Company: NREF
Filing Date: 2025-03-27
Form Type: 10-K
Source: 0001786248-25-000004
Chunk: 40

Company: NexPoint Real Estate Finance, Inc.
Filing Date: 2025-03-27
Form: 10-K
Item: Item 9C
Chunk 40
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15 %4.05 %New Jersey*4.02 %Other (33 and 32 states each at <4%)28.40 %29.66 %100.00 %100.00 %*Included in “Other.”Collateral Property TypeDecember 31, 2024December 31, 2023Multifamily99.57 %97.45 %Manufactured Housing0.43 %2.55 %100.00 %100.00 %

5. Common and Preferred Stock Investments

Common Stock Investments, at fair valueThe Company owns approximately 25.7% of the total outstanding shares of common stock of NSP and thus can exercise significant influence over NSP. NSP is a VIE and the Company has determined that it is not the primary beneficiary of NSP. The investment qualifies to be accounted for using the equity method. However, the Company elected the fair-value option in accordance with ASC 825-10-10 for NSP.The investment in NSP is a Level 3 asset in the fair value hierarchy and was initially measured using the entry price of the asset. The Company's valuation policy for common stock is to use readily available market prices on the relevant valuation date to the extent they are available. On a quarterly basis, the Company determines the value using widely accepted valuation techniques. A bottom up approach was used by valuing the wholly-owned self-storage assets in aggregate and development loans individually. In this bottom 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 bottom up approach but uses the top-down approach to corroborate the bottom up conclusion with a reasonable precision.The Company owns approximately 6.3% of the total outstanding shares of common stock of the Private REIT as of December 31, 2024 and 2023. 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 December 31, 2024 and 2023,