Company: NREF
Filing Date: 2025-11-13
Form Type: 10-Q
Source: 0001628280-25-052000
Chunk: 26

Company: NexPoint Real Estate Finance, Inc.
Filing Date: 2025-11-13
Form: 10-Q
Item: Item 8
Chunk 26
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%North Carolina5.08 %4.74 %Other (28 and 32 states each at <4%)31.66 %31.55 %100.00 %100.00 %Collateral Property TypeSeptember 30, 2025December 31, 2024Multifamily100.00 %99.57 %Manufactured Housing— %0.43 %100.00 %100.00 %

5. Common and Preferred Stock Investments

Common Stock Investments, at fair valueThe Company owns approximately 25.5% of the total outstanding shares of common stock of NexPoint Storage Partners, Inc. ("NSP") and thus can exercise significant influence over NSP. 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 bottoms-up approach was used by valuing the wholly-owned self-storage assets in aggregate and development loans individually. In this bottoms-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 bottoms-up approach but uses the top-down approach to corroborate the bottoms-up conclusion with a reasonable precision.The Company owns approximately 6.3% of the total outstanding shares of common stock of a private ground lease REIT (the "Private REIT") as of September 30, 2025. 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 September 30, 2025, the Company valued this investment based on the Private REIT's market approach price of $18.33 per share.    

21

The following table presents "Common stock investments, at fair