# EDGAR Filing Document

**Accession Number:** 0001356115
**File Stem:** 0001356115-25-000021
**Filing Date:** 2025-8
**Character Count:** 394603
**Document Hash:** e9bdb905709d4a7fea40f752ae5e529c
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001356115-25-000021.hdr.sgml**: 20250814

**ACCESSION NUMBER**: 0001356115-25-000021

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 114

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250814

**DATE AS OF CHANGE**: 20250814

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NEXPOINT DIVERSIFIED REAL ESTATE TRUST
- **CENTRAL INDEX KEY:** 0001356115
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 800139099
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-32921
- **FILM NUMBER:** 251219071

**BUSINESS ADDRESS:**
- **STREET 1:** 300 CRESCENT COURT
- **STREET 2:** SUITE 700
- **CITY:** DALLAS
- **STATE:** TX
- **ZIP:** 75201
- **BUSINESS PHONE:** 214-276-6300

**MAIL ADDRESS:**
- **STREET 1:** 300 CRESCENT COURT
- **STREET 2:** SUITE 700
- **CITY:** DALLAS
- **STATE:** TX
- **ZIP:** 75201

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NexPoint Strategic Opportunities Fund
- **DATE OF NAME CHANGE:** 20180319

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** NexPoint Credit Strategies Fund
- **DATE OF NAME CHANGE:** 20120702

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** Pyxis Credit Strategies Fund
- **DATE OF NAME CHANGE:** 20120109

?xml version='1.0' encoding='ASCII'? nxdt-20250630

<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**Washington, D.C. 20549**

**_____________________________________________________________________________________**

**FORM 10-Q**

**_____________________________________________________________________________________**

**(Mark One)**

⌧ **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended June 30, 2025**

**OR**

□ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the transition period from <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u> to <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>**

**Commission File Number 001-32921**

**_____________________________________________________________________________________**

**NexPoint Diversified Real Estate Trust**

**(Exact Name of Registrant as Specified in Its Charter)**

**_____________________________________________________________________________________**

---

| | |
|:---|:---|
| **Delaware** | **80-0139099** |
| **(State or other Jurisdiction of<br>Incorporation or Organization)** | **(I.R.S. Employer<br>Identification No.)** |

---

---

| | |
|:---|:---|
| **300 Crescent Court, Suite 700, Dallas, Texas**<br>**(Address of Principal Executive Offices)** | **75201**<br>**(Zip Code)** |

---

 **(214) 276-6300**

**(Telephone Number, Including Area Code)**

**Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:**

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which registered** |
| **Common Shares, par value $0.001 per share** | **NXDT** | **New York Stock Exchange** |
| **5.50% Series A Cumulative Preferred Shares, par value<br>$0.001 per share ($25.00 liquidation preference per share)** | **NXDT-PA** | **New York Stock Exchange** |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No □

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No □

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

---

| | | | |
|:---|:---|:---|:---|
| Large Accelerated Filer | □ | Accelerated Filer | □ |
| Non-Accelerated Filer | ☒ | Smaller reporting company | ☒ |
| Emerging growth company | □ | | |

---

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. □

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes □ No ⌧

As of August 14, 2025, the registrant had 47,348,941.52 common shares, par value $0.001 per share, outstanding.

------

<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

**Form 10-Q**

**Quarter Ended June 30, 2025**

**INDEX**

---

| | | |
|:---|:---|:---|
| | | Page |
| <u>[Cautionary Statement Regarding Forward Looking Statements](#id5fbc0fb3ee04afa9876fc107e02d4b8_10)</u> | <u>[Cautionary Statement Regarding Forward Looking Statements](#id5fbc0fb3ee04afa9876fc107e02d4b8_10)</u> | [ii](#id5fbc0fb3ee04afa9876fc107e02d4b8_10) |
|  | **PART I — FINANCIAL INFORMATION** |  |
| [Item 1.](#id5fbc0fb3ee04afa9876fc107e02d4b8_91) | <u>[Financial Statements](#id5fbc0fb3ee04afa9876fc107e02d4b8_13)</u> |  |
|  | <u>[Consolidated Balance Sheets as of June 30, 2025 (Unaudited) and December 31, 2024](#id5fbc0fb3ee04afa9876fc107e02d4b8_22)</u> | [1](#id5fbc0fb3ee04afa9876fc107e02d4b8_22) |
|  | <u>[Consolidated Unaudited Statements of Operations and Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2025 and 2024](#id5fbc0fb3ee04afa9876fc107e02d4b8_25)</u>  | [2](#id5fbc0fb3ee04afa9876fc107e02d4b8_25) |
|  | <u>[Consolidated Unaudited Statements of Equity for the Three and Six Months Ended June 30, 2025 and 2024](#id5fbc0fb3ee04afa9876fc107e02d4b8_31)</u> | [3](#id5fbc0fb3ee04afa9876fc107e02d4b8_31) |
|  | <u>[Consolidated Unaudited Statements of Cash Flows for the Six Months Ended June 30, 2025 and 2024](#id5fbc0fb3ee04afa9876fc107e02d4b8_43)</u> | [7](#id5fbc0fb3ee04afa9876fc107e02d4b8_43) |
|  | <u>[Notes to Consolidated Unaudited Financial Statements](#id5fbc0fb3ee04afa9876fc107e02d4b8_46)</u> | [8](#id5fbc0fb3ee04afa9876fc107e02d4b8_46) |
| [Item 2.](#id5fbc0fb3ee04afa9876fc107e02d4b8_313) | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#id5fbc0fb3ee04afa9876fc107e02d4b8_127)</u> | [45](#id5fbc0fb3ee04afa9876fc107e02d4b8_127) |
| [Item 3.](#id5fbc0fb3ee04afa9876fc107e02d4b8_295) | <u>[Quantitative and Qualitative Disclosures About Market Risk](#id5fbc0fb3ee04afa9876fc107e02d4b8_190)</u> | [75](#id5fbc0fb3ee04afa9876fc107e02d4b8_190) |
| [Item 4.](#id5fbc0fb3ee04afa9876fc107e02d4b8_127) | <u>[Controls and Procedures](#id5fbc0fb3ee04afa9876fc107e02d4b8_193)</u> | [75](#id5fbc0fb3ee04afa9876fc107e02d4b8_193) |
|  | **PART II — OTHER INFORMATION** |  |
| Item 1. | <u>[Legal Proceedings](#id5fbc0fb3ee04afa9876fc107e02d4b8_55)</u> | [76](#id5fbc0fb3ee04afa9876fc107e02d4b8_199) |
| [Item 1A.](#id5fbc0fb3ee04afa9876fc107e02d4b8_130) | <u>[Risk Factors](#id5fbc0fb3ee04afa9876fc107e02d4b8_64)</u> | [76](#id5fbc0fb3ee04afa9876fc107e02d4b8_202) |
| [Item 2.](#id5fbc0fb3ee04afa9876fc107e02d4b8_133) | <u>[Unregistered Sale of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](#id5fbc0fb3ee04afa9876fc107e02d4b8_205)</u> | [76](#id5fbc0fb3ee04afa9876fc107e02d4b8_205) |
| [Item 3.](#id5fbc0fb3ee04afa9876fc107e02d4b8_139) | <u>[Defaults Upon Senior Securities](#id5fbc0fb3ee04afa9876fc107e02d4b8_70)</u> | [76](#id5fbc0fb3ee04afa9876fc107e02d4b8_208) |
| [Item 4.](#id5fbc0fb3ee04afa9876fc107e02d4b8_142) | <u>[Mine Safety Disclosures](#id5fbc0fb3ee04afa9876fc107e02d4b8_211)</u> | [76](#id5fbc0fb3ee04afa9876fc107e02d4b8_211) |
| [Item 5.](#id5fbc0fb3ee04afa9876fc107e02d4b8_145) | <u>[Other Information](#id5fbc0fb3ee04afa9876fc107e02d4b8_76)</u> | [76](#id5fbc0fb3ee04afa9876fc107e02d4b8_214) |
| [Item 6.](#id5fbc0fb3ee04afa9876fc107e02d4b8_148) | <u>[Exhibits](#id5fbc0fb3ee04afa9876fc107e02d4b8_79)</u> | [76](#id5fbc0fb3ee04afa9876fc107e02d4b8_220) |
| <u>[Signatures](#id5fbc0fb3ee04afa9876fc107e02d4b8_82)</u> | <u>[Signatures](#id5fbc0fb3ee04afa9876fc107e02d4b8_82)</u> | [78](#id5fbc0fb3ee04afa9876fc107e02d4b8_223) |

---

i

------

<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**Cautionary Statement Regarding Forward-Looking Statements**

This quarterly report (this "Quarterly Report") contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. In particular, statements relating to our business and investment strategies, plans or intentions, our liquidity and capital resources, our performance and results of operations, expectations on our ability to refinance debt as necessary and repositioning of the portfolio of the Hospitality segment contain forward-looking statements. Furthermore, all of the statements regarding future financial performance (including market conditions and demographics) are forward-looking statements. We caution investors that any forward-looking statements presented in this Quarterly Report are based on management's current beliefs and assumptions made by, and information currently available to, management. When used, the words "anticipate," "believe," "expect," "intend," "may," "might," "plan," "potential," "estimate," "project," "target," "should," "will," "would," "result," "goal," "could," "future," "continue," "if," the negative version of these words and similar expressions that do not relate solely to historical matters are intended to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions.

Forward-looking statements are subject to risks, uncertainties and assumptions and may be affected by known and unknown risks, trends, uncertainties and factors that are beyond our control. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those anticipated, estimated or projected. We caution you therefore against relying on any of these forward-looking statements.

Some of the risks and uncertainties that may cause our actual results, performance, liquidity or achievements to differ materially from those expressed or implied by forward-looking statements include, among others, the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Unfavorable changes in economic conditions and their effects on the real estate industry generally and our operations and financial condition, including inflation, rising or high interest rates, new or increased tariffs, tightening monetary policy or recession, which may limit our ability to access funding and generate returns for shareholders;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our loans and investments expose us to risks similar to and associated with real estate investments generally;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Commercial real estate-related investments that are secured, directly or indirectly, by real property are subject to delinquency, foreclosure and loss, which could result in losses to us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with the ownership of real estate, including dependence on tenants and compliance with laws and regulations related to ownership of real property;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with our investment in diverse issuers, industries and investment forms and classes, both in real estate and in non-real estate sectors, including common equity, preferred equity, options or other derivatives, short sale contracts, secured loans of securities, reverse repurchase agreements, structured finance securities, below investment grade senior loans, bonds, convertible instruments, joint ventures, and emerging markets;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Fluctuations in interest rate and credit spreads, could reduce our ability to generate income on our loans and other investments, which could lead to a significant decrease in our results of operations, cash flows and the market value of our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• The use of leverage to finance our investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with our loans and investments in debt instruments including, senior loans, mezzanine loans, collateralized loan obligations ("CLOs"), and structured finance securities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Our loans and investments are concentrated in terms of type of interest, geography, asset types, industry and sponsors and may continue to be so in the future;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have a substantial amount of indebtedness which may limit our financial and operating activities and may adversely affect our ability to incur additional debt to fund future needs;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We have limited operating history as a standalone company and may not be able to operate our business successfully, find suitable investments, or generate sufficient revenue to make or sustain distributions to our shareholders;

ii

------

<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We may not replicate the historical results achieved by other entities managed or sponsored by affiliates of NexPoint Advisors, L.P. ("NexPoint" or our "Sponsor"), members of the NexPoint Real Estate Advisors X, L.P. (our "Adviser") management team or their affiliates;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We are dependent upon our Adviser and its affiliates to conduct our day-to-day operations; thus, adverse changes in their financial health or our relationship with them could cause our operations to suffer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• We pay substantial fees and expenses to our Adviser and its affiliates, which payments increase the risk that shareholders will not earn a profit on their investment;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• If we fail to qualify as a real estate investment trust ("REIT") for U.S. federal income tax purposes, cash available for distributions to be paid to our shareholders could decrease materially, which would limit our ability to make distributions to our shareholders; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• Any other risks included under Part I, Item 1A, "Risk Factors," of our Annual Report on Form 10-K filed with the Securities and Exchange Commission (the "SEC") on March 31, 2025.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. They are based on estimates and assumptions only as of the date of this Quarterly Report. We undertake no obligation to update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes, except as required by law.

iii

------

<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

**(in thousands, except share and par value amounts)**

---

| | | |
|:---|:---|:---|
| | **June 30, 2025 (Unaudited)** | **December 31, 2024** |
| **ASSETS** | | |
| Consolidated Real Estate Investments |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Land | $62228 | $62227 |
| &nbsp;&nbsp;&nbsp;&nbsp;Buildings and improvements | 313105 | 312200 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible lease assets | 10979 | 10979 |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction in progress | 24824 | 24689 |
| &nbsp;&nbsp;&nbsp;&nbsp;Furniture, fixtures, and equipment | 10232 | 10124 |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use assets ($624 and $712 with related parties, respectively) | 2088 | 2176 |
| Total Gross Consolidated Real Estate Investments | 423456 | 422395 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated depreciation and amortization | (42547) | (35002) |
| Total Net Consolidated Real Estate Investments | 380909 | 387393 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate held for sale |  | 29890 |
| Total Net Real Estate Investments | 380909 | 417283 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments, at fair value ($442,281 and $493,909 with related parties, respectively) | 591045 | 643432 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity method investments ($614 and $407 with related parties, respectively) | 35205 | 54429 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments in DSTs ($33,559 and $30,559, with related parties, respectively) | 33559 | 30559 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 4730 | 8791 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 44141 | 40110 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable, net | 5293 | 4463 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other assets ($0 and $7,315 with related parties, respectively) | 10206 | 17500 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest and dividends | 2577 | 5495 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rate caps | 479 | 159 |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred tax asset, net | 2846 | 2618 |
| **Total Assets** | $1110990 | $1224839 |
| **LIABILITIES AND EQUITY** |  |  |
| **Liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgages payable, net ($10,000 and $10,000 with related parties, respectively) | $228170 | $261945 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable, net ($65,670 and $66,731 with related parties, respectively) | 83877 | 90888 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prime brokerage borrowing | 4410 | 1222 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other accrued liabilities | 21796 | 22739 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax payable |  | 255 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued real estate taxes payable | 2630 | 226 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable | 9716 | 8724 |
| &nbsp;&nbsp;&nbsp;&nbsp;Security deposit liability | 367 | 389 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid rents | 521 | 1053 |
| &nbsp;&nbsp;&nbsp;&nbsp;Intangible lease liabilities, net | 2602 | 3139 |
| &nbsp;&nbsp;&nbsp;&nbsp;Lease liability ($686 and $721 with related parties, respectively) | 686 | 721 |
| **Total Liabilities** | 354775 | 391301 |
| Redeemable Series B Preferred shares, $0.001 par value: 16,000,000 authorized: 145,554 and 0 shares issued and outstanding, respectively | 3171 |  |
| Redeemable noncontrolling interests in the OP | 336 |  |
| Equity: |  |  |
| Shareholders' Equity |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Series A Preferred shares, $0.001 par value: 4,800,000 shares authorized; 3,359,593 shares issued and outstanding | 3 | 3 |
| &nbsp;&nbsp;&nbsp;&nbsp;Common shares, $0.001 par value: unlimited shares authorized; 47,421,929 and 42,679,569 shares issued and outstanding, respectively | 47 | 43 |
| &nbsp;&nbsp;&nbsp;&nbsp;Additional paid-in capital | 1048828 | 1039280 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accumulated earnings (loss) | (296170) | (202818) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Shareholders' Equity | 752708 | 836508 |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interests |  | (2970) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total Equity | 752708 | 833538 |
| **TOTAL LIABILITIES AND EQUITY** | $1110990 | $1224839 |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS** 

**AND COMPREHENSIVE INCOME (LOSS)** 

**(in thousands, except per share amounts)**

**(Unaudited)**

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended June 30,** | **For the Three Months Ended June 30,** | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** |
| | **2025** | **2024** | **2025** | **2024** |
| **Revenues** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Rental income ($69, $68, $138 and $135 with related parties, respectively) | $3713 | $3985 | $7358 | $8032 |
| &nbsp;&nbsp;&nbsp;&nbsp;Rooms | 6281 | 8200 | 16631 | 8200 |
| &nbsp;&nbsp;&nbsp;&nbsp;Food and beverage | 750 | 812 | 1639 | 812 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest income ($375, $584, $920 and $1,066 with related parties, respectively) | 2295 | 1708 | 4397 | 3390 |
| &nbsp;&nbsp;&nbsp;&nbsp;Dividend income ($7,590, $6,948, $15,113 and $13,853 with related parties, respectively) | 7682 | 7196 | 19492 | 14245 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other income | 313 | 373 | 591 | 400 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 21034 | 22274 | 50108 | 35079 |
| **Expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Property operating expenses ($52, $0, $113 and $0 with related parties, respectively) | 5523 | 6756 | 12484 | 8333 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property management fees ($183, $176, $363 and $361 with related parties, respectively) | 387 | 185 | 906 | 361 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes and insurance | 1573 | 1775 | 3414 | 3014 |
| &nbsp;&nbsp;&nbsp;&nbsp;Advisory and administrative fees | 7020 | 3443 | 10662 | 6689 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property general and administrative expenses ($69, $68, $138 and $135 with related parties, respectively) | 1616 | 2225 | 3607 | 2892 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate general and administrative expenses | 1020 | 3195 | 3947 | 6030 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 4028 | 4102 | 7937 | 6898 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment loss |  |  | 1752 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total expenses | 21167 | 21681 | 44709 | 34217 |
| **Operating income (loss)** | (133) | 593 | 5399 | 862 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | (6637) | (7851) | (13913) | (12382) |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity in income (losses) of unconsolidated equity method ventures ($160, $156, $206 and $370 with related parties, respectively) | 190 | 196 | (167) | (958) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized gains (losses) ($(36775), $3,295, $(56711) and $(12381) with related parties, respectively) | (41637) | (3154) | (74959) | 3136 |
| &nbsp;&nbsp;&nbsp;&nbsp;Realized gains (losses) ($3,462, $0, $3,462 and $0 with related parties, respectively) | 3462 | (3) | 4981 | (21875) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on sales of real estate | 26 |  | 37 |  |
| **Net income (loss) before income taxes** | (44729) | (10219) | (78622) | (31217) |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | 641 | (303) | (572) | (853) |
| **Net loss** | (44088) | (10522) | (79194) | (32070) |
| **Net (income) loss attributable to Series A preferred shareholders** | (1155) | (1155) | (2310) | (2310) |
| **Net (income) loss attributable to Series B preferred shareholders** | (28) |  | (30) |  |
| **Net (income) loss attributable to noncontrolling interests** |  | 1894 | 1945 | 1894 |
| **Net (income) loss attributable to redeemable noncontrolling interests in the OP** | 20 |  | 20 |  |
| **Net loss attributable to common shareholders** | $(45251) | $(9783) | $(79569) | $(32486) |
| **Weighted average common shares outstanding - basic** | 45687 | 39616 | 44303 | 39094 |
| **Weighted average common shares outstanding - diluted** | 45687 | 39616 | 44303 | 39094 |
| **Loss per share - basic** | $(0.99) | $(0.24) | $(1.80) | $(0.83) |
| **Loss per share - diluted** | $(0.99) | $(0.24) | $(1.80) | $(0.83) |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF EQUITY**

**(in thousands, except share and per share amounts)**

**(Unaudited)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Series A Preferred Shares** | **Series A Preferred Shares** | **Common Shares** | **Common Shares** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Earnings (Loss)** | **Noncontrolling Interests** | **Total** |
|<br>**Three Months Ended June 30, 2025** | **Number of<br>Shares** | **Amount** | **Number of<br>Shares** | **Amount** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Earnings (Loss)** | **Noncontrolling Interests** | **Total** |
| **Balances, March 31, 2025** | 3359593 | $3 | 44517013 | $45 | $1046414 | $(243747) | $(4915) | $797800 |
| &nbsp;&nbsp;Stock-based compensation expense |  |  | 114604 |  | 1671 |  |  | 1671 |
| &nbsp;&nbsp;Shares issued to Adviser for admin and advisory fees |  |  | 298883 | 1 | 1391 |  |  | 1392 |
| &nbsp;&nbsp;Net loss attributable to common shareholders |  |  |  |  |  | (45251) |  | (45251) |
| &nbsp;&nbsp;Net income attributable to Series A preferred shareholders |  |  |  |  |  | 1155 |  | 1155 |
| &nbsp;&nbsp;Common share distributions declared ($0.15 per share) |  |  | 1406836 |  | 5486 | (7172) |  | (1686) |
| &nbsp;&nbsp;Series A preferred share distributions declared ($0.34375 per share) |  |  |  |  |  | (1155) |  | (1155) |
| &nbsp;&nbsp;Acquisition of noncontrolling interests in NHT |  |  | 1084593 | 1 | (6134) |  | 4915 | (1218) |
| **Balances, June 30, 2025** | 3359593 | $3 | 47421929 | $47 | $1048828 | $(296170) | $— | $752708 |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF EQUITY**

**(in thousands, except share and per share amounts)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Series A Preferred Shares** | **Series A Preferred Shares** | **Common Shares** | **Common Shares** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Earnings (Loss)** | **Noncontrolling Interests** | **Total** |
|<br>**Six Months Ended June 30, 2025** | **Number of<br>Shares** | **Amount** | **Number of<br>Shares** | **Amount** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Earnings (Loss)** | **Noncontrolling Interests** | **Total** |
| **Balances, December 31, 2024** | 3359593 | $3 | 42679569 | $43 | $1039280 | $(202818) | $(2970) | $833538 |
| &nbsp;&nbsp;Stock-based compensation expense |  |  | 358173 |  | 2153 |  |  | 2153 |
| &nbsp;&nbsp;Shares issued to Adviser for admin and advisory fees |  |  | 556436 | 1 | 2893 |  |  | 2894 |
| &nbsp;&nbsp;Net loss attributable to common shareholders |  |  |  |  |  | (79569) |  | (79569) |
| &nbsp;&nbsp;Net loss attributable to noncontrolling interests |  |  |  |  |  |  | (1945) | (1945) |
| &nbsp;&nbsp;Net income attributable to Series A preferred shareholders |  |  |  |  |  | 2310 |  | 2310 |
| &nbsp;&nbsp;Common share distributions declared ($0.30 per share) |  |  | 2743158 | 2 | 10636 | (13783) |  | (3145) |
| &nbsp;&nbsp;Series A preferred share distributions declared ($0.68750 per share) |  |  |  |  |  | (2310) |  | (2310) |
| &nbsp;&nbsp;Acquisition of noncontrolling interests in NHT |  |  | 1084593 | 1 | (6134) |  | 4915 | (1218) |
| **Balances, June 30, 2025** | 3359593 | 3 | 47421929 | 47 | 1048828 | (296170) | $— | $752708 |

---

&nbsp;&nbsp;&nbsp;&nbsp;

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF EQUITY**

**(in thousands, except share and per share amounts)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | Series A Preferred Shares | Series A Preferred Shares | **Common Shares** | **Common Shares** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Earnings (Loss)** | **Noncontrolling Interest** | **Total** |
|<br>**Three Months Ended June 30, 2024** | **Number of<br>Shares** | **Amount** | **Number of<br>Shares** | **Amount** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Earnings (Loss)** | **Noncontrolling Interest** | **Total** |
| **Balances, March 31, 2024** | 3359593 | $3 | 39301419 | $39 | $1018136 | $(155155) | $— | $863023 |
| &nbsp;&nbsp;Noncontrolling interests from NHT Acquisition |  |  |  |  |  |  | 6873 | 6873 |
| &nbsp;&nbsp;Stock-based compensation expense |  |  | 145433 |  | 900 |  |  | 900 |
| &nbsp;&nbsp;Shares issued to Adviser for admin and advisory fees |  |  | 208117 | 1 | 1353 |  |  | 1354 |
| &nbsp;&nbsp;Net loss attributable to common shareholders |  |  |  |  |  | (9783) |  | (9783) |
| &nbsp;&nbsp;Net income attributable to noncontrolling interests |  |  |  |  |  |  | (1894) | (1894) |
| &nbsp;&nbsp;Net income attributable to preferred shareholders |  |  |  |  |  | 1155 |  | 1155 |
| &nbsp;&nbsp;Common share distributions declared ($0.15 per share) |  |  | 995149 | 1 | 4755 | (6163) |  | (1407) |
| &nbsp;&nbsp;Series A preferred shares distributions declared ($0.34375 per share) |  |  |  |  |  | (1155) |  | (1155) |
| **Balances, June 30, 2024** | 3359593 | 3 | 40650118 | 41 | 1025144 | (171101) | 4979 | 859066 |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF EQUITY**

**(in thousands, except share and per share amounts)**

**(Unaudited)**

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | Series A Preferred Shares | Series A Preferred Shares | **Common Shares** | **Common Shares** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Earnings (Loss)** | **Noncontrolling Interest** | **Total** |
|<br>**Six Months Ended June 30, 2024** | **Number of<br>Shares** | **Amount** | **Number of<br>Shares** | **Amount** | **Additional<br>Paid-in<br>Capital** | **Accumulated<br>Earnings (Loss)** | **Noncontrolling Interest** | **Total** |
| **Balances, December 31, 2023** | 3359593 | $3 | 38389600 | $38 | $1011613 | $(126580) | $— | $885074 |
| &nbsp;&nbsp;Noncontrolling interests from NHT Acquisition |  |  |  |  |  |  | 6873 | 6873 |
| &nbsp;&nbsp;Stock-based compensation expense |  |  | 145433 |  | 1447 |  |  | 1447 |
| &nbsp;&nbsp;Shares issued to Adviser for admin and advisory fees |  |  | 378038 | 1 | 2704 |  |  | 2705 |
| &nbsp;&nbsp;Net loss attributable to common shareholders |  |  |  |  |  | (32486) |  | (32486) |
| &nbsp;&nbsp;Net loss attributable to noncontrolling interests |  |  |  |  |  |  | (1894) | (1894) |
| &nbsp;&nbsp;Net income attributable to preferred shareholders |  |  |  |  |  | 2310 |  | 2310 |
| &nbsp;&nbsp;Common share distributions declared ($0.30 per share) |  |  | 1737047 | 2 | 9380 | (12035) |  | (2653) |
| &nbsp;&nbsp;Series A preferred share distributions declared ($0.68750 per share) |  |  |  |  |  | (2310) |  | (2310) |
| **Balances, June 30, 2024** | 3359593 | 3 | 40650118 | 41 | 1025144 | (171101) | 4979 | 859066 |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(in thousands)**

**(Unaudited)**

---

| | | |
|:---|:---|:---|
| | **For the Six Months Ended June 30,** | **For the Six Months Ended June 30,** |
| | **2025** | **2024** |
| **Cash flows from operating activities** |  |  |
| Net loss | $(79194) | $(32070) |
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 7937 | 6898 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of intangible lease assets and liabilities | (497) | (525) |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of deferred financing costs | 339 | 447 |
| &nbsp;&nbsp;&nbsp;&nbsp;Amortization of fair value adjustment of assumed debt | 820 | 286 |
| &nbsp;&nbsp;&nbsp;&nbsp;Paid-in-kind interest ($(2824) and $(2613) with related parties, respectively) | (5363) | (4748) |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash (paid) received on derivative settlements | (308) | 330 |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from paid-in-kind interest ($518 and $0 with related parties, respectively) | 528 | 2272 |
| &nbsp;&nbsp;&nbsp;&nbsp;Realized (gain) loss | (4981) | 21875 |
| &nbsp;&nbsp;&nbsp;&nbsp;Net change in unrealized (gain) loss on investments held at fair value ($56,711 and $12,381 with related parties, respectively) | 74959 | (3136) |
| &nbsp;&nbsp;&nbsp;&nbsp;(Gain) on sales of real estate | (37) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Unrealized (gain) loss on interest rate derivatives | (12) | (81) |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment loss | 1752 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity in (income) losses of unconsolidated ventures ($(206) and $(370) with related parties, respectively) | 167 | 958 |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions of earnings from unconsolidated ventures ($0 and $502 with related parties, respectively) | 5343 | 1787 |
| &nbsp;&nbsp;&nbsp;&nbsp;Stock-based compensation expense | 2467 | 1779 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity security dividends reinvested ($(1310) and $(4185) with related parties, respectively) | (1310) | (4258) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred tax (benefit) expense | (228) | (190) |
| Changes in operating assets and liabilities, net of effects of acquisitions: |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax payable | (255) | (356) |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes payable | 2404 | 571 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating assets | 1681 | (567) |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating liabilities | 939 | 681 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by (used in) operating activities | 7151 | (8047) |
| **Cash flows from investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from asset redemptions ($18,282 and $1,700 with related parties, respectively) | 18312 | 10114 |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions from CLO investments |  | 1266 |
| &nbsp;&nbsp;&nbsp;&nbsp;Sale of consolidated real estate investment | 28306 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from return of investment | 15054 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Net cash acquired in acquisition of NexPoint Hospitality Trust |  | 42749 |
| &nbsp;&nbsp;&nbsp;&nbsp;Purchases of investments ($(11558) and $(6632) with related parties, respectively) | (25518) | (6862) |
| &nbsp;&nbsp;&nbsp;&nbsp;Additions to consolidated real estate investments | (1294) | (5045) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by investing activities | 34860 | 42222 |
| **Cash flows from financing activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage proceeds received | 411 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgage payments | (33952) | (4121) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prime brokerage borrowing | 3497 | 155 |
| &nbsp;&nbsp;&nbsp;&nbsp;Credit facilities payments | (8665) | (3000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prime brokerage payments | (309) | (588) |
| &nbsp;&nbsp;&nbsp;&nbsp;Deferred financing costs paid | (522) | (385) |
| &nbsp;&nbsp;&nbsp;&nbsp;Payments for taxes related to net share settlement of stock-based compensation | (314) | (332) |
| &nbsp;&nbsp;&nbsp;&nbsp;Proceeds from issuance of Series B preferred shares through public offering, net of offering costs | 3171 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions paid to Series A preferred shareholders | (2310) | (2310) |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions paid to Series B preferred shareholders | (30) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Distributions paid to common shareholders | (3015) | (2456) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Distributions to redeemable noncontrolling interests in the OP | (3) |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (42041) | (13037) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | (30) | 21138 |
| Cash, cash equivalents and restricted cash, beginning of period | 48901 | 53169 |
| Cash, cash equivalents and restricted cash, end of period | $48871 | $74307 |
| **Supplemental Disclosure of Cash Flow Information** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest paid | $12101 | $5903 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax paid | $1300 | $— |
| **Supplemental Disclosure of Noncash Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash distribution payment | $10638 | $9384 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-cash advisory fee payment | $2894 | $2705 |
| &nbsp;&nbsp;&nbsp;&nbsp;Increase (decrease) in dividends payable upon vesting of restricted stock units | $128 | $197 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate investments assumed in acquisition of NexPoint Hospitality Trust | $— | $(167624) |
| &nbsp;&nbsp;&nbsp;&nbsp;DST investments assumed in acquisition of NexPoint Hospitality Trust | $— | $(5000) |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest rate caps assumed in acquisition of NexPoint Hospitality Trust | $— | $(1064) |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable assumed in acquisition of NexPoint Hospitality Trust | $— | $50694 |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable assumed in merger of NexPoint Hospitality Trust | $784 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgages payable assumed in acquisition of NexPoint Hospitality Trust | $— | $114640 |
| &nbsp;&nbsp;&nbsp;&nbsp;APIC assumed in merger of NexPoint Hospitality Trust | $(6059) | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Right of use assets assumed in acquisition of NexPoint Hospitality Trust | $— | $(1465) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued interest payable assumed in acquisition of NexPoint Hospitality Trust | $— | $6353 |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interests extinguished in merger of NexPoint Hospitality Trust | $4915 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Noncontrolling interests assumed in acquisition of NexPoint Hospitality Trust | $— | $6873 |
| &nbsp;&nbsp;&nbsp;&nbsp;Redeemable noncontrolling interest in the OP from the acquisition of NexPoint Hospitality Trust | $359 | $— |
| &nbsp;&nbsp;&nbsp;&nbsp;Deconsolidated investments at fair value from the acquisition of NexPoint Hospitality Trust | $— | $24981 |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts receivable and other assets assumed in acquisition of NexPoint Hospitality Trust | $— | $(1305) |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid assets and other assets assumed in acquisition of NexPoint Hospitality Trust | $— | $(1492) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other liabilities assumed in acquisition of NexPoint Hospitality Trust | $— | $14276 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes payable assumed in acquisition of NexPoint Hospitality Trust | $— | $1233 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in capitalized construction costs included in accounts payable and other accrued liabilities | $25 | $(410) |

---

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**1. Organization and Description of Business**

NexPoint Diversified Real Estate Trust (the "Company", "we", "us", or "our") was formed in Delaware and has elected to be taxed as a real estate investment trust (a "REIT"). Substantially all of the Company's business is conducted through NexPoint Diversified Real Estate Trust Operating Partnership, L.P. (the "OP"), the Company's operating partnership. The Company conducts its business (the "Portfolio") through the OP and its wholly owned taxable REIT subsidiaries ("TRSs"). The Company's wholly owned subsidiary, NexPoint Diversified Real Estate Trust OP GP, LLC (the "OP GP"), is the sole general partner of the OP. As of June 30, 2025, there were 44,536,894.47 common units of the OP outstanding, of which 99.96% were owned by the Company, 3,359,593 Series A Preferred Units of the OP outstanding, of which 100.0% were owned by the Company, and 145,554 Series B Preferred Units of the OP, of which 100.0% were owned by the Company.

The Company is externally managed by NexPoint Real Estate Advisors X, L.P. (the "Adviser"), through an agreement dated July 1, 2022, amended on October 25, 2022, April 11, 2023 and July 22, 2024 (the "Advisory Agreement"), by and among the Company and the Adviser for a term that will expire on July 1, 2026 and successive one-year terms thereafter unless earlier terminated. The Adviser manages the day-to-day operations of the Company and provides investment management services. The Company had no employees as of June 30, 2025. All of the Company's investment decisions are made by the Adviser, subject to general oversight by the Adviser's investment committee and our board of trustees (the "Board"). The Adviser is wholly owned by NexPoint Advisors, L.P. (the "Sponsor" or "NexPoint").

As a diversified REIT, the Company's primary investment objective is to provide both current income and capital appreciation. Target underlying property types primarily include, but are not limited to, single-family rentals, multifamily, self-storage, life science, office, industrial, hospitality, net lease, retail and small-bay industrial. The Company may, to a limited extent, hold, acquire or transact in certain non-real estate securities.

**2. Asset Acquisition**

*NHT Acquisition*

On April 10, 2024, NexPoint Real Estate Partners, LLC ("NREP"), an entity advised by an affiliate of the Adviser, and Highland Capital Management, L.P. ("Highland"), a third party, entered into a Purchase Agreement ("Purchase Agreement") whereby Highland agreed to sell, among other things, 2,176,257 units (the "NHT Units") of NexPoint Hospitality Trust ("NHT") to NREP. The Purchase Agreement was funded in part by cash of $0.8 million provided to NREP by the Company that was allocated for the sale of the NHT Units. Then on April 19, 2024, the Company, NexPoint Real Estate Opportunities, LLC ("NREO"), a wholly owned subsidiary of the Company, and NREP entered into an Assignment of Interests Agreement whereby NREP distributed, assigned, conveyed, transferred, set over, and delivered to NREO its right to purchase the NHT Units under the Purchase Agreement and all of its rights, title and interest in, to and under the NHT Units, including all voting, consent and financial rights, free and clear of all liens and encumbrances (the "NHT Acquisition"). As a result, the Company owned 53.65% of the outstanding NHT Units and was determined to hold the controlling financial interest in NHT and as a result consolidated NHT. The NHT Acquisition was accounted for as an asset acquisition under Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 805, *Business Combinations*.

Because the Company did not wholly own NHT following the NHT Acquisition, the Company recognized a noncontrolling interest ("NCI") of $6.9 million, which was recorded at fair value when the controlling financial interest was acquired. The Company also recorded an unrealized gain on its previously held interest in NHT of $3.9 million.

On November 22, 2024, the Company announced that it had entered into an Agreement and Plan of Merger (the "NHT Merger Agreement") pursuant to which it would acquire the remaining outstanding NHT Units in a merger transaction (the "NHT Merger"). On February 21, 2025, NHT's unitholders voted to approve the NHT Merger. On April 17, 2025, the Company consummated the NHT Merger in accordance with the NHT Merger Agreement.

As consideration for the NHT Merger, the Company issued 1,084,593 common shares to the former unitholders of NHT and caused the OP to issue 227,728.5 profits interest units to certain individuals employed by an affiliate of the Adviser as replacement awards for profits interest units they were previously granted by NHT and 19,881.2299 limited partnership units to one of the members of NHT's operating company. Additionally, the Company issued promissory notes

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to certain unitholders of NHT that may be deemed affiliates of the Company in an aggregate principal amount of approximately $0.8 million in lieu of common shares they otherwise would have been entitled to receive in consideration for the NHT Merger. Unitholders of NHT who elected to receive a cash payment for the redemption of their units received aggregate payments of approximately $76.0 thousand from NHT in a reorganization transaction consummated prior to the consummation of the NHT Merger. NHT also paid an aggregate of approximately $0.9 million to redeem certain deferred units held by its trustees prior to the consummation of the NHT Merger.

The accumulated cost of the NHT Acquisition was allocated to the acquired assets and liabilities based on their relative fair values as of April 10, 2024, as follows (in thousands):

---

| | |
|:---|:---|
| **Description** | |
| &nbsp;&nbsp;&nbsp;&nbsp;Land | $22673 |
| &nbsp;&nbsp;&nbsp;&nbsp;Buildings and improvements | 128616 |
| &nbsp;&nbsp;&nbsp;&nbsp;Construction in progress | 3613 |
| &nbsp;&nbsp;&nbsp;&nbsp;Furniture, fixtures, and equipment | 12722 |
| &nbsp;&nbsp;&nbsp;&nbsp;Investments, at fair value | 5000 |
| &nbsp;&nbsp;&nbsp;&nbsp;Cash and cash equivalents | 38467 |
| &nbsp;&nbsp;&nbsp;&nbsp;Restricted cash | 5065 |
| &nbsp;&nbsp;&nbsp;&nbsp;Prepaid and other assets | 4001 |
| &nbsp;&nbsp;&nbsp;&nbsp;Right-of-use asset | 1465 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest-rate cap | 1064 |
| &nbsp;&nbsp;&nbsp;&nbsp;Mortgages payable | (114640) |
| &nbsp;&nbsp;&nbsp;&nbsp;Notes payable | (70529) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accounts payable and other accrued liabilities | (21826) |
| &nbsp;&nbsp;&nbsp;&nbsp;Accrued real estate taxes | (1233) |
| Identifiable Net Assets Acquired | $14458 |

---

**3. Summary of Significant Accounting Policies**

*Basis of Accounting*

Readers of this Quarterly Report on Form 10-Q ("Quarterly Report") should refer to the audited financial statements and notes to consolidated financial statements of the Company for the year ended December 31, 2024, which are included in our <u>[2024 Annual Report on Form 10-K ("2024 Annual Report")](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001356115/000135611525000003/nxdt-20241231.htm)</u>, filed with the SEC and also available on our website (nxdt.nexpoint.com), since we have omitted from this Quarterly Report certain footnote disclosures which would substantially duplicate those contained in such audited financial statements. You should also refer to Note 3, Summary of Significant Accounting Policies, in the notes to consolidated financial statements in our <u>[2024 Annual Report](https://www.sec.gov/ix?doc=/Archives/edgar/data/0001356115/000135611525000003/nxdt-20241231.htm)</u> for further discussion of our significant accounting policies and estimates. Information contained on, or accessible through, our website is not incorporated by reference into and does not constitute a part of this Quarterly Report or any other report or documents we file or furnish with the SEC.

*Reclassification of Prior Year Activity on the Consolidated Statement of Cash Flows* 

Certain reclassifications have been made within the consolidated statements of cash flows to proceeds from asset redemptions, proceeds from sale of investments, and proceeds from paydowns of investments for the six months ended June 30, 2025 to be comparative to the consolidated statement of cash flows for the six months ended June 30, 2024.

*Income Taxes*

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I.*U.S. REIT Status*

The Company elected to be taxed as a REIT under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended (the "Code"), and expects to continue to qualify as a REIT. To qualify as a REIT, the Company must meet a

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

number of organizational and operational requirements, including a requirement to distribute annually at least 90% of its "REIT taxable income," as defined by the Code, to its shareholders. As a REIT, the Company will be subject to federal income tax on its undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions it pays with respect to any calendar year are less than the sum of (1) 85% of its ordinary income, (2) 95% of its capital gain net income and (3) 100% of its undistributed income from prior years. The Company intends to operate in such a manner so as to qualify as a REIT, but no assurance can be given that the Company will operate in a manner so as to qualify as a REIT. Taxable income from certain non-REIT activities is managed through a TRS and is subject to applicable federal, state, and local income and margin taxes.

If the Company fails to meet these requirements, it could be subject to federal income tax on all of the Company's taxable income at regular corporate rates for that year. The Company would not be able to deduct distributions paid to shareholders in any year in which it fails to qualify as a REIT. Additionally, the Company will also be disqualified from electing to be taxed as a REIT for the four taxable years following the year during which qualification was lost unless the Company is entitled to relief under specific statutory provisions. As of June 30, 2025, the Company believes it is in compliance with all applicable REIT requirements.

As a REIT for U.S. federal income tax purposes, the Company may deduct earnings distributed to shareholders against the income generated by our REIT operations. The Company continues to be subject to income taxes on the income of its taxable REIT subsidiaries. A reconciliation of the deferred tax asset (liability) for the periods indicated is as follows (in thousands):

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **As of June 30,** | **As of June 30,** | **As of June 30,** | **As of June 30,** | **As of December 31,** | **As of December 31,** | **As of December 31,** | **As of December 31,** |
| | **2025** | **2025** | **2025** | **2025** | **2024** | **2024** | **2024** | **2024** |
| | NHF TRS | NREO TRS | NHT TRSs | Combined | NHF TRS | NREO TRS | NHT TRSs | Combined |
| Deferred Tax Assets | $14945 | $218 | $372 | $15535 | $14942 | $290 | $6561 | $21793 |
| Valuation Allowance | (10632) |  | (223) | (10855) | (10487) |  | (6535) | (17022) |
| Deferred Tax Liability |  | (1834) |  | (1834) |  | (2127) | (26) | (2153) |
| Deferred Tax Asset (Liability), net of Valuation Allowance | $4313 | $(1616) | $149 | $2846 | $4455 | $(1837) | $— | $2618 |

---

The Company's tax provision for interim periods is determined using an estimate of its annual current and deferred effective tax rates, adjusted for discrete items. Our effective tax rates for the three months ended June 30, 2025 and 2024 were (0.73)% and (2.73)%, respectively. Our effective tax rate differs from the U.S. federal statutory corporate tax rate of 21.0% primarily due to our REIT operations generally not being subject to federal income taxes.

The Company recognizes its tax positions and evaluates them using a two-step process. First, the Company determines whether a tax position is more-likely-than-not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Second, the Company will determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement.

The Company had no material unrecognized tax benefit or expense, accrued interest or penalties as of June 30, 2025 and 2024. The Company and its subsidiaries are subject to federal income tax as well as income tax of various state and local jurisdictions. The 2024, 2023, 2022 and 2021 tax years remain open to examination by tax jurisdictions to which the Company and its subsidiaries are subject. When applicable, the Company recognizes interest and/or penalties related to uncertain tax positions on its Consolidated Statement of Operations and Comprehensive Income (Loss). The Company has not recorded any uncertain tax positions for the six months ended June 30, 2025 and 2024.

A reconciliation of the statutory income tax provisions to the effective income tax provisions for the periods indicated is as follows (in thousands):

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Period Ended June 30,** | **For the Period Ended June 30,** | **For the Period Ended June 30,** | **For the Period Ended June 30,** |
| | **2025** | **2025** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2024** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**2024** |
| Expected tax at statutory rate | $(16511) | 21.0% | $(6556) | 21.0% |
| Non-taxable REIT income | 23250 | -29.6% | 7600 | -24.3% |
| Change in valuation allowance | (6167) | 7.8% | (191) | 0.6% |
| Total provision | $572 | -0.7% | $853 | -2.7% |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;*II.Canadian mutual fund status*

Through April 17, 2025, NHT was a mutual fund trust pursuant to the Income Tax Act (Canada) (the "Tax Act"). Under the-then current tax legislation, a mutual fund trust that was not a specified investment flow-through trust ("SIFT") pursuant to the Tax Act generally was entitled to deduct distributions of taxable income such that it was not liable to pay Canadian income taxes provided that its taxable income was fully distributed to unitholders. On April 17, 2025, in connection with the merger of NHT into NXDT, NHT ceased to exist as a separate entity and no longer qualified for mutual fund trust status. Accordingly, the mutual fund trust provisions described above are no longer applicable subsequent to the merger date.

**4. Investments in Real Estate Subsidiaries**

The Company conducts its operations through the OP which owns several real estate properties through single asset limited liability companies that are special purpose entities ("SPEs"). The Company consolidates the SPEs that it controls as well as any VIEs where it is the primary beneficiary. All of the properties the SPEs own are consolidated in the Company's consolidated financial statements. The assets of each entity can only be used to settle obligations of that particular entity, and the creditors of each entity have no recourse to the assets of other entities or the Company.

As of June 30, 2025, the Company, through the OP, owned eight properties through SPEs, including four in the Diversified segment, and four in the Hospitality segment. The following table represents the Company's ownership in each property by virtue of its consolidation of the SPEs that directly own the title to each property as of June 30, 2025 and December 31, 2024:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | | | | **Effective Ownership Percentage at** | **Effective Ownership Percentage at** |
|<br>**Property Name** | |<br>**Location** |<br>**Year Acquired** | | **June 30, 2025** | **December 31, 2024** |
| White Rock Center |  | Dallas, Texas | 2013 |  | 100% | 100% |
| 5916 W Loop 289 |  | Lubbock, Texas | 2013 |  | 100% | 100% |
| Cityplace Tower |  | Dallas, Texas | 2018 |  | 100% | 100% |
| NexPoint Dominion Land, LLC | (1) | Plano, Texas | 2022 |  | 100% | 100% |
| Dallas Hilton Garden Inn |  | Dallas, Texas | 2014 | (2) | 100% | 54% |
| St. Petersburg Marriott |  | St. Petersburg, Florida | 2018 | (2) | 100% | 54% |
| Hyatt Place Park City |  | Park City, Utah | 2022 | (2) | 100% | 54% |
| Bradenton Hampton Inn & Suites |  | Bradenton, Florida | 2022 | (2) | 100% | 54% |

---

---

| |
|:---|
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)NexPoint Dominion Land, LLC owns 100% of 21.5 acres of undeveloped land in Plano, Texas. |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Reflects the date NHT or its predecessor acquired the property. |

---

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**5. Consolidated Real Estate Investments**

As of June 30, 2025, the major components of the Company's investments in real estate held by SPEs the Company consolidates, which are included in "Consolidated Real Estate Investments" on the Consolidated Balance Sheets, were as follows (in thousands):

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Operating Properties** | **Land** | **Buildings and <br>Improvements** | **Intangible Lease Assets** | **Intangible Lease <br>Liabilities** | **Right of use assets** | **Construction in Progress** | **Furniture, Fixtures, and <br>Equipment** | **Totals** |
| White Rock Center | $1315 | $10597 | $1921 | $(101) | $— | $— | $13 | $13745 |
| 5916 W Loop 289 | 1081 | 2938 |  |  |  |  |  | 4019 |
| Cityplace Tower | 18813 | 195416 | 9058 | (6669) |  | 19418 | 356 | 236392 |
| NexPoint Dominion Land, LLC | 26500 |  |  |  |  |  |  | 26500 |
| Dallas Hilton Garden Inn | 4116 | 24674 |  |  |  | 79 | 1527 | 30396 |
| St. Petersburg Marriott | 5829 | 33770 |  |  |  | 4090 | 2301 | 45990 |
| Hyatt Place Park City | 3737 | 20175 |  |  |  | 956 | 3166 | 28034 |
| Bradenton Hampton Inn & Suites | 837 | 25535 |  |  | 1465 | 281 | 2869 | 30987 |
| HUB Research Triangle Park |  |  |  |  | 623 |  |  | 623 |
| Accumulated depreciation and amortization |  | (31545) | (8799) | 4168 | (48) |  | (2155) | (38379) |
| **Total Operating Properties** | $62228 | $281560 | $2180 | $(2602) | $2040 | $24824 | $8077 | $378307 |

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

As of December 31, 2024, the major components of the Company's investments in real estate held by SPEs the Company consolidates, which are included in "Consolidated Real Estate Investments" on the Consolidated Balance Sheets, were as follows (in thousands):

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Operating Properties** | **Land** | **Buildings and <br>Improvements** | **Intangible Lease Assets** | **Intangible Lease <br>Liabilities** | **Right of use assets** | **Construction in Progress** | **Furniture, Fixtures, and <br>Equipment** | **Totals** |
| White Rock Center | $1315 | $10568 | $1921 | $(101) | $— | $— | $13 | $13716 |
| 5916 W Loop 289 | 1081 | 2938 |  |  |  |  |  | 4019 |
| Cityplace Tower | 18812 | 195408 | 9058 | (6669) |  | 19053 | 356 | 236018 |
| NexPoint Dominion Land, LLC | 26500 |  |  |  |  |  |  | 26500 |
| Dallas Hilton Garden Inn | 4116 | 24631 |  |  |  | 96 | 1475 | 30318 |
| St. Petersburg Marriott | 5829 | 33715 |  |  |  | 3951 | 2301 | 45796 |
| Hyatt Place Park City | 3737 | 19876 |  |  |  | 877 | 3146 | 27636 |
| Bradenton Hampton Inn & Suites | 837 | 25064 |  |  | 1465 | 712 | 2833 | 30911 |
| HUB Research Triangle Park |  |  |  |  | 711 |  |  | 711 |
| Accumulated depreciation and amortization |  | (25230) | (8353) | 3631 | (29) |  | (1390) | (31371) |
| **Total Operating Properties** | $62227 | $286970 | $2626 | $(3139) | $2147 | $24689 | $8734 | $384254 |
| **Held for Sale Properties** |  |  |  |  |  |  |  |  |
| Plano Homewood Suites | $2106 | $5394 | $— | $— | $— | $28 | $738 | $8266 |
| Las Colinas Homewood Suites | 2292 | 10153 |  |  |  | 313 | 1004 | 13762 |
| Addison Property | 2351 | 4577 |  |  |  | 518 | 804 | 8250 |
| Accumulated depreciation and amortization |  | (218) |  |  |  |  | (170) | (388) |
| **Total Held for Sale Properties** | $6749 | $19906 | $— | $— | $— | $859 | $2376 | $29890 |

---

Depreciation expense was $3.5 million and $7.1 million for the three and six months ended June 30, 2025 and $3.7 million and $6.0 million for the three and six months ended June 30, 2024. Amortization expense related to the Company's intangible lease assets was $0.2 million and $0.4 million for the three and six months ended June 30, 2025 and $0.3 million and $0.6 million for the three and six months ended June 30, 2024. Amortization expense related to the Company's intangible lease liabilities was $0.3 million and $0.5 million for the three and six months ended June 30, 2025 and $0.3 million and $0.6 million for the three and six months ended June 30, 2024. The net amount amortized as an increase to rental revenue for capitalized above and below-market lease intangibles was $0.2 million and $0.5 million for the three and six months ended June 30, 2025 and $0.2 million and $0.5 million for the three and six months ended June 30, 2024.

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

*Acquisitions*

There were no acquisitions by the Company for the six months ended June 30, 2025. During the six months ended June 30, 2024, as a result of the NHT Acquisition, the Company consolidated the following properties: Dallas Hilton Garden Inn, Addison Property, Plano Homewood Suites, Las Colinas Homewood Suites, St. Petersburg Marriott, Hyatt Place Park City, Bradenton Hampton Inn & Suites.

*Dispositions* 

The Company sold three properties during the six months ended June 30, 2025 as detailed in the table below (in thousands). The Company did not sell any properties during the six months ended June 30, 2024.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Property Name** | **Location** | **Date of Sale** | **Sales Price** | **Net Cash Proceeds** | **Gain (Loss) on Sale of Real Estate** |
| Plano Homewood Suites | Plano, Texas | January 24, 2025 | $8300 | $8154 | $11 |
| Addison Property | Addison, Texas | April 18, 2025 | $6400 | $6308 | $(88) |
| Las Colinas HomeWood Suites | Las Colinas, Texas | April 8, 2025 | $14000 | $13844 | $114 |

---

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**6. Debt**

The following table contains summary information of the Company's debt as of June 30, 2025 and December 31, 2024 (dollars in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Outstanding principal as of** | **Outstanding principal as of** | | |
|<br>**Description** |<br>**Type** | **June 30, 2025** | **December 31, 2024** |<br>**Interest Rate** |<br>**Maturity Date** |
| **Mortgages Payable** | | | | | |
| &nbsp;&nbsp;Cityplace Note A-1 (1) | &nbsp;&nbsp;Floating | $98594 | $99435 | 6.68% | &nbsp;&nbsp;3/8/2026 |
| &nbsp;&nbsp;Cityplace Note A-2 (1) | &nbsp;&nbsp;Floating | 12412 | 12517 | 6.68% | &nbsp;&nbsp;3/8/2026 |
| &nbsp;&nbsp;Cityplace Note B-1 (1) | &nbsp;&nbsp;Floating | 21568 | 21751 | 10.68% | &nbsp;&nbsp;3/8/2026 |
| &nbsp;&nbsp;Cityplace Note B-2 (1) | &nbsp;&nbsp;Floating | 2715 | 2738 | 10.68% | &nbsp;&nbsp;3/8/2026 |
| &nbsp;&nbsp;Cityplace Mezz Note-1 (1) | &nbsp;&nbsp;Floating | 3081 | 3107 | 10.68% | &nbsp;&nbsp;3/8/2026 |
| &nbsp;&nbsp;Cityplace Mezz Note-2 (1) | &nbsp;&nbsp;Floating | 388 | 391 | 10.68% | &nbsp;&nbsp;3/8/2026 |
| &nbsp;&nbsp;NHT - Note A Loan (2) | &nbsp;&nbsp;Floating | 28069 | 50188 | 6.32% | &nbsp;&nbsp;9/8/2025 |
| &nbsp;&nbsp;NHT - Note B Loan (2) | &nbsp;&nbsp;Floating | 13515 | 24165 | 10.78% | &nbsp;&nbsp;9/8/2025 |
| &nbsp;&nbsp;NHT - PC & B Loan (3) | &nbsp;&nbsp;Floating | 38285 | 37875 | 9.02% | &nbsp;&nbsp;2/5/2026 |
| &nbsp;&nbsp;White Rock Center (4) | &nbsp;&nbsp;Fixed | 10000 | 10000 | 10.00% | &nbsp;&nbsp;8/2/2029 |
| **Notes Payable** |  |  |  |  |  |
| &nbsp;&nbsp;Dominion Note | &nbsp;&nbsp;Floating | 13250 | 13250 | 7.50% | &nbsp;&nbsp;8/8/2025 |
| &nbsp;&nbsp;Raymond James Loan | &nbsp;&nbsp;Floating | 5000 | 11000 | 8.57% | &nbsp;&nbsp;10/6/2025 |
| &nbsp;&nbsp;NexBank Revolver (5) | &nbsp;&nbsp;Floating | 13829 | 16485 | 7.82% | &nbsp;&nbsp;11/21/2025 |
| &nbsp;&nbsp;Convertible Notes Due to Affiliates | &nbsp;&nbsp;Fixed | 57986 | 57986 | 2.25% - 7.50% | &nbsp;&nbsp;2/14/2027 - 9/30/2042 |
| &nbsp;&nbsp;Promissory Notes Due to Affiliates | &nbsp;&nbsp;Fixed | 775 |  | 7.33% | &nbsp;&nbsp;4/17/2027 |
| **Prime Brokerage Borrowing** |  |  |  |  |  |
| &nbsp;&nbsp;Jefferies Line of Credit | &nbsp;&nbsp;Floating | 4410 | 1222 | 4.83% | &nbsp;&nbsp;N/A (7) |
| **Total Debt** |  | $323877 | $362110 |  |  |
| Fair market value adjustment, net of accumulated amortization (6) |  | (6920) | (7740) |  |  |
| Deferred financing costs |  | (500) | (315) |  |  |
|  |  | $316457 | $354055 |  |  |

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(1) This debt is secured by the following property: Cityplace Tower.

(2) This debt is secured by the following properties: HGI Property and the St. Pete Property.

(3) This debt is secured by the following properties: Park City and Bradenton.

(4) This debt is secured by the following property: White Rock Center.

(5) This debt is secured by the following property and investments: 5916 W Loop 289 and IQHQ, LP ("IQHQ LP").

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(6) The Company recorded a valuation adjustment of the Convertible Notes Due to Affiliates upon the consolidation of NHT to adjust for the difference between the fair value and the outstanding principal amount of the debt. The difference is amortized into interest expense.

(7) This debt balance has no stated maturity date.

*Cityplace Tower Debt*

The Company has debt on the Cityplace Tower pursuant to a Loan Agreement, originally dated August 15, 2018 and subsequently amended (the "Loan Agreement"). The debt is limited recourse to the Company and encumbers the property. On April 15, 2025, the lender agreed to defer the maturity of the Cityplace Tower debt by twelve months to March 8, 2026. The debt restructuring per the terms of the Fourteenth Omnibus Amendment Agreement was considered a debt modification. The purpose of the deferral was to allow for continued discussions around refinancing the debt. Management recognizes that finding an alternative source of funding is necessary to repay the debt by the maturity date. Management is evaluating multiple options to fund the repayment of the $138.8 million principal balance outstanding as of June 30, 2025, including refinancing the debt, securing additional equity or debt financing, selling a portion of the portfolio, or any combination thereof. Management believes that there is sufficient time before the maturity date and that the Company has sufficient access to capital to ensure the Company is able to meet its obligations as they become due.

The weighted average interest rate of the Company's debt related to its Cityplace Tower investment was 7.48% as of June 30, 2025 and 7.65% as of December 31, 2024. The one-month secured overnight financing rate ("SOFR") was 4.32% as of June 30, 2025 and 4.33% as of December 31, 2024.

The Loan Agreement contains customary events of default, including defaults in the payment of principal or interest, defaults in compliance with the covenants contained in the documents evidencing the loan, defaults in payments under any other security instrument covering any part of the property, whether junior or senior to the loan, and bankruptcy or other insolvency events.

*White Rock Center Debt*

On August 2, 2024, the Company, through Freedom LHV, LLC ("Freedom LHV"), an indirect subsidiary of the Company, borrowed approximately $10.0 million from The Ohio State Life Insurance Company ("OSL"). The note bears interest at an annual fixed rate of 10.0% and matures on August 2, 2029. The debt is secured by certain real property held by Freedom LHV and is guaranteed by the Company.

*Dominion Note*

On August 9, 2022, the Company borrowed approximately $13.3 million from the seller, Gabriel Legacy, LLC to finance its acquisition of 21.5 acres of land in Plano, Texas held through NexPoint Dominion Land, LLC, a wholly owned subsidiary of the OP. The note (the "Dominion Note") bears interest at an annual rate equal to the WSJ Prime Rate and initially matured on August 8, 2025, with two one-year extension options. On August 8, 2025, the Company elected to use one of the one-year extensions under the Dominion Note to extend the maturity date to August 8, 2026.

*Mortgages Payable, Hospitality*

On February 28, 2019, a subsidiary of the Company, entered into a borrowing arrangement for a $59.4 million Note A loan (the "Note A Loan") and a $28.6 million Note B loan (the "Note B Loan") with ACORE Capital Mortgage, LP ("ACORE"). The Note A Loan and Note B Loan are secured by the HGI Property and the St. Pete Property. The Note A Loan bears interest at a variable rate equal to the 30-day SOFR plus 2.00% and matures on September 8, 2025. The Note B Loan bears interest at a variable rate equal to the 30-day SOFR plus 6.46% and matures on September 8, 2025. The Note A Loan and Note B Loan principal amounts reflected their fair values on the date of the NHT Acquisition. As of June 30, 2025, the Note A Loan and the Note B Loan had an outstanding balance of $28.1 million and $13.5 million and effective interest rates of 6.32% and 10.78%, respectively. For the six months ended June 30, 2025, our subsidiary paid $0.5 million and $0.4 million in interest on the Note A Loan and the Note B Loan, respectively.

On February 15, 2022, in connection with the acquisition of the Park City and Bradenton properties, the Company, through its subsidiaries entered into a borrowing arrangement for a $39.3 million loan (the "PC & B Loan") with AREEIF Lender, LLC. The PC & B Loan principal amount reflected its fair value on the date of the NHT Acquisition. The

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

outstanding balance on the PC & B Loan as of June 30, 2025 was $38.3 million, with $1.0 million available to draw on for renovation purposes as of June 30, 2025. In connection with the NHT Merger, a subsidiary of the Company assumed the obligations under the debt.

The loan documents, including the guaranty, for the PC & B Loan and the Note A Loan and Note B Loan contain customary representations, warranties, and events of default, which require a subsidiary of the Company to comply with affirmative and negative covenants. As of June 30, 2025, a subsidiary of the Company, as the guarantor of certain obligations under the PC & B Loan documents, was not in compliance with the PC & B Loan covenants related to the minimum net worth and the minimum liquid assets. AREEIF Lender, LLC, the lender under the PC & B Loan has not granted a waiver for the covenant violations as of June 30, 2025. While the lender under the PC & B Loan has not indicated that it will accelerate the PC & B Loan, the lender has the ability under the loan documents to do so if the conditions remain uncured after the giving of notice and expiration of a cure period. There can be no assurance that the lender under the PC & B Loan will waive such covenant beaches, and discussions regarding such a waiver are ongoing. The PC & B Loan is secured by mortgages on our Park City and Bradenton properties. Should the lender under the PC & B Loan exercise its remedies under the relevant loan documents, up to and including the acceleration of the full amount of the PC & B Loan, it may have a material adverse impact on our financial condition, liquidity and results of operations. If we are unable to pay the amount due upon acceleration, the lender under the PC & B Loan may elect to foreclose on the Park City and Bradenton properties to satisfy the indebtedness. In connection with the NHT Merger, a subsidiary of the Company assumed the obligations under the debt.

*Notes Payable, Hospitality*

NHT and certain of its subsidiaries also entered into several convertible notes with affiliates of NexPoint Real Estate Advisors VI, L.P. (the "NHT Adviser") since January 8, 2019. The fixed rate notes have rates ranging from 2.25% to 7.50% (which were market interest rates at the time of their issuance) while outstanding and mature in 20 years from their date of issuance, with the earliest maturing on February 14, 2027 and the latest maturing on September 30, 2042. For $3.6 million of the notes, the principal and interest is convertible into Class B units of NHT OP ("NHT OP Class B Units") (at the option of their respective holder) at the market price of the NHT Units at the time of conversion any time during the term of the note. For $38.0 million of the notes, the principal of the notes is convertible into NHT OP Class B Units, at prices ranging from $1.60 to $2.50 for a period of five years from its date of issuance (with the expiration of conversion rights ranging from June 25, 2026 to September 30, 2027). One note issued to Highland Global Allocation Fund in the amount of $8.5 million is not convertible into NHT OP Class B Units. On October 30, 2023, the TSX Venture Exchange (the "TSXV") approved the issuance of up to 21,075,012 NHT Units in connection with the redemption of NHT OP Class B Units issued to a holder of notes on conversion of the $38.0 million of notes. With respect to the $3.6 million of notes convertible on the basis of the market price of the NHT Units at the time of the conversion, any issuance of NHT Units in connection with a redemption of NHT OP Class B Units received by holders on a conversion of such notes is subject to the prior approval of the TSXV. The relative fair value of the convertible notes did not reflect the outstanding principal on the date of the NHT Acquisition. The difference between the fair value and the principal amount of debt is amortized into interest expense over the remaining term. As of June 30, 2025, the net carrying amount of the convertible notes due to affiliates of the NHT Adviser was $51.0 million. On April 17, 2025, the notes were amended and restated in connection with the closing of the NHT Merger. In connection with the NHT Merger, a subsidiary of the Company assumed the obligations under the notes.

*Convertible Notes Payable to Affiliates*

In connection with the NHT Merger, on April 17, 2025, several promissory notes were issued to certain affiliates of the Company due to a limitation on common shares issued to affiliates of the issuer by the New York Stock Exchange. The aggregate principal amount of such promissory notes was $0.8 million, each with an interest rate of 7.334% and maturing on April 17, 2027, with two one-year extension options. As of June 30, 2025, the carrying amount of the promissory notes due to affiliates under the notes was $0.8 million.

*Credit Facility*

On January 8, 2021, the Company entered into a $30.0 million credit facility (the "Credit Facility") with Raymond James Bank, N.A. and drew the full balance. Prior to October 20, 2023, the Company paid down the outstanding amount under the Credit Facility to $1.0 million. Amounts repaid by the Company under the Credit Facility could not be reborrowed. On October 20, 2023, Raymond James Bank, N.A. agreed to amend the terms of the Credit Facility, which, among other things, extended the maturity date to October 6, 2025 and amended the credit limit to $20.0 million. During

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

the six months ended June 30, 2025, the Company paid down $6.0 million on the Credit Facility. As of June 30, 2025, the Credit Facility had an outstanding balance of $5.0 million and bore interest at the one-month SOFR plus 4.25%.

*Revolving Credit Facility*

On May 22, 2023, the Company entered into a $20.0 million revolving credit facility (the "NexBank Revolver") with NexBank, in the initial principal balance of $20.0 million, with the option for the Company to receive additional disbursements thereunder up to a maximum of $50.0 million, a maturity date of May 21, 2024 and the option to extend the maturity two times by six months. On May 21, 2024, the Company elected to extend the maturity by six months to November 21, 2024. On November 21, 2024, the Company elected to extend the maturity by six months to May 21, 2025. On May 15, 2025, the Company amended the NexBank Revolver agreement to extend the maturity date to November 21, 2025, and to provide for three additional six-month extension options. As of June 30, 2025, the NexBank Revolver bears interest at one-month SOFR plus 3.50% and matures on November 21, 2025. As of June 30, 2025, the NexBank Revolver had an outstanding balance of $13.8 million.

*Deferred Financing Costs*

The Company defers costs incurred in obtaining financing and amortizes the costs over the terms of the related loans using the straight-line method, which approximates the effective interest method. Deferred financing costs, net of amortization, are recorded as a reduction from the related debt on the Company's Consolidated Balance Sheets. Upon repayment of or in conjunction with a material change in the terms of the underlying debt agreement, any unamortized costs are charged to loss on extinguishment of debt and modification costs.

*Prime Brokerage Borrowing*

Effective July 2, 2022, the Company entered a prime brokerage account with Jefferies to hold securities owned by the Company (the "Prime Brokerage"). The Company from time to time borrows against the value of these securities. As of June 30, 2025, the Company had a margin balance of approximately $4.4 million outstanding with Jefferies bearing interest at the Overnight Bank Funding Rate plus 0.50%. Securities with a fair value of approximately $13.1 million are pledged as collateral against this margin balance. This arrangement has no stated maturity date. Due to the short-term nature of the debt, the fair value of the debt is approximately the outstanding balance.

*Schedule of Debt Maturities*

The aggregate scheduled maturities, including amortizing principal payments, of total debt for the next five calendar years subsequent to June 30, 2025 are as follows (in thousands):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Mortgages Payable** | **Credit Facilities** | **Notes Payable** | **Prime Brokerage Borrowing** | **Total** |
| 2025 | $41583 | $18829 | $13250 | $— | $73662 |
| 2026 | 177044 |  |  |  | 177044 |
| 2027 |  |  | 21275 |  | 21275 |
| 2028 |  |  |  |  |  |
| 2029 | 10000 |  |  |  | 10000 |
| Thereafter |  |  | 37486 | 4410 | 41896 |
| Total | $228627 | $18829 | $72011 | $4410 | $323877 |

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**7. Variable Interest Entities**

As of June 30, 2025, and December 31, 2024, the Company does not consolidate the investments below as it does not have a controlling financial interest in these investments:

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Entities** | **Instrument** | **Asset Type** | **Percentage Ownership as of June 30, 2025** | | **Percentage Ownership as of December 31, 2024** | **Relationship as of June 30, 2025** | **Relationship as of December 31, 2024** |
| *Unconsolidated Entities:* |  |  |  |  |  |  |  |
| &nbsp;&nbsp;NexPoint Storage Partners, Inc. | Common stock | Self-storage | 52.8% |  | 52.8% | VIE | VIE |
| &nbsp;&nbsp;NexPoint Storage Partners Operating Company, LLC | LLC interest | Self-storage | 35.7% |  | 29.5% | VIE | VIE |
| &nbsp;&nbsp;Perilune Aero Equity Holdings One, LLC | LLC interest | Aircraft | 16.4% |  | 16.4% | VIE | VIE |
| &nbsp;&nbsp;Sandstone Pasadena Apartments, LLC | LLC Interest | Multifamily | 50.0% |  | 50.0% | VIE | VOE |
| &nbsp;&nbsp;Life Sciences II DST | DST investment | Life science | 25.8% |  | 25.8% | VIE | VIE |
| &nbsp;&nbsp;Semiconductor DST | DST investment | Industrial | 19.2% |  | 16.8% | VIE | VIE |
| &nbsp;&nbsp;Capital Acquisitions Partners, LLC | LLC interest | Multifamily | 20.9% |  | 20.9% | VIE | VIE |
| &nbsp;&nbsp;IQHQ Holdings, LP | LP interest | Life science | 1.1% |  | 1.2% | VIE | VIE |
| &nbsp;&nbsp;NexPoint Real Estate Finance Operating Partnership, L.P. | LP interest | Mortgage | 15.6% |  | 15.6% | VIE | VIE |
| &nbsp;&nbsp;VineBrook Homes Operating Partnership, L.P. | LP interest | Single-family rental | 11.6% |  | 11.4% | VIE | VIE |
| &nbsp;&nbsp;NexPoint SFR Operating Partnership, L.P. | LP interest | Single-family rental | 30.8% |  | 30.8% | VIE | VIE |
| &nbsp;&nbsp;NexAnnuity Holdings, Inc. | Preferred Shares | Annuities | 100.0% | (1) | 100.0% | VIE | VIE |
| &nbsp;&nbsp;AMS C-Store JV, LLC | Preferred Shares | Retail | 100.0% | (2) | N/A | VIE | N/A |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Company owns 100% of the preferred stock of NexAnnuity Holdings, Inc. ("NHI"), but it does not own any of the outstanding common stock of NHI.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The Company owns 100% of the preferred units of AMS C-Store JV, LLC, but it does not own any of the outstanding common units of AMS C-Store JV, LLC.

The maximum exposure to loss of value for the VIE investments includes both the carrying value of each investment, as presented in the tables in Note 8 and 10, and the Company's exposure through additional arrangements. The Company has provided guarantees on certain debt obligations of some of the VIEs, see Note 14 for further details.

*Consolidated VIEs*

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

The Company did not have any consolidated VIEs as of June 30, 2025 and December 31, 2024.

**8. Equity Method Investments**

Below is a summary of the Company's equity method investments as of June 30, 2025 (dollars in thousands):

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investee Name** | **Instrument** | **Asset Type** | **NXDT Percentage Ownership** | | **Investment Basis** | **Share of Investee's Net Assets (1)** | **Basis Difference (2)** | **Share of Earnings (Loss)** |
| Sandstone Pasadena Apartments, LLC | LLC interest | Multifamily | 50.0% |  | $9667 | $(9590) | $19257 | $341 |
| AM Uptown Hotel, LLC | LLC interest | Hospitality | 60.0% | (3) | (1340) | 101 | (1441) | 101 |
| Las Vegas Land Owner, LLC | LLC interest | Land | 77.0% | (4) | 12322 | 12323 | (1) | 2 |
| Perilune Aero Equity Holdings One, LLC | LLC interest | Aircraft | 16.4% | (8) | 12602 | 10742 | 1860 | 102 |
| Capital Acquisitions Partners, LLC | LLC interest | Multifamily | 20.9% |  | 614 | 1717 | (1103) | 206 |
|  |  |  |  |  | $33865 | $15293 | $18572 | $752 |

---

Below is a summary of the Company's investments as of June 30, 2025 that qualify for equity method accounting for which the Company has elected to account for using the fair value option. Amounts are included in "Investments, at fair value" on the Consolidated Balance Sheets.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Investee Name** | **Instrument** | **Asset Type** | **NXDT Percentage Ownership** | | **Fair Value** |
| NexPoint Real Estate Finance Operating Partnership, L.P. | LP interest | Mortgage | 15.6% | (6) | $67145 |
| NexPoint Real Estate Finance, Inc. | Common stock | Mortgage | 11.8% | (6) | 28959 |
| Claymore Holdings, LLC | LLC interest | N/A | 50.0% | (5) |  |
| LLV Holdco, LLC | LLC interest | Land | 26.8% |  | 2918 |
| NexPoint Storage Partners, Inc. | Common stock | Self-storage | 52.8% | (3) | 50844 |
| NexPoint Storage Partners Operating Company, LLC | LLC interest | Self-storage | 35.7% |  | 35094 |
| VineBrook Homes Operating Partnership, L.P. | LP interest | Single-family rental | 11.6% | (6) | 134076 |
| NexPoint SFR Operating Partnership, L.P. | LP interest | Single-family rental | 30.8% |  | 33322 |
| AMS C-Store JV, LLC | Preferred stock | Retail | 100.0% | (9) | 13461 |
|  |  |  |  |  | $365819 |

---

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

Below is a summary of the Company's equity method investments as of December 31, 2024 (dollars in thousands):

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investee Name** | **Instrument** | **Asset Type** | **NXDT Percentage Ownership** | | **Investment Basis** | **Share of Investee's Net Assets (1)** | **Basis Difference (2)** | **Share of Earnings (Loss)** |
| Sandstone Pasadena Apartments, LLC | LLC interest | Multifamily | 50.0% |  | $10055 | $(9590) | $19645 | $70 |
| AM Uptown Hotel, LLC | LLC interest | Hospitality | 60.0% | (3) | 18081 | 14970 | 3111 | (155) |
| Las Vegas Land Owner, LLC | LLC interest | Land | 77.0% | (4) | 12321 | 12321 |  | 10 |
| Perilune Aero Equity Holdings One, LLC | LLC interest | Aircraft | 16.4% | (8) | 13565 | 10488 | 3077 | 1414 |
| Capital Acquisitions Partners, LLC | LLC interest | Multifamily | 20.9% |  | 407 | 1717 | (1310) | 126 |
|  |  |  |  |  | $54429 | $29906 | $24523 | $1465 |

---

Below is a summary of the Company's investments as of December 31, 2024 that qualify for equity method accounting for which the Company has elected to account for using the fair value option. Amounts are included in "Investments, at fair value" on the Consolidated Balance Sheets.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Investee Name** | **Instrument** | **Asset Type** | **NXDT Percentage Ownership** | | **Fair Value** |
| NexPoint Real Estate Finance Operating Partnership, L.P. | LP interest | Mortgage | 15.6% | (6) | $76396 |
| NexPoint Real Estate Finance, Inc. | Common stock | Mortgage | 12.0% | (6) | 32949 |
| Claymore Holdings, LLC | LLC interest | N/A | 50.0% | (5) |  |
| Allenby, LLC | LLC interest | N/A | 50.0% | (5) |  |
| Haygood, LLC | LLC interest | N/A | 31.0% | (7) |  |
| LLV Holdco, LLC | LLC interest | Land | 26.8% |  | 2606 |
| NexPoint Storage Partners, Inc. | Common stock | Self-storage | 52.8% | (3) | 62709 |
| NexPoint Storage Partners Operating Company, LLC | LLC interest | Self-storage | 29.5% |  | 34172 |
| VineBrook Homes Operating Partnership, L.P. | LP interest | Single-family rental | 11.4% | (6) | 151706 |
| NexPoint SFR Operating Partnership, L.P. | LP interest | Single-family rental | 30.8% |  | 37953 |
|  |  |  |  |  | $398491 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Represents the Company's percentage share of net assets of the investee per the investee's books and records.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Represents the difference between the basis at which the investments in unconsolidated ventures are carried by the Company and the Company's proportionate share of the equity method investee's net assets. To the extent that the Company's cost basis is different from the basis reflected at the joint venture level, the basis difference is generally amortized over the lives of the related assets and liabilities, and such amortization is included in the Company's share of equity in earnings of the joint venture.

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)The Company owns greater than 50% of the outstanding common equity but is not deemed to be the primary beneficiary or have a controlling financial interest of the investee and as such, accounts for the investee using the equity method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)The Company owns 100% of Las Vegas Land Owner, LLC which owns 77% of a joint venture that owns an 8.5 acre tract of land (the "Tivoli North Property"). Through a tenants in common arrangement, the Company shares control and as such accounts for this investment using the equity method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(5)The Company has a 50% non-controlling interest in Claymore Holdings, LLC ("Claymore") and Allenby, LLC, ("Allenby"). The Company has determined it is not the primary beneficiary and does not consolidate these entities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(6)The Company owns less than 20% of the investee but has significant influence due to members of the management team serving on the board of the investee or its parent and as such, accounts for the investee using the equity method.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(7)The Company has a 31% non-controlling interest in Haygood, LLC, ("Haygood"). The Company has determined it is not the primary beneficiary and does not consolidate this entity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8)The Company owns less than 20% of the investee but has significant influence due to the legal nature of a partnership that implies an inherent right to influence the operating and financial policies of the partnership.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(9)The Company owns 100% of the preferred units in AMS C-Store JV, LLC but is not deemed to be the primary beneficiary or have a controlling financial interest of the investee and as such, accounts for the investee using the equity method.

*Marriott Uptown Basis*

As of June 30, 2025, the Company held an equity method investment in AM Uptown, LLC ("Marriott Uptown"). The Company accounts for this investment under the equity method of accounting, as it has the ability to exercise significant influence over operating and financial policies.

During the three months ended June 30, 2025, the Company received cash distributions of $2.2 million from Marriott Uptown. These distributions exceeded the Company's equity method investment balance, which was $0.8 million as of March 31, 2025. Because the Company has continuing obligations to Marriott Uptown, including a guarantee of certain recourse debt, the excess of distributions over the carrying value of the investment was not recognized as a gain. Instead, the Company recorded a liability of $1.4 million, which is presented within "Accounts payable and other accrued liabilities" on the Consolidated Balance Sheets.

For the three months ended June 30, 2025, the Company also recognized its share of net income from Marriott Uptown, of approximately $0.1 million, reducing the liability to $1.3 million as of June 30, 2025.

The Company will continue to evaluate the investment for indications of other-than-temporary impairment and will assess whether its obligations under the guarantee require recognition of additional liabilities.

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

*Significant Equity Method Investments*

For its interim reporting, the Company assesses and presents summarized financial information for its significant equity method investments in accordance with Rule 10-01(b)(1) of Regulation S-X. The Company reports the financial information on a three-month lag to align with the availability of investee financials. NexPoint Real Estate Finance, Inc. ("NREF"), VineBrook Homes Trust, Inc. ("VineBrook") and NexPoint Storage Partners, Inc. ("NSP") do not prepare standalone financials for their operating companies as all operations and investments are owned through their operating companies and are consolidated by the corporate entities.

The table below presents summarized statement of operations for the three months ended March 31, 2025 for the Company's equity method investments (dollars in thousands):

---

| | | |
|:---|:---|:---|
| | **VineBrook** | **NSP** |
| **Revenues** | | |
| &nbsp;&nbsp;&nbsp;Rental income | $90384 | $29697 |
| &nbsp;&nbsp;&nbsp;Net interest income |  | 403 |
| &nbsp;&nbsp;&nbsp;Other income | 2377 | 1277 |
| Total revenues | 92761 | 31377 |
| **Expenses** |  |  |
| &nbsp;&nbsp;&nbsp;Total expenses | 130943 | 27317 |
| Gain (loss) on sales of real estate | (464) |  |
| Other income (expense) | (506) | (22392) |
| Unrealized gain (loss) on derivatives |  |  |
| Total comprehensive income (loss) | $(39152) | $(18332) |

---

The table below presents the summarized statement of operations for the three months ended March 31, 2024 for the Company's significant equity method investments (dollars in thousands):

---

| | | |
|:---|:---|:---|
| | **NREF** | **VineBrook** |
| **Revenues** | | |
| &nbsp;&nbsp;&nbsp;Rental income | $2087 | $88783 |
| &nbsp;&nbsp;&nbsp;Net interest income | (12814) |  |
| &nbsp;&nbsp;&nbsp;Other income | 124 | 1502 |
| Total revenues | (10603) | 90285 |
| **Expenses** |  |  |
| &nbsp;&nbsp;&nbsp;Total expenses | 11026 | 129441 |
| Gain (loss) on sales of real estate |  | (3887) |
| Other income (expense) | 6988 | (1028) |
| Unrealized gain (loss) on derivatives |  | 2773 |
| Total comprehensive income (loss) | $(14641) | $(41298) |

---

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**9. Fair Value of Financial Instruments**

The table below summarizes the Company's assets within the valuation hierarchy carried at fair value on a recurring basis as of June 30, 2025 (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Fair Value** | **Fair Value** | **Fair Value** | **Fair Value** |
| | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Assets** | | | | |
| &nbsp;&nbsp;&nbsp;Bond | $— | $57 | $— | $57 |
| &nbsp;&nbsp;&nbsp;Common stock | 43925 |  | 126472 | 170397 |
| &nbsp;&nbsp;&nbsp;Convertible notes |  |  | 14081 | 14081 |
| &nbsp;&nbsp;&nbsp;LLC interest |  |  | 51473 | 51473 |
| &nbsp;&nbsp;&nbsp;LP interest |  | 67145 | 167398 | 234543 |
| &nbsp;&nbsp;&nbsp;Preferred Shares |  |  | 72719 | 72719 |
| &nbsp;&nbsp;&nbsp;Rights and warrants |  | 1788 |  | 1788 |
| &nbsp;&nbsp;&nbsp;Senior loan |  | 40 | 45947 | 45987 |
|  | $43925 | $69030 | $478090 | $591045 |

---

The table below summarizes the Company's assets within the valuation hierarchy carried at fair value on a recurring basis as of December 31, 2024 (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Fair Value** | **Fair Value** | **Fair Value** | **Fair Value** |
| | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Assets** | | | | |
| &nbsp;&nbsp;&nbsp;Bond | $— | $62 | $— | $62 |
| &nbsp;&nbsp;Common stock | 46436 |  | 157828 | 204264 |
| &nbsp;&nbsp;Convertible notes |  |  | 20846 | 20846 |
| &nbsp;&nbsp;LLC interest |  |  | 36777 | 36777 |
| &nbsp;&nbsp;LP interest |  | 76396 | 189659 | 266055 |
| &nbsp;&nbsp;&nbsp;Preferred Shares |  |  | 69895 | 69895 |
| &nbsp;&nbsp;&nbsp;Rights and warrants |  | 1788 |  | 1788 |
| &nbsp;&nbsp;Senior loan |  | 52 | 43693 | 43745 |
|  | $46436 | $78298 | $518698 | $643432 |

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&nbsp;&nbsp;&nbsp;&nbsp;

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

The table below sets forth a summary of changes in the Company's Level 3 assets (assets measured at fair value using significant unobservable inputs) for the six months ended June 30, 2025 (in thousands):

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **Contributions/ <br>Purchases** | **Paid in- <br>kind <br>dividends** | **Transfer Into (Out of) Level 3** | **Redemptions/<br>conversions** | **Return of capital** | **Realized <br>gain/(loss)** | **Unrealized gain/(loss)** | **June 30, 2025** |
| Common stock | $157828 | $— | $— | $— | $(3687) | $— | $1511 | $(29180) | $126472 |
| Convertible notes | 20846 |  |  |  | (7001) |  |  | 236 | 14081 |
| LLC interest | 36777 | 22345 |  |  | (3995) |  | 3462 | (7116) | 51473 |
| LP interest | 189659 | 1310 |  |  |  |  |  | (23571) | 167398 |
| Preferred Shares | 69895 |  | 2824 |  |  |  |  |  | 72719 |
| Senior loan | 43693 |  | 2514 |  | (522) |  | 2 | 260 | 45947 |
| Total | $518698 | $23655 | $5338 | $— | $(15205) | $— | $4975 | $(59371) | $478090 |

---

&nbsp;&nbsp;&nbsp;&nbsp;

The table below sets forth a summary of changes in the Company's Level 3 assets (assets measured at fair value using significant unobservable inputs) for the six months ended June 30, 2024 (in thousands):

---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **December 31, 2023** | **Contributions/ <br>Purchases** | **Paid in- <br>kind <br>dividends** | **Transfer Into (Out of) Level 3** | **Investments (Eliminated) Acquired Through Consolidation¹** | **Redemptions/<br>conversions** | **Return of capital** | **Realized <br>gain/(loss)** | **Unrealized gain/(loss)** | **June 30, 2024** |
| CLO | $1215 | $— | $— | $— | $— | $— | $(1266) | $(22735) | $22786 | $— |
| Common stock | 176256 | 904 |  |  | (5763) |  |  |  | (8922) | 162475 |
| Convertible notes | 42251 |  |  |  | (19835) | (2125) |  |  | 533 | 20824 |
| LLC interest | 39399 | 157 |  |  | 5000 |  |  |  | 304 | 44860 |
| LP interest | 195898 | 4185 |  |  |  |  |  |  | 2886 | 202969 |
| Preferred Shares | 66268 |  | 2613 |  |  | (1700) |  |  |  | 67181 |
| Senior loan | 46353 | 6500 | 2135 |  |  | (6123) |  | 574 | (61) | 49378 |
| Total | $567640 | $11746 | $4748 | $— | $(20598) | $(9948) | $(1266) | $(22161) | $17526 | $547687 |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)&nbsp;&nbsp;&nbsp;&nbsp;As a result of the NHT consolidation, certain investments were eliminated or acquired.

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The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the significant unobservable inputs used in the fair valuation of assets categorized within Level 3 of the fair value hierarchy as of June 30, 2025.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Category** | **Valuation Technique** | **Significant Unobservable Inputs** | **Input Value(s) <br>(Arithmetic Mean)** | **Input Value(s) <br>(Arithmetic Mean)** | **Input Value(s) <br>(Arithmetic Mean)** | **Input Value(s) <br>(Arithmetic Mean)** | **Fair Value** |
| **Common Stock** | Market Approach | Unadjusted Price/MHz-PoP | $0.10 |  | $0.90 | $(0.48) | $**126472** |
|  | Discounted Cash Flow | Discount Rate | 7.00% |  | 14.00% | (9.50)% |  |
|  |  | Market Rent (per sqft) | $13.00 |  | $42.50 | $(27.75) |  |
|  | NAV Approach | Discount Rate |  | 10.00% |  |  |  |
|  |  | NAV per Share |  | $7.72 |  |  |  |
|  |  | Multiple of EBITDA | 3.00x |  | 4.25x | (3.63)x |  |
|  | Recent Transaction | Implied Enterprise Value from Transaction Price ($mm) |  | $1151.00 |  |  |  |
| **Convertible Notes** | Discounted Cash Flow | Discount Rate | 6.08% |  | 8.08% | (7.08)% | **14081** |
| **LLC Interest** | Discounted Cash Flow | Discount Rate | 7.00% |  | 26.00% | (12.5)% | **51473** |
|  |  | Market Rent (per sqft) | $13.00 |  | $42.50 | $(27.75) |  |
|  |  | Capitalization Rate |  | 5.25% |  |  |  |
| **LP Interest** | Direct Capitalization Approach | Capitalization Rate | 5.25% |  | 5.50% | (5.375)% | **167398** |
|  | Market Approach | Discount to NAV |  | (7.50)% |  |  |  |
|  | Recent Transaction | Price per Share |  | $14.01 |  |  |  |
| **Preferred Shares** | Liquidation Analysis | Par |  | $1000 |  |  | **72719** |
| **Senior Loan** | Discounted Cash Flow | Discount Rate | 13.25% |  | 15.00% | (14.13)% | **45947** |
| **Total** |  |  |  |  |  |  | $**478090** |

---

The following is a summary of the significant unobservable inputs used in the fair valuation of assets categorized within Level 3 of the fair value hierarchy as of December 31, 2024.

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Category** | **Valuation Technique** | **Significant Unobservable Inputs** | **Input Value(s) <br>(Arithmetic Mean)** | **Input Value(s) <br>(Arithmetic Mean)** | **Input Value(s) <br>(Arithmetic Mean)** | **Fair Value** |
| **Common Stock** | Market Approach | Unadjusted Price/MHz-PoP | $0.10 | $0.90 | $(0.48) | $**157828** |

---

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | Discounted Cash Flow | Discount Rate | 7.00% |  | 14.50% | (9.63)% | |
| | | Market Rent (per sqft) | $13.00 |  | $42.50 | $(27.75) | |
| | NAV Approach | Discount Rate | | 10.00% | | | |
| | | NAV per Share | | 12.75 | | | |
| | | Multiple of EBITDA | 3.00x |  | 4.25x | (3.63)x | |
| | Recent Transaction | Implied Enterprise Value from Transaction Price ($mm) | | $1149.00 | | | |
| | | N/A | $25.31 |  | $28.00 | $(26.66) | |
| | | Discount to NAV | (30.00)% |  | (20.00)% | (25.00)% | |
| | | Offer Price per Share | | $4.27 | | | |
| **Convertible Notes** | Discounted Cash Flow | Discount Rate | 6.08% |  | (8.08)% | (7.08)% | **20846** |
| **LLC Interest** | Discounted Cash Flow | Discount Rate | 7.00% |  | 26.00% | (12.5)% | **36777** |
|  |  | Market Rent (per sqft) | $13.00 |  | $42.50 | $(27.75) |  |
|  |  | Capitalization Rate |  | 5.13% |  |  |  |
| **LP Interest** | Direct Capitalization Approach | Capitalization Rate | 5.25% |  | 5.50% | (5.38)% | **189659** |
|  | Market Approach | Discount to NAV |  | (7.5)% |  |  |  |
|  | Recent Transaction | Price per Share |  | $16.41 |  |  |  |
| **Preferred Shares** | Liquidation Analysis | Par |  | $1000 |  |  | **69895** |
| **Senior Loan** | Discounted Cash Flow | Discount Rate | 13.30% |  | 26.00% | (19.65)% | **43693** |
| **Total** |  |  |  |  |  |  | $**518698** |

---

*Financial Instruments Not Carried at Fair Value*

At June 30, 2025 and December 31, 2024, the fair values of cash and cash equivalents, restricted cash, accounts receivable, prepaid and other assets, accrued interest and dividends, accounts payable and other accrued liabilities, accrued real estate taxes payable, accrued interest payable, income tax payable, security deposits and prepaid rent approximated their carrying values because of the short-term nature of these instruments. The estimated fair values of other financial instruments were determined by the Company using available market information and appropriate valuation methodologies. Considerable judgment is necessary to interpret market data and develop estimated fair values. Accordingly, the estimates presented herein are not necessarily indicative of the amounts the Company would realize on the disposition of the financial instruments. The use of different market assumptions or estimation methodologies may have a material effect on the estimated fair value amounts.

In calculating the fair value of its long-term indebtedness, the Company used interest rate and spread assumptions that reflect current credit worthiness and market conditions available for the issuance of long-term debt with similar terms and remaining maturities. These financial instruments utilize Level 2 inputs. Long-term indebtedness is carried at amounts that

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

reasonably approximate their fair value at June 30, 2025 and December 31, 2024, except for the following debt (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **June 30, 2025** | **June 30, 2025** | **December 31, 2024** | **December 31, 2024** |
| | **Outstanding Principal Balance** | **Estimated Fair Value** | **Outstanding Principal Balance** | **Estimated Fair Value** |
| Notes payable | $90840 | $70227 | $98721 | $78607 |

---

*Derivative Financial Instruments*

The NHT segment manages interest rate risks primarily by managing the amount, sources, and duration of its debt funding and the use of derivative financial instruments.

The NHT segment performs market valuations on its derivative financial instruments. The valuation of these instruments is determined using widely accepted valuation techniques, including discounted cash flow analysis on the expected cash flows of each derivative. This analysis reflects the contractual terms of the derivatives, including the period to maturity, and uses observable market-based inputs, including interest rate curves and implied volatilities. The fair values of interest rate caps are determined using the market standard methodology of discounting the future expected cash receipts that would occur if variable interest rates rise above the strike rate of the caps. The variable interest rates used in the calculation of projected receipts on the cap are based on an expectation of future interest rates derived from observable market interest rate curves and volatilities.

Interest rate caps involve the receipt of variable-rate amounts from a counterparty if interest rates rise above the strike rate on the contract in exchange for an up-front premium. The NHT segment has an interest rate cap agreement related to the notes payable on the Park City and Bradenton properties. As of June 30, 2025, the interest rate cap agreements effectively cap one-month SOFR on $38.3 million of the NHT segment's floating rate mortgage and mezzanine indebtedness at a weighted average rate of 6.70%.

To comply with the provisions of ASC 820, Fair Value Measurement, the NHT segment incorporates credit valuation adjustments to appropriately reflect both the NHT segment's own nonperformance risk and the respective counterparty's nonperformance risk in the fair value measurements. Although the Company has determined that the majority of the inputs used to value its derivatives fall within Level 2 of the fair value hierarchy, the credit valuation adjustments associated with the NHT segment's derivatives utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by the NHT segment and its counterparties. The Company has determined that the significance of the impact of the credit valuation adjustments made to the NHT segment's derivative contracts, which determination was based on the fair value of each individual contract, was not significant to the overall valuation. Additionally, in the case of interest rate caps, the NHT segment has no performance obligation, so no credit valuation adjustment is necessary. As a result, all of the Hospitality segment's derivatives held as of June 30, 2025 were classified as Level 2 of the fair value hierarchy.

Changes in fair value of the interest rate caps are recorded directly as interest expense on the Consolidated Statement of Operations and Comprehensive Income (Loss). For the six months ended June 30, 2025, NHT recorded $(11.5) thousand in interest expense related to changes in the fair value of interest rate caps. The combined fair value of the interest rate caps is $0.5 million as of June 30, 2025, and is recorded as interest rate caps in the Consolidated Balance Sheets.

As of June 30, 2025, the Hospitality segment had the following outstanding interest rate caps:

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Type of Derivative** | **Hedged Financial Instrument** | **Notional** | **Strike Rate** | **Reference Rate** | **Reference Rate** | **Termination Date** |
| Interest rate cap | Note payable | $39300 | 2.00% | One-month SOFR | 2.00% | February 5, 2026 |

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**10. Investments in DSTs**

The Company invested in the Class 1 Beneficial Interests ("Class 1") in two Delaware Statutory Trusts (DSTs). The Class 1 are accounted for as investments in equity securities without readily determinable fair values under the measurement alternative, which measures the investment at cost minus impairment, if any, plus or minus changes in fair

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value when observable prices are identified. As the Class 1 are still being actively issued, the investments are held at cost with no upward or downward fair value adjustment nor impairment losses to date. Therefore, the fair value of the Investment in DSTs utilizing Level 3 inputs approximate their carrying amount. The Company recognized $0.5 million and $0.9 million in dividend income for the three and six months ended June 30, 2025, respectively, and $0.1 million and $0.1 million, respectively, in dividend income for the three and six months ended June 30, 2024, respectively.

As of June 30, 2025, the Company held the following investments (dollars in thousands):

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| | | |
|:---|:---|:---|
| **Balances, as of June 30, 2025** | **Number of Shares** | **Carrying Amount** |
| NexPoint Life Sciences II DST | 1044040 | $9600 |
| NexPoint Semiconductor DST | 2625618 | 23959 |
| Total |  | $33559 |

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As of December 31, 2024, the Company held the following investments (dollars in thousands):

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| | | |
|:---|:---|:---|
| **Balances, as of December 31, 2024** | **Number of Shares** | **Carrying Amount** |
| NexPoint Life Sciences II DST | 1044040 | $9600 |
| NexPoint Semiconductor DST | 2296851 | 20959 |
| Total |  | $30559 |

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**11. Shareholders**' **Equity**

*Common Shares*

During the six months ended June 30, 2025 and 2024, the Company issued 4,742,360 and 2,260,518 common shares, respectively.

During the six months ended June 30, 2025, the Company paid two distributions on its common shares in the amount of $0.15 per share each, which were paid on March 31, 2025 to shareholders of record on February 28, 2025, and on June 30, 2025 to shareholders of record on May 9, 2025. During the six months ended June 30, 2024, the Company paid a distribution of $0.15 per share on its common shares on March 28, 2024 to shareholders of record on February 16, 2024 and June 28, 2024 to shareholders of record on May 15, 2024. The distributions paid on June 30, 2025, March 31, 2025, June 28, 2024 and March 28, 2024 consisted of a combination of cash and shares, with the cash component of each distribution (other than cash paid in lieu of fractional shares) comprising 20% of the distribution, with the balance being paid in the Company's common shares.

As of June 30, 2025, and December 31, 2024, the Company had 47,421,929 and 42,679,569 common shares, issued and outstanding, respectively.

*Series A Preferred Shares*

On January 8, 2021, the Company issued 3,359,593 5.50% Series A Cumulative Preferred Shares, par value $0.001 per share, liquidation preference $25.00 per share ("Series A Preferred Shares") with an aggregate liquidation preference of approximately $84.0 million. The Series A Preferred Shares were issued as part of the consideration for an exchange offer for a portion of the Company's common shares. The Series A Preferred Shares are callable beginning on December 15, 2023 at a price of $25 per share. The Company may exercise its call option at the Company's discretion. As a result, these are included in permanent equity.

During the six months ended June 30, 2025, the Company declared two distributions on its Series A Preferred Shares, in the amount of $0.34375 per share each, which were paid on March 31, 2025, to shareholders of record on March 24, 2025 and June 30, 2025 to shareholders of record on June 23, 2025.

During the six months ended June 30, 2024, the Company declared distributions on its Series A Preferred Shares, in the amount of $0.34375 per share each, which were paid on April 1, 2024 to shareholders of record on March 25, 2024 and

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July 1, 2024, to shareholders of record on June 24, 2024. The Company sent funding to the transfer agent for the dividend paid on July 1, 2024 prior to June 30, 2024, which was then paid to shareholders on July 1, 2024.

Distributions on the Series A Preferred Shares are cumulative from their original issue date at the annual rate of 5.5% of the $25 per share liquidation preference and are payable quarterly on March 31, June 30, September 30, and December 31 of each year, or in each case on the next succeeding business day.

*Series B Preferred Shares*

On January 30, 2025, the Company announced the launch of a continuous public offering (the "Series B Preferred Offering") of up to 16,000,000 shares of its newly designated 9.00% Series B Cumulative Redeemable Preferred Shares, par value $0.001 per share, liquidation preference $25.00 per share ("Series B Preferred Shares") at a price to the public of $25.00 per share, for gross proceeds of $400.0 million. As of June 30, 2025, the Company has issued 145,554 Series B Preferred Shares for gross proceeds of $3.6 million before deducting selling commissions and dealer manager fees of approximately $0.2 million, and organization and offering costs of approximately $0.3 million. The Company expects that the offering will terminate on the earlier of the date the Company sells all 16,000,000 Series B Preferred Shares in the offering or August 1, 2027 (which is the third anniversary of the effective date of the Company's registration statement), which may be extended by the Board in its sole discretion. The Board may elect to terminate the Series B Preferred Offering at any time.

During the six months ended June 30, 2025, the Company declared eight distributions on the Series B Preferred Shares, each in the amount of $0.1875 per share, two of which will be paid to holders of Series B Preferred Shares on October 6, 2025 and September 5, 2025 to holders of record on September 25, 2025 and August 25, 2025, respectively, and the remaining which were paid to holders of Series B Preferred Shares on August 5, 2025, July 7, 2025, June 5, 2025, May 5, 2025, April 7, 2025 and March 5, 2025 to holders of record of Series B Preferred Shares on July 25, 2025, June 25, 2025, May 23, 2025, April 25, 2025, March 25, 2025 and February 25, 2025, respectively.

Distributions on the Series B Preferred Shares are cumulative from their original issue date at the annual rate of 9% of the $25 per share initial stated value and are payable monthly on the fifth day of each calendar month or, if such date is not a business day, on the next succeeding business day.

*Long Term Incentive Plan, NXDT*

On January 30, 2023, the Company's shareholders approved a long-term incentive plan (the "2023 LTIP" as amended by the A&R 2023 LTIP (as defined below), the "LTIP") and the Company subsequently filed a registration statement on Form S-8 registering 2,545,000 common shares, which the Company may issue pursuant to the 2023 LTIP. On June 10, 2025, the Company's shareholders approved an amendment and restatement of the 2023 LTIP (the "A&R" 2023 LTIP") and the Company subsequently filed a registration statement on Form S-8 registering an additional 1,007,258 common shares, which the Company may issue pursuant to the A&R 2023 LTIP. The LTIP authorizes the compensation committee of the Board to provide equity-based compensation in the form of share options, appreciation rights, restricted shares, restricted share units, performance shares, performance units and certain other awards denominated or payable in, or otherwise based on, the Company's common shares or factors that may influence the value of the Company's common shares, plus cash incentive awards, for the purpose of providing the Company's trustees, officers and other key employees (and those of the Adviser and the Company's subsidiaries), and potentially certain nonemployees who perform employee-type functions, incentives and rewards for performance (the "participants").

*Restricted Share Units*. Under the LTIP, restricted share units may be granted to the participants and typically vest over a three to five-year period for officers, employees and certain key employees of the Adviser and annually for trustees. The most recent grant of restricted share units to officers, employees and certain key employees of the Adviser will vest over a four-year period. Beginning on the date of grant, restricted share units earn distributions that are payable in cash on the vesting date. Compensation expense is recognized on a straight-line basis over the total requisite service period for the entire award. Forfeitures are recognized as they occur. The following table includes the number of restricted share units granted to its trustees, officers, employees and certain key employees of the Adviser under the LTIP:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Summary of Grants** | **Summary of Grants** | **Summary of Grants** | |
| | **March** | **April** | **June** |<br>**Total** |
| 2023 |  | 603482 |  | 603482 |
| 2024 | 1033787 |  |  | 1033787 |
| 2025 |  | 937643 | 572592 | 1510235 |
| Total | 1033787 | 1541125 | 572592 | 3147504 |

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As of June 30, 2025 and December 31, 2024, the Company had 2,483,801 and 1,438,049 unvested units under the LTIP, respectively.

The following table includes the number of restricted share units granted, vested, forfeited and outstanding as of and for the six months ended June 30, 2025:

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| | | | |
|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** |
| | **Number of Units** | | **Weighted Average<br>Grant Date Fair Value** |
| Outstanding January 1, 2025 | 1438049 |  | $7.35 |
| Granted | 1510235 |  | 3.73 |
| Vested | (449024) | (1) | 3.76 |
| Forfeited | (15459) |  | 7.99 |
| Outstanding June 30, 2025 | 2483801 |  | $5.79 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Certain key employees of the Adviser elected to net the taxes owed upon the vesting against the shares issued resulting in 358,173 shares being issued as shown on the Consolidated Statement of Equity.

The following table contains information regarding the vesting of restricted share units under the LTIP as of June 30, 2025:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Shares Vesting** | **Shares Vesting** | **Shares Vesting** | **Shares Vesting** | **Shares Vesting** |
| | **February** | **March** | **April** | **June** | **Total** |
| 2025 |  |  |  |  |  |
| 2026 |  | 234527 | 400535 | 172893 | 807955 |
| 2027 | 358606 | 234527 | 130974 |  | 724107 |
| 2028 | 358606 | 234527 |  |  | 593133 |
| 2029 | 358606 |  |  |  | 358606 |
| Total | 1075818 | 703581 | 531509 | 172893 | 2483801 |

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For the three months ended June 30, 2025 and 2024, the company recognized approximately $1.0 million and $0.9 million, respectively of equity-based compensation expense related to grants of restricted share units. For the six months ended June 30, 2025 and 2024, the Company recognized approximately $1.8 million and $1.4 million, respectively, of equity-based compensation expense related to grants of restricted share units. As of June 30, 2025, the Company had recognized a liability of approximately $1.0 million related to distributions earned on restricted share units that are payable in cash upon vesting. As of June 30, 2025, total unrecognized compensation expense on restricted share units was approximately $11.7 million, and the expense is expected to be recognized over a weighted average vesting period of 1.9 years. As of December 31, 2024, total unrecognized compensation expense on restricted share units was approximately $8.0 million, and the expense is expected to be recognized over a weighted average vesting period of 1.5 years.

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**12. Earnings (Loss) Per Share**

Basic earnings (loss) per share is computed by dividing net income (loss) attributable to common shareholders by the weighted average number of the Company's common shares outstanding and excludes any unvested restricted share units issued pursuant to the LTIP.

Diluted earnings (loss) per share is computed by adjusting basic earnings per share for the dilutive effect of the assumed vesting of restricted share units. During periods of net loss, the assumed vesting of restricted share units is anti-dilutive and is not included in the calculation of earnings (loss) per share.

The following table sets forth the computation of basic and diluted earnings (loss) per share (in thousands, except per share amounts):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Three Months Ended June 30,** | **Three Months Ended June 30,** | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| | | **2025** | **2024** | **2025** | **2024** |
| **Numerator for loss per share:** |  |  |  |  |  |
| &nbsp;&nbsp;**Net income (loss) attributable to common shareholders** |  | $(45251) | $(9783) | $(79569) | $(32486) |
| **Denominator for loss per share:** |  |  |  |  |  |
| Weighted average common shares outstanding |  | 45687 | 39616 | 44303 | 39094 |
| &nbsp;&nbsp;Denominator for basic loss per share |  | 45687 | 39616 | 44303 | 39094 |
| &nbsp;&nbsp;Weighted average unvested restricted share units |  | 2016 | 1435 | 1694 | 1210 |
| &nbsp;&nbsp;Weighted average number of common shares from assumed conversion of Series B Preferred Stock |  | 184 |  | 14 |  |
| &nbsp;&nbsp;Denominator for diluted loss per share | (1) | 45687 | 39616 | 44303 | 39094 |
| **Loss per weighted average common share:** |  |  |  |  |  |
| &nbsp;&nbsp;Basic |  | $(0.99) | $(0.24) | $(1.80) | $(0.83) |
| &nbsp;&nbsp;Diluted |  | $(0.99) | $(0.24) | $(1.80) | $(0.83) |

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(1)&nbsp;&nbsp;&nbsp;&nbsp;If the Company sustains a net loss for the period presented, unvested restricted share units and convertible Series B Preferred Shares are not included in the diluted earnings per share calculation.

**13. Related Party Transactions**

*Advisory and Administrative Fees, NXDT*

Pursuant to the Advisory Agreement, subject to the overall supervision of our Board, the Adviser manages the day-to-day operations of the Company and provides investment management services.

As of June 30, 2025 and 2024, as consideration for the Adviser's services under the Advisory Agreement, we pay our Adviser an annual fee (the "Advisory Fee") of 1.00% of Managed Assets (defined below) and an annual fee (the "Administrative Fee" and, together with the Advisory Fee, the "Fees") of 0.20% of the Company's Managed Assets.

On July 22, 2024, we entered into an amendment to the Advisory Agreement whereby the monthly installment of the Administrative Fee shall be paid in cash and the monthly installment of the Advisory Fee shall be paid in one-half in cash and one-half in common shares of the Company, subject to certain restrictions including that in no event shall the common shares issued to the Adviser under the Advisory Agreement exceed five percent of the number of common shares or five percent of the voting power of the Company outstanding prior to the first such issuance (the "Share Cap") and that in no event shall the common shares issued to the Adviser under the Advisory Agreement exceed 6,000,000 common shares;

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provided, however, that the Share Cap will not apply if the Company's shareholders have approved issuances in excess of the Share Cap. At the Company's 2025 annual meeting of shareholders, the Company's shareholders approved issuances in excess of the Share Cap. During the six months ended June 30, 2025, we issued 556,435.90 common shares to the Adviser in payment of the Fees in an amount of $2.89 million.

Under the Advisory Agreement, "Managed Assets" means an amount equal to the total assets of the Company, including any form of leverage, minus all accrued expenses incurred in the normal course of operations, but not excluding any liabilities or obligations attributable to leverage obtained through (i) indebtedness of any type (including, without limitation, borrowing to purchase or develop real estate or other investments, borrowing through a credit facility, or the issuance of debt securities), (ii) the issuance of preferred shares or other preference securities, (iii) the reinvestment of collateral received for securities loaned in accordance with the Company's investment objectives and policies, and/or (iv) any other means. In the event the Company holds collateralized mortgage-backed securities ("CMBS") where the Company holds the controlling tranche of the securitization and is required to consolidate under U.S. generally accepted accounting principles ("GAAP") all assets and liabilities of a specific CMBS trust, the consolidated assets and liabilities of the consolidated trust will be netted to calculate the allowable amount to be included as Managed Assets. In addition, in the event the Company consolidates another entity it does not wholly own as a result of owning a controlling interest in such entity or otherwise, Managed Assets will be calculated without giving effect to such consolidation and instead such entity's assets, leverage, expenses, liabilities and obligations will, on a pro rata basis consistent with the Company's percentage ownership, be considered those of the Company for purposes of calculation of Managed Assets. The Adviser computes Managed Assets as of the end of each fiscal quarter and then computes each installment of the Fees as promptly as possible after the end of the month with respect to which such installment is payable.

*Advisory Fees, NHT*

Prior to the closing of the NHT Merger on April 17, 2025, NHT was externally managed by the NHT Adviser. In accordance with the agreement entered into with the NHT Adviser (the "NHT Advisory Agreement"), the Company paid the NHT Adviser an advisory fee equal to 1.00% of the REIT Asset Value (as defined below). Under the direct supervision of the REIT, the duties performed by NHT's Adviser under the terms of the NHT Advisory Agreement include, but are not limited to: providing daily management for NHT, selecting and working with third party service providers, overseeing the third party manager, formulating an investment strategy for NHT and selecting suitable properties and investments, managing NHT's outstanding debt and its interest rate exposure through derivative instruments, determining when to sell assets, and managing the renovation program or overseeing a third party vendor that implements the renovation program. REIT Asset Value means the value of NHT's total assets, as determined in accordance with International Financial Reporting Standards (IFRS) except that such value shall only consolidate NHT's and NHT Holdings, LLC assets plus NHT's pro rata share of leverage at NHT OP. Pursuant to the terms of the NHT Advisory Agreement, NHT will reimburse the NHT Adviser for all documented Operating Expenses and offering expenses it incurs on behalf of NHT. "Operating Expenses" include legal, accounting, financial and due diligence services performed by the NHT Adviser that outside professionals or outside consultants would otherwise perform and NHT's pro rata share of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of the NHT Adviser required for NHT's operations. Operating Expenses do not include expenses for the advisory services described in the NHT Advisory Agreement. Certain Operating Expenses, such as NHT's ratable share of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses incurred by the NHT Adviser or its affiliates that relate to the operations of NHT, may be billed monthly to NHT under a shared services agreement.

As of April 19, 2024, the date of the NHT Acquisition, NHT had a payable balance of advisory fees of $6.5 million. As of June 30, 2025 there is a remaining payable of advisory fees of $11.3 million. The NHT Advisory Agreement was terminated in connection with the closing of the NHT Merger on April 17, 2025, and the Company assumed the remaining outstanding advisory fees under the NHT Advisory Agreement, and the termination of the Advisory Agreement incurred a termination fee of $3.5 million.

*Reimbursement of Expenses*

We also generally reimburse our Adviser for operating or offering expenses it incurs on our behalf or in connection with the services it performs for us. The Adviser may, at its discretion and at any time, waive its right to reimbursement for eligible out-of-pocket expenses paid on the Company's behalf. Once waived, those expenses are considered permanently waived and became non-recoupable.

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The Advisory Agreement has a term that will expire on July 1, 2026, and successive additional one-year terms thereafter unless earlier terminated. We have the right to terminate the Advisory Agreement on 30 days' written notice upon the occurrence of a cause event (as defined in the Advisory Agreement). The Advisory Agreement can be terminated by us or the Adviser without cause upon the expiration of the then-current term with at least 180 days' written notice to the other party prior to the expiration of such term. The Adviser may also terminate the agreement with 30 days' written notice if we have materially breached the agreement and such breach has continued for 30 days before we are given such notice. In addition, the Advisory Agreement will automatically terminate in the event of an Advisers Act Assignment (as defined in the Advisory Agreement) unless we provide written consent. A termination fee will be payable to the Adviser by us upon termination of the Advisory Agreement for any reason, including non-renewal, other than a termination by us upon the occurrence of a cause event or due to an Advisers Act Assignment. The termination fee will be equal to three times the Fees earned by the Adviser during the twelve month period immediately preceding the most recently completed calendar quarter prior to the effective termination date; provided, however, if the Advisory Agreement is terminated prior to the one year anniversary of the date of the Advisory Agreement, the Fees earned during such period will be annualized for purposes of calculating the Fees.

For the three months ended June 30, 2025 and 2024, the Company incurred Administrative Fees and Advisory Fees of $3.4 million and $3.2 million, respectively. For the six months ended June 30, 2025 and 2024, the Company incurred Administrative Fees and Advisory Fees of $6.8 million and $6.4 million, respectively.

*Expense Cap, NHT*

Prior to the closing of the NHT Merger on April 17, 2025, the terms of the NHT Advisory Agreement, expenses paid or incurred by NHT for advisory fees payable to the NHT Adviser, Operating Expenses incurred by the NHT Adviser or its affiliates in connection with the services it provides to NHT and its subsidiaries and compensation expenses relating to equity awards granted under a long-term incentive plan of NHT will not exceed 1.5% of REIT Asset Value for the calendar year (or part thereof) that the NHT Advisory Agreement is in effect (the "NHT Expense Cap"). The NHT Expense Cap does not apply to legal, accounting, financial, due diligence and other service fees incurred in connection with mergers and acquisitions, extraordinary litigation, or other events outside NHT's ordinary course of business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of real estate assets. From the date of the NHT Acquisition to the period ended June 30, 2025, NHT incurred expenses subject to the NHT Expense Cap of $3.2 million. The NHT Advisory Agreement was terminated in connection with the closing of the NHT Merger on April 17, 2025, and the Company assumed the remaining expense reimbursement obligations under the NHT Advisory Agreement.

*Loans from Affiliates*

As of June 30, 2025, a subsidiary of the Company assumed several convertible notes issued by NHT to certain affiliates of the NHT Adviser in connection with the NHT Merger totaling $51.1 million (see Note 6 to our consolidated financial statements). The proceeds of the notes were primarily used for general corporate and working capital purposes and have been consolidated into one account on the Consolidated Balance Sheets.

*Revolving Credit Facility, NXDT*

On May 22, 2023, the Company entered into the NexBank Revolver in the initial principal amount of $20.0 million, with the option for the Company to receive additional disbursements thereunder up to a maximum amount of $50.0 million and bears interest at one-month SOFR plus 3.50%. On May 21, 2024, the Company elected to extend the maturity by six months to November 21, 2024. On November 21, 2024, the Company elected to extend the maturity by six months to May 21, 2025. On May 15, 2025, the Company amended the NexBank Revolver agreement to extend the maturity date to November 21, 2025, and to provide for three additional six-month extension options. As of June 30, 2025, the NexBank Revolver had an outstanding balance of $13.8 million.

*Guaranties of NexPoint Storage Partners, Inc. Debt*.

On October 4, 2024, the Company entered into a Guaranty Agreement (Recourse Obligations), dated October 4, 2024 (the "Citi Guaranty") for the benefit of JPM and Citi Real Estate Funding, Inc. (collectively, the "Citi Lender") under a loan agreement (the "Citi Loan Agreement"), by and among the borrowers thereunder (collectively, "Citi Borrower") and the Citi Lender. The Company is the owner of an indirect interest in Citi Borrower and entered into the Citi Guaranty as a condition of the Citi Lender lending to Citi Borrower under the Citi Loan Agreement. Pursuant to the Citi Guaranty, the

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Company guarantees the Guaranteed Obligations (as defined in the Citi Loan Agreement). The Guaranteed Obligations consist of liability for losses suffered by the Citi Lender arising out of certain bad acts, such as if the Citi Borrower takes actions that are fraudulent or improper or upon certain violations of the Citi Loan Agreement. The Guaranteed Obligations also include the full payment of the debt upon the occurrence of certain events including borrower voluntarily filing for bankruptcy or similar liquidation or reorganization action or upon certain other violations of the Citi Loan Agreement. The Citi Loan Agreement provides for a loan of $750.0 million to Citi Borrower. The Citi Loan Agreement is set to mature on November 1, 2029. Borrowings outstanding under the Citi Loan Agreement are secured by mortgages on real property owned by one or more of the borrowers comprising Citi Borrower.

On December 8, 2022 and in connection with a restructuring of NSP, the Company, together with NREF, Highland Opportunities and Income Fund and NexPoint Real Estate Strategies Fund (collectively, the "NSP Co-Guarantors"), as guarantors, entered into a Sponsor Guaranty Agreement in favor of Extra Space Storage, LP ("Extra Space") pursuant to which the Company and the NSP Co-Guarantors guaranteed obligations of NSP with respect to accrued dividends on NSP's newly created Series D Preferred Stock and two promissory notes in an aggregate principal amount of approximately $64.2 million issued to Extra Space. The guaranties by the Company and the NSP Co-Guarantors were capped at $97.6 million, and each of the Company and the NSP Co-Guarantors generally guaranteed the foregoing obligations of NSP up to the cap amount on a pro rata basis with respect to its percentage ownership of NSP's common stock. On February 15, 2023, NSP paid down approximately $15.0 million of these promissory notes, resulting in an aggregate principal amount of approximately $49.2 million. On December 8, 2023, NSP paid down the remaining principal balance of $49.2 million. The Series D Preferred Stock remains outstanding as of June 30, 2025. As of June 30, 2025, the outstanding NSP Series D Preferred Stock accrued dividends were $13.3 million, and the Company and NREF OP IV REIT Sub, LLC are jointly and severally liable for 85.90% of the guaranteed amount.

*NexBank Guaranty*

The Company is a guarantor and an indemnitor on the NexBank Revolver. As of June 30, 2025, the NexBank Revolver had an outstanding balance of $13.8 million. The Company guarantees the borrowers' obligations under the loan agreement and the guaranty is a guaranty of payment and performance, not of collection, which is generally applicable without the need for the lender to make any demand upon or pursue any rights or remedies against the borrower or any other loan party. The guarantor's liability is immediate and not contingent on prior actions taken by the lender against other parties. As an indemnitor, the Company is responsible for indemnifying the lender against losses, claims, damages, and costs (including attorneys' fees) arising from the borrowers' or any other loan party's breach of its warranties, representations, and agreements under the loan agreement. The Company has not recorded a contingent liability with respect to this guaranty as the borrowers are current on all debt payments and in compliance with all debt compliance provisions.

*NREF OP Promissory Note*

On April 19, 2024, the Company, through the OP, loaned $6.5 million to NREF OP IV, L.P. ("NREF OP IV"). In connection with the loan, NREF OP IV issued a promissory note to the OP in the principal amount of $6.5 million bearing interest at 7.535%, which is payable in kind, interest only during the term and matures on April 19, 2029. NREF OP IV is a subsidiary of NREF, which is managed by an affiliate of the Adviser. On September 11, 2024, NREF OP IV extinguished the note and paid down the remaining principal balance and accrued interest.

*NFRO SFR REIT Promissory Notes*

On December 14, 2023, the Company, through the OP, loaned approximately $3.6 million to NFRO SFR REIT, LLC ("NFRO SFR REIT"). In connection with the loan, NFRO SFR REIT issued a promissory note to the OP in the principal amount of approximately $3.6 million bearing interest at 7.535% per annum, which is payable in kind, interest only during the term and matures on June 14, 2025. On April 9, 2025, NFRO SFR REIT extinguished the note and paid down the remaining principal balance and accrued interest.

On February 15, 2024, the Company, through the OP, loaned approximately $3.2 million to NFRO SFR REIT. In connection with the loan, NFRO SFR REIT issued a promissory note to the OP in the principal amount of approximately $3.2 million bearing interest at 7.535% per annum, which is payable in kind, interest only during the term and matures on August 15, 2025. NFRO SFR REIT is a subsidiary of an entity that is advised by an affiliate of the Adviser. On May 16, 2025, NFRO SFR REIT extinguished the note and paid down the remaining principal balance and accrued interest.

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*Investments in DSTs*

On July 26, 2024, the Company, through NREO, acquired $4.6 million worth of Class 1 in NexPoint Life Sciences II DST ("Life Sciences DST"), a Delaware statutory trust. Life Sciences DST is managed by an affiliate of the Adviser. Life Sciences DST owns a manufacturing and production facility in Philadelphia, PA that is under a triple net lease.

On July 26, 2024, the Company, through NREO, acquired $14.9 million worth of Class 1 in NexPoint Semiconductor DST ("Semiconductor DST"), a Delaware statutory trust. Semiconductor DST is managed by an affiliate of the Adviser. Semiconductor DST owns a semiconductor manufacturing property in Temecula, CA that is under a triple net lease. On September 11, 2024, the Company acquired an additional $6.1 million worth of Class 1 in Semiconductor DST. On January 2, 2025, the Company acquired an additional $3.0 million worth of Class 1 in Semiconductor DST.

*Capital Acquisitions Partners, LLC*

The Company owns approximately 20.9% of the total outstanding membership interests of Capital Acquisitions Partners, LLC, an entity that invests in multifamily housing. The remaining membership interests are held by NexPoint Real Estate Finance Operating Partnership, L.P. ("NREF OP"). See Notes 7 and 8 for additional information.

*IQHQ Transactions*

On May 23, 2024, the Company, through the OP, along with certain entities advised by affiliates of our Adviser or that may be deemed an affiliate of the Adviser through common beneficial ownership, entered into a participation rights agreement with NexPoint Bridge Investor I, LLC ("Bridge Investor I"), an entity owned by an affiliate of the Adviser, pursuant to which the Company had a right to fund up to specified amounts of a Secured Convertible Promissory Note (the "IQHQ Promissory Note"), with a purchase commitment of $150 million, and a corresponding warrant to purchase Class A-3 Units of IQHQ Holdings, LP ("IQHQ Holdings") (as amended, the "IQHQ Bridge Warrant"), issued and sold by IQHQ LP to Bridge Investor.

On December 31, 2024, the Company, through certain subsidiaries, along with certain entities advised by affiliates of our Adviser or that may be deemed an affiliate of the Adviser through common beneficial ownership, entered into a participation rights agreement with Bridge Investor I pursuant to which the Company has a right to fund up to specified amounts of a Subscription Agreement (the "IQHQ Subscription Agreement") entered into by Bridge Investor I, whereby Bridge Investor I committed to purchase $160.1 million of Series E preferred stock of IQHQ, Inc. ("IQHQ") and the corresponding warrant to purchase Class A-3 Units of IQHQ Holdings issued to Bridge Investor I (as amended, the "IQHQ Series E Warrant").

*Series B Preferred Shares Offering*

On January 30, 2025, the Company announced the launch of the Series B Preferred Offering. NexPoint Securities, Inc., an affiliate of the Adviser, serves as the Company's dealer manager (the "Dealer Manager") in connection with the Series B Preferred Offering. The Dealer Manager uses its reasonable best efforts to sell the Series B Preferred Shares offered in the Series B Preferred Offering, and the Company pays the Dealer Manager, subject to the discounts and other special circumstances described or referenced therein, (i) selling commissions of 7.0% of the aggregate gross proceeds from sales of Series B Preferred Shares in the offering ("Selling Commissions") and (ii) a dealer manager fee of 3.0% of the gross proceeds from sales of Series B Preferred Shares in the offering (the "Dealer Manager Fee"). The Dealer Manager, subject to federal and state securities laws, will reallow all or any portion of the Selling Commissions and may reallow a portion of the Dealer Manager Fee to other securities dealers that the Dealer Manager may retain who sold the Series B Preferred Shares as is described more fully in the agreements between such dealers and the Dealer Manager. The Company expects that the offering will terminate on the earlier of the date the Company sells all 16,000,000 Series B Preferred Shares in the offering or August 1, 2027 (which is the third anniversary of the effective date of the Company's registration statement), which may be extended by the Board in its sole discretion. The Board may elect to terminate this offering at any time. As of June 30, 2025, the Company has sold 145,554 shares of the Series B Preferred Shares for total gross proceeds of $3.6 million.

*Ground Lease*

The Company 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. See Note 15 for additional information.

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*Other Related Party Transactions*

The Company has in the past, and may in the future, utilize the services of affiliated parties. The Company holds multiple operating accounts at NexBank. The Company's operating properties, other than undeveloped land, are managed by NexVest Realty Advisors, LLC ("NexVest"), an affiliate of the Adviser. For the six months ended June 30, 2025 and 2024 the Company through its subsidiaries has paid approximately $0.4 million and $0.4 million, respectively, in property management fees to NexVest. The property management agreement with NexVest for the retail property in Lubbock, Texas is dated January 1, 2014 and had a fixed fee of $750 per month. Effective January 1, 2023, the property management agreement was amended and the property management fee was increased to $1,200 per month. The property management agreement with NexVest for the White Rock Center is dated June 1, 2013, and the management fee is calculated on 4% of gross receipts, payable monthly. The property management agreement with NexVest for the undeveloped property in Plano, Texas is dated September 1, 2024, and the management fee is calculated on 3% of gross receipts, with a minimum fee of $750 per month. The property management agreement with NexVest for Cityplace Tower is dated August 15, 2018, and the management fee is calculated on 3% of gross revenues, with a minimum fee of $20,000 per month. The property management agreement with NexVest for Cityplace Tower also allows for the manager, as the agent of CP Tower Owner, LLC ("Owner"), to draw on the operating account when required in connection with the operation or maintenance of the property, the payment of certain expenses defined in the agreement, or as expressly approved in writing by Owner. For the three and six months ended June 30, 2025, the SPE holding Cityplace Tower reimbursed $0.4 million and $0.8 million, respectively, to NexVest for these expenses. For the three and six months ended June 30, 2024, the SPE holding Cityplace Tower reimbursed $0.4 million and $0.9 million, respectively, to NexVest for these expenses.

A trustee and officer of the Company also (i) is the beneficiary of a trust that indirectly owns 100% of the limited partnership interests in the parent of the Adviser and directly owns 100% of the general partnership interests in the parent of the Adviser and (ii) is a director of NexBank Capital, the holding company of NexBank, directly owns a minority of the common stock of NexBank, and is the beneficiary of a trust that directly owns a substantial portion of the common stock of NexBank.

The Company is a guarantor and an indemnitor on a loan from OSL, an entity that may be deemed an affiliate of the Adviser through common beneficial ownership, taken by Freedom LHV which owns White Rock Center, with an aggregate principal amount of $10.0 million as of June 30, 2025. The obligations include a continuing guarantee, which is generally applicable to all current and future liabilities or obligations of the borrower, whether directly or indirectly incurred, including through an agreement with an affiliate, joint venture partner or other third party. This guarantee remains in effect until all such obligations have been satisfied in full, unless terminated in accordance with the terms of the guarantee agreement. The loan is secured by certain real property held by Freedom LHV.

On March 14, 2025, the Company purchased 2,754.59 shares of NexPoint Storage Partners Operating Company, LLC (the "NSP OC Common Units") for an aggregate amount of $2.0 million, 4,638.07 shares for an aggregate amount of $3.2 million on April 29, 2025, and 5,157.67 shares for an aggregate amount of $3.6 million on June 16, 2025. As of June 30, 2025, the Company owns approximately 59,615 Class B Units, or 35.7%, of the outstanding NSP OC Common Units.

On September 1, 2023, the Company, through one of its wholly owned TRSs, entered into a contribution agreement to transfer the Structured Note in SFP and all its rights, title and interests to related party NHI and its wholly owned subsidiaries. The Company also transferred all of its ordinary shares in SFP to a separate share trustee. In exchange, the Company was issued 68,500 shares of Class A Preferred Stock in NHI and owns 72,718 and 65,864 shares, respectively, as of June 30, 2025 and 2024.

*Related Party Investments*

The Company, from time to time, may invest in entities managed by affiliates of the Adviser. For the six months ended and as of June 30, 2025, the Company had the following investments in entities managed or advised by, or directly or indirectly owned by entities managed or advised by, affiliates of the Adviser (in thousands).

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Related Party** | **Investment** | **Fair <br>Value/Carrying Value** | **Change in Unrealized <br>Gain/(Loss)** | **Realized<br>Gain/(Loss)** | **Equity in income (loss)** | **Interest and <br>Dividends** | **Total Income** |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **Related Party** | **Investment** | **Fair <br>Value/Carrying Value** | **Change in Unrealized <br>Gain/(Loss)** | **Realized<br>Gain/(Loss)** | **Equity in income (loss)** | **Interest and <br>Dividends** | **Total Income** |
| NexPoint Real Estate Finance, Inc. | Common Stock | $28958 | $(3990) | $— | $— | $2100 | $(1890) |
| NexPoint Storage Partners, Inc. | Common Stock | 50844 | (11866) |  |  |  | (11866) |
| NexPoint Residential Trust, Inc. | Common Stock | 3288 | (829) |  |  | 100 | (729) |
| NexPoint SFR Operating Partnership, L.P. | Convertible Notes | 14081 | 236 |  |  | 668 | 904 |
| NexPoint Storage Partners Operating Company, LLC | LLC Units | 35094 | (7915) |  |  |  | (7915) |
| Claymore Holdings, LLC | LLC Units |  |  |  |  |  |  |
| Allenby, LLC | LLC Units |  | 456 | 3493 |  |  | 3949 |
| Haygood, LLC. | LLC Units |  | 31 | (31) |  |  |  |
| VineBrook Homes Operating Partnership, L.P. | Partnership Units | 134076 | (17631) |  |  | 2986 | (14645) |
| NexPoint Real Estate Finance Operating Partnership, L.P. | Partnership Units | 67145 | (9251) |  |  | 4869 | (4382) |
| NexPoint SFR Operating Partnership, L.P. | Partnership Units | 33322 | (5941) |  |  | 1310 | (4631) |
| NexAnnuity Holdings, Inc. | Preferred Shares | 72719 |  |  |  | 2824 | 2824 |
| NexPoint Storage Partners Operating Company, LLC | Promissory Note | 2754 | (11) |  |  | 74 | 63 |
| NexPoint SFR Operating Partnership, L.P. | Promissory Note |  |  |  |  | 7 | 7 |
| NFRO SFR REIT, LLC | Promissory Note |  |  |  |  | 88 | 88 |
| NFRO SFR REIT, LLC | Promissory Note |  |  |  |  | 82 | 82 |
| Semiconductor DST | LLC Units | 23959 |  |  |  | 690 | 690 |
| Life Science II DST | LLC Units | 9600 |  |  |  | 235 | 235 |
| Capital Acquisitions Partners, LLC | LLC Units | 614 |  |  | 206 |  | 206 |
| Total |  | $476454 | $(56711) | $3462 | $206 | $16033 | $(37010) |

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For the six months ended and as of June 30, 2024, the Company had the following investments in entities managed or advised by, or directly or indirectly owned by entities managed or advised by, affiliates of the Adviser (in thousands).

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Related Party** | **Investment** | **Fair <br>Value/Carrying Value** | **Change in Unrealized <br>Gain/(Loss)** | **Equity in income (loss)** | **Interest and <br>Dividends** | **Total Income** |
| NexPoint Real Estate Finance, Inc. | Common Stock | $28812 | $(4263) | $— | $2100 | $(2163) |
| NexPoint Storage Partners, Inc. | Common Stock | 67256 | (932) |  |  | (932) |
| NexPoint Residential Trust, Inc. | Common Stock | 3719 | 481 |  | 86 | 567 |
| NexPoint SFR Operating Partnership, L.P. | Convertible Notes | 20824 | 11 |  | 814 | 825 |
| NexPoint Storage Partners Operating Company, LLC | LLC Units | 36649 | (508) |  |  | (508) |
| SFR WLIF III, LLC | LLC Units | 6948 |  | 370 |  | 370 |
| Claymore Holdings, LLC | LLC Units |  | (110) |  |  | (110) |
| Allenby, LLC | LLC Units |  | (46) |  |  | (46) |
| Haygood, LLC. | LLC Units |  |  |  |  |  |
| VineBrook Homes Operating Partnership, L.P. | Partnership Units | 156658 | 7201 |  | 2943 | 10144 |
| NexPoint Real Estate Finance Operating Partnership, L.P. | Partnership Units | 66804 | (9885) |  | 4869 | (5016) |
| NexPoint SFR Operating Partnership, L.P. | Partnership Units | 46310 | (4315) |  | 1242 | (3073) |
| NexAnnuity Holdings, Inc. | Preferred Shares | 67181 |  |  | 2613 | 2613 |
| NexPoint Storage Partners Operating Company, LLC | Promissory Note | 4986 | (15) |  | 134 | 119 |
| NexPoint SFR Operating Partnership, L.P. | Promissory Note | 500 |  |  | 22 | 22 |
| NREF OP IV, L.P. | Promissory Note | 5900 |  |  | 96 | 96 |
| Total |  | $512547 | $(12381) | $370 | $14919 | $2908 |

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**14. Commitments and Contingencies**

*Commitments*

On December 8, 2022 and in connection with a restructuring of NSP, the Company, together with the NSP Co-Guarantors, as guarantors, entered into a Sponsor Guaranty Agreement in favor of Extra Space pursuant to which the Company and the NSP Co-Guarantors guaranteed obligations of NSP with respect to accrued dividends on NSP's newly created Series D Preferred Stock and two promissory notes in an aggregate principal amount of approximately $64.2 million issued to Extra Space, which were paid in full on December 8, 2023. The NSP Series D Preferred Stock remains outstanding as of June 30, 2025. As of June 30, 2025, the outstanding NSP Series D Preferred Stock accrued dividends were $13.3 million. See Note 13 to our consolidated financial statements for additional information.

On October 4, 2024, the Company entered into the Citi Guaranty for the benefit of the Citi Lender under the Citi Loan Agreement, by and among Citi Borrower and the Citi Lender. Pursuant to the Citi Guaranty, the Company guarantees the Guaranteed Obligations (as defined in the Citi Loan Agreement). See Note 13 to our consolidated financial statements for additional information.

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The Company is a limited guarantor and an indemnitor on one of the subsidiaries of the Company's loans with an aggregate principal amount of $41.6 million outstanding, as of June 30, 2025. The obligations include a customary environmental indemnity and a so-called "bad boy" guarantee, which is generally only applicable if and when the borrower directly, or indirectly through an agreement with an affiliate, joint venture partner or other third party, voluntarily files a bankruptcy or similar liquidation or reorganization action or takes other actions that are fraudulent or improper.

The Company is a guarantor and an indemnitor on a loan taken by the SPE which owns Cityplace Tower with an aggregate principal amount of $138.8 million as of June 30, 2025. The obligations include guarantees, which are generally only applicable if and when the borrower, which is a subsidiary of the Company, directly, or indirectly through an agreement with an affiliate, joint venture partner or other third party, voluntarily terminates construction services prior to the completion of the project, files a bankruptcy or similar liquidation or reorganization action or takes other actions that are fraudulent or improper. As of June 30, 2025, management does not anticipate any material deviations from schedule or budget related to construction projects current in process, and Cityplace Tower is current on all debt payments and in compliance with all debt compliance provisions.

The Company is a guarantor and an indemnitor on a loan from OSL, an entity that may be deemed an affiliate of the Adviser through common beneficial ownership, taken by Freedom LHV which owns White Rock Center. See Note 13 to our consolidated financial statements for additional information.

The Company, together with Calida Holdings III, LP, is a guarantor and an indemnitor on a loan taken by the SPE that owns Tivoli. As of June 30, 2025, the loan had an outstanding balance of $13.5 million. As a guarantor, it owes the obligations including a guaranty of payment, which is generally applicable without the need for the lender to make any demand upon or pursue any rights or remedies against the borrower or any other loan party. The guarantor's liability is immediate and not contingent on prior actions taken by the lender against other parties. As an indemnitor, it owes customary environmental indemnifications. The Company has not recorded a contingent liability as Tivoli is current on all debt payments and in compliance with all debt compliance provisions.

The Company is a guarantor and an indemnitor on a revolving credit facility entered into by the Company, and two wholly owned subsidiaries with NexBank. See Note 13 to our consolidated financial statements for additional information.

The Company is a guarantor and indemnitor of a loan held by the SPE that owns Marriott Uptown. As of June 30, 2025, the loan had an outstanding principal balance of $87.5 million. The Company has provided an absolute, irrevocable, and unconditional guaranty of payment and performance, under which it is liable as a primary obligor for all obligations of the borrower. This guaranty is not contingent on the lender first pursuing remedies against the borrower, any other party, or any collateral, and the Company's liability is direct, immediate, and unlimited in amount. The loan is secured by the property through a deed of trust. As an indemnitor, the Company also provides customary environmental indemnities. No liability has been recorded as of the reporting date as the borrower is current on all debt service obligations and in compliance with all loan covenants.

*AMS C-Store JV, LLC*

On January 30, 2025, the Company, through one of its subsidiaries, committed to fund $18.4 million of the preferred units of AMS C-Store JV, LLC with respect to convenience store property developments across Texas. The Company funded $9.2 million on January 30, 2025, $1.8 million on February 28, 2025, $1.0 million on May 1, 2025, and $1.5 million on May 15, 2025. The Company's expected maximum commitment under AMS C-Store JV, LLC is $18.4 million, of which $4.9 million was unfunded as of June 30, 2025.

The table below shows the Company's unfunded commitments by investment type as of June 30, 2025 and December 31, 2024 (in thousands):

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| | | |
|:---|:---|:---|
| | **June 30, 2025** | **December 31, 2024** |
|<br>**Investment Type** | **Unfunded Commitments** | **Unfunded Commitments** |
| Preferred Equity | $4897 | $— |
| Total | $4897 | $— |

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*Contingencies*

In the normal course of business, the Company is subject to claims, lawsuits, and legal proceedings. While it is not possible to ascertain the ultimate outcome of all such matters, management believes that the aggregate amount of such liabilities, if any, in excess of amounts provided or covered by insurance, will not have a material adverse effect on the Consolidated Balance Sheets or Consolidated Statements of Operations and Comprehensive Income (Loss) of the Company. The Company is not involved in any material litigation nor, to management's knowledge, is any material litigation currently threatened against the Company or its properties or subsidiaries.

Environmental liabilities could have a material adverse effect on the Company's business, assets, cash flows or results of operations. As of June 30, 2025, the Company was not aware of any environmental liabilities. There can be no assurance that material environmental liabilities do not exist.

Claymore is engaged in ongoing litigation that could result in a possible gain contingency to the Company. The probability, timing, and potential amount of recovery, if any, are unknown.

**15. Leases**

The following table lists the tenants where the rental revenue from the tenants represented 10% or more of total rental income in the Company's Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands) for the six months ended June 30, 2025:

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| | |
|:---|:---|
|<br>**Tenant** | **For the Six Months Ended June 30, 2025**<br>**Rental Income** |
| Neiman Marcus Group, LLC | $1201 |

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The following table lists the tenants where the rental revenue from the tenants represented 10% or more of total rental income in the Company's Consolidated Statements of Operations and Comprehensive Income (in thousands) for the six months ended June 30, 2024:

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| | |
|:---|:---|
|<br>**Tenant** | **For the Six Months Ended June 30, 2024**<br>**Rental Income** |
| Neiman Marcus Group, LLC | $979 |
| Saputo Dairy Foods | $924 |

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*Ground Lease*

The Company 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 June 30, 2025, the carrying amount of the right-of-use asset is $0.6 million, and the lease liability is $(0.7) million.

For the six months ended June 30, 2025, the Company recognized lease expense of $0.1 million recorded on a straight-line basis over the lease term.

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 **16. Segment Reporting**

The Company has two reportable segments: Diversified and Hospitality. 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 Diversified 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 Hospitality segment primarily consists of acquiring additional U.S. located hospitality assets that meet its investment objective and criteria and seeking to own, renovate and operate its portfolio of income-producing hotel properties. The majority of NHT's revenue is comprised of revenue from renting rooms and selling food and beverages ("F&B"). Therefore, the Company has identified Diversified and Hospitality as the two operating segments and the two reportable segments. The Company's chief operating decision maker is the president of the Company.

The following table presents measures of the reportable segment measures of profitability, along with significant segment expenses (in thousands):

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2025** | **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** | **For the Six Months Ended June 30, 2024** |
| | **Diversified** | **Hospitality** | **Total** | **Diversified** | **Hospitality** | | **Total** |
| Total Revenues | $31191 | $18917 | $50108 | $25693 | $9386 |  | $35079 |
| &nbsp;&nbsp;Less: |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Advisory and administrative fees | 6764 | 3898 | 10662 | 6420 | 269 |  | 6689 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate general and administrative expenses | 5577 | (1630) | 3947 | 5460 | 570 |  | 6030 |
| &nbsp;&nbsp;&nbsp;&nbsp;Real estate taxes and insurance | 2375 | 1039 | 3414 | 2466 | 548 |  | 3014 |
| &nbsp;&nbsp;&nbsp;&nbsp;Property operating expense | 3090 | 9394 | 12484 | 3335 | 4998 |  | 8333 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 7513 | 6400 | 13913 | 8911 | 3471 |  | 12382 |
| &nbsp;&nbsp;&nbsp;&nbsp;Realized (gains) losses from non-real estate investments | (4981) |  | (4981) | 21875 |  |  | 21875 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized (gains) losses from non-real estate investments | 74959 |  | 74959 | (3136) |  |  | (3136) |
| &nbsp;&nbsp;&nbsp;&nbsp;Gain on sales of real estate |  | (37) | (37) |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Property general and administrative expenses | 1147 | 2460 | 3607 | 1326 | 1566 |  | 2892 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment loss |  | 1752 | 1752 |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense (benefit) | 484 | 88 | 572 | 853 |  |  | 853 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 5721 | 2216 | 7937 | 5543 | 1355 |  | 6898 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity in (income) losses of unconsolidated equity method ventures | 167 |  | 167 | 958 |  |  | 958 |
| &nbsp;&nbsp;&nbsp;&nbsp;Other segment items (1) | 363 | 543 | 906 | 342 | 19 | ~ | 361 |
| Net loss | $(71988) | $(7206) | $(79194) | $(28662) | $(3408) |  | $(32070) |

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The following table presents total assets for the reportable segments (in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **As of June 30, 2025** | **As of June 30, 2025** | **As of June 30, 2025** | **As of December 31, 2024** | **As of December 31, 2024** | **As of December 31, 2024** |
| | **Diversified** | **Hospitality** | **Total** | **Diversified** | **Hospitality** | **Total** |
| Total assets | $959694 | $151296 | $1110990 | $1039392 | $185447 | $1224839 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

(1) Other segment items includes: Property management fees.

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**17. Noncontrolling Interests**

*Redeemable Noncontrolling Interests in the OP*

The following table sets forth the redeemable noncontrolling interests in the OP for the six months ended June 30, 2025 and 2024 (in thousands):

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| | | |
|:---|:---|:---|
| | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
| | **2025** | **2024** |
| **Redeemable noncontrolling interest in the OP, January 1,** | $— | $— |
| &nbsp;&nbsp;Redeemable noncontrolling interests from NHT Merger | 359 |  |
| &nbsp;&nbsp;Net loss attributable to redeemable noncontrolling interests in the OP | (20) |  |
| &nbsp;&nbsp;Distributions to redeemable noncontrolling interests in the OP | (3) |  |
| **Redeemable noncontrolling interest in the OP, June 30,** | $336 | $— |

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**18. Subsequent Events**

*Distributions Declared*

On July 28, 2025, the Board approved a quarterly distribution of $0.15 per common share, payable on September 30, 2025 to shareholders of record on August 14, 2025. The distribution on the Company's common shares consists of a combination of cash and shares, with the cash component of the distribution (other than cash paid in lieu of fractional shares) not to exceed 20% in the aggregate, with the balance being paid in the Company's common shares. Also on July 28, 2025, the Board approved a quarterly distribution of $0.34375 per Series A Preferred Share, payable on September 30, 2025 to shareholders of record on September 23, 2025.

*Dominion Debt Extension*

On August 8, 2025, the Company elected to use one of the one-year extensions under the Dominion Note to extend the maturity date to August 8, 2026.

*Hospitality Debt, Guarantor Substitution*

On August 4, 2025, the Company executed a loan modification agreement related to the PC&B Loan. As part of the modification, the original guarantor, which was a consolidated subsidiary of the Company, was replaced by the Company. The Company continues to guarantee the loan obligations through the replacement guarantor.

*Share Repurchases*

From July 1 through August 14, 2025, the Company has purchased 72,988 shares of its common stock, totaling approximately $0.3 million at an average price of $4.68 per share.

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**Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations**

*The following is a discussion and analysis of our financial condition and our historical results of operations. The following should be read in conjunction with our financial statements and accompanying notes included herein and with our 2024 Annual Report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those projected, forecasted, or expected in these forward-looking statements as a result of various factors, including, but not limited to, those discussed below and elsewhere in this Quarterly Report. See* "*Cautionary Statement Regarding Forward-Looking Statements*" *in this Quarterly Report and "Risk Factors" in Part I, Item 1A, "Risk Factors" of our 2024 Annual Report.*

**Overview**

As of June 30, 2025, our Portfolio consisted primarily of debt and equity investments in the single-family rental, self-storage, office, hospitality, life science and multifamily sectors. The Company has two reportable segments, Diversified and Hospitality. Diversified represents the Company's primary reportable segment and represents a significant majority of the Company's consolidated portfolio. The Diversified reportable segment is the legacy reportable segment and is 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 Hospitality reportable segment represents a minority of the Company's consolidated portfolio and operations and is focused on exiting out of its remaining hospitality assets and repositioning the portfolio into other real estate sectors where management has extensive operating expertise and experience. Substantially all of our business is conducted through the OP. The OP GP is the sole general partner of the OP and is owned 100% by the Company. As of June 30, 2025, there were 44,536,894.47 common units of the OP outstanding, of which 99.96% were owned by the Company, 3,359,593 Series A Preferred Units of the OP outstanding, of which 100.0% were owned by the Company, and 145,554 Series B Preferred Units of the OP, of which 100.0% were owned by the Company.

As a diversified REIT, the Company's primary investment objective is to provide both current income and capital appreciation. Target underlying property types primarily include, but are not limited to, single-family rentals, multifamily, self-storage, life science, office, industrial, hospitality, net lease, retail and small-bay industrial. The Company may, to a limited extent, hold, acquire or transact in certain non-real estate securities. We are externally managed by the Adviser through the Advisory Agreement, by and among the Company and the Adviser. The Advisory Agreement was dated July 1, 2022, and amended on October 25, 2022, April 11, 2023 and July 22, 2024, for a term that will expire on July 1, 2026 and successive one-year terms thereafter unless earlier terminated. The Adviser is wholly owned by our Sponsor.

We have elected to be taxed as a REIT under Sections 856 through 860 of the Code commencing with our taxable year ended December 31, 2021. To qualify as a REIT, we must meet a number of organizational and operational requirements, including a requirement that we distribute at least 90% of our REIT taxable income to our shareholders. As a REIT, we will be subject to federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. We believe we qualify for taxation as a REIT under the Code, and we intend to continue to operate in such a manner, but no assurance can be given that we will operate in a manner so as to qualify as a REIT. Taxable income from certain non-REIT activities is managed through one or more TRS entities and is subject to applicable U.S. federal, state, and local income and margin taxes.

On October 16, 2019, Highland, a former affiliate of our Sponsor, filed for Chapter 11 bankruptcy protection with the United States Bankruptcy Court for the District of Delaware. On October 15, 2021, Marc S. Kirschner, as litigation trustee of a litigation subtrust formed pursuant to Highland's plan of reorganization and disclosure statement which became effective on August 11, 2021, filed a lawsuit (the "Bankruptcy Trust Lawsuit") against various persons and entities, including our Sponsor and James Dondero. On March 24, 2023, the litigation trustee filed a motion for leave to stay the Bankruptcy Trust Lawsuit, which was granted by the bankruptcy court on April 4, 2023. Per the court's order, the Bankruptcy Trust Lawsuit is stayed until any party provides 30 days' notice of the intent to resume the adversary proceeding, with all pending deadlines extended for a period of time commensurate with the length of the stay. As of the date of this filing, the Bankruptcy Trust Lawsuit continues to be stayed. In addition, on February 8, 2023, UBS Securities LLC and UBS AG London (collectively "UBS") filed a lawsuit in the Supreme Court of the State of New York, County of New York related to a default that occurred in 2009 on a warehouse facility between UBS and funds affiliated with Highland. The lawsuit makes claims against several persons and entities, seeking to collect on $1.3 billion in judgments UBS obtained against entities that were managed indirectly by Highland (the "UBS Lawsuit"). On March 7, 2023, the

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matter was removed to the United States District Court for the Southern District of New York. On April 6, 2023, UBS moved to have the case remanded to New York state court. The federal court remanded the state law causes of action and retained and stayed the federal cause of action. On February 26, 2024, several of the respondents, including Mr. Dondero, filed motions in state court to dismiss the UBS Lawsuit on various grounds. A hearing was held on July 8, 2024. The court dismissed the claims against one respondent, CLO HoldCo, Ltd., for lack of personal jurisdiction in a July 12, 2024 order. On March 26, 2025, the court entered an order denying the remaining motions to dismiss and directed the respondents to file an answer to the UBS Lawsuit within 20 days, which they did. Mr. Dondero is appealing the denial of the motion to dismiss to the Appellate Division of the Supreme Court of the State of New York. Neither the Bankruptcy Trust Lawsuit nor the UBS Lawsuit include claims related to our business or our assets. Our Sponsor and Mr. Dondero have informed us they believe the Bankruptcy Trust Lawsuit has no merit and Mr. Dondero has informed us he believes the UBS Lawsuit has no merit; we have been advised that the defendants named in each of the lawsuits intend to vigorously defend against the claims. We do not expect the Bankruptcy Trust Lawsuit or the UBS Lawsuit will have a material effect on our business, results of operations or financial condition.

Macroeconomic trends, including increases in or high inflation and rising or high interest rates, may adversely impact our business, financial condition and results of operations. Inflation could have an adverse impact on our operating expenses, as these costs could increase at a rate higher than our rental and other revenue. The high rate environment and ongoing economic uncertainty has limited credit availability to commercial real estate. Less available and more expensive debt capital has had pronounced effects on the capital markets, making property acquisitions and other investments harder to finance. Similar factors also impact the timing of and proceeds generated from asset sales and our ability to obtain debt capital. There is no guarantee we will be able to mitigate the impact of rising or high inflation. To the extent our exposure to increases in or high interest rates on any of our debt is not eliminated through interest rate swaps and interest rate protection agreements, such increases or elevated rates will result in higher debt service costs which will adversely affect our cash flows. We cannot make assurances that our access to capital and other sources of funding will not become constrained, which could adversely affect the availability and terms of future borrowings, renewals or refinancings. Such future constraints could increase our borrowing costs, which would make it more difficult or expensive to obtain additional financing or refinance existing obligations and commitments, which could slow or deter future growth.

The U.S. government announced a comprehensive set of tariffs in the second quarter of 2025. Since then, the U.S. government has paused implementation for some of these tariffs. Although certain tariffs have gone into effect, the timing and scope of other tariffs is still currently uncertain. Such tariffs could impact our results of operations by increasing the costs of various goods, including construction materials. The impact of such tariffs is subject to uncertainties regarding the timing of their implementation, the magnitude of such tariffs and possible exemption for certain goods, among other unknowns.

Our website is located at nxdt.nexpoint.com. From time to time, we may use our website as a distribution channel for material company information.

**Components of Our Revenues and Expenses**

***Revenues***

*Rental income*. Our rental income is primarily attributable to the rental revenue from our investment in Cityplace Tower, a 42-story, 1.36 million-square-foot, trophy office building acquired in 2018 as well as rental income from two retail properties. Our rental income also includes utility reimbursements, late fees, common area maintenance reimbursements, and other rental fees charged to tenants.

*Food and beverage revenue.* F&B revenue includes revenue generated from the sale of food and/or beverage offerings. All F&B revenue is derived from the Hospitality segment.

*Room revenue.* Room revenue includes revenue from renting out rooms to customers. All rooms revenue is derived from the Hospitality segment.

*Interest income.* Interest income includes interest earned from our debt investments.

*Dividend income.* Dividend income includes dividends from our equity investments.

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*Other income.* Other income includes ancillary income earned from tenants such as non-refundable fees, parking fees, and other miscellaneous fees charged to tenants and income items.

***Expenses***

*Property operating expenses.* Property operating expenses include property maintenance costs, salary and employee benefit costs, utilities, casualty-related expenses and recoveries and other property operating costs of property owned directly or indirectly by us.

*Property management fees.* Property management fees include fees paid to NexVest, our property manager, for managing each property directly or indirectly owned by us (see Note 13 to our consolidated financial statements) and other property managers for managing the day-to-day operations of our hotels.

*Real estate taxes and insurance.* Real estate taxes include the property taxes assessed by local and state authorities depending on the location of each property owned directly or indirectly by us. Insurance includes the cost of commercial, general liability, and other needed insurance for each property owned directly or indirectly by us.

*Advisory and administrative fees.* Advisory and administrative fees include the fees paid to our Adviser pursuant to the Advisory Agreement and fees previously paid to NexPoint Real Estate Advisors VI, L.P. (the "NHT Adviser") pursuant to the NHT Advisory Agreement (see Note 13 to our consolidated financial statements).

*Property general and administrative expenses.* Property general and administrative expenses include the costs of marketing, professional fees, general office supplies, and other administrative related costs of each property owned directly or indirectly by us.

*Corporate general and administrative expenses.* Corporate general and administrative expenses include, but are not limited to, audit fees, legal fees, listing fees, board of trustee fees, investor relations costs and payments of reimbursements to our Adviser for operating expenses.

*Depreciation and amortization.* Depreciation and amortization costs primarily include depreciation of our real properties and amortization of acquired in-place leases on property owned directly or indirectly by us.

*Impairment loss.* Impairment loss includes impairment charges recognized on real estate assets held and used and the loss recognized for real estate held for sale, which is reported at the lower of its carrying amount or its estimated fair value less estimated costs to sell.

***Other Income and Expense***

*Interest Expense.* Interest expense primarily includes the cost of interest expense on debt, the amortization of deferred financing costs, if any, and the related impact of interest rate derivatives, if any, used to manage our interest rate risk.

*Equity in Earnings (Losses) of Unconsolidated Ventures*. Equity in earnings (losses) of unconsolidated ventures represents the change in our basis in equity method investments resulting from our share of the investments' income and expenses. Profit and loss from equity method investments for which we've elected the fair value option are classified in divided income, change in unrealized gains and realized gains as applicable.

*Income Tax Expense.* Income tax expense is primarily derived from taxable gains from asset sales and other income earned from investments held in NXDT's TRSs and former NHT's TRSs.

*Unrealized Gain (Loss) on Investments*. Unrealized gains and losses represent changes in fair value for equity method investments, CLO equity investments, bonds, common stock, convertible notes, LLC interests, LP interests, rights and warrants, and senior loans for which the fair value option has been elected.

*Realized Gain (Loss) on Investments.* The Company recognizes the excess, or deficiency, of net proceeds received, less the carrying value of such investments, as realized gains or losses, respectively. The Company reverses cumulative, unrealized gains or losses previously reported in its Consolidated Statements of Operations and Comprehensive Income (Loss) with respect to the investment sold at the time of the sale.

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**Real Estate Investments Statistics**

As of June 30, 2025, the Diversified segment was invested in two retail properties, and one office, multifamily and hospitality property (excluding investments in undeveloped land), and the Hospitality segment consisted of six hotel properties as listed below:

*Diversified Segment:*

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | | | | | **Average Effective Monthly <br>Occupied Rent Per Square Foot <br>(1) as of** | **% Occupied (2) as of** | |
|<br>**Property Name** |<br>**Rentable Square <br>Footage<br>(in thousands)** |<br>**Property Type** | |<br>**Date <br>Acquired** | **June 30,<br>2025** | **June 30,<br>2025** | |
| White Rock Center | 82793 | Retail |  | 6/13/2013 | $1.60 | 81.4% |  |
| 5916 W Loop 289 | 30140 | Retail |  | 7/23/2013 | $— | —% | (4) |
| Cityplace Tower | 1365711 | Office, Multifamily & Hospitality | (3) | 8/15/2018 | $2.15 | 46.4% |  |
|  | 1478644 |  |  |  |  |  |  |

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*Hospitality Segment:*

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Brand** | **Location** | **Name** | **Chain Scale** | **Service Scale** | **Year Built/Last Renovation** | **Rooms** |
| Hilton Garden Inn | Dallas, Texas | HGI Property | Upscale | Select-Service | 1995/2016 | 240 |
| Hyatt | Park City, Utah | Park City | Upscale | Full-Service | 2016 | 122 |
| Hampton Inn & Suites | Bradenton, Florida | Bradenton | Upscale | Select-Service | 1926/2016 | 119 |
| Marriott | St. Petersburg, Florida | St. Pete Property | Upper Upscale | Full-Service | 2001/2021 | 209 |
| Total Rooms: |  |  |  |  |  | 690 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Average effective monthly occupied rent per square foot is equal to the average of the contractual rent for commenced leases as of June 30, 2025, minus any tenant concessions over the term of the lease, divided by the occupied square footage of commenced leases as of June 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Percent occupied is calculated as the rentable square footage occupied as of June 30, 2025, divided by the total rentable square footage, expressed as a percentage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)Cityplace is currently under development and the Company is converting part of the property into a hotel, which was still under construction as of June 30, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)The property's tenant vacated in the fourth quarter of 2023. The Company is currently looking into leasing out the property.

**Consolidated Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024** 

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**The three months ended June 30, 2025 as compared to the three months ended June 30, 2024**

The following tables set forth a summary of our operating results for the three months ended June 30, 2025 and 2024 (in thousands):

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| | | | |
|:---|:---|:---|:---|
| | **For the Three Months Ended June 30,** | **For the Three Months Ended June 30,** | |
| | **2025** | **2024** | **$ Change** |
| Total revenues | $21034 | $22274 | $(1240) |
| Total expenses | (21167) | (21681) | 514 |
| Operating income | (133) | 593 | (726) |
| Interest expense | (6637) | (7851) | 1214 |
| Equity in income (losses) of unconsolidated ventures | 190 | 196 | (6) |
| Income tax expense | 641 | (303) | 944 |
| Change in unrealized gains (losses) | (41637) | (3154) | (38483) |
| Realized gains (losses) | 3462 | (3) | 3465 |
| Gains on sales of real estate | 26 |  | 26 |
| Net income (loss) | (44088) | (10522) | (33566) |
| Net (income) attributable to Series A preferred shareholders | (1155) | (1155) |  |
| Net (income) attributable to Series B preferred shareholders | (28) |  | (28) |
| Net loss attributable to noncontrolling interests |  | 1894 | (1894) |
| Net loss attributable to redeemable noncontrolling interests in the OP | 20 |  | 20 |
| Net income (loss) attributable to common shareholders | $(45251) | $(9783) | $(35460) |

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The net loss for the three months ended June 30, 2025 increased by $33.6 million as compared to the three months ended June 30, 2024. The increase between periods primarily relates to mark-to-market losses on our investments accounted for at fair value.

***Revenues***

*Rental income*. Rental income was $3.7 million for the three months ended June 30, 2025, compared to $4.0 million for the three months ended June 30, 2024, which was a decrease of approximately $0.3 million. Rental income decreased between the periods due to a decrease in occupancy at Cityplace Tower.

*Rooms.* Rooms revenue was $6.3 million for the three months ended June 30, 2025, compared to $8.2 million for the three months ended June 30, 2024, which was a decrease of approximately $1.9 million. Rooms revenue decreased between the periods due to the disposition of Hospitality properties in 2025.

*Food and beverage.* F&B revenue was $0.8 million for the three months ended June 30, 2025, compared to $0.8 million for the three months ended June 30, 2024, which was flat.

*Interest and dividends*. Interest and dividends totaled $10.0 million for the three months ended June 30, 2025, compared to $8.9 million for the three months ended June 30, 2024, which was an increase of approximately $1.1 million. The increase between the periods was primarily due to an increase in dividend income.

*Other income.* Other income was approximately $313.0 thousand for the three months ended June 30, 2025, compared to $373.0 thousand for the three months ended June 30, 2024, which was a decrease of approximately $60.0 thousand. The decrease between the periods due to a decrease in resort charges, due to the disposition of Hospitality properties in 2025.

***Expenses***

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*Property operating expenses.* Property operating expenses were $5.5 million for the three months ended June 30, 2025, compared to $6.8 million for the three months ended June 30, 2024, which was a decrease of approximately $1.3 million. The decrease between the periods was primarily due to the disposition of Hospitality properties in 2025.

*Property management fees.* Property management fees were $0.4 million for the three months ended June 30, 2025, compared to $0.2 million for the three months ended June 30, 2024, which was an increase of approximately $0.2 million. The increase between the periods was primarily due to fees associated with onboarding new property managers at the Hospitality segment properties.

*Real estate taxes and insurance.* Real estate taxes and insurance costs were $1.6 million for the three months ended June 30, 2025, compared to $1.8 million for the three months ended June 30, 2024, which was a decrease of approximately $0.2 million. Real estate taxes and insurance expenses consist primarily of expenses from our investment in Cityplace Tower and our Hospitality properties. The decrease between the periods was primarily due to the disposition of Hospitality properties in 2025.

*Advisory and administrative fees.* For the three months ended June 30, 2025, the Company incurred administrative fees and advisory fees of $7.0 million, compared to $3.4 million for the three months ended June 30, 2024, which was an increase of approximately $3.6 million. The increase between the periods is primarily attributed to a one-time termination fee paid to the former NHT Adviser in connection with the termination of the advisory agreement following the NHT Merger.

*Property general and administrative expenses.* Property general and administrative expenses were $1.6 million for the three months ended June 30, 2025, compared to $2.2 million for the three months ended June 30, 2024, which was a decrease of approximately $0.6 million. The decrease between the periods was primarily due to the disposition of Hospitality properties in 2025.

*Corporate general and administrative expenses.* Corporate general and administrative expenses were $1.0 million for the three months ended June 30, 2025, compared to $3.2 million for the three months ended June 30, 2024, which was a decrease of approximately $2.2 million. The decrease between the periods was primarily due to a write off of accrued payables and expenses.

*Depreciation and amortization.* Depreciation and amortization costs were $4.0 million for the three months ended June 30, 2025, compared to $4.1 million for the three months ended June 30, 2024, which was a decrease of approximately $0.1 million. The decrease between the periods was primarily due to the disposition of Hospitality properties in 2025.

***Other Income and Expense***

*Interest expense.* Interest expense was $6.6 million for the three months ended June 30, 2025, compared to $7.9 million for the three months ended June 30, 2024, which was a decrease of approximately $1.2 million. The decrease between the periods was primarily due a decrease in debt related to paydowns.

*Equity in income (losses) of unconsolidated ventures*. Equity in income (losses) of unconsolidated ventures was $0.2 million for the three months ended June 30, 2025, compared to $0.2 million for the three months ended June 30, 2024, which was flat.

*Income tax expense (benefit)*. The Company has recorded income tax expense (benefit) of $0.1 million associated with the TRSs for the three months ended June 30, 2025, and $0.5 million associated with the TRSs for the three months ended June 30, 2024. The tax expense (benefit) for the three months ended June 30, 2025 is partially decreased by the annual change in valuation allowance on a deferred tax asset of $0.7 million for a net (benefit) of $(0.6) million for the three months ended June 30, 2025, that is recorded on the Consolidated Statement of Operations and Comprehensive Income.

*Change in unrealized gains (losses)*. Unrealized gains (losses) from our investments accounted for at fair value was $(41.6) million for the three months ended June 30, 2025, compared to $(3.2) million for the three months ended June 30, 2024, which was a decrease of approximately $(38.4) million. The losses for the three months ended June 30, 2025 were largely driven by mark-to-market losses on NSP common equity of $16.0 million, NREF OP ("NREF OP Units") of $7.3 million, IQHQ LP interests of $5.2 million and NREF common stock of $3.2 million. The losses for the three months ended June 30, 2024 were primarily driven by mark-to-market losses on NSP common equity of $54.9 million and

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VineBrook Homes Operating Partnership, L.P. ("VB OP Units") of $20.9 million offset by mark-to-market gains on NREF OP Units of $3.7 million and mark-to-market gains on our legacy CLOs of $13.4 million.

*Realized gains (losses)*. Realized gains (losses) were $3.5 million for the three months ended June 30, 2025, compared to $0.0 million for the three months ended June 30, 2024, which was an increase of approximately $3.5 million. The realized losses for the three months ended June 30, 2024 was primarily driven by a contingent gain on the Haygood and Allenby entities.

**The six months ended June 30, 2025 as compared to the six months ended June 30, 2024**

The following table sets forth a summary of our operating results for the six months ended June 30, 2025 as compared to the six months ended June 30, 2024 (in thousands):

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| | | | |
|:---|:---|:---|:---|
| | **For the Six Months Ended June 30,** | **For the Six Months Ended June 30,** | |
| | **2025** | **2024** | **$ Change** |
| Total revenues | $50108 | $35079 | $15029 |
| Total expenses | (44709) | (34217) | (10492) |
| Operating income | 5399 | 862 | 4537 |
| Interest expense | (13913) | (12382) | (1531) |
| Equity in income (losses) of unconsolidated ventures | (167) | (958) | 791 |
| Income tax expense | (572) | (853) | 281 |
| Change in unrealized gains (losses) | (74959) | 3136 | (78095) |
| Realized gains (losses) | 4981 | (21875) | 26856 |
| Gains on sales of real estate | 37 |  | 37 |
| Net loss | (79194) | (32070) | (47124) |
| Net (income) attributable to Series A preferred shareholders | (2310) | (2310) |  |
| Net (income) attributable to Series B preferred shareholders | (30) |  | (30) |
| Net loss attributable to noncontrolling interests | 1945 | 1894 | 51 |
| Net loss attributable to redeemable noncontrolling interests in the OP | 20 |  | 20 |
| Net income (loss) attributable to common shareholders | $(79569) | $(32486) | $(47103) |

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The net loss for the six months ended June 30, 2025 increased by $47.1 million as compared to the six months ended June 30, 2024. The increase between periods primarily relates to mark-to-market losses on our investments accounted for at fair value partially offset by an increase to total revenues.

***Revenues***

*Rental income*. Rental income was $7.4 million for the six months ended June 30, 2025, compared to $8.0 million for the six months ended June 30, 2024, which was a decrease of approximately $0.6 million. The decrease between the periods was primarily due to a decrease in occupancy at Cityplace Tower.

*Rooms revenue.* Rooms revenue was $16.6 million for the six months ended June 30, 2025, compared to $8.2 million for the six months ended June 30, 2024, which was an increase of approximately $8.4 million. The increase between the periods is due to the Hospitality segment not being consolidated prior to April 19, 2024.

*Food and beverage revenue.* F&B revenue was $1.6 million for the six months ended June 30, 2025, compared to $0.8 million for the six months ended June 30, 2024, which was an increase of approximately $0.8 million. The increase between the periods is due to the Hospitality segment not being consolidated prior to April 19, 2024.

*Interest and dividends*. Interest and dividends totaled $23.9 million for the six months ended June 30, 2025, compared to $17.6 million for the six months ended June 30, 2024, which was an increase of approximately $6.3 million. The increase between the periods was attributed to an increase in dividends from equity investments.

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*Other income.* Other income was approximately $0.6 million for the six months ended June 30, 2025, compared to $0.4 million for the six months ended June 30, 2024, which was an increase of approximately $0.2 million. The decrease between the periods was primarily due to a decrease in resort charges, associated with a decrease in Hospitality assets.

***Expenses***

*Property operating expenses.* Property operating expenses were $12.5 million for the six months ended June 30, 2025, compared to $8.3 million for the six months ended June 30, 2024, which was an increase of approximately $4.2 million. The increase between the periods was primarily due to the NHT consolidation.

*Property management fees.* Property management fees were $0.9 million for the six months ended June 30, 2025, compared to $0.4 million for the six months ended June 30, 2024, which was an increase of approximately $0.5 million. The increase between the periods was primarily due to the NHT consolidation.

*Real estate taxes and insurance.* Real estate taxes and insurance costs were $3.4 million for the six months ended June 30, 2025, compared to $3.0 million for the six months ended June 30, 2024, which was an increase of approximately $0.4 million. Real estate taxes and insurance expenses consist primarily of expenses from our investment in Cityplace Tower and our Hospitality properties. The increase between the periods was primarily due to the consolidation of NHT.

*Advisory and administrative fees.* For the six months ended June 30, 2025, the Company incurred administrative fees and advisory fees of $10.7 million. For the six months ended June 30, 2024, the Company incurred administrative fees and advisory fees of $6.7 million. The increase between the six months ended June 30, 2025 and the six months ended June 30, 2024, is primarily due to the addition of fees paid to the NHT Adviser pursuant to the NHT Advisory Agreement from the consolidation of NHT.

*Property general and administrative expenses.* Property general and administrative expenses were $3.6 million for the six months ended June 30, 2025, compared to $2.9 million for the six months ended June 30, 2024, which was an increase of approximately $0.7 million. The increase between the periods is primarily attributed to the NHT consolidation.

*Corporate general and administrative expenses.* Corporate general and administrative expenses were $3.9 million for the six months ended June 30, 2025, compared to $6.0 million for the six months ended June 30, 2024, which was a decrease of approximately $2.1 million. The decrease between periods was primarily due to a write off of accrued payables and expenses.

*Depreciation and amortization.* Depreciation and amortization costs were $7.9 million for the six months ended June 30, 2025, compared to $6.9 million for the six months ended June 30, 2024, which was an increase of approximately $1.0 million. This change reset the depreciable basis of our properties as well as caused the recognition of new intangible lease assets. The increase between the periods was primarily due to the NHT consolidation.

*Impairment loss.* Impairment loss was $1.8 million for six months ended June 30, 2025, compared to $0 for the six months ended June 30, 2024.The increase between the periods was due to an increase in impairment charges relating to the Addison Property.

***Other Income and Expense***

*Interest expense.* Interest expense was $13.9 million for the six months ended June 30, 2025, compared to $12.4 million for the six months ended June 30, 2024, which was an increase of approximately $1.5 million. The increase between the periods was primarily due to the NHT consolidation.

*Equity in income (losses) of unconsolidated ventures*. Equity in losses of unconsolidated ventures was $(0.2) million for the six months ended June 30, 2025, compared to $(1.0) million for the six months ended June 30, 2024, which was a decrease of approximately $0.8 million. The decrease between periods was primarily due to a decrease in net loss at Marriott Uptown.

*Income tax expense (benefit)*. The Company has recorded income tax expense (benefit) of $0.6 million associated with the TRSs for the six months ended June 30, 2025 and $1.0 million associated with the TRSs for the six months ended June 30, 2024. The tax expense for the six months ended June 30, 2025 is partially decreased by the annual change in

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valuation allowance on a deferred tax asset of $0.2 million, and an income tax expense of $0.8 million for a net expense of $0.6 million for the six months ended June 30, 2025 that is recorded on the Consolidated Statements of Operations and Comprehensive Income (Loss).

*Change in unrealized gains (losses)*. Unrealized gains (losses) from our investments accounted for at fair value was $(75.0) million for the six months ended June 30, 2025, compared to $3.1 million for the six months ended June 30, 2024, which was a decrease of approximately $(78.1) million. The losses for the six months ended June 30, 2025 were largely driven by mark-to-market losses on NSP common equity of $19.8 million, NREF OP Units of $9.3 million, IQHQ LP interests of $5.8 million and NREF common stock of $4.0 million. The gains for the six months ended June 30, 2024 were largely driven by redemptions of the legacy CLO positions, which generated realized losses and a positive change in unrealized, mark-to-market gains on VB OP Units of $7.2 million, offset by NREF OP Units of $9.8 million, and NREF common stock of $7.3 million.

*Realized gains (losses)*. Realized gains (losses) were $5.0 million for the six months ended June 30, 2025, compared to $(21.9) million for the six months ended June 30, 2024, which was an increase of approximately $26.9 million. The gains for the six months ended June 30, 2025 were primarily driven by realized gains on United Development Funding IV common equity. The losses for the six months ended June 30, 2024 were primarily driven by realized losses on the legacy CLOs of $22.8 million.

**Non-GAAP Measurements**

***Consolidated Net Operating Income and Same Store Net Operating Income***

Net Operating Income ("NOI") is a non-GAAP financial measure of performance. NOI is used by investors and our management to evaluate and compare the performance of our properties between segments and to other comparable properties, to determine trends in earnings and to compute the fair value of our properties as NOI is calculated by adjusting net income (loss) to add back (1) interest expense, (2) advisory fees and administrative fees, (3) the impact of depreciation and amortization, (4) corporate general and administrative expenses, (5) income tax expenses, (6) non-operating property investment revenue, (7) realized and change in unrealized gains (losses) generated from non-real estate investments, (8) equity in income (losses) of unconsolidated equity method ventures, and (9) impairment loss.

The cost of funds is eliminated from net income (loss) because it is specific to our particular financing capabilities and constraints. The cost of funds is also eliminated because it is dependent on historical interest rates and other costs of capital as well as past decisions made by us regarding the appropriate mix of capital, which may have changed or may change in the future. Corporate general and administrative expenses, advisory fees and administrative fees, and income tax expenses are eliminated because they do not reflect continuing operating costs of the property. Depreciation and amortization expenses and impairment loss are eliminated because they may not accurately represent the actual change in value in our properties that result from use of the properties or changes in market conditions. While certain aspects of real property do decline in value over time in a manner that is reasonably captured by depreciation and amortization, the value of the properties as a whole have historically increased or decreased as a result of changes in overall economic conditions instead of from actual use of the property or the passage of time. Equity in income (losses) of unconsolidated equity method ventures are eliminated because they do not reflect continuing operating costs of the properties. Non-operating property investment revenue and realized and change in unrealized gains (losses) from non-real estate investments are eliminated as they do not reflect continuing operating costs of the properties. We believe that eliminating these items from net income (loss) is useful because the resulting measure captures the actual ongoing revenue generated and actual expenses incurred in operating our properties as well as trends in occupancy rates, rental rates and operating costs.

However, the usefulness of NOI is limited because it excludes corporate general and administrative expenses, interest expense, advisory fees and administrative fees, income tax expenses, depreciation and amortization expense, non-operating property investment revenue and realized and change in unrealized gains and losses generated from non-real estate investments, equity in income or losses of unconsolidated equity method ventures, and impairment loss, all of which may be material values. NOI may fail to capture significant trends in these components of net income, which further limits its usefulness.

NOI is a measure of the operating performance of our properties but does not measure our performance as a whole. NOI is therefore not a substitute for net income (loss) as computed in accordance with GAAP. This measure should be analyzed in conjunction with net income (loss) computed in accordance with GAAP and discussions elsewhere in "—Results of Operations" regarding the components of net income (loss) that are eliminated in the calculation of NOI.

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Other companies may use different methods for calculating NOI or similarly entitled measures and, accordingly, our NOI may not be comparable to similarly entitled measures reported by other companies that do not define the measure exactly as we do.

We define "Same Store NOI" as NOI for our properties that are comparable between periods and that are stabilized. Please see below for a discussion of properties included as Same Store (defined below). We view Same Store NOI as an important measure of the operating performance of our properties because it allows us to compare operating results of properties owned for the entirety of the current and comparable periods and therefore eliminates variations caused by acquisitions or dispositions from the beginning of the compared period to the end of the current period.

There are two properties, White Rock Center and 5916 W Loop 289, in our same store pool for the three months ended June 30, 2025, and 2024 (our "Same Store" properties). Our Same Store properties exclude Cityplace Tower as of June 30, 2025 and 2024, because it was not yet stabilized, meaning construction or renovation was not completed. Non-Same Store properties include properties not yet stabilized. Our Same Store properties also exclude the Hospitality segment, as the properties in that segment were not held in the full comparable period.

***Consolidated NOI and Same Store NOI for the Three and Six Months Ended June 30, 2025 and 2024***

The following table, which has not been adjusted for the effects of NCI, reconciles our consolidated NOI for the three and six months ended June 30, 2025 and 2024 to net income (loss), the most directly comparable GAAP financial measure (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended June 30** | **For the Three Months Ended June 30** | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** |
| | **2025** | **2024** | **2025** | **2024** |
| Net loss | $(44088) | $(10522) | $(79194) | $(32070) |
| &nbsp;&nbsp;Adjustments to reconcile net loss to NOI: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Advisory and administrative fees | 7020 | 3443 | 10662 | 6689 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate general and administrative expenses | 1020 | 3195 | 3947 | 6030 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | (641) | 303 | 572 | 853 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 4028 | 4102 | 7937 | 6898 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 6637 | 7851 | 13913 | 12382 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-operating property investment revenue¹ | (9977) | (8904) | (23939) | (17635) |
| &nbsp;&nbsp;&nbsp;&nbsp;Realized (gains) losses from non-real estate investments | (3462) | 3 | (4981) | 21875 |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized (gains) losses from non-real estate investments | 41637 | 3154 | 74959 | (3136) |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity in (income) losses of unconsolidated equity method ventures | (190) | (196) | 167 | 958 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment loss |  |  | 1752 |  |
| NOI | $1984 | $2429 | $5795 | $2844 |
| &nbsp;&nbsp;Less Non-Same Store |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenues | $(10582) | $(12986) | $(25361) | $(16739) |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating expenses | 8941 | 10805 | 20098 | 14312 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating income | (26) |  | (37) |  |
| Same Store NOI | $317 | $247 | $495 | $418 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Non-operating property investment revenue is defined as revenue included in the consolidated financial statements that are from non-operating properties such as dividend income and interest income.

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The following table, which has not been adjusted for the effects of NCI, reconciles our NOI for each of our segments for the three and six months ended June 30, 2025 to net income (loss), the most directly comparable GAAP financial measure by reportable segment (in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **For the Three Months Ended June 30,** | **For the Three Months Ended June 30,** | **For the Three Months Ended June 30,** | **For the Six Months Ended June 30,** | **For the Six Months Ended June 30,** | **For the Six Months Ended June 30,** |
| | **2025** | **2025** | **2025** | **2025** | **2025** | **2025** |
| | **Diversified** | **Hospitality** | **Total** | **Diversified** | **Hospitality** | **Total** |
| Net loss | $(40485) | $(3603) | $(44088) | $(71395) | $(7799) | $(79194) |
| &nbsp;&nbsp;Adjustments to reconcile net loss to NOI: |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Advisory and administrative fees | 3422 | 3598 | 7020 | 6764 | 3898 | 10662 |
| &nbsp;&nbsp;&nbsp;&nbsp;Corporate general and administrative expenses | 3222 | (2202) | 1020 | 5577 | (1630) | 3947 |
| &nbsp;&nbsp;&nbsp;&nbsp;Income tax expense | (478) | (163) | (641) | 484 | 88 | 572 |
| &nbsp;&nbsp;&nbsp;&nbsp;Depreciation and amortization | 2929 | 1099 | 4028 | 5721 | 2216 | 7937 |
| &nbsp;&nbsp;&nbsp;&nbsp;Interest expense | 3787 | 2850 | 6637 | 7513 | 6400 | 13913 |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-operating property investment revenue¹ | (9635) | (342) | (9977) | (23293) | (646) | (23939) |
| &nbsp;&nbsp;&nbsp;&nbsp;Realized (gains) losses from non-real estate investments | (3462) |  | (3462) | (4981) |  | (4981) |
| &nbsp;&nbsp;&nbsp;&nbsp;Change in unrealized (gains) losses from non-real estate investments | 41637 |  | 41637 | 74959 |  | 74959 |
| &nbsp;&nbsp;&nbsp;&nbsp;Equity in (income) losses of unconsolidated equity method ventures | (190) |  | (190) | 167 |  | 167 |
| &nbsp;&nbsp;&nbsp;&nbsp;Impairment loss |  |  |  |  | 1752 | 1752 |
| NOI | $747 | $1237 | $1984 | $1516 | $4279 | $5795 |
| &nbsp;&nbsp;Less Non-Same Store |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Revenues | $(14791) | $4209 | $(10582) | $(18330) | $(7031) | $(25361) |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating expenses | 3282 | 5659 | 8941 | 6661 | 13436 | 20097 |
| &nbsp;&nbsp;&nbsp;&nbsp;Operating income |  | (26) | (26) |  | (37) | (37) |
| Same Store NOI | $(10762) | $11079 | $317 | $(10153) | $10648 | $495 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Non-operating property investment revenue is defined as revenue included in the consolidated financial statements that are from non-operating properties such as dividend income and interest income.

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***Consolidated NOI for Our Same Store and Non-Same Store Properties for the Three Months Ended June 30, 2025 and 2024***

There are two properties, White Rock Center and 5916 W Loop 289, in our same store pool for the three months ended June 30, 2025, and 2024 (our "Same Store" properties). Our Same Store properties exclude Cityplace Tower as of June 30, 2025 and 2024, because it was not yet stabilized, meaning construction or renovation was not completed. Non-Same Store properties include properties not yet stabilized. Our Same Store properties also exclude the Hospitality segment, as the properties in that segment were not held in the full comparable period.

The following table reflects the revenues, property operating expenses and NOI for the three months ended June 30, 2025 and 2024 for our Same Store and Non-Same Store properties (dollars in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended June 30** | **For the Three Months Ended June 30** | | |
| | **2025** | **2024** | **$ Change** | **% Change** |
| **Revenues** |  |  |  |  |
| Same Store |  |  |  |  |
| &nbsp;&nbsp;Rental income | $449 | $386 | $63 | 16.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;Same Store revenues | 449 | 386 | 63 | 16.3% |
| Non-Same Store |  |  |  |  |
| &nbsp;&nbsp;Rental income | 3264 | 3600 | (336) | -9.3% |
| &nbsp;&nbsp;Other income | 287 | 374 | (87) | -23.3% |
| &nbsp;&nbsp;Rooms | 6281 | 8200 | (1919) | -23.4% |
| &nbsp;&nbsp;Food and beverage | 750 | 812 | (62) | -7.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-Same Store revenues | 10582 | 12986 | (2404) | -18.5% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 11031 | 13372 | (2341) | -17.5% |
| **Operating expenses** |  |  |  |  |
| Same Store |  |  |  |  |
| &nbsp;&nbsp;Property operating expenses | 58 | 39 | 19 | 48.7% |
| &nbsp;&nbsp;Real estate taxes and insurance | 74 | 66 | 8 | 12.1% |
| &nbsp;&nbsp;Property management fees | 22 | 21 | 1 | 4.8% |
| &nbsp;&nbsp;Property general and administrative expenses | 4 | 14 | (10) | N/M |
| &nbsp;&nbsp;&nbsp;&nbsp;Same Store operating expenses | 158 | 139 | 18 | 12.9% |
| Non-Same Store |  |  |  |  |
| &nbsp;&nbsp;Property operating expenses | 5465 | 6717 | (1252) | -18.6% |
| &nbsp;&nbsp;Real estate taxes and insurance | 1499 | 1708 | (209) | -12.2% |
| &nbsp;&nbsp;Property management fees | 365 | 166 | 199 | N/M |
| &nbsp;&nbsp;Property general and administrative expenses | 1612 | 2214 | (602) | -27.2% |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-Same Store operating expenses | 8941 | 10805 | (1864) | -17.3% |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 9099 | 10944 | (1846) | -16.9% |
| **Operating income** |  |  |  |  |
| Non-Same Store |  |  |  |  |
| &nbsp;&nbsp;Realized gains (losses) | 26 |  | 26 | —% |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating income | 26 |  | 26 | —% |
| **NOI** |  |  |  |  |
| &nbsp;&nbsp;Same Store | 317 | 247 | 70 | 28.3% |
| &nbsp;&nbsp;Non-Same Store | 1667 | 2182 | (515) | -23.6% |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total NOI** | $1984 | $2428 | $(444) | -18.3% |

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***Consolidated Same Store Results of Operations for the Three Months Ended June 30, 2025 and 2024***

As of June 30, 2025, our Same Store properties were approximately 59.7% leased with a weighted average monthly effective occupied rent per square foot of $1.18, compared to 51.5% leased with a weighted average monthly effective

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occupied rent per square foot of $1.14 as of June 30, 2024. For our Same Store properties, we recorded the following operating results for the three months ended June 30, 2025 and 2024.

***Revenues***

*Rental Income*. Rental income was $0.4 million for the three months ended June 30, 2025, compared to $0.4 million for the three months ended June 30, 2024.

***Expenses***

*Property operating expenses*. Property operating expenses were $58.0 thousand for the three months ended June 30, 2025, compared to $39.0 thousand for the three months ended June 30, 2024, which was an increase of approximately $19.0 thousand or 48.7%. The majority of the increase between the three months ended June 30, 2025 and the three months ended June 30, 2024 is related to an increase in repair and maintenance fees.

*Real estate taxes and insurance*. Real estate taxes and insurance costs were $74.0 thousand for the three months ended June 30, 2025, compared to $66.1 thousand for the three months ended June 30, 2024, which was a decrease of approximately $7.9 thousand or 12.1%. The majority of the decrease between the three months ended June 30, 2025 and the three months ended June 30, 2024 is related to a decrease in the property tax budget.

*Property management fees*. Property management fees were $22.0 thousand for the three months ended June 30, 2025, compared to $20.5 thousand for the three months ended June 30, 2024, which was an increase of approximately $1.5 thousand, or 4.8%. The increase between the three months ended June 30, 2025 and the three 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 $4.0 thousand for the three months ended June 30, 2025, compared to $13.5 thousand for the three months ended June 30, 2024, which was a decrease of approximately $9.5 thousand. The decrease between the three months ended June 30, 2025 and the three months ended June 30, 2024 is related to a decrease in professional fees.

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***Consolidated NOI for Our Same Store and Non-Same Store Properties for the Six Months Ended June 30, 2025 and 2024***

The following table reflects the revenues, property operating expenses and NOI for the six months ended June 30, 2025 and 2024 for our Same Store and Non-Same Store properties (dollars in thousands):

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** | | | |
| | **2025** | **2024** | **$ Change** | **% Change** | |
| **Revenues** |  |  |  |  |  |
| Same Store |  |  |  |  |  |
| &nbsp;&nbsp;Rental income | $808 | $707 | $101 | 14.3% |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Same Store revenues | 808 | 707 | 101 | 14.3% |  |
| Non-Same Store |  |  |  |  |  |
| &nbsp;&nbsp;Rental income | 6550 | 7325 | (775) | -10.6% |  |
| &nbsp;&nbsp;Other income | 541 | 402 | 139 | 34.6% | (1) |
| &nbsp;&nbsp;Rooms | 16631 | 8200 | 8431 | N/M |  |
| &nbsp;&nbsp;Food and beverage | 1639 | 812 | 827 | N/M |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-Same Store revenues | 25361 | 16739 | 8622 | N/M | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total revenues | 26169 | 17446 | 8723 | 50.0% | (1) |
| **Operating expenses** |  |  |  |  |  |
| Same Store |  |  |  |  |  |
| &nbsp;&nbsp;Property operating expenses | 122 | 88 | 34 | 38.6% |  |
| &nbsp;&nbsp;Real estate taxes and insurance | 140 | 146 | (6) | -4.1% |  |
| &nbsp;&nbsp;Property management fees | 41 | 38 | 3 | 7.9% |  |
| &nbsp;&nbsp;Property general and administrative expenses | 10 | 17 | (7) | -41.2% |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Same Store operating expenses | 313 | 288 | 25 | 8.7% |  |
| Non-Same Store |  |  |  |  |  |
| &nbsp;&nbsp;Property operating expenses | 12362 | 8246 | 4116 | 49.9% | (1) |
| &nbsp;&nbsp;Real estate taxes and insurance | 3274 | 2868 | 406 | 14.2% | (1) |
| &nbsp;&nbsp;Property management fees | 865 | 324 | 541 | N/M | (1) |
| &nbsp;&nbsp;Property general and administrative expenses | 3597 | 2875 | 722 | 25.1% | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Non-Same Store operating expenses | 20098 | 14312 | 5786 | 40.4% | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expenses | 20411 | 14601 | 5810 | 39.8% | (1) |
| **Operating income** |  |  |  |  |  |
| Non-Same Store |  |  |  |  |  |
| &nbsp;&nbsp;Realized gains (losses) | 37 |  | 37 | —% |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total operating income | 37 |  | 37 | —% |  |
| **NOI** |  |  |  |  |  |
| &nbsp;&nbsp;Same Store | 495 | 419 | 76 | 18.1% |  |
| &nbsp;&nbsp;Non-Same Store | 5300 | 2426 | 2874 | N/M | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Total NOI** | $5795 | $2845 | $2950 | N/M | (1) |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Denotes that the significant percentage change in the current period comparison is primarily attributed to the consolidation of NHT.

See reconciliation of net income (loss) to NOI above under "Consolidated NOI and Same Store NOI for the Six Months Ended June 30, 2025 and 2024."

***Consolidated Same Store Results of Operations for the Six Months Ended June 30, 2025 and 2024***

As of June 30, 2025, our Same Store properties were approximately 59.7% leased with a weighted average monthly effective occupied rent per square foot of $1.18, compared to 51.5% leased with a weighted average monthly effective occupied rent per square foot of $1.14 as of June 30, 2024. For our Same Store properties, we recorded the following operating results for the six months ended June 30, 2025 and 2024.

***Revenues***

*Rental Income*. Rental income was $808.0 thousand for the six months ended June 30, 2025, compared to $707.4 thousand for the six months ended June 30, 2024, which is an increase of approximately $100.6 thousand or 14.3%. The majority of the increase between the six months ended June 30, 2025 and the six months ended June 30, 2024 is due to an increase in occupancy at White Rock Center.

***Expenses***

*Property operating expenses*. Property operating expenses were $122.0 thousand for the six months ended June 30, 2025, compared to $88.0 thousand for the six months ended June 30, 2024, which was an increase of approximately $34.0 thousand or 38.6%. The majority of the increase between the six months ended June 30, 2025 and the six months ended June 30, 2024 is related to an increase in repair and maintenance fees.

*Real estate taxes and insurance*. Real estate taxes and insurance costs were $140.0 thousand for the six months ended June 30, 2025, compared to $145.9 thousand for the six months ended June 30, 2024, which was a decrease of approximately $5.9 thousand or 4.1%. 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 the property tax budget.

*Property management fees*. Property 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 slightly in that we begin with net income (loss) before adjusting for amounts attributable to prior redeemable non-controlling interests in NHT and redeemable non-controlling interests in the OP and we show the combined amounts attributable to such non-controlling interests as an adjustment to arrive at FFO attributable to common shareholders.

AFFO makes certain adjustments to FFO in order to arrive at a more refined measure of the operating performance of our Portfolio. There is no industry standard definition of AFFO and practice is divergent across the industry. AFFO adjusts FFO to remove items such as equity based compensation expense and the amortization of deferred financing costs incurred in connection with obtaining long-term debt financing, non-controlling interests (as described above) related to these items, change in unrealized gains (losses) and a one-time termination fee paid to the former NHT Adviser in connection with the termination of the advisory agreement following the NHT Merger. We believe AFFO is useful to investors as a supplemental gauge of our operating performance and is useful in comparing our operating performance with other REITs that are not as involved in the aforementioned activities.

We believe that the use of FFO and AFFO, combined with the required GAAP presentations, improves the understanding of operating results of REITs among investors and makes comparisons of operating results among such companies more meaningful. While FFO and AFFO are relevant and widely used measures of operating performance of REITs, they do not represent cash flows from operations or net income (loss) as defined by GAAP and should not be considered as an alternative or substitute to those measures in evaluating our liquidity or operating performance. FFO and AFFO do not purport to be indicative of cash available to fund our future cash requirements. Further, our computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other REITs that do not define FFO in accordance with the current NAREIT definition or that interpret the current NAREIT definition or define AFFO differently than we do.

The following table reconciles our calculations of FFO and AFFO to net income (loss), the most directly comparable GAAP financial measure, for the six months ended June 30, 2025 and 2024 (in thousands, except per share amounts):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | **For the Three Months Ended June 30,** | **For the Three Months Ended June 30,** | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** | |
| | | **2025** | **2024** | **2025** | **2024** |<br>**% Change (1)** |
| Net income (loss) |  | $(44088) | $(10522) | $(79194) | $(32070) | N/M |
| Depreciation and amortization |  | 4028 | 4102 | 7937 | 6898 | 15.1% |
| Realized (gains) losses |  | (3498) | 3 | (5018) | 21875 | N/M |
| Impairment loss |  |  |  | 1752 |  | —% |
| Adjustment for noncontrolling interests |  |  | 1266 | 615 | 1266 | N/M |
| Adjustment for redeemable noncontrolling interests in the OP |  | 20 |  | 20 |  | —% |
| **FFO** |  | (43538) | (5151) | (73888) | (2031) | N/M |
| Distributions to Series A preferred shareholders |  | (1155) | (1155) | (2310) | (2310) | —% |
| Distributions to Series B preferred shareholders |  | (28) |  | (30) |  | —% |
| **FFO attributable to common shareholders** |  | (44721) | (6306) | (76228) | (4341) | N/M |
| **FFO per share - basic** |  | $(0.99) | $(0.16) | $(1.72) | $(0.11) | N/M |
| **FFO per share - diluted** |  | $(0.99) | $(0.16) | $(1.72) | $(0.11) | N/M |
| Equity-based compensation expense |  | 1663 | 1232 | 2467 | 1779 | 38.7% |
| Amortization of deferred financing costs - long term debt |  | 196 | (176) | 339 | (447) | N/M |
| Change in unrealized (gains) losses |  | 41637 | 3154 | 74959 | (3136) | N/M |
| Termination fee expense | (2) | 3539 |  | 3539 |  | —% |
| **AFFO attributable to common shareholders** |  | 2313 | (2096) | 5076 | (6145) | N/M |
| **AFFO per share - basic** |  | $0.05 | $(0.05) | $0.11 | $(0.16) | N/M |
| **AFFO per share - diluted** |  | $0.05 | $(0.05) | $0.11 | $(0.16) | N/M |
| **Weighted average common shares outstanding - basic** |  | 45687 | 39616 | 44303 | 39094 | 13.3% |
| **Weighted average common shares outstanding - diluted** | (3) | 45871 | 41062 | 46090 | 39321 | 17.2% |
| **Distributions declared per common share** |  | $0.15 | $0.15 | $0.30 | $0.30 | —% |
| **Net income (loss) coverage** | (4) | -6.43x | -1.77x | -5.96x | -2.73x | N/M |
| **FFO Coverage - diluted** | (4) | -6.6x | -1.07x | -5.73x | -0.37x | N/M |
| **AFFO Coverage - diluted** | (4) | 0.34x | -0.34x | 0.37x | -0.52x | N/M |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Represents the percentage change for the six months ended June 30, 2025 compared to the six months ended June 30, 2024.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Represents one-time termination fee paid to the former NHT Adviser in connection with the termination of the advisory agreement following the NHT Merger. Management considers this not indicative of ongoing operating performance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3)The Company uses actual diluted weighted average common shares outstanding when in a dilutive position for FFO and AFFO.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(4)Indicates coverage ratio of net income (loss)/FFO/AFFO per common share (diluted) over distributions declared per common share during the period.

*The three months ended June 30, 2025 as compared to the three months ended June 30, 2024*

FFO was $(43.5) million for the three months ended June 30, 2025, compared to $(5.2) million for the three months ended June 30, 2024, which was a decrease of approximately $38.4 million. The change in our FFO between the three months ended June 30, 2025 and the three months ended June 30, 2024 primarily relates to an increase in unrealized losses, primarily attributed to decreases in mark-to-market values of our investments at fair value.

AFFO was $2.3 million for the three months ended June 30, 2025, compared to $(2.1) million for the three months ended June 30, 2024, which was an increase of approximately $4.4 million. The change in our AFFO between the three months ended June 30, 2025 and the three months ended June 30, 2024 primarily relates a decrease in expenses.

*The six months ended June 30, 2025 as compared to the six months ended June 30, 2024*

FFO was $(73.9) million for the six months ended June 30, 2025, compared to $(2.0) million for the six months ended June 30, 2024, which was a decrease of approximately $71.9 million. The change in our FFO between the six months ended June 30, 2025 and the six months ended June 30, 2024 primarily relates to an increase in unrealized losses, primarily attributed to decreases in mark-to-market values of our investments at fair value.

AFFO was $5.1 million for the six months ended June 30, 2025, compared to $(6.1) million for the six months ended June 30, 2024, which was an increase of approximately $11.2 million. The change in our AFFO between the six months ended June 30, 2025 and the six months ended June 30, 2024 primarily relates to an increase in total revenues, largely attributed to the Hospitality properties, which were not held in the full comparable period in 2024.

***Net Asset Value***

The SEC does not provide rules on the methodology we must use to determine our NAV or NAV per common share. The determination of NAV involves a number of subjective assumptions, estimates and judgments that may not be accurate or complete. We believe there is no established practice among REITs for calculating NAV. Different firms using different property-specific, general real estate, capital markets, economic and other assumptions, estimates and judgments could derive a NAV that could be significantly different from our NAV. Thus, other public REITs methodologies used to calculate NAV may differ materially from ours. Additionally, our NAV differs from the values of our real estate assets as calculated in accordance with GAAP, in that we calculate NAV based on the Consolidated Balance Sheets as total assets minus total liabilities, less any equity attributable to preferred shareholders (such as the Series A Preferred Shares and the Series B Preferred Shares) and noncontrolling interests. Our NAV per common share is calculated by dividing our NAV by our diluted common shares outstanding, which represents the aggregate of our common shares outstanding plus any unvested restricted share units as of the last day of the reporting period, and common shares assumed to be issued upon redemption of any outstanding and applicable Series B Preferred Shares. We calculate NAV per common share on a quarterly basis beginning with the quarter ended December 31, 2024.

The presentation of NAV and NAV per common share below is intended to be the Applicable NAV (as defined in the statement of preferences of the Series B Preferred Shares) for purposes of the offering of the Series B Preferred Shares. The below table presents the NAV calculation (in thousands, except per common share amounts):

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| **As Of** | **Total Assets** | **Total Liabilities** | **Series A Preferred Shares (1)** | **Series B Preferred Shares (2)** | **NAV** | **Diluted Common Shares Outstanding** | **NAV Per Common Share** |
| June 30, 2025 | 1110990 | (354775) | (83252) | (3171) | 669792 | 50288 | $13.32 |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Represents the liquidation preference, net of approximately $738 thousand issuance costs, from the issuance of the Company's Series A Preferred Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)Represents the liquidation preference, net of approximately $500 thousand issuance costs, from the issuance of the Company's Series B Preferred Shares.

**Liquidity and Capital Resources**

Our short-term liquidity requirements consist primarily of funds necessary to pay for debt maturities, operating expenses and other expenditures including:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• capital expenditures to continue the ongoing development of Cityplace Tower;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• capital expenditures necessary to maintain the Hospitality hotel properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• interest expense and scheduled principal payments on outstanding indebtedness (see "—Obligations and Commitments" below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• recurring maintenance necessary to maintain our properties;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• distributions necessary to qualify for taxation as a REIT;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• income taxes for taxable income generated by TRS entities;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• acquisition of additional properties or investments;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• advisory and administrative fees payable to our Adviser;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• general and administrative expenses;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• reimbursements to our Adviser; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• property management fees.

We expect to meet our short-term liquidity requirements generally through our investment income, existing cash balance, the Series B Preferred Offering and, if necessary, future debt or equity issuances. As of June 30, 2025, we had $4.7 million of cash available to meet our short-term liquidity requirements. As of June 30, 2025, we also had $32.7 million of restricted cash held in reserve by the lender on the Cityplace Tower debt. These reserves include escrows for property taxes and insurance, reserves for tenant improvements as well as required excess collateral. As of June 30, 2025, we also had $0.9 million of restricted cash held in reserve by the lender on the NexBank Revolver. These reserves are to be used for future interest payments on the debt facility. As of June 30, 2025, we also had $10.5 million of restricted cash reserves associated with the Hospitality segment for brand-mandated performance improvement plans and furniture, fixtures and equipment upgrades arising from the execution of the Company's franchise agreement and future insurance and property tax expenses.

Our long-term liquidity requirements consist primarily of funds necessary to pay for the costs of acquiring additional properties, make additional accretive investments pursuant to our investment strategy, renovations and other capital expenditures to improve our properties and scheduled debt payments and distributions. We expect to meet our long-term liquidity requirements through various sources of capital, including the Series B Preferred Offering, and which may also include a revolving credit facility and future debt or equity issuances, existing working capital, net cash provided by operations, long-term mortgage indebtedness and other secured and unsecured borrowings, and property and non-real estate asset dispositions. However, there are a number of factors that may have a material adverse effect on our ability to access these capital sources, including the state of overall equity and credit markets, our degree of leverage, our unencumbered asset base and borrowing restrictions imposed by lenders (including as a result of any failure to comply with

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financial covenants in our existing and future indebtedness), general market conditions for REITs, our operating performance and liquidity, market perceptions about us and restrictions on sales of properties under the Code. The success of our business strategy will depend, in part, on our ability to access these various capital sources.

In addition to our ongoing renovation of Cityplace Tower, our other properties will require periodic capital expenditures and renovation to remain competitive. We estimate an additional $250 million to $270 million of capital expenditures to complete the Cityplace Tower renovation. Also, acquisitions, redevelopments, or expansions of our properties will require significant capital outlays. Long-term, we may not be able to fund such capital improvements solely from net cash provided by operations because we must distribute annually at least 90% of our REIT taxable income, determined without regard to the deductions for distributions paid and excluding net capital gains, to qualify and maintain our qualification as a REIT, and we are subject to tax on any retained income and gains. As a result, our ability to fund capital expenditures, acquisitions, or redevelopment through retained earnings long-term is limited. Consequently, we expect to rely heavily upon the availability of debt or equity capital for these purposes. If we are unable to obtain the necessary capital on favorable terms, or at all, our financial condition, liquidity, results of operations, and prospects could be materially and adversely affected.

In the coming year, NXDT plans to re-focus its asset allocation across sectors in which our Sponsor has an extensive experience and expertise. This re-focusing will involve selling legacy assets that do not fall within our core investment strategy. A more favorable capital market environment, with lower interest rates and increased liquidity, is expected to facilitate this process. The Company's objective is to opportunistically sell $100 million to $150 million in assets to free up capital for reinvestment in target asset classes such as residential, self-storage, and life sciences.

We believe that our available cash, expected operating cash flows, and potential debt or equity financings will provide sufficient funds for our operations, anticipated scheduled debt service payments and distribution requirements for the twelve-month period following June 30, 2025. See "—Debt" for additional details regarding our indebtedness and related liquidity requirements.

***Recent Tax Law Update***

On July 4, 2025, President Trump signed into law the legislation known as the One Big Beautiful Bill Act ("the OBBBA"). The OBBBA made significant changes to the U.S. federal income tax laws in various areas. Among the notable changes, the OBBBA permanently extended certain provisions that were enacted in the Tax Cuts and Jobs Act of 2017, most of which were set to expire after December 31, 2025. These include the permanent extension of (i) the reduced marginal U.S. federal income tax rates and (ii) the 20% deduction on "qualified REIT dividends" for individuals and other non-corporate taxpayers and (iii) the limitation on non-corporate taxpayers using "excess business losses" to offset other income. The OBBBA also increased the percentage limit under the REIT asset test applicable to TRSs from 20% to 25% for taxable years beginning after December 31, 2025. As a result, for taxable years beginning after December 31, 2025, the aggregate value of all securities of TRSs held by a REIT may not exceed 25% of the value of its gross assets.

***Series B Preferred Shares Offering***

On January 30, 2025, the Company announced the launch of a continuous public offering of up to 16,000,000 shares of its newly designated Series B Preferred Shares at a price to the public of $25.00 per share, for gross proceeds of up to $400.0 million. The Series B Preferred Shares are convertible at the option of the holder thereof into our common shares beginning on the first day of the month following the third anniversary of the date of original issuance of the shares to be converted if the 5-day volume weighted average price of our common shares on the NYSE ending on the trading day immediately preceding the date the holder delivers a duly completed conversion notice to the Company (such 5-day VWAP, the "Market Price") represents a 15.0% premium to the estimated fair market NAV of the Company per common share as most recently published by the Company at the time of issuance of the applicable Series B Preferred Share (the "Minimum Market Price Trigger"). If the Minimum Market Price Trigger is satisfied, the Series B Preferred Shares will be convertible at a 6%, 10% or 12% discount to the Market Price beginning on the first day of the month following the third, fourth and fifth anniversary of the date of original issuance of the shares to be converted, respectively. Beginning on the first day of the calendar month following the date of original issuance, the Series B Preferred Shares are redeemable at the option of the holder at a redemption price per share equal to the stated value of $25.00 per share, plus all accrued but unpaid cash distributions and less certain redemption fees. After the first day of the first quarter following the second anniversary of the date of original issuance, the Company also has the option to redeem, in whole or in part, subject to certain restrictions in the Company's agreement and declaration of trust and the statement of preferences setting forth the terms of the Series B Preferred Shares, at a redemption price per share equal to the stated value of $25.00 per share, plus any accrued but unpaid cash distributions. In all optional redemptions, the Company has the right, in its sole discretion, to

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pay the redemption in cash or in equal value of the Company's common shares for so long as the common shares are listed or admitted to trading on the NYSE or another national securities exchange or automated quotation system. NexPoint Securities, Inc., an affiliate of the Adviser, serves as the Company's dealer manager (the "Dealer Manager") in connection with the offering. The Dealer Manager uses its reasonable best efforts to sell the Series B Preferred Shares offered in the offering, and the Company pays the Dealer Manager, subject to the discounts and other special circumstances described or referenced therein, (i) selling commissions of 7.0% of the aggregate gross proceeds from sales of Series B Preferred Shares in the offering ("Selling Commissions") and (ii) a dealer manager fee of 3.0% of the gross proceeds from sales of Series B Preferred Shares in the offering (the "Dealer Manager Fee"). The Dealer Manager, subject to federal and state securities laws, will reallow all or any portion of the Selling Commissions and may reallow a portion of the Dealer Manager Fee to other securities dealers that the Dealer Manager may retain who sold the Series B Preferred Shares as is described more fully in the agreements between such dealers and the Dealer Manager. The Company expects that the offering will terminate on the earlier of the date the Company sells all 16,000,000 Series B Preferred Shares in the offering or August 1, 2027 (which is the third anniversary of the effective date of the Company's registration statement), which may be extended by the Board in its sole discretion. The Board may elect to terminate this offering at any time. As of June 30, 2025, the Company has sold 145,554 shares of the Series B Preferred Shares for total gross proceeds of $3.6 million.

***Cash Flows***

The following table presents selected data from our consolidated statements of cash flows for the six months ended June 30, 2025 and 2024 (in thousands):

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| | | |
|:---|:---|:---|
| | **For the Six Months Ended June 30** | **For the Six Months Ended June 30** |
| | **2025** | **2024** |
| Net cash provided by (used in) operating activities | $7151 | $(8047) |
| Net cash provided by investing activities | 34860 | 42222 |
| Net cash used in financing activities | (42041) | (13037) |
| Net decrease in cash, cash equivalents and restricted cash | (30) | 21138 |
| Cash, cash equivalents and restricted cash, beginning of period | 48901 | 53169 |
| Cash, cash equivalents and restricted cash, end of period | $48871 | $74307 |

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*Cash flows from operating activities.* During the six months ended June 30, 2025, net cash provided by (used in) operating activities was $7.2 million, compared to net cash provided by operating activities of $(8.0) million for the six months ended June 30, 2024. The change in cash flows from operating activities was mainly due to an increase in dividend income from equity securities.

*Cash flows from investing activities.* During the six months ended June 30, 2025, net cash provided by investing activities was $34.9 million, compared to net cash provided by investing activities of $42.2 million for the six months ended June 30, 2024. The change in cash flows from investing activities was attributed to proceeds from held-for-sale properties of $8.3 million and a return of capital from the Marriott Uptown equity method investment of $15.1 million.

*Cash flows from financing activities.* During the six months ended June 30, 2025, net cash used in financing activities was $(42.0) million, compared to net cash used in financing activities of $(13.0) million for the six months ended June 30, 2024. The change in cash flows from financing activities was due to paydowns on the mortgage debt with proceeds from the held-for-sale assets.

**Debt**

***Mortgage Debt***

As of June 30, 2025, our consolidated subsidiaries had aggregate mortgage debt outstanding to third parties of approximately $218.6 million at a weighted average interest rate of 7.55%. See Note 6 to our consolidated financial statements for additional information.

We intend to invest in additional real estate investments as suitable opportunities arise and adequate sources of equity and debt financing are available. We expect that future investments in properties, including any improvements or renovations of current or newly acquired properties, will depend on and will be financed by, in whole or in part, our

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existing cash, future borrowings and the proceeds from additional issuances of common shares, Series B Preferred Shares or other securities or investment and property dispositions.

Although we expect to be subject to restrictions on our ability to incur indebtedness, we expect that we will be able to refinance existing indebtedness or incur additional indebtedness for acquisitions or other purposes, if needed. However, there can be no assurance that we will be able to refinance our indebtedness, incur additional indebtedness or access additional sources of capital, such as by issuing common shares or other debt or equity securities, on terms that are acceptable to us or at all.

Furthermore, following the completion of our renovation and development programs and depending on the interest rate environment at the applicable time, we may seek to refinance our floating rate debt into longer-term fixed rate debt at lower leverage levels.

***Cityplace Tower Debt***

Effective March 8, 2025, the lender agreed to defer the maturity of the Cityplace Tower debt by twelve months to March 8, 2026. The purpose of the deferral was to allow for continued discussions around refinancing the debt. Management recognizes that finding an alternative source of funding is necessary to repay the debt by the maturity date. Management believes that there is sufficient time before the maturity date and that the Company has sufficient access to capital to ensure the Company is able to meet its obligations as they become due.

***Credit Facility***

On January 8, 2021, the Company entered into a $30.0 million credit facility ("Credit Facility") with Raymond James Bank, N.A. and drew the full balance. Prior to October 20, 2023, the Company paid down the outstanding amount under the Credit Facility to $1.0 million. Amounts repaid by the Company under the Credit Facility could not be reborrowed. On October 20, 2023, Raymond James Bank, N.A. agreed to amend the terms of the Credit Facility, which, among other things, extended the maturity date to October 6, 2025 and increased the credit limit to $20 million. On October 23, 2023, the Company drew $6.0 million of the available balance. On November 20, 2023, the Company drew the remaining $13.0 million of the available balance. As of June 30, 2025, the Credit Facility bore interest at the one-month SOFR plus 4.25%. During the six months ended June 30, 2025, the Company paid down $6.0 million on the Credit Facility. As of June 30, 2025, the Credit Facility had an outstanding balance of $5.0 million. For additional information regarding our Credit Facility, see Note 6 to our consolidated financial statements.

The Credit Facility will mature on October 6, 2025 and is subject to monthly amortization payments through the maturity date. We believe we will have adequate liquidity to pay these obligations when they come due.

***Revolving Credit Facility***

On May 22, 2023, the Company entered into a revolving credit facility with NexBank (the "NexBank Revolver"), with the option for the Company to receive additional disbursements thereunder up to a maximum amount of $50.0 million, and with the option to extend the maturity two times by six months. As of June 30, 2025, the NexBank Revolver bears interest at one-month SOFR plus 3.50% and matures on May 21, 2025. On May 21, 2024, the Company elected to use one of the two extension options to extend the maturity by six months to November 21, 2024. On November 21, 2024, the Company elected to use the second extension option to extend the maturity by six months to May 21, 2025. On October 22, 2024, the Company amended the NexBank Revolver agreement to allow for the Lubbock property to be used as collateral for the debt. On May 15, 2025, the Company amended the NexBank Revolver agreement to extend the maturity date to November 21, 2025, and to provide for three additional six-month extension options. As of June 30, 2025, the NexBank Revolver had an outstanding balance of $13.8 million. As of June 30, 2025, the Company held $0.9 million in restricted cash in the interest reserve account.

***Notes Payable, Freedom LHV***

On August 2, 2024, the Company, through Freedom LHV, LLC ("Freedom LHV"), an indirect subsidiary of the Company, borrowed approximately $10.0 million from The Ohio State Life Insurance Company ("OSL"), an entity that may be deemed an affiliate of the Adviser through common beneficial ownership. Due to the recently transacted nature of the note, the fair value of the note is approximately the outstanding balance. The note bears interest at an annual fixed rate

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of 10.0% and matures on August 2, 2029. The debt is secured by certain real property held by Freedom LHV and is guaranteed by the Company.

***Mortgages Payable, Hospitality***

On February 28, 2019, NHT entered into a borrowing arrangement for a $59.4 million Note A loan (the "Note A Loan") and a $28.6 million Note B loan (the "Note B Loan") with ACORE. The Note A Loan bears interest at a variable rate equal to the 30-day SOFR plus 2.00% and matures on September 8, 2025. The Note B Loan bears interest at a variable rate equal to the 30-day SOFR plus 6.46% and matures on September 8, 2025. As of June 30, 2025, the Note A Loan and Note B Loan had an outstanding balance of $28.1 million and $13.5 million and effective interest rates of 6.32% and 10.79%, respectively.

On February 15, 2022, in connection with the acquisition of the Park City and Bradenton properties, NHT entered into the PC & B Loan with an original maturity date of February 5, 2025. See Note 14 for a discussion of the extension of the maturity date of the PC & B Loan. The outstanding balance on the PC & B Loan at June 30, 2025 was $38.3 million, with $1.0 million available to draw on for renovation purposes as of June 30, 2025.

The loan documents, including the guaranty, for the PC & B Loan and the Note A Loan and Note B Loan contain customary representations, warranties, and events of default, which require a subsidiary of the Company to comply with affirmative and negative covenants. As of June 30, 2025, a subsidiary of the Company, as the guarantor of certain obligations under the PC & B Loan documents, was not in compliance with the PC & B Loan covenants related to the minimum net worth and the minimum liquid assets. AREEIF Lender, LLC, the lender under the PC & B Loan, has not granted a waiver for the covenant violations as of June 30, 2025. While the lender under the PC & B Loan has not indicated that it will accelerate the PC & B Loan, the lender has the ability under the loan documents to do so if the conditions remain uncured after the giving of notice and expiration of a cure period. There can be no assurance that the lender under the PC & B Loan will waive such covenant beaches, and discussions regarding such a waiver are ongoing. The PC & B Loan is secured by mortgages on our Park City and Bradenton properties. Should the lender under the PC & B Loan exercise its remedies under the relevant loan documents, up to and including the acceleration of the full amount of the PC & B Loan, it may have a material adverse impact on our financial condition, liquidity and results of operations. If we are unable to pay the amount due upon acceleration, the lender under the PC & B Loan may elect to foreclose on the Park City and Bradenton properties to satisfy the indebtedness.

***Convertible Notes, NHT***

A subsidiary of the Company also entered into several convertible notes with affiliates of the NHT Adviser prior to the closing of the NHT Merger since January 8, 2019. The fixed rate notes have rates ranging from 2.25% to 7.50% (which were market interest rates at the time of their issuance) while outstanding and mature in 20 years from their date of issuance. As of June 30, 2025, the net carrying amount of the convertible notes due to affiliates of the former NHT Adviser was $51.0 million.

***Promissory Notes Due to Affiliates***

In connection with the NHT Merger, on April 17, 2025, several promissory notes with affiliates of the Company were issued due to a limitation on common shares issued to affiliates of the issuer by the New York Stock Exchange. The aggregate principal amount of such promissory notes was $0.8 million, each with an interest rate of 7.334% and maturing on April 15, 2027, with two one-year extension options. As of June 30, 2025, the carrying amount of the promissory notes due to affiliates was $0.8 million.

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**Obligations, Commitments and Investment Opportunities**

The following table summarizes our contractual obligations and commitments as of June 30, 2025 for the next five calendar years subsequent to June 30, 2025.

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| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | **Payments Due by Period (in thousands)** | |
| | **Total** | | **2025** | **2026** | **2027** | **2028** | **2029** | **Thereafter** | |
| **Property Level Debt** |  |  |  |  |  |  |  |  |  |
| Principal payments | $241877 |  | $54833 | $177044 | $— | $— | $10000 | $— |  |
| Interest expense | 14013 |  | 8129 | 3295 | 1000 | 1000 | 589 |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $255890 |  | $62962 | $180339 | $1000 | $1000 | $10589 | $— |  |
| **Prime Brokerage Borrowing** |  |  |  |  |  |  |  |  |  |
| Principal payments | $4410 |  | $— | $— | $— | $— | $— | $4410 | (1) |
| Interest expense | 958 |  | 106 | 213 | 213 | 213 | 213 |  | (1) |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $5368 |  | $106 | $213 | $213 | $213 | $213 | $4410 |  |
| **Series A Preferred Shares** |  |  |  |  |  |  |  |  |  |
| Distribution payments | N/A | (2) | $— | $2310 | $4620 | $4620 | $4620 | N/A | (2) |
| **Series B Preferred Shares** |  |  |  |  |  |  |  |  |  |
| Distribution payments | N/A | (2) | $— | $30 | $60 | $60 | $60 | N/A | (2) |
| **Credit Facility** |  |  |  |  |  |  |  |  |  |
| Principal payments | $77590 |  | $18829 | $— | $21275 | $— | $— | $37486 |  |
| Interest expense | 25893 |  | 1836 | 2597 | 1591 | 1413 | 1413 | 17043 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;Total | $103483 |  | $20665 | $2597 | $22866 | $1413 | $1413 | $54529 |  |
| **Total contractual obligations and commitments** | $381121 |  | $83733 | $185489 | $28759 | $7306 | $16895 | $58939 |  |

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1)Assumes no additional borrowings or repayments. The Prime Brokerage (as defined below) balance has no stated maturity date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2)The Series A & B Preferred Shares are perpetual.

*NXDT Advisory Agreement*

As consideration for the Adviser's services under the Advisory Agreement, we pay our Adviser the Fees, which includes the Advisory Fee equal to 1.00% of Managed Assets and the Administrative Fee equal to 0.20% of the Company's Managed Assets. The Advisory Agreement provides that the Administrative Fees shall be paid in cash and the monthly installment of the Advisory Fees shall be paid one-half in cash and one-half in common shares of the Company, subject to certain restrictions. For additional information, see Note 13 to our consolidated financial statements.

We also generally reimburse our Adviser for operating or offering expenses it incurs on our behalf or in connection with the services it performs for us. The Adviser may, at its discretion and at any time, waive its right to reimbursement for

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eligible out-of-pocket expenses paid on the Company's behalf. Once waived, those expenses are considered permanently waived and became non-recoupable.

For the three and six months ended June 30, 2025, the Company expensed $3.4 million and $6.8 million, respectively, related to the Fees. Of this $3.4 million, $1.4 million is related to shares that were, or are expected to be issued in lieu of cash. Of this $6.8 million, $2.6 million is related to shares that were, or are expected to be issued in lieu of cash.

*NHT Advisory Agreement*

Prior to the closing of the NHT Merger on April 17, 2025, as consideration for the NHT Adviser's services under the NHT Advisory Agreement, we paid the NHT Adviser an advisory fee equal to 1.00% of the REIT Asset Value. Pursuant to the terms of the NHT Advisory Agreement, NHT reimbursed the NHT Adviser for all documented Operating Expenses and offering expenses it incurred on behalf of NHT. Expenses paid or incurred by NHT for advisory fees payable to the NHT Adviser, Operating Expenses incurred by the NHT Adviser or its affiliates in connection with the services it provides to NHT and its subsidiaries and compensation expenses relating to equity awards granted under a long-term incentive plan of NHT will not exceed 1.5% of the REIT Asset Value for the calendar year (or part thereof). The NHT Expense Cap did not apply to legal, accounting, financial, due diligence and other service fees incurred in connection with extraordinary litigation and mergers and acquisitions and other events outside NHT's ordinary course of business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of real estate assets. From April 19, 2024 to June 30, 2025, NHT incurred expenses subject to the NHT Expense Cap of $4.1 million. The NHT Advisory Agreement was terminated in connection with the closing of the NHT Merger on April 17, 2025, and the Company assumed the remaining expense reimbursement obligations under the NHT Advisory Agreement.

*Alewife Holdings Loan*

On May 10, 2024, the Company, through the OP, NREF OP IV, a subsidiary of NREF, an entity that is managed by an affiliate of the Adviser, and OSL, an entity that may be deemed an affiliate of the Adviser through common beneficial ownership, entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which NREF OP IV assigned the right to fund up to 9% of a loan (the "Alewife Loan") to be made to IQHQ-Alewife Holdings, LLC ("Alewife Holdings") to the OP and allocated the right to fund up to 9% of the Alewife Loan to OSL. Effective January 2, 2025, NREF OP IV and OSL entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which NREF OP IV assigned $7.5 million of interest in the Alewife Loan to OSL for cash and increased OSL's allocation of the right to fund up to 10.32% of the Alewife Loan. In addition, at any time and from time to time, NREF may purchase up to all of the amounts funded by OSL in the Alewife Loan from OSL. Upon receipt of a draw request, the OP and OSL have the right to elect to fund an amount equal or greater than zero and up to (i) 9% or 10.32%, respectively, of the total amount of all advances previously made under the Alewife Loan plus the amount of the then current borrowing, (ii) less the total amount of advances previously made by the OP and OSL, respectively. NREF OP IV is required to fund any amounts not funded by OSL and the OP. At any time that the OP and OSL have funded less than their respective percentages of all advances made under the Alewife Loan, the OP and OSL have the option upon notice to NREF OP IV to pay to NREF OP IV any amount of such unfunded amount. Upon such payment, the OP or OSL would become entitled to all interest and fees accrued on the amount paid to NREF OP IV on and after the date of such payment.

*IQHQ Subscription Agreement and Warrant*

On December 31, 2024, Bridge Investor I entered into a Subscription Agreement ("IQHQ Subscription Agreement") whereby Bridge Investor I committed to purchase $160.1 million of Series E preferred stock of IQHQ, Inc. In connection with the IQHQ Subscription Agreement, on December 31, 2024, Bridge Investor I also entered into a Warrant Purchase Agreement (the "IQHQ Warrant Purchase Agreement") whereby IQHQ Holdings issued and sold a corresponding warrant to Bridge Investor I to purchase Class A-3 Units of IQHQ Holdings (as amended, the "IQHQ Series E Warrant"). The IQHQ Series E Warrant entitles the holder to purchase, at an exercise price of $0.01, Class A-3 Units of IQHQ Holdings initially intended to represent up to 10.25% of the fully diluted and outstanding common equity of IQHQ Holdings. The IQHQ Series E Warrant is exercisable, in whole or in part, at any time for ten years unless there is an earlier change of control, initial public offering or liquidation.

In connection with the IQHQ Subscription Agreement and IQHQ Warrant Purchase Agreement, the OP, along with NREF, through certain subsidiaries, and certain entities advised by affiliates of our Adviser (the "IQHQ Participating Purchasers") entered into a participation rights agreement with Bridge Investor I pursuant to which the OP and the IQHQ

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Participating Purchasers have a right to fund up to specified amounts of the IQHQ Subscription Agreement and the IQHQ Series E Warrant. Upon receipt of a draw request, each IQHQ Participating Purchaser has the right to elect to fund an amount equal or greater than zero up to their respective preemptive right under the IQHQ Holdings or IQHQ, L.P. organizational documents less the total amount of advances previously made by such IQHQ Participating Purchaser. Upon receipt of a draw request, the OP will also have the right to elect to fund an amount equal or greater than zero up to 50% of the total requested amount that is not funded by the IQHQ Participating Purchasers. NREF would be required to fund any amounts not funded by the IQHQ Participating Purchasers and the OP. At any time that the IQHQ Participating Purchasers have funded less than their respective participation amounts, the IQHQ Participating Purchasers have the option to pay NREF or the OP (to the extent it has funded) any amount of such unfunded amount. Upon such payment, the IQHQ Participating Purchaser would become entitled to all interest accrued on the amounts paid to NREF or the OP, if applicable, on and after the date of such payment. Bridge Investor I can allocate all or any portion of the IQHQ Bridge Warrant to any parties to the participation rights agreement.

As of the June 30, 2025, the OP has not funded any amounts.

**Income Taxes**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;I.*U.S REIT Status*

We anticipate that we will continue to qualify to be taxed as a REIT for U.S. federal income tax purposes, and we intend to continue to be organized and to operate in a manner that will permit us to qualify as a REIT. However, we can give no assurance that we will maintain REIT qualification. To qualify as a REIT, we must meet certain organizational and operational requirements, including a requirement to distribute at least 90% of our annual "REIT taxable income", as defined by the Code, to shareholders. As a REIT, we will be subject to federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. Taxable income from certain non-REIT activities is managed through a TRS and is subject to applicable federal, state, and local income and margin taxes. The Company has recorded a current income tax expense of $0.6 million associated with the TRSs for the six months ended June 30, 2025, which is largely driven by income from the Company's preferred stock investments and investments in debt instruments not secured by mortgages on real property. The tax expense is increased by the annual change in valuation allowance on a deferred tax asset of $0.2 million and income tax expense of $0.8 million for a net expense of $0.6 million for the six months ended June 30, 2025, that is recorded on the Consolidated Statement of Operations and Comprehensive Income (Loss).

If we fail to qualify as a REIT in any taxable year, we could be subject to U.S. federal income tax on our taxable income at regular corporate income tax rates, and distributions paid to our shareholders would not be deductible by us in computing taxable income. Any resulting corporate liability could be substantial and could materially and adversely affect our net income (loss) and net cash available for distribution to shareholders. Unless we were entitled to relief under certain Code provisions, we also would be disqualified from re-electing to be taxed as a REIT for the four taxable years following the year in which we failed to qualify to be taxed as a REIT. As of June 30, 2025, we believe we are in compliance with all applicable REIT requirements.

We evaluate the accounting and disclosure of tax positions taken or expected to be taken in the course of preparing our tax returns to determine whether the tax positions are "more-likely-than-not" (greater than 50% probability) of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Our management is required to analyze all open tax years, as defined by the statute of limitations, for all major jurisdictions, which include federal and certain states. As of June 30, 2025 and to our knowledge, we have no examinations in progress and none are expected at this time.

We recognize our tax positions and evaluate them using a two-step process. First, we determine whether a tax position is more likely than not to be sustained upon examination, including resolution of any related appeals or litigation processes, based on the technical merits of the position. Second, we will determine the amount of benefit to recognize and record the amount that is more likely than not to be realized upon ultimate settlement.

We had no material unrecognized tax benefit or expense, accrued interest or penalties as of June 30, 2025. We and our subsidiaries are subject to federal income tax as well as income tax of various state and local jurisdictions. The 2024, 2023, 2022 and 2021 tax years remain open to examination by tax jurisdictions to which our subsidiaries and we are

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subject. When applicable, we recognize interest and/or penalties related to uncertain tax positions on our Consolidated Statements of Operations and Comprehensive Income (Loss).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;II.*Canadian mutual fund status*

Prior to the closing of the NHT Merger, NHT was a mutual fund trust pursuant to the Tax Act. Under the then-current tax legislation, a mutual fund trust that was not a SIFT pursuant to the Tax Act is entitled to deduct distributions of taxable income such that it was not liable to pay Canadian income taxes provided that its taxable income was fully distributed to unitholders.

**Distributions**

We intend to make regular quarterly distribution payments to holders of our common shares. U.S. federal income tax law generally requires that a REIT distribute annually at least 90% of its REIT taxable income, without regard to the deduction for distributions paid and excluding net capital gains. As a REIT, we will be subject to federal income tax on our undistributed REIT taxable income and net capital gain and to a 4% nondeductible excise tax on any amount by which distributions we pay with respect to any calendar year are less than the sum of (1) 85% of our ordinary income, (2) 95% of our capital gain net income and (3) 100% of our undistributed income from prior years. We intend to make regular quarterly distribution payments of all or substantially all of our taxable income to holders of our common shares out of assets legally available for this purpose, if and to the extent authorized by our Board. Before we make any distribution payments, whether for U.S. federal income tax purposes or otherwise, we must first meet both our operating requirements and debt service on our debt payable. If our cash available for distribution is less than our taxable income, we could be required to sell assets, borrow funds or raise additional capital to make cash distributions or we may make a portion of the required distribution in the form of a taxable distribution of shares or debt securities.

We will make distribution payments based on our estimate of taxable earnings per common share, but not earnings calculated pursuant to GAAP. Our distributions and taxable income and GAAP earnings will typically differ due to items such as depreciation and amortization, fair value adjustments, differences in premium amortization and discount accretion, investments held through our TRSs, book/tax differences on income derived from partnerships, and non-deductible general and administrative expenses. Our quarterly dividends per share may be substantially different than our quarterly taxable earnings and GAAP earnings per share. Our Board declared a distribution on our common shares of $0.15 per share which was paid on June 30, 2025 to shareholders of record on May 9, 2025. The distribution on the Company's common shares consists of a combination of cash and shares, with the cash component of the distribution (other than cash paid in lieu of fractional shares) not to exceed 20% in the aggregate, with the balance being paid in the Company's common shares. Our Board declared a distribution on our Series A Preferred Shares of $0.34375 per share which was paid on June 30, 2025, to shareholders of record on June 23, 2025. Our Board declared three distributions on our Series B Preferred Shares of $0.1875 per share, one of which was paid to holders of Series B Preferred Shares on July 7, 2025 to holders of record on June 25, 2025 and two of which will be paid to holders of Series B Preferred Shares on October 6, 2025 and September 5, 2025 to holders of record on September 25, 2025 and August 25, 2025, respectively. We expect that distributions on our common shares, when, if and as declared by our Board, will be declared on a quarterly basis.

The purpose of paying the elective share distribution partially in shares and partially in cash is to conserve cash for additional investments at the Company. The Company may revert to paying the distribution solely in cash at some point in the future when cash flow from operations supports such a cash distribution. However, there can be no assurance that cash flow from operations will be able to support a cash distribution in the future.

**Off-Balance Sheet Arrangements**

As of June 30, 2025, we had the following off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

*Commitments*

The Company is a guarantor on dividend payments with respect to Series D Preferred Stock of NSP, an affiliate of the Adviser. As of June 30, 2025, the outstanding NSP Series D Preferred Stock accrued dividends were $13.3 million, and the Company and NREF OP IV REIT Sub, LLC are jointly and severally liable for 85.90% of the guaranteed amount. See Note 13 to our consolidated financial statements for additional information.

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The Company is a guarantor on one of NSP's loans, with an aggregate principal amount of $750.0 million outstanding as of June 30, 2025. The obligations consist of liability for losses suffered by the lender arising out of certain bad acts, such as if the borrower takes actions that are fraudulent or improper or upon certain violations of the related loan agreement. See Note 13 to our consolidated financial statements for additional information.

The Company is a limited guarantor and an indemnitor on one of our subsidiary's loans with an aggregate principal amount of $41.6 million as of June 30, 2025. The obligations include a customary environmental indemnity and a so-called "bad boy" guarantee, which is generally only applicable if and when the borrower directly, or indirectly through an agreement with an affiliate, joint venture partner or other third party, voluntarily files a bankruptcy or similar liquidation or reorganization action or takes other actions that are fraudulent or improper. The Company is current on all debt payments and in compliance with all debt compliance provisions.

The Company is a guarantor and an indemnitor on one of Cityplace Tower's loans with an aggregate principal amount of $138.8 million as of June 30, 2025. The obligations include guarantees, which are generally only applicable if and when the borrower, which is a subsidiary of the Company, directly, or indirectly through an agreement with an affiliate, joint venture partner or other third party, voluntarily terminates construction services prior to the completion of the project, files a bankruptcy or similar liquidation or reorganization action or takes other actions that are fraudulent or improper. As of June 30, 2025, management does not anticipate any material deviations from schedule or budget related to construction projects current in process, and Cityplace Tower is current on all debt payments and in compliance with all debt compliance provisions.

**Critical Accounting Policies and Estimates**

Management's discussion and analysis of financial condition and results of operations is based upon our unaudited consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires our management to make judgments, assumptions and estimates that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate these judgments, assumptions and estimates for changes that would affect the reported amounts. These estimates are based on management's historical industry experience and on various other judgments and assumptions that are believed to be reasonable under the circumstances. Actual results may differ from these judgments, assumptions and estimates. Below is a discussion of the accounting policies that we consider critical to understanding our financial condition or results of operations where there is uncertainty or where significant judgment is required.

See Note 3 to our consolidated financial statements, "Summary of Significant Accounting Policies", for further discussion of our accounting estimates and policies.

*Valuation of Level 3 Fair Valued Investments*

As of June 30, 2025, approximately 43.0% of the total assets owned by the Company are comprised of fair valued level 3 investments. The Company elected the fair-value option in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 825-10-10. On an annual basis, the Company hires independent third-party valuation firms to provide updated fair values for subsequent measurement absent a readily available market price. The valuation is determined using widely accepted valuation techniques. See Note 9 to our consolidated financial statements, "Fair Value Financial Instruments", for further discussion of our valuation techniques of level 3 investments. The necessary inputs for these valuations includes a variety of valuation techniques and unobservable inputs. These inputs are subject to assumptions and estimates. As a result, the determination of fair value is uncertain because it involves subjective judgments and estimates that are unobservable. For the six months ended June 30, 2025, the unrealized gains (loss) related to the change in fair value of level 3 investments is $(59.4) million. See Note 9 to our consolidated financial statements for additional disclosures regarding the valuation of level 3 fair valued investments.

*Purchase Price Allocation*

Upon acquisition of a property considered to be an asset acquisition, the purchase price and related acquisition costs ("total consideration") are allocated to land, buildings, improvements, furniture, fixtures, and equipment, and intangible lease assets based on relative fair value in accordance with FASB ASC 805, *Business Combinations.* Acquisition costs related to asset acquisitions are capitalized in accordance with FASB ASC 805.

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The allocation of total consideration, which is determined using inputs that are classified within Level 3 of the fair value hierarchy established by FASB ASC 820 (see Note 9 to our consolidated financial statements), is based on management's estimate of the property's "as-if" vacant fair value and is calculated by using all available information such as the replacement cost of such asset, appraisals, property condition reports, market data and other related information. If any debt is assumed in an acquisition, the difference between the fair value, which is estimated using inputs that are classified within Level 2 of the fair value hierarchy, and the face value of debt is recorded as a premium or discount and amortized as interest expense over the life of the debt assumed.

*Impairment*

Real estate assets held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. The key inputs into our impairment analysis include, but are not limited to, the holding period, net operating income, and capitalization rates. In such cases, we will evaluate the recoverability of such real estate assets based on estimated future cash flows and the estimated liquidation value of such real estate assets, and provide for impairment if such undiscounted cash flows are insufficient to recover the carrying amount of the real estate asset. If impaired, the real estate asset will be written down to its estimated fair value. The Company's impairment analysis identifies and evaluates events or changes in circumstances that indicate the carrying amount of a real estate investment may not be recoverable, including determining the period the Company will hold the rental property, net operating income, and the estimated capitalization rate for each respective real estate investment. The Company did not record any impairment charges for the three and six months ended June 30, 2025. The Company did not record any impairment charges for the three and six months ended June 30, 2024.

*Held for Sale* 

The Company periodically classifies real estate assets as held for sale when certain criteria are met in accordance with U.S. GAAP. At that time, the Company presents the net real estate assets and the liabilities associated with the real estate held for sale separately in its Consolidated Balance Sheets, and the Company ceases recording depreciation and amortization expense related to that property. Real estate held for sale is reported at the lower of its carrying amount or its estimated fair value less estimated costs to sell. As of June 30, 2025 and December 31, 2024, there were zero and one properties classified as held for sale, respectively. In addition to the net real estate assets, the Consolidated Balance Sheets also includes approximately $0.0 million and $0.1 million of accounts receivable and prepaid and other assets, and approximately $0.0 million and $0.8 million of accounts payable, real estate taxes payable, security deposits, prepaid rents, and other accrued liabilities related to assets held for sale as of June 30, 2025 and December 31, 2024, respectively. For the three and six months ended June 30, 2025 the Company recorded approximately $0.0 million and $1.8 million of losses on real estate held for sale, respectively, which are included in impairment loss on the Consolidated Statements of Operations and Comprehensive Income (Loss). The Company did not record any losses on real estate held for sale for the three and six months ended June 30, 2024.

**Inflation**

The real estate market has not been directly affected by inflation in the past several years due to increases in rents nationwide. Our lease terms are generally for a period of one year or more and rental rates reset to market if renewed. The majority of our leases also contain protection provisions applicable to reimbursement billings for utilities.

Inflation may also affect the overall cost of debt, as the implied cost of capital increases. We intend to mitigate these risks through long-term fixed interest rate loans and interest rate hedges.

Inflation has had a significant impact in the regions in which the Hospitality segment holds properties, causing a decrease in the willingness of the general population to travel and reduced occupancy, the effect of which may continue to impact NHT's operations.

**Implications of being a Smaller Reporting Company**

We are a "smaller reporting company" as defined in the Exchange Act and may elect to take advantage of certain of the scaled disclosures available to smaller reporting companies.

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**Item 3. Quantitative and Qualitative Disclosures About Market Risk**

Not required.

**Item 4. Controls and Procedures**

**Evaluation of Disclosure Controls and Procedures**

As required by Rule 13a-15(b) and Rule 15d-15(b) under the Exchange Act, our management, including our President and Chief Financial Officer, evaluated, as of June 30, 2025, the effectiveness of our disclosure controls and procedures as defined in Exchange Act Rule 13a-15(e) and Rule 15d-15(e). Based on that evaluation, our President and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of June 30, 2025, to provide reasonable assurance that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified by the rules and forms of the Exchange Act and is accumulated and communicated to management, including the President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

We believe, however, that a controls system, no matter how well designed and operated, cannot provide absolute assurance that the objectives of the controls systems are met, and no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, within a company have been detected.

**Changes in Internal Control over Financial Reporting**

There has been no change in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the quarter ended June 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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**PART II — OTHER INFORMATION**

**Item 1. Legal Proceedings**

From time to time, we are party to legal proceedings that arise in the ordinary course of our business. Management is not aware of any legal proceedings of which the outcome is reasonably likely to have a material adverse effect on our results of operations or financial condition, nor are we aware of any such legal proceedings contemplated by government agencies.

**Item 1A. Risk Factors**

There have been no material changes to the risk factors previously disclosed under Part I, Item 1A, "Risk Factors" in our Annual Report on Form 10-K filed with the SEC on March 31, 2025.

**Item 2. Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities**

On May 15, 2025, the Company issued a total of 298,888.28 common shares of the Company to the Adviser as payment of a portion of the monthly Advisory Fees pursuant to the Advisory Agreement. These shares were issued in a private placement and the proceeds were used to support the ongoing operations of the Company. The Company issued the common shares to the Adviser in reliance upon Section 4(a)(2) of the Securities Act.

**Item 3. Defaults Upon Senior Securities**

Not required for smaller reporting companies.

**Item 4. Mine Safety Disclosures**

Not applicable.

**Item 5. Other Information**

None.

**Item 6. Exhibits**

**EXHIBIT INDEX**

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| | |
|:---|:---|
| **Exhibit<br>Number** | **Description** |
| 10.1 | <u>[Second Amended and Restated Limited Partnership Agreement of NexPoint Diversified Real Estate Trust Operating Partnership, L.P., dated April 17, 2025 (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on April 17, 2025).](https://www.sec.gov/Archives/edgar/data/1356115/000143774925012294/ex_802939.htm)</u> |
| 10.2 | <u>[Amended and Restated NexPoint Diversified Real Estate Trust 2023 Long Term Incentive Plan (incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K filed with the SEC on June 10, 2025).](https://www.sec.gov/Archives/edgar/data/1356115/000143774925019985/ex_828641.htm)</u> |
| 10.3\* | <u>[Form of Restricted Share Units Agreement (Employee) for awards entered into in April 2025](ex103nxdt-formofrsuawardag.htm)</u> |
| 10.4\* | <u>[Form of Restricted Share Units Agreement (Trustee) for awards entered into in April 2025](ex104nxdt-formofrsuagreeme.htm)</u> |
| 10.5\* | <u>[Form of Restricted Share Units Agreement (Employee) for awards entered into in June 2025 and after](ex105nxdt-formofrsuawardag.htm)</u> |
| 10.6\* | <u>[Form of Restricted Share Units Agreement (Trustee) for awards entered into in June 2025 and after](ex106nxdt-formofrsuagreeme.htm)</u> |
| 31.1\* | <u>[Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](nxdt-2025630xexx311.htm)</u> |

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| | |
|:---|:---|
| 31.2\* | <u>[Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](nxdt-2025630xexx312.htm)</u> |
| 32.1+ | <u>[Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](nxdt-2025630xexx321.htm)</u> |
| 101.INS\* | Inline XBRL Instance Document (The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document) |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

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_______________________

\*Filed herewith.

+&nbsp;&nbsp;&nbsp;&nbsp;Furnished herewith.

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<u>[**Table of Contents**](#id5fbc0fb3ee04afa9876fc107e02d4b8_7)</u>

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST** 

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| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Jim Dondero | President | August 14, 2025 |
| Jim Dondero | (Principal Executive Officer) |  |
| /s/ Paul Richards | Chief Financial Officer, Executive VP-Finance,<br>Treasurer, and Assistant Secretary | August 14, 2025 |
| Paul Richards | (Principal Financial Officer and Principal<br>Accounting Officer) |  |

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## Exhibit 10.3

**Exhibit 10.3**

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

**<u>FORM OF RESTRICTED SHARES UNITS AGREEMENT</u>**

This RESTRICTED SHARES UNITS AGREEMENT (this "***Agreement***") is made as of_______ ___, 2025, by and between NexPoint Diversified Real Estate Trust, a Delaware statutory trust (the "***Company***"), and [●] (the "***Participant***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**<u>Certain Definitions</u>**. Capitalized terms used, but not otherwise defined, in this Agreement, including Appendix A, will have the meanings given to such terms in the Company's 2023 Long Term Incentive Plan (as amended from time to time, the "***Plan***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**<u>Grant of RSUs</u>**. Subject to and upon the terms, conditions and restrictions set forth in this Agreement and in the Plan, the Company has granted to the Participant as of _______ ___, 2025 (the "***Date of Grant***") [●] Restricted Shares Units ("***RSUs***"). Each RSU shall represent the right of the Participant to receive one Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**<u>Restrictions on Transfer of RSUs</u>**. Subject to Section 16 of the Plan, neither the RSUs evidenced hereby nor any interest therein or in the Shares underlying such RSUs shall be transferable prior to payment to the Participant pursuant to **<u>Section 5</u>** hereof other than (i) by transfer by the Participant for no consideration to Immediate Family Members or to a bona fide trust, partnership or other entity controlled by and for the benefit of one or more Immediate Family Members, or (ii) by will or pursuant to the laws of descent and distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**<u>Vesting of RSUs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>General</u>. The RSUs covered by this Agreement shall become nonforfeitable and payable to the Participant pursuant to **<u>Section 5</u>** hereof ("***Vest***" or similar terms) as provided in this **<u>Section 4(a)</u>**. The RSUs covered by this Agreement shall Vest as follows, in each case, conditioned upon the Participant's Continuous Service through each such date (the period from the Date of Grant until the final Vesting date, the "***Vesting Period***"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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| | |
|:---|:---|
| (a)**Portion of RSU Vesting** | (a)**Vesting Date** |
| (a)1/__ | (a)1<sup>st</sup> anniversary of the Date of Grant |
| (a)1/__ | (a)February 15, 2027 |
| (a)[1/__ | (a)February 15, 202__] |
| (a)[1/__ | (a)February 15, 202__] |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Any RSUs that do not so Vest will be forfeited, including, except as provided in **<u>Section 4(b)</u>**<u>,</u> **<u>Section 4(c)</u>** or **<u>Section 4(d)</u>** below, if the Participant ceases to be in Continuous Service prior to the end of the Vesting Period.

&nbsp;&nbsp;&nbsp;&nbsp;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Vesting due to Death or Disability</u>. Notwithstanding **<u>Section 4(a)</u>** above, the RSUs shall Vest (to the extent the RSUs have not previously become Vested or been forfeited) prior to the end of the Vesting Period upon the date of Participant's termination of Continuous Service due to the Participant's death or Disability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Vesting due to a Termination without Cause</u>. Notwithstanding **<u>Section 4(a)</u>** above, upon the Participant's termination of Continuous Service without Cause, the portion of the RSUs that would have Vested based on the Participant's Continuous Service in the 12-month period immediately following such termination shall Vest on the 55<sup>th</sup> day following such termination, provided that by such 55<sup>th</sup> day the Participant has (i) executed a general release of claims in a form prescribed by the Company (the "***Release***") within 21 days (or such longer number of days as is necessary to comply with applicable law) following such termination and (ii) the period of time during which the Participant could revoke the executed release has lapsed and the Release has become effective and nonrevocable. If the Release is not executed, or if it is executed but is subsequently revoked, such that no effective Release exists on the 55<sup>th</sup> day following such termination of Continuous Service without Cause, the RSUs that could have Vested shall be forfeited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Treatment on a Change in Control</u>. Notwithstanding **<u>Section 4(a)</u>** above, in the event of a Change in Control that occurs prior to the end of the Vesting Period and provided that the Participant is still in Continuous Service on the date of the Change in Control, the RSUs shall become Vested and payable, if at all, in accordance with this **<u>Section 4(d)</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)Unless a Replacement Award is provided to the Participant in accordance with **<u>Section 4(d)(ii)</u>**, the RSUs shall Vest (to the extent the RSUs have not previously become Vested or been forfeited) on the date of the Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)If (A) the Company or the Company's successor replaces the outstanding award with a Replacement Award and (B) the Replacement Award requires accelerated full Vesting on a Qualifying Termination (to the extent not previously Vested or forfeited), there will be no accelerated Vesting of the Participant's Replacement Awards due solely to the Change in Control that required the outstanding award to be replaced with a Replacement Award.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)A Replacement Award shall provide that to the extent the Replacement Award vests due to a Qualifying Termination, payment will be made within 10 days following such Qualifying Termination. In order for the Replacement Awards to vest, if the Replacement Award is:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)exempt from Code Section 409A, the Qualifying Termination may occur at any point following the Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)subject to Code Section 409A, the Qualifying Termination must occur within the two years following the Change in Control for the award to vest.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**<u>Form and Time of Payment of RSUs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>General</u>. Subject to **<u>Section 4</u>** and **<u>Section 5</u>**, payment for Vested RSUs will be made in Shares within 10 days following the Vesting dates specified in **<u>Section 4(a)</u>**, **<u>4(b)</u>** and **<u>4(c)</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Other Payment Events</u>. Notwithstanding **<u>Section 5(a)</u>**, to the extent that the RSUs are Vested on the dates set forth below, payment with respect to the RSUs will be made as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Change in Control</u>. Upon a Change in Control, and if no Replacement Award is granted, the Participant is entitled to receive payment for Vested RSUs in Shares on the date of the Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>Qualifying Termination Following Change in Control</u>. With respect to Replacement Awards, within 10 days following the Participant's Qualifying Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Except to the extent permitted by Section 409A of the Code and the Committee, no Shares may be issued to the Participant at a time earlier than otherwise expressly provided in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Committee may also determine to pay for Vested RSUs in cash based on the market value of the Shares on the date of settlement. The Company's obligations to the Participant with respect to the RSUs will be satisfied in full upon the issuance of Shares corresponding to such RSUs or upon a cash payment corresponding to such RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**<u>Dividend Equivalents; Other Rights</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Participant shall have no rights of ownership in the Shares underlying the RSUs and no right to vote the Shares underlying the RSUs until the date on which the Shares underlying the RSUs are issued or transferred to the Participant pursuant to **<u>Section 5</u>** above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)From and after the Date of Grant and until the earlier of (i) the time when the RSUs become Vested and are paid in accordance with **<u>Section 5</u>** hereof or (ii) the time when the Participant's right to receive Shares in payment of the RSUs is forfeited in accordance with **<u>Section 4</u>** hereof, on the date that the Company pays a cash dividend (if any) to holders of Shares generally, the Participant shall be credited with cash per RSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including Vesting, payment and forfeitability) as apply to the RSUs in respect of which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the RSUs to which they relate are paid in Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Participant will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.**<u>Adjustments</u>**. The number of Shares issuable for each RSU and the other terms and conditions of the grant evidenced by this Agreement are subject to adjustment as provided in Section 12 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.**<u>Withholding Taxes</u>**. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with the delivery to the Participant of Shares or any other payment to the Participant or any other payment or Vesting event under this Agreement, and the amounts available to the Company for such withholding are insufficient, it shall be a condition to the obligation of the Company to make any such delivery or payment that the Participant make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld. The Participant may elect that all or any part of such withholding requirement be satisfied by retention by the Company of a portion of the Shares to be delivered to the Participant or by delivering to the Company other Shares held by the Participant. If such election is made, the Shares so retained shall be credited against such withholding requirement at the market value of such Shares on the date of such delivery. In no event will the market value of the Shares to be withheld and/or delivered pursuant to this **<u>Section 8</u>** to satisfy applicable withholding taxes exceed the minimum amount of taxes required to be withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.**<u>Compliance With Law</u>**. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; <u>provided</u>, <u>however</u>, notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue any Shares pursuant to this Agreement if the issuance thereof would result in a violation of any such law. Notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue Shares or make any payments pursuant to this Agreement if the issuance or payment thereof could impair the Company's status as a REIT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.**<u>Compliance With Section 409A of the Code</u>**. To the extent applicable, it is intended that this Agreement and the Plan comply with or be exempt from the provisions of Section 409A of the Code. This Agreement and the Plan shall be administered in a manner consistent with this intent, and any provision that would cause this Agreement or the Plan to fail to satisfy Section 409A of the Code shall have no force or effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Participant). Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.**<u>No Right to Future Awards or Employment</u>**. The grant of the RSUs under this Agreement to the Participant is a voluntary, discretionary award being made on a one-time basis, and it does not constitute a commitment to make any future awards. The grant of the RSUs and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law. Nothing contained in this Agreement shall confer upon the Participant any right to be employed or remain employed by any Company Group Member, nor limit or affect in any manner the right of any Company Group Member to terminate the employment or adjust the compensation of the Participant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.**<u>Relation to Other Benefits</u>**. Any economic or other benefit to the Participant under this Agreement or the Plan shall not be taken into account in determining any benefits to which the Participant may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company Group and shall not affect the amount of any life insurance coverage in respect of the Participant under any life insurance plan covering employees of the Company Group.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.**<u>Amendments</u>**. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; <u>provided</u>, <u>however</u>, that (a) no amendment shall adversely affect the rights of the Participant under this Agreement without the Participant's written consent, and (b) the Participant's consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code or Section 10D of the Exchange Act or to prevent impairment of the Company's status as a REIT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.**<u>Severability</u>**. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.**<u>Relation to Plan</u>**. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determine any questions which arise in connection with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.**<u>Clawback</u>**. Any award granted under this Agreement shall be subject to any clawback or recoupment policy currently in effect or as may be adopted by the Company, in each case, as may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.**<u>Electronic Delivery</u>**. The Company may, in its sole discretion, deliver any documents related to the RSUs and the Participant's participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Participant's consent to participate in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.**<u>Governing Law</u>**. This Agreement shall be governed by and construed in accordance with the internal substantive laws of the state of incorporation or formation of the Company, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.**<u>Successors and Assigns</u>**. Without limiting **<u>Section 3</u>** hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Participant, and the successors and assigns of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.**<u>Acknowledgement</u>**. The Participant acknowledges that the Participant (a) has received a copy of the Plan, (b) has had an opportunity to review the terms of this Agreement and the Plan, (c) understands the terms and conditions of this Agreement and the Plan and (d) agrees to such terms and conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.**<u>Counterparts</u>**. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

**[SIGNATURES ON FOLLOWING PAGE]**

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**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: [___]<br>Title: [____]

**Participant Acknowledgment and Acceptance** 

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:

[Signature Page to NXDT RSU Award Agreement]

AmericasActive:21030754.7

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**<u>APPENDIX A</u>**

**<u>DEFINITIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.For purposes of this Agreement, the following definitions shall apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)"***Adviser Affiliate***" means any corporation, partnership, joint venture or other entity, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the Adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)"***Cause***" means the following, unless otherwise provided in an Award Agreement: (i) a material breach by the Participant of any written agreement then in effect between the Participant and a Company Group Member, (ii) the Participant's conviction of or plea of "guilty" or "no contest" to a felony under the laws of the United States or any state thereof, (iii) gross negligence or gross misconduct by Participant with respect to any Company Group Member, (iv) Participant's abandonment of Participant's employment or service with any Company Group Member, as applicable, or (v) the Participant's willful and continued failure to substantially perform the duties associated with the Participant's position (other than any such failure resulting from the Participant's incapacity due to physical or mental illness), which failure has not been cured within thirty (30) days after a written demand for substantial performance is delivered to the Participant by the Board (or its successor or delegate), which demand specifically identifies the manner in which the Board (or its successor or delegate) believes that the Participant has not substantially performed the Participant's duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)"***Change in Control***" shall have the meaning prescribed under the Plan. Provided the RSUs are exempt from Code Section 409A, the definition of Change in Control for purposes of this Agreement shall include, in addition to the events listed under the Plan, the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)any Person becomes a "***Beneficial Owner***" (as such term is defined in the Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of either (A) 50% or more of the then-outstanding general or limited partnership interests of the Adviser ("***Adviser Interests***"), (B) 50% or more of the then-outstanding membership interests of NexPoint Real Estate Advisors X GP, LLC (the "***Adviser GP***") ("***Adviser GP Interests***"), (C) 50% or more of the then outstanding general or limited partnership interests of NexPoint Advisors, L.P. (the "***Adviser Parent***") ("***Adviser Parent Interests***") or (D) 50% or more of the then-outstanding membership interests of NexPoint Advisors GP, LLC (the "***Adviser Parent GP***") ("***Adviser Parent GP Interests***"); *provided*, *however*, that for purposes of this subsection (i), the following acquisitions of Adviser Interests, Adviser GP Interests, Adviser Parent Interests or Adviser Parent GP Interests shall not constitute a Change in Control: (W) an acquisition directly from the Adviser, the Adviser GP, the Adviser Parent or the Adviser Parent GP, respectively, (X) an acquisition by the Adviser or an Adviser Affiliate, (Y) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Adviser or any Adviser Affiliate, or (Z) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (ii) below);

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Adviser, the Adviser GP, the Adviser Parent or the Adviser GP (an "***Adviser Reorganization***"), or the sale or other disposition of all or substantially all of the Adviser's, the Adviser GP's, the Adviser Parent's or the Adviser GP's assets (an "***Adviser Sale***") or the acquisition of assets or stock of another corporation or other entity (an "***Adviser Acquisition***"), unless immediately following such Adviser Reorganization, Adviser Sale or Adviser Acquisition: (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Adviser Interests, Adviser GP Interests, Adviser Parent Interests or Adviser Parent GP Interests, as applicable, immediately prior to such Adviser Reorganization, Adviser Sale or Adviser Acquisition beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding equity and the combined voting power of the then outstanding voting securities entitled to vote generally, as the case may be, of the entity resulting from such Adviser Reorganization, Adviser Sale or Adviser Acquisition (including, without limitation, an entity which as a result of such transaction owns the Adviser, the Adviser GP, the Adviser Parent or the Adviser Parent GP, as applicable, or all or substantially all of the Adviser's, the Adviser GP's, the Adviser Parent's or the Adviser Parent GP's, as applicable, assets or stock either directly or through one or more subsidiaries) (the "***Adviser Surviving Entity***") in substantially the same proportions as their ownership, immediately prior to such Adviser Reorganization, Adviser Sale or Adviser Acquisition, of the outstanding Adviser Interests, Adviser GP Interests, Adviser Parent Interests or Adviser Parent GP Interests, as the case may be, and (B) no Person (other than (X) the Adviser or any Adviser Affiliate, (Y) the Adviser Surviving Entity or its ultimate parent entity, or (Z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 50% or more of the total equity or 50% or more of the total voting power of the outstanding voting securities of the Adviser Surviving Entity (any Adviser Reorganization, Adviser Sale or Adviser Acquisition which satisfies all of the criteria specified in (A) and (B) above shall be deemed to be a "***Non-Qualifying Transaction***"); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)approval by the partners or members, as applicable, of the Adviser, the Adviser GP, Adviser Parent, or the Adviser Parent GP of a complete liquidation or dissolution of the Adviser, Adviser GP, Adviser Parent or Adviser Parent GP.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)"***Company Group***" means (i) the Company, (ii) the Affiliates (including the Adviser), (iii) Adviser Affiliates and (iv) as applicable, any of their successors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)"***Company Group Member***" means a member of the Company Group or its successor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)"***Continuous Service***" means that the Participant's service with the Company Group, whether as an employee, Trustee, consultant, general partner, officer or advisor is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company Group as an employee, Trustee, consultant, general partner, officer or advisor or a change in the Company Group Member for which the Participant renders such service, provided that there is no

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interruption or termination of the Participant's service with the Company Group, will not terminate a Participant's Continuous Service; provided, however, that if the Company Group Member for which a Participant is rendering services ceases to qualify as an Affiliate or an Adviser Affiliate, as determined by the Committee, such Participant's Continuous Service will be considered to have terminated on the date such Company Group Member ceases to qualify as an Affiliate or an Adviser Affiliate, unless the Participant is in Continuous Service with another Company Group Member. For example, a change in status from an employee of the Company to a consultant of an Affiliate or to a Trustee will not constitute an interruption of Continuous Service. To the extent permitted by law, the Committee or the chief executive officer of the Company, in that party's sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Committee or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between Company Group Members or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an award under the Plan only to such extent as may be provided in the applicable Company Group Member's leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law. In addition, to the extent required for exemption from or compliance with Section 409A of the Code, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of "separation from service" as defined under Treasury Regulation Section 1.409A-1(h) (without regard to any alternative definition thereunder).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)"***Disability***" means a medically determinable physical or mental impairment expected to result in death or to continue for a period of not less than 12 months that causes the Participant to be unable to engage in any substantial gainful activity.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)"***Good Reason***" means, unless otherwise provided in an Award Agreement, any of the following without the Participant's written consent: (i) a material diminution in the Participant's duties or responsibilities; (ii) a material reduction in the aggregate value of base salary and bonus opportunity provided to the Participant by the Company Group immediately before the material reduction; or (iii) a reassignment of the Participant to another primary office more than 50 miles from the Participant's current office location. Such event shall constitute Good Reason only to the extent the following conditions are satisfied: the Participant must (x) notify the Company Group of the Participant's intention to invoke termination of Continuous Service for Good Reason within 90 days after the Participant has knowledge of such event, (y) provide, as applicable, the Company Group 30 days' opportunity for cure (the "***Cure Period***"), and (z) terminate Participant's Continuous Service within 30 days following the end of the Cure Period. The Participant may not invoke termination of Continuous Service for Good Reason if Cause exists at the time of such termination of Continuous Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)"***Qualifying Termination***" means the termination of a Participant's Continuous Service (i) by the Company Group (including a successor) without Cause or (ii) by Participant for Good Reason.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)"***Replaced Award***" means an award that is continued, replaced or assumed following a Change in Control.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)"***Replacement Award***" means an award (i) of the same type (*e.g.*, time-based restricted share units for time-based restricted share units) as the Replaced Award, (B) that has a value at least equal to the value of the Replaced Award, (C) that relates to publicly traded equity securities of the Company or its successor in the Change in Control or another entity that is affiliated with the Company or its successor following the Change in Control, (D) the tax consequences of which to such Participant under the Code are not less favorable to such Participant than the tax consequences of the Replaced Award, and (E) the other terms and conditions of which are not less favorable to the Participant than the terms and conditions of the Replaced Award (including the provisions that would apply in the event of a subsequent Change in Control). A Replacement Award may be granted only to the extent it does not result in the Replaced Award or Replacement Award failing to comply with or be exempt from Section 409A of the Code. Without limiting the generality of the foregoing, the Replacement Award may take the form of a continuation of the Replaced Award if the requirements of the two preceding sentences are satisfied. The determination of whether an award is a Replacement Award shall be made in the sole discretion of the Committee, as constituted immediately before the Change in Control.

## Exhibit 10.4

**Exhibit 10.4**

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

**<u>FORM OF RESTRICTED SHARES UNITS AGREEMENT (Trustee)</u>**

This RESTRICTED SHARES UNITS AGREEMENT (this "<u>Agreement</u>") is made as of _______, 20__, by and between NexPoint Diversified Real Estate Trust, a Delaware statutory trust (the "<u>Company</u>"), and __________ (the "<u>Participant</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**<u>Certain Definitions</u>**. Capitalized terms used, but not otherwise defined, in this Agreement, including Appendix A, will have the meanings given to such terms in the Company's 2023 Long Term Incentive Plan (as amended from time to time, the "<u>Plan</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**<u>Grant of RSUs</u>**. Subject to and upon the terms, conditions and restrictions set forth in this Agreement and in the Plan, the Company has granted to the Participant as of _______, 20__ (the "<u>Date of Grant</u>") _______ Restricted Shares Units ("<u>RSUs</u>"). Each RSU shall represent the right of the Participant to receive one Share subject to and upon the terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**<u>Restrictions on Transfer of RSUs</u>**. Subject to Section 16 of the Plan, neither the RSUs evidenced hereby nor any interest therein or in the Shares underlying such RSUs shall be transferable prior to payment to the Participant pursuant to <u>Section 5</u> hereof other than (i) by transfer by the Participant for no consideration to Immediate Family Members or to a bona fide trust, partnership or other entity controlled by and for the benefit of one or more Immediate Family Members, or (ii) by will or pursuant to the laws of descent and distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**<u>Vesting of RSUs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>General</u>. The RSUs covered by this Agreement shall become nonforfeitable and payable to the Participant pursuant to <u>Section 5</u> hereof ("<u>Vest</u>," or similar terms), on the first anniversary of the Date of Grant, conditioned upon the Participant's Continuous Service on the Board through such date (the period from the Date of Grant until the first anniversary of the Date of Grant, the "<u>Vesting Period</u>"). Any RSUs that do not so Vest will be forfeited, including, except as provided in <u>Section 4(b)</u> or <u>Section 4(c)</u> below, if the Participant ceases to be in Continuous Service prior to the end of the Vesting Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Vesting due to Death or Disability</u>. Notwithstanding <u>Section 4(a)</u> above, the RSUs shall Vest (to the extent the RSUs have not previously become Vested or been forfeited) prior to the end of the Vesting Period upon the date of Participant's termination of Continuous Service due to the Participant's death or Disability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Treatment on a Change in Control</u>. Notwithstanding <u>Section 4(a)</u> above, in the event of a Change in Control that occurs prior to the end of the Vesting Period and provided that the Participant is still in Continuous Service on the date of the Change in Control, the RSUs shall Vest (to the extent the RSUs have not previously become Vested or been forfeited) on the date of the Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**<u>Form and Time of Payment of RSUs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Payment for the RSUs, after and to the extent they have become Vested, shall be made in the form of Shares. Payment shall be made as soon as administratively practicable following (but no later than thirty (30) days following) the date that the RSUs become Vested pursuant to <u>Section 4(a)</u>, <u>4(b)</u> and <u>4(c)</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Except to the extent permitted by Section 409A of the Code and the Committee, no Shares may be issued to the Participant at a time earlier than otherwise expressly provided in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Committee may also determine to pay for Vested RSUs in cash based on the market value of the Shares on the date of settlement. The Company's obligations to the Participant with respect to the RSUs will be satisfied in full upon the issuance of Shares corresponding to such RSUs or upon a cash payment corresponding to such RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**<u>Dividend Equivalents; Other Rights</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Participant shall have no rights of ownership in the Shares underlying the RSUs and no right to vote the Shares underlying the RSUs until the date on which the Shares underlying the RSUs are issued or transferred to the Participant pursuant to <u>Section 5</u> above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)From and after the Date of Grant and until the earlier of (i) the time when the RSUs become Vested and are paid in accordance with <u>Section 5</u> hereof or (ii) the time when the Participant's right to receive Shares in payment of the RSUs is forfeited in accordance with <u>Section 4</u> hereof, on the date that the Company pays a cash dividend (if any) to holders of Shares generally, the Participant shall be credited with cash per RSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including Vesting, payment and forfeitability) as apply to the RSUs in respect of which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the RSUs to which they relate are paid in Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Participant will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.**<u>Adjustments</u>**. The number of Shares issuable for each RSU and the other terms and conditions of the grant evidenced by this Agreement are subject to adjustment as provided in Section 12 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.**<u>Taxes</u>**. The Participant will be solely responsible for the payment of all taxes that arise with respect to the granting and payment of the RSUs, including the payment of any Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.**<u>Compliance With Law</u>**. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; <u>provided</u>, <u>however</u>, notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue any Shares pursuant to this Agreement if the issuance thereof would result in a violation of any such law. Notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue Shares or make any payments pursuant to this Agreement if the issuance or payment thereof could impair the Company's status as a REIT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.**<u>Compliance With Section 409A of the Code</u>**. To the extent applicable, it is intended that this Agreement and the Plan comply with or be exempt from the provisions of Section 409A of the Code. This Agreement and the Plan shall be administered in a manner consistent with this intent, and any provision that would cause this Agreement or the Plan to fail to satisfy Section 409A of the Code shall have no force or effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the

&nbsp;&nbsp;&nbsp;&nbsp;

------

Participant). Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.**<u>No Right to Future Awards or Board Membership</u>**. The grant of the RSUs under this Agreement to the Participant is a voluntary, discretionary award being made on a one-time basis, and it does not constitute a commitment to make any future awards. Nothing contained in this Agreement shall confer upon the Participant any right to continued service as a member of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.**<u>Amendments</u>**. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; <u>provided</u>, <u>however</u>, that (a) no amendment shall adversely affect the rights of the Participant under this Agreement without the Participant's written consent, and (b) the Participant's consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code or Section 10D of the Exchange Act or to prevent impairment of the Company's status as a REIT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.**<u>Severability</u>**. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.**<u>Relation to Plan</u>**. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determine any questions which arise in connection with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.**<u>Electronic Delivery</u>**. The Company may, in its sole discretion, deliver any documents related to the RSUs and the Participant's participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Participant's consent to participate in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.**<u>Governing Law</u>.** This Agreement shall be governed by and construed in accordance with the internal substantive laws of the state of incorporation or formation of the Company, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.**<u>Clawback</u>**. Any award granted under this Agreement shall be subject to any clawback or recoupment policy currently in effect or as may be adopted by the Company, in each case, as may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.**<u>Successors and Assigns</u>**. Without limiting <u>Section 3</u> hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Participant, and the successors and assigns of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.**<u>Acknowledgement</u>**. The Participant acknowledges that the Participant (a) has received a copy of the Plan, (b) has had an opportunity to review the terms of this Agreement

&nbsp;&nbsp;&nbsp;&nbsp;

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and the Plan, (c) understands the terms and conditions of this Agreement and the Plan and (d) agrees to such terms and conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.**<u>Counterparts</u>**. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

**[SIGNATURES ON FOLLOWING PAGE]**

&nbsp;&nbsp;&nbsp;&nbsp;

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**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: <br>Title:

**Participant Acknowledgment and Acceptance** 

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:

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**<u>APPENDIX A</u>**

**<u>DEFINITIONS</u>**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.For purposes of this Agreement, the following definitions shall apply:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)"<u>Adviser Affiliate</u>" means any corporation, partnership, joint venture or other entity, directly or indirectly, through one or more intermediaries, controlling, controlled by, or under common control with the Adviser.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)"<u>Company Group</u>" means (i) the Company, (ii) the Affiliates (including the Adviser), (iii) Adviser Affiliates and (iv) as applicable, any of their successors.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)"<u>Company Group Member</u>" means a member of the Company Group or its successor.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)"<u>Continuous Service</u>" means that the Participant's service with the Company Group, whether as an employee, Trustee, consultant, general partner, officer or advisor is not interrupted or terminated. A change in the capacity in which the Participant renders service to the Company Group as an employee, Trustee, consultant, general partner, officer or advisor or a change in the Company Group Member for which the Participant renders such service, provided that there is no interruption or termination of the Participant's service with the Company Group, will not terminate a Participant's Continuous Service; provided, however, that if the Company Group Member for which a Participant is rendering services ceases to qualify as an Affiliate or an Adviser Affiliate, as determined by the Committee, such Participant's Continuous Service will be considered to have terminated on the date such Company Group Member ceases to qualify as an Affiliate or an Adviser Affiliate, unless the Participant is in Continuous Service with another Company Group Member. For example, a change in status from an employee of the Company to a consultant of an Affiliate or to a Trustee will not constitute an interruption of Continuous Service. To the extent permitted by law, the Committee or the chief executive officer of the Company, in that party's sole discretion, may determine whether Continuous Service will be considered interrupted in the case of (i) any leave of absence approved by the Committee or chief executive officer, including sick leave, military leave or any other personal leave, or (ii) transfers between Company Group Members or their successors. Notwithstanding the foregoing, a leave of absence will be treated as Continuous Service for purposes of vesting in an award under the Plan only to such extent as may be provided in the applicable Company Group Member's leave of absence policy, in the written terms of any leave of absence agreement or policy applicable to the Participant, or as otherwise required by law. In addition, to the extent required for exemption from or compliance with Section 409A of the Code, the determination of whether there has been a termination of Continuous Service will be made, and such term will be construed, in a manner that is consistent with the definition of "separation from service" as defined under Treasury Regulation Section 1.409A-1(h) (without regard to any alternative definition thereunder).

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)"<u>Disability</u>" means a medically determinable physical or mental impairment expected to result in death or to continue for a period of not less than 12 months that causes the Participant to be unable to engage in any substantial gainful activity.

AmericasActive:21023485.4

## Exhibit 10.5

**Exhibit 10.5**

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

**<u>FORM OF RESTRICTED SHARE UNITS AGREEMENT</u>**

This RESTRICTED SHARE UNITS AGREEMENT (this "***Agreement***") is made as of June ___, 2025, by and between NexPoint Diversified Real Estate Trust, a Delaware statutory trust (the "***Company***"), and [●] (the "***Participant***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**<u>Certain Definitions</u>**. Capitalized terms used, but not otherwise defined, in this Agreement will have the meanings given to such terms in the Company's 2023 Long Term Incentive Plan (as amended from time to time, the "***Plan***").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**<u>Grant of RSUs</u>**. Subject to and upon the terms, conditions and restrictions set forth in this Agreement and in the Plan, the Company has granted to the Participant as of _____, 20__ (the "***Date of Grant***") [●] Restricted Share Units ("***RSUs***"). Each RSU shall represent the right of the Participant to receive one Share.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**<u>Restrictions on Transfer of RSUs</u>**. Subject to Section 16 of the Plan, neither the RSUs evidenced hereby nor any interest therein or in the Shares underlying such RSUs shall be transferable prior to payment to the Participant pursuant to **<u>Section 5</u>** hereof other than (i) by transfer by the Participant for no consideration to Immediate Family Members or to a bona fide trust, partnership or other entity controlled by and for the benefit of one or more Immediate Family Members, or (ii) by will or pursuant to the laws of descent and distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**<u>Vesting of RSUs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>General</u>. The RSUs covered by this Agreement shall become nonforfeitable and payable to the Participant pursuant to **<u>Section 5</u>** hereof ("***Vest***" or similar terms) as provided in this **<u>Section 4(a)</u>**. The RSUs covered by this Agreement shall Vest as follows, in each case, conditioned upon the Participant's Continuous Service through each such date (the period from the Date of Grant until the final Vesting date, the "***Vesting Period***"):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;

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| | |
|:---|:---|
| (a)**Portion of RSU Vesting** | (a)**Vesting Date** |
| (a)1/__ | (a)1<sup>st</sup> anniversary of the Date of Grant |
| (a)1/__ | (a)February 15, 2027 |
| (a)[1/__ | (a)February 15, 202__] |
| (a)[1/__ | (a)February 15, 202__] |

---

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Any RSUs that do not so Vest will be forfeited, including, except as provided in **<u>Section 4(b)</u>**<u>,</u> **<u>Section 4(c)</u>** or **<u>Section 4(d)</u>** below, if the

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Participant ceases to be in Continuous Service prior to the end of the Vesting Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)<u>Vesting due to Death or Disability</u>. Notwithstanding **<u>Section 4(a)</u>** above, the RSUs shall Vest (to the extent the RSUs have not previously become Vested or been forfeited) prior to the end of the Vesting Period upon the date of Participant's termination of Continuous Service due to the Participant's death or Disability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)<u>Vesting due to a Termination without Cause</u>. Notwithstanding **<u>Section 4(a)</u>** above, upon the Participant's termination of Continuous Service without Cause, the portion of the RSUs that would have Vested based on the Participant's Continuous Service in the 12-month period immediately following such termination shall Vest on the 55<sup>th</sup> day following such termination, provided that by such 55<sup>th</sup> day the Participant has (i) executed a general release of claims in a form prescribed by the Company (the "***Release***") within 21 days (or such longer number of days as is necessary to comply with applicable law) following such termination and (ii) the period of time during which the Participant could revoke the executed release has lapsed and the Release has become effective and nonrevocable. If the Release is not executed, or if it is executed but is subsequently revoked, such that no effective Release exists on the 55<sup>th</sup> day following such termination of Continuous Service without Cause, the RSUs that could have Vested shall be forfeited.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)<u>Treatment on a Change in Control</u>. Notwithstanding **<u>Section 4(a)</u>** above, in the event of a Change in Control that occurs prior to the end of the Vesting Period and provided that the Participant is still in Continuous Service on the date of the Change in Control, the RSUs shall Vest (to the extent the RSUs have not previously become Vested or been forfeited) or be converted into Replacement Awards eligible for accelerated vesting on a Qualifying Termination, as prescribed in Section 13 of the Plan. Provided the RSUs are exempt from Code Section 409A, the definition of Change in Control for purposes of this Agreement shall include, in addition to the events listed under the Plan, the occurrence of any of the following events:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)any Person becomes a Beneficial Owner (as such term is defined in the Rule 13d-3 of the General Rules and Regulations under the Exchange Act), directly or indirectly, of either (A) 50% or more of the then-outstanding general or limited partnership interests of the Adviser ("***Adviser Interests***"), (B) 50% or more of the then-outstanding membership interests of NexPoint Real Estate Advisors X GP, LLC (the "***Adviser GP***") ("***Adviser GP Interests***"), (C) 50% or more of the then outstanding general or limited partnership interests of NexPoint Advisors, L.P. (the "***Adviser Parent***") ("***Adviser Parent Interests***") or (D) 50% or more of the then-outstanding membership interests of NexPoint Advisors GP, LLC (the "***Adviser Parent GP***") ("***Adviser Parent GP Interests***"); provided, however, that for purposes of this subsection (i), the following acquisitions of Adviser Interests, Adviser GP Interests, Adviser Parent Interests or Adviser Parent GP Interests shall not constitute a Change in Control: (W) an acquisition directly from the Adviser, the Adviser GP, the Adviser Parent or the Adviser Parent

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GP, respectively, (X) an acquisition by the Adviser or an Adviser Affiliate, (Y) an acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Adviser or any Adviser Affiliate, or (Z) an acquisition pursuant to a Non-Qualifying Transaction (as defined in subsection (ii) below);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)the consummation of a reorganization, merger, consolidation, statutory share exchange or similar form of corporate transaction involving the Adviser, the Adviser GP, the Adviser Parent or the Adviser GP (an "***Adviser Reorganization***"), or the sale or other disposition of all or substantially all of the Adviser's, the Adviser GP's, the Adviser Parent's or the Adviser GP's assets (an "***Adviser Sale***") or the acquisition of assets or stock of another corporation or other entity (an "***Adviser Acquisition***"), unless immediately following such Adviser Reorganization, Adviser Sale or Adviser Acquisition: (A) all or substantially all of the individuals and entities who were the Beneficial Owners, respectively, of the Adviser Interests, Adviser GP Interests, Adviser Parent Interests or Adviser Parent GP Interests, as applicable, immediately prior to such Adviser Reorganization, Adviser Sale or Adviser Acquisition beneficially own, directly or indirectly, more than 50% of, respectively, the then outstanding equity and the combined voting power of the then outstanding voting securities entitled to vote generally, as the case may be, of the entity resulting from such Adviser Reorganization, Adviser Sale or Adviser Acquisition (including, without limitation, an entity which as a result of such transaction owns the Adviser, the Adviser GP, the Adviser Parent or the Adviser Parent GP, as applicable, or all or substantially all of the Adviser's, the Adviser GP's, the Adviser Parent's or the Adviser Parent GP's, as applicable, assets or stock either directly or through one or more subsidiaries) (the "***Adviser Surviving Entity***") in substantially the same proportions as their ownership, immediately prior to such Adviser Reorganization, Adviser Sale or Adviser Acquisition, of the outstanding Adviser Interests, Adviser GP Interests, Adviser Parent Interests or Adviser Parent GP Interests, as the case may be, and (B) no Person (other than (X) the Adviser or any Adviser Affiliate, (Y) the Adviser Surviving Entity or its ultimate parent entity, or (Z) any employee benefit plan (or related trust) sponsored or maintained by any of the foregoing) is the Beneficial Owner, directly or indirectly, of 50% or more of the total equity or 50% or more of the total voting power of the outstanding voting securities of the Adviser Surviving Entity (any Adviser Reorganization, Adviser Sale or Adviser Acquisition which satisfies all of the criteria specified in (A) and (B) above shall be deemed to be a "***Non-Qualifying Transaction***"); or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii)approval by the partners or members, as applicable, of the Adviser, the Adviser GP, Adviser Parent, or the Adviser Parent GP of a complete liquidation or dissolution of the Adviser, Adviser GP, Adviser Parent or Adviser Parent GP.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**<u>Form and Time of Payment of RSUs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>General</u>. Subject to **<u>Section 4</u>** and **<u>Section 5</u>**, payment for Vested RSUs will be made in Shares within 10 days following the Vesting dates specified in **<u>Section 4(a)</u>**, **<u>4(b)</u>** and **<u>4(c)</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Other Payment Events</u>. Notwithstanding **<u>Section 5(a)</u>**, to the extent that the RSUs are Vested on the dates set forth below, payment with respect to the RSUs will be made as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)<u>Change in Control</u>. Upon a Change in Control, and if no Replacement Award is granted, the Participant is entitled to receive payment for Vested RSUs in Shares on the date of the Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii)<u>Qualifying Termination Following Change in Control</u>. With respect to Replacement Awards, within 10 days following the Participant's Qualifying Termination.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Except to the extent permitted by Section 409A of the Code and the Committee, no Shares may be issued to the Participant at a time earlier than otherwise expressly provided in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Committee may also determine to pay for Vested RSUs in cash based on the market value of the Shares on the date of settlement. The Company's obligations to the Participant with respect to the RSUs will be satisfied in full upon the issuance of Shares corresponding to such RSUs or upon a cash payment corresponding to such RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**<u>Dividend Equivalents; Other Rights</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Participant shall have no rights of ownership in the Shares underlying the RSUs and no right to vote the Shares underlying the RSUs until the date on which the Shares underlying the RSUs are issued or transferred to the Participant pursuant to **<u>Section 5</u>** above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)From and after the Date of Grant and until the earlier of (i) the time when the RSUs become Vested and are paid in accordance with **<u>Section 5</u>** hereof or (ii) the time when the Participant's right to receive Shares in payment of the RSUs is forfeited in accordance with **<u>Section 4</u>** hereof, on the date that the Company pays a cash dividend (if any) to holders of Shares generally, the Participant shall be credited with cash per RSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including Vesting, payment and forfeitability) as apply to the RSUs in respect of which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the RSUs to which they relate are paid in Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Participant will be no greater than that of an unsecured general creditor. No assets of the Company will be held or

------

set aside as security for the obligations of the Company under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.**<u>Adjustments</u>**. The number of Shares issuable for each RSU and the other terms and conditions of the grant evidenced by this Agreement are subject to adjustment as provided in Section 12 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.**<u>Withholding Taxes</u>**. To the extent that the Company is required to withhold federal, state, local or foreign taxes in connection with the delivery to the Participant of Shares or any other payment to the Participant or any other payment or Vesting event under this Agreement, and the amounts available to the Company for such withholding are insufficient, it shall be a condition to the obligation of the Company to make any such delivery or payment that the Participant make arrangements satisfactory to the Company for payment of the balance of such taxes required to be withheld. The Participant may elect that all or any part of such withholding requirement be satisfied by retention by the Company of a portion of the Shares to be delivered to the Participant or by delivering to the Company other Shares held by the Participant. If such election is made, the Shares so retained shall be credited against such withholding requirement at the market value of such Shares on the date of such delivery. In no event will the market value of the Shares to be withheld and/or delivered pursuant to this **<u>Section 8</u>** to satisfy applicable withholding taxes exceed the minimum amount of taxes required to be withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.**<u>Compliance With Law</u>**. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; <u>provided</u>, <u>however</u>, notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue any Shares pursuant to this Agreement if the issuance thereof would result in a violation of any such law. Notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue Shares or make any payments pursuant to this Agreement if the issuance or payment thereof could impair the Company's status as a REIT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.**<u>Compliance With Section 409A of the Code</u>**. To the extent applicable, it is intended that this Agreement and the Plan comply with or be exempt from the provisions of Section 409A of the Code. This Agreement and the Plan shall be administered in a manner consistent with this intent, and any provision that would cause this Agreement or the Plan to fail to satisfy Section 409A of the Code shall have no force or effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the Participant). Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.**<u>No Right to Future Awards or Employment</u>**. The grant of the RSUs under this Agreement to the Participant is a voluntary, discretionary award being made on a one-time basis, and it does not constitute a commitment to make any future awards. The grant of the RSUs and any payments made hereunder will not be considered salary or other compensation for purposes of any severance pay or similar allowance, except as otherwise required by law. Nothing contained in this Agreement shall confer upon the Participant any right to be employed or remain employed by any Company Group Member, nor limit or affect in any manner the right of any Company Group Member to terminate the employment or adjust the compensation of the Participant.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.**<u>Relation to Other Benefits</u>**. Any economic or other benefit to the Participant under this Agreement or the Plan shall not be taken into account in determining any benefits to which the Participant may be entitled under any profit-sharing, retirement or other benefit or compensation plan maintained by the Company Group and shall not affect the amount of any life insurance coverage in respect of the Participant under any life insurance plan covering employees of the Company Group.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.**<u>Amendments</u>**. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; <u>provided</u>, <u>however</u>, that (a) no amendment shall adversely affect the rights of the Participant under this Agreement without the Participant's written consent, and (b) the Participant's consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code or Section 10D of the Exchange Act or to prevent impairment of the Company's status as a REIT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.**<u>Severability</u>**. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.**<u>Relation to Plan</u>**. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determine any questions which arise in connection with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.**<u>Clawback</u>**. Any award granted under this Agreement shall be subject to any clawback or recoupment policy currently in effect or as may be adopted by the Company, in each case, as may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.**<u>Electronic Delivery</u>**. The Company may, in its sole discretion, deliver any documents related to the RSUs and the Participant's participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Participant's consent to participate in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.**<u>Governing Law</u>**. This Agreement shall be governed by and construed in accordance with the internal substantive laws of the state of incorporation or formation of the Company, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.**<u>Successors and Assigns</u>**. Without limiting **<u>Section 3</u>** hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Participant, and the successors and assigns of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.**<u>Acknowledgement</u>**. The Participant acknowledges that the Participant (a) has received a copy of the Plan, (b) has had an opportunity to review the terms of this Agreement and the Plan, (c) understands the terms and conditions of this Agreement and the Plan and (d) agrees to such terms and conditions.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;21.**<u>Counterparts</u>**. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

**[SIGNATURES ON FOLLOWING PAGE]**

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**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: [___]<br>Title: [____]

**Participant Acknowledgment and Acceptance** 

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <br>

## Exhibit 10.6

**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

**<u>FORM OF RESTRICTED SHARE UNITS AGREEMENT (Trustee)</u>**

This RESTRICTED SHARES UNIT AGREEMENT (this "<u>Agreement</u>") is made as of June ___, 2025, by and between NexPoint Diversified Real Estate Trust, a Delaware statutory trust (the "<u>Company</u>"), and __________ (the "<u>Participant</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**<u>Certain Definitions</u>**. Capitalized terms used, but not otherwise defined, in this Agreement will have the meanings given to such terms in the Company's 2023 Long Term Incentive Plan (as amended from time to time, the "<u>Plan</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**<u>Grant of RSUs</u>**. Subject to and upon the terms, conditions and restrictions set forth in this Agreement and in the Plan, the Company has granted to the Participant as of _____, 20__ (the "<u>Date of Grant</u>") [●] Restricted Share Units ("<u>RSUs</u>"). Each RSU shall represent the right of the Participant to receive one Share subject to and upon the terms and conditions of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**<u>Restrictions on Transfer of RSUs</u>**. Subject to Section 16 of the Plan, neither the RSUs evidenced hereby nor any interest therein or in the Shares underlying such RSUs shall be transferable prior to payment to the Participant pursuant to <u>Section 5</u> hereof other than (i) by transfer by the Participant for no consideration to Immediate Family Members or to a bona fide trust, partnership or other entity controlled by and for the benefit of one or more Immediate Family Members, or (ii) by will or pursuant to the laws of descent and distribution.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**<u>Vesting of RSUs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)<u>General</u>. The RSUs covered by this Agreement shall become nonforfeitable and payable to the Participant pursuant to <u>Section 5</u> hereof ("<u>Vest</u>," or similar terms), on the first anniversary of the Date of Grant, conditioned upon the Participant's Continuous Service on the Board through such date (the period from the Date of Grant until the first anniversary of the Date of Grant, the "<u>Vesting Period</u>"). Any RSUs that do not so Vest will be forfeited, including, except as provided in <u>Section 4(b)</u> or <u>Section 4(c)</u> below, if the Participant ceases to be in Continuous Service prior to the end of the Vesting Period.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)<u>Vesting due to Death or Disability</u>. Notwithstanding <u>Section 4(a)</u> above, the RSUs shall Vest (to the extent the RSUs have not previously become Vested or been forfeited) prior to the end of the Vesting Period upon the date of Participant's termination of Continuous Service due to the Participant's death or Disability.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)<u>Treatment on a Change in Control</u>. Notwithstanding <u>Section 4(a)</u> above, in the event of a Change in Control that occurs prior to the end of the Vesting Period and provided that the Participant is still in Continuous Service on the date of the Change in Control, the RSUs shall Vest (to the extent the RSUs have not previously become Vested or been forfeited) on the date of the Change in Control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.**<u>Form and Time of Payment of RSUs</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Payment for the RSUs, after and to the extent they have become Vested, shall be made in the form of Shares. Payment shall be made as soon as administratively practicable following (but no later than thirty (30) days following) the date that the RSUs become Vested pursuant to <u>Section 4(a)</u>, <u>4(b)</u> and <u>4(c)</u> hereof.

&nbsp;&nbsp;&nbsp;&nbsp;

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Except to the extent permitted by Section 409A of the Code and the Committee, no Shares may be issued to the Participant at a time earlier than otherwise expressly provided in this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Committee may also determine to pay for Vested RSUs in cash based on the market value of the Shares on the date of settlement. The Company's obligations to the Participant with respect to the RSUs will be satisfied in full upon the issuance of Shares corresponding to such RSUs or upon a cash payment corresponding to such RSUs.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**<u>Dividend Equivalents; Other Rights</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Participant shall have no rights of ownership in the Shares underlying the RSUs and no right to vote the Shares underlying the RSUs until the date on which the Shares underlying the RSUs are issued or transferred to the Participant pursuant to <u>Section 5</u> above.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)From and after the Date of Grant and until the earlier of (i) the time when the RSUs become Vested and are paid in accordance with <u>Section 5</u> hereof or (ii) the time when the Participant's right to receive Shares in payment of the RSUs is forfeited in accordance with <u>Section 4</u> hereof, on the date that the Company pays a cash dividend (if any) to holders of Shares generally, the Participant shall be credited with cash per RSU equal to the amount of such dividend. Any amounts credited pursuant to the immediately preceding sentence shall be subject to the same applicable terms and conditions (including Vesting, payment and forfeitability) as apply to the RSUs in respect of which the dividend equivalents were credited, and such amounts shall be paid in cash at the same time as the RSUs to which they relate are paid in Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The obligations of the Company under this Agreement will be merely that of an unfunded and unsecured promise of the Company to deliver Shares in the future, and the rights of the Participant will be no greater than that of an unsecured general creditor. No assets of the Company will be held or set aside as security for the obligations of the Company under this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.**<u>Adjustments</u>**. The number of Shares issuable for each RSU and the other terms and conditions of the grant evidenced by this Agreement are subject to adjustment as provided in Section 12 of the Plan.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.**<u>Taxes</u>**. The Participant will be solely responsible for the payment of all taxes that arise with respect to the granting and payment of the RSUs, including the payment of any Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.**<u>Compliance With Law</u>**. The Company shall make reasonable efforts to comply with all applicable federal and state securities laws; <u>provided</u>, <u>however</u>, notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue any Shares pursuant to this Agreement if the issuance thereof would result in a violation of any such law. Notwithstanding any other provision of the Plan and this Agreement, the Company shall not be obligated to issue Shares or make any payments pursuant to this Agreement if the issuance or payment thereof could impair the Company's status as a REIT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.**<u>Compliance With Section 409A of the Code</u>**. To the extent applicable, it is intended that this Agreement and the Plan comply with or be exempt from the provisions of Section 409A of the Code. This Agreement and the Plan shall be administered in a manner consistent with this intent, and any provision that would cause this Agreement or the Plan to fail to satisfy Section 409A of the Code shall have no force or effect until amended to comply with Section 409A of the Code (which amendment may be retroactive to the extent permitted by Section 409A of the Code and may be made by the Company without the consent of the

&nbsp;&nbsp;&nbsp;&nbsp;

------

Participant). Any reference in this Agreement to Section 409A of the Code will also include any proposed, temporary or final regulations, or any other guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the Internal Revenue Service.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.**<u>No Right to Future Awards or Board Membership</u>**. The grant of the RSUs under this Agreement to the Participant is a voluntary, discretionary award being made on a one-time basis, and it does not constitute a commitment to make any future awards. Nothing contained in this Agreement shall confer upon the Participant any right to continued service as a member of the Board.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.**<u>Amendments</u>**. Any amendment to the Plan shall be deemed to be an amendment to this Agreement to the extent that the amendment is applicable hereto; <u>provided</u>, <u>however</u>, that (a) no amendment shall adversely affect the rights of the Participant under this Agreement without the Participant's written consent, and (b) the Participant's consent shall not be required to an amendment that is deemed necessary by the Company to ensure compliance with Section 409A of the Code or Section 10D of the Exchange Act or to prevent impairment of the Company's status as a REIT.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.**<u>Severability</u>**. In the event that one or more of the provisions of this Agreement shall be invalidated for any reason by a court of competent jurisdiction, any provision so invalidated shall be deemed to be separable from the other provisions hereof, and the remaining provisions hereof shall continue to be valid and fully enforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;14.**<u>Relation to Plan</u>**. This Agreement is subject to the terms and conditions of the Plan. In the event of any inconsistency between the provisions of this Agreement and the Plan, the Plan shall govern. The Committee acting pursuant to the Plan, as constituted from time to time, shall, except as expressly provided otherwise herein or in the Plan, have the right to determine any questions which arise in connection with this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;15.**<u>Clawback</u>**. Any award granted under this Agreement shall be subject to any clawback or recoupment policy currently in effect or as may be adopted by the Company, in each case, as may be amended from time to time.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;16.**<u>Electronic Delivery</u>**. The Company may, in its sole discretion, deliver any documents related to the RSUs and the Participant's participation in the Plan, or future awards that may be granted under the Plan, by electronic means or request the Participant's consent to participate in the Plan by electronic means. The Participant hereby consents to receive such documents by electronic delivery and, if requested, agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;17.**<u>Governing Law</u>.** This Agreement shall be governed by and construed in accordance with the internal substantive laws of the state of incorporation or formation of the Company, without giving effect to any principle of law that would result in the application of the law of any other jurisdiction.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;18.**<u>Successors and Assigns</u>**. Without limiting <u>Section 3</u> hereof, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the successors, administrators, heirs, legal representatives and assigns of the Participant, and the successors and assigns of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;19.**<u>Acknowledgement</u>**. The Participant acknowledges that the Participant (a) has received a copy of the Plan, (b) has had an opportunity to review the terms of this Agreement

&nbsp;&nbsp;&nbsp;&nbsp;

------

and the Plan, (c) understands the terms and conditions of this Agreement and the Plan and (d) agrees to such terms and conditions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;20.**<u>Counterparts</u>**. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same agreement.

**[SIGNATURES ON FOLLOWING PAGE]**

&nbsp;&nbsp;&nbsp;&nbsp;

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**NEXPOINT DIVERSIFIED REAL ESTATE TRUST**

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: <br>Title:

**Participant Acknowledgment and Acceptance** 

By: <u>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;</u>

Name:

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO** 

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002** 

I, Jim Dondero, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of NexPoint Diversified Real Estate Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 14, 2025

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| |
|:---|
| /s/ Jim Dondero |
| Jim Dondero |
| President |
| (Principal Executive Officer) |

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## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO** 

**SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002** 

I, Paul Richards, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of NexPoint Diversified Real Estate Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;c)evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;d)disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: August 14, 2025

---

| |
|:---|
| /s/ Paul Richards |
| Paul Richards |
| Chief Financial Officer, Executive VP-<br>Finance, Treasurer and Assistant Secretary |
| (Principal Financial Officer) |

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## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,** 

**AS ADOPTED PURSUANT TO SECTION 906 OF** 

**THE SARBANES-OXLEY ACT OF 2002** 

In connection with the Quarterly Report on Form 10-Q of NexPoint Diversified Real Estate Trust (the "Company") for the period ending June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, Jim Dondero, President of the Company, and Paul Richards, Chief Financial Officer, Executive VP-Finance, Treasurer and Assistant Secretary of the Company, each certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that:

1. The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

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| | |
|:---|:---|
| Dated: August 14, 2025 | /s/ Jim Dondero |
| | Jim Dondero<br>President and Trustee<br>(Principal Executive Officer) |

---

---

| | |
|:---|:---|
| Dated: August 14, 2025 | /s/ Paul Richards |
| | Paul Richards<br>Chief Financial Officer, Executive VP-<br>Finance, Treasurer and Assistant Secretary<br>(Principal Financial Officer) |

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