# EDGAR Filing Document

**Accession Number:** 0001786248
**File Stem:** 0001628280-25-052000
**Filing Date:** 2025-11
**Character Count:** 405874
**Document Hash:** 49c5d56543ba6b6dd2e7742b444cdbf5
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001628280-25-052000.hdr.sgml**: 20251113

**ACCESSION NUMBER**: 0001628280-25-052000

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 104

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251113

**DATE AS OF CHANGE**: 20251113

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** NexPoint Real Estate Finance, Inc.
- **CENTRAL INDEX KEY:** 0001786248
- **STANDARD INDUSTRIAL CLASSIFICATION:** REAL ESTATE INVESTMENT TRUSTS [6798]
- **ORGANIZATION NAME:** 05 Real Estate & Construction
- **EIN:** 842178264
- **STATE OF INCORPORATION:** MD
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-39210
- **FILM NUMBER:** 251478303

**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

?xml version='1.0' encoding='ASCII'? nref-20250930

<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_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 September 30, 2025**

**OR**

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

**For the transition period from __________ to __________**

**Commission File Number 001-39210**

__________________________________

**NexPoint Real Estate Finance, Inc.**

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

__________________________________

---

| | |
|:---|:---|
| **Maryland** | **84-2178264** |
| **(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 Act:**

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which registered** |
| **Common Stock, par value $0.01 per share**<br>**8.50% Series A Cumulative Redeemable Preferred Stock, par value 0.01 per share** | **NREF**<br>**NREF-PRA** | **New York Stock Exchange; NYSE Texas**<br>**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 November 12, 2025, the registrant had 17,721,828 shares of its common stock, par value $0.01 per share, outstanding.

------

<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

**NEXPOINT REAL ESTATE FINANCE, INC.**

**Form 10-Q**

**Quarter Ended September 30, 2025**

**INDEX**

---

| | | |
|:---|:---|:---|
| | | **Page** |
| <u>[Cautionary Statement Regarding Forward-Looking Statements](#i9ff9279a2f2940438e9ef2cad123cb40_10)</u> | <u>[Cautionary Statement Regarding Forward-Looking Statements](#i9ff9279a2f2940438e9ef2cad123cb40_10)</u> | <u>[ii](#i9ff9279a2f2940438e9ef2cad123cb40_10)</u> |
|  | **PART I—FINANCIAL INFORMATION** | **PART I—FINANCIAL INFORMATION** |
| [Item 1.](#i9ff9279a2f2940438e9ef2cad123cb40_16) | Financial Statements | <u>[1](#i9ff9279a2f2940438e9ef2cad123cb40_16)</u> |
|  | <u>[Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024](#i9ff9279a2f2940438e9ef2cad123cb40_19)</u> | <u>[2](#i9ff9279a2f2940438e9ef2cad123cb40_19)</u> |
|  | <u>[Consolidated Unaudited Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024](#i9ff9279a2f2940438e9ef2cad123cb40_22)</u> | <u>[5](#i9ff9279a2f2940438e9ef2cad123cb40_22)</u> |
|  | <u>[Consolidated Unaudited Statements of Stockholders' Equity for the Three and Nine Months Ended September 30, 2025 and 2024](#i9ff9279a2f2940438e9ef2cad123cb40_25)</u> | <u>[8](#i9ff9279a2f2940438e9ef2cad123cb40_25)</u> |
|  | <u>[Consolidated Unaudited Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024](#i9ff9279a2f2940438e9ef2cad123cb40_28)</u> | <u>[10](#i9ff9279a2f2940438e9ef2cad123cb40_28)</u> |
|  | <u>[Notes to Consolidated Unaudited Financial Statements](#i9ff9279a2f2940438e9ef2cad123cb40_31)</u> | <u>[11](#i9ff9279a2f2940438e9ef2cad123cb40_31)</u> |
| Item 2. | <u>[Management's Discussion and Analysis of Financial Condition and Results of Operations](#i9ff9279a2f2940438e9ef2cad123cb40_88)</u> | <u>[49](#i9ff9279a2f2940438e9ef2cad123cb40_88)</u> |
| [Item 3.](#i9ff9279a2f2940438e9ef2cad123cb40_181) | <u>[Quantitative and Qualitative Disclosures About Market Risk](#i9ff9279a2f2940438e9ef2cad123cb40_130)</u> | <u>[73](#i9ff9279a2f2940438e9ef2cad123cb40_130)</u> |
| [Item 4.](#i9ff9279a2f2940438e9ef2cad123cb40_184) | <u>[Controls and Procedures](#i9ff9279a2f2940438e9ef2cad123cb40_136)</u> | <u>[73](#i9ff9279a2f2940438e9ef2cad123cb40_136)</u> |
|  | **PART II—OTHER INFORMATION** | **PART II—OTHER INFORMATION** |
| [Item 1.](#i9ff9279a2f2940438e9ef2cad123cb40_31) | <u>[Legal Proceedings](#i9ff9279a2f2940438e9ef2cad123cb40_142)</u> | <u>[73](#i9ff9279a2f2940438e9ef2cad123cb40_142)</u> |
| [Item 1A.](#i9ff9279a2f2940438e9ef2cad123cb40_34) | <u>[Risk Factors](#i9ff9279a2f2940438e9ef2cad123cb40_145)</u> | <u>[73](#i9ff9279a2f2940438e9ef2cad123cb40_145)</u> |
| [Item 2.](#i9ff9279a2f2940438e9ef2cad123cb40_169) | <u>[Unregistered Sales of Equity Securities and Use of Proceeds](#i9ff9279a2f2940438e9ef2cad123cb40_148)</u> | <u>[73](#i9ff9279a2f2940438e9ef2cad123cb40_148)</u> |
| [Item 3.](#i9ff9279a2f2940438e9ef2cad123cb40_37) | <u>[Defaults Upon Senior Securities](#i9ff9279a2f2940438e9ef2cad123cb40_151)</u> | <u>[73](#i9ff9279a2f2940438e9ef2cad123cb40_151)</u> |
| [Item 4.](#i9ff9279a2f2940438e9ef2cad123cb40_40) | <u>[Mine Safety Disclosures](#i9ff9279a2f2940438e9ef2cad123cb40_154)</u> | <u>[73](#i9ff9279a2f2940438e9ef2cad123cb40_154)</u> |
| [Item 5.](#i9ff9279a2f2940438e9ef2cad123cb40_43) | <u>[Other Information](#i9ff9279a2f2940438e9ef2cad123cb40_157)</u> | <u>[73](#i9ff9279a2f2940438e9ef2cad123cb40_157)</u> |
| [Item 6.](#i9ff9279a2f2940438e9ef2cad123cb40_46) | <u>[Exhibits](#i9ff9279a2f2940438e9ef2cad123cb40_160)</u> | <u>[74](#i9ff9279a2f2940438e9ef2cad123cb40_160)</u> |
| <u>[Signatures](#i9ff9279a2f2940438e9ef2cad123cb40_163)</u> | <u>[Signatures](#i9ff9279a2f2940438e9ef2cad123cb40_163)</u> | <u>[75](#i9ff9279a2f2940438e9ef2cad123cb40_163)</u> |

---

i

------

<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

**Cautionary Statement Regarding Forward-Looking Statements**

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 liquidity and capital resources, our performance and results of operations 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 then-current beliefs and assumptions made by, and information currently available to, management. When used, the words "anticipate," "believe," "could," "expect," "intend," "may," "might," "plan," "estimate," "project," "should," "will," "would," "result," 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;• Our loans and investments expose us to risks similar to and associated with debt-oriented real estate investments generally;

&nbsp;&nbsp;&nbsp;&nbsp;• Macroeconomic trends including inflation and high interest rates may continue to, and other trends such as tariffs may, adversely affect our financial condition and results of operations;

&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;• Fluctuations in interest rate and credit spreads could reduce our ability to generate income on our loans and other investments, including our ability to estimate allowances for credit losses, 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;• Risks associated with the ownership of real estate;

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

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

&nbsp;&nbsp;&nbsp;&nbsp;• We are dependent upon our Manager 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;• We pay substantial fees and expenses to our Manager and its affiliates, which payments increase the risk that you will not earn a profit on your investment;

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

ii

------

<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with pandemics, including unpredictable variants and the future outbreak of other highly infectious or contagious diseases;

&nbsp;&nbsp;&nbsp;&nbsp;• Risks associated with the Highland Capital Management, L.P. bankruptcy, including related litigation and potential conflicts of interest; and

&nbsp;&nbsp;&nbsp;&nbsp;• Any other risks included under Part I, Item1A, "Risk Factors," of our Annual Report on Form 10-K filed with the Securities and Exchange Commission ("SEC") on March 27, 2025 (our "Annual Report").

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**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

**PART I**

**Item 1. Financial Statements**

------

<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

**NEXPOINT REAL ESTATE FINANCE, INC. AND SUBSIDIARIES**

**CONSOLIDATED BALANCE SHEETS**

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

------

<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

---

| | | |
|:---|:---|:---|
| | **September 30, 2025** | **December 31, 2024** |
| | **(Unaudited)** | |
| **ASSETS** | | |
| &nbsp;&nbsp;&nbsp;Cash and cash equivalents | $17921 | $3877 |
| &nbsp;&nbsp;&nbsp;Restricted cash | 3640 | 3176 |
| &nbsp;&nbsp;&nbsp;Net Operating Real Estate Investments | 64310 | 121836 |
| &nbsp;&nbsp;&nbsp;Loans, held-for-investment, net ($23,801 and $28,036 with related parties, respectively) (1) | 583646 | 497544 |
| &nbsp;&nbsp;&nbsp;Common stock investments, at fair value ($26,010 and $30,467 with related parties, respectively) | 51566 | 57389 |
| &nbsp;&nbsp;&nbsp;Equity method investments ($1,660 and $1,504 with related parties, respectively) | 1660 | 1504 |
| &nbsp;&nbsp;&nbsp;Mortgage loans, held-for-investment, net (2) | 122176 | 263395 |
| &nbsp;&nbsp;&nbsp;Preferred stock investments, at fair value | 155715 | 18949 |
| &nbsp;&nbsp;&nbsp;Accrued interest and dividends | 60703 | 41208 |
| &nbsp;&nbsp;&nbsp;Mortgage loans held in variable interest entities, at fair value | 4054259 | 4343359 |
| &nbsp;&nbsp;&nbsp;CMBS structured pass-through certificates, at fair value | 42334 | 34979 |
| &nbsp;&nbsp;&nbsp;Stock warrant investments, at fair value | 116228 | 27400 |
| &nbsp;&nbsp;&nbsp;Accounts receivable and other assets | 3916 | 1457 |
| **TOTAL ASSETS** | $5278074 | $5416073 |
| **LIABILITIES AND STOCKHOLDERS' EQUITY** |  |  |
| Liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Secured financing agreements, net ($9,958 and $9,869 with related parties, respectively) | $176752 | $235769 |
| &nbsp;&nbsp;&nbsp;Master repurchase agreements | 257605 | 243454 |
| &nbsp;&nbsp;&nbsp;Unsecured notes, net ($6,500 and $6,500 with related parties, respectively) | 222217 | 221001 |
| &nbsp;&nbsp;&nbsp;Mortgages payable, net | 63500 | 95464 |
| &nbsp;&nbsp;&nbsp;Accounts payable and other accrued liabilities | 11889 | 9458 |
| &nbsp;&nbsp;&nbsp;Accrued interest payable | 15326 | 10020 |
| &nbsp;&nbsp;&nbsp;Bonds payable held in variable interest entities, at fair value | 3755809 | 4029214 |
| **Total Liabilities** | 4503098 | 4844380 |
| Redeemable Series B Preferred stock, $0.01 par value: 16,000,000 shares authorized; 13,717,142 and 6,695,715 shares issued and outstanding, respectively | 305564 | 149045 |
| Redeemable noncontrolling interests in the OP | 93989 | 86164 |
| &nbsp;&nbsp;&nbsp;Stockholders' Equity: |  |  |
| &nbsp;&nbsp;&nbsp;Noncontrolling interest in CMBS variable interest entities | 3319 | 3255 |
| &nbsp;&nbsp;&nbsp;Noncontrolling interest in subsidiary | 95 | 95 |
| &nbsp;&nbsp;&nbsp;Series A Preferred stock, $0.01 par value: 100,000,000 shares authorized; 1,645,000 and 1,645,000 shares issued and outstanding, respectively | 16 | 16 |
| &nbsp;&nbsp;&nbsp;Common stock, $0.01 par value: 500,000,000 shares authorized; 17,721,828 and 17,461,129 shares issued and outstanding, respectively | 177 | 174 |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 390804 | 387892 |
| &nbsp;&nbsp;&nbsp;Retained earnings (accumulated deficit) | (18988) | (54948) |
| **Total Stockholders' Equity** | 375423 | 336484 |
| **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | $5278074 | $5416073 |

---

------

<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

(1) Includes credit allowance of $25.9 million and $0.8 million, respectively

(2) Includes credit allowance of $0.1 million and $0.6 million, respectively

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

**NEXPOINT REAL ESTATE FINANCE, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF OPERATIONS**

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

**(Unaudited)**

------

<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| **Net interest income (loss)** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest income (1) | $22853 | $23559 | $67734 | $40218 |
| &nbsp;&nbsp;&nbsp;Interest expense | (10356) | (11041) | (31659) | (33774) |
| Total net interest income (loss) | 12497 | 12518 | 36075 | 6444 |
| **Other income (loss)** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Change in net assets related to consolidated CMBS variable interest entities | 1838 | 10200 | 9711 | 31532 |
| &nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) on CMBS structured pass-through certificates | 607 | 1541 | 2439 | 1962 |
| &nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) on common stock investments | 751 | 4289 | (5823) | 1647 |
| &nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) on preferred stock and stock warrant investments | 50387 | 201 | 88582 | 303 |
| &nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) on MSCR Notes |  |  |  | (13) |
| &nbsp;&nbsp;&nbsp;Change in unrealized gain (loss) on mortgage backed securities |  | 464 |  | 1079 |
| &nbsp;&nbsp;&nbsp;Reversal of (provision for) credit losses | (15680) | 298 | (24589) | 720 |
| &nbsp;&nbsp;&nbsp;Dividend income | 5775 | 503 | 11810 | 1504 |
| &nbsp;&nbsp;&nbsp;Other income (loss) | (122) | 240 | (140) | 728 |
| &nbsp;&nbsp;&nbsp;Realized gain | (23) | 14 | (23) | 485 |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | (2125) | (175) | (2297) | (359) |
| &nbsp;&nbsp;&nbsp;Equity in losses of equity method investments | 12 | (1105) | (952) | (3997) |
| &nbsp;&nbsp;&nbsp;Gain on sale from real estate owned ($3,718 and $0 with related parties, respectively) | 3718 |  | 3718 |  |
| &nbsp;&nbsp;&nbsp;Revenues from consolidated real estate owned | 1579 | 2189 | 6490 | 6435 |
| Total other income (loss) | $46717 | $18659 | $88926 | $42026 |
| **Operating expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;General and administrative expenses | 3377 | 2161 | 9652 | 9527 |
| &nbsp;&nbsp;&nbsp;Loan servicing fees | 372 | 341 | 1067 | 1258 |
| &nbsp;&nbsp;&nbsp;Management fees | 1777 | 1042 | 4751 | 2774 |
| Expenses from consolidated real estate owned | 2826 | 4300 | 10436 | 14105 |
| Total operating expenses | $8352 | $7844 | $25906 | $27664 |
| **Net income** | 50862 | 23333 | 99095 | 20806 |
| **Net (income) loss attributable to Series A preferred stockholders** | (874) | (874) | (2622) | (2622) |
| **Net (income) loss attributable to Series B preferred stockholders** | (7174) | (2403) | (17256) | (4545) |
| **Net (income) loss attributable to redeemable noncontrolling interests** | (7782) | (3940) | (15383) | (4322) |
| **Net income attributable to common stockholders** | $35032 | $16116 | $63834 | $9317 |
| **Weighted-average common shares outstanding - basic** | 17722 | 17461 | 17651 | 17383 |
| **Weighted-average common shares outstanding - diluted** | 43854 | 30468 | 39628 | 27673 |
| **Earnings (loss) per share outstanding - basic** | $1.98 | $0.92 | $3.62 | $0.54 |
| **Earnings (loss) per share outstanding - diluted** | $1.14 | $0.74 | $2.43 | $0.54 |
| **Dividends declared per common share** | $0.5000 | $0.5000 | $1.5000 | $1.5000 |

---

(1) &nbsp;&nbsp;&nbsp;&nbsp;Includes $25.0 million related to accelerated amortization of the premium associated with the prepayment on a senior loan in the first quarter of 2024.

------

<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

See Notes to Consolidated Financial Statements

------

<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

**NEXPOINT REAL ESTATE FINANCE, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF STOCKHOLDERS**' **EQUITY**

**(dollars in thousands)**

**(Unaudited)**

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Nine Months Ended September 30, 2025** | **Series A Preferred Stock** | **Series A Preferred Stock** | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Retained Earnings Less Dividends** | **Noncontrolling interest in CMBS VIEs** | **Noncontrolling interest in Subsidiary** | **Total** |
| **Nine Months Ended September 30, 2025** | **Number of<br>Shares** | **Par Value** | **Number of<br>Shares** | **Par Value** | **Additional Paid-in Capital** | **Retained Earnings Less Dividends** | **Noncontrolling interest in CMBS VIEs** | **Noncontrolling interest in Subsidiary** | **Total** |
| **Balances, December 31, 2024** | 1645000 | $16 | 17461129 | $174 | $387892 | $(54948) | $3255 | $95 | $336484 |
| &nbsp;&nbsp;Vesting of stock-based compensation |  |  | 260699 | 3 | 2912 |  |  |  | 2915 |
| &nbsp;&nbsp;Noncontrolling interest in CMBS variable interest entities |  |  |  |  |  |  | 64 |  | 64 |
| &nbsp;&nbsp;Net income attributable to Series A preferred stockholders |  |  |  |  |  | 2622 |  |  | 2622 |
| &nbsp;&nbsp;Net income attributable to common stockholders |  |  |  |  |  | 63834 |  |  | 63834 |
| &nbsp;&nbsp;Series A preferred stock dividends declared ($1.5939 per share) |  |  |  |  |  | (2622) |  |  | (2622) |
| Common stock dividends declared ($1.5000 per share) |  |  |  |  |  | (27874) |  |  | (27874) |
| **Balances, September 30, 2025** | 1645000 | $16 | 17721828 | $177 | $390804 | $(18988) | $3319 | $95 | $375423 |

---

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Three Months Ended September 30, 2025** | **Series A Preferred Stock** | **Series A Preferred Stock** | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Retained Earnings Less Dividends** | **Noncontrolling interest in CMBS VIEs** | **Noncontrolling interest in Subsidiary** | **Total** |
| **Three Months Ended September 30, 2025** | **Number of<br>Shares** | **Par Value** | **Number of<br>Shares** | **Par Value** | **Additional Paid-in Capital** | **Retained Earnings Less Dividends** | **Noncontrolling interest in CMBS VIEs** | **Noncontrolling interest in Subsidiary** | **Total** |
| **Balances, June 30, 2025** | 1645000 | $16 | 17721828 | $177 | $389300 | $(44650) | $3297 | $95 | $348235 |
| &nbsp;&nbsp;Vesting of stock-based compensation |  |  |  |  | 1504 |  |  |  | 1504 |
| &nbsp;&nbsp;Noncontrolling interest in CMBS variable interest entities |  |  |  |  |  |  | 22 |  | 22 |
| &nbsp;&nbsp;Net income attributable to Series A preferred stockholders |  |  |  |  |  | 874 |  |  | 874 |
| &nbsp;&nbsp;Net income attributable to common stockholders |  |  |  |  |  | 35032 |  |  | 35032 |
| &nbsp;&nbsp;Series A preferred stock dividends declared ($0.5313 per share) |  |  |  |  |  | (874) |  |  | (874) |
| Common stock dividends declared ($0.5000 per share) |  |  |  |  |  | (9370) |  |  | (9370) |
| **Balances, September 30, 2025** | 1645000 | $16 | 17721828 | $177 | $390804 | $(18988) | $3319 | $95 | $375423 |

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Nine Months Ended September 30, 2024** | **Series A Preferred Stock** | **Series A Preferred Stock** | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Retained Earnings Less Dividends** | **Common Stock Held in Treasury at Cost** | **Preferred Stock Held in Treasury at Cost** | **Noncontrolling interest in CMBS VIEs** | **Noncontrolling interest in Subsidiary** | **Total** |
| **Nine Months Ended September 30, 2024** | **Number of<br>Shares** | **Par Value** | **Number of<br>Shares** | **Par Value** | **Additional Paid-in Capital** | **Retained Earnings Less Dividends** | **Common Stock Held in Treasury at Cost** | **Preferred Stock Held in Treasury at Cost** | **Noncontrolling interest in CMBS VIEs** | **Noncontrolling interest in Subsidiary** | **Total** |
| **Balances, December 31, 2023** | 1645000 | $16 | 17231913 | $172 | $395737 | $(35821) | $(4195) | $(8567) | $— | $95 | $347437 |
| &nbsp;&nbsp;Vesting of stock-based compensation |  |  | 229216 | 2 | 3506 |  |  |  |  |  | 3508 |
| &nbsp;&nbsp;Noncontrolling interest in CMBS variable interest entities |  |  |  |  |  |  |  |  | 3212 |  | 3212 |
| &nbsp;&nbsp;Cancellation of common stock held in treasury |  |  |  |  | (12762) |  | 4195 | 8567 |  |  |  |
| &nbsp;&nbsp;Net income attributable to Series A preferred stockholders |  |  |  |  |  | 2622 |  |  |  |  | 2622 |
| Net income attributable to common stockholders |  |  |  |  |  | 9317 |  |  |  |  | 9317 |
| &nbsp;&nbsp;Series A preferred stock dividends declared ($1.5939 per share) |  |  |  |  |  | (2622) |  |  |  |  | (2622) |
| Common stock dividends declared ($1.5000 per share) |  |  |  |  |  | (27630) |  |  |  |  | (27630) |
| **Balances, September 30, 2024** | 1645000 | $16 | 17461129 | $174 | $386481 | $(54134) | $— | $— | $3212 | $95 | $335844 |

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Three Months Ended September 30, 2024** | **Series A Preferred Stock** | **Series A Preferred Stock** | **Common Stock** | **Common Stock** | **Additional Paid-in Capital** | **Retained Earnings Less Dividends** | **Common Stock Held in Treasury at Cost** | **Preferred Stock Held in Treasury at Cost** | **Noncontrolling interest in CMBS VIEs** | **Noncontrolling interest in Subsidiary** | **Total** |
| **Three Months Ended September 30, 2024** | **Number of<br>Shares** | **Par Value** | **Number of<br>Shares** | **Par Value** | **Additional Paid-in Capital** | **Retained Earnings Less Dividends** | **Common Stock Held in Treasury at Cost** | **Preferred Stock Held in Treasury at Cost** | **Noncontrolling interest in CMBS VIEs** | **Noncontrolling interest in Subsidiary** | **Total** |
| **Balances, June 30, 2024** | 1645000 | $16 | 17461129 | $174 | $385071 | $(61059) | $— | $— | $3177 | $95 | $327474 |
| &nbsp;&nbsp;Vesting of stock-based compensation |  |  |  |  | 1410 |  |  |  |  |  | 1410 |
| &nbsp;&nbsp;Noncontrolling interest in CMBS variable interest entities |  |  |  |  |  |  |  |  | 35 |  | 35 |
| &nbsp;&nbsp;Net income attributable to Series A preferred stockholders |  |  |  |  |  | 874 |  |  |  |  | 874 |
| Net income attributable to common stockholders |  |  |  |  |  | 16116 |  |  |  |  | 16116 |
| &nbsp;&nbsp;Series A preferred stock dividends declared ($0.5313 per share) |  |  |  |  |  | (874) |  |  |  |  | (874) |
| Common stock dividends declared ($0.5000 per share) |  |  |  |  |  | (9191) |  |  |  |  | (9191) |
| **Balances, September 30, 2024** | 1645000 | $16 | 17461129 | $174 | $386481 | $(54134) | $— | $— | $3212 | $95 | $335844 |

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**NEXPOINT REAL ESTATE FINANCE, INC. AND SUBSIDIARIES**

**CONSOLIDATED STATEMENTS OF CASH FLOWS**

**(in thousands)**

**(Unaudited)**

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| | | |
|:---|:---|:---|
| | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2025** | **2024** |
| **Cash flows from operating activities** |  |  |
| Net income (loss) | $99095 | $20806 |
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Amortization of premiums | 8570 | 33649 |
| &nbsp;&nbsp;&nbsp;Accretion of discounts | (9156) | (14644) |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization of real estate investments | 2313 | 4499 |
| &nbsp;&nbsp;&nbsp;Amortization of deferred financing costs | 161 | 36 |
| &nbsp;&nbsp;&nbsp;Provision for (reversal of) credit losses | 24589 | (720) |
| &nbsp;&nbsp;&nbsp;Net change in unrealized (gain) loss on investments held at fair value | (77911) | 543 |
| &nbsp;&nbsp;&nbsp;Equity in (income) losses of unconsolidated equity method ventures | 952 | 3997 |
| &nbsp;&nbsp;&nbsp;Net realized (gain) loss | (3182) | (10959) |
| &nbsp;&nbsp;&nbsp;Stock-based compensation expense | 4475 | 4663 |
| &nbsp;&nbsp;&nbsp;Payment in kind income | (9376) | (11033) |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 2297 | 359 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Accrued interest and dividends receivable | (19495) | (10737) |
| &nbsp;&nbsp;&nbsp;Accounts receivable and other assets | 328 | 2339 |
| &nbsp;&nbsp;&nbsp;Accrued interest payable | 5307 | 2686 |
| &nbsp;&nbsp;&nbsp;Accounts payable, accrued expenses and other liabilities | (1515) | (559) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by operating activities | 27452 | 24925 |
| **Cash flows from investing activities** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from payments received on mortgage loans held in variable interest entities | 331237 | 357172 |
| &nbsp;&nbsp;&nbsp;Proceeds from payments received on mortgage loans held for investment | 117922 | 551570 |
| &nbsp;&nbsp;&nbsp;Originations of mortgage loans, held-for-investment, net |  | (122247) |
| &nbsp;&nbsp;&nbsp;Originations of loans, held-for-investment, net | (75476) | (127841) |
| &nbsp;&nbsp;&nbsp;Purchases of preferred stock and stock warrants | (137012) | (21643) |
| &nbsp;&nbsp;&nbsp;Purchases of equity method investments | (1500) | (10892) |
| &nbsp;&nbsp;&nbsp;Sale of equity method investments | 392 |  |
| &nbsp;&nbsp;&nbsp;Purchases of CMBS securitizations | (11590) |  |
| &nbsp;&nbsp;&nbsp;Purchases of CMBS securitizations held in variable interest entities, at fair value |  | (53619) |
| &nbsp;&nbsp;&nbsp;Sales of CMBS securitizations held in variable interest entities, at fair value |  | 124168 |
| &nbsp;&nbsp;&nbsp;Purchases of mortgage backed securities, at fair value |  | (44396) |
| &nbsp;&nbsp;&nbsp;Sale of mortgage backed securities, at fair value |  | 84397 |
| &nbsp;&nbsp;&nbsp;Additions to real estate investments | (662) | (734) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net proceeds from dispositions of real estate investments | 56348 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash provided by investing activities | 279659 | 735935 |
| **Cash flows from financing activities** |  |  |
| &nbsp;&nbsp;Borrowings under secured financing agreements | 22725 | 119107 |
| &nbsp;&nbsp;Principal repayments on borrowings under secured financing agreements | (83575) | (512064) |
| &nbsp;&nbsp;Distributions to bondholders of variable interest entities | (317376) | (342094) |
| &nbsp;&nbsp;Borrowings under master repurchase agreements | 29703 | 85599 |
| &nbsp;&nbsp;Principal repayments on borrowings under master repurchase agreements | (15552) | (150110) |
| &nbsp;&nbsp;Proceeds received from unsecured promissory note |  | 6500 |
| &nbsp;&nbsp;Principal repayment on unsecured promissory note |  | (6500) |
| &nbsp;&nbsp;Borrowings under bridge facility |  | 19900 |
| &nbsp;&nbsp;Bridge facility repayments |  | (20000) |
| &nbsp;&nbsp;Proceeds from the issuance of Series B preferred stock through public offering, net of offering costs | 156519 | 102093 |
| &nbsp;&nbsp;Principal repayments on mortgages payable | (32125) | (173) |
| &nbsp;&nbsp;Payments for taxes related to net share settlement of stock-based compensation | (1560) | (1152) |
| &nbsp;&nbsp;Dividends paid to common stockholders | (25987) | (25183) |
| &nbsp;&nbsp;Dividends paid to Series A preferred stockholders | (2622) | (2622) |
| &nbsp;&nbsp;Dividends paid to Series B preferred stockholders | (15195) | (4545) |
| &nbsp;&nbsp;Distributions to redeemable noncontrolling interests in the OP | (7558) | (7558) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Net cash used in financing activities | (292603) | (738802) |
| &nbsp;&nbsp;Net increase (decrease) in cash, cash equivalents, and restricted cash | 14508 | 22058 |
| &nbsp;&nbsp;Cash, cash equivalents and restricted cash, beginning of period | 7053 | 16649 |
| &nbsp;&nbsp;Cash, cash equivalents and restricted cash, end of period | $21561 | $38707 |
| **Supplemental Disclosure of Cash Flow Information** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Interest paid | 26353 | 31088 |
| **Supplemental Disclosure of Noncash Investing and Financing Activities** |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Adjustment to loans, held for investment, interest capitalization | 19074 |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Increase in dividends payable upon vesting of restricted stock units | 1887 | 2447 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidation of mortgage loans and bonds payable held in variable interest entities |  | 1276923 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Consolidation of noncontrolling interest in CMBS variable interest entities | 64 | 3212 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Deconsolidation of mortgage loans and bonds payable held in variable interest entities |  | (2327220) |

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**NEXPOINT REAL ESTATE FINANCE, INC. AND SUBSIDIARIES**

**NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**1*.* Organization and Description of Business**

NexPoint Real Estate Finance, Inc. (the "Company", "we", "our", "NREF") is a commercial mortgage REIT incorporated in Maryland on June 7, 2019. The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended (the "Code"), commencing with its taxable year ended December 31, 2020 and the Company believes the current organization and method of operation will enable it to maintain its status as a REIT. The Company is focused on originating, structuring and investing in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties and common equity investments, as well as multifamily and single-family rental ("SFR") commercial mortgage backed securities securitizations ("CMBS securitizations"), promissory notes, revolving credit facilities and stock warrants, or our target assets. We primarily focus on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage and life science sectors predominantly in the top 50 metropolitan statistical areas ("MSAs"). Substantially all of the Company's business is conducted through NexPoint Real Estate Finance Operating Partnership, L.P. (the "OP"), the Company's operating partnership. As of September 30, 2025, the Company holds approximately 83.82% of the common limited partnership units in the OP ("OP Units") which represents 100% of the Class A OP Units, and the OP owns all of the common limited partnership units ("SubOP Units") of its subsidiary partnerships (collectively, the "Subsidiary OPs") (see Note 13).

The OP also directly owns all of the membership interests of a limited liability company (the "Mezz LLC") through which it owns a portfolio of mezzanine loans, as further discussed below. NexPoint Real Estate Finance OP GP, LLC (the "OP GP") is the sole general partner of the OP.

The Company commenced operations on February 11, 2020 upon the closing of its initial public offering of shares of its common stock (the "IPO"). Prior to the closing of the IPO, the Company engaged in a series of transactions through which it acquired an initial portfolio consisting of senior pooled mortgage loans backed by SFR properties (the "SFR Loans"), the junior most bonds of multifamily CMBS securitizations (the "CMBS B-Pieces"), mezzanine loan and preferred equity investments in real estate companies and properties in other structured real estate investments within the multifamily, SFR and self-storage asset classes (the "Initial Portfolio"). The Initial Portfolio was acquired from affiliates (the "Contribution Group") of our Sponsor, pursuant to a contribution agreement with the Contribution Group through which the Contribution Group contributed their interest in the Initial Portfolio to special purpose entities ("SPEs") owned by the Subsidiary OPs, in exchange for SubOP Units (the "Formation Transaction"). Subsequent to the Formation Transaction, the Company has continued to invest in asset types and real estate sectors within the Initial Portfolio and expanded to include additional asset types and real estate sectors.

The Company is externally managed by the Manager through a management agreement dated February 6, 2020 and amended as of July 17, 2020 and November 3, 2021, that renewed on February 6, 2025 for a one-year term and is automatically renewed for successive one-year terms thereafter unless earlier terminated (as amended, the "Management Agreement"), by and between the Company and the Manager. The Manager conducts substantially all of the Company's operations and provides asset management services for its real estate investments. The Company expects it will only have accounting employees while the Management Agreement is in effect. All of the Company's investment decisions are made by the Manager, subject to general oversight by the Manager's investment committee and the Company's board of directors (the "Board"). The Manager is wholly owned by our Sponsor.

The Company's primary investment objective is to generate attractive, risk-adjusted returns for stockholders over the long term. The Company intends to achieve this objective primarily by originating, structuring and investing in our target assets. The Company concentrates on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage and life science sectors predominantly in the top 50 MSAs. In addition, the Company targets lending or investing in properties that are stabilized or have a "light transitional" business plan, meaning a property that requires limited deferred funding to support leasing or ramp-up of operations and for which most capital expenditures are for value-add improvements. Through active portfolio management the Company seeks to take advantage of market opportunities to achieve a superior portfolio risk-mix that delivers attractive total returns.

**2. Summary of Significant Accounting Policies**

Readers of this Quarterly Report on Form 10-Q (the "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 Annual Report, filed with the SEC and also available on our website (nref.nexpoint.com), since we have omitted from this Quarterly Report certain footnote disclosures which would substantially duplicate those contained in such

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audited financial statements. You should also refer to Note 2, Summary of Significant Accounting Policies, in the notes to consolidated financial statements in our Annual Report 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.

*General*

In accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X as issued by the SEC, these Condensed Consolidated Financial Statements do not include all of the information and disclosures required by U.S. generally accepted accounting principles ("GAAP") for complete financial statements. Readers of this Quarterly Report should refer to the Company's audited Consolidated Financial Statements, which are included in the Company's Annual Report. In the opinion of management, all normal recurring adjustments necessary for a fair presentation of the financial position, results of operations, comprehensive income, cash flows, and equity for the interim periods have been included. The results for the three and nine months ended September 30, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025 and future fiscal years.

*Basis of Accounting*

The accompanying unaudited consolidated financial statements are presented in accordance with GAAP. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the dates of the unaudited consolidated financial statements and the amounts of revenues and expenses during the reporting periods. Actual amounts realized or paid could differ from those estimates. All significant intercompany accounts and transactions have been eliminated in consolidation. There have been no significant changes to the Company's significant accounting policies during the nine months ended September 30, 2025.

The accompanying unaudited consolidated financial statements have been prepared according to the rules and regulations of the SEC. Certain information and note disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted according to such rules and regulations, although management believes that the disclosures are adequate to make the information presented not misleading.

*Use of Estimates and Assumptions*

The preparation of the consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting periods. It is at least reasonably possible that these estimates could change in the near term. Estimates are inherently subjective in nature and actual results could differ from our estimates and the differences could be material.

*Principles of Consolidation*

The Company accounts for subsidiary partnerships in which it holds an ownership interest in accordance with Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 810, *Consolidation*. The Company first evaluates whether each entity is a variable interest entity ("VIE"). Under the VIE model, the Company consolidates an entity when it has power to direct the activities of the VIE and the obligation to absorb losses or the right to receive benefits that could potentially be significant to the VIE. Under the voting model, the Company consolidates an entity when it controls the entity through ownership of a majority voting interest. As of September 30, 2025, the Company has determined it must consolidate the OP and the Subsidiary OPs under the VIE model as it was determined the Company both controls the direct activities of the OP and Subsidiary OPs and possesses the right to receive benefits that could potentially be significant to the OP and Subsidiary OPs. The consolidated financial statements include the accounts of the Company and its subsidiaries, including the OP and its subsidiaries. The Company's sole significant asset is its investment in the OP, and consequently, substantially all of the Company's assets and liabilities represent those assets and liabilities of the OP.

*Variable Interest Entities*

The Company evaluates all of its interests in VIEs for consolidation. When the Company's interests are determined to be variable interests, the Company assesses whether it is deemed to be the primary beneficiary of the VIE. The primary beneficiary of a VIE is required to consolidate the VIE. FASB ASC Topic 810, *Consolidation*, defines the primary beneficiary as the party that has both (i) the power to direct the activities of the VIE that most significantly impact its economic performance, and (ii) the obligation to absorb losses and the right to receive benefits from the VIE which could

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be potentially significant. The Company considers its variable interests, as well as any variable interests of its related parties in making this determination. Where both of these factors are present, the Company is deemed to be the primary beneficiary, and it consolidates the VIE. Where either one of these factors is not present, the Company is not the primary beneficiary, and it does not consolidate the VIE (see Note 6).

*CMBS Trusts*

The Company consolidates the trusts that issue beneficial ownership interests in mortgage loans secured by commercial real estate (commonly known as CMBS) when the Company holds a variable interest in, and management considers the Company to be the primary beneficiary of, those trusts. Management believes the performance of the assets that underlie CMBS issuances most significantly impact the economic performance of the trust, and the primary beneficiary is generally the entity that conducts activities that most significantly impact the performance of the underlying assets. In particular, the most subordinate tranches of CMBS expose the holder to greater variability of economic performance when compared to more senior tranches since the subordinate tranches absorb a disproportionately higher amount of the credit risk related to the underlying assets. Generally, a trust designates the most junior subordinate tranche outstanding as the controlling class, which entitles the holder of the controlling class to unilaterally appoint, remove and replace the special servicer for the trust. For the nine CMBS that the Company consolidates, the Company owns 100% of the most subordinate tranche of seven of the securities and 93.9% and 95.0%, respectively, of the most subordinate tranche of two of the securities issued by the trusts. The subordinate tranche includes the controlling class, and has the ability to remove and replace the special servicer. The portion of the controlling class not owned by the Company is classified as noncontrolling interest in CMBS variable interest entities.

On the Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024, the Company consolidated each of the Freddie Mac K-Series securitization entities (the "CMBS Entities") that were determined to be VIEs and for which the Company is the primary beneficiary. The CMBS Entities are independent of the Company, and the assets and liabilities of the CMBS Entities are not owned by and are not legal obligations of ours. Our exposure to the CMBS Entities is through the subordinated tranches. For financial reporting purposes, the underlying mortgage loans held by the trusts are recorded as a separate line item on the balance sheet under "Mortgage loans held in variable interest entities, at fair value." The liabilities of the trusts consist solely of obligations to the CMBS holders of the consolidated trusts, excluding the CMBS B-Piece investments held by the Company. The liabilities are presented as "Bonds payable held in variable interest entities, at fair value" on the Consolidated Balance Sheets. The CMBS B-Pieces held by the Company, and the interest earned thereon are eliminated in consolidation. Management has elected the measurement alternative in ASC 810 to report the fair value of the assets and liabilities of the consolidated CMBS Entities in order to provide users of the financial statements with better information regarding the effects of credit risk and other market factors on the CMBS B-Pieces owned by the Company. Management has elected to show interest income and interest expense related to the CMBS Entities in aggregate with the change in fair value as "Change in net assets related to consolidated CMBS variable interest entities." The residual difference between the fair value of the CMBS Entities' assets and liabilities represents the Company's investments in the CMBS B-Pieces at fair value.

*Mortgage and Other Loans Held-For-Investment*

Loans that are held-for-investment are carried at their aggregate outstanding face amount, net of applicable (i) unamortized origination or acquisition premium and discounts, (ii) unamortized deferred fees and other direct loan origination costs, (iii) valuation allowance for credit losses and (iv) write-downs of impaired loans. The effective interest method is used to amortize origination or acquisition premiums and discounts and deferred fees or other direct loan origination costs. In general, an increase in prepayment rates accelerates the amortization of purchase premiums, thereby reducing the interest income earned on the assets. Conversely, discounts on such assets are accreted into interest income. In general, an increase in prepayment rates accelerates the accretion of purchase discounts, thereby increasing the interest income earned on the assets.

*Allowance for Credit Losses* 

We adopted ASU 2016-13 as of January 1, 2023. The implementation process included the utilization of loan loss forecasting models, updates to our loan credit loss policy documentation, changes to internal reporting processes and related internal controls, and overall operational readiness for our adoption of the new standard. We have implemented loan loss forecasting models for estimating expected life-time credit losses, at the individual loan level, for our loan portfolio. These models are also utilized for estimating expected life-time credit losses for unfunded loan commitments for which the Company has a present contractual obligation to extend the credit and the obligation is not unconditionally cancellable. The current expected credit loss ("CECL") forecasting methods used by the Company include (i) a probability of default and

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loss given default method using underlying third-party CMBS/Commercial Real Estate loan database with historical loan losses from 1998 to 2024, and (ii) probability weighted expected cash flow method, depending on the type of loan and the availability of relevant historical market loan loss data. We might use other acceptable alternative approaches in the future depending on, among other factors, the type of loan, underlying collateral, and availability of relevant historical market loan loss data. Significant inputs to our forecasting methods include (i) key loan-specific inputs such as loan-to-value, vintage year, loan-term, underlying property type, senior loan balances, occupancy, geographic location, performance against the underwritten business plan, and our internal loan risk rating, and (ii) a macro-economic environment forecast. The reasonable and supportable forecast period is determined based on the Company's assessment of the most likely scenario of assumptions and plausible outcomes for the U.S. economy, current portfolio composition, level of historical loss forecast estimates, material changes in growth and credit strategy and other factors that may affect its loss experience. The Company regularly evaluates the reasonable and supportable forecast period to determine if a change is needed. The Company has determined that economic forecasts used in our CECL model can be reasonable and supportable over four quarters as it provides enough time to account for the expected changes of the economic conditions and the performance of the underlying assets. Beyond the Company's reasonable and supportable forecast period, the Company immediately reverts to historical loss information. The Company considers an immediate reversion period appropriate in the CECL model because it provides a suitable balance between the stability of historical data and the flexibility to account for changing market conditions.

*Specific CECL Reserve* 

In certain circumstances, we may determine that a loan is no longer suited for the model because (i) it has unique risk characteristics, (ii) we have deemed the borrower/sponsor to be experiencing financial difficulty and the repayment of the loan's principal is collateral-dependent, (iii) we anticipate assuming legal title and/or physical possession of the underlying collateral property and the fair value of the collateral asset is determined to be below the carrying value of our loan, and/or (iv) recovery of our loan may occur at an amount below our loan's carrying value. We may instead elect to employ different methods to estimate credit losses that also conform to ASC 326 and related guidance.

*Nonaccrual and Past Due Loans* 

We cease accruing interest on loans if we deem the interest to be uncollectible with any previously accrued uncollected interest on the loan charged to interest income in the same period. The amortized cost basis, net of specific CECL allowance, for loans on nonaccrual was $21.3 million as of September 30, 2025.

*Loan Modifications Pursuant to ASC 326* 

During the nine months ended September 30, 2025, the Company utilized term extensions as the primary modification type for financing receivables related to borrowers experiencing financial difficulty for the two loans that were placed on nonaccrual status. These modifications generally involved extending the contractual maturity dates to provide additional time for repayment without reducing the principal balance or interest rate. The extensions were granted after evaluating borrower-specific circumstances and were intended to improve collectability while maintaining the contractual cash flows.

The following table summarizes our expected credit loss reserve for the nine months ended September 30, 2025 and 2024 (dollars in thousands):

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| | | |
|:---|:---|:---|
| | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2025** | **2024** |
| **Balances, January 1,** | $(1377) | $(2100) |
| &nbsp;&nbsp;&nbsp;(Provision for) reversal of credit losses | (24589) | 720 |
| **Balances, September 30,** | $(25966) | $(1380) |

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The following table summarizes our expected credit loss reserve as of September 30, 2025 and 2024 (dollars in thousands):

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| | | |
|:---|:---|:---|
| | **2025** | **2024** |
| General Reserve | $6978 | $1380 |
| Specific Reserve | 18988 |  |
| **Total Reserve** | $25966 | $1380 |

---

Significant judgment is required in determining impairment and in estimating the resulting loss allowance, and actual losses, if any, could materially differ from those estimates.

The Company performs a quarterly review of the portfolio. In conjunction with this review, the Company assesses the risk factors of each loan, including, without limitation, loan-to-value ratio, debt yield, property type, geographic and local market dynamics, physical condition, collateral, cash-flow volatility, leasing and tenant profile, loan structure, exit plan and project sponsorship. Based on a 5-point scale, our loans are rated "1" through "5," from least risk to greatest risk, respectively, which ratings are defined as follows:

1 – Outperform – Materially exceeds performance metrics (for example, technical milestones, occupancy, rents and net operating income) included in original or current credit underwriting and business plan;

2 – Exceeds Expectations – Collateral performance exceeds substantially all performance metrics included in original or current credit underwriting and business plan;

3 – Satisfactory – Collateral performance meets, or is on track to meet, underwriting; business plan is met or can reasonably be achieved;

4 – Underperformance – Collateral performance falls short of underwriting, material differences exist from business plan, or both; technical milestones have been missed; defaults may exist or may soon occur absent material improvement; and

5 – Risk of Impairment/Default – Collateral performance is significantly worse than underwriting; major variance from business plan; loan covenants or technical milestones have been breached; timely exit from loan via sale or refinancing is questionable.

The Company regularly evaluates the extent and impact of any credit deterioration associated with the performance and/or value of the underlying collateral, as well as the financial and operating capability of the borrower. Specifically, the collateral's operating results and any cash reserves are analyzed and used to assess (i) whether cash from operations is sufficient to cover the debt service requirements currently and into the future, (ii) the ability of the borrower to refinance the loan and/or (iii) the collateral's liquidation value. The Company also evaluates the financial condition of any loan guarantors, as well as any changes in the borrower's competency in managing and operating the collateral. In addition, the Company considers the overall economic environment, real estate or industry sector and geographic sub-market in which the borrower operates. Such impairment analyses are completed and reviewed by asset management and finance personnel who utilize various data sources, including (i) periodic financial data such as property operating statements, occupancy, tenant profile, rental rates, operating expenses, the borrower's exit plan and capitalization and discount rates, (ii) site inspections and (iii) current credit spreads and discussions with market participants.

The Company considers loans to be past-due when a monthly payment is due and unpaid for 60 days or more. Loans will be placed on nonaccrual status and considered non-performing when full payment of principal and interest is in doubt, which generally occurs when they become 120 days or more past-due unless the loan is both well secured and in the process of collection. Accrual of interest on individual loans is discontinued when management believes that, after considering economic and business conditions and collection efforts, the borrower's financial condition is such that collection of interest is doubtful. Our policy is to cease accruing interest when a loan's delinquency exceeds 120 days. All interest accrued but not collected for loans that are placed on nonaccrual status or subsequently charged-off are reversed against interest income. Income is subsequently recognized on the cash basis until, in management's judgment, the borrower's ability to make periodic principal and interest payments returns and future payments are reasonably assured, in which case the loan is returned to accrual status.

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A loan is written off when it is no longer realizable and/or it is legally discharged.

The Company also recognizes a liability for expected credit losses for off-balance sheet exposures if the Company has a present contractual obligation to extend the credit and the obligation is not unconditionally cancellable by the Company.

*Recent Accounting Pronouncements*

Section 107 of the Jumpstart Our Business Startups Act ("JOBS Act") provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Securities Exchange Act of 1934 (the "Exchange Act"), for complying with new or revised accounting standards applicable to public companies. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. The Company has elected to take advantage of this extended transition period. As a result of this election, our consolidated financial statements may not be comparable to companies that comply with public company effective dates for such new or revised standards. The Company may elect to comply with public company effective dates at any time, and such election would be irrevocable pursuant to Section 107(b) of the JOBS Act.

In November 2024, the FASB issued ASU 2024-03, *Disaggregation of Income Statement Expenses* ("ASU 2024-03"). ASU 2024-03 requires disclosures of disaggregated information about certain income statement expense line items on an annual and interim basis. The amendments are effective for fiscal years beginning after December 15, 2026, with early adoption permitted, and should be applied prospectively, with the option to apply retrospectively. The Company is currently evaluating the impact of adopting the amendments on its disclosures.

In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures ("ASU-2023-09"), which introduces enhancements to income tax disclosures. The key enhancements affect expanded rate reconciliation requirements, disclosure of income taxes paid, and disclosures on tax position/carryforwards. The Company is currently evaluating the impact of adopting the amendments on its disclosures.

*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 the purchases of preferred stock and warrant investments for the nine months ended September 30, 2024.

**3. Loans Held for Investment, Net**

The Company's investments in mortgage loans, mezzanine loans, preferred equity, promissory notes and revolving credit facilities are accounted for as loans held for investment. The mortgage loans are presented as "Mortgage loans, held-for-investment, net" and the mezzanine loans, preferred equity, promissory notes and revolving credit facilities are

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presented as "Loans, held-for-investment, net" on the Consolidated Balance Sheets. The following tables summarize our loans held-for-investment as of September 30, 2025 and December 31, 2024, respectively (dollars in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | | | **Weighted Average** | **Weighted Average** | **Weighted Average** |
|<br>**Loan Type** |<br>**Outstanding<br>Face Amount** |<br>**Carrying Value (1)** |<br>**Loan Count** | **Fixed Rate (2)** | **Coupon (3)** | **Life (years) (4)** |
| **September 30, 2025** | | | | | | |
| &nbsp;&nbsp;&nbsp;Mortgage loans, held-for-investment | $119243 | $122176 | 9 | 100.00% | 5.32% | 2.0 |
| &nbsp;&nbsp;&nbsp;Mezzanine loans, held-for-investment | 230490 | 222494 | 22 | 43.25% | 10.23% | 2.7 |
| &nbsp;&nbsp;&nbsp;Preferred equity, held-for-investment | 224468 | 207932 | 18 | 46.13% | 10.32% | 2.2 |
| &nbsp;&nbsp;&nbsp;Promissory notes, held-for-investment | 15500 | 15494 | 2 | 100.00% | 13.65% | 0.8 |
| &nbsp;&nbsp;&nbsp;Revolving credit facility, held-for-investment | 148600 | 137726 | 1 | 100.00% | 13.50% | 2.3 |
|  | $738301 | $705822 | 52 | 65.90% | 10.20% | 2.3 |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Loan Type** | **Outstanding Face Amount** | **Carrying Value (1)** | **Loan Count** | **Weighted Average** | **Weighted Average** | **Weighted Average** |
| **Loan Type** | **Outstanding Face Amount** | **Carrying Value (1)** | **Loan Count** | **Fixed Rate (2)** | **Coupon (3)** | **Life (years) (4)** |
| **December 31, 2024** | | | | | | |
| &nbsp;&nbsp;&nbsp;Mortgage loans, held-for-investment | $260901 | $263395 | 10 | 46.23% | 9.99% | 2.4 |
| &nbsp;&nbsp;&nbsp;Mezzanine loans, held-for-investment | 133207 | 134870 | 22 | 78.31% | 9.41% | 4.4 |
| &nbsp;&nbsp;&nbsp;Preferred equity, held-for-investment | 224423 | 223653 | 16 | 42.43% | 11.92% | 2.3 |
| Promissory notes, held-for-investment | 4000 | 3992 | 2 | 100.00% | 14.69% | 0.5 |
| Revolving credit facility, held-for-investment | 148600 | 135029 | 1 | 100.00% | 13.50% | 3.0 |
|  | $771131 | $760939 | 51 | 61.31% | 11.15% | 2.8 |

---

(1)Carrying value includes the outstanding face amount plus unamortized purchase premiums/discounts and any allowance for loan losses.

(2)The weighted-average of loans paying a fixed rate is weighted on current principal balance.

(3)The weighted-average coupon is weighted on outstanding face amount.

(4)The weighted-average life is weighted on outstanding face amount and assumes no prepayments. The maturity date for preferred equity investments represents the maturity date of the senior mortgage, as the preferred equity investments require repayment upon the sale or refinancing of the asset.

For the nine months ended September 30, 2025 and 2024, the loans held for investment, net and preferred equity portfolio activity was as follows (in thousands):

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| | | |
|:---|:---|:---|
| | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2025** | **2024** |
| **Balances, December 31,** | $760939 | $1004880 |
| &nbsp;&nbsp;&nbsp;Originations | 75476 | 250088 |
| &nbsp;&nbsp;&nbsp;Proceeds from principal repayments | (117922) | (551570) |
| &nbsp;&nbsp;&nbsp;PIK distribution reinvested in Preferred Units | 9376 | 11033 |
| &nbsp;&nbsp;&nbsp;Amortization of loan premium, net (1) | 2542 | (21319) |
| &nbsp;&nbsp;&nbsp;(Provision for) reversal of credit losses | (24589) | 720 |
| **Balance at September 30,** | $705822 | $693832 |

---

(1)Includes net amortization of loan purchase premiums.

As of September 30, 2025 and December 31, 2024, there were $6.5 million and $8.8 million of unamortized premiums on loans, held-for-investment, net, respectively, on the Consolidated Balance Sheets.

As discussed in Note 2, the Company evaluates loans classified as held-for-investment on a loan-by-loan basis every quarter. In conjunction with the review of the portfolio, the Company assesses the risk factors of each loan and assign a risk rating based on a variety of factors. Loans are rated "1" through "5," from least risk to greatest risk, respectively. See Note 2 for a more detailed discussion of the risk factors and ratings. The following tables allocate the principal balance and net book value of the loan portfolio based on our internal risk ratings (dollars in thousands):

---

| | | | |
|:---|:---|:---|:---|
| | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|<br>**Risk Rating** | **Number of Loans** | **Carrying Value** | **% of Loan Portfolio** |
| 1 |  | $— |  |
| 2 |  |  |  |
| 3 | 47 | 689063 | 97.63% |
| 4 | 2 | 5713 | 0.81% |
| 5 | 3 | 11046 | 1.56% |
|  | 52 | $705822 | 100.00% |

---

---

| | | | |
|:---|:---|:---|:---|
| **Risk Rating** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| **Risk Rating** | **Number of Loans** | **Carrying Value** | **% of Loan Portfolio** |
| 1 |  | $— |  |
| 2 |  |  |  |
| 3 | 49 | 739960 | 97.24% |
| 4 | 2 | 20979 | 2.76% |
| 5 |  |  |  |
|  | 51 | $760939 | 100.00% |

---

Our loan portfolio had a weighted-average risk rating of 3.0 as of September 30, 2025, and 3.0 as of December 31, 2024.

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The following tables present the carrying value of the loan portfolio by the Company's internal risk rating and year of origination as of September 30, 2025 and December 31, 2024 (dollars in thousands):

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** |
|<br>**Risk Rating** | **Number of<br>Loans** | **Outstanding Face Amount** | **2025** | **2024** | **2023** | **2022** | **2021** | **Prior** | **Total Carrying Value** |
| 1 |  | $— | $— | $— | $— | $— | $— | $— | $— |
| 2 |  |  |  |  |  |  |  |  |  |
| 3 | 47 | 702201 | 9516 | 259628 | 82294 | 65526 | 41100 | 230999 | 689063 |
| 4 | 2 | 6000 |  |  |  | 4268 |  | 1445 | 5713 |
| 5 | 3 | 30100 |  |  |  | 4811 | 6235 |  | 11046 |
|  | 52 | $738301 | $9516 | $259628 | $82294 | $74605 | $47335 | $232444 | $705822 |

---

(1)Represents the date a loan was originated or acquired.

---

| | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** | **Carrying Value by Year of Origination (1)** |
|<br>**Risk Rating** | **Number of<br>Loans** | **Outstanding Face Amount** | **2024** | **2023** | **2022** | **2021** | **2020** | **Prior** | **Total Carrying Value** |
| 1 |  | $— | $— | $— | $— | $— | $— | $— | $— |
| 2 |  |  |  |  |  |  |  |  |  |
| 3 | 49 | 750031 | 284958 | 94446 | 74658 | 38067 | 19812 | 228019 | 739960 |
| 4 | 2 | 21100 |  |  | 8479 | 12500 |  |  | 20979 |
| 5 |  |  |  |  |  |  |  |  |  |
|  | 51 | $771131 | $284958 | $94446 | $83137 | $50567 | $19812 | $228019 | $760939 |

---

(1)Represents the date a loan was originated or acquired.

The following tables present the geographies and property types of collateral underlying the Company's loans held-for-investment as a percentage of the loans' face amounts.

---

| | | |
|:---|:---|:---|
| **Geography** | **September 30, 2025** | **December 31, 2024** |
| Massachusetts | 17.66% | 22.68% |
| Texas | 17.54% | 16.39% |
| Georgia | 11.09% | 8.68% |
| Maryland | 8.22% | 8.61% |
| California | 6.09% | 8.55% |
| Virginia | 5.89% | 5.15% |
| Florida | 4.28% | 5.15% |
| Other (21 and 21 states each at <4%) | 29.23% | 24.79% |
|  | 100.00% | 100.00% |

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---

| | | |
|:---|:---|:---|
| **Collateral Property Type** | **September 30, 2025** | **December 31, 2024** |
| Multifamily | 36.31% | 34.57% |
| Single Family Rental | 29.36% | 26.57% |
| Life Science | 28.29% | 34.98% |
| Self-Storage | 3.80% | 2.73% |
| Marina | 2.24% | 1.15% |
|  | 100.00% | 100.00% |

---

**4. CMBS Trusts**

As of September 30, 2025, the Company consolidated all of the CMBS Entities that it determined are VIEs and for which the Company is the primary beneficiary. The Company elected the fair-value measurement alternative in accordance with ASU 2014-13 for each of the trusts and carries the fair values of the trust's assets and liabilities at fair value in its Consolidated Balance Sheets, recognizes changes in the trust's net assets, including changes in fair-value adjustments and net interest earned, in its Consolidated Statements of Operations and records cash interest received from the trusts and cash interest paid to bondholders of the CMBS not beneficially owned by the Company as investing and financing cash flows, respectively.

The following table presents the Company's recognized Trust's Assets and Liabilities (in thousands):

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| | | |
|:---|:---|:---|
| **Trust's Assets** | **September 30, 2025** | **December 31, 2024** |
| Mortgage loans held in variable interest entities, at fair value | $4054259 | $4343359 |
| Accrued interest receivable | 2911 | 3877 |
| **Trust's Liabilities** |  |  |
| Bonds payable held in variable interest entities, at fair value | (3755809) | (4029214) |
| Accrued interest payable | (2310) | (3212) |

---

The following table presents "Change in net assets related to consolidated CMBS variable interest entities" (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Net interest earned | $5669 | $7780 | $17508 | $26640 |
| Realized gain (loss) | (429) | 4291 | (513) | 10489 |
| Unrealized gain (loss) | (3402) | (1871) | (7284) | (5597) |
| Change in net assets related to consolidated CMBS variable interest entities | $1838 | $10200 | $9711 | $31532 |

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The following tables present the geographies and property types of collateral underlying the CMBS trusts consolidated by the Company as a percentage of the collateral unpaid principal balance:

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| | | |
|:---|:---|:---|
| **Geography** | **September 30, 2025** | **December 31, 2024** |
| Texas | 17.71% | 16.54% |
| Colorado | 10.09% | 10.99% |
| California | 8.91% | 9.26% |
| Florida | 8.22% | 7.65% |
| Washington | 7.57% | 9.24% |
| Georgia | 5.54% | 5.16% |
| New York | 5.22% | 4.87% |
| North Carolina | 5.08% | 4.74% |
| Other (28 and 32 states each at <4%) | 31.66% | 31.55% |
|  | 100.00% | 100.00% |

---

---

| | | |
|:---|:---|:---|
| **Collateral Property Type** | **September 30, 2025** | **December 31, 2024** |
| Multifamily | 100.00% | 99.57% |
| Manufactured Housing | —% | 0.43% |
|  | 100.00% | 100.00% |

---

**5. Common and Preferred Stock Investments**

*Common Stock Investments, at fair value*

The Company owns approximately 25.5% of the total outstanding shares of common stock of NexPoint Storage Partners, Inc. ("NSP") and thus can exercise significant influence over NSP. The Company elected the fair value option in accordance with ASC 825-10-10 for NSP.

The investment in NSP is a Level 3 asset in the fair value hierarchy and was initially measured using the entry price of the asset. The Company's valuation policy for common stock is to use readily available market prices on the relevant valuation date to the extent they are available. On a quarterly basis, the Company determines the value using widely accepted valuation techniques. A bottoms-up approach was used by valuing the wholly-owned self-storage assets in aggregate and development loans individually. In this bottoms-up approach, the discounted cash flow methodology is applied to the self-storage assets owned by NSP. Additionally, the income approach is used to determine the fair value of the development loans owned by NSP whereby contractual cash flows are discounted at observable market discount rates. In addition, as a secondary check for reasonableness, a top-down approach was applied whereby observable market terminal capitalization rates and discount rates are applied to the consolidated NSP cash flows. The valuation relies primarily on the bottoms-up approach but uses the top-down approach to corroborate the bottoms-up conclusion with a reasonable precision.

The Company owns approximately 6.3% of the total outstanding shares of common stock of a private ground lease REIT (the "Private REIT") as of September 30, 2025. The Company elected the fair value option in accordance with ASC 825-10-10 for the Private REIT.

The investment in the Private REIT is a Level 3 asset in the fair value hierarchy. As of September 30, 2025, the Company valued this investment based on the Private REIT's market approach price of $18.33 per share.

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The following table presents "Common stock investments, at fair value" as of September 30, 2025 and December 31, 2024, respectively (in thousands, except share amounts):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | | **Shares** | **Shares** | **Fair Value** | **Fair Value** |
|<br>**Investment** |<br>**Investment Date** |<br>**Property Type** | **September 30, 2025** | **December 31, 2024** | **September 30, 2025** | **December 31, 2024** |
| **Common Stock** | | | | | | |
| &nbsp;&nbsp;&nbsp;NexPoint Storage Partners | 11/6/2020 | Self-storage | 41963 | 41963 | $26010 | $30467 |
| &nbsp;&nbsp;&nbsp;Private REIT | 4/14/2022 | Ground lease | 1394213 | 1394213 | 25556 | 26922 |

---

The following table presents "Change in unrealized gain (loss) on common stock investments" (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Change in unrealized gain (loss) on NexPoint Storage Partners | $1308 | $3006 | $(4457) | $2553 |
| Change in unrealized gain (loss) on Private REIT | (557) | 1283 | (1366) | (906) |
| Change in unrealized gain (loss) on common stock investments | $751 | $4289 | $(5823) | $1647 |

---

*Equity Method Investments*

The Company owns approximately 98.0% of the total outstanding common equity of each of Resmark Forney Gateway Holdings, LLC ("RFGH") and Resmark The Brook Holdings, LLC ("RTB"). These investments are held in entities that are considered VIEs as the power to direct activities is not proportional to ownership interests. The investments are accounted for under the equity method and classified as Equity method investments.

The Company owns approximately 6.0% of the total outstanding common equity of Ridgeview Place. The investment is held in an entity that is considered a VIE as the power to direct activities is not proportional to ownership interests. The investments are accounted for under the equity method and classified as Equity method investments.

The Company owns approximately 79.1% of total outstanding membership interests of Capital Acquisitions Partners, LLC ("CAP"). The investment is held in an entity that is considered a VIE as the power to direct activities is not proportional to ownership interests. The investment is accounted for under the equity method and classified as Equity method investments.

*Preferred Stock Investments, at fair value*

On November 9, 2023, the Company invested in the Series D-1 preferred stock ("Series D-1") of IQHQ, Inc. ("IQHQ"), a privately held life sciences real estate investment trust. The Series D-1 dividend accumulates quarterly at a 10.5% dividend rate per annum. The Series D-1 are not deemed to be in-substance common stock and are accounted for as investments in equity securities measured at fair value. The securities do not have a readily determinable fair value, and the Company does not elect the measurement alternative. The Company owns approximately 11.8% of the total outstanding shares of the Series D-1 as of September 30, 2025.

The investment in the Series D-1 is a Level 3 asset in the fair value hierarchy and was initially measured using the entry price of the asset. As of September 30, 2025, the Company valued this investment at fair value, which is supported by a discounted cash flow based on the present value of the expected future cash flows of the underlying investment.

On January 2, 2025, the Company invested in the Series E preferred stock ("Series E") of IQHQ through the IQHQ Subscription Agreement (as defined in Note 15). The Series E dividend accumulates quarterly at a 16.5% dividend rate per annum. The Series E are not deemed to be in-substance common stock and are accounted for as investments in equity securities measured at fair value. The securities do not have a readily determinable fair value, and the Company does not

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elect the measurement alternative. The Company owns approximately 46.8% of the total outstanding shares of the Series E as of September 30, 2025.

The investment in the Series E is a Level 3 asset in the fair value hierarchy and was initially measured using the entry price of the asset. As of September 30, 2025, the Company valued the investment at fair value as there is a continuous offering open.

The following table presents "Preferred stock and warrant investments, at fair value" as of September 30, 2025 and December 31, 2024, respectively (in thousands, except share amounts):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | | | **Shares** | **Shares** | **Fair Value** | **Fair Value** |
|<br>**Investment** |<br>**Investment Date** |<br>**Property Type** | **September 30, 2025** | **December 31, 2024** | **September 30, 2025** | **December 31, 2024** |
| **Preferred Stock** | | | | | | |
| &nbsp;&nbsp;&nbsp;IQHQ Series D Preferred Stock | 11/9/2023 | Life Science | 18949 | 18949 | $18702 | $18949 |
| &nbsp;&nbsp;&nbsp;IQHQ Series E Preferred Stock | 1/2/2025 | Life Science | 137013 |  | 137013 |  |
| **Warrants** |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;IQHQ, Inc. | 5/23/2024 | Life Science | 43859625 | 13699840 | 116228 | 27400 |

---

The following table presents "Change in unrealized gain (loss) on preferred stock and warrant investments" (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Change in unrealized gain on preferred stock investments | $24929 | $201 | $55110 | $303 |
| Change in unrealized gain on warrants | 25458 |  | 33472 |  |
| Change in unrealized gain on preferred stock and warrant investments | $50387 | $201 | $88582 | $303 |

---

**6. Unconsolidated Variable Interest Entities**

*Unconsolidated VIEs*

The Company continually reassesses whether it remains the primary beneficiary for VIEs consolidated under the VIE model.

As of September 30, 2025, the Company has accounted for the following investments as unconsolidated VIEs:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Entities** | **Instrument** | **Asset Type** | **Accounting Treatment** | **Percentage Ownership as of September 30, 2025** | **Relationship as of September 30, 2025** |
| **Entities** | **Instrument** | **Asset Type** | **Accounting Treatment** | **Percentage Ownership as of September 30, 2025** | **Relationship as of September 30, 2025** |
| **Unconsolidated Entities:** | | | | | |
| NexPoint Storage Partners, Inc. | Common Stock | Self-storage | Fair Value | 25.5% | VIE |
| Resmark Forney Gateway Holdings, LLC | Common Equity | Multifamily | Equity Method | 98.0% | VIE |
| Resmark The Brook Holdings, LLC | Common Equity | Multifamily | Equity Method | 98.0% | VIE |
| Private REIT | Common Stock | Ground lease | Fair Value | 6.3% | VIE |
| Ridgeview Place | Common Equity | Multifamily | Equity Method | 6.0% | VIE |
| Capital Acquisitions Partners, LLC | Membership Interests | Multifamily | Equity Method | 79.1% | VIE |

---

The Company's maximum exposure to loss of value for the NSP investment is the fair value of the Company's $26.0 million NSP common stock investment. The Company's maximum exposure to loss of value for CAP is the $1.7 million carrying value. The Company's maximum exposure to loss of value for the Private REIT investment is the fair value of the Company's $25.6 million Private REIT common stock investment.

**7. CMBS Structured Pass-Through Certificates**

As of September 30, 2025, the Company held fourteen CMBS interest only strips ("CMBS I/O Strips") at fair value. The CMBS I/O Strips consist of interest only tranches of Freddie Mac structured pass-through certificates with underlying portfolios of fixed-rate mortgage loans secured primarily by stabilized multifamily properties. Multifamily structured credit risk notes ("MSCR Notes") are unguaranteed securities designed to transfer to investors a portion of the credit risk associated with eligible multifamily mortgages linked to a reference pool. Mortgage backed securities receive principal and interest on floating-rate loans secured by SFR, multifamily and self-storage properties.

The following table presents the CMBS I/O Strips as of September 30, 2025 (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Investment** | **Investment Date** | **Carrying Value** | **Property Type** | **Interest Rate** | **Current Yield (1)** | **Maturity Date** |
| **CMBS I/O Strips** | | | | | | |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 5/18/2020 | $1223 | Multifamily | 2.02% | 20.58% | 1/25/2030 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 8/6/2020 | 12733 | Multifamily | 2.98% | 23.57% | 6/25/2030 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 4/28/2021 | 3620 | Multifamily | 1.59% | 23.67% | 1/25/2030 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 5/27/2021 | 2658 | Multifamily | 3.38% | 23.50% | 5/25/2030 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 6/7/2021 | 275 | Multifamily | 2.31% | 33.44% | 11/25/2028 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 6/11/2021 | 1254 | Multifamily | 1.69% | 28.35% | 5/25/2029 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 6/21/2021 | 727 | Multifamily | —% | —% | 5/25/2030 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 8/10/2021 | 1695 | Multifamily | 1.89% | 23.92% | 4/25/2030 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 8/11/2021 | 1033 | Multifamily | 3.10% | 19.14% | 7/25/2031 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 8/24/2021 | 182 | Multifamily | 2.61% | 20.77% | 1/25/2031 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 9/1/2021 | 2677 | Multifamily | 1.92% | 22.55% | 6/25/2030 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 9/11/2021 | 2985 | Multifamily | 2.95% | 18.84% | 9/25/2031 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 1/16/2025 | 5708 | Multifamily | 5.67% | 15.01% | 11/25/2034 |
| &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 4/24/2025 | 5564 | Multifamily | 5.69% | 15.81% | 4/25/2034 |
| **Total** |  | $42334 |  | 3.37% | 20.61% |  |

---

(1)Current yield is the annualized income earned divided by the cost basis of the investment.

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<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

The following table presents the CMBS I/O Strips as of December 31, 2024 (in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| **Investment** | **Investment<br>Date** | **Carrying Value** | **Property Type** | **Interest Rate** | **Current Yield (1)** | **Maturity Date** |
| **CMBS I/O Strips** | | | | | | |
| &nbsp;&nbsp;CMBS I/O Strip | 5/18/2020 | $1395 | Multifamily | 2.02% | 16.62% | 1/25/2030 |
| &nbsp;&nbsp;CMBS I/O Strip | 8/6/2020 | 14188 | Multifamily | 2.98% | 20.73% | 6/25/2030 |
| &nbsp;&nbsp;CMBS I/O Strip | 4/28/2021 | 4175 | Multifamily | 1.59% | 20.52% | 1/25/2030 |
| &nbsp;&nbsp;CMBS I/O Strip | 5/27/2021 | 2972 | Multifamily | 3.38% | 20.56% | 5/25/2030 |
| &nbsp;&nbsp;CMBS I/O Strip | 6/7/2021 | 330 | Multifamily | 2.31% | 27.43% | 11/25/2028 |
| &nbsp;&nbsp;CMBS I/O Strip | 6/11/2021 | 1581 | Multifamily | 0.61% | 9.13% | 5/25/2029 |
| &nbsp;&nbsp;CMBS I/O Strip | 6/21/2021 | 1001 | Multifamily | 1.15% | 19.71% | 5/25/2030 |
| &nbsp;&nbsp;CMBS I/O Strip | 8/10/2021 | 1925 | Multifamily | 1.89% | 20.89% | 4/25/2030 |
| &nbsp;&nbsp;CMBS I/O Strip | 8/11/2021 | 1104 | Multifamily | 3.10% | 17.20% | 7/25/2031 |
| &nbsp;&nbsp;CMBS I/O Strip | 8/24/2021 | 199 | Multifamily | 2.61% | 18.42% | 1/25/2031 |
| &nbsp;&nbsp;CMBS I/O Strip | 9/1/2021 | 2947 | Multifamily | 1.92% | 19.72% | 6/25/2030 |
| &nbsp;&nbsp;CMBS I/O Strip | 9/11/2021 | 3162 | Multifamily | 2.95% | 17.01% | 9/25/2031 |
| **Total** |  | $34979 |  | 2.49% | 19.50% |  |

---

(1)Current yield is the annualized income earned divided by the cost basis of the investment

The following table presents activity related to the Company's CMBS I/O Strips, MSCR Notes and mortgage backed securities (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Net interest earned | $(38) | $(455) | $(57) | $772 |
| Change in unrealized gain (loss) on CMBS structured pass-through certificates | 607 | 1541 | 2439 | 1962 |
| Change in unrealized gain (loss) on MSCR Notes |  |  |  | (13) |
| Change in unrealized gain (loss) on mortgage backed securities |  | 464 |  | 1079 |
| Total | $569 | $1550 | $2382 | $3800 |

---

**8. Real Estate Investments, net**

On December 31, 2021*,* the Company acquired a 204-unit multifamily property in Charlotte, North Carolina (Hudson Montford).

On June 4, 2025, the Company entered into a Membership Interest Purchase Agreement (the "MIPA") between NexPoint Montford Investment Co, LLC (a wholly owned subsidiary of the OP, the "Seller") and NexBank Capital, Inc. ("NexBank Capital") to sell all the membership interests of NexPoint Montford, LLC ("Montford subsidiary"). On July 22, 2025 (the "closing date"), in accordance with the MIPA, the Seller sold the membership interests of the Montford subsidiary to NexBank Capital for $60.0 million. Substantially all of the fair value of the disposed membership interests is concentrated in the property that is wholly owned by the Montford subsidiary at the closing date. As such, the Company determined the Montford subsidiary is not a business, and the membership interests represent an in-substance nonfinancial asset consistent with ASC 610-20, *Gains and Losses from the Derecognition of Nonfinancial Assets*.

The membership interests sold represented 100% of the outstanding equity interests. Following the sale, the Company determined it no longer holds a controlling financial interest in the Montford subsidiary and is no longer the primary beneficiary. The Company deconsolidated the Montford subsidiary (including the property) as of July 22, 2025.

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<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

Simultaneously with the sale, the Seller, NexBank Capital and the Montford subsidiary entered into an Agreement Regarding Ownership of Bank Accounts, which retained the bank account and its balance, along with all its respective rights, titles and interest in, to, and under, at the Seller. During the nine months ended September 30, 2025, the Company recognized a gain on deconsolidation of $3.7 million which was recognized in gain on sales of real estate in the consolidated statement of operations.

A director 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 Manager and directly owns 100% of the general partnership interests in the parent of the Manager 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. For more information on the sale, see Note 17.

On October 10, 2023, the Company exercised its right to terminate and replace the existing manager of SPG Alexander JV LLC, which owns a 280-unit multifamily property in Atlanta, Georgia (Alexander at the District).

As of September 30, 2025, the components of the Company's investment in a multifamily property were as follows (in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Real Estate Investments, Net** | **Land** | **Buildings and<br>Improvements** | **Construction in Progress** | **Furniture,<br>Fixtures and<br>Equipment** | **Totals** |
| Alexander at the District | $7806 | $59785 | $— | $1438 | $69029 |
| Accumulated depreciation and amortization |  | (4014) |  | (705) | (4719) |
| Net Operating Real Estate Investments | $7806 | $55771 | $— | $733 | $64310 |

---

As of December 31, 2024, the components of the Company's investments in multifamily properties were as follows (in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Real Estate Investments, Net** | **Land** | **Buildings and<br>Improvements** | **Construction in Progress** | **Furniture,<br>Fixtures and<br>Equipment** | **Totals** |
| Hudson Montford | $10996 | $50204 | $— | $1018 | $62218 |
| Alexander at the District | 7806 | 59331 | 2 | 1229 | 68368 |
| Accumulated depreciation and amortization |  | (7662) |  | (1088) | (8750) |
| Total Real Estate Investments, Net | $18802 | $101873 | $2 | $1159 | $121836 |

---

------

<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

The following table reflects the revenue and expenses for the three and nine months ended September 30, 2025 and 2024 for our multifamily properties (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| **Revenues** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Rental income | $1569 | $2195 | $6401 | $6316 |
| &nbsp;&nbsp;&nbsp;Other income | 10 | (6) | 89 | 119 |
| Total revenues | 1579 | 2189 | 6490 | 6435 |
| **Expenses** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | 1456 | 2096 | 5113 | 6270 |
| &nbsp;&nbsp;&nbsp;Real estate taxes and insurance | 217 | 150 | 980 | 1034 |
| &nbsp;&nbsp;&nbsp;Property operating expenses | 389 | 653 | 1516 | 1799 |
| &nbsp;&nbsp;&nbsp;Property general and administrative expenses | 92 | 98 | 333 | 175 |
| &nbsp;&nbsp;&nbsp;Property management fees | 51 | 66 | 192 | 190 |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization | 620 | 1099 | 2313 | 4499 |
| &nbsp;&nbsp;&nbsp;Rate cap (income) expense | 1 | 138 | (11) | 139 |
| &nbsp;&nbsp;&nbsp;Casualty (gain) loss |  |  |  | (1) |
| Total expenses | 2826 | 4300 | 10436 | 14105 |
| **Net income (loss) from consolidated real estate owned** | $(1247) | $(2111) | $(3946) | $(7670) |

---

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<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

**9*.* Debt**

The following table summarizes the Company's financing arrangements in place as of September 30, 2025 (dollars in thousands):

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| | **Facility** | **Facility** | **Facility** | **Facility** | **Facility** | **Facility** | **Facility** | **Collateral** | **Collateral** | **Collateral** | **Collateral** |
| | **Date issued** | **Outstanding<br>face amount** | **Carrying<br>value** | **Final stated<br>maturity** | | **Weighted<br>average<br>interest<br>rate (1)** | **Weighted<br>average<br>life (years)<br>(2)** | **Outstanding<br>face amount** | **Amortized cost basis** | **Carrying<br>value (3)** | **Weighted<br>average<br>life (years)<br>(2)** |
| **Master Repurchase Agreements** | | | | | | | | | | | |
| CMBS |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Mizuho(4) | 4/15/2020 | $257605 | $257605 | N/A | (5) | 5.96% | 0.0 | $740573 | $352449 | $337306 | 4.1 |
| **Asset Specific Financing** |  |  |  |  |  |  |  |  |  |  |  |
| Single Family Rental loans |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Freddie Mac | 7/12/2019 | 108848 | 108848 | 7/12/2029 |  | 2.69% | 2.0 | 119243 | 122176 | 122176 | 2.0 |
| Mezzanine loans |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Freddie Mac | 10/20/2020 | 57945 | 57945 | 8/1/2031 |  | 0.30% | 4.6 | 98254 | 90336 | 90336 | 4.6 |
| Multifamily properties |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Argentic | 10/10/2023 | 63500 | 63500 | 11/6/2025 | (6) | 8.59% | 0.1 | N/A | 64310 | 64310 | 0.1 |
| Common stock investment |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NexBank, SSB | 4/29/2024 | 10000 | 9958 | 4/27/2026 |  | 8.23% | 0.6 | N/A | N/A | 25555 | N/A |
| **Unsecured Financing** |  |  |  |  |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Various | 10/15/2020 | 36500 | 36485 | 10/15/2025 | (7) | 7.50% | 0.0 | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Various | 4/20/2021 | 180000 | 179232 | 5/1/2026 |  | 5.75% | 0.6 | N/A | N/A | N/A | N/A |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NFRO REIT Sub, LLC | 10/18/2022 | 6500 | 6500 | 10/18/2027 |  | 7.50% | 2.0 | N/A | N/A | N/A | N/A |
| Total/weighted average |  | $720898 | $720073 |  |  | 5.32% | 0.9 | $958070 | $629271 | $639683 | 3.9 |

---

(1)Weighted-average interest rate using unpaid principal balances.

(2)Weighted-average life is determined using the maximum maturity date of the corresponding loans, assuming all extension options are exercised by the borrower.

(3)CMBS are shown at fair value on an unconsolidated basis. SFR Loans and mezzanine loans are shown at amortized cost.

(4)On April 15, 2020, three of our subsidiaries entered into a master repurchase agreement with Mizuho Securities ("Mizuho"). Borrowings under these repurchase agreements are collateralized by portions of the CMBS B-Pieces and CMBS I/O Strips.

(5)The master repurchase agreement with Mizuho does not have a stated maturity date. The transactions in place have a one-month to two-month tenor and are expected to roll accordingly.

(6)Debt was assumed upon consolidation of this property and recorded at the outstanding principal amount. The loan was extended on November 6, 2024 for one year to November 6, 2025. The loan was further extended one year to November 6, 2026.

(7)On October 15, 2025, upon maturity, the OP repaid $37.9 million of its 7.5% OP Notes, which includes accrued interest, and extinguished the 7.50% OP Notes.

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<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

The following table summarizes the Company's financing arrangements in place as of December 31, 2024 (dollars in thousands):

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
| | **Facility** | **Facility** | **Facility** | **Facility** | **Facility** | **Facility** | **Facility** | **Collateral** | **Collateral** | **Collateral** | **Collateral** |
| | **Date issued** | **Outstanding<br>face amount** | **Carrying value** | **Final stated<br>maturity** | | **Weighted<br>average interest<br>rate (1)** | **Weighted<br>average life<br>(years) (2)** | **Outstanding<br>face amount** | **Amortized cost<br>basis** | **Carrying value<br>(3)** | **Weighted<br>average life<br>(years) (2)** |
| **Master Repurchase Agreements** | | | | | | | | | | | |
| **CMBS** | | | | | | | | | | | |
| Mizuho(4) | 4/15/2020 | $243454 | $243454 | N/A | (5) | 6.49% | 0.0 | $740022 | $360427 | $350379 | 4.7 |
| **Asset Specific Financing** |  |  |  |  |  |  |  |  |  |  |  |
| **Single Family Rental loans** |  |  |  |  |  |  |  |  |  |  |  |
| Freddie Mac | 7/12/2019 | 110097 | 110097 | 7/12/2029 |  | 2.70% | 2.8 | 120618 | 124071 | 124071 | 2.8 |
| **Mezzanine loans** |  |  |  |  |  |  |  |  |  |  |  |
| Freddie Mac | 10/20/2020 | 59252 | 59253 | 8/1/2031 |  | 0.30% | 5.3 | 96817 | 98597 | 98597 | 5.3 |
| **Multifamily properties** |  |  |  |  |  |  |  |  |  |  |  |
| CBRE | 12/31/2021 | 32480 | 31964 | 6/1/2028 | (6) | 8.06% | 3.4 | N/A | 56348 | 56348 | 3.4 |
| Argentic | 10/10/2023 | 63500 | 63500 | 11/6/2025 | (7) | 8.59% | 0.8 | N/A | 65488 | 65488 | 0.8 |
| **Common stock investment** |  |  |  |  |  |  |  |  |  |  |  |
| NexBank, SSB | 4/29/2024 | 10000 | 9869 | 4/28/2025 |  | 8.78% | 0.3 | N/A | N/A | 26922 | N/A |
| **Promissory note** |  |  |  |  |  |  |  |  |  |  |  |
| Raymond James | 5/20/2024 | 57520 | 56550 | 5/20/2025 | (8) | 10.55% | 0.4 | 140283 | 139324 | 139324 | 2.1 |
| **Unsecured Financing** |  |  |  |  |  |  |  |  |  |  |  |
| Various | 10/15/2020 | 36500 | 36205 | 10/25/2025 |  | 7.50% | 0.8 | N/A | N/A | N/A | N/A |
| Various | 4/20/2021 | 180000 | 178296 | 5/1/2026 |  | 5.75% | 1.3 | N/A | N/A | N/A | N/A |
| NFRO REIT Sub, LLC | 10/18/2022 | 6500 | 6500 | 10/18/2027 |  | 7.50% | 2.8 | N/A | N/A | N/A | N/A |
| **Total/weighted average** |  | $799303 | $795688 |  |  | 5.95% | 1.4 | $1097740 | $844255 | $861129 | 4.2 |

---

(1)Weighted-average interest rate using unpaid principal balances.

(2)Weighted-average life is determined using the maximum maturity date of the corresponding loans, assuming all extension options are exercised by the borrower.

(3)CMBS are shown at fair value on an unconsolidated basis. SFR Loans and mezzanine loans are shown at amortized cost.

(4)On April 15, 2020, three of our subsidiaries entered into a master repurchase agreement with Mizuho Securities ("Mizuho"). Borrowings under these repurchase agreements are collateralized by portions of the CMBS B-Pieces and CMBS I/O Strips.

(5)The master repurchase agreement with Mizuho does not have a stated maturity date. The transactions in place have a one-month to two-month tenor and are expected to roll accordingly.

(6)Debt was assumed upon acquisition of this property and recorded at the outstanding principal amount, net of debt issuance costs. The loan can be prepaid at a 1.0% prepayment premium on any unpaid principal. The loan is open to pre-payment in the last three months of the term.

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<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

(7)Debt was assumed upon consolidation of this property and recorded at the outstanding principal amount. The loan was extended on November 6, 2024 for one year.

(8)Debt was extended from the original loan maturity of November 20, 2024 to November 20, 2025.

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<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

Prior to the Formation Transaction, two of our subsidiaries entered into a loan and security agreement dated July 12, 2019 with Freddie Mac (the "Credit Facility"). Under the Credit Facility, these entities borrowed approximately $788.8 million in connection with their acquisition of senior pooled mortgage loans backed by SFR properties (the "Underlying Loans"). No additional borrowings can be made under the Credit Facility, and our obligations will be secured by the Underlying Loans. The Credit Facility is guaranteed by certain members of the Contribution Group and the OP. The guarantors are subject to minimum net worth and liquidity covenants. The Credit Facility continues to be guaranteed by members of the Contribution Group and the OP as of September 30, 2025. The Credit Facility was assumed by the Company as part of the Formation Transaction at carrying value which approximated fair value. As such, the remaining outstanding balance of $788.8 million was contributed to the Company on February 11, 2020*.* Our borrowings under the Credit Facility will mature on July 12, 2029*.* However, if an Underlying Loan matures or is paid off prior to July 12, 2029, the Company will be required to repay the portion of the Credit Facility that is allocated to that loan. As of September 30, 2025, the outstanding balance on the Credit Facility was $108.8 million.

We, through the Subsidiary OPs, have borrowed approximately $257.6 million under our repurchase agreements and posted $740.6 million par value of our CMBS B-Piece and CMBS I/O Strip investments as collateral as of September 30, 2025. The CMBS B-Pieces and CMBS I/O Strips held as collateral are illiquid and irreplaceable in nature. These assets are restricted solely to satisfy the interest and principal balances owed to the lender.

The Company has issued an aggregate principal amount of $180.0 million of its 5.75% Senior Unsecured Notes ("5.75% Notes").

As of September 30, 2025 the principal outstanding senior loans and mezzanine loans consisted of the following (dollars in thousands):

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investment** | **Investment Date** | **Outstanding Principal Balance (1)** | | **Location** | **Property Type** | **Interest Type** | **Interest Rate** | **Maturity Date** |
| **Senior Loans** | | | | | | | | |
| &nbsp;&nbsp;&nbsp;Senior loan | 2/11/2020 | $28564 | (2) | Various | Single-family | Fixed | 2.14% | 12/1/2025 |
| &nbsp;&nbsp;&nbsp;Senior loan | 2/11/2020 | 32719 |  | Various | Single-family | Fixed | 2.70% | 11/1/2028 |
| &nbsp;&nbsp;&nbsp;Senior loan | 2/11/2020 | 9284 |  | Various | Single-family | Fixed | 2.45% | 3/1/2026 |
| &nbsp;&nbsp;&nbsp;Senior loan | 2/11/2020 | 6691 |  | Various | Single-family | Fixed | 3.51% | 2/1/2028 |
| &nbsp;&nbsp;&nbsp;Senior loan | 2/11/2020 | 8581 |  | Various | Single-family | Fixed | 3.30% | 10/1/2028 |
| &nbsp;&nbsp;&nbsp;Senior loan | 2/11/2020 | 7643 |  | Various | Single-family | Fixed | 3.14% | 1/1/2029 |
| &nbsp;&nbsp;&nbsp;Senior loan | 2/11/2020 | 5664 |  | Various | Single-family | Fixed | 2.99% | 3/1/2029 |
| &nbsp;&nbsp;&nbsp;Senior loan | 2/11/2020 | 5056 |  | Various | Single-family | Fixed | 3.14% | 12/1/2028 |
| &nbsp;&nbsp;&nbsp;Senior loan | 2/11/2020 | 4646 |  | Various | Single-family | Fixed | 2.64% | 10/1/2028 |
| **Total** |  | $108848 |  |  |  |  | 2.69% |  |
| **Mezzanine Loans** | **Mezzanine Loans** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | $8723 |  | Wilmington, DE | Multifamily | Fixed | 0.30% | 6/1/2029 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 7344 |  | White Marsh, MD | Multifamily | Fixed | 0.30% | 4/1/2031 |

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 6353 | Philadelphia, PA | Multifamily | Fixed | 0.30% | 7/1/2031 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 5881 | Daytona Beach, FL | Multifamily | Fixed | 0.30% | 7/1/2031 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 4523 | Laurel, MD | Multifamily | Fixed | 0.30% | 7/1/2031 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 4179 | Temple Hills, MD | Multifamily | Fixed | 0.30% | 1/1/2029 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 3390 | Temple Hills, MD | Multifamily | Fixed | 0.30% | 5/1/2029 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 3348 | Lakewood, NJ | Multifamily | Fixed | 0.30% | 5/1/2029 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 2454 | North Aurora, IL | Multifamily | Fixed | 0.30% | 11/1/2028 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 2264 | Rosedale, MD | Multifamily | Fixed | 0.30% | 10/1/2028 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 2215 | Cockeysville, MD | Multifamily | Fixed | 0.30% | 7/1/2031 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 2026 | Laurel, MD | Multifamily | Fixed | 0.30% | 7/1/2029 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 1836 | Vancouver, WA | Multifamily | Fixed | 0.30% | 8/1/2031 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 1763 | Tyler, TX | Multifamily | Fixed | 0.30% | 11/1/2028 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 918 | Atlanta, GA | Multifamily | Fixed | 0.30% | 8/1/2031 |
| &nbsp;&nbsp;&nbsp;Mezzanine loan | 10/20/2020 | 728 | Des Moines, IA | Multifamily | Fixed | 0.30% | 3/1/2029 |
| **Total** |  | $57945 |  |  |  | 0.30% |  |

---

(1)Outstanding principal balance represents the total repurchase agreement balance outstanding as of September 30, 2025.

(2)The Company deferred maturity to December 1, 2025

For the nine months ended September 30, 2025 and 2024, the activity related to the carrying value of the master repurchase agreements, secured financing agreements and unsecured financing were as follows (in thousands):

---

| | | |
|:---|:---|:---|
| | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2025** | **2024** |
| **Balances as of January 1,** | $795688 | $1268212 |
| &nbsp;&nbsp;&nbsp;Principal borrowings | 52428 | 231106 |
| &nbsp;&nbsp;&nbsp;Principal repayments | (99127) | (688674) |
| &nbsp;&nbsp;&nbsp;Principal repayments on mortgages payable | (32125) | (173) |
| &nbsp;&nbsp;&nbsp;Loss on extinguishment of debt | 1839 | 359 |
| &nbsp;&nbsp;&nbsp;Accretion of discounts | 1209 | 1121 |
| &nbsp;&nbsp;&nbsp;Amortization of deferred financing costs | 161 | 36 |
| **Balances as of September 30,** | $720073 | $811987 |

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*Schedule of Debt Maturities*

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

---

| | | | |
|:---|:---|:---|:---|
| **Year** | **Recourse** | **Non-recourse** | **Total** |
| 2025(1) | $100000 | $286169 | $386169 |
| 2026 | 190000 | 9284 | 199284 |
| 2027 | 6500 |  | 6500 |
| 2028 |  | 64174 | 64174 |
| 2029 |  | 35701 | 35701 |
| Thereafter |  | 29070 | 29070 |
|  | $296500 | $424398 | $720898 |

---

(1)The transactions in place in the master repurchase agreement with Mizuho have a one-month to two-month tenor and are expected to roll accordingly.

**10. Fair Value of Financial Instruments**

*Derivative Financial Instruments and Hedging Activities*

In the normal course of business, our operations are exposed to market risks, including the effect of changes in interest rates. We may enter into derivative financial instruments to offset this underlying market risk. There have been no significant changes in our policy and strategy from what was disclosed in the financial statements included in our Annual Report.

*Financial Instruments Carried at Fair Value*

See Notes 2, 4, 5, 6 and 7 for additional information.

*Financial Instruments Not Carried at Fair Value*

The fair values of cash and cash equivalents, accrued interest and dividends, accounts payable and other accrued liabilities and accrued interest payable 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 creditworthiness and market conditions available for the issuance of long-term debt with similar terms and remaining maturities. These financial instruments utilize Level 2 inputs.

Amounts borrowed under master repurchase agreements are based on their contractual amounts that reasonably approximate their fair value given the short to moderate term and floating rate nature.

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The carrying values and fair values of the Company's financial assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments not carried at fair value as of September 30, 2025 (in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Fair Value** | **Fair Value** | **Fair Value** | **Fair Value** |
| |<br>**Carrying<br>Value** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Assets** | | | | | |
| &nbsp;&nbsp;Cash and cash equivalents | $17921 | $17921 | $— | $— | $17921 |
| &nbsp;&nbsp;Restricted cash | 3640 | 3640 |  |  | 3640 |
| &nbsp;&nbsp;Loans, held-for-investment, net | 583646 |  |  | 578970 | 578970 |
| &nbsp;&nbsp;Preferred stock investments, at fair value | 155715 |  |  | 155715 | 155715 |
| &nbsp;&nbsp;Common stock investments, at fair value | 51566 |  |  | 51566 | 51566 |
| &nbsp;&nbsp;Equity method investments | 1660 |  |  | 1660 | 1660 |
| &nbsp;&nbsp;Mortgage loans, held-for-investment, net | 122176 |  |  | 120573 | 120573 |
| &nbsp;&nbsp;Accrued interest | 60703 | 60703 |  |  | 60703 |
| &nbsp;&nbsp;Mortgage loans held in variable interest entities, at fair value | 4054259 |  | 4047023 | 7236 | 4054259 |
| &nbsp;&nbsp;CMBS structured pass-through certificates, at fair value | 42334 |  | 42334 |  | 42334 |
| &nbsp;&nbsp;Stock warrant investments | 116228 |  |  | 116228 | 116228 |
| &nbsp;&nbsp;Accounts receivable and other assets | 3916 | 3916 |  |  | 3916 |
| **Total Assets** | $5213764 | $86180 | $4089357 | $1031948 | $5207485 |
| **Liabilities** |  |  |  |  |  |
| &nbsp;&nbsp;Secured financing agreements, net | $176752 | $— | $— | $155359 | $155359 |
| &nbsp;&nbsp;Master repurchase agreements | 257605 |  |  | 257605 | 257605 |
| &nbsp;&nbsp;Unsecured notes, net | 222217 |  | 222171 |  | 222171 |
| &nbsp;&nbsp;Mortgages payable, net | 63500 |  |  | 59574 | 59574 |
| &nbsp;&nbsp;Accounts payable and other accrued liabilities | 11889 | 11889 |  |  | 11889 |
| &nbsp;&nbsp;Accrued interest payable | 15326 | 15326 |  |  | 15326 |
| &nbsp;&nbsp;Bonds payable held in variable interest entities, at fair value | 3755809 |  | 3755809 |  | 3755809 |
| **Total Liabilities** | $4503098 | $27215 | $3977980 | $472538 | $4477733 |

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The carrying values and fair values of the Company's financial assets and liabilities recorded at fair value on a recurring basis, as well as other financial instruments not carried at fair value as of December 31, 2024 (in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | | **Fair Value** | **Fair Value** | **Fair Value** | **Fair Value** |
| |<br>**Carrying<br>Value** | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Assets** | | | | | |
| &nbsp;&nbsp;Cash and cash equivalents | $3877 | $3877 | $— | $— | $3877 |
| &nbsp;&nbsp;Restricted cash | 3176 | 3176 |  |  | 3176 |
| &nbsp;&nbsp;Loans, held-for-investment, net | 497544 |  |  | 505866 | 505866 |
| &nbsp;&nbsp;Preferred stock investments, at fair value | 18949 |  |  | 18949 | 18949 |
| &nbsp;&nbsp;Common stock investments, at fair value | 57389 |  |  | 57389 | 57389 |
| &nbsp;&nbsp;Equity method investments | 1504 |  |  | 1504 | 1504 |
| &nbsp;&nbsp;Mortgage loans, held-for-investment, net | 263395 |  |  | 262037 | 262037 |
| &nbsp;&nbsp;Accrued interest | 41208 | 41208 |  |  | 41208 |
| &nbsp;&nbsp;Mortgage loans held in variable interest entities, at fair value | 4343359 |  | 4343359 |  | 4343359 |
| &nbsp;&nbsp;CMBS structured pass-through certificates, at fair value | 34979 |  | 34979 |  | 34979 |
| &nbsp;&nbsp;Stock warrant investments | 27400 |  |  | 27400 | 27400 |
| &nbsp;&nbsp;Accounts receivable and other assets | 1457 | 1184 | 273 |  | 1457 |
| **Total Assets** | $5294237 | $49445 | $4378611 | $873145 | $5301201 |
| **Liabilities** |  |  |  |  |  |
| &nbsp;&nbsp;Secured financing agreements, net | $235769 | $— | $— | $250285 | $250285 |
| &nbsp;&nbsp;Master repurchase agreements | 243454 |  |  | 243454 | 243454 |
| &nbsp;&nbsp;Unsecured notes, net | 221001 |  | 213457 |  | 213457 |
| &nbsp;&nbsp;Mortgages payable, net | 95464 |  |  | 92157 | 92157 |
| &nbsp;&nbsp;Accounts payable and other accrued liabilities | 9458 | 9458 |  |  | 9458 |
| &nbsp;&nbsp;Accrued interest payable | 10020 | 10020 |  |  | 10020 |
| &nbsp;&nbsp;Bonds payable held in variable interest entities, at fair value | 4029214 |  | 4029214 |  | 4029214 |
| **Total Liabilities** | $4844380 | $19478 | $4242671 | $585896 | $4848045 |

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The significant unobservable inputs used in the fair value measurement of the Company's investments are the discount rate and terminal capitalization rate. Significant increases (decreases) in any of those inputs in isolation could result in a significantly lower (higher) fair value measurement.

Management elected the fair value option to account for the Company's Level 3 assets as of September 30, 2025 (in thousands):

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| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Fair<br>Value** | **Valuation Technique** | **Unobservable Inputs** | **Range** | **Weighted Average (1)** | **Weighted Average (1)** |
| &nbsp;&nbsp;NexPoint Storage Partners | $26010 | Discounted cash flow | Terminal cap rate | 5.00% - 5.50% | 5.25 | % |
|  |  |  | Discount rate | 7.00% - 9.00% | 8.00 | % |
| &nbsp;&nbsp;IQHQ Series D Preferred Stock | 18703 | Discounted cash flow | Discount rate | 15.25% - 16.75% | 16.00 | % |
| &nbsp;&nbsp;IQHQ Series E Preferred Stock | 137013 | Discounted cash flow | Discount rate | 15.76% - 17.26% | 16.51 | % |
| &nbsp;&nbsp;Private REIT | 25556 | Market approach | NAV per share multiple | 0.95 - 1.05x | 1.00 | x |
| &nbsp;&nbsp;IQHQ Warrants | 116228 | NAV Approach | Marketability Discount (2) | 29.00% - 50.00% | 39.50 | % |

---

(1)Averages are weighted based on the fair value of the related instrument

(2)Change in valuation technique as a result transitioning third party report

The following is a summary of significant unobservable inputs used in the fair valuation of the Company's Level 3 assets carried at fair value on the Consolidated Balance Sheets as of December 31, 2024 (dollars in thousands):

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| | **Fair<br>Value** | **Valuation Technique** | **Unobservable Inputs** | **Range** | **Weighted Average (1)** |
| &nbsp;&nbsp;NexPoint Storage Partners | $30467 | Discounted cash flow | Terminal cap rate | 5.00% - 5.50% | 5.25% |
|  |  |  | Discount rate | 8.00% - 8.50% | 8.25% |
| &nbsp;&nbsp;IQHQ, Inc. | 18949 | Discounted cash flow | Discount rate | 11.00% - 12.00% | 11.50% |
| &nbsp;&nbsp;Private REIT | 26922 | Market approach | NAV per share multiple | 1.00x - 1.15x | 1.08x |

---

(1)Averages are weighted based on the fair value of the related instrument.

The table below reflects a summary of changes for the Company's Level 3 common and preferred stock assets carried at fair value on the Consolidated Balance Sheets for the nine months ended September 30, 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
| | **Balances as of December 31, 2024** | **Additions** | **Change in Unrealized Gains/(Losses)** | **Balances as of September 30, 2025** |
| &nbsp;&nbsp;NexPoint Storage Partners | $30467 | $— | $(4457) | $26010 |
| &nbsp;&nbsp;IQHQ Series D Preferred Stock | 18949 |  | (247) | 18702 |
| &nbsp;&nbsp;IQHQ Series E Preferred Stock |  | 81656 | 55357 | 137013 |
| &nbsp;&nbsp;Private REIT | 26922 |  | (1366) | 25556 |
| &nbsp;&nbsp;IQHQ Warrants | 27400 | 55356 | 33472 | 116228 |

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The table below reflects a summary of changes for the Company's Level 3 common and preferred stock assets carried at fair value on the Consolidated Balance Sheets for the nine months ended September 30, 2024:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Balances as of December 31, 2023** | **Additions** | **Change in Unrealized Gains/(Losses)** | **Balances as of September 30, 2024** |
| &nbsp;&nbsp;NexPoint Storage Partners | $33129 | $— | $2553 | $35682 |
| &nbsp;&nbsp;IQHQ, Inc. | 14776 | 3506 | 303 | 18585 |
| &nbsp;&nbsp;Private REIT | 28400 |  | (906) | 27494 |

---

*Other Financial Instruments Carried at Fair Value*

Redeemable noncontrolling interests in the OP and the 9.00% Series B Cumulative Redeemable Preferred Stock, par value $0.01 per share (the "Series B Preferred Stock") have redemption features and are marked to their redemption value if such value exceeds the carrying value. The redemption values are based on the fair value of the Company's common stock at the redemption date, and therefore, are calculated based on the fair value of the Company's common stock at the balance sheet date. Since the valuation is based on observable inputs such as quoted prices for similar instruments in active markets, the redeemable noncontrolling interests in the OP and the Series B Preferred Stock are classified as Level 2 if they are adjusted to their redemption value. As of September 30, 2025, the redeemable noncontrolling interests in the OP and the Series B Preferred Stock are valued at their carrying value on the Consolidated Balance Sheets.

**11. Stockholders**' **Equity**

*Common Stock*

During the nine months September 30, 2025, the Company issued 260,699 shares of common stock, par value of $0.01 per share pursuant to the Amended and Restated NexPoint Real Estate Finance, Inc. 2020 Long Term Incentive Plan (the "LTIP").

As of September 30, 2025, the Company had 17,721,828 shares of common stock issued and outstanding.

*Preferred Stock*

On July 24, 2020, the Company issued 2,000,000 shares of its 8.50% Series A Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock") at a price to the public of $24.00 per share, for gross proceeds of $48.0 million before deducting underwriting discounts and commissions of approximately $1.2 million and other offering expenses of approximately $0.8 million. The Series A Preferred Stock has a $25.00 per share liquidation preference.

On November 2, 2023, the Company announced the launch of a continuous public offering (the "Series B Preferred Offering") of up to 16,000,000 shares of its Series B Preferred Stock at a price to the public of $25.00 per share. On October 1, 2025, the Company increased the number of authorized and offered shares of Series B Preferred Stock to 17,200,000. As of September 30, 2025, the Company has issued 13,717,142 shares of Series B Preferred Stock for gross proceeds of $335.1 million before deducting selling commissions and dealer manager fees of approximately $26.6 million. The Series B Preferred Stock has a $25.00 per share liquidation preference. The Company expects that the Series B Preferred Offering will terminate on the earlier of the date the Company sells all 17,200,000 shares of the Series B Preferred Stock in the Series B Preferred Offering or December 29, 2026 (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 year ended December 31, 2024, Series B Preferred shareholders redeemed 1,746 shares of Series B Preferred Stock. During the nine months ended September 30, 2025, Series B Preferred shareholders redeemed 56,225 shares of Series B Preferred Stock.

*Share Repurchase Program*

On March 9, 2020, the Board authorized a share repurchase program (the "Prior Share Repurchase Program") through which the Company could repurchase an indeterminate number of shares of our common stock at an aggregate market value of up to $10.0 million in shares of its common stock during a two-year period that expired on March 9, 2022. On September 28, 2020, the Board authorized the expansion of the Prior Share Repurchase Program to include the Company's Series A Preferred Stock with the same period and repurchase limit. The Company was able to utilize various methods to affect the repurchases, and the timing and extent of the repurchases will depend upon several factors, including

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market and business conditions, regulatory requirements and other corporate considerations, including whether the Company's common stock is trading at a significant discount to net asset value ("NAV") per share. From inception through expiration, the Company repurchased 327,422 shares of its common stock, par value $0.01 per share, at a total cost of approximately $4.8 million, or $14.61 per share. These repurchased shares of common stock are classified as treasury stock and reduce the number of shares of the Company's common stock outstanding and, accordingly, are considered in the weighted-average number of shares outstanding during the period until cancelled. On March 3, 2021, the Company cancelled 40,435 shares of common stock, and on May 29, 2024, the Company cancelled 286,987 shares of common stock, eliminating the remaining treasury shares.

On February 22, 2023, the Board authorized a share repurchase program (the "Share Repurchase Program") through which the Company may repurchase an indeterminate number of shares of our common stock and Series A Preferred Stock at an aggregate market value of up to $20.0 million in shares of its common stock, during a two-year period set to expire on February 22, 2025. The Board extended the Share Repurchase Program for an additional two-year period set to expire on February 24, 2027. The Company may utilize various methods to affect the repurchases, and the timing and extent of the repurchases will depend upon several factors, including market and business conditions, regulatory requirements and other corporate considerations, including whether the Company's common stock is trading at a significant discount to NAV per share. Repurchases under this program may be discontinued at any time. The Company has not made any purchases under the Share Repurchase Program as of September 30, 2025.

*Long Term Incentive Plan*

On January 31, 2020, the NexPoint Real Estate Finance, Inc. 2020 Long Term Incentive Plan (the "Original LTIP") was approved and on May 7, 2020, the Company filed a registration statement on Form S-8 registering 1,319,734 shares of common stock, which the Company may issue pursuant to the Original LTIP.

On January 26, 2024, the LTIP was approved and on January 30, 2024, the Company filed a registration statement on Form S-8 registering an additional 2,308,000 shares of common stock, which the Company may issue pursuant to the LTIP. The LTIP authorizes the compensation committee of the Board to provide equity-based compensation in the form of stock options, appreciation rights, restricted shares, restricted stock units, performance shares, performance units and certain other awards denominated or payable in, or otherwise based on, the Company's common stock or factors that may influence the value of the Company's common stock, plus cash incentive awards, for the purpose of providing the Company's directors, officers and other key employees (and those of the Manager and the Company's subsidiaries), and potentially certain non-employees who perform employee-type functions, incentives and rewards for performance.

*Restricted Stock Units* 

Under the LTIP, restricted stock units may be granted to the Company's directors, officers and other key employees (and those of the Manager and the Company's subsidiaries) and typically vest over a three to five-year period for officers, employees and certain key employees of the Manager and annually for directors. The most recent grant of restricted stock units to officers, employees and certain key employees of the Manager will vest over a four-year period. Beginning on the date of grant, restricted stock units earn dividends that are payable in cash on the vesting date. On February 22, 2021, the Company granted 220,352 restricted stock units to its officers and other employees of the Manager and 11,832 restricted stock units to its directors, on November 8, 2021, the Company granted 1,201 restricted stock units to the sole member of the general partner of one of the Company's subsidiaries, on February 21, 2022, the Company granted 264,476 restricted stock units to its officers and other employees of the Manager and 12,464 restricted stock units to its directors, on April 4, 2023, the Company granted 418,685 restricted stock units to its officers and other employees of the Manager and 21,370 restricted stock units to its directors, on March 13, 2024 the Company granted 442,666 restricted stock units to its officers and other employees of the Manager and 22,650 restricted stock units to its directors, and on April 3, 2025, the Company granted 449,664 restricted stock units to its officers and other employees of the Manager and 33,108 restricted stock units

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to its directors. 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 stock units granted, vested, forfeited and outstanding as of September 30, 2025:

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| | | | |
|:---|:---|:---|:---|
| | **2025** | **2025** | **2025** |
| | **Number of Units** | | **Weighted Average<br>Grant Date Fair Value** |
| Outstanding December 31, 2024 | 920076 |  | $15.81 |
| Granted | 482772 |  | 14.66 |
| Vested | (363852) | (1) | 16.48 |
| Forfeited | (13390) |  | 14.63 |
| Outstanding September 30, 2025 | 1025606 |  | $15.15 |

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(1)Certain key employees of the Manager elected to net the taxes owed upon vesting against the shares issued resulting in 260,699 shares being issued as shown on the consolidated statements of stockholders' equity.

The vesting schedule for the restricted stock units as of September 30, 2025 is as follows:

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| | | | | |
|:---|:---|:---|:---|:---|
| | **Shares Vesting** | **Shares Vesting** | **Shares Vesting** | **Shares Vesting** |
| | **February** | **March** | **April** | **Total** |
| 2026 | 51950 | 105667 | 232475 | 390092 |
| 2027 | 112419 | 105664 | 86945 | 305028 |
| 2028 | 112414 | 105665 |  | 218079 |
| 2029 | 112407 |  |  | 112407 |
| **Total** | 389190 | 316996 | 319420 | 1025606 |

---

As of September 30, 2025, total unrecognized compensation expense on restricted stock unit awards was approximately $12.2 million, and the expense is expected to be recognized over a weighted average vesting period of 0.8 years.

*At-The-Market-Offering*

On March 15, 2022, the Company, the OP and the Manager entered into separate equity distribution agreements (the "Equity Distribution Agreements") with each of Raymond James & Associates, Inc. ("Raymond James"), Keefe, Bruyette & Woods, Inc., Robert W. Baird & Co. Incorporated and Virtu Americas LLC, pursuant to which the Company could issue and sell from time to time shares of the Company's common stock and Series A Preferred Stock having an aggregate sales price of up to $100.0 million (the "ATM Program"). The Equity Distribution Agreements provided for the issuance and sale of common stock or Series A Preferred Stock by the Company through a sales agent acting as a sales agent or directly to the sales agent acting as principal for its own account at a price agreed upon at the time of sale.

Sales of shares of common stock or Series A Preferred Stock under the ATM Program, if any, may be made in transactions that are deemed to be "at the market" offerings, as defined in Rule 415 under the Securities Act of 1933 (the "Securities Act") including, without limitation, sales made by means of ordinary brokers' transactions on the New York Stock Exchange ("NYSE"), to or through a market maker at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices based on prevailing market prices.

The following table contains summary information of the ATM Program for sales from inception through September 30, 2025:

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| | |
|:---|:---|
| Gross Proceeds | $12575493 |
| Shares of Common Stock Issued | 531728 |
| Gross Average Sale Price per Share of Common Stock | $23.65 |
| Sales Commissions | $188655 |
| Offering Costs | 888249 |
| Net Proceeds | 11498589 |
| Average Price Per Share, net | $21.62 |

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*OP Unit Redemptions*

At the 2021 annual meeting of the Company, the Company's stockholders approved the potential issuance of 13,758,906 shares of the Company's common stock to related parties in connection with the redemption of their OP Units or SubOP Units that may be redeemed for OP Units. As of September 30, 2025, the Company had issued 8,748,735 shares of the Company's common stock to redeeming unitholders.

**12. Earnings Per Share**

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

Diluted earnings per share is computed by adjusting basic earnings per share for the dilutive effect of the assumed vesting of restricted stock units. Additionally, the Company includes the dilutive effect of the potential redemption of OP Units for common shares in accordance with the third amended and restated limited partnership agreement of the OP (as amended, the "OP LPA"). The Company also includes the assumed conversion of the Series B Preferred Stock using the if-converted method. During periods of net loss, the assumed vesting of restricted stock units is anti-dilutive and is not included in the calculation of earnings (loss) per share.

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

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2025** | **2024** | **2025** | **2024** |
| Net income (loss) attributable to common stockholders | $35032 | $16116 | $63834 | $9317 |
| Earnings for basic computations |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Net income attributable to redeemable noncontrolling interests | 7782 | 3940 | 15383 | 4322 |
| &nbsp;&nbsp;&nbsp;Net income attributable to Series B preferred stockholders | 7174 | 2403 | 17256 | 4545 |
| Net income (loss) for diluted computations | $49988 | $22459 | $96473 | $18184 |
| Weighted-average common shares outstanding |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Average number of common shares outstanding - basic | 17722 | 17461 | 17651 | 17383 |
| &nbsp;&nbsp;&nbsp;Average number of common shares from assumed vesting of unvested restricted stock units | 95 | 920 | 229 | 904 |
| &nbsp;&nbsp;&nbsp;Average number of common shares from assumed conversion of OP Units | 5038 | 5038 | 5038 | 5038 |
| &nbsp;&nbsp;&nbsp;Average number of common shares from assumed conversion of Series B Preferred Stock | 20999 | 7049 | 16710 | 4348 |
| Average number of common shares outstanding - diluted | 43854 | 30468 | 39628 | 27673 |
| **Earnings per weighted average common share:** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | $1.98 | $0.92 | $3.62 | $0.54 |
| &nbsp;&nbsp;&nbsp;Diluted | $1.14 | $0.74 | $2.43 | $0.54 |

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**13. Noncontrolling Interests**

*Redeemable Noncontrolling Interests in the OP*

The following table sets forth the redeemable noncontrolling interests in the OP (reflecting the OP's consolidation of the Subsidiary OPs) for the nine months ended September 30, 2025 and 2024 (in thousands):

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| | | |
|:---|:---|:---|
| | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** |
| | **2025** | **2024** |
| **Redeemable noncontrolling interests in the OP, January 1,** | $86164 | $89471 |
| &nbsp;&nbsp;&nbsp;Net income attributable to redeemable noncontrolling interests in the OP | 15383 | 4322 |
| &nbsp;&nbsp;&nbsp;Distributions to redeemable noncontrolling interests in the OP | (7558) | (7558) |
| **Redeemable noncontrolling interests in the OP, September 30,** | $93989 | $86235 |

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The table below presents the common shares and OP Units outstanding held by the noncontrolling interests ("NCI"), as the OP Units held by the Company are eliminated in consolidation:

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| | | | |
|:---|:---|:---|:---|
| **Period End** | **Common Shares<br>Outstanding** | **OP Units Held by<br>NCI** | **Combined<br>Outstanding** |
| September 30, 2025 | 17,721,828 | 5,038,382 | 22,760,210 |

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**14. Related Party Transactions**

*Management Fee*

In accordance with the Management Agreement, the Company pays the Manager an annual management fee equal to 1.5% of Equity (as defined below), paid monthly, in cash or shares of Company common stock at the election of our Manager (the "Annual Fee"). The duties performed by the Company's Manager under the terms of the Management Agreement include, but are not limited to: providing daily management for the Company, selecting and working with third-party service providers, formulating an investment strategy for the Company and selecting suitable investments, managing the Company's outstanding debt and its interest rate exposure and determining when to sell assets.

"Equity" means (a) the sum of (1) total stockholders' equity immediately prior to the closing of the IPO, plus (2) the net proceeds received by the Company from all issuances of the Company's equity securities in and after the IPO, plus (3) the Company's cumulative Earnings Available for Distribution ("EAD") (as defined below) from and after the IPO to the end of the most recently completed calendar quarter, (b) less (1) any distributions to the holders of the Company's common stock from and after the IPO to the end of the most recently completed calendar quarter and (2) all amounts that the Company or any of its subsidiaries has paid to repurchase for cash the shares of the Company's equity securities from and after the IPO to the end of the most recently completed calendar quarter. In the Company's calculation of Equity, the Company will adjust its calculation of EAD to remove the compensation expense relating to awards granted under one or more of its long-term incentive plans that is added back in the calculation of EAD. Additionally, for the avoidance of doubt, Equity does not include the assets contributed to the Company in the Formation Transaction.

"EAD" means the net income (loss) attributable to the common stockholders of the Company, computed in accordance with GAAP, including realized gains and losses not otherwise included in net income (loss), excluding any unrealized gains or losses or other similar non-cash items that are included in net income (loss) for the applicable reporting period, regardless of whether such items are included in other comprehensive income (loss), or in net income (loss) and adding back amortization of stock-based compensation. For the purpose of calculating EAD for the Annual Fee, net income (loss) attributable to common stockholders may also be adjusted for the effects of certain GAAP adjustments and transactions that may not be indicative of the Company's current operations, in each case after discussions between the Manager and the independent directors of the Board and approved by a majority of the independent directors of the Board.

Pursuant to the terms of the Management Agreement, the Company is required to pay directly or reimburse the Manager for all documented Operating Expenses and Offering Expenses it incurs on behalf of the Company. "Operating Expenses" include legal, accounting, financial and due diligence services performed by the Manager that outside professionals or outside consultants would otherwise perform, the Company's pro rata share of rent, telephone, utilities, office furniture, equipment, machinery and other office, internal and overhead expenses of the Manager required for the Company's operations and compensation expenses under the LTIP. "Offering Expenses" include all expenses (other than underwriters' discounts) in connection with an offering of securities, including, without limitation, legal, accounting, printing, mailing and filing fees and other documented offering expenses. For the nine months ended September 30, 2025 and 2024, there were no Offering Expenses that were paid on the Company's behalf for which the Company reimbursed the Manager.

*Connections at Buffalo Pointe Contribution*

On May 29, 2020, the OP entered into a contribution agreement (the "Buffalo Pointe Contribution Agreement") with entities affiliated with executive officers of the Company and the Manager (the "BP Contributors") whereby the BP Contributors contributed their respective preferred membership interests in NexPoint Buffalo Pointe Holdings, LLC ("Buffalo Pointe"), to the OP for total consideration of $10.0 million paid in OP Units. A total of 564,334 OP Units were issued to the BP Contributors, which was calculated by dividing the total consideration of $10.0 million by the combined book value of the Company's common stock and the SubOP Units, on a per share or unit basis, as of March 31, 2023, or $17.72 per OP Unit. The Company additionally contributed an aggregate of approximately $2.7 million through

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September 30, 2025. Buffalo Pointe owns a stabilized multifamily property located in Houston, Texas with 93.2% occupancy as of September 30, 2025. The preferred equity investment pays current interest at a rate of 6.5%, deferred interest at a rate of 4.5% and has a maturity date of May 1, 2030.

Pursuant to the OP LPA and the Buffalo Pointe Contribution Agreement, the BP Contributors have the right to cause our OP to redeem their OP Units for cash or, at our election, shares of our common stock on a one-for-one basis, subject to adjustment, as provided and subject to the limitations in our OP LPA, provided the OP Units have been outstanding for at least one year and our stockholders have approved the issuance of shares of common stock to the BP Contributors. On May 11, 2021, our stockholders approved the issuance of such shares upon the exercise of the BP Contributors' redemption rights.

*RSU Issuance*

For a discussion of the Company's restricted stock units issued in accordance with the LTIP, see Note 11.

*OP Unit Redemptions*

As of September 30, 2025, the Company had issued 8,748,735 shares of the Company's common stock to redeeming unitholders. See Note 11.

*Expense Cap*

Pursuant to the terms of the Management Agreement, direct payment of operating expenses by the Company, which includes compensation expense relating to equity awards granted under the LTIP, together with reimbursement of operating expenses of the Manager, plus the Annual Fee, may not exceed 2.5% of equity book value (the "Expense Cap") for any calendar year or portion thereof; provided, however, that this limitation will not apply to Offering Expenses, legal, accounting, financial, due diligence and other service fees incurred in connection with extraordinary litigation and mergers and acquisitions and other events outside the ordinary course of business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of certain real estate-related investments. For the nine months ended September 30, 2025, operating expenses did not exceed the Expense Cap.

For the nine months ended September 30, 2025, the Company incurred management fees of $4.8 million.

*NSP Guaranty*

On December 8, 2022 and in connection with a restructuring of NSP, the Company, through NREF OP IV REIT Sub, LLC ("REIT Sub") together with NexPoint Diversified Real Estate Trust ("NXDT"), an entity that is advised by an affiliate of the Manager, Highland Income Fund and NexPoint Real Estate Strategies Fund (collectively, the "Co-Guarantors"), as guarantors, entered into a sponsor guaranty agreement in favor of Extra Space Storage, LP ("Extra Space") pursuant to which REIT Sub and the 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 REIT Sub and the Co-Guarantors are capped at $97.6 million, and each of REIT Sub and the 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 NSP Series D preferred stock remains outstanding as of September 30, 2025. As of September 30, 2025, the outstanding NSP Series D Preferred Stock accrued dividends was $14.1 million and the Company and NexPoint Diversified Real Estate Trust are jointly and severally liable for 85.90% of the guaranteed amount equal to $12.2 million.

*Convertible Promissory Note*

On October 18, 2022, the Company, through a subsidiary, borrowed $6.5 million from NFRO REIT Sub, LLC (the "Holder") and issued $6.5 million aggregate amount of a 7.50% note to the Holder maturing on October 18, 2027. Beginning on January 1, 2023 through June 30, 2027, the Holder may elect to convert all or any part of the outstanding principal and accrued but unpaid interest due, and all other amounts due and payable to the Holder thereunder or in connection therewith, into equity interests of an affiliate of the borrower.

*Elysian at Hughes Center*

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As of September 30, 2025, $54.0 million of the Company's preferred investment in Elysian at Hughes Center had been redeemed, resulting in a remaining principal balance of $11.4 million.

*Series B Preferred Stock Offering*

On November 2, 2023, the Company announced the launch of the Series B Preferred Offering. NexPoint Securities, Inc., an affiliate of the Manager, 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 shares of Series B Preferred Stock 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 Stock in the Series B Preferred Offering ("Selling Commissions") and (ii) a dealer manager fee of 3.0% of the gross proceeds from sales of Series B Preferred Stock in the Series B Preferred 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 shares of Series B Preferred Stock 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 17,200,000 shares of the Series B Preferred Stock in the offering or December 29, 2026 (which is the third anniversary of the effective date of the Company's registration statement), which may be extended by the Company's Board in its sole discretion. The Board may elect to terminate this offering at any time. As of September 30, 2025, the Company has issued 13,717,142 shares of Series B Preferred Stock for gross proceeds of $335.1 million and paid the Dealer Manager $16.3 million Selling Commissions and $8.1 million Dealer Manager Fees.

*SFR OP Promissory Notes*

On March 28, 2024, the Company loaned $0.5 million to NexPoint SFR Operating Partnership, L.P. (the "SFR OP"), the operating partnership of NexPoint Homes Trust, Inc., an entity that is advised by an affiliate of the Manager. In connection with the loan, SFR OP issued a $0.5 million 12.50% note (the "SFR OP Note") to the Company on March 31, 2024. The SFR OP Note bears interest at 12.50%, which is payable in kind, is interest only during the term of the SFR OP Note and matured on March 31, 2025. On March 12, 2025, the SFR OP extinguished the note and paid down the remaining outstanding principal balance of $0.5 million plus accrued interest.

SFR OP issued a note (the "SFR OP Note II") to the Company on July 10, 2024 with a maximum commitment of $5.0 million. The SFR OP Note II bears interest at 15%, which is payable in kind, is interest only during the term of the SFR OP Note II and initially matured on July 10, 2025. On August 25, 2025, the Company, through the REIT Sub, extended the maturity date to July 10, 2026. The Company funded $3.5 million through December 31, 2024. SFR OP paid down $1.9 million of principal on April 29, 2025. The Company funded $3.4 million, $5.0 million and $2.5 million on July 31, 2025, August 24, 2025 and September 24, 2025, respectively. The Company's maximum commitment under the loan is $15.0 million, of which $2.5 million was unfunded as of September 30, 2025.

*VineBrook Homes Mortgage Backed Securities*

On February 29, 2024, the Company, through one of the Subsidiary OPs, purchased approximately $49.2 million aggregate principal amount of the Class A, E1, and E2 tranches of the VINEB 2024 SFR1 CMBS at a blended price equal to 90.2% of par value. On March 1, 2024, the Company, through one of the Subsidiary OPs, borrowed approximately $35.8 million through the existing repurchase agreement. The loans bear interest at a rate of 1.0%, 1.6%, and 1.6% over SOFR, respectively. On May 8, 2024, the Company sold $30.0 million aggregate principal amount of the Class A tranche of VINEB 2024-SFR1 for net loss of $0.4 million. On September 27, 2024, the Company sold $6.7 million aggregate principal amount of the E2 tranche of the VINEB 2024 SFR1 for net proceeds of $2.2 million. On November 14, 2024, the Company sold $9.5 million aggregate principal amount of the E1 tranche of the VINEB 2024 SFR1 for net proceeds of $2.5 million.

*IQHQ Transactions*

On May 10, 2024, the Company, through OP IV, along with entities advised by affiliates of our Manager or that may be deemed an affiliate of the Manager through common beneficial ownership, entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which OP IV assigned the right to fund up to specified amounts in the Alewife Loan (as defined in Note 15). Effective January 2, 2025, the Company, through OP IV, along with an entity that may be deemed an affiliate of the Manager through common beneficial ownership, entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which OP IV assigned a portion of its interest in the Alewife Loan for cash and

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increased the specified amounts such entity had the right to fund in the Alewife Loan. See Note 15 for additional information.

On May 23, 2024, the Company, through certain subsidiaries, along with certain entities advised by affiliates of our Manager, or that may be deemed an affiliate of the Manager 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 Manager, pursuant to which the Company had a right to fund up to specified amounts of the IQHQ Promissory Note (as defined in Note 15) and the IQHQ Bridge Warrant (as defined in Note 15). See Note 15 for additional information.

On December 31, 2024, the Company, through certain subsidiaries, along with certain entities advised by affiliates of our Manager or that may be deemed an affiliate of the Manager 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 the IQHQ Subscription Agreement (as defined in Note 15) and the IQHQ Series E Warrant (as defined in Note 15). See Note 15 for additional information.

*NexBank Loan*

On April 29, 2024, the Company, through the OP, entered into a loan agreement with NexBank, as lender, providing for a loan in the aggregate principal amount of $10.0 million (the "NexBank Loan"). The NexBank Loan bears interest at the rate which is the higher of (i) One Month Term Secured Overnight Financing Rate plus 4.2% per annum or (ii) 8.25% per annum, which is interest only during the term of the NexBank Loan and was set to mature on April 28, 2025, with the OP having two 364-day extension options, which may be exercised at the OP's sole discretion. The Company exercised one of the extension options which brings the maturity date to April 27, 2026. As of September 30, 2025, the outstanding balance of the loan is $10.0 million.

The NexBank Loan is secured by certain equity interests held by the OP and is guaranteed by the Company. The loan agreement contains customary events of default, including defaults in the payment of principal or interest, defaults in compliance with the covenants contained therein, defaults in payments under any other security instrument, and bankruptcy or other insolvency events.

*Capital Acquisitions Partners, LLC*

The Company owns approximately 79.1% of total outstanding membership interests of CAP. The remaining ownership is held by NexPoint Real Estate Opportunities, LLC, a wholly owned subsidiary of NXDT. See Note 5 for additional information.

**15. Commitments and Contingencies**

Except as otherwise disclosed below, the Company is not aware of any contractual obligations, legal proceedings, or any other contingent obligations incurred in the normal course of business that would have a material adverse effect on our consolidated financial statements.

On March 14, 2023, the Company, through one of the Subsidiary OPs, committed to fund $24.0 million of preferred equity with respect to a ground up construction horizontal single-family property located in Phoenix, Arizona, of which $3.1 million was unfunded as of September 30, 2025. The preferred equity investment provides a floating annual return that is the greater of prime rate plus 5.0% or 11.25%, compounded monthly with a MOIC of 1.30x and 1.0% placement fee. The Company was also issued a common interest at the time of its first funding of preferred equity on May 16, 2023. The common interest allows the Company to receive a 10% profit share once aggregate distributions exceed the 20% internal rate of return ("IRR") hurdle as shown below. There was no value ascribed to the common interest as of September 30, 2025. Further, once the Company's preferred equity and accrued interest has been repaid, any additional cash flow and net sale proceeds shall be distributed as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 0% to the Company and 100% to issuer up to a 20% IRR; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 10% to the Company and 90% to issuer thereafter.

On February 10, 2023, the Company, through one of the Subsidiary OPs, through a unit purchase agreement, committed to purchase $30.3 million of the preferred units with respect to a multifamily property development located in Forney, Texas, which was fully funded as of September 30, 2025. Further, the Company committed to purchase

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$4.3 million of common equity with respect to the same property. The Company funded $0.5 million on April 4, 2025, resulting in an unfunded commitment of $0.3 million as of September 30, 2025.

On February 10, 2023, the Company, through one of the Subsidiary OPs, through a unit purchase agreement, committed to purchase $30.3 million of the preferred units with respect to a multifamily property development located in Richmond, Virginia, which has been fully funded as of September 30, 2025. Further, the Company committed to purchase $4.3 million of common equity with respect to the same property. The Company funded $0.5 million on April 4, 2025, resulting in an unfunded commitment of $0.3 million as of September 30, 2025.

*SFR OP Promissory Note II Commitments*

SFR OP issued the SFR OP Note II to the Company on July 10, 2024. The SFR OP Note II bears interest at 15%, which is payable in kind, is interest only during the term of the SFR OP Note II and initially matured on July 10, 2025. On August 25, 2025, the Company, through REIT Sub, extended the maturity date to July 10, 2026 and increased the maximum amount available under the SFR OP Note II to $15.0 million. The Company funded $3.5 million through December 31, 2024. SFR OP paid down $1.9 million of principal on April 29, 2025. The Company funded $3.4 million, $5.0 million and $2.5 million on July 31, 2025, August 24, 2025 and September 24, 2025, respectively. The Company's maximum commitment under the loan is $15.0 million, of which $2.5 million was unfunded as of September 30, 2025.

*Alewife Holdings Loan Commitments*

On January 26, 2024, the Company, through one of its subsidiaries ("OP IV"), along with The Ohio State Life Insurance Company ("OSL"), an entity that may be deemed an affiliate of the Manager through common beneficial ownership, entered into a Mezzanine Loan and Security Agreement (the "Alewife Loan") whereby it made a loan in the maximum principal amount of up to $218.0 million to IQHQ-Alewife Holdings, LLC ("Alewife Holdings"), which is solely owned by IQHQ, L.P. Alewife Holdings is the sole member of IQHQ-Alewife Member, LLC ("Alewife Member") and Alewife Member is the sole member of IQHQ-Alewife, LLC ("Alewife"). The Company has an ownership interest in the preferred stock in IQHQ, which is the limited partner in IQHQ, L.P.; however, the Company has no controlling financial interest nor significant influence in IQHQ, L.P.

On May 10, 2024, OP IV, NexPoint Diversified Real Estate Trust Operating Partnership, L.P. ("NXDT OP"), the operating partnership of NXDT, and OSL entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which OP IV assigned the right to fund up to 9% of the Alewife Loan to NXDT OP and allocated the right to fund up to 9% of the Alewife Loan to OSL. Effective January 2, 2025, OP IV and OSL entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which OP IV assigned $7.5 million 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, under the Assignment Agreement, 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, NXDT 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 NXDT OP and OSL, respectively. OP IV is required to fund any amounts not funded by OSL and NXDT OP. At any time that NXDT OP and OSL have funded less than their respective percentages of all advances made under the Alewife Loan, NXDT OP and OSL have the option upon notice to OP IV to pay to OP IV any amount of such unfunded amount. Upon such payment, NXDT OP or OSL would become entitled to all interest and fees accrued on the amount paid to OP IV on and after the date of such payment.

On September 30, 2025, the Alewife Loan was bifurcated into a (i) a senior mortgage loan in the maximum principal sum of $85.0 million (the "Alewife Senior Loan") and (ii) a mezzanine loan in the maximum principal sum of $133.0 million (the "Alewife Mezzanine Loan"). The Alewife Senior Loan was deemed fully funded, with the Company holding 73.5% of the Alewife Senior Loan based on prior fundings of the Alewife Loan of $62.5 million, and OSL holding 26.5% of the Alewife Senior Loan based on prior fundings of the Alewife Loan of $22.5 million. On September 30, 2025 the Company and OSL sold the Alewife Senior Loan. The Company's prior fundings of $102.0 million of the Alewife Loan were deemed fundings of the Alewife Mezzanine Loan, with the Company holding 100% of the Alewife Mezzanine Loan at closing. The Alewife Mezzanine Loan is secured by an equity pledge by Alewife Holdings of its equity interest in Alewife Member and an equity pledge by Alewife Member of its equity interest in Alewife. The Company's expected maximum commitment under the Alewife Mezzanine Loan is $133.0 million, of which $31.0 million was unfunded as of September 30, 2025.

*IQHQ Revolving Credit Facility, Series E and Warrant*

On May 23, 2024, Bridge Investor I entered into a Secured Convertible Promissory Note and Warrant Purchase Agreement ("Bridge Purchase Agreement") whereby IQHQ, L.P. issued and sold to Bridge Investor I a Secured

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Convertible Promissory Note ("IQHQ Promissory Note") with a purchase commitment of $150.0 million. The IQHQ Promissory Note bore interest at 16.5%, which was payable in kind, and matured on May 23, 2025. The IQHQ Promissory Note would automatically convert into Series E of IQHQ upon a Qualified Equity Financing (as defined in the IQHQ Promissory Note). In accordance with the Bridge Purchase Agreement, IQHQ Holdings, L.P. ("IQHQ Holdings") also issued and sold a corresponding warrant to Bridge Investor I to purchase Class A-3 Units of IQHQ Holdings (as amended, the "IQHQ Bridge Warrant"). The IQHQ Bridge Warrant entitles the holder to purchase, at an exercise price of $0.01, Class A-3 Units of IQHQ Holdings initially intended to represent 6.25% of the fully diluted and outstanding common equity of IQHQ Holdings. The IQHQ Bridge Warrant is exercisable, in whole or in part, at any time, and expires on May 23, 2034, unless there is an earlier change of control, initial public offering or liquidation.

In connection with the Bridge Purchase Agreement, the Company, through certain subsidiaries, along with certain entities advised by affiliates of our Manager or that may be deemed an affiliate of the Manager through common beneficial ownership (the "IQHQ Participating Purchasers"), entered into a participation rights agreement with Bridge Investor I pursuant to which the Company and the IQHQ Participating Purchasers had a right to fund up to specified amounts of the IQHQ Promissory Note and the IQHQ Bridge Warrant. Upon receipt of a draw request, each IQHQ Participating Purchaser had 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 and NXDT OP had 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. The Company, through certain subsidiaries, was required to fund any amounts not funded by the IQHQ Participating Purchasers and NXDT OP. Bridge Investor I can allocate all or any portion of the IQHQ Warrant to any parties to the participation rights agreement. On December 2, 2024, the IQHQ Promissory Note was fully funded. The Company funded $148.6 million and the IQHQ Participating Purchasers funded $1.4 million.

On December 31, 2024, the Company, through OP IV and the OP, along with the IQHQ Participating Purchasers that funded the IQHQ Promissory Note and Bluerock Total Income+ Real Estate Fund ("Bluerock") entered into a Revolving Credit Agreement (the "IQHQ Revolving Loan") whereby it made a loan in the maximum principal amount of up to $300.0 million to IQHQ, L.P. In connection with the IQHQ Revolving Loan, the full $150 million of the principal amount of the IQHQ Promissory Note and the full $150 million of the principal amount of a promissory note held by Bluerock was substituted and exchanged for deemed borrowings under the IQHQ Revolving Loan, and the IQHQ Revolving Loan was fully funded on December 31, 2024. On September 30, 2025, the IQHQ Revolving Loan was amended and restated to, among other things, add a new lender and increase the aggregate amount of the loan to $440.0 million, with the new lender funding $100.0 million at closing and each of the Company and Bluerock committing to fund an additional $20.0 million during the commitment period subject to certain terms and conditions. The IQHQ Revolving Loan accrues interest at a rate per annum equal to 13.5% per annum, which, prior to September 30, 2025, was fully payable in kind and, on and after September 30, 2025 is payable 1.5% per annum in kind and 12% per annum in cash. The revolving period during which IQHQ, L.P. is permitted to borrow, repay and re-borrow loans, subject to satisfaction of certain conditions and payment of certain fees, will terminate on September 30, 2028, the maturity date of the IQHQ Revolving Loan. As of September 30, 2025, the Company holds 38.32% of the revolving commitment under the IQHQ Revolving Loan, with an unfunded commitment balance of $20.0 million.

In connection with the IQHQ Revolving Loan, 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 of IQHQ. Pursuant to the IQHQ Subscription Agreement, the full $10.1 million of the interest accrued on the IQHQ Promissory Note was substituted and exchanged for a deemed funding of $10.1 million under the IQHQ Subscription Agreement. 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 Company, through certain subsidiaries, along with the IQHQ Participating Purchasers entered into a participation rights agreement with Bridge Investor I pursuant to which the Company and the IQHQ Participating Purchasers have a right to fund up to specified amounts of the Series E of IQHQ commitment 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, NXDT 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. The Company, through certain subsidiaries, would be required to fund any amounts not funded by the IQHQ Participating Purchasers and NXDT OP. At any time that the IQHQ Participating Purchasers have

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funded less than their respective participation amounts, the IQHQ Participating Purchasers have the option to pay the Company or NXDT 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 the Company or NXDT OP, if applicable, on and after the date of such payment. Bridge Investor I can allocate all or any portion of the IQHQ Warrant to any parties to the participation rights agreement.

IQHQ Holdings is the sole common stockholder of IQHQ, and the IQHQ Participating Purchasers own common equity in IQHQ Holdings and/or IQHQ, L.P. The Company has an ownership interest in the preferred stock in IQHQ, which is the limited partner in IQHQ, L.P.; however, the Company has no controlling financial interest nor significant influence in IQHQ, L.P.

The loan participation was considered a transfer of the IQHQ Promissory Note and the IQHQ Bridge Warrant and is considered a transfer of the Series E of IQHQ and the IQHQ Series E Warrant qualified as a sale under ASC 860, *Transfers and Servicing*, as (1) the transfer legally isolated the transferred assets from the transferor, (2) the transferee has the right to pledge or exchange the transferred assets and no condition both constrains the transferee's right to pledge or exchange the assets and provides more than a trivial benefit to the transferor, and (3) the transferor does not maintain effective control over the transferred assets. The IQHQ Promissory Note was classified as Loans, held-for-investment, net, the Series E of IQHQ is classified as preferred stock and the IQHQ Bridge Warrants are classified as Stock warrant investments. The IQHQ Bridge Warrants are accounted for as investments in equity securities under ASC 321, *Investments – Equity Securities*, and the Company elected to use the fair value option. As a result, the IQHQ Bridge Warrants are being fair valued using an option pricing model that considers both short and long-term exit scenario. The model incorporates economic and control rights, marketability of the Units, and other market-derived metrics, applying discounts for lack of marketability and control due to the minority stake and absence of public trading options.

As of September 30, 2025, the Company has funded $137.0 million of the IQHQ Subscription Agreement, with an unfunded commitment balance of $23.0 million.

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

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| | | |
|:---|:---|:---|
| **Investment Type** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**September 30, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31, 2024** |
| **Investment Type** | **Unfunded Commitments** | **Unfunded Commitments** |
| Loans | $59929 | $64217 |
| Preferred Equity | 3055 | 7874 |
| Common Equity | 1536 | 2536 |
| Preferred Stock | 23000 | 150000 |
|  | $87520 | $224627 |

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**16. Segment Reporting**

We have one reportable segment: NREF. For a description of the types of products and services from which this single reportable segment derives its revenues, see Notes 1 and 2. The accounting policies of the NREF segment are the same as those described in the Summary of Significant Accounting Policies. The chief operating decision maker assesses performance for the NREF segment and decides how to allocate resources based on net income that also is reported on the Consolidated Statements of Operations. The measure of segment assets is reported on the Consolidated Balance Sheets as Total Assets. The chief operating decision maker uses net income to evaluate profitability generated from the segment's portfolio in deciding whether to reinvest profits into new or existing investments or into other parts of the entity, such as for acquisitions or dividend amounts. The chief operating decision maker manages the business on a consolidated basis, and therefore the Company has identified NREF as the one operating segment and the reportable segment. As of September 30, 2025 the Company's chief operating decision maker was the Chief Financial Officer, Executive VP-Finance, Assistant Secretary and Treasurer of the Company.

The significant segment expenses are computed in accordance with GAAP and are consistent with the financial information presented in the Consolidated Statements of Operations.

**17. Subsequent Events**

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*Upsize of Series B Preferred Offering*

On October 1, 2025, the Company increased the number of authorized, classified and offered shares of its Series B Preferred Stock by 1,200,000 for a total of 17,200,000 shares of Series B Preferred Stock authorized and classified for issuance.

*NexPoint Storage Series G Preferred Stock*

On October 8, 2025, the Company, through the OP, purchased 3,178,286 shares of 15.0% Cumulative Series G Preferred Stock, $0.01 par value, of NSP for an aggregate purchase price of approximately $3.2 million.

*Unsecured Notes Issuance*

On October 10, 2025, the OP issued an aggregate of $45.0 million of 7.875% Senior Unsecured Notes due 2026 (the "2026 OP Notes"), pursuant to a note purchase agreement by and among the OP, the Company, the Manager, OSL and Bluerock. The 2026 OP Notes are due October 10, 2026, with two six-month extension options in the sole discretion of the OP, subject to an extension fee. The OP used a portion of the proceeds to fully repay the OP 7.50% Senior Unsecured Notes due 2025 ("7.50% OP Notes").

*7.50% OP Notes Payoff*

On October 15, 2025, upon maturity, the OP repaid $37.9 million of its 7.50% OP Notes, which includes accrued interest, and extinguished the 7.50% OP Notes.

*Dividends Declared*

The Board declared the fourth regular quarterly dividend of 2025 to common stockholders of $0.50 per share on October 28, 2025, to be paid on December 31, 2025, to stockholders of record as of December 15, 2025.

*Series B Preferred*

As of October 31, 2025, the Company has issued an additional 774,751 shares of Series B Preferred Stock for net proceeds of $17.4 million.

*Series B Preferred Redemptions*

As of November 11, 2025, the Company redeemed a total of 25,320 shares of the Series B Preferred Stock for $0.3 million, which is the share price of $25.00 per share subject to the applicable redemption fee plus any accrued but unpaid dividends.

*Series C Preferred Offering*

On November 4, 2025, the Company launched a $200.0 million offering of its 8.00% Series C Cumulative Redeemable Preferred Stock, par value $0.01 per share with a stated value of $25.00 per share.

*Palisades Mezzanine Loan Payoff* 

On November 6, 2025, the Company received $12.7 million from Lurin Real Estate Mezz LI, LLC, related to the full payoff of principal, accrued interest and fees under a mezzanine loan.

*Center Pointe Mezzanine Loan Partial Payoff* 

On October 23, 2025 and November 10, 2025, the Company received $2.5 million CPW Mezz LI, LLC related to a partial payoff of accrued interest under a mezzanine loan, with $3.4 million remaining outstanding.

**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 results of operations. The following should be read in conjunction with our financial statements and accompanying notes included herein and with our Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 27, 2025. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those* 

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*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" and "Risk Factors" in Part I, Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2024. Our management believes the assumptions underlying the Company's financial statements and accompanying notes are reasonable. However, the Company's financial statements and accompanying notes may not be an indication of our financial condition and results of operations in the future.*

**Overview**

We are a commercial mortgage REIT incorporated in Maryland on June 7, 2019. Our strategy is to originate, structure and invest in first-lien mortgage loans, mezzanine loans, preferred equity, convertible notes, multifamily properties and common equity investments, as well as multifamily and SFR CMBS securitizations, promissory notes, revolving credit facilities and stock warrants, or our target assets. We primarily focus on investments in real estate sectors where our senior management team has operating expertise, including in the multifamily, SFR, self-storage and life science sectors predominantly in the top 50 MSAs. In addition, we target lending or investing in properties that are stabilized or have a light-transitional business plan.

Our investment objective is to generate attractive, risk-adjusted returns for stockholders over the long term. We seek to employ a flexible and relative-value focused investment strategy and expect to re-allocate capital periodically among our target investment classes. We believe this flexibility will enable us to efficiently manage risk and deliver attractive risk-adjusted returns under a variety of market conditions and economic cycles.

We are externally managed by our Manager, a subsidiary of our Sponsor, an SEC-registered investment advisor, which has extensive real estate experience, having completed as of September 30, 2025 approximately $21.7 billion of gross real estate transactions since the beginning of 2012. In addition, our Sponsor, together with its affiliates and NexBank, is one of the most experienced global alternative credit managers managing approximately $14.4 billion of loans and debt or credit related investments as of September 30, 2025 and has managed credit investments for over 25 years. We believe our relationship with our Sponsor benefits us by providing access to resources including research capabilities, an extensive relationship network, other proprietary information, scalability, and a vast wealth of knowledge of information on real estate in our target assets and sectors.

We elected to be treated as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2020. We also intend to operate our business in a manner that will permit us to maintain one or more exclusions or exemptions from registration under the Investment Company Act.

The U.S. government announced a comprehensive set of tariffs in the second quarter of 2025. Following the pause of certain of these tariffs, the majority of the previously announced tariffs have been implemented. The U.S. government has indicated that it could impose additional tariffs on particular countries and impose global tariffs on certain goods. Such tariffs could impact our results of operations by increasing the costs of various goods, including construction materials. Management is actively engaged with vendors and business partners to reduce financial risks of tariffs; however, 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.

On October 15, 2021, a lawsuit (the "Bankruptcy Trust Lawsuit") was filed by a litigation subtrust formed in connection with Highland's bankruptcy 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. On June 30, 2025, the bankruptcy court approved a settlement agreement between Highland and Hunter Mountain Investment Trust ("HMIT") pursuant to which the claims asserted in the Bankruptcy Trust Lawsuit were assigned to HMIT. HMIT subsequently filed a motion to lift the stay of the Bankruptcy Trust Lawsuit, which was granted and became effective on October 3, 2025. As of the date of this filing, the bankruptcy court has requested briefing from the parties regarding whether the court continues to have jurisdiction over the Bankruptcy Trust Lawsuit given the assignment of claims from Highland to HMIT. Briefs on this matter are due on November 18, 2025. 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, including Mr. Dondero, the President of our Sponsor, 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 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

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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 or operations. 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.

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

**Purchases and Dispositions in the Quarter**

***Acquisitions and Originations***

The Company acquired or originated the following investments through the Subsidiary OPs in the three months ended September 30, 2025. The amounts in the table below are as of the purchase or investment date:

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| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investment** | **Property Type** | **Investment Date** | **Outstanding Principal<br>Amount** | **Cost (% of Par Value)** | **Coupon (1)** | **Current Yield (1)** | **Maturity Date** | **Interest Rate Type** |
| Common Equity | Multifamily | 7/8/2025 | $500000 | 100.0% | N/A | N/A | N/A | Fixed |
| Mezzanine | Life Science | 7/9/2025 | 6533824 | 100.0% | 14.00% | 14.00% | 2/9/2027 | Floating |
| Preferred Equity | Single-family | 7/10/2025 | 1158939 | 99.0% | 13.50% | 13.64% | 4/28/2027 | Fixed |
| Preferred Stock | Life Science | 7/17/2025 | 42500000 | 100.0% | 16.50% | 16.50% | N/A | Fixed |
| Promissory Note | Single-family | 7/31/2025 | 10936042 | 100.0% | 15.00% | 15.00% | 7/10/2026 | Fixed |
| Real Estate | Multifamily | 7/31/2025 | 225513 | 100.0% | N/A | N/A | N/A | Fixed |
| Mezzanine | Self-Storage | 8/1/2025 | 3297500 | 100.0% | 10.55% | 10.55% | 8/1/2026 | Floating |
| Preferred Equity | Marina | 8/1/2025 | 4480000 | 100.0% | 13.00% | 13.00% | 8/15/2035 | Fixed |
| Mezzanine | Multifamily | 8/8/2025 | 376794 | 99.0% | 15.30% | 15.46% | 1/9/2026 | Floating |
| Promissory Note | Multifamily | 9/30/2025 | 3000000 | 100.0% | 8.00% | 8.00% | 9/30/2026 | Fixed |
|  |  |  | $73008612 |  |  |  |  |  |

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(1)Current yield and coupon as of September 30, 2025.

***Redemptions and Sales***

The following investments were redeemed or sold during the three months ended September 30, 2025:

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|:---|:---|:---|:---|:---|:---|:---|:---|
| **Investment** | **Property Type** | **Investment Date** | **Disposition Date** | **Amortized Cost Basis** | **Redemption/Sales Proceeds** | **Prepayment Penalties** | **Net Gain (Loss) on Repayment** |
| &nbsp;&nbsp;&nbsp;Preferred Equity | Life Science | 4/6/2023 | 7/11/2025 | $702604 | $702604 | $— | $— |
| &nbsp;&nbsp;&nbsp;Real Estate | Multifamily | 12/31/2021 | 7/22/2025 | 29865383 | 29865383 |  |  |
| &nbsp;&nbsp;&nbsp;Preferred Equity | Life Science | 10/19/2022 | 9/26/2025 | 441743 | 441743 |  |  |
| &nbsp;&nbsp;&nbsp;Preferred Equity | Multifamily | 10/5/2022 | 9/29/2025 | 2539672 | 2539672 |  |  |
| &nbsp;&nbsp;&nbsp;Common Equity | Multifamily | 5/8/2024 | 9/29/2025 | 391500 | 391500 |  |  |
| &nbsp;&nbsp;&nbsp;Senior Loan | Life Science | 1/26/2024 | 9/30/2025 | 62450000 | 62450000 |  |  |
|  |  |  |  | $96390902 | $96390902 | $— | $— |

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**Components of Our Revenues and Expenses**

***Net Interest Income***

*Interest income*. Our earnings are primarily attributable to the interest income from mortgage loans, mezzanine loan and preferred equity investments. Loan premium/discount amortization and prepayment penalties are also included as components of interest income.

*Interest expense.* Interest expense represents interest accrued on our various financing obligations used to fund our investments and is shown as a deduction to arrive at net interest income.

***Other Income (Loss)***

*Change in net assets related to consolidated CMBS variable interest entities.* Includes unrealized gain (loss) based on changes in the fair value of the assets and liabilities of the CMBS trusts and net interest earned on the consolidated CMBS trusts. See Note 4 to our consolidated financial statements for additional information.

*Change in unrealized gain (loss) on CMBS structured pass-through certificates.* Includes unrealized gain (loss) based on changes in the fair value of the CMBS I/O Strips. See Note 7 to our consolidated financial statements for additional information.

*Change in unrealized gain on common stock investments.* Includes unrealized gain (loss) based on changes in the fair value of our common stock investments in NSP and the Private REIT. See Note 5 to our consolidated financial statements for additional information.

*Change in unrealized gain on preferred stock investments and stock warrants.* Includes unrealized gain (loss) based on changes in the fair value of our preferred stock investments in IQHQ Series D and E and changes in the fair value of our stock warrants in IQHQ. See Note 5 to our consolidated financial statements for additional information.

*Change in unrealized gain (loss) on MSCR Notes.* Includes unrealized gain (loss) based on changes in the fair value of our MSCR Notes. See Note 7 to our consolidated financial statements for additional information.

*Change in unrealized gain on mortgage backed securities.* Includes unrealized gain (loss) based on changes in the fair value of our mortgage backed securities. See Note 7 to our consolidated financial statements for additional information.

*Provision for (reversal of) credit losses, net.* Provision for (reversal of) credit losses, net represents the change in our allowance for loan losses. See Note 2 to our consolidated financial statements for additional information.

*Realized losses.* Realized losses include the excess, or deficiency, of net proceeds received, less the carrying value of such investments, as realized losses. The Company reverses cumulative unrealized gains or losses previously reported in its Consolidated Statements of Operations with respect to the investment sold at the time of the sale.

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*Revenues from consolidated real estate owned (Note 8).* Reflects the total revenues for our multifamily properties. Revenues include rental income from the multifamily properties.

*Equity in Income (Losses) of Equity Method Investments.* 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.

*Other income.* Includes exit fees, placement fees and other miscellaneous income items.

***Operating Expenses***

*G&A expenses.* G&A expenses include, but are not limited to, audit fees, legal fees, listing fees, Board fees, equity-based and other compensation expenses, investor-relations costs and payments of reimbursements to our Manager. The Manager will be reimbursed for expenses it incurs on behalf of the Company. However, our Manager is responsible, and we will not reimburse our Manager or its affiliates, for the salaries or benefits to be paid to personnel of our Manager or its affiliates who serve as our officers, except that 50% of the salary of our VP of Finance is allocated to us and we may grant equity awards to our officers under the LTIP. Direct payment of operating expenses by us, which includes compensation expense relating to equity awards granted under the LTIP, together with reimbursement of operating expenses to our Manager, plus the Annual Fee, may not exceed 2.5% of equity book value determined in accordance with GAAP, for any calendar year or portion thereof, provided, however, that this limitation will not apply to Offering Expenses, legal, accounting, financial, due diligence and other service fees incurred in connection with extraordinary litigation and mergers and acquisitions and other events outside the ordinary course of our business or any out-of-pocket acquisition or due diligence expenses incurred in connection with the acquisition or disposition of certain real estate related investments. To the extent total corporate G&A expenses would otherwise exceed 2.5% of equity book value, our Manager will waive all or a portion of its Annual Fee to keep our total corporate G&A expenses at or below 2.5% of equity book value.

*Loan servicing fees.* We pay various service providers fees for loan servicing of our SFR Loans, mezzanine loans and consolidated CMBS trusts. We classify the expenses related to the administration of the SFR Loans and mezzanine loans as servicing fees while the fees associated with the CMBS trusts are included as a component of the change in net assets related to consolidated CMBS VIEs.

*Management fees.* Management fees include fees paid to our Manager pursuant to the Management Agreement.

*Expenses from consolidated real estate owned (Note 8).* Reflects the total expenses for our multifamily properties. Expenses include interest, real estate taxes and insurance, operating, general and administrative, management fees, depreciation and amortization, rate cap (income) expense, and debt service bridge expenses of the multifamily properties.

**Results of Operations for the Three and Nine Months Ended September 30, 2025 and 2024**

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

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | | |
| | **2025** | **2024** |<br>**$ Change** |<br>**% Change** |
| Net interest income | $12497 | $12518 | $(21) | (0.2)% |
| Other income | 46717 | 18659 | 28058 | 150.4% |
| Operating expenses | (8352) | (7844) | (508) | 6.5% |
| Net income | 50862 | 23333 | 27529 | 118.0% |
| Net (income) loss attributable to Series A Preferred stockholders | (874) | (874) |  | —% |
| Net (income) loss attributable to Series B Preferred stockholders | (7174) | (2403) | (4771) | 198.5% |
| Net (income) loss attributable to redeemable noncontrolling interests | (7782) | (3940) | (3842) | 97.5% |
| Net income attributable to common stockholders | $35032 | $16116 | $18916 | 117.4% |

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The change in our net income for the three months ended September 30, 2025 as compared to the net income for the three months ended September 30, 2024 primarily relates to an increase in interest income due to higher yielding assets, as well as an increase in other income. Our net income attributable to common stockholders for the three months ended September 30, 2025 was approximately $35.0 million. We had approximately $12.5 million in net interest income, generated $46.7 million in other income, incurred operating expenses of $8.4 million, allocated $0.9 million of income to Series A Preferred stockholders, allocated $7.2 million of income to Series B Preferred stockholders, and allocated $7.8 million of income to redeemable noncontrolling interests for the three months ended September 30, 2025.

***Revenues***

*Net interest income.* Net interest income was $12.5 million for the three months ended September 30, 2025 compared to net interest income of $12.5 million for the three months ended September 30, 2024 which remained consistent between periods.

*Other income.* Other income was $46.7 million for the three months ended September 30, 2025 compared to $18.7 million for the three months ended September 30, 2024, which was an increase of approximately $28.1 million. This was primarily due to an increase in unrealized gain related to preferred stock and warrants, an increase in our provision for credit losses as a result due to an increase in specific reserves related to a preferred investment, gain on sale of real estate assets, dividend income and an increase in income of equity method investments between the periods.

***Expenses***

*G&A expenses.* G&A expenses were $3.4 million for the three months ended September 30, 2025 compared to $2.2 million for the three months ended September 30, 2024, which was an increase of approximately $1.2 million. The increase between the periods was primarily due to a $0.5 million increase in other expenses compared to the prior period as well as a $0.5 million increase in audit fees.

*Loan servicing fees.* Loan servicing fees were $0.4 million for the three months ended September 30, 2025 compared to $0.3 million for the three months ended September 30, 2024, which was an increase of approximately $0.1 million and primarily the result of increases in loan servicing rates.

*Management fees.* Management fees were $1.8 million for the three months ended September 30, 2025 compared to $1.0 million for the three months ended September 30, 2024, which was an increase of approximately $0.8 million. The increase between the periods was primarily due to an increase in Equity as defined by the Management Agreement.

*Expenses from consolidated real estate owned*. Expenses from consolidated real estate owned were $2.8 million for the three months ended September 30, 2025, compared to $4.3 million for the three months ended September 30, 2024, which was a decrease of approximately $1.5 million. The decrease between the periods is due to the Company selling Hudson Montford on July 22, 2025.

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

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| | | | | |
|:---|:---|:---|:---|:---|
| | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** | | |
| | **2025** | **2024** |<br>**$ Change** |<br>**% Change** |
| Net interest income | $36075 | $6444 | $29631 | 459.8% |
| Other income | 88926 | 42026 | 46900 | 111.6% |
| Operating expenses | (25906) | (27664) | 1758 | (6.4)% |
| Net income | 99095 | 20806 | 78289 | 376.3% |
| Net (income) loss attributable to Series A Preferred stockholders | (2622) | (2622) |  | —% |
| Net (income) loss attributable to Series B Preferred stockholders | (17256) | (4545) | (12711) | 279.7% |
| Net (income) loss attributable to redeemable noncontrolling interests | (15383) | (4322) | (11061) | 255.9% |
| Net income attributable to common stockholders | $63834 | $9317 | $54517 | 585.1% |

---

The change in our net income for the nine months ended September 30, 2025 as compared to the net income (loss) for the nine months ended September 30, 2024 primarily relates to an increase in interest income due to higher yielding assets and a decrease in interest expense related to the repayment of one of our senior and mezzanine loans. Our net income attributable to common stockholders for the nine months ended September 30, 2025 was approximately $63.8 million. We had approximately $36.1 million in net interest income, and generated income of $88.9 million in other income, incurred operating expenses of $25.9 million, allocated $2.6 million of income to Series A Preferred stockholders, allocated $17.3 million of income to Series B Preferred stockholders, and allocated $15.4 million of income to redeemable noncontrolling interests for the nine months ended September 30, 2025.

***Revenues***

*Net interest income.* Net interest income was $36.1 million for the nine months ended September 30, 2025 compared to net interest income of $6.4 million for the nine months ended September 30, 2024, which was an increase of approximately $29.6 million. The increase between the periods is primarily due to increased income from investments in preferred equity loans and on the revolving credit facility.

*Other income.* Other income was $88.9 million for the nine months ended September 30, 2025 compared to $42.0 million for the nine months ended September 30, 2024, which was an increase of approximately $46.9 million. This was primarily due to an increase in unrealized gain related to preferred stock and warrants, an increase in our provision for credit losses due to an increase in specific reserves related to a preferred investment and an increase in dividend income, with an offset against the provision for expected credit losses.

***Expenses***

*G&A expenses.* G&A expenses were $9.7 million for the nine months ended September 30, 2025 compared to $9.5 million for the nine months ended September 30, 2024, which was an increase of approximately $0.1 million. The increase between the periods was primarily due to a $0.1 million increase in audit expense as compared to the prior period.

*Loan servicing fees.* Loan servicing fees were $1.1 million for the nine months ended September 30, 2025 compared to $1.3 million for the nine months ended September 30, 2024, which was a decrease of approximately $0.2 million. The decrease between the periods was primarily due to a decrease in SFR Loans in the portfolio compared to the prior period.

*Management fees.* Management fees were $4.8 million for the nine months ended September 30, 2025 compared to $2.8 million for the nine months ended September 30, 2024. The increase between the periods was primarily due to an increase in Equity as defined by the Management Agreement.

*Expenses from consolidated real estate owned*. Expenses from consolidated real estate owned were $10.4 million for the nine months ended September 30, 2025, compared to $14.1 million for the nine months ended September 30, 2024,

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which was a decrease of approximately $3.7 million. The decrease between the periods is due to the Company selling Hudson Montford on July 22, 2025.

**Key Financial Measures and Indicators**

As a real estate finance company, we believe the key financial measures and indicators for our business are earnings per share, dividends declared, EAD, CAD and book value per share.

***Earnings Per Share and Dividends Declared***

The following table sets forth the calculation of basic and diluted net income per share and dividends declared per share (in thousands, except per share data):

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| | | | |
|:---|:---|:---|:---|
| | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | |
| | **2025** | **2024** | **% Change** |
| Net income attributable to common stockholders | $35032 | $16116 | 117.4% |
| Net income attributable to redeemable noncontrolling interests | 7782 | 3940 | 97.5% |
| Net income attributable to Series B Preferred stockholders | 7174 | 2403 | 198.5% |
| Weighted-average number of shares of common stock outstanding |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 17722 | 17461 | 1.5% |
| &nbsp;&nbsp;&nbsp;Diluted | 43854 | 30468 | 43.9% |
| Net income per share, basic | $1.98 | $0.92 | 115.2% |
| Net income per share, diluted | $1.14 | $0.74 | 54.1% |
| Dividends declared per share | $0.5000 | $0.5000 | —% |

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| | | | |
|:---|:---|:---|:---|
| | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** | |
| | **2025** | **2024** | **% Change** |
| Net income (loss) attributable to common stockholders | $63834 | $9317 | 585.1% |
| Net income attributable to redeemable noncontrolling interests | 15383 | 4322 | 255.9% |
| Net income attributable to Series B Preferred stockholders | 17256 | 4545 | 279.7% |
| Weighted-average number of shares of common stock outstanding |  |  |  |
| &nbsp;&nbsp;&nbsp;Basic | 17651 | 17383 | 1.5% |
| &nbsp;&nbsp;&nbsp;Diluted | 39628 | 27673 | 43.2% |
| Net income per share, basic | $3.62 | $0.54 | 570.4% |
| Net income per share, diluted | $2.43 | $0.54 | 350.0% |
| Dividends declared per share | $1.5000 | $1.5000 | —% |

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***Earnings Available for Distribution, Cash Available for Distribution and Adjusted Weighted Average Common Shares Outstanding - Diluted***

EAD is a non-GAAP financial measure. We believe EAD serves as a useful indicator for investors in evaluating our performance and our long-term ability to pay distributions. EAD is defined as the net income (loss) attributable to our common stockholders computed in accordance with GAAP, including realized gains and losses not otherwise included in net income (loss), excluding any unrealized gains or losses or other similar non-cash items that are included in net income (loss) for the applicable reporting period, regardless of whether such items are included in other comprehensive income (loss), or in net income (loss) and adding back amortization of stock-based compensation. Net income (loss) attributable to

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common stockholders may also be adjusted for the effects of certain GAAP adjustments and transactions that may not be indicative of our current operations.

We use EAD to evaluate our performance which excludes the effects of certain GAAP adjustments and transactions that we believe are not indicative of our current operations and to assess our long-term ability to pay distributions. We believe providing EAD as a supplement to GAAP net income (loss) to our investors is helpful to their assessment of our performance and our long term ability to pay distributions. EAD does not represent net income or cash flows from operating activities and should not be considered as an alternative to GAAP net income, an indication of our GAAP cash flows from operating activities, a measure of our liquidity or an indication of funds available for our cash needs. Our computation of EAD may not be comparable to EAD reported by other REITs.

We also use EAD as a component of the management fee paid to our Manager. As consideration for the Manager's services, we will pay our Manager an annual management fee of 1.5% of Equity, paid monthly, in cash or shares of our common stock at the election of our Manager. "Equity" means (a) the sum of (1) total stockholders' equity immediately prior to the closing of our IPO, plus (2) the net proceeds received by us from all issuances of our equity securities in and after the IPO, plus (3) our cumulative EAD from and after the IPO to the end of the most recently completed calendar quarter, (b) less (1) any distributions to our holders of common stock from and after the IPO to the end of the most recently completed calendar quarter and (2) all amounts that we have paid to repurchase for cash the shares of our equity securities from and after the IPO to the end of the most recently completed calendar quarter. In our calculation of Equity, we will adjust our calculation of EAD to remove the compensation expense relating to awards granted under one or more of our long-term incentive plans that is added back in our calculation of EAD. Additionally, for the avoidance of doubt, Equity does not include the assets contributed to us in the Formation Transaction. For the purpose of calculating EAD for the management fee, net income (loss) attributable to common stockholders may be adjusted for the effects of certain GAAP adjustments and transactions that may not be indicative of our current operations, in each case after discussions between the Manager and the independent directors of our Board and approved by a majority of the independent directors of our Board.

CAD is a non-GAAP financial measure. We calculate CAD by adjusting EAD by adding back amortization of premiums, depreciation and amortization of real estate investment, amortization of deferred financing costs and by removing accretion of discounts. We use CAD to evaluate our performance and our current ability to pay distributions. We also believe that providing CAD as a supplement to GAAP net income (loss) to our investors is helpful to their assessment of our performance and our current ability to pay distributions. CAD does not represent net income or cash flows from operating activities and should not be considered as an alternative to GAAP net income, an indication of our GAAP cash flows from operating activities, a measure of our liquidity or an indication of funds available for our cash needs. Our computation of CAD may not be comparable to CAD reported by other REITs.

EAD per diluted common share and CAD per diluted common share are based on adjusted weighted average common shares outstanding - diluted. Adjusted weighted average common shares outstanding - diluted is a non-GAAP measure calculated by subtracting the dilutive effect of potential redemptions of Series B Preferred shares for shares of our common stock from weighted average common shares outstanding - diluted. We believe providing adjusted weighted average common shares outstanding - diluted and EAD per diluted common share and CAD per diluted common share based on adjusted weighted average common shares outstanding - diluted is helpful to our investors in their assessment of our performance without the potential dilutive effect of the Series B Preferred shares. We have the right to redeem the Series B Preferred shares for cash or shares of our common stock. Additionally, Series B Preferred redemptions are capped at 2% of the outstanding Series B Preferred shares per month, 5% per quarter and 20% per year. The Company maintains sufficient liquidity to pay cash to cover any redemptions up to the quarterly redemption cap. Further, it is the Company's intent to not settle Series B Preferred redemptions in shares of common stock when the Company's common stock price is below book value.

Adjusted weighted average common shares outstanding - diluted should not be considered as an alternative to the GAAP measures. Our computation of adjusted weighted average common shares outstanding - diluted may not be comparable to adjusted weighted average common shares outstanding - diluted reported by other companies.

EAD per diluted common share and CAD per diluted common share for periods prior to the second quarter of 2024 have not been updated to reflect this adjustment as the dilutive effect of the Series B Preferred redemptions were immaterial to prior periods.

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The following table provides a reconciliation of EAD and CAD to GAAP net income including the dilutive effect of noncontrolling interests and adjusted weighted average common shares outstanding - diluted to weighted average common shares outstanding - diluted for the three and nine months ended September 30, 2025 and 2024 (in thousands, except per share amounts):

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| | | | |
|:---|:---|:---|:---|
| | **For the Three Months Ended September 30,** | **For the Three Months Ended September 30,** | |
| | **2025** | **2024** |<br>**% Change** |
| **Net income attributable to common stockholders** | $35032 | $16116 | 117.4% |
| **Net income attributable to redeemable noncontrolling interests** | 7782 | 3940 | 97.5% |
| **Adjustments** |  |  |  |
| &nbsp;&nbsp;Amortization of stock-based compensation | 1504 | 1411 | 6.6% |
| &nbsp;&nbsp;Provision for (reversal of) credit losses | 15680 | (298) | 5361.7% |
| &nbsp;&nbsp;Equity in (income) losses of equity method investments | (12) | 1105 | (101.1)% |
| &nbsp;&nbsp;Unrealized (gains) or losses (1) | (48344) | (4660) | 937.4% |
| **EAD** | $11642 | $17614 | (33.9)% |
| **EAD per Diluted Common Share** | $0.51 | $0.75 | (32.3)% |
| **Adjustments** |  |  |  |
| &nbsp;&nbsp;Amortization of premiums | 3750 | 4093 | (8.4)% |
| &nbsp;&nbsp;Accretion of discounts | (4055) | (7071) | 42.7% |
| &nbsp;&nbsp;Depreciation and amortization of real estate investments | 620 | 1099 | (43.6)% |
| &nbsp;&nbsp;Amortization of deferred financing costs | 137 | 12 | 1041.7% |
| **CAD** | $12094 | $15747 | (23.2)% |
| **CAD per Diluted Common Share** | $0.53 | $0.67 | (20.9)% |
| **Weighted-average common shares outstanding - basic** | 17722 | 17461 | 1.5% |
| **Weighted-average common shares outstanding - diluted** | 43854 | 30468 | 43.9% |
| **Shares attributable to potential redemption of Series B Preferred** | (20999) | (7049) | (197.9)% |
| **Adjusted weighted-average common shares outstanding - diluted** | 22855 | 23419 | (2.4)% |

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(1)Unrealized gains are the net change in unrealized loss on investments held at fair value applicable to common stockholders.

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| | | | |
|:---|:---|:---|:---|
| | **For the Nine Months Ended September 30,** | **For the Nine Months Ended September 30,** | |
| | **2025** | **2024** |<br>**% Change** |
| **Net income attributable to common stockholders** | $63834 | $9317 | 585.1% |
| **Net income attributable to redeemable noncontrolling interests** | 15383 | 4322 | 255.9% |
| **Adjustments** |  |  |  |
| &nbsp;&nbsp;Amortization of stock-based compensation | 4475 | 4663 | (4.0)% |
| &nbsp;&nbsp;Provision for (reversal of) credit losses | 24589 | (720) | 3515.1% |
| &nbsp;&nbsp;Equity in (income) losses of equity method investments | 952 | 3997 | (76.2)% |
| &nbsp;&nbsp;Unrealized (gains) or losses (1) | (77911) | 543 | (14448.3)% |
| **EAD** | $31322 | $22122 | 41.6% |
| **EAD per Diluted Common Share (2)** | $1.37 | $0.95 | 44.2% |
| **Adjustments** |  |  |  |
| &nbsp;&nbsp;Amortization of premiums | 8570 | 33649 | (74.5)% |
| &nbsp;&nbsp;Accretion of discounts | (9156) | (14644) | 37.5% |
| &nbsp;&nbsp;Depreciation and amortization of real estate investments | 2313 | 4499 | -48.6% |
| &nbsp;&nbsp;Amortization of deferred financing costs | 161 | 36 | 347.2% |
| **CAD** | $33210 | $45662 | (27.3)% |
| **CAD per Diluted Common Share (2)** | $1.45 | $1.96 | (26.0)% |
| **Weighted-average common shares outstanding - basic** | 17651 | 17383 | 1.5% |
| **Weighted-average common shares outstanding - diluted** | 39628 | 27673 | 43.2% |
| **Shares attributable to potential redemption of Series B Preferred** | (16710) | (4348) | (284.3)% |
| **Adjusted weighted-average common shares outstanding - diluted (2)** | 22918 | 23325 | (1.7)% |

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(1)Unrealized gains are the net change in unrealized loss on investments held at fair value applicable to common stockholders.

(2)Starting in the second quarter of 2024, EAD per diluted common share, CAD per diluted common share and adjusted weighted average common shares outstanding - diluted do not include the dilutive effect of the potential redemption of Series B Preferred Stock for common shares. Periods prior to the second quarter of 2024 have not been updated to reflect this adjustment because the dilutive effect of potential Series B Preferred redemptions were immaterial to prior periods. For the three months ended March 31, 2024, the adjusted weighted average common shares outstanding - diluted does not exclude the dilutive effect of the potential redemption of Series B Preferred Stock for common shares.

***Book Value per Share / Unit***

The following table calculates our book value per share (in thousands, except per share data):

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| | | |
|:---|:---|:---|
| | **September 30, 2025** | **December 31, 2024** |
| Common stockholders' equity | $334499 | $295624 |
| Shares of common stock outstanding at period end | 17722 | 17461 |
| Book value per share of common stock | $18.87 | $16.93 |

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Due to the large noncontrolling interest in the OP (see Note 13 to our consolidated financial statements for more information), we believe it is useful to also look at book value on a combined basis as shown in the table below (in thousands, except per share data):

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| | | |
|:---|:---|:---|
| | **September 30, 2025** | **December 31, 2024** |
| Common stockholders' equity | $334499 | $295624 |
| Redeemable noncontrolling interests in the OP | 93989 | 86164 |
| Total equity | $428488 | $381788 |
| Redeemable OP Units at period end | 5038 | 5038 |
| Shares of common stock outstanding at period end | 17722 | 17461 |
| Combined shares of common stock and redeemable OP Units | 22760 | 22499 |
| Combined book value per share / unit | $18.83 | $16.97 |

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**Our Portfolio**

Our portfolio consists of SFR Loans, CMBS B-Pieces, CMBS I/O Strips, mezzanine loans, preferred equity investments, common stock investments, preferred stock investments, multifamily properties, promissory notes, revolving credit facilities and stock warrants with a combined unpaid principal balance of $1.5 billion as of September 30, 2025 and assumes the CMBS Entities' assets and liabilities are not consolidated. The following table sets forth additional information relating to our portfolio as of September 30, 2025 (dollars in thousands):

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| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Investment (1)** | **Investment<br>Date** | **Current<br>Principal<br>Amount** | | **Net Equity (2)** | **Location** | **Property Type** | **Coupon** | **Current Yield (3)** | **Remaining Term (4)<br>(years)** |
| | **Senior Loans** | | | | | | | | | |
| 1 | &nbsp;&nbsp;&nbsp;Senior Loan | 2/11/2020 | $7688 |  | $1081 | Various | Single-family | 5.35% | 5.29% | 2.34 |
| 2 | &nbsp;&nbsp;&nbsp;Senior Loan | 2/11/2020 | 5056 |  | 588 | Various | Single-family | 5.24% | 5.06% | 3.01 |
| 3 | &nbsp;&nbsp;&nbsp;Senior Loan | 2/11/2020 | 31793 |  | 3303 | Various | Single-family | 4.74% | 4.73% | 0.17 |
| 4 | &nbsp;&nbsp;&nbsp;Senior Loan | 2/11/2020 | 9253 |  | 1041 | Various | Single-family | 6.10% | 5.87% | 3.01 |
| 5 | &nbsp;&nbsp;&nbsp;Senior Loan | 2/11/2020 | 34835 |  | 3692 | Various | Single-family | 5.55% | 5.31% | 3.09 |
| 6 | &nbsp;&nbsp;&nbsp;Senior Loan | 2/11/2020 | 5447 |  | 617 | Various | Single-family | 5.99% | 5.75% | 3.17 |
| 7 | &nbsp;&nbsp;&nbsp;Senior Loan | 2/11/2020 | 8380 |  | 1028 | Various | Single-family | 5.88% | 5.68% | 3.26 |
| 8 | &nbsp;&nbsp;&nbsp;Senior Loan | 2/11/2020 | 6268 |  | 797 | Various | Single-family | 5.46% | 5.30% | 3.42 |
| 9 | &nbsp;&nbsp;&nbsp;Senior Loan | 2/11/2020 | 10523 |  | 1283 | Various | Single-family | 4.72% | 4.70% | 0.42 |
|  | &nbsp;&nbsp;&nbsp;**Total** |  | **119243** |  | **13430** |  |  | **5.32%** | **5.18%** | **2.05** |
|  | &nbsp;&nbsp;&nbsp;**CMBS B-Pieces** |  |  |  |  |  |  |  |  |  |
| 1 | &nbsp;&nbsp;&nbsp;CMBS B-Piece | 2/11/2020 | 13202 | (5) | 3142 | Various | Multifamily | 7.21% | 7.21% | 0.41 |
| 2 | &nbsp;&nbsp;&nbsp;CMBS B-Piece | 2/11/2020 | 28581 | (5) | 6984 | Various | Multifamily | 6.07% | 6.07% | 1.15 |
| 3 | &nbsp;&nbsp;&nbsp;CMBS B-Piece | 7/30/2020 | 15910 | (5) | (2277) | Various | Multifamily | 13.47% | 13.47% | 1.73 |
| 4 | &nbsp;&nbsp;&nbsp;CMBS B-Piece | 4/20/2021 | 14714 | (5) | 3727 | Various | Multifamily | 10.60% | 10.60% | 5.41 |
| 5 | &nbsp;&nbsp;&nbsp;CMBS B-Piece | 6/30/2021 | 108303 | (5) | 24631 | Various | Multifamily | —% | 9.36% | 1.25 |
| 6 | &nbsp;&nbsp;&nbsp;CMBS B-Piece | 5/2/2022 | 25532 | (5) | 5321 | Various | Multifamily | 4.91% | 5.24% | 13.16 |
| 7 | &nbsp;&nbsp;&nbsp;CMBS B-Piece | 7/28/2022 | 53691 | (5) | 13497 | Various | Multifamily | 9.60% | 9.60% | 3.82 |
| 8 | &nbsp;&nbsp;&nbsp;CMBS B-Piece | 2/22/2024 | 30869 | (5) | 6660 | Various | Multifamily | 5.90% | 6.59% | 3.82 |
| 9 | &nbsp;&nbsp;&nbsp;CMBS B-Piece | 4/24/2024 | 31931 | (5) | 7566 | Various | Multifamily | 5.59% | 6.30% | 3.48 |
|  | &nbsp;&nbsp;&nbsp;**Total** |  | **322733** |  | **69251** |  |  | **5.08%** | **8.39%** | **3.26** |
|  | &nbsp;&nbsp;&nbsp;**CMBS I/O Strips** |  |  |  |  |  |  |  |  |  |
| 1 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 5/18/2020 | 17590 | (6) | 283 | Various | Multifamily | 2.02% | 20.58% | 4.32 |
| 2 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 8/6/2020 | 108643 | (6) | 3116 | Various | Multifamily | 2.98% | 23.57% | 4.74 |
| 3 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 4/28/2021 | 63181 | (6) | 852 | Various | Multifamily | 1.59% | 23.67% | 4.32 |
| 4 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 5/27/2021 | 20000 | (6) | 650 | Various | Multifamily | 3.38% | 23.50% | 4.65 |
| 5 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 6/7/2021 | 4266 | (6) | 60 | Various | Multifamily | 2.31% | 33.44% | 3.16 |

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| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| 6 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 6/11/2021 |  | 85340 | (6) | 515 | Various | Multifamily | 1.69% | 28.35% | 3.65 |
| 7 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 6/24/2021 |  | 19384 | (6) | 274 | Various | Multifamily | —% | —% | 4.65 |
| 8 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 8/10/2021 |  | 25000 | (6) | 362 | Various | Multifamily | 1.89% | 23.92% | 4.57 |
| 9 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 8/11/2021 |  | 6942 | (6) | 262 | Various | Multifamily | 3.10% | 19.14% | 5.82 |
| 10 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 8/24/2021 |  | 1625 | (6) | 43 | Various | Multifamily | 2.61% | 20.77% | 5.32 |
| 11 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 9/1/2021 |  | 34625 | (6) | 641 | Various | Multifamily | 1.92% | 22.55% | 4.74 |
| 12 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 9/11/2021 |  | 20902 | (6) | 760 | Various | Multifamily | 2.95% | 18.84% | 5.99 |
| 13 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 1/16/2025 |  | 15000 | (6) | 1440 | Various | Multifamily | 5.67% | 15.01% | 9.16 |
| 14 | &nbsp;&nbsp;&nbsp;CMBS I/O Strip | 4/15/2025 |  | 15327 | (6) | 1352 | Various | Multifamily | 5.69% | 15.81% | 8.57 |
|  | &nbsp;&nbsp;&nbsp;**Total** |  |  | **437825** |  | **10610** |  |  | **2.41%** | **22.51%** | **4.78** |
|  | &nbsp;&nbsp;&nbsp;**Mezzanine Loans** |  |  |  |  |  |  |  |  |  |  |
| 1 | &nbsp;&nbsp;&nbsp;Mezzanine | 6/12/2020 |  | 5000 |  | 5000 | Houston, TX | Multifamily | 11.00% | 11.00% | 1.69 |
| 2 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 5470 |  | 2213 | Wilmington, DE | Multifamily | 7.50% | 7.38% | 3.59 |
| 3 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 10380 |  | 4245 | White Marsh, MD | Multifamily | 7.42% | 7.27% | 5.75 |
| 4 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 14253 |  | 5783 | Philadelphia, PA | Multifamily | 7.59% | 7.46% | 3.67 |
| 5 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 3700 |  | 1492 | Daytona Beach, FL | Multifamily | 7.83% | 7.71% | 3.01 |
| 6 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 12000 |  | 4904 | Laurel, MD | Multifamily | 7.71% | 7.55% | 5.50 |
| 7 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 3000 |  | 1227 | Temple Hills, MD | Multifamily | 7.32% | 7.17% | 5.84 |
| 8 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 1500 |  | 614 | Temple Hills, MD | Multifamily | 7.22% | 7.07% | 5.84 |
| 9 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 5540 |  | 2241 | Lakewood, NJ | Multifamily | 7.33% | 7.21% | 3.59 |
| 10 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 6829 |  | 2757 | North Aurora, IL | Multifamily | 7.53% | 7.41% | 3.26 |
| 11 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 3620 |  | 1480 | Rosedale, MD | Multifamily | 7.42% | 7.27% | 5.75 |
| 12 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 9610 |  | 3930 | Cockeysville, MD | Multifamily | 7.42% | 7.27% | 5.75 |
| 13 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 7390 |  | 3022 | Laurel, MD | Multifamily | 7.42% | 7.27% | 5.75 |
| 14 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 1190 |  | 481 | Las Vegas, NV | Multifamily | 7.71% | 7.59% | 3.42 |
| 15 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 3310 |  | 1340 | Atlanta, GA | Multifamily | 6.91% | 6.80% | 3.75 |
| 16 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 2880 |  | 1162 | Des Moines, IA | Multifamily | 7.89% | 7.77% | 3.09 |
| 17 | &nbsp;&nbsp;&nbsp;Mezzanine | 10/20/2020 |  | 4010 |  | 1618 | Urbandale, IA | Multifamily | 7.89% | 7.77% | 3.09 |
| 18 | &nbsp;&nbsp;&nbsp;Mezzanine | 11/18/2021 |  | 12600 |  | 12537 | Irving, TX | Multifamily | —% | —% | 3.17 |
| 19 | &nbsp;&nbsp;&nbsp;Mezzanine | 12/29/2021 |  | 8136 |  | 8125 | Rogers, AR | Multifamily | 15.30% | 15.32% | 0.28 |
| 20 | &nbsp;&nbsp;&nbsp;Mezzanine | 6/9/2022 | (7) | 4500 |  | 4497 | Rogers, AR | Multifamily | —% | —% | 0.11 |
| 21 | &nbsp;&nbsp;&nbsp;Mezzanine | 8/1/2025 |  | 3573 |  | 3298 | Beacon, NY | Self-Storage | 10.55% | 11.43% | 0.84 |
| 22 | &nbsp;&nbsp;&nbsp;Mezzanine | 1/26/2024 | (8) | 101999 |  | 101999 | Cambridge, MA | Life Science | 14.00% | 14.00% | 1.36 |
|  | &nbsp;&nbsp;&nbsp;**Total** |  |  | **230490** |  | **173965** |  |  | **10.23%** | **10.18%** | **2.72** |
|  | **Preferred Equity** |  |  |  |  |  |  |  |  |  |  |
| 1 | &nbsp;&nbsp;&nbsp;Preferred Equity | 5/29/2020 | (9) | 12735 |  | 12735 | Houston, TX | Multifamily | 11.00% | 11.00% | 4.59 |
| 2 | &nbsp;&nbsp;&nbsp;Preferred Equity | 9/29/2021 |  | 22054 |  | 22020 | Holly Springs, NC | Life Science | 10.00% | 10.02% | 1.00 |
| 3 | &nbsp;&nbsp;&nbsp;Preferred Equity | 12/28/2021 |  | 11377 |  | 11377 | Las Vegas, NV | Multifamily | 10.50% | 10.50% | 6.42 |
| 4 | &nbsp;&nbsp;&nbsp;Preferred Equity | 1/14/2022 |  | 35181 |  | 35168 | Vacaville, CA | Life Science | 10.00% | 10.00% | 1.00 |
| 5 | &nbsp;&nbsp;&nbsp;Preferred Equity | 4/7/2022 |  | 3903 |  | 3879 | Beaumont, TX | Self-Storage | 14.19% | 14.28% | 4.92 |
| 6 | &nbsp;&nbsp;&nbsp;Preferred Equity | 6/8/2022 |  | 4480 |  | 4454 | Temple, TX | Self-Storage | 13.47% | 13.55% | 4.92 |
| 7 | &nbsp;&nbsp;&nbsp;Preferred Equity | 7/1/2022 |  | 10000 |  | 9966 | Medley, FL | Self-Storage | 11.00% | 11.04% | 1.75 |
| 8 | &nbsp;&nbsp;&nbsp;Preferred Equity | 8/10/2022 |  | 8500 |  | 8500 | Plano, TX | Multifamily | —% | —% | 0.15 |
| 9 | &nbsp;&nbsp;&nbsp;Preferred Equity | 9/30/2022 |  | 9000 |  | 8998 | Fort Worth, TX | Multifamily | —% | —% | 0.00 |
| 10 | &nbsp;&nbsp;&nbsp;Preferred Equity | 10/19/2022 |  | 8063 |  | 8108 | Woodbury, MN | Life Science | 10.00% | 9.94% | 1.00 |
| 11 | &nbsp;&nbsp;&nbsp;Preferred Equity | 2/10/2023 |  | 29450 |  | 29462 | Forney, TX | Multifamily | 11.00% | 11.00% | 2.50 |
| 12 | &nbsp;&nbsp;&nbsp;Preferred Equity | 2/24/2023 |  | 28970 |  | 28975 | Richmond, VA | Multifamily | 11.00% | 11.00% | 1.48 |
| 13 | &nbsp;&nbsp;&nbsp;Preferred Equity | 5/16/2023 |  | 20945 |  | 20820 | Phoenix, AZ | Single-family | 13.50% | 13.58% | 1.58 |
| 14 | &nbsp;&nbsp;&nbsp;Preferred Equity | 5/17/2023 |  | 4192 |  | 4154 | Houston, TX | Life Science | 13.00% | 13.12% | 0.23 |
| 15 | &nbsp;&nbsp;&nbsp;Preferred Equity | 6/28/2024 |  | 7500 |  | 7473 | Knoxville, TN | Marina | 13.00% | 13.05% | 3.08 |
| 16 | &nbsp;&nbsp;&nbsp;Preferred Equity | 3/19/2025 |  | 5428 |  | 5427 | Kuttawa, KY | Marina | 13.00% | 13.00% | 9.88 |
| 17 | &nbsp;&nbsp;&nbsp;Preferred Equity | 1/31/2025 |  | 1200 |  | 1200 | Houston, TX | Multifamily | 14.00% | 14.00% | 2.50 |
| 18 | &nbsp;&nbsp;&nbsp;Preferred Equity | 10/5/2022 |  | 1490 |  | 1483 | Kirkland, WA | Multifamily | 9.00% | 9.04% | 2.25 |
|  | &nbsp;&nbsp;&nbsp;**Total** |  |  | **224468** |  | **224199** |  |  | **10.32%** | **10.34%** | **2.18** |

---

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---

| | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Common Equity** | | | | | | | | | |
| 1 | &nbsp;&nbsp;&nbsp;Common Stock | 11/6/2020 |  | N/A | 26010 | N/A | Self-Storage | N/A | N/A | N/A |
| 2 | &nbsp;&nbsp;&nbsp;Common Stock | 4/14/2022 |  | N/A | 25556 | N/A | Ground Lease | N/A | N/A | N/A |
| 3 | &nbsp;&nbsp;&nbsp;Common Equity | 2/10/2023 |  | N/A |  | Forney, TX | Multifamily | N/A | N/A | N/A |
| 4 | &nbsp;&nbsp;&nbsp;Common Equity | 2/24/2023 |  | **N/A** |  | Richmond, VA | Multifamily | **N/A** | N/A | **N/A** |
| 5 | &nbsp;&nbsp;&nbsp;Common Equity | 9/8/2023 |  | N/A |  | Atlanta, GA | Multifamily | N/A | N/A | N/A |
| 6 | &nbsp;&nbsp;&nbsp;Common Equity | 7/8/2025 |  | N/A |  | Irving, TX | Multifamily | N/A | N/A | N/A |
| 7 | &nbsp;&nbsp;&nbsp;Membership Interest | 4/9/2024 |  | N/A | 1660 | Various | Multifamily | N/A | N/A | N/A |
|  | &nbsp;&nbsp;&nbsp;**Total** |  |  |  | **53226** |  |  |  |  |  |
|  | **Preferred Stock** |  |  |  |  |  |  |  |  |  |
| 1 | &nbsp;&nbsp;&nbsp;Preferred Stock | 11/9/2023 |  | N/A | 18702 | Various | Life Science | 10.50% | N/A | N/A |
| 2 | &nbsp;&nbsp;&nbsp;Preferred Stock | 1/2/2025 |  | N/A | 137013 | Various | Life Science | 16.50% | N/A | N/A |
|  | &nbsp;&nbsp;&nbsp;**Total** |  |  |  | **155715** |  |  |  |  |  |
|  | **Real Estate** |  |  |  |  |  |  |  |  |  |
| 1 | &nbsp;&nbsp;&nbsp;Real Estate | 12/31/2021 | (10) | N/A | 188 | Charlotte, NC | Multifamily | N/A | N/A | N/A |
| 2 | &nbsp;&nbsp;&nbsp;Real Estate | 10/10/2023 | (11) | N/A | (1566) | Atlanta, GA | Multifamily | N/A | N/A | N/A |
|  | &nbsp;&nbsp;&nbsp;**Total** |  |  |  | **(1378)** |  |  |  |  |  |
|  | **Promissory Note** |  |  |  |  |  |  |  |  |  |
| 1 | &nbsp;&nbsp;Promissory Note | 7/10/2024 |  | 12500 | 12500 | Various | Single-family | 15.00% | 15.00% | 0.78 |
| 2 | &nbsp;&nbsp;&nbsp;Promissory Note | 9/30/2025 |  | 3000 | 3000 | Las Vegas, NV | Multifamily | 8.00% | 8.00% | 1.00 |
|  | &nbsp;&nbsp;&nbsp;**Total** |  |  | **15500** | **15500** |  |  | **13.65%** | **13.65%** | **0.82** |
|  | **Revolving Credit Facility** |  |  |  |  |  |  |  |  |  |
| 1 | &nbsp;&nbsp;&nbsp;Revolving Credit Facility | 12/31/2024 |  | 148600 | 137901 | Various | Life Science | 13.50% | 13.50% | 2.25 |
|  | &nbsp;&nbsp;&nbsp;**Total** |  |  | **148600** | **137901** |  |  | **13.50%** | **13.50%** | **2.25** |
|  | **Stock Warrant** |  |  |  |  |  |  |  |  |  |
| 1 | &nbsp;&nbsp;&nbsp;Stock Warrant | 5/23/2024 |  | N/A | 116228 | Various | Life Science | N/A | N/A | N/A |
|  | &nbsp;&nbsp;&nbsp;**Total** |  |  |  | **116228** |  |  |  |  |  |

---

(1)Our total portfolio represents the current principal amount of the consolidated senior loans, CMBS I/O Strips, mezzanine loans, preferred equity, multifamily properties, promissory notes, revolving credit facilities and stock warrants as well as the net equity of our CMBS B-Piece investments.

(2)Net equity represents the carrying value less borrowings collateralized by the investment.

(3)Current yield is the annualized income earned divided by the cost basis of the investment.

(4)The weighted-average life is weighted on current principal balance and assumes no prepayments. The maturity date for preferred equity investments represents the maturity date of the senior mortgage, as the preferred equity investments require repayment upon the sale or refinancing of the asset.

(5)The CMBS B-Pieces are shown on an unconsolidated basis reflecting the value of our investments.

(6)The number shown represents the notional value on which interest is calculated for the CMBS I/O Strips. CMBS I/O Strips receive no principal payments and the notional value decreases as the underlying loans are paid off.

(7)The mezzanine loan term was extended effective April 9, 2025 to May 16, 2025, and extended further to November 10, 2025. The Company intends to extend the maturity to facilitate the sale of the property.

(8)Effective April 1, 2024, the Company reclassified this investment from a mezzanine loan to senior loan because there was no senior mortgage on the property collateralized by the loan. Effective September 30, 2025, the Company reclassified this investment back to a mezzanine loan because as of September 30, 2025 there is a senior mortgage on the property collateralized by the loan.

(9)The Company, through the Subsidiary OPs, invested $1.1 million in the year ended December 31, 2024 in this preferred equity investment.

(10)Real Estate is a 204-unit multifamily property the Company sold on July 22, 2025. The Company must include the net assets still owed in its financial statements pursuant to applicable accounting standards.

(11)Real Estate is a 280-unit multifamily property. As of September 30, 2025, the property was 94.6% occupied with effective rent per occupied unit of $1,617 per month.

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<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

The following table details overall statistics for our portfolio as of September 30, 2025 (dollars in thousands):

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| | **Total<br>Portfolio** | **Floating Rate<br>Investments** | **Fixed Rate<br>Investments** | **Common Equity<br>Investments** | **Real Estate Investments** | **Stock Warrants** |
| Number of investments | 88 | 20 | 58 | 7 | 2 | 1 |
| Principal balance (1) | $1110823 | $377836 | $732986 | N/A | N/A | N/A |
| Carrying value | $1574961 | $367907 | $973290 | $53226 | $64310 | $116228 |
| Weighted-average cash coupon | 5.32% | 5.61% | 5.17% | N/A | N/A | N/A |
| Weighted-average all-in yield | 7.62% | 10.77% | 6.43% | N/A | N/A | N/A |

---

(1) Cost is used in lieu of notional value for CMBS I/O Strips.

&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;&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;&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;&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;&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;&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;&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;&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;&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;&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;&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;&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;&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;&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;**Liquidity and Capital Resources**

Our short-term liquidity requirements consist primarily of funds necessary to pay for our ongoing commitments to repay borrowings, maintain our investments, make distributions to our stockholders and other general business needs. Our investments generate liquidity on an ongoing basis through principal and interest payments, prepayments and dividends. 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, any potential obligations to fulfill unfunded commitments and dividend requirements for the twelve-month period following September 30, 2025.

Our long-term liquidity requirements consist primarily of acquiring additional investments, scheduled debt payments and distributions. We expect to meet our long-term liquidity requirements through various sources of capital, which may include future debt or equity issuances, net cash provided by operations and other secured and unsecured borrowings. Our leverage is matched in term and structure to provide stable contractual spreads which will protect us from fluctuations in market interest rates over the long-term. 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, borrowing restrictions imposed by lenders, general market conditions for REITs and our operating performance and liquidity. We believe that our various sources of capital, which may include future debt or equity issuances, net cash provided by operations and other secured and unsecured borrowings, will provide sufficient funds for our operations, anticipated debt service payments, potential obligations to purchase investments under the Company's commitments noted in Note 15 to our consolidated financial statements and dividend requirements for the long-term.

***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. We are currently evaluating the full potential impact of the provisions in the OBBBA, however, we do not expect it to have a material impact on our business.

The following table details the asset and debt metrics for the SFR and mezzanine loans as of September 30, 2025:

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| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
| | **Asset Metrics** | **Asset Metrics** | **Asset Metrics** | **Debt Metrics** | **Debt Metrics** | **Debt Metrics** | |
|<br>**Investment** | **Fixed/Floating Rate** | **Interest Rate** | **Maturity Date** | **Fixed/Floating Rate** | **Interest Rate** | **Maturity Date** | **Net Spread** |
| **SFR Loans** | | | | | | | |
| &nbsp;&nbsp;&nbsp;Senior loan | Fixed | 5.35% | 2/1/2028 | Fixed | 3.51% | 2/1/2028 | 1.84% |
| &nbsp;&nbsp;&nbsp;Senior loan | Fixed | 5.24% | 10/1/2028 | Fixed | 2.64% | 10/1/2028 | 2.60% |
| &nbsp;&nbsp;&nbsp;Senior loan | Fixed | 4.74% | 10/1/2025 | Fixed | 2.14% | 10/1/2025 | 2.60% |
| &nbsp;&nbsp;&nbsp;Senior loan | Fixed | 6.10% | 10/1/2028 | Fixed | 3.30% | 10/1/2028 | 2.80% |
| &nbsp;&nbsp;&nbsp;Senior loan | Fixed | 5.55% | 11/1/2028 | Fixed | 2.70% | 11/1/2028 | 2.85% |
| &nbsp;&nbsp;&nbsp;Senior loan | Fixed | 5.99% | 12/1/2028 | Fixed | 3.14% | 12/1/2028 | 2.85% |
| &nbsp;&nbsp;&nbsp;Senior loan | Fixed | 5.88% | 1/1/2029 | Fixed | 3.14% | 1/1/2029 | 2.74% |
| &nbsp;&nbsp;&nbsp;Senior loan | Fixed | 5.46% | 3/1/2029 | Fixed | 2.99% | 3/1/2029 | 2.47% |
| &nbsp;&nbsp;&nbsp;Senior loan | Fixed | 4.72% | 3/1/2026 | Fixed | 2.45% | 3/1/2026 | 2.27% |
| **Mezzanine Loans** |  |  |  |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.50% | 5/1/2029 | Fixed | 0.30% | 5/1/2029 | 7.20% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.42% | 7/1/2031 | Fixed | 0.30% | 7/1/2031 | 7.12% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.59% | 6/1/2029 | Fixed | 0.30% | 6/1/2029 | 7.29% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.83% | 10/1/2028 | Fixed | 0.30% | 10/1/2028 | 7.53% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.71% | 4/1/2031 | Fixed | 0.30% | 4/1/2031 | 7.41% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.32% | 8/1/2031 | Fixed | 0.30% | 8/1/2031 | 7.02% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.22% | 8/1/2031 | Fixed | 0.30% | 8/1/2031 | 6.92% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.33% | 5/1/2029 | Fixed | 0.30% | 5/1/2029 | 7.03% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.53% | 7/1/2031 | Fixed | 0.30% | 7/1/2031 | 7.23% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.42% | 1/1/2029 | Fixed | 0.30% | 1/1/2029 | 7.12% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.42% | 7/1/2031 | Fixed | 0.30% | 7/1/2031 | 7.12% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.42% | 4/1/2031 | Fixed | 0.30% | 4/1/2031 | 7.12% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.71% | 3/1/2029 | Fixed | 0.30% | 3/1/2029 | 7.41% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 6.91% | 7/1/2029 | Fixed | 0.30% | 7/1/2029 | 6.61% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.89% | 11/1/2028 | Fixed | 0.30% | 11/1/2028 | 7.59% |
| &nbsp;&nbsp;&nbsp;Mezzanine | Fixed | 7.89% | 11/1/2028 | Fixed | 0.30% | 11/1/2028 | 7.59% |

---

Our primary sources of liquidity and capital resources to date consist of cash generated from our operating results and the following:

***Freddie Mac Credit Facilities***

Prior to the Formation Transaction, two of our subsidiaries entered into the Credit Facility. Under the Credit Facility, these entities borrowed approximately $788.8 million in connection with their acquisition of the Underlying Loans. No additional borrowings can be made under the Credit Facility, and our obligations will be secured by the Underlying Loans. The Credit Facility was assumed by the Company as part of the Formation Transaction. As such, the remaining outstanding balance of $788.8 million was contributed to the Company on February 11, 2020. Our borrowings under the Credit Facility will mature on July 12, 2029; however, if an Underlying Loan matures prior to July 12, 2029, we will be required to repay the portion of the Credit Facility that is allocated to that loan. As of September 30, 2025, the outstanding balance on the Credit Facility was $108.8 million.

***Repurchase Agreements***

From time to time, we may enter into repurchase agreements to finance the acquisition of our target assets. Repurchase agreements will effectively allow us to borrow against loans and securities that we own in an amount equal to (1) the market value of such loans and/or securities multiplied by (2) the applicable advance rate. Under these agreements, we will sell our loans and securities to a counterparty and agree to repurchase the same loans and securities from the counterparty at a price equal to the original sales price plus an interest factor. During the term of a repurchase agreement, we will receive the principal and interest on the related loans and securities and pay interest to the lender under the repurchase agreement. At any point in time, the amounts and the cost of our repurchase borrowings will be based on the

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<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

assets being financed. For example, higher risk assets will result in lower advance rates (i.e., levels of leverage) at higher borrowing costs. In addition, these facilities may include various financial covenants and limited recourse guarantees.

As discussed in Note 9 to our consolidated financial statements, we, through the OP and the Subsidiary OPs, have borrowed approximately $257.6 million under our repurchase agreements and posted approximately $740.6 million par value of our CMBS B-Piece and CMBS I/O Strip investments as collateral. The CMBS B-Pieces and CMBS I/O Strips held as collateral are illiquid and irreplaceable in nature. These assets are restricted solely to satisfy the interest and principal balances owed to the lender.

The table below provides additional details regarding recent borrowings under the master repurchase agreements (in thousands):

---

| | | | | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|:---|
| | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
| | **Facility** | **Facility** | **Facility** | **Facility** | **Facility** | **Facility** | | **Collateral** | **Collateral** | **Collateral** | **Collateral** |
| | **Date issued** | **Outstanding<br>face amount** | **Carrying<br>value** | **Final stated<br>maturity** | | **Weighted<br>average<br>interest<br>rate (1)** | **Weighted<br>average<br>life (years)<br>(2)** | **Outstanding<br>face amount** | **Amortized cost basis** | **Carrying<br>value (3)** | **Weighted<br>average<br>life (years)<br>(2)** |
| **Master Repurchase Agreements** | **Master Repurchase Agreements** | | | | | | | | | | |
| Mizuho<sup>(4)</sup> | 4/15/2020 | 257605 | 257605 | N/A | (5) | 5.96% | 0.0 | 740573 | 352449 | 337306 | 4.1 |

---

(1)Weighted-average interest rate using unpaid principal balances.

(2)Weighted-average life is determined using the maximum maturity date of the corresponding loans, assuming all extension options are exercised by the borrower.

(3)CMBS are shown at fair value on an unconsolidated basis.

(4)Borrowings under these repurchase agreements are collateralized by portions of the CMBS B-Pieces and CMBS I/O Strips.

(5)The master repurchase agreement with Mizuho does not have a stated maturity date. The transactions in place have a one-month to two-month tenor and are expected to roll accordingly

***At-The-Market Offering***

On March 15, 2022, the Company, the OP and the Manager separately entered into Equity Distribution Agreements with each of Raymond James, Keefe, Bruyette & Woods, Inc., Robert W. Baird & Co. Incorporated and Virtu Americas LLC, pursuant to which the Company may issue and sell from time to time under its ATM Program. The Equity Distribution Agreements provide for the issuance and sale of common stock or Series A Preferred Stock by the Company through a sales agent acting as a sales agent or directly to the sales agent acting as principal for its own account at a price agreed upon at the time of sale. As of September 30, 2025, pursuant to the Equity Distribution Agreements, the Company has sold 531,728 shares of its common stock and zero shares of Series A Preferred Stock for total gross sales of $12.6 million. For additional information about the ATM Program, see Note 11 to our consolidated financial statements.

***Series B Preferred Stock Offering***

On November 2, 2023, the Company announced the launch of a continuous public offering of up to 16,000,000 shares of its Series B Preferred Stock at a price to the public of $25.00 per share, for gross proceeds of $400.0 million. On October 1, 2025, the Company increased the size of the Series B Preferred Stock offering to 17,200,000 shares for gross proceeds of $430.0 million. Beginning on the first day of the calendar month following the date of original issuance, the Series B Preferred Stock are redeemable at the option of the holder at a redemption price per share equal to the liquidation preference of $25.00 per share, plus all accrued but unpaid cash dividends and less certain redemption fees. After the first day of the calendar month following the second anniversary of the original issue date, the Company also has the option to redeem, in whole or in part, subject to certain restrictions in the Company's charter and the articles supplementary setting forth the terms of the Series B Preferred Stock, at a redemption price per share equal to the liquidation preference of $25.00 per share, plus any accrued but unpaid cash dividends. In all optional redemptions, the Company has the right, in its sole discretion, to pay the redemption in cash or in equal value of shares of the Company's common stock for so long as the common stock is listed or admitted to trading on the NYSE or another national securities exchange or automated quotation system. The Dealer Manager serves as the Company's dealer manager in connection with the offering. The Dealer Manager uses its reasonable best efforts to sell the shares of Series B Preferred Stock 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 Stock in the offering and (ii) a Dealer Manager Fee of 3.0% of the gross proceeds from sales of Series B Preferred Stock in the offering. The Dealer

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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 shares of Series B Preferred Stock 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 17,200,000 shares of the Series B Preferred Stock in the offering or December 29, 2026 (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 September 30, 2025, the Company has sold 13,717,142 shares of Series B Preferred Stock for total gross proceeds of $335.1 million.

***Company Notes Offering***

The Company has an aggregate principal amount of $180.0 million of its 5.75% Notes outstanding as of September 30, 2025.

***OP Notes Offering***

As of September 30, 2025, the OP had an aggregate principal amount of $36.5 million of its 7.50% OP Notes outstanding.

Subsequent to September 30, 2025, the OP issued a total of $45.0 million aggregate principal amount of its 2026 OP Notes for proceeds of approximately $43.9 million after original issue discount, the proceeds of which were used to repay the 7.50% OP Notes at maturity.

***Other Potential Sources of Financing***

We may seek additional sources of liquidity from further repurchase facilities, other borrowings and future offerings of common and preferred equity and debt securities and contributions from existing holders of the OP or Subsidiary OPs. In addition, we may apply our existing cash and cash equivalents and cash flows from operations to any liquidity needs. As of September 30, 2025, our cash and cash equivalents were $17.9 million.

***Cash Flows***

The following table presents selected data from our Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and September 30, 2024 (in thousands):

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| | | |
|:---|:---|:---|
| | **For the Nine Months Ended September 30, 2025** | **For the Nine Months Ended September 30, 2025** |
| | **2025** | **2024** |
| Net cash provided by operating activities | $27452 | $24925 |
| Net cash provided by investing activities | 279659 | 735935 |
| Net cash (used in) financing activities | (292603) | (738802) |
| Net increase (decrease) in cash, cash equivalents, and restricted cash | 14508 | 22058 |
| Cash, cash equivalents and restricted cash, beginning of period | 7053 | 16649 |
| Cash, cash equivalents and restricted cash, end of period | $21561 | $38707 |

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*Cash flows from operating activities.* During the nine months ended September 30, 2025, net cash provided by operating activities was $27.5 million compared to net cash provided by operating activities of $24.9 million for the nine months ended September 30, 2024. This increase primarily relates to the change in unrealized gains on investments held at fair value.

*Cash flows from investing activities.* During the nine months ended September 30, 2025, net cash provided by investing activities was $279.7 million compared to net cash provided by investing activities of $735.9 million for the nine months ended September 30, 2024. This decrease was primarily due to a decrease in proceeds from payments received on mortgage loans held for investment.

*Cash flows from financing activities.* During the nine months ended September 30, 2025, net cash used in financing activities was $292.6 million compared to net cash used in financing activities of $738.8 million for the nine months ended

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September 30, 2024. The decrease primarily relates to a decrease of principal repayments on borrowings under secured financing agreements.

**Emerging Growth Company and Smaller Reporting Company Status**

Section 107 of the JOBS Act provides that an emerging growth company can take advantage of the extended transition period provided in Section 13(a) of the Exchange Act, for complying with new or revised accounting standards applicable to public companies. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of this extended transition period. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates for such new or revised standards. We may elect to comply with public company effective dates at any time, and such election would be irrevocable pursuant to Section 107(b) of the JOBS Act. The Company expects to lose its emerging growth company status at December 31, 2025.

We are also a "smaller reporting company" as defined under the Exchange Act, and may elect to take advantage of certain of the scaled disclosures available to smaller reporting companies. We may be a smaller reporting company even after we are no longer an "emerging growth company."

**Dividends**

We intend to make regular quarterly dividend payments to holders of our common stock. We also intend to make the accrued dividend payments on the Series A Preferred Stock, which are payable quarterly in arrears as provided in the articles supplementary setting forth the terms of the Series A Preferred Stock, and the Series B Preferred Stock, which are payable monthly as provided in the articles supplementary setting forth the terms of the Series B Preferred Stock. 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 dividends paid and excluding net capital gains. As a REIT, we will be subject to U.S. 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 dividend payments of all or substantially all of our taxable income, which is not used to pay dividends on the Series A Preferred Stock and Series B Preferred Stock, to holders of our common stock out of assets legally available for this purpose, if and to the extent authorized by our Board. Before we make any dividend 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 dividends or we may make a portion of the required dividend in the form of a taxable distribution of stock or debt securities.

We will make dividend payments to holders of our common stock based on our estimate of taxable earnings per share of common stock, but not earnings calculated pursuant to GAAP. Our dividends 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 and non-deductible G&A expenses. Our quarterly dividends per share of our common stock may be substantially different than our quarterly taxable earnings and GAAP earnings per share.

**Off-Balance Sheet Arrangements**

As of September 30, 2025, we had one off balance sheet arrangement that has or is 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.

On December 8, 2022, the Co-Guarantors, as guarantors, entered into the NSP Sponsor Guaranty Agreement in favor of Extra Space pursuant to which REIT Sub and the 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 REIT Sub and the Co-Guarantors are capped at $97.6 million, and each of REIT Sub and the 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 NSP Series D preferred stock remains outstanding as of September 30, 2025. As of September 30, 2025, the outstanding NSP Series D Preferred Stock accrued dividends was $14.1 million and the Company and NexPoint Diversified Real Estate Trust are jointly and severally liable for 85.90% of the guaranteed amount equal to $12.2 million.

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**Commitments and Contingencies**

Except as otherwise disclosed below, the Company is not aware of any contractual obligations, legal proceedings or any other contingent obligations incurred in the normal course of business that would have a material adverse effect on our consolidated financial statements.

The Company provides certain guarantees in connection with the NSP Sponsor Guaranty Agreement. See Off-Balance Sheet Arrangements above for further details.

On March 14, 2023, the Company, through one of the Subsidiary OPs, committed to fund $24.0 million of preferred equity with respect to a ground up construction horizontal single-family property located in Phoenix, Arizona, of which $3.1 million was unfunded as of September 30, 2025. The preferred equity investment provides a floating annual return that is the greater of prime rate plus 5.0% or 11.25%, compounded monthly with a MOIC of 1.30x and 1.0% placement fee. The Company was also issued a common interest at the time of its first funding of preferred equity on May 16, 2023. The common interest allows the Company to receive a 10% profit share once aggregate distributions exceed the 20% internal rate of return IRR hurdle as shown below. There was no value ascribed to the common interest as of September 30, 2025. Further, once the Company's preferred equity and accrued interest has been repaid, any additional cash flow and net sale proceeds shall be distributed as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 0% to the Company and 100% to issuer up to a 20% IRR

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;• 10% to the Company and 90% to issuer thereafter

On February 10, 2023, the Company, through one of the Subsidiary OPs, through a unit purchase agreement, committed to purchase $30.3 million of the preferred units with respect to a multifamily property development located in Forney, Texas, which was fully funded as of September 30, 2025. Further, the Company committed to purchase $4.3 million of common equity with respect to the same property, of which $0.3 million was unfunded as of September 30, 2025.

On February 10, 2023, the Company, through one of the Subsidiary OPs, through a unit purchase agreement, committed to purchase $30.3 million of the preferred units with respect to a multifamily property development located in Richmond, Virginia, which has been fully funded as of September 30, 2025. Further, the Company committed to purchase $4.3 million of common equity with respect to the same property, of which $0.3 million was unfunded as of September 30, 2025.

SFR OP issued the SFR OP Note II to the Company on July 10, 2024. The SFR OP Note II bears interest at 15%, which is payable in kind, is interest only during the term of the SFR OP Note II and initially matured on July 10, 2025. On August 25, 2025, the Company, through REIT Sub. extended the maturity date to July 10, 2026 and increased the maximum amount available under the SFR OP Note II to $15.0 million. The Company funded $3.5 million through December 31, 2024. SFR OP paid down $1.9 million of principal on April 29, 2025. The Company funded $3.4 million, $5.0 million, $2.5 million on July 31, 2025, August 24, 2025 and September 24, 2025, respectively. The Company's maximum commitment under the loan is $15.0 million, of which $2.5 million was unfunded as of September 30, 2025.

On January 26, 2024, the Company, through OP IV, along with OSL, entered into the Alewife Loan whereby it made a loan in the maximum principal amount of up to $218.0 million to Alewife Holdings, which is solely owned by IQHQ, L.P. The Company has an ownership interest in the preferred stock in IQHQ, who is the limited partner in IQHQ, L.P.; however, the Company has no controlling financial interest nor significant influence in IQHQ, L.P.

On September 30, 2025, the Alewife Loan was bifurcated into (i) a senior mortgage loan in the maximum principal sum of $85.0 million (the "Alewife Senior Loan") and (ii) a mezzanine loan in the maximum principal sum of $133.0 million (the "Alewife Mezzanine Loan"). The Alewife Senior Loan was deemed fully funded, with the Company holding 73.5% of the Alewife Senior Loan based on prior fundings of the Alewife Loan of $62.5 million, and OSL holding 26.5% of the Alewife Senior Loan based on prior fundings of the Alewife Loan of $22.5 million. On September 30, 2025 the Company and OSL sold the Alewife Senior Loan. The Company's prior fundings of $102.0 million of the Alewife Loan were deemed fundings of the Alewife Mezzanine Loan, with the Company holding 100% of the Alewife Mezzanine Loan at closing. The Alewife Mezzanine Loan is secured by an equity pledge by Alewife Holdings of its equity interest in Alewife Member and an equity pledge by Alewife Member of its equity interest in Alewife. The Company's expected

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maximum commitment under the Alewife Mezzanine Loan is $133.0 million, of which $31.0 million was unfunded as of September 30, 2025.

On May 10, 2024, OP IV, NXDT OP and OSL entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which OP IV assigned the right to fund up to 9% of the Alewife Loan to NXDT OP and allocated the right to fund up to 9% of the Alewife Loan to OSL. Effective January 2, 2025, OP IV and OSL entered into an Assignment and Assumption and Co-Lender Agreement, pursuant to which OP IV assigned $7.5 million 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, under the Assignment Agreement, 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, NXDT 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 NXDT OP and OSL, respectively. OP IV is required to fund any amounts not funded by OSL and NXDT OP. At any time that NXDT OP and OSL have funded less than their respective percentages of all advances made under the Alewife Loan, NXDT OP and OSL have the option upon notice to OP IV to pay to OP IV any amount of such unfunded amount. Upon such payment, NXDT OP or OSL would become entitled to all interest and fees accrued on the amount paid to OP IV on and after the date of such payment. The Company's expected maximum commitment under the Alewife Mezzanine Loan is $133.0 million, of which $31.0 million was unfunded as of September 30, 2025.

On May 23, 2024, Bridge Investor I entered into the Bridge Purchase Agreement whereby IQHQ, L.P. issued and sold to Bridge Investor I the IQHQ Promissory Note with a purchase commitment of $150.0 million. The IQHQ Promissory Note bore interest at 16.5%, which was payable in kind, and matured on May 23, 2025. The IQHQ Promissory Note would automatically convert into Series E of IQHQ upon a Qualified Equity Financing (as defined in the IQHQ Promissory Note). In accordance with the Bridge Purchase Agreement, IQHQ Holdings also issued and sold the IQHQ Bridge Warrant to Bridge Investor I to purchase Class A-3 Units of IQHQ. The IQHQ Bridge Warrant entitles the holder to purchase, at an exercise price of $0.01, Class A-3 Units of IQHQ Holdings initially intended to represent 6.25% of the fully diluted and outstanding common equity of IQHQ Holdings. The IQHQ Bridge Warrant is exercisable, in whole or in part, at any time, and expires on May 23, 2034, unless there is an earlier change of control, initial public offering or liquidation.

In connection with the Bridge Purchase Agreement, the IQHQ Participating Purchasers entered into a participation rights agreement with Bridge Investor I pursuant to which the Company and the IQHQ Participating Purchasers had a right to fund up to specified amounts of the IQHQ Promissory Note and the IQHQ Bridge Warrant. Upon receipt of a draw request, each IQHQ Participating Purchaser had 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 and NXDT OP had 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. The Company, through certain subsidiaries, was required to fund any amounts not funded by the IQHQ Participating Purchasers and NXDT OP. Bridge Investor I can allocate all or any portion of the IQHQ Warrant to any parties to the participation rights agreement. On December 2, 2024, the IQHQ Promissory Note was fully funded. The Company funded $148.6 million and the IQHQ Participating Purchasers funded $1.4 million.

On December 31, 2024, the Company, through OP IV and the OP, along with the IQHQ Participating Purchasers that funded the IQHQ Promissory Note and Bluerock Total Income+ Real Estate Fund ("Bluerock") entered into a Revolving Credit Agreement (the "IQHQ Revolving Loan") whereby it made a loan in the maximum principal amount of up to $300.0 million to IQHQ, L.P. In connection with the IQHQ Revolving Loan, the full $150 million of the principal amount of the IQHQ Promissory Note and the full $150 million of the principal amount of a promissory note held by Bluerock was substituted and exchanged for deemed borrowings under the IQHQ Revolving Loan, and the IQHQ Revolving Loan was fully funded on December 31, 2024. On September 30, 2025, the IQHQ Revolving Loan was amended and restated to, among other things, add a new lender and increase the aggregate amount of the loan to $440.0 million, with the new lender funding $100.0 million at closing and each of the Company and Bluerock committing to fund an additional $20.0 million during the commitment period subject to certain terms and conditions. The IQHQ Revolving Loan accrues interest at a rate per annum equal to 13.5% per annum, which, prior to September 30, 2025, was fully payable in kind and, on and after September 30, 2025 is payable 1.5% per annum in kind and 12% per annum in cash. The revolving period during which IQHQ, L.P. is permitted to borrow, repay and re-borrow loans, subject to satisfaction of certain conditions and payment of certain fees, will terminate on September 30, 2028, the maturity date of the IQHQ Revolving Loan. As of September 30, 2025, the Company holds 38.32% of the revolving commitment under the IQHQ Revolving Loan, with an unfunded commitment balance of $20.0 million.

In connection with the IQHQ Revolving Loan, on December 31, 2024, Bridge Investor I entered into the IQHQ Subscription Agreement whereby Bridge Investor I committed to purchase $160.1 million of Series E of IQHQ. Pursuant to the IQHQ Subscription Agreement, the full $10.1 million of the interest accrued on the IQHQ Promissory Note was substituted and exchanged for a deemed funding of $10.1 million under the IQHQ Subscription Agreement. In connection

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with the IQHQ Subscription Agreement, on December 31, 2024, Bridge Investor I also entered into the IQHQ Warrant Purchase Agreement whereby IQHQ Holdings issued and sold 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 Company, through certain subsidiaries, along with the IQHQ Participating Purchasers entered into a participation rights agreement with Bridge Investor I pursuant to which the Company and the IQHQ Participating Purchasers have a right to fund up to specified amounts of the Series E of IQHQ commitment 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, NXDT 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. The Company, through certain subsidiaries, would be required to fund any amounts not funded by the IQHQ Participating Purchasers and NXDT 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 the Company or NXDT 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 the Company or NXDT OP, if applicable, on and after the date of such payment. Bridge Investor I can allocate all or any portion of the IQHQ Warrant to any parties to the participation rights agreement.

IQHQ Holdings is the sole common stockholder of IQHQ, and the IQHQ Participating Purchasers own common equity in IQHQ Holdings and/or IQHQ, L.P. The Company has an ownership interest in the Series D-1 preferred stock in IQHQ, which is the limited partner in IQHQ, L.P.; however, the Company has no controlling financial interest nor significant influence in IQHQ, L.P.

The loan participation was considered a transfer of the IQHQ Promissory Note and the IQHQ Bridge Warrant and is considered a transfer of the Series E of IQHQ and the IQHQ Series E Warrant qualified as a sale under ASC 860, *Transfers and Servicing*, as (1) the transfer legally isolated the transferred assets from the transferor, (2) the transferee has the right to pledge or exchange the transferred assets and no condition both constrains the transferee's right to pledge or exchange the assets and provides more than a trivial benefit to the transferor, and (3) the transferor does not maintain effective control over the transferred assets. The IQHQ Promissory Note was classified as Loans, held-for-investment, net, the Series E of IQHQ is classified as preferred stock and the IQHQ Bridge Warrant is classified as Stock warrant investments. The IQHQ Bridge Warrants are accounted for as investments in equity securities under ASC 321, *Investments – Equity Securities*, and the Company elected to use the fair value option. As a result, the IQHQ Bridge Warrants are being fair valued using an option pricing model that considers both short and long-term exit scenario. The model incorporates economic and control rights, marketability of the Units, and other market-derived metrics, applying discounts for lack of marketability and control due to the minority stake and absence of public trading options.

As of September 30, 2025, the Company has funded $137.0 million of IQHQ Subscription Agreement, with an unfunded commitment balance of $23.0 million.

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

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| | | |
|:---|:---|:---|
| **Investment Type** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**September 30, 2025** | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**December 31, 2024** |
| **Investment Type** | **Unfunded Commitments** | **Unfunded Commitments** |
| Loans | $59929 | $64217 |
| Preferred Equity | 3055 | 7874 |
| Common Equity | 1536 | 2536 |
| Preferred Stock | 23000 | 150000 |
|  | $87520 | $224627 |

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**Critical Accounting Policies and Estimates**

Management's discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial

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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 and estimates that involve significant estimation uncertainty that have or are reasonably likely to have a material impact on our financial condition or results of operations. A discussion of recent accounting pronouncements and our significant accounting policies, including further discussion of the accounting policies described below, can be found in Note 2 to our consolidated financial statements.

*Allowance for Credit Losses*

In periods ending on or prior to December 31, 2022, the Company, with the assistance of an independent valuations firm, performed a quarterly evaluation of loans classified as held for investment for impairment on a loan-by-loan basis in accordance with ASC 310-10-35, *Receivables, Subsequent Measurement* ("ASC 310-10-35"). If the Company determined that it was probable that it would be unable to collect all amounts owed according to the contractual terms of a loan, impairment of that loan was indicated. If a loan was considered to be impaired, the Company would establish an allowance for loan losses, through a valuation provision in earnings that reduced carrying value of the loan to the present value of expected future cash flows discounted at the loan's contractual effective rate or the fair value of the collateral, if repayment was expected solely from the collateral. For non-impaired loans with no specific allowance the Company determined an allowance for loan losses in accordance with ASC 450-20, *Loss Contingencies* ("ASC 450-20"), which represented management's best estimate of incurred losses inherent in the portfolio at the balance sheet date, excluding impaired loans and loans carried at fair value. Management considered quantitative factors likely to cause estimated credit losses, including default rate and loss severity rates. The Company also evaluated qualitative factors such as macroeconomic conditions, evaluations of underlying collateral, trends in delinquencies and non-performing assets. Increases to (or reversals of) the allowance for loan loss for the fiscal year ended December 31, 2022 and prior years are included in "Loan loss (provision)" on the accompanying Consolidated Statements of Operations.

In June 2016, the FASB issued ASU 2016-13, *Financial Instruments – Credit Losses on Financial Instruments* ("ASU 2016-13"), which establishes credit losses on certain types of financial instruments. The new approach changes the impairment model for most financial assets and requires the use of a CECL model for financial instruments measured at amortized cost and certain other instruments. This model applies to trade and other receivables, loans, debt securities, net investments in leases and off-balance sheet credit exposures (such as loan commitments, standby letters of credit and financial guarantees not accounted for as insurance) and requires entities to estimate the lifetime expected credit loss on such instruments and record an allowance that represents the portion of the amortized cost basis that the entity does not expect to collect.

We adopted ASU 2016-13 as of January 1, 2023. The implementation process included the utilization of loan loss forecasting models, updates to our loan credit loss policy documentation, changes to internal reporting processes and related internal controls, and overall operational readiness for our adoption of the new standard. We have implemented loan loss forecasting models for estimating expected life-time credit losses, at the individual loan level, for our loan portfolio. These models are also utilized for estimating expected life-time credit losses for unfunded loan commitments for which the Company has a present contractual obligation to extend the credit and the obligation is not unconditionally cancellable. The CECL forecasting methods used by the Company include (i) a probability of default and loss given default method using underlying third-party CMBS/Commercial Real Estate loan database with historical loan losses from 1998 to 2022, and (ii) probability weighted expected cash flow method, depending on the type of loan and the availability of relevant historical market loan loss data. We might use other acceptable alternative approaches in the future depending on, among other factors, the type of loan, underlying collateral, and availability of relevant historical market loan loss data. Significant inputs to our forecasting methods include (i) key loan-specific inputs such as loan-to-value, vintage year, loan-term, underlying property type, occupancy, geographic location, performance against the underwritten business plan, and our internal loan risk rating, and (ii) a macro-economic environment forecast. The cumulative effect of adoption of ASU 2016-13 as of January 1, 2023 was a $1.6 million reduction in retained earnings. The beginning allowance for credit loss as of January 1, 2025 was $1.4 million. The provision for credit losses of $24.6 million for the nine months ended September 30, 2025 is included in reversal of (provision for) credit losses on the accompanying Consolidated Statements of Operations, resulting in an ending allowance for credit loss of $26.0 million as of September 30, 2025.

Significant judgment is required in determining impairment and in estimating the resulting loss allowance, and actual losses, if any, could materially differ from those estimates.

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*Valuation of Common Equity, Preferred Stock and Warrants*

As of September 30, 2025, the Company owns approximately 25.5% of the total outstanding shares of NSP and thus can exercise significant influence over NSP. The Company elected the fair-value option in accordance with ASC 825-10-10. On a quarterly basis, the Company, with the assistance of an independent third-party valuation firm, determines the fair value for subsequent measurement absent a readily available market price. The valuation is determined using widely accepted valuation techniques consistent with the principles of ASC 820. Specifically, these techniques include the discounted cash flow methodology whereby observable market terminal capitalization rates and discount rates are applied to projected cash flows generated by self-storage assets owned by NSP. The necessary inputs for the valuation include projected cash flows of NSP, terminal capitalization rates and discount rates. These inputs are reflective of public company comparables, but are assumptions and estimates. As a result, the determination of fair value involves significant estimation uncertainty because it involves subjective judgments and estimates that are based on unobservable inputs. For the nine months ended September 30, 2025, the unrealized loss related to the change in fair value estimate is $4.5 million. See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the valuation of NSP.

As of September 30, 2025, the Company owns approximately 6.3% of the total outstanding common equity of the Private REIT. The Company records the Private REIT at fair value in accordance with ASC 321. The valuation is determined using a market approach. The necessary input for the valuation includes the yield of the Private REIT. As a result, the determination of fair value is uncertain because it involves subjective judgments and estimates that are unobservable. For the nine months ended September 30, 2025, the unrealized loss related to the change in fair value estimate is $1.4 million. See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the valuation of the Private REIT.

As of September 30, 2025, the Company owns approximately 98.0% of the total outstanding common equity of each of RFGH and RTB and 79.1% of the total outstanding membership interests of CAP. The Company holds these equity method investments based on the Company's proportionate share of income (losses) for the nine months ended September 30, 2025. See Notes 5 and 6 to our consolidated financial statements for additional disclosures regarding the equity method investments.

As of September 30, 2025, the Company owns 11.8% of the total outstanding shares of the Series D-1 preferred stock in IQHQ. See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the equity security investment in IQHQ.

As of September 30, 2025, the Company owns 46.8% of the total outstanding shares of the Series E Preferred Stock in IQHQ. See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the equity security investment in IQHQ.

As of September 30, 2025, the Company owns 43.9 million warrants of IQHQ. See Notes 5 and 10 to our consolidated financial statements for additional disclosures regarding the equity security investment in IQHQ.

*Considerations Related to Tightening Monetary Policy*

The macroeconomic environment remains challenging as central banks have held interest rates high to combat inflation. The high rate environment, coupled with bank failures in early 2023 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 investments harder to finance. Similar factors also impact the timing of and proceeds generated from asset sales and our ability to obtain debt capital.

**REIT Tax Election**

We elected to be treated as a REIT for U.S. federal income tax purposes. 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," as defined by the Code, to our stockholders. 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. We had no significant taxes associated with our TRS for the nine months ended September 30, 2025 and September 30, 2024. We believe that our organization and current and proposed method of operation will allow us to qualify for taxation as a REIT, but no assurance can be given that we will operate in a manner so as to qualify as a REIT.

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<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

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

Not required for smaller reporting companies.

**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 September 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 September 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 September 30, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

**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 27, 2025.

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

None.

**Item 3. Defaults Upon Senior Securities**

None.

**Item 4. Mine Safety Disclosures**

Not applicable.

**Item 5. Other Information**

None.

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<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_7)</u>

**Item 6. Exhibits** 

**EXHIBIT INDEX**

---

| | |
|:---|:---|
| **Exhibit Number** | **Description** |
| 2.1\* | <u>[Membership Interest Purchase Agreement, effective as of July 22, 2025, by and among NREF OP IV, L.P., NexPoint Montford Investment Co, LLC, and NexBank Capital, Inc.](nref-montfordxexecutedmipa.htm)</u> |
| 10.1\* | <u>[Second Amended and Restated](nhxt-secondarpromissorynot.htm)[Promissory Note, dated August 25, 2025, by and between NexPoint SFR Operating Partnership, L.P. and NREF OP IV REIT Sub, LLC.](nhxt-secondarpromissorynot.htm)</u> |
| 31.1\* | <u>[Certification of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](a93025nref-exx311.htm)</u> |
| 31.2\* | <u>[Certification of Principal Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.](a93025nref-exx312.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.](a93025nref-exx321.htm)</u> |
| 101.INS\* | Inline XBRL Instance Document (The instance document does not appear in the interactive date file because its XBRL tags are embedded within the inline XBRL document) |
| 101.SCH\* | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document |
| 101.DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document |
| 101.LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document |
| 101.PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document |
| 104\* | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |

---

______________________

\*&nbsp;&nbsp;&nbsp;&nbsp;Filed herewith.

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

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<u>[**Table of Contents**](#i9ff9279a2f2940438e9ef2cad123cb40_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 REAL ESTATE FINANCE, INC.**

---

| | | |
|:---|:---|:---|
| **Signature** | **Title** | **Date** |
| /s/ Jim Dondero | President<br>(Principal Executive Officer) | November 13, 2025 |
| Jim Dondero | President<br>(Principal Executive Officer) |  |
| /s/ Paul Richards | Chief Financial Officer, Executive VP-Finance, Assistant Secretary and Treasurer<br>(Principal Financial Officer and Principal<br>Accounting Officer) | November 13, 2025 |
| Paul Richards | Chief Financial Officer, Executive VP-Finance, Assistant Secretary and Treasurer<br>(Principal Financial Officer and Principal<br>Accounting Officer) |  |

---

## Exhibit 2.1

**MEMBERSHIP INTEREST PURCHASE AGREEMENT**

This Membership Interest Purchase Agreement (this "**Agreement**"), dated as of June 4, 2025 (the "**Effective Date**"), is entered into by and among **NEXPOINT MONTFORD INVESTMENT CO, LLC**, a Delaware limited liability company ("**Seller**"), **NEXBANK CAPITAL, INC.**, a Delaware corporation ("**Buyer**"), and (with regard to Article II, [Section 4.07](#iad45d12b2f6b4b88a87a3f4588941b2c_1) and Article VI only) **NREF OP IV, L.P.**, a Delaware limited partnership ("**Seller Principal**").

**RECITALS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(A)WHEREAS, Seller owns, and will own at the time of the Closing, all of the issued and outstanding Membership Units (the "**Membership Interests**") of NexPoint Montford, LLC, a Delaware limited liability company (the "**Company**"), which Membership Interests represent 100% of the outstanding equity interests of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(B)WHEREAS, Seller wishes to sell to Buyer, and Buyer wishes to purchase from Seller, the Membership Interests, subject to the terms and conditions set forth herein;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(C)WHEREAS, Seller and the Company are, and will be at the time of Closing, party to that certain Limited Liability Company Agreement of the Company, dated as of December 31, 2021 (the "**Company Operating Agreement**");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(D)WHEREAS, the Company owns, and will own at the time of Closing, the real property and improvements located generally at 1420 Estates Avenue, Charlotte, North Carolina 28209 (the "**Property**");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(E)WHEREAS, Seller Principal is, and will be at the time of Closing, the indirect owner of the Company;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(F)WHEREAS, the Company is a borrower under the loan(s) with the Federal Home Loan

Mortgage Corporation ("Freddie Mac" or "Lender"), as Lender in the original principal amount of

$32,480,000.00 (the "**Loan**") which is secured by, among other things, the Company's grant of a first priority mortgage against the Property; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(G)WHEREAS, Seller is, and will be at the time of Closing, the sole member and manager of the Company (the "**Managing Member**").

NOW, THEREFORE, in consideration of the premises set forth herein, the mutual covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

**<u>ARTICLE I.</u> <u>PURCHASE AND SALE</u>**

**Section 1.01 Purchase and Sale**. Subject to the terms and conditions set forth herein, at the Closing (as defined herein), Seller shall sell to Buyer, and Buyer shall purchase from Seller, all of Seller's right, title and interest in and to the Membership Interests, free and clear of any

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mortgage, pledge, lien, charge, security interest, claim or other encumbrance (collectively,

"**Encumbrance**"), for the consideration specified in [Section 1.02](#iad45d12b2f6b4b88a87a3f4588941b2c_1).

**Section 1.02&nbsp;&nbsp;&nbsp;&nbsp;Purchase Price**.

&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)The aggregate purchase price for the Membership Interests shall be Sixty Million and No/100 Dollars ($60,000,000.00) (the "**Purchase Price**").

&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)At Closing, the Purchase Price, as increased or decreased by prorations and adjustments as herein provided, shall be paid by Buyer in cash in full, less the Deposit, by wire transfer of immediately available funds.

**Section 1.03 Earnest Money Deposit**. Within two (2) business days following the Effective Date, Buyer shall deposit the sum of Six Hundred Thousand and No/100 Dollars ($600,000.00) with Republic Title of Texas, Inc. ("**Escrow Agent**"), as earnest money (the "**Deposit**"). The Deposit shall be fully refundable to Buyer in the event that Buyer terminates this Agreement prior to the expiration of the Due Diligence Investigations Period (as defined hereinafter). After the expiration of the Due Diligence Investigations Period, the Deposit shall be non-refundable to Buyer and payable in full to Seller in the event that Buyer terminates this Agreement prior to the Closing Date; <u>provided</u> however, if Buyer's termination of this Agreement is due to (a) failure to satisfy the closing condition set forth in [Section 4.04(a)(v)](#iad45d12b2f6b4b88a87a3f4588941b2c_1), or (b) Seller's breach of its representations, warranties, or covenants under this Agreement such that the closing conditions set forth in [Section 4.04(a)(i)](#iad45d12b2f6b4b88a87a3f4588941b2c_1) or [Section 4.04(a)(ii)](#iad45d12b2f6b4b88a87a3f4588941b2c_1) are not satisfied, one-half of the Deposit shall be payable to Buyer and one-half of the Deposit shall be payable to Seller. In the event Buyer terminates the Agreement and is entitled to receive any or all of the Deposit, Seller shall be entitled to receive One Hundred and No/100 Dollars ($100.00) of the Deposit as consideration for entering into the Agreement (the "**Independent Contract Consideration**"), which amount the parties bargained for and agreed to as consideration for Seller's grant to Buyer of Buyer's exclusive right to purchase the Membership Interests pursuant to the terms hereof and for Seller's execution, delivery and performance of this Agreement. This Independent Contract Consideration is in addition to and independent of any other consideration or payment provided in this Agreement, is non-refundable under any circumstances, and shall be retained by Seller notwithstanding any other provisions of this Agreement in consideration of the rights and options granted by Seller under this Agreement. Escrow Agent shall only transfer or disburse the Deposit in connection with a (i) written instructions executed by both (a) Seller, and (b) Buyer (such instructions, "**Joint Written Instruction**"), or (ii) a final order of a court of competent jurisdiction. Notwithstanding anything contained herein, the completed Closing (as defined below) by Seller and Buyer shall be deemed a Joint Written Instruction to the Escrow Agent to disburse the Deposit to Seller as a portion of the Purchase Price.

**Section 1.04&nbsp;&nbsp;&nbsp;&nbsp;Intentionally Deleted.**

**Section 1.05 Closing**. The closing of the transactions contemplated by this Agreement (the "**Closing**") shall take place on or before July 22, 2025 (the "**Closing Date**"). All deliveries shall occur at the offices of Buyer at 2515 McKinney Avenue, 11<sup>th</sup> Floor, Dallas, Texas 75201, or at such law firm or title agency as Buyer may select.

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**Section 1.06 Transfer Taxes, Fees and Costs**. Buyer and Seller shall each be responsible for the payment of 50% of the amount of any transfer Taxes actually payable as a Tax to an applicable governmental authority resulting from the transfer of the Membership Interests to Buyer; <u>provided</u> that, for the avoidance of doubt, each of Buyer and Seller shall be responsible for its own fees, charges, or expenses that become due and payable as a result of the transactions contemplated by this Agreement, provided all fees, charges and expenses incurred in connection with the payment of the foregoing transfer Tax shall be borne by Buyer. The party required to do so under applicable law shall file any Tax Returns related to any Taxes described in this [Section](#iad45d12b2f6b4b88a87a3f4588941b2c_1)

[1.06](#iad45d12b2f6b4b88a87a3f4588941b2c_1) and the other parties shall cooperate in filing such Tax Returns if required under applicable law.

**Section 1.07 Withholding Taxes**. It is anticipated that no withholding Taxes will be due or payable on account of the transaction described herein. In the event any withholding taxes shall apply to such transactions, each of Buyer and Escrow Agent shall be entitled to deduct and withhold from the amounts otherwise payable by it pursuant to this Agreement to any recipient, including the Purchase Price, all Taxes or other amounts that Buyer or the Escrow Agent, as applicable, may be required to deduct and withhold under any provision of applicable law, and to collect any necessary Tax forms or similar information from Seller or any other recipients of payments hereunder. In the event that any amount is so deducted and withheld, such amount will be treated for all purposes of this Agreement as having been paid to the person to whom the payment from which such amount was withheld was made.

**Section 1.08 Exhibits and Schedules**. Exhibits and Schedules hereto include Exhibit "A" (Disclosure Schedule), Exhibit "B" (form of Transfer and Assignment), Exhibit "C" (form of Certificate of Non-Foreign Status), and Exhibit "D" (form of Bank Account Agreement), and all of such exhibits and schedules are incorporated by reference herein.

**<u>ARTICLE II.</u>**

**REPRESENTATIONS AND WARRANTIES OF SELLER**

Seller represents and warrants to Buyer that the statements contained in this Article II are true and correct as of the Effective Date and will be true and correct as of Closing. Seller has knowledge of the Company, the Property, the Assets (as hereinafter defined) and the Business (as hereafter defined). For purposes of this Article II, "Seller's knowledge," "knowledge of Seller" and any similar phrases shall mean the actual knowledge of Seller Principal.

**Section 2.01 Organization and Authority of Seller; Enforceability**. Seller is a limited liability company duly formed or organized under the laws of the State of Delaware, is validly existing and is in good standing under the laws of the State of Delaware. Seller has full power and authority to execute and deliver this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Seller, and (assuming due authorization, execution and delivery by Buyer) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Seller, enforceable against Seller in accordance with their respective terms.

------

**Section 2.02 Organization and Authority of the Company; Enforceability**. The Company is a limited liability company duly organized, validly existing and in good standing under the laws of the state of Delaware and is duly qualified to do business in the state where the Property is located. Seller has provided to Buyer true, correct and complete copies of the current certificate of formation and the Company Operating Agreement and all other organizational documents of the Company (collectively, the "**Company Organizational Documents**"), which are in full force and effect, and which are the only agreements in effect with respect to the matters described therein, and which have not been amended. Exhibit A to the Company Operating Agreement is a true, correct and complete list of all Membership Interests in the Company.

**Section 2.03 No Conflicts; Consents**. The execution, delivery and performance by Seller of this Agreement and the documents to be delivered hereunder, and the consummation by Seller and the Company of the transactions contemplated hereby, do not and will not: (a) violate or conflict with or constitute a default under any organizational documents of Seller (the "**Seller Organizational Documents**") or the Company Organizational Documents; (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to Seller or the Company; (c) conflict with, or result in (with or without notice or lapse of time or both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any contract or other instrument to which Seller or the Company is a party; or (d) result in the creation or imposition of any lien or Encumbrance on the Membership Interests or the Property. Except as disclosed in the Disclosure Schedule attached hereto as **Exhibit "A"** (the "**Disclosure Schedule**"), no consent, approval, waiver or authorization is required to be obtained by Seller or the Company from any person or entity (including any governmental authority) in connection with the execution, delivery and performance by Seller of this Agreement and the consummation of the transactions contemplated hereby.

**Section 2.04 Legal Proceedings**. There is no claim, action, suit, proceeding (including any mediation or arbitration) or governmental investigation of any nature pending or, to Seller's knowledge, threatened against Seller (a) relating to or affecting the Membership Interests, the Property, the Assets or the Business; and/or (b) that challenges or seeks to prevent, enjoin or otherwise delay the transactions contemplated by this Agreement; and, to Seller's knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such claim, action, suit, proceeding or governmental investigation against Seller. Except as shown in the Disclosure Schedule, there is no claim, action, suit, proceeding (including any mediation or arbitration) or, to Seller's knowledge, governmental investigation of any nature pending or to Seller's knowledge threatened against the Company. To Seller's knowledge, no event has occurred or circumstances exist that may give rise to, or serve as a basis for, any such claim, action, suit, proceeding or governmental investigation against the Company.

**Section 2.05&nbsp;&nbsp;&nbsp;&nbsp;Ownership of Membership Interests**.

&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)Seller is, and will be at Closing, the sole legal, beneficial, record and equitable owner of the Membership Interests of the Company, free and clear of any Encumbrance whatsoever.

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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;(b)The Membership Interests were issued in full compliance with all applicable securities laws and other requirements of applicable law. The Membership Interests were

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not issued in violation of Company Organizational Documents or any other agreement, arrangement or commitment to which Seller or the Company is a party and are not subject to or in violation of any preemptive or similar rights of any person or entity.

&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)Other than the Company Organizational Documents, there are no voting trusts, proxies or other agreements or understandings in effect with respect to the voting or transfer of any of the Membership Interests.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Except for the Membership Interests owned by Seller, there are no outstanding or authorized options, warrants, convertible securities or other rights, agreements, arrangements or commitments of any character relating to the issuance of equity interests in the Company or obligating Seller or the Company to issue or sell any equity interests in the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)No certificates were issued in conjunction with any equity interests of the Company.

**Section 2.06 Brokers**. No broker, finder or investment banker is entitled to any brokerage, finder's or other fee or commission in connection with the transactions contemplated by this Agreement based upon arrangements made by or on behalf of Seller or the Company.

**Section 2.07 No Plan Assets.** Seller is not (and, throughout the period transactions are occurring pursuant to this Agreement, will not be) and is not acting on behalf of (and, throughout the period transactions are occurring pursuant to this Agreement, will not be acting on behalf of) an "employee benefit plan" as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended ("**ERISA**"), that is subject to Title I of ERISA, a "plan" as defined in and subject to Section 4975 of the Internal Revenue Code of 1986, as amended (the "**Code**"), or an entity deemed to hold the plan assets of any of the foregoing pursuant to 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA. None of the transactions contemplated by this Agreement are in violation of any statutes, applicable to Seller, that regulate investments of, and fiduciary obligations with respect to, governmental plans and that are similar to the provisions of Section 406 of ERISA or Section 4975 of the Code.

**Section 2.08 Non-foreign Status**. Neither Seller nor Seller Principal is a foreign person as such term is used in Code Sections 1445 and 1446(f)(2) and the U.S. Department of Treasury regulations (the "Treasury Regulations") issued pursuant to Code Section 1445. Seller and Seller Principal will cooperate with Buyer upon request in providing any certificates or affidavits relative to federal or state foreign seller requirements or withholding requirements or related Taxes.

**Section 2.09 Business**. To Seller's knowledge, the Property and the business operated at the Property (the "**Business**") have been, and are currently licensed by all governmental authorities having jurisdiction over the Business, and are in compliance in all material respects with all codes, ordinances, laws, rules and regulations of all governmental authorities having jurisdiction over the Property and the Business and all recorded documents relating to the Property. The Company has full right, power, and authority to own the Assets and to operate the Business as currently being owned and operated. To Seller's knowledge, other than any certificates of occupancy that may exist (as has been previously discussed by Seller and Buyer), there are no

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licenses, certificates and permits (collectively, the "**Licenses**") that are necessary to be held by the Company to operate the Business.

**Section 2.10 Prior Business**. The Company does not own (and have never owned) any real property other than the Property. No other business or enterprise is or has ever been operated by the Company and no other business is currently operated by anyone at the Property. Other than the property of the tenants at the Property and any property owned by any third party manager of the Property, the Company is the owner of the Property and all improvements, fixtures, furniture, personalty, and general intangibles used relative to the Property (the Property and such other items are collectively, the "**Assets**") and has, or the Company will have at Closing, good and marketable title to the Assets, free and clear of all Encumbrances (except with respect to the matters described in the existing title policy covering the Property and any title commitment obtained by Buyer in connection with the Closing). The Company does not have (and has never had) any employees or has sponsored or otherwise participated in any employee benefit plan.

**Section 2.11 Construction Contractors**. All general contractors and all subcontractors have completed all work relative to the Property, have been paid in full as to any sums accrued, due and/or owing relative to their contracts, subcontracts, or otherwise relative to the Property, and, to Seller's knowledge, have no claims or causes of action against Seller, the Company, or otherwise, relative to the Property. Any bond with respect to claims by contractors for work done in the construction of the improvements on the Property shall remain in full force and effect following Closing.

**Section 2.12 Financial Statements**. Seller has delivered to Buyer copies of the unaudited balance sheet and statements of operations, members' equity and cash flows of the Company as of and for the fiscal years ended 2022, 2023 and 2024 *(*collectively, the "**Financial Statements**") which are the same Financial Statements used and relied upon by Seller in the conduct of the Business. Except as set forth in the Financial Statements, the Company does not have any material liabilities (whether or not contingent or required to be reflected on a balance sheet under generally accepted accounting principles).

**Section 2.13 Continued Operations**. Since the opening date of the Business, (a) the Business has been operated only in the ordinary course of business; (b) none of the Assets were sold or disposed of except in the ordinary course of the Business; (c) the Company has kept and maintained its inventory of stock-in-trade and supplies in the ordinary course of business; and (d) Seller has exercised its best efforts to cause the Company to maintain good relations with customers and potential customers of the Business.

**Section 2.14 OFAC**. Neither Seller or the Company is a person or entity with whom

U.S. persons or entities are restricted from doing business under regulations of the Office of Foreign Asset Control of the Department of the Treasury ("**OFAC**") (including those named on its Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action.

**Section 2.15 Patriot Act**. Seller represents and warrants that neither Seller nor the Company is acting, directly or indirectly, for or on behalf of any person, group, entity, or nation

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named by the U.S. Treasury Department as a Specially Designated National and Blocked Person, or for or on behalf of any person, group, entity, or nation designated in Presidential Executive Order 13224 as a person who commits, threatens to commit, or supports terrorism; and that neither Seller nor the Company is engaged in this transaction directly or indirectly on behalf of, or facilitating this transaction directly or indirectly on behalf of, any such person, group, entity, or nation.

**Section 2.16 Hazardous Materials**. To Seller's knowledge, except as set forth in any environmental report delivered to Buyer, no Hazardous Materials (as hereinafter defined in this [Section 2.16](#iad45d12b2f6b4b88a87a3f4588941b2c_1)) are stored, used or located at the Property in violation of any Environmental Law (as hereinafter defined). Seller has not received any written notice of any, and to Seller's knowledge, there are no threatened or pending environmental proceedings affecting the Property or any part thereof. For purposes of this Agreement, the term "**Hazardous Materials**" includes petroleum, including crude oil or any fraction thereof, natural gas, natural gas liquids, liquefied natural gas or synthetic gas usable for fuel (or mixtures or natural gas or synthetic gas) and any substance, material, waste, pollutant or contaminant regulated by, or listed or defined as hazardous or toxic under, any Environmental Law. The term "**Environmental Law**" means the Resource Conservation and Recovery Act, the Comprehensive Environmental Response Compensation and Liability Act and all other federal laws governing the environment in effect as of the Effective Date, and all state, regional, county, municipal, local and other laws, rules, regulations and ordinances that are equivalent or similar to the federal laws described above or that purport to regulate Hazardous Materials.

**Section 2.17 Commercial Documents**. All social security, withholding, sales, unemployment insurance, and other Taxes that are due and owing with reference to the Assets and the Business for all periods prior to the Closing have been paid in full. Seller is not aware of any state of facts that would operate to prevent Buyer from carrying on the Business immediately following Closing in the manner in which the Business is currently operated.

**Section 2.18 Maintenance; Utilities**. All tangible Assets are in good working order and fit for their intended uses. There are no material defects or deficiencies in any necessary utility services and easements for such services, including electrical, gas, water, sewer and telephone, and bills for each month for each utility payable with respect to the Property for each month ended after the opening date of the Business, have been provided to Buyer by Seller. To Seller's knowledge, there are no agreements or arrangements with any municipality, subdivision or regulatory body having jurisdiction over the Property that requires any continuing obligation of the Company with respect to which the Company is not in compliance or that has not otherwise previously been satisfied.

**Section 2.19&nbsp;&nbsp;&nbsp;&nbsp;Contracts, Leases and Rent Roll**.

&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)The Management Agreement dated as of December 29, 2021 (the "**Management Agreement**") with BH Management Services, LLC (the "**Property Manager**") is in full force and effect and is paid current as of the date of this Agreement; a true, correct and complete copy of the Management Agreement has been provided to Buyer by Seller, and the Management Agreement has not been amended.

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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;(b)Seller has provided the most current rent roll available from the Property Manager under the Management Agreement (the "**Rent Roll**"). The Rent Roll is true, correct and complete as of the Effective Date in all material respects. The Rent Roll is in the same form that Seller uses in the ordinary course of its business. True, correct and complete copies of all Leases (as defined below) will be delivered to Buyer in accordance with [Section 4.08](#iad45d12b2f6b4b88a87a3f4588941b2c_1).

&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)Except for any parties in possession pursuant to, and any rights of possession granted thereunder, the Leases shown on the Rent Roll, there are no leases, subleases, occupancies or tenancies or parties in possession of any part of the Property. No third party has any option, right of first refusal that has not been waived, license or other similar agreement with respect to a purchase or sale of the Property or any portion thereof or any interest therein. Neither Seller's interest in the Leases nor any of the rentals due or to become due under the Leases will be assigned, encumbered or subject to any Encumbrances at the time of Closing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)Except as set forth in the Rent Roll, Seller has not given nor received any written notice of default with respect to any of the Leases.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)Except as set forth in the Rent Roll, all leasing commissions due to brokers under any of the Leases, and all tenant improvement obligations, concessions and other tenant inducements, have been fully paid and satisfied by Sellers and no such commissions, obligations, concessions or inducements become payable in the future. Without limiting the foregoing, the Rent Roll discloses all leasing commissions, and all tenant improvement obligations, concessions and other tenant inducements, which have not been paid and are now due and payable or will become payable in the future with respect to any of the Leases, including the initial and renewal term(s) thereof and any expansion of the space leased thereunder. Except as set forth in the Rent Roll, Seller has not received from any tenant any notice to cancel, renew or extend any Lease.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Seller has collected and remitted security deposits in accordance with the applicable Leases and applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)There are no Leases other than as set forth on Schedule 2.19.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)Excepting the Management Agreement (which Buyer acknowledges and accepts), the Contract List (as defined below) required by [Section 4.08](#iad45d12b2f6b4b88a87a3f4588941b2c_1) will be a correct and complete list of all management, service, supply, repair and maintenance agreements, equipment leases and other contracts (excluding the Leases) with respect to the Property as of the Effective Date. Correct and complete copies of all Contracts (as defined below) (or written descriptions of oral Contracts) will be delivered to Buyer pursuant to [Section](#iad45d12b2f6b4b88a87a3f4588941b2c_1) [4.08](#iad45d12b2f6b4b88a87a3f4588941b2c_1).

&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)The inventory of all tangible personal property, machinery, apparatus, appliances, equipment and supplies currently used in the operation, repair and maintenance of all or any portion of the Property (excluding, however, any tangible personal property and fixtures which are owned by tenants or the Property Manager) (the "**Personal**

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**Property**") required by [Section 4.08](#iad45d12b2f6b4b88a87a3f4588941b2c_1) will be a correct and complete list of any and all Personal Property currently used in the operation, repair and maintenance of all or any portion of the Property (excluding, however, any Personal Property which is owned by tenants or the Property Manager) as of the Effective Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)Seller has no knowledge of and has neither given nor received any written notice of default with respect to any of the Contracts and all agreements, amendments, guaranties, side letters and other documents relating thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)The Intangible Property List (as defined below) required by [Section 4.08](#iad45d12b2f6b4b88a87a3f4588941b2c_1) will be a correct and complete list of any and all of the Company's right, title and interest in and to any intangible personal property related to the Property, including, but not limited to, all service, maintenance and other agreements, including any equipment leases, in connection with the operation of the Property, development entitlements, all applications, reports, studies, Licenses, plans, maps, site plans, drawings, specifications, surveys, consultant work product, warranties, guaranties, agreements, contracts, development agreements, utility rights, development rights, approvals, entitlements, third party claims (including claims against previous owners or developers of the Property, any contractors, subcontractors, consultants or other suppliers of materials or services with respect to the Property), actions or defenses, Licenses, entitlements, will serve letters and all similar rights related to the Property, whether granted by governmental or quasi-governmental authorities or private persons or entities, all rights of the Company to electronic files, data and information, software licenses, internet domain names, URLs and websites, telephone and facsimile numbers, goodwill of the Company related to the Property, trademarks, servicemarks, logos, and other items of intangible personal property relating with respect to or used in connection with the Business, the Assets and the Property (the "**Intangible Property**"). To Seller's knowledge there are no guaranties, warranties or other Intangible Property issued with respect to the Personal Property, whether written or oral, or any tenant improvement obligations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)Seller has no knowledge of and has neither given nor received any written notice of default with respect to the Intangible Property.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)Except as disclosed in the Disclosure Schedule, there are no other contracts or agreements, written or oral, of any kind relative to the Property, the Assets and the Business or that the Company is otherwise party to. To Seller's knowledge, all Contracts disclosed in the Disclosure Schedule are in full force and effect, and no default or breach of any kind exists thereunder, nor is Seller aware of a condition or state of facts that with or without the giving of notice, the passage to time, or both, would constitute a default or breach thereunder. True, correct and complete copies of any such Contracts identified in the Disclosure Schedule have been provided by Seller to Buyer.

**Section 2.20 Insurance**. The Company currently maintains in full force and effect all insurance policies required to be kept under applicable law (the "**Insurance Policies**"), and, except as set forth on Schedule 2.20, there are no pending claims under any of such Insurance Policies, nor are there any insurable matters that have not been covered under any of such Insurance Policies, except as shown in the Disclosure Schedule.

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**Section 2.21 Condemnation**. Neither Seller or the Company has received written notice of any pending or threatened condemnation or eminent domain proceedings relating to the Property nor to Seller's knowledge is any such proceeding contemplated by any governmental authority.

**Section 2.22&nbsp;&nbsp;&nbsp;&nbsp;Taxes.**

&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)The Company (and Seller and Seller Principal, with respect to the Company) has timely filed with the appropriate taxing authorities when due (taking into account properly obtained extensions) all income and other material Tax Returns that it was required to file under applicable law. All such Tax Returns are true, correct and complete in all material respects and were prepared in compliance with Applicable Law in all material respects.

&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)Seller has delivered to Buyer true and accurate copies of the federal and State income Tax Returns, sales and use Tax Returns, purchase invoices, and warranties relating to the Company, the Assets, and the Business.

&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)All income and other material Taxes due and owing by the Company (and by Seller and Seller Principal, with respect to the Company) have been timely paid to the appropriate taxing authorities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)There are no liens for Taxes (other than current Taxes not yet due and payable) upon any of the assets of the Company, including the Assets. Without limiting the generality of the foregoing, the Loan has been, or will be, fully paid off and released, and there are no liens for Taxes related thereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)All income and other material Taxes that the Company is required to withhold or collect in connection with amounts paid or owing to any employee, independent contractor, creditor, shareholder, member or other third party have been duly withheld or collected, and have been timely paid over to the proper authorities to the extent due and payable and all information returns and other material documents required with respect to such withholding and remittances have been properly and timely filed and maintained.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)No deficiency or proposed adjustment for any amount of Tax has been proposed, asserted or assessed by any taxing authority against Company, the Assets, or the Business that has not been paid, settled or otherwise resolved. There is no proceeding now pending, proposed or threatened against the Company, the Assets, or the Business with respect to any Taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)No private letter rulings, technical advice memoranda or similar agreements or rulings relating to Taxes have been entered into or issued by any taxing authority with respect to the Company, the Assets, or the Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)The Company has never been a member of an affiliated, consolidated, combined, unitary or similar group of corporations or included in a combined, consolidated or unitary Tax Return.

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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;(i)There is no Tax allocation, sharing, indemnity, holiday, abatement, reimbursement agreement or arrangement (or any similar or corresponding agreement or arrangement) in effect with respect to the Company, the Property, the Assets or the Business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)None of the Assets is (i) required to be treated as being owned by another person pursuant to the so-called "safe harbor lease" provisions of former Section 168(f)(8) of the Internal Revenue Code of 1954, as amended, (ii) subject to Section 168(g)(1)(A) of the Code or (iii) subject to a disqualified leaseback or long-term agreement as defined in Section 467 of the Code.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)The Company is, and always has been, treated as an entity that is disregarded from its owner for U.S. federal income tax purposes (and applicable state and local tax purposes).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)For purposes of this Agreement, the following terms shall have the following meanings:

&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;(i)"**Tax**" or "**Taxes**" means (1) all federal, state, local, foreign and other income, gross receipts, sales, use, production, ad valorem, transfer, franchise, registration, profits, license, lease, service, service use, withholding, payroll, employment, unemployment, margin, gross margin, estimated, excise, severance, environmental, stamp, occupation, premium, property (real or personal), escheat, unclaimed property, abandonment, real property gains, windfall profits, customs, duties or other taxes, fees, assessments or charges of any kind whatsoever, together with any interest, additions or penalties with respect thereto and any interest in respect of such additions or penalties, and (2) any liability for the payment of any amount of a type described in clause (1) as a result of any obligation to indemnify or otherwise assume or succeed to the liability of any other Person.

&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;(ii)"**Tax Return**" means any return, declaration, report, claim for refund, information return or statement or other document relating to Taxes, including any schedule or attachment thereto, and including any amendment thereof.

**<u>ARTICLE III.</u>**

**BUYER'S REPRESENTATIONS**

**Section 3.01 Buyer's Representations**. Buyer represents and warrants that it has full power and authority to enter into this Agreement and consummate the transactions contemplated herein. Buyer has full power and authority to execute and deliver this Agreement and the documents to be delivered hereunder, to carry out its obligations hereunder and to consummate the transactions contemplated hereby. This Agreement and the documents to be delivered hereunder have been duly executed and delivered by Buyer and (assuming due authorization,

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execution and delivery by Seller) this Agreement and the documents to be delivered hereunder constitute legal, valid and binding obligations of Buyer, enforceable against Buyer in accordance with their respective terms.

**Section 3.02 Patriot Act**. Buyer represents and warrants that it is not acting, directly or indirectly, for or on behalf of any person, group, entity, or nation named by the U.S. Treasury Department as a Specially Designated National and Blocked Person, or for or on behalf of any person, group, entity, or nation designated in Presidential Executive Order 13224 as a person who commits, threatens to commit, or supports terrorism; and that it is not engaged in this transaction directly or indirectly on behalf of, or facilitating this transaction directly or indirectly on behalf of, any such person, group, entity, or nation.

**Section 3.03 OFAC**. Buyer is not a person or entity with whom U.S. persons or entities are restricted from doing business under regulations of OFAC (including those named on its Specially Designated and Blocked Persons List) or under any statute, executive order (including the September 24, 2001 Executive Order Blocking Property and Prohibiting Transactions with Persons Who Commit, Threaten to Commit, or Support Terrorism), or other governmental action.

**Section 3.04&nbsp;&nbsp;&nbsp;&nbsp;Intentionally Deleted**.

**Section 3.05 Buyer's Knowledge.** Buyer has no knowledge as of the date hereof of any breach of any representation or warranty of Seller set forth in Article II above. For the purposes of this [Section 3.05](#iad45d12b2f6b4b88a87a3f4588941b2c_1), "Buyer's knowledge" shall mean the actual knowledge of Matt Siekielski.

**<u>ARTICLE IV.</u>**

**CLOSING MATTERS**

**Section 4.01&nbsp;&nbsp;&nbsp;&nbsp;Seller's Deliverables**. At the Closing, Seller and the Company shall deliver to Buyer the following:

&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)A Transfer and Assignment of Membership Interest in substantially the form attached hereto as **Exhibit** "**B**" (the "**Transfer and Assignment**"), executed by Seller and Buyer, and consented to by the Company;

&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)A Non-Foreign Affidavit in substantially the form attached hereto as

**Exhibit** "**C**" (the "**Certificate of Non-Foreign Status**"), executed by Seller;

&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)An Agreement Regarding Ownership of Bank Accounts in substantially the form attached hereto as **Exhibit "D"** (the "**Bank Account Agreement**"), executed by Seller;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)An executed written consent of all required members or managers of Seller stating that this Agreement and the transactions contemplated hereby have been approved and duly authorized and authorizing the managing member of Seller to sign the documents necessary to consummate such transactions;

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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;(e)An executed written consent of all required members or managers of the Company stating that this Agreement and the transactions contemplated hereby have been approved and duly authorized and authorizing the managing member of the Company to sign the documents necessary to consummate such transactions;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)Good standing certificates issued by the appropriate governmental agency for Seller and the Company in their state of organization, and for Company in the jurisdiction where the Property is located;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)a closing statement or settlement statement (the "**Closing Statement**"), executed by Seller;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)at least ten (10) days prior to Closing, updated Seller Disclosure Schedules and Rent Roll;

&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)a certificate pursuant to Treasury Regulations Section 1.1445-2(b) that Seller (or, if Seller is a disregarded entity for tax purposes, Seller Principal) is not a foreign person within the meaning of Section 1445 of the Code;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)affidavits and other documents reasonably required by the Escrow Agent to issue the Updated Title Policy (as defined in [Section 4.09](#iad45d12b2f6b4b88a87a3f4588941b2c_1), including without limitation, evidence of authority, non-imputation affidavit, owner's affidavit and a survey affidavit of no-change;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)a payoff letter evidencing the amount of the Loan that remains outstanding;

and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)such other and further documentation as Buyer or Escrow Agent may

Seller:

reasonably require.

**Section 4.02&nbsp;&nbsp;&nbsp;&nbsp;Buyer's Deliverables**. At the Closing, Buyer shall deliver the following to

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)The Purchase Price;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)The Transfer and Assignment, executed by Buyer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)The Bank Account Agreement, executed by Buyer; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The Closing Statement, executed by Buyer.

**Section 4.03&nbsp;&nbsp;&nbsp;&nbsp;Intentionally Deleted.**

**Section 4.04&nbsp;&nbsp;&nbsp;&nbsp;Conditions Precedent to a Party's Obligation to Close.**

(a)The obligations of Seller and Buyer (each, a "**Closing Party**") to

consummate the transactions contemplated hereunder shall be subject to the satisfaction at

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or prior to the Closing of each of the following conditions (unless such Closing Party waives such condition in writing):

&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;(i)The representations and warranties of the other Closing Party contained in this Agreement shall be true and correct in all material respects as of the date when made and as of the Closing Date, as though such representations and warranties were made at and as of the Closing Date, except to the extent that they expressly refer to an earlier or specific time, in which case they shall be true and correct in all material respects as of such time;

&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;(ii)The other Closing Party shall have performed or complied in all material respects with all agreements, covenants and obligations to be performed or complied with by such other Closing Party hereunder at or prior to the Closing;

&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;(iii)No governmental authority, court or arbitration tribunal shall have enacted, issued, promulgated, enforced or entered any order, judgment, injunction, decree, award or other determination which is in effect and has the effect of making the transactions contemplated by this Agreement illegal or otherwise prohibiting consummation of such transactions or causing any of the transactions contemplated hereunder to be rescinded following completion thereof;

&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;(iv)From the Effective Date until the Closing Date, the Company has operated and conducted its business in the ordinary course in all material respects and has not (1) borrowed any amount (which shall not prohibit drawing funds pursuant to a draw request made in accordance with the loan documents evidencing the Loan), (2) guaranteed the indebtedness of any person, or cancelled any indebtedness owed to it, (3) granted, created, or suffered a lien on any of the Company's assets, (4) failed to promptly pay and discharge current liabilities in accordance with material contractual obligations except where disputed in good faith by appropriate proceedings, (5) issued, transferred, sold any Membership Interests, or issued any covenants or warrants related to the same, (6) sold, transferred, licensed or otherwise disposed of any of the Company's assets, except in the ordinary course of business, (7) authorized or made any capital expenditures or commitments therefore in excess of $10,000 individually or $20,000 in the aggregate, (8) entered into any compromise or settlement of any claim, litigation, arbitration, dispute or proceeding, (9) made or permitted any change in the Company's articles of formation, company agreements, partnership agreements or operating agreements, (10) other than in a negotiated, "arm's length" transaction, entered into any transaction or other arrangement outside the ordinary course of business with any officer, director, or equity holder of the Company, (11) increased the compensation payable to any employee, officer, director, consultant or

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agent of the Company, (12) entered into or promised any employment, consulting, change in control, severance or indemnification contract or a contract with respect to a retention bonus with any employee of the Company or any other person or entity, (13) engaged in any conduct that is likely to give rise to an environmental claim or any environmental liability, (14) engaged in any conduct that would result in any additional Encumbrances or title defects with respect to the Property or (15) committed to do any of the foregoing in the future;

(v)Buyer shall have received all of the Seller's Deliverables prior to 5:00

p.m. CST on the Closing Date; Seller shall have received all of the

Buyer's Deliverables prior to 5:00 p.m. CST on the Closing Date; and

&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;(vi)No Material Adverse Effect shall have occurred since the Effective Date of this Agreement. "**Material Adverse Effect**" means any change, development, effect, event or occurrence that is or would reasonably be likely to cause a Material Title Defect or a Material Environmental Issue. A "**Material Environmental Issue**" means an environmental condition affecting the Property that is revealed by Buyer's environmental inspections of the Property, and (1) the cost of which to cure exceeds the sum of One Hundred Thousand and No/100 Dollars ($100,000.00), or (2) materially and adversely affects Buyer's ability to own and operate the Property following Closing in a manner consistent with the current operation of the Property, or (3) causes an institutional lender (i.e., a national or regional bank and/or Freddie Mac or the Federal National Mortgage Association ("Fannie Mae")) to refuse to provide financing to Buyer for the acquisition of the Property on market terms, as evidenced by Buyer's delivery to Seller of a sworn affidavit executed by Buyer certifying to the foregoing. A "**Material Title Defect**" means a title matter reflected in the title commitment or the survey which materially and adversely affects the Property, and (1) the cost of which to cure exceeds the sum of One Hundred Thousand and No/100 Dollars ($100,000.00), or (2) materially and adversely affects Buyer's ability to own and operate the Property following Closing in a manner consistent with the current operation of the Property, or (3) causes an institutional lender (i.e., a national or regional bank and/or Freddie Mac or Fannie Mae) to refuse to provide financing to Buyer for the acquisition of the Property on market terms, as evidenced by Buyer's delivery to Seller of a sworn affidavit executed by Buyer certifying to the foregoing.

**Section 4.05&nbsp;&nbsp;&nbsp;&nbsp;Prorations**.

&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)All rents, water and other utility service charges for electricity, sewer, heat and air conditioning services and other utilities, elevator maintenance, insurance premiums, tenant lease improvement construction costs, and other expenses incurred in operating the Property, and assessments on the Property for the current fiscal year of the

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taxing authorities in which the Closing occurs, shall be prorated with Seller being responsible for or receiving (as appropriate) the portion thereof applicable to the period ending on the Closing Date and Buyer being responsible for and/or receiving (as appropriate) the portion thereof applicable to the period commencing after (and including) the Closing Date. To the extent that at Closing, the Company has a negative working capital account balance (as calculated pursuant to the Company's historical accounting policies consistently applied and subject to the satisfactory review by Buyer), the Purchase Price shall be adjusted downward in the amount necessary to bring such working capital account balance to $0.00. All prorations contemplated in this [Section 4.05](#iad45d12b2f6b4b88a87a3f4588941b2c_1) have been taken into account in the determination of the Purchase Price and the Purchase Price reflects such prorations and such prorations are final in all respects.

&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)In the case of any taxable period that begins before and ends after the Closing Date (a "**Straddle Period**"), Buyer and Seller shall apportion all property and similar ad valorem Taxes with respect to the Assets and the Contracts based upon the number of days in such Straddle Period. Seller shall be responsible for all such Taxes with respect to the Assets and the Contracts for the portion of such Straddle Period ending on the Closing Date, and Buyer shall be responsible for all such Taxes with respect to the Assets and the Contracts for the portion of such Straddle Period beginning after the Closing Date, as determined on a daily *pro rata* basis. If the final prorated amounts are not known as of the Closing Date, such amounts shall be estimated and adjustments thereto shall be made after the Closing at such time as they are known to Buyer and Seller.

&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)All prorations contemplated in this [Section 4.05](#iad45d12b2f6b4b88a87a3f4588941b2c_1) have been taken into account in the determination of the Purchase Price and the Purchase Price reflects such prorations and such prorations are final in all respects.

**Section 4.06 Bank Accounts and Cash**. At the Closing, Seller, Buyer and the Company will enter into an Agreement Regarding Ownership of Bank Accounts substantially in the form attached hereto as **Exhibit "D"** (the "**Bank Account Agreement**"). For administrative convenience, Buyer will establish new bank accounts for the Company (the "**New Bank Accounts**") rather than take control of and use the existing bank accounts of the Company (the "**Existing Bank Accounts**") following the Closing, with the exception of the existing bank account maintained by the Property Manager (the "**Property Manager Account**"). The ownership and control of the Existing Bank Accounts, with the exception of the Property Manager Account, will be transferred to Seller at the Closing. In no event shall any funds in any of the Existing Bank Accounts be considered accounts receivable, cash or cash equivalents for purposes of prorations, credits to the Purchase Price or otherwise under this Agreement. Furthermore, any cash in the Property Manager Account shall be applied in the following order (i) first to any operating expenses for the Property, and (ii) any remainder shall be disbursed to Seller as if such account was closed and the funds therein disbursed in connection with the Closing. The Existing Bank Accounts will be closed within 30 days of Closing. At Closing, Seller and Buyer agree that the Property Manager Account shall be transferred to Buyer.

**Section 4.07 Insurance**. Seller and Seller Principal acknowledge and agree that current insurance, in accordance with [Section 2.20](#iad45d12b2f6b4b88a87a3f4588941b2c_1), is in place as of Closing and such parties shall not take

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any action prior to or after Closing to terminate or adjust such insurance coverage without the express written consent of Buyer.

**Section 4.08 Seller's Deliveries Prior to Closing.** Seller shall, by the second (2<sup>nd</sup>) business day after the Effective Date, at Seller's sole cost, deliver (which may include "delivery" pursuant to an on-line data site) to Buyer the information set forth below (collectively, the "**Seller's Deliveries**"):

&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)a list of all Contracts related to the operation and maintenance of the

Business and the Property (collectively the "**Contract List**");

&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)a list of all Intangible Property related to the Business and the Property (collectively, the "**Intangible Property List**");

&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)a list of all Personal Property currently used in the operation, repair and

maintenance of the Property (collectively, the "**Personal Property List**");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)copies of (i) any and all leases, licenses, tenancies or occupancy arrangements for all premises (whether written or oral), and all right, title and interest of Seller or the Company as landlord thereunder, affecting any portion of the Property, if any, that extend beyond the Closing, and which are identified on the Rent Roll, including, but not limited to, all cellular tower, billboard, apartment, office/retail, and other commercial leases relating to the Property (the "**Leases**"), (iii) all right, title and interest of Seller or the Company in and to all contracts, agreements or commitments, oral or written, other than the Leases, binding upon or relating to the Property that extend beyond the Closing (collectively, the "**Contracts**"), and (iv) to the extent in Seller's Possession or Reasonable Control, any and all reports, studies, financial or other records, books or documents existing and relating to the ownership, use, operation, construction, repair or maintenance of, or otherwise to, the Property, including the following: surveys, maps, plats and street improvement specifications of the Property; soil, substratus, environmental, engineering, structural and geological studies, reports and assessments; architectural drawings, as-builts, plans, engineer's drawings and specifications; appraisals; title reports or policies together with any copies of documents referenced therein; all development-related documents; and booklets, manuals, files, records, correspondence contained in lease files, tenant lists, tenant files, logos, tenant prospect lists, other mailing lists, sales brochures and other materials, and leasing brochures and advertising materials and similar items (collectively, the "**Plans and Records**");

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)true, correct and complete copies of all Insurance Policies; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)copies of all other documents identified in Schedule 4.08 which are within Seller's Possession or Reasonable Control.

For purposes of this [Section 4.08](#iad45d12b2f6b4b88a87a3f4588941b2c_1), "Seller's Possession or Reasonable Control" shall mean within the possession or reasonable control of Seller or any of Seller's affiliates or the Property Manager, or any of Seller's current employees, agents or current third-party consultants or contractors, including attorneys.

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**Section 4.10&nbsp;&nbsp;&nbsp;&nbsp;Reserved.**

**Section 4.11&nbsp;&nbsp;&nbsp;&nbsp;Reserved.**

**Section 4.12&nbsp;&nbsp;&nbsp;&nbsp;Reserved.**

**Section 4.13&nbsp;&nbsp;&nbsp;&nbsp;Reserved**.

**Section 4.14&nbsp;&nbsp;&nbsp;&nbsp;Reserved**.

**Section 4.15&nbsp;&nbsp;&nbsp;&nbsp;Reserved.**

**<u>ARTICLE V.</u>**

**TAX MATTERS**

**Section 5.01 Tax Treatment.** Prior to and as of the Closing Date, the Company is a single member limited liability company owned by Seller that, for U.S. federal income tax purposes, is disregarded as an entity separate from its owner under 26 CFR §301.7701-3(b)(ii). Seller has not and shall not file an election for the Company to be classified otherwise. For U.S. federal income tax purposes, the sale of Membership Interests of the Company will be treated as a sale of all of the Company's assets from Seller to Buyer. Neither Buyer nor Seller shall take any position (whether in audits, on tax returns or otherwise) that is inconsistent with the foregoing unless required to do so by applicable law.

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**Section 5.02 Purchase Price Allocation**. Buyer and Seller agree to use good faith commercially reasonable efforts to allocate the Purchase Price (including any assumed liabilities treated as taxable consideration for the Membership Interests for tax purposes) among the Assets deemed purchased by Buyer in accordance with Section 1060 of the Code and the Treasury Regulations thereunder, and Buyer and Seller shall agree on a schedule (the "**Allocation Schedule**") with such allocation prior to the Closing Date. Buyer and Seller shall report, act, take positions consistent with and file all required Tax Returns (including, without limitation, IRS Form 8594) in all respects and for all purposes consistent with the Allocation Schedule, as finally determined, unless otherwise required by applicable law.

**Section 5.03 Pre-Closing Tax Periods**. Seller shall include the Assets and the Contracts and any items of income, gain, loss, deduction, and tax credit with respect to the Assets and the Contracts and properly allocable under applicable tax law to a taxable period that ends on or prior to the Closing Date on Seller's federal, state, local and non-U.S. income tax return.

**Section 5.04 Cooperation**. Buyer and Seller shall provide each other with such cooperation and information as either of them reasonably may request of the other in filing any Tax Return that includes Pre-Closing Taxes or in connection with any audit or other proceeding in respect of Pre-Closing Taxes. Such cooperation and information shall include providing copies of relevant Tax Returns or portions thereof, together with accompanying schedules, related work papers and documents relating to rulings or other determinations by tax authorities; <u>provided</u> that Buyer shall be permitted to redact any portion of a Tax Return that does not relate a Pre-Closing Tax. Each of Buyer and Seller shall retain all Tax Returns, schedules and work papers, records and other documents in its possession relating to Pre-Closing Taxes until the expiration of the statute of limitations of the taxable periods to which such Tax Returns and other documents relate. Prior to transferring, destroying or discarding any Tax Returns, schedules and work papers, records and other documents in its possession relating to Pre-Closing Taxes, Buyer or Seller (as the case may be) shall provide the other Parties with reasonable written notice and offer the other Parties the opportunity to take custody of such materials (redacted consistently with this [Section 5.04](#iad45d12b2f6b4b88a87a3f4588941b2c_1), if necessary).

**Section 5.05 Bulk Sales**. Buyer waives compliance by Seller or Seller Principal with the provisions of any bulk sales laws of any jurisdiction that may apply to the transactions contemplated by this Agreement; provided that Seller and Seller Principal, as applicable, shall indemnify and hold harmless Buyer and the Company from and against any and all losses or Taxes relating to, resulting from or arising out of any non-compliance by Seller or Seller Principal with any bulk sales law or similar law of any jurisdiction that applies to the transactions contemplated by this Agreement.

**<u>ARTICLE VI.</u>**

**REMEDIES AND RELEASE**

**Section 6.01 Survival of Representations and Covenants**. All representations and warranties contained in this Agreement (other than the Fundamental Representations (as defined below)) and the Tax Representations (as defined below)) shall survive the Closing for a period of nine (9) months, provided such termination shall be tolled with respect to any claim so long as

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notice of such claim has been provided to Seller or Buyer in writing or is otherwise the subject of any proceeding. All representations and warranties of Seller set forth in [Section 2.01](#iad45d12b2f6b4b88a87a3f4588941b2c_1), [Section](#iad45d12b2f6b4b88a87a3f4588941b2c_1) [2.02](#iad45d12b2f6b4b88a87a3f4588941b2c_1), [Section 2.03](#iad45d12b2f6b4b88a87a3f4588941b2c_1), [Section 2.05](#iad45d12b2f6b4b88a87a3f4588941b2c_1), [Section 2.06](#iad45d12b2f6b4b88a87a3f4588941b2c_1), [Section 2.08](#iad45d12b2f6b4b88a87a3f4588941b2c_1), [Section 2.14](#iad45d12b2f6b4b88a87a3f4588941b2c_1), [Section 2.15](#iad45d12b2f6b4b88a87a3f4588941b2c_1), and [Section 2.16](#iad45d12b2f6b4b88a87a3f4588941b2c_1) of this Agreement and all representations and warranties of Buyer set forth in Sections [Section 3.01](#iad45d12b2f6b4b88a87a3f4588941b2c_1), [Section 3.02](#iad45d12b2f6b4b88a87a3f4588941b2c_1)and [Section 3.03](#iad45d12b2f6b4b88a87a3f4588941b2c_1)(the "**Fundamental Representations**") shall survive the Closing indefinitely, and all representations and warranties of Seller set forth in [Section 2.22](#iad45d12b2f6b4b88a87a3f4588941b2c_1) (the "**Tax Representations**") shall survive the Closing until the date that is sixty (60) days after the end of the applicable statute of limitations (including all extensions thereof). In the event that Buyer has not notified Seller and/or Seller Principal (as applicable) in writing on or before the expiration of nine (9) months from the date of Closing (the "**Indemnity Time Limit**") that Buyer alleges Seller and/or Seller Principal (as applicable) has breached a representation or warranty hereunder (other than a Fundamental Representation or Tax Representation) and stating with reasonable specificity the alleged breach, then Buyer shall be deemed to have waived Buyer's right to bring an action against Seller, and/or Seller Principal, as the case may be, for any breach of a representation or warranty (other than a Fundamental Representation or Tax Representation) not included in such a written notice to Seller and/or Seller Principal. In the event that Seller and/or Seller Principal has not notified Buyer in writing on or before the expiration of the Indemnity Time Limit that Seller and/or Seller Principal alleges Buyer has breached a representation or warranty hereunder (other than a Fundamental Representation or Tax Representation) and stating with reasonable specificity the alleged breach, then Seller and/or Seller Principal shall be deemed to have waived Seller and/or Seller Principal's right to bring an action against Buyer for any breach of a representation or warranty (other than a Fundamental Representation) not included in such a written notice to Buyer.

**Section 6.02 Indemnity**. Seller and Seller Principal, jointly and severally, agree to indemnify and hold harmless Buyer from and against any and all losses, liabilities, causes of action, or demands or other claims of any kind whatsoever arising out of or relating to (a) a breach of any representation or warranty hereunder, and (b) any Pre-Closing Taxes, including reasonable attorney's fees and expenses incurred by Buyer in the defense of any such claim or demand. Subject to [Section 6.01](#iad45d12b2f6b4b88a87a3f4588941b2c_1) above, Seller and Seller Principal, jointly and severally agree to indemnify and hold harmless Buyer from and against any and all losses, liabilities, causes of action, or demands or other claims of any kind whatsoever arising out of or relating to the Company and Assets or the Business which may have arisen or may arise from any state of facts, act or omission prior to the Closing, including reasonable attorney's fees and expenses incurred by Buyer in the defense of any claim or demand, and including any claims or demands arising out of or relating to any breach of any representations or warranties by Seller, the Company, or Seller Principal set forth herein or the failure of Seller, the Company or Seller Principal to perform any covenant or agreement set forth herein; provided the aggregate liability for indemnity provided by Seller and Seller Principal set forth herein arising out of or relating to the breach of a representation or warranty hereunder, other than the Fundamental Representations, shall not exceed twenty percent (20%) of the Purchase Price (the "**Cap**"). Subject to [Section 6.01](#iad45d12b2f6b4b88a87a3f4588941b2c_1) above, Buyer agrees to indemnify and hold harmless Seller from and against any and all losses, liabilities, causes of action, or demands or other claims of any kind whatsoever arising out of or relating to the Company and Assets or the Business which may arise from any state of facts, act or omission first occurring after the Closing, including reasonable attorney's fees and expenses incurred by Seller in the defense of any such claim or demand, and for any claims or demands arising out of or relating to any breach of any Buyer's representations or warranties set forth herein or the failure of Buyer to perform any

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covenant or agreement set forth herein; provided the aggregate liability for indemnity provided by Buyer set forth herein shall not exceed the Cap.

**Section 6.03 Net Worth Covenant.** Seller Principal shall maintain net worth not less than the Cap for a period of twelve (12) months from and after the Closing Date (or, if one or more claim notices are delivered to Seller or Seller Principal pursuant to [Section 6.02](#iad45d12b2f6b4b88a87a3f4588941b2c_1) above during such period, until the final resolution of such claim(s)) and Seller and the Seller Principal agree to provide Buyer with reasonable documentation evidencing the foregoing upon the reasonable request of Buyer.

**Section 6.04&nbsp;&nbsp;&nbsp;&nbsp;Intentionally Deleted**.

**Section 6.05 Termination of Affiliate Agreements**. As of the Closing, all accounts, contracts and agreements, whether written or oral, between the Company, on the one hand, and Seller, on the other hand, including any development agreements of any kind, shall be fully paid, assumed, released or cancelled without the need for any further documentation, so that the Company shall have no further liabilities or obligations with respect to such accounts, contracts or agreements.

**Section 6.06 Resignations**. As of the Closing, Seller and any of its officers, directors or managers, as may be applicable, hereby resign from and are automatically removed from any officer, director, manager or similar position of Company, including but not limited to the resignation of Seller as the sole managing member of the Company.

**Section 6.07 Termination of Company Operating Agreement**. As of the Closing, the Company Operating Agreement shall be deemed terminated automatically without the need for any further documentation, and shall be of no further force and effect, and by the execution hereof, the parties hereto consent to the termination of the Company Operating Agreement as of the Closing.

**<u>ARTICLE VII.</u>**

**MISCELLANEOUS**

**Section 7.01 Expenses**. Except as otherwise provided in [Section 1.06](#iad45d12b2f6b4b88a87a3f4588941b2c_1) and [Section 4.09](#iad45d12b2f6b4b88a87a3f4588941b2c_1), all costs and expenses incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses.

**Section 7.02 Further Assurances**. Following the Closing, each of the parties hereto shall, and shall cause their respective affiliates to, execute and deliver such additional documents, instruments, conveyances and assurances and take such further actions as may be reasonably required to carry out the provisions hereof and give effect to the transactions contemplated by this Agreement.

**Section 7.03 Notices**. All notices, requests, consents, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been given (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee if sent by a nationally recognized overnight courier (receipt requested); or (c) on the date sent by

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e-mail of a PDF document (with confirmation of transmission) if sent during normal business hours of the recipient, and on the next business day if sent after normal business hours of the recipient. Such communications must be sent to the respective parties at the following addresses (or at such other address for a party as shall be specified in a notice given in accordance with this section):

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| | |
|:---|:---|
| If to Seller:<br>with a copy to: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;NexPoint Montford Investment Co, LLC c/o NexPoint Residential Trust Operating Partnership, L.P.<br>300 Crescent Court, Suite 700<br>Dallas, Texas 75201 Attention: General Counsel Email: <u>legal@nexpoint.com</u><br>Wick, Phillips, Gould & Martin LLP 3131 McKinney Avenue, Suite 500<br>Dallas, Texas 75204<br>Attention: Chris Fuller and Rachel Sam Email: <u>Chris.Fuller@wickphillips.com</u>; <u>rachel.sam@wickphillips.com</u> |
| <br>If to Buyer: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<br>NexBank Capital, Inc.<br>2515 McKinney Avenue, 11<sup>th</sup> Floor Dallas, Texas 75201<br>Attention: Matt Siekielski, President and CEO |

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| | |
|:---|:---|
| with a copy to:<br>if to Seller Principal:<br>with a copy to: | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Hunton Andrews Kurth LLP 1445 Ross Avenue<br>Suite 3700<br>Dallas, Texas 75202<br>Attention: Peter Weinstock and Beth Whitaker<br>NREF OP IV, L.P.,<br>300 Crescent Court, Suite 700<br>Dallas, Texas 75201 Attention: General Counsel Email: <u>legal@nexpoint.com</u><br>Wick, Phillips, Gould & Martin LLP 3131 McKinney Avenue, Suite 500<br>Dallas, Texas 75204<br>Attention: Chris Fuller and Rachel Sam Email: <u>Chris.Fuller@wickphillips.com</u>; |

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<u>rachel.sam@wickphillips.com</u>

**Section 7.04 Headings**. The headings in this Agreement are for reference only and shall not affect the interpretation of this Agreement.

**Section 7.05 Severability**. If any term or provision of this Agreement is invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Agreement or invalidate or render unenforceable such term or provision in any other jurisdiction. Upon such determination that any term or other provision is invalid, illegal or unenforceable, the parties hereto shall negotiate in good faith to modify the Agreement so as to effect the original intent of the parties as closely as possible in a mutually acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the greatest extent possible.

**Section 7.06 Entire Agreement**. This Agreement and the documents to be delivered hereunder constitute the sole and entire agreement of the parties to this Agreement with respect to the subject matter contained herein, and supersede all prior and contemporaneous understandings and agreements, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and those in documents to be delivered hereunder, the exhibits and Disclosure Schedule (other than an exception expressly set forth as such in the Disclosure Schedule), the statements in the body of this Agreement will control.

**Section 7.07 Successors and Assigns**. This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and permitted assigns. Neither party may assign its rights or obligations hereunder without the prior written consent of

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the other party, which consent shall not be unreasonably withheld or delayed; provided, that Buyer shall be permitted to assign any or all of its rights and obligations hereunder to Public Welfare Investments HoldCo, LLC. No assignment shall relieve the assigning party of any of its obligations hereunder. The singular usage of a word shall be deemed to include the plural, and the plural shall be deemed to include the singular, as the context requires or permits.

**Section 7.08 No Third-Party Beneficiaries**. Except as expressly provided to the contrary herein, this Agreement is for the sole benefit of the parties hereto and their respective successors and permitted assigns and nothing herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit or remedy of any nature whatsoever under or by reason of this Agreement.

**Section 7.09 Amendment and Modification**. This Agreement may only be amended, modified or supplemented by an agreement in writing signed by each party hereto.

**Section 7.10 Waiver**. No waiver by any party of any of the provisions hereof shall be effective unless explicitly set forth in writing and signed by the party so waiving. No waiver by any party shall operate or be construed as a waiver in respect of any failure, breach or default not expressly identified by such written waiver, whether of a similar or different character, and whether occurring before or after that waiver. No failure to exercise, or delay in exercising, any right, remedy, power or privilege arising from this Agreement shall operate or be construed as a waiver thereof; nor shall any single or partial exercise of any right, remedy, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, remedy, power or privilege.

**Section 7.11 Governing Law**. This Agreement shall be governed by and construed in accordance with the internal laws of the State of Texas without giving effect to any choice or conflict of law provision or rule (whether of the State of Texas or any other jurisdiction) that would call for the application of the laws of any jurisdiction other than those of the State of Texas.

**Section 7.12 Submission to Jurisdiction**. Any legal suit, action or proceeding arising out of or based upon this Agreement or the transactions contemplated hereby may be instituted in the state and federal courts of the United States of America in the State of Texas, or the state courts of in the county where the Property is located, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding and agrees venue shall be proper in such courts.

**Section 7.13 Waiver of Jury Trial**. Each party acknowledges and agrees that any controversy which may arise under this Agreement is likely to involve complicated and difficult issues and, therefore, each such party irrevocably and unconditionally waives any right it may have to a trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.

**Section 7.14 Counterparts**. This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means

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of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.

**Section 7.15 No Presumption Against Drafting Party**. Each of the parties acknowledges that each party to this Agreement has been represented by counsel in connection with this Agreement and the transactions contemplated by this Agreement. Accordingly, any rule of law or any legal decision that would require interpretation of any claimed ambiguities in this Agreement against the drafting party has no application and is expressly waived.

**Section 7.16 Press Releases**. Any press release or other public disclosure regarding this Agreement or the transaction contemplated hereby shall not be made without Seller and Buyer's prior written consent, which may be withheld in such party's sole discretion. Notwithstanding the foregoing, Buyer shall be permitted to make public disclosures regarding this Agreement and the transaction contemplated hereby pursuant to public company reporting requirements without Seller's consent.

**Section 7.17 Legal Costs**. The parties hereto agree that they shall pay directly any and all legal costs which they have incurred on their own behalf in the preparation of this Agreement, all other agreements pertaining to this transaction, and that such legal costs shall not be part of the closing costs. Notwithstanding the foregoing, if either Buyer or Seller brings any suit or other proceeding with respect to the subject matter or the enforcement of this Agreement, the prevailing party (as determined by the court, agency, arbitrator or other authority before which such suit or proceeding is commenced), in addition to such other relief as may be awarded, shall be entitled to recover reasonable attorneys' fees, expenses and costs of investigation actually incurred. The foregoing includes attorneys' fees, expenses and costs of investigation (including those incurred in appellate proceedings), costs incurred in establishing the right to indemnification, or in any action or participation in, or in connection with, any case or proceeding under Chapter 7, 11 or 13 of the Bankruptcy Code (11 United States Code Sections 101 et seq.), or any successor statutes.

**Section 7.18 Disclosure Schedule**. The disclosures in the Disclosure Schedule delivered by Seller to Buyer, concurrently with the execution and delivery of the Agreement and any schedule part thereof delivered thereafter and attached hereto as <u>Exhibit A</u>, with respect to a particular representation and warranty, shall be considered a disclosure for purposes of any other representation and warranty in this Agreement to which the applicability of a disclosure included in the Disclosure Schedule is reasonably apparent.

**Section 7.19&nbsp;&nbsp;&nbsp;&nbsp;Time**. Time is of the essence hereunder.

[SIGNATURE PAGE FOLLOWS]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

**<u>Seller</u>**:

**NEXPOINT MONTFORD INVESTMENT CO, LLC**,

a Delaware limited liability company

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: <u>Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Title: <u>Authorized Signatory&nbsp;&nbsp;&nbsp;&nbsp;</u>

**<u>Buyer</u>**:

**NEXBANK CAPITAL, INC.**,

a Delaware corporation

By: <u>/s/ Matt Siekielski&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: Matt Siekielski

Title: President and Chief Executive Officer

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their respective officers thereunto duly authorized.

**<u>Seller Principal</u>**

**NREF OP IV, L.P.**,

a Delaware limited partnership

By: <u>/s/ Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Name: <u>Matt McGraner&nbsp;&nbsp;&nbsp;&nbsp;</u> Title: <u>Authorized Signatory&nbsp;&nbsp;&nbsp;&nbsp;</u>

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**SCHEDULES**

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**EXHIBIT "A"**

Disclosure Schedule (Sections 2.03, 2.19 and 2.20)

[Intentionally Omitted]

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**EXHIBIT "B"**

**TRANSFER AND ASSIGNMENT**

[Intentionally Omitted]

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**EXHIBIT "C"**

**CERTIFICATE OF NON-FOREIGN STATUS**

[Intentionally Omitted]

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**EXHIBIT "D"**

**FORM OF BANK ACCOUNT AGREEMENT**

[Intentionally Omitted]

## Exhibit 10.1

THIS AMENDED AND RESTATED PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT AND LAWS.

**<u>SECOND</u> <u>AMENDED</u> <u>AND</u> <u>RESTATED</u> <u>PROMISSORY</u> <u>NOTE</u>**

U.S. $10,000,000.00&nbsp;&nbsp;&nbsp;&nbsp;August 25, 2025

FOR VALUE RECEIVED, NexPoint SFR Operating Partnership, L.P., having an address at 300 Crescent Court, Suite 700, Dallas, Texas 75201 (the "<u>Maker</u>"), hereby promises to pay to the order of NREF OP IV REIT Sub, LLC ("<u>Holder</u>"), at its address at 300 Crescent Court, Suite 700, Dallas, Texas 75201 or such other address as it may designate, the principal sum of TEN MILLION AND NO/DOLLARS ($10,000,000.00), or such amount as has been advanced, up to the Maximum Principal Amount (as defined below and with such Advances (as defined below) reflected on Schedule A hereto), and is then outstanding under this Note, together with interest from the Note Date or the date of such Advance on the balance of principal from time to time outstanding, in United States currency, at the rates and at the times hereinafter described.

This Note amends and restates in its entirety that certain Amended and Restated Promissory Note dated as of January 17, 2025 executed by Maker in favor of NREF OP IV REIT Sub, LLC in a maximum principal amount of $5,000,000.00.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.**<u>Interest</u>**. Interest is payable quarterly in arrears on January 1, April 1, July 1 and October 1, commencing October 1, 2024, on said principal sum or such amount as has been advanced from the date such amount has been advanced at a rate of 3.0% per annum, until payment of said principal sum or such amount as has been advanced has been made or duly provided for. Additionally, interest on the principal sum or such amount as has been advanced from the date such amount has been advanced is payable at a rate of 12% per annum on the Maturity Date. Interest shall be calculated for the actual number of days elapsed on the basis of a 360-day year, including the first date of the applicable period or the date of such advance to the applicable interest payment date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.**<u>Maximum</u> <u>Lawful</u> <u>Rate</u>**. It is the intent of Maker and Holder to conform to and contract in strict compliance with applicable usury law from time to time in effect. In no way, nor in any event or contingency (including but not limited to prepayment, default, demand for payment, or acceleration of the maturity of any obligation), shall the rate of interest taken, reserved, contracted for, charged or received under this Note exceed the highest lawful interest rate permitted under applicable law. If Holder shall ever receive anything of value which is characterized as interest under applicable law and which would apart from this provision be in excess of the highest lawful interest rate permitted under applicable law, an amount equal to the amount which would have been excessive interest shall, without penalty, be applied to the reduction of the principal amount owing on the Note in the inverse order of its maturity and not to the payment of interest, or refunded to the Maker or the other payor thereof if and to the extent such amount which would have been excessive exceeds such unpaid principal. All interest paid or agreed to be paid to the Holder hereof shall, to the extent permitted by applicable law, be amortized, prorated, allocated and spread throughout the full stated term (including any renewal or extension) of the Note so that the amount of interest on account of such obligation does not exceed the maximum permitted by applicable law. As used in this Section, the term "<u>applicable law</u>" shall mean the laws of the State of

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Texas or the federal laws of the United States, whichever laws allow the greater interest, as such laws now exist or may be changed or amended or come into effect in the future.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.**<u>Definitions.</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;(a)"<u>Maximum Principal Amount</u>" means $15,000,000.00

&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)"<u>Note Date</u>" means July 10, 2024.

&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)"<u>Note</u>" means this Second Amended and Restated Promissory Note dated August 25, 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.**<u>Payment</u> <u>At</u> <u>Maturity</u> <u>Date</u>**. Maker shall make a payment in full of principal and accrued and unpaid interest on the Maturity Date or Extended Maturity Date, as applicable. Notwithstanding the foregoing, Maker may make repayments from time to time in accordance with Section 7(b).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.**<u>Maturity</u> <u>Date</u>**. The indebtedness evidenced hereby shall mature on July 10, 2026 (the "<u>Maturity Date</u>"). On the Maturity Date, the entire outstanding principal balance hereof, together with accrued and unpaid interest and all other sums evidenced by this Note, shall, if not sooner paid, become due and payable. Notwithstanding the foregoing, Maker may elect to extend the Maturity Date to July 10, 2027 (the "<u>Extended Maturity Date</u>") by providing written notice to Holder one (1) month in advance of the original Maturity Date (or such shorter period as agreed by Holder in its sole discretion). On the Extended Maturity Date, the entire outstanding principal balance hereof, together with accrued and unpaid interest and all other sums evidenced by this Note, shall, if not sooner paid, become due and payable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.**<u>Advances</u>**.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Maker may, from time to time, request a loan, advance, or other extension of credit (each an "<u>Advance</u>") by Holder in favor of Maker up to the Maximum Principal Amount. Notwithstanding the foregoing, at no time shall Holder be under any obligation to make any Advance to Maker. For the avoidance of doubt, Holder may, in its sole discretion, refuse to make any Advance to Maker without incurring any liability due to such refusal and without affecting Maker's liability under this Note and all amounts advanced under this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)Maker may, from time to time, repay any Advance and re-request any previously repaid Advances.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Maker may, from time to time, request an Advance hereunder, subject to the following:

&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;(i) Maker shall deliver in each such request in writing to Holder at least one (1) business day prior to the proposed effective date of the requested Advance (or such shorter period as agreed to by Holder in its sole discretion) and (ii) after giving effect to the requested Advance, the aggregate unpaid principal amount of Advances outstanding under this Note shall not exceed the Maximum Principal Amount.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)The amount and funding date of each Advance and the amount and repayment thereof shall be noted on Schedule A, which shall be conclusive evidence of the foregoing, absent manifest error.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.**<u>General</u> <u>Provisions</u>**.

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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)Maker agrees that the obligation evidenced by this Note is an exempt transaction under the Truth-in-Lending Act, 15 U.S.C. § 1601, et seq.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)This Note and all provisions hereof shall be binding upon Maker and all persons claiming under or through Maker, and shall inure to the benefit of Holder, together with its successors and assigns, including each owner and holder from time to time of this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)Time is of the essence as to all dates set forth herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)To the fullest extent permitted by applicable law, Maker agrees that its liability shall not be in any manner affected by any indulgence, extension of time, renewal, waiver, or modification granted or consented to by Holder; and Maker consents to any indulgences and all extensions of time, renewals, waivers, or modifications that may be granted by Holder with respect to the payment or other provisions of this Note, and agrees to the addition or release of any makers, endorsers, guarantors, or sureties, all whether primarily or secondarily liable, without notice to Maker and without affecting its liability hereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)To the fullest extent permitted by applicable law, Maker hereby waives and renounces for itself, its successors and assigns, all rights to the benefits of any statute of limitations and any moratorium, reinstatement, marshalling, forbearance, valuation, stay, extension, redemption, appraisement, or exemption and homestead laws now provided, or which may hereafter be provided, by the laws of the United States and of any state thereof against the enforcement and collection of the obligations evidenced by this Note.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)If this Note is placed in the hands of attorneys for collection or is collected through any legal proceedings, Maker promises and agrees to pay, in addition to the principal, interest and other sums due and payable hereon, all costs of collecting or attempting to collect this Note, including all reasonable attorneys' fees and disbursements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)To the fullest extent permitted by applicable law, all parties now or hereafter liable with respect to this Note, whether Maker, principal, surety, guarantor, endorsee or otherwise hereby severally waive presentment for payment, demand, notice of nonpayment or dishonor, protest and notice of protest. No failure to accelerate the indebtedness evidenced hereby, acceptance of past due amounts following the expiration of any cure period provided by this Note, any documents now or in the future executed by Maker or its subsidiaries in connection with any loan provided by any lender which is secured by a mortgage or deed of trust on any property or applicable law, or indulgences granted from time to time shall be construed (i) as a novation of this Note or as a reinstatement of the indebtedness evidenced hereby or as a waiver of such right of acceleration or of the right of Holder thereafter to insist upon strict compliance with the terms of this Note, or (ii) to prevent the exercise of such right of acceleration or any other right granted hereunder or under applicable law. Maker hereby expressly waives the benefit of any statute or rule of law or equity now provided, or which may hereafter be provided, which would produce a result contrary to or in conflict with the foregoing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)Irrespective of the place of execution and/or delivery, this Note shall be governed by, and shall be construed in accordance with, the laws of the State of Texas.

[Signature page follows.]

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Maker has delivered this Note as of the day and year first set forth above.

MAKER:

NEXPOINT SFR OPERATING PARTNERSHIP, L.P.

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Paul Richards&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Paul Richards

Title:&nbsp;&nbsp;&nbsp;&nbsp;President, Secretary and Treasurer

**ACKNOWLEDGED AND AGREED TO BY HOLDER THIS 25**<sup>TH</sup> **DAY OF <u>AUGUST</u> 2025.**

NREF OP IV REIT SUB, LLC

By:&nbsp;&nbsp;&nbsp;&nbsp;<u>/s/ Paul Richards&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</u>

Name: Paul Richards

Title:&nbsp;&nbsp;&nbsp;&nbsp;Chief Financial Officer

[Promissory Note]

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**<u>SCHEDULE</u> <u>A</u>**

**Advances**

The initial principal amount of this Note is TEN MILLION AND NO/DOLLARS ($10,000,000.00). The following increases or decreases in the principal balance outstanding under this Note have been made:

## 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 Real Estate Finance, Inc.;

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.

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| | |
|:---|:---|
| Date: November 13, 2025 | |
| | /s/ Jim Dondero |
| | Jim Dondero<br>President<br>(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 Real Estate Finance, Inc.;

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.

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| | |
|:---|:---|
| Date: November 13, 2025 | |
| | /s/ Paul Richards |
| | Paul Richards<br>Chief Financial Officer, Executive VP-Finance, Assistant Secretary and Treasurer<br>(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 Real Estate Finance, Inc. (the "Company") for the period ending September 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 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: November 13, 2025 | /s/ Jim Dondero |
| | Jim Dondero<br>President<br>(Principal Executive Officer) |
| Dated: November 13, 2025 | /s/ Paul Richards |
| | Paul Richards<br>Chief Financial Officer, Executive VP-Finance, Assistant Secretary and Treasurer<br>(Principal Financial Officer) |

---

<br>