Company: NXDT
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001628280-25-052132
Chunk: 112

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-11-13
Form: 10-Q
Item: Item 1A
Chunk 112
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 asset. If impaired, the real estate asset will be written down to its estimated fair value. The Company’s impairment analysis identifies and evaluates events or changes in circumstances that indicate the carrying amount of a real estate investment may not be recoverable, including determining the period the Company will hold the rental property, net operating income, and the estimated capitalization rate for each respective real estate investment. The Company did not record any impairment charges for the three and nine months ended September 30, 2025. For the three and nine months ended September 30, 2024, the Company recorded approximately $1.0 million of impairment charges on real estate assets held and used, which are included in Impairment loss on the Consolidated Statements of Operations and Comprehensive Income (Loss). 

Held for Sale 

The Company periodically classifies real estate assets as held for sale when certain criteria are met in accordance with U.S. GAAP. At that time, the Company presents the net real estate assets and the liabilities associated with the real estate held for sale separately in its Consolidated Balance Sheets, and the Company ceases recording depreciation and amortization expense related to that property. Real estate held for sale is reported at the lower of its carrying amount or its estimated fair value less estimated costs to sell. As of September 30, 2025 and December 31, 2024, there were zero and one properties classified as held for sale, respectively. In addition to the net real estate assets, the Consolidated Balance Sheets also includes approximately $0.0 million and $0.1 million of accounts receivable and prepaid and other assets, and approximately $0.0 million and $0.8 million of accounts payable, real estate taxes payable, security deposits, prepaid rents, and other accrued liabilities related to assets held for sale as of September 30, 2025 and December 31, 2024, respectively. For the three and nine months ended September 30, 2025 the Company recorded approximately $0.0 million and $1.8 million of losses on real estate held for sale, respectively, which are included in impairment loss on the Consolidated Statements of Operations and Comprehensive Income (Loss). For the three and nine months ended September 30, 2024, the Company recorded approximately $5.1 million of losses on real estate held for sale, which are included in Impairment loss on the Consolidated Statements of Operations and Comprehensive Income (Loss).

Inflation

The real estate market