Company: NXDT
Filing Date: 2025-01-30
Form Type: 424B5
Source: 0001437749-25-002263
Chunk: 28

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-01-30
Form: 424B5
Chunk 28
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’s option, or upon conversion of our Series B Preferred Shares into common shares.

Our Declaration contains restrictions on the ownership and transfer of all classes or series of our beneficial interests, including the Series B Preferred Shares, that are intended to assist us in complying with the requirements for qualification as a REIT. Unless exempted by our Board, our Declaration provides, among other things, that subject to certain exceptions, no person or entity may actually or beneficially own, or be deemed to own by virtue of the applicable constructive ownership provisions of the Code more than 9.8% (in value or in number of shares, whichever is more restrictive) of the outstanding shares of our common shares or more than 9.8% (in value or in number of shares, whichever is more restrictive) of the aggregate of the outstanding shares of our beneficial interests, including the Series B Preferred Shares. See “Description of Capital Shares—Restrictions on Ownership and Transfer” in the accompanying prospectus. You should consider these ownership limitations prior to a purchase of our Series B Preferred Shares.

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If our common shares and the Series A Preferred Shares are no longer listed on the NYSE or another national securities exchange, we may be required to terminate any continuous offering(s) of Series B Preferred Shares.

The Series B Preferred Shares are “covered securities” and therefore are not subject to registration under the state securities, or “Blue Sky,” regulations in the various states in which it may be sold due to its seniority to our common shares, which are listed on the NYSE. If our common shares and the Series A Preferred Shares are no longer listed on the NYSE or another appropriate exchange, we may be required to register any offering of Series B Preferred Shares in any state in which such offering was subsequently made. This could require the termination of any continuous offering(s) of Series B Preferred Shares and could result in our raising an amount of gross proceeds that is substantially less than the amount of the gross proceeds we expect to raise if the maximum offering amounts are sold. This would reduce our ability to make additional investments and limit the diversification of our portfolio.

To the extent that our distributions represent a return of capital for tax purposes, shareholders may recognize an increased gain or a reduced loss upon subsequent sales (including cash redemptions) of their Series B Preferred Shares.

The dividends payable by us on the Series B Preferred Shares may exceed our current and accumulated earnings and profits as determined for U.S. federal income tax purposes. If