Company: NREF
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001786248-25-000016
Chunk: 26

Company: NexPoint Real Estate Finance, Inc.
Filing Date: 2025-08-07
Form: 10-Q
Item: Item 8
Chunk 26
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 in aggregate and development loans individually. In this bottoms-up approach, the discounted cash flow methodology is applied to the self-storage assets owned by NSP. Additionally, the income approach is used to determine the fair value of the development loans owned by NSP whereby contractual cash flows are discounted at observable market discount rates. In addition, as a secondary check for reasonableness, a top-down approach was applied whereby observable market terminal capitalization rates and discount rates are applied to the consolidated NSP cash flows. The valuation relies primarily on the bottoms-up approach but uses the top-down approach to corroborate the bottoms-up conclusion with a reasonable precision.The Company owns approximately 6.3% of the total outstanding shares of common stock of a private ground lease REIT (the "Private REIT") as of June 30, 2025. The Company elected the fair value option in accordance with ASC 825-10-10 for the Private REIT.The investment in the Private REIT is a Level 3 asset in the fair value hierarchy. As of June 30, 2025, the Company valued this investment based on the Private REIT's market approach price of $18.73 per share.    

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The following table presents "Common stock investments, at fair value" as of June 30, 2025 and December 31, 2024, respectively (in thousands, except share amounts):SharesFair ValueInvestmentInvestment DateProperty TypeJune 30, 2025December 31, 2024June 30, 2025December 31, 2024Common StockNexPoint Storage Partners11/6/2020Self-storage41,963 41,963 $24,703 $30,467 Private REIT4/14/2022Ground lease1,394,213 1,394,213 26,113 26,922 The following table presents “Change in unrealized gain (loss) on common stock investments” (in thousands): For the Three Months Ended June 30,For the Six Months Ended June 30,2025202420252024Change in unrealized gain (loss) on NexPoint Storage Partners$(4,587)$(1,088)$(5,765)$(453)Change in unrealized gain (loss) on Private REIT(573)(683)(809)(2,189)Change in unrealized gain (loss) on common stock investments$(5,160)$(1,771)$(6,574