Company: NXDT
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001356115-25-000021
Chunk: 84

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-08-14
Form: 10-Q
Item: Item 1A
Chunk 84
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 management fees were $41.0 thousand for the six months ended June 30, 2025, compared to $37.5 thousand for the six months ended June 30, 2024, which was an increase of approximately $3.5 thousand, or 7.9%. The increase between the six months ended June 30, 2025 and the six months ended June 30, 2024 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 $10.0 thousand for the six months ended June 30, 2025, compared to $16.8 thousand for the six months ended June 30, 2024, which was a decrease of approximately $6.8 thousand, which was not a material change. The majority of the decrease between the six months ended June 30, 2025 and the six months ended June 30, 2024 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 net income (loss), excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization, plus impairment losses and realized gains (losses). Our calculation of FFO differs slightly from NAREIT's definition of FFO because we exclude realized gains (losses). We believe the exclusion of realized gains (losses) is appropriate because 

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these realized gains (losses) are not related to our real estate properties. Our presentation differs