NexPoint Residential Trust board rejects resignation of director James Dondero

NexPoint Residential Trust, Inc. (NYSE:NXRT), a REIT with a market capitalization of $840 million and a strong 6% dividend yield, announced Monday that its board of directors has decided to reject the resignation offered by James Dondero, who serves as Chairman of the Board and President. According to InvestingPro data, the company has maintained a decade-long track record of consecutive dividend increases. The decision follows a review by the Nominating and Corporate Governance Committee, which recommended that the board not accept Dondero’s resignation.

According to a statement based on a Securities and Exchange Commission filing, Dondero had previously tendered his resignation after receiving more votes “withheld” than “for” his election as a director at the company’s 2025 annual meeting of stockholders. The effectiveness of his resignation was subject to the board’s acceptance.

The company reported that the Nominating and Corporate Governance Committee considered several factors in making its recommendation, including Dondero’s expertise in investment management and real estate investment trusts, his experience as an executive officer and director of multiple companies, his tenure on the board, and his role as Chairman and President. The committee and board also noted that proxy advisory firm voting recommendations against Dondero’s election were related to director attendance at board meetings, and that Dondero has attended all board meetings so far in 2025.

Dondero did not participate in the committee’s recommendation or the board’s decision regarding his resignation or future board service.

As a result of the board’s decision, Dondero will continue to serve as a member of the board until the 2026 annual meeting of stockholders or until a successor is elected and qualified.

This information is based on a statement from NexPoint Residential Trust’s filing with the Securities and Exchange Commission.

In other recent news, NexPoint Residential Trust reported its first-quarter earnings for 2025, showing a net loss of $6.9 million, or $0.27 per diluted share, which was slightly better than the expected loss of $0.30 per share. The company reported revenues of $63.2 million, just below the anticipated $63.35 million. Despite this minor revenue miss, NexPoint exceeded first-quarter core funds from operations (FFO) expectations, posting $0.75 per share against the forecast of $0.63 by Citizens JMP and the consensus estimate of $0.65 per share. This strong performance led NexPoint management to increase their full-year 2025 core FFO guidance, raising the midpoint from $1.70 to $1.75 per share.

In analyst updates, Truist Securities adjusted its outlook on NexPoint, reducing the price target to $38 from $42 while maintaining a Hold rating. Meanwhile, Citizens JMP downgraded NexPoint from Market Outperform to Market Perform due to concerns over the company’s balance sheet risk. Both firms noted NexPoint’s high financial leverage and the impending expiration of interest rate swaps in 2026 as potential risks. Despite these concerns, NexPoint benefits from favorable supply and demand trends in the residential REIT sector.

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