Company: NXDT
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001356115-25-000003
Chunk: 802

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-03-31
Form: 10-K
Item: Item 9B
Chunk 802
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 estate taxes and insurance costs were $292.9 thousand for the year ended December 31, 2024, compared to $264.3 thousand for the year ended December 31, 2023, which was an increase of approximately $29.0 thousand or 11.0%. The majority of the increase between the year ended December 31, 2024 and the year ended December 31, 2023 is related to an increase in the property tax budget.

Property management fees. Property management fees were $75.3 thousand for the year ended December 31, 2024, compared to $73.7 thousand for the year ended December 31, 2023, which was an increase of approximately $1.0 thousand, or 1.4%. The increase between the year ended December 31, 2024 and the year ended December 31, 2023 is related to an increase in rental revenue, which the management fee is calculated off of. 

Property general and administrative expenses. Property general and administrative expenses were $47.9 thousand for the year ended December 31, 2024, compared to $68.0 thousand for the year ended December 31, 2023, which was a decrease of approximately $20.0 thousand, or (29.4)%. The majority of the decrease between the year ended December 31, 2024 and the year ended December 31, 2023 is related to a decrease in professional fees.

Consolidated FFO and AFFO

We believe that net income (loss), as defined by GAAP, is the most appropriate earnings measure. We also believe that funds from operations (“FFO”), as defined by the National Association of Real Estate Investment Trusts (“NAREIT”) and adjusted funds from operations (“AFFO”) are important non-GAAP supplemental measures of operating performance for a REIT.

Since the historical cost accounting convention used for real estate assets requires depreciation except on land, such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income (loss), as defined by GAAP. We compute FFO attributable to common shareholders as