Company: NXDT
Filing Date: 2025-01-21
Form Type: 424B3
Source: 0001437749-25-001494
Chunk: 113

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-21
Form: 424B3
Chunk 113
---
 |

| ● | NXDT pays substantial fees and expenses to the NXDT Adviser and its affiliates, which payments increase the risk that you will not earn a profit on your investment; |

| ● | If NXDT fails to qualify as a real estate investment trust for U.S. federal income tax purposes, cash available for distributions to be paid to NXDT’s shareholders could decrease materially, which would limit NXDT’s ability to make distributions to NXDT’s shareholders; |

| ● | If NXDT’s operating partnership fails to be taxable as a partnership for U.S. federal income tax purposes, possibly causing NXDT to fail to qualify for or to maintain real estate investment trust status; |

| ● | Compliance with real estate investment trust requirements, which may limit NXDT’s ability to hedge NXDT’s liabilities effectively and cause NXDT to forgo otherwise attractive opportunities, liquidate certain of NXDT’s investments or incur tax liabilities; |

| ● | The risks associated with NXDT’s ownership of interests in TRSs; |

| ● | NXDT may recognize taxable gains from the sale of properties as a result of the inability to complete certain like-kind exchanges in accordance with Section 1031 of the Code; |

| ● | The risk that the Internal Revenue Service may consider certain sales of properties to be prohibited transactions, resulting in a 100% penalty tax on any taxable gain; |

| ● | The risk that NXDT may be subject to other tax liabilities that may reduce NXDT’s cash flows and distributions on NXDT’s shares; |

| ● | The ineligibility of dividends payable by real estate investment trusts for the reduced tax rates available for some dividends; |

| ● | The risks associated with the share ownership restrictions of the Code for real estate investment trusts and the share ownership limit imposed by NXDT’s declaration of trust (the “NXDT Declaration”); |

| ● | The ability of the NXDT Board to revoke NXDT’s real estate investment trust qualification without shareholder approval; |

<div align='center'>-72-</div>

| ● | There may be legislative or regulatory tax changes or other actions affecting real estate investment trusts; |

| ● | Non-U.S. investors may be subject to U.S. federal income tax or withholding tax on distributions received from NXDT or on proceeds and the disposition of NXDT’s shares; and |

NXDT urges you to carefully consider these risks and review the additional disclosures NXDT makes concerning risks and other factors that may materially affect the outcome of NXDT’s forward-looking statements