
As of December 31, 2025 and 2024, the outstanding principal balance of the ABS I Loan was $366.9 million and $389.3 million, respectively. As of December 31, 2025 and 2024, there was zero remaining availability to be drawn on the ABS I Loan. The ABS I Loan, net of unamortized deferred financing costs, is included in notes payable on the consolidated balance sheets.
Asset Backed Securitization II
On February 29, 2024, the OP, via its indirect special purpose subsidiary, VineBrook Homes Borrower 2, LLC (the "ABS II Borrower"), completed an asset backed securitization ("ABS II") and entered into a loan agreement (the "ABS II Loan Agreement") with BofA Securities, Inc., as sole structuring agent, joint bookrunner and co-lead manager, Mizuho Securities USA LLC, as joint bookrunner and co-lead manager and Citizens JMP Securities, LLC, J.P. Morgan Securities LLC, Raymond James & Associates, Inc., and Truist Securities, Inc., as co-managers (the "ABS II Loan").
Concurrent with the execution of the ABS II Loan Agreement, the lender sold the ABS II Loan to the Depositor, an indirect subsidiary of the OP, which, in turn, transferred the loan to a trust in exchange for (i) $176.9 million principal amount of Class A pass-through certificates (the "ABS II Class A Certificates"), (ii) $38.6 million principal amount of Class B pass-through certificates (the "ABS II Class B Certificates"), (iii) $30.6 million principal amount of Class C pass-through certificates (the "ABS II Class C Certificates"), (iv) $42.9 million principal amount of Class D pass-through certificates (the "ABS II Class D Certificates"), (v) $63.5 million principal amount of Class E-1 pass-through certificates (the "ABS II Class E1 Certificates"), (vi) $11.2 million principal amount of Class E-2 pass-through certificates (the "ABS II Class E2 Certificates," and collectively with the ABS II Class A Certificates, ABS II Class B Certificates, ABS II Class C Certificates, ABS II Class D Certificates and ABS II Class E1 Certificates, the "ABS II Regular Certificates"), and (vii) $39.9 million ABS II Class R pass-through certificates (the "ABS II Class R Certificates," and together with the ABS II Regular Certificates, the "ABS II Certificates"). Initially, the OP retained $19.5 million of the ABS II Class A Certificates, $10.5 million of the ABS II Class B Certificates, and $2.0 million of the ABS II Class C Certificates. On July 11, 2024, the OP sold $10.5 million of the ABS II Class B Certificates. On July 24, 2024, the OP sold $19.5 million of the ABS II Class A Certificates. On September 25, 2024, the OP sold $2.0 million of the ABS II Class C Certificates.
The Depositor sold the ABS II Certificates, acquired by the Depositor in the manner described above, to placement agents who resold the Certificates to investors in a private offering. The ABS II Regular Certificates are exempt from registration under the Securities Act and are "exempted securities" under the Exchange Act. To satisfy applicable risk retention rules, the OP purchased and retained the ABS II Class F component, totaling $39.9 million. Additionally, the OP purchased and retained a portion of the ABS II Class A, Class B and Class C components, totaling $19.5 million, $10.5 million and $2.0 million, respectively. The Company evaluated the purchased ABS II Class A, Class B, Class C and Class F certificates as a variable interest in the trust and concluded that the ABS II Class A, Class B, Class C and Class F certificates do not provide the Company with an ability to direct activities that could impact the trust's economic performance. The Company does not consolidate the trust and the remaining $39.9 million of the ABS II Certificates are reflected as asset-backed securitization certificates on the Company's consolidated balance sheets. For the retained ABS II Class F certificate, the Company determined to classify the debt security as a held to maturity investment (see Note 2). The Depositor used the proceeds from the sale of the ABS II Certificates to purchase the ABS II Loan from the lender, as described above. The ABS II Regular Certificates were sold to investors at a discount and the OP retained the entire Class F certificate (as described above), with the result that the proceeds, before closing costs, from the ABS II Loan to the ABS II Borrower were approximately $331.8 million. A portion of the net proceeds from the ABS II were used to pay down $242.4 million on the JPM Facility and fund reserves per the credit agreement.
The ABS II Loan is collateralized by 2,423 single-family rental homes, and as of December 31, 2025, approximately 11.90% of the Portfolio served as collateral for outstanding borrowings under the ABS II Loan. The ABS II Loan is segregated into seven tranches, Components A through F, providing for a 5-year, fixed-rate, interest-only loan. The weighted average interest rate of the ABS II Regular Certificates (Class A through E2) is 4.6495% and have a maturity date of March 9, 2029.
As of December 31, 2025 and 2024, the outstanding principal balance of the ABS II Loan was $397.12 million and $402.3 million, respectively. As of December 31, 2025 and 2024, there was zero remaining availability to be drawn on the ABS II Loan. The ABS II Loan, net of unamortized deferred financing costs, is included in notes payable on the consolidated balance sheets.
MetLife Note
On January 26, 2021, the Company (as guarantor) and VB Two, LLC (as borrower) entered into a $125.0 million note with Metropolitan Life Insurance (the "MetLife Note"). The MetLife Note was secured by equity pledges in VB Two, LLC and its wholly owned subsidiaries and bore interest at a fixed rate of 3.25%. The MetLife Note was interest-only and had a maturity date of January 31, 2026.
As of December 31, 2025 and 2024, the outstanding principal balance of the MetLife Note was zero and $104.3 million, respectively. As of December 31, 2025 and 2024, there was zero remaining availability to be drawn on the MetLife Note. On October 17, 2025, the Company fully paid off the outstanding principal balance and interest on the MetLife Note. The MetLife Note, net of unamortized deferred financing costs, was included in notes payable on the consolidated balance sheets in 2024.
MetLife Term Loan I
On August 22, 2024, VB Nine, LLC ("VB Nine") and VB Ten, LLC ("VB Ten"), indirect subsidiaries of the Company, as borrowers, entered into two credit agreements for term loan credit facilities (collectively, the "MetLife Term Loan I Facilities") with Metropolitan Life Insurance Company and Metropolitan Tower Life Insurance Company, and the lenders party thereto from time to time, which provided a total commitment of $343.2 million. Borrowings under the MetLife Term Loan I Facilities are secured by an equity pledge by VB Nine Equity, LLC and VB Ten Equity, LLC of their equity interests in VB Nine and VB Ten, respectively, and the property and assets held by VB Nine and VB Ten, respectively, and bear interest at a fixed rate equal to 4.5%. The MetLife Term Loan I Facilities are full-term, interest-only facilities that mature on August 22, 2029. The Company used $282.0 million of the proceeds to pay down a portion of the outstanding amounts under the Warehouse Facility.
As of December 31, 2025 and 2024, the outstanding principal balance of the MetLife Term Loan I Facilities was $308.9 million and $340.1 million, respectively. As of December 31, 2025 and 2024, there was zero remaining availability to be drawn on the MetLife Term Loan I Facilities. The MetLife Term Loan I Facilities, net of unamortized deferred financing costs, are included in notes payable on the consolidated balance sheets.
MetLife Term Loan II
On November 4, 2024, VB Eleven, LLC, an indirect subsidiary of the Company ("VB Eleven"), as borrower, entered into a $250.0 million credit agreement for a term loan credit facility (the "MetLife Term Loan II Facility") with Metropolitan Life Insurance Company and Metropolitan Tower Life Insurance Company, and the lenders party thereto from time to time. Borrowings under the MetLife Term Loan II Facility are secured by an equity pledge by VB Eleven Equity, LLC of its equity interests in VB Eleven and the property and assets held by VB Eleven, and bear interest at a fixed rate equal to 4.75%. The MetLife Term Loan II Facility is a full-term, interest-only facility that matures on November 4, 2029.
As of December 31, 2025 and 2024, the outstanding principal balance of the MetLife Term Loan II Facility was $245.0 million and $249.9 million, respectively. As of December 31, 2025 and 2024, there was zero remaining availability to be drawn on the MetLife Term Loan II Facility. The MetLife Term Loan II Facility, net of unamortized deferred financing costs, is included in notes payable on the consolidated balance sheets.
OSL Loan
On February 25, 2025, the OP, as borrower, entered into a $10.0 million credit agreement (the "OSL Loan") with OSL. OSL is an affiliate of the Company's Adviser through common beneficial ownership. The OSL Loan provides for a 2-year, interest-only loan at a 9.0% fixed interest rate and is guaranteed by the Company, maturing on February 25, 2027. On May 5, 2025, the OP used its option to draw an additional $5.0 million on the OSL Loan.
As of December 31, 2025 and 2024, the outstanding principal balance of the OSL Loan was zero for both years ended. As of December 31, 2025 and December 31, 2024, there was zero remaining availability to be drawn on the OSL Loan. On October 30, 2025, the Company fully paid off the outstanding principal balance and interest on the OSL Loan.
OSL Loan II
On August 7, 2025, the OP, as borrower, entered into a secured $10.0 million revolving credit agreement (the "OSL Loan II") with OSL. The OSL Loan II provides for a 2-year, interest-only loan at a 9.0% fixed interest rate and is guaranteed by the Company, maturing on August 7, 2027. On September 11, 2025, the Company fully paid off the outstanding principal balance and interest on OSL Loan II.
As of December 31, 2025 and 2024, the outstanding principal balance of the OSL Loan II was zero for both years ended. As of December 31, 2025 and 2024, there was zero remaining availability to be drawn on the OSL Loan II. On October 30, 2025, the Company fully paid off the outstanding principal balance and interest on the OSL Loan II.
Refinancing of Capital
We intend to invest in additional homes, including through BTR communities, as suitable opportunities arise and adequate sources of equity and debt financing are available. We expect that future investments in properties, including any improvements or renovations of current or newly acquired properties, will depend on and will be financed by, in whole or in part, our existing cash, future borrowings and the proceeds from additional issuances of shares of Common Stock, Preferred Stock or other securities or property dispositions.
Although we expect to be subject to restrictions on our ability to incur indebtedness, we expect that we will be able to refinance existing indebtedness or incur additional indebtedness for acquisitions or other purposes, if needed. However, there can be no assurance that we will be able to refinance our indebtedness, incur additional indebtedness or access additional sources of capital, such as by issuing Common Stock, preferred stock or other debt or equity securities, on terms that are acceptable to us or at all.
Furthermore, following the completion of our renovations and depending on the interest rate environment at the applicable time, we may seek to refinance our floating rate debt into longer-term fixed rate debt at lower leverage levels.
Interest Rate Derivative Agreements
We have entered into and expect to continue to enter into interest rate swap and cap agreements with various third parties to fix or cap the floating interest rates on a majority of our floating rate mortgage debt outstanding. The interest rate swap agreements generally have a term of approximately three to six years and effectively establish a fixed interest rate on debt on the underlying notional amounts. In order to fix a portion of, and mitigate the risk associated with, our floating rate indebtedness (without incurring substantial prepayment penalties or defeasance costs typically associated with fixed rate indebtedness when repaid early or refinanced), we, through the OP, previously entered into 12 interest rate swap transactions with KeyBank and Mizuho Capital Markets LLC ("Mizuho") with a combined notional amount of $1.1 billion all of which have expired or terminated as of December 31, 2025. On February 1, 2025, an interest rate swap with KeyBank with a total notional amount of $50.0 million expired, and on March 3, 2025, another KeyBank swap with a total notional amount of $20.0 million expired. On September 15, 2025, five interest rate swaps with a total notional of $650.0 million were terminated early at the discretion of the Mizuho counterparty. In connection with the early terminations, the Company received approximately $1.3 million, which is included within cash on the consolidated balance sheets and recognized a gain of approximately $0.1 million, which is included within interest expense on the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2025. On November 1, 2025, three interest rate swaps with KeyBank with a total notional amount of $250.0 million expired, and on December 21, 2025, two KeyBank swaps with a total notional amount of $150.0 million expired. Following these expirations, all interest rate swaps were either terminated or matured, and the Company had no interest rate swaps outstanding as of December 31, 2025. See Notes 5 and 6 to our consolidated financial statements for additional information.
Interest rate caps involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. On April 13, 2022, the Company, through the OP, paid a premium of approximately $12.7 million and entered into an interest rate cap transaction with Goldman Sachs Bank USA with a
notional amount of $300.0 million. The interest rate cap effectively capped one-month term SOFR at 1.50% on $300.0 million of floating rate debt and expired on November 1, 2025. On June 27, 2025, the Company, through the OP, paid a premium of approximately $0.1 million and entered into an interest rate cap transaction with Royal Bank of Canada with a notional amount of $31.9 million (the "RBC Cap"). On September 29, 2025, the Company, through the OP, paid a premium of less than $0.1 million and modified the RBC Cap, wherein the notional amount was increased to $35.9 million. On October 28, 2025, the Company, through the OP, paid a premium of less than $0.1 million and modified the RBC Cap, wherein the notional amount was increased to $81.9 million. On December 29, 2025, the Company, through the OP, paid a premium of less than $0.1 million and modified the RBC Cap, wherein the notional amount was increased to $82.9 million. The interest rate cap effectively caps one-month term SOFR at 4.25% on $82.9 million of floating rate debt. The interest rate cap expires on July 9, 2027.
Investments in Subsidiaries
As of December 31, 2025, the Company, through the OP and its SPE subsidiaries, owned the Portfolio, which consisted of 20,355 properties in the VineBrook Portfolio and 2,035 properties in the NexPoint Homes Portfolio, through 15 SPEs and their various subsidiaries and through the consolidated investment in NexPoint Homes. The following table presents the ownership structure of each SPE group that directly or indirectly owns the title to each real estate asset as of December 31, 2025, the number of assets held, the cost of those assets, the resulting debt allocated to each SPE and whether the debt is a mortgage loan. The table presents the debt allocations to each SPE that collateralizes the related debt per the loan agreements. The mortgage loan may be settled from the assets of the below entity or entities to which the loan is made (dollars in thousands):
|
VIE Name |
Homes |
Cost Basis |
OP Beneficial Ownership % |
Encumbered by Mortgage |
Debt Allocated |
||||||||||||||||
|
NREA VB I, LLC |
34 |
$ |
3,416 |
100 |
% |
Yes |
2,220 |
||||||||||||||
|
NREA VB II, LLC |
45 |
4,593 |
100 |
% |
Yes |
2,938 |
|||||||||||||||
|
NREA VB III, LLC |
423 |
40,895 |
100 |
% |
Yes |
27,614 |
|||||||||||||||
|
NREA VB IV, LLC |
125 |
12,670 |
100 |
% |
Yes |
8,160 |
|||||||||||||||
|
NREA VB V, LLC |
1,085 |
71,249 |
100 |
% |
Yes |
70,830 |
|||||||||||||||
|
NREA VB VI, LLC |
100 |
10,433 |
100 |
% |
Yes |
6,528 |
|||||||||||||||
|
NREA VB VII, LLC |
21 |
1,997 |
100 |
% |
Yes |
1,371 |
|||||||||||||||
|
True FM2017-1, LLC |
168 |
16,792 |
100 |
% |
Yes |
7,422 |
|||||||||||||||
|
VB One, LLC |
5,341 |
730,907 |
100 |
% |
Yes |
348,665 |
|||||||||||||||
|
VB Two, LLC |
1,535 |
155,162 |
100 |
% |
Yes |
175,341 |
|||||||||||||||
|
VB Three, LLC |
1,293 |
195,215 |
100 |
% |
Yes |
147,698 |
|||||||||||||||
|
VB Five, LLC |
111 |
13,594 |
100 |
% |
Yes |
4,623 |
|||||||||||||||
|
VB Eight, LLC |
101 |
15,647 |
100 |
% |
Yes |
6,593 |
|||||||||||||||
|
VB Nine, LLC |
1,230 |
181,485 |
100 |
% |
Yes |
155,158 |
|||||||||||||||
|
VB Ten, LLC |
1,231 |
181,053 |
100 |
% |
Yes |
153,752 |
|||||||||||||||
|
VB Eleven, LLC |
2,013 |
188,297 |
100 |
% |
Yes |
245,008 |
|||||||||||||||
|
VB Twelve, LLC |
435 |
126,393 |
100 |
% |
Yes |
82,569 |
|||||||||||||||
|
VineBrook Homes Borrower 1, LLC |
2,641 |
386,527 |
100 |
% |
Yes |
366,906 |
|||||||||||||||
|
VineBrook Homes Borrower 2, LLC |
2,423 |
363,851 |
100 |
% |
Yes |
397,117 |
|||||||||||||||
|
NexPoint Homes |
2,035 |
607,646 |
83 |
% |
No |
(1 |
) |
409,920 |
|||||||||||||
|
22,390 |
$ |
3,307,822 |
$ |
2,620,433 |
(2) |
||||||||||||||||
(1)
Assets held, directly or indirectly, by NexPoint Homes and its subsidiaries are not encumbered by a mortgage. Instead, the applicable lender has an equity pledge in certain assets of the respective SPEs and an equity pledge in the equity of the respective SPEs.
(2)
In addition to the debt allocated to the SPEs noted above, as of December 31, 2025, NexPoint Homes had approximately $105.8 million of debt not collateralized directly by homes which reflects the amount outstanding on the SFR OP Convertible Notes and the $15.0 million promissory note by and between the SFR OP and NREF as of December 31, 2025.
REIT Tax Election and Income Taxes
We have elected to be taxed as a REIT under Sections 856 through 860 of the Code commencing with our taxable year ended December 31, 2018 and expect to continue to qualify as a REIT. To qualify as a REIT, we must meet a number
of organizational and operational requirements, including a requirement that we distribute at least 90% of our "REIT taxable income," as defined by the Code, to our stockholders. Taxable income from certain non-REIT activities is managed through TRSs and is subject to applicable U.S. federal, state, and local income and margin taxes. We had no significant taxes associated with our TRSs for the years ended December 31, 2025, 2024 and 2023. We believe we qualify for taxation as a REIT under the Code, and we intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify as a REIT. NexPoint Homes elected to be taxed as a REIT under Sections 856 through 860 of the Code, beginning with the year ended December 31, 2023.
We anticipate that we will continue to qualify to be taxed as a REIT for U.S. federal income tax purposes, and we intend to continue to be organized and to operate in a manner that will permit us to qualify as a REIT. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our annual REIT taxable income to stockholders. As a REIT, we will be subject to U.S. federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years.
If we fail to qualify as a REIT in any taxable year, we will be subject to U.S. federal income tax on our taxable income at regular corporate income tax rates, and dividends paid to our stockholders would not be deductible by us in computing taxable income. Any resulting corporate liability could be substantial and could materially and adversely affect our net income and net cash available for distribution to stockholders. Unless we were entitled to relief under certain Code provisions, we also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify to be taxed as a REIT.
We evaluate the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are "more-likely-than-not" (greater than 50%) of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Our management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which include federal and certain states. We have no examinations in progress and none are expected at this time.
We recognize our tax positions and evaluate them using a two-step process. First, we determine whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Second, we will determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement.
We had no material unrecognized tax benefit or expense, accrued interest or penalties as of December 31, 2025. We and our subsidiaries are subject to U.S. federal income tax as well as income tax of various state and local jurisdictions. The 2024, 2023 and 2022 tax years remain open to examination by tax jurisdictions to which our subsidiaries and we are subject. When applicable, we recognize interest and/or penalties related to uncertain tax positions on our consolidated statements of operations and comprehensive income (loss).
Dividends
We intend to make regular quarterly dividend payments to holders of our Common Stock. We also intend to make the accrued dividend payments on the Series A Preferred Stock, which are payable quarterly in arrears as provided in the articles supplementary setting forth the terms of the Series A Preferred Stock, and the accrued dividend payments on the Series B Preferred Stock, which are payable quarterly in arrears as provided in the articles supplementary setting forth the terms of the Series B Preferred Stock. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for dividends paid and excluding net capital gains. As a REIT, we will be subject to U.S. federal income tax on our undistributed REIT taxable income and net capital gains and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the
sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. We intend to make regular quarterly dividend payments of all or substantially all of our taxable income, which is not used to pay dividends on the Series A Preferred Stock and Series B Preferred Stock, to holders of our Common Stock out of assets legally available for this purpose, if and to the extent authorized by our Board. Before we make any dividend payments, whether for U.S. federal income tax purposes or otherwise, we must first meet both our operating requirements and debt service on our debt payable. If our cash available for distribution is less than our taxable income, we could be required to sell assets, borrow funds or raise additional capital to make cash dividends or we may make a portion of the required dividend in the form of a taxable distribution of stock or debt securities.
We will make dividend payments based on our estimate of taxable earnings per share of Common Stock, but not earnings calculated pursuant to GAAP. Our dividends and taxable income and GAAP earnings will typically differ due to items such as depreciation and amortization, fair value adjustments, differences in premium amortization and discount accretion, and non-deductible general and administrative expenses. Our dividends per share may be substantially different than our taxable earnings and GAAP earnings per share.
Inflation
The real estate market has not been affected significantly by inflation in the past several years due to increases in rents nationwide. The majority of our lease terms are for a period of one year or less and reset to market if renewed. The majority of our leases also contain protection provisions applicable to reimbursement billings for utilities. Due to the short-term nature of our leases, we do not believe our results will be materially affected.
Inflation may also affect the overall cost of debt, as the implied cost of capital increases. The Federal Reserve, in response to or in anticipation of continued inflation concerns, could raise interest rates. We intend to mitigate these risks through long-term fixed interest rate loans and interest rate derivatives, which to date have included interest rate cap and interest rate swap agreements.
Seasonality
We believe that our business and related operating results will be impacted by seasonal factors throughout the year. We experience higher levels of resident move-outs and move-ins during the late spring and summer months, which impacts both our rental revenues and related turnover costs. Furthermore, our property operating costs are seasonally impacted in certain markets for expenses such as repairs to heating, ventilation and air conditioning systems, turn costs and landscaping expenses during the summer season. Additionally, our SFR properties are at greater risk in certain markets for adverse weather conditions such as extreme cold weather in winter months and hurricanes in late summer months.
Off-Balance Sheet Arrangements
As of December 31, 2025, December 31, 2024 and December 31, 2023 we had no off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Critical Accounting Policies and Estimates
Management's discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires our management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate these judgments, assumptions and estimates for changes that would affect the reported amounts. These estimates are based on management's historical industry experience and on various other judgments and assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these judgments, assumptions and estimates. Below is a discussion of the accounting policies that we consider critical to understanding our financial condition or results of operations where there is
uncertainty or where significant judgment is required. A discussion of recently issued accounting pronouncements and our significant accounting policies, including further discussion of the accounting policies described below, can be found in Note 2 "Summary of Significant Accounting Policies" to our consolidated financial statements included in this report.
Real Estate Investments
Upon acquisition, we evaluate our acquired SFR properties for purposes of determining whether a transaction should be accounted for as an asset acquisition or business combination. Since substantially all of the fair value of our acquired properties is concentrated in a single identifiable asset or group of similar identifiable assets and the acquisitions do not include a substantive process, our purchases of homes or portfolios of homes qualify as asset acquisitions. Accordingly, upon acquisition of a property, the purchase price and related acquisition costs (the "Total Consideration") are allocated to land, buildings, improvements, fixtures, and intangible lease assets based upon their relative fair values.
The allocation of Total Consideration, which is determined using inputs that are classified within Level 3 of the fair value hierarchy established by FASB ASC 820, Fair Value Measurement ("ASC 820") (see Note 6 to our consolidated financial statements), is based on an independent third-party valuation firm's estimate of the fair value of the tangible and intangible assets and liabilities acquired, or management's internal analysis based on market knowledge obtained from historical transactions. The valuation methodology utilizes market comparable information, depreciated replacement cost and other estimates in allocating value to the tangible assets. The allocation of the Total Consideration to intangible lease assets represents the value associated with the in-place leases, as one month's worth of effective gross income (rental revenue, less credit loss allowance, plus other income) as the average downtime of the assets in the portfolio is approximately one month and the assets in the portfolio are leased on a gross rental structure. If any debt is assumed in an acquisition, the difference between the fair value, which is estimated using inputs that are classified within Level 2 of the fair value hierarchy, and the face value of debt is recorded as a premium or discount and amortized or accreted as interest expense over the life of the debt assumed. The allocation of Total Consideration requires relying upon estimates and assessments of factors that are, at times, subject to significant uncertainty.
The allocation of Total Consideration to the various components of properties acquired during the year can have an effect on our net income/(loss) due to the useful depreciable and amortizable lives applicable to each component and the recognition of the related depreciation and amortization expense. For example, if a greater portion of the Total Consideration is allocated to land, which does not depreciate, our net income would be higher. Typically, we allocate between 10% to 30% of the Total Consideration to land.
Real estate assets, including land, buildings, improvements, fixtures, and intangible lease assets are stated at historical cost less accumulated depreciation and amortization. Costs incurred in making repairs and maintaining real estate assets are expensed as incurred. Expenditures for improvements, renovations, and replacements are capitalized at cost. The Company also incurs costs to prepare acquired properties for rental. These costs are capitalized to the cost of the property during the period the property is undergoing activities to prepare it for its intended use. We capitalize interest costs as a cost of the property only during the period for which activities necessary to prepare an asset for its intended use are ongoing, provided that expenditures for the asset have been made and interest costs have been incurred. Upon completion of the renovation of our properties, all costs of operations, including repairs and maintenance, are expensed as incurred, unless the renovation meets the Company's capitalization criteria.
Impairment
Real estate assets are reviewed for impairment quarterly or whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Significant indicators of impairment may include, but are not limited to, declines in home values, changes in hold periods, rental rates or occupancy percentages, as well as significant changes in the economy. In such cases, the Company will evaluate the recoverability of the assets by comparing the estimated future cash flows expected to result from the use and eventual disposition of each asset to its carrying amount and provide for impairment if such undiscounted cash flows are insufficient to recover the carrying amount. If impaired, the real estate asset
will be written down to its estimated fair value. The process whereby we assess our single-family rental homes for impairment requires significant judgment and assessment of factors that are, at times, subject to significant uncertainty. During the years ended December 31, 2025 and 2024, $5.2 million and $1.8 million of impairments on operating properties were recorded, respectively, which are included in loss on sales and impairment of real estate, net on the consolidated statements of operations and comprehensive income (loss), and no significant impairment on operating properties were recorded during the year ended December 31, 2023.
Implications of being an Emerging Growth Company
We are an "emerging growth company," as defined in the Jumpstart Our Business Startups Act (the " JOBS Act") and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not "emerging growth companies" including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
The JOBS Act permits an emerging growth company such as us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to take advantage of this extended transition period. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates for such new or revised standards. We may elect to comply with public company effective dates at any time, and such election would be irrevocable pursuant to Section 107(b) of the JOBS Act.
We could remain an "emerging growth company" until the earliest of (1) the end of the fiscal year following the fifth anniversary of the date of the first sale of shares of our Common Stock pursuant to an effective registration statement, (2) the last day of the fiscal year in which our annual gross revenues exceed $1.235 billion, (3) the date that we become a "large accelerated filer" as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), which would occur if the market value of our Common Stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (4) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.
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