Company: NXDT
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001356115-25-000003
Chunk: 872

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-03-31
Form: 10-K
Item: Item 9B
Chunk 872
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per sqft)$11.5—$41$(26.25)Capitalization Rate5.25%LP InterestDirect Capitalization ApproachCapitalization Rate4.00%—6.80%5.51%195,898 Discount to NAV(12.5)%—(2.5)%(-7.5%)Market ApproachCapitalization Rate5.00%—5.50%(5.22)%Recent TransactionPrice per Share$21.59Preferred SharesRecent TransactionPrice per Share$1,00066,268 Senior LoanDiscounted Cash FlowDiscount Rate12.30%—20.00%(16.15)%46,353 Total$567,640 

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Financial Instruments Not Carried at Fair ValueAt December 31, 2024 and December 31, 2023, the fair values of cash and cash equivalents, restricted cash, accounts receivable, prepaid and other assets, accrued interest and dividends, accounts payable and other accrued liabilities, accrued real estate taxes payable, accrued interest payable, income tax payable, security deposits and prepaid rent approximated their carrying values because of the short-term nature of these instruments. The estimated fair values of other financial instruments were determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair values. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company would realize on the disposition of the financial instruments. The use of different market assumptions or estimation methodologies may have a material effect on the estimated fair value amounts.In calculating the fair value of its long-term indebtedness, the Company used interest rate and spread assumptions that reflect current credit worthiness and market conditions available for the issuance of long-term debt with similar terms and remaining maturities. These financial instruments utilize Level 2 inputs. Long-term indebtedness is carried at amounts that reasonably approximate their fair value at December 31, 2024 and 2023, except for the following debt (in thousands):December 31, 2024December 31, 2023Outstanding Principal BalanceEstimated Fair ValueOutstanding Principal BalanceEstimated Fair ValueNotes payable$98,721 $78,607 $53,250 $53,250 Derivative Financial Instruments and Hedging ActivitiesThe Company manages interest rate risks primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments. The Company performs market valuations on its derivative financial instruments. The valuation of these instruments is