Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 61

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 61
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 to different factors. The above factors are not presented in any order of priority.

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For their services in reviewing and considering the Transaction on behalf of the REIT, the Board determined that each member of the Special Committee shall receive a flat fee of $25,000 (or $35,000 in the case of the Chair of the Special Committee), plus a monthly fee of $5,000 for each month that the Special Committee is in existence. Such payments are not contingent upon the completion of the Transaction.

Pursuant to an engagement letter dated as of September 26, 2024, Doane Grant Thornton agreed to provide the REIT with various advisory services in connection with the Transaction including, among other things, the provision of the Fairness Opinion.

The Fairness Opinion was delivered to the Special Committee on November 22, 2024.

To prepare the Fairness Opinion, Doane Grant Thornton performed certain analyses on the REIT based on those methodologies and assumptions that Doane Grant Thornton considered appropriate in the circumstances for the purposes of preparing the Fairness Opinion. In arriving at its conclusion, Doane Grant Thornton did not attribute any particular weight to any specific approach or analysis, but rather developed qualitative judgments on the basis of its experience in rendering such opinions and on the information provided to it presented as a whole.

In considering fairness, Doane Grant Thornton considered whether the fair market value (“FMV”) of the consideration payable to Unitholders in connection with the Transaction was greater than or equal to the FMV of the REIT as of the date of the Fairness Opinion. To make such determination, Doane Grant Thornton considered the following methodologies: (i) net asset value analysis; (ii) comparable company analysis; and (iii) precedent transactions analysis.

Net Asset Value (NAV) Analysis

The NAV approach assigns a distinct value to each asset and liability category for the REIT, adopting a FMV for each category, and utilizing a methodology appropriate for each category. The total liabilities are then subtracted from the overall value of assets.

To determine the value of the REIT’s properties, Doane Grant Thornton utilized (i) an income capitalization approach and (ii) a discounted cash flow (“DCF”) approach.

Per the income capitalization approach, Doane Grant Thornton capitalized sustainable net operating income projections, and then determined capitalization rates for each property of the REIT based on (i) their understanding of the properties, (ii) research of publicly available capitalization rate