Company: NXDT
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001356115-25-000003
Chunk: 395

Company: NEXPOINT DIVERSIFIED REAL ESTATE TRUST
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 395
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 of Operations and Comprehensive Income (in thousands) for the year ended December 31, 2023:For the Year Ended December 31, 2023TenantRental IncomeHudson Advisors LLC$2,610 Ground LeaseA subsidiary of NHT OP has a ground lease situated in Durham County, North Carolina, with a subsidiary of OSL, an entity that may be deemed an affiliate of the Adviser through common beneficial ownership. The lease has a remaining term of 4 years and a discount rate of 4.6% and contains five one-year extension options. As of December 31, 2024, the carrying amount of the right-of-use asset is $0.7 million, and the lease liability is $0.7 million.The future minimum lease payments under the operating lease as of December 31, 2024 are as follows:Years Ending December 31,Minimum Lease Payment2025$204 202620820272122028217Total undiscounted lease payments841Less: Present Value discount(120)Total lease liability$721 

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For the year ended December 31, 2024, the Company recognized lease expense of $0.3 million recorded on a straight-line basis over the lease term.

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17. Segment Reporting

The Company has two reportable segments: NXDT and NHT. For a description of the types of products and services from which these reportable segments derive their revenues, see Notes 1, 2 and 3. The accounting policies of both segments are the same as those described in the Summary of Significant Accounting Policies. The chief operating decision maker primarily assesses performance for the segments and decides how to allocate resources based on segment net income (loss). The measures of segment assets are based on each segment’s total assets. The chief operating decision maker uses segment net income (loss) to evaluate profitability in deciding whether to reinvest profits into new or existing investments or into other parts of the entity, such as for dividend amounts. The Company’s two reportable segments serve different strategic purposes. The NXDT segment primarily consists of activities focused on investing in various commercial real estate property types and across the capital structure, including but not limited to equity, mortgage debt, mezzanine debt and preferred equity. The majority of NXDT’s revenue is comprised of Rental income, Dividend income, and Interest income. The NHT segment primarily consists of acquiring additional U.S. located hospitality assets that meet its investment objective and criteria and seeking to own, renovate and