A newly formed commercial real estate finance company whose offerings include self-storage loans filed Dec. 23 for a $110 million IPO.
Dallas, TX-based NexPoint Real Estate Finance Inc., founded in 2019, plans to list its shares on the New York Stock Exchange under the symbol NREF, according to its IPO filing with the U.S. Securities and Exchange Commission. The company has ties to Jernigan Capital Inc., which financially backs self-storage developments.
NexPoint Real Estate Finance focuses on lending and investing in the self-storage, multifamily, single-family rental, hospitality and office sectors, with a primary emphasis on properties in the country’s 50 largest metro areas, the filing shows. In those sectors, the company handles first-mortgage loans, mezzanine loans, preferred equity investments and alternative structured financings.
NexPoint Real Estate Advisors VII LP, a subsidiary of NexPoint Advisors LP, will manage the REIT, according to the filing.
Affiliates of NexPoint Advisors have invested or lent $211 million in the self-storage sector. That includes a $125 million equity investment in Jernigan Capital, a publicly traded REIT that provides equity and debt capital to developers, owners and operators of self-storage facilities. Effective Dec. 31, Dean Jernigan, executive chairman of Jernigan Capital, retired from the Memphis, TN-based company, which he founded in 2015; CEO John Good now holds the title of chairman.
Before its IPO, NexPoint Real Estate Finance plans to assemble a portfolio of commercial real estate loans, bonds and investments.
Key executives of the new REIT will include James Dondero, set to take the role of president, and Brian Mitts, poised to become chief financial officer. Dondero is president and co-founder of Dallas-based Highland Capital Management, a platform specializing in alternative investments, and has been a member of Jernigan Capital’s board since 2016. Mitts is chief financial officer of Dallas-based NexPoint Residential Trust Inc., a publicly traded multifamily REIT affiliated with Highland.
In October 2019, Highland Capital Management LP, an investment adviser within the Highland Capital Management platform, voluntarily filed for Chapter 11 bankruptcy to protect its assets in the wake of an unfavorable court judgment. No other affiliates of the Highland Capital Management parent company are involved in the bankruptcy case, with business proceeding as usual at those units.
Once its IPO is completed, NexPoint Real Estate Finance’s board of directors will comprise five members, the IPO filing shows. One of the directors will be well-known American economist Arthur Laffer, who received the Presidential Medal of Freedom in June 2019. Laffer first gained notice as an economist while serving as an economic adviser to President Ronald Reagan.